DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT SLEE GRAND PRAIRIE, L.P., a Delaware limited partnership, BORROWER TO PETER S. GRAF, ESQ., AS TRUSTEE FOR THE BENEFIT OF CIBC INC., LENDER DATED: AS OF NOVEMBER 22, 2006
Exhibit 10.2
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON YOU MAY REMOVE OR STRIKE ANY OF
THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
SLEE GRAND PRAIRIE, L.P., a
Delaware limited partnership,
BORROWER
Delaware limited partnership,
BORROWER
TO
XXXXX X. XXXX, ESQ.,
AS TRUSTEE
AS TRUSTEE
FOR THE BENEFIT OF
CIBC INC.,
LENDER
LENDER
DATED: AS OF NOVEMBER 22, 2006
| Property Address | ||||||
| Xxxx Xxx Xxxxxx | ||||||
| 725-000 Xxxxx Xxxxx Xxxxxxxxx Xxxxxxx | ||||||
| Arlington, Texas 76011 | ||||||
| Assessor’s | ||||||
| Parcel No.: | 7592515 | |||||
| County: | Tarrant | |||||
| State: | Texas | |||||
Record and Return to:
Xxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Xx., Esq.
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT (this “Deed of
Trust”) is made as of the 22nd day of November, 2006, by SLEE GRAND PRAIRIE, L.P., a Delaware
limited partnership, with an address c/o Gladstone Commercial Corporation, 0000 Xxxxxxxxxx Xxxxx,
XxXxxx, Xxxxxxxx 00000, as grantor (“Borrower”) to XXXXX X. XXXX, ESQ., as trustee
(“Trustee”), whose address is 0000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000, in
favor of CIBC INC., a Delaware corporation, as beneficiary (“Lender”), whose address is
Attn: Real Estate Finance Group, 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, Xxxxxxxx, FIRST PARK TEN COCO SAN ANTONIO, L.P.., a Delaware limited partnership and
OB MIDWAY NC GLADSTONE COMMERCIAL LLC, a Delaware limited liability company (collectively, the
“Borrower Parties”) have requested that Lender make a loan to the Borrower Parties in the
principal amount of FOURTEEN MILLION THREE HUNDRED NINE THOUSAND AND 00/100 DOLLARS
($14,309,000.00) (the “Loan”);
NOW THEREFORE, in consideration of the making of the Loan and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby acknowledged, Xxxxxxxx hereby
agrees, covenants, represents and warrants with and to Lender as follows:
THAT FOR THE PURPOSES OF SECURING:
(1) The Loan together with interest thereon evidenced by that certain promissory note (such
promissory note, together with any and all renewals, modifications, consolidations and extensions
thereof, is hereinafter referred to as the “Note”) of even date with this Deed of Trust,
made by Borrower Parties to the order of Lender in like amount;
(2) The full and prompt payment and performance of all of the provisions, agreements,
covenants and obligations herein contained and contained in any other agreements, documents or
instruments now or hereafter evidencing, securing or otherwise relating to the indebtedness
evidenced by the Note, whether executed or delivered by Xxxxxxxx, Borrower Parties or by any
indemnitor or guarantor with respect to any obligation of Borrower under the Loan Documents (each,
hereinafter, an “Indemnitor”), as defined herein, or jointly and severally (the Note, this
Deed of Trust, Assignment of Leases and Rents, Assignment of Warranties and Other Contract Rights,
Hazardous Substances Indemnity Agreement, Indemnity & Guaranty Agreement, Manager’s Subordination
Agreement, Closing Certificate, Cash Management Agreement, Clearing Bank Instruction Letter, and
FIRPTA Certificate, together with any and all renewals, amendments, extensions and modifications
thereof, are hereinafter collectively referred to as the “Loan Documents”) excluding only
the obligations pursuant to that certain Hazardous Substances Indemnity Agreement of even date
herewith by Borrower Parties and Gladstone Commercial Corporation, a Maryland corporation
(“Indemnitor”), jointly and severally, for the benefit of Lender (the “Hazardous
Substances Indemnity”) and the Indemnity and Guaranty Agreement of even date herewith by
Indemnitor for the benefit of Lender (the “Guaranty Indemnity”);
(3) Any and all additional advances made by Lender to protect or preserve the Property (as
defined herein) or the lien or security interest created hereby on the Property, or for Taxes and
Other Charges (each as defined in Section 1.5) or Insurance Premiums (as defined in Section 1.6) as
hereinafter provided or for performance of any of Borrower’s obligations hereunder or Borrower
Parties’ obligations under the other Loan Documents or for any other purpose provided herein or in
the other Loan Documents (whether or not the original Borrower named herein remains the owner of
the Property at the time of such advances), and any and all out of pocket third party costs and
expenses (including reasonable attorney’s fees) incurred by Xxxxxx hereunder in performing the
obligations required to be performed by Borrower or Borrower Parties or otherwise incurred by
Lender pursuant to the terms of this Deed of
Trust, together with interest on each such advance, cost or expense (which interest shall
accrue at the Default Interest Rate (as defined in the Note) from the date such amounts are
advanced or paid by Lender until the date repaid by Borrower); and
(4) Any and all other indebtedness now owing or which may hereafter be owing by Borrower and
Borrower Parties to Lender in connection with the Loan, the Loan Documents and/or the Property,
including, without limitation, all prepayment fees, however and whenever incurred or evidenced,
whether express or implied, direct or indirect, absolute or contingent, or due or to become due,
and all renewals, modifications, consolidations, replacements and extensions thereof;
(All of the sums referred to in Paragraphs (1) through (4) above are herein sometimes referred to
as the “Obligations”)
and for and in consideration of the sum of Ten and no/100 Dollars ($10.00), and other valuable
consideration, the receipt and sufficiency of which are hereby conclusively acknowledged, BORROWER
HAS IRREVOCABLY GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents does GRANT, BARGAIN,
SELL and CONVEY, unto Trustee, in trust, with power of sale, in all of Borrower’s estate, right,
title and interest in, to and under any and all of the following described property, whether now
owned or hereafter acquired (collectively, the “Property”):
A. All that certain real property referenced on the cover page of this Deed of Trust and
situated in the County of Bexar, State of Texas, more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (the “Real Estate”) together
with all of the easements, rights, privileges, franchises, tenements, hereditaments and
appurtenances now or hereafter thereunto belonging or in any way appertaining thereto, and all of
the estate, right, title, interest, claim and demand whatsoever of Borrower therein or thereto,
either at law or in equity, in possession or in expectancy, now or hereafter acquired;
B. All structures, buildings and improvements of every kind and description now or at any time
hereafter located or placed on the Real Estate (the “Improvements”);
C. All furniture, furnishings, fixtures, goods, equipment, inventory or personal property
owned by Borrower now or hereafter located on, attached to or used in and about the Improvements,
including, but not limited to, all machines, engines, boilers, dynamos, elevators, stokers, tanks,
cabinets, awnings, screens, shades, blinds, carpets, draperies, lawn mowers, and all appliances,
plumbing, heating, air conditioning, lighting, ventilating, refrigerating, disposal and
incinerating equipment, and all fixtures and appurtenances thereto, and such other goods and
chattels and personal property owned by Borrower as are now and hereafter used or furnished in
operating the Improvements, or the activities conducted therein, and all building materials and
equipment hereafter situated on or about the Real Estate or Improvements, and all warranties and
guaranties relating thereto, and all additions thereto and substitutions and replacements therefor
(exclusive of any of the foregoing owned or leased by tenants of space in the Improvements)
(hereinafter, all of the foregoing items described in this paragraph D, collectively, the
“Equipment”);
D. All easements, rights-of-way, strips and gores of land, vaults, streets, ways, alleys,
passages, sewer rights, air rights and other development rights now or hereafter located on the
Real Estate or under or above the same or any part or parcel thereof, and all estates, rights,
titles, interests, tenements, hereditaments and appurtenances, reversions and remainders
whatsoever, in any way belonging, relating or appertaining to the Real Estate and/or Improvements
or any part thereof, or which hereafter shall in any way belong, relate or be appurtenant thereto,
whether now owned or hereafter acquired by Borrower;
-2-
E. All water, ditches, xxxxx, reservoirs and drains and all water, ditch, well, reservoir and
drainage rights which are appurtenant to, located on, under or above or used in connection with the
Real Estate or the Improvements, or any part thereof, whether now existing or hereafter created or
acquired;
F. All minerals, crops, timber, trees, shrubs, flowers and landscaping features now or
hereafter located on, under or above the Real Estate;
G. All cash funds, deposit accounts and other rights and evidence of rights to cash, now or
hereafter created or held by Lender pursuant to this Deed of Trust or any other of the Loan
Documents, including, without limitation, all funds now or hereafter on deposit in the Impound
Account, as defined in Section 1.6, and in the reserves required pursuant to Section 1.28 (all
such funds, together with the Impound Account, collectively, the “Reserves”);
H. All leases, subleases (including, without limitation, oil, gas and mineral leases, and that
certain Lease Agreement for the entire Property dated February 28, 1991 between Borrower, as
landlord, and Xxxx Xxx Corporation, a Maryland corporation (“Principal Tenant”), as tenant,
(as subsequently amended and assigned, the “Principal Lease”, the Principal Lease, all
subleases, licenses, concessions and occupancy agreements of all or any part of the Real Estate or
the Improvements now or hereafter entered into and any guaranty thereof are each referred to as a
“Lease”, and collectively, the “Leases”) and all rents, subrents, sub-subrents,
royalties, issues, profits, revenue, income, claims, judgments, awards, settlements and other
benefits (collectively, the “Rents and Profits”) of the Real Estate or the Improvements,
now or hereafter arising from the use or enjoyment of all or any portion thereof or from any
present or future Lease or other agreement pertaining thereto or arising from any of the Contracts
(as hereinafter defined) or any of the General Intangibles (as hereinafter defined) and all cash or
securities deposited to secure performance by the tenants, lessees, subtenants, sub-subtenants,
sublessees, sub-sublessees or licensees, as applicable (each, a “Tenant” and collectively,
the “Tenants”), of their obligations under any such Leases, whether said cash or securities
are to be held until the expiration of the terms of said Leases or applied to one or more of the
installments of rent coming due prior to the expiration of said terms, subject to, however, the
provisions contained in Section 1.9 hereinbelow;
I. All rights of the Borrower under contracts, agreements and documents now or hereafter
entered into relating to the ownership or operation or management of the Real Estate or the
Improvements or any portion of either of them (collectively, the “Contracts”) including,
without limitation, service contracts, maintenance contracts, equipment leases, personal property
leases and any contracts or documents relating to construction on any part of the Real Estate or
the Improvements (including plans, drawings, surveys, tests, reports, bonds and governmental
approvals) or to the management or operation of any part of the Real Estate or the Improvements and
any and all warranties and guaranties, to the extent assignable, relating to the Real Estate or the
Improvements or any fixtures, equipment or personal property owned by Borrower and located on
and/or used in connection with the Property, together with all revenue, income and other benefits
thereof and all claims, judgments, awards and settlements arising thereunder;
J. All present and future monetary deposits given to any public or private utility with
respect to utility services furnished to any part of the Real Estate or the Improvements;
K. All present and future funds, accounts, instruments, accounts receivable, documents, causes
of action, claims, general intangibles (including without limitation, trademarks, trade names,
servicemarks and symbols now or hereafter used in connection with any part of the Real Estate or
the Improvements, all names by which the Real Estate or the Improvements may be operated or known,
-3-
all rights to carry on business under such names, and all rights, interest and privileges
which Borrower has or may have as developer or declarant under any covenants, restrictions or
declarations now or hereafter relating to the Real Estate or the Improvements) and all notes or
chattel paper, to the extent assignable, now or hereafter arising from or by virtue of any
transactions related to the Real Estate or the Improvements (collectively, the “General
Intangibles”);
L. All water taps, sewer taps, certificates of occupancy, permits, licenses, franchises,
certificates, consents, approvals and other rights and privileges now or hereafter obtained in
connection with the Real Estate or the Improvements and all present and future warranties and
guaranties relating to the Improvements or to any equipment, fixtures, furniture, furnishings,
personal property or components of any of the foregoing now or hereafter located or installed on
the Real Estate or the Improvements, to the extent assignable;
M. All building materials, supplies and equipment now or hereafter placed on the Real Estate
or in the Improvements and all architectural renderings, models, drawings, plans, specifications,
studies and data now or hereafter relating to the Real Estate or the Improvements;
N. Any insurance policies or binders now or hereafter relating to the Property including any
unearned premiums thereon;
O. All proceeds, products, substitutions and accessions (including claims and demands
therefor) of the conversion, voluntary or involuntary, of any of the foregoing into cash or
liquidated claims, including, without limitation, proceeds of insurance and condemnation awards and
proceeds of refunds of any Taxes or Other Charges with respect to any period from and after the
date hereof until the Loan is indefeasibly paid or defeased in full;
P. All of Xxxxxxxx’s claims and rights to damages and any other remedies in connection with or
arising from the rejection of the Principal Lease by tenant, or any trustee, custodian or receiver
pursuant to the Bankruptcy Code in the event that there shall be filed by or against tenant any
petition, action or proceeding under the Bankruptcy Code or under any other similar federal or
state law now or hereafter in effect; and
Q. All other or greater rights and interests of every nature in the Real Estate or the
Improvements and in the possession or use thereof and income therefrom, whether now owned or
hereafter acquired by Borrower.
TO HAVE AND TO HOLD the above granted and described Property unto Trustee, its successors and
assigns forever, and Xxxxxxxx does hereby bind itself, its successors and assigns, to WARRANT AND
FOREVER DEFEND the title to the Property unto Trustee against every person whomsoever lawfully
claiming or to claim the same or any part thereof.
ARTICLE I
COVENANTS OF BORROWER
COVENANTS OF BORROWER
For the purpose of further securing the Obligations and for the protection of the security of
this Deed of Trust, for so long as the Obligations or any part thereof remains unpaid, Borrower
represents, warrants, covenants and agrees as follows:
-4-
1.1 Representations and Warranties of Borrower. Borrower, for itself and its
successors and assigns, does hereby represent, warrant and covenant to and with Lender, its
successors and assigns, that:
(a) Organization and Existence. Borrower is duly organized and validly existing as a
limited liability company in good standing under the laws of the State of Delaware and is qualified
to do business in the State of Texas and in all other jurisdictions in which Borrower is
transacting business.
(b) Authorization. Xxxxxxxx has the power and authority to execute, deliver and
perform the obligations imposed on it under the Loan Documents and to consummate the transactions
contemplated by the Loan Documents. Xxxxxxxx has obtained or made all necessary consents,
approvals, authorizations, orders or filings required by any partners or members of Borrower whose
approval is required by the terms of Borrower’s organizational documents have duly approved the
transactions contemplated by the Loan Documents and have authorized execution and delivery thereof
by the respective signatories.
(c) Valid Execution and Delivery. All of the Loan Documents requiring execution by
Xxxxxxxx have been duly and validly executed and delivered by Xxxxxxxx.
(d) Enforceability. All of the Loan Documents executed by Borrower constitute valid,
legal and binding obligations of Borrower and are fully enforceable against Borrower in accordance
with their terms, subject only to bankruptcy, insolvency, reorganization, moratorium and similar
laws affecting creditors rights generally and statutory or other laws (including common law) now or
hereafter in effect regarding fraudulent conveyances or preferential transfers and general
principles of equity.
(e) No Defenses. The Note, this Deed of Trust and the other Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense, nor would the operation of
any of the terms of the Note, this Deed of Trust or any of the other Loan Documents, or the
exercise of any right thereunder, render this Deed of Trust unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense.
(f) Defense of Usury. Xxxxxxxx knows of no facts that would support a claim of usury
to defeat or avoid its obligation to repay the principal of, interest on, and other sums or amounts
due and payable by the Borrower under, the Loan Documents.
(g) No Conflict/Violation of Law. The execution, delivery and performance of the Loan
Documents by the Borrower will not cause or constitute a default under or conflict with the
organizational documents of Borrower, any Indemnitor or any Constituent Entity (as defined in
Section 1.27) of either of them. The execution, delivery and performance of the obligations
imposed on Borrower under the Loan Documents will not cause Borrower or any Indemnitor or any
Constituent Entity of either of them to be in default, including after due notice or lapse of time
or both, under the provisions of any agreement, judgment or order to which Borrower or any
Indemnitor or any Constituent Entity of either of them is a party or by which Borrower or any
Indemnitor or any Constituent Entity of either of them is bound.
(h) Compliance with Applicable Laws and Regulations. To the knowledge of Borrower,
after due and diligent inquiry and investigation, all of the Improvements and the use of the
Property by the Borrower comply in all material respects with, and shall remain in material
compliance with, all applicable statutes, rules, regulations and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Property, including all applicable
health, fire and building codes, and all applicable statutes, rules and regulations pertaining to
requirements for environmental
-5-
protection, zoning and land use (collectively, “Applicable Laws”). To the knowledge
of Borrower, after due and diligent inquiry and investigation, all certifications, permits,
licenses and approvals, including, without limitation, certificates of completion and occupancy
permits required for the legal use, occupancy and operation of the Property and for the use
currently being made thereof have been obtained and are in full force and effect. To the knowledge
of Borrower, after due and diligent inquiry and investigation, all of the Improvements comply with
all material requirements of any applicable zoning and subdivision laws and ordinances.
(i) Consents Obtained. All consents, approvals, authorizations, orders or filings
with any court or governmental agency or body, if any, required for the execution, delivery and
performance of the Loan Documents by Borrower have been obtained or made.
(j) No Litigation. There are no pending actions, suits or proceedings, arbitrations
or governmental investigations against Borrower, or to the knowledge of Borrower, after due and
diligent inquiry, the Property, any Indemnitor or any Constituent Entity of Borrower or any
Indemnitor, an adverse outcome of which could reasonably be expected to materially affect the
Borrower’s performance under the Note, the Deed of Trust or the other Loan Documents.
(k) Title. Borrower has good and marketable fee simple title to the Real Estate and
Improvements, subject only to those matters expressly listed as exceptions to title or subordinate
matters in the title insurance policy (the “Permitted Exceptions”) accepted by Lender in
connection with this Deed of Trust (the “Title Insurance Policy”). Xxxxxxxx’s title to the
Property has been peaceful and undisturbed and to the best of Xxxxxxxx’s knowledge title thereto
has not been disputed or questioned. Further, Xxxxxxxx has full power and lawful authority to
grant, bargain, sell, convey, assign, transfer and mortgage its interest in the Property in the
manner and form hereby done or intended. Borrower will preserve its interest in and title to the
Property and will forever warrant and defend the same to Lender against any and all claims
whatsoever and will forever warrant and defend the validity and priority of the lien and security
interest created herein against the claims of all persons and parties whomsoever, subject, in each
case, to the Permitted Exceptions. The foregoing warranty of title shall survive the foreclosure
of this Deed of Trust and shall inure to the benefit of and be enforceable by Lender in the event
Lender acquires title to the Property pursuant to any foreclosure.
(l) Permitted Exceptions. The Permitted Exceptions do not materially and adversely
affect (1) the ability of the Borrower to pay in full the principal and interest on the Note in the
manner provided for therein or (2) the use of the Property for the use currently being made
thereof, the operation of the Property as currently being operated or the value of the Property.
(m) First Lien. Upon the execution by the Borrower and the recording of this Deed of
Trust in the land records of Tarrant, Taxas, and upon the execution and filing of UCC-1 financing
statements or amendments thereto with the State of Delaware Secretary of State, the Lender will
have a valid first lien on the Property and a valid security interest in all personal property
encumbered hereby, subject to no liens, charges or encumbrances other than the Permitted
Exceptions.
(n) ERISA. Borrower is not an entity subject to regulation or restriction under
ERISA, and no assets of Borrower are “plan assets” (as defined in ERISA).
(o) Contingent Liabilities. Neither Borrower nor any Indemnitor has any known
material contingent liabilities, except for contingent liabilities of Borrower or any Indemnitor
explicitly set forth on the financial statements of Borrower and Indemnitor that were delivered to
Lender in connection with the Loan.
-6-
(p) No Other Obligations. The Borrower has no material financial obligation under any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the
Borrower is a party or by which the Borrower or the Property is otherwise bound, other than (i)
obligations incurred in the ordinary course of the operation of the Property that do not violate
Section 1.27, (ii) the Obligations, and (iii) the Principal Lease.
(q) Fraudulent Conveyance. The Borrower (1) has not entered into the Loan or any Loan
Document with the actual intent to hinder, delay, or defraud any creditor and (2) the Borrower
Parties have received reasonably equivalent value in exchange for their obligations under the Loan
Documents. Giving effect to the Loan contemplated by the Loan Documents, the fair saleable value
of the Borrower Parties’ assets exceed and will, immediately following the execution and delivery
of the Loan Documents, exceed the Borrower Parties’ total liabilities, including, without
limitation, subordinated, unliquidated, disputed or contingent liabilities. The fair saleable
value of the Borrower Parties’ assets is and will, immediately following the execution and delivery
of the Loan Documents (including the Loan Documents as defined in those certain Deed of Trusts
given by the two other Borrower Parties to secure the Note (collectively, the “Other Loan
Documents”), be greater than the Borrower Parties’ probable liabilities, including the maximum
amount of its contingent liabilities or its debts as such debts become absolute and matured. To
the Borrower’s knowledge, after due and diligent inquiry and investigation, the Borrower Parties’
assets do not and, immediately following the execution and delivery of the Loan Documents and the
Other Loan Documents will not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. The Borrower Parties do not intend to, and do not
believe that they will, incur debts and liabilities (including, without limitation, contingent
liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into
account the timing and amounts to be payable on or in respect of obligations of the Borrower
Parties).
(r) Investment Company Act. Borrower is not (1) an “investment company” or a company
“controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940,
as amended; (2) a “holding company” or a “subsidiary company” of a “holding company” or an
“affiliate” of either a “holding company” or a “subsidiary company” within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (3) subject to any other federal or
state law or regulation which purports to restrict or regulate its ability to borrow money.
(s) Access/Utilities. The Property has vehicular and pedestrian access to and from
public ways that is adequate for the use of the Property as of the date hereof, and such access is
pursuant to either access easements for the benefit of the Property or as a result of the Real
Property abutting a public way. The Property is served by water, sewer, sanitary sewer and storm
drain facilities that provide such utilities in amounts that are adequate for the use of the
Property as of the date hereof. All public utilities necessary to the continued use and enjoyment
of the Property as presently used and enjoyed are located in the public right-of-way abutting the
Property, or enter the Property via permanent easements not subject to termination except with the
consent of Borrower, and all such utilities are connected so as to serve the Property. All roads
providing vehicular and pedestrian access from the Property to public ways are located on either
access easements for the benefit of the Property of the Property. All such roads necessary for the
full utilization of the Property for its current purpose have been completed.
(t) Taxes Paid. Xxxxxxxx has filed all federal, state, county and municipal tax
returns required to have been filed by Xxxxxxxx, and has paid all taxes which have become due
pursuant to such returns or to any notice of assessment received by Xxxxxxxx. Borrower has no
knowledge of any basis for additional assessment with respect to such Taxes and Other Charges.
Further, the Property is free from any liens for delinquent Taxes and Other Charges.
-7-
(u) Single Tax Lot. The Real Estate consists of a single lot or multiple tax lots; no
portion of said tax lot(s) covers property other than the Real Estate or a portion of the Real
Estate and no portion of the Real Estate lies in any other tax lot.
(v) Special Assessments. Except as disclosed in the Title Insurance Policy, to the
knowledge of Borrower, there are no pending or, to the knowledge of Borrower, proposed special or
other assessments for public improvements or otherwise affecting the Property, nor, to the
knowledge of Borrower, are there any contemplated improvements to the Property that may result in
such special or other assessments.
(w) Flood Zone. The Property is not located in a flood hazard area as defined by the
Federal Insurance Administration.
(x) Seismic Exposure. The Real Estate is not located in Zone 3 or Zone 4 of the
“Seismic Zone Map of the U.S.”
(y) Misstatements of Fact. No statement of fact made in the Loan Documents contains
any untrue statement of a material fact. All reports, certificates, affidavits, representations,
statements and other data furnished by or on behalf of Xxxxxxxx, Indemnitor and each Constituent
Entity of each of them to Lender, or their respective agents, in connection with the Loan are true
and correct in all material respects.
(z) Condition of Improvements. The Property has not been materially damaged by fire,
water, wind or other cause of loss since the date of the inspection of the Property by Xxxxxx’s
property consultant as set forth in the property condition report prepared by said consultant and
delivered to Lender in connection with the Loan (the “Property Condition Report”). Except as set
forth in the Property Condition Report, the Improvements are structurally sound, in good repair and
free of defects in materials and workmanship. Except as set forth in the Property Condition
Report, to Xxxxxxxx’s knowledge after due and diligent inquiry and investigation all major building
systems located within the Improvements, including, without limitation, the heating and air
conditioning systems and the electrical and plumbing systems, are in good working order and
condition.
(aa) No Insolvency or Judgment. Neither Borrower, nor any Indemnitor, nor any
Constituent Entity of Borrower or any Indemnitor, (a) has been or is currently the subject of or a
party to any completed or pending bankruptcy, reorganization or insolvency proceeding; or (b) is
currently the subject of any judgment unsatisfied of record or docketed in any court of the state
in which the Property is located or in any other court located in the United States. The proposed
Loan will not render the Borrower and the Borrower Parties (collectively) or any general partner or
member of Borrower insolvent. As used in this Deed of Trust, the term “insolvent” means that the
sum total of all of an entity’s liabilities (whether secured or unsecured, contingent or fixed, or
liquidated or unliquidated) is in excess of the value of all such entity’s non-exempt assets, i.e.,
all of the assets of the entity that are available to satisfy claims of creditors.
(bb) No Condemnation. No proceeding for the partial or total condemnation or taking
of the Property is pending, or the knowledge of Borrower, threatened.
(cc) No Labor or Materialmen Claims. All parties furnishing labor and materials to
Borrower or the Property (on behalf of Borrower) have been paid in full (or will be paid in the
ordinary course of business, provided that the amount due such parties are not due and payable as
of the date hereof) and, except for such liens or claims expressly disclosed in, and insured
against by the Title Insurance Policy, there are no mechanics’, laborers’ or materialmen’s liens or
claims outstanding for
-8-
work, labor or materials affecting the Property, whether prior to, equal with or subordinate
to the lien of the Deed of Trust.
(dd) No Purchase Options. No Tenant, person, party, firm, corporation or other entity
has an option, right of first offer, or right of first refusal, to purchase the Property, any
portion thereof or any interest therein, except as specifically described in the Title Insurance
Policy and in the Principal Lease.
