EXHIBIT 10.5
SCHEDULE OF ADDITIONAL AGREEMENTS
On June 8, 2005, additional agreements in substantially the same form as
the below agreement were signed by the following entities:
Agreement Borrowing Entities
--------- ------------------
1 AREC 9, LLC
UHIL 9, LLC
2 AREC 10, LLC
UHIL 10, LLC
3 AREC 11, LLC
UHIL 11, LLC
4 AREC 12, LLC
UHIL 12, LLC
5 AREC 13, LLC
UHIL 13, LLC
U-Haul Grande
MSMCI Loan No.: 05-20270
================================================================================
AREC 8, LLC
and
UHIL 8, LLC,
as Borrower
to
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.,
as Lender
MORTGAGE, SECURITY AGREEMENT,
ASSIGNMENT OF RENTS AND FIXTURE FILING
--------------------------
Dated: June 8, 2005
PREPARED BY AND UPON RECORDATION RETURN TO:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
================================================================================
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE FILING
(the"Security Instrument") is made as of the 8th day of June, 2005, by AREC 8,
LLC ("Fee Owner") and UHIL 8, LLC ("Lessee" and together with Fee Owner,
hereinafter collectively referred to as "Borrower"), each having its chief
executive office at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, to XXXXXX
XXXXXXX MORTGAGE CAPITAL INC. having an address at 0000 Xxxxxx xx xxx Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Lender has authorized and made a loan (hereinafter referred to as
the "Loan") to Borrower in the maximum principal sum of TWO HUNDRED FORTY
MILLION AND NO/100 DOLLARS ($240,000,000.00) (hereinafter referred to as the
"Loan Amount"), which Loan is evidenced by one or more promissory notes or
amended, restated and consolidated promissory notes, as applicable, dated the
date hereof (together with any supplements, amendments, modifications,
replacements or extensions thereof, hereinafter collectively referred to as the
"Note") given by Borrower and certain Affiliates of Borrower (the
"Cross-collateralized Borrowers"), as maker, to Lender, as payee;
WHEREAS, in consideration of the Loan, the Cross-collateralized Borrowers
have agreed to make payments in amounts sufficient to pay and redeem, and
provide for the payment and redemption of the principal of, premium, if any, and
interest on the Note when due;
WHEREAS, Xxxxxxxx desires by this Security Instrument to provide for,
among other things, the issuance of the Note and for the deposit, deed and
pledge by Borrower with, and the creation of a security interest in favor of,
Lender, as security for the Cross-collateralized Borrowers' obligations to
Lender from time to time pursuant to the Note and the other Loan Documents;
WHEREAS, Xxxxxxxx and Xxxxxx intend these recitals to be a material part
of this Security Instrument; and
WHEREAS, all things necessary to make this Security Instrument the valid
and legally binding obligation of Borrower in accordance with its terms, for the
uses and purposes herein set forth, have been done and performed.
NOW THEREFORE, to secure the payment of the principal of, prepayment
premium (if any) and interest on the Note, and all other obligations,
liabilities or sums due or to become due under this Security Instrument, the
Note or any other Loan Document, including, without limitation, interest on said
obligations, liabilities or sums (said principal, premium, interest and other
sums being hereinafter referred to as the "Debt"), and the performance of all
other covenants, obligations and liabilities of the Cross-collateralized
Borrowers pursuant to the Loan Documents, Xxxxxxxx has executed and delivered
this Security Instrument; and Xxxxxxxx has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably grant,
bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Lender, forever
with power of sale, all right, title and interest of Xxxxxxxx in and to all of
the following property, rights, interests and estates:
(a) the plot(s), piece(s) or parcel(s) of real property described in
EXHIBIT A attached hereto and made a part hereof (individually and
collectively, hereinafter referred to as the "Premises");
(b) (i) all buildings, foundations, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and
improvements of every kind or nature now or hereafter located on the
Premises (hereinafter collectively referred to as the "Improvements"); and
(ii) to the extent permitted by law, the name or names, if any, as may now
or hereafter be used for any of the Improvements, and the goodwill
associated therewith;
(c) all easements, servitudes, rights-of-way, strips and gores of
land, streets, ways, alleys, passages, sewer rights, water, water courses,
water rights and powers, ditches, ditch rights, reservoirs and reservoir
rights, air rights and development rights, lateral support, drainage, gas,
oil and mineral rights, tenements, hereditaments and appurtenances of any
nature whatsoever, in any way belonging, relating or pertaining to the
Premises or the Improvements and the reversion and reversions, remainder
and remainders, whether existing or hereafter acquired, and all land lying
in the bed of any street, road or avenue, opened or proposed, in front of
or adjoining the Premises to the center line thereof and any and all
sidewalks, drives, curbs, passageways, streets, spaces and alleys adjacent
to or used in connection with the Premises and/or Improvements and all the
estates, rights, titles, interests, property, possession, claim and demand
whatsoever, both in law and in equity, of Borrower of, in and to the
Premises and Improvements and every part and parcel thereof, with the
appurtenances thereto;
(d) all machinery, equipment, fittings, apparatus, appliances,
furniture, furnishings, tools, fixtures (including, but not limited to,
all heating, air conditioning, ventilating, waste disposal, sprinkler and
fire and theft protection equipment, plumbing, lighting, communications
and elevator fixtures) and other property of every kind and nature
whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon, or in, and used in connection
with the Premises or the Improvements, or appurtenant thereto, and all
building equipment, materials and supplies of any nature whatsoever owned
by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon, or in, and used in connection with the Premises or
the Improvements or appurtenant thereto (hereinafter, all of the foregoing
items described in this paragraph (d) are collectively called the
"Equipment"), all of which, and any replacements, modifications,
alterations and additions thereto, to the extent permitted by applicable
law, shall be deemed to constitute fixtures (together with all "fixtures"
(as defined in the UCC) hereafter located on the Premises or the
Improvements, the "Fixtures"), and are part of the real estate and
security for the payment of the Debt and the performance of Borrower's
obligations. For specificity, the parties acknowledge that U-Haul's truck,
van and wagon rental fleet shall not constitute Equipment hereunder. To
the extent any portion of the Equipment is not real property or Fixtures
under applicable law, it shall be deemed to be personal property, and this
Security Instrument shall constitute a security agreement creating a
security interest therein in favor of Lender under the UCC;
(e) all awards or payments, including interest thereon, which may
hereafter be made with respect to the Premises, the Improvements, the
Fixtures, or the Equipment, whether from the exercise of the right of
eminent domain (including but not limited to any transfer made in lieu of
or in anticipation of the exercise of said right), or for a change of
grade, or for any other injury to or decrease in the value of the
Premises, the Improvements or the Equipment or refunds with respect to the
payment of property taxes and assessments, and all other proceeds of the
conversion, voluntary or involuntary, of the Premises, Improvements,
Equipment, Fixtures or any other Property or part thereof into cash or
liquidated claims;
(f) all leases, tenancies, licenses and other agreements affecting
the use, enjoyment or occupancy of the Premises, the Improvements, the
Fixtures, or the Equipment or any portion thereof now or hereafter entered
into, whether before or after the filing by or against Borrower of any
petition for relief under the Bankruptcy Code and all reciprocal easement
agreements, license agreements and other agreements with Pad Owners
(hereinafter collectively referred to as the "Leases"), together with all
cash or security deposits, lease termination payments, advance rentals and
payments of similar nature and guarantees or other security held by, or
issued in favor of, Borrower in connection therewith to the extent of
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Borrower's right or interest therein and all remainders, reversions and
other rights and estates appurtenant thereto, and all base, fixed,
percentage or additional rents, and other rents, oil and gas or other
mineral royalties, and bonuses, issues, profits and rebates and refunds or
other payments made by any Governmental Authority from or relating to the
Premises, the Improvements, the Fixtures or the Equipment plus all rents,
receipts, common area charges and other payments now existing or hereafter
arising, whether paid or accruing before or after the filing by or against
Borrower of any petition for relief under the Bankruptcy Code (the
"Rents") and all proceeds from the sale or other disposition of the Leases
and the right to receive and apply the Rents to the payment of the Debt;
(g) all proceeds of and any unearned premiums on any insurance
policies covering the Premises, the Improvements, the Fixtures, the Rents
or the Equipment, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in
lieu thereof, for damage to the Premises, the Improvements, the Fixtures
or the Equipment and all refunds or rebates of Impositions, and interest
paid or payable with respect thereto;
(h) all deposit accounts, securities accounts, funds or other
accounts maintained or deposited with Lender, or its assigns, in
connection herewith, including, without limitation, the Security Deposit
Account (to the extent permitted by law), the Engineering Escrow
Sub-Account, the Rent Account, the Central Account, the Basic Carrying
Costs Sub-Account, the Debt Service Payment Sub-Account, the Operation and
Maintenance Expense Sub-Account, the Mez Payment Sub-Account and the
Recurring Replacement Reserve Sub-Account and all monies and investments
deposited or to be deposited in such accounts;
(i) all accounts receivable, contract rights, franchises, interests,
estate or other claims, both at law and in equity, now existing or
hereafter arising, and relating to the Premises, the Improvements, the
Fixtures or the Equipment, not included in Rents;
(j) all now existing or hereafter arising claims against any Person
with respect to any damage to the Premises, the Improvements, the Fixtures
or the Equipment, including, without limitation, damage arising from any
defect in or with respect to the design or construction of the
Improvements, the Fixtures or the Equipment and any damage resulting
therefrom;
(k) all deposits or other security or advance payments, including
rental payments now or hereafter made by or on behalf of Borrower to
others, with respect to (i) insurance policies, (ii) utility services,
(iii) cleaning, maintenance, repair or similar services, (iv) refuse
removal or sewer service, (v) parking or similar services or rights and
(vi) rental of Equipment, if any, relating to or otherwise used in the
operation of the Premises, the Improvements, the Fixtures or the
Equipment;
(l) intangible property now or hereafter relating to the Premises,
the Improvements, the Fixtures or the Equipment or its operation,
including, without limitation, software, letter of credit rights, trade
names, trademarks (including, without limitation, any licenses of or
agreements to license trade names or trademarks now or hereafter entered
into by Borrower), logos, building names and goodwill;
(m) all now existing or hereafter arising advertising material,
guaranties, warranties, building permits, other permits, licenses, plans
and specifications, shop and working drawings, soil tests, appraisals and
other documents, materials and/or personal property of any kind now or
hereafter existing in or relating to the Premises, the Improvements, the
Fixtures, and the Equipment;
(n) all now existing or hereafter arising drawings, designs, plans
and specifications prepared by architects, engineers, interior designers,
landscape designers and any other consultants or professionals for the
design, development, construction, repair and/or improvement of the
Property, as amended from time to time;
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(o) the right, in the name of and on behalf of Xxxxxxxx, to appear
in and defend any now existing or hereafter arising action or proceeding
brought with respect to the Premises, the Improvements, the Fixtures or
the Equipment and to commence any action or proceeding to protect the
interest of Lender in the Premises, the Improvements, the Fixtures or the
Equipment; and
(p) all proceeds, products, substitutions and accessions (including
claims and demands therefor) of each of the foregoing.
All of the foregoing items (a) through (p), together with all of the
right, title and interest of Borrower therein, are collectively referred to as
the "Property".
TO HAVE AND TO HOLD the above granted and described Property unto Xxxxxx,
and the successors and assigns of Lender in fee simple, forever.
PROVIDED, ALWAYS, and these presents are upon this express condition, if
Borrower shall well and truly pay and discharge the Debt and perform and observe
the terms, covenants and conditions set forth in the Loan Documents, then these
presents and the estate hereby granted shall cease and be void.
AND Borrower covenants with and warrants to Lender that:
ARTICLE I: DEFINITIONS
Section 1.01. Certain Definitions.
For all purposes of this Security Instrument, except as otherwise
expressly provided or unless the context clearly indicates a contrary intent:
(i) the capitalized terms defined in this Section have the meanings
assigned to them in this Section, and include the plural as well as the
singular;
(ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(iii) the words "herein", "hereof", and "hereunder" and other words
of similar import refer to this Security Instrument as a whole and not to
any particular Section or other subdivision.
"Affiliate" of any specified Person shall mean any other Person directly
or indirectly Controlling or Controlled by or under direct or indirect common
Control with such specified Person.
"Aggregate Debt Service Coverage" shall mean the quotient obtained by
dividing the aggregate Net Operating Income for all of the Cross-collateralized
Properties for the specified period by the aggregate payments of interest and
principal (not including the amount of principal payable upon Maturity) due for
such specified period under the Note (determined as of the date the calculation
of Aggregate Debt Service Coverage is required or requested hereunder).
"Allocated Loan Amount" shall mean the Initial Allocated Loan Amount of
each Cross-collateralized Property as such amount may be adjusted from time to
time as hereinafter set forth. Upon each adjustment of the Principal Amount
(each a "Total Adjustment"), whether as a result of amortization, defeasance or
prepayment or as otherwise expressly provided herein or in any other Loan
Document, each Allocated Loan Amount shall be increased or decreased, as the
case may be, by an amount equal to the product of (a) the Total Adjustment, and
(b) a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
Principal Amount prior to the adjustment to the Principal Amount which results
in the recalculation of the Allocated Loan Amount. However, when the Principal
Xxxxxx is reduced as a result of Xxxxxx's receipt of (a) a Release Price or, in
connection with a Release, funds sufficient to prepay a portion of the
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Principal Amount in the amount of the Release Price, the Allocated Loan Amount
for the Cross-collateralized Property being released and discharged from the
encumbrance of the applicable Cross-collateralized Mortgage and related Loan
Documents shall be reduced to zero (the amount by which such Allocated Loan
Amount is reduced being referred to as the "Released Allocated Amount"), and
each other Allocated Loan Amount shall be decreased by an amount equal to the
product of (i) the excess of (A) the Release Price over (B) the Released
Allocated Amount and (ii) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the denominator
of which is the aggregate of all of the Allocated Loan Amounts other than the
Allocated Loan Amount applicable to the Cross-collateralized Property for which
the Release Price was paid , or (b) Net Proceeds, the Allocated Loan Amount for
the Cross-collateralized Property with respect to which the Net Proceeds were
received shall be reduced to zero (the amount by which such Allocated Loan
Amount is reduced being referred to as the "Foreclosed Allocated Amount") and
each other Allocated Loan Amount shall (A) if the Net Proceeds exceed the
Foreclosed Allocated Amount (such excess being referred to as the "Surplus Net
Proceeds"), be decreased by an amount equal to the product of (i) the Surplus
Net Proceeds and (ii) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the denominator
of which is the aggregate of all of the Allocated Loan Amounts (prior to the
adjustment in question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property with respect to which the Net Proceeds were
received (such fraction being referred to as the "Net Proceeds Adjustment
Fraction"), (B) if the Foreclosed Allocated Amount exceeds the Net Proceeds
(such excess being referred to as the "Net Proceeds Deficiency"), be increased
by an amount equal to the product of (i) the Net Proceeds Deficiency and (ii)
the Net Proceeds Adjustment Fraction, or (C) if the Net Proceeds equal the
Foreclosed Allocated Amount, remain unadjusted, or (c) Loss Proceeds or partial
prepayments or defeasances, as applicable, made in accordance with Section 15.01
hereof, the Allocated Loan Amount for the Cross-collateralized Property with
respect to which the Loss Proceeds or partial prepayments or defeasances, as
applicable, were received shall be decreased by an amount equal to the sum of
(i) with respect to Loss Proceeds, Loss Proceeds which are applied towards the
reduction of the Principal Amount as set forth in Article III hereof, if any,
and (ii) with respect to partial prepayments or defeasances, as applicable, the
amount of any such partial prepayment which is applied towards the reduction of
the Principal Amount in accordance with the provisions of the Note, if any, but
in no event shall the Allocated Loan Amount for the Cross-collateralized
Property with respect to which the Loss Proceeds or partial prepayments or
defeasances, as applicable, were received be reduced to an amount less than zero
(the amount by which such Allocated Loan Amount is reduced being referred to as
the "Loss Proceeds or Prepayment Allocated Amount") and each other Allocated
Loan Amount shall be decreased by an amount equal to the product of (i) the
excess of (A) the Loss Proceeds or such partial prepayments or defeasances, as
applicable, over (B) the Loss Proceeds or Prepayment Allocated Amount, and (ii)
a fraction, the numerator of which is the applicable Allocated Loan Amount
(prior to the adjustment in question) and the denominator of which is the
aggregate of all of the Allocated Loan Amounts (prior to the adjustment in
question) other than the Allocated Loan Amount applicable to the
Cross-collateralized Property to which such Loss Proceeds or partial prepayments
or defeasances, as applicable, were applied.
"Annual Budget" shall mean an annual budget submitted by Borrower to
Lender in accordance with the terms of Section 2.09 hereof.
"Appraisal" shall mean the appraisal of the Property and all supplemental
reports or updates thereto previously delivered to Lender in connection with the
Loan.
"Appraiser" shall mean the Person who prepared the Appraisal.
"Approved Annual Budget" shall mean each Annual Budget approved by Lender
in accordance with terms hereof or, if there is no Annual Budget approved by
Lender, the actual expenses set forth in the cash flow statements delivered to
Lender pursuant to Section 2.09(c) hereof with respect to the prior Fiscal Year
adjusted to reflect increases in Basic Carrying Costs and to delete
non-recurring expenses.
"Approved Manager Standard" shall mean the standard of business
operations, practices and procedures customarily employed by entities having a
senior executive with at least seven (7) years' experience in the management of
self-storage and retail properties which manage not less than 1,000,000 square
feet of gross leasable area,
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including, without limitation, certain properties which contain more than
100,000 square feet of gross leasable area.
"Architect" shall have the meaning set forth in Section 3.04(b)(i) hereof.
"Assignment" shall mean the Assignment of Leases and Rents and Security
Deposits of even date herewith relating to the Property given by Borrower to
Lender, as the same may be modified, amended or supplemented from time to time.
"Bank" shall mean the bank, trust company, savings and loan association or
savings bank designated by Lender, in its sole and absolute discretion, in which
the Central Account shall be located.
"Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., as amended
from time to time.
"Basic Carrying Costs" shall mean the sum of the following costs
associated with the Property: (a) Impositions and (b) insurance premiums.
"Basic Carrying Costs Monthly Installment" shall mean Xxxxxx's estimate of
one-twelfth (1/12th) of the annual amount for Basic Carrying Costs. "Basic
Carrying Costs Monthly Installment" shall also include, if required by Xxxxxx, a
sum of money which, together with such monthly installments, will be sufficient
to make the payment of each such Basic Carrying Cost at least thirty (30) days
prior to the date initially due. Should such Basic Carrying Costs not be
ascertainable at the time any monthly deposit is required to be made, the Basic
Carrying Costs Monthly Installment shall be determined by Lender in its
reasonable discretion on the basis of the aggregate Basic Carrying Costs for the
prior Fiscal Year or month or the prior payment period for such cost. As soon as
the Basic Carrying Costs are fixed for the then current Fiscal Year, month or
period, the next ensuing Basic Carrying Costs Monthly Installment shall be
adjusted to reflect any deficiency or surplus in prior monthly payments. If at
any time during the term of the Loan Lender determines that there will be
insufficient funds in the Basic Carrying Costs Sub-Account to make payments when
they become due and payable, Lender shall have the right to adjust the Basic
Carrying Costs Monthly Installment such that there will be sufficient funds to
make such payments. Notwithstanding the foregoing, provided that no Trigger
Event has occurred and is continuing, that a sum equal to not less than the
Initial Basic Carrying Costs Deposit is on deposit in the Basic Carrying Costs
Sub-Account and Borrower has delivered to Lender evidence of payment of all
Basic Carrying Costs within fifteen (15) days of the date such sums were due and
payable, the Basic Carrying Costs Monthly Installment shall be $0.
"Basic Carrying Costs Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.06 hereof.
"Borrower" shall mean Borrower named herein and any successor to the
obligations of Xxxxxxxx.
"Borrower Account" shall mean an Eligible Account maintained in the name
of Xxxxxxxx.
"Business Day" shall mean any day other than (a) a Saturday or Sunday, or
(b) a day on which banking and savings and loan institutions in the State of New
York are authorized or obligated by law or executive order to be closed, or at
any time during which the Loan is an asset of a Securitization, the cities,
states and/or commonwealths used in the comparable definition of "Business Day"
in the Securitization documents.
"Capital Expenditures" shall mean for any period, the amount expended for
items capitalized under GAAP including expenditures for building improvements or
major repairs, leasing commissions and tenant improvements.
"Cash Expenses" shall mean for any period, the operating expenses for the
Property as set forth in an Approved Annual Budget to the extent that such
expenses are actually incurred by Borrower minus payments into the Basic
Carrying Costs Sub-Account, the Debt Service Payment Sub-Account and the
Recurring Replacement Reserve Sub-Account.
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"Central Account" shall mean an Eligible Account, maintained at the Bank,
in the name of Lender or its successors or assigns (as secured party) as may be
designated by Xxxxxx.
"Closing Date" shall mean the date of the Note.
"Code" shall mean the Internal Revenue Code of 1986, as amended and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto.
"Collection Account" shall mean a demand deposit account designated by
Lender, which shall be an Eligible Account, to which payments of Debt are
transferred.
"Condemnation Proceeds" shall mean all of the proceeds in respect of any
Taking or purchase in lieu thereof.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Control" means, when used with respect to any specific Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person whether through
ownership of voting securities, beneficial interests, by contract or otherwise.
The definition is to be construed to apply equally to variations of the word
"Control" including "Controlled," "Controlling" or "Controlled by."
"CPI" shall mean "The Consumer Price Index (New Series) (Base Period
1982-84=100) (all items for all urban consumers)" issued by the Bureau of Labor
Statistics of the United States Department of Labor (the "Bureau"). If the CPI
ceases to use the 1982-84 average equaling 100 as the basis of calculation, or
if a change is made in the term, components or number of items contained in said
index, or if the index is altered, modified, converted or revised in any other
way, then the index shall be adjusted to the figure that would have been arrived
at had the change in the manner of computing the index in effect at the date of
this Security Instrument not been made. If at any time during the term of this
Security Instrument the CPI shall no longer be published by the Bureau, then any
comparable index issued by the Bureau or similar agency of the United States
issuing similar indices shall be used in lieu of the CPI.
"Cross-collateralization Agreement" shall mean that certain
Cross-collateralization Agreement of even date herewith among Borrower, the
Cross-collateralized Borrowers and Lender.
"Cross-collateralized Mortgage" shall mean each mortgage, deed of trust,
deed to secure debt, security agreement, assignment of rents and fixture filing
as originally executed or as same may hereafter from time to time be
supplemented, amended, modified or extended by one or more indentures
supplemental thereto granted by a Cross-collateralized Borrower to Lender as
security for the Note.
"Cross-collateralized Property" shall mean each parcel or parcels of real
property encumbered by a Cross-collateralized Mortgage as identified on EXHIBIT
F attached hereto and made a part hereof; provided, however, at such time, if
any, that a Cross-collateralized Mortgage is released by Lender, the property
which was encumbered by such Cross-collateralized Property shall no longer
constitute a Cross-collateralized Property.
"Debt" shall have the meaning set forth in the Recitals hereto.
"Debt Service" shall mean the amount of interest and principal payments
due and payable in accordance with the Note during an applicable period.
"Debt Service Coverage" shall mean the quotient obtained by dividing Net
Operating Income for the specified period by the sum of the (a) aggregate
payments of interest, principal and all other sums due for such
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specified period under the Note (determined as of the date the calculation of
Debt Service Coverage is required or requested hereunder) and (b) aggregate
payments of interest, principal and all other sums due for such specified period
pursuant to the terms of subordinate or mezzanine financing, if any, then
affecting the Property or, if Debt Service Coverage is being calculated in
connection with a request for consent to any subordinate financing, then
proposed.
"Debt Service Payment Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.07 hereof for the purposes of making Debt Service
payments.
"Default" shall mean any Event of Default or event which would constitute
an Event of Default if all requirements in connection therewith for the giving
of notice, the lapse of time, and the happening of any further condition, event
or act, had been satisfied.
"Default Rate" shall mean the lesser of (a) the highest rate allowable at
law and (b) five percent (5%) above the interest rate set forth in the Note.
"Default Rate Interest" shall mean, to the extent the Default Rate becomes
applicable, interest in excess of the interest which would have accrued on (a)
the Principal Amount and (b) any accrued but unpaid interest, if the Default
Rate was not applicable.
"Defeasance Deposit" shall mean an amount equal to the total cost incurred
or to be incurred in the purchase on behalf of Borrower of Federal Obligations
necessary to meet the Scheduled Defeasance Payments.
"Defeased Note" shall have the meaning set forth in Section 15.01 hereof.
"Development Laws" shall mean all applicable subdivision, zoning,
environmental protection, wetlands protection, or land use laws or ordinances,
and any and all applicable rules and regulations of any Governmental Authority
promulgated thereunder or related thereto.
"Eligible Account" shall mean a segregated account which is either (a) an
account or accounts maintained with a federal or state chartered depository
institution or trust company the long term unsecured debt obligations of which
are rated by each of the Rating Agencies (or, if not rated by Fitch, Inc.
("Fitch"), otherwise acceptable to Fitch, as confirmed in writing that such
account would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to any certificates issued in
connection with a Securitization) in its highest rating category at all times
(or, in the case of the Basic Carrying Costs Sub-Account, the long term
unsecured debt obligations of which are rated at least "AA" (or its equivalent))
by each of the Rating Agencies (or, if not rated by Fitch, otherwise acceptable
to Fitch, as confirmed in writing that such account would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to any certificates issued in connection with a Securitization) or, if
the funds in such account are to be held in such account for less than thirty
(30) days, the short term obligations of which are rated by each of the Rating
Agencies (or, if not rated by Fitch, otherwise acceptable to Fitch, as confirmed
in writing that such account would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization) in its highest rating
category at all times or (b) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity which, in the case of a state chartered depository
institution is subject to regulations substantially similar to 12 C.F.R. Section
9.10(b), having in either case a combined capital and surplus of at least
$100,000,000 and subject to supervision or examination by federal and state
authority, or otherwise acceptable (as evidenced by a written confirmation from
each Rating Agency that such account would not, in and of itself, cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
any certificates issued in connection with a Securitization) to each Rating
Agency, which may be an account maintained by Lender or its agents. Eligible
Accounts may bear interest. The title of each Eligible Account shall indicate
that the funds held therein are held in trust for the uses and purposes set
forth herein.
8
"Engineer" shall have the meaning set forth in Section 3.04(b)(i) hereof.
"Engineering Escrow Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof, maintained pursuant to
Section 5.12 hereof and funded on the Closing Date relating to payments for any
Required Engineering Work.
"Environmental Problem" shall mean any of the following:
(a) the presence of any Hazardous Material on, in, under, or above
all or any portion of the Property except those Hazardous Materials used
in the ordinary course of Borrower's business, in compliance with, and not
likely to give rise to liability under, Environmental Statutes;
(b) the release or threatened release of any Hazardous Material from
or onto the Property;
(c) the violation or threatened violation of any Environmental
Statute with respect to the Property; or
(d) the failure to obtain or to abide by the terms or conditions of
any permit or approval required under any Environmental Statute with
respect to the Property.
A condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.
"Environmental Report" shall mean the environmental audit report for the
Property and any supplements or updates thereto, previously delivered to Lender
in connection with the Loan.
"Environmental Statute" shall mean any federal, state or local statute,
ordinance, rule or regulation, any judicial or administrative order (whether or
not on consent) or judgment applicable to Borrower or the Property including,
without limitation, any judgment or settlement based on common law theories, and
any provisions or condition of any permit, license or other authorization
binding on Borrower relating to (a) the protection of the environment, the
safety and health of persons (including employees) or the public welfare from
actual or potential exposure (or effects of exposure) to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Hazardous Materials or (b) the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Materials,
including, but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. Section 9601 et seq., the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42
U.S.C. Section 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. Section 1251 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. Section 2601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 1101 et
seq., the Clean Air Act of 1966, as amended, 42 U.S.C. Section 7401 et seq., the
National Environmental Policy Act of 1975, 42 U.S.C. Section 4321, the Rivers
and Harbors Act of 1899, 33 U.S.C. Section 401 et seq., the Endangered Species
Act of 1973, as amended, 16 U.S.C. Section 1531 et seq., the Occupational Safety
and Health Act of 1970, as amended, 29 U.S.C. Section 651 et seq., and the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. Section 300(f) et seq., and
all rules, regulations and guidance documents promulgated or published
thereunder.
"Equipment" shall have the meaning set forth in granting clause (d) of
this Security Instrument.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Security
Instrument and, as of the relevant date, any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
9
"ERISA Affiliate" shall mean any corporation or trade or business that is
a member of any group of organizations (a) described in Section 414(b) or (c) of
the Code of which Borrower or Guarantor is a member and (b) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which
Borrower or Guarantor is a member.
"Event of Default" shall have the meaning set forth in Section 13.01
hereof.
"Extraordinary Expense" shall mean an extraordinary operating expense or
capital expense not set forth in the Approved Annual Budget or allotted for in
the Recurring Replacement Reserve Sub-Account.
"Federal Obligations" shall mean non-callable direct obligations of, or
obligations fully guaranteed as to payment of principal and interest by, the
United States of America or any agency or instrumentality thereof provided that
such obligations are backed by the full faith and credit of the United States of
America as chosen by Xxxxxxxx, subject to the approval of Lender.
"First Interest Accrual Period" shall mean the period commencing on the
Closing Date and ending on the last day of the month in which the Closing Date
occurs.
"First Payment Date" shall mean the Payment Date in the month following
the month in which the Loan is initially funded.
"Fiscal Year" shall mean the twelve (12) month period commencing on April
1 and ending on March 31 during each year of the term of this Security
Instrument, or such other fiscal year of Borrower as Borrower may select from
time to time with the prior written consent of Lender.
"Fixtures" shall have the meaning set forth in granting clause (d) of this
Security Instrument.
"Force Majeure" shall mean an unavoidable delay caused by general strikes,
lockouts or labor disputes, wars (declared or undeclared), terrorist attacks,
natural disasters such as fires, storms, floods or earthquakes, power outages or
other utility interruptions or other material extraordinary events not
reasonably foreseeable by the parties hereto, and which such interruption causes
a delay in the performance of any material obligation hereunder.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as of the date of the applicable financial report,
consistently applied.
"General Partner" shall mean, if Xxxxxxxx is a partnership, each general
partner of Xxxxxxxx and, if Borrower is a limited liability company, each
managing member of Borrower and in each case, if applicable, each general
partner or managing member of such general partner or managing member. In the
event that Borrower or any General Partner is a single member limited liability
company, the term "General Partner" shall include such single member.
"Governmental Authority" shall mean, with respect to any Person, any
federal or State government or other political subdivision thereof and any
entity, including any regulatory or administrative authority or court,
exercising executive, legislative, judicial, regulatory or administrative or
quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal, in each case having jurisdiction over such
applicable Person or such Person's property and any stock exchange on which
shares of capital stock of such Person are listed or admitted for trading.
"Guarantor" shall mean any Person guaranteeing, in whole or in part, the
obligations of Borrower under the Loan Documents.
"Hazardous Material" shall mean any flammable, explosive or radioactive
materials, hazardous materials or wastes, hazardous or toxic substances,
pollutants or related materials, asbestos or any material containing asbestos,
10
molds, spores and fungus which may pose a risk to human health or the
environment or any other substance or material as defined in or regulated by any
Environmental Statutes.
"Impositions" shall mean all taxes (including, without limitation, all
real estate, ad valorem, sales (including those imposed on lease rentals), use,
single business, gross receipts, value added, intangible, transaction, privilege
or license or similar taxes), assessments (including, without limitation, all
assessments for public improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not commenced or completed
within the term of this Security Instrument), ground rents, water, sewer or
other rents and charges, excises, levies, fees (including, without limitation,
license, permit, inspection, authorization and similar fees), and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Property and/or any Rent (including all interest and penalties thereon), which
at any time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a lien upon (a) Borrower (including, without
limitation, all franchise, single business or other taxes imposed on Borrower
for the privilege of doing business in the jurisdiction in which the Property or
any other collateral delivered or pledged to Lender in connection with the Loan
is located) or Lender, (b) the Property or any part thereof or any Rents
therefrom or any estate, right, title or interest therein, or (c) any occupancy,
operation, use or possession of, or sales from, or activity conducted on, or in
connection with the Property, or any part thereof, or the leasing or use of the
Property, or any part thereof, or the acquisition or financing of the
acquisition of the Property, or any part thereof, by Borrower.
"Improvements" shall have the meaning set forth in granting clause (b) of
this Security Instrument.
"Indemnified Parties" shall have the meaning set forth in Section 12.01
hereof.
"Independent" shall mean, when used with respect to any Person, a Person
who (a) is in fact independent, (b) does not have any direct financial interest
or any material indirect financial interest in Borrower, or in any Affiliate of
Borrower or any constituent partner, shareholder, member or beneficiary of
Borrower, (c) is not connected with Borrower or any Affiliate of Borrower or any
constituent partner, shareholder, member or beneficiary of Borrower as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions and (d) is not a member of the immediate family of
a Person defined in (b) or (c) above. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be provided, such opinion or
certificate shall state that the Person executing the same has read this
definition and is Independent within the meaning hereof.
"Initial Allocated Loan Amount" shall mean the portion of the Loan Amount
allocated to each Cross-collateralized Property as set forth on EXHIBIT C
attached hereto and made a part hereof.
"Initial Basic Carrying Cost Deposit" shall equal the amount set forth on
EXHIBIT B attached hereto and made a part hereof.
"Initial Engineering Deposit" shall equal the amount set forth on EXHIBIT
B attached hereto and made a part hereof.
"Initial Recurring Replacement Reserve Deposit" shall equal the amount set
forth on EXHIBIT B attached hereto and made a part hereof.
"Institutional Lender" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of
ERISA or for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any
11
broker or dealer registered under the Securities Exchange Act of 1934, as
amended, or any investment adviser registered under the Investment Adviser Act
of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, or (j) any other entity all of the equity owners of which are
Institutional Lenders; provided that each of said Persons shall have net assets
in excess of $1,000,000,000 and a net worth in excess of $500,000,000, be in the
business of making commercial mortgage loans, secured by properties of like
type, size and value as the Property and have a long term credit rating which is
not less than "BBB-" (or its equivalent) from each Rating Agency.
