EXHIBIT 99.2
RECORDING REQUESTED BY:
----------------------------------
And After Recordation This Deed of Trust
Should Be Returned To:
Xxxxx Xxxxxxxx, Esquire
c/o Teachers Insurance and Annuity
Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
by and between
SCIENCE PARK CENTER LLC,
a California limited liability company,
as Borrower
and
XXXXXXX TITLE GUARANTY COMPANY,
as Trustee
for the benefit of
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA,
as Lender
Property Known As
NEUROCRINE BIOSCIENCES CAMPUS
0
XXXX Xxxx. # XXX0000
M -- 0005852
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING made this 25th day of October, 2004, by and between SCIENCE
PARK CENTER LLC, a California limited liability company ("Borrower"), having its
principal place of business at 00000 Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, and XXXXXXX TITLE GUARANTY COMPANY ("TRUSTEE"), having an office at 000
Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, for the benefit of
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation
("LENDER"), having an address at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
RECITALS:
A. Lender agreed to make and Borrower agreed to accept a loan (the
"LOAN") in the maximum principal amount of Forty-Nine Million Five Hundred
Thousand Dollars ($49,500,000.00).
B. To evidence the Loan, Borrower executed and delivered to Lender a
promissory note (the "NOTE"), dated the date of this Deed of Trust, in the
principal amount of Forty-Nine Million Five Hundred Thousand Dollars
($49,500,000.00) (that amount or so much as is outstanding from time to time is
referred to as the "PRINCIPAL"), promising to pay the Principal with interest
thereon to the order of Lender as set forth in the Note and with the balance, if
any, of the Debt being due and payable on November 1, 2014 (the "MATURITY
DATE").
C. To secure the Note, this Deed of Trust conveys, among other things,
Borrower's fee interest in the real property located in the City of San Diego,
County of San Diego, State of California more particularly described in EXHIBIT
A (the "LAND").
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. Capitalized terms used in this Deed of Trust
are defined in EXHIBIT B or in the text with a cross-reference in EXHIBIT B.
Section 1.2. Rules of Construction. This Deed of Trust will be
interpreted in accordance with the rules of construction set forth in EXHIBIT C.
2
ARTICLE II
GRANTING CLAUSES
Section 2.1. Encumbered Property. Borrower irrevocably grants,
mortgages, warrants, conveys, assigns and pledges to Trustee in trust, WITH
POWER OF SALE and right of entry and possession, and grants to Trustee a
security interest in, the following property, rights, interests and estates, to
the full extent, but only to the extent, now or in the future owned, held or
acquired by Borrower (the "PROPERTY") for the uses and purposes set forth in
this Deed of Trust (capitalized terms used in this SECTION 2.1 and not defined
in this Deed of Trust have the meanings ascribed to them in the Uniform
Commercial Code):
(i) the Land;
(ii) all buildings and improvements located on the Land (the
"IMPROVEMENTS");
(iii) all easements; rights of way or use, including any rights of
ingress and egress; streets, roads, ways, sidewalks, alleys and passages; strips
and gores; sewer rights; water, water rights, water courses, riparian rights and
drainage rights; air rights and development rights; oil and mineral rights; and
tenements, hereditaments and appurtenances, in each instance adjoining or
otherwise appurtenant to or benefitting the Land or the Improvements;
(iv) all General Intangibles (including Software) and Goods, including
Fixtures, Equipment and Consumer Goods attached to, contained in or used in
connection with the Land or the Improvements (excluding personal property owned
by tenants);
(v) all agreements, ground leases, grants of easements or
rights-of-way, permits, declarations of covenants, conditions and restrictions,
disposition and development agreements, planned unit development agreements,
cooperative, condominium or similar ownership or conversion plans, management,
leasing, brokerage or parking agreements or other material documents affecting
Borrower or the Land, the Improvements or the Fixtures and Personal Property,
but expressly excluding the Leases (the "PROPERTY DOCUMENTS");
(vi) all Inventory held for sale, lease or resale or furnished or to be
furnished under contracts of service, or used or consumed in the ownership, use
or operation of the Land, the Improvements or the Fixtures and Personal
Property, and all Documents of title evidencing any part of any of the
foregoing;
(vii) all Accounts, Documents, Goods, Instruments, money, Deposit
Accounts, Chattel Paper, Letter-of-Credit Rights, Investment Property, General
Intangibles and Supporting Obligations relating to the Property, including all
deposits held from time to time by the Accumulations Depositary to provide
reserves for Taxes and Assessments together with interest thereon, if any (the
"ACCUMULATIONS");
(viii) all awards and other compensation paid after the date of this
Deed of Trust for any Condemnation (the "CONDEMNATION AWARDS");
3
(ix) all proceeds of and all unearned premiums on the Policies (the
"INSURANCE PROCEEDS");
(x) all licenses, certificates of occupancy, contracts, management
agreements, operating agreements, operating covenants, franchise agreements,
permits and variances relating to the Land, the Improvements or the Fixtures and
Personal Property;
(xi) all books, records and other information, wherever located, which
are in Borrower's possession, custody or control or to which Borrower is
entitled at law or in equity and which are related to the Property, including
all computer hardware and software or other equipment used to record, store,
manage, manipulate or access the information;
(xii) all after-acquired title to or remainder or reversion in any of
the property described in this Section; all Proceeds (excluding, however, sales
or other dispositions of Inventory in the ordinary course of the business of
operating the Land or the Improvements), replacements, substitutions, products,
accessions and increases within any one or more of the following types of
collateral: Goods, Equipment, Inventory, Instruments, Investment Property,
Chattel Paper, Letter-of-Credit Rights, Documents, Accounts or General
Intangibles, all additions, accessions and extensions to, improvements of and
substitutions or replacements for any of the Property described in this Section;
and all xxxxxxxxxx xxxxx, xxxxxxx, interests, rights or other property acquired
by Borrower after the date of this Deed of Trust for use in connection with the
Land or the Improvements, all without the need for any additional mortgage,
assignment, pledge or conveyance to Lender but Borrower will execute and deliver
to Lender, upon Lender's request, any documents reasonably requested by Lender
to further evidence the foregoing.
Section 2.2. [Intentionally Deleted]
Section 2.3. Security Agreement.
(a) The Property includes both real and personal property and this Deed
of Trust is a real property deed of trust and also a "security agreement" and a
"financing statement" within the meaning of the Uniform Commercial Code. By
executing and delivering this Deed of Trust, Borrower, as debtor, grants to
Lender, as secured party, as security for the Obligations, a security interest
in the Property to the full extent that any of the Property may be subject to
the Uniform Commercial Code.
(b) Except as otherwise provided in the Loan Documents, no financing
statement in favor of any secured party other than Lender covering the Fixtures
or Personal Property or any portion thereof is on file in any public office.
Borrower will not remove or permit the removal of the collateral or any part
thereof without the prior written permission of Lender, provided that obsolete
and worn-out articles may be removed concurrently with the replacement or
renewal thereof with property of at least equal value or usefulness in the
operation of the Property. At Lender's election, in addition to or instead of
any other description of the collateral, any financing statement description may
use the terms "all assets," "all personal property," or words to similar effect.
4
(c) The personal property in which Lender has a security interest
includes goods which are or will become fixtures related to the Land. This Deed
of Trust constitutes a financing statement filed as a fixture filing under the
Laws of the state or California and for such purpose the following information
is set forth, and Borrower represents, as of the date hereof, that the
information set forth in clauses (i), (ii), (vi), (vii) and (viii), is true and
correct:
(i) Exact legal name of Debtor (as indicated on the public
record of the jurisdiction of Borrower's organization, which shows
Borrower to have been organized): Science Park Center LLC
(ii) Mailing address of Debtor: As set forth in the first
paragraph of this Deed of Trust
(iii) Name and address of Secured Party: As set forth in the
first paragraph of this Deed of Trust
(iv) Description of the types (or items) of property covered
by this Financing Statement: all of the property described in Section
ii-xii of the Section entitled "Encumbered Property" described or
referred to herein and included as part of the Property.
(v) Description of real estate to which collateral is attached
or upon which it is located: Described in Exhibit A.
(vi) Type of organization of Debtor: limited liability company
(vii) California organizational identification number (NOT tax
id number) of Debtor: 199709210011
(viii) Debtor's sole state of organization: California.
Section 2.4. Conditions to Grant. This Deed of Trust is made on the
express condition that if Borrower pays and performs the Obligations in full in
accordance with the Loan Documents, then unless expressly provided otherwise in
the Loan Documents, the Loan Documents will be released at Borrower's expense.
ARTICLE III
OBLIGATIONS SECURED
Section 3.1. The Obligations. This Deed of Trust secures the Principal,
the Interest, the Late Charges, the Prepayment Premium, the Evasion Premium, the
Expenses, any additional advances made by Lender in connection with the Property
or the Loan and all other amounts payable under the Loan Documents (the "DEBT")
and also secures both the timely payment of the Debt as and when required and
the timely performance of all other obligations and covenants to be performed
under the Loan Documents (such payment and performance collectively, the
"OBLIGATIONS").
5
ARTICLE IV
TITLE AND AUTHORITY
Section 4.1. Title to the Property.
(a) Subject to the conveyance effectuated by this Deed of Trust, except
for Permitted Exceptions Borrower has and will continue to have good and
marketable title in fee simple absolute to the Land and the Improvements and
good and marketable title to the Fixtures and Personal Property, all free and
clear of liens, encumbrances and charges except the Permitted Exceptions. To
Borrower's knowledge, there are no facts or circumstances that might give rise
to a lien, encumbrance or charge on the Property except Permitted Exceptions.
(b) Borrower owns and will continue to own all of the other Property
free and clear of all liens, encumbrances and charges except the Permitted
Exceptions.
(c) This Deed of Trust is and will remain a valid and enforceable first
lien on and security interest in the Property, subject only to the Permitted
Exceptions.
Section 4.2. Authority.
(a) Borrower is and will continue to be (i) duly organized, validly
existing and in good standing under the Laws of the state of California, and
(ii) duly qualified to conduct business, in good standing, in the state or
California.
(b) Borrower has all approvals required by Law or otherwise (except
where the failure to have a de minimus type of approval does not have an adverse
effect on the Property, Borrower, or Lender's liens and interests in the
Property) and full right, power and authority to (i) own and operate the
Property and carry on Borrower's business as now conducted or as proposed to be
conducted; (ii) execute and deliver the Loan Documents; (iii) grant, mortgage,
warrant the title to, convey, assign and pledge the Property to Lender pursuant
to the provisions of this Deed of Trust; and (iv) perform the Obligations.
Borrower will continue to have all approvals required by Law or otherwise
(except where the failure to have an approval would have no material adverse
effect on the Property, Borrower, or Lender's liens and interests in the
Property) and full right, power and authority to (i) own and operate the
Property and carry on Borrower's business as now conducted or as proposed to be
conducted; (ii) execute and deliver the Loan Documents; (iii) grant, mortgage,
warrant the title to, convey, assign and pledge the Property to Lender pursuant
to the provisions of this Deed of Trust; and (iv) perform the Obligations.
(c) The execution and delivery of the Loan Documents by Borrower and
the performance of the Obligations by Borrower do not and will not conflict with
or result in a default under any Laws or any Leases or Property Documents and do
not and will not conflict with or result in a default under any agreement
binding upon Borrower.
(d) The Loan Documents constitute and will continue to constitute
legal, valid and binding obligations of all parties to the Loan Documents
enforceable in accordance with their respective terms.
6
(e) Borrower has not changed its legal name or its state or
commonwealth of organization, as set forth in SECTION 2.3, in the four months
prior to the date hereof, except as Borrower has disclosed any such change to
Lender in writing and delivered to Lender appropriate Uniform Commercial Code
search reports in connection therewith.
(f) Borrower has not (i) merged with or into any other entity or
otherwise been involved in any reorganization or (ii) acquired substantially all
of the assets of any other entity where Borrower became subject to the
obligations of such entity, for a period of one year ending on the date hereof,
except as Borrower has disclosed any such change, merger, reorganization or
acquisition to Lender in writing and delivered to Lender appropriate Uniform
Commercial Code search reports in connection therewith.
Section 4.3. No Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Code.
Section 4.4. Litigation. There are no Proceedings or, to Borrower's
knowledge, investigations against or affecting Borrower or the Property and, to
Borrower's knowledge, there are no facts or circumstances that might give rise
to a Proceeding or an investigation against or affecting Borrower or the
Property. Borrower will give Lender prompt notice of the commencement of any
Proceeding or investigation against or affecting the Property or Borrower which
could have a material adverse effect on the Property or on Lender's interests in
the Property or under the Loan Documents. Borrower also will deliver to Lender
such additional information relating to the Proceeding or investigation as
Lender may request from time to time.
ARTICLE V
PROPERTY STATUS, MAINTENANCE AND LEASES
Section 5.1. Status of the Property.
(a) Borrower has obtained all certificates, licenses, permits and
approvals that are issued or required by Law or by any entity having
jurisdiction over the Property or over Borrower or that are necessary for the
Permitted Use, for occupancy and operation of the Property for the conveyance
described in this Deed of Trust and for the conduct of Borrower's business on
the Property in accordance with the Permitted Use, except where the failure to
obtain a deminimus type of certificate, license, permit or approval does not
have an adverse effect on the Property, Borrower, or Lender's liens and
interests in the Property. Borrower will maintain in full force and effect all
certificates, licenses, permits and approvals that are issued or required by Law
or by any entity having jurisdiction over the Property or over Borrower or that
are necessary for the Permitted Use, for occupancy and operation of the Property
for the conveyance described in this Deed of Trust and for the conduct of
Borrower's business on the Property in accordance with the Permitted Use, except
where the failure to maintain a certificate, license, permit or approval would
have no material adverse effect on the Property, Borrower, or Lender's liens and
interests in the Property.
(b) The Property is and will continue to be serviced by all public
utilities required for the Permitted Use of the Property.
7
(c) All roads and streets necessary for service of and access to the
Property for the current or contemplated use of the Property have been completed
and are and will continue to be serviceable, physically open and dedicated to
and accepted by the Government for use by the public.
(d) The Property is free from damage caused by a Casualty.
(e) All costs and expenses of labor, materials, supplies and equipment
used in the construction of the Improvements have been paid in full.
Section 5.2. Maintenance of the Property. Borrower will maintain the
Property in thorough repair and good and safe condition, suitable for the
Permitted Use, including, to the extent necessary, replacing the Fixtures and
Personal Property with property at least equal in quality and condition to that
being replaced and free of liens. Borrower will not erect any new buildings,
building additions or other structures on the Land or otherwise materially alter
the Improvements without Lender's prior consent which may be withheld in
Lender's sole discretion. The Property will be managed by a property manager
satisfactory to Lender pursuant to a management agreement satisfactory to
Lender; provided, however, that management by a property manager shall not be
required so long as the Existing Lease remains in effect. Any property
management agreement for the Property shall be satisfactory to Lender, with a
property manager satisfactory to Lender, and shall be terminable by Borrower
upon 30 days notice to the property manager.
Section 5.3. Change in Use. Borrower will use and permit the use of the
Property for the Permitted Use and for no other purpose.
Section 5.4. Waste. Borrower will not commit or permit any waste
(including economic and non-physical waste), impairment or deterioration of the
Property or any material alteration, demolition or removal of any of the
Property without Lender's prior consent which may be withheld in Lender's sole
discretion.
Section 5.5. Inspection of the Property. Subject to the rights of
tenants under the Leases, Lender and its agents, attorneys, employees and
contractors have the right to enter and inspect the Property during business
hours on reasonable prior notice, except during the existence of an Event of
Default, when neither prior notice nor entry and inspection during business
hours shall be necessary. Borrower shall cooperate in such entries and
inspections as Lender may request. Lender has the right to engage an independent
expert to review and report on Borrower's compliance with Borrower's obligations
under this Deed of Trust to maintain the Property, comply with Law and refrain
from waste, impairment or deterioration of the Property and the alteration,
demolition or removal of any of the Property except as may be permitted by the
provisions of this Deed of Trust. If the independent expert's report discloses
material failure to comply with such obligations or if Lender engages the
independent expert after the occurrence of an Event of Default, then Borrower
shall pay, upon demand, the reasonable fees and costs of the independent
expert's review and report.