(ee) Leases. The Property is not subject to any leases, subleases, licenses,
concessions or other agreements related to the leasing or renting of the Property or any portion
thereof, except for Principal Leases (as amended from time to time), as set forth on the Rent Roll
(as defined herein). No person has any possessory interest in the Property or right to occupy the
same, other than pursuant to the Principal Lease disclosed in the Rent Roll. Borrower hereby
represents that: (i) Borrower has delivered a schedule (the “Rent Roll”) of all Leases
affecting the Property, which is attached to the Closing Certificate, which accurately and
completely sets forth in all material respects for each Lease, the following: the name of the
Tenant, the Lease expiration date, the space demised and amount of rent, which Rent Roll is true,
correct and complete as of the date hereof; and (ii) the Borrower is the owner and holder of the
landlord’s interest under the Leases, and there are no prior assignments of all or any portion of
the Leases or any portion of the Rents and Profits which are presently outstanding and have
priority over the assignment of leases and rents contained herein in Section 1.9 given by Borrower
to Lender; and (iii) each Lease constitutes the legal, valid and binding obligation of Borrower;
and (iv) to Xxxxxxxx’s knowledge, after due and diligent inquiry and investigation no default
exists, or with the passing of time or the giving of notice or both would exist, under any Lease
which would, in the aggregate, have a material adverse effect on Borrower or the Property; and (v)
except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to
Lender in connection with the Loan, to the Borrower’s knowledge, after due and diligent inquiry and
investigation, no Tenant has any offset or defense to the payment of rent under its Lease; and (vi)
except as disclosed in writing in an estoppel certificate by such Tenant that has been delivered to
Lender in connection with the Loan, no Tenant has, as of the date hereof, paid rent under its Lease
more than one (1) month in advance, and the rents under such Lease has not been waived, released,
or otherwise discharged or compromised; and (vii) except as disclosed in writing in the estoppel
certificate delivered to Lender in connection with the Loan all work to be performed by Borrower
under each Lease has been substantially performed, all contributions to be made by Borrower to the
Tenant thereunder have been made and all other conditions precedent to each Tenant’s obligations
thereunder have been satisfied; and (viii) except as disclosed in writing in an estoppel
certificate by such Tenant that has been delivered to and accepted by Xxxxxx in connection with the
Loan, each Tenant under a Lease has entered into occupancy of the demised premises; and (ix)
Borrower has delivered to Lender true, correct and complete copies of all Leases described in the
Rent Roll; and (x) to the best of Borrower’s knowledge and belief, each Tenant is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment for the benefit of
creditors; and (xi) except as specifically described in the Title Insurance Policy, no Lease
provides any party with the right to obtain a lien or encumbrance upon the Property superior to the
lien of this Deed of Trust.
(ff) Appraisal. All information provided by or on behalf of Borrower to the appraiser
in connection therewith was true, correct and complete in all material respects at the time such
information was provided.
(gg) Boundary Lines. Except as disclosed on the survey of the Property delivered to
Lender in connection with the Loan, the Improvements which were included in determining the
appraised value of the Property lie wholly within the boundaries and building restriction lines of
the Property, and except as specifically described in the Title Insurance Policy, no improvements
on adjoining properties
-9-
encroach upon the Property and no easements or other encumbrances upon the Real Estate
encroach upon any of the Improvements, in each case so as to affect the value or marketability of
the Property.
(hh) Survey. The survey of the Property does not fail to reflect any material matter
affecting the Property or the title thereto of which the Borrower has knowledge.
(ii) Intentionally Omitted.
(jj) Use of Rents and Profits. All Rents and Profits generated by or derived from the
Property shall first be utilized solely for current expenses directly attributable to the ownership
and operation of the Property, including, without limitation, current expenses relating to
Borrower’s liabilities and obligations with respect to this Deed of Trust and the other Loan
Documents, and none of the Rents and Profits generated by or derived from the Property shall be
diverted by Borrower or utilized for any other purposes unless all such current expenses
attributable to the ownership and operation of the Property have been fully paid and satisfied.
(kk) No Broker. No financial advisors, brokers, underwriters, placement agents,
agents or finders have been dealt with by the Borrower in connection with the Loan, except for any
broker whose full commission is being paid out of the proceeds of the Loan and is set forth in the
written instructions from Borrower to Lender regarding disbursement of the proceeds of the Loan.
(ll) Conviction of Criminal Acts. Each of Borrower and Indemnitor has never been
convicted of a crime (which shall not include traffic violations) and is not currently the subject
of any pending or threatened criminal investigation or proceeding. Xxxxxxxx has disclosed to
Lender in writing any civil action (whether or not such action resulted in a judgment) and
regulatory or enforcement proceeding to which Borrower and any Indemnitor was a defendant or
respondent in which it was alleged that Borrower or such Indemnitor engaged in fraud, deception or
misrepresentation, or with respect to which Borrower or any Indemnitor was ordered or agreed not to
engage in the banking or securities industry.
(mm) Security Agreements. There are no security agreements or financing statements
affecting or encumbering any of the Property other than the security agreements and financing
statements created in favor of Lender.
(nn) Homestead. The Property forms no part of any property owned, used or claimed by
Xxxxxxxx as a residence or business homestead and is not exempt from forced sale under the laws of
the State in which the Real Estate is located. Borrower hereby disclaims and renounces each and
every claim to all or any portion of the Property as a homestead.
(oo) Contracts. Borrower will comply with all of its obligations under all Contracts
which are material to the operation of the Property in accordance with Borrower’s current practice
(to the extent any non-compliance with the obligations under such Contracts shall result in an
event of default or adversely affect the respective Contract or the Property in any manner as
determined by Lender in its discretion), and with all material obligations under all other
Contracts.
(pp) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering Laws. (i) None
of Borrower, Managing Member, any indemnitor or guarantor, or any Person who owns any direct equity
interest in or controls Borrower or Managing Member currently is identified on the OFAC List or
otherwise qualifies as a Prohibited Person, and Borrower will implement procedures, approved by
Managing Member, to ensure that no Person who now or hereafter owns any direct equity interest in
Borrower or Managing Member is a Prohibited Person or controlled by a Prohibited Person, and (ii)
none
-10-
of Borrower, Managing Member, or any indemnitor or guarantor are in violation of any
applicable laws relating to anti-money laundering or anti-terrorism, including, without limitation,
any applicable laws related to transacting business with Prohibited Persons or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, U.S. Public Law 107-56, and the related regulations issued
thereunder, including temporary regulations, all as amended from time to time. For purposes
hereof: (1) the term “Managing Member” shall mean, if Borrower is a partnership, each
general partner of Borrower and, if Borrower is a limited liability company, each manager or
managing member of Xxxxxxxx and in each case, if applicable, each general partner or managing
member of such general partner or managing member. In the event that Borrower or any Managing
Member is a single member limited liability company, the term “Managing Member” shall include such
single member; (2) the term “Person” shall mean any individual, corporation, limited
liability company, partnership, joint venture, estate, trust, unincorporated association, any
federal, state, county or municipal government or any bureau, department or agency thereof and any
fiduciary acting in such capacity on behalf of any of the foregoing; (3) the term “Prohibited
Person” shall mean any Person identified on the OFAC List or any other Person with whom a U.S.
Person may not conduct business or transactions by prohibition of Federal law or Executive Order of
the President of the United States or America; (4) the term “OFAC List” shall mean the list
of specially designated nationals and blocked persons subject to financial sanctions that is
maintained by the U.S. Treasury Department, Office of Foreign Assets Control and accessible through
the internet website xxx.xxxxx.xxx/xxxx/x00xxx.xxx. Notwithstanding the foregoing, no
representation is made as to whether any shareholder of Gladstone Commercial Corporation (A) is
identified on the OFAC List or otherwise qualifies as a Prohibited Person, or (B) is in violation
of any applicable laws relating to anti-money laundering or anti-terrorism or the requirements of
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 and the related regulations issued thereunder, all as amended from
time to time.
(qq) Principal Lease. (i) The Principal Lease is in full force and effect, to
Xxxxxxxx’s knowledge, after due and diligent inquiry, there is no existing default under the
Principal Lease, nor is there any event which, with notice or the passage of time or both, would
constitute a default under the Principal Lease, (ii) to Xxxxxxxx’s knowledge, after due and
diligent inquiry, there is no defense, offset, claim or counterclaim in favor of any party under
the Principal Lease, (iii) there is no suit, action, proceeding or audit pending, or, to Borrower’s
knowledge, threatened against or affecting the parties to the Principal Lease or the Property,
before or by any court, administrative agency, or other governmental authority which brings into
question the validity of the Principal Lease or which, if determined adversely to any party, might
result in any adverse change to estates demised under the Principal Lease, (iv) the only real
property presently demised under the Principal Lease is the Land and Improvements, and, to such
person’s knowledge, the only person or entity presently having an interest in the Principal Lease
as tenant under the Principal Lease is Principal Xxxxxx and (v) neither the execution and delivery
of this Deed of Trust, nor any modification thereof or assignment of the beneficial interests
thereunder, constitutes a default under the Principal Lease.
(rr) Financial Condition of Borrower. Borrower is solvent.
(ss) Leasing. Borrower agrees that, upon the execution of any Lease approved or
deemed approved in accordance with Section 1.10 of this Deed of Trust, Borrower shall timely
perform all build-out, construction, tenant improvement work and other work required to be
performed by Borrower under such Lease (the foregoing, “Tenant Improvements”) and timely
pay as and when due any and all commissions to brokers in connection with such Lease (“Leasing
Commissions”; Tenant Improvements and Leasing Commissions collectively are hereinafter referred
to as “Leasing Costs”). Borrower shall perform all Tenant Improvements in a good and
workmanlike manner, in accordance with all applicable codes and regulations, and each case in a
manner satisfactory to Lender and as necessary to
-11-
maintain the Property in good condition and in compliance with all applicable laws,
ordinances, rules and regulations.
1.2 Defense of Title. If, while this Deed of Trust is in force, the title to the
Property or the interest of Lender therein shall be the subject, directly or indirectly, of any
action at law or in equity, or be attached directly or indirectly, or endangered, clouded or
adversely affected in any manner, Borrower, at Borrower’s expense, shall take all necessary and
proper steps for the defense of said title or interest, including the employment of counsel
approved by Xxxxxx (it being agreed that Lender shall not unreasonably withhold its consent to
counsel appointed pursuant to the Title Insurance Policy for such purposes), the prosecution or
defense of litigation, and the compromise or discharge of claims made against said title or
interest. Notwithstanding the foregoing, in the event that Lender determines that Borrower is not
adequately performing its obligations under this Section, Lender may, without limiting or waiving
any other rights or remedies of Lender hereunder, take such steps with respect thereto as Lender
shall deem necessary or proper; any and all third party out of pocket costs and expenses (including
reasonable attorney fees) incurred by Lender in connection therewith, together with interest
thereon at the Default Interest Rate, shall be immediately paid by Borrower on demand.
1.3 Performance of Obligations. Borrower shall pay when due the principal of and the
interest on and other amounts evidenced by the Note. Xxxxxxxx shall also pay and perform all of
the Obligations as and when due. Further, Borrower shall promptly and strictly perform and comply
with all covenants, conditions, obligations and prohibitions required of Borrower in connection
with any other document or instrument affecting title to the Property (to the extent that any
failure to comply with such documents or instruments shall endanger, cloud or adversely affect
title to the Property in any manner as determined by Lender in its discretion), or any part
thereof, regardless of whether such document or instrument is superior or subordinate to this Deed
of Trust.
1.4 Insurance. Borrower shall at no cost or expense to Lender, maintain, or cause to
be maintained, in force and effect on the Property at all times while this Deed of Trust continues
in effect the following insurance.
(a) Insurance against loss or damage to the Property by fire, windstorm, tornado and hail and
against loss and damage by such other, further and additional risks as may be now or hereafter
embraced by an “all-risk” form of insurance policy. The amount of such insurance shall be not less
than one hundred percent (100%) of the full replacement (insurable) cost of the Improvements,
furniture, furnishings, fixtures, equipment and other items (whether personalty or fixtures)
included in the Property and owned by Borrower from time to time, without reduction for
depreciation. The determination of the replacement cost amount shall be adjusted annually to
comply with the requirements of the insurer issuing such coverage or, at Xxxxxx’s election, by
reference to such indices, appraisals or information as Lender determines in its reasonable
discretion. Full replacement cost, as used herein, means, with respect to the Improvements, the
cost of replacing the Improvements without regard to deduction for depreciation, exclusive of the
cost of excavations, foundations and footings below the lowest basement floor, and means, with
respect to such furniture, furnishings, fixtures, equipment and other items, the cost of replacing
the same, in each case, with inflation guard coverage to reflect the effect of inflation, or annual
valuation. Each policy or policies shall contain a replacement cost endorsement and either an
agreed amount endorsement (to avoid the operation of any co-insurance provisions) or a waiver of
any co-insurance provisions, all subject to Lender’s approval. The deductible with respect to such
insurance shall not exceed $10,000.00 per claim.
(b) Comprehensive Commercial General Liability Insurance for personal injury, bodily injury,
death and property damage liability in amounts not less than $1,000,000.00 per occurrence and
$2,000,000.00 in the aggregate, together with umbrella coverage in amounts not less than
-12-
$5,000,000.00. During any construction on the Property by Borrower or Principal Tenant,
Xxxxxxxx’s (or Principal Tenant’s) general contractor for such construction shall also provide the
insurance required in this Subsection (b). Lender hereby retains the right to periodically
review the amount of said liability insurance being maintained by Borrower and to require an
increase in the amount of said liability insurance should Lender deem an increase to be reasonably
prudent under then existing circumstances. No deductible shall be permitted with respect to such
insurance.
(c) General boiler and machinery insurance coverage is required if steam boilers or other
pressure-fired vessels are in operation at the Property. Minimum liability amount per accident
must equal the lesser of the replacement (insurable) value of the Improvements housing such boiler
or pressure-fired machinery or $2,000,000.00. The deductible with respect to such insurance shall
not exceed $10,000.00 per claim.
(d) If the Property or any part thereof is identified by the Secretary of Housing and Urban
Development as being situated in an area now or subsequently designated as having special flood
hazards (including, without limitation, those areas designated as Zone A or Zone V), flood
insurance in an amount equal to the lesser of: (i) the minimum amount required, under the terms of
coverage, to compensate for any damage or loss on a replacement basis (or the unpaid balance of the
Obligations if replacement cost coverage is not available for the type of building insured); or
(ii) the maximum insurance available under the appropriate National Flood Insurance Administration
program. The deductible with respect to such insurance shall not exceed $25,000.00 per occurrence.
(e) During the period of any construction on the Property or renovation or alteration of the
Improvements, a so-called “Builder’s All-Risk Completed Value” or “Course of Construction”
insurance policy in non-reporting form for any Improvements under construction, renovation or
alteration in an amount approved by Lender and Worker’s Compensation Insurance covering all persons
engaged in such construction, renovation or alteration. The deductible for such insurance, if any,
shall be satisfactory to Lender.
(f) Loss of rents or loss of business income insurance in amounts sufficient to compensate
Borrower for all Rents and Profits following a casualty until completion of Restoration (as defined
in Section 1.7 below) together with an additional period of not less than twelve (12) months
thereafter. The amount of coverage shall be adjusted annually to reflect the then-current Rents
and Profits or income payable during such period. The deductible for such insurance, if any, shall
be satisfactory to Lender.
(g) Such other insurance on the Property or on any replacements or substitutions thereof or
additions thereto as may from time to time be required by Lender against other insurable hazards or
casualties which at the time are commonly insured against in the case of property similarly
situated including, without limitation, Sinkhole, Mine Subsidence, Terrorism, Earthquake and
Environmental insurance, due regard being given to the height and type of buildings, their
construction, location, use and occupancy.
All such insurance shall (i) be with insurers authorized to do business in the state within
which the Property is located and who have and maintain a rating of at least “A-” from Standard &
Poors except that Lender has approved Affiliated FM Insurance Company as the issuer of the
insurance described in Section 1.4(a) above, which insurer has, and shall maintain, a rating of at
least “A+:XV” from A.M. Best Company (or, alternatively, if the insurers maintain re-insurance with
re-insurers maintaining such rating, Lender will not unreasonably withhold its consent to
satisfying such required rating by means of a “cut-through” endorsement allowing recourse directly
against a reinsurer maintaining such rating), (ii) contain the complete address of the Property (or
a complete legal
-13-
description), (iii) be for terms of at least one year, and (iv) be subject to the approval of
Lender as to insurance companies, amounts, content, forms of policies, method by which premiums are
paid and expiration dates.
Borrower shall deliver to Lender evidence that said insurance policies have been paid current
as of the date hereof and original certificates of insurance signed by an authorized agent of the
applicable insurance companies evidencing such insurance satisfactory to Lender. Borrower shall
renew (or cause to be renewed) all such insurance and deliver (or cause to be delivered) to Lender
certificates evidencing such renewals at least thirty (30) days before any such insurance shall
expire. Without limiting the required endorsements to the insurance policies, Xxxxxxxx further
agrees that all such policies shall include a standard, non-contributory, mortgagee clause naming:
CIBC Inc., its successors and/or assigns, as their interests may appear
Attn: Real Estate Finance Group
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Real Estate Finance Group
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(x) as an additional insured under all liability insurance policies, (y) as the first mortgagee on
all property insurance policies and (z) as the loss payee on all loss of rents or loss of business
income insurance policies. Borrower further agrees that all such insurance policies: (1) shall
provide for at least thirty (30) days’ prior written notice to Lender prior to any cancellation or
termination thereof and prior to any modification thereof which affects the interest of Lender; (2)
shall contain an endorsement or agreement by the insurer that any loss shall be payable to Lender
in accordance with the terms of such policy notwithstanding any act or negligence of Borrower which
might otherwise result in forfeiture of such insurance; (3) shall waive all rights of subrogation
against Lender; (4) in the event that the Real Estate or the Improvements constitutes a legal
non-conforming use under applicable building, zoning or land use laws or ordinances, shall include
an ordinance or law coverage endorsement which will contain Coverage A: “Loss Due to Operation of
Law” (with a minimum liability limit equal to Replacement Cost With Agreed Value Endorsement),
Coverage B: “Demolition Cost” and Coverage C: “Increased Cost of Construction” coverages; and (5)
may be in the form of a blanket policy provided that, in the event that any such coverage is
provided in the form of a blanket policy, Borrower hereby acknowledges and agrees that failure to
pay any portion of the premium therefor which is not allocable to the Property or by any other
action not relating to the Property which would otherwise permit the issuer thereof to cancel the
coverage thereof, would require the Property to be insured by a separate, single-property policy.
The blanket policy must properly identify and fully protect the Property as if a separate policy
were issued for 100% of Replacement Cost at the time of loss and otherwise meet all of Lender’s
applicable insurance requirements set forth in this Section 1.4. In the event of foreclosure of
this Deed of Trust, or other transfer of title to the Property in extinguishment in whole or in
part of the Obligations, all right, title and interest of Borrower in and to all unearned insurance
premiums and proceeds payable under such policies then in force concerning the Property shall
thereupon vest in the purchaser at such foreclosure, or in Lender or other transferee in the event
of such other transfer of title whether or not the damage to the Property occurred prior to such
transfer of title. Approval of any insurance by Lender shall not be a representation of the
solvency of any insurer or the sufficiency of any amount of insurance. In the event Borrower fails
to, or fails to cause Tenant to, provide, maintain, keep in force or deliver and furnish to Lender
the policies of insurance required by this Deed of Trust or evidence of their renewal as required
herein, Lender may, but shall not be obligated to, procure such insurance and Borrower shall pay
all amounts advanced by Lender therefor, together with interest thereon at the Default Interest
Rate from and after the date advanced by Lender until actually repaid by Borrower, promptly upon
demand by Lender. Xxxxxx shall not be responsible for nor incur any liability for the insolvency of
the insurer or other failure of the insurer to perform, even though Xxxxxx has caused the insurance
to be placed with the insurer after failure of Borrower to furnish (or cause to be furnished) such
insurance. Borrower shall not obtain
-14-
insurance for the Property in addition to that required by Lender without the prior written consent
of Lender, which consent will not be unreasonably withheld provided that (i) Lender is a named
insured on such insurance, (ii) Lender receives complete copies of all policies evidencing such
insurance, and (iii) such insurance complies with all of the applicable requirements set forth
herein. To the extent that at any time Xxxxxx agrees to accept insurance from an insurer that is
rated less than the foregoing, Lender may terminate its waiver and reassert the aforesaid minimum
rating requirements upon any renewal of any insurance coverage, or at any time if the rating of any
insurer is reduced.
1.5 Payment of Taxes. Except to the extent funds are held in the Impound Account
therefor pursuant to Section 1.6 of this Deed of Trust, Borrower shall (a) pay or cause to be paid
all taxes, assessments, water rents, sewer rents, governmental impositions and other charges,
including, without limitation, vault charges and license fees for the use of vaults, chutes and
similar areas adjoining the Real Estate, now or hereafter levied or assessed or imposed against, or
which are or may become a lien upon, the Property (“Taxes”), and all ground rents,
maintenance charges and similar charges, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the “Other Charges”) when the same become due and payable,
and (b) furnish Lender with receipts (or if receipts are not immediately available, with copies of
canceled checks evidencing payment with receipts to follow promptly after they become available)
showing payment of such Taxes and Other Charges at least fifteen (15) days prior to the applicable
delinquency date therefor. Notwithstanding the foregoing, Borrower may in good faith, by
appropriate proceedings and upon notice to Lender, contest the validity, applicability or amount of
any asserted Taxes or Other Charges so long as (x) such contest is diligently pursued, (y) Lender
determines, in its subjective opinion, that such contest suspends the obligation to pay the Taxes
or Other Charges and that nonpayment of such Taxes or Other Charges will not result in the sale,
loss, forfeiture or diminution of the Property or any part thereof or any interest of Lender
therein, and (z) prior to the earlier of the commencement of such contest or the delinquency date
of the asserted Taxes or Other Charges, Borrower deposits, or causes to be deposited, adequate
security as determined by a court of competent jurisdiction, or if not required by such court, in
the Impound Account an amount determined by Lender to be adequate to cover the payment of such
Taxes or Other Charges and a reasonable additional sum to cover possible interest, costs and
penalties; provided, however, that Borrower shall promptly cause to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all interest, costs and
penalties thereon, promptly after such judgment becomes final; and provided,
further, that in any event each such contest shall be concluded, the Taxes or Other
Charges, as the case may be, together with any applicable interest, costs and penalties, shall be
paid prior to the date any writ or order is issued under which the Property may be sold, lost or
forfeited.
1.6 Tax and Insurance Impound Account. (a) Subject to Section 1.6(b) below, Borrower
shall establish and maintain with Lender at all times while this Deed of Trust continues in effect
an impound account (the “Impound Account”) for payment of Taxes and Other Charges and for the
premiums on the insurance required to be maintained with respect to Borrower and the Property
(“Insurance Premiums”) and as additional security for the Obligations. In addition to the initial
deposit to the Impound Account required simultaneously with the execution hereof, commencing on the
first Payment Date (as defined in the Note) and continuing thereafter on each Payment Date until
the Note and all other Obligations are fully paid and performed, Borrower shall pay to Lender, or
cause to be paid to Lender, for deposit to the Impound Account, an amount equal to one-twelfth
(1/12) of the amount of the annual Taxes and Other Charges that will next become due and payable on
the Property, plus one-twelfth (1/12) of the amount of the annual Insurance Premiums that will next
become due and payable, each as estimated and determined by Xxxxxx. So long as no Event of Default
(as defined in Section 2.1 hereunder) has occurred and is continuing, all sums in the Impound
Account shall be held by Xxxxxx in the Impound Account to pay said Taxes and Other Charges, in
periodic installments, and Insurance Premiums in one annual installment, in each case, before the
same become delinquent. Borrower shall be responsible for ensuring the receipt by Xxxxxx, at least
thirty (30) days prior to the respective due date for
-15-
payment thereof, of all bills, invoices and statements for all Taxes and Other Charges, and
all Insurance Premiums, and so long as no Event of Default has occurred and is continuing, Lender
shall pay the governmental authority or other party entitled thereto directly to the extent funds
are available for such purpose in the Impound Account. In making any payment from the Impound
Account, Xxxxxx shall be entitled to rely on any bill, statement or estimate procured from the
appropriate public office or insurance company or agent without any inquiry into the accuracy of
such bill, statement or estimate and without any inquiry into the accuracy, validity,
enforceability or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or
title or claim thereof. The Impound Account shall not, unless otherwise explicitly required by
applicable law, be or be deemed to be escrow or trust funds, but, at Xxxxxx’s option and in
Xxxxxx’s discretion, may either be held in a separate account or be commingled by Lender with the
general funds of Lender. No interest on the funds contained in the Impound Account shall be paid
by Xxxxxx to Borrower. The Impound Account is solely for the protection of Lender and entails no
responsibility on Xxxxxx’s part beyond the payment of Taxes and Other Charges, and of Insurance
Premiums, following receipt of bills, invoices or statements therefor in accordance with the terms
hereof and beyond the allowing of due credit for the sums actually received. Upon assignment of
this Deed of Trust by Xxxxxx, any funds in the Impound Account shall be turned over to the assignee
and any responsibility of Lender, as assignor, with respect to such funds shall terminate. If the
total funds in the Impound Account are reasonably determined by Lender to be in excess of the
amount of payments required by Lender for the purposes of the Impound Account, such excess may be
credited by Xxxxxx on the subsequent payment to be made hereunder or, if such excess is greater
than the amounts due from Borrower to Lender in the month following such determination (and if no
Event of Default is then continuing and no event has occurred, and no state of facts exists, which
in either case would, with the giving of notice and/or the passage of time, constitute an Event of
Default (any such event or state of facts, a “Default”) is then continuing), refunded to Borrower.
If at any time Lender determines that, with the making of all monthly deposits to the Impound
Account when due, the Impound Account nonetheless would not contain sufficient funds to pay the
next due periodic installments of all Taxes and Other Charges at least 30 days prior to the
delinquency date thereof, or to pay the next due annual Insurance Premiums at least 30 days prior
to the due date thereof, Borrower shall, within ten (10) days after receipt of written notice
thereof, deposit with Lender the full amount of any such deficiency. If the Borrower shall fail to
deposit with Lender the full amount of such deficiency as provided above, Lender shall have the
option, but not the obligation, to make such deposit and all amounts so deposited by Lender,
together with interest thereon at the Default Interest Rate from the date incurred by Xxxxxx until
actually paid by Borrower, shall be immediately paid by Borrower on demand. At any time during the
continuance of an Event of Default, Lender may, but shall not be obligated to, apply at any time
the balance then remaining in the Impound Account against the Obligations in whatever order Lender
shall subjectively determine. No such application of the Impound Account shall be deemed to cure
any Default or Event of Default hereunder, and any such application shall not limit Borrower’s
obligation to deposit any deficiency of which Lender gives notice. Upon full payment of the
Obligations in accordance with its terms or at such earlier time as Lender may elect, the balance
of the Impound Account then in Xxxxxx’s possession shall be paid over to Borrower and no other
party shall have any right or claim thereto.