"Insurance Proceeds" shall mean all of the proceeds received under the
insurance policies required to be maintained by Borrower pursuant to Article III
hereof.
"Insurance Requirements" shall mean all terms of any insurance policy
required by this Security Instrument, all requirements of the issuer of any such
policy, and all regulations and then current standards applicable to or
affecting the Property or any use or condition thereof, which may, at any time,
be recommended by the Board of Fire Underwriters, if any, having jurisdiction
over the Property, or such other Person exercising similar functions.
"Interest Accrual Period" shall mean the First Interest Accrual Period
and, thereafter, each one (1) month period, which shall be a calendar month.
"Interest Rate" shall have the meaning set forth in the Note.
"Interest Shortfall" shall mean any shortfall in the amount of interest
required to be paid with respect to the Loan Amount on any Payment Date.
"Late Charge" shall have the meaning set forth in Section 13.09 hereof.
"Leases" shall have the meaning set forth in granting clause (f) of this
Security Instrument.
"Legal Requirement" shall mean as to any Person, the certificate of
incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other organization or governing documents of such Person, and any
law, statute, order, ordinance, judgement, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental Statutes, Development
Laws and Use Requirements) or determination of an arbitrator or a court or other
Governmental Authority and all covenants, agreements, restrictions and
encumbrances contained in any instruments, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Lender" shall mean the Lender named herein and its successors or assigns.
"Loan" shall have the meaning set forth in the Recitals hereto.
"Loan Amount" shall have the meaning set forth in the Recitals hereto.
"Loan Documents" shall mean this Security Instrument, the Note, the
Assignment, and any and all other agreements, instruments, certificates or
documents executed and delivered by Borrower, any of the Cross-collateralized
Borrowers or any Affiliate of Borrower in connection with the Loan.
"Loan Year" shall mean each 365 day period (or 366 day period if the month
of February in a leap year is included) commencing on the first day of the month
following the Closing Date (provided, however, that the first Loan Year shall
also include the period from the Closing Date to the end of the month in which
the Closing Date occurs).
"Loss Proceeds" shall mean, collectively, all Insurance Proceeds and all
Condemnation Proceeds.
12
"Major Space Lease" shall mean any Space Lease of a tenant or Affiliate of
such tenant where such tenant or such Affiliate leases, in the aggregate, five
percent (5%) or more of the Total GLA.
"Management Agreement" shall have the meaning set forth in Section 7.02
hereof.
"Manager" shall mean the Person, other than Borrower, which manages the
Property on behalf of Borrower, which Person shall be subject to the review and
approval of Lender. If the Property is self managed, "Manager" shall mean
Borrower.
"Manager Certification" shall have the meaning set forth in Section 2.09
hereof.
"Material Adverse Effect" shall mean any event or condition that has a
material adverse effect on (a) the Property, (b) the business, prospects,
profits, management, operations or condition (financial or otherwise) of
Borrower, (c) the enforceability, validity, perfection or priority of the lien
of any Loan Document or (d) the ability of Borrower to perform any obligations
under any Loan Document.
"Maturity", when used with respect to the Note, shall mean the Maturity
Date set forth in the Note or such other date pursuant to the Note on which the
final payment of principal, and premium, if any, on the Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or by
declaration of acceleration, or otherwise.
"Maturity Date" shall mean the Maturity Date set forth in the Note.
"Mez Loan" shall mean a certain mezzanine loan in the original principal
sum of $20,000,000 and, provided that the aggregate debt service coverage and
loan-to-value ratio for all of the Cross-collateralized Properties and other
properties in which the borrower under such mezzanine loan holds a direct or
indirect ownership interest, in each case as determined by Lender in its
reasonable discretion utilizing its then current underwriting standards and
assuming that the principal balance of the Mez Loan is increased to the
requested amount, is 1.15:1.0 or greater and 85% or lower, respectively, a
maximum principal sum of $50,000,000, which is evidenced or to be evidenced by a
certain promissory note, secured by, among other things, a first priority pledge
of the direct or indirect ownership interest in Borrower and which matures no
earlier than the Maturity Date. In the event that the Mez Loan does not close as
of the Closing Date, such loan must be consented to in writing by Xxxxxx, which
consent shall not be unreasonably withheld and may be conditioned upon, among
other things, receipt by Xxxxxx of an executed intercreditor agreement, in form
and substance reasonably acceptable to Lender between the lender of the proposed
Mez Loan and Lender and receipt of written confirmation from each Rating Agency
that any rating issued by the Rating Agency in connection with a Securitization
will not, as a result of the proposed Mez Loan be downgraded from the then
current ratings thereof, qualified or withdrawn.
"Mez Payment Amount" shall mean, as of any Payment Date, the amount of
interest and principal then due and payable pursuant to the terms of the Mez
Loan.
"Mez Payment Sub-Account" shall mean the Sub-Account of the Central
Account established pursuant to Section 5.02 hereof and maintained pursuant to
Section 5.14 hereof.
"Monthly Debt Service Payment" shall mean a monthly payment of principal
and interest in an amount equal to that which is required pursuant to the Note.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been, or were required to
have been, made by Borrower, Guarantor or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"Net Capital Expenditures" shall mean for any period the amount by which
Capital Expenditures during such period exceeds reimbursements for such items
during such period from any fund established pursuant to the Loan Documents.
13
"Net Operating Income" shall mean in each Fiscal Year or portion thereof
during the term hereof, Operating Income less Operating Expenses.
"Net Proceeds" shall mean the excess of (a)(i) the purchase price (at
foreclosure or otherwise) actually received by Lender with respect to the
Property as a result of the exercise by Lender of its rights, powers, privileges
and other remedies after the occurrence of an Event of Default, or (ii) in the
event that Lender (or Lender's nominee) is the purchaser at foreclosure by
credit bid, then the amount of such credit bid, in either case, over (b) all
costs and expenses, including, without limitation, all reasonable attorneys'
fees and disbursements and any brokerage fees, if applicable, incurred by Lender
in connection with the exercise of such remedies, including the sale of such
Property after a foreclosure against the Property.
"Note" shall have the meaning set forth in the Recitals hereto.
"OFAC List" means the list of specially designated nationals and blocked
persons subject to financial sanctions that is maintained by the U.S. Treasury
Department, Office of Foreign Assets Control and accessible through the internet
website xxx.xxxxx.xxx/xxxx/x00xxx.xxx.
"Officer's Certificate" shall mean a certificate delivered to Lender by
Borrower which is signed on behalf of Borrower by an authorized representative
of Borrower which states that the items set forth in such certificate are true,
accurate and complete in all respects.
"Operating Expenses" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all expenses directly attributable to the operation,
repair and/or maintenance of the Property including, without limitation, (a)
Impositions, (b) insurance premiums, (c) management fees, whether or not
actually paid, equal to the greater of the actual management fees and five
percent (5%) of annual "base" or "fixed" Rent due under the Leases and (d) costs
attributable to the operation, repair and maintenance of the systems for
heating, ventilating and air conditioning the Improvements and actually paid for
by Borrower. Operating Expenses shall not include interest, principal and
premium, if any, due under the Note or otherwise in connection with the Debt,
income taxes, extraordinary capital improvement costs, any non-cash charge or
expense such as depreciation or amortization.
"Operating Income" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all revenue derived by Borrower arising from the
Property including, without limitation, rental revenues (whether denominated as
basic rent, additional rent, escalation payments, electrical payments or
otherwise) and other fees and charges payable pursuant to Leases or otherwise in
connection with the Property, and business interruption, rent or other similar
insurance proceeds. Operating Income shall not include (a) Insurance Proceeds
(other than proceeds of rent, business interruption or other similar insurance
allocable to the applicable period) and Condemnation Proceeds (other than
Condemnation Proceeds arising from a temporary taking or the use and occupancy
of all or part of the applicable Property allocable to the applicable period),
or interest accrued on such Condemnation Proceeds, (b) proceeds of any
financing, (c) proceeds of any sale, exchange or transfer of the Property or any
part thereof or interest therein, (d) capital contributions or loans to Borrower
or an Affiliate of Borrower, (e) any item of income otherwise includable in
Operating Income but paid directly by any tenant to a Person other than Borrower
except for real estate taxes paid directly to any taxing authority by any
tenant, (f) any other extraordinary, non-recurring revenues, (g) Rent paid by or
on behalf of any lessee under a Space Lease which is the subject of any
proceeding or action relating to its bankruptcy, reorganization or other
arrangement pursuant to the Bankruptcy Code or any similar federal or state law
or which has been adjudicated a bankrupt or insolvent unless such Space Lease
has been affirmed by the trustee in such proceeding or action, (h) Rent paid by
or on behalf of any lessee under a Space Lease the demised premises of which are
not occupied either by such lessee or by a sublessee thereof (i) Rent paid by or
on behalf of any lessee under a Space Lease in whole or partial consideration
for the termination of any Space Lease, or (j) sales tax rebates from any
Governmental Authority.
"Operation and Maintenance Expense Sub-Account" shall mean the Sub-Account
of the Central Account established pursuant to Section 5.02 hereof and
maintained pursuant to Section 5.09 hereof relating to the payment of Operating
Expenses (exclusive of Basic Carrying Costs).
14
"Pad Owners" shall mean any owner of any fee interest in property
contiguous to or surrounded by the Property who has entered into or is subject
to a reciprocal easement agreement or other agreement or agreements with
Borrower either (a) in connection with an existing or potential improvement on
such property or (b) relating to or affecting the Property.
"Payment Date" shall mean, with respect to each month, the first (1st)
calendar day in such month, or if such day is not a Business Day, the next
following Business Day.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Permitted Encumbrances" shall have the meaning set forth in Section
2.05(a) hereof.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Plan" shall mean an employee benefit or other plan established or
maintained by Borrower, Guarantor or any ERISA Affiliate during the five-year
period ended prior to the date of this Security Instrument or to which Borrower,
Guarantor or any ERISA Affiliate makes, is obligated to make or has, within the
five year period ended prior to the date of this Security Instrument, been
required to make contributions (whether or not covered by Title IV of ERISA or
Section 302 of ERISA or Section 401(a) or 412 of the Code), other than a
Multiemployer Plan.
"Premises" shall have the meaning set forth in granting clause (a) of this
Security Instrument.
"Principal Amount" shall mean the Loan Amount as such amount may be
reduced from time to time pursuant to the terms of this Security Instrument, the
Note or the other Loan Documents.
"Principal Payments" shall mean all payments of principal made pursuant to
the terms of the Note.
"Prohibited Person" means any Person identified on the OFAC List or any
other Person or foreign country or agency thereof with whom a U.S. Person may
not conduct business or transactions by prohibition of Federal law or Executive
Order of the President of the United States of America.
"Property" shall have the meaning set forth in the granting clauses of
this Security Instrument.
"Property Agreements" shall mean all agreements, grants of easements
and/or rights-of-way, reciprocal easement agreements, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, management or parking agreements, party
wall agreements or other instruments affecting the Property, including, without
limitation any agreements with Pad Owners, but not including any brokerage
agreements, management agreements, service contracts, Space Leases or the Loan
Documents.
"Rating Agency" shall mean each of Standard & Poor's Ratings Services,
Inc., a division of The XxXxxx-Xxxx Company, Inc. ("Standard & Poor's"), Fitch,
Inc., and Xxxxx'x Investors Service, Inc. ("Moody's"), and any successor to any
of them; provided, however, that at any time after a Securitization, "Rating
Agency" shall mean those of the foregoing rating agencies that from time to time
rate the securities issued in connection with such Securitization.
"Realty" shall have the meaning set forth in Section 2.05(b) hereof.
"Recurring Replacement Expenditures" shall mean expenditures related to
capital repairs, replacements and improvements performed at the Property from
time to time.
15
"Recurring Replacement Reserve Monthly Installment" shall mean the amount
per month set forth on EXHIBIT B attached hereto and made a part hereof.
Notwithstanding the foregoing, provided that no Trigger Event has occurred and
is continuing and that a sum equal to not less than the Initial Recurring
Replacement Reserve Deposit is on deposit in the Recurring Replacement Reserve
Sub-Account, the Recurring Replacement Reserve Monthly Installment shall be $0.
"Recurring Replacement Reserve Sub-Account" shall mean the Sub-Account of
the Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement
Expenditures.
"Release" shall mean a release of this Security Instrument in recordable
form with respect to the Property.
"Release Price" shall mean an amount equal to the sum of (i) one hundred
percent (100%) of the Allocated Loan Amount, plus (ii) twenty-five percent (25%)
of the Initial Allocated Loan Amount.
"Rent Account" shall mean an Eligible Account, maintained at the Rent
Account Bank, in the joint names of Xxxxxx and Lender or its successors or
assigns (as secured party) as may be designated by Xxxxxx.
"Rent Account Bank" shall mean the bank in which the Rent Account is
located.
"Rents" shall have the meaning set forth in granting clause (f) of this
Security Instrument.
"Rent Roll" shall have the meaning set forth in Section 2.05 (o) hereof.
"Required Debt Service Coverage" shall mean a Debt Service Coverage of not
less than 1.10:1.
"Required Debt Service Payment" shall mean, as of any Payment Date, the
amount of interest and principal then due and payable pursuant to the Note,
together with any other sums due thereunder, including, without limitation, any
prepayments required to be made or for which notice has been given under this
Security Instrument, Default Rate Interest and premium, if any, paid in
accordance therewith.
"Required Engineering Work" shall have the meaning set forth in Section
5.02 hereof.
"Retention Amount" shall have the meaning set forth in Section
3.04(b)(vii) hereof.
"Scheduled Defeasance Payments" shall mean:
(a) with respect to a defeasance of the Loan in whole, payments on
or prior to, but as close as possible to (i) each scheduled Payment Date,
after the date of defeasance and through and including the Maturity Date,
upon which interest payments or interest and Principal Payments are
required under the Loan Documents and in amounts equal to the scheduled
payments due on such dates under the Loan Documents and (ii) the Maturity
Date, of the Principal Amount and any accrued and unpaid interest thereon;
or
(b) with respect to any defeasance of the Loan in part, payments on
or prior to, but as close as possible to, (i) each scheduled Payment Date
after the date of defeasance through and including the Maturity Date, of a
proportionate share (based on the percentage of outstanding principal
prior to the defeasance represented by the amount of principal defeased)
of the monthly installments of principal and interest due on such dates
under the Loan Documents and (ii) the Maturity Date, of the unpaid portion
of the portion of the Principal Amount so defeased and any accrued and
unpaid interest thereon.
"Securities Act" shall mean the Securities Act of 1933, as the same shall
be amended from time to time.
16
"Securitization" shall mean a public or private offering of securities by
Lender or any of its Affiliates or their respective successors and assigns which
are collateralized, in whole or in part, by this Security Instrument.
"Security Agreement" shall have the meaning set forth in Section 15.01
hereof.
"Security Deposit Account" shall have the meaning set forth in Section
5.01 hereof.
"Security Instrument" shall mean this Security Instrument as originally
executed or as it may hereafter from time to time be supplemented, amended,
modified or extended by one or more indentures supplemental hereto.
"Single Purpose Entity" shall mean a corporation, partnership, joint
venture, limited liability company, trust or unincorporated association, which
is formed or organized solely for the purpose of holding, directly, an ownership
interest in the Property and the other properties encumbered by the
Cross-collateralized Mortgages or, with respect to General Partner, holding an
ownership interest in and managing a Person which holds an ownership interest in
the Property, does not engage in any business unrelated to the Property, does
not have any assets other than those related to its interest in the Property or
any indebtedness other than as permitted by this Security Instrument or the
other Loan Documents, has its own separate books and records and has its own
accounts, in each case which are separate and apart from the books and records
and accounts of any other Person, holds itself out as being a Person separate
and apart from any other Person and which otherwise satisfies the criteria of
the Rating Agency, as in effect on the Closing Date, for a special-purpose
bankruptcy-remote entity.
"Solvent" shall mean, as to any Person, that (a) the sum of the assets of
such Person, at a fair valuation, exceeds its liabilities, including contingent
liabilities, (b) such Person has sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (c) such
Person has not incurred debts, and does not intend to incur debts, beyond its
ability to pay such debts as they mature. For purposes of this definition,
"debt" means any liability on a claim, and "claim" means (a) a right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured, or (b) a right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured, or unsecured. With respect to any such
contingent liabilities, such liabilities shall be computed in accordance with
GAAP at the amount which, in light of all the facts and circumstances existing
at the time, represents the amount which can reasonably be expected to become an
actual or matured liability.
"Space Leases" shall mean any Lease or sublease thereunder (including,
without limitation, any Major Space Lease) or any other agreement providing for
the use and occupancy of a portion of the Property as the same may be amended,
renewed or supplemented.
"State" shall mean any of the states which are members of the United
States of America.
"Stated Maturity", when used with respect to the Note or any installment
of interest and/or principal payment thereunder, shall mean the date specified
in the Note as the fixed date on which a payment of all or any portion of
principal and/or interest is due and payable.
"Sub-Accounts" shall have the meaning set forth in Section 5.02 hereof.
"Substantial Casualty" shall have the meaning set forth in Section 3.04
hereof.
"Taking" shall mean a condemnation or taking pursuant to the lawful
exercise of the power of eminent domain.
"Total GLA" shall mean the total gross leasable area of the Property,
including all Space Leases.
17
"Transfer" shall mean the conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to, or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (a) in all or any portion of the Property (other than
easements that do not have a Material Adverse Effect and which are entered into
in accordance with the terms of this Security Instrument and Leases entered into
by Borrower in the ordinary course of Borrower's business); (b) if Borrower or,
if Borrower is a partnership, any General Partner, is a corporation, in the
stock of Borrower or any General Partner; (c) in Borrower (or any trust of which
Borrower is a trustee); or (d) if Borrower is a limited or general partnership,
joint venture, limited liability company, trust, nominee trust, tenancy in
common or other unincorporated form of business association or form of ownership
interest, in any Person having a legal or beneficial ownership in Borrower,
excluding any legal or beneficial interest in any constituent limited partner,
if Borrower is a limited partnership, or in any non-managing member, if Borrower
is a limited liability company, unless such interest would, or together with all
other direct or indirect interests in Borrower which were previously
transferred, aggregate 49% or more of the partnership or membership, as
applicable, interest in Borrower or would result in any Person who, as of the
Closing Date, did not own, directly or indirectly, 49% or more of the
partnership or membership, as applicable, interest in Borrower owning, directly
or indirectly, 49% or more of the partnership or membership, as applicable,
interest in Borrower and excluding any legal or beneficial interest in any
General Partner unless such interest would, or together with all other direct or
indirect interest in the General Partner which were previously transferred,
aggregate 49% or more of the partnership or membership, as applicable, interest
in the General Partner (or result in a change in control of the management of
the General Partner from the individuals exercising such control immediately
prior to the conveyance or other disposition of such legal or beneficial
interest) and shall also include, without limitation to the foregoing, the
following: an installment sales agreement wherein Xxxxxxxx agrees to sell the
Property or any part thereof or any interest therein for a price to be paid in
installments; an agreement by Borrower leasing all or substantially all of the
Property to one or more Persons pursuant to a single or related transactions, or
a sale, assignment or other transfer of, or the grant of a security interest in,
Xxxxxxxx's right, title and interest in and to any Leases or any Rent; any
instrument subjecting the Property to a condominium regime or transferring
ownership to a cooperative corporation; and the dissolution or termination of
Borrower or the merger or consolidation of Borrower with any other Person;
provided, however that "Transfer" shall not include (a) transfers made by devise
or descent or by operation of law upon the death of a partner, member or
shareholder of Borrower or General Partner or any Person owning a direct or
indirect legal or beneficial interest in Borrower or General Partner if (i)
written notice of any transfer pursuant to this proviso is given to Lender
together with such documents relating to the transfer as Lender may reasonably
require, (ii) control over the management and operation of the Property is
retained by AMERCO (the "Original Principals", whether one or more) and (iii) no
such transfer, death or other event has any adverse effect either on the Single
Purpose Entity status of Borrower under the requirements of any Rating Agency or
on the status of Borrower as a continuing legal entity liable for the payment of
the Debt and the performance of all other obligations secured hereby, nor (b)
subject to the provisions of clauses (i) through (iii) above and provided, that
(i) any inter vivos transfer of all or any portion of the Property or any inter
vivos transfer or issuance of capital stock (or other ownership interests) in
Borrower or General Partner is made in connection with Original Principals' bona
fide, good faith estate planning, (ii) Original Principals do not transfer in
excess of 49% of their direct or indirect ownership interest in Borrower and
(iii) the Person(s) with Control of Borrower or the management of the Property
are (x) the same Person(s) who had such Control and management rights
immediately prior to the transfer in question, or (y) reasonably acceptable to
Lender, (i) an inter vivos or testamentary transfer of all or any portion of the
ownership interest in Borrower to one or more family members of Original
Principals or a trust in which all of the beneficial interest is held by one or
more family members of Original Principals or a partnership, limited liability
company, corporation or other legal entity in which a majority of the capital
and profits interests are held by one or more family members of Original
Principals, or (ii) any inter vivos or testamentary transfer or issuance of
capital stock (or other ownership interests) in the General Partner to one or
more family members of Original Principals, a trust in which all of the
beneficial interest is held by one or more family members of Original Principals
or a partnership, limited liability company, corporation or other legal entity
in which a majority of the capital and profits interests are held by one or more
family members of Original Principals. As used herein, "family members" shall
include spouses, children and grandchildren and any lineal descendants.
"Treasury Constant Maturity Yield Index" shall mean the average yield for
"This Week" as reported by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519).
18
"Trigger Event" shall mean the earliest to occur of (a) an Event of
Default or (b) the date on which the Aggregate Debt Service Coverage, as
determined by Lender in its sole and absolute discretion, shall fall below
1.15:1.0 for the trailing twelve (12) month period.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State in which the Realty is located.
"Undefeased Note" shall have the meaning set forth in Section 15.01
hereof.
"Unscheduled Payments" shall mean (a) all Loss Proceeds that Borrower has
elected or is required to apply to the repayment of the Debt pursuant to this
Security Instrument, the Note or any other Loan Documents, (b) any funds
representing a voluntary or involuntary principal prepayment other than
scheduled Principal Payments and (c) any Net Proceeds
"Use Requirements" shall mean any and all building codes, permits,
certificates of occupancy or compliance, laws, regulations, or ordinances
(including, without limitation, health, pollution, fire protection, medical and
day-care facilities, waste product and sewage disposal regulations),
restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Property or any part thereof.
"Welfare Plan" shall mean an employee welfare benefit plan as defined in
Section 3(1) of ERISA established or maintained by Borrower, Guarantor or any
ERISA Affiliate or that covers any current or former employee of Borrower,
Guarantor or any ERISA Affiliate.
"Work" shall have the meaning set forth in Section 3.04(a)(i) hereof.
ARTICLE II: COVENANTS, WARRANTIES
AND REPRESENTATIONS OF BORROWER
Section 2.01. Payment of Debt. Borrower will pay the Debt at the time and
in the manner provided in the Note and the other Loan Documents, all in lawful
money of the United States of America in immediately available funds.
Section 2.02. Representations, Warranties and Covenants of Borrower.
Borrower represents and warrants to and covenants with Lender:
(a) Organization and Authority. Borrower (i) is a limited liability
company, general partnership, limited partnership or corporation, as the case
may be, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, (ii) has all requisite power and authority
and all necessary licenses and permits to own and operate the Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Property is located and in each other jurisdiction
where the conduct of its business or the nature of its activities makes such
qualification necessary, or if not qualified or authorized to do business under
such jurisdictions, will become qualified and authorized in such jurisdictions
within ninety (90) days of the date hereof. If Borrower is a limited liability
company, limited partnership or general partnership, each general partner or
managing member, as applicable, of Borrower which is a corporation is duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Power. Xxxxxxxx and, if applicable, each General Partner has full
power and authority to execute, deliver and perform, as applicable, the Loan
Documents to which it is a party, to make the borrowings thereunder, to execute
and deliver the Note and to grant to Lender a first, prior, perfected and
continuing lien on and security interest in the Property, subject only to the
Permitted Encumbrances.
19
(c) Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents to which Xxxxxxxx is a party, the making of the borrowings
thereunder, the execution and delivery of the Note, the grant of the liens on
the Property pursuant to the Loan Documents to which Borrower is a party and the
consummation of the Loan are within the powers of Borrower and have been duly
authorized by Borrower and, if applicable, the General Partners, by all
requisite action (and Borrower hereby represents that no approval or action of
any member, limited partner or shareholder, as applicable, of Borrower is
required to authorize any of the Loan Documents to which Borrower is a party)
and will constitute the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with their terms, except as
enforcement may be stayed or limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in proceedings at law or in equity) and
will not (i) violate any provision of its partnership agreement or partnership
certificate or certificate of incorporation or by-laws, or operating agreement,
certificate of formation or articles of organization, as applicable, or, to its
knowledge, any law, judgment, order, rule or regulation of any court,
arbitration panel or other Governmental Authority, domestic or foreign, or other
Person affecting or binding upon Borrower or the Property, or (ii) violate any
provision of any indenture, agreement, mortgage, deed of trust, contract or
other instrument to which Borrower or, if applicable, any General Partner is a
party or by which any of their respective property, assets or revenues are
bound, or be in conflict with, result in an acceleration of any obligation or a
breach of or constitute (with notice or lapse of time or both) a default or
require any payment or prepayment under, any such indenture, agreement,
mortgage, deed of trust, contract or other instrument, or (iii) result in the
creation or imposition of any lien, except those in favor of Xxxxxx as provided
in the Loan Documents to which it is a party.
(d) Consent. Neither Borrower nor, if applicable, any General Partner, is
required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or other agency in
connection with or as a condition to the execution, delivery or performance of
this Security Instrument, the Note or the other Loan Documents which has not
been so obtained or filed.
(e) Intentionally Omitted.
(f) Other Agreements. Borrower is not a party to nor is otherwise bound by
any agreements or instruments which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect. Neither Borrower nor, if
applicable, any General Partner, is in violation of its organizational documents
or other restriction or any agreement or instrument by which it is bound, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
Governmental Authority, or any Legal Requirement, in each case, applicable to
Borrower or the Property, except for such violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
(g) Maintenance of Existence. (i) Borrower and, if applicable, each
General Partner at all times since their formation have been duly formed and
existing and shall preserve and keep in full force and effect their existence as
a Single Purpose Entity.
(ii) Borrower and, if applicable, each General Partner, at all times
since their organization have complied, and will continue to comply, with
the provisions of its certificate and agreement of partnership or
certificate of incorporation and by-laws or articles of organization,
certificate of formation and operating agreement, as applicable, and the
laws of its jurisdiction of organization relating to partnerships,
corporations or limited liability companies, as applicable.
(iii) Borrower and, if applicable, each General Partner have done or
caused to be done and will do all things necessary to observe
organizational formalities and preserve their existence and Borrower and,
if applicable, each General Partner will not amend, modify or otherwise
change the certificate and agreement of partnership or certificate of
incorporation and by-laws or articles of organization, certificate of
formation and operating agreement, as applicable, or other organizational
documents of Borrower and, if applicable, each General Partner without the
prior written consent of Lender.
20
(iv) Borrower and, if applicable, each General Partner, have at all
times accurately maintained, and will continue to accurately maintain,
their respective financial statements, accounting records and other
partnership, company or corporate documents separate from those of any
other Person and Borrower will file its own tax returns or, if Borrower
and/or, if applicable, General Partner is part of a consolidated group for
purposes of filing tax returns, Borrower and, General Partner, as
applicable will be shown as separate members of such group. Borrower and,
if applicable, each General Partner have not at any time since their
formation commingled, and will not commingle, their respective assets with
those of any other Person, other than funds deposited into the "U-Haul
Concentration Account" and funds deposited into local bank accounts,
provided that the Insolvency Opinion has concluded that such commingling
will not result in a substantive consolidation of Borrower with any other
Person, and will maintain on a ledger basis their assets in such a manner
such that it will not be costly or difficult to segregate, ascertain or
identify their individual assets from those of any other Person. Borrower
and, if applicable, each General Partner have at all times since their
formation accurately maintained and utilized, and will continue to
accurately maintain and utilize, their own separate bank accounts (unless
the Insolvency Opinion has concluded that the failure to have separate
bank accounts will not result in a substantive consolidation of Borrower
with any other Person), payroll and separate books of account, stationery,
invoices and checks, if any.
(v) Borrower and, if applicable, each General Partner, have at all
times paid, and will continue to pay, their own liabilities from their own
separate assets and shall each allocate and charge fairly and reasonably
any overhead which Borrower and, if applicable, any General Partner,
shares with any other Person, including, without limitation, for office
space and services performed by any employee of another Person.
(vi) Borrower and, if applicable, each General Partner, have at all
times identified themselves, and will continue to identify themselves, in
all dealings with the public, under their own names and as separate and
distinct entities and shall correct any known misunderstanding regarding
their status as separate and distinct entities. Borrower and, if
applicable, each General Partner, have not at any time identified
themselves, and will not identify themselves, as being a division of any
other Person.
(vii) Borrower and, if applicable, each General Partner, have been
at all times, and will continue to be, adequately capitalized in light of
the nature of their respective businesses.
(viii) Borrower and, if applicable, each General Partner, (A) have
not owned, do not own and will not own any assets or property other than,
with respect to Borrower, the Property and any incidental personal
property necessary for the ownership, management or operation of the
Property and, with respect to General Partner, if applicable, its interest
in Borrower, (B) have not engaged and will not engage in any business
other than the ownership, management and operation of the Property or,
with respect to General Partner, if applicable, its interest in Borrower,
(C) have not incurred and will not incur any debt, secured or unsecured,
direct or contingent (including guaranteeing any obligation), other than
(X) the Loan, (Y) unsecured trade and operational debt which (1) is not
evidenced by a note, (2) is incurred in the ordinary course of the
operation of the Property, (3) does not exceed in the aggregate three
percent (3%) of the Allocated Loan Amount for the Property and (4) is,
unless being contested in accordance with the terms of this Security
Instrument, paid prior to the earlier to occur of the thirtieth (30th) day
after the date incurred and the date when due, and (Z) with respect to the
General Partner, the Mez Loan, (D) have not pledged and will not pledge
their assets for the benefit of any other Person other than, with respect
to the Mez Loan, the pledge by each General Partner of its interest in
Borrower, and (E) have not made and will not make any loans or advances to
any Person (including any Affiliate).
(ix) Neither Borrower nor, if applicable, any General Partner will
change its name or principal place of business.
(x) Neither Borrower nor, if applicable, any General Partner has,
and neither of such Persons will have, any subsidiaries.
21
(xi) Borrower will preserve and maintain its existence as a Delaware
limited liability company and all material rights, privileges, tradenames
and franchises.
(xii) Neither Borrower, nor, if applicable, any General Partner,
will merge or consolidate with, or sell all or substantially all of its
respective assets to any Person, or liquidate, wind up or dissolve itself
(or suffer any liquidation, winding up or dissolution). Neither Borrower,
nor, if applicable, any General Partner will acquire any business or
assets from, or capital stock or other ownership interest of, or be a
party to any acquisition of, any Person.
(xiii) Borrower and, if applicable, each General Partner, have not
at any time since their formation assumed, guaranteed or held themselves
out to be responsible for, and will not assume, guarantee or hold
themselves out to be responsible for the liabilities or the decisions or
actions respecting the daily business affairs of their partners,
shareholders or members or any predecessor company, corporation or
partnership, each as applicable, any Affiliates, or any other Persons.
Borrower has not at any time since its formation acquired, and will not
acquire, obligations or securities of its partners or shareholders,
members or any predecessor company, corporation or partnership, each as
applicable, or any Affiliates. Borrower and, if applicable, each General
Partner, have not at any time since their formation made, and will not
make, loans to its partners, members or shareholders or any predecessor
company, corporation or partnership, each as applicable, or any Affiliates
of any of such Persons. Borrower and, if applicable, each General Partner,
have no known contingent liabilities nor do they have any material
financial liabilities under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Person is a party
or by which it is otherwise bound other than under the Loan Documents and,
with respect to each General Partner, the Mez Loan.
(xiv) Borrower has not at any time since its formation entered into
and was not a party to, and, will not enter into or be a party to, any
transaction with its Affiliates, members, partners or shareholders, as
applicable, or any Affiliates thereof except in the ordinary course of
business of Borrower on terms which are no less favorable to Borrower than
would be obtained in a comparable arm's length transaction with an
unrelated third party.
(xv) If Borrower is a limited partnership or a limited liability
company, the General Partner shall be a corporation or limited liability
company whose sole asset is its interest in Borrower and the General
Partner will at all times comply, and will cause Borrower to comply, with
each of the representations, warranties, and covenants contained in this
Section 2.02(g) as if such representation, warranty or covenant was made
directly by such General Partner.
(xvi) Borrower shall at all times cause there to be at least one (1)
duly appointed member of the board of directors or board of managers or
other governing board or body, as applicable (an "Independent Director"),
of, if Borrower is a corporation, Borrower, and, if Borrower is a limited
partnership or limited liability company, of the General Partner,
reasonably satisfactory to Lender who shall not have been at the time of
such individual's appointment, and may not be or have been at any time (A)
a shareholder, officer, director, attorney, counsel, partner, member or
employee of Borrower or any of the foregoing Persons or Affiliates
thereof, (B) a customer or creditor of, or supplier or service provider
to, Borrower or any of its shareholders, partners, members or their
Affiliates, (C) a member of the immediate family of any Person referred to
in (A) or (B) above or (D) a Person Controlling, Controlled by or under
common Control with any Person referred to in (A) through (C) above. A
natural person who otherwise satisfies the foregoing definition except for
being the Independent Director of a Single Purpose Entity Affiliated with
Borrower or General Partner shall not be disqualified from serving as an
Independent Director if such individual is at the time of initial
appointment, or at any time while serving as the Independent Director, an
Independent Director of a Single Purpose Entity Affiliated with Borrower
or General Partner if such individual is an independent director provided
by a nationally-recognized company that provides professional independent
directors.