8
Section 5.6. Leases and Rents.
(a) Borrower assigns the Leases and the Rents to Lender absolutely and
unconditionally and not merely as additional collateral or security for the
payment and performance of the Obligations, but subject to a license back to
Borrower of the right to collect the Rents unless and until an Event of Default
occurs at which time the license will terminate automatically, all as more
particularly set forth in the Assignment, the provisions of which are
incorporated in this Deed of Trust by reference.
(b) Borrower appoints Lender as Borrower's attorney-in-fact to execute
unilaterally and record, at Lender's election, a document subordinating this
Deed of Trust to the Leases, provided that the subordination will not affect (i)
the priority of Lender's entitlement to Insurance Proceeds or Condemnation
Awards or (ii) the priority of this Deed of Trust over intervening liens or
liens arising under or with respect to the Leases.
Section 5.7. Parking. Borrower will provide, maintain, monitor and
light parking areas within the Property, including any sidewalks, aisles,
streets, driveways, sidewalk cuts and rights-of-way to and from the adjacent
public streets, in a manner consistent with the Permitted Use and sufficient to
accommodate the greatest of: (i) the number of parking spaces required by Law;
(ii) the number of parking spaces required by the Leases and the Property
Documents; or (iii) 669 parking spaces. The parking areas will be reserved and
used exclusively for ingress, egress and parking for Borrower and the tenants
under the Leases and their respective employees, customers and invitees and in
accordance with the Leases and the Property Documents.
Section 5.8. Separate Tax Lot. The Property is and will remain assessed
for real estate tax purposes as one or more wholly independent tax lots,
separate from any property that is not part of the Property.
Section 5.9. Changes in Zoning or Restrictive Covenants. Borrower will
not (i) initiate, join in or consent to any change in any Laws pertaining to
zoning, any restrictive covenant or other restriction which would restrict the
Permitted Uses for the Property; (ii) permit the Property to be used to fulfill
any requirements of Law for the construction or maintenance of any improvements
on property that is not part of the Property; (iii) permit the Property to be
used for any purpose not included in the Permitted Use; or (iv) impair the
integrity of the Property as a single, legally subdivided zoning lot separate
from all other property.
Section 5.10. Lender's Right to Appear. Lender has the right to appear
in and defend any Proceeding brought regarding the Property and to bring any
Proceeding, in the name and on behalf of Borrower or in Lender's name, which
Lender, in its sole discretion, determines should be brought to protect Lender's
interest in the Property.
9
ARTICLE VI
IMPOSITIONS AND ACCUMULATIONS
Section 6.1. Impositions.
(a) Subject to clause (c) below, Borrower will pay each Imposition at
least 15 days before the date (the "IMPOSITION PENALTY DATE") that is the
earlier of (i) the date on which the Imposition becomes delinquent and (ii) the
date on which any penalty, interest or charge for non-payment of the Imposition
accrues.
(b) At least 10 days before each Imposition Penalty Date, Borrower will
deliver to Lender a receipted xxxx or other evidence of payment.
(c) Borrower, at its own expense, may contest any Taxes or Assessments,
provided that Borrower pays the amount of such Taxes or Assessments in
accordance with clause (a) above or the following conditions are met:
(i) not less than 30 days prior to the Imposition Penalty
Date, Borrower delivers to Lender notice of the proposed contest;
(ii) the contest is by a Proceeding promptly initiated and
conducted diligently and in good faith;
(iii) there is no Event of Default;
(iv) the Proceeding suspends the collection of the contested
Taxes or Assessments;
(v) the Proceeding is permitted under and is conducted in
accordance with the Leases and the Property Documents;
(vi) the Proceeding precludes imposition of criminal or civil
penalties and sale or forfeiture of the Property and Lender will not be
subject to any civil suit; and
(vii) Borrower either deposits with the Accumulations
Depositary reserves or furnishes a bond or other security satisfactory
to Lender, in either case in an amount sufficient to pay the contested
Taxes or Assessments, together with all interest and penalties or
Borrower pays all of the contested Taxes or Assessments under protest.
(d) Installment Payments. If any Assessment is payable in installments,
Borrower will nevertheless pay the Assessment in its entirety on the day the
first installment becomes due and payable, unless Lender approves payment of the
Assessment in installments, which approval shall not be unreasonably withheld.
Section 6.2. Accumulations.
(a) Borrower made an initial deposit with either Lender or a mortgage
servicer or financial institution designated or approved by Lender from time to
time, acting on behalf of
10
Lender as Lender's agent or otherwise such that Lender is the "customer", as
defined in the Uniform Commercial Code, of the depository bank with respect to
the deposit account and/or securities account into which the Accumulations are
deposited, to receive, hold and disburse the Accumulations in accordance with
this Section (the "ACCUMULATIONS DEPOSITARY"). On the first day of each calendar
month during the Term Borrower will deposit with the Accumulations Depositary an
amount equal to one-twelfth (1/12th) of the annual Taxes and Assessments as
determined by Lender or its designee. Borrower will deliver to the Accumulations
Depositary, promptly upon receipt, any bills and other documents that are
necessary to pay the Taxes and Assessments.
(b) Subject to all of the other provisions of this SECTION 6.2, the
Accumulations will be applied to the payment of Taxes and Assessments and any
excess Accumulations after payment of Taxes and Assessments will be returned to
Borrower or credited against future payments of the Accumulations, at Lender's
election or as required by Law. If the Accumulations are not sufficient to pay
Taxes and Assessments, Borrower will pay the deficiency to the Accumulations
Depositary promptly upon receipt of notice thereof (and in any event not less
than ten (10) Business Days prior to the date when any penalty or interest for
the nonpayment of such Taxes and Assessments would attach).
(c) The Accumulations Depositary will hold the Accumulations as
security for the Obligations until applied in accordance with the provisions of
this Deed of Trust and any agreement among Borrower, Lender and the
Accumulations Depositary. If Lender is not the Accumulations Depositary, the
Accumulations Depositary will deliver the Accumulations to Lender upon Lender's
demand at any time after an Event of Default.
(d) If the Property is sold or conveyed other than by foreclosure or
transfer in lieu of foreclosure, all right, title and interest of Borrower to
the Accumulations will automatically, and without necessity of further
assignment, be held for the account of the new owner, subject to the provisions
of this Section and Borrower will have no further interest in the Accumulations.
(e) Borrower waives all right to demand, receive or collect any
interest or other return on the Accumulations, which will not be held in trust
and which, except as required by Law or as otherwise agreed in that certain Real
Estate Tax Pledge and Security Agreement of even date herewith, will be held in
a non-interest bearing account and may be commingled with other monies held by
the Accumulations Depositary.
(f) Lender has the right to pay, or to direct the Accumulations
Depositary to pay, any Taxes or Assessments unless Borrower is contesting the
Taxes or Assessments in accordance with the provisions of this Deed of Trust, in
which event any payment of the contested Taxes or Assessments will be made under
protest in the manner prescribed by Law or, at Lender's election, will be
withheld.
(g) If Lender assigns this Deed of Trust, Lender will pay, or cause the
Accumulations Depositary to pay, the unapplied balance of the Accumulations to
or at the direction of the assignee. Simultaneously with the payment, if the
assignee assumes, with respect to the amounts so paid, Lender's obligations
under that certain Real Estate Tax Pledge and Security Agreement of even date
herewith, Lender and the Accumulations Depositary will be released from all
11
liability with respect to the Accumulations and Borrower will look solely to the
assignee with respect to the Accumulations. When the Obligations have been fully
satisfied, any unapplied balance of the Accumulations will be returned to
Borrower. At any time after an Event of Default occurs, Lender may apply the
Accumulations as a credit against any portion of the Debt selected by Lender in
its sole discretion.
Section 6.3. Changes in Tax Laws. If a Law requires the deduction of
the Debt from the value of the Property for the purpose of taxation or imposes a
tax, either directly or indirectly, on the Debt, any Loan Document or Lender's
interest in the Property, Borrower will pay the tax with interest and penalties,
if any. If Lender determines that Borrower's payment of the tax may be unlawful,
unenforceable, usurious or taxable to Lender, the Debt will become immediately
due and payable on 120 days' prior notice.
ARTICLE VII
INSURANCE, CASUALTY, CONDEMNATION AND RESTORATION
Section 7.1. Insurance Coverages.
(a) Borrower will maintain such insurance coverages and endorsements in
form and substance and in amounts as Lender may require in its sole discretion,
from time to time, provided, however, that the insurance required hereunder
shall be of the type and in the amounts that is no more onerous to Borrower than
the types and amounts Lender requires for other properties that are similar in
type and location as the Property. Until Lender notifies Borrower of changes in
Lender's requirements, Borrower will maintain not less than the insurance
coverages and endorsements Lender required for closing of the Loan.
(b) The insurance, including renewals, required under this Section will
be issued on valid and enforceable policies and endorsements reasonably
satisfactory to Lender (the "POLICIES"). Each Policy will contain a standard
waiver of subrogation and a replacement cost endorsement and will provide that
Lender will receive not less than 30 days' prior written notice of any
cancellation, termination or non-renewal of a Policy or any material change
other than an increase in coverage and that Lender will be named under a
standard mortgage endorsement as loss payee.
(c) The insurance companies issuing the Policies (the "INSURERS") must
be authorized to do business in the State of California, must have been in
business for at least 5 years, must carry an A.M. Best Company, Inc. policy
holder rating of A- or better and an A.M. Best Company, Inc. financial category
rating of Class X or better and must be otherwise satisfactory to Lender. Lender
may select an alternative credit rating agency and may impose different credit
rating standards for the Insurers so long as the credit rating requirements are
no more stringent than those set forth herein. Notwithstanding Lender's right to
approve the Insurers and to establish credit rating standards for the Insurers,
Lender will not be responsible for the solvency of any Insurer.
(d) Notwithstanding Lender's rights under this Article, Lender will not
be liable for any loss, damage or injury resulting from the inadequacy or lack
of any insurance coverage.
12
(e) Borrower will comply with the provisions of the Policies and with
the requirements, notices and demands imposed by the Insurers and applicable to
Borrower or the Property.
(f) Borrower will pay the Insurance Premiums for each Policy not less
than 10 days before the expiration date of the Policy being replaced or renewed
and will deliver to Lender a certificate of insurance evidencing the new or
renewed Policy not less than 5 days prior to the expiration date of the Policy
being replaced or renewed, and will deliver to Lender an original or, if a
blanket policy, a certified copy of each Policy marked "Paid" promptly upon
receipt by Borrower.
(g) Borrower will not carry separate insurance concurrent in kind or
form or contributing in the event of loss with any other insurance carried by
Borrower.
(h) Borrower will not carry any of the insurance required under this
Section on a blanket or umbrella policy without in each instance Lender's prior
approval which may be withheld in Lender's sole discretion (except that, so long
as the Property is owned by Science Park Center LLC, a California limited
liability company, Lender's prior approval will not be unreasonably withheld).
If Lender approves, Borrower will deliver to Lender a certified copy of the
blanket policy which will allocate to the Property the amount of coverage
required under this Section and otherwise will provide the same coverage and
protection as would a separate policy insuring only the Property.
(i) Borrower will give the Insurers prompt notice of any change in
ownership or occupancy of the Property. This subsection does not abrogate the
prohibitions on transfers set forth in this Deed of Trust.
(j) If the Property is sold at a foreclosure sale or otherwise is
transferred so as to extinguish the Obligations, all of Borrower's right, title
and interest in and to the Policies then in force will be transferred
automatically to the purchaser or transferee.
Section 7.2. Casualty and Condemnation.
(a) Borrower will give Lender notice of any Casualty promptly after it
occurs and will give Lender notice of any Condemnation Proceeding promptly after
Borrower receives notice of commencement or notice that such a Condemnation
Proceeding will be commencing. Borrower will promptly deliver to Lender copies
of all documents Borrower delivers or receives relating to the Casualty or the
Condemnation Proceeding, as the case may be.
(b) Borrower authorizes Lender, at Lender's option, to act on
Borrower's behalf to collect, adjust and compromise any claims for loss, damage
or destruction under the Policies on such terms as Lender determines in Lender's
sole discretion. Borrower authorizes Lender to act, at Lender's option, on
Borrower's behalf in connection with any Condemnation Proceeding. Borrower will
execute and deliver to Lender all documents requested by Lender and all
documents as may be required by Law to confirm such authorizations. Nothing in
this Section will be construed to limit or prevent Lender from joining with
Borrower either as a co-defendant or as a co-plaintiff in any Condemnation
Proceeding.
13
(c) If Lender elects not to act on Borrower's behalf as provided in
this Section, then Borrower promptly will file and prosecute all claims
(including Lender's claims) relating to the Casualty and will prosecute or
defend (including defense of Lender's interest) any Condemnation Proceeding.
Borrower will have the authority to settle or compromise the claims or
Condemnation Proceeding, as the case may be, provided that Lender has approved
in Lender's reasonable discretion any compromise or settlement that exceeds
$500,000.00. Any check for Insurance Proceeds or Condemnation Awards, as the
case may be (the "PROCEEDS") will be made payable to Lender and Borrower.
Borrower will endorse the check to Lender promptly upon Lender presenting the
check to Borrower for endorsement or if Borrower receives the check first, will
endorse the check promptly upon receipt and forward it to Lender. If any
Proceeds are paid to Borrower, Borrower will promptly deposit the Proceeds with
Lender, to be applied or disbursed in accordance with the provisions of this
Deed of Trust. Lender will be responsible for only the Proceeds actually
received by Lender.
Section 7.3. Application of Proceeds. Subject to Section 7.4, after
deducting the costs incurred by Lender in collecting the Proceeds, Lender may,
in its sole discretion, (i) apply the Proceeds as a credit against any portion
of the Debt selected by Lender in its sole discretion; (ii) apply the Proceeds
to restore the Improvements, provided that Lender will not be obligated to see
to the proper application of the Proceeds and provided further that any amounts
released for Restoration will not be deemed a payment on the Debt; or (iii)
deliver the Proceeds to Borrower.
Section 7.4. Conditions to Availability of Proceeds for Restoration.
Notwithstanding the preceding Section, after a Casualty or a Condemnation (a
"DESTRUCTION EVENT"), Lender will make the Proceeds (less any costs incurred by
Lender in collecting the Proceeds) available for Restoration in accordance with
the conditions for disbursements set forth in the Section entitled
"RESTORATION", provided that the following conditions are met:
(i) Science Park Center LLC, a California limited liability company, or
the transferee under a Permitted Transfer, if any, continues to be Borrower at
the time of the Destruction Event and at all times thereafter until the Proceeds
have been fully disbursed;
(ii) no Event of Default under the Loan Documents exists at the time of
the Destruction Event and no Event of Default has occurred during the 12 months
prior to the Destruction Event;
(iii) Leases for at least 80% of the rentable square feet for which
Leases are in effect immediately prior to the Destruction Event and all Property
Documents in effect immediately prior to the Destruction Event that are
essential to the use and operation of the Property continue in full force and
effect notwithstanding the Destruction Event;
(iv) if the Destruction Event is a Condemnation, Borrower delivers to
Lender evidence reasonably satisfactory to Lender that the Improvements can be
restored to an economically and architecturally viable unit;
(v) Borrower delivers to Lender evidence reasonably satisfactory to
Lender that the Proceeds are sufficient to complete Restoration or if the
Proceeds are insufficient to complete
14
Restoration, Borrower first deposits with Lender funds ("ADDITIONAL FUNDS") that
when added to the Proceeds will be sufficient to complete Restoration;
(vi) if the Destruction Event is a Casualty, Borrower delivers to
Lender evidence satisfactory to Lender that the Insurer under each affected
Policy has not denied liability under the Policy as to Borrower or the insured
under the Policy;
(vii) Lender is reasonably satisfied that the proceeds of any business
interruption insurance or lost rental insurance in effect together with other
available gross revenues from the Property and Additional Funds, to the extent
Borrower elects in its sole discretion to deposit such Additional Funds with
Lender and such Additional Funds are in excess of amounts necessary to satisfy
clause (v) above, are sufficient to pay Debt Service Payments after paying the
Impositions, Insurance Premiums, reasonable and customary operating expenses and
capital expenditures until Restoration is complete;
(viii) Lender is satisfied that Restoration will be completed on or
before the date (the "RESTORATION COMPLETION DATE") that is the earliest of: (A)
12 months prior to the Maturity Date; (B) 18 months after the Destruction Event;
(C) the earliest date required for completion of Restoration under any Lease
(other than a Lease which is not, pursuant to Section 7.4(iii), required to
remain in effect), or any Property Document; or (D) any date required by Law;
and
(ix) following the Restoration Completion Date the annual Rents
(excluding security deposits) under Leases which are in effect on the date of
the Destruction Event and which will remain in effect after the Restoration
Completion Date will, after payment of annual Insurance Premiums, Impositions
and operating expenses of the Property (including ground rent, if any), provide
debt service coverage equal to at least 1.15 times the amount of annual Debt
Service Payments, all as reasonably projected by Lender, provided that, if such
Rents will not provide such debt service coverage, then Borrower expressly
authorizes and directs Lender to apply an amount from the Proceeds to reduction
of Principal in order to reduce the annual Debt Service Payments sufficiently
for such debt service coverage to be achieved. The reduced debt service payments
will be calculated using the Fixed Interest Rate and an amortization schedule
that will achieve the same proportionate amortization of the reduced Principal
over the then remaining Term as would have been achieved if the Principal and
the originally scheduled Debt Service Payments had not been reduced. Borrower
will execute any documentation that Lender deems reasonably necessary to
evidence the reduced Principal and debt service payments.