(b) Notwithstanding the provisions of Section 1.6(a) to the contrary, provided and on
condition that each and all of the Tax and Insurance Conditions Precedent (as hereinafter defined)
are satisfied and remain satisfied at all times, Borrower shall not be required to fund the Impound
Account on account of Taxes and Other Charges and Insurance Premiums as provided herein. If at any
time any or all of the Tax and Insurance Conditions Precedent are no longer met to the satisfaction
of Lender, Borrower shall immediately begin and shall continue to fund the Impound Account on
account of Taxes and Other Charges and Insurance Premiums as provided herein. The “Tax and
Insurance Conditions Precedent” means the following conditions precedent: (i) no Event of
Default exists, (ii) no default has occurred and is continuing under the Principal Lease, (iii)
tenant under the Principal Lease is obligated to pay all Taxes and Other Charges and Insurance
Premiums under the Principal Lease, (iv) Borrower shall pay or cause to
-16-
be paid all Taxes and Other Charges and Insurance Premiums to be paid as required under
Sections 1.4 and 1.5 of this Deed of Trust (including without limitation the payment of
Insurance Premiums for terrorism insurance) and (v) Borrower shall furnish Lender with receipts (or
if receipts are not immediately available, with copies of canceled checks evidencing payment with
receipts to follow promptly after they become available) showing payment of such Taxes and Other
Charges and Insurance Premiums at least fifteen (15) days prior to the respective applicable
delinquency date therefor.
1.7 Condemnation and Casualty. Borrower shall give Lender prompt written notice of
the occurrence of any casualty (other than a de minimus casualty) affecting, or the institution of
any proceedings for eminent domain or for the condemnation of, the Property or any portion thereof.
All insurance proceeds on the Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the Property or for any
damage or injury to it for any loss or diminution in value of the Property, are hereby assigned to
and shall be paid to Lender. Lender may participate in any suits or proceedings relating to any
such proceeds, causes of action, claims, compensation, awards or recoveries and Lender is hereby
authorized, in its own name or in Borrower’s name, to adjust any loss covered by insurance or any
condemnation claim or cause of action, and to settle or compromise any claim or cause of action in
connection therewith, and Borrower shall from time to time deliver to Lender any instruments
required to permit such participation; provided, however, that so long as
no Event of Default is continuing, Lender shall not participate in the adjustment of, and Borrower
shall have the right to directly receive proceeds with respect to, any loss which is not in excess
of the lesser of (i) ten percent (10%) of the then outstanding principal balance of the Note and
(ii) $500,000.00. Except as provided in the foregoing sentence, Lender may, at Lender’s option,
(y) hold the balance of any of such proceeds to be used to reimburse Borrower for the cost of
restoring and repairing the Property to the equivalent of its condition immediately prior to the
casualty or, in the case of condemnation, to a condition approved by Lender (the “Restoration”),
and require Borrower to restore the Property to the equivalent of its original condition or to a
condition approved by Lender, or (z) apply the balance of such proceeds to the payment of the
Obligations, whether or not then due. To the extent Lender, in accordance with the terms hereof,
determines to apply insurance or condemnation proceeds to Restoration, Lender shall do so in
accordance with Lender’s then-current policies relating to the, as applicable, restoration of
casualty damage on similar properties or restoration or rebuilding of properties that have been the
subject of a partial condemnation. Lender shall not exercise its option to apply insurance
proceeds or condemnation proceeds to the payment of the Obligations if all of the following
conditions are met: (1) no Default or Event of Default has occurred and is continuing; (2) in the
case of casualty, less than forty percent (40%) of the Improvements have been damaged, or in the
case of a taking, less than twenty-five percent (25%) of the Improvements have been taken; (3)
Lender determines, in its discretion, that there will be sufficient funds to complete the
Restoration (including, without limitation, by means of a deposit of any shortfall by Borrower with
Lender prior to the commencement of the Restoration or promptly upon Lender’s determination that
such a shortfall exists); (4) Lender determines, in its discretion, that the rental income from the
Property after completion of the Restoration will be sufficient to meet all operating costs and
other expenses, deposits to the Impound Account, deposits to reserves and loan repayment
obligations relating to the Property and that the debt service coverage ratio for the Property
after Restoration will be the same as on the closing date of the Loan and the ratio of the loan to
value after Restoration will be the same as on the closing date of the Loan; (5) Lender determines,
in its discretion, that (A) the Restoration will be completed before the earlier of (i) one year
before the Anticipated Balloon Date of
the Note or (ii) one year after the date of the loss or
casualty and (B) the rent loss insurance or business interruption insurance referenced in Section
1.4(f) above will cover all payments due under the Loan during the completion of the Restoration;
(6) upon Lender’s request, Borrower provides Lender evidence of the availability during and after
the Restoration of the insurance required to be maintained by Borrower pursuant to Section 1.4; (7)
Borrower provides Lender with written notice within five business (5) days after settlement of the
aforesaid insurance or condemnation claim of its request to undertake a Restoration; and (8) the
Principal Lease is in full force and effect, the tenant under the Principal Lease
-17-
does not have the right to terminate the Principal Lease due to such casualty or taking (as
the case may be), or the tenant under the Principal Lease affirms in writing that it has waived any
right to terminate the Principal Lease as a result of such casualty or taking (as the case may be).
Except as provided in the Note any application of any awards or proceeds to the Obligations
shall not extend or postpone the due date of any monthly installments referred to in the Note or
the Loan Documents or change the amount of such installments. Xxxxxxxx agrees to execute such
further evidence of assignment of any awards or proceeds as Lender may require. Any reduction in
the Obligations resulting from Xxxxxx’s application of any sums received by it hereunder shall take
effect only when Xxxxxx actually receives such sums and elects to apply such sums to the
Obligations and, in any event, the unpaid portion of the Obligations shall remain in full force and
effect and Borrower shall not be excused in the payment thereof. Except as provided in the Note,
partial payments received by Xxxxxx, as described in the preceding sentence, shall be applied first
to the final payment due under the Note and thereafter to installments due under the Note in the
inverse order of their due date. If Borrower elects to effect a Restoration, Borrower shall
promptly and diligently, at Borrower’s sole cost and expense and regardless of whether the
insurance proceeds or condemnation award, as appropriate, shall be sufficient for the purpose,
restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and
character immediately prior to such casualty or partial taking in accordance with the foregoing
provisions and Borrower shall pay to Lender all costs and expenses of Lender incurred in
administering said rebuilding, restoration or repair, provided the Lender makes such proceeds or
award available for such purpose. Xxxxxxxx agrees to execute and deliver from time to time such
further instruments as may be requested by Xxxxxx to confirm the foregoing assignment to Lender of
any award, damage, insurance proceeds, payment or other compensation. Subject to the preceding
provisions of this Section 1.7, Lender is hereby irrevocably constituted and appointed the
attorney-in-fact of Borrower (which power of attorney shall be irrevocable so long as any
Obligations is outstanding, shall be deemed coupled with an interest, shall survive the voluntary
or involuntary dissolution of Borrower and shall not be affected by any disability or incapacity
suffered by Borrower subsequent to the date hereof), with full power of substitution, subject to
the terms of this section, to settle for, collect and receive any such awards, damages, insurance
proceeds, payments or other compensation from the parties or authorities making the same, to appear
in and prosecute any proceedings therefor and to give receipts and acquittances therefor.
1.8 Mechanics’ Liens. Borrower shall pay or cause to be paid when due all claims and
demands of mechanics, materialmen, laborers and others for any work performed or materials
delivered for the Real Estate or Improvements; provided, however, that, Borrower
shall have the right to contest in good faith any such claim or demand, so long as it does so
diligently, by appropriate proceedings and without prejudice to Lender, and provided that neither
the Property nor any interest therein would be in any danger of sale, loss or forfeiture as a
result of such proceeding or contest. In the event Borrower shall contest any such claim or
demand, Borrower shall promptly notify Lender of such contest and thereafter shall, upon Xxxxxx’s
request, promptly provide a bond, cash deposit or other security satisfactory to Lender to protect
Xxxxxx’s interest and security should the contest be unsuccessful. If Borrower shall fail to
immediately discharge or provide security against any such claim or demand as aforesaid, Lender may
do so and any and all expenses incurred by Xxxxxx, together with interest thereon at the Default
Interest Rate from the date incurred by Xxxxxx until actually paid by Xxxxxxxx, shall be
immediately paid by Borrower on demand.
1.9 Assignment of Leases and Xxxxx and Profits. As additional and collateral security
for the payment of the Obligations and cumulative of any and all rights and remedies herein
provided for, Borrower hereby absolutely and presently assigns to Lender all existing and future
Leases, and all existing and future Rents and Profits. Borrower hereby grants to Lender the sole,
exclusive and immediate right, without taking possession of the Property, to demand, collect (by
suit or otherwise),
-18-
receive and give valid and sufficient receipts for any and all of said Xxxxx and Profits, for
which purpose Borrower does hereby irrevocably make, constitute and appoint Lender its
attorney-in-fact with full power to appoint substitutes or a trustee to accomplish such purpose
(which power of attorney shall be irrevocable so long as any Obligations is outstanding, shall be
deemed to be coupled with an interest, shall survive the voluntary or involuntary dissolution of
Borrower and shall not be affected by any disability or incapacity suffered by Borrower subsequent
to the date hereof). Lender shall be without liability for any loss that may arise from a failure
or inability to collect Rents and Profits, proceeds or other payments except for loss that arises
solely and directly from Lender’s gross negligence or willful misconduct. However, so long as an
Event of Default is not continuing under this Deed of Trust, Borrower shall have a license to
collect and receive the Rents and Profits when due and prepayments thereof for not more than one
month prior to due date thereof. During the continuance of an Event of Default, Borrower’s license
shall automatically terminate without notice to Borrower and Lender may thereafter, without taking
possession of the Property, collect the Rents and Profits itself or by an agent or receiver. From
and after the termination of such license, Borrower shall be the agent of Lender in collection of
the Rents and Profits and all of the Rents and Profits so collected by Borrower shall be held in
trust by Borrower for the sole and exclusive benefit of Lender and Borrower shall, within one (1)
business day after receipt of any Rents and Profits, pay the same to Lender to be applied by Xxxxxx
as hereinafter set forth. Borrower hereby irrevocably agrees that any Tenant paying Rents and
Profits as directed by Xxxxxx shall be deemed to have paid such amount in satisfaction of its
obligation under such Tenant’s Lease, and each Tenant may rely on such agreement by Borrower.
Neither the demand for or collection of Rents and Profits by Xxxxxx, nor the exercise of Xxxxxx’s
rights as assignee of the Leases, shall constitute any assumption by Lender of any obligations
under any Lease or other agreement relating thereto. Xxxxxx is obligated to account only for such
Rents and Profits as are actually collected or received by Xxxxxx. Xxxxxxxx irrevocably agrees and
consents that the respective payors of the Rents and Profits shall, upon demand and notice from
Lender of an Event of Default hereunder, pay said Xxxxx and Profits to Lender without liability to
determine the actual existence of any Event of Default claimed by Xxxxxx. Borrower hereby waives
any right, claim or demand which Borrower may now or hereafter have against any such payor by
reason of such payment of Rents and Profits to Lender, and any such payment shall discharge such
payor’s obligation to make such payment to Borrower. All Rents and Profits collected or received
by Xxxxxx shall be applied against all third party out of pocket expenses of collection, including,
without limitation, reasonable attorneys’ fees, against third party out of pocket costs of
operation and management of the Property and against the Obligations, in whatever order or priority
as to any of the items so mentioned as Lender directs in its sole subjective discretion and without
regard to the adequacy of its security. Neither the exercise by Xxxxxx of any rights under this
Section nor the application of any Rents and Profits to the Obligations shall cure or be deemed a
waiver of any Default or Event of Default hereunder. The assignment of Leases and of Rents and
Profits hereinabove granted shall continue in full force and effect during any period of
foreclosure or redemption with respect to the Property.
1.10 Leases.
(a) Entering Into Leases. Borrower will not enter into, modify, amend, consent to the
cancellation of or terminate any Lease (including, without limitation, the Principal Lease),
whether now existing or hereafter entered into, without the prior written consent of Lender which
consent may be granted or withheld in Xxxxxx’s sole discretion.
(b) Covenants Regarding Leases. Borrower (i) shall observe and perform all the
obligations imposed upon the lessor under each Lease in all material respects, and shall not do or
permit to be done anything to impair the value of any Lease as security for the Obligations; (ii)
upon request (which request is hereby deemed given with respect to any “Major Lease”, as defined
below), shall promptly send copies to Lender of all notices of default which Borrower shall send or
receive thereunder;
-19-
(iii) shall enforce all of the material terms, covenants and conditions contained in each
Lease upon the part of the Tenant thereunder to be observed or performed, (iv) shall not collect
any of the Rents more than one (1) month in advance (it being acknowledged that security deposits
shall not be deemed Rents collected in advance); (v) shall not execute any other assignment of the
lessor’s interest in any of the Leases or the Rents and Profits (other than to Lender as security
for the Obligations); and (vi) shall not consent to any assignment of or subletting under any Lease
not in accordance with the terms of such Lease, in each case without the prior written consent of
Lender. Within 30 days after Xxxxxx’s request therefor (which request shall not be made more than
the lesser of twice in any calendar year absent an Event of Default) or the maximum number of
estoppel certificates the Tenant under the Lease is required to provide, Borrower shall deliver to
Lender an estoppel certificate from each Tenant.
(c) Amendments to Leases. Borrower shall not, without the consent of Lender, amend,
modify or waive the provisions of any Lease or terminate, reduce rents under, accept a surrender of
space under, or shorten the term of, any Lease, sublease or sub-sublease (including any guaranty,
letter of credit or other credit support with respect thereto) (the foregoing, collectively, a
“Lease Modification”).
(d) Security Deposits. All security deposits of tenants, whether held in cash or in
any other form, shall be held in compliance with applicable law. None of such security deposits
shall be commingled with any other funds of Borrower or any other person. Any bond or other
instrument which Borrower is permitted to hold in lieu of cash security deposits under any
applicable legal requirements shall be maintained in full force and effect in the full amount of
such deposits unless replaced by cash deposits as hereinabove described; shall be issued by an
institution reasonably satisfactory to Lender; shall, if permitted pursuant to any applicable legal
requirements, name Lender as payee or mortgagee thereunder or, at Lender’s option, be assigned or
fully assignable to Lender; and shall, in all respects, comply with any applicable legal
requirements and otherwise be reasonably satisfactory to Lender. Borrower shall, upon request,
provide Lender with evidence reasonably satisfactory to Lender of Borrower’s compliance with the
foregoing. Upon an Event of Default under this Deed of Trust, Borrower shall, immediately upon
Xxxxxx’s request (if permitted by applicable law), deliver to Lender the security deposits (and any
interest previously earned thereon and not disbursed to the person(s) lawfully entitled to receive
same) with respect to all or any portion of the Property, to be held by Lender subject to the terms
of the Leases.
(e) Tenant Financial Information. Borrower shall cause each Lease entered into on or
after the date hereof to require the Tenant under such Lease to deliver to Borrower periodic
operating statements with respect to (i) such Tenant’s operations at the Property, and (ii) the
operations of such Tenant and, if applicable, any parent or affiliated entity of such Tenant which
operates, or has subsidiaries that operate, comparable businesses (collectively, “Tenant
Financial Information”). Borrower shall, from time to time promptly upon request of Lender, to
the extent permitted under the applicable Lease, request Tenant Financial Information from the
Tenant and promptly upon receipt thereof, deliver such Tenant Financial Information to Lender,
provided, however, that (1) prior to a Secondary Market Transaction consisting of a securitization,
Lender shall not require Borrower to request Tenant Financial Information more than three (3)
times, and (2) following a Secondary Market Transaction consisting of a securitization, provided no
Event of Default is continuing, Lender shall not request such information without reasonable cause
(which reasonable cause shall include, without limitation, the occurrence of any default by a
Tenant or if such Tenant ceases to conduct its business in the premises demised by such Principal
Lease).
-20-
1.11 Alienation and Further Encumbrances.
(a) Notwithstanding anything to the contrary contained in Section 5.6 hereof, neither the
Property, nor any part thereof or interest therein (including without limitation, any fee,
leasehold or subleasehold interest therein), shall be sold, conveyed, disposed of, alienated,
hypothecated, leased (except to Tenants under Leases which are not in violation of Section 1.10
hereof), assigned, pledged, mortgaged, further encumbered or otherwise transferred, nor shall
Borrower be divested of its title to the Property or any interest therein, in any manner or way,
whether voluntarily or involuntarily (any of the foregoing, a “Transfer”), except as
expressly set forth in this Section 1.11, in each case without the prior written consent of Lender
being first obtained, which consent may be withheld in Xxxxxx’s sole discretion. For the purposes
of this Section 1.11, a “Transfer” shall also include (i) transfers of direct or indirect ownership
interests in Borrower, and the creation of new or additional ownership interests in Borrower, or in
any Constituent Entity of Borrower, in each case except as set forth in Section 1.11(c) below, (ii)
an installment sales agreement with respect to the Property or any portion thereof, (iii) a Lease
of all or substantially all of the Property other than for actual occupancy by a space tenant
thereunder, (iv) any sale or assignment of any of Borrower’s right, title and interest in, to and
under any Leases or Rents and Profits, other than to Lender, (v) if Borrower or any Constituent
Entity of Borrower is a partnership or joint venture, the addition, change, removal or resignation
of any general partner, or the transfer or pledge of any interest (whether as a general partner or
limited partner) of any general partner in such partnership, and (vi) if Borrower or any
Constituent Entity of Borrower is a limited liability company, the addition, change, removal or
resignation of any manager or managing member, or the transfer or pledge of any interest (whether
as a managing member or otherwise) of such manager or managing member in such limited liability
company, or the transfer of control (as defined in Section 1.27) of such manager or managing
member.
(b) Notwithstanding the foregoing provisions of this Section, Lender shall not unreasonably
withhold its consent to the sale of the Property in its entirety (hereinafter, “Sale”) to a
single-purpose entity with organizational documents containing provisions substantially similar to
those set forth in Section 1.27 and otherwise reasonably acceptable to Lender (hereinafter,
“Buyer”) provided that such Sale occurs after the earlier to occur of a Secondary Market
Transaction (as defined herein) and the second (2nd) anniversary of the date hereof, and
each of the following terms and conditions are satisfied in connection with such Sale:
(1) No Default or Event of Default is then continuing;
(2) Xxxxxxxx gives Xxxxxx written notice of the terms of such prospective Sale not less than
thirty (30) days before the date on which such Sale is scheduled to close, accompanied by all
information concerning the proposed Buyer as Lender would require in evaluating an initial
extension of credit to a borrower and a non-refundable application fee in the amount of $2,500.00.
Lender shall have the right to approve or disapprove the proposed Buyer in its reasonable
discretion (it being acknowledged that Lender may, as a condition to approving any proposed Buyer,
require confirmation in writing from each of the Rating Agencies (as defined herein) that such Sale
will not result in a qualification, downgrade or withdrawal of any rating in effect immediately
prior to such Sale for any securities issued in connection with a Secondary Market Transaction),
and such approval, if given, may be given subject to such conditions as Lender may deem
appropriate;
(3) Borrower pays Lender, concurrently with the closing of such Sale, a non-refundable
assumption fee in an amount equal to all third party out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys’ fees, incurred by Lender in connection with the Sale plus
an amount equal to one percent (1.0%) of the then outstanding principal balance of the Note;
-21-
(4) Xxxxx assumes and agrees to pay the Obligations (subject to the provisions of Section 5.25
hereof) and, prior to or concurrently with the closing of such Sale, the Buyer executes, without
any cost or expense to Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate said assumption and delivers such legal opinions as Lender may require;
(5) Borrower and the Buyer execute and cause to be filed in such public records as Lender
deems appropriate, without any cost or expense to Lender, new financing statements or financing
statement amendments and any additional documents reasonably requested by Xxxxxx;
(6) Borrower causes to be delivered to Lender, without any cost or expense to Lender, such
endorsements to Lender’s title insurance policy, hazard insurance endorsements or certificates and
other similar materials as Lender may deem necessary at the time of the Sale, all in form and
substance satisfactory to Lender, including, without limitation, an endorsement or endorsements to
Lender’s title insurance policy insuring the lien of this Deed of Trust, extending the effective
date of such policy to the date of execution and delivery (or, if later, of recording) of the
assumption agreement referenced above in subparagraph (4) of this Section, with no additional
exceptions added to such policy and insuring that fee simple title to the Real Estate Property is
vested in the Buyer (or a new mortgagee policy providing substantially similar coverage as the
Lender’s title insurance policy endorsed pursuant to the foregoing provisions of this paragraph);
(7) Borrower executes and delivers to Lender, without any cost or expense to Lender, a release
of Lender, its officers, directors, employees and agents, from all claims and liability relating to
the transactions evidenced by the Loan Documents through and including the date of the closing of
the Sale, which agreement shall be in form and substance satisfactory to Lender and shall be
binding upon the Buyer;
(8) Subject to the provisions of Section 5.25 hereof, such Sale is not construed so as to
relieve Borrower of any personal liability under the Note or any of the other Loan Documents for
any acts or events occurring or obligations arising prior to or simultaneously with the closing of
such Sale and Borrower executes, without any cost or expense to Lender, such documents and
agreements as Lender shall reasonably require to evidence and effectuate the ratification of said
personal liability. Borrower shall be released from and relieved of any personal liability under
the Note or any of the other Loan Documents for any acts or events occurring or obligations arising
after the closing of such Sale; and
(9) Such Sale is not construed so as to relieve any Indemnitor of its obligations under any
Loan Document, and a Constituent Entity of the Buyer approved by Lender in its sole discretion (a
“Successor Indemnitor”) assumes the obligations of such Indemnitor and executes such
documents as may be required by Lender to evidence such assumption. Each Indemnitor shall be
released from and relieved of any of its obligations under any indemnity or guaranty executed in
connection with the Loan for any acts or events occurring or obligations arising after the closing
of such Sale;
(10) Xxxxx has furnished to Lender all appropriate papers evidencing the Buyer’s capacity and
good standing, and the authority of the signers to execute the assumption of the Loan Documents and
the Obligations, which papers shall include certified copies of all documents relating to the
organization and formation of the Buyer and of the entities, if any, which are Constituent Entities
of the Buyer, all of which shall be satisfactory to Lender;
-22-
(11) Buyer shall assume the obligations of Borrower under any management agreements pertaining
to the Property, or shall cause the new manager and management agreement to satisfy the
requirements of Section 1.24 hereof; and
(12) Buyer shall furnish an opinion of counsel satisfactory to Lender that the acquisition of
the Property and the assumption of the Loan Documents and Obligations by Buyer and, to the extent
applicable, Successor Indemnitor, was validly authorized, and duly executed and delivered, and
constitutes the legal, valid and binding obligations of Buyer and Successor Indemnitor, enforceable
against each of them in accordance with their respective terms, and with respect to such other
matters as Lender may reasonably require.
(c) Subject to Section 1.11(c)(1)(b), provided no Default shall then be continuing, the
following direct or indirect transfers of interests in Borrower, or any Constituent Entity of
Borrower, shall be permitted without the prior written consent of Lender:
(1) If (a) Borrower (or any Constituent Entity of Borrower) is a corporation, any direct or
indirect transfer of stock in such corporation, or the issuance of new stock in such corporation,
which does not result in a change of control (as defined under Rule 405 under the Securities Act of
1933, as amended) of such corporation; or (b) Borrower (or any Constituent Entity of Borrower, or
any general partner or managing member of Borrower) is a Publicly-Held Corporation (as defined
below), any direct or indirect transfer of stock in such corporation, or the issuance of new stock
in such corporation, regardless of whether a Default shall then be continuing. As used herein, the
term “Publicly-Held Corporation” means a corporation the outstanding voting stock of which
is registered under Section 12(b) or 12(g) of the Securities and Exchange Act of 1934, as amended;
(2) If Borrower (or any Constituent Entity of Borrower) is a limited partnership, any direct
or indirect transfer of limited partnership interests in such limited partnership, or the issuance
of new limited partnership interests which results in the dilution of the existing limited
partners, so that after giving effect to such transfer or issuance, (x) not more than 49% of the
equity interests in such partnership have been transferred or issued from and after the date hereof
and (y) the persons responsible for the management of the Borrower and the Property remain
unchanged;
(3) If Borrower (or any Constituent Entity of Borrower) is a limited liability company, any
direct or indirect transfer of membership interests in Borrower, or the issuance of new membership
interests which results in the dilution of the existing members, so that after giving effect to
such transfer or issuance, (x) not more than 49% of the equity interests in such limited liability
company have been transferred or issued from and after the date hereof and (y) the persons
responsible for the management of the Borrower and the Property remain unchanged; and
(4) Either (a) any transfer for estate planning purposes by the Indemnitor, or (b) any
involuntary transfer caused by the death of a holder of ownership interests in Borrower, or in any
general partner or managing member of Xxxxxxxx, in each case so long as (y) Borrower is
reconstituted, if required, following any such death and (z) either (i) those persons responsible
for the management of the Borrower and the Property remain unchanged as a result of such death or
estate planning or (ii) the person(s) to become responsible for management of the Borrower and the
Property are approved by Xxxxxx.
Borrower shall give Lender (i) prior written notice of any event set forth in Subparagraphs (1)(a),
(2) or (3) above, and (ii) prompt written notice after any event giving rise to a transfer set
forth in Subparagraph (4) above, in each case together with copies of all documents, instruments
and agreements effecting such transfer, all of which shall be certified by Borrower to be true,
correct and complete.
-23-
1.12 Payment of Utilities, Assessments, Charges, Etc. Borrower shall pay, or cause to
be paid, when due all utility charges (e.g., for gas, electricity, water and sewer services and
similar charges) which are incurred by Borrower or its agents, and all other assessments or charges
of a similar nature, or assessments payable pursuant to any restrictive covenants, whether public
or private, affecting the Real Estate and/or the Improvements or any portion thereof, whether or
not such assessments or charges are or may become liens thereon.
1.13 Access Privileges and Inspections. Lender and the agents, representatives and
employees of Lender shall, subject to the rights of tenants, have full and free access to the Real
Estate and the Improvements and any other location where books and records concerning the Property
are kept at all reasonable times and on reasonable prior notice for the purposes of inspecting the
Property and of examining, copying and making extracts from the books and records of Borrower
relating to the Property. Borrower shall lend assistance to all such agents, representatives and
employees of Xxxxxx.
1.14 Waste; Alteration of Improvements. Borrower shall not commit, suffer or permit
any physical waste on the Property nor take any actions that might invalidate any insurance carried
on the Property. Borrower shall maintain or cause to be maintained the Property in good condition
and repair. No part of the Improvements may be removed, demolished or materially altered, in each
case, without the prior written consent of Lender, except as required pursuant to Applicable Laws
or the Leases. Without the prior written consent of Lender in each case (or as expressly required
under the Leases), Borrower shall not commence construction of any improvements on the Real Estate
other than improvements required for the maintenance or repair of the Property.
1.15 Zoning. Without the prior written consent of Lender in each case, Borrower shall
not seek, make, suffer, consent to or acquiesce in any change in the zoning or conditions of use of
the Real Estate or the Improvements. If, under applicable zoning provisions, the use of all or any
part of the Real Estate or the Improvements is or becomes a nonconforming use, Borrower shall not
cause or permit such use to be discontinued or abandoned without the prior written consent of
Lender. Without Xxxxxx’s prior written consent, Borrower shall not file or subject any part of the
Real Estate or the Improvements to any declaration of condominium or co-operative or convert any
part of the Real Estate or the Improvements to a condominium, co-operative or other form of
multiple ownership and governance.