22
(xvii) Borrower and, if applicable, each General Partner, shall not
cause or permit the board of directors or board of managers or other
governing board or body, as applicable, of Borrower or, if applicable,
each General Partner, to take any action which, under the terms of any
certificate of incorporation, by-laws or articles of organization with
respect to any common stock, requires a vote of the board of directors of
Borrower, or, if applicable, the General Partner, unless at the time of
such action there shall be at least one member who is an Independent
Director.
(xviii) Xxxxxxxx and, if applicable, each General Partner shall pay
the salaries of their own employees and maintain a sufficient number of
employees in light of their contemplated business operations.
(xix) Borrower shall, and shall cause its Affiliates to, conduct its
business so that the assumptions made with respect to Borrower in that
certain opinion letter relating to substantive non-consolidation dated the
date hereof (the "Insolvency Opinion") delivered in connection with the
Loan shall be true and correct in all respects.
Notwithstanding anything to the contrary contained in this Section 2.02(g),
provided Borrower is a Delaware single member limited liability company which
satisfies the single purpose bankruptcy remote entity requirements of each
Rating Agency for a single member limited liability company, the foregoing
provisions of this Section 2.02(g) shall not apply to the General Partner.
(h) No Defaults. No Default or Event of Default has occurred and is
continuing or would occur as a result of the consummation of the transactions
contemplated by the Loan Documents. Borrower is not in default in the payment or
performance of any of its Contractual Obligations in any respect.
(i) Consents and Approvals. Xxxxxxxx and, if applicable, each General
Partner, have obtained or made all necessary (i) consents, approvals and
authorizations, and registrations and filings of or with all Governmental
Authorities and (ii) consents, approvals, waivers and notifications of partners,
stockholders, members creditors, lessors and other nongovernmental Persons, in
each case, which are required to be obtained or made by Borrower or, if
applicable, the General Partner, in connection with the execution and delivery
of, and the performance by Borrower of its obligations under, the Loan
Documents.
(j) Investment Company Act Status, etc. Borrower is not (i) an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (iii) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
(k) Compliance with Law. Borrower is in compliance in all material
respects with all Legal Requirements to which it or the Property is subject,
including, without limitation, all Environmental Statutes, the Occupational
Safety and Health Act of 1970, the Americans with Disabilities Act and ERISA. No
portion of the Property has been or will be purchased, improved, fixtured,
equipped or furnished with proceeds of any illegal activity and to the best of
Borrower's knowledge, no illegal activities are being conducted at or from the
Property.
(l) Financial Information. All financial data that has been delivered by
Borrower to Lender (i) is true, complete and correct in all material respects,
(ii) accurately represents the financial condition and results of operations of
the Persons covered thereby as of the date on which the same shall have been
furnished, and (iii) has been prepared in accordance with GAAP (or such other
accounting basis as is reasonably acceptable to Lender) throughout the periods
covered thereby. As of the date hereof, neither Borrower nor, if applicable, any
General Partner, has any contingent liability, liability for taxes or other
unusual or forward commitment not reflected in such financial statements
delivered to Lender. Since the date of the last financial statements delivered
by Borrower to Lender except as otherwise disclosed in such financial statements
or notes thereto, there has been no change in the assets, liabilities or
financial position of Borrower nor, if applicable, any General Partner, or in
the results of
23
operations of Borrower which would have a Material Adverse Effect. Neither
Borrower nor, if applicable, any General Partner, has incurred any obligation or
liability, contingent or otherwise not reflected in such financial statements
which would have a Material Adverse Effect.
(m) Transaction Brokerage Fees. Xxxxxxxx has not dealt with any financial
advisors, brokers, underwriters, placement agents, agents or finders in
connection with the transactions contemplated by this Security Instrument. All
brokerage fees, commissions and other expenses payable in connection with the
transactions contemplated by the Loan Documents have been paid in full by
Borrower contemporaneously with the execution of the Loan Documents and the
funding of the Loan. Xxxxxxxx hereby agrees to indemnify and hold Lender
harmless for, from and against any and all claims, liabilities, costs and
expenses of any kind in any way relating to or arising from (i) a claim by any
Person that such Person acted on behalf of Borrower in connection with the
transactions contemplated herein or (ii) any breach of the foregoing
representation. The provisions of this subsection (m) shall survive the
repayment of the Debt.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of "purchasing" or "carrying" any "margin stock" within
the meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.
(o) Pending Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Borrower, threatened against or affecting Borrower
or the Property in any court or before any Governmental Authority which if
adversely determined either individually or collectively has or is reasonably
likely to have a Material Adverse Effect.
(p) Solvency; No Bankruptcy. Each of Borrower and, if applicable, the
General Partner, (i) is and has at all times been Solvent and will remain
Solvent immediately upon the consummation of the transactions contemplated by
the Loan Documents and (ii) is free from bankruptcy, reorganization or
arrangement proceedings or a general assignment for the benefit of creditors and
is not contemplating the filing of a petition under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
such Person's assets or property and Borrower has no knowledge of any Person
contemplating the filing of any such petition against it or, if applicable, the
General Partner. None of the transactions contemplated hereby will be or have
been made with an intent to hinder, delay or defraud any present or future
creditors of Borrower and Borrower has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Borrower's assets do not,
and immediately upon consummation of the transaction contemplated in the Loan
Documents will not, constitute unreasonably small capital to carry out its
business as presently conducted or as proposed to be conducted. Borrower does
not intend to, nor believe that it will, incur debts and liabilities beyond its
ability to pay such debts as they may mature.
(q) Use of Proceeds. The proceeds of the Loan shall be applied by Xxxxxxxx
to, inter alia, (i) satisfy certain mortgage loans presently encumbering all or
a part of the Property, (ii) pay certain transaction costs incurred by Borrower
in connection with the Loan and (iii) for operating capital. No portion of the
proceeds of the Loan will be used for family, personal, agricultural or
household use.
(r) Tax Filings. Borrower and, if applicable, each General Partner, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Xxxxxxxx and, if applicable, the
General Partners. Xxxxxxxx and, if applicable, the General Partners, believe
that their respective tax returns properly reflect the income and taxes of
Xxxxxxxx and said General Partner, if any, for the periods covered thereby,
subject only to reasonable adjustments required by the Internal Revenue Service
or other applicable tax authority upon audit.
(s) Not Foreign Person. Borrower is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Code.
24
(t) ERISA. (i) The assets of Borrower and Guarantor are not and will not
become treated as "plan assets", whether by operation of law or under
regulations promulgated under ERISA. Each Plan and Welfare Plan, and, to the
knowledge of Borrower, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, its terms and the applicable provisions of ERISA, the Code and any other
applicable Legal Requirement, and no event or condition has occurred and is
continuing as to which Borrower would be under an obligation to furnish a report
to Lender under clause (ii)(A) of this Section. Other than an application for a
favorable determination letter with respect to a Plan, there are no pending
issues or claims before the Internal Revenue Service, the United States
Department of Labor or any court of competent jurisdiction related to any Plan
or Welfare Plan under which Borrower, Guarantor or any ERISA Affiliate, directly
or indirectly (through an indemnification agreement or otherwise), could be
subject to any material risk of liability under Section 409 or 502(i) of ERISA
or Section 4975 of the Code. No Welfare Plan provides or will provide benefits,
including, without limitation, death or medical benefits (whether or not
insured) with respect to any current or former employee of Borrower, Guarantor
or any ERISA Affiliate beyond his or her retirement or other termination of
service other than (A) coverage mandated by applicable law, (B) death or
disability benefits that have been fully provided for by fully paid up insurance
or (C) severance benefits.
(ii) Borrower will furnish to Lender as soon as possible, and in any
event within ten (10) days after Borrower knows or has reason to believe
that any of the events or conditions specified below with respect to any
Plan, Welfare Plan or Multiemployer Plan has occurred or exists, an
Officer's Certificate setting forth details respecting such event or
condition and the action, if any, that Borrower or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or notice
required to be filed with or given to PBGC (or any other relevant
Governmental Authority)) by Borrower or an ERISA Affiliate with respect to
such event or condition, if such report or notice is required to be filed
with the PBGC or any other relevant Governmental Authority:
(A) any reportable event, as defined in Section 4043 of ERISA
and the regulations issued thereunder, with respect to a Plan, as to
which PBGC has not by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within thirty (30) days of the
occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section
302 of ERISA, including, without limitation, the failure to make on
or before its due date a required installment under Section 412(m)
of the Code and of Section 302(e) of ERISA, shall be a reportable
event regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code), and any request for a waiver under
Section 412(d) of the Code for any Plan;
(B) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by Borrower or
an ERISA Affiliate to terminate any Plan;
(C) the institution by PBGC of proceedings under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by PBGC with respect to such Multiemployer Plan;
(D) the complete or partial withdrawal from a Multiemployer
Plan by Borrower or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or
the receipt by Borrower or any ERISA Affiliate of notice from a
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(E) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against Borrower or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within thirty (30) days;
25
(F) the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is
a part if Borrower or an ERISA Affiliate fails to timely provide
security to the Plan in accordance with the provisions of said
Sections; or
(G) the imposition of a lien or a security interest in
connection with a Plan.
(iii) Borrower shall not knowingly engage in or permit any
transaction in connection with which Borrower, Guarantor or any ERISA
Affiliate could be subject to either a civil penalty or tax assessed
pursuant to Section 502(i) or 502(l) of ERISA or Section 4975 of the Code,
permit any Welfare Plan to provide benefits, including without limitation,
medical benefits (whether or not insured), with respect to any current or
former employee of Borrower, Guarantor or any ERISA Affiliate beyond his
or her retirement or other termination of service other than (A) coverage
mandated by applicable law, (B) death or disability benefits that have
been fully provided for by paid up insurance or otherwise or (C) severance
benefits, permit the assets of Borrower or Guarantor to become "plan
assets", whether by operation of law or under regulations promulgated
under ERISA or adopt, amend (except as may be required by applicable law)
or increase the amount of any benefit or amount payable under, or permit
any ERISA Affiliate to adopt, amend (except as may be required by
applicable law) or increase the amount of any benefit or amount payable
under, any employee benefit plan (including, without limitation, any
employee welfare benefit plan) or other plan, policy or arrangement,
except for normal increases in the ordinary course of business consistent
with past practice that, in the aggregate, do not result in a material
increase in benefits expense to Borrower, Guarantor or any ERISA
Affiliate.
(u) Labor Matters. No organized work stoppage or labor strike is pending
or threatened by employees or other laborers at the Property and (i) Borrower
(A) is not involved in or threatened with any labor dispute, grievance or
litigation relating to labor matters involving any employees and other laborers
at the Property, including, without limitation, violation of any federal, state
or local labor, safety or employment laws (domestic or foreign) and/or charges
of unfair labor practices or discrimination complaints; (B) has not engaged in
any unfair labor practices within the meaning of the National Labor Relations
Act or the Railway Labor Act; and (C) is not a party to, or bound by, any
collective bargaining agreement or union contract with respect to employees and
other laborers at the Property and no such agreement or contract is currently
being negotiated by Borrower, Manager or any of their Affiliates; and (ii)
Manager (A) is not involved in or threatened with any labor dispute, grievance
or litigation relating to labor matters involving any employees and other
laborers at the Property, including, without limitation, violation of any
federal, state or local labor, safety or employment laws (domestic or foreign)
and/or charges of unfair labor practices or discrimination complaints; (B) has
not engaged in any unfair labor practices at the Property within the meaning of
the National Labor Relations Act or the Railway Labor Act; and (C) is not a
party to, or bound by, any collective bargaining agreement or union contract
with respect to employees and other laborers at the Property and no such
agreement or contract is currently being negotiated by Xxxxxxxx, Manager or any
of their Affiliates.
(v) Borrower's Legal Status. Xxxxxxxx's exact legal name that is indicated
on the signature page hereto, organizational identification number and place of
business or, if more than one, its chief executive office, as well as Xxxxxxxx's
mailing address, if different, which were identified by Borrower to Lender and
contained in this Security Instrument, are true, accurate and complete. Borrower
(i) will not change its name, its place of business or, if more than one place
of business, its chief executive office, or its mailing address or
organizational identification number if it has one without giving Lender at
least thirty (30) days prior written notice of such change, (ii) if Borrower
does not have an organizational identification number and later obtains one,
Borrower shall promptly notify Lender of such organizational identification
number and (iii) Borrower will not change its type of organization, jurisdiction
of organization or other legal structure.
(w) Compliance with Anti-Terrorism, Embargo and Anti-Money Laundering
Laws. (i) None of Borrower, General Partner, any Guarantor, or any Person who
owns any equity interest in or Controls Borrower, General Partner or any
Guarantor currently is identified on the OFAC List or otherwise qualifies as a
Prohibited Person, and Borrower has implemented procedures, approved by General
Partner, to ensure that no Person who now
26
or hereafter owns an equity interest in Borrower or General Partner is a
Prohibited Person or Controlled by a Prohibited Person, (ii) no proceeds of the
Loan will be used to fund any operations in, finance any investments or
activities in or make any payments to, Prohibited Persons, and (iii) none of
Borrower, General Partner, or any Guarantor are in violation of any Legal
Requirements relating to anti-money laundering or anti-terrorism, including,
without limitation, Legal Requirements related to transacting business with
Prohibited Persons or the requirements of the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, U.S. Public Law 107-56, and the related regulations issued thereunder,
including temporary regulations, all as amended from time to time. No tenant at
the Property currently is identified on the OFAC List or otherwise qualifies as
a Prohibited Person, and, to the best of Xxxxxxxx's knowledge, no tenant at the
Property is owned or Controlled by a Prohibited Person. Xxxxxxxx has determined
that Manager has implemented procedures, approved by Xxxxxxxx, to ensure that no
tenant at the Property is a Prohibited Person or owned or Controlled by a
Prohibited Person.
Section 2.03. Further Acts, etc. Xxxxxxxx will, at the cost of Xxxxxxxx,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages or deeds of trust, as
applicable, assignments, notices of assignments, transfers and assurances as
Lender shall, from time to time, reasonably require for the better assuring,
conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated, or which Borrower may
be or may hereafter become bound to convey or assign to Lender, or for carrying
out or facilitating the performance of the terms of this Security Instrument or
for filing, registering or recording this Security Instrument and, on demand,
will execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or comparable
security instruments to evidence more effectively the lien hereof upon the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of protecting, perfecting, preserving and
realizing upon the interests granted pursuant to this Security Instrument and to
effect the intent hereof, all as fully and effectually as Borrower might or
could do; and Borrower hereby ratifies all that Lender shall lawfully do or
cause to be done by virtue hereof. Upon receipt of an affidavit of an officer of
Lender as to the loss, theft, destruction or mutilation of the Note or any other
Loan Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other
applicable Loan Document, dated the date of such lost, stolen, destroyed or
mutilated Note or other Loan Document in the same principal amount thereof and
otherwise of like tenor.
Section 2.04. Recording of Security Instrument, etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument, and any security instrument
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security
interest hereof upon, and the interest of Lender in, the Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Security Instrument, any
mortgage or deed of trust, as applicable, supplemental hereto, any security
instrument with respect to the Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Security Instrument, any mortgage or deed of trust, as
applicable, supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, except where prohibited by law
to do so, in which event Xxxxxx may declare the Debt to be immediately due and
payable. Borrower shall hold harmless and indemnify Lender and its successors
and assigns, against any liability incurred as a result of the imposition of any
tax on the making and recording of this Security Instrument.
Section 2.05. Representations, Warranties and Covenants Relating to the
Property. Borrower represents and warrants to and covenants with Lender with
respect to the Property as follows:
(a) Lien Priority. This Security Instrument is a valid and enforceable
first lien on the Property, free and clear of all encumbrances and liens having
priority over the lien of this Security Instrument, except for office
27
equipment such as computers, facsimile machines and copiers leased in the normal
course of Borrower's business, with an aggregate value not to exceed $5,000 and
except for the items set forth as exceptions to or subordinate matters in the
title insurance policy insuring the lien of this Security Instrument and other
items disclosed to Lender in a disclosure statement delivered by Borrower to
Lender in connection with the origination of the Loan, none of which,
individually or in the aggregate, materially interfere with the benefits of the
security intended to be provided by this Security Instrument, materially affect
the value or marketability of the Property, impair the use or operation of the
Property for the use currently being made thereof or impair Borrower's ability
to pay its obligations in a timely manner (such items being the "Permitted
Encumbrances").
(b) Title. Fee Owner has, subject only to the Permitted Encumbrances,
good, insurable and marketable fee simple title to the Premises, Improvements
and Fixtures (collectively, the "Realty") and Lessee has, subject only to
Permitted Encumbrances, good, insurable and marketable leasehold title to the
Realty and, in each case, to all easements and rights benefiting the Realty and
has the right, power and authority to mortgage, encumber, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, pledge, assign, and hypothecate the
Property. Borrower will preserve its interest in and title to the Property and
will forever warrant and defend the same to Lender against any and all claims
made by, through or under Xxxxxxxx and will forever warrant and defend the
validity and priority of the lien and security interest created herein against
the claims of all Persons whomsoever claiming by, through or under Xxxxxxxx. The
foregoing warranty of title shall survive the foreclosure of this Security
Instrument and shall inure to the benefit of and be enforceable by Lender in the
event Lender acquires title to the Property pursuant to any foreclosure. In
addition, there are no outstanding options or rights of first refusal to
purchase the Property or Xxxxxxxx's ownership thereof.
(c) Taxes and Impositions. All taxes and other Impositions and
governmental assessments due and owing in respect of, and affecting, the
Property have been paid. Borrower has paid all Impositions which constitute
special governmental assessments in full, except for those assessments which are
permitted by applicable Legal Requirements to be paid in installments, in which
case all installments which are due and payable have been paid in full. There
are no pending, or to Borrower's best knowledge, proposed special or other
assessments for public improvements or otherwise affecting the Property, nor are
there any contemplated improvements to the Property that may result in such
special or other assessments.
(d) Casualty; Flood Zone. The Realty is in good repair and free and clear
of any damage, destruction or casualty (whether or not covered by insurance)
that would materially affect the value of the Realty or the use for which the
Realty was intended, there exists no structural or other material defects or
damages in or to the Property and Borrower has not received any written notice
from any insurance company or bonding company of any material defect or
inadequacies in the Property, or any part thereof, which would materially and
adversely affect the insurability of the same or cause the imposition of
extraordinary premiums or charges thereon or of any termination or threatened
termination of any policy of insurance or bond. No portion of the Premises is
located in an "area of special flood hazard," as that term is defined in the
regulations of the Federal Insurance Administration, Department of Housing and
Urban Development, under the National Flood Insurance Act of 1968, as amended
(24 CFR Section 1909.1) or Borrower has obtained the flood insurance required by
Section 3.01(a)(vi) hereof. The Premises either does not lie in a 100 year flood
plain that has been identified by the Secretary of Housing and Urban Development
or any other Governmental Authority or, if it does, Borrower has obtained the
flood insurance required by Section 3.01(a)(vi) hereof.
(e) Completion; Encroachment. All Improvements necessary for the efficient
use and operation of the Premises, including, without limitation, all
Improvements which were included for purposes of determining the appraised value
of the Property in the Appraisal, have been completed and none of said
Improvements lie outside the boundaries and building restriction lines of the
Premises except for de-minimis encroachments on adjoining properties as
disclosed in the survey provided to Lender in connection with the origination of
the Loan. Except as set forth in the title insurance policy insuring the lien of
this Security Instrument, no improvements on adjoining properties encroach upon
the Premises.
(f) Separate Lot. The Premises are taxed separately without regard to any
other real estate and constitute a legally subdivided lot under all applicable
Legal Requirements (or, if not subdivided, no subdivision or
28
platting of the Premises is required under applicable Legal Requirements), and
for all purposes may be mortgaged, encumbered, conveyed or otherwise dealt with
as an independent parcel. The Property does not benefit from any tax abatement
or exemption.
(g) Use. The existence of all Improvements, the present use and operation
thereof and the access of the Premises and the Improvements to all of the
utilities and other items referred to in paragraph (k) below are in compliance
in all material respects with all Leases affecting the Property and all
applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Borrower has not received any
notice from any Governmental Authority alleging any uncured violation relating
to the Property of any applicable Legal Requirements.
(h) Licenses and Permits. Xxxxxxxx currently holds and will continue to
hold all certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals of any Governmental Authority or any other Person which
are material for the lawful occupancy and operation of the Realty or which are
material to the ownership or operation of the Property or the conduct of
Xxxxxxxx's business. All such certificates of occupancy, licenses,
registrations, permits, consents, franchises and approvals are current and in
full force and effect.
(i) Environmental Matters. Xxxxxxxx has received and reviewed the
Environmental Report and has no reason to believe that the Environmental Report
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which such statements were made, not misleading.
(j) Property Proceedings. There are no actions, suits or proceedings
pending or threatened in any court or before any Governmental Authority or
arbitration board or tribunal (i) relating to (A) the zoning of the Premises or
any part thereof, (B) any certificates of occupancy, licenses, registrations,
permits, consents or approvals issued with respect to the Property or any part
thereof, (C) except as otherwise disclosed in writing to Lender, the
condemnation of the Property or any part thereof, or (D) the condemnation or
relocation of any roadways abutting the Premises required for access or the
denial or limitation of access to the Premises or any part thereof from any
point of access to the Premises, (ii) asserting that (A) any such zoning,
certificates of occupancy, licenses, registrations, permits, consents and/or
approvals do not permit the operation of any material portion of the Realty as
presently being conducted, (B) any material improvements located on the Property
or any part thereof cannot be located thereon or operated with their intended
use or (C) the operation of the Property or any part thereof is in violation in
any material respect of any Environmental Statutes, Development Laws or other
Legal Requirements or Space Leases or Property Agreements or (iii) which might
(A) affect the validity or priority of any Loan Document or (B) have a Material
Adverse Effect. Xxxxxxxx is not aware of any facts or circumstances which may
give rise to any actions, suits or proceedings described in the preceding
sentence.
(k) Utilities. The Premises has all necessary legal access to water, gas
and electrical supply, storm and sanitary sewerage facilities, other required
public utilities (with respect to each of the aforementioned items, by means of
either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting the
Premises or through permanent insurable easements benefiting the Premises), fire
and police protection, parking, and means of direct access between the Premises
and public highways over recognized curb cuts (or such access to public highways
is through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).
(l) Mechanics' Liens. The Property is free and clear of any mechanics'
liens or liens in the nature thereof, and no rights are outstanding that under
law could give rise to any such liens, any of which liens are or may be prior
to, or equal with, the lien of this Security Instrument, except those which are
insured against by the title insurance policy insuring the lien of this Security
Instrument.
(m) Title Insurance. Xxxxxx has received a lender's title insurance policy
insuring this Security Instrument as a first lien on the Realty subject only to
Permitted Encumbrances.
29
(n) Insurance. The Property is insured in accordance with the requirements
set forth in Article III hereof.
(o) Space Leases.
(i) Borrower has delivered a true, correct and complete schedule of
all Space Leases as of the date hereof, which accurately and completely
sets forth in all material respects, for each such Space Lease, the
matters set forth therein (collectively, the "Rent Roll").
(ii) Each Space Lease constitutes the legal, valid and binding
obligation of Borrower and, to the knowledge of Borrower, is enforceable
against the tenant thereof. No default exists, or with the passing of time
or the giving of notice would exist, (A) under any Major Space Lease or
(B) under any other Space Leases which would, in the aggregate, have a
Material Adverse Effect.
(iii) No tenant under any Space Lease has, as of the date hereof,
paid Rent more than thirty (30) days in advance except for Rent
aggregating not more than five percent (5%) of the Rent receivable for
such period, and the Rents under such Space Leases have not been waived,
released, or otherwise discharged or compromised.
(iv) All work to be performed by Borrower under the Space Leases has
been substantially performed, all contributions to be made by Borrower to
the tenants thereunder have been made except for any held-back amounts,
and all other conditions precedent to each such tenant's obligations
thereunder have been satisfied.
(v) Except as previously disclosed to Lender in writing, there are
no options to terminate any Major Space Lease.
(vi) Each tenant under a Major Space Lease or such tenant's
authorized subtenant is currently occupying the space demised by such
Major Space Lease.
(vii) Borrower has delivered to Lender true, correct and complete
copies of all Major Space Leases described in the Rent Roll.
(viii) Each Space Lease is in full force and effect and (except as
disclosed on the Rent Roll) has not been assigned, modified, supplemented
or amended in any way.
(ix) Each tenant under each Major Space Lease is free from
bankruptcy, reorganization or arrangement proceedings or a general
assignment for the benefit of creditors.
(x) No Space Lease provides any party with the right to obtain a
lien or encumbrance upon the Property superior to the lien of this
Security Instrument.
(p) Property Agreements.
(i) Each Property Agreement other than the lease between Fee Owner
and Lessee (which is terminable upon the occurrence of an Event of
Default) and Permitted Encumbrances is terminable with or without cause on
not less than thirty (30) days notice and is otherwise on commercially
reasonable terms and consistent with the Approved Manager Standard.
(ii) No Property Agreement provides any party with the right to
obtain a lien or encumbrance upon the Property superior to the lien of
this Security Instrument.
30
(iii) No default exists or with the passing of time or the giving of
notice or both would exist under any Property Agreement which would,
individually or in the aggregate, have a Material Adverse Effect.
(iv) Borrower has not received or given any written communication
which alleges that a default exists or, with the giving of notice or the
lapse of time, or both, would exist under the provisions of any Property
Agreement.
(v) No condition exists whereby Borrower or any future owner of the
Property may be required to purchase any other parcel of land which is
subject to any Property Agreement or which gives any Person a right to
purchase, or right of first refusal with respect to, the Property.
(vi) To the best knowledge of Borrower, no offset or any right of
offset exists respecting continued contributions to be made by any party
to any Property Agreement except as expressly set forth therein. Except as
previously disclosed to Lender in writing, no material exclusions or
restrictions on the utilization, leasing or improvement of the Property
(including non-compete agreements) exists in any Property Agreement.
(vii) All "pre-opening" requirements contained in all Property
Agreements (including, but not limited to, all off-site and on-site
construction requirements), if any, have been fulfilled, and, to the best
of Borrower's knowledge, no condition now exists whereby any party to any
such Property Agreement could refuse to honor its obligations thereunder.
(viii) All work, if any, to be performed by Borrower under each of
the Property Agreements has been substantially performed, all
contributions to be made by Borrower to any party to such Property
Agreements have been made, and all other conditions to such party's
obligations thereunder have been satisfied.
(q) Personal Property. Borrower has delivered to Lender a true, correct
and complete schedule of all personal property, if any, owned by Xxxxxxxx and
located upon the Property or used in connection with the use or operation of the
Realty or, in lieu thereof, an Officer's Certificate stating that the aggregate
value of any such personal property does not exceed $5,000 and Borrower
represents that it has good and marketable title to all such personal property,
free and clear of any liens, except for liens created under the Loan Documents
and liens which describe the equipment and other personal property owned by
tenants.
(r) Leasing Brokerage and Management Fees. Except as previously disclosed
to Lender in writing, there are no brokerage fees or commissions payable by
Borrower with respect to the leasing of space at the Property and there are no
management fees payable by Borrower with respect to the management of the
Property.
(s) Security Deposits. Borrower is in compliance with all Legal
Requirements relating to all security deposits as to which failure to comply
might, individually or in the aggregate, have a Material Adverse Effect.
(t) Loan to Value Ratio. To the best knowledge of Borrower, based on the
substantial real estate expertise of Xxxxxxxx, Xxxxxxxx's familiarity with the
Property, and the Appraisal (which Borrower believes to contain a reasonable
assessment of the fair market value of the Property), the Initial Allocated Loan
Amount does not exceed one hundred twenty-five percent (125%) of the fair market
value of the Property as of the Closing Date. For the purposes of this clause
(t), the term "fair market value" shall be reduced by (i) the amount of any
indebtedness secured by a lien affecting the Property that is prior to, or on a
parity with, the lien of this Security Instrument, and (ii) the value of any
property that is not "real property" within the meaning of Treas. Reg. Sections
1.860G-2 and 1.856-3(d).
(u) Representations Generally. The representations and warranties
contained in this Security Instrument, and the review and inquiry made on behalf
of Borrower therefor, have all been made by Persons having the requisite
expertise and knowledge to provide such representations and warranties. No
representation, warranty
31
or statement of fact made by or on behalf of Borrower in this Security
Instrument or in any certificate, document or schedule furnished to Lender
pursuant hereto, contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained therein or herein
not misleading (which may be to Borrower's best knowledge where so provided
herein). There are no facts presently known to Borrower which have not been
disclosed to Lender which would, individually or in the aggregate, have a
Material Adverse Effect nor as far as Borrower can foresee might, individually
or in the aggregate, have a Material Adverse Effect.
Section 2.06. Removal of Lien. (a) Borrower shall, at its expense,
maintain this Security Instrument as a first lien on the Property and shall keep
the Property free and clear of all liens and encumbrances of any kind and nature
other than the Permitted Encumbrances. Borrower shall, within thirty (30) days
of being served with notice thereof, promptly discharge of record, by bond or
otherwise, any such liens and, promptly upon request by Xxxxxx, shall deliver to
Lender evidence reasonably satisfactory to Lender of the discharge thereof.
(b) Without limitation to the provisions of Section 2.06(a) hereof,
Borrower shall (i) pay, from time to time when the same shall become due, all
claims and demands of mechanics, materialmen, laborers, and others which, if
unpaid, might result in, or permit the creation of, a lien on the Property or
any part thereof, (ii) cause to be removed of record (by payment or posting of
bond or settlement or otherwise) any mechanics', materialmens', laborers' or
other lien on the Property, or any part thereof, or on the revenues, rents,
issues, income or profit arising therefrom, and (iii) in general, do or cause to
be done, without expense to Lender, everything reasonably necessary to preserve
in full the lien of this Security Instrument. If Borrower fails to comply with
the requirements of this Section 2.06(b), then, upon five (5) Business Days'
prior notice to Borrower, Lender may, but shall not be obligated to, pay any
such lien, and Borrower shall, within five (5) Business Days after Xxxxxx's
demand therefor, reimburse Lender for all sums so expended, together with
interest thereon at the Default Rate from the date advanced, all of which shall
be deemed part of the Debt. Nothing contained herein shall be deemed a consent
or request of Lender, express or implied, by inference or otherwise, to the
performance of any alteration, repair or other work by any contractor,
subcontractor or laborer or the furnishing of any materials by any materialmen
in connection therewith.
(c) Notwithstanding the foregoing, Borrower may contest any lien (other
than a lien relating to non-payment of Impositions, the contest of which shall
be governed by Section 4.04 hereof) of the type set forth in subparagraph
(b)(ii) of this Section 2.06 provided that, following prior notice to Lender (i)
Borrower is contesting the validity of such lien with due diligence and in good
faith and by appropriate proceedings, without cost or expense to Lender or any
of its agents, employees, officers, or directors, (ii) Borrower shall preclude
the collection of, or other realization upon, any contested amount from the
Property or any revenues from or interest in the Property, (iii) neither the
Property nor any part thereof nor interest therein, shall be in any danger of
being sold, forfeited or lost by reason of such contest by Xxxxxxxx, (iv) such
contest by Borrower shall not affect the ownership, use or occupancy of the
Property, (v) such contest by Borrower shall not subject Lender or Borrower to
the risk of civil or criminal liability (other than the civil liability of
Borrower for the amount of the lien in question), (vi) such lien is subordinate
to the lien of this Security Instrument, (vii) Borrower has not consented to
such lien, (viii) Borrower has given Lender prompt notice of the filing of such
lien and the bonding thereof by Xxxxxxxx and, upon request by Xxxxxx from time
to time, notice of the status of such contest by Xxxxxxxx and/or confirmation of
the continuing satisfaction of the conditions set forth in this Section 2.06(c),
(ix) Borrower shall promptly pay the obligation secured by such lien upon a
final determination of Borrower's liability therefor, and (x) in the event any
such lien exceeds $25,000 or at any time after and during the occurrence of a
Default, Borrower shall deliver to Lender cash, a bond or other security
acceptable to Lender equal to 125% of the contested amount pursuant to
collateral arrangements reasonably satisfactory to Lender.
Section 2.07. Cost of Defending and Upholding this Security Instrument
Lien. If any action or proceeding is commenced to which Lender is made a party
relating to the Loan Documents and/or the Property or Lender's interest therein
or in which it becomes necessary to defend or uphold the lien of this Security
Instrument or any other Loan Document, Borrower shall, on demand, reimburse
Lender for all expenses (including, without limitation, reasonable attorneys'
fees and disbursements) incurred by Lender in connection therewith, and such
sum, together with interest thereon at the Default Rate from and after such
demand until fully paid, shall constitute a part of the Debt.
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Section 2.08. Use of the Property. Borrower will use, or cause to be used,
the Property for such use as is permitted pursuant to applicable Legal
Requirements including, without limitation, under the certificate of occupancy
applicable to the Property, and which is required by the Loan Documents.
Borrower shall not suffer or permit the Property or any portion thereof to be
used by the public, any tenant, or any Person not subject to a Lease, in a
manner as is reasonably likely to impair Xxxxxxxx's title to the Property, or in
such manner as may give rise to a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Property or any part
thereof.
Section 2.09. Financial Reports. (a) Borrower will keep and maintain or
will cause to be kept and maintained on a Fiscal Year basis, in accordance with
GAAP (or such other accounting basis reasonably acceptable to Lender)
consistently applied, proper and accurate books, tax returns, records and
accounts reflecting (i) all of the financial affairs of Borrower and Guarantor
and (ii) all items of income and expense in connection with the operation of the
Property or in connection with any services, equipment or furnishings provided
in connection with the operation thereof, whether such income or expense may be
realized by Borrower or by any other Person whatsoever, excepting lessees
unrelated to and unaffiliated with Borrower who have leased from Borrower
portions of the Premises for the purpose of occupying the same. Lender shall
have the right from time to time at all times during normal business hours upon
reasonable notice to examine such books, tax returns, records and accounts at
the office of Borrower or other Person maintaining such books, tax returns,
records and accounts and to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default, Borrower shall pay any
costs and expenses incurred by Xxxxxx to examine Xxxxxxxx's and Guarantor's
accounting records with respect to the Property, as Lender shall determine to be
necessary or appropriate in the protection of Xxxxxx's interest.