Section 7.5. Restoration.
(a) If the total Proceeds for any Destruction Event are $250,000.00 or
less and Lender elects or is obligated by Law or under this Article to make the
Proceeds available for Restoration, Lender will disburse to Borrower the entire
amount received by Lender and Borrower will commence Restoration promptly after
the Destruction Event and complete Restoration not later than the Restoration
Completion Date.
(b) If the Proceeds for any Destruction Event exceed $250,000.00 and
Lender elects or is obligated by Law or under this Article to make the Proceeds
available for Restoration, Lender will disburse the Proceeds and any Additional
Funds (the "RESTORATION FUNDS") upon
15
Borrower's request as Restoration progresses, generally in accordance with
normal construction lending practices for disbursing funds for construction
costs, provided that the following conditions are met:
(i) Borrower commences Restoration promptly after the
Destruction Event and completes Restoration on or before the
Restoration Completion Date;
(ii) if Lender requests, Borrower delivers to Lender prior to
commencing Restoration, for Lender's approval, which approval shall not
be unreasonably withheld, plans and specifications and a detailed
budget for the Restoration;
(iii) Borrower delivers to Lender satisfactory evidence of the
costs of Restoration incurred prior to the date of the request, and
such other documents as Lender may reasonably request including
mechanics' lien waivers and title insurance endorsements;
(iv) Borrower pays all costs of Restoration whether or not the
Restoration Funds are sufficient and, if at any time during
Restoration, Lender reasonably determines that the undisbursed balance
of the Restoration Funds is insufficient to complete Restoration,
Borrower deposits with Lender, as part of the Restoration Funds, an
amount equal to the deficiency within 30 days of receiving notice of
the deficiency from Lender; and
(v) there is no Event of Default under the Loan Documents at
the time Borrower requests funds or at the time Lender disburses funds.
(c) If an Event of Default occurs at any time after the Destruction
Event, then Lender will have no further obligation to make any remaining
Proceeds available for Restoration and may apply any remaining Proceeds as a
credit against any portion of the Debt selected by Lender in its sole
discretion.
(d) Lender may elect at any time prior to commencement of Restoration
or while work is in progress to retain, at Borrower's expense, an independent
engineer or other consultant to review the plans and specifications, to inspect
the work as it progresses and to provide reports. If any matter included in a
report by the engineer or consultant is unsatisfactory to Lender, Lender may
suspend disbursement of the Restoration Funds until the unsatisfactory matters
contained in the report are resolved to Lender's satisfaction.
(e) If Borrower fails to commence and complete Restoration in
accordance with the terms of this Article, then in addition to the Remedies,
Lender may elect to restore the Improvements on Borrower's behalf and reimburse
itself out of the Restoration Funds for costs and expenses incurred by Lender in
restoring the Improvements, or Lender may apply the Restoration Funds as a
credit against any portion of the Debt selected by Lender in its sole
discretion.
(f) Lender may commingle the Restoration Funds with its general assets
and will not be liable to pay any interest or other return on the Restoration
Funds unless otherwise required
16
by Law. Lender will not hold any Restoration Funds in trust. At Lender's
election or, so long as no Event of Default has occurred, at Borrower's request,
Lender will deposit the Restoration Funds with a depositary satisfactory to
Lender under a disbursement and security agreement satisfactory to Lender, and
such agreement shall include provisions for the payment of interest on
Restoration Funds held by the depositary.
(g) Borrower will pay all of Lender's expenses incurred in connection
with a Destruction Event or Restoration. If Borrower fails to do so, then in
addition to the Remedies, Lender may from time to time reimburse itself out of
the Restoration Funds.
(h) If any excess Proceeds remains after Restoration, Lender may elect,
in its sole discretion either to apply the excess as a credit against any
portion of the Debt as selected by Lender in its sole discretion or to deliver
the excess to Borrower.
ARTICLE VIII
COMPLIANCE WITH LAW AND AGREEMENTS
Section 8.1. Compliance with Law. Borrower, the Property and the use of
the Property comply with Law and with all agreements and conditions necessary to
preserve and extend all rights, licenses, permits, privileges, franchises and
concessions (including zoning variances, special exceptions and non-conforming
uses) relating to the Property or Borrower (other than a de minimus violation
that would not have or cause an adverse effect on the Property, Borrower, or
Lender's liens and interests in the Property). Borrower, the Property and the
use of the Property will continue to comply with Law and with all agreements and
conditions necessary to preserve and extend all rights, licenses, permits,
privileges, franchises and concessions (including zoning variances, special
exceptions and non-conforming uses) relating to the Property or Borrower (other
than a violation that would not have or cause a material adverse effect on the
Property, Borrower, or Lender's liens and interests in the Property). Borrower
will notify Lender of the commencement of any investigation or Proceeding
relating to a possible violation of Law immediately after Borrower receives
notice thereof and, will deliver promptly to Lender copies of all documents
Borrower receives or delivers in connection with the investigation or
Proceeding. Borrower will not alter the Property in any manner that would
increase Borrower's responsibilities for compliance with Law.
Section 8.2. Compliance with Agreements. There are no defaults, events
of defaults or events which, with the passage of time or the giving of notice,
would constitute an event of default under the Property Documents. Borrower will
pay and perform all of its obligations under the Property Documents as and when
required by the Property Documents, except where failure to do so could not
reasonably be expected to result in an adverse effect on the Property, Borrower,
or Lender's liens or interest in the Property. Borrower will use all
commercially reasonable efforts and means to cause all other parties to the
Property Documents to pay and perform their obligations under the Property
Documents as and when required by the Property Documents, except where failure
to do so could not reasonably be expected to result in an adverse effect on the
Property, Borrower, or Lender's liens or interest in the Property. Borrower will
not amend or waive any provisions of the Property Documents; exercise any
options under the Property Documents; give any approval required or permitted
under the Property Documents
17
that would adversely affect the Property or Lender's rights and interests under
the Loan Documents; cancel or surrender any of the Property Documents; or
release or discharge or permit the release or discharge of any party to or
entity bound by any of the Property Documents, without, in each instance,
Lender's prior approval (excepting therefrom all service contracts or other
agreements entered into in the normal course of business that are cancelable
upon not more than 30 days notice). Borrower promptly will deliver to Lender
copies of any notices of default or of termination that Borrower receives or
delivers relating to any Property Document.
Section 8.3. ERISA Compliance.
(a) Neither Borrower nor any of Borrower's Constituents (not including
holders of publicly-traded shares) is or will be an "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA") that is subject to Title I of ERISA or a "plan" as defined in Section
4975(e)(1) of the Code that is subject to Section 4975 of the Code, and neither
the assets of Borrower or of Borrower's Constituents (not including holders of
publicly-traded shares) are or will constitute "plan assets" of one or more such
plans for purposes of Title I of ERISA or Section 4975 of the Code.
(b) Borrower is not and will continue not to be a "governmental plan"
within the meaning of Section 3(32) of ERISA and transactions by or with
Borrower are not and will not be subject to any Laws regulating investments of
and fiduciary obligations with respect to governmental plans.
(c) Borrower will not engage in any transaction which would cause any
obligation or any action under the Loan Documents, including Lender's exercise
of the Remedies, to be a non-exempt prohibited transaction under ERISA.
Section 8.4. Section 6045(e) Filing. Borrower will supply or cause to
be supplied to Lender either (i) a copy of a completed Form 0000-X, Xxxxxxxxx
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Proceeds
prepared by Borrower's attorney or other person responsible for the preparation
of the form, together with a certificate from the person who prepared the form
to the effect that the form has, to the best of the preparer's knowledge, been
accurately prepared and that the preparer will timely file the form; or (ii) a
certification from Borrower that the Loan is a refinancing of the Property or is
otherwise not required to be reported to the Internal Revenue Service pursuant
to Section 6045(e) of the Code. Under no circumstances will Lender or Lender's
counsel be obligated to file the reports or returns.
Section 8.5. Compliance with Anti-Terrorism Laws.
(a) None of Borrower, any guarantor or indemnitor or their respective
Constituents (not including holders of publicly-traded shares) or affiliates are
or will be in violation of any Anti-Terrorism Law.
(b) None of Borrower, any guarantor or indemnitor, any of their
respective Constituents (not including holders of publicly-traded shares) or
affiliates, or, to Borrower's knowledge as of the date hereof, any of their
respective brokers or other agents acting or benefiting in any capacity in
connection with the Loan is or will be a Prohibited Person.
18
(c) None of Borrower, any guarantor or indemnitor, any of their
respective affiliates or Constituents (not including holders of publicly-traded
shares), or, to Borrower's knowledge as of the date hereof, any of their
respective brokers or other agents acting in any capacity in connection with the
Loan, is or will knowingly (i) conduct any business or engage in any transaction
or dealing with any Prohibited Person, including the making or receiving any
contribution of funds, goods or services to or for the benefit of any Prohibited
Person, (ii) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to Executive Order No. 13224;
or (iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any
of the prohibitions set forth in any Anti-Terrorism Law.
(d) Borrower covenants and agree to deliver to Lender any certification
or other evidence requested from time to time by Lender in its sole discretion,
confirming Borrower's compliance with this Section.
ARTICLE IX
ENVIRONMENTAL
Section 9.1. Environmental Representations and Warranties. Except as
disclosed in the Environmental Report and to Borrower's knowledge as of the date
of this Deed of Trust:
(i) no Environmental Activity has occurred or is occurring on the
Property other than the use, storage, and disposal of Hazardous Substances which
(A) is (or at the time occurring was) in the ordinary course of business
consistent with the Permitted Use or the construction of the Improvements; (B)
is (or was at such time) in compliance with all Environmental Laws and (C) has
not resulted in Material Environmental Contamination of the Property; and
(ii) no Environmental Activity has occurred or is occurring on any
property in the vicinity of the Property which has resulted in Material
Environmental Contamination of the Property.
Section 9.2. Environmental Covenants.
(a) Borrower will not cause or permit any Material Environmental
Contamination of the Property.
(b) No Environmental Activity will occur on the Property other than the
use, storage and disposal of Hazardous Substances which (A) is in the ordinary
course of business consistent with the Permitted Use; (B) is in compliance with
all Environmental Laws; and (C) does not create a material risk of Material
Environmental Contamination of the Property.
(c) Borrower will notify Lender promptly upon Borrower becoming aware
of (i) any Material Environmental Contamination of the Property or (ii) any
Environmental Activity with respect to the Property that is not in accordance
with the preceding subsection (b). Borrower promptly will deliver to Lender
copies of all documents delivered to or received by Borrower regarding the
matters set forth in this subsection, including notices of Proceedings or
investigations concerning any Material Environmental Contamination of the
Property or
19
Environmental Activity or concerning Borrower's status as a potentially
responsible party (as defined in the Environmental Laws). Borrower's
notification of Lender in accordance with the provisions of this subsection will
not be deemed to excuse any default under the Loan Documents resulting from the
violation of Environmental Laws or the Material Environmental Contamination of
the Property or Environmental Activity that is the subject of the notice. If
Borrower receives notice of a suspected violation of Environmental Laws in the
vicinity of the Property that poses a risk of Material Environmental
Contamination of the Property, Borrower will give Lender notice and copies of
any documents received relating to such suspected violation.
(d) From time to time at Lender's request, Borrower will deliver to
Lender any information known and documents available to Borrower relating to the
environmental condition of the Property.
(e) Lender may perform or engage an independent consultant to perform
an assessment of the environmental condition of the Property and of Borrower's
compliance with this Section on an annual basis, or at any other time for
reasonable cause or after an Event of Default. In connection with the
assessment: (i) Lender or its consultant may enter and inspect the Property and
perform tests of the air, soil, ground water and building materials; (ii)
Borrower will cooperate and use best efforts to cause tenants and other
occupants of the Property to cooperate with Lender or consultant; (iii) Borrower
will receive a copy of any final report prepared after the assessment, to be
delivered to Borrower not more than 10 days after Borrower requests a copy and
executes Lender's standard confidentiality and waiver of liability letter; (iv)
Borrower will accept custody of and arrange for lawful disposal of any Hazardous
Substances required to be disposed of as a result of the tests; (v) Lender will
not have liability to Borrower with respect to the results of the assessment;
and (vi) Lender will not be responsible for any damage to the Property resulting
from the tests described in this subsection and Borrower will look solely to the
consultants to reimburse Borrower for any such damage, provided that Lender
causes each consultant to assume in writing responsibility for any such damage
before permitting any such consultant to enter or inspect the Property, and the
consultant provides Borrower with evidence of at least $1,000,000 of liability
insurance, covering the owner of the property (but not specifically naming
Borrower) as an additional insured prior to entry on the Property. The
consultant's reasonable fees and costs for such assessment and reports will be
at Borrower's expense (i) if the reports disclose any material adverse change in
the environmental condition of the Property from that disclosed in the
Environmental Report; (ii) if Lender engaged the consultant when Lender had
reasonable cause to believe Borrower was not in compliance with the terms of
this Article and, after written notice from Lender, Borrower failed to provide
promptly reasonable evidence that Borrower is in compliance; or (iii) if Lender
engaged the consultant after the occurrence of an Event of Default.
(f) If Lender has reasonable cause to believe that there is
Environmental Activity at the Property, Lender may elect in its sole discretion
to direct the Trustee to reconvey any portion of the Property affected by the
Environmental Activity and Borrower will accept the reconveyance.
20
ARTICLE X
FINANCIAL REPORTING
Section 10.1. Financial Reporting.
(a) Borrower will deliver to Lender within 90 days after the close of
each Fiscal Year an annual financial statement (the "ANNUAL FINANCIAL
STATEMENT") for the Property (and, upon Lender's request, for Borrower) for the
Fiscal Year, which will include a comparative balance sheet, a cash flow
statement, an income and expense statement, a detailed breakdown of all receipts
and expenses and all supporting schedules. The Annual Financial Statement will
be:
(i) audited by a CPA and accompanied by an opinion of the CPA
that, in all material respects, the Annual Financial Statement fairly
presents the financial position of the Property (or Borrower, as
applicable); provided, however, that prior to the occurrence of any
Event of Default, the Annual Financial Statement may be unaudited, if
accompanied by a certification of Borrower and an authorized officer of
NBI, which certification shall state that, in all material respects,
the Annual Financial Statement fairly presents the financial position
of the Property (or Borrower, as applicable); and
(ii) separate and distinct from any consolidated statement or
report for Borrower or any other entity or any other property.