1.16 Financial Statements, Books and Records, and Informational Reporting. Borrower
shall keep accurate books and records of account of the Property and its own financial affairs
sufficient to permit the preparation of financial statements therefrom in accordance with generally
accepted accounting principles. Lender and its duly authorized representatives shall have the
right to examine, copy and audit Xxxxxxxx’s records and books of account at all reasonable times
upon reasonable prior written notice. So long as this Deed of Trust continues in effect, Borrower
shall provide to Lender, in addition to any other financial statements required hereunder or under
any of the other Loan Documents, the following financial statements and information, all of which
must be certified to Lender as being true and correct by Borrower or the person or entity to which
they pertain, as applicable, be prepared in accordance with generally accepted accounting
principles consistently applied and be in form and substance reasonably acceptable to Lender:
(a) upon request by Xxxxxx, copies of all tax returns filed by Indemnitor (which tax return
shall include Xxxxxxxx) , within thirty (30) days after the date of filing;
(b) monthly operating statements for the Property (including a current Rent Roll containing
the information set forth in Paragraph 1.1(ee) above), within fifteen (15) days after the end of
each month during the first twelve (12) months of the term of the Loan or until the occurrence of a
-24-
Secondary Market Transaction, whichever first occurs, and (ii) during any period when Borrower
is required to make payments of net cash flow to any Reserve;
(c) quarterly operating statements for the Property, within thirty (30) days after the end of
each calendar quarter;
(d) annual financial statements for Borrower (setting forth Borrower’s balance sheet and
operating statements for the Property) and each Indemnitor, within ninety (90) days after the end
of each calendar year;
(e) a current Rent Roll, containing the information set forth in Paragraph 1.1(ee) above,
dated as of January 1 of each calendar year and certified by Borrower as being true, correct and
complete, which shall be delivered to Lender on or before January 15 of each year; and
(f) such other information with respect to the Property, Borrower, the principals in Borrower,
and each Indemnitor which may reasonably be requested from time to time by Xxxxxx, within a
reasonable time after the applicable request.
If any of the aforementioned materials are not furnished to Lender within the applicable time
periods, in addition to any other rights and remedies of Lender contained herein, Lender shall have
the right, but not the obligation, to obtain the same by means of an audit by an independent
certified public accountant selected by Xxxxxx, in which event Xxxxxxxx agrees to pay, or to
reimburse Lender for, any expense of such audit and further agrees to provide all necessary
information to said accountant and to otherwise cooperate in the making of such audit.
1.17 Further Documentation. Borrower shall, on the request of Lender and at the
expense of Borrower, promptly: (a) correct any defect, error or omission which may be discovered in
the contents of this Deed of Trust or in the contents of any of the other Loan Documents; (b)
execute, acknowledge, deliver and record or file such further instruments (including, without
limitation, further mortgages, deeds of trust, security deeds, security agreements, financing
statements, continuation statements and assignments of rents or leases) and promptly do such
further acts as may be necessary, desirable or proper to carry out more effectively the purposes of
this Deed of Trust and the other Loan Documents and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof and thereof to be covered hereby and
thereby, including specifically, but without limitation, any renewals, additions, substitutions,
replacements or appurtenances to the Property; (c) execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically any financing statement) deemed
advisable by Lender to protect, continue or perfect the liens or the security interests hereunder
against the rights or interests of third persons; and (d) furnish to Lender, upon Xxxxxx’s request
(not more than twice in a calendar year, provided no Event of Default has occurred), a duly
acknowledged written statement and estoppel certificate addressed to such party or parties as
directed by Xxxxxx and in form and substance supplied by Lender, setting forth all amounts due
under the Note, stating whether any Default or Event of Default exists, stating whether any offsets
or defenses exist against the Obligations, affirming that the Loan Documents are the legal, valid
and binding obligations of Borrower, and containing such other matters as Lender may reasonably
require.
1.18 Payment of Costs; Reimbursement to Lender. Borrower shall pay all costs and
expenses of every character incurred in connection with the closing of the Loan or otherwise
attributable or chargeable to Borrower as the owner of the Property, including, without limitation,
appraisal fees, recording fees, documentary, stamp, mortgage or intangible taxes, brokerage fees
and commissions, title policy premiums and title search fees, public records search fees, escrow
fees and attorneys’ fees. Borrower shall pay to Lender any and all reasonable costs and expenses
(including, without limitation,
-25-
reasonable attorneys’ fees and expenses) in connection with any matter for which the consent
or approval of Lender is required (or which is required to be delivered to Lender for review and/or
approval) pursuant to the Loan Documents. If Borrower defaults in any such payment, which default
is not cured within any applicable grace or cure period, Lender may pay the same and Borrower shall
reimburse Lender on demand for all such costs and expenses incurred or paid by Xxxxxx, together
with such interest thereon at the Default Interest Rate from and after the date Lender makes demand
for such payment until reimbursement thereof by Borrower. Further, Xxxxxxxx shall promptly notify
Lender in writing of any litigation or litigation threatened in writing affecting the Property, or
any other demand or claim which, if enforced, could impair or threaten to impair Xxxxxx’s security
hereunder. Without limiting or waiving any other rights and remedies of Lender hereunder, if any
action or proceeding of any kind (including, but not limited to, any bankruptcy, insolvency,
arrangement, reorganization or other debtor relief proceeding) is commenced which might affect
Lender’s interest in the Property or Lender’s right to enforce its security, or upon the occurrence
of any other Event of Default, then Lender may, at its option, with or without notice to Borrower,
make any appearances, disburse any sums and take any actions as may be necessary or desirable to
protect or enforce the security of this Deed of Trust or to remedy such Event of Default (without,
however, waiving any Default). Xxxxxxxx agrees to pay on demand all expenses of Xxxxxx incurred
with respect to the foregoing (including, but not limited to, reasonable fees and disbursements of
counsel), together with interest thereon at the Default Interest Rate from and after the date on
which Lender incurs such expenses until reimbursement thereof by Xxxxxxxx. The necessity for any
such actions and of the amounts to be paid shall be determined by Lender in its discretion. Xxxxxx
is hereby empowered to enter and to authorize others to enter upon the Property or any part thereof
for the purpose of performing or observing any such defaulted term, covenant or condition without
thereby becoming liable to Borrower or any person in possession holding under Borrower. Borrower
hereby acknowledges and agrees that the remedies set forth in this Section 1.18 shall be
exercisable by Xxxxxx, and any and all payments made or costs or expenses incurred by Lender in
connection therewith shall be secured hereby and shall be, without demand, immediately repaid by
Borrower with interest thereon at the Default Interest Rate, notwithstanding the fact that such
remedies were exercised and such payments made and costs incurred by Lender after the filing by
Borrower of a voluntary case or the filing against Borrower of an involuntary case pursuant to or
within the meaning of the Bankruptcy Reform Act of 1978, as amended, Title 11 U.S.C., or after any
similar action pursuant to any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter, in effect, which may be or become
applicable to Borrower, Lender, any Indemnitor, the Obligations or any of the Loan Documents.
Borrower hereby indemnifies and holds Xxxxxx harmless from and against all loss, cost and expenses
with respect to any Event of Default hereof, any liens (i.e., judgments, mechanics’ and
materialmen’s liens, or otherwise), charges and encumbrances filed against the Property, and from
any claims and demands for damages or injury, including claims for property damage, personal injury
or wrongful death, arising out of or in connection with any accident or fire or other casualty on
the Real Estate or the Improvements or any nuisance made or suffered thereon, including, in any
case, reasonable attorneys’ fees, costs and expenses as aforesaid, excluding matters arising solely
and directly out of the Lender’s gross negligence or willful misconduct, whether at pretrial, trial
or appellate level, and such indemnity shall survive payment in full of the Obligations. This
Section shall not be construed to require Lender to incur any expenses, make any appearances or
take any actions.
1.19 Security Interest and Security Agreement. This Deed of Trust is also a security
agreement under the Uniform Commercial Code for any of the Property which, under applicable law,
may be subject to a security interest under the Uniform Commercial Code, whether acquired now or in
the future, including, without limitation, the Reserves, all products, and cash and non-cash
proceeds thereof (collectively, “UCC Collateral”). Borrower hereby grants to Lender a
security interest in the UCC Collateral. Borrower hereby authorizes Lender to file such financing
statements, continuation statements and amendments, in such form as Lender may require, to perfect
or continue the perfection of this security interest. Borrower shall pay all third party out of
pocket costs of preparing and filing such
-26-
statements, and all costs and expenses of any record searches for financing statements that
Lender may require. Without the prior written consent of Lender, Borrower shall not create or
permit to exist any other lien or security interest in any of the UCC Collateral. The name and
address of Borrower (as Debtor under any applicable Uniform Commercial Code) and Lender (as Secured
Party under any applicable Uniform Commercial Code) are as set forth on Page 1 of this Deed of
Trust.
1.20 Easements and Rights-of-Way. Borrower shall not grant any easement or
right-of-way with respect to all or any portion of the Real Estate or the Improvements without the
prior written consent of Lender, which consent shall not be unreasonably withheld. The purchaser
at any foreclosure sale hereunder may, at its discretion, disaffirm any easement or right-of-way
granted in violation of any of the provisions of this Deed of Trust and may take immediate
possession of the Property free from, and despite the terms of, such grant of easement or
right-of-way. If Lender consents to the grant of an easement or right-of-way, Xxxxxx agrees to
grant such consent provided that Xxxxxx is paid a reasonable review fee together with all other
expenses, including, without limitation, reasonable attorneys’ fees, incurred by Xxxxxx in the
review of Xxxxxxxx’s request and in the preparation of documents effecting the subordination.
Borrower shall at all times comply with all easement agreements, reciprocal easement agreements,
declarations, restrictive covenants and any other similar types of agreements now or hereafter
affecting the Property (to the extent that any failure to comply with such documents, agreements or
instruments shall endanger, cloud or adversely affect title to the Property in any manner, or
adversely affect the Property in any manner, as determined by Lender in its discretion), and
Borrower shall not amend, modify or terminate any such easement agreements, reciprocal easement
agreements, declarations, restrictive covenants or any other similar types of agreements without
Lender’s prior written consent.
1.21 Compliance with Laws. Borrower shall at all times comply with all Applicable
Laws. Borrower may, upon providing Lender with security satisfactory to Lender, proceed diligently
and in good faith to contest the validity or applicability of any Applicable Law so long as the
Property shall not be subject to any lien, charge, fine or other liability, and shall not be in
danger of being forfeited, lost or closed, during or as a result of such contest. Borrower shall
not alter the Property in any manner that would materially increase Borrower’s responsibilities for
compliance with Applicable Laws without the prior approval of Lender. Borrower shall not use or
occupy, or allow the use or occupancy of, the Property in any manner which violates any Lease or
any Applicable Law or which constitutes a public or private nuisance or which makes void, voidable
or cancelable, or increases the premium of, any insurance then in force with respect thereto.
Borrower shall, from time to time, upon Xxxxxx’s request, provide Lender with evidence reasonably
satisfactory to Lender that the Property complies with all Applicable Laws. Notwithstanding the
foregoing, if as a result of a change in Applicable Law material structural changes are required to
be made to the Property, then Borrower shall have the right at any time during the Defeasance
Period to partially defease the Loan and obtain a release of the Property from the lien of this
Deed of Trust pursuant to Section 1.03(d)-(f) of the Note.
1.22 Additional Taxes. In the event of the enactment after this date of any law of
the state where the Property is located or of any other governmental entity deducting from the
value of the Property for the purpose of taxation any lien or security interest thereon, or
imposing upon Lender the payment of the whole or any part of the Taxes or Other Charges herein
required to be paid by Borrower, or changing in any way the laws relating to the taxation of
mortgages or security agreements or debts secured by mortgages or security agreements or the
interest of the Lender or secured party in the property covered thereby, or the manner of
collection of such Taxes or Other Charges, so as to adversely affect this Deed of Trust or the
Obligations or Lender, then, and in any such event, Borrower, upon demand by Xxxxxx, shall pay such
Taxes or Other Charges, or reimburse Lender therefor; provided, however,
that if in the opinion of counsel for Lender (a) it might be unlawful to require Borrower
to make such payment, or (b) the making of such payment might result in the imposition of interest
beyond the maximum amount
-27-
permitted by law, then and in either such event, Lender may elect, by notice in writing given
to Xxxxxxxx, to declare all of the Obligations to be and become due and payable in full sixty (60)
days from the giving of such notice.
1.23 Xxxxxxxx’s Waivers. To the full extent permitted by law, Borrower shall not at
any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in
force providing for any appraisement, valuation, stay, moratorium or extension, or any law now or
hereafter in force providing for the reinstatement of the Obligations prior to any sale of the
Property to be made pursuant to any provisions contained herein or prior to the entering of any
decree, judgment or order of any court of competent jurisdiction, or any right under any statute to
redeem all or any part of the Property so sold. Borrower, for Xxxxxxxx and Xxxxxxxx’s successors
and assigns, and for any and all persons ever claiming any interest in the Property, to the full
extent permitted by law, hereby knowingly, intentionally and voluntarily with and upon the advice
of competent counsel: (a) waives, releases, relinquishes and forever forgoes all rights of
valuation, appraisement, stay of execution, reinstatement and notice of election or intention to
mature or declare due the Obligations (except such notices as are specifically provided for
herein); (b) waives, releases, relinquishes and forever forgoes all right to a marshalling of the
assets of Xxxxxxxx, including the Property, to a sale in the inverse order of alienation, or to
direct the order in which any of the Property shall be sold in the event of foreclosure of the
liens and security interests hereby created and agrees that any court having jurisdiction to
foreclose such liens and security interests may order the Property sold as an entirety; and (c)
waives, releases, relinquishes and forever forgoes all rights and periods of redemption provided
under applicable law. To the full extent permitted by law, Borrower shall not have or assert any
right under any statute or rule of law pertaining to the exemption of homestead or other exemption
under any federal, state or local law now or hereafter in effect, the administration of estates of
decedents or other matters whatever to defeat, reduce or affect the right of Lender under the terms
of this Deed of Trust to a sale of the Property, for the collection of the Obligations without any
prior or different resort for collection, or the right of Lender under the terms of this Deed of
Trust to the payment of the Obligations out of the proceeds of sale of the Property in preference
to every other claimant whatever. Further, Borrower hereby knowingly, intentionally and
voluntarily, with and upon the advice of competent counsel, waives, releases, relinquishes and
forever forgoes all present and future statutes of limitations as a defense to any action to
enforce the provisions of this Deed of Trust or to collect any of the Obligations the fullest
extent permitted by law. Borrower covenants and agrees that upon the commencement of a voluntary
or involuntary bankruptcy proceeding by or against Borrower, Borrower shall not seek a supplemental
stay or otherwise shall not seek pursuant to 11 U.S.C. §105 or any other provision of the
Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,
which may be or become applicable, to stay, interdict, condition, reduce or inhibit the ability of
Lender to enforce any rights of Lender against any Indemnitor of the secured obligations or any
other party liable with respect thereto by virtue of any indemnity, guaranty or otherwise.
1.24 Management.
(a) The management of the Property shall be by either (1) Borrower or an entity affiliated
with Borrower approved by Lender for so long as Borrower or said affiliated entity is managing the
Property in a first class, commercially reasonable manner to upkeep the building in accordance with
its condition as of the date hereof; or (2) a professional property management company approved by
Lender, and in either case pursuant to a written agreement approved by Lender. Xxxxxxxx represents
that, as of the date hereof, Xxxxxxxx has not retained either a property manager or a leasing agent
for the Property. In no event shall any manager be removed, replaced or retained, or any
management agreement entered into, modified or amended, in each case without the prior written
consent of Lender, which shall not unreasonably be withheld. After an Event of Default hereunder
or a default under any management
-28-
contract then in effect, which default is not cured within any applicable grace or cure
period, Lender shall have the right to terminate, or to direct Borrower to terminate, such
management contract upon thirty (30) days’ notice and to retain, or to direct Borrower to retain, a
new management agent approved by Xxxxxx. It shall be a condition of Xxxxxx’s consent to any
management agreement, whether with an affiliate of Borrower or a professional property management
company, that such manager enter into an agreement with Lender whereby the manager acknowledges and
agrees to the aforesaid rights of Xxxxxx, and as to such other matters as Lender may require.
(b) Without limiting the restrictions set forth in Section 1.24(a) pertaining to the
management agreement for the Property, Borrower may not terminate any other Contract that is
material to the operation of the Property, or enter into any amendment thereto that makes the terms
thereof less favorable to Borrower, in each case without the prior written consent of Lender, which
shall not unreasonably be withheld, provided, however, that if the other party to such Contract is
in default thereunder, and Borrower can replace the goods or services provided on terms not
materially disadvantageous to Borrower, then the prior written consent of Lender shall not be
required to terminate such Contract. Borrower shall perform its obligations under each Contract
and each of the General Intangibles, except where Xxxxxxxx’s failure to do so would not have a
material adverse effect on Borrower or the Property. Borrower represents that its interest under
each Contract, and each General Intangible, is not subject to any claim, setoff, lien, deduction or
encumbrance of any nature, other than that created by this Deed of Trust. At any time during the
continuance of an Event of Default, Lender may (but shall not be obligated to) take such action as
Lender may determine to be reasonably necessary to protect the rights of Borrower under any or all
of the Contracts and/or the General Intangibles. Should Lender, or Xxxxxx’s designee, acquire the
Property (whether pursuant to exercise of Xxxxxx’s remedies hereunder or by transfer in lieu
thereof), Lender may elect to assume Xxxxxxxx’s interests under any or all of the Contracts or
General Intangibles as Lender shall determine, and Borrower shall cause to be terminated, without
obligation to Lender or the successor owner of the Property, such other Contracts and/or General
Intangibles as Lender may direct.
1.25 Hazardous Waste and Other Substances.
(a) Borrower hereby represents and warrants to Lender that, as of the date hereof, except as
disclosed in writing to Lender: (i) to Borrower’s knowledge, obtained in Borrower’s ownership,
possession and, to the extent applicable, occupancy of the Property, except as expressly set forth
in the environmental reports prepared for Lender in connection with the Loan (collectively, the
“Environmental Report”), the Property is not in direct or indirect violation of any local,
state or federal law, rule or regulation pertaining to environmental regulation, contamination or
clean-up (collectively, “Environmental Laws”), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601
et seq. and 40 CFR §302.1 et seq.), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. §6901 et seq.), the Federal Water Pollution Control
Act (33 U.S.C. §1251 et seq. and 40 CFR § 116.1 et seq.), those
relating to lead based paint, and the Hazardous Materials Transportation Act (49 U.S.C. §1801
et seq.), and the regulations promulgated pursuant to said laws, all as amended;
(ii) to Borrower’s knowledge, obtained in Borrower’s ownership, possession and, to the extent
applicable, occupancy of the Property, except as expressly set forth in the Environmental Report,
no hazardous, toxic or harmful substances, wastes, materials, pollutants or contaminants
(including, without limitation, asbestos, lead based paint, polychlorinated biphenyls, petroleum
products, flammable explosives, radioactive materials, infectious substances or raw materials which
include hazardous constituents) or any other substances or materials which are included under or
regulated by Environmental Laws, or any molds, spores or fungus or other harmful microbial matter
(collectively, “Hazardous Substances”) are located on or have been handled, generated,
stored, processed or disposed of on or released or discharged from the Property (including
underground contamination) except for those substances used, stored or handled by Borrower or
Tenants in the ordinary course of their
-29-
respective business and in compliance with all Environmental Laws; (iii) to the best of
Borrower’s knowledge, after due and diligent inquiry, the Property is not subject to any private or
governmental lien or judicial or administrative notice or action relating to Hazardous Substances;
(iv) to Borrower’s knowledge, obtained in Borrower’s ownership, possession and, to the extent
applicable, occupancy of the Property, except as expressly set forth in the Environmental Report,
there are no existing or closed underground storage tanks or other underground storage receptacles
for Hazardous Substances on the Property; (v) Borrower has received no written notice of, and to
the best of Borrower’s knowledge and belief, there exists no investigation, action, proceeding or
claim by any agency, authority or unit of government or by any third party which could result in
any liability, penalty, sanction or judgment under any Environmental Laws with respect to any
condition, use or operation of the Property nor does Borrower know of any basis for such a claim;
and (vi) Borrower has received no written notice of and, to the best of Xxxxxxxx’s knowledge and
belief, there has been no claim by any party that any use, operation or condition of the Property
has caused any nuisance or any other liability or adverse condition on any other property nor does
Borrower know of any basis for such a claim.
(b) Borrower shall keep or cause the Property to be kept free from Hazardous Substances
(except those substances disclosed in the Environmental Report and used, stored or handled by
Borrower and Tenants in the ordinary course of their respective business and, in each case, in
compliance with all Environmental Laws) and in compliance with all Environmental Laws, shall not
install or use any underground storage tanks, shall expressly prohibit the use, generation,
handling, storage, production, processing and disposal of Hazardous Substances by all Tenants
(except in the ordinary course of a business that is not a Prohibited Use and in each case in
compliance with all Environmental Laws) and, without limiting the generality of the foregoing,
during the term of this Deed of Trust, shall not install in the Improvements or permit to be
installed in the Improvements asbestos-containing materials (“ACMs”) or any substance
containing ACMs. Borrower shall, if required under applicable Environmental Laws, maintain all
applicable Material Safety Data Sheets with respect to the Property, and make same available to
Lender or Lender’s consultants upon reasonable notice.
(c) Borrower shall promptly notify Lender if Borrower shall become aware of the possible
existence of any Hazardous Substances on the Property (except as disclosed in the Environmental
Report, in the ordinary course of a business that is not a Prohibited Use and in each case in
compliance with all Environmental Laws) or if Borrower shall become aware that the Property is or
may be in violation of any Environmental Laws. Further, immediately upon receipt of the same,
Borrower shall deliver to Lender copies of any and all orders, notices, permits, applications,
reports, and other communications, documents and instruments received, communicated to or obtained
by Borrower pertaining to the actual, alleged or potential presence or existence of any Hazardous
Substances at, on, about, under, within, near or in connection with the Property. Borrower shall,
promptly and when and as required by Lender, at Borrower’s sole cost and expense, take all actions
as shall be necessary or advisable for the clean-up of any and all portions of the Property or
other affected property which Lender reasonably determines to be migrating from the Property to
such affected property, in accordance with, and to the extent required by, all applicable
Environmental Laws, including, without limitation, all investigative, monitoring, removal,
containment and remedial actions in accordance with and to the extent required by all applicable
Environmental Laws, and shall further pay or cause to be paid, at no expense to Lender, all
clean-up, administrative and enforcement costs of applicable governmental agencies which may be
asserted against the Property; in the event Borrower fails to take such actions, (1) Lender may,
but shall not be obligated to, cause the Property or other affected property to be freed from any
Hazardous Substances (except for those Hazardous Substances disclosed in the Environmental Report,
used in the ordinary course of a business that are not a Prohibited Use and in each case are in
compliance with all Environmental Laws) or otherwise brought into compliance with Environmental
Laws and any and all costs and expenses incurred by Xxxxxx in connection therewith, together with
interest thereon at the Default Interest Rate from the date demand for payment is made by Lender
until actually paid by
-30-
Borrower, shall be immediately paid by Borrower on demand, and (2) Borrower hereby grants to
Lender and its agents and employees access to the Property and a license to remove any Hazardous
Substances (except for those Hazardous Substances disclosed in the Environmental Report, used in
the ordinary course of business that are not a Prohibited Use and in each case are in compliance
with all Environmental Laws) and to do all things Lender shall deem necessary to bring the Property
in conformance with Environmental Laws. Borrower covenants and agrees, at Xxxxxxxx’s sole cost and
expense, to indemnify, defend (at trial and appellate levels, and with attorneys, consultants and
experts acceptable to Xxxxxx), and hold Lender harmless from and against any and all liens,
damages, losses, liabilities, obligations, settlement payments, penalties, assessments, citations,
directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses of any kind or of any nature whatsoever (including, without limitation,
reasonable attorneys’, consultants’ and experts’ fees and disbursements actually incurred in
investigating, defending, settling or prosecuting any claim, litigation or proceeding) which may at
any time be imposed upon, incurred by or asserted or awarded against Lender or the Property, and
arising directly or indirectly from or out of: (i) the presence, release or threat of release of
any Hazardous Substances on, in, under or affecting all or any portion of the Property regardless
of whether or not caused by or within the control of Borrower; (ii) the violation of any
Environmental Laws relating to or affecting the Property, whether or not caused by or within the
control of Borrower; (iii) the failure by Borrower to comply fully with the terms and conditions of
this Section 1.25; (iv) the breach of any representation or warranty contained in this Section
1.25; or (v) the enforcement of this Section 1.25, including, without limitation, the cost of
assessment, containment and/or removal of any and all Hazardous Substances from all or any portion
of the Property the cost of any actions taken in response to the presence, release or threat of
release of any Hazardous Substances on, in, under or affecting any portion of the Property or (to
the extent such Hazardous Substances were released from, or migrated from, the Property) any
surrounding areas to prevent or minimize such release or threat of release so that it does not
migrate or otherwise cause or threaten danger to present or future public health, safety, welfare
or the environment, and costs incurred to comply with the Environmental Laws in connection with
all or any portion of the Property or any such surrounding areas. The indemnity set forth in this
Section 1.25(c) shall also include, when realized, any diminution in the value of the security
afforded by the Property or any future reduction in the sales price of the Property by reason of
any matter set forth in this Section 1.25(c). Xxxxxx’s rights under this Section shall survive
payment in full of the Obligations and shall be in addition to all other rights of Lender under
this Deed of Trust, the Note and the other Loan Documents.
(d) Upon Xxxxxx’s request, at any time after the occurrence of an Event of Default hereunder
and in connection with a potential sale of the Property pursuant to Lender’s exercise of its rights
and remedies under this Deed of Trust, or at such other time as Lender has reasonable grounds to
believe that Hazardous Substances (except for those Hazardous Substances disclosed in the
Environmental Report, used in the ordinary course of a business that are not a Prohibited Use and
in each case are in compliance with all Environmental Laws) are or have been released, stored or
disposed of on or around the Property or that the Property may be in violation of the Environmental
Laws (except for items disclosed in the environmental report delivered to Lender in connection
herewith), Borrower shall provide, at Borrower’s sole cost and expense, an inspection or audit of
the Property prepared by a hydrogeologist or environmental engineer or other appropriate consultant
approved by Lender to determine the presence or absence of Hazardous Substances on the Property or
an inspection or audit of the Improvements prepared by an engineering or consulting firm approved
by Lender to determine the presence or absence of friable asbestos or substances containing
asbestos on the Property. If Borrower fails to provide such inspection or audit within thirty (30)
days after such request, Lender may order the same, and Borrower hereby grants to Lender and its
employees and agents access to the Property and a license to undertake such inspection or audit.