(b) Borrower will furnish Lender (i) annually, within seventy-five (75)
days following the end of each Fiscal Year of AMERCO with a complete copy of
AMERCO's financial statements audited by XXXXXX's Independent auditors; (ii)
quarterly with forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of AMERCO's quarterly financial statements reviewed
by XXXXXX's Independent auditors; (iii) annually within seventy-five (75) days
following the end of each Fiscal Year of AMERCO with a complete copy of each
Guarantor's financial statements, prepared in accordance with GAAP by an
in-house certified public accountant and certified by Borrower; and (iv)
quarterly within forty (40) days following the end of each fiscal quarter of
AMERCO with a complete copy of each Guarantor's financial statements, prepared
in accordance with GAAP by an in-house certified public accountant and certified
by Borrower. Together with such financial statements, Borrower shall deliver
Borrower's financial statements prepared in accordance with GAAP (or such other
accounting basis reasonably acceptable to Lender) consistently applied covering
(i) all of the financial affairs of Borrower and (ii) the operation of the
Property for such Fiscal Year or fiscal quarter, as applicable, and containing a
statement of revenues and expenses, a statement of assets and liabilities and a
statement of Borrower's equity and Borrower shall furnish to Lender an Officer's
Certificate certifying as of the date thereof (1) that the financial statements
accurately represent the results of operations and financial condition of
Borrower and the Property all in accordance with GAAP (or such other accounting
basis reasonably acceptable to Lender) consistently applied, and (2) whether
there exists an event or circumstance which constitutes, or which upon notice or
lapse of time or both would constitute, a Default under the Note or any other
Loan Document executed and delivered by Xxxxxxxx, and if such event or
circumstance exists, the nature thereof, the period of time it has existed and
the action then being taken to remedy such event or circumstance.
(c) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a true, complete and correct cash flow statement
with respect to the Property in the form attached hereto as EXHIBIT E and made a
part hereof, showing (i) all cash receipts of any kind whatsoever and all cash
payments and disbursements, and (ii) year-to-date summaries of such cash
receipts, payments and disbursements together with a certification of Manager
stating that such cash flow statement is true, complete and correct and a list
of all litigation and proceedings affecting Borrower or the Property in which
the amount involved is $250,000 or more, if not covered by insurance (or
$1,000,000 or more whether or not covered by insurance).
(d) Borrower will furnish Lender monthly, within sixty (60) days following
the end of each month, with a certification of Manager stating that all
Operating Expenses with respect to the Property which had accrued as of the last
day of the month preceding the delivery of the cash flow statement referred to
in clause (c) above have
33
been fully paid or otherwise reserved or provided for by Manager (any such
certification or any certification furnished by a Manager pursuant to clause (c)
above, a "Manager Certification").
(e) Borrower will furnish Lender annually, upon request by Lender
therefor, within forty-five (45) days following receipt of such request, with a
true, complete and correct (i) "unitmix" report for the Property which notes the
number of self-storage units that are rented on the basis of the size of the
unit and includes the security deposit, if any, held by Borrower, the space
covered and the arrearages for such tenant, if any, and (ii) rent roll for the
Property with respect to all commercial tenants, including a list of which
tenants are in default under their respective Leases, dated as of the date of
Lender's request, identifying each tenant, the monthly rent and additional rent,
if any, payable by such tenant, the expiration date of such tenant's Lease, the
security deposit, if any, held by Borrower under the Lease, the space covered by
the Lease, and the arrearages for such tenant, if any, and each such "unitmix"
report and rent roll shall be accompanied by an Officer's Certificate, dated as
of the date of the delivery of such "unitmix" report or rent roll, certifying
that such "unitmix" report or rent roll is true, correct and complete in all
material respects as of its date.
(f) Borrower shall furnish to Lender, within the later of sixty (60) days
after Xxxxxx's request therefor and five (5) days following the date on which
such item is available, with such further detailed information with respect to
the operation of the Property and the financial affairs of Borrower as may be
reasonably requested by Xxxxxx.
(g) Borrower shall cause Manager to furnish to Lender, within forty-five
(45) days after receipt of Xxxxxx's written request, a schedule of tenant
security deposits, together with a certification of Manager as to the balance in
the Security Deposit Account and that such tenant security deposits are being
held in accordance with all Legal Requirements.
(h) Borrower will furnish Lender annually, within one hundred and twenty
(120) days after the end of each Fiscal Year, with a report setting forth (i)
the Net Operating Income for such Fiscal Year, (ii) the average occupancy rate
of the Property during such Fiscal Year, (iii) the capital repairs, replacements
and improvements performed at the Property during such Fiscal Year and the
aggregate Recurring Replacement Expenditures made in connection therewith, and
(iv) the balance contained in each of the Sub-Accounts as of the end of such
Fiscal Year (which balance Lender shall provide upon Borrower's written request
therefor).
(i) Borrower shall and shall cause Guarantor to furnish to Lender
annually, within sixty (60) days of filing, its respective tax return, a copy of
such tax return.
(j) If a Trigger Event has occurred and is continuing, Borrower shall
submit to Lender for Lender's written approval an Annual Budget not later than
sixty (60) days prior to the commencement of each Fiscal Year or, if a Trigger
Event occurs subsequent to a date which is sixty (60) days prior to the
commencement of a Fiscal Year, within sixty (60) days of the occurrence of the
Trigger Event, in form satisfactory to Lender setting forth in reasonable detail
budgeted monthly operating income and monthly operating capital and other
expenses for the Property. Each Annual Budget shall contain, among other things,
limitations on management fees, third party service fees, and other expenses as
Borrower may reasonably determine. Lender shall have the right to approve such
Annual Budget which approval shall not be unreasonably withheld, and in the
event that Lender objects to the proposed Annual Budget submitted by Borrower,
Lender shall advise Borrower of such objections within fifteen (15) days after
receipt thereof (and deliver to Borrower a reasonably detailed description of
such objections) and Borrower shall, within three (3) days after receipt of
notice of any such objections, revise such Annual Budget and resubmit the same
to Lender. Lender shall advise Borrower of any objections to such revised Annual
Budget within ten (10) days after receipt thereof (and deliver to Borrower a
reasonably detailed description of such objections) and Borrower shall revise
the same in accordance with the process described herein until Lender approves
an Annual Budget, provided, however, that if Lender shall not advise Borrower of
its objections to any proposed Annual Budget within the applicable time period
set forth in this Section, then such proposed Annual Budget shall be deemed
approved by Lender. Until such time that Lender approves a proposed Annual
Budget, the most recently Approved Annual Budget shall apply; provided that,
such Approved Annual Budget shall be adjusted to reflect
34
actual increases in Basic Carrying Costs and to delete any non-recurring
expenses and provided, further, if there is no approved Annual Budget for the
prior Fiscal Year, Lender shall utilize the actual expenses set forth in the
cash flow statements delivered to Lender pursuant to Section 2.09(c) with
respect to the prior Fiscal Year adjusted to reflect actual increases in Basic
Carrying Costs and to delete non-recurring expenses. In the event that Borrower
must incur an Extraordinary Expense, then Borrower shall promptly deliver to
Lender a reasonably detailed explanation of such proposed Extraordinary Expense
for Xxxxxx's approval, which approval may be granted or denied in Xxxxxx's sole
and absolute discretion.
(k) In the event that Borrower fails to deliver any of the financial
statements, reports or other information required to be delivered to Lender
pursuant to this Section 2.09 on or prior to their due dates, if any such
failure shall continue for ten (10) days following notice thereof from Lender,
Borrower shall pay to Lender on each Payment Date for each month or portion
thereof that any such financial statement, report or other information remains
undelivered, an administrative fee in the amount of Five Thousand Dollars
($5,000) multiplied by the number of undelivered statements, reports or other
items. Borrower agrees that such administrative fee (i) is a fair and reasonable
fee necessary to compensate Lender for its additional administrative costs and
increased costs relating to Xxxxxxxx's failure to deliver the aforementioned
statements, reports or other items as and when required hereunder and (ii) is
not a penalty.
(l) Borrower may, with respect to the information requested in Section
2.09(a)-(j), (i) to the extent permitted by law, provide consolidated tax
returns and consolidated financial statements and (ii) permit its assets to be
listed on the financial statements of an Affiliate if permitted by GAAP;
provided, however, that any consolidated financial statement shall indicate that
its separate assets and liabilities are neither available to pay the debts of
the consolidated entity nor constitute obligations of the consolidated entity.
Section 2.10. Litigation. Borrower will give prompt written notice to
Lender of any litigation or governmental proceedings pending or threatened (in
writing) against Borrower which might have a Material Adverse Effect.
Section 2.11. Updates of Representations. Borrower shall deliver to Lender
within ten (10) days of the request of Lender an Officer's Certificate updating
all of the representations and warranties contained in this Security Instrument
and the other Loan Documents and certifying that all of the representations and
warranties contained in this Security Instrument and the other Loan Documents,
as updated pursuant to such Officer's Certificate, are true, accurate and
complete as of the date of such Officer's Certificate.
ARTICLE III: INSURANCE AND CASUALTY RESTORATION
Section 3.01. Insurance Coverage. (a) Borrower shall, at its expense,
maintain or cause to be maintained the following insurance coverages with
respect to the Property during the term of this Security Instrument:
(i) Insurance against loss or damage by fire, casualty and other
hazards included in an "all-risk" extended coverage endorsement or its
equivalent, with such endorsements as Lender may from time to time
reasonably require and which are customarily required by Institutional
Lenders of similar properties similarly situated, including, without
limitation, if the Property constitutes a legal non-conforming use, an
ordinance of law coverage endorsement which contains "Demolition Cost",
"Loss Due to Operation of Law" and "Increased Cost of Construction"
coverages, covering the Property in an amount not less than the greater of
(A) 100% of the insurable replacement value of the Property (exclusive of
the Premises and footings and foundations) and (B) such other amount as is
necessary to prevent any reduction in such policy by reason of and to
prevent Borrower, Lender or any other insured thereunder from being deemed
to be a co-insurer. Not less frequently than once every three (3) years,
Borrower, at its option, shall either (A) have the Appraisal updated or
obtain a new appraisal of the Property, (B) have a valuation of the
Property made by or for its insurance carrier conducted by an appraiser
experienced in valuing properties of similar type to that of the Property
which are in the geographical area in which the Property is located or (C)
35
provide such other evidence as will, in Xxxxxx's sole judgment, enable
Lender to determine whether there shall have been an increase in the
insurable value of the Property and Borrower shall deliver such updated
Appraisal, new appraisal, insurance valuation or other evidence acceptable
to Lender, as the case may be, and, if such updated Appraisal, new
appraisal, insurance valuation, or other evidence acceptable to Lender
reflects an increase in the insurable value of the Property, the amount of
insurance required hereunder shall be increased accordingly and Xxxxxxxx
shall deliver evidence satisfactory to Lender that such policy has been so
increased.
(ii) Commercial comprehensive general liability insurance against
claims for personal and bodily injury and/or death to one or more persons
or property damage, occurring on, in or about the Property (including the
adjoining streets, sidewalks and passageways therein) in such amounts as
Lender may from time to time reasonably require (but in no event shall
Lender's requirements be increased more frequently than once during each
twelve (12) month period) and which are customarily required by
Institutional Lenders for similar properties similarly situated, but not
less than $1,000,000 per occurrence and $2,000,000 general aggregate on a
per location basis and, in addition thereto, not less than $75,000,000
excess and/or umbrella liability insurance shall be maintained for any and
all claims.
(iii) Business interruption, rent loss or other similar insurance
(A) with loss payable to Lender, (B) covering all risks required to be
covered by the insurance provided for in Section 3.01(a)(i) hereof and (C)
in an amount not less than 100% of the projected fixed or base rent plus
percentage rent for the succeeding twelve (12) month period based on an
occupancy rate of 100%. The amount of such insurance shall be determined
upon the execution of this Security Instrument, and not more frequently
than once each calendar year thereafter based on Borrower's reasonable
estimate of projected fixed or base rent plus percentage rent, from the
Property for the next succeeding twelve (12) months. In the event the
Property shall be damaged or destroyed, Borrower shall and hereby does
assign to Lender all payment of claims under the policies of such
insurance, and all amounts payable thereunder, and all net amounts, shall
be collected by Lender under such policies and shall be applied in
accordance with this Security Instrument; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to
timely pay all amounts due under the Loan Documents.
(iv) War risk insurance when such insurance is obtainable from the
United States of America or any agency or instrumentality thereof at
reasonable rates (for the maximum amount of insurance obtainable) and if
requested by Lender, and such insurance is then customarily required by
Institutional Lenders of similar properties similarly situated.
(v) Insurance against loss or damages from (A) leakage of sprinkler
systems and (B) explosion of steam boilers, air conditioning equipment,
pressure vessels or similar apparatus now or hereafter installed at the
Property, in such amounts as Lender may from time to time reasonably
require and which are then customarily required by Institutional Lenders
of similar properties similarly situated.
(vi) Flood insurance in an amount equal to the full insurable value
of the Property or the maximum amount available, whichever is less, if the
Improvements are located in an area designated by the Secretary of Housing
and Urban Development as being "an area of special flood hazard" under the
National Flood Insurance Program (i.e., having a one percent or greater
chance of flooding), and if flood insurance is available under the
National Flood Insurance Act.
(vii) Worker's compensation insurance or other similar insurance
which may be required by Governmental Authorities or Legal Requirements.
(viii) Intentionally omitted.
36
(ix) Insurance against damage resulting from acts of terrorism, or
an insurance policy without an exclusion for damages resulting from
terrorism, on terms consistent with the commercial property insurance
policy required under subsections (i) (ii) and (iii) above.
(x) Such other insurance as may from time to time be required by
Lender and which is then customarily required by Institutional Lenders for
similar properties similarly situated, against other insurable hazards,
including, but not limited to, malicious mischief, vandalism, sinkhole and
mine subsidence, mold, spores and fungus, windstorm and/or earthquake, due
regard to be given to the size and type of the Premises, Improvements,
Fixtures and Equipment and their location, construction and use.
(b) If Borrower is a partnership or limited liability company, Borrower
shall cause the General Partners to maintain fidelity insurance in an amount
equal to or greater than the annual Operating Income of the Property for the six
(6) month period immediately preceding the date on which the premium for such
insurance is due and payable.
(c) Borrower shall cause any Manager of the Property to maintain fidelity
insurance in an amount equal to or greater than the annual Operating Income of
the Property for the six (6) month period immediately preceding the date on
which the premium for such insurance is due and payable or such lesser amount as
Lender shall approve.
Section 3.02. Policy Terms. (a) All insurance required by this Article III
shall be in the form (other than with respect to Sections 3.01(a)(vi) and (vii)
above when insurance in those two sub-sections is placed with a governmental
agency or instrumentality on such agency's forms) and amount and with
deductibles as, from time to time, shall be reasonably acceptable to Lender,
under valid and enforceable policies issued by financially responsible insurers
authorized to do business in the State where the Property is located, with a
general policyholder's service rating of not less than A and a financial rating
of not less than VIII as rated in the most currently available Best's Insurance
Reports (or the equivalent, if such rating system shall hereafter be altered or
replaced) and shall have a claims paying ability rating and/or financial
strength rating, as applicable, of not less than "A" (or its equivalent) or such
lower claims paying ability rating and/or financial strength rating, as
applicable, as Lender shall, in its sole and absolute discretion, consent to,
from a Rating Agency (one of which after a Securitization in which Standard &
Poor's rates any securities issued in connection with such Securitization, shall
be Standard & Poor's) or by a syndicate of insurers through which at least 75%
of the coverage (if there are four (4) or fewer members of such syndicate) or at
least 60% of the coverage (if there are five (5) or more members of the
syndicate) is with carriers having claims-paying ability or financial strength
ratings, as applicable, of "A" (or its equivalent) from the Ratings Agencies,
provided that all members of the syndicate shall have claims-paying ability
ratings and/or financial strength ratings, as applicable, of not less than "BBB"
(or its equivalent) from the Ratings Agencies. Lender acknowledges that so long
as the claims paying ability rating and/or financial strength rating, as
applicable, of Commonwealth is "BBB" (or its equivalent), Commonwealth shall be
an acceptable insurer until the end of the current policy term. Originals or
certified copies of all insurance policies shall be delivered to and held by
Xxxxxx. All such policies (except policies for worker's compensation) shall name
Xxxxxx, its successors and/or assigns as an additional named insured, shall
provide for loss payable to Lender, its successors and/or assigns and shall
contain (or have attached): (i) standard "non-contributory mortgagee"
endorsement or its equivalent relating, inter alia, to recovery by Lender
notwithstanding the negligent or willful acts or omissions of Borrower; (ii) a
waiver of subrogation endorsement as to Lender; (iii) an endorsement indicating
that neither Lender nor Borrower shall be or be deemed to be a co-insurer with
respect to any casualty risk insured by such policies and shall provide for a
deductible per loss of an amount not more than the lesser of (x) that which is
customarily maintained by owners of similar properties similarly situated and
(y) five percent (5%) of the Net Operating Income, and (iv) a provision that
such policies shall not be canceled, terminated, denied renewal or amended,
including, without limitation, any amendment reducing the scope or limits of
coverage, without at least thirty (30) days' prior written notice to Lender in
each instance. Not less than thirty (30) days prior to the expiration dates of
the insurance policies obtained pursuant to this Security Instrument, originals
or certified copies of renewals of such policies (or certificates evidencing
such renewals) bearing notations evidencing the payment of premiums or
accompanied by other reasonable evidence of such payment (which premiums shall
not be paid by Borrower through or by any financing arrangement which would
entitle an insurer to terminate a policy) shall be delivered by Borrower to
Lender.
37
Borrower shall not carry separate insurance, concurrent in kind or form or
contributing in the event of loss, with any insurance required under this
Article III.
(b) If Borrower fails to maintain and deliver to Lender the original
policies or certificates of insurance required by this Security Instrument, or
if there are insufficient funds in the Basic Carrying Costs Sub-Account to pay
the premiums for same, Lender may, at its option, procure such insurance, and
Borrower shall pay, or as the case may be, reimburse Lender for, all premiums
thereon promptly, upon demand by Lender, with interest thereon at the Default
Rate from the date paid by Xxxxxx to the date of repayment and such sum shall
constitute a part of the Debt.
(c) Borrower shall notify Lender of the renewal premium of each insurance
policy and Lender shall be entitled to pay such amount on behalf of Borrower
from the Basic Carrying Costs Sub-Account. With respect to insurance policies
which require periodic payments (i.e., monthly or quarterly) of premiums, Lender
shall be entitled to pay such amounts fifteen (15) days (or such lesser number
of days as Lender shall determine) prior to the respective due dates of such
installments.
(d) The insurance required by this Security Instrument may, at the option
of Borrower, be effected by blanket and/or umbrella policies issued to Borrower
covering the Property provided that, in each case, the policies otherwise comply
with the provisions of this Security Instrument and allocate to the Property,
from time to time (but in no event less than once a year), the coverage
specified by this Security Instrument, without possibility of reduction or
coinsurance by reason of, or damage to, any other property (real or personal)
named therein. If the insurance required by this Security Instrument shall be
effected by any such blanket or umbrella policies, Borrower shall furnish to
Lender (i) original policies or certified copies thereof, or an original
certificate of insurance together with reasonable access to the original of such
policy to review such policy's coverage of the Property, with schedules attached
thereto showing the amount of the insurance provided under such policies
applicable to the Property and (ii) an Officer's Certificate setting forth (A)
the number of properties covered by such policy, (B) the location by city (if
available, otherwise, county) and state of the properties, (C) the average
square footage of the properties, (D) a brief description of the typical
construction type included in the blanket policy and (E) such other information
as Lender may reasonably request.
Section 3.03. Assignment of Policies. (a) Borrower hereby assigns to
Lender the proceeds of all insurance (other than worker's compensation and
liability insurance) obtained pursuant to this Security Instrument, all of which
proceeds shall be payable to Lender as collateral and further security for the
payment of the Debt and the performance of the Cross-collateralized Borrowers'
obligations hereunder and under the other Loan Documents, and Borrower hereby
authorizes and directs the issuer of any such insurance to make payment of such
proceeds directly to Lender. Except as otherwise expressly provided in Section
3.04 or elsewhere in this Article III, Lender shall have the option, in its
discretion, and without regard to the adequacy of its security, to apply all or
any part of the proceeds it may receive pursuant to this Article in such manner
as Lender may elect to any one or more of the following: (i) the payment of the
Debt, whether or not then due, in any proportion or priority as Lender, in its
discretion, may elect, (ii) the repair or restoration of the Property, (iii) the
cure of any Default or (iv) the reimbursement of the costs and expenses of
Lender incurred pursuant to the terms hereof in connection with the recovery of
the Insurance Proceeds. Nothing herein contained shall be deemed to excuse
Borrower from repairing or maintaining the Property as provided in this Security
Instrument or restoring all damage or destruction to the Property, regardless of
the sufficiency of the Insurance Proceeds, and the application or release by
Lender of any Insurance Proceeds shall not cure or waive any Default or notice
of Default.
(b) In the event of the foreclosure of this Security Instrument or any
other transfer of title or assignment of all or any part of the Property in
extinguishment, in whole or in part, of the Debt, all right, title and interest
of Borrower in and to all policies of insurance required by this Security
Instrument shall inure to the benefit of the successor in interest to Borrower
or the purchaser of the Property. If, prior to the receipt by Lender of any
proceeds, the Property or any portion thereof shall have been sold on
foreclosure of this Security Instrument or by deed in lieu thereof or otherwise,
or any claim under such insurance policy arising during the term of this
Security Instrument is not paid until after the extinguishment of the Debt, and
Lender shall not have received the entire amount of the Debt outstanding at the
time of such extinguishment, whether or not a deficiency judgment on this
38
Security Instrument shall have been sought or recovered or denied, then, the
proceeds of any such insurance to the extent of the amount of the Debt not so
received, shall be paid to and be the property of Xxxxxx, together with interest
thereon at the Default Rate, and the reasonable attorney's fees, costs and
disbursements incurred by Lender in connection with the collection of the
proceeds which shall be paid to Lender and Borrower hereby assigns, transfers
and sets over to Lender all of Borrower's right, title and interest in and to
such proceeds. Notwithstanding any provisions of this Security Instrument to the
contrary, Lender shall not be deemed to be a trustee or other fiduciary with
respect to its receipt of any such proceeds, which may be commingled with any
other monies of Lender; provided, however, that Lender shall use such proceeds
for the purposes and in the manner permitted by this Security Instrument. Any
proceeds deposited with Lender shall be held by Lender in an interest-bearing
account, but Lender makes no representation or warranty as to the rate or amount
of interest, if any, which may accrue on such deposit and shall have no
liability in connection therewith. Interest accrued, if any, on the proceeds
shall be deemed to constitute a part of the proceeds for purposes of this
Security Instrument. The provisions of this Section 3.03(b) shall survive the
termination of this Security Instrument by foreclosure, deed in lieu thereof or
otherwise as a consequence of the exercise of the rights and remedies of Lender
hereunder after a Default.
Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to
or destruction of the Property, Borrower shall give prompt written notice to
Lender (which notice shall set forth Borrower's good faith estimate of the cost
of repairing or restoring such damage or destruction, or if Borrower cannot
reasonably estimate the anticipated cost of restoration, Borrower shall
nonetheless give Lender prompt notice of the occurrence of such damage or
destruction, and will diligently proceed to obtain estimates to enable Borrower
to quantify the anticipated cost and time required for such restoration,
whereupon Borrower shall promptly notify Lender of such good faith estimate)
and, provided that restoration does not violate any Legal Requirements, Borrower
shall promptly commence and diligently prosecute to completion the repair,
restoration or rebuilding of the Property so damaged or destroyed to a condition
such that the Property shall be at least equal in value to that immediately
prior to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Property are
sometimes hereinafter collectively referred to as the "Work".
(ii) Borrower shall not adjust, compromise or settle any claim for
Insurance Proceeds without the prior written consent of Lender, which
shall not be unreasonably withheld or delayed and Lender shall have the
right, at Borrower's sole cost and expense, to participate in any
settlement or adjustment of Insurance Proceeds; provided, however, that,
except during the continuance of an Event of Default, Xxxxxx's consent
shall not be required and Lender shall not have the right to participate
in any settlement or adjustment of Insurance Proceeds with respect to the
adjustment, compromising or settlement of any claim for Insurance Proceeds
in an amount less than $300,000.
(iii) Subject to Section 3.04(a)(iv), Lender shall apply any
Insurance Proceeds which it may receive towards the Work in accordance
with Section 3.04(b) and the other applicable sections of this Article
III.
(iv) If (A) a Default shall have occurred and is then continuing,
(B) Lender is not reasonably satisfied that the Debt Service Coverage,
after substantial completion of the Work, will be at least equal to the
Required Debt Service Coverage, (C) more than thirty percent (30%) of the
reasonably estimated fair market value of the Property is damaged or
destroyed, (D) Lender is not reasonably satisfied that the Work can be
completed six (6) months prior to Maturity or (E) Lender is not reasonably
satisfied that the Work can be completed within six (6) months of the
damage to or destruction of the Property (each, a "Substantial Casualty"),
Lender shall have the option, in its sole discretion to apply any
Insurance Proceeds it may receive pursuant to this Security Instrument
(less any cost to Lender of recovering and paying out such proceeds
incurred pursuant to the terms hereof and not otherwise reimbursed to
Lender, including, without limitation, reasonable attorneys' fees and
expenses) to the payment of the Debt, without any prepayment fee or charge
of any kind (in which event, notwithstanding any other term or provision
hereof and, provided no Event of Default has occurred and is continuing,
Borrower shall have the right to repay, without any prepayment fee or
charge of any kind, the Release Price with respect to the Property and
obtain
39
a Release of the Property), or to allow such proceeds to be used for the
Work pursuant to the terms and subject to the conditions of Section
3.04(b) hereof and the other applicable sections of this Article III.
(iv) In the event that Lender elects or is obligated hereunder to
allow Insurance Proceeds to be used for the Work, any excess proceeds
remaining after completion of such Work shall be applied to the payment of
the Debt without any prepayment fee or charge of any kind.
(b) If any Condemnation Proceeds in accordance with Section 6.01(a), or
any Insurance Proceeds in accordance with Section 3.04(a), are to be applied to
the repair, restoration or rebuilding of the Property, then such proceeds shall
be deposited into a segregated interest-bearing bank account at the Bank, which
shall be an Eligible Account, held by Lender and shall be paid out from time to
time to Borrower as the Work progresses (less any cost to Lender of recovering
and paying out such proceeds, including, without limitation, reasonable
attorneys' fees and costs allocable to inspecting the Work and the plans and
specifications therefor) subject to Section 5.13 hereof and to all of the
following conditions:
(i) An architect or engineer selected by Xxxxxxxx and reasonably
acceptable to Lender (an "Architect" or "Engineer") or a Person otherwise
reasonably acceptable to Lender, shall have delivered to Lender a
certificate estimating the cost of completing the Work, and, if the amount
set forth therein is more than the sum of the amount of Insurance Proceeds
then being held by Lender in connection with a casualty and amounts agreed
to be paid as part of a final settlement under the insurance policy upon
or before completion of the Work, Borrower shall have delivered to Lender
(A) cash collateral in an amount equal to such excess, (B) an
unconditional, irrevocable, clean sight draft letter of credit, in form,
substance and issued by a bank reasonably acceptable to Lender, in the
amount of such excess and draws on such letter of credit shall be made by
Lender to make payments pursuant to this Article III following exhaustion
of the Insurance Proceeds therefore or (C) a completion bond in form,
substance and issued by a surety company reasonably acceptable to Lender.
(ii) If the cost of the Work is reasonably estimated by an Architect
or Engineer in a certification reasonably acceptable to Lender to be equal
to or exceed ten percent (10%) of the Allocated Loan Amount, such Work
shall be performed under the supervision of an Architect or Engineer, it
being understood that the plans and specifications with respect thereto
shall provide for Work so that, upon completion thereof, the Property
shall be at least equal in replacement value and general utility to the
Property prior to the damage or destruction.
(iii) Each request for payment shall be made on not less than ten
(10) days' prior notice to Lender and shall be accompanied by a
certificate of an Architect or Engineer, or, if the Work is not required
to be supervised by an Architect or Engineer, by an Officer's Certificate
stating (A) that payment is for Work completed in compliance with the
plans and specifications, if required under clause (ii) above, (B) that
the sum requested is required to reimburse Borrower for payments by
Borrower to date, or is due to the contractors, subcontractors,
materialmen, laborers, engineers, architects or other Persons rendering
services or materials for the Work (giving a brief description of such
services and materials), and that when added to all sums previously paid
out by Xxxxxx does not exceed the value of the Work done to the date of
such certificate, (C) if the sum requested is to cover payment relating to
repair and restoration of personal property required or relating to the
Property, that title to the personal property items covered by the request
for payment is vested in Borrower (unless Borrower is lessee of such
personal property), and (D) that the Insurance Proceeds and other amounts
deposited by Borrower held by Lender after such payment is more than the
estimated remaining cost to complete such Work; provided, however, that if
such certificate is given by an Architect or Engineer, such Architect or
Engineer shall certify as to clause (A) above, and such Officer's
Certificate shall certify as to the remaining clauses above, and provided,
further, that Lender shall not be obligated to disburse such funds if
Lender determines, in Xxxxxx's reasonable discretion, that Borrower shall
not be in compliance with this Section 3.04(b). Additionally, each request
for payment shall contain a statement signed by Xxxxxxxx stating that the
requested payment is for Work satisfactorily done to date.
40
(iv) Each request for payment shall be accompanied by waivers of
lien, in customary form and substance, covering that part of the Work for
which payment or reimbursement is being requested and, if required by
Xxxxxx, a search prepared by a title company or licensed abstractor, or by
other evidence satisfactory to Lender that there has not been filed with
respect to the Property any mechanic's or other lien or instrument for
retention of title relating to any part of the Work not discharged of
record. Additionally, as to any personal property covered by the request
for payment, Lender shall be furnished with evidence of having incurred a
payment obligation therefor and such further evidence reasonably
satisfactory to assure Xxxxxx that UCC filings therefor provide a valid
first lien on the personal property.
(v) Lender shall have the right to inspect the Work at all
reasonable times upon reasonable prior notice and may condition any
disbursement of Insurance Proceeds upon satisfactory compliance by
Borrower with the provisions hereof. Neither the approval by Lender of any
required plans and specifications for the Work nor the inspection by
Lender of the Work shall make Lender responsible for the preparation of
such plans and specifications, or the compliance of such plans and
specifications of the Work, with any applicable law, regulation,
ordinance, covenant or agreement.
(vi) Insurance Proceeds shall not be disbursed more frequently than
once every thirty (30) days.
(vii) Until such time as the Work has been substantially completed,
Lender shall not be obligated to disburse up to ten percent (10%) of the
cost of the Work (the "Retention Amount") to Borrower. Upon substantial
completion of the Work, Borrower shall send notice thereof to Lender and,
subject to the conditions of Section 3.04(b)(i)-(iv), Lender shall
disburse one-half of the Retention Amount to Borrower; provided, however,
that the remaining one-half of the Retention Amount shall be disbursed to
Borrower when Lender shall have received copies of any and all final
certificates of occupancy or other certificates, licenses and permits
required for the ownership, occupancy and operation of the Property in
accordance with all Legal Requirements. Borrower hereby covenants to
diligently seek to obtain any such certificates, licenses and permits.
(viii) Upon failure on the part of Borrower promptly to commence the
Work or to proceed diligently and continuously to completion of the Work
(in either case, other than due to Force Majeure), which failure shall
continue after notice for thirty (30) days, Lender may apply any Insurance
Proceeds or Condemnation Proceeds it then or thereafter holds to the
payment of the Debt in accordance with the provisions of the Note;
provided, however, that Lender shall be entitled to apply at any time all
or any portion of the Insurance Proceeds or Condemnation Proceeds it then
holds to the extent necessary to cure any Event of Default.
(c) If Borrower (i) within ninety (90) days after the occurrence of any
damage to the Property or any portion thereof (or such shorter period as may be
required under any Major Space Lease) shall fail to submit to Lender for
approval plans and specifications (if required pursuant to Section 3.04(b)(ii)
hereof) for the Work (approved by the Architect and by all Governmental
Authorities whose approval is required), (ii) after any such plans and
specifications are approved by all Governmental Authorities, the Architect and
Lender, shall fail to promptly commence such Work (other than due to Force
Majeure) or (iii) shall fail to diligently prosecute such Work to completion
(other than due to Force Majeure), then, in addition to all other rights
available hereunder, at law or in equity, Lender, or any receiver of the
Property or any portion thereof, upon five (5) days' prior notice to Borrower
(except in the event of emergency in which case no notice shall be required),
may (but shall have no obligation to) perform or cause to be performed such
Work, and may take such other steps as it reasonably deems advisable. Borrower
hereby waives, for Borrower, any claim, other than for gross negligence or
willful misconduct, against Lender and any receiver arising out of any act or
omission of Lender or such receiver pursuant hereto, and Lender may apply all or
any portion of the Insurance Proceeds (without the need to fulfill any other
requirements of this Section 3.04) to reimburse Lender and such receiver, for
all costs not reimbursed to Lender or such receiver upon demand together with
interest thereon at the Default Rate from the date such amounts are advanced
until the same are paid to Lender or the receiver.
41
(d) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to collect and receive any Insurance Proceeds paid
with respect to any portion of the Property or the insurance policies required
to be maintained hereunder, and to endorse any checks, drafts or other
instruments representing any Insurance Proceeds whether payable by reason of
loss thereunder or otherwise.