(b) Borrower will keep full and accurate Financial Books and Records
for each Fiscal Year. Borrower will permit Lender or Lender's accountants or
auditors to inspect or audit the Financial Books and Records from time to time
and with reasonable notice, except that during the existence of an Event of
Default, no notice shall be required. Borrower will maintain the Financial Books
and Records for each Fiscal Year for not less than 3 years after the date
Borrower delivers to Lender the Annual Financial Statement and the other
financial certificates, statements and information to be delivered to Lender for
the Fiscal Year. Financial Books and Records will be maintained at Borrower's
address set forth in the section entitled "NOTICES" or at any other location as
may be approved by Lender.
Section 10.2. Certificate of Good Standing. Borrower will cause to be
delivered to Lender, together with the annual financial statement required to be
delivered hereunder, or as otherwise requested by Lender from time to time, a
certificate of good standing from its state of organization.
Section 10.3. Annual Budget. Not less than 90 days after the end of
each Fiscal Year, Borrower will deliver to Lender a detailed comparative budget
(the "BUDGET") for the Property for the then current Fiscal Year showing
anticipated operating expenses, Insurance Premiums, Impositions, leasing
commissions, capital improvement costs, tenant improvement costs and any other
information Lender requests. Unless Lender notifies Borrower within 60 days
after Lender receives the Budget that Lender disputes information in the Budget,
the Budget as submitted will constitute the Budget for the then current Fiscal
Year. If Borrower concludes in good faith that a Budget needs material revision,
Borrower will submit a revised Budget to Lender, together with a detailed
explanation of the revisions. Unless Lender notifies Borrower within 60 days
after Lender receives the revised Budget that Lender disputes information in the
revised Budget, the
21
revised Budget as submitted will constitute the Budget for the remainder of the
then Fiscal Year. Borrower and Lender will use reasonable efforts to resolve
promptly any differences over a Budget or revised Budget. If Borrower and Lender
fail to agree on a Budget or revised Budget, Borrower will continue to manage
and operate the Property under the last undisputed Budget. Borrower waives any
defense or right of offset to the Obligations, and any claim or counterclaim
against Lender, arising out of any discussions between Borrower and Lender
regarding any Budget or revised Budget delivered to Lender or the resolution of
any disagreements relating to a Budget or revised Budget including any defense,
right of offset, claim or counterclaim alleging in substance, that by virtue of
such delivery, discussions or resolution, Lender has interfered with, influenced
or controlled Borrower or the operations at the Property.
ARTICLE XI
EXPENSES AND DUTY TO DEFEND
Section 11.1. Payment of Expenses.
(a) Borrower is obligated to pay all fees and expenses (the "EXPENSES")
reasonably incurred by Lender, Trustee or that are otherwise payable in
connection with the Loan, the Property or Borrower, including reasonable
attorneys' fees and expenses and any reasonable fees and expenses relating to
(i) the preparation, execution, acknowledgment, delivery and recording or filing
of the Loan Documents; (ii) any Proceeding or other claim asserted against
Lender or any Proceeding described in the Section entitled "Lender's Right to
Appear"; (iii) any inspection, assessment, survey and test permitted under the
Loan Documents; (iv) any Destruction Event; (v) the preservation of Trustee's
title and/or Lender's security; (vi) the enforcement of the Loan Documents or
any of their terms or and the exercise of any rights or remedies available at
Law, in equity or otherwise, whether or not any Proceeding is filed; (vii)
administration of the Loan; (viii) the Leases and the Property Documents; and
(ix) any Proceeding in or for bankruptcy, insolvency, reorganization or other
debtor relief or similar Proceeding relating to Borrower, the Property or any
person liable under any guarantee, indemnity or other credit enhancement
delivered in connection with the Loan. Notwithstanding the foregoing, Borrower
shall not be obligated to pay any Expenses that arise out of the gross
negligence or willful misconduct of Lender.
(b) Borrower will pay the Expenses promptly on demand, together with
any applicable interest, premiums or penalties. If Lender pays any of the
Expenses, Borrower will reimburse Lender the amount paid by Lender promptly upon
demand, together with interest on such amount at the Default Interest Rate from
the date Lender paid the Expenses through and including the date Borrower
reimburses Lender. The Expenses together with any applicable interest, premiums
or penalties constitute a portion of the Debt secured by this Deed of Trust.
Section 11.2. Duty to Defend. If Lender or any of its trustees,
officers, participants, employees or affiliates is a party in any Proceeding
relating to the Property, Borrower or the Loan, Borrower will indemnify and hold
harmless the party and will defend the party with attorneys and other
professionals retained by Borrower and reasonably approved by Lender; provided,
however, that Borrower shall have no obligation to indemnify or defend any such
party to the extent such Proceeding arises out of such party's gross negligence
or willful misconduct.
22
Lender may elect to engage its own attorneys and other professionals, at
Borrower's reasonable expense, to defend or to assist in the defense of the
party. In all events, case strategy will be determined by Lender if Lender so
elects and no Proceeding will be settled without Lender's prior approval which
may be withheld in its sole discretion.
ARTICLE XII
TRANSFERS, LIENS AND ENCUMBRANCES
Section 12.1. Prohibitions on Transfers, Liens and Encumbrances.
(a) Borrower acknowledges that in making the Loan, Lender is relying to
a material extent on the business expertise and net worth of Borrower and
Borrower's general partners, members or principals and on the continuing
interest that each of them has, directly or indirectly, in the Property.
Accordingly, except as specifically set forth in this Deed of Trust, Borrower
(i) will not, and will not permit its partners, members or principals to, effect
a Transfer without Lender's prior approval, which may be withheld in Lender's
sole discretion and (ii) will keep the Property free from all liens and
encumbrances other than the lien of this Deed of Trust and the Permitted
Exceptions. Subject to SECTION 12.1(C), a "TRANSFER" is defined as any sale,
grant, lease (other than bona fide third-party space leases with tenants),
conveyance, assignment or other transfer of, or any encumbrance or pledge
against, the Property, any interest in the Property, any interest of Borrower's
partners, members or principals in the Property, or any change in Borrower's
Constituents or composition, in each instance whether voluntary or involuntary,
direct or indirect, by operation of law or otherwise and including the grant of
an option or the execution of an agreement relating to any of the foregoing
matters.
(b) Borrower represents, warrants and covenants that:
(i) Borrower is a California limited liability company with
only the following members: (A) NBI, which is Borrower's managing
member, and owns 99.5% of the membership interests in Borrower; and (B)
NBIHQ, which owns 0.5% of the membership interests in Borrower. The
managing member and the other members are referred to as the "EXISTING
MEMBERS".
(ii) If Borrower's members are in turn partnerships,
corporations or limited liability companies, the general partners,
principals or members thereof and the percentage of partnership
interest, stock or membership interest held by each (and so on at each
level) are as follows: (A) NBIHQ is owned 100% by NBI; and (B) NBI is a
publicly-traded company.
(c) So long as the capital stock or other securities of NBI are
publicly traded (or, after completion of a HoldCo Transaction which constitutes
a Permitted Transfer, the capital stock or other securities of HoldCo are
publicly traded; or, after completion of an NBI Transaction which constitutes a
Permitted Transfer, the capital stock or other securities of the NBI Survivor
are publicly traded), the term "Transfer" is not intended to include, and shall
not be interpreted to include, transactions in such publicly-traded NBI
securities (or, after such a HoldCo Transaction, such publicly-traded HoldCo
securities; or, after such an NBI Transaction, such publicly-traded NBI Survivor
securities), including sales, transfers and other dispositions thereof, which do
not,
23
alone or together with other transactions in such securities, effect a change in
control of NBI (or, after such a HoldCo Transaction, change in control of
HoldCo; or, after such an NBI Transaction, change in control of the NBI
Survivor). However, the term "Transfer" does include all other transactions in
such securities, including but not limited to mergers, consolidations, share
exchanges, or business combinations of, by or involving NBI (or HoldCo, or an
NBI Survivor), regardless of the form of such transaction. As used in this
SECTION 12.1(C), "change in control" means the consummation of any transaction
the result of which is that any entity becomes the beneficial owner, directly or
indirectly, of more than twenty percent (20%) of the voting stock of NBI (or,
after such a HoldCo Transaction, the voting stock of HoldCo; or, after such an
NBI Transaction, the voting stock of the NBI Survivor), measured by voting power
rather than by number of shares.
Section 12.2. Permitted Transfers.
(a) Notwithstanding the prohibitions regarding Transfers, a Permitted
Transfer may occur without Lender's prior consent, provided that the following
conditions are met:
(i) at least 30 days prior to the proposed Permitted Transfer,
Borrower delivers to Lender a notice that is sufficiently detailed to
enable Lender to determine that the proposed Permitted Transfer
complies with the terms of this Section;
(ii) there is no Event of Default either when Lender receives
the notice or when the proposed Permitted Transfer occurs;
(iii) the proposed Permitted Transfer will not result in a
violation of any of the covenants contained in the Section entitled,
"ERISA COMPLIANCE" and Borrower will deliver to Lender such
documentation of compliance as Lender requests in its sole discretion;
(iv) the transferee (including any Constituents and affiliates
of the transferee) is not a Prohibited Person and the Permitted
Transfer will not result in a violation of any Anti-Terrorism Laws and,
prior to the transfer, Borrower provides Lender with a certification to
that effect executed by an entity reasonably satisfactory to Lender;
(v) subject to SECTION 12.2(C), when Lender receives the
notice and when the proposed Permitted Transfer occurs, the transferee
has never been an adverse party to Lender in any litigation to which
Lender was a party; the transferee has never defaulted on a loan from
Lender or on any contract or other agreement with Lender; and the
transferee has never threatened litigation against Lender (for purposes
of this subsection "transferee" includes the transferee's Constituents
and all entities which are directly or indirectly owned or controlled
by the transferee or which are under direct or indirect common
ownership or control with the transferee, and "Lender" includes
Lender's subsidiaries);
24
(vi) Borrower pays all of Lender's reasonable expenses
relating to the Transfer including Lender's reasonable attorneys' fees;
(vii) Lender is satisfied that, if the Property is to be
managed by a property manager, the manager and management agreement are
satisfactory to Lender;
(vii) on or before the date of the proposed Permitted
Transfer, if so requested by Lender, a Uniform Commercial Code search
report, dated as of a date reasonably prior to the date of the proposed
Permitted Transfer, is delivered to Lender relating to (i) the
transferee, (ii) any predecessor entity that transferee merged with or
into, and (iii) any entity where transferee acquired substantially all
of its assets, in each case satisfactory to Lender and indicating that
Lender's security interest in such portion of the Property as is
perfected by filing a financing statement is prior to all other
security interests reflected in the report; and
(viii) Borrower (or, in the case of a Permitted Transfer of
the Property to a third-party transferee, such transferee) shall, after
such Transfer, have a member or other immediate Constituent that has at
least two Independent Directors, and all of the requirements of SECTION
13.3 shall remain satisfied with respect to Borrower and NBIHQ (or
shall be satisfied with respect to such transferee and its relevant
member or other immediate Constituent).
(b) Upon compliance with the conditions set forth in the preceding
subsection, the following Transfers (the "PERMITTED TRANSFERS") may occur
without Lender's prior consent:
(i) (A) Transfers of membership interests in Borrower
among the Existing Members; and
(B) other transfers of membership interests in
Borrower; provided that subsequent to the Transfer NBI remains
as Borrower's managing member and retains not less than 20% of
the membership interests in Borrower.
(ii) a one-time sale of the Property to an unaffiliated bona
fide purchaser, provided that the following conditions are met:
(A) the transferee or the party that executes a
substitute guaranty of recourse obligations and environmental
indemnity and that controls the transferee and that owns at
least 20% of the equity interests in the transferee (the
"TRANSFEREE'S PARENT") has a net worth of at least
$50,000,000.00;
(B) the transferee or the Transferee's Parent is an
Institutional Investor or a developer, owner or manager of
first-class commercial real estate comparable to the Property
and having a reputation in the industry at least equivalent to
that of Borrower and its managing member as of the date of
this Deed of Trust;
(C) the transferee has expressly assumed the
obligations of Borrower under the Property Documents and under
the Loan Documents;
25
(D) subsequent to the Transfer, the Property is
managed by a property manager that has managed first-class
commercial real estate comparable to the Subject Property for
not less than 10 years and that has a good reputation in the
industry at least equivalent to that of Borrower and its
managing member or the existing property manager as of the
date of this Deed of Trust;
(E) Borrower pays to Lender a transfer fee of one
percent (1%) of the outstanding Principal; and
(F) Borrower delivers to Lender a substitute for the
environmental indemnity delivered to Lender in connection with
the Loan and, if applicable, a substitute guaranty or surety
instrument, satisfactory to Lender, executed by a substitute
indemnitor, guarantor or surety, as the case may be, that
satisfies the Net Worth Test and the Liquid Assets Test.
(iii) Any NBI Transaction in which all of the following
conditions are met:
(A) NBI is the surviving entity in the NBI
Transaction; and
(B) NBI remains the managing member of Borrower and
NBI retains not less than a 20% membership interest in
Borrower; and
(C) NBI satisfies the Net Worth Test and the Liquid
Assets Test.
(iv) Any NBI Transaction in which all of the following
conditions are met:
(A) NBI is not the surviving entity in such NBI
Transaction;
(B) Borrower gives Lender written notice of the terms
of such NBI Transaction promptly after filing notice of any
such NBI Transaction with the Securities and Exchange
Commission;
(C) Borrower pays or causes to be paid to Lender,
prior to or concurrently with the closing of such NBI
Transaction, a non-refundable fee in an amount equal to
$10,000.00;
(D) The NBI Survivor satisfies the Net Worth Test and
the Liquid Assets Test.
(E) The NBI Survivor executes and delivers to Lender
a Guaranty of Recourse Obligations and an Environmental
Indemnity Agreement, in the form executed in connection with
the Loan by NBI, with no material changes.
(F) The NBI Survivor furnishes, if the NBI Survivor
is a corporation, partnership or other entity, all documents
evidencing the NBI Survivor's capacity and good standing, and
the qualification of the signers to execute the documents
listed in subsection (E) above, which documents shall include,
without limitation, certified copies of all organizational and
formation documents of the NBI
26
Survivor, all of which shall be consistent with the scope of
evidence and certificates delivered by NBI in connection with
the original closing of the Loan.
(v) a one-time HoldCo Transaction.
(c) If Borrower notifies Lender of a proposed Transfer, including the
identity of the proposed transferee, then within five (5) Business Days after
actual receipt of such notice Lender shall notify Borrower if the proposed
transferee would not, as of that time, satisfy the requirements of SECTION
12.2(a)(v). If Lender so notifies Borrower and Borrower nonetheless intends to
proceed with the Transfer, Borrower may demonstrate to Lender that the proposed
Transfer would satisfy every requirement of SECTION 12.2(a) other than SECTION
12.2(a)(v) and would otherwise constitute a Permitted Transfer, and if Borrower
so demonstrates, then:
(i) Lender may, by notice to Borrower sent within ten (10)
Business Days after Borrower so demonstrates, enforce the requirements
of SECTION 12.2(a)(v) and disapprove the proposed Transfer, and in that
event Borrower shall have the right to prepay the Debt (including
Prepayment Premium and other costs) upon and as a condition to the
occurrence of such Transfer, pursuant to SECTION 3(a)(iii) of the Note;
or
(ii) if Lender fails to so notify Borrower within such time,
then Lender shall be deemed to have waived the requirements of SECTION
12.2(a)(v) with respect to that proposed Transfer to that proposed
transferee.