The cost of such inspection or audit shall be immediately due and payable to Lender by Borrower on
demand, together with interest thereon at the Default Interest Rate from the date demand for
payment is made by Lender until actually paid by Xxxxxxxx.
-31-
(e) The obligations of Borrower under this Deed of Trust (including, without limitation,
this Section 1.25) with respect to Hazardous Substances shall not in any way limit the obligations
of any party under the Hazardous Substances Indemnity.
(f) Borrower covenants and agrees to institute, within thirty (30) days after the date hereof,
an operations and maintenance program (the “ACM O&M Plan”) designed by an environmental consultant,
satisfactory to the Lender, with respect to “ACM’s”, consistent with “Guidelines for Controlling
Asbestos-Containing Materials in Buildings” (USEPA, 1985) and other relevant guidelines, and such
ACM O&M Plan will hereafter continuously remain in effect until the Obligations is repaid in full.
In furtherance of the foregoing, Borrower shall inspect and maintain all ACM’s on a regular basis
and ensure that all ACM’s shall be maintained in a condition that prevents exposure of tenants or
invitees to ACM’s at all times. Without limiting the generality of the preceding sentence, Lender
may reasonably require (i) periodic notices or reports to Lender in form, substance and at such
intervals as Lender may specify, (ii) an amendment to the ACM O&M Plan to address changing
circumstances, laws or other matters, (iii) at Borrower’s sole expense, supplemental examination of
the Property by consultants specified by Xxxxxx, and (iv) variation of the ACM O&M Plan in response
to the reports provided by any such consultants
1.26 Brokerage Fees; Indemnification; Subrogation.
(a) Borrower shall indemnify, defend and hold Lender harmless against: (i) any and all claims
for brokerage, leasing, finders or similar fees which may be made relating to the Property or the
Obligations, and (ii) any and all liability, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including Lender’s reasonable attorneys’ fees, together with
reasonable appellate counsel fees, if any) of whatever kind or nature which may be asserted
against, imposed on or incurred by Xxxxxx in connection with the Obligations, this Deed of Trust,
the Property, or any part thereof, or the exercise by Lender of any rights or remedies granted to
it under this Deed of Trust; provided, however, that nothing herein shall be construed to obligate
Borrower to indemnify, defend and hold harmless Lender from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs and expenses enacted
against, imposed on or incurred by Xxxxxx by reason of Xxxxxx’s willful misconduct or gross
negligence.
(b) If Xxxxxx is made a party defendant to any litigation or any claim is threatened or
brought against Lender concerning the Obligations, this Deed of Trust, the Property, or any part
thereof, or any interest therein, or the construction, maintenance, operation or occupancy or use
thereof, then Borrower shall indemnify, defend and hold Lender harmless from and against all
liability by reason of said litigation or claims, including reasonable attorneys’ fees (together
with reasonable appellate counsel fees, if any) and expenses incurred by Xxxxxx in any such
litigation or claim, whether or not any such litigation or claim is prosecuted to judgment. If
Xxxxxx commences an action against Borrower to enforce any of the terms hereof or to prosecute any
breach by Borrower of any of the terms hereof or of any of the other Loan Documents, or to recover
any sum secured hereby, Borrower shall pay to Lender its reasonable attorneys’ fees (together with
reasonable appellate counsel fees, if any) and expenses. The right to such attorneys’ fees
(together with reasonable appellate counsel fees, if any) and expenses shall be deemed to have
accrued on the commencement of such action, and shall be enforceable whether or not such action is
prosecuted to judgment. If Borrower breaches any term of this Deed of Trust, Xxxxxx may engage the
services of an attorney or attorneys to protect its rights hereunder, and in the event of such
engagement following any breach by Xxxxxxxx, Borrower shall pay Lender reasonable attorneys’ fees
(together with reasonable appellate counsel fees, if any) and expenses incurred by Xxxxxx, whether
or not an action is actually commenced against Borrower by reason of such breach. All references
to “attorneys” in this Subsection and elsewhere in this Deed of Trust shall include without
limitation any attorney or law firm engaged by Xxxxxx and Xxxxxx’s in-house counsel, and all
references to “fees and
-32-
expenses” in this Subsection and elsewhere in this Deed of Trust shall
include without limitation any reasonable fees of such attorney or law firm and any reasonable allocation charges and
reasonable allocation costs of Xxxxxx’s in-house counsel.
(c) A waiver of subrogation shall be obtained by Borrower from its insurance carrier and,
consequently, Borrower waives any and all right to claim or recover against Lender, its officers,
employees, agents and representatives, for loss of or damage to Borrower, the Property, Xxxxxxxx’s
property or the property of others under Borrower’s control from any cause insured against or
required to be insured against by the provisions of this Deed of Trust.
1.27 Single-Purpose Entity Covenants. Borrower hereby represents, warrants and
covenants, as of the date hereof and until such time as the Obligations are paid in full, that
without, in each case, the prior written consent of Lender (which may be withheld or conditioned
by Xxxxxx in its sole and absolute discretion for any reason or for no reason):
(a) The sole purpose of Borrower has been, is and will be, to acquire, own, hold, maintain,
and operate the Property, together with such other activities as may be necessary or advisable in
connection with the ownership of the Property. Xxxxxxxx has not engaged, and does not and shall
not engage, in any business, and it has and shall have no purpose, unrelated to ownership of the
Property. Borrower has not owned, does not own and shall not acquire, any real property or own
assets other than those related to the Property and/or otherwise in furtherance of the limited
purposes of Borrower.
(b) Xxxxxxx Xxxxxxxx, nor any general partner, manager or managing member (a “Controlling
Entity”) of Borrower, as applicable, shall have the authority to perform any act in respect of
Borrower in violation of any (a) applicable laws or regulations or (b) any agreement between
Borrower and Lender (including, without limitation, the Loan Documents).
(c) Borrower shall not:
(1) make any loans to the holder (directly or indirectly) of any equity interests in Borrower
(collectively, the “Equity Holders”), any Affiliate (as defined below) of Borrower or of any Equity
Holders;
(2) except as expressly permitted by the Lender in writing, sell, encumber (except with
respect to the Lender) or otherwise transfer or dispose of all or substantially all of the
properties of Borrower (a sale or disposition will be deemed to be “all or substantially all of the
properties of Borrower” if the sale or disposition includes the Property or if the total value of
the properties sold or disposed of in such transaction and during the twelve months preceding such
transaction is sixty six and two thirds percent (66-2/3%) or more in value of Borrower’s total
assets as of the end of the most recently completed fiscal year of Borrower);
(3) to the fullest extent permitted by law, dissolve, wind-up, or liquidate Borrower;
(4) merge, consolidate or acquire all or substantially all of the assets of an Affiliate of
same or other person or entity;
(5) change the nature of the business conducted by Xxxxxxxx; or
(6) except as permitted by the Lender in writing, amend, modify or otherwise change the
Organizational Documents (as defined below) of Borrower (which approval, after a
-33-
Secondary Market Transaction with respect to the Loan, may be conditioned upon Xxxxxx’s receipt of
confirmation from each of the applicable Rating Agencies that such amendment, modification or
change would not result in the qualification, withdrawal or downgrade of any securities rating).
(d) Borrower shall not, and no Equity Holder or other person or entity on behalf of Borrower
shall, without the prior written affirmative vote of one hundred percent (100%) of the members,
partners or stockholders of Borrower: (1) institute proceedings to be adjudicated bankrupt or
insolvent; (2) consent to the institution of bankruptcy or insolvency proceedings against it; (3)
file a petition seeking, or consenting to, reorganization or relief under any applicable federal or
state law relating to bankruptcy (but the foregoing clause (2) shall not apply to Persons that own
shares in a Publicly Traded Corporation); (4) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of Borrower or a substantial part of
its property; (5) make any assignment for the benefit of creditors; (6) admit in writing its
inability to pay its debts generally as they become due or declare or effect a moratorium on its
debts; or (7) take any action in furtherance of any such action ((1) through (7) above, with
respect to any individual or entity, collectively, a “Bankruptcy Action”).
(e) Borrower shall have no indebtedness or incur any liability other than (1) unsecured debts
and liabilities for trade payables and accrued expenses incurred in the ordinary course of its
business of operating the Property, provided, however, that such unsecured indebtedness or
liabilities (y) are in amounts that are normal and reasonable under the circumstances, but in no
event to exceed three percent (3%) of the original principal amount of the Loan and (z) are not
evidenced by a note and are paid when due, but in no event for more than sixty (60) days from the
date that such indebtedness or liabilities are incurred and (2) the Obligations. No indebtedness
other than the Loan shall be secured (senior, subordinated or pari passu) by the
Property.
(f) The following provisions shall apply only when Borrower is a limited liability company or
a partnership. A Bankruptcy Action by or against any partner or member of Borrower, as applicable,
shall not cause such partner or member of Borrower, as applicable, to cease to be a partner or
member of Borrower and upon the occurrence of a Bankruptcy Action, Borrower shall continue without
dissolution. Additionally, to the fullest extent permitted by law, if any partner or member of
Borrower, as applicable, ceases to be a partner or member of Borrower, as applicable, such event
shall not terminate Borrower and Borrower shall continue without dissolution.
(g) Borrower shall at all times observe the applicable legal requirements for the recognition
of Borrower as a legal entity separate from any Equity Holders or Affiliates of Borrower or of any
Equity Holder, including, without limitation, as follows:
(1) Borrower shall either (a) maintain its principal executive office and telephone and
facsimile numbers separate from that of any Affiliate of Borrower or of any Equity Holder and shall
conspicuously identify such office and numbers as its own, or (b) shall allocate by written
agreement fairly and reasonably any rent, overhead and expenses for shared office space.
Additionally, Borrower shall use its own separate stationery, invoices and checks which reflects
its name, address, telephone number and facsimile number.
(2) Borrower shall maintain correct and complete financial statements, accounts, books and
records and other entity documents separate from those of any Affiliate of Borrower or of any
Equity Holder or any other person or entity (except that Borrower Parties may have one bank
account). Borrower shall prepare unaudited quarterly and annual financial statements, and
Xxxxxxxx’s financial statements shall substantially comply with generally accepted accounting
principles.
-34-
(3) Borrower shall maintain its own separate bank accounts (except that Borrower Parties may
have one bank account), payroll and correct, complete and separate books of account.
(4) Borrower shall file or cause to be filed its own separate tax returns, or may be
consolidated with the tax returns of the Indemnitor, as the case may be.
(5) Borrower shall hold itself out to the public (including any of its Affiliates’ creditors)
under Borrower’s own name and as a separate and distinct entity and not as a department, division
or otherwise of any Affiliate of Borrower or of any Equity Holder.
(6) Borrower shall observe all customary formalities regarding the existence of Borrower,
including holding meetings and maintaining current and accurate minute books separate from those of
any Affiliate of Borrower or of any Equity Holder.
(7) Borrower shall hold title to its assets in its own name and act solely in its own name and
through its own duly authorized officers and agents. No Affiliate of Borrower or of any Equity
Holder other than Gladstone Limited Partnership shall be appointed or act as agent of Borrower,
other than as a property manager or leasing agent with respect to the Property.
(8) Investments shall be made in the name of Borrower directly by Xxxxxxxx or on its behalf by
brokers engaged and paid by Xxxxxxxx.
(9) Except as required by Lender, Borrower shall not guarantee, pledge or assume or hold
itself out or permit itself to be held out as having guaranteed, pledged or assumed any liabilities
or obligations of any Equity Holder or any Affiliate of Borrower, nor shall it make any loan,
except as permitted in the Loan Documents.
(10) Reserved.
(11) Assets of Borrower shall be separately identified, maintained and segregated. Borrower’s
assets shall at all times be held by or on behalf of Xxxxxxxx and if held on behalf of Borrower by
another entity, shall at all times be kept identifiable (in accordance with customary usages) as
assets owned by Borrower. This restriction requires, among other things, that (i) funds of
Borrower shall be deposited or invested in Borrower’s name (except that Borrower Parties may have
one bank account), (ii) funds of Borrower shall not be commingled with the funds of any Affiliate
of Borrower or of any Equity Holder, (iii) the Borrower Parties shall maintain all accounts in
their collective name and with the same tax identification number, separate from those of any
Affiliate of Borrower or of any Equity Holder, and (iv) funds of Borrower shall be used only for
the business of Borrower.
(12) Borrower shall maintain its assets in such a manner that it is not costly or difficult to
segregate, ascertain or identify its individual assets from those of any Affiliate of Borrower or
of any Equity Holder.
(13) Borrower shall pay or cause to be paid its own liabilities and expenses of any kind,
including but not limited to salaries of its employees, only out of its own separate funds and
assets, except as required by the Loan Documents.
(14) Borrower is adequately capitalized as of the date hereof to engage in the transactions
contemplated at the closing of the Loan.
-35-
(15) Borrower shall not do any act which would make it impossible to carry on the ordinary
business of Borrower.
(16) All data and records (including computer records) used by Borrower or any Affiliate of
Borrower in the collection and administration of any loan shall reflect Xxxxxxxx’s ownership
interest therein.
(17) No funds of Borrower shall be invested in securities issued by, nor shall Borrower
acquire the indebtedness or obligation of, an Affiliate of Borrower or of an Equity Holder.
(18) Borrower shall maintain an arm’s length relationship with each of its Affiliates and may
enter into contracts or transact business with its Affiliates only on commercially reasonable terms
that are no less favorable to Borrower than is obtainable in the market from a person or entity
that is not an Affiliate of Borrower or of any Equity Holder.
(19) Borrower shall correct any misunderstanding that is known by Borrower regarding its name
or separate identity.
(h) Any indemnification obligation of Borrower to the holder of any equity interest in
Borrower shall (1) be fully subordinated to the Loan and (2) not constitute a claim against
Borrower or its assets until such time as the Loan has been indefeasibly paid in accordance with
its terms and otherwise has been fully discharged (or has been defeased in accordance with the
Note).
(i) The following shall only apply if and when Borrower is a limited partnership. Each
general partner of Borrower may not be an individual. Each general partner of Borrower shall at
all times have as its sole purpose to act as the general partner of Xxxxxxxx, and shall be engaged
in no other business or have any other purpose. Additionally, any additional or substitute general
partner of Borrower shall have organizational documents that (1) include covenants substantially
similar to the foregoing provisions of this Section 1.27, inclusive of all single
purpose/bankruptcy remote provisions, and (2) are acceptable to the Lender.
(j) Borrower shall cause the Organizational Documents of Borrower to include, at all times,
requirements substantially similar to the foregoing, in a manner reasonably satisfactory to Lender.
At any time when Borrower is a limited partnership, the Organizational Documents of the general
partner shall include provisions substantially similar to those set forth in Section 1.27(i) above.
(k) As used in this Deed of Trust:
(i) “Affiliate” means any person or entity which directly or indirectly through one or
more intermediaries controls, is controlled by or is under common control with a specified person
or entity. For purposes of the definition of “Affiliate”, the terms “control”, “controlled”, or
“controlling” with respect to a specified person or entity shall include, without limitation, (i)
the ownership, control or power to vote ten percent (10%) or more of (x) the outstanding shares of
any class of voting securities or (y) beneficial interests, of any such person or entity, as the
case may be, directly or indirectly, or acting through one or more persons or entities, (ii) the
control in any manner over the general partner(s) or the election of more than one director or
trustee (or persons exercising similar functions) of such person or entity, or (iii) the power to
exercise, directly or indirectly, control over the management or policies of such person or entity.
(ii) “Constituent Entity” shall mean, with respect to any entity, (i) with respect to
any limited partnership, (x) any general partner of such limited partnership and (y) any limited
-36-
partner of such partnership which owns (or is owned by any person or entity owning, holding or
controlling, directly or indirectly) the right to receive 50% or more of the income, distributable
funds or losses of such partnership; (ii) with respect to any general partnership or joint venture,
any partner or venturer in such general partnership or joint venturer; (iii) with respect to any
corporation, any person or entity which owns or controls 50% or more of any class of stock of such
corporation; (iv) with respect to any limited liability company, (x) any manager of such limited
liability company, (y) any managing member of such limited liability company, or the sole member of
any limited liability company having only one (1) member, and (z) any non-managing member of such
limited liability company which owns (or is owned by any person or entity owning, holding or
controlling, directly or indirectly) the right to receive 50% or more of the income, distributable
funds or losses of such limited liability company; (v) any person or entity which controls any
entity described in any of clauses (i) through (iv) of this definition (except any officers or
directors of Gladstone Commercial Corporation so long as no such officers or directors own or
control 50% or more of any class of stock of such corporation); and (vi) any entity which is a
“Constituent Entity” with respect to an entity which is a “Constituent Entity” of the subject
entity. For all purposes of this Deed of Trust unless expressly noted, “control” and “controlled
by” shall have the meanings assigned to them in Rule 405 under the Securities Act of 1933, as
amended. For the purposes of clause (vi) of the definition of Constituent Entity, if entity “B” is
a Constituent Entity of entity “A”, then any Constituent Entity of “B” shall be deemed to be a
Constituent Entity of any entity of which “A” is a Constituent Entity.
(iii) “Organizational Documents” shall mean, with respect to any entity, the documents
customarily used to form an entity and provide for its governance, as the same may be amended from
time to time, including, without limitation, (a) with respect to a corporation, the articles of
incorporation or certificate of incorporation or charter, and the by-laws; (b) with respect to a
limited liability company, the articles of organization and the operating agreement; (c) with
respect to a limited partnership, the certificate of limited partnership and the limited
partnership agreement; and (d) with respect to a general partnership, the agreement of partnership.
(l) In the event Borrower is a single-member Delaware limited liability company, the limited
liability company agreement of Borrower (the “LLC Agreement”) shall provide that (i) upon
the occurrence of any event that causes the sole member of Borrower (“Member”) to cease to
be the member of Borrower (other than (A) upon an assignment by Member of all of its limited
liability company interest in Borrower and the admission of the transferee, or (B) the resignation
of Member and the admission of an additional member, in either case in accordance with the terms of
the Loan Documents and the LLC Agreement), the person executing the LLC Agreement as a “Special
Member Designee” (as such term is defined in the LLC Agreement) (“Special Member”) shall,
without any action of any other Person and simultaneously with the Member ceasing to be the member
of Borrower, automatically be admitted to Borrower as a special member and shall continue Borrower
without dissolution and (ii) such Special Member may not resign from Borrower or transfer its
rights as Special Member unless a successor Special Member has been admitted to Borrower as Special
Member in accordance with requirements of Delaware law. The LLC Agreement shall further provide
that (i) Special Member shall automatically cease to be a member of Borrower upon the admission to
Borrower of a substitute Member, (ii) Special Member shall be a member of Borrower that has no
interest in the profits, losses and capital of Borrower and has no right to receive any
distributions of Borrower assets, (iii) pursuant to Section 18-301 of the Delaware Limited
Liability Company Act (the “Act”), Special Member shall not be required to make any capital
contributions to Borrower and shall not receive a limited liability company interest in Borrower,
(iv) Special Member, in its capacity as Special Member, may not bind Borrower, and (v) except as
required by any mandatory provision of the Act, Special Member, in its capacity as Special Member,
shall have no right to vote on, approve or otherwise consent to any action by, or matter relating
to, Borrower, including, without limitation, the merger, consolidation or conversion of Borrower.
-37-
1.28 Reserve Accounts and Disbursement Requests. At Lender’s option,
as additional security for the indebtedness secured hereby, Borrower shall establish and
maintain the reserve accounts required by this Section 1.28, subject to the security
interest therein as more fully set forth in Section 1.19 hereof.
(a) Replacement Reserve. Xxxxxxxx agrees that it will perform, or cause to be
performed, all repairs and replacements necessary to maintain the Property in good working order,
in accordance with its condition as of the date hereof. Simultaneously herewith, Borrower shall
pay to Lender the sum of $94,500.00, and simultaneous herewith and on each Payment Date until the
Note is paid in full, Borrower shall pay to Lender the sum of $533.33 to be held in a reserve fund
(the “Replacement Reserve”) subject to this Deed of Trust, for payment of certain repairs
and replacements at the Property which, under generally accepted accounting principles, are
categorized as capital expenses and not as operating expenses (the “Repairs”).
Notwithstanding the foregoing, Borrower shall not be required to make a deposit into the
Replacement Reserve to the extent that any such deposit would increase the amount in the
Replacement Reserve (after deducting any pending disbursement requests therefrom) above $12,800.00.
Borrower shall perform, or cause Principal Tenant to perform, all Repairs in a good and
workmanlike manner, in accordance with all applicable codes and regulations, and each case in a
manner satisfactory to Lender and as necessary to maintain the Property in good condition and in
compliance with all applicable laws, ordinances, rules and regulations. So long as no Default
shall exist and be continuing, Lender shall, to the extent funds are available for such purpose in
the Replacement Reserve, disburse to Borrower the amount paid or incurred by Borrower in performing
the Repairs as required above upon satisfaction of the requirements set forth in Section 1.29 of
this Deed of Trust. Lender may, at Borrower’s expense, make or cause to be made an inspection of
the Property to determine the need, as determined by Lender in its reasonable judgment, for further
Repairs of the Property. In the event that such inspection reveals that further Repairs are
required, Lender shall provide Borrower with a written description of the required Repairs, and
Borrower shall complete, or cause Principal Tenant to complete, such Repairs to Lender’s reasonable
satisfaction within ninety (90) days after Xxxxxx’s notice, or such later date as may be approved
by Lender in its discretion.
(b) Xxxx Xxx Excess Cash Flow Reserve. In the event Borrower has not delivered a
Satisfactory Letter of Credit (as that term is defined in Section 5.31 hereof) to Lender on or
before February 1, 2012, then commencing on February 1, 2012 (the “Xxxx Xxx Sweep Period”),
all Excess Cash Flow (as defined below) shall be deposited (the “Excess Cash Flow Sweep”)
into a reserve account (the “Xxxx Xxx Excess Cash Flow Reserve”) to be held by Lender as
additional collateral for the Loan, and for payment of Leasing Costs. Borrower shall be required
to continue to make such deposits of Excess Cash Flow into the Xxxx Xxx Excess Cash Flow Reserve
each month until the satisfaction of the Xxxx Xxx Tenant Conditions (as defined in that certain
Cash Management Agreement of even date herewith between the Borrower Parties and Lender (the
“CMA”)) or until the date that the sum in the Xxxx Xxx Excess Cash Flow Reserve is equal to
$563,000.00. Upon the satisfaction of the Xxxx Xxx Tenant Conditions, provided no Default exists,
Lender shall disburse funds in the Xxxx Xxx Excess Cash Flow Reserve for payment of Leasing Costs
incurred by Borrower in connection with Xxxxxxxx’s leasing of space at the Property, subject to and
in accordance with Section 1.29 below. Lender may use funds in the Xxxx Xxx Excess Cash Flow
Reserve to pay for Leasing Costs in connection with re-leasing the Property to a Xxxx Xxx
Replacement Tenant pursuant to a lease approved by Lender in accordance with this Deed of Trust
(“Approved Leasing Costs”). In the event Borrower has delivered a Satisfactory Letter of
Credit to Lender, and Xxxxxxxx has failed to pay the Leasing Costs for any Lease of space at the
Property, then Lender may and is hereby authorized to draw upon the Letter of Credit, by sight
draft on the Issuing Bank (as those terms are defined in Section 5.31 hereof), and deposit the cash
proceeds thereof into the Xxxx Xxx Excess Cash Flow Reserve and to disburse funds in the Xxxx Xxx
Excess Cash Flow Reserve for payment of Leasing Costs incurred by Borrower in connection with
Xxxxxxxx’s leasing of space at the Property, subject to and in accordance with Section 1.29 below.
As used herein, the term “Excess Cash
-38-
Flow” shall mean all cash flow generated by the
Property and Properties after deducting the payments
identified in Section 2(d)(ii)(a-e) of the CMA. Defined terms used herein and not defined
shall have the meanings ascribed to them in the CMA.
(c) [RESERVED]
(d) Early Termination of Leases. If any Tenant (a “Terminating Tenant”) gives
notice to Borrower that it is exercising an early termination option set forth in its Lease with
Borrower, Borrower shall direct such Tenant to deliver the payment required pursuant to its Lease
in connection with the exercise of the early termination option (the “Early Termination
Payment”) to be remitted to Lender. Xxxxxxxx agrees, furthermore, that if such Tenant remits
the Early Termination Payment directly to Borrower, Borrower shall remit the Early Termination
Payment to Lender. Any Early Termination Payment shall be deposited in a segregated sub-account of
the Leasing Reserve (the “Early Termination Reserve”) to be held as additional security for
the Obligations; a separate Early Termination Reserve shall be maintained with respect to each
Lease so terminated. So long as no Default shall exist and be continuing, Lender shall, to the
extent that funds are available for such purpose in the Early Termination Reserve, disburse to
Borrower funds then on deposit in the Early Termination Reserve as follows:
(i) If Borrower enters into a Lease for the entire premises previously demised under the Lease
so terminated (the “Vacated Space”) with a Tenant reasonably acceptable to Lender and such
Lease satisfies all applicable requirements of Section 1.10 hereof, and the Tenant under such Lease
accepts such demised premises, takes occupancy thereof and commences the payment of base rent under
its Lease (any such Lease, a “Qualified Replacement Lease”), then all funds in the Early
Termination Reserve shall be used first to pay Leasing Costs with respect to such Qualified
Replacement Lease upon satisfaction of the conditions set forth in Section 1.29 hereof; any funds
remaining in the Early Termination Reserve after payment of all Leasing Costs with respect thereto
shall be disbursed to Borrower as follows: (x) if the monthly net rent payable under the Qualified
Replacement Lease is greater than or equal to the monthly rent payable by the Terminating Tenant
under its Lease as of the date of such termination, then provided no Default is then continuing,
such funds remaining in the Early Termination Reserve shall be disbursed to Borrower; and (y) if
the monthly net rent payable under the Qualified Replacement Lease is less than the monthly rent
payable by the Terminating Tenant under its Lease as of the date of such termination, then provided
no Default is then continuing all funds remaining in the Early Termination Reserve shall be
disbursed to Borrower in equal monthly installments over the remaining term of the Qualified
Replacement Lease, until such time as all funds have been disbursed from the Early Termination
Reserve.