Section 3.05. Compliance with Insurance Requirements. Borrower promptly
shall comply with, and shall cause the Property to comply with, all Insurance
Requirements, even if such compliance requires structural changes or
improvements or would result in interference with the use or enjoyment of the
Property or any portion thereof provided Borrower shall have a right to contest
in good faith and with diligence such Insurance Requirements provided (a) no
Default shall exist during such contest and such contest shall not subject the
Property or any portion thereof to any lien or affect the priority of the lien
of this Security Instrument, (b) failure to comply with such Insurance
Requirements will not subject Lender or any of its agents, employees, officers
or directors to any civil or criminal liability, (c) such contest will not cause
any reduction in insurance coverage, (d) such contest shall not affect the
ownership, use or occupancy of the Property, (e) the Property or any part
thereof or any interest therein shall not be in any danger of being sold,
forfeited or lost by reason of such contest by Xxxxxxxx, (f) Borrower has given
Lender prompt notice of such contest and, upon request by Xxxxxx from time to
time, notice of the status of such contest by Xxxxxxxx and/or information of the
continuing satisfaction of the conditions set forth in clauses (a) through (e)
of this Section 3.05, (g) upon a final determination of such contest, Borrower
shall promptly comply with the requirements thereof, and (h) prior to and during
such contest, Borrower shall furnish to Lender security satisfactory to Lender,
in its reasonable discretion, against loss or injury by reason of such contest
or the non-compliance with such Insurance Requirement (and if such security is
cash, Lender shall deposit the same in an interest-bearing account and interest
accrued thereon, if any, shall be deemed to constitute a part of such security
for purposes of this Security Instrument, but Lender (i) makes no representation
or warranty as to the rate or amount of interest, if any, which may accrue
thereon and shall have no liability in connection therewith and (ii) shall not
be deemed to be a trustee or fiduciary with respect to its receipt of any such
security and any such security may be commingled with other monies of Lender).
If Borrower shall use the Property or any portion thereof in any manner which
could permit the insurer to cancel any insurance required to be provided
hereunder, Xxxxxxxx immediately shall obtain a substitute policy which shall
satisfy the requirements of this Security Instrument and which shall be
effective on or prior to the date on which any such other insurance policy shall
be canceled. Borrower shall not by any action or omission invalidate any
insurance policy required to be carried hereunder unless such policy is replaced
as aforesaid, or materially increase the premiums on any such policy above the
normal premium charged for such policy. Borrower shall cooperate with Xxxxxx in
obtaining for Lender the benefits of any Insurance Proceeds lawfully or
equitably payable to Lender in connection with the transaction contemplated
hereby.
Section 3.06. Event of Default During Restoration. Notwithstanding
anything to the contrary contained in this Security Instrument including,
without limitation, the provisions of this Article III, if, at the time of any
casualty affecting the Property or any part thereof, or at any time during any
Work, or at any time that Lender is holding or is entitled to receive any
Insurance Proceeds pursuant to this Security Instrument, a Default exists and is
continuing (whether or not it constitutes an Event of Default), Lender shall
then have no obligation to make such proceeds available for Work and Lender
shall have the right and option, to be exercised in its sole and absolute
discretion and election, with respect to the Insurance Proceeds, either to
retain and apply such proceeds in reimbursement for the actual costs, fees and
expenses incurred by Lender in accordance with the terms hereof in connection
with the adjustment of the loss and any balance toward payment of the Debt in
such priority and proportions as Lender, in its sole discretion, shall deem
proper, or towards the Work, upon such terms and conditions as Lender shall
determine, or to cure any Event of Default, or to any one or more of the
foregoing as Lender, in its sole and absolute discretion, may determine. If
Lender shall receive and retain such Insurance Proceeds, the lien of this
Security Instrument shall be reduced only by the amount thereof received, after
reimbursement to Lender of expenses of collection, and actually applied by
Lender in reduction of the principal sum payable under the Note in accordance
with the Note.
Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to
the Property, or any part thereof, by fire or other casualty whatsoever, whether
such damage be partial or total, shall relieve Borrower from its liability to
pay in full the Debt and to perform its obligations under this Security
Instrument and the other Loan Documents.
42
(b) If any Insurance Proceeds are applied to reduce the Debt, Lender shall
apply the same in accordance with the provisions of the Note.
ARTICLE IV: IMPOSITIONS
Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a)
Borrower shall pay or cause to be paid all Impositions at least five (5) days
prior to the date upon which any fine, penalty, interest or cost for nonpayment
is imposed, and furnish to Lender receipted bills of the appropriate taxing
authority or other documentation reasonably satisfactory to Lender evidencing
the payment thereof. If Borrower shall fail to pay any Imposition in accordance
with this Section and is not contesting or causing a contesting of such
Imposition in accordance with Section 4.04 hereof, or if there are insufficient
funds in the Basic Carrying Costs Sub-Account to pay any Imposition, Lender
shall have the right, but shall not be obligated, to pay that Imposition, and
Borrower shall repay to Lender, on demand, any amount paid by Lender, with
interest thereon at the Default Rate from the date of the advance thereof to the
date of repayment, and such amount shall constitute a portion of the Debt
secured by this Security Instrument and the other Cross-collateralized
Mortgages.
(b) Borrower shall, prior to the date upon which any fine, penalty,
interest or cost for the nonpayment is imposed, pay or cause to be paid all
charges for electricity, power, gas, water and other services and utilities in
connection with the Property, and shall, upon request, deliver to Lender
receipts or other documentation reasonably satisfactory to Lender evidencing
payment thereof. If Borrower shall fail to pay any amount required to be paid by
Borrower pursuant to this Section 4.01 and is not contesting such charges in
accordance with Section 4.04 hereof, Lender shall have the right, but shall not
be obligated, to pay that amount, and Borrower will repay to Lender, on demand,
any amount paid by Lender with interest thereon at the Default Rate from the
date of the advance thereof to the date of repayment, and such amount shall
constitute a portion of the Debt secured by this Security Instrument and the
other Cross-collateralized Mortgages.
(c) Borrower shall pay all taxes, charges, filing, registration and
recording fees, excises and levies imposed upon Lender by reason of or in
connection with its ownership of any Loan Document or any other instrument
related thereto, or resulting from the execution, delivery and recording of, or
the lien created by, or the obligation evidenced by, any of them, other than
income, franchise and other similar taxes imposed on Lender and shall pay all
corporate stamp taxes, if any, and other taxes, required to be paid on the Loan
Documents. If Borrower shall fail to make any such payment within ten (10) days
after written notice thereof from Lender, Lender shall have the right, but shall
not be obligated, to pay the amount due, and Xxxxxxxx shall reimburse Lender
therefor, on demand, with interest thereon at the Default Rate from the date of
the advance thereof to the date of repayment, and such amount shall constitute a
portion of the Debt secured by this Security Instrument and the other
Cross-collateralized Mortgages.
Section 4.02. Deduction from Value. In the event of the passage after the
date of this Security Instrument of any Legal Requirement deducting from the
value of the Property for the purpose of taxation, any lien thereon or changing
in any way the Legal Requirements now in force for the taxation of this Security
Instrument, the other Cross-collateralized Mortgages and/or the Debt for
federal, state or local purposes, or the manner of the operation of any such
taxes so as to adversely affect the interest of Lender, or imposing any tax or
other charge on any Loan Document, then Borrower will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the
event the payment of such tax or interest and penalties by Xxxxxxxx would be
unlawful, or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then in any such event, Lender shall have the option, by
written notice of not less than ninety (90) days, to declare the Debt
immediately due and payable, with no prepayment fee or charge of any kind.
Section 4.03. No Joint Assessment. Borrower shall not consent to or
initiate the joint assessment of the Premises or the Improvements (a) with any
other real property constituting a separate tax lot and Borrower represents and
covenants that the Premises and the Improvements are and shall remain a separate
tax lot or (b) with any portion of the Property which may be deemed to
constitute personal property, or any other procedure whereby
43
the lien of any taxes which may be levied against such personal property shall
be assessed or levied or charged to the Property as a single lien.
Section 4.04. Right to Contest. Borrower shall have the right, after prior
notice to Lender, at its sole expense, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender or any of its agents, employees, officers or directors, the validity,
amount or application of any Imposition or any charge described in Section
4.01(b), provided that (a) no Default or Event of Default shall exist during
such proceedings and such contest shall not (unless Borrower shall comply with
clause (d) of this Section 4.04) subject the Property or any portion thereof to
any lien or affect the priority of the lien of this Security Instrument, (b)
failure to pay such Imposition or charge will not subject Lender or any of its
agents, employees, officers or directors to any civil or criminal liability, (c)
the contest suspends enforcement of the Imposition or charge (unless Borrower
first pays the Imposition or charge), (d) prior to and during such contest,
Borrower shall furnish to Lender security satisfactory to Lender, in its
reasonable discretion, against loss or injury by reason of such contest or the
non-payment of such Imposition or charge (and if such security is cash, Lender
may deposit the same in an interest-bearing account and interest accrued
thereon, if any, shall be deemed to constitute a part of such security for
purposes of this Security Instrument, but Lender (i) makes no representation or
warranty as to the rate or amount of interest, if any, which may accrue thereon
and shall have no liability in connection therewith and (ii) shall not be deemed
to be a trustee or fiduciary with respect to its receipt of any such security
and any such security may be commingled with other monies of Lender), (e) such
contest shall not affect the ownership, use or occupancy of the Property, (f)
the Property or any part thereof or any interest therein shall not be in any
danger of being sold, forfeited or lost by reason of such contest by Xxxxxxxx,
(g) Borrower has given Lender notice of the commencement of such contest and
upon request by Xxxxxx, from time to time, notice of the status of such contest
by Xxxxxxxx and/or confirmation of the continuing satisfaction of clauses (a)
through (f) of this Section 4.04, and (h) upon a final determination of such
contest, Borrower shall promptly comply with the requirements thereof. Upon
completion of any contest, Borrower shall immediately pay the amount due, if
any, and deliver to Lender proof of the completion of the contest and payment of
the amount due, if any, following which Lender shall return the security, if
any, deposited with Lender pursuant to clause (d) of this Section 4.04. Borrower
shall not pay any Imposition in installments unless permitted by applicable
Legal Requirements, and shall, upon the request of Lender, deliver copies of all
notices and bills relating to any Imposition or other charge covered by this
Article IV to Lender.
Section 4.05. No Credits on Account of the Debt. Borrower will not claim
or demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Property or any part thereof and no
deduction shall otherwise be made or claimed from the taxable value of the
Property, or any part thereof, by reason of this Security Instrument or the
Debt. In the event such claim, credit or deduction shall be required by Legal
Requirements, Lender shall have the option, by written notice of not less than
ninety (90) days, to declare the Debt immediately due and payable, and Xxxxxxxx
hereby agrees to pay such amounts not later than ninety (90) days after such
notice.
Section 4.06. Documentary Stamps. If, at any time, the United States of
America, any State or Commonwealth thereof or any subdivision of any such State
shall require revenue or other stamps to be affixed to the Note, this Security
Instrument or any other Loan Document, or impose any other tax or charges on the
same, Borrower will pay the same, with interest and penalties thereon, if any.
ARTICLE V: CENTRAL CASH MANAGEMENT
Section 5.01. Cash Flow. Borrower hereby acknowledges and agrees that the
Rent (which for the purposes of this Section 5.01 shall not include security
deposits from tenants under Leases held by Borrower and not applied towards
Rent) derived from the Property and Loss Proceeds shall be utilized (a) to fund
the Basic Carrying Costs Sub-Account, (b) to pay all amounts to become due and
payable under the Note by funding the Debt Service Payment Sub-Account, (c) to
fund the Recurring Replacement Reserve Sub-Account, (d)to fund the Operation and
Maintenance Expense Sub-Account and (e) to fund the Mez Payment Sub-Account.
Borrower shall cause Manager to collect all security deposits from tenants under
valid Leases, which shall be held by Manager, as agent for Borrower, in
accordance with applicable law, and unless otherwise agreed to in writing by
Xxxxxx, in a segregated demand deposit bank account at such commercial or
savings bank or banks as may be reasonably satisfactory to
44
Xxxxxx (the "Security Deposit Account"). Borrower shall notify Lender of any
security deposits held as letters of credit and, upon Xxxxxx's request, such
letters of credit shall be promptly delivered to Lender. Borrower shall have no
right to withdraw funds from the Security Deposit Account; provided that, prior
to the occurrence of an Event of Default, Borrower may withdraw funds from the
Security Deposit Account to refund or apply security deposits as required by the
Leases or by applicable Legal Requirements. After the occurrence of an Event of
Default, all withdrawals from the Security Deposit Account must be approved by
Xxxxxx. Manager shall collect all Rent and shall deposit such funds within one
(1) Business Day after receipt thereof in the Rent Account, the name and address
of the bank in which such account is located and the account number of which to
be identified in writing by Manager to Lender. Borrower shall, or shall cause
the Manager to, cause the Rent Account Bank to enter into a lockbox agreement in
form and substance reasonably acceptable to Lender (the "Rent Account
Agreement"). Pursuant to the Rent Account Agreement, the bank in which the Rent
Account is located (the "Rent Account Bank") has been instructed that (a) prior
to receipt of notice from Lender (a "Sweep Notice") that a Trigger Event has
occurred, all funds deposited in the Rent Account shall be transferred to the
Borrower Account not less often than one time per week, and (b) from and after
the receipt of a Sweep Notice from Lender, all funds deposited in the Rent
Account shall be automatically transferred through automatic clearing house
funds or by Federal wire to the Central Account prior to 1:00 p.m. (New York
City time) on each Business Day until receipt by such bank of notice from Lender
revoking the Sweep Notice. Lender shall provide the Rent Account Bank with
revocation of the Sweep Notice promptly upon the cure of each Trigger Event.
Lender may elect to change the financial institution in which the Central
Account shall be maintained; however, Lender shall give Borrower and the Rent
Account Bank not fewer than five (5) Business Days' prior notice of such change.
Neither Borrower nor Manager shall change the Rent Account Bank or the Rent
Account without the prior written consent of Lender. All fees and charges of the
bank(s) in which the Rent Account and the Central Account is located shall be
paid by Borrower. Borrower grants to Lender an irrevocable power of attorney
coupled with an interest for the purpose of executing any Lockbox Agreement in
the event Borrower fails to deliver any executed Lockbox Agreement to Lender.
Section 5.02. Establishment of Sub-Accounts. Xxxxxx has established the
Central Account in the name of Xxxxxx, as secured party and Xxxxxxxx has
established the Rent Account in the joint names of Xxxxxxxx and Lender. The Rent
Account and the Central Account shall be under the sole dominion and control of
Lender. From and after the occurrence of a Trigger Event, the Rent Account shall
be under the control of Lender pursuant to Section 5.01 hereof and Borrower
shall have no right of withdrawal from the Rent Account. Borrower hereby
irrevocably directs and authorizes Lender to withdraw funds from the Central
Account, all in accordance with the terms and conditions of this Security
Instrument. Borrower shall have no right of withdrawal in respect of the Central
Account or the Rent Account except as specifically provided herein. Each
transfer of funds to be made hereunder shall be made only to the extent that
funds are on deposit in the Central Account or the affected Sub-Account, and
Lender shall have no responsibility to make additional funds available in the
event that funds on deposit are insufficient. The Central Account shall contain
the Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the
Recurring Replacement Reserve Sub-Account, the Operation and Maintenance Expense
Sub-Account and the Mez Payment Sub-Account, each of which accounts shall be
Eligible Accounts (each a "Sub-Account" and collectively, the "Sub-Accounts") to
which certain funds shall be allocated and from which disbursements shall be
made pursuant to the terms of this Security Instrument. In addition, on the date
hereof the Central Account shall also contain a Sub-Account entitled the
"Engineering Escrow Sub-Account" which initially shall be funded with the
Initial Engineering Deposit (representing sums applicable to certain engineering
work as set forth on EXHIBIT D, attached hereto and made a part hereof
(collectively, "Required Engineering Work")). Disbursements from the Engineering
Escrow Sub-Account shall be made in accordance with Section 5.12 hereof.
Section 5.03. Intentionally Omitted.
Section 5.04. Intentionally Omitted.
Section 5.05. Monthly Funding of Sub-Accounts. On or before each Payment
Date during the term of the Loan, commencing on the first (1st) Payment Date
occurring after the month in which the Loan is initially funded, Borrower shall
pay, or cause to be paid by Federal wire or automatic clearing house funds to
the Central Account, the Basic Carrying Costs Monthly Installment, the Required
Debt Service Payment, the Recurring Replacement Reserve Monthly Installment, the
Mez Payment Amount and all sums required to be deposited into the
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Operation and Maintenance Expense Sub-Account pursuant to clauses (a) through
(g) of this Section 5.05 and all funds transferred or deposited into the Central
Account shall be allocated among the Sub-Accounts as follows and in the
following priority:
(a) first, to the Basic Carrying Costs Sub-Account, until an amount equal
to the Basic Carrying Costs Monthly Installment for such Interest Accrual Period
has been allocated to the Basic Carrying Costs Sub-Account;
(b) second, to the Debt Service Payment Sub-Account, until an amount equal
to the Required Debt Service Payment for the Payment Date occurring for such
Interest Accrual Period has been allocated to the Debt Service Payment
Sub-Account;
(c) third, to the Recurring Replacement Reserve Sub-Account, until an
amount equal to the Recurring Replacement Reserve Monthly Installment for such
Interest Accrual Period has been allocated to the Recurring Replacement Reserve
Sub-Account;
(d) fourth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the Cash Expenses, other
than management fees payable to Affiliates of Borrower, for such Interest
Accrual Period pursuant to the related Approved Annual Budget;
(e) fifth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Net Capital Expenditures for such Interest Accrual Period pursuant to the
related Approved Annual Budget;
(f) sixth, but only if a Trigger Event has occurred, to the Operation and
Maintenance Expense Sub-Account in an amount equal to the amount, if any, of the
Extraordinary Expenses approved by Lender for such Interest Accrual Period; and
(g) seventh, but only if an Event of Default is not then continuing, to
the Mez Payment Sub-Account until an amount equal to the Mez Payment Amount has
been allocated to the Mez Payment Sub-Account.
Lender shall notify Borrower as soon as reasonably practicable after the
amounts set forth in clauses (a) through (g) above have been transferred or
deposited into the Central Account and allocated as aforesaid to the extent such
deposits are fully made prior to the Payment Date in such Interest Accrual
Period. Provided that (I) no Event of Default has occurred and is continuing and
(II) Lender has received the Manager's Certification referred to in Section
2.09(d) hereof for the most recent period for which the same is due, Lender
agrees that in each Interest Accrual Period any amounts deposited into or
remaining in the Central Account after the Sub-Accounts have been funded in
accordance with clauses (a) through (g) above with respect to such Interest
Accrual Period and any periods prior thereto, shall be disbursed by Lender to
Borrower on the Payment Date in such Interest Accrual Period. The balance of the
funds distributed to, or withdrawn by, Borrower after payment of all Operating
Expenses by or on behalf of Borrower may be retained by Xxxxxxxx. After the
occurrence, and during the continuance, of an Event of Default, no funds held in
the Central Account or the Rent Account shall be distributed to, or withdrawn
by, Borrower, and Lender shall have the right to apply all or any portion of the
funds held in either or both of such accounts and any Sub-Account to the Debt in
Xxxxxx's sole discretion.
Section 5.06. Payment of Basic Carrying Costs. Borrower hereby agrees to
pay all Basic Carrying Costs (without regard to the amount of money in the Basic
Carrying Costs Sub-Account). Should an Event of Default occur, the sums on
deposit in the Basic Carrying Costs Sub-Account may be applied by Lender in
payment of any Basic Carrying Costs or may be applied to the payment of the Debt
or any other charges affecting all or any portion of the Cross-collateralized
Properties as Lender in its sole discretion may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.
46
Section 5.07. Debt Service Payment Sub-Account. On each Payment Date
during the term of the Loan, Lender shall transfer to the Collection Account,
from the Debt Service Payment Sub-Account, an amount equal to the sum of (a) the
Required Debt Service Payment for such Payment Date and (b) any amounts
deposited into the Central Account that are either (i) Loss Proceeds that Lender
has elected to apply to reduce the Debt in accordance with the terms of Article
III hereof or (ii) excess Loss Proceeds remaining after the completion of any
restoration required hereunder.
Section 5.08. Recurring Replacement Reserve Sub-Account. Borrower hereby
agrees to pay all Recurring Replacement Expenditures with respect to the
Property (without regard to the amount of money then available in the Recurring
Replacement Reserve Sub-Account). Should an Event of Default occur, the sums on
deposit in the Recurring Replacement Reserve Sub-Account may be applied by
Lender in payment of any Recurring Replacement Expenditures or may be applied to
the payment of the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
Section 5.09. Operation and Maintenance Expense Sub-Account. Borrower
hereby agrees to pay all Operating Expenses with respect to the Property
(without regard to the amount of money then available in the Operation and
Maintenance Expense Sub-Account). All funds allocated to the Operation and
Maintenance Expense Sub-Account shall be held by Lender pursuant to the
provisions of this Security Instrument. Any sums held in the Operation and
Maintenance Expense Sub-Account shall be disbursed to Borrower within five (5)
Business Days of receipt by Xxxxxx from Borrower of (a) a written request for
such disbursement which shall indicate the Operating Expenses (exclusive of
Basic Carrying Costs and any management fees payable to Borrower, or to any
Affiliate of Borrower) for which the requested disbursement is to pay and (b) an
Officer's Certificate stating that no Operating Expenses with respect to the
Property are more than sixty (60) days past due; provided, however, in the event
that Borrower legitimately disputes any invoice for an Operating Expense, and
(i) no Event of Default has occurred and is continuing hereunder, (ii) Borrower
shall have set aside adequate reserves for the payment of such disputed sums
together with all interest and late fees thereon, (iii) Borrower has complied
with all the requirements of this Security Instrument relating thereto, and (iv)
the contesting of such sums shall not constitute a default under any other
instrument, agreement, or document to which Borrower is a party, then Borrower
may, after certifying to Lender as to items (i) through (iv) hereof, contest
such invoice. Borrower may request a disbursement from the Operation and
Maintenance Expense Sub-Account no more than one (1) time per calendar month.
Should an Event of Default occur and be continuing, the sums on deposit in the
Operation and Maintenance Expense Sub-Account may be applied by Lender in
payment of any Operating Expenses for the Property or may be applied to the
payment of the Debt or other charges affecting all or any portion of the
Property as Lender, in its sole discretion, may determine; provided, however,
that no such application shall be deemed to have been made by operation of law
or otherwise until actually made by Lender as herein provided.
Section 5.10. Intentionally Omitted.
Section 5.11. Intentionally Omitted.
Section 5.12. Performance of Engineering Work. (a) Borrower shall promptly
commence and diligently thereafter pursue to completion (without regard to the
amount of money then available in the Engineering Escrow Sub-Account) the
Required Engineering Work within the timetable set forth on EXHIBIT D hereof or
such longer period of time, if any, to which Lender has agreed in writing, which
period may, provided that Borrower is attempting to complete the Required
Engineering Work with all due diligence, be extended in the event of a Force
Majeure for whatever period of time the Force Majeure prevented Xxxxxxxx from
completing the Required Engineering Work, such extension period not to exceed an
additional three (3) months. After Borrower completes an item of Required
Engineering Work, Borrower may submit to Lender an invoice therefor with lien
waivers and an Officer's Certificate or, with respect to items which
individually or in the aggregate exceed $10,000, a statement from the Engineer,
in each case reasonably acceptable to Lender, indicating that the portion of the
Required Engineering Work in question has been completed in a workmanlike manner
and in compliance with all Legal
47
Requirements, and Lender shall, within twenty (20) days thereafter, although in
no event more frequently than once each month, reimburse such amount to Borrower
from the Engineering Escrow Sub-Account; provided, however, that Xxxxxxxx shall
not be reimbursed more than the amount set forth on EXHIBIT D hereto as the
amount allocated to the portion of the Required Engineering Work for which
reimbursement is sought.
(b) From and after the date all of the Required Engineering Work is
completed, Borrower may submit a written request, which request shall be
delivered together with final lien waivers and a statement from the Engineer, as
the case may be, reasonably acceptable to Lender, indicating that all of the
Required Engineering Work has been completed in compliance with all Legal
Requirements, and Lender shall, within twenty (20) days thereafter, disburse any
balance of the Engineering Escrow Sub-Account to Borrower. Should an Event of
Default occur, the sums on deposit in the Engineering Escrow Sub-Account may be
applied by Lender in payment of any Required Engineering Work or may be applied
to the payment of the Debt or any other charges affecting all or any portion of
the Cross-collateralized Properties, as Lender in its sole discretion may
determine; provided, however, that no such application shall be deemed to have
been made by operation of law or otherwise until actually made by Lender as
herein provided.
Section 5.13. Loss Proceeds. In the event of a casualty to the Property,
unless Lender elects, or is required pursuant to Article III hereof to make all
of the Insurance Proceeds available to Borrower for restoration, Lender and
Borrower shall cause all such Insurance Proceeds to be paid by the insurer
directly to the Central Account, whereupon Lender shall, after deducting
Lender's costs of recovering and paying out such Insurance Proceeds, including
without limitation, reasonable attorneys' fees, apply same to reduce the Debt in
accordance with the terms of the Note; provided, however, that if Lender elects,
or is deemed to have elected, to make the Insurance Proceeds available for
restoration, all Insurance Proceeds in respect of rent loss, business
interruption or similar coverage shall be maintained in the Central Account, to
be applied by Lender in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Insurance Proceeds with respect to such rent loss, business interruption or
similar insurance policy are paid in a lump sum in advance, Lender shall hold
such Insurance Proceeds in a segregated interest-bearing escrow account, which
shall be an Eligible Account, shall estimate, in Lender's reasonable discretion,
the number of months required for Borrower to restore the damage caused by the
casualty, shall divide the aggregate rent loss, business interruption or similar
Insurance Proceeds by such number of months, and shall disburse from such bank
account into the Central Account each month during the performance of such
restoration such monthly installment of said Insurance Proceeds. In the event
that Insurance Proceeds are to be applied toward restoration, Lender shall hold
such funds in a segregated bank account at the Bank, which shall be an Eligible
Account, and shall disburse same in accordance with the provisions of Section
3.04 hereof. Unless Lender elects, or is required pursuant to Section 6.01
hereof to make all of the Condemnation Proceeds available to Borrower for
restoration, Lender and Borrower shall cause all such Condemnation Proceeds to
be paid to the Central Account, whereupon Lender shall, after deducting Lender's
costs of recovering and paying out such Condemnation Proceeds, including without
limitation, reasonable attorneys' fees, apply same, by transferring such amounts
to the Collection Account, to reduce the Debt in accordance with the terms of
the Note; provided, however, that any Condemnation Proceeds received in
connection with a temporary Taking shall be maintained in the Central Account,
to be applied by Xxxxxx in the same manner as Rent received with respect to the
operation of the Property; provided, further, however, that in the event that
the Condemnation Proceeds of any such temporary Taking are paid in a lump sum in
advance, Lender shall hold such Condemnation Proceeds in a segregated
interest-bearing bank account, which shall be an Eligible Account, shall
estimate, in Lender's reasonable discretion, the number of months that the
Property shall be affected by such temporary Taking, shall divide the aggregate
Condemnation Proceeds in connection with such temporary Taking by such number of
months, and shall disburse from such bank account into the Central Account each
month during the pendency of such temporary Taking such monthly installment of
said Condemnation Proceeds. In the event that Condemnation Proceeds are to be
applied toward restoration, Lender shall hold such funds in a segregated bank
account at the Bank, which shall be an Eligible Account, and shall disburse same
in accordance with the provisions of Section 3.04 hereof. If any Loss Proceeds
are received by Borrower, such Loss Proceeds shall be received in trust for
Lender, shall be segregated from other funds of Borrower, and shall be forthwith
paid into the Central Account, or paid to Lender to hold in a segregated bank
account at the Bank, in each case to be applied or disbursed in accordance with
the foregoing. Any Loss Proceeds made available to Borrower for restoration in
accordance herewith, to the extent not used by Borrower in connection with, or
to the extent they exceed the cost of, such restoration, shall be
48
deposited into the Central Account, whereupon Lender shall apply the same to
reduce the Debt in accordance with the terms of the Note.
Section 5.14. Mez Payment Sub-Account. Provided that no Event of Default
has occurred and is continuing, on each Payment Date during which the Mez Loan
is outstanding, Lender shall transfer to the holder of the Mez Loan, as
identified in writing by a joint direction executed by Xxxxxxxx and the holder
of the Mez Loan, an amount equal to the Mez Payment Amount. Should an Event of
Default occur, the sums on deposit in the Mez Payment Sub-Account may be applied
by Lender to the payment of the Debt or any other charges affecting all or any
portion of the Property, as Lender in its sole discretion may determine;
provided, however, that no such application shall be deemed to have been made by
operation of law or otherwise until actually made by Lender as herein provided.
The holder of the Mez Loan shall be deemed a third party beneficiary for
purposes of enforcing its right to receive payments of the Mez Payment Amount
pursuant to the provisions of this Section 5.14, except that Borrower (and not
Lender) shall be responsible for any deficiencies in such amount.
ARTICLE VI: CONDEMNATION
Section 6.01. Condemnation. (a) Borrower shall notify Lender
promptly of the commencement or threat of any Taking of the Property or any
portion thereof. Lender is hereby irrevocably appointed as Xxxxxxxx's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain the proceeds of any such Taking and to make any compromise or
settlement in connection with such proceedings (subject to Borrower's reasonable
approval, except after the occurrence of an Event of Default, in which event
Borrower's approval shall not be required), subject to the provisions of this
Security Instrument; provided, however, that Borrower may participate in any
such proceedings and shall be authorized and entitled to compromise or settle
any such proceeding with respect to Condemnation Proceeds in an amount less than
five percent (5%) of the Allocated Loan Amount. Borrower shall execute and
deliver to Lender any and all instruments reasonably required in connection with
any such proceeding promptly after request therefor by Xxxxxx. Except as set
forth above, Xxxxxxxx shall not adjust, compromise, settle or enter into any
agreement with respect to such proceedings without the prior consent of Lender.
All Condemnation Proceeds are hereby assigned to and shall be paid to Lender to
be applied in accordance with the terms hereof. With respect to Condemnation
Proceeds in an amount in excess of five percent (5%) of the Allocated Loan
Amount, Borrower hereby authorizes Xxxxxx to compromise, settle, collect and
receive such Condemnation Proceeds, and to give proper receipts and acquittance
therefor. Subject to the provisions of this Article VI, Lender may apply such
Condemnation Proceeds (less any cost to Lender of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys' fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment of
the Debt or to allow such proceeds to be used for the Work.
(b) "Substantial Taking" shall mean (i) a Taking of such portion of the
Property that would, in Lender's reasonable discretion, leave remaining a
balance of the Property which would not under then current economic conditions,
applicable Development Laws and other applicable Legal Requirements, permit the
restoration of the Property so as to constitute a complete, rentable facility of
the same sort as existed prior to the Taking, having adequate ingress and egress
to the Property, capable of producing a projected Net Operating Income (as
reasonably determined by Lender) yielding a projected Debt Service Coverage
therefrom for the next two (2) years of not less than the Required Debt Service
Coverage, (ii) a Taking which occurs less than two (2) years prior to the
Maturity Date, (iii) a Taking which Lender is not reasonably satisfied could be
restored within twelve (12) months and at least six (6) months prior to the
Maturity Date or (iv) a Taking of more than fifteen percent (15%) of the
reasonably estimated fair market value of the Property.
(c) In the case of a Substantial Taking, Condemnation Proceeds shall be
payable to Lender in reduction of the Debt but without any prepayment fee or
charge of any kind and, if Borrower elects to apply any Condemnation Proceeds it
may receive pursuant to this Security Instrument to the payment of the Debt,
Borrower may prepay the balance of the Debt without any prepayment fee or charge
of any kind.
49
(d) In the event of a Taking which is less than a Substantial Taking,
Borrower at its sole cost and expense (whether or not the award shall have been
received or shall be sufficient for restoration) shall proceed diligently to
restore, or cause the restoration of, the remaining Improvements not so taken,
to maintain a complete, rentable, self-contained fully operational facility of
the same sort as existed prior to the Taking in as good a condition as is
reasonably possible. In the event of such a Taking, Xxxxxx shall receive the
Condemnation Proceeds and shall pay over the same:
(i) first, provided no Default shall have occurred and be
continuing, to Borrower to the extent of any portion of the award as may
be necessary to pay the reasonable cost of restoration of the Improvements
remaining, and
(ii) second, to Lender, in reduction of the Debt without any
prepayment premium or charge of any kind.
If one or more Takings in the aggregate create a Substantial Taking, then,
in such event, the sections of this Article VI above applicable to Substantial
Takings shall apply.
(e) In the event Lender is obligated to or elects to make Condemnation
Proceeds available for the restoration or rebuilding of the Property, such
proceeds shall be disbursed in the manner and subject to the conditions set
forth in Section 3.04(b) hereof. If, in accordance with this Article VI, any
Condemnation Proceeds are used to reduce the Debt, they shall be applied in
accordance with the provisions of the Note. Borrower shall promptly execute and
deliver all instruments requested by Xxxxxx for the purpose of confirming the
assignment of the Condemnation Proceeds to Lender. Application of all or any
part of the Condemnation Proceeds to the Debt shall be made in accordance with
the provisions of Sections 3.06 and 3.07 hereof. No application of the
Condemnation Proceeds to the reduction of the Debt shall have the effect of
releasing the lien of this Security Instrument until the remainder of the Debt
has been paid in full. In the case of any Taking, Xxxxxx, to the extent that
Xxxxxx has not been reimbursed by Xxxxxxxx, shall be entitled, as a first
priority out of any Condemnation Proceeds, to reimbursement for all costs, fees
and expenses reasonably incurred in the determination and collection of any
Condemnation Proceeds. All Condemnation Proceeds deposited with Lender pursuant
to this Section, until expended or applied as provided herein, shall be held in
accordance with Section 3.04(b) hereof and shall constitute additional security
for the payment of the Debt and the payment and performance of Borrower's
obligations, but Lender shall not be deemed a trustee or other fiduciary with
respect to its receipt of such Condemnation Proceeds or any part thereof. All
awards so deposited with Lender shall be held by Lender in an Eligible Account,
but Lender makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection therewith. For purposes hereof, any reference to the
award shall be deemed to include interest, if any, which has accrued thereon.