Section 12.3. Right to Contest Liens. Borrower, at its own expense, may
contest the amount, validity or application, in whole or in part, of any
mechanic's, materialmen's or environmental liens in which event Lender will
refrain from exercising any of the Remedies, provided that Borrower pays the
contested liens under protest or the following conditions are met:
(i) Borrower delivers to Lender notice of the proposed contest not more
than 30 days Borrower becomes aware of the lien;
(ii) the contest is by a Proceeding promptly initiated and conducted in
good faith and with due diligence;
(iii) there is no Event of Default other than the Event of Default
arising from the filing of the lien;
(iv) the Proceeding suspends enforcement of collection of the lien,
imposition of criminal or civil penalties and sale or forfeiture of the Property
and Lender will not be subject to any civil suit;
(v) the Proceeding is permitted under and is conducted in accordance
with the Leases and the Property Document;
27
(vi) Borrower sets aside reserves or furnishes a bond or other security
satisfactory to Lender, in either case in an amount sufficient to pay the claim
giving rise to the lien, together with all interest and penalties; and
(vii) with respect to an environmental lien, Borrower is using best
efforts to mitigate or prevent any deterioration of the Property resulting from
the alleged violation of any Environmental Laws or the alleged Environmental
Activity.
ARTICLE XIII
ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 13.1. Further Assurances.
(a) Borrower will execute, acknowledge and deliver to Lender or to any
other entity Lender designates any additional or replacement documents and
perform any additional actions that Lender determines are reasonably necessary
to evidence, perfect or protect Lender's first lien on and prior security
interest in the Property or to carry out the intent or facilitate the
performance of the provisions of the Loan Documents.
(b) Borrower appoints Lender as Borrower's attorney-in-fact to perform,
at Lender's election, any actions and to execute and record any of the
additional or replacement documents referred to in this Section, in each
instance only at Lender's election and only to the extent Borrower has failed to
comply with the terms of this Section.
Section 13.2. Estoppel Certificates.
(a) Within 10 days of Lender's request, Borrower will deliver to Lender
or to any entity Lender designates a certificate certifying (i) the original
principal amount of the Note; (ii) to Borrower's knowledge, the unpaid principal
amount of the Note; (iii) the Fixed Interest Rate; (iv) the amount of the then
current Debt Service Payments; (v) the Maturity Date; (vi) the date a Debt
Service Payment was last made; (vii) that, to Borrower's knowledge, except as
may be disclosed in the statement, there are no defaults or events which, with
the passage of time or the giving of notice, would constitute an Event of
Default; and (viii) to Borrower's knowledge, there are no offsets or defenses
against any portion of the Obligations except as may be disclosed in the
statement.
(b) If Lender requests, Borrower shall use good faith efforts to
promptly deliver to Lender or to any entity Lender designates a certificate from
each party to any Property Document, certifying that the Property Document is in
full force and effect with, to such party's knowledge, no defaults or events
which, with the passage of time or the giving of notice, would constitute an
event of default under the Property Document (except as may be disclosed in such
certificate) and that, to such party's knowledge, there are no defenses or
offsets against the performance of its obligations under the Property Document
(except as may be disclosed in such certificate).
(c) If Lender requests, Borrower promptly will deliver to Lender, or to
any entity Lender designates, a certificate from each tenant under a Lease then
affecting the Property,
28
certifying to any facts regarding the Lease as Lender may reasonably require,
including that the Lease is in full force and effect, with, to such tenant's
knowledge, no defaults or events which, with the passage of time or the giving
of notice, would constitute an event of default under the Lease by any party
(except as may be disclosed in such certificate), that the rent has not been
paid more than one month in advance and that the tenant claims no defense or
offset against the performance of its obligations under the Lease (except as may
be disclosed in such certificate).
Section 13.3. Independent Directors; Unanimous Consent.
(a) Borrower represents, warrants and covenants, as of the date of this
Deed of Trust and on a continuing basis thereafter:
(i) The organizational documents of Borrower provide and shall
continue to provide that: (A) the commencement of a bankruptcy,
insolvency, reorganization, assignment for the benefit of creditors or
other debtor-relief or similar procedure or Proceeding by or on behalf
of Borrower requires the prior unanimous consent of all of Borrower's
members; (B) unanimous consent of Borrower's members shall not be
deemed to have occurred unless, at the time thereof, (1) the board of
NBIHQ (or any successor thereto, if NBIHQ's membership in the Borrower
has been transferred) includes at least two Independent Directors, and
(2) NBIHQ's (or any such successor's) consent, as a member of Borrower,
has been approved by the prior unanimous consent of all members of
NBIHQ's (or any such successor's) board of directors, including such
Independent Directors; (C) any action or purported action taken by or
on behalf of Borrower not in compliance with such unanimous consent
requirements shall be void and of no effect; and (D) subject to SECTION
13.3(C), such provisions of Borrower's organizational documents cannot
be modified or waived.
(ii) The organizational documents of NBIHQ (or any such
successor) provide and shall continue to provide that: (A) the board of
directors of NBIHQ (or any such successor) must at all times include
two Independent Directors; (B) consent by NBIHQ (or any such
successor), as a member of Borrower, to any matter which requires the
unanimous consent of all of Borrower's members shall require the prior
unanimous consent of all members of NBIHQ's (or any such successor's)
board of directors, including such Independent Directors; (C) any
action or purported action taken by or on behalf of NBIHQ (or any such
successor) not in compliance with such unanimous consent requirement
shall be void and of no effect; and (D) subject to SECTION 13.3(C),
such provisions of NBIHQ's (or such successor's) organizational
documents cannot be modified or waived.
(iii) The board of NBIHQ (or any such successor) includes and
shall continue to include at least two Independent Directors.
(b) Borrower shall take all necessary action to cause the
representations and warranties set forth in SECTION 13.3(A) to remain at all
times true and correct, and shall not cause or permit the occurrence of any act,
event or condition which would result in any such representation or warranty
becoming incorrect.
29
(c) The organizational documents of Borrower and/or NBIHQ (or such
successor) may permit modification and/or waiver of the provisions required by
SECTION 13.3(A) at any time after 180 days after the date on which a full
reconveyance of this Deed of Trust is recorded if the Debt has been paid in full
with no Events of Default.
ARTICLE XIV
DEFAULTS AND REMEDIES
Section 14.1. Events of Default. The term "EVENT OF DEFAULT" means the
occurrence of any of the following events:
(i) if Borrower fails to pay any amount due, as and when required,
under any Loan Document and the failure continues for a period of 5 days;
(ii) if Borrower makes a general assignment for the benefit of
creditors or generally is not paying, or is unable to pay, or admits in writing
its inability to pay, its debts as they become due; or if Borrower or any other
party commences any Proceeding (A) relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, in each instance with
respect to Borrower; (B) seeking to have an order for relief entered with
respect to Borrower; (C) seeking attachment, distraint or execution of a
judgment with respect to Borrower; (D) seeking to adjudicate Borrower as
bankrupt or insolvent; (E) seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to Borrower or Borrower's debts; or (F) seeking appointment of a Receiver,
trustee, custodian, conservator or other similar official for Borrower or for
all or any substantial part of Borrower's assets, provided that if the
Proceeding is commenced by a party other than Borrower or any of Borrower's
general partners or members, Borrower will have 120 days to have the Proceeding
dismissed or discharged before an Event of Default occurs;
(iii) if Borrower is in default beyond any applicable grace and cure
period under any other mortgage, deed of trust, deed to secure debt or other
security agreement encumbering the Property whether junior or senior to the lien
of this Deed of Trust;
(iv) if there is a default beyond any applicable grace and cure period
under any indemnity or guaranty in favor of Lender delivered to Lender in
connection with the Loan or in connection with any loan cross-collateralized
with the Loan;
(v) if a Transfer occurs except in accordance with the provisions of
this Deed of Trust;
(vi) if Borrower abandons the Property or ceases to conduct its
business at the Property;
(vii) if:
(A) Borrower's organizational documents are amended or
purported to be amended to provide other than as set forth in SECTION
13.3(A)(I);
30
(B) NBIHQ's (or successor's) organizational documents are
amended or purported to be amended to provide other than as set forth
in SECTION 13.3(A)(II);
(C) any action or purported action is taken by Borrower or
NBIHQ (or successor) contrary to the unanimous consent requirements
described in SECTIONS 13.3(A)(I) OR (II), respectively;
(D) there cease to be two Independent Directors of NBIHQ (or
successor) at any time; provided, however, that in the event of an
Independent Director's death, incapacity, or resignation, it shall not
be an Event of Default so long as such Independent Director is replaced
by another Independent Director within ten (10) days; or
(E) there occurs any breach or default by Borrower under
SECTION 13.3(B);
(viii) if there is a default in the performance of any other provision
of any Loan Document or if there is any inaccuracy or falsehood in any
representation or warranty contained in any Loan Document which is not remedied
within 30 days after Borrower receives notice thereof, provided that if the
default, inaccuracy or falsehood is of a nature that it cannot be cured within
the 30-day period and during that period Borrower commences to cure, and
thereafter diligently continues to cure, the default, inaccuracy or falsehood,
then the 30-day period will be extended for a reasonable period not to exceed
180 days after the notice to Borrower.
Section 14.2. Remedies.
(a) If an Event of Default occurs, Lender may take any of the following
actions (the "REMEDIES") without notice to Borrower:
(i) declare all or any portion of the Debt immediately due and
payable ("ACCELERATION");
(ii) pay or perform any Obligation;
(iii) institute a Proceeding for the specific performance of
any Obligation;
(iv) apply for and obtain the appointment of a Receiver to be
vested with the fullest powers permitted by Law, without bond being
required, which appointment may be made ex parte, as a matter of right
and without regard to the value of the Property, the amount of the Debt
or the solvency of Borrower or any other person liable for the payment
or performance of any portion of the Obligations;
(v) directly, by its agents or representatives or through a
Receiver appointed by a court of competent jurisdiction, enter on the
Land and Improvements, take possession of the Property, dispossess
Borrower and exercise Borrower's rights with respect to the Property,
either in Borrower's name or otherwise;
(vi) institute a Proceeding for the foreclosure of this Deed
of Trust or sell by power of sale all or any portion of the Property
31
(vii) institute proceedings for the partial foreclosure of
this Deed of Trust for the portion of the Debt then due and payable,
subject to the continuing lien of this Deed of Trust for the balance of
the Debt not then due;
(viii) deliver to Trustee a declaration of default and demand
for sale and a notice of default and election to cause Borrower's
interest in the Property to be sold, which notice Trustee or Lender
will file in the official records of the county in which the Property
is located;
(ix) sell, lease, license or otherwise dispose of any or all
of the Fixtures and/or Personal Property, disclaiming any or all
warranties of any kind which by law may be disclaimed (and no such
disclaimer shall be considered to affect the commercial reasonableness
of any such sale, lease, license or other disposition), and exercise
any and all other rights and remedies granted to a secured party under
the Uniform Commercial Code; and
(x) pursue any other right or remedy available to Lender at
Law, in equity or otherwise.
(b) If an Event of Default occurs, the license granted to Borrower in
the Loan Documents to collect Rents will terminate automatically without any
action required of Lender.
Section 14.3. General Provisions Pertaining to Remedies.
(a) The Remedies are cumulative and may be pursued by Lender or Trustee
concurrently or otherwise, at such time and in such order as Lender or Trustee
may determine in their sole discretion and without presentment, demand, protest
or further notice of any kind, all of which are expressly waived by Borrower.
(b) The enumeration in the Loan Documents of specific rights or powers
will not be construed to limit any general rights or powers or impair Lender's
or Trustee's rights with respect to the Remedies.
(c) If Lender or Trustee exercises any of the Remedies, Lender will not
be deemed a mortgagee-in-possession unless Lender has elected affirmatively to
be a mortgagee-in-possession.
(d) Lender and Trustee will not be liable for any act or omission of
Lender or Trustee in connection with the exercise of the Remedies.
(e) Lender's and Trustee's right to exercise any Remedy will not be
impaired by any delay in exercising or failure to exercise the Remedy and the
delay or failure will not be construed as extending any cure period or
constitute a waiver of the default or Event of Default.
(f) If an Event of Default occurs, Lender's payment or performance or
acceptance of payment or performance will not be deemed a waiver or cure of the
Event of Default.
32
(g) Lender's acceptance of partial payment or receipt of Rents will not
extend or affect any grace period or constitute a waiver of a default or Event
of Default or constitute a rescission of Acceleration, but will be credited
against the Debt.
Section 14.4. Foreclosure by Power of Sale.
(a) Should Lender elect following an Event of Default to foreclose this
Deed of Trust by exercise of the power of sale contained in this Deed of Trust,
Lender will notify Trustee and deposit, if required by Trustee, with Trustee
this Deed of Trust, the Note and such of the other Loan Documents as Trustee may
require.
(b) Upon receipt of the notice from Lender, Trustee will have recorded,
published and delivered to Borrower any notice of default as is then required by
Law. Trustee will, without demand on Borrower after lapse of any time as may
then be required by Law and after notice of sale having been given as required
by Law, sell the Property at the time and place of sale fixed by it in the
notice of sale, either as a whole, or in separate lots or parcels or items and
in such order as Lender may direct Trustee so to do, at public auction to the
highest bidder as provided by Law. Trustee will deliver to the purchaser of the
Property a good and sufficient deed or deeds conveying the Property so sold, but
without any covenant or warranty, express or implied. The recitals in the deed
of any matter or fact will be conclusive proof of the truthfulness of the
recitals. Any person, including Borrower, Trustee or Lender may purchase at the
sale, and Borrower will warrant and defend the title of the purchaser.
(c) After deducting all costs, fees and expenses of Lender and Trustee,
including costs of evidence of title in connection with sale, Lender will apply
the proceeds of sale in the following priority, to payment of (i) first, all
sums expended under the terms of the Loan Documents, not then repaid, with
accrued interest at the Default Rate; (ii) second, the Debt in such order as
Lender determines; and (iii) the remainder, if any to the person or persons
legally entitled to it.
(d) Trustee may postpone sale of all or any portion of the Property as
permitted by Law, and without further notice make such sale at the time fixed by
the last postponement, or may, in its discretion, give a new notice of sale.
(e) A sale of less than the whole of the Property or any defective or
irregular sale made under this Deed of Trust will not exhaust the power of sale
provided for in this Deed of Trust; and subsequent sales may be made until the
Obligations have been satisfied, or the entire Property sold, without defect or
irregularity.
Section 14.5. General Provisions Pertaining to Receiver and other
Remedies.
(a) If an Event of Default occurs, any court of competent jurisdiction
will, upon application by Lender, appoint a Receiver as designated in the
application and issue an injunction prohibiting Borrower from interfering with
the Receiver, collecting Rents, disposing of any Rents or any part of the
Property, committing waste or doing any other act that will tend to affect the
preservation of the Leases, the Rents and the Property and Borrower approves the
appointment of the designated Receiver or any other Receiver appointed by the
court. Borrower
33
agrees that the appointment may be made ex parte and as a matter of right to
Lender or Trustee, either before or after sale of the Property, without further
notice, and without regard to the solvency or insolvency, at the time of
application for the Receiver, of the person or persons, if any, liable for the
payment of any portion of the Debt and the performance of any portion of the
Obligations and without regard to the value of the Property or whether the
Property is occupied as a homestead and without bond being required of the
applicant.
(b) The Receiver will be vested with the fullest powers permitted by
Law including all powers necessary or usual in similar cases for the protection,
possession and operation of the Property and all the powers and duties of Lender
as a mortgagee-in-possession as provided in this Deed of Trust and may continue
to exercise all the usual powers and duties until the Receiver is discharged by
the court.
(c) In addition to the Remedies and all other available rights, Lender
or the Receiver may take any of the following actions:
(i) take exclusive possession, custody and control of the
Property and manage the Property so as to prevent waste;
(ii) require Borrower to deliver to Lender or the Receiver all
keys, security deposits, operating accounts, prepaid Rents, past due
Rents, the Financial Books and Records and all original counterparts of
the Leases and the Property Documents;
(iii) collect, xxx for and give receipts for the Rents and,
after paying all expenses of collection, including reasonable
receiver's, broker's and attorney's fees, apply the net collections to
any portion of the Debt selected by Lender in its sole discretion;
(iv) enter into, modify, extend, enforce, terminate, renew or
accept surrender of Leases and evict tenants except that in the case of
a Receiver, such actions may be taken only with the written consent of
Lender as provided in this Deed of Trust and in the Assignment;
(v) enter into, modify, extend, enforce, terminate or renew
Property Documents except that in the case of a Receiver, such actions
may be taken only with the written consent of Lender as provided in
this Deed of Trust and in the Assignment;
(vi) appear in and defend any Proceeding brought in connection
with the Property and bring any Proceeding to protect the Property as
well as Borrower's and Lender's respective interests in the Property
(unless any such Proceeding has been assigned previously to Lender in
the Assignment, or if so assigned, Lender has not expressly assigned
such Proceeding to the Receiver and consented to such appearance or
defense by the Receiver); and
(vii) perform any act in the place of Borrower that Lender or
the Receiver deems necessary (A) to preserve the value, marketability
or rentability of the Property;
34
(B) to increase the gross receipts from the Property; or (C)
otherwise to protect Borrower's and Lender's respective interests in
the Property.