(ii) If Borrower enters into one or more Leases each for less than the entire Vacated Space,
no disbursements shall be permitted from the Early Termination Reserve except as follows:
(i) until such time as the entire Vacated Space has been re-leased pursuant to
one or more Qualified Replacement Leases, and the Tenant under each such Qualified
Replacement Lease accepts such demised premises, takes occupancy thereof and
commences the payment of base rent under its Lease, Lender shall from time to time
make disbursements on account of Leasing Costs with respect to the Vacated Space,
provided, however, that the disbursements with respect to any portion of the Vacated
Space on a per-square foot basis shall not exceed the amount of the Early
Termination Payment on a per-square-foot basis; and
(ii) at such time as the entire Vacated Space has been re-leased pursuant to
one or more Qualified Replacement Leases and the Tenant under each such
-39-
Qualified Replacement Lease accepts such demised premises, takes occupancy thereof and
commences the payment of base rent under its Lease, then after payment of all
Leasing Costs with respect to the re-leasing of such Vacated Space, the funds
remaining in the Early Termination Reserve shall be disbursed as follows:
(i)first, to the extent that any disbursements were made from the Leasing
Reserve with respect to such Vacated Space, an amount equal to the sum of all such
disbursements will be transferred to the Leasing Reserve (notwithstanding any limit
to the required deposits thereto); (ii) next, any funds remaining in the
Early Termination Reserve shall be disbursed to Borrower as follows: (x) if the
monthly aggregate net rents payable under all such Qualified Replacement Leases is
greater than or equal to the monthly rent payable by the Terminating Tenant, and the
term of all such Qualified Replacement Leases extends to or beyond the scheduled
expiration date of the Lease with the Terminating Tenant, then provided no Default
is then continuing such funds remaining in the Early Termination Reserve shall be
disbursed to Borrower; and (y) if the conditions of clause (x) are not satisfied,
then provided no Default is then continuing such funds remaining in the Early
Termination Reserve shall be disbursed to Borrower in equal monthly installments
over the period that would have been remaining in the term of the Lease with the
Terminating Tenant.
Leasing Costs with respect to any Qualified Replacement Lease shall be disbursed first out of the
related Early Termination Reserve, if applicable, prior to using any funds in the Leasing Reserve
with respect thereto.
(e) Payment Reserve. Contemporaneously with the execution hereof, Xxxxxxxx has
established with Lender a temporary reserve in the amount equal to one (1) regular monthly
installment of principal, interest and all required reserves, deposits or impounds under the Loan
Documents (the “Payment Reserve”). Xxxxxxxx understands and agrees that, notwithstanding
the establishment of the Payment Reserve as herein required, all of the proceeds of the Note have
been, and shall be considered, fully disbursed and shall bear interest and be payable on the terms
provided therein. So long as no Default has occurred hereunder, Lender shall on the first Payment
Date under the Note, advance from the Payment Reserve to itself the amount due and payable by
Borrower under the Note on such Payment Date and shall also advance from the Payment Reserve into
the Impound Account the amount of any deposit for Taxes and Other Charges and Insurance Premiums
and into each other Reserve the amount of any deposit required to be paid for such purpose by
Borrower on such Payment Date pursuant to the terms hereof. Borrower shall not be obligated to
make any further deposits into the Payment Reserve after the disbursement of the funds held therein
as aforesaid, and the Payment Reserve shall terminate upon such disbursement. No interest on funds
contained in the Payment Reserve shall be paid by Lender to Borrower. Nothing contained herein,
including, without limitation, the existence of the Payment Reserve, shall release Borrower of any
obligation to make payments under the Note, this Deed of Trust or the other Loan Documents strictly
in accordance with the terms hereof or thereof and, in this regard, without limiting the generality
of the foregoing, should the amounts contained in the Payment Reserve not be sufficient to pay in
full the amount due under the Note and the Impound Account and other Reserve deposits referenced
above in this subparagraph on such Payment Date, Borrower shall be responsible for paying such
deficiency on the due date of any such payments.
1.29 Disbursements from the Property Reserve Accounts. So long as no Event of
Default shall have occurred and be continuing under this Deed of Trust, all sums in each of the
Excess Cash Flow Reserve and the Replacement Reserve (the foregoing, collectively, the
“Property Reserve Accounts”) shall be held by Lender in the respective Property Reserve
Account as set forth above for the purposes set forth in Section 1.28. So long as no Default has
occurred and is continuing, Lender shall disburse to Borrower, from the appropriate Property
Reserve Account for the purposes set forth in Section
-40-
1.28, an amount equal to the actual expenses incurred to date by Xxxxxxxx, less any prior disbursements to Borrower from any of the
Property Reserve Account for such expenditure, but only to the extent that such expense
is one for which, pursuant to Section 1.28, the proceeds of a Property
Reserve Account may be disbursed. Disbursements shall be made to Borrower within ten (10)
days following Xxxxxx’s receipt of each of the following:
(a) a written request from Borrower for such disbursement, accompanied by a certification by
Xxxxxxxx, in the form therefor then utilized by Lender or Xxxxxx’s servicing agent;
(b) copies of invoices, receipts or other evidence satisfactory to Lender verifying the cost
and expenses actually incurred by Borrower or the payment of the costs and expenses for which
Borrower is requesting such disbursement;
(c) for disbursement requests in connection with a single project, or group of related
projects, for which Xxxxxxxx is seeking reimbursement of $20,000 or more, affidavits, lien waivers
or other evidence reasonably satisfactory to Lender showing that all materialmen, laborers,
contractors, suppliers and other parties who have or might claim statutory or common law liens, or
who have furnished labor, materials or supplies to or in connection with the Property, have been
paid all amounts due;
(d) for disbursement requests in connection with a single project, or group of related
projects, for which Xxxxxxxx is seeking reimbursement of $40,000 or more, excluding, however,
Leasing Commissions, a certification from an inspecting architect or other third party reasonably
acceptable to Lender, verifying that the any work for which Borrower is requesting a disbursement
has been properly completed and that the cost of such work bears a reasonable relationship to the
costs incurred therefor;
(e) a copy of the certificate of occupancy for the Improvements if, as a result of any work
undertaken by Borrower, it was necessary to receive an amendment to the existing certificate of
occupancy (or similar instrument) issued with respect to the Improvements, or to obtain a new
certificate of occupancy for the Improvements, or a certification of Borrower that no such amended
or new certificate of occupancy is required; and
(f) payment of an administrative fee of $150.00 per request.
Lender shall not be required to make an advance from each Property Reserve Account more frequently
than once in any thirty (30) day period. In making any disbursement from a Property Reserve
Account, Lender shall be entitled to rely on the disbursement request from Borrower without any
inquiry into the accuracy, validity or contestability of any amount set forth therein. All costs
and expenses required to be incurred in connection with the review and approval of each request for
a disbursement from a Property Reserve Account shall be paid by Borrower not later than
concurrently with such disbursement. The Reserves shall not, unless otherwise explicitly required
by applicable law, be or be deemed to be escrow or trust funds. Lender may, at its discretion,
hold the Reserves either in a separate account or commingled by Lender with any other funds in the
possession or control of Lender. The Reserves are solely for the protection of Lender, and entail
no responsibility on Xxxxxx’s part beyond making disbursements upon strict satisfaction of the
requirements of Section 1.28 and this Section 1.29 and beyond the allowing of due credit for the
sums actually received. In the event that the amounts on deposit in any of the Property Reserve
Account are insufficient to reimburse Borrower for amounts otherwise properly requested, Lender
shall not be obligated or authorized to transfer funds from other Reserves, and Borrower shall pay
the amount of such deficiency. Upon assignment of this Deed of Trust by Xxxxxx, any funds in the
Reserves shall be turned over to the assignee, and any responsibility of the assignor with respect
thereto shall terminate.
-41-
1.30 Interest-Bearing Reserves. Lender shall cause funds in the Leasing Reserve and
the Replacement Reserve (referred to in this Section 1.30 as the “Interest-Bearing
Reserve”) to be deposited into an interest bearing account of the type customarily maintained
by Lender or its servicing agent for the investment of similar reserves, which account may not
yield the highest interest
rate then available. To the extent that any funds in any of the Reserves are invested in
any investment suitable for the investment of escrows and reserves established under mortgage
loans included in a Secondary Market Transaction in which some or all of the securities issued
thereby are rated “AAA” (or the equivalent rating) by one or more Rating Agencies, as the
standards therefor are established from time to time (or if Lender reasonably determines that no
such standards exist, such investments as are otherwise acceptable to Lender, in the exercise of
prudent lending standards), Borrower shall bear the risk of loss of such investments. Interest
payable on such amounts shall be computed based on the daily outstanding balance in the
Interest-Bearing Reserve. Such interest shall be calculated on a simple, non-compounded interest
basis based solely on contributions made to the Interest-Bearing Reserve by Borrower. All
interest earned on amounts contributed to the Interest-Bearing Reserve shall be retained by
Lender and added to the balance in such Interest-Bearing Reserve and shall be disbursed for
payment of the items for which other funds in such Interest-Bearing Reserve are to be disbursed.
Borrower acknowledges that all Reserves other than the Interest-Bearing Reserves shall not accrue
or bear interest for the benefit of Borrower, and no interest shall be payable thereon by Lender.
1.31 Principal Lease.
(a) Borrower will comply in all material respects with the terms and conditions of the
Principal Lease, Borrower will not, without the prior consent of Lender, do or permit anything to
be done, the doing of which, or refrain from doing anything, the omission of which, will impair or
tend to impair the security of the Real Estate under the Principal Lease or will be grounds for
declaring a forfeiture of the Principal Lease.
(b) Borrower shall enforce in all material respects the Principal Lease and will not, without
the prior written consent of Lender, which consent shall not be unreasonably withheld, conditioned
or delayed as to any matter other than a surrender or termination of the Principal Lease or the
exercise of any option thereunder, terminate, modify, cancel, change, supplement, alter or amend
any of the Principal Lease, or waive, excuse, condone or in any way release or discharge its
interest under the Principal Lease, or from any of the material covenants and conditions to be
performed or observed by Principal Tenant under the Principal Lease (Principal Tenant is
hereinafter referred to in this Section 1.31 as the “Tenant”). Any such termination,
cancellation, modification, change, supplement, alteration or amendment of the Principal Lease
without the prior consent of Lender shall be void and of no force and effect.
(c) Borrower will give Lender prompt (and in all events within five (5) days) notice of the
receipt by Borrower of any notice of default from the Tenant. Borrower will promptly (and in all
events within five (5) days) furnish to Lender copies of all material information furnished to the
Tenant by the terms of the Principal Lease. Borrower will deliver to Lender an exact copy of any
material notice, communication, plan, specification or other instrument or document received or
given by Borrower in any way relating to or affecting the Principal Lease which may concern or
affect the estate of the Tenant or Borrower thereunder in or under the Principal Lease or in the
real estate respectively thereby demised.
(d) Lender shall have the right, but not the obligation, to perform any obligations of
Borrower under the terms of the Principal Lease during the continuance of a default thereunder,
after notice, if applicable, and the expiration of any applicable grace or cure period, if any.
All costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) so
incurred, after such a default shall be treated as an advance secured by this Deed of Trust, shall
bear interest thereon at the
-42-
Default Interest Rate from the date of payment by Xxxxxx until paid in
full and shall be paid by Borrower to Lender during the continuance of an Event of Default within
five (5) days after demand. No performance by Xxxxxx of any obligations of Borrower shall
constitute a waiver of any default arising by reason of Xxxxxxxx’s failure to perform the same. If
Lender shall make any payment or perform any act or take action in accordance with this Section
1.31(d), Lender will notify Borrower of the making of any such payment, the performance of any such act, or the taking of any such action. In any such
event, subject to the rights of lessees, sublessees and other occupants under the Principal Lease,
Lender and any person designated by Lender shall have, and are hereby granted, the right to enter
upon the Property at any time and from time to time for the purpose of taking any such action.
(e) To the extent permitted by law, the price payable by Borrower or any other person or
entity in the exercise of any right of redemption following foreclosure of the Property shall
include all rents paid and other sums advanced by Xxxxxx, together with interest thereon at the
Default Interest Rate as fee owner and as lessee under the Principal Lease, respectively, on behalf
of Borrower on account of the Property.
(f) If either Borrower or the Tenant shall deliver to Lender a copy of any notice of default
sent by such person to another party under the Principal Lease, such notice shall constitute full
protection to Lender for any action taken or omitted to be taken by Lender in reliance thereon
after notice, if applicable, and the expiration of any applicable cure period if any.
(g) Borrower hereby assigns, transfers and sets over to Lender all of Xxxxxxxx’s claims and
rights to the payment of damages arising from any rejection by Tenant of the Principal Lease under
the Bankruptcy Code. Borrower shall notify Lender promptly (and in any event within ten (10) days)
of any claim, suit action or proceeding relating to the rejection of any of the Principal Lease.
Xxxxxx is hereby irrevocably appointed as Xxxxxxxx’s attorney-in-fact, coupled with an interest,
with exclusive power to file and prosecute, to the exclusion of Borrower, any proofs of claim,
complaints, motions, applications, notices and other documents, in any case in respect of Tenant
under the Bankruptcy Code during the continuance of any Event of Default. Borrower may make any
compromise or settlement in connection with such proceedings (subject to Lender’s reasonable
approval); provided, however, that Lender shall be authorized and entitled to compromise or settle
any such proceeding if such compromise or settlement is made after the occurrence and during the
continuance of any Event of Default. Borrower shall promptly execute and deliver to Lender any and
all instruments reasonably required in connection with any such proceeding after request therefor
by Xxxxxx. Except as set forth above, Xxxxxxxx shall not adjust, compromise, settle or enter into
any agreement with respect to such proceedings without the prior written consent of Lender.
(h) Borrower shall not, without Xxxxxx’s prior written consent, elect to treat any of the
Principal Lease as terminated under Section 365(h)(l) of the Bankruptcy Code. Any such election
made without Xxxxxx’s prior written consent shall be void.
(i) If pursuant to Section 365(h)(2) of the Bankruptcy Code, Borrower seeks to offset against
the rent reserved in the Principal Lease the amount of any damages caused by the non-performance by
the Tenant of any of the Tenant’s obligations under the Principal Lease after the rejection by the
Tenant of the Principal Lease under the Bankruptcy Code, Borrower shall, prior to effecting such
offset, notify Lender of its intention to do so, setting forth the amounts proposed to be so offset
and the basis therefor. If Xxxxxx has failed to object as aforesaid within ten (10) days after
notice from Borrower in accordance with the first sentence of this subsection (l), Borrower may
proceed to effect such offset in the amounts set forth in Borrower’s notice. Neither Lender’s
failure to object as aforesaid nor any objection or other communication between Lender and Borrower
relating to such offset shall constitute an approval of any such offset by Lender. Borrower shall
indemnify and save Lender harmless from and
-43-
against any and all claims, demands, actions, suits,
proceedings, damages, losses, costs and expenses of every nature whatsoever (including, without
limitation, reasonable attorneys’ fees and disbursements) arising from or relating to any such
offset by Borrower against the rent reserved in the respective Lease.
(j) If any action, proceeding, motion or notice shall be commenced or filed in respect of
Borrower or, after the occurrence and during the continuance of any Event of Default, the
Property in connection with any case under the Bankruptcy Code, Lender shall have the option,
to the exclusion of Borrower, exercisable upon notice from Lender to Borrower, to conduct and
control any such litigation with counsel of Xxxxxx’s choice. Lender may proceed in its own name or
in the name of Borrower in connection with any such litigation, and Xxxxxxxx agrees to execute any
and all powers, authorizations, consents and other documents required by Xxxxxx in connection
therewith. Borrower shall pay to Lender all costs and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) paid or incurred by Xxxxxx in connection with the
prosecution or conduct of any such proceedings within five (5) days after notice from Lender
setting forth such costs and expenses in reasonable detail. Any such costs or expenses not paid by
Borrower as aforesaid shall be secured by the lien of this Deed of Trust, shall be added to the
principal amount of the Debt and shall bear interest at the Default Interest Rate. Borrower shall
not commence any action, suit, proceeding or case, or file any application or make any motion, in
respect of the Principal Lease in any such case under the Bankruptcy Code without the prior written
consent of Lender.
(k) Borrower shall immediately, after obtaining knowledge thereof, notify Lender of any filing
by or against the Tenant of a petition under the Bankruptcy Code. Borrower shall thereafter
forthwith give written notice of such filing to Lender, setting forth any information available to
Borrower as to the date of such filing, the court in which such petition was filed, and the relief
sought therein. Borrower shall promptly deliver to Lender following receipt any and all notices,
summonses, pleadings, applications and other documents received by Borrower in connection with any
such petition and any proceedings relating thereto.
(l) Borrower hereby covenants and agrees to send to Lender copies of all material notices
under the Principal Lease hereafter given or received by such person in connection therewith to
Lender in accordance with Section 5.5 hereof.
(m) Effective upon the entry of an order for relief in respect of Borrower under the
Bankruptcy Code, Borrower hereby assigns and transfers to Lender a non-exclusive right to apply to
the Bankruptcy Court under Section 365(d)(4) of the Bankruptcy Code for an order extending the
period during which the Principal Lease may be rejected or assumed.
ARTICLE II
EVENTS OF DEFAULT
2.1 Events of Default. The occurrence of any of the following shall be an “Event of
Default” hereunder:
(a) Borrower or Borrower Parties fail to punctually perform any covenant, agreement,
obligation, term or condition of the Note, this Deed of Trust or any other Loan Document which
requires payment of any money to Lender, and (1) in the case of any Monthly Payment Amount due
under the Note or any payment to any Reserve required under this Deed of Trust, such failure
continues beyond the applicable grace period set forth in the Note with respect to the Monthly
Payment Amount, (2) in the case of any other amount due from Borrower to Lender, such failure
continues for the
-44-
applicable period set forth therein or, if no period is set forth, for seven (7)
days after such payment becomes due or, if due on demand, is demanded.
(b) Borrower (i) fails to provide insurance as required by Section 1.4 hereof or (ii) fails to
perform any covenant, agreement, obligation, term or condition set forth in Section 1.5 hereof
(except to the extent that such lapse is due solely to a failure by Lender to pay the insurance
premiums after so requested by Borrower and sufficient funds are available therefore at such time
in the Impound Account) or (iii) fails to comply with Section 1.31 hereof.
(c) Borrower fails to perform any other covenant, agreement, obligation, term or condition set
forth herein other than those otherwise described in this Section 2.1 and, to the extent such
failure or default is susceptible of being cured, the continuance of such failure or default for
thirty (30) days after written notice thereof from Lender to Borrower; provided, however,
that if such default is susceptible of cure but such cure cannot be accomplished with reasonable
diligence within said period of time, and if Borrower commences to cure such default promptly after
receipt of notice thereof from Lender, and thereafter prosecutes the curing of such default with
reasonable diligence, such period of time shall be extended for such period of time as may be
necessary to cure such default with reasonable diligence, but not to exceed an additional sixty
(60) days.
(d) Any representation or warranty made herein, in or in connection with the Loan Application
or any commitment relating to the Loan (not correctly stated in the Loan Documents), or in any of
the other Loan Documents to Lender, by Borrower, by any Indemnitor or by any Constituent Entity of
Borrower or any Indemnitor, is determined by Lender to have been false or misleading in any
material respect at the time made.
(e) A Transfer, except as expressly permitted by Section 1.11 hereof.
(f) A default occurs under any of the other Loan Documents which has not been cured within any
applicable grace or cure period therein provided.
(g) Borrower, any Indemnitor, the sole member of Borrower or the Tenant, or any guarantor of
the Principal Lease becomes insolvent, or shall make a transfer in fraud of creditors, or shall
make an assignment for the benefit of creditors, shall file a petition in bankruptcy, shall
voluntarily be adjudicated insolvent or bankrupt or shall admit in writing the inability to pay
debts as they mature, shall petition or apply to any tribunal for or shall consent to or shall not
contest the appointment of a receiver, trustee, custodian or similar officer for Borrower, any
Indemnitor or the sole member of Borrower, Principal Tenant and any guarantor of the Principal
Lease, or for a substantial part of the assets of Borrower, the sole member of Borrower, or the
Principal Tenant and any guarantor thereunder, Principal Lease or Borrower, any such Indemnitor the
sole member of Borrower, or the Tenant under the Principal Lease or any guarantor thereunder, or
shall commence any case, proceeding or other action under any bankruptcy, reorganization,
arrangement, readjustment or debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect. Notwithstanding the foregoing to the contrary, Lender shall
not deem the filing of a petition in bankruptcy by the Principal Tenant or any guarantor under the
Principal Lease to be an Event of Default provided (i) all excess cash flow is deposited
into the Excess Cash Flow Reserve (as that term is defined in Section 1.28 herein) until the
petition for bankruptcy against the Principal Tenant or any guarantor under the Principal Lease is
dismissed, or the reorganization plan proposed by the Principal Tenant or any guarantor under the
Principal Lease is confirmed by the bankruptcy court and (ii) the Principal Tenant or any guarantor
under the Principal Lease assumes the Principal Lease under the Bankruptcy Code and resumes making
monthly payments of rent under the Principal Lease.
-45-
(h) A petition is filed or any case, proceeding or other action is commenced against Borrower,
against any Indemnitor or against the sole member of Borrower, or the Principal Tenant or any
guarantor under the Principal Lease seeking to have an order for relief entered against it as
debtor or seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts or other relief under any law relating to bankruptcy, insolvency, arrangement,
reorganization, receivership or other debtor relief under any law or statute of any jurisdiction
whether now or hereafter in effect or a court of competent jurisdiction enters an order for relief
against Xxxxxxxx, against any Indemnitor, against the sole member of Xxxxxxxx, or against the
Principal Tenant or any guarantor under the Principal Lease, as debtor, or an order, judgment or
decree is entered appointing, with or without the consent of Borrower, of any Indemnitor, of the
sole member of Xxxxxxxx, a receiver, trustee, custodian or similar
officer for Borrower, for any such Indemnitor or the sole member of Borrower, for the
Principal Tenant or any guarantor under the Principal Lease, or for any substantial part of any of
the properties of Borrower, any such Indemnitor, the sole member of Borrower, or the Principal
Tenant or any guarantor thereunder, and if any such event shall occur, such petition, case,
proceeding, action, order, judgment or decree shall not be dismissed within sixty (60) days after
being commenced. Notwithstanding the foregoing to the contrary, Lender shall not deem the filing
of a petition for bankruptcy against the Principal Tenant or any guarantor under the Principal
Lease to be an Event of Default provided (i) all excess cash flow is deposited into the
Excess Cash Flow Reserve (as that term is defined in Section 1.28 herein) until the petition for
bankruptcy against the Principal Tenant or any guarantor under the Principal Lease is dismissed, or
the reorganization plan proposed by the Principal Tenant or any guarantor under the Principal Lease
is confirmed by the bankruptcy court and (ii) the Principal Tenant or any guarantor under the
Principal Lease assumes the Principal Lease under the Bankruptcy Code and resumes making monthly
payments of rent under the Principal Lease.
(i) The Property or any part thereof shall be taken on execution or other process of law
(other than by eminent domain) in any action against Xxxxxxxx.
(j) Borrower abandons all or a portion (other than a de minimis portion) of the Property less
and except personalty in the ordinary course of business.
(k) The holder of any lien or security interest on the Property (without implying the consent
of Lender to the existence or creation of any such lien or security interest), whether superior or
subordinate to this Deed of Trust or any of the other Loan Documents, declares a default and such
default is not cured within any applicable grace or cure period set forth in the applicable
document or such holder institutes foreclosure or other proceedings for the enforcement of its
remedies thereunder.
(l) The Property, or any part thereof, is subjected to actual physical waste or to removal,
demolition or material alteration so that the value of the Property is materially diminished
thereby.
(m) Any dissolution, termination, partial or complete liquidation, merger or consolidation of
Borrower, any Indemnitor or the sole member of Borrower or any Indemnitor, without the prior
written consent of Lender.
(n) If any Lease, sublease or sub-sublease shall be terminated, modified or amended without
the prior written consent of Lender, in violation of any of the Loan Documents.
(o) Borrower attempts to supplement, modify, terminate or exercise any purchase option, if
any, under the Principal Lease without the prior written consent of Lender, or if any of the
interests or estates under the Principal Lease shall be surrendered by a party thereto or the
Principal Lease shall be terminated or cancelled for any reason or under any circumstances
whatsoever, or any of the
-46-
terms, covenants or conditions of the Principal Lease shall in any manner
be modified, changed, supplemented, altered or amended without the consent of Lender, in violation
of any of the Loan Documents. Notwithstanding the foregoing to the contrary, Lender shall not deem
the termination or cancellation of the Principal Lease to be an Event of Default provided
Borrower continues to make monthly payments of rent due under the Principal Lease to Lender, with
the balance of any such funds, if any, being deposited by Lender into the Excess Cash Flow Reserve
(as that term is defined in Section 1.28 herein) until a replacement tenant takes possession and
occupancy of substantially all of the Principal Tenant Space pursuant to a lease approved by Lender
in accordance with the terms of the Deed of Trust, which lease shall contain substantially the same
term and base rent as the Principal Lease.
(p) A default beyond any applicable grace or cure period by Borrower in the observance or
performance of any term covenant or condition of any of the Principal Lease.
(q) There shall occur an Event of Default under (i) that certain Deed of Trust, Assignment of
Leases and Rents and Security Agreement given by First Park Ten COCO San Antonio, L.P. (an
affiliate of Borrower), to Lender dated of even date herewith and intended to be recorded in
Tarrant County, Texas, and that certain Deed of Trust, Assignment of Leases and Rents and Security
Agreement given by OB Midway NC Gladstone Commercial LLC (an affiliated of Borrower), to Lender
dated of even date herewith and intended to be recorded in Davidson County, North Carolina.
ARTICLE III
REMEDIES
3.1 Remedies Available. If there shall occur an Event of Default under this Deed of
Trust, then the Property shall be subject to sale and this Deed of Trust shall be subject to
foreclosure, all as provided by law, and Lender may, at its option and by or through a trustee,
nominee, assignee or otherwise, to the fullest extent permitted by law, exercise any or all of
the following rights, remedies and recourses, either successively or concurrently:
(a) Acceleration. Accelerate the maturity date of the Note and declare any or all of
the Obligations to be immediately due and payable without any presentment, demand, protest, notice,
or action of any kind whatever (each of which is hereby expressly waived by Borrower), whereupon
the same shall become immediately due and payable. Upon any such acceleration, payment of such
accelerated amount shall constitute a prepayment of the principal balance of the Note and any
applicable prepayment fee provided for in the Note shall then be immediately due and payable.
(b) Entry on the Property. Either in person or by agent, with or without bringing any
action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of
its security, enter upon and take possession of the Property, or any part thereof, without force or
with such force as is permitted by law and without notice or process or with such notice or process
as is required by law unless such notice and process is waivable, in which case Borrower hereby
waives such notice and process, and do any and all acts and perform any and all work which may be
desirable or necessary in Xxxxxx’s judgment to complete any unfinished construction on the Real
Estate, to preserve the value, marketability or rentability of the Property, to increase the income
therefrom, to manage and operate the Property or to protect the security hereof and all sums
expended by Lender therefor, together with interest thereon at the Default Interest Rate, shall be
immediately due and payable to Lender by Borrower on demand.
(c) Collect Rents and Profits. With or without taking possession of the Property, sue
or otherwise collect the Rents and Profits, including those past due and unpaid.