ARTICLE VII: LEASES AND RENTS
Section 7.01. Assignment. (a) Borrower does hereby bargain, sell, assign
and set over unto Lender, all of Borrower's interest in the Leases and Rents.
The assignment of Leases and Rents in this Section 7.01 is an absolute,
unconditional and present assignment from Borrower to Lender and not an
assignment for security and the existence or exercise of Xxxxxxxx's revocable
license to collect Rent shall not operate to subordinate this assignment to any
subsequent assignment. The exercise by Lender of any of its rights or remedies
pursuant to this Section 7.01 shall not be deemed to make Lender a
mortgagee-in-possession. In addition to the provisions of this Article VII,
Borrower shall comply with all terms, provisions and conditions of the
Assignment.
(b) So long as there shall exist and be continuing no Event of Default,
Borrower shall have a revocable license to take all actions with respect to all
Leases and Rents, present and future, including the right to collect and use the
Rents, subject to the terms of this Security Instrument and the Assignment.
(c) In a separate instrument Borrower shall, as requested from time to
time by Xxxxxx, assign to Lender or its nominee by specific or general
assignment, any and all Leases, such assignments to be in form and content
reasonably acceptable to Lender, but subject to the provisions of Section
7.01(b) hereof. Xxxxxxxx agrees to
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deliver to Lender, within thirty (30) days after Xxxxxx's request, a true and
complete copy of every Major Space Lease and during the continuance of any
Default, all other Leases and, within ten (10) days after Xxxxxx's request, a
complete list of the Leases, certified by Borrower to be true, accurate and
complete and stating the demised premises, the names of the lessees, the Rent
payable under the Leases, the date to which such Rents have been paid, the
material terms of the Leases, including, without limitation, the dates of
occupancy, the dates of expiration, any Rent concessions, work obligations or
other inducements granted to the lessees thereunder, and any renewal options.
(d) The rights of Lender contained in this Article VII, the Assignment
or any other assignment of any Lease shall not result in any obligation or
liability of Lender to Borrower or any lessee under a Lease or any party
claiming through any such lessee.
(e) At any time after an Event of Default, the license granted
hereinabove may be revoked by Xxxxxx, and Lender or a receiver appointed in
accordance with this Security Instrument may enter upon the Property, and
collect, retain and apply the Rents toward payment of the Debt in such priority
and proportions as Lender in its sole discretion shall deem proper.
(f) In addition to the rights which Lender may have herein, upon the
occurrence of any Event of Default, Lender, at its option, may require Borrower
to pay monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Property as may be used and occupied by Borrower and may require
Borrower to vacate and surrender possession of the Property to Lender or to such
receiver and, in default thereof, Borrower may be evicted by summary proceedings
or otherwise.
Section 7.02. Management of Property. (a) Borrower shall manage the
Property or cause the Property to be managed in a manner which is consistent
with the Approved Manager Standard. All Space Leases shall provide for rental
rates comparable to then existing local market rates and terms and conditions
which constitute good and prudent business practice and are consistent with
prevailing market terms and conditions, and shall be arms-length transactions.
All Leases shall be on a form previously approved by Lender and shall provide
that they are subordinate to this Security Instrument and that the lessees
thereunder attorn to Lender; provided, however, that the foregoing shall not
apply to month-to-month agreements entered into with respect to the use of
mini-storage facilities by Borrower in the ordinary course of business and on
Borrower's standard form agreement. Borrower shall deliver copies of all Major
Space Leases, amendments, modifications and renewals thereof to Lender. All
proposed Major Space Leases for the Property shall be subject to the prior
written approval of Lender, provided, however that Borrower may enter into new
commercial leases with unrelated third parties without obtaining the prior
consent of Lender provided that: (i) the proposed tenant is unrelated to a
tenant under an existing Lease; (ii) the proposed leases conform with the
requirements of this Section 7.02; (iii) the space to be leased pursuant to such
proposed lease does not exceed 5,000 square feet; and (iv) the term of the
proposed lease inclusive of all extensions and renewals, does not exceed five
(5) years.
(b) Borrower (i) shall observe and perform all of its material
obligations under the Leases pursuant to applicable Legal Requirements and shall
not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall promptly send copies to Lender of all notices
of default which Borrower shall receive under the Leases; (iii) shall,
consistent with the Approved Manager Standard, enforce all of the terms,
covenants and conditions contained in the Leases to be observed or performed;
(iv) shall not collect more than five percent (5%) of monthly Rent under the
Leases more than one (1) month in advance (except that Borrower may collect in
advance such security deposits as are permitted pursuant to applicable Legal
Requirements and are commercially reasonable in the prevailing market); (v)
shall not execute any other assignment of lessor's interest in the Leases or the
Rents except as otherwise expressly permitted pursuant to this Security
Instrument; (vi) shall not cancel or terminate any of the Leases or accept a
surrender thereof in any manner inconsistent with the Approved Manager Standard;
(vii) shall not convey, transfer or suffer or permit a conveyance or transfer of
all or any part of the Premises or the Improvements or of any interest therein
so as to effect a merger of the estates and rights of, or a termination or
diminution of the obligations of, lessees thereunder; (viii) shall not alter,
modify or change the terms of any guaranty of any Major Space Lease or cancel or
terminate any such guaranty; (ix) shall, in accordance with the Approved Manager
Standard, make all reasonable efforts to seek lessees for space as it becomes
vacant and enter into Leases
51
in accordance with the terms hereof; (x) shall not materially modify, alter or
amend any Major Space Lease or Property Agreement without Lender's consent,
which consent will not be unreasonably withheld or delayed; (xi) shall notify
Lender promptly if any Pad Owner shall cease business operations or of the
occurrence of any event of which it becomes aware affecting a Pad Owner or its
property which might have any material effect on the Property; and (xii) shall,
without limitation to any other provision hereof, execute and deliver at the
request of Lender all such further assurances, confirmations and assignments in
connection with the Property as are required herein and as Lender shall from
time to time reasonably require.
(c) All security deposits of lessees, whether held in cash or any other
form, shall be treated by Borrower as trust funds and shall be held in
compliance with all Legal Requirements. Any bond or other instrument which
Borrower is permitted to hold in lieu of cash security deposits under applicable
Legal Requirements shall be maintained in full force and effect unless replaced
by cash deposits as hereinabove described, shall be issued by a Person
reasonably satisfactory to Lender, shall, if permitted pursuant to Legal
Requirements, at Lender's option, name Lender as payee or mortgagee thereunder
or be fully assignable to Lender and shall, in all respects, comply with
applicable Legal Requirements and otherwise be reasonably satisfactory to
Lender. Borrower shall, upon request, provide Lender with evidence reasonably
satisfactory to Lender of Borrower's compliance with the foregoing. Following
the occurrence and during the continuance of any Event of Default, Borrower
shall, upon Xxxxxx's request, if permitted by applicable Legal Requirements,
turn over the security deposits (and any interest thereon) to Lender to be held
by Lender in accordance with the terms of the Leases and all Legal Requirements.
(d) Xxxxxx shall, upon request of Borrower, enter into a subordination,
nondisturbance and attornment agreement ("SNDA") with respect to each proposed
tenant entering into a Lease in compliance with the requirements of this
Security Instrument; provided, that such Lease is (i) for at least 5,000 square
feet of space of the Premises, (ii) with a tenant reasonably approved by Xxxxxx
in writing prior to Borrower's execution of any such Lease and (iii) on the
standard form of Lease previously approved in writing by Xxxxxx. Any SNDA
executed by Xxxxxx shall be on Xxxxxx's then standard form and provide that in
the event Lender or any purchaser at foreclosure shall succeed to Xxxxxxxx's
interest in the Property, the Leases of such tenants will remain in full force
and effect and be binding upon Lender or such purchaser and such tenant as
though each were original parties thereto.
(e) Borrower covenants and agrees with Lender that (i) the Property will
be managed at all times by Borrower or Manager pursuant to a management
agreement to be approved by Xxxxxx (the "Management Agreement"), (ii) after
Borrower has knowledge of a fifty percent (50%) or more change in control of the
ownership of Manager, Borrower will promptly give Lender notice thereof (a
"Manager Control Notice") and (iii) the Management Agreement may be terminated
by Lender at any time for cause (including, but not limited to, Manager's gross
negligence, misappropriation of funds, willful misconduct or fraud) or at any
time following (A) the occurrence of an Event of Default, or (B) the receipt of
a Manager Control Notice or (C) the date upon which the trailing twelve (12)
month Aggregate Debt Service Coverage is equal to or less than 1.10:1.00, and a
substitute managing agent shall be appointed by Xxxxxxxx, subject to Xxxxxx's
prior written approval, which may be given or withheld in Xxxxxx's sole
discretion and which may be conditioned on, inter alia, a letter from the Rating
Agency confirming that any rating issued by the Rating Agency in connection with
a Securitization will not, as a result of the proposed change of Manager, be
downgraded from the then current ratings thereof, qualified or withdrawn.
Borrower may from time to time appoint a successor manager to manage the
Property with Xxxxxx's prior written consent which consent shall not be
unreasonably withheld or delayed, provided that any such successor manager shall
be a reputable management company which meets the Approved Manager Standard and
each Rating Agency shall have confirmed in writing that any rating issued by the
Rating Agency in connection with a Securitization will not, as a result of the
proposed change of Manager, be downgraded from the then current ratings thereof,
qualified or withdrawn. Borrower further covenants and agrees that Borrower
shall require Manager (or any successor managers) to maintain at all times
during the term of the Loan worker's compensation insurance as required by
Governmental Authorities. Xxxxxx acknowledges that, as of the Closing Date, the
Property is self-managed by Xxxxxxxx.
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ARTICLE VIII: MAINTENANCE AND REPAIR
Section 8.01. Maintenance and Repair of the Property; Alterations;
Replacement of Equipment. Borrower hereby covenants and agrees:
(a) Borrower shall not (i) desert or abandon the Property, (ii) change
the use of the Property or cause or permit the use or occupancy of any part of
the Property to be discontinued if such discontinuance or use change would
violate any zoning or other law, ordinance or regulation; (iii) consent to or
seek any lowering of the zoning classification, or greater zoning restriction
affecting the Property; or (iv) take any steps whatsoever to convert the
Property, or any portion thereof, to a condominium or cooperative form of
ownership.
(b) Borrower shall, at its expense, (i) take good care of the Property
including grounds generally, and utility systems and sidewalks, roads, alleys,
and curbs therein, and shall keep the same in good, safe and insurable condition
and in compliance with all applicable Legal Requirements, (ii) promptly make all
repairs to the Property, above grade and below grade, interior and exterior,
structural and nonstructural, ordinary and extraordinary, unforeseen and
foreseen, and maintain the Property in a manner appropriate for the facility and
(iii) not commit or suffer to be committed any waste of the Property or do or
suffer to be done anything which will increase the risk of fire or other hazard
to the Property or impair the value thereof. Borrower shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Property, clean and
free from dirt, snow, ice, rubbish and obstructions. All repairs made by
Borrower shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or Pad Owners or other Persons under Property Agreements, Borrower
may fulfill its obligations hereunder by causing such tenants, Pad Owners or
other Persons, as the case may be, to perform their obligations thereunder. As
used herein, the terms "repair" and "repairs" shall be deemed to include all
necessary replacements.
(c) Borrower shall not demolish, remove, construct, or, except as
otherwise expressly provided herein, restore, or alter the Property or any
portion thereof; nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration which would diminish the value
of the Property without Lender's prior written consent in each instance, which
consent shall not be unreasonably withheld or delayed; provided, however,
Borrower may make structural or exterior alterations to the Improvements or
interior alterations of a non-structural type without Lender's prior written
consent provided that (i) the aggregate cost of such alterations does not exceed
$100,000.00 or (ii) in the event that such alterations are required due to an
emergency situation and Borrower determines, in its commercially reasonable
discretion and subject to the Approved Manager Standard that obtaining such
consent from Lender is not practical under the circumstances (provided, however
that Borrower shall use its best efforts to provide notice to Lender of such
alterations within five (5) Business Days of such emergency condition commencing
at the Property).
(d) Borrower represents and warrants to Lender that (i) there are no
fixtures, machinery, apparatus, tools, equipment or articles of personal
property attached or appurtenant to, or located on, or used in connection with
the management, operation or maintenance of the Property, except for the
Equipment and Fixtures, equipment leased by Borrower for the management,
operation or maintenance of the Property in accordance with the Loan Documents
and the U-Haul rental fleet of trucks, vans and wagons; (ii) the Equipment and
the leased equipment constitute all of the fixtures, machinery, apparatus,
tools, equipment and articles of personal property necessary to the proper
operation and maintenance of the Property; and (iii) all of the Equipment is
free and clear of all liens, except for the lien of this Security Instrument and
the Permitted Encumbrances. All right, title and interest of Borrower in and to
all extensions, improvements, betterments, renewals and appurtenances to the
Property hereafter acquired by, or released to, Borrower or constructed,
assembled or placed by Borrower in the Property, and all changes and
substitutions of the security constituted thereby, shall be and, in each such
case, without any further mortgage, encumbrance, conveyance, assignment or other
act by Lender or Borrower, shall become subject to the lien and security
interest of this Security Instrument as fully and completely, and with the same
effect, as though now owned by Xxxxxxxx and specifically described in this
Security Instrument, but at any and all times Borrower shall execute and deliver
to Lender any documents Lender may reasonably deem necessary or appropriate for
the purpose of specifically subjecting the same to the lien and security
interest of this Security Instrument.
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(e) Notwithstanding the provisions of this Security Instrument to the
contrary, Borrower shall have the right, at any time and from time to time, to
remove and dispose of Equipment which may have become obsolete or unfit for use
or which is no longer useful in the management, operation or maintenance of the
Property. Borrower shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Borrower shall not be required to replace the
same. All such replacements or additional equipment shall be deemed to
constitute "Equipment" and shall be covered by the security interest herein
granted.
ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE PROPERTY
Section 9.01. Other Encumbrances. Borrower shall not further encumber or
permit the further encumbrance in any manner (whether by grant of a pledge,
security interest or otherwise) of the Property or any part thereof or interest
therein, including, without limitation, of the Rents therefrom (other than
purchase money financing of equipment in the ordinary course of business
provided that such purchase money financing complies with the provisions of
Section 2.02(g)(viii) hereof); provided, however, notwithstanding anything
contained in this Security Instrument, Lender hereby consents to the Mez Loan
and the pledge of a direct or indirect interest in Borrower in connection
therewith. In addition, Borrower shall not further encumber and shall not permit
the further encumbrance in any manner (whether by grant of a pledge, security
interest or otherwise) of Borrower or any direct or indirect interest in
Borrower except as expressly permitted pursuant to this Security Instrument.
Section 9.02. No Transfer. Borrower acknowledges that Xxxxxx has examined
and relied on the expertise of Xxxxxxxx and, if applicable, each General
Partner, in owning and operating properties such as the Property in agreeing to
make the Loan and will continue to rely on Xxxxxxxx's ownership of the Property
as a means of maintaining the value of the Property as security for repayment of
the Debt and Borrower acknowledges that Xxxxxx has a valid interest in
maintaining the value of the Property. Borrower shall not Transfer, nor permit
any Transfer, without the prior written consent of Lender, which consent Lender
may withhold in its sole and absolute discretion. Lender shall not be required
to demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable upon
a Transfer without Xxxxxx's consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer.
Section 9.03. Due on Sale. Lender may declare the Debt immediately due and
payable upon any Transfer or further encumbrance without Xxxxxx's consent
without regard to whether any impairment of its security or any increased risk
of default hereunder can be demonstrated. This provision shall apply to every
Transfer or further encumbrance of the Property or any part thereof or interest
in the Property or in Borrower regardless of whether voluntary or not, or
whether or not Lender has consented to any previous Transfer or further
encumbrance of the Property or interest in Borrower.
Section 9.04. Permitted Transfer. Notwithstanding the foregoing provisions
of this Article IX, subsequent to the first (1st) anniversary of the Closing
Date, a one time sale, conveyance or transfer of the Cross-collateralized
Properties in their entirety (hereinafter, "Sale") shall be permitted hereunder,
provided that each of the following terms and conditions are satisfied:
(a) no Default is then continuing hereunder or under any of the other
Loan Documents;
(b) Lender shall have consented to the Sale, which consent shall not be
unreasonably withheld or delayed, and, if the proposed Sale is to occur at any
time after a Securitization, each Rating Agency shall have delivered written
confirmation that any rating issued by such Rating Agency in connection with the
Securitization will not, as a result of the proposed Sale, be downgraded from
the then current ratings thereof, qualified or withdrawn; provided, however,
that no request for consent to the Sale will be entertained by Xxxxxx if the
proposed Sale is to occur within sixty (60) days of any contemplated sale of the
Loan by Xxxxxx, whether in connection with a Securitization or otherwise;
54
(c) Borrower gives Lender written notice of the terms of the proposed
Sale not less than sixty (60) days before the date on which such Sale is
scheduled to close and, concurrently therewith, gives Lender (i) all such
information concerning the proposed transferee of the Property (hereinafter,
"Buyer") as Lender would require in evaluating an initial extension of credit to
a borrower and Lender determines, in its sole discretion that the Buyer is
acceptable to Lender in all respects and (ii) a non-refundable application fee
equal to $7,500;
(d) Borrower pays Lender, concurrently with the closing of such Sale, a
non-refundable assumption fee in an amount equal to one percent (1%) of the then
outstanding Loan Amount together with all out-of-pocket costs and expenses,
including, without limitation, reasonable attorneys' fees, incurred by Lender in
connection with the Sale;
(e) Buyer assumes all of the obligations under the Loan Documents and,
prior to or concurrently with the closing of such Sale, Buyer executes, without
any cost or expense to Lender, such documents and agreements as Lender shall
reasonably require to evidence and effectuate said assumption and delivers such
legal opinions as Lender may reasonably require;
(f) Borrower and Buyer execute, without any cost or expense to Lender,
new financing statements or financing statement amendments and any additional
documents reasonably requested by Xxxxxx;
(g) Borrower delivers to Lender, without any cost or expense to Lender,
such endorsements to Lender's title insurance policy, hazard insurance policy
endorsements or certificates and other similar materials as Lender may deem
necessary at the time of the Sale, all in form and substance reasonably
satisfactory to Lender, including, without limitation, an endorsement or
endorsements to Lender's title insurance policy insuring the lien of this
Security Instrument, extending the effective date of such policy to the date of
execution and delivery (or, if later, of recording) of the assumption agreement
referenced above in subparagraph (e) of this Section, with no additional
exceptions added to such policy, and insuring that fee simple title to the
Property is vested in Buyer;
(h) Borrower executes and delivers to Lender, without any cost or
expense to Lender, a release of Lender, its officers, directors, employees and
agents, from all claims and liability relating to the transactions evidenced by
the Loan Documents, through and including the date of the closing of the Sale,
which agreement shall be in form and substance reasonably satisfactory to Lender
and shall be binding upon Buyer;
(i) subject to the provisions of Section 18.32 hereof, such Sale is not
construed so as to relieve Borrower of any personal liability under the Note or
any of the other Loan Documents for any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Sale, and Borrower
executes, without any cost or expense to Lender, such documents and agreements
as Lender shall reasonably require to evidence and effectuate the ratification
of said personal liability;
(j) such Sale is not construed so as to relieve any Guarantor of its
obligations under any guaranty or indemnity agreement executed in connection
with the Loan and each such Guarantor executes, without any cost or expense to
Lender, such documents and agreements as Lender shall reasonably require to
evidence and effectuate the ratification of each such guaranty agreement,
provided that if Buyer or a party associated with Buyer approved by Lender in
its sole discretion assumes the obligations of the current Guarantor under its
guaranty and Buyer or such party associated with Buyer, as applicable, executes,
without any cost or expense to Lender, a new guaranty in similar form and
substance to the existing guaranty and otherwise satisfactory to Lender, then
Lender shall release the current Guarantor from all obligations arising under
its guaranty after the closing of such Sale; and
(k) Buyer is a Single Purpose Entity and Xxxxxx receives a
non-consolidation opinion relating to Xxxxx from Buyer's counsel, which opinion
is in form and substance acceptable to Lender.
ARTICLE X: CERTIFICATES
Section 10.01. Estoppel Certificates. (a) After request by Xxxxxx,
Borrower, within fifteen (15) days and at its expense, will furnish Lender with
a statement, duly acknowledged and certified, setting forth (i) the
55
amount of the original principal amount of the Note, and the unpaid principal
amount of the Note, (ii) the rate of interest of the Note, (iii) the date
payments of interest and/or principal were last paid, (iv) any offsets or
defenses to the payment of the Debt, and if any are alleged, the nature thereof,
(v) that the Note and this Security Instrument have not been modified or if
modified, giving particulars of such modification and (vi) that there has
occurred and is then continuing no Default or if such Default exists, the nature
thereof, the period of time it has existed, and the action being taken to remedy
such Default.
(b) Within fifteen (15) days after written request by Xxxxxxxx, Lender
shall furnish to Borrower a written statement confirming the amount of the Debt,
the maturity date of the Note and the date to which interest has been paid.
(c) Borrower shall use all reasonable efforts to obtain estoppel
certificates from tenants that may be required hereunder or under the other Loan
Documents.
ARTICLE XI: NOTICES
Section 11.01. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and delivered personally or sent to the party
to whom the notice, demand or request is being made by Federal Express or other
nationally recognized overnight delivery service, as follows and shall be deemed
given when delivered personally or one (1) Business Day after being deposited
with Federal Express or such other nationally recognized delivery service:
If to Lender: To Lender, at the address first written above,
with a copy to:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxx
Xxxxxxxxx: No.: (000) 000-0000
and:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
If to Borrower: To Borrower, at the address first written above,
with a copy to:
U-Haul International, Inc.
Legal Department
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
or such other address as either Borrower or Lender shall hereafter specify by
not less than ten (10) days prior written notice as provided herein; provided,
however, that notwithstanding any provision of this Article to the contrary,
such notice of change of address shall be deemed given only upon actual receipt
thereof. Rejection or other refusal to accept or the inability to deliver
because of changed addresses of which no notice was given as herein required
shall be deemed to be receipt of the notice, demand, statement, request or
consent.
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ARTICLE XII: INDEMNIFICATION
Section 12.01. Indemnification Covering Property. In addition, and without
limitation, to any other provision of this Security Instrument or any other Loan
Document, Borrower shall protect, indemnify and save harmless Lender and its
successors and assigns, and each of their agents, employees, officers,
directors, stockholders, partners and members (collectively, "Indemnified
Parties") for, from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, known or unknown, contingent or otherwise, whether incurred or imposed
within or outside the judicial process, including, without limitation,
reasonable attorneys' fees and disbursements imposed upon or incurred by or
asserted against any of the Indemnified Parties by reason of (a) ownership of
this Security Instrument, the Assignment, the Property or any part thereof or
any interest therein or receipt of any Rents; (b) any accident, injury to or
death of any person or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Property or any part thereof or on the adjoining sidewalks, curbs, parking
areas, streets or ways; (d) any failure on the part of Borrower to perform or
comply with any of the terms of this Security Instrument or the Assignment; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Property or any part thereof; (f) any claim by
brokers, finders or similar Persons claiming to be entitled to a commission in
connection with any Lease or other transaction involving the Property or any
part thereof; (g) any Imposition including, without limitation, any Imposition
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien or claim arising on or
against the Property or any part thereof under any Legal Requirement or any
liability asserted against any of the Indemnified Parties with respect thereto;
(i) any claim arising out of or in any way relating to any tax or other
imposition on the making and/or recording of this Security Instrument, the Note
or any of the other Loan Documents; (j) a Default under Sections 2.02(f),
2.02(g), 2.02(k), 2.02(t) or 2.02(w) hereof, (k) the failure of any Person to
file timely with the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with the Loan, or to supply a
copy thereof in a timely fashion to the recipient of the proceeds of the Loan;
or (l) the claims of any lessee or any Person acting through or under any lessee
or otherwise arising under or as a consequence of any Lease. Notwithstanding the
foregoing provisions of this Section 12.01 to the contrary, Borrower shall have
no obligation to indemnify the Indemnified Parties pursuant to this Section
12.01 for liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses relative to the foregoing which result from Xxxxxx's,
and its successors' or assigns', willful misconduct or gross negligence. Any
amounts payable to Lender by reason of the application of this Section 12.01
shall constitute a part of the Debt secured by this Security Instrument and the
other Loan Documents and shall become immediately due and payable and shall bear
interest at the Default Rate from the date the liability, obligation, claim,
cost or expense is sustained by Xxxxxx, as applicable, until paid. The
provisions of this Section 12.01 shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or delivery of a deed
in lieu thereof, assignment or otherwise. In case any action, suit or proceeding
is brought against any of the Indemnified Parties by reason of any occurrence of
the type set forth in (a) through (l) above, Borrower shall, at Borrower's
expense, resist and defend such action, suit or proceeding or will cause the
same to be resisted and defended by counsel at Borrower's expense for the
insurer of the liability or by counsel designated by Borrower (unless reasonably
disapproved by Lender promptly after Xxxxxx has been notified of such counsel);
provided, however, that nothing herein shall compromise the right of Lender (or
any other Indemnified Party) to appoint its own counsel at Xxxxxxxx's expense
for its defense with respect to any action which, in the reasonable opinion of
Lender or such other Indemnified Party, as applicable, presents a conflict or
potential conflict between Lender or such other Indemnified Party that would
make such separate representation advisable. Any Indemnified Party will give
Borrower prompt notice after such Indemnified Party obtains actual knowledge of
any potential claim by such Indemnified Party for indemnification hereunder. The
Indemnified Parties shall not settle or compromise any action, proceeding or
claim as to which it is indemnified hereunder without notice to Xxxxxxxx. The
provisions of this Section 12.01 shall survive for a period of ten (10) years
after the termination of this Security Instrument, whether by repayment of the
Debt, foreclosure or delivery of a deed in lieu thereof, assignment or
otherwise. Notwithstanding the foregoing, the provisions of this Article XII are
not intended to modify or restrict the provisions of Section 18.32 hereof.
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ARTICLE XIII: DEFAULTS
Section 13.01. Events of Default. The Debt shall become immediately due at
the option of Lender upon any one or more of the following events ("Event of
Default"):
(a) if the final payment or prepayment premium, if any, due under the
Note shall not be paid on Maturity;
(b) if any monthly payment of interest and/or principal due under the
Note (other than the sums described in (a) above) shall not be fully paid within
five (5) days of the date upon which the same is due and payable thereunder;
(c) if payment of any sum (other than the sums described in (a) above or
(b) above) required to be paid pursuant to the Note, this Security Instrument or
any other Loan Document shall not be paid within five (5) days after Xxxxxx
delivers written notice to Borrower that same is due and payable thereunder or
hereunder;
(d) if Borrower, Guarantor or, if Borrower or Guarantor is a
partnership, any general partner of Borrower or Guarantor, or, if Borrower or
Guarantor is a limited liability company, any member of Borrower or Guarantor,
shall institute or cause to be instituted any proceeding for the termination or
dissolution of Borrower, Guarantor or any such general partner or member;
(e) if the insurance policies required hereunder are not kept in full
force and effect, or if the insurance policies are not assigned and delivered to
Lender as herein provided;
(f) if Borrower or Guarantor attempts to assign its rights under this
Security Instrument or any other Loan Document or any interest herein or
therein, or if any Transfer occurs other than in accordance with the provisions
hereof;
(g) if any representation or warranty of Borrower or Guarantor made
herein or in any other Loan Document or in any certificate, report, financial
statement or other instrument or agreement furnished to Lender shall prove false
or misleading in any material respect;
(h) if Borrower, Guarantor or any general partner of Borrower or
Guarantor shall make an assignment for the benefit of creditors or shall admit
in writing its inability to pay its debts generally as they become due;
(i) if a receiver, liquidator or trustee of Borrower, Guarantor or any
general partner of Borrower or Guarantor shall be appointed or if Borrower,
Guarantor or their respective general partners shall be adjudicated a bankrupt
or insolvent, or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state law, shall
be filed by or against, consented to, or acquiesced in, by Borrower, Guarantor
or their respective general partners or if any proceeding for the dissolution or
liquidation of Borrower, Guarantor or their respective general partners shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Xxxxxxxx, Guarantor or their respective
general partners, as applicable, upon the same not being discharged, stayed or
dismissed within sixty (60) days or if Borrower, Guarantor or their respective
general partners shall generally not be paying its debts as they become due;
(j) if Borrower shall be in default beyond any notice or grace period,
if any, under any other mortgage or deed of trust or security agreement covering
any part of the Property without regard to its priority relative to this
Security Instrument; provided, however, this provision shall not be deemed a
waiver of the provisions of Article IX prohibiting further encumbrances
affecting the Property or any other provision of this Security Instrument;
(k) if the Property becomes subject (i) to any lien which is superior to
the lien of this Security Instrument, other than a lien for real estate taxes
and assessments not due and payable, or (ii) to any mechanic's, materialman's or
other lien which is or is asserted to be superior to the lien of this Security
Instrument, and such lien
58
shall remain undischarged (by payment, bonding, or otherwise) for thirty (30)
days following service of notice thereof upon Borrower unless contested in
accordance with the terms hereof;
(l) if Borrower discontinues the operation of the Property or any part
thereof for reasons other than repair or restoration arising from a casualty or
condemnation for ten (10) days or more;
(m) except as permitted in this Security Instrument, any material
alteration, demolition or removal of any of the Improvements without the prior
consent of Lender;
(n) if Borrower consummates a transaction which would cause this
Security Instrument or Lender's rights under this Security Instrument, the Note
or any other Loan Document to constitute a non-exempt prohibited transaction
under ERISA or result in a violation of a state statute regulating government
plans subjecting Lender to liability for a violation of ERISA or a state
statute;
(o) if an Event of Default shall occur under any of the other
Cross-collateralized Mortgages or any default beyond applicable notice and grace
periods under any document executed by the Cross-collateralized Borrowers; or
(p) if a default under any of the other terms, covenants or conditions
of the Note, this Security Instrument or any other Loan Document, other than as
set forth in (a) through (o) above, for ten (10) days after notice from Lender
in the case of any default which can be cured by the payment of a sum of money,
or for thirty (30) days after notice from Lender in the case of any other
default or an additional thirty (30) days if Borrower is diligently and
continuously effectuating a cure of a curable non-monetary default, other than
as set forth in (a) through (o) above.
Section 13.02. Remedies. (a) Upon the occurrence and during the
continuance of any Event of Default, Lender may, in addition to any other rights
or remedies available to it hereunder or under any other Loan Document, at law
or in equity, take such action, without notice or demand, as it reasonably deems
advisable to protect and enforce its rights against Borrower or any one or more
of the Cross-collateralized Borrowers and in and to the Property or any one or
more of the Cross-collateralized Properties or any one or more of them,
including, but not limited to, the following actions, each of which may be
pursued singly, concurrently or otherwise, at such time and in such order as
Lender may determine, in its sole discretion, without impairing or otherwise
affecting any other rights and remedies of Lender hereunder, at law or in
equity: (i) declare all or any portion of the unpaid Debt to be immediately due
and payable; provided, however, that upon the occurrence of any of the events
specified in Section 13.01(i), the entire Debt will be immediately due and
payable without notice or demand or any other declaration of the amounts due and
payable; or (ii) bring an action to foreclose this Security Instrument and
without applying for a receiver for the Rents, but subject to the rights of the
tenants under the Leases, enter into or upon the Property or any part thereof,
either personally or by its agents, nominees or attorneys, and dispossess
Borrower and its agents and servants therefrom, and thereupon Lender may (A)
use, operate, manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the business thereat,
(B) make alterations, additions, renewals, replacements and improvements to or
on the Property or any part thereof, (C) exercise all rights and powers of
Borrower with respect to the Property or any part thereof, whether in the name
of Borrower or otherwise, including, without limitation, the right, subject to
the terms of the Leases, to make, cancel, enforce or modify Leases, obtain and
evict tenants, and demand, sue for, collect and receive all earnings, revenues,
rents, issues, profits and other income of the Property and every part thereof,
and (D) apply the receipts from the Property or any part thereof to the payment
of the Debt, after deducting therefrom all expenses (including, without
limitation, reasonable attorneys' fees and disbursements) reasonably incurred in
connection with the aforesaid operations and all amounts necessary to pay the
Impositions, insurance and other charges in connection with the Property or any
part thereof, as well as just and reasonable compensation for the services of
Xxxxxx's third-party agents; or (iii) have an appraisal or other valuation of
the Property or any part thereof performed by an Appraiser (and Borrower
covenants and agrees it shall cooperate in causing any such valuation or
appraisal to be performed) and any cost or expense incurred by Lender in
connection therewith shall constitute a portion of the Debt and be secured by
this Security Instrument and shall be immediately due and payable to Lender with
interest, at the Default Rate, until the date of receipt by Lender; or (iv) sell
the Property or institute proceedings for the complete foreclosure of this
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Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument in which case the Property or any part thereof may be sold for cash
or credit in one or more parcels; or (v) with or without entry, and to the
extent permitted and pursuant to the procedures provided by applicable Legal
Requirements, institute proceedings for the partial foreclosure of this
Security Instrument, or take such other action as may be allowed pursuant to
Legal Requirements, at law or in equity, for the enforcement of this Security
Instrument for the portion of the Debt then due and payable, subject to the lien
of this Security Instrument continuing unimpaired and without loss of priority
so as to secure the balance of the Debt not then due; or (vi) sell the Property
or any part thereof and any or all estate, claim, demand, right, title and
interest of Borrower therein and rights of redemption thereof, pursuant to power
of sale or otherwise, at one or more sales, in whole or in parcels, in any order
or manner, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law, at the discretion of Lender, and in the
event of a sale, by foreclosure or otherwise, of less than all of the Property,
this Security Instrument shall continue as a lien on the remaining portion of
the Property; or (vii) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained in the
Loan Documents, or any of them; or (viii) recover judgment on the Note or any
guaranty either before, during or after (or in lieu of) any proceedings for the
enforcement of this Security Instrument; or (ix) apply, ex parte, for the
appointment of a custodian, trustee, receiver, keeper, liquidator or conservator
of the Property or any part thereof, irrespective of the adequacy of the
security for the Debt and without regard to the solvency of Borrower or of any
Person liable for the payment of the Debt, to which appointment Borrower does
hereby consent and such receiver or other official shall have all rights and
powers permitted by applicable law and such other rights and powers as the court
making such appointment may confer, but the appointment of such receiver or
other official shall not impair or in any manner prejudice the rights of Lender
to receive the Rent with respect to any of the Property pursuant to this
Security Instrument or the Assignment; or (x) require, at Lender's option,
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of any portion of the Property occupied by Borrower and may require
Borrower to vacate and surrender possession to Lender of the Property or to such
receiver and Borrower may be evicted by summary proceedings or otherwise; or
(xi) without notice to Borrower (A) apply all or any portion of the cash
collateral in any Sub-Account, including any interest and/or earnings therein,
to carry out the obligations of Borrower under this Security Instrument and the
other Loan Documents, to protect and preserve the Property and for any other
purpose permitted under this Security Instrument and the other Loan Documents
and/or (B) have all or any portion of such cash collateral immediately paid to
Lender to be applied against the Debt in the order and priority set forth in the
Note; or (xii) pursue any or all such other rights or remedies as Lender may
have under applicable law or in equity; provided, however, that the provisions
of this Section 13.02(a) shall not be construed to extend or modify any of the
notice requirements or grace periods provided for hereunder or under any of the
other Loan Documents. Borrower hereby waives, to the fullest extent permitted by
Legal Requirements, any defense Borrower might otherwise raise or have by the
failure to make any tenants parties defendant to a foreclosure proceeding and to
foreclose their rights in any proceeding instituted by Xxxxxx.