(d) Borrower appoints Lender as Borrower's attorney-in-fact, at
Lender's election, to perform any actions and to execute and record any
instruments necessary to effectuate the actions described in this Section, in
each instance only at Lender's election and only to the extent Borrower has
failed to comply with the provisions of this Section.
Section 14.6. General Provisions Pertaining to Foreclosures and the
Power of Sale. The following provisions will apply to any Proceeding to
foreclose and to any sale of the Property by power of sale or pursuant to a
judgment of foreclosure and sale:
(i) Lender's or Trustee's right to institute a Proceeding to foreclose
or to sell by power of sale will not be exhausted by a Proceeding or a sale that
is defective or not completed or by conducting separate sales of portions of the
Property;
(ii) any sale may be postponed or adjourned by Lender by public
announcement at the time and place appointed for the sale without further
notice;
(iii) with respect to any sale pursuant to a judgment of foreclosure
and sale or by power of sale, the Property may be sold as an entirety or in
parcels, at one or more sales, at the time and place, on terms and in the order
that Lender deems expedient in its sole discretion;
(iv) if a portion of the Property is sold pursuant to this Article, the
Loan Documents will remain in full force and effect with respect to any
unmatured portion of the Debt and this Deed of Trust will continue as a valid
and enforceable first lien on and security interest in the remaining portion of
the Property, subject only to the Permitted Exceptions, without loss of priority
and without impairment of any of Lender's or Trustee's rights and remedies with
respect to the unmatured portion of the Debt;
(v) Lender may bid for and acquire the Property at a sale and, in lieu
of paying cash, may credit the amount of Lender's bid against any portion of the
Debt selected by Lender in its sole discretion after deducting from the amount
of Lender's bid the expenses of the sale, costs of enforcement and other amounts
that Lender is authorized to deduct at Law, in equity or otherwise; and
(vi) Lender's receipt of the proceeds of a sale will be sufficient
consideration for the portion of the Property sold and Lender will apply the
proceeds as set forth in this Deed of Trust.
Section 14.7. Application of Proceeds. Lender may apply the proceeds of
any sale of the Property by power of sale or pursuant to a judgment of
foreclosure and sale and any other amounts collected by Lender in connection
with the exercise of the Remedies to payment of the Debt in such priority and
proportions as Lender may determine in its sole discretion or in such priority
and proportions as required by Law.
Section 14.8. Power of Attorney. Borrower appoints Lender as Borrower's
attorney-in-fact to perform any actions necessary and incidental to exercising
the Remedies.
35
Section 14.9. Tenant at Sufferance. If Lender, Trustee, or a Receiver
enters the Property in the exercise of the Remedies and Borrower is allowed to
remain in occupancy of the Property, Borrower will pay to Lender, Trustee, or
the Receiver, as the case may be, in advance, a reasonable rent for the Property
occupied by Borrower. If Borrower fails to pay the rent, Borrower may be
dispossessed by the usual Proceedings available against defaulting tenants.
ARTICLE XV
LIMITATION OF LIABILITY
Section 15.1. Limitation of Liability.
(a) Notwithstanding any provision in the Loan Documents to the
contrary, except as set forth in subsections (b) and (c), in enforcing the Debt
Lender shall be limited to its rights and Remedies with respect to the Property
and any other security now or hereafter given and shall not seek a deficiency
judgment against Borrower or its members, except as set forth in subsections (b)
and (c).
(b) The limitation of liability in subsection (a) will not affect or
impair (i) the lien of this Deed of Trust or Lender's other rights and Remedies
under the Loan Documents, including Lender's right as beneficiary or secured
party to commence an action to foreclose any lien or security interest Lender
has under the Loan Documents; (ii) the validity of the Loan Documents or the
Obligations; (iii) Lender's rights under any Loan Document that are not
expressly non-recourse; or (iv) Lender's right to present and collect on any
letter of credit or other credit enhancement document held by Lender in
connection with the Obligations.
(c) The following are excluded and excepted from the limitation of
liability in subsection (a) and Lender may recover personally against Borrower
and its general partners, if any, for the following:
(i) all losses suffered and liabilities and expenses incurred
by Lender relating to any intentional fraud or intentional
misrepresentation or omission by Borrower or any of Borrower's
partners, members, officers, directors, shareholders or principals in
connection with (A) the performance of any of the conditions to Lender
making the Loan; (B) any inducements to Lender to make the Loan; (C)
the execution and delivery of the Loan Documents; (D) any certificates,
representations or warranties given in connection with the Loan; or (E)
Borrower's performance of the Obligations;
(ii) all Rents (or the amounts thereof) derived from the
Property after a default under the Loan Documents and all moneys that,
on the date such a default occurs, are on deposit in one or more
accounts used by or on behalf of Borrower relating to the operation of
the Property, except to the extent properly applied to payment of Debt
Service Payments, Impositions, Insurance Premiums and any reasonable
and customary expenses incurred by Borrower in the operation,
maintenance and leasing of the Property or delivered to Lender;
(iii) the cost of remediation of any Environmental Activity
affecting the Property, any diminution in the value of the Property
arising from any Environmental
36
Activity affecting the Property and any other losses suffered and
liabilities and expenses incurred by Lender relating to a default under
the Article entitled "ENVIRONMENTAL";
(iv) all security deposits collected by Borrower or any of
Borrower's predecessors and not refunded to Tenants in accordance with
their respective Leases, applied in accordance with the Leases or Law
or delivered to Lender, and all advance rents collected by Borrower or
any of Borrower's predecessors and not applied in accordance with the
Leases or delivered to Lender;
(v) the replacement cost of any Fixtures or Personal Property
removed from the Property by or on behalf of or with the permission of
Borrower or any affiliate of Borrower after an Event of Default occurs;
(vi) all losses suffered and liabilities and expenses incurred
by Lender relating to any intentional acts or omissions by Borrower
that result in material physical waste on the Property;
(vii) all protective advances and other payments made by
Lender pursuant to express provisions of the Loan Documents to protect
Lender's security interest in the Property or to protect the assignment
of the property described in and effected by the Assignment, but only
to the extent that the Rents would have been sufficient to permit
Borrower to make the payment and Borrower failed to do so;
(viii) all mechanics' or similar liens relating to work
performed on or materials delivered to the Property prior to Lender
exercising its Remedies, but only to the extent Lender had advanced
funds to pay for the work or materials;
(ix) all Proceeds that are not applied in accordance with this
Deed of Trust or not paid to Lender as required under this Deed of
Trust;
(x) all losses suffered and liabilities and reasonable
expenses incurred by Lender relating to a Transfer that is not
permitted under the Section entitled "PERMITTED TRANSFERS";
(xi) all losses suffered and liabilities and reasonable
expenses incurred by Lender relating to forfeiture or threatened
forfeiture of the Property to the Government as a result of criminal
conduct by Borrower; and
(xii) all losses suffered and liabilities and reasonable
expenses incurred by Lender relating to any default by Borrower under
any of the provisions of this Deed of Trust relating to ERISA including
the prohibition on any Transfer that results in a violation of ERISA.
(d) Nothing under subparagraph (a) above will be deemed to be a waiver
of any right which Lender may have under Section 506(a), 506(b), 1111(b) or any
other provisions of the Bankruptcy Code or under any other Law relating to
bankruptcy or insolvency to file a claim for
37
the full amount of the Debt or to require that all collateral will continue to
secure all of the Obligations in accordance with the Loan Documents.
ARTICLE XVI
WAIVERS
SECTION 16.1. WAIVER OF STATUTE OF LIMITATIONS. BORROWER WAIVES THE
RIGHT TO CLAIM ANY STATUTE OF LIMITATIONS AS A DEFENSE TO BORROWER'S PAYMENT AND
PERFORMANCE OF THE OBLIGATIONS.
SECTION 16.2. WAIVER OF NOTICE. BORROWER WAIVES THE RIGHT TO RECEIVE
ANY NOTICE FROM LENDER OR TRUSTEE WITH RESPECT TO THE LOAN DOCUMENTS EXCEPT FOR
THOSE NOTICES THAT LENDER OR TRUSTEE IS EXPRESSLY REQUIRED TO DELIVER PURSUANT
TO THE LOAN DOCUMENTS.
SECTION 16.3. WAIVER OF MARSHALLING AND OTHER MATTERS. BORROWER WAIVES
THE BENEFIT OF ANY RIGHTS OF MARSHALLING OR ANY OTHER RIGHT TO DIRECT THE ORDER
IN WHICH ANY OF THE PROPERTY WILL BE (i) SOLD; OR (ii) MADE AVAILABLE TO ANY
ENTITY IF THE PROPERTY IS SOLD BY POWER OF SALE OR PURSUANT TO A JUDGMENT OF
FORECLOSURE AND SALE. BORROWER ALSO WAIVES THE BENEFIT OF ANY LAWS RELATING TO
APPRAISEMENT, VALUATION, STAY, EXTENSION, REINSTATEMENT, MORATORIUM, HOMESTEAD
AND EXEMPTION RIGHTS OR A SALE IN INVERSE ORDER OF ALIENATION.
SECTION 16.4. WAIVER OF TRIAL BY JURY. TO THE FULL EXTENT PERMITTED BY
LAW, BORROWER WAIVES, AND, BY THEIR ACCEPTANCE OF THIS DEED OF TRUST LENDER AND
TRUSTEE WAIVE, TRIAL BY JURY IN ANY PROCEEDING BETWEEN OR AMONG ANY OF THEM
RELATING TO THE LOAN, THE PROPERTY DOCUMENTS OR THE LEASES.
SECTION 16.5. WAIVER OF COUNTERCLAIM. BORROWER WAIVES THE RIGHT TO
ASSERT A COUNTERCLAIM OR CROSS-COMPLAINT, OTHER THAN COMPULSORY OR MANDATORY
COUNTERCLAIMS OR CROSS-COMPLAINTS, IN ANY PROCEEDING LENDER OR TRUSTEE BRINGS
AGAINST BORROWER RELATING TO THE LOAN, INCLUDING ANY PROCEEDING TO ENFORCE
REMEDIES.
SECTION 16.6. [INTENTIONALLY OMITTED]
SECTION 16.7. WAIVER OF SUBROGATION. BORROWER WAIVES ALL RIGHTS OF
SUBROGATION TO LENDER'S RIGHTS OR CLAIMS RELATED TO OR AFFECTING THE PROPERTY OR
ANY OTHER SECURITY FOR THE LOAN UNTIL THE LOAN IS PAID IN FULL AND ALL FUNDING
OBLIGATIONS UNDER THE LOAN DOCUMENTS HAVE BEEN TERMINATED.
38
SECTION 16.8. GENERAL WAIVER. BORROWER ACKNOWLEDGES THAT (A) BORROWER
AND BORROWER'S PARTNERS, MEMBERS OR PRINCIPALS, AS THE CASE MAY BE, ARE
KNOWLEDGEABLE BORROWERS OF COMMERCIAL FUNDS AND EXPERIENCED REAL ESTATE
DEVELOPERS OR INVESTORS WHO UNDERSTAND FULLY THE EFFECT OF THE ABOVE PROVISIONS;
(B) LENDER WOULD NOT MAKE THE LOAN WITHOUT THE PROVISIONS OF THIS ARTICLE; (C)
THE LOAN IS A COMMERCIAL OR BUSINESS LOAN UNDER THE LAWS OF THE STATE OR
COMMONWEALTH WHERE THE PROPERTY IS LOCATED NEGOTIATED BY LENDER AND BORROWER AND
THEIR RESPECTIVE ATTORNEYS AT ARMS LENGTH; AND (D) ALL WAIVERS BY BORROWER IN
THIS ARTICLE HAVE BEEN MADE VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER
BORROWER FIRST HAS BEEN INFORMED BY COUNSEL OF BORROWER'S OWN CHOOSING AS TO
POSSIBLE ALTERNATIVE RIGHTS, AND HAVE BEEN MADE AS AN INTENTIONAL RELINQUISHMENT
AND ABANDONMENT OF A KNOWN RIGHT AND PRIVILEGE. THE FOREGOING ACKNOWLEDGMENT IS
MADE WITH THE INTENT THAT LENDER AND ANY SUBSEQUENT HOLDER OF THE NOTE WILL RELY
ON THE ACKNOWLEDGMENT.
ARTICLE XVII
NOTICES
Section 17.1. Notices. All acceptances, approvals, consents, demands,
notices, requests, waivers and other communications (the "NOTICES") required or
permitted to be given under the Loan Documents must be in writing and (a)
delivered personally by a process server providing a sworn declaration
evidencing the date of service, the individual served, and the address where the
service was made; (b) sent by certified mail, return receipt requested; or (c)
delivered by nationally recognized overnight delivery service that provides
evidence of the date of delivery (for next morning delivery if sent by overnight
delivery service), in all cases with charges prepaid addressed to the
appropriate party at its address listed below:
If to Lender: Teachers Insurance and Annuity Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Director Portfolio Management
Mortgage and Real Xxxxxx
Xxxxxxxxxxx # XXX0000
Mortgage # M -- 0005852
39
with a courtesy Teachers Insurance and Annuity Association of America
copy to: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Counsel, New York, Investment
Management Law
Application # AAA4268
Mortgage # M -- 0005852
If to Borrower: Science Park Center LLC
00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, Manager
with a courtesy Science Park Center LLC
copy to: 00000 Xx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxxx Valeur-Xxxxxx, Counsel
If to Trustee: Xxxxxxx Title Guaranty Company
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 000000
Lender and Borrower each may change from time to time the address to
which Notices must be sent, by notice given in accordance with the provisions of
this Section. All Notices given in accordance with the provisions of this
Section will be deemed to be effective as of the earliest of (i) actual receipt;
(ii) rejection of delivery; or (iii) the third Business Day after having been
deposited in any mail depository regularly maintained by the United States
postal service, if sent by certified mail, or the first Business Day after
having been deposited with a nationally recognized overnight delivery service,
if sent by overnight delivery or on the date of personal service, if served by a
process server.
Section 17.2. Change in Borrower's Legal Name, Place of Business or
State of Formation. Borrower will notify Lender in writing prior to any change
in Borrower's legal name, place of business or state or commonwealth of
organization, including as a result of, or in connection with, any Transfer,
including any Permitted Transfer.
Section 17.3. Request for Notice. Borrower requests that a copy of any
statutory notice of default or sale hereunder be mailed to Borrower at the
address set forth in this Article.
ARTICLE XVIII
MISCELLANEOUS
Section 18.1. Applicable Law. The Loan Documents are governed by and
will be construed in accordance with the Laws of the state or commonwealth in
which the Property is located without regard to conflict of law provisions,
except to the extent that the Uniform Commercial Code requires otherwise.
40
Section 18.2. Usury Limitations. Borrower and Lender intend to comply
with all Laws with respect to the charging and receiving of interest. Any
amounts charged or received by Lender for the use or forbearance of the
Principal to the extent permitted by Law, will be amortized and spread
throughout the Term until payment in full so that the rate or amount of interest
charged or received by Lender on account of the Principal does not exceed the
Maximum Interest Rate. If any amount charged or received under the Loan
Documents that is deemed to be interest is determined to be in excess of the
amount permitted to be charged or received at the Maximum Interest Rate, the
excess will be deemed to be a prepayment of Principal when paid, without
premium, and any portion of the excess not capable of being so applied will be
refunded to Borrower. If during the Term the Maximum Interest Rate, if any, is
eliminated, then for purposes of the Loan, there will be no Maximum Interest
Rate.