-47-
(d) Appointment of Receiver. Upon, or at any time prior to or after, initiating the
exercise of any power of sale, instituting any judicial foreclosure or instituting any other
foreclosure of the liens and security interests provided for herein or any other legal proceedings
hereunder, make application to a court of competent jurisdiction for appointment of a receiver for
all or any part of the Property, as a matter of strict right and without notice to Borrower and
without regard to the adequacy of the Property for the repayment of the Obligations or the solvency
of Borrower or any person or persons liable for the payment of the Obligations, and Xxxxxxxx hereby
irrevocably consent to such appointment, waives any and all notices of and defenses to such
appointment and agrees not to oppose any application therefor by Xxxxxx, but nothing herein is to
be construed to deprive Lender of any other right, remedy or privilege Lender may now have under
the law to have a receiver appointed, provided, however, that, the
appointment of such receiver, trustee or other appointee by virtue of any court order, statute
or regulation shall not impair or in any manner prejudice the rights of Lender to receive payment
of the Rents and Profits pursuant to other terms and provisions hereof. Any such receiver shall
have all of the usual powers and duties of receivers in similar cases, including, without
limitation, the full power to hold, develop, rent, lease, manage, maintain, operate and otherwise
use or permit the use of the Property upon such terms and conditions as said receiver may deem to
be prudent and reasonable under the circumstances as more fully set forth in Section 3.3 below.
Such receivership shall, at the option of Lender, continue until full payment of all of the
Obligations or until title to the Property shall have passed by foreclosure sale under this Deed of
Trust or deed in lieu of foreclosure.
(e) Foreclosure. Immediately commence an action to foreclose this Deed of Trust or to
specifically enforce its provisions or any of the Obligations pursuant to the statutes in such case
made and provided and sell the Property or cause the Property to be sold in accordance with the
requirements and procedures provided by said statutes in a single parcel or in several parcels at
the option of Lender.
(1) Should Lender have elected to accelerate the indebtedness secured hereby, Xxxxxx may
initiate foreclosure of the Property by requesting the Trustee to effectuate a non-judicial
foreclosure sale. The Trustee of this Deed of Trust shall then sell, or offer for sale, the
Property at public sale to the highest bidder for cash during a three hour period between the hours
of ten o’clock a.m. and four o’clock p.m. whose earliest point in time is specified, on the first
Tuesday of any month, at the area officially designated for holding such sales at the courthouse of
any county in the State in which any part of the Property is situated, after having given notice of
the date, the time period, place and terms of said sale in accordance with the laws of the State
where the Property is located then in force and governing said sales of real property and
improvements under powers conferred by deeds of trust. The Property shall be sold by posting, or
causing to be posted, at least twenty-one (21) consecutive days prior to the date of said sale,
written or printed notice thereof at the courthouse door in each of the counties in which the
Property is situated, designating the county where the Property will be sold and designating the
date, the time period, the place and the terms of sale. A copy of such notice shall also be filed
in the office of the County Clerk in each county of the State in which any part of the Property is
situated at least twenty-one (21) consecutive days before the date of said sale of the Property.
Lender shall have the right to become the purchaser at any sale held by any Trustee or substitute
or successor Trustee, or by any receiver or public officer. Any Lender purchasing at any such sale
shall have the right to credit the secured indebtedness owing to such Lender upon the amount of its
bid entered at such sale to the extent necessary to satisfy such bid. Said Trustee may appoint an
attorney-in-fact to act in its stead as Trustee to conduct sale as hereinbefore provided. Borrower
authorizes and empowers the Trustee to sell the Property, in lots or parcels or as a whole, and to
execute and deliver to the purchaser or purchasers thereof good and sufficient deeds of conveyance
thereto of the estate of title then existing on the Property and bills of sale with covenants of
general warranty. Xxxxxxxx binds himself to warrant and forever defend the title of such purchaser
or purchasers when so made by the Trustee, and agrees to accept proceeds of said sale, if any,
which are payable to Borrower as provided herein. In addition to the posting and filing of notices
hereinabove provided, and for so long as required by law, no foreclosure under the power of
-48-
sale herein contained shall be held unless Lender, at least twenty-one (21) days preceding the date of
sale and in the manner prescribed by law, shall have served written notice of the proposed sale
which designates the county where the Property will be sold and designates the date, time period,
the place and the terms of sale by certified mail on Borrower. Service of such a notice by
certified mail shall be completed upon deposit of such notice, postage prepaid and properly
addressed to each such person or entity at the address for Borrower indicated on the first page of
this Deed of Trust, in a Post Office of the United States Postal Service or in an official
depository under the care and custody of the United States Postal Service. The affidavit of a
person knowledgeable of the facts to the effect that such service was completed shall be prima
facie evidence of the fact of service.
(2) Should Lender have not elected to accelerate the indebtedness secured hereby,
Xxxxxx may nonetheless proceed with foreclosure in satisfaction of such default, either
through the courts or by directing the Trustee to proceed as if under a full foreclosure,
conducting sale as hereinbefore provided, but without declaring the entire indebtedness secured by
this Deed of Trust due, and provided that if said sale is made because of such default, such sale
may be made subject to the unmatured part of the secured indebtedness. Such sale, if so made,
shall not in any manner affect the unmatured part of the debt secured by this Deed of Trust, but as
to such unmatured part, this Deed of Trust shall remain in full force as though no sale had been
made. Several sales may be made without exhausting the right of sale with respect to any unmatured
part of the secured indebtedness, it being the purpose and intent hereof to provide for a
foreclosure and the sale of the Property for any matured portion of said secured indebtedness
without exhausting the power of foreclosure.
(3) In the event foreclosure proceedings are filed by Xxxxxx, all expenses incident to such
proceeding, including, but not limited to, attorneys’ fees and costs, shall be paid by Xxxxxxxx and
secured by this Deed of Trust and by all of the other Loan Documents securing all or any part of
the indebtedness evidenced by the Note. The Obligations and all other obligations secured by this
Deed of Trust, including, without limitation, interest at the Default Interest Rate (as defined in
the Note), any prepayment charge, fee or premium required to be paid under the Note in order to
prepay principal (to the extent permitted by applicable law), attorneys’ and trustee’s fees and any
other amounts due and unpaid to Lender under the Loan Documents, may be bid by Xxxxxx in the event
of a foreclosure sale hereunder.
(f) Rights under the Uniform Commercial Code. Exercise any or all of the remedies of
a secured party under the Uniform Commercial Code against the UCC Collateral, either separately or
together, and in any order, without in any way affecting the availability of Xxxxxx’s other
remedies. Furthermore, to the extent permitted by law, in conjunction within, addition to or in
substitution for the rights and remedies available to Lender pursuant to any applicable Uniform
Commercial Code: in the event of a foreclosure sale with respect to the portions of the Property
which are not UCC Collateral, the Property (including the UCC Collateral) may, at the option of
Lender, be sold as a whole or in parts, as determined by Lender in its sole discretion; and (2) it
shall not be necessary that (x) Lender take possession of the UCC Collateral, or any part thereof,
prior to the time that any sale pursuant to the provisions of this Section is conducted, or (y) the
UCC Collateral, or any part thereof, be present at the location of such sale; and (3) Lender may
appoint or delegate any one or more persons as agent to perform any act or acts necessary or
incident to any sale held by Lender, including the sending of notices and the conduct of the sale,
but in the name and on behalf of Xxxxxx.
(g) Judicial Remedies. Proceed by suit or suits, at law or in equity, instituted by
Xxxxxx, or Trustee, upon written request of Xxxxxx, to enforce the payment of the indebtedness
secured hereby or the other obligations of Borrower hereunder or pursuant to the Loan Documents, to
foreclose the liens and security interests of this Deed of Trust as against all or any part of the
Property, and to have all or any part of the Property sold under the judgment or decree of a court
of competent jurisdiction. This remedy shall be cumulative of any other non-judicial remedies
available to the Lender with respect
-49-
to the Loan Documents. Proceeding with the request or
receiving a judgment for legal relief shall not be or be deemed to be an election of remedies or
bar any available non-judicial remedy of the Lender.
(h) Other. Exercise any other right or remedy available (i) hereunder, including, but
not limited to, drawing upon the Letter of Credit, (ii) under any of the other Loan Documents,
(iii) under any of the Other Deed of Trusts or (iv) at law or in equity.
3.2 Application of Proceeds. To the fullest extent permitted by law, the proceeds
of any sale under this Deed of Trust shall be applied to the extent funds are so available to the
following items in such order as Lender in its discretion may determine:
(a) To payment of the costs, expenses and fees of taking possession of the Property, and of
holding, operating, maintaining, using, leasing, repairing, improving, marketing and selling the
same and of otherwise enforcing Xxxxxx’s right and remedies hereunder and under the other Loan
Documents, including, but not limited to, a reasonable fee to the Trustee, receivers’ fees, court
costs, attorneys’, accountants’, appraisers’, managers’ and other professional fees, title charges
and transfer taxes.
(b) To payment of all sums expended by Xxxxxx under the terms of any of the Loan Documents and
not yet repaid, together with interest on such sums at the Default Interest Rate.
(c) To payment of the Obligations and all other obligations secured by this Deed of Trust,
including, without limitation, interest at the Default Interest Rate and, to the extent permitted
by applicable law, any prepayment fee, charge or premium required to be paid under the Note in
order to prepay principal, in any order that Lender chooses in its sole discretion.
The remainder, if any, of such funds shall be disbursed to Borrower or to the person or
persons legally entitled thereto.
3.3 Right and Authority of Receiver or Lender in the Event of Default; Power of
Attorney. Upon the occurrence of an Event of Default hereunder, and entry upon the Property
pursuant to Section 3.1(b) hereof or appointment of a receiver pursuant to Section 3.1(d) hereof,
and under such terms and conditions as may be prudent and reasonable under the circumstances in
Xxxxxx’s or the receiver’s sole discretion, all at Borrower’s expense, Xxxxxx or said receiver,
or such other persons or entities as they shall hire, direct or engage, as the case may be, may
do or permit one or more of the following, successively or concurrently: (a) enter upon and take
possession and control of any and all of the Property; (b) take and maintain possession of all
documents, books, records, papers and accounts relating to the Property; (c) exclude Borrower and
its agents, servants and employees wholly from the Property; (d) manage and operate the Property;
(e) preserve and maintain the Property; (f) make repairs and alterations to the Property; (g)
complete any construction or repair of the Improvements, with such changes, additions or
modifications of the plans and specifications or intended disposition and use of the Improvements
as Lender may in its sole discretion deem appropriate or desirable to place the Property in such
condition as will, in Lender’s sole discretion, make it or any part thereof readily marketable or
rentable; (h) conduct a marketing or leasing program with respect to the Property, or employ a
marketing or leasing agent or agents to do so, directed to the leasing or sale of the Property
under such terms and conditions as Lender may in its sole discretion deem appropriate or
desirable; (i) employ such contractors, subcontractors, materialmen, architects, engineers,
consultants, managers, brokers, marketing agents, or other employees, agents, independent
contractors or professionals, as Lender may in its sole discretion deem appropriate or desirable
to implement and effectuate the rights and powers herein granted; (j) execute and deliver, in the
name of Xxxxxx as attorney-in-fact and agent of Borrower or in its own name as Lender, such
documents and instruments as are necessary or appropriate to consummate authorized
-50-
transactions;
(k) enter into such Leases, whether of real or personal property, under such terms and conditions
as Lender may in its sole discretion deem appropriate or desirable; (l) collect and receive the
Rents and Profits from the Property; (m) eject Tenants or repossess personal property, as
provided by law, for breaches of the conditions of their Leases; (n) sue for unpaid Rents and
Profits, payments, income or proceeds in the name of Borrower or Lender; (o) maintain actions in
forcible entry and detainer, ejectment for possession and actions in distress for rent; (p)
compromise or give acquittance for Rents and Profits, payments, income or proceeds that may
become due; (q) delegate or assign any and all rights and powers given to Lender by this Deed of
Trust; and (r) do any acts which Lender in its sole discretion deems appropriate or desirable to
protect the security hereof and use such measures, legal or equitable, as Lender may in its sole
discretion deem appropriate or desirable to implement and effectuate the provisions of this Deed
of Trust. After an Event of Default has occurred this Deed of Trust shall
constitute a direction to and full authority to any Tenant, lessee, or other third party who
has heretofore dealt or contracted or may hereafter deal or contract with Borrower or Lender, at
the request of Xxxxxx, to pay all amounts owing under any Lease, contract or other agreement to
Lender without proof of the Event of Default relied upon. Any such Tenant, lessee or third party
is hereby irrevocably authorized to rely upon and comply with (and shall be fully protected by
Borrower in so doing) any request, notice or demand by Lender for the payment to Lender of any
Rents and Profits or other sums which may be or thereafter become due under its Lease, contract
or other agreement, or for the performance of any undertakings under any such Lease, contract or
other agreement, and shall have no right or duty to inquire whether any Event of Default under
this Deed of Trust, or any default under any of the other Loan Documents, has actually occurred
or is then existing. Borrower hereby constitutes and appoints Lender, its assignees, successors,
transferees and nominees, as Xxxxxxxx’s true and lawful attorney-in-fact and agent, with full
power of substitution in the Property, in Xxxxxxxx’s name, place and stead, to do or permit any
one or more of the foregoing described rights, remedies, powers and authorities, successively or
concurrently, and said power of attorney shall be deemed a power coupled with an interest and
irrevocable so long as any Obligations is outstanding. Any money advanced by Xxxxxx in
connection with any action taken under this Section 3.3, together with interest thereon at the
Default Interest Rate from the date of making such advancement by Xxxxxx until actually paid by
Xxxxxxxx, shall be a demand obligation owing by Borrower to Lender.
3.4 Occupancy After Foreclosure. In the event there is a foreclosure sale hereunder
and at the time of such sale, Borrower or Borrower’s representatives, successors or assigns, or
any other persons claiming any interest in the Property by, through or under Borrower (except
tenants of space in the Improvements subject to Leases entered into prior to the date hereof),
are occupying or using the Property, or any part thereof, then, to the extent not prohibited by
applicable law, each and all shall, at the option of Lender or the purchaser at such sale, as the
case may be, immediately become the tenant of the purchaser at such sale, which tenancy shall be
a tenancy from day-to-day, terminable at the will of either landlord or tenant, at a reasonable
rental per day based upon the value of the Property occupied or used, such rental to be due daily
to the purchaser. Further, to the extent permitted by applicable law, in the event the tenant
fails to surrender possession of the Property upon the termination of such tenancy, the purchaser
shall be entitled to institute and maintain an action for unlawful detainer of the Property in
the appropriate court of the county in which the Real Estate is located.
3.5 Notice to Account Debtors. Lender may, at any time after an Event of Default
hereunder, notify the account debtors and obligors of any accounts, chattel paper, negotiable
instruments or other evidences of indebtedness, to Borrower included in the Property to pay
Lender directly. Borrower shall at any time or from time to time upon the request of Xxxxxx
provide to Lender a current list of all such account debtors and obligors and their addresses.
3.6 Cumulative Remedies. All remedies contained in this Deed of Trust are
cumulative and Lender shall also have all other remedies provided at law and in equity or in any
other
-51-
Loan Documents. Such remedies may be pursued separately, successively or concurrently at
the sole subjective direction of Lender and may be exercised in any order and as often as
occasion therefor shall arise. No act of Lender shall be construed as an election to proceed
under any particular provisions of this Deed of Trust to the exclusion of any other provision of
this Deed of Trust or as an election of remedies to the exclusion of any other remedy which may
then or thereafter be available to Lender. No delay or failure by Lender to exercise any right
or remedy under this Deed of Trust shall be construed to be a waiver of that right or remedy or
of any Event of Default hereunder. Lender may exercise any one or more of its rights and
remedies at its option without regard to the adequacy of its security.
3.7 Payment of Expenses. Borrower shall pay on demand all of Xxxxxx’s third party
out of pocket expenses incurred in any efforts to enforce any terms of this Deed of Trust,
whether or not any lawsuit is filed and whether or not foreclosure is commenced but not
completed, including, but not limited to, reasonable legal fees and disbursements, foreclosure
costs and title charges, together with interest thereon from and after the date incurred by
Xxxxxx until actually paid by Borrower at the Default Interest Rate. Furthermore, Borrower
shall, and does hereby, indemnify Lender for, and hold Lender harmless from, any and all losses,
costs, expenses, claims, actions, demands liabilities, loss or damage which may or might be
incurred by Lender under this Deed of Trust or by the exercise of rights or remedies hereunder,
and from any and all claims and demands whatsoever which may be asserted against Lender by reason
of any alleged obligations or undertakings on Lender’s part with respect to the Property except
as expressly set forth in the Loan Documents, other than those finally determined to have
resulted solely from the gross negligence or willful misconduct of Lender. Borrower’s obligation
pursuant to the previous sentence shall include, without limitation, payment to (or reimbursement
of) any compensation payable by the holder of the Loan to any servicing agent under a Secondary
Market Transaction pursuant to the Securitization Documents (as defined herein) if such payment
becomes due solely by reason of the existence and continuance of any Event of Default. Should
Lender incur any such liability, the amount thereof, including, without limitation, costs,
expenses and attorneys’ fees, together with interest thereon at the Default Interest Rate from
the date incurred by Xxxxxx until actually paid by Xxxxxxxx, shall be immediately due and payable
to Lender from Borrower on demand.
3.8 Fair Market Value. The “fair market value” of the Property shall be determined
as of the foreclosure date in order to enforce a deficiency against Borrower or any other party
liable for the repayment of the indebtedness secured hereby, the term “fair market value” shall
include those matters required by law and shall also include the additional factors as follows:
(1) The Property is to be valued “AS IS, WHERE IS” and “WITH ALL FAULTS” and there shall be no
assumption of restoration of or refurbishment of the Property after the date of foreclosure;
(2) There shall be an assumption of a prompt resale of the Property for an all cash sales
price by the purchaser at the foreclosure so that no extensive holding period should be factored
into the determination of “fair market value” of the Property;
(3) An offset to the fair market value of the Property, as determined hereunder, shall be made
by deducting from such value the reasonable estimated closing costs relating to the sale of the
Property, including, but not limited to, brokerage commissions, title policy expenses, tax
prorations, escrow fees, and other common charges which are incurred by a seller of real property
similar to the Property; and
(4) After consideration of the factors required by law and those required above, an additional
discount factor shall be calculated based upon the estimated time it will take to effectuate a sale
of the Property so that the “fair market value” as so determined is discounted to be as of the date
of the foreclosure of the Property.
-52-
ARTICLE IV
CONCERNING THE TRUSTEE
4.1 No Required Action. Trustee shall not be required to take any action toward the
execution and enforcement of the trust hereby created or to institute, appear in, or defend any
action, suit, or other proceeding in connection therewith where, in his opinion, such action
would be likely to involve him in expense or liability, unless requested so to do by a written instrument
signed by Xxxxxx and, if Trustee so requests, unless Trustee is tendered security and indemnity
satisfactory to Trustee against any and all cost, expense, and liability arising therefrom.
Trustee shall not be responsible for the execution, acknowledgment, or validity of the Loan
Documents, or for the proper authorization thereof, or for the sufficiency of the lien and
security interest purported to be created hereby, and Trustee makes no representation in respect
thereof or in respect of the rights, remedies, and recourse of Lender.
4.2 Certain Rights. With the approval of Xxxxxx, Trustee shall have the right to
take any and all of the following actions: (i) to select, employ, and consult with counsel (who
may be, but need not be, counsel for Xxxxxx) upon any matters arising hereunder, including the
preparation, execution, and interpretation of the Loan Documents, and shall be fully protected in
relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder either directly or through his agents or
attorneys, (iii) to select and employ, in and about the execution of his duties hereunder,
suitable accountants, engineers and other experts, agents and attorneys-in-fact, either corporate
or individual, not regularly in the employ of Trustee (and Trustee shall not be answerable for
any act, default, negligence, or misconduct of any such accountant, engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act
done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances
whatsoever, except for Trustee’s gross negligence or bad faith), and (iv) any and all other
lawful action that Xxxxxx may instruct Trustee to take to protect or enforce Xxxxxx’s rights
hereunder. Trustee shall not be personally liable in case of entry by Trustee, or anyone
entering by virtue of the powers herein granted to Trustee, upon the Property for debts
contracted for or liability or damages incurred in the management or operation of the Property.
Trustee shall have the right to rely on any instrument, document, or signature authorizing or
supporting any action taken or proposed to be taken by Trustee hereunder, believed by Trustee in
good faith to be genuine. Trustee shall be entitled to reimbursement for expenses incurred by
Xxxxxxx in the performance of Xxxxxxx’s duties hereunder and to reasonable compensation for such
of Trustee’s services hereunder as shall be rendered. Borrower will, from time to time, pay the
compensation due to Trustee hereunder and reimburse Trustee for, and save Trustee harmless
against, any and all liability and expenses which may be incurred by Trustee in the performance
of Xxxxxxx’s duties.
4.3 Retention of Money. All moneys received by Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were received, but need not
be segregated in any manner from any other moneys (except to the extent required by applicable
law), and Trustee shall be under no liability for interest on any moneys received by Trustee
hereunder.
4.4 Successor Trustees. Trustee may resign by the giving of notice of such
resignation in writing or verbally to Xxxxxx. If Trustee shall die, resign, or become
disqualified from acting in the execution of this trust, or if, for any reason, Xxxxxx shall
prefer to appoint a substitute trustee or multiple substitute trustees, or successive substitute
trustees or successive multiple substitute trustees, to act instead of the aforenamed Trustee,
Xxxxxx shall have full power to appoint a substitute trustee (or, if preferred, multiple
substitute trustees) in succession who shall succeed (and if multiple substitute trustees are
appointed, each of such multiple substitute trustees shall succeed) to all the estates, rights,
powers, and
-53-
duties of the aforenamed Trustee. Such appointment may be executed by any authorized
agent of Lender, and if such Lender be a corporation and such appointment be executed in its
behalf by any officer of such corporation, such appointment shall be conclusively presumed to be
executed with authority and shall be valid and sufficient without proof of any action by the
board of directors or any superior officer of the corporation. Borrower hereby ratifies and
confirms any and all acts which the aforenamed Trustee, or his successor or successors in this
trust, shall do lawfully by virtue hereof. If multiple substitute Trustees are appointed, each
of such multiple substitute Trustees shall be empowered and authorized to act alone without the
necessity of the joinder of the other multiple substitute trustees, whenever any action or undertaking of such substitute trustees
is requested or required under or pursuant to this Deed of Trust or applicable law.
4.5 Perfection of Appointment. Should any deed, conveyance, or instrument of any
nature be required from Borrower by any Trustee or substitute Trustee to more fully and certainly
vest in and confirm to the Trustee or substitute Trustee such estates, rights, powers, and
duties, then, upon request by the Trustee or substitute Trustee, any and all such deeds,
conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be
caused to be recorded and/or filed by Borrower.
4.6 Succession Instruments. Any substitute Trustee appointed pursuant to any of the
provisions hereof shall, without any further act, deed, or conveyance, become vested with all the
estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder
with like effect as if originally named as Trustee herein; but nevertheless, upon the written
request of Lender or of the substitute Trustee, the Trustee ceasing to act shall execute and
deliver any instrument transferring to such substitute Trustee, upon the trusts herein expressed,
all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and
shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to
the substitute Trustee so appointed in the Trustee’s place.
4.7 No Representation by Trustee or Lender. By accepting or approving anything
required to be observed, performed, or fulfilled or to be given to Trustee or Lender pursuant to
the 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, neither Trustee nor Lender shall be deemed to have warranted, consented to, or affirmed
the sufficiency, legality, effectiveness, or legal effect of the same, or of any term, provision,
or condition thereof, and such acceptance or approval thereof shall not be or constitute any
warranty or affirmation with respect thereto by Trustee or Lender.
ARTICLE V
MISCELLANEOUS TERMS AND CONDITIONS
5.1 Time of Essence. Time is of the essence with respect to all provisions of the
Loan Documents.
5.2 Release of Deed of Trust. If all of the Obligations be paid and performed, then
and in that event only, upon Xxxxxxxx’s written request, Xxxxxx shall promptly execute and
deliver to Borrower a written satisfaction of the Deed of Trust, and upon the recordation
thereof, all rights under this Deed of Trust shall terminate except for those provisions hereof
which by their terms survive, and the Property shall become wholly clear of the liens, security
interests, conveyances and assignments evidenced hereby, which shall be released by Lender in due
form at Borrower’s cost. No release of this Deed of Trust or the lien hereof shall be valid
unless executed by Xxxxxx.
-54-
5.3 Certain Rights of Lender. Without affecting Borrower’s liability for the
payment of any of the Obligations, Lender may from time to time and without notice to Borrower:
(a) release any person liable for the payment of the Obligations; (b) extend or modify the terms
of payment of the Obligations; (c) accept additional real or personal property of any kind as
security or alter, substitute or release any property securing the Obligations; (d) consent in
writing to the making of any subdivision map or plat thereof; (e) join in granting any easement
therein; or (f) join in any extension agreement of the Deed of Trust or any agreement
subordinating the lien hereof.
5.4 Waiver of Certain Defenses. No action for the enforcement of the lien hereof or
of any other provision hereof, shall be subject to any defense which would not be good and
available to the party interposing such defense in an action at law upon the Note or any of the
other Loan Documents, in each case to the greatest extent permitted by law.
5.5 Notices. All notices, demands, requests or other communications to be sent by
one party to the other hereunder or required by law shall be in writing and shall be deemed to
have been validly given or served by delivery of the same in person to the intended addressee, or
by depositing the same with Federal Express or another reputable private courier service for next
business day delivery, with all charges prepaid, or by depositing the same in the United States
mail, postage prepaid, certified mail, return receipt requested, in any event addressed to the
intended addressee at its address set forth on the first page of this Deed of Trust or at such
other address as may be designated by such party as herein provided. All notices, demands and
requests shall be effective upon such personal delivery, or one (1) business day after being
deposited with Federal Express or another reputable national private courier service, or three
(3) business days after being deposited in the United States mail as required above. Rejection
or other refusal to accept or the inability to deliver because of changed address of which no
notice was given as herein required shall be deemed to be receipt of the notice, demand or
request sent. By giving to the other party hereto at least fifteen (15) days’ prior written
notice thereof in accordance with the provisions hereof, the parties hereto shall have the right
from time to time to change their respective addresses and each shall have the right to specify
as its address any other address within the United States of America.
5.6 Successors and Assigns. The terms, provisions, indemnities, covenants and
conditions hereof shall be binding upon Borrower and the successors and assigns of Borrower,
including all successors in interest of Xxxxxxxx in and to all or any part of the Property, and
shall inure to the benefit of Lender, its successors and assigns, and shall constitute covenants
running with the land. All indemnities in this Deed of Trust for the benefit of Lender shall
inure to the benefit of Lender and each of its directors, officers, shareholders, partners,
members, managers, employees and agents (including, without limitation, any servicers retained by
Lender with respect to the Loan), and pledgees and participants of the Obligations, and their
respective successors and assigns. All references in this Deed of Trust to Borrower or Lender
shall be deemed to include each such party’s successors and assigns. If Borrower consists of
more than one person or entity, each will be jointly and severally liable to perform the
obligations of Borrower.
5.7 Severability. A determination that any provision of this Deed of Trust is
unenforceable or invalid shall not affect the enforceability or validity of any other provision,
and any determination that the application of any provision of this Deed of Trust to any person
or circumstance is illegal or unenforceable shall not affect the enforceability or validity of
such provision as it may apply to any other persons or circumstances.