(b) Any time after an Event of Default Lender shall have the power to
sell the Property or any part thereof at public auction, in such manner, at such
time and place, upon such terms and conditions, and upon such public notice as
Lender may deem best for the interest of Lender, or as may be required or
permitted by applicable law, consisting of advertisement in a newspaper of
general circulation in the jurisdiction and for such period as applicable law
may require and at such other times and by such other methods, if any, as may be
required by law to convey the Property in fee simple by Xxxxxx's deed with
special warranty of title to and at the cost of the purchaser, who shall not be
liable to see to the application of the purchase money. The proceeds or avails
of any sale made under or by virtue of this Section 13.02, together with any
other sums which then may be held by Lender under this Security Instrument,
whether under the provisions of this Section 13.02 or otherwise, shall be
applied as follows:
First: To the payment of the third-party costs and expenses reasonably
incurred in connection with any such sale and to advances, fees and
expenses, including, without limitation, reasonable fees and expenses of
Xxxxxx's legal counsel as applicable, and of any judicial proceedings
wherein the same may be made, and of all expenses, liabilities and
advances reasonably made or incurred by Lender under this Security
Instrument, together with interest as provided herein on all such advances
made by Xxxxxx, and all Impositions, except any Impositions or other
charges subject to which the Property shall have been sold;
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Second: To the payment of the whole amount then due, owing and unpaid
under the Note for principal and interest thereon, with interest on such
unpaid principal at the Default Rate from the date of the occurrence of
the earliest Event of Default that formed a basis for such sale until the
same is paid;
Third: To the payment of any other portion of the Debt required to be paid
by Borrower pursuant to any provision of this Security Instrument, the
Note, or any of the other Loan Documents; and
Fourth: The surplus, if any, to Borrower unless otherwise required by
Legal Requirements.
Lender and any receiver or custodian of the Property or any part thereof shall
be liable to account for only those rents, issues, proceeds and profits actually
received by it.
(c) Lender may adjourn from time to time any sale by it to be made under
or by virtue of this Security Instrument by announcement at the time and place
appointed for such sale or for such adjourned sale or sales and, except as
otherwise provided by any applicable provision of Legal Requirements, Lender
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales made by Lender under or by
virtue of this Section 13.02 or the other provisions of this Security
Instrument, Lender, or any officer of any court empowered to do so, shall
execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, granting, conveying,
assigning and transferring all estate, right, title and interest in and to the
property and rights sold. Lender is hereby irrevocably appointed the true and
lawful attorney-in-fact of Xxxxxxxx (coupled with an interest), in its name and
stead, to make all necessary conveyances, assignments, transfers and deliveries
of the property and rights so sold and for that purpose Lender may execute all
necessary instruments of conveyance, assignment, transfer and delivery, and may
substitute one or more Persons with like power, Borrower hereby ratifying and
confirming all that its said attorney-in-fact or such substitute or substitutes
shall lawfully do by virtue hereof. Nevertheless, Borrower, if so requested by
Lender, shall ratify and confirm any such sale or sales by executing and
delivering to Lender, or to such purchaser or purchasers all such instruments as
may be advisable, in the sole judgement of Lender, for such purpose, and as may
be designated in such request. Any such sale or sales made under or by virtue of
this Section 13.02, whether made under the power of sale herein granted or under
or by virtue of judicial proceedings or a judgment or decree of foreclosure and
sale, shall operate to divest all the estate, right, title, interest, claim and
demand whatsoever, whether at law or in equity, of Borrower in and to the
property and rights so sold, and shall, to the fullest extent permitted under
Legal Requirements, be a perpetual bar, both at law and in equity against
Xxxxxxxx and against any and all Persons claiming or who may claim the same, or
any part thereof, from, through or under Borrower.
(e) In the event of any sale made under or by virtue of this Section
13.02 (whether made under the power of sale herein granted or under or by virtue
of judicial proceedings or a judgment or decree of foreclosure and sale), the
entire Debt immediately thereupon shall, anything in the Loan Documents to the
contrary notwithstanding, become due and payable.
(f) Upon any sale made under or by virtue of this Section 13.02 (whether
made under the power of sale herein granted or under or by virtue of judicial
proceedings or a judgment or decree of foreclosure and sale), Lender may bid for
and acquire the Property or any part thereof and in lieu of paying cash therefor
may make settlement for the purchase price by crediting upon the Debt the net
sales price after deducting therefrom the expenses of the sale and the costs of
the action.
(g) No recovery of any judgment by Xxxxxx and no levy of an execution
under any judgment upon the Property or any part thereof or upon any other
property of Borrower shall release the lien of this Security Instrument upon the
Property or any part thereof, or any liens, rights, powers or remedies of Lender
hereunder, but such liens, rights, powers and remedies of Lender shall continue
unimpaired until all amounts due under the Note, this Security Instrument and
the other Loan Documents are paid in full.
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(h) Upon the exercise by Lender of any power, right, privilege, or
remedy pursuant to this Security Instrument which requires any consent,
approval, registration, qualification, or authorization of any Governmental
Authority, Borrower agrees to execute and deliver, or will cause the execution
and delivery of, all applications, certificates, instruments, assignments and
other documents and papers that Lender or any purchaser of the Property may be
required to obtain for such governmental consent, approval, registration,
qualification, or authorization and Lender is hereby irrevocably appointed the
true and lawful attorney-in-fact of Xxxxxxxx (coupled with an interest), in its
name and stead, to execute all such applications, certificates, instruments,
assignments and other documents and papers.
Section 13.03. Payment of Debt After Default. If, following the occurrence
of any Event of Default, Borrower shall tender payment of an amount sufficient
to satisfy the Debt in whole or in part at any time prior to a foreclosure sale
of the Property, and if at the time of such tender prepayment of the principal
balance of the Note is not permitted by the Note or this Security Instrument,
Borrower shall also pay to Lender a sum equal to (a) the entire principal
balance of the Note, all accrued interest thereon and all other fees, charges
and sums due and payable hereunder, (b) all costs and expenses in connection
with the enforcement of Lender's rights hereunder, and (c) a prepayment charge
(the "Prepayment Charge") equal to the greater of (i) 1% of the principal
balance of the Note and (ii) the amount, which when added to the Principal
Amount, will be sufficient to purchase the Federal Obligations necessary to meet
the Scheduled Defeasance Payments assuming defeasance would be permitted under
Article 15 of this Security Instrument. Failure of Lender to require any of
these payments shall not constitute a waiver of the right to require the same in
the event of any subsequent default or to exercise any other remedy available to
Lender hereunder, under any other Loan Document or at law or in equity. If at
the time of such tender, prepayment of the principal balance of the Note is
permitted, such tender by Borrower shall be deemed to be a voluntary prepayment
of the principal balance of the Note, and Borrower shall, in addition to the
entire Debt, also pay to Lender the applicable prepayment consideration
specified in the Note and this Security Instrument.
Section 13.04. Possession of the Property. Upon the occurrence of any
Event of Default and the acceleration of the Debt or any portion thereof,
Borrower, if an occupant of the Property or any part thereof, upon demand of
Lender, shall immediately surrender possession of the Property (or the portion
thereof so occupied) to Lender, and if Borrower is permitted to remain in
possession, the possession shall be as a month-to-month tenant of Lender and, on
demand, Borrower shall pay to Lender monthly, in advance, a reasonable rental
for the space so occupied and in default thereof Borrower may be dispossessed.
The covenants herein contained may be enforced by a receiver of the Property or
any part thereof. Nothing in this Section 13.04 shall be deemed to be a waiver
of the provisions of this Security Instrument making the Transfer of the
Property or any part thereof without Xxxxxx's prior written consent an Event of
Default.
Section 13.05. Interest After Default. If any amount due under the Note,
this Security Instrument or any of the other Loan Documents is not paid within
any applicable notice and grace period after same is due, whether such date is
the stated due date, any accelerated due date or any other date or at any other
time specified under any of the terms hereof or thereof, then, in such event,
Borrower shall pay interest on the amount not so paid from and after the date on
which such amount first becomes due at the Default Rate; and such interest shall
be due and payable at such rate until the earlier of the cure of all Events of
Default or the payment of the entire amount due to Lender, whether or not any
action shall have been taken or proceeding commenced to recover the same or to
foreclose this Security Instrument. All unpaid and accrued interest shall be
secured by this Security Instrument as part of the Debt. Nothing in this Section
13.05 or in any other provision of this Security Instrument shall constitute an
extension of the time for payment of the Debt.
Section 13.06. Xxxxxxxx's Actions After Default. After the happening of
any Event of Default and immediately upon the commencement of any action, suit
or other legal proceedings by Xxxxxx to obtain judgment for the Debt, or of any
other nature in aid of the enforcement of the Loan Documents, Borrower will (a)
after receipt of notice of the institution of any such action, waive the
issuance and service of process and enter its voluntary appearance in such
action, suit or proceeding, and (b) if required by Lender, consent to the
appointment of a receiver or receivers of the Property or any part thereof and
of all the earnings, revenues, rents, issues, profits and income thereof.
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Section 13.07. Control by Lender After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Borrower, or of
any of its property, or of the Property or any part thereof, to the extent
permitted by Legal Requirements, Lender shall be entitled to obtain possession
and control of all property now and hereafter covered by this Security
Instrument and the Assignment in accordance with the terms hereof.
Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any
Event of Default, Lender or its agents may, but without any obligation to do so
and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent
as Lender may deem necessary to protect the security hereof. Lender and its
agents are authorized to enter upon the Property or any part thereof for such
purposes, or appear in, defend, or bring any action or proceedings to protect
Xxxxxx's interest in the Property or any part thereof or to foreclose this
Security Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this Section 13.08, shall constitute a portion of the
Debt and shall be immediately due and payable to Lender upon demand. All such
costs and expenses incurred by Lender or its agents in remedying such Event of
Default or in appearing in, defending, or bringing any such action or proceeding
shall bear interest at the Default Rate, for the period from the date so
demanded to the date of payment to Lender. All such costs and expenses incurred
by Lender or its agents together with interest thereon calculated at the above
rate shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument.
(b) If Lender makes any payment or advance that Lender is authorized by
this Security Instrument to make in the place and stead of Borrower (i) relating
to the Impositions or tax liens asserted against the Property, Lender may do so
according to any bill, statement or estimate procured from the appropriate
public office without inquiry into the accuracy of the bill, statement or
estimate or into the validity of any of the Impositions or the tax liens or
claims thereof; (ii) relating to any apparent or threatened adverse title, lien,
claim of lien, encumbrance, claim or charge, Lender will be the sole judge of
the legality or validity of same; or (iii) relating to any other purpose
authorized by this Security Instrument but not enumerated in this Section 13.08,
Lender may do so whenever, in its judgment and discretion, the payment or
advance seems necessary or desirable to protect the Property and the full
security interest intended to be created by this Security Instrument. In
connection with any payment or advance made pursuant to this Section 13.08,
Lender has the option and is authorized, but in no event shall be obligated, to
obtain a continuation report of title prepared by a title insurance company. The
payments and the advances made by Xxxxxx pursuant to this Section 13.08 and the
cost and expenses of said title report will be due and payable by Xxxxxxxx on
demand, together with interest at the Default Rate, and will be secured by this
Security Instrument.
Section 13.09. Late Payment Charge. If any portion of the Debt is not paid
in full on or before the fifth (5th) day after the date on which it is due and
payable hereunder, Borrower shall pay to Lender an amount equal to five percent
(5%) of such unpaid portion of the Debt ("Late Charge") to defray the expense
incurred by Lender in handling and processing such delinquent payment, and such
amount shall constitute a part of the Debt.
Section 13.10. Recovery of Sums Required to Be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Lender thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by
Borrower existing at the time such earlier action was commenced.
Section 13.11. Marshalling and Other Matters. Borrower hereby waives, to
the fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshalling in the
event of any sale hereunder of the Property or any part thereof or any interest
therein. Nothing herein or in any other Loan Document shall be construed as
requiring Lender to resort to any particular Cross-collateralized Property for
the satisfaction of the Debt in preference or priority to any other
Cross-collateralized Property but Lender may seek satisfaction out of all the
Cross-collateralized Properties or any part thereof in its absolute discretion.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, whether equitable or statutory and on behalf of each and
every Person acquiring
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any interest in or title to the Property or any part thereof subsequent to the
date of this Security Instrument and on behalf of all Persons to the fullest
extent permitted by applicable law.
Section 13.12. Tax Reduction Proceedings. After an Event of Default,
Borrower shall be deemed to have appointed Xxxxxx as its attorney-in-fact to
seek a reduction or reductions in the assessed valuation of the Property for
real property tax purposes or for any other purpose and to prosecute any action
or proceeding in connection therewith. This power, being coupled with an
interest, shall be irrevocable for so long as any part of the Debt remains
unpaid and any Event of Default shall be continuing.
Section 13.13. General Provisions Regarding Remedies.
(a) Right to Terminate Proceedings. Lender may terminate or rescind any
proceeding or other action brought in connection with its exercise of the
remedies provided in Section 13.02 at any time before the conclusion thereof, as
determined in Xxxxxx's sole discretion and without prejudice to Lender.
(b) No Waiver or Release. The failure of Lender to exercise any right,
remedy or option provided in the Loan Documents shall not be deemed a waiver of
such right, remedy or option or of any covenant or obligation contained in the
Loan Documents. No acceptance by Lender of any payment after the occurrence of
an Event of Default and no payment by Lender of any payment or obligation for
which Borrower is liable hereunder shall be deemed to waive or cure any Event of
Default. No sale of all or any portion of the Property, no forbearance on the
part of Lender, and no extension of time for the payment of the whole or any
portion of the Debt or any other indulgence given by Lender to Borrower or any
other Person, shall operate to release or in any manner affect the interest of
Lender in the Property or the liability of Borrower to pay the Debt. No waiver
by Xxxxxx shall be effective unless it is in writing and then only to the extent
specifically stated.
(c) No Impairment; No Releases. The interests and rights of Lender under
the Loan Documents shall not be impaired by any indulgence, including (i) any
renewal, extension or modification which Lender may grant with respect to any of
the Debt; (ii) any surrender, compromise, release, renewal, extension, exchange
or substitution which Lender may grant with respect to the Property or any
portion thereof; or (iii) any release or indulgence granted to any maker,
endorser, guarantor or surety of any of the Debt.
(d) Effect on Judgment. No recovery of any judgment by Xxxxxx and no
levy of an execution under any judgment upon any Property or any portion thereof
shall affect in any manner or to any extent the lien of the other
Cross-collateralized Mortgages upon the remaining Cross-collateralized
Properties or any portion thereof, or any rights, powers or remedies of Lender
hereunder or thereunder. Such lien, rights, powers and remedies of Lender shall
continue unimpaired as before.
ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS
Section 14.01. Compliance with Legal Requirements. (a) Borrower shall
promptly comply with all present and future Legal Requirements, foreseen and
unforeseen, ordinary and extraordinary, whether requiring structural or
nonstructural repairs or alterations including, without limitation, all zoning,
subdivision, building, safety and environmental protection, land use and
development Legal Requirements, all Legal Requirements which may be applicable
to the curbs adjoining the Property or to the use or manner of use thereof, and
all rent control, rent stabilization and all other similar Legal Requirements
relating to rents charged and/or collected in connection with the Leases.
Borrower represents and warrants that (i) except as previously disclosed to
Lender in the zoning report delivered to Lender in connection with the
origination of the Loan, the Property is in compliance in all material respects
with all Legal Requirements as of the date hereof, no notes or notices of
violations of any Legal Requirements have been entered or received by Borrower
and there is no basis for the entering of such notes or notices and (ii) any
violations of Legal Requirements with respect to the Property will not result in
a Material Adverse Effect, be a threat to the health and safety of any Person or
impair Xxxxxxxx's ability to collect any Rent.
(b) Borrower shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Lender, the validity or application of any Legal Requirement and to suspend
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compliance therewith if permitted under applicable Legal Requirements, provided
(i) failure to comply therewith may not subject Lender to any civil or criminal
liability, (ii) prior to and during such contest, Borrower shall furnish to
Lender security reasonably satisfactory to Lender, in its discretion, against
loss or injury by reason of such contest or non-compliance with such Legal
Requirement, (iii) no Default or Event of Default shall exist during such
proceedings and such contest shall not otherwise violate any of the provisions
of any of the Loan Documents, (iv) such contest shall not, (unless Borrower
shall comply with the provisions of clause (ii) of this Section 14.01(b))
subject the Property to any lien or encumbrance the enforcement of which is not
suspended or otherwise affect the priority of the lien of this Security
Instrument; (v) such contest shall not affect the ownership, use or occupancy of
the Property; (vi) the Property or any part thereof or any interest therein
shall not be in any danger of being sold, forfeited or lost by reason of such
contest by Xxxxxxxx; (vii) Borrower shall give Lender prompt notice of the
commencement of such proceedings and, upon request by Xxxxxx, notice of the
status of such proceedings and/or confirmation of the continuing satisfaction of
the conditions set forth in clauses (i) - (vi) of this Section 14.01(b); and
(viii) upon a final determination of such proceeding, Borrower shall take all
steps necessary to comply with any requirements arising therefrom.
(c) Borrower shall at all times comply with all applicable Legal
Requirements with respect to the construction, use and maintenance of any vaults
adjacent to the Property. If by reason of the failure to pay taxes, assessments,
charges, permit fees, franchise taxes or levies of any kind or nature, the
continued use of the vaults adjacent to Property or any part thereof is
discontinued, Borrower nevertheless shall, with respect to any vaults which may
be necessary for the continued use of the Property, take such steps (including
the making of any payment) to ensure the continued use of vaults or
replacements.
Section 14.02. Compliance with Recorded Documents; No Future Grants.
Borrower shall promptly perform and observe or cause to be performed and
observed, all of the terms, covenants and conditions of all Property Agreements
and all things necessary to preserve intact and unimpaired any and all
appurtenances or other interests or rights affecting the Property.
ARTICLE XV: DEFEASANCE; PREPAYMENT
Section 15.01. Defeasance; Prepayment. (a) Except as set forth in this
Section 15.01, no prepayment or defeasance of the Debt may be made by or on
behalf of Borrower in whole or in part.
(b) Borrower may defease the Loan at any time subsequent to the second
(2nd) anniversary of a Securitization and prior to the calendar month three (3)
months prior to the Maturity Date, in whole or, from time to time, in part, as
of the last day of an Interest Accrual Period, in accordance with the following
provisions:
(i) Lender shall have received from Borrower, not less than thirty
(30) days', nor more than ninety (90) days', prior written notice
specifying the date proposed for such defeasance and the amount which is
to be defeased, which proposed date shall be a Payment Date.
(ii) Borrower shall also pay to Lender all interest due through and
including the last day of the Interest Accrual Period ending on the day
prior to the Payment Date in which such defeasance is being made, together
with any and all other amounts due and owing pursuant to the terms of the
Note, this Security Instrument or the other Loan Documents, including,
without limitation, any costs incurred in connection with a defeasance.
(iii) No Event of Default shall have occurred and be continuing.
(iv) Borrower shall (A) pay the Defeasance Deposit and (B) deliver
to Lender (1) a security agreement, in form and substance reasonably
satisfactory to Lender, creating a first priority lien on the Defeasance
Deposit and the Federal Obligations purchased on behalf of Borrower with
the Defeasance Deposit in accordance with the terms of this Section
15.01(b)(iv) (the "Security Agreement"); (2) an Officer's Certificate
certifying that the requirements set forth in this Section 15.01(b)(iv)
have been satisfied; (3) an opinion of counsel for Borrower in form and
substance reasonably satisfactory to Lender
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stating, among other things, that (x) Lender has a perfected security
interest in the Defeasance Deposit and a first priority perfected security
interest in the Federal Obligations purchased by Xxxxxx on behalf of
Xxxxxxxx, (y) the contemplated defeasance will not result in any deemed
exchange pursuant to Section 1001 of the Code of the Note and will not
adversely affect the Note's or, if applicable, the undefeased Note's
status as indebtedness for Federal income tax purposes and (z) any trust
formed as a "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code ("REMIC") in connection with a Securitization
will not fail to maintain its status as a REMIC as a result of such
defeasance; (4) in the event that only a portion of the Loan is being
defeased, Borrower shall execute and deliver all necessary documents to
split the Note into two substitute notes, one having a principal balance
equal to the defeased portion of the Note (the "Defeased Note") and one
note having a principal balance equal to the undefeased portion of the
Note (the "Undefeased Note"), the amortization schedule for which notes
shall be calculated, in the case of a Defeased Note, or recalculated, in
the case of an Undefeased Note, to fully amortize the respective principal
balances of each on a twenty-five (25) year schedule (commencing on the
Closing Date) utilizing level monthly payments of principal and interest;
(5) a certificate, in form and substance reasonably satisfactory to Lender
from a nationally recognized Independent certified public accountant
confirming that the requirements of this Section 15.01(b) have been
satisfied; and (6) such other certificates, documents, opinions or
instruments as Lender may reasonably request. Borrower hereby irrevocably
appoints Lender as its agent and attorney-in-fact, coupled with an
interest, for the purpose of using the Defeasance Deposit to purchase
Federal Obligations which provide Scheduled Defeasance Payments, and
Lender shall, upon receipt of the Defeasance Deposit, purchase such
Federal Obligations on behalf of Borrower. Borrower, pursuant to the
Security Agreement or other appropriate document, shall authorize and
direct that the payments received from the Federal Obligations shall be
made directly to Lender and applied to satisfy the obligations of Borrower
under the Defeased Note. The Defeased Note and the Undefeased Note shall
have identical terms as the Note, except for the principal balance. A
Defeased Note cannot be the subject of a further defeasance.
(v) The Rating Agencies shall have confirmed in writing that any
rating issued by the Rating Agencies in connection with the Securitization
will not, as a result of the proposed defeasance, be downgraded from the
then current ratings thereof, qualified or withdrawn.
(vi) In the event of a defeasance of the Loan in whole, but not in
part, if Borrower shall continue to own any assets other than the
Defeasance Deposit, Borrower shall establish or designate a
special-purpose bankruptcy-remote successor entity acceptable to Lender
(the "Successor Borrower"), with respect to which a substantive
nonconsolidation opinion satisfactory in form and substance reasonably
satisfactory to Lender has been delivered to Lender and Borrower shall
transfer and assign to the Successor Borrower all obligations, rights and
duties under the Note and the Security Agreement, together with the
pledged Defeasance Deposit. The Successor Borrower shall assume the
obligations of Borrower under the Note and the Security Agreement and
Borrower shall be relieved of its obligations hereunder and thereunder.
Borrower shall pay Ten and No/100 Dollars ($10.00) to the Successor
Borrower as consideration for assuming such Borrower obligations.
(vii) In the event that Borrower desires to allocate all or any
portion of a Defeasance Deposit to reduce the Allocated Loan Amount of a
specific Cross-collateralized Property, Borrower shall have included in
the notice required to be given pursuant to clause (i) of this Section
15.01(b) a statement designating to which Cross-collateralized Property
Borrower wishes to have such Defeasance Deposit allocated.
(c) At any time on or subsequent to the Payment Date which is six (6)
months prior to the Maturity Date, Borrower may prepay the Loan, in whole, but
not in part, as of the last day of an Interest Accrual Period, in accordance
with the following provisions:
(i) Lender shall have received from Borrower, not less than thirty
(30) days', nor more than ninety (90) days', prior written notice
specifying the date proposed for such prepayment and the amount which is
to be prepaid which proposed date shall be a Payment Date.
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(ii) Borrower shall also pay to Lender all interest due through and
including the last day of the Interest Accrual Period ending on the day
prior to the Payment Date in which such prepayment is being made, together
with any and all other amounts due and owing pursuant to the terms of the
Note, this Security Instrument or the other Loan Documents.
(iii) No Event of Default shall have occurred and be continuing.
(iv) Any partial prepayment of the Principal Amount, including,
without limitation, Unscheduled Payments, shall be applied to the
installments of principal last due hereunder and shall not release or
relieve Borrower or any other Cross-collateralized Borrower from the
obligation to pay the regularly scheduled installments of principal
becoming due under the Note.
Section 15.02. Release of Property. If Loss Proceeds from the Property are
applied towards the repayment of the Debt, Lender shall, promptly, upon
satisfaction of all the following terms and conditions, execute, acknowledge and
deliver to Borrower a release of this Security Instrument (a "Release") in
recordable form with respect to the Property:
(a) In the event of a prepayment of the Loan in part, but not in whole,
Lender shall have received the Release Price.
(b) Borrower shall, at its sole cost and expense, prepare any and all
documents and instruments necessary to effect the Release, all of which shall be
subject to the reasonable approval of Lender, and Borrower shall pay all costs
reasonably incurred by Xxxxxx (including, but not limited to, reasonable
attorneys' fees and disbursements, title search costs and endorsement premiums)
in connection with the review, execution and delivery of the Release.
(c) No Event of Default has occurred and is continuing.
(d) Subsequent to the Release, Borrower shall continue to be in
compliance with all of the terms of the Loan Documents, including without
limitation, Section 2.02(g) hereof.
(e) The Rating Agencies shall have confirmed in writing that any rating
issued by the Rating Agencies in connection with a Securitization will not, as a
result of the proposed Release, be downgraded from their current ratings
thereof, qualified or withdrawn.
ARTICLE XVI: ENVIRONMENTAL COMPLIANCE
Section 16.01. Covenants, Representations and Warranties. (a) Borrower has
not, at any time, and, to Xxxxxxxx's best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other Person
has at any time, handled, buried, stored, retained, refined, transported,
processed, manufactured, generated, produced, spilled, allowed to seep, leak,
escape or xxxxx, or pumped, poured, emitted, emptied, discharged, injected,
dumped, transferred or otherwise disposed of or dealt with Hazardous Materials
on, to or from the Premises or any other real property owned and/or occupied by
Borrower, and Borrower does not intend to and shall not use the Property or any
part thereof or any such other real property for the purpose of handling,
burying, storing, retaining, refining, transporting, processing, manufacturing,
generating, producing, spilling, seeping, leaking, escaping, leaching, pumping,
pouring, emitting, emptying, discharging, injecting, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials, except for use and
storage for use of heating oil, cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the same
purposes as the Property is presently being used, provided such use and/or
storage for use is in compliance with the requirements hereof and the other Loan
Documents and does not give rise to liability under applicable Legal
Requirements or Environmental Statutes or be the basis for a lien against the
Property or any part thereof. In addition, without limitation to the foregoing
provisions, Borrower represents and warrants that, to the best of its knowledge,
after due inquiry and investigation, except as previously disclosed in writing
to Lender, there is no asbestos in, on, over, or under all or any portion of the
fire-proofing or any other portion of the Property.
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(b) Xxxxxxxx, after due inquiry and investigation, knows of no seepage,
leak, escape, xxxxx, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials into waters on, under or
adjacent to the Property or any part thereof or any other real property owned
and/or occupied by Borrower, or onto lands from which such Hazardous Materials
might seep, flow or drain into such waters, except as disclosed in the
Environmental Report.
(c) Borrower shall not permit any Hazardous Materials to be handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or xxxxx, or to be
pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with on, under, to or from the Property or any
portion thereof at any time, except for use and storage for use of heating oil,
ordinary cleaning fluids, pesticides and other substances customarily used in
the operation of properties that are being used for the same purposes as the
Property is presently being used, provided such use and/or storage for use is in
compliance with the requirements hereof and the other Loan Documents and does
not give rise to liability under applicable Legal Requirements or be the basis
for a lien against the Property or any part thereof.
(d) Borrower represents and warrants that no actions, suits, or
proceedings have been commenced, or are pending, or to the best knowledge of
Borrower, are threatened with respect to any Legal Requirement governing the
use, manufacture, storage, treatment, transportation, or processing of Hazardous
Materials with respect to the Property or any part thereof. Borrower has
received no notice of, and, except as disclosed in the Environmental Report,
after due inquiry, has no knowledge of any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Property or any part thereof or
any other real property owned or occupied by Borrower or arising out of the
conduct of Xxxxxxxx, including, without limitation, pursuant to any
Environmental Statute.
(e) Borrower has not waived any Person's liability with regard to
Hazardous Materials in, on, under or around the Property, nor has Borrower
retained or assumed, contractually or by operation of law, any other Person's
liability relative to Hazardous Materials or any claim, action or proceeding
relating thereto.
(f) In the event that there shall be filed a lien against the Property
or any part thereof pursuant to any Environmental Statute pertaining to
Hazardous Materials, Borrower shall, within sixty (60) days or, in the event
that the applicable Governmental Authority has commenced steps to cause the
Premises or any part thereof to be sold pursuant to the lien, within fifteen
(15) days, from the date that Borrower receives notice of such lien, either (i)
pay the claim and remove the lien from the Property, or (ii) furnish (A) a bond
satisfactory to Lender in the amount of the claim out of which the lien arises,
(B) a cash deposit in the amount of the claim out of which the lien arises, or
(C) other security reasonably satisfactory to Lender in an amount sufficient to
discharge the claim out of which the lien arises.
(g) Xxxxxxxx represents and warrants that (i) except as disclosed in the
Environmental Report, Xxxxxxxx has no knowledge of any violation of any
Environmental Statute or any Environmental Problem in connection with the
Property, nor has Borrower been requested or required by any Governmental
Authority to perform any remedial activity or other responsive action in
connection with any Environmental Problem and (ii) neither the Property nor any
other property owned by Borrower is included or, to Borrower's best knowledge,
after due inquiry and investigation, proposed for inclusion on the National
Priorities List issued pursuant to CERCLA by the United States Environmental
Protection Agency (the "EPA") or on the inventory of other potential "Problem"
sites issued by the EPA and has not otherwise been identified by the EPA as a
potential CERCLA site or included or, to Xxxxxxxx's knowledge, after due inquiry
and investigation, proposed for inclusion on any list or inventory issued
pursuant to any other Environmental Statute, if any, or issued by any other
Governmental Authority. Borrower covenants that Borrower will comply with all
Environmental Statutes affecting or imposed upon Borrower or the Property.
(h) Borrower covenants that it shall promptly notify Lender of the
presence and/or release of any Hazardous Materials and of any request for
information or any inspection of the Property or any part thereof by any
Governmental Authority with respect to any Hazardous Materials and provide
Lender with copies of such request
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and any response to any such request or inspection. Borrower covenants that it
shall, in compliance with applicable Legal Requirements, conduct and complete
all investigations, studies, sampling and testing (and promptly shall provide
Lender with copies of any such studies and the results of any such test) and all
remedial, removal and other actions necessary to clean up and remove all
Hazardous Materials in, on, over, under, from or affecting the Property or any
part thereof in accordance with all such Legal Requirements applicable to the
Property or any part thereof to the satisfaction of Lender.
(i) Following the occurrence of an Event of Default hereunder, and
without regard to whether Xxxxxx shall have taken possession of the Property or
a receiver has been requested or appointed or any other right or remedy of
Xxxxxx has or may be exercised hereunder or under any other Loan Document,
Lender shall have the right (but no obligation) to conduct such investigations,
studies, sampling and/or testing of the Property or any part thereof as Lender
may, in its discretion, determine to conduct, relative to Hazardous Materials.
All costs and expenses incurred in connection therewith including, without
limitation, consultants' fees and disbursements and laboratory fees, shall
constitute a part of the Debt and shall, upon demand by Lender, be immediately
due and payable and shall bear interest at the Default Rate from the date so
demanded by Xxxxxx until reimbursed. Borrower shall, at its sole cost and
expense, fully and expeditiously cooperate in all such investigations, studies,
samplings and/or testings including, without limitation, providing all relevant
information and making knowledgeable people available for interviews.
(j) Borrower represents and warrants that all paint and painted surfaces
existing within the interior or on the exterior of the Improvements are not
flaking, peeling, cracking, blistering, or chipping, and do not contain lead or
are maintained in a condition that prevents exposure of young children to
lead-based paint, as of the date hereof, and that the current inspections,
operation, and maintenance program at the Property with respect to lead-based
paint is consistent with FNMA guidelines and sufficient to ensure that all
painted surfaces within the Property shall be maintained in a condition that
prevents exposure of tenants to lead-based paint. To Xxxxxxxx's knowledge, there
have been no claims for adverse health effects from exposure on the Property to
lead-based paint or requests for the investigation, assessment or removal of
lead-based paint at the Property.
(k) Borrower represents and warrants that except in accordance with all
applicable Environmental Statutes and as disclosed in the Environmental Report,
(i) no underground treatment or storage tanks or pumps or water, gas, or oil
xxxxx are or have been located about the Property, (ii) no PCBs or transformers,
capacitors, ballasts or other equipment that contain dielectric fluid containing
PCBs are located about the Property, (iii) no insulating material containing
urea formaldehyde is located about the Property and (iv) no asbestos-containing
material is located about the Property.