Section 18.3. Lender's Discretion. Wherever under the Loan Documents
any matter is required to be satisfactory to Lender, Lender has the right to
approve or determine any matter or Lender has an election, Lender's approval,
determination or election will be made in Lender's reasonable discretion unless
expressly provided to the contrary.
Section 18.4. Unenforceable Provisions. If any provision in the Loan
Documents is found to be illegal or unenforceable or would operate to invalidate
any of the Loan Documents, then the provision will be deemed expunged and the
Loan Documents will be construed as though the provision was not contained in
the Loan Documents and the remainder of the Loan Documents will remain in full
force and effect.
Section 18.5. Survival of Borrower's Obligations. Borrower's
representations, warranties and covenants contained in the Loan Documents will
continue in full force and effect and survive (i) satisfaction of the
Obligations; (ii) reconveyance of the lien of this property by Trustee; (iii)
assignment or other transfer of all or any portion of Lender's interest in the
Loan Documents or the Property; (iv) Lender's or Trustee's exercise of any of
the Remedies or any of Lender's or Trustee's other rights under the Loan
Documents; (v) a Transfer; (vi) amendments to the Loan Documents; and (vii) any
other act or omission that might otherwise be construed as a release or
discharge of Borrower.
Section 18.6. Relationship Between Borrower and Lender; No Third Party
Beneficiaries.
(a) Lender is not a partner of or joint venturer with Borrower or any
other entity as a result of the Loan or Lender's rights under the Loan
Documents; the relationship between Lender and Borrower is strictly that of
creditor and debtor. Each Loan Document is an agreement between the parties to
that Loan Document for the mutual benefit of the parties and no entities other
than the parties to that Loan Document will be a third party beneficiary or will
have any claim against Lender or Borrower by virtue of the Loan Document. As
between Lender and Borrower, any actions taken by Lender under the Loan
Documents will be taken for Lender's protection only, and Lender has not and
will not be deemed to have assumed any responsibility to Borrower or to any
other entity by virtue of Lender's actions.
(b) All conditions to Lender's performance of its obligations under the
Loan Documents are imposed solely for the benefit of Lender. No entity other
than Lender will have
41
standing to require satisfaction of the conditions in accordance with their
provisions or will be entitled to assume that Lender will refuse to perform its
obligations in the absence of strict compliance with any of the conditions.
Section 18.7. Partial Reconveyances or Releases, Extensions, Waivers.
Lender may: (i) permit the reconveyance of any part of the Property or release
any entity obligated for the Obligations; (ii) extend the time for payment or
performance of any of the Obligations or otherwise amend the provisions for
payment or performance by agreement with any entity that is obligated for the
Obligations or that has an interest in the Property; (iii) accept additional
security for the payment and performance of the Obligations; and (iv) waive any
entity's performance of an Obligation, release any entity or individual now or
in the future liable for the performance of the Obligation or waive the exercise
of any Remedy or option. Lender may exercise any of the foregoing rights without
notice, without regard to the amount of any consideration given, without
affecting the priority of the Loan Documents, without releasing any entity not
specifically released from its obligations under the Loan Documents, without
releasing any guarantor(s) or surety(ies) of the Obligations, without effecting
a novation of the Loan Documents and, with respect to a waiver, without waiving
future performance of the Obligation or exercise of the Remedy waived.
Section 18.8. Service of Process. Borrower irrevocably consents to
service of process by registered or certified mail, postage prepaid, return
receipt requested, to Borrower at its address set forth in the Article entitled
"NOTICES".
Section 18.9. Entire Agreement. Oral agreements or commitments between
Borrower and Lender to lend money, to extend credit or to forbear from enforcing
repayment of a debt, including promises to extend or renew the debt, are not
enforceable. Any agreements among Borrower, Lender and Trustee relating to the
Loan are contained in the Loan Documents, which contain the complete and
exclusive statement of the agreements among Borrower, Lender and Trustee, except
as Borrower, Lender and, if applicable, Trustee may later agree in writing to
amend the Loan Documents. The language of each Loan Document will be construed
as a whole according to its fair meaning and will not be construed against the
party by or for whom it was drafted.
Section 18.10. No Oral Amendment. The Loan Documents may not be
amended, waived or terminated orally or by any act or omission made individually
by Borrower, Lender or Trustee but may be amended, waived or terminated only by
a written document signed by the party against which enforcement of the
amendment, waiver or termination is sought.
Section 18.11. Lost or Destroyed Note. If the Note is lost, mutilated,
destroyed or stolen, Borrower will deliver to Lender a new, substitute note
containing the same provisions as the Note, provided that Borrower is furnished
with reasonably satisfactory evidence of the loss, mutilation, destruction or
theft of the Note.
Section 18.12. Covenants Run with the Land. Subject to the restrictions on
transfer contained in the Article entitled "TRANSFERS, LIENS AND ENCUMBRANCES",
all of the covenants of this Deed of Trust and the Assignment run with the Land,
will bind all parties hereto and all tenants and subtenants of the Land or the
Improvements and their respective heirs,
42
executors, administrators, successors and assigns, and all occupants and
subsequent owners of the Property, and will inure to the benefit of Lender and
all subsequent holders of the Note and this Deed of Trust.
Section 18.13. Time of the Essence. Time is of the essence with respect
to Borrower's payment and performance of the Obligations.
Section 18.14. Subrogation. If the Principal or any other amount
advanced by Lender is used directly or indirectly to pay off, discharge or
satisfy all or any part of an encumbrance affecting the Property, then Lender is
subrogated to the encumbrance and to any security held by the holder of the
encumbrance, all of which will continue in full force and effect in favor of
Lender as additional security for the Obligations.
Section 18.15. Joint and Several Liability. If Borrower consists of
more than one person or entity, the obligations and liabilities of each such
person or entity under this Deed of Trust are joint and several.
Section 18.16. Successors and Assigns. The Loan Documents bind the
parties to the Loan Documents and their respective successors, assigns, heirs,
administrators, executors, agents and representatives and inure to the benefit
of Lender and its successors, assigns, heirs, administrators, executors, agents
and representatives and to the extent applicable inure to the benefit of Trustee
and its successors, assigns, heirs, administrators, executors, agents and
representatives.
Section 18.17. Duplicates and Counterparts. Duplicate counterparts of
any of the Loan Documents, other than the Note, may be executed and together
will constitute a single original document.
Section 18.18. Severability. The invalidity, illegality or
unenforceability of any provision of any of the Loan Documents will not affect
any other provisions of the Loan Documents, which will be construed as if the
invalid, illegal or unenforceable provision never had been included.
ARTICLE XIX
TRUSTEE PROVISIONS
Section 19.1. Acceptance of Trust.
(a) Trustee accepts this trust upon recordation of this Deed of Trust
as provided by Law. Except as provided by Law, Trustee is not obligated to
notify any party of a pending sale under this Deed of Trust or of a Proceeding
in which Borrower, Lender or Trustee is a party.
(b) Lender may from time to time unilaterally substitute a successor to
Trustee pursuant to a recordable instrument that complies with Law for
substitution of Trustees. The recorded substitution will be conclusive proof of
proper substitution of trustee who will, without conveyance from predecessor
trustee, succeed to all of the predecessor trustee's title, estate, rights,
powers and duties.
43
Section 19.2. Reconveyance After Payment. Upon written request of
Lender stating that all of the Obligations have been paid, upon surrender of
this Deed of Trust to Trustee for cancellation and retention and upon payment to
Trustee of its fees, costs and expenses incurred or to be incurred thereby,
Trustee shall reconvey, without warranty, the Property then held hereunder. The
recitals in such reconveyance of any matters or facts shall be conclusive proof
of the truthfulness thereof. The grantee in such reconveyance may be described
as "the person or persons legally entitled thereto."
IN WITNESS WHEREOF, Borrower has executed and delivered this Deed of
Trust as of the date first set forth above.
SCIENCE PARK CENTER LLC, a California
limited liability company
By NEUROCRINE BIOSCIENCES, INC., a
Delaware corporation, its managing member
By: /s/ Xxxx Xxxxxx
____________________________________________
Xxxx Xxxxxx,
Executive Vice President and Chief Financial
Officer
44
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
) SS:
COUNTY OF SAN DIEGO )
On 10/26/04, before me, the undersigned, a Notary Public in and for
said State, personally appeared Xxxx X. Xxxxxx, personally known to me or
proved to me on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same in his authorized capacity, and that by his signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
Signature: /s/ Xxxxxxx X. XxXxxx
Xxxxxxx X. XxXxxx
_______________________________________
Name (Typed or Printed)
(Seal)
45
Exhibit A
LEGAL DESCRIPTION
THE REAL PROPERTY SITUATED IN THE COUNTY OF SAN DIEGO, CALIFORNIA, DESCRIBED AS
FOLLOWS:
PARCEL A:
PARCEL 2 OF PARCEL MAP 19394, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY, DECEMBER 18, 2003.
EXCEPTING THEREFROM ALL OIL RIGHTS ON HEREIN DESCRIBED PROPERTY TO BE RESERVED
BY THE GRANTOR, HER HEIRS AND ASSIGNS, FOREVER, AND FURTHER THAT THE SAID
GRANTOR, HER HEIRS OR ASSIGNS AGREE TO PAY A REASONABLE COMPENSATION TO THE SAID
GRANTEE OR THEIR ASSIGNS, SHOULD THE GRANTOR, HER HEIRS OR ASSIGNS, ENTER THE
HEREIN DESCRIBED LAND FOR THE PURPOSE OF DIGGING OR DRILLING FOR OIL, AS
RESERVED IN DEED FROM XXXXXX X. XXXX, ALSO KNOWN AS XXXXXX XXXXXX XXXX TO
XXXX-XXXXXX COMPANY, DATED JULY 29, 1919 AND RECORDED JULY 29, 1919 IN BOOK 789,
PAGE 78 OF DEEDS.
PARCEL B:
A LICENSE FOR ADDITIONAL PARKING CREATED BY THAT CERTAIN "SHARED PARKING
AGREEMENT" DATED DECEMBER 10, 2003 BY AND BETWEEN SCIENCE PARK CENTER, LLC, AND
XXXXXX HOMES, A CALIFORNIA CORPORATION, AND THE CITY OF SAN DIEGO.
PARCEL C:
AN EASEMENT FOR PEDESTRIAN AND VEHICULAR INGRESS, EGRESS, AND PARKING AS SET
FORTH IN THE EASEMENT AGREEMENT DATED OCTOBER 25, 2004 AND RECORDED OCTOBER 25,
2004 AS FILE NO. 2004-1008077 OF OFFICIAL RECORDS.
46
Exhibit B
DEFINITIONS
"ACCELERATION" is defined in Section 14.2(a)(i).
"ACCUMULATIONS" is defined in Section 2.1(vii).
"ACCUMULATIONS DEPOSITARY" is defined in Section 6.2(a).
"ADDITIONAL FUNDS" is defined in Section 7.4(v).
"ANNUAL FINANCIAL STATEMENT" is defined in Section 10.1(a).
"ANTI-TERRORISM LAW" is defined as any Law relating to terrorism or
money-laundering, including Executive Order No. 13224 and the USA Patriot Act.
"ASSESSMENTS" is defined as all assessments now or hereafter levied, assessed or
imposed against the Property.
"ASSIGNMENT" is defined as the Assignment of Leases and Rents dated of even date
with this Deed of Trust made by Borrower for the benefit of Lender.
"BANKRUPTCY CODE" means Title 11 of the United States Code.
"BORROWER" is defined in the introductory paragraph.
"BUDGET" is defined in Section 10.2.
"BUSINESS DAYS" is defined as any day on which commercial banks are not
authorized or required by Law to close in New York, New York.
"CASUALTY" is defined as damage to or destruction of the Property by fire or
other casualty.
"CODE" is defined as the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"CONDEMNATION" is defined as the permanent or temporary taking of all or any
portion of the Property, or any interest therein or right accruing thereto, by
the exercise of the right of eminent domain (including any transfer in lieu of
or in anticipation of the exercise of the right), inverse condemnation or any
similar injury or damage to or decrease in the value of the Property, including
severance and change in the grade of any streets and a Condemnation will be
deemed to have occurred on the date title to the property taken passes or if the
Condemnation is temporary, on the date Borrower no longer has use of the
affected property.
"CONDEMNATION AWARDS" is defined in Section 2.1(viii).
47
"CONDEMNATION PROCEEDING" is defined as a Proceeding that could result in a
Condemnation.
"CONSTITUENTS" is defined as all entities holding interests in another entity,
directly or indirectly (for example, "Constituents" includes all members of a
limited liability company, all general and limited partners of a partnership,
and all shareholders of a corporation), at all levels (for example, if a
corporation is a member of a limited liability company, both the corporation and
its shareholders are included among the "Constituents" of that limited liability
company, and so on up the chain of ownership). The phrase "IMMEDIATE
CONSTITUENT" means a direct, first-level Constituent of the specified entity
(for example, a member of a limited liability company).
"CPA" is defined as an independent certified public accountant reasonably
satisfactory to Lender.
"DEBT" is defined in Section 3.1.
"DEBT SERVICE PAYMENTS" is defined as the monthly installments of principal and
interest payable by Borrower to Lender as set forth in the Note.
"DEED OF TRUST" is defined as this Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing Statement.
"DEFAULT INTEREST RATE" is defined as the lower of 11.48% per annum or the
Maximum Interest Rate, if any.
"DESTRUCTION EVENT" is defined in Section 7.4.
"ENVIRONMENTAL ACTIVITY" is defined as any actual, suspected or threatened
abatement, cleanup, disposal, generation, handling, manufacture, possession,
release, remediation, removal, storage, transportation, treatment or use of any
Hazardous Substances. The actual, suspected or threatened presence of any
Hazardous Substances, or the actual, suspected or threatened noncompliance with
any Environmental Laws, will be deemed Environmental Activity.
"ENVIRONMENTAL LAWS" is defined as all Laws pertaining to health, safety,
protection of the environment, natural resources, conservation, wildlife, waste
management, Environmental Activities and pollution.
"ENVIRONMENTAL REPORT" is defined as the Phase 1 Environmental Site Assessment
and the Regulatory Compliance Assessment prepared by ENSR International, Inc.,
dated August 2004, as amended.
"ERISA" is defined in Section 8.3(a).
"EVASION PREMIUM" is defined in the Note.
"EVENT OF DEFAULT" is defined in Section 14.1.
48
"EXECUTIVE ORDER NO. 13224" is defined as the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001, relating to "Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism."
"EXISTING LEASE" is defined as that certain Standard Industrial/Commercial
Single-Tenant Lease -- Net dated May 10, 2004, by and between Borrower as lessor
and NBI as lessee, as amended by that certain First Amendment to Lease dated as
of October 18, 2004.
"EXISTING MEMBERS" is defined in Section 12.1(b).
"EXPENSES" is defined in Section 11.1(a).
"FINANCIAL BOOKS AND RECORDS" is defined as detailed accounts of the income and
expenses of the Property and of Borrower and all other data, records and
information that either are specifically referred to in the Article entitled
"FINANCIAL REPORTING" or are necessary to the preparation of any of the
statements, reports or certificates required under such Article and includes all
supporting schedules prepared or used by the CPA and delivered to Borrower, if
any, in auditing the Annual Financial Statement or in issuing its opinion.
"Financial Books and Records" does not include any working papers prepared or
used by the CPA or any other outside accountant.
"FISCAL YEAR" is defined as any calendar year or partial calendar year during
the Term.
"FIXED INTEREST RATE" is defined as 6.48% per annum.
"GOVERNMENT" is defined as any federal, state or municipal governmental or
quasi-governmental authority including executive, legislative or judicial
branch, division and any subdivision or agency of any of them and any entity to
which any of them has delegated authority.