5.8 Interpretation. Within this Deed of Trust, words of any gender shall be held
and construed to include any other gender, and words in the singular shall be held and construed
to include the plural, and vice versa, unless the context otherwise requires. The headings of
the sections and paragraphs
-55-
of this Deed of Trust are for convenience of reference only, are not
to be considered a part hereof and shall not limit or otherwise affect any of the terms hereof.
In the event of any inconsistency between the provisions hereof and the provisions in any of the
other Loan Documents, it is intended that the provisions of this Deed of Trust shall be
controlling.
5.9 Waiver: Discontinuance of Proceedings. Xxxxxx may waive any single Event of
Default by Borrower hereunder without waiving any other prior or subsequent Event of Default.
Xxxxxx may remedy any Event of Default by Borrower hereunder without waiving the Event of Default
remedied. Neither the failure by Xxxxxx to exercise, nor the delay by Xxxxxx in exercising,
any right, power or remedy upon any Event of Default by Borrower hereunder shall be
construed as a waiver of such Event of Default or as a waiver of the right to exercise any such
right, power or remedy at a later date. No single or partial exercise by Lender of any right,
power or remedy hereunder shall exhaust the same or shall preclude any other or further exercise
thereof, and every such right, power or remedy hereunder may be exercised at any time and from
time to time. No modification or waiver of any provision hereof nor consent to any departure by
Borrower therefrom shall in any event be effective unless the same shall be in writing and signed
by Xxxxxx, and then such waiver or consent shall be effective only in the specific instance and
for the specific purpose given. No notice to nor demand on Borrower in any case shall of itself
entitle Borrower to any other or further notice or demand in similar or other circumstances.
Acceptance by Lender of any payment in an amount less than the amount then due on any of the
Obligations shall be deemed an acceptance on account only and shall not in any way affect the
existence of a Default or an Event of Default hereunder. In case Lender shall have proceeded to
invoke any right, remedy or recourse permitted hereunder or under the other Loan Documents and
shall thereafter elect to discontinue or abandon the same for any reason, Lender shall have the
unqualified right to do so and, in such an event, Borrower and Lender shall be restored to their
former positions with respect to the Obligations, the Loan Documents, the Property and otherwise,
and the rights, remedies, recourses and powers of Lender shall continue as if the same had never
been invoked.
5.10 Governing Law.
(A) THE LOAN, SECURED IN PART BY THIS DEED OF TRUST, WAS NEGOTIATED IN THE STATE OF NEW YORK,
AND MADE BY XXXXXX IN THE STATE OF NEW YORK. AND THE PROCEEDS OF THE NOTE DELIVERED PURSUANT HERETO
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 DEED OF TRUST 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 LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER
LOAN DOCUMENTS 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 PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
-56-
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS DEED OF TRUST AND THE NOTE, AND THIS DEED OF
TRUST AND THE NOTE 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 DEED OF TRUST MAY AT XXXXXX’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, 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 EXCLUSIVE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE
AND APPOINT:
Corporation Service Company
0000 Xxxxxx xx xxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
0000 Xxxxxx xx xxx Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
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. XXXXXXXX (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.
5.11 Counting of Days. The term “days” when used herein shall mean calendar days.
If any time period ends on a Saturday, Sunday or holiday officially recognized by the state
within which the Fee Real Estate is located, the period shall be deemed to end on the next
succeeding business day. The term “business day” when used herein shall mean a weekday, Monday
through Friday, except a legal holiday or a day on which banking institutions in the State in
which the Fee Real Estate is located are authorized by law to be closed.
5.12 Relationship of the Parties. The relationship between Xxxxxxxx and Xxxxxx is
that of a borrower and a lender only and neither of those parties is, nor shall it hold itself
out to be, the agent, employee, joint venturer or partner of the other party.
5.13 Application of the Proceeds of the Note. To the extent that proceeds of the
Note are used to pay indebtedness secured by any outstanding lien, security interest, charge or
prior encumbrance against the Property, such proceeds have been advanced by Xxxxxx at Borrower’s
request
-57-
and Xxxxxx shall be subrogated to any and all rights, security interests and liens owned
by any owner or holder of such outstanding liens, security interests, charges or encumbrances,
irrespective of whether said liens, security interests, charges or encumbrances are released.
5.14 Unsecured Portion of Indebtedness. If any part of the Obligations cannot be
lawfully secured by this Deed of Trust or if any part of the Property cannot be lawfully subject
to the lien and security interest hereof to the full extent of such indebtedness, then all
payments made shall be applied on said indebtedness first in discharge of that portion thereof
which is unsecured by this Deed of Trust.
5.15 Cross Default. An Event of Default shall be a default under each of the other
Loan Documents.
5.16 Interest After Sale. In the event the Property or any part thereof shall be
sold upon foreclosure as provided hereunder, to the extent permitted by law, the sum for which
the same shall have been sold shall, for purposes of redemption (pursuant to the laws of the
state in which the Property is located), bear interest at the Default Interest Rate.
5.17 Construction of this Document. This document may be construed as a mortgage,
security deed, deed of trust, chattel mortgage, conveyance, assignment, security agreement,
pledge, financing statement, hypothecation or contract, or any one or more of the foregoing, as
determined by Xxxxxx, in order to fully effectuate the liens and security interests created
hereby and the purposes and agreements herein set forth.
5.18 No Merger. It is the desire and intention of the parties hereto that this Deed
of Trust and the lien hereof do not merge in fee simple title to the Property. It is hereby
understood and agreed that should Xxxxxx acquire any additional or other interests in or to the
Property or the ownership thereof, then, unless a contrary intent is manifested by Xxxxxx as
evidenced by an appropriate document duly recorded, this Deed of Trust and the lien hereof shall
not merge in such other or additional interests in or to the Property, toward the end that this
Deed of Trust may be foreclosed as if owned by a stranger to said other or additional interests.
5.19 Rights With Respect to Junior Liens. Any person or entity purporting to have
or to take a junior mortgage or other lien upon the Property or any interest therein shall be
subject to the rights of Lender to amend, modify, increase, vary, alter or supplement this Deed
of Trust, the Note or any of the other Loan Documents and to extend the maturity date of the
indebtedness secured hereby and to increase the amount of the indebtedness secured hereby and to
waive or forebear the exercise of any of its rights and remedies hereunder or under any of the
other Loan Documents and to release any collateral or security for the indebtedness secured
hereby, in each and every case without obtaining the consent of the holder of such junior lien
and without the lien or security interest of this Deed of Trust losing its priority over the
rights of any such junior lien.
5.20 Lender May File Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other proceedings affecting
Borrower or the principals or general partners or members in Borrower, or their respective
creditors or property, Lender, to the extent permitted by law, shall be entitled to file such
proofs of claim and other documents as may be necessary or advisable in order to have the claims
of Lender allowed in such proceedings for the entire Obligations at the date of the institution
of such proceedings and for any additional amount which may become due and payable by Borrower
hereunder after such date.
-58-
5.21 Fixture Filing. To the extent permitted under applicable law, this Deed of
Trust shall be effective from the date of its recording as a financing statement filed as a
fixture filing with respect to all goods constituting part of the Property which are or are to
become fixtures. This Deed of Trust shall also be effective as a financing statement covering
minerals or the like (including oil and gas) and is to be filed for record in the Real Estate
Records of the county where the Property is situated. The mailing address of Borrower and the
address of Lender from which information concerning the security interests may be obtained are
set forth above. Xxxxxxxx and Xxxxxx acknowledge that for purposes of Article 9 of the UCC the
laws of the State of New York shall govern and control.
5.22 After-Acquired Property. All property acquired by Xxxxxxxx after the date of
this Deed of Trust which by the terms of this Deed of Trust shall be subject to the lien and the
security interest created hereby, shall immediately upon the acquisition thereof by Xxxxxxxx and
without further mortgage, conveyance or assignment become subject to the lien and security
interest created by this Deed of Trust. Nevertheless, Xxxxxxxx (at the sole cost and expense of
Xxxxxxxx) shall execute, acknowledge, deliver and record or file, as appropriate, all and every
such further mortgages, security agreements, financing statements, assignments and assurances, as
Lender shall require for accomplishing the purposes of this Deed of Trust.
5.23 No Representation. By accepting delivery of any item required to be observed,
performed or fulfilled or to be given to Lender pursuant to the Loan Documents, including, but
not limited to, any officer’s certificates, balance sheet, statement of profit and loss or other
financial statement, survey, appraisal or insurance policy, Lender shall not be deemed to have
warranted, consented to, or affirmed the sufficiency, legality, effectiveness or legal effect of
the same, or of any term, provision or condition thereof, and such acceptance of delivery thereof
shall not be or constitute any warranty, consent or affirmation with respect thereto by Lender.
5.24 Counterparts. This Deed of Trust may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed
an original, and all of which shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature page. Any signature page of this
Deed of Trust may be detached from any counterpart of this Deed of Trust without impairing the
legal effect of any signatures thereon and may be attached to another counterpart of this Deed of
Trust identical in form hereto but having attached to it one or more additional signature pages.
5.25 Exculpation. Notwithstanding anything to the contrary contained in this Deed
of Trust, the liability of Borrower and its officers, directors, members and general partners for
the Obligations and for the performance of the other agreements, covenants and obligations
contained herein and in the other Loan Documents shall be limited as set forth in Section 1.05 of
the Note.
5.26 Recording and Filing. Borrower (at the sole cost and expense of Borrower) will
cause the Loan Documents and all amendments and supplements thereto and substitutions therefor to
be recorded, filed, re-recorded and re-filed in such manner and in such places as Lender shall
reasonably request, and will pay on demand all such recording, filing, re-recording and re-filing
taxes, fees and other charges. Borrower shall reimburse Lender, or its servicing agent, for the
costs incurred in obtaining a tax service company to verify the status of payment of Taxes and
Other Charges on the Property.
5.27 Entire Agreement and Modification. This Deed of Trust and the other Loan
Documents contain the entire agreements between the parties relating to the subject matter hereof
and thereof and all prior agreements relative hereto and thereto which are not contained herein
or therein are terminated. This Deed of Trust and the other Loan Documents may not be amended,
revised, waived, discharged, released or terminated orally but only by a written instrument or
instruments executed by the
-59-
party against which enforcement of the amendment, revision, waiver,
discharge, release or termination is asserted. Any alleged amendment, revision, waiver,
discharge, release or termination which is not so documented shall not be effective as to any
party.
5.28 Maximum Interest. The provisions of Section 2.03 of the Note are incorporated
in this Deed of Trust by reference as if more fully set forth herein.
5.29 Secondary Market Transaction.
(a) Cooperation. Borrower acknowledges that Lender may effectuate a Secondary Market
Transaction. Borrower shall cooperate in good faith with Lender in effecting any such Secondary
Market Transaction and shall cooperate in good faith to implement all requirements imposed by
any Investor (as defined herein) or Rating Agency involved therein, including, without limitation,
all structural or other changes to Borrower and/or the Obligations, and modifications to any Loan
Documents; provided, however, that the Borrower shall not be required to modify any Loan Documents
if such modification would (A) increase the interest rate payable under the Note, (B) shorten the
period until the stated maturity of the Note, (C) modify the amortization of principal of the Note,
or (D) modify any other material term of the Obligations. Borrower shall provide such information
and documents relating to Borrower, any Indemnitor, the Property and any Tenants as Lender may
reasonably request in connection with such Secondary Market Transaction. Borrower shall make
available to Lender all information concerning its business and operations that Lender may
reasonably request.
(b) Disclosure; Indemnification. Lender shall be permitted to share all information
provided in connection with the Loan with the Investors, Rating Agencies, investment banking firms,
accounting firms, law firms and other third-party advisory firms involved with the Loan Documents
or the applicable Secondary Market Transaction. It is understood that the information provided to
Lender in connection with the Loan may ultimately be incorporated into the offering documents for
the Secondary Market Transaction and thus potential Investors may also see some or all of the
information with respect to the Loan, the Property, Borrower and the holders of direct or indirect
interests in Borrower. Borrower irrevocably waives any and all rights it may have under any
applicable laws (including, without limitation, any right of privacy) to prohibit such disclosure.
Xxxxxx and all of the aforesaid third-party advisors and professional firms shall be entitled to
rely on the information supplied by, or on behalf of, Xxxxxxxx. Borrower hereby indemnifies Lender
as to any losses, claims, damages or liabilities that arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the information provided by
or on behalf of Xxxxxxxx, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated in such information, or necessary in order to
make the statements in such information, or in light of the circumstances under which they were
made, not misleading. Lender may publicize the existence of the Obligations in connection with its
marketing for a Secondary Market Transaction or otherwise as part of its business development.
(c) Borrower acknowledges that, as part of the documents creating and governing any Secondary
Market Transaction in which the Loan (or any portion of or interest in the Loan) may be included
(the “Securitization Documents”), the parties to such Secondary Market Transaction may, in their
sole discretion, elect to impose certain requirements as conditions precedent to certain actions by
one or more of the servicing agents appointed with respect to the Loan (including, without
limitation, that such servicing agent obtain written confirmation from each applicable Rating
Agency that the proposed action will not result in a downgrade, qualification or withdrawal of any
rating issued on securities evidencing an ownership interest in the Loan that was in effect
immediately prior to such proposed action). No requirement or condition imposed upon such
servicing agent pursuant to such Securitization Documents as a condition precedent to the granting
or denying of any consent or approval, or the taking or refusal to take of any action, pursuant to
this Deed of Trust (except only for any action required of
-60-
Lender hereunder) shall give rise to any claim or cause of action by Borrower against Xxxxxx, or give Borrower any defense for failure to
perform its obligations under the Loan Documents. Borrower further acknowledges that the cost of
any such rating confirmation required by the Securitization Documents shall be payable by Borrower.
(d) Definitions: A “Secondary Market Transaction” shall be (1) any sale of the Deed
of Trust, Note and other Loan Documents to one or more investors as a whole loan, (2) a
participation of the Obligations to one or more investors, (3) a securitization of the Loan, (4)
any other sale or transfer of the Obligations or any interest therein to one or more investors.
“Rating Agency” shall mean any nationally-recognized statistical rating organization that has been
designated by Lender to provide, or that provides, a rating on Borrower, the Loan or any securities
evidencing an interest in, inter alia, a trust or other entity which is the holder of the Note. “Investor” shall mean
any actual or potential purchaser, transferee, assignee, servicer, participant or investor in a
Secondary Market Transaction.
5.30 WAIVER OF JURY TRIAL.
XXXXXX AND BORROWER, TO THE FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY, INTENTIONALLY AND
VOLUNTARILY, WITH AND UPON THE ADVICE OF COMPETENT COUNSEL, WAIVE, RELINQUISH AND FOREVER FORGO THE
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE OBLIGATIONS OR ANY CONDUCT, ACT OR OMISSION OF LENDER OR BORROWER, OR ANY OF THEIR
DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS
AFFILIATED WITH LENDER OR BORROWER, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE
5.31 Letter of Credit
(a) Additional Definitions. The following capitalized terms shall have the respective
meanings set forth below:
(i) “Letter of Credit” means a Satisfactory Letter of Credit in the amount of
$563,000.00.
(ii) “Satisfactory Letter of Credit” shall mean, for purposes of this Deed of Trust, a
clean, irrevocable and unconditional letter of credit that satisfies all of the provisions in this
Section 5.31.
(b) The Letter of Credit shall be issued in favor of Xxxxxx, its successors and/or assigns as
beneficiary by an issuer having a rating with respect thereto of “A“ or better by a Rating Agency
or such other issuer as shall be approved by Xxxxxx in its sole and absolute discretion (the
“Issuing Bank”).
(c) The Letter of Credit shall be drawable (with partial draws permitted) by Lender solely
upon the presentment to the issuer of a sight draft, demanding such payment, and accompanying draw
certificate, each in form and substance satisfactory to Lender in its sole and absolute discretion.
(d) The Letter of Credit shall have an initial expiration date of at least one (1) year from
the date of delivery to Lender provided, however, that such Letter of Credit bear an “evergreen
clause” whereby it shall be deemed automatically renewed, without amendment, for consecutive
periods of one (1) year each thereafter during the term of the Loan through the date which is
forty-five (45) days
-61-
following the end of the term of the Loan, unless the Issuing Bank sends a
notice (the “Non-Renewal Notice”) to Lender by certified mail, return receipt requested,
not less than thirty (30) days nor more than sixty (60) days prior to the then-current expiration
date of the Letter of Credit, stating that the Issuing Bank has elected not to renew such Letter of
Credit. Lender shall have the right, at any time following the receipt of a Non-Renewal Notice, to
draw the full amount of such Letter of Credit, by sight draft on the Issuing Bank, and shall
thereafter maintain the cash proceeds of such Letter of Credit in the Excess Cash Flow Reserve for
Leasing Costs (as further described in paragraph (e) below) pursuant to the applicable terms of the
Deed of Trust. Upon presentation by Borrower to Lender of a replacement Letter of Credit meeting
the requirements of Section 5.31, Lender shall refund such cash proceeds to Borrower. The
Issuing Bank shall agree with all drawers, endorsers and bona fide holders that drafts drawn under
and in compliance with the terms of the Letter of Credit will be duly honored upon presentation to
the Issuing Bank (or its correspondent bank, on terms and conditions no less favorable to Lender
than would apply to such a draft drawn on the Issuing Bank) at an office location in New York, New York. The Letter of Credit
shall be issued subject to the International Standby Practices 1998 or the most recent revision
thereof or successor thereto which shall be in effect from time to time (“ISP 1998”), and,
as to matters not expressly covered by ISP 98, by the law of the State of New York (including,
without limitation, Article 5 of the New York Uniform Commercial Code, but excluding Section
5-102(4) thereof).
(e) The Letter of Credit shall be in form and substance satisfactory to Lender in its sole and
absolute discretion.
(f) Borrower hereby pledges to Lender the Letter of Credit and any proceeds thereof, as
additional security for the payment of the indebtedness evidenced by the Note and secured, in part,
by the Deed of Trust, including without limitation all expenses (including reasonable attorneys’
fees and costs), taxes, and all transfer, recordings, filing and other charges in connection with
or incidental to the custody, care, transfer or administration of the Letter of Credit or in any
way relating to the enforcement, protection or preservation of the rights of remedies of Lender
pursuant to the Letter of Credit. Borrower shall, at its sole cost and expense, enter into any
letter of credit agreements or letter of credit security agreements required by Lender in its sole
and absolute discretion. Borrower hereby irrevocably authorizes Lender to file UCC Financing
Statements, Financing Statement Amendments and/or Financing Statement Continuations that Lender
deems necessary to perfect and/or continue the perfection of the pledge and security interest
granted hereunder.
(g) Provided that no Event of Default then exists and that the Letter of Credit has been
delivered to Lender, Xxxxxx shall return the Letter of Credit (or the then available proceeds
thereof) to Borrower upon Xxxxxx’s determination, in its sole and absolute discretion, that the
Xxxx Xxx Tenant Conditions have been satisfied.
(h) Each Letter of Credit delivered under this Section 5.31 shall be additional security for
the payment of the Debt. Upon the occurrence of an Event of Default, Lender shall have the right,
at its option, to draw on any Letter of Credit and to apply all or any part thereof to the payment
of the items for which such Letter of Credit was established or to apply each such Letter of Credit
to payment of the Obligations in such order, proportion or priority as Lender may determine. Any
such application to the Obligations shall be subject to the Yield Maintenance Premium. On the
Stated Maturity Date, any such Letter of Credit may be applied to reduce the Debt.
(i) In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to
the terms and conditions of this Deed of Trust, Lender shall have the additional rights to draw in
full any Letter of Credit: (i) with respect to any evergreen Letter of Credit, if Xxxxxx has
received a notice from the issuing bank that the Letter of Credit will not be renewed and a
substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which
the outstanding Letter of Credit is
-62-
scheduled to expire; (ii) with respect to any Letter of Credit
with a stated expiration date, if Xxxxxx has not received a notice from the issuing bank that it
has renewed the Letter of Credit at least thirty (30) days prior to the date on which such Letter
of Credit is scheduled to expire and a substitute Letter of Credit is not provided at least thirty
(30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (iii)
upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except
if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of
this Agreement or a substitute Letter of Credit is provided); or (iv) if Xxxxxx has received notice
that the bank issuing the Letter of Credit shall cease to be an Eligible Institution.
Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw
any Letter of Credit upon the happening of an event specified in (i), (ii), (iii) or (iv) above and
shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing
the Letter of Credit if Xxxxxx has not drawn the Letter of Credit.
5.32 State Specific Provisions. The following provisions shall govern and control in
the event of a conflict with any other provision of this Deed of Trust:
(1) Warranties of Borrower. The following items are added to the end of Section 1.1
as a part thereof:
| (pp) | No Leasing Commissions; No Management Fees Due. There are no brokerage fees or commissions payable by Borrower with respect to the leasing of space at the Property and there are no management fees payable by Borrower with respect to the management of the Property; and | ||
| (qq) | Security Deposits. To the extent required under applicable law, all security deposits are held in a segregated account and Borrower is in compliance with all legal requirements relating to such security deposits. |
(b) Environmental Laws. The term “Environmental Laws” as used in this Deed of Trust
shall include, without limitation, the Texas Solid Waste Disposal Act (V.T.C.A. Health and Safety
Code §361.001 et. Seq.), the Texas Water Code (V.T.C.A. Water Code §§26.001-26.407) and Risk
Reduction Standard No. 1 (30 Tex. Adm. Code §335.554).
(c) Acceleration. The following language shall be added to the end of Section 3.1(a)
of this Deed of Trust as a part thereof:
“Without limiting the foregoing, Borrower hereby waives, relinquishes and agrees not to
assert or take advantage of any requirement for notice of intent to accelerate and/or notice
of acceleration, to the extent permitted under applicable law.”
(d) Fair Market Value. Section 3.8 of this Deed of Trust is hereby deleted in its
entirety and is replaced by the following language:
“3.8 Fair Market Value. To the extent Section 51.003 of the
Texas Property Code, or any amendment thereto or judicial interpretation
thereof, requires that the “fair market value” of the Property shall be
determined as of the foreclosure date in order to enforce a deficiency
against Borrower or any other party liable for the repayment of the
indebtedness secured hereby, the term “fair market value” shall include
those matters required by law and shall also include the additional factors
as follows:
-63-
(a) The Property is to be valued “AS IS, WHERE IS” and “WITH ALL
FAULTS” and there shall be no assumption of restoration of or refurbishment
of the Property after the date of foreclosure;
(b) There shall be an assumption of a prompt resale of the Property for
an all cash sales price by the purchaser at the foreclosure so that no
extensive holding period should be factored into the determination of “fair
market value” of the Property;
(c) An offset to the fair market value of the Property, as determined
hereunder, shall be made by deducting from such value the reasonable
estimated closing costs relating to the sale of the Property, including, but
not limited to, brokerage commissions, title policy expenses, tax
prorations, escrow fees, and other common charges which are incurred by a seller of
real property similar to the Property; and
(d) After consideration of the factors required by law and those
required above, an additional discount factor shall be calculated based upon
the estimated time it will take to effectuate a sale of the property so that
the “fair market value” as so determined is discounted to be as of the date
of the foreclosure of the Property.”
(e) Counting of Days. The following language shall be added to the end of Section
5.11 of this Deed of Trust as a part thereof:
“Nothing contained in this Section 5.11 shall be deemed to prohibit or impair the conduct of
a non-judicial foreclosure sale on a legal holiday in accordance with the provisions of
Article III hereof.”
(f) Fixture Filing. Without limiting any provision of Section 5.21 of this Deed of
Trust, this Deed of Trust shall also constitute and be effective as a financing statement covering
accounts subject to subsection (e) of Section 9.103 of the Texas Business and Commerce Code, as
amended (or any successor statute thereof).
(g) Personal Liability. The following language shall be added to the end of Section
5.25 of this Deed of Trust as a part thereof:
”; provided, however, that nothing herein shall be deemed to be a waiver of any right which
Lender may have under Sections 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the indebtedness secured hereby or to
require that all collateral shall continue to secure all indebtedness owing to Lender in
accordance with the Note, this Deed of Trust and the other Loan Documents.”
(h) Maximum Interest. The following language shall be added to the end of Section
5.28 of this Deed of Trust as a part thereof:
-64-
“To the extent that Lender is relying on Chapter 303, as amended, of the Texas Finance Code
to determine the maximum amount of interest (as defined in the Note) permitted by applicable
law on the principal of the Note, beneficiary will utilize the weekly rate ceiling from time
to time in effect as provided in such Chapter 303, as amended. To the extent United States
federal law permits a greater amount of Interest than is permitted under Texas law, Lender
will rely on United States federal law instead of such Chapter 303, as amended, for the
purpose of determining the maximum amount permitted by applicable law. Additionally, to the
extent permitted by applicable law now or hereafter in effect, Lender may, at its option and
from time to time, implement any other method of computing the maximum lawful rate under
such Chapter 303, as amended, or under other applicable law by giving notice, if required,
to maker as provided by applicable law now or hereafter in effect. In no event shall the
provisions of chapter 346 of the Texas Finance Code (which regulates certain revolving
credit loan accounts and revolving triparty accounts) apply to the indebtedness evidenced by
the Loan Documents.”
(i) SPECIFIC NOTICE. IT IS EXPRESSLY AGREED AND UNDERSTOOD THAT THIS DEED OF TRUST
INCLUDES INDEMNIFICATION PROVISIONS (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION PROVISIONS
CONTAINED IN SECTIONS 1.25 AND 1.26 HEREOF) WHICH, IN CERTAIN CIRCUMSTANCES, COULD INCLUDE
AN INDEMNIFICATION BY BORROWER OF LENDER FROM CLAIMS OR LOSSES ARISING AS A RESULT OF XXXXXX’S OWN
NEGLIGENCE.
[NO FURTHER TEXT ON THIS PAGE]
-65-
IN WITNESS WHEREOF, Xxxxxxxx has executed this Deed of Trust as of the day and year first
above written.
| BORROWER: | ||||||
| SLEE GRAND PRAIRIE, L.P.,, a | ||||||
| Delaware limited partnership | ||||||
| By: | FIRST PARK TEN COCO SAN ANTONIO GP LLC, a Delaware limited liability company, its general partner |
|||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
STATE OF
|
) | |||||||
| ) | ss.: | |||||||
COUNTY OF
|
) |
BEFORE ME, the undersigned, a Notary Public in and for said County and State, on this day
personally appeared _________, in
his capacity as the _________ of SLEE GRAND
PRAIRIE, L.P., a Delaware limited liability company, GENERAL PARTNER of FIRST PARK TEN COCO SAN
ANTONIO, L.P., a Delaware limited partnership, known to me to be the person whose name is
subscribed to the foregoing instrument, and, being by me first duly sworn, declared and
acknowledged to me under oath that he executed the same for the purposes and consideration therein
expressed and in the capacity therein stated, as the act and deed of said limited liability
company, on behalf of the limited partnership.
GIVEN
UNDER MY HAND AND SEAL OF OFFICE this ___ day of November, 2006.
| Notary Public in and for | |||||||
| County, State of | |||||||
EXHIBIT A
PROPERTY DESCRIPTION
EXHIBIT B
LIST OF DEFERRED MAINTENANCE ITEMS
| ITEM | AMOUNT | |||||||
TOTAL
|