"HAZARDOUS SUBSTANCES" is defined as (i) any by-product, chemical, compound,
contaminant, pollutant, product, substance, waste or other material that is
hazardous or toxic, (ii) any by-product, chemical, compound, contaminant,
pollutant, product, substance, waste or other material, the abatement, cleanup,
discharge, disposal, emission, exposure to, generation, handling, manufacture,
possession, presence, release, removal, remediation, storage, transportation,
treatment or use of which is controlled, prohibited or regulated by any
Environmental Laws, including asbestos, petroleum, petroleum products and
polychlorinated biphenyls and (iii) mold, mildew, fungi, bacteria, viruses and
other microbial matter. "Hazardous Substances" excludes the following
substances, but only to the extent stored, formulated, used or tested at or on
the Property in accordance with all applicable laws: office supplies, cleaning
supplies, construction supplies, herbicides, insecticides, fertilizers, and
other garden products, rodentcides, chemicals used in the biological or
pharmaceutical research, pharmaceuticals and pharmaceutical supplies and
chemicals and supplies, in each case stored, fabricated, used or tested at or on
the Property in the ordinary course of a tenant's business.
"HOLDCO" is defined as set forth in the definition of HoldCo Transaction.
49
"HOLDCO TRANSACTION" is defined as a restructuring of NBI pursuant to Section
251(g) of the Delaware General Corporation Law, in one or more substantially
contemporaneous steps, in which: (a) NBI becomes a wholly-owned subsidiary of a
newly-created holding company ("HOLDCO"), (b) each share of NBI common stock is
converted into one share of HoldCo common stock and continues to trade publicly
on The Nasdaq Stock Market,, (c) HoldCo assumes the name "Neurocrine
Biosciences, Inc." and NBI is renamed, (d) NBI survives thereafter as the same,
continuing corporate entity as existed prior thereto, (e) all material assets of
NBI continue to be owned thereafter by NBI (but certain non-material
sales/marketing-related assets may be transferred to another subsidiary of
HoldCo or NBI), and (f) no other change to Borrower's Constituents occurs.
"IMPOSITION PENALTY DATE" is defined in Section 6.1(a).
"IMPOSITIONS" is defined as all Taxes, Assessments, ground rent, if any, water
and sewer rents, fees and charges, levies, permit, inspection and license fees
and other dues, charges or impositions, including all charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, maintenance
and similar charges and charges for utility services, in each instance whether
now or in the future, directly or indirectly, levied, assessed or imposed on the
Property or Borrower and whether levied, assessed or imposed as excise,
privilege or property taxes.
"IMPROVEMENTS" is defined in Section 2.1(ii).
"INDEPENDENT DIRECTOR" is defined as a duly appointed member of the board of
directors of a specified entity, who is reasonably satisfactory to Lender, and
who is not, when appointed to such board, and who has not been, at any time
during the preceding five years, and who shall not be, at any time while serving
as such director, any of the following: (i) a shareholder of, or an officer,
director, partner or employee of, Borrower or any of its shareholders, partners,
members, subsidiaries or affiliates, (ii) a customer of, or supplier to,
Borrower or any of its shareholders, partners, members, subsidiaries or
affiliates, (iii) a person controlling or under common control with any such
shareholder, officer, director, partner, member, employee, supplier or customer,
or (iv) a member of the immediate family of any such shareholder, officer,
director, partner, member, employee, supplier or customer. As used herein, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policy of a person, whether
through ownership of voting securities, by contract or otherwise.
"INSURANCE PREMIUMS" is defined as all present and future premiums and other
charges due and payable on policies of fire, rental value and other insurance
covering the Property and required pursuant to the provisions of this Deed of
Trust.
"INSURANCE PROCEEDS" is defined in Section 2.1(ix).
"INSURERS" is defined in Section 7.1(c).
50
"INSTITUTIONAL INVESTOR" is defined as any bank, savings institution, charitable
foundation, insurance company, real estate investment trust, pension fund or
investment advisor registered under the Investment Advisors Act of 1940, as
amended, and acting as trustee or agent.
"INTEREST" is defined as the fixed interest payable under the Note at the Fixed
Interest Rate and any other sums which could be deemed to be interest under Law.
"LAND" is defined in the Recitals.
"LATE CHARGE" is defined in the Note.
"LAW" is defined as all present and future codes, constitutions, cases,
opinions, rules, manuals, regulations, determinations, laws, orders, ordinances,
requirements and statutes, as amended, of any Government that affect or that may
be interpreted to affect the Property, Borrower or the Loan, including
amendments and all guidance documents and publications promulgated thereunder.
"LEASES" is defined as all present and future leases, subleases, licenses and
other agreements for the use and occupancy of the Land and Improvements, any
related guarantees and including any use and occupancy arrangements created
pursuant to Section 365 (h) of the Bankruptcy Code or otherwise in connection
with the commencement or continuation of any bankruptcy, reorganization,
arrangement, insolvency, dissolution, receivership or similar Proceedings, or
any assignment for the benefit of creditors, in respect of any tenant or other
occupant of the Land and Improvements.
"LENDER" is defined in the introductory paragraph.
"LIQUID ASSETS" is defined to mean any of the following, but only to the extent
owned individually, free of all security interests, liens, pledges, charges or
any other encumbrance: (i) cash, (ii) certificates of deposit (with a maturity
of two years or less) issued by, or savings accounts with, any bank or other
financial institution reasonably acceptable to Lender (provided, however, the
value of any certificates of deposit as of any date of determination shall be
reduced by the amount of any penalty, if any, that would then be imposed for
early withdrawal relating to such certificate of deposit) or (iii) marketable
securities listed on a national exchange or international exchange, marked to
market.
"LIQUID ASSETS TEST" shall mean that the specified entity has Liquid Assets of
at least $25,000,000.
"LOAN" is defined in the Recitals.
"LOAN DOCUMENTS" is defined as the Note, this Deed of Trust, the Assignment and
all documents now or hereafter executed by Borrower or held by Lender or Trustee
relating to the Loan, including all amendments but excluding any indemnities or
guaranties delivered in connection with the Loan.
51
"MARKET CAPITALIZATION" is defined as the market price of an entire company,
calculated by multiplying the number of shares outstanding by the price per
share.
"MATERIAL ENVIRONMENTAL CONTAMINATION" is defined as contamination of the
Property with Hazardous Substances (i) that constitutes a violation of one or
more Environmental Laws; (ii) for which there is a significant possibility that
remediation will be required under Environmental Laws; (iii) that results in a
material risk of liability or expense to Lender; or (iv) that diminishes the
value of the Property.
"MATURITY DATE" is defined in the Recitals.
"MAXIMUM INTEREST RATE" is defined as the maximum rate of interest, if any,
permitted by Law to be charged with respect to the Loan as the maximum rate may
be increased or decreased from time to time.
"NBI" is defined as the Delaware corporation named, as of the date of this Deed
of Trust, Neurocrine Biosciences, Inc. (Delaware Secretary of State File #
2604831), but which is to be renamed in the HoldCo Transaction, and as used
herein "NBI" refers to this same corporation even after such renaming. "NBI"
does not refer to HoldCo, which, in the HoldCo Transaction, will take the name
Neurocrine Biosciences, Inc.
"NBI SURVIVOR" is defined as the surviving entity in an NBI Transaction in which
NBI is not the surviving entity.
"NBI TRANSACTION" is defined as any Transfer or series of Transfers that
involves the offer, issuance, transfer, conveyance, sale, alienation, or other
disposition or acquisition of any legal or beneficial interests in NBI, or of
any equity or other securities, interests, indebtedness, liabilities, or assets,
regardless of the form or manner of such transaction, including, without
limitation, any merger, consolidation, share exchange, or business combination
of, by or involving NBI, regardless of the form of such transaction; excluding,
however, the HoldCo Transaction.
"NBIHQ" is defined to mean Neurocrine HQ, Inc., a Delaware corporation
"NET WORTH" shall mean all assets of the specified entity (excluding, however,
any asset subject to a foreclosure action or judgment lien) less all liabilities
of such entity. Net Worth shall be determined pursuant to generally accepted
accounting principles.
"NET WORTH TEST" shall mean that the specified entity shall have a Net Worth (if
not publicly traded) or a Market Capitalization (if publicly traded) of at least
$65,000,000.
"NOTE" is defined in the Recitals.
"NOTICES" is defined in Section 17.1.
"OBLIGATIONS" is defined in Section 3.1.
52
"PERMITTED EXCEPTIONS" is defined as the matters shown in Schedule B, Part 1 and
2 of the title insurance policy insuring the lien of this Deed of Trust, liens
contested by Borrower in accordance with Section 12.3, and Taxes or Assessments
contested by Borrower in accordance with Section 6.1(c).
"PERMITTED TRANSFERS" is defined in Section 12.2(b).
"PERMITTED USE" is defined as use as a first-class commercial office building
with respect to the smaller of the two buildings within the Property, and as
biotech wet laboratory and administrative space with respect to the larger of
such buildings, and uses incidentally and directly related to such uses.
"PERSONAL PROPERTY" is defined as the Property, other than Fixtures, the Land or
the Improvements.
"POLICIES" is defined in Section 7.1(b).
"PREPAYMENT PREMIUM" is defined in the Note.
"PRINCIPAL" is defined in the Recitals.
"PROCEEDING" is defined as a pending or threatened action, claim or litigation
before a legal, equitable or administrative tribunal having proper jurisdiction.
"PROCEEDS" is defined in Section 7.2(c).
"PROHIBITED PERSON" is defined as:
(i) a person or entity that is listed in the Annex to, or is
otherwise subject to the provisions of, Executive Order No. 13224;
(ii) a person or entity wholly-owned or controlled by, or
acting for or on behalf of, any person or entity that is listed in the
Annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224;
(iii) a person or entity with whom Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;
(iv) a person or entity who commits, threatens or conspires to
commit or supports "terrorism" as defined in Executive Order No. 13224;
(v) a person or entity that is named as a "specially
designated national and blocked person" on the most current list
published by the U.S. Treasury Department Office of Foreign Assets
Control at its official website, xxxx://xxx.xxxxx.xxx/xxxx/x00xxx.xxx
or at any replacement website or at any other official publication of
such list; or
53
(vi) a person or entity who is controlled by or under common
control with a person or entity described in clauses (i)-(v) of this
definition.
"PROPERTY" is defined in Section 2.1.
"PROPERTY DOCUMENTS" is defined in Section 2.1(v).
"RECEIVER" is defined as a receiver, custodian, trustee, liquidator or
conservator of the Property.
"REMEDIES" is defined in Section 14.2(a).
"RENTS" is defined as all present and future rents, prepaid rents, percentage,
participation or contingent rents, issues, profits, proceeds, parking fees,
revenues and other consideration accruing under or in connection with the Leases
or otherwise derived from the use and occupancy of the Land or the Improvements,
including tenant contributions to expenses, security deposits and royalties, if
any, all other fees or payments paid to or for the benefit of Borrower,
including liquidated damages after a default under a Lease, any termination,
cancellation, modification or other fee or premium payable by a tenant for any
reason, the proceeds of any rental insurance and any payments received pursuant
to Sections 502(b) or 365 of the Bankruptcy Code or otherwise in connection with
the commencement or continuance of any bankruptcy, reorganization, arrangement,
insolvency, dissolution, receivership or similar proceedings, or any assignment
for the benefit of creditors, in respect of any tenant or other occupant of the
Land or the Improvements and all claims as a creditor in connection with any of
the foregoing.
"RESTORATION" is defined as the restoration of the Property after a Destruction
Event as nearly as possible to its condition immediately prior to the
Destruction Event, in accordance with the plans and specifications, in a
first-class workmanlike manner using materials substantially equivalent in
quality and character to those used for the original improvements, in accordance
with Law and free and clear of all liens, encumbrances or other charges other
than this Deed of Trust and the Permitted Exceptions.
"RESTORATION COMPLETION DATE" is defined in Section 7.4(viii).
"RESTORATION FUNDS" is defined in Section 7.5(b).
"TAXES" is defined as all present and future real estate taxes or personal
property taxes, if any, levied, assessed or imposed against the Property.
"TERM" is defined as the scheduled term of this Deed of Trust commencing on the
date Lender makes the first disbursement of the Loan and terminating on the
Maturity Date.
"TRANSFER" is defined in Section 12.1(a).
"TRUSTEE" is defined in the introductory paragraph.
54
"UNIFORM COMMERCIAL CODE" is defined as the Uniform Commercial Code as in effect
from time to time in the jurisdiction where the Land is located or, to the
extent required by the Uniform Commercial Code, where the Borrower is located,
as applicable.
"USA PATRIOT ACT" is defined as the "Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001" (Public Law 107-56).
55
Exhibit C
RULES OF CONSTRUCTION
(a) References in any Loan Document to numbered Articles or Sections
are references to the Articles and Sections of that Loan Document. References in
any Loan Document to any numbered or lettered Exhibits or Schedules are
references to the Exhibits or Schedules attached to that Loan Document, all of
which are incorporated in and constitute a part of that Loan Document. Article,
Section, Exhibit and Schedule captions used in any Loan Document are for
reference only and do not describe or limit the substance, scope or intent of
that Loan Document or the individual Articles, Sections, Exhibits or Schedules
of that Loan Document.
(b) The terms "include", "including" and similar terms are construed as
if followed by the phrase "without limitation".
(c) The terms "Land", "Improvements", "Fixtures and Personal Property",
"Condemnation Awards", "Insurance Proceeds" and "Property" are construed as if
followed by the phrase "or any part thereof".
(d) Any agreement by or duty imposed on Borrower in any Loan Document
to perform any obligation or to refrain from any act or omission constitutes a
covenant running with the ownership or occupancy of the Land and the
Improvements, which will bind all parties hereto and their respective successors
and assigns, and all lessees, subtenants and assigns of same, and all occupants
and subsequent owners of the Property, and will inure to the benefit of Lender
and all subsequent holders of the Note and this Deed of Trust and includes a
covenant by Borrower to cause its partners, members, principals, agents,
representatives and employees to perform the obligation or to refrain from the
act or omission in accordance with the Loan Documents. Any statement or
disclosure contained in any Loan Document about facts or circumstances relating
to the Property, Borrower or the Loan constitutes a representation and warranty
by Borrower made as of the date of the Loan Document in which the statement or
disclosure is contained.
(e) The term "to [a specified entity's] knowledge" is construed as
meaning to the best of that entity's knowledge after diligent inquiry.
(f) The singular of any word includes the plural and the plural
includes the singular. The use of any gender includes all genders.
(g) The terms "person", "party" and "entity" include natural persons,
firms, partnerships, limited liability companies and partnerships, corporations
and any other public or private legal entity.
(h) The term "provisions" includes terms, covenants, conditions,
agreements and requirements.
56
(i) The term "amend" includes modify, supplement, renew, extend,
replace or substitute and the term "amendment" includes modification,
supplement, renewal, extension, replacement and substitution.
(j) Reference to any specific Law or to any document or agreement,
including the Note, this Deed of Trust, any of the other Loan Documents, the
Leases, and the Property Documents includes any future amendments to the Law,
document or agreement, as the case may be.
(k) No inference in favor of or against a party with respect to any
provision in any Loan Document may be drawn from the fact that the party drafted
the Loan Document.
(l) The term "certificate" means the sworn, notarized statement of the
entity giving the certificate, made by a duly authorized person reasonably
satisfactory to Lender affirming the truth and accuracy of every statement in
the certificate. Any document that is "certified" means the document has been
appended to a certificate of the entity certifying the document that affirms the
truth and accuracy of everything in the document being certified, unless the
applicable Loan Document provides for a different certification. In all
instances the entity issuing a certificate must be reasonably satisfactory to
Lender.
(m) Any appointment of Lender as Borrower's attorney-in-fact is
irrevocable and coupled with an interest. Lender may appoint a substitute
attorney-in-fact. Borrower ratifies all actions taken by the attorney-in-fact
but, nevertheless, if Lender requests, Borrower will specifically ratify any
action taken by the attorney-in-fact by executing and delivering to the
attorney-in-fact or to any entity designated by the attorney-in-fact all
documents necessary to effect the ratification.
(n) Any document, instrument or agreement to be delivered by Borrower
will be in form and content satisfactory to Lender.
(o) All obligations, rights, remedies and waivers contained in the Loan
Documents will be construed as being limited only to the extent required to be
enforceable under the Law.
(p) The unmodified word "days" means calendar days.
57