Section 16.02. Environmental Indemnification. Borrower shall defend,
indemnify and hold harmless the Indemnified Parties for, from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
whether incurred or imposed within or outside the judicial process, including,
without limitation, reasonable attorneys' and consultants' fees and
disbursements and investigations and laboratory fees arising out of, or in any
way related to any Environmental Problem, including without limitation:
(a) the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threat of release of any Hazardous Materials in,
on, over, under, from or affecting the Property or any part thereof whether or
not disclosed by the Environmental Report;
(b) any personal injury (including wrongful death, disease or other
health condition related to or caused by, in whole or in part, any Hazardous
Materials) or property damage (real or personal) arising out of or related to
any Hazardous Materials in, on, over, under, from or affecting the Property or
any part thereof whether or not disclosed by the Environmental Report;
(c) any action, suit or proceeding brought or threatened, settlement
reached, or order of any Governmental Authority relating to such Hazardous
Material whether or not disclosed by the Environmental Report; and/or
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(d) any violation of the provisions, covenants, representations or
warranties of Section 16.01 hereof or of any Legal Requirement which is based on
or in any way related to any Hazardous Materials in, on, over, under, from or
affecting the Property or any part thereof including, without limitation, the
cost of any work performed and materials furnished in order to comply therewith
whether or not disclosed by the Environmental Report.
Notwithstanding the foregoing provisions of this Section 16.02 to the
contrary, Borrower shall have no obligation to indemnify Lender for liabilities,
claims, damages, penalties, causes of action, costs and expenses relative to the
foregoing which result directly from Xxxxxx's willful misconduct or gross
negligence. Any amounts payable to Lender by reason of the application of this
Section 16.02 shall be secured by this Security Instrument and shall, upon
demand by Xxxxxx, become immediately due and payable and shall bear interest at
the Default Rate from the date so demanded by Xxxxxx until paid.
This indemnification shall survive the termination of this Security
Instrument whether by repayment of the Debt, foreclosure or deed in lieu
thereof, assignment, or otherwise; provided, however, in the event that no Event
of Default had occurred and Lender shall have received a clean Phase I
environmental report satisfactory in form and substance and prepared by a Person
satisfactory to Lender in all respects, this indemnification shall terminate
five (5) years after repayment of the Debt. The indemnity provided for in this
Section 16.02 shall not be included in any exculpation of Borrower or its
principals from personal liability provided for in this Security Instrument or
in any of the other Loan Documents. Nothing in this Section 16.02 shall be
deemed to deprive Lender of any rights or remedies otherwise available to
Lender, including, without limitation, those rights and remedies provided
elsewhere in this Security Instrument or the other Loan Documents.
ARTICLE XVII: ASSIGNMENTS
Section 17.01. Participations and Assignments. Lender shall have the right
to assign this Security Instrument and/or any of the Loan Documents, and to
transfer, assign or sell participations and subparticipations (including blind
or undisclosed participations and subparticipations) in the Loan Documents and
the obligations hereunder to any Person; provided, however, that no such
participation shall increase, decrease or otherwise affect either Borrower's or
Lender's obligations under this Security Instrument or the other Loan Documents.
ARTICLE XVIII: MISCELLANEOUS
Section 18.01. Right of Entry. Upon reasonable notice, except in the event
of an emergency, in which case no reasonable notice shall be required, Lender
and its agents shall have the right to enter and inspect the Property or any
part thereof at all reasonable times and to inspect Xxxxxxxx's books and records
and to make abstracts and reproductions thereof.
Section 18.02. Cumulative Rights. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled, subject to the terms of this Security
Instrument, to every right and remedy now or hereafter afforded by law.
Section 18.03. Liability. If Borrower consists of more than one Person,
the obligations and liabilities of each such Person hereunder shall be joint and
several.
Section 18.04. Exhibits Incorporated. The information set forth on the
cover hereof, and the Exhibits annexed hereto, are hereby incorporated herein as
a part of this Security Instrument with the same effect as if set forth in the
body hereof.
Section 18.05. Severable Provisions. If any term, covenant or condition of
the Loan Documents including, without limitation, the Note or this Security
Instrument, is held to be invalid, illegal or unenforceable in any respect, such
Loan Document shall be construed without such provision.
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Section 18.06. Duplicate Originals. This Security Instrument may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument.
Section 18.07. No Oral Change. The terms of this Security Instrument,
together with the terms of the Note and the other Loan Documents constitute the
entire understanding and agreement of the parties hereto and supersede all prior
agreements, understandings and negotiations between Borrower and Lender with
respect to the Loan. This Security Instrument, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act on the part of Borrower or Lender, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
Section 18.08. Waiver of Counterclaim, Etc. BORROWER HEREBY WAIVES THE
RIGHT TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY
ACTION OR PROCEEDING BROUGHT AGAINST IT BY LENDER OR ITS AGENTS, AND WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER OR IN ANY COUNTERCLAIM BORROWER MAY BE PERMITTED TO ASSERT HEREUNDER
OR WHICH MAY BE ASSERTED BY LENDER OR ITS AGENTS, AGAINST BORROWER, OR IN ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS SECURITY
INSTRUMENT OR THE DEBT.
Section 18.09. Headings; Construction of Documents; etc. The table of
contents, headings and captions of various paragraphs of this Security
Instrument are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
Xxxxxxxx acknowledges that it was represented by competent counsel in connection
with the negotiation and drafting of this Security Instrument and the other Loan
Documents and that neither this Security Instrument nor the other Loan Documents
shall be subject to the principle of construing the meaning against the Person
who drafted same.
Section 18.10. Sole Discretion of Lender. Whenever Lender exercises any
right given to it to approve or disapprove, or any arrangement or term is to be
satisfactory to Lender, the decision of Lender to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall be
in the sole discretion of Lender and shall be final and conclusive, except as
may be otherwise specifically provided herein.
Section 18.11. Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters for
which this Security Instrument specifically and expressly provides for the
giving of notice by Xxxxxx to Borrower and except with respect to matters for
which Borrower is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice.
Section 18.12. Covenants Run with the Land. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises, shall be
binding upon Borrower and shall inure to the benefit of Lender, subsequent
holders of this Security Instrument and their successors and assigns. Without
limitation to any provision hereof, the term "Borrower" shall include and refer
to the borrower named herein, any subsequent owner of the Property, and its
respective heirs, executors, legal representatives, successors and assigns. The
representations, warranties and agreements contained in this Security Instrument
and the other Loan Documents are intended solely for the benefit of the parties
hereto, shall confer no rights hereunder, whether legal or equitable, in any
other Person and no other Person shall be entitled to rely thereon.
Section 18.13. Applicable Law. THIS SECURITY INSTRUMENT WAS NEGOTIATED IN
NEW YORK, AND MADE BY XXXXXXXX AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE
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GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE
CREATION, PERFECTION, PRIORITY, ENFORCEMENT AND FORECLOSURE OF THE LIENS AND
SECURITY INTERESTS CREATED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PREMISES ARE LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL
LOAN DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING HEREUNDER.
Section 18.14. Security Agreement. (a) (i) This Security Instrument is
both a real property mortgage, deed to secure debt or deed of trust, as
applicable, and a "security agreement" within the meaning of the UCC. The
Property includes both real and personal property and all other rights and
interests, whether tangible or intangible in nature, of Borrower in the
Property. This Security Instrument is filed as a fixture filing and covers goods
which are or are to become fixtures on the Property. Borrower by executing and
delivering this Security Instrument has granted to Lender, as security for the
Debt, a security interest in the Property to the full extent that the Property
may be subject to the UCC (said portion of the Property so subject to the UCC
being called in this Section 18.14 the "Collateral"). If an Event of Default
shall occur, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the UCC,
including, without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the Collateral. Upon request or demand of Lender following an Event of
Default, Borrower shall, at its expense, assemble the Collateral and make it
available to Lender at a convenient place acceptable to Lender. Borrower shall
pay to Lender on demand any and all expenses, including reasonable legal
expenses and attorneys' fees, incurred or paid by Xxxxxx in protecting its
interest in the Collateral and in enforcing its rights hereunder with respect to
the Collateral. Any disposition pursuant to the UCC of so much of the Collateral
as may constitute personal property shall be considered commercially reasonable
if made pursuant to a public sale which is advertised at least twice in a
newspaper in which sheriff's sales are advertised in the county where the
Premises is located. Any notice of sale, disposition or other intended action by
Lender with respect to the Collateral given to Borrower in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Borrower. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper. It is not necessary that the Collateral be present at any disposition
thereof. Lender shall have no obligation to clean-up or otherwise prepare the
Collateral for disposition.
(ii) The mention in a financing statement filed in the records
normally pertaining to personal property of any portion of the Property shall
not derogate from or impair in any manner the intention of this Security
Instrument. Xxxxxx and Borrower hereby declare that all items of Collateral are
part of the real property encumbered hereby to the fullest extent permitted by
law, regardless of whether any such item is physically attached to the
Improvements or whether serial numbers are used for the better identification of
certain items. Specifically, the mention in any such financing statement of any
items included in the Property shall not be construed to alter, impair or impugn
any rights of Lender as determined by this Security Instrument or the priority
of Xxxxxx's lien upon and security interest in the Property in the event that
notice of Xxxxxx's priority of interest as to any portion of the Property is
required to be filed in accordance with the UCC to be effective against or take
priority over the interest of any particular class of persons, including the
federal government or any subdivision or instrumentality thereof. No portion of
the Collateral constitutes or is the proceeds of "Farm Products", as defined in
the UCC.
(iii) If Xxxxxxxx is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of Xxxxxxxx, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(A) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to Lender of the proceeds of any drawing under the letter of
credit or (B) arrange for Xxxxxx to become the transferee beneficiary of the
letter of credit, with Xxxxxx agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied as provided in this
Security Instrument.
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(iv) Borrower and Xxxxxx acknowledge that for the purposes of
Article 9 of the UCC, the law of the State of New York shall be the law of the
jurisdiction of the bank in which the Central Account is located.
(v) Lender may comply with any applicable Legal Requirements in
connection with the disposition of the Collateral, and Lender's compliance
therewith will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral.
(vi) Lender may sell the Collateral without giving any warranties
as to the Collateral. Lender may specifically disclaim any warranties of title,
possession, quiet enjoyment or the like. This procedure will not be considered
to adversely affect the commercial reasonableness of any sale of the Collateral.
(vii) If Lender sells any of the Collateral upon credit, Xxxxxxxx
will be credited only with payments actually made by the purchaser, received by
Xxxxxx and applied to the indebtedness of Borrower. In the event the purchaser
of the Collateral fails to fully pay for the Collateral, Lender may resell the
Collateral and Borrower will be credited with the proceeds of such sale.
(b) Borrower hereby irrevocably appoints Lender as its attorney-in-fact,
coupled with an interest, to file with the appropriate public office on its
behalf any financing or other statements signed only by Xxxxxx, as secured
party, or, to the extent permitted under the UCC, unsigned, in connection with
the Collateral covered by this Security Instrument.
Section 18.15. Actions and Proceedings. Lender has the right to appear in
and defend any action or proceeding brought with respect to the Property in its
own name or, if required by Legal Requirements or, if in Lender's reasonable
judgment, it is necessary, in the name and on behalf of Borrower, which Xxxxxx
believes will adversely affect the Property or this Security Instrument and to
bring any action or proceedings, in its name or in the name and on behalf of
Borrower, which Xxxxxx, in its discretion, decides should be brought to protect
its interest in the Property.
Section 18.16. Usury Laws. This Security Instrument and the Note are
subject to the express condition, and it is the expressed intent of the parties,
that at no time shall Borrower be obligated or required to pay interest on the
principal balance due under the Note at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Security Instrument or the Note, Borrower
is at any time required or obligated to pay interest on the principal balance
due under the Note at a rate in excess of such maximum rate, such rate of
interest shall be deemed to be immediately reduced to such maximum rate and the
interest payable shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and shall be deemed to
have been payments in reduction of the principal balance of the Note. No
application to the principal balance of the Note pursuant to this Section 18.16
shall give rise to any requirement to pay any prepayment fee or charge of any
kind due hereunder, if any.
Section 18.17. Remedies of Borrower. In the event that a claim or
adjudication is made that Xxxxxx has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Security Instrument or
the Loan Documents, it has an obligation to act reasonably or promptly, Lender
shall not be liable for any monetary damages, and Xxxxxxxx's remedies shall be
limited to injunctive relief or declaratory judgment.
Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this
Security Instrument, the Assignment and the Note shall take the same free and
clear of all offsets, counterclaims or defenses which are unrelated to the Note,
the Assignment or this Security Instrument which Borrower may otherwise have
against any assignor of this Security Instrument, the Assignment and the Note
and no such unrelated counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such assignee upon this
Security Instrument, the Assignment or the Note and any such right to interpose
or assert any such unrelated offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Borrower.
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Section 18.19. No Merger. If Xxxxxxxx's and Xxxxxx's estates become the
same including, without limitation, upon the delivery of a deed by Borrower in
lieu of a foreclosure sale, or upon a purchase of the Property by Lender in a
foreclosure sale, this Security Instrument and the lien created hereby shall not
be destroyed or terminated by the application of the doctrine of merger and in
such event Lender shall continue to have and enjoy all of the rights and
privileges of Lender as to the separate estates; and, as a consequence thereof,
upon the foreclosure of the lien created by this Security Instrument, any Leases
or subleases then existing and created by Borrower shall not be destroyed or
terminated by application of the law of merger or as a result of such
foreclosure unless Lender or any purchaser at any such foreclosure sale shall so
elect. No act by or on behalf of Lender or any such purchaser shall constitute a
termination of any Lease or sublease unless Lender or such purchaser shall give
written notice thereof to such lessee or sublessee.
Section 18.20. Restoration of Rights. In case Lender shall have proceeded
to enforce any right under this Security Instrument by foreclosure sale, entry
or otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, in every such case,
Borrower and Lender shall be restored to their former positions and rights
hereunder with respect to the Property subject to the lien hereof.
Section 18.21. Waiver of Statute of Limitations. The pleadings of any
statute of limitations as a defense to any and all obligations secured by this
Security Instrument are hereby waived to the full extent permitted by Legal
Requirements.
Section 18.22. Advances. This Security Instrument shall cover any and all
advances made pursuant to the Loan Documents, rearrangements and renewals of the
Debt and all extensions in the time of payment thereof, even though such
advances, extensions or renewals be evidenced by new promissory notes or other
instruments hereafter executed and irrespective of whether filed or recorded.
Likewise, the execution of this Security Instrument shall not impair or affect
any other security which may be given to secure the payment of the Debt, and all
such additional security shall be considered as cumulative. The taking of
additional security, execution of partial releases of the security, or any
extension of time of payment of the Debt shall not diminish the force, effect or
lien of this Security Instrument and shall not affect or impair the liability of
Borrower and shall not affect or impair the liability of any maker, surety, or
endorser for the payment of the Debt.
Section 18.23. Application of Default Rate Not a Waiver. Application of
the Default Rate shall not be deemed to constitute a waiver of any Default or
Event of Default or any rights or remedies of Lender under this Security
Instrument, any other Loan Document or applicable Legal Requirements, or a
consent to any extension of time for the payment or performance of any
obligation with respect to which the Default Rate may be invoked.
Section 18.24. Intervening Lien. To the fullest extent permitted by law,
any agreement hereafter made pursuant to this Security Instrument shall be
superior to the rights of the holder of any intervening lien.
Section 18.25. No Joint Venture or Partnership. Xxxxxxxx and Xxxxxx intend
that the relationship created hereunder be solely that of mortgagor and
mortgagee or grantor and beneficiary or borrower and lender, as the case may be.
Nothing herein is intended to create a joint venture, partnership,
tenancy-in-common, or joint tenancy relationship between Xxxxxxxx and Lender nor
to grant Lender any interest in the Property other than that of mortgagee,
beneficiary or lender.
Section 18.26. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Borrower hereunder.
Section 18.27. Xxxxxxxx's Obligations Absolute. Borrower acknowledges that
Lender and/or certain Affiliates of Lender are engaged in the business of
financing, owning, operating, leasing, managing, and brokering real estate and
in other business ventures which may be viewed as adverse to or competitive with
the business, prospect, profits, operations or condition (financial or
otherwise) of Borrower. Except as set forth to the contrary in the Loan
Documents, all sums payable by Borrower hereunder shall be paid without notice
or demand,
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counterclaim, set-off, deduction or defense and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of
Borrower hereunder shall in no way be released, discharged, or otherwise
affected (except as expressly provided herein) by reason of: (a) any damage to
or destruction of or any Taking of the Property or any portion thereof or any
other Cross-collateralized Property; (b) any restriction or prevention of or
interference with any use of the Property or any portion thereof or any other
Cross-collateralized Property; (c) any title defect or encumbrance or any
eviction from the Premises or any portion thereof by title paramount or
otherwise; (d) any bankruptcy proceeding relating to Borrower, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Security Instrument or any other Loan Document by any trustee or receiver
of Borrower or any other Cross-collateralized Borrower or any such General
Partner, guarantor or indemnitor, or by any court, in any such proceeding; (e)
any claim which Borrower has or might have against Lender; (f) any default or
failure on the part of Lender to perform or comply with any of the terms hereof
or of any other agreement with Borrower or any other Cross-collateralized
Borrower; or (g) any other occurrence whatsoever, whether similar or dissimilar
to the foregoing, whether or not Borrower shall have notice or knowledge of any
of the foregoing.
Section 18.28. Publicity. All promotional news releases, publicity or
advertising by Manager, Borrower or their respective Affiliates through any
media intended to reach the general public shall not refer to the Loan Documents
or the financing evidenced by the Loan Documents, or to Lender or to any of its
Affiliates without the prior written approval of Lender or such Affiliate, as
applicable, in each instance, such approval not to be unreasonably withheld or
delayed. Lender shall be authorized to provide information relating to the
Property, the Loan and matters relating thereto to rating agencies,
underwriters, potential securities investors, auditors, regulatory authorities
and to any Persons which may be entitled to such information by operation of
law. Notwithstanding the foregoing, Xxxxxx shall obtain Borrower's written
approval (which approval shall not unreasonably be withheld, delayed or
conditioned) prior to releasing any publicity articles or advertisements (such
as "tombstones") concerning the finances of the Property or the Loan.
Section 18.29. Securitization Opinions. In the event the Loan is included
as an asset of a Securitization by Lender or any of its Affiliates, Borrower
shall, within fifteen (15) Business Days after Xxxxxx's written request
therefor, at Xxxxxx's sole cost and expense, deliver opinions in form and
substance and delivered by counsel reasonably acceptable to Lender and each
Rating Agency, as may be reasonably required by Lender and/or the Rating Agency
in connection with such securitization. Xxxxxxxx's failure to deliver the
opinions required hereby within such fifteen (15) Business Day period shall
constitute an "Event of Default" hereunder.
Section 18.30. Cooperation with Rating Agencies. Borrower covenants and
agrees that in the event the Loan is to be included as an asset of a
Securitization, Borrower shall (a) gather any information reasonably required by
each Rating Agency in connection with such a Securitization, (b) at Lender's
request, meet with representatives of each Rating Agency to discuss the business
and operations of the Property, and (c) cooperate with the reasonable requests
of each Rating Agency and Lender in connection with all of the foregoing as well
as in connection with all other matters and the preparation of any offering
documents with respect thereto, including, without limitation, entering into any
amendments or modifications to this Security Instrument or to any other Loan
Document which may be requested by Lender to conform to Rating Agency or market
standards for a Securitization provided that no such modification shall modify
(a) the interest rate payable under the Note, (b) the stated maturity of the
Note, (c) the amortization of principal under the Note, (d) Section 18.32
hereof, (e) any other material economic term of the Loan or (f) any provision,
the effect of which would materially increase Borrower's obligations or
materially decrease Borrower's rights under the Loan Documents. Borrower
acknowledges that the information provided by Borrower to Lender may be
incorporated into the offering documents for a Securitization and to the fullest
extent permitted, Borrower irrevocably waives all rights, if any, to prohibit
such disclosures including, without limitation, any right of privacy. Lender and
each Rating Agency shall be entitled to rely on the information supplied by, or
on behalf of, Xxxxxxxx and Borrower indemnifies and holds harmless the
Indemnified Parties, their Affiliates and each Person who controls such Persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Securities Exchange Act of 1934, as same may be amended from time to time, for,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or
unknown, contingent or otherwise, whether incurred or imposed within or outside
the judicial process, including, without limitation, reasonable attorneys' fees
and disbursements that arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in such information or
arise out of or are based
75
upon the omission or alleged omission to state therein a material fact required
to be stated in such information or necessary in order to make the statements in
such information, or in light of the circumstances under which they were made,
not misleading.
Section 18.31. Securitization Financials. Borrower covenants and agrees
that, upon Xxxxxx's written request therefor in connection with a
Securitization, Borrower shall, at Xxxxxx's sole cost and expense, promptly
deliver audited financial statements and related documentation prepared by an
Independent certified public accountant that satisfy securities laws and
requirements for use in a public registration statement (which may include up to
three (3) years of historical financial statements).
Section 18.32. Exculpation. Notwithstanding anything herein or in any
other Loan Document to the contrary, except as otherwise set forth in this
Section 18.32 to the contrary, Lender shall not enforce the liability and
obligation of Borrower or (a) if Borrower is a partnership, its constituent
partners or any of their respective partners, (b) if Borrower is a trust, its
beneficiaries or any of their respective Partners (as hereinafter defined), (c)
if Borrower is a corporation, any of its shareholders, directors, principals,
officers or employees, or (d) if Borrower is a limited liability company, any of
its members (the Persons described in the foregoing clauses (a) -(d), as the
case may be, are hereinafter referred to as the "Partners") to perform and
observe the obligations contained in this Security Instrument or any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Borrower or the Partners, except that Lender may bring a
foreclosure action, action for specific performance, or other appropriate action
or proceeding (including, without limitation, an action to obtain a deficiency
judgment) solely for the purpose of enabling Lender to realize upon (i)
Borrower's interest in the Property, (ii) the Rent to the extent (x) received by
Borrower (or received by its Partners) after the occurrence of an Event of
Default, or (y) distributed to Borrower (or its Partners, but only to the extent
received by its Partners) during or with respect to any period for which Xxxxxx
did not receive a Manager Certification accurate in all material respects
confirming and certifying that all Operating Expenses with respect to the
Property which had accrued as of the applicable date of such Manager
Certification had been paid (or if same had not been paid, that Manager had
taken adequate reserves therefor) (all Rent covered by clauses (x) and (y) being
hereinafter referred to as the "Recourse Distributions") and (iii) any other
collateral given to Lender under the Loan Documents (the collateral described in
the foregoing clauses (i) through (iii) is hereinafter referred to as the
"Default Collateral"); provided, however, that any judgment in any such action
or proceeding shall be enforceable against Borrower and the Partners only to the
extent of any such Default Collateral. The provisions of this Section shall not,
however, (a) impair the validity of the Debt evidenced by the Note or in any way
affect or impair the lien of this Security Instrument or any of the other Loan
Documents or the right of Lender to foreclose this Security Instrument following
the occurrence of an Event of Default; (b) impair the right of Lender to name
Borrower as a party defendant in any action or suit for judicial foreclosure and
sale under this Security Instrument; (c) affect the validity or enforceability
of the Note, this Security Instrument, or any of the other Loan Documents, or
impair the right of Lender to seek a personal judgment against Guarantor; (d)
impair the right of Lender to obtain the appointment of a receiver; (e) impair
the enforcement of the Assignment; (f) impair the right of Lender to bring suit
for a monetary judgment with respect to fraud or material misrepresentation by
Borrower, or any other Person in connection with this Security Instrument, the
Note or the other Loan Documents, and the foregoing provisions shall not modify,
diminish or discharge the liability of Borrower or the Partners with respect to
same; (g) impair the right of Lender to bring suit for a monetary judgment to
obtain the Recourse Distributions received by Borrower including, without
limitation, the right to bring suit for a monetary judgement to proceed against
any Partner, to the extent of any such Recourse Distributions theretofore
distributed to and received by such Partner, and the foregoing provisions shall
not modify, diminish or discharge the liability of Borrower or the Partners with
respect to same; (h) impair the right of Lender to bring suit for a monetary
judgment with respect to Borrower's misappropriation of tenant security deposits
or Rent collected more than one (1) month in advance, and the foregoing
provisions shall not modify, diminish or discharge the liability of Borrower or
the Partners with respect to same; (i) impair the right of Lender to obtain Loss
Proceeds due to Lender pursuant to this Security Instrument; (j) impair the
right of Lender to enforce the provisions of Sections 2.02(g), 12.01, 16.01 or
16.02, inclusive of this Security Instrument, even after repayment in full by
Borrower of the Debt or to bring suit for a monetary judgment against Borrower
or the Partners with respect to any obligation set forth in said Sections; (k)
prevent or in any way hinder Lender from exercising, or constitute a defense, or
counterclaim, or other basis for relief in respect of the exercise of, any other
remedy against any or all of the collateral securing the Note as provided in the
Loan Documents; (l) impair the right of Lender to bring suit for a
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monetary judgment with respect to any misapplication or conversion of Loss
Proceeds, and the foregoing provisions shall not modify, diminish or discharge
the liability of Borrower or the Partners with respect to same; (m) impair the
right of Lender to sue for, seek or demand a deficiency judgment against
Borrower solely for the purpose of foreclosing the Property or any part thereof,
or realizing upon the Default Collateral; provided, however, that any such
deficiency judgment referred to in this clause (m) shall be enforceable against
Borrower and the Partners (but only to the extent distributed to and actually
received by such Partner) only to the extent of any of the Default Collateral;
(n) impair the ability of Lender to bring suit for a monetary judgment with
respect to damage, arson or waste to or of the Property resulting from
intentional misconduct or gross negligence of Borrower, the Partners or any
Affiliates thereof; (o) intentionally omitted; (p) be deemed a waiver of any
right which Lender may have under Sections 506(a), 506(b), 1111(b) or any other
provision of the Bankruptcy Code to file a claim for the full amount of the Debt
or to require that all collateral shall continue to secure all of the Debt; (q)
impair the right of Lender to bring suit for monetary judgment with respect to
any losses resulting from any claims, actions or proceedings initiated by
Xxxxxxxx (or any Affiliate of Borrower) alleging that the relationship of
Xxxxxxxx and Xxxxxx is that of joint venturers, partners, tenants in common,
joint tenants or any relationship other than that of debtor and creditor; or (r)
impair the right of Lender to bring suit for a monetary judgment in the event of
a Transfer in violation of the provisions of Article IX hereof. The provisions
of this Section 18.32 shall be inapplicable to Borrower if (a) any proceeding,
action, petition or filing under the Bankruptcy Code, or any similar state or
federal law now or hereafter in effect relating to bankruptcy, reorganization or
insolvency, or the arrangement or adjustment of debts, shall be filed by,
consented to or acquiesced in by or with respect to Borrower, or if Borrower
shall institute any proceeding for its dissolution or liquidation, or shall make
an assignment for the benefit of creditors, or (b) Borrower or any Affiliate
contests or in any material way interferes with, directly or indirectly
(collectively, a "Contest") any foreclosure action, UCC sale or other material
remedy exercised by Lender upon the occurrence of any Event of Default whether
by making any motion, bringing any counterclaim, claiming any defense, seeking
any injunction or other restraint, commencing any action, or otherwise (provided
that if any such Person obtains a non-appealable order successfully asserting a
Contest, Borrower shall have no liability under this clause (b)), in which event
Lender shall have recourse against all of the assets of Borrower including,
without limitation, any right, title and interest of Borrower in and to the
Property and any Recourse Distributions received by the Partners of Borrower
(but excluding the other assets of such Partners to the extent Lender would not
have had recourse thereto other than in accordance with the provisions of this
Section 18.32).
Section 18.33. Certain Matters Relating to Property Located in the State
of Alabama. With respect to the Property which is located in the State of
Alabama, notwithstanding anything contained herein to the contrary:
(a) The money, property or services that are the subject of the
transactions provided for in the Loan Documents are not primarily for personal,
family or household purposes as contemplated by Section 5-19-1(2) of the Code of
Alabama 1975, as amended.
(b) Any time after an Event of Default, this Security Instrument shall
be subject to foreclosure and may be foreclosed as provided by law in case of
past-due mortgages, and Lender shall be authorized, at its option, whether or
not possession of the Property is taken, to sell the Property (or such part of
parts thereof as Lender may from time to time elect to sell) under the power of
sale which is hereby given to Lender, at public outcry, to the highest bidder
for cash, at the front or main door of the courthouse of the county in which the
Premises to be sold, or a substantial or material part thereof, is located,
after first giving notice by publication one a week for three successive weeks
of the time, place and terms of such sale, together with a description of the
Property to be sold, by publication in some newspaper published in the county or
counties in which the Premises to be sold is located. If there is Premises to be
sold in more than one county, publication shall be made in all counties where
the Premises to be sold is located, but if no newspaper is published in any such
county, the notice shall be published in a newspaper published in an adjoining
county for three successive weeks. The sale shall be held between the hours of
11:00 a.m. and 4:00 p.m. on the day designated for the exercise of the power of
sale hereunder. Lender may bid at any sale held under this Security Instrument
and may purchase the Property, or any part thereof, if the highest bidder
therefor. The purchaser at any such sale shall be under no obligation to see to
the proper application of the purchase money. At any sale all or any part of the
Property, real, personal, or mixed, may be offered for sale in parcels or en
masse for one total price, and the proceeds of any such sale en masse shall be
accounted for in one amount without distinction between the items included
therein and without assigning to them any proportion of such proceeds,
77
Borrower hereby waiving the application of any doctrine of marshalling or like
proceeding. In case Lender, in the exercise of the power of sale herein given,
elects to sell the Property in parts or parcels, sales thereof may be held from
time to time, and the power of sale granted herein shall not be fully exercised
until all of the Property not previously sold shall have been sold or all the
Debt shall have been paid in full and this Security Instrument shall have been
terminated as provided herein. In case of any sale of the Property as authorized
by this paragraph, all prerequisites to the sale shall be presumed to have been
performed, and in any conveyance given hereunder all statements of facts, or
other recitals therein made, as to the nonpayment of any of the Debt or as to
the advertisement of sale, or the time, place and manner of sale, or as to any
other fact or thing, shall be taken in all courts of law or equity as rebuttably
presumptive evidence that the facts so stated or recited are true.
(c) This Security Instrument shall be effective as a financing statement
filed as a fixture filing for purposes of Article 9 of the Uniform Commercial
Code. The fixture filing covers all goods that are or are to become affixed to
the Realty. The goods are described by item or type in the granting clauses
hereof. Borrower is the debtor, and Xxxxxx is the secured party. The names of
the debtor (Borrower) and the secured party (Lender) are given in the first
paragraph of this Security Instrument. This Security Instrument is signed by the
debtor (Borrower) as a fixture filing. The mailing address of Lender set out in
the first paragraph of this Security Instrument is an address of the secured
party from which information concerning the security interest may be obtained.
The mailing address of the Borrower set out in the first paragraph of this
Security Instrument is a mailing address for the debtor. A statement indicating
the types, or describing the items, of collateral is set forth in this Section
and in the granting clauses of this Security Instrument. The real estate to
which the goods are or are to be affixed is described in Exhibit A. The Borrower
is a record owner of the real estate.
(d) Intentionally omitted.
(e) The date of this Security Instrument is intended as a date for the
convenient identification of this Security Instrument and is not intended to
indicate that this Security Instrument was executed and delivered on that date.
(f) The "NOW THEREFORE" clause is amended by deleting the words "Borrower
has irrevocably granted, and by these presents and by the execution and delivery
hereof does hereby irrevocably grant, bargain, sell, alien, demise, release,
convey, assign, transfer, deed, hypothecate, pledge, set over, warrant, mortgage
and confirm to Lender, forever, with power of sale," and inserting the following
in its place: "Borrower has granted, bargained, sold and conveyed unto the
Lender and by these presents does xxxxxx xxxxx, bargain, sell and convey unto
the Lender, forever, with power of sale, and has granted and by these presents
does hereby grant to the Lender, a security interest in,".
Section 18.34. Certain Matters Relating to Property Located in the State
of Arkansas. With respect to the Property which is located in the State of
Arkansas, notwithstanding anything contained herein to the contrary:
(a) Borrower releases all right of appraisement and also releases all
right of redemption under the laws of Arkansas, including, without limitation,
all right of redemption under Ark. Code Xxx. Section 00-00-000 (1987).
(b) Upon the occurrence or continuance of an Event of Default, Borrower
acknowledges and consents to statutory foreclosure pursuant to Ark. Code Xxx.
Sections 00-00-000 et seq. (2003 Supp.).
Section 18.35. Certain Matters Relating to Property Located in the State
of Connecticut. With respect to the Property which is located in the State of
Connecticut, notwithstanding anything contained herein to the contrary:
(a) This Security Instrument shall constitute an Open-End Mortgage Deed in
accordance with Conn. Gen. Statutes Section 49-2. Further, it is agreed that
additional advancement may be made by Lender or its assignees as provided in
this Security Instrument or any of the other Loan Documents for the benefit of
Borrower, whether such future advances are obligatory or made at the option of
Lender. Each such advance is to be secured
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with and have the same priority as the Debt to the extent the amount of such
subsequent advance when added to the amount of the Debt does not exceed the sum
of two (2) times the Loan Amount. Such advances are repayable no later than the
maturity date specified in the Loan Documents. Borrower shall execute a note or
notes evidencing such future advances, which note or notes shall be delivered to
Lender or its assigns and which note or notes shall be included in the words
"Note" or "Debt" wherever either appears in the context of this Security
Instrument. To the extent permitted by law, the failure to execute such note or
notes shall not impair the validity of this Security Instrument and such
advances shall be secured by the lien of this Security Instrument.
(b) The term "Security Instrument" as used herein shall mean this
"Open-End Mortgage Deed."
(c) A copy of the Note is attached hereto and made a part hereof.
Section 18.36. Certain Matters Relating to Property located in the State
of Florida. With respect to the Property which is located in the State of
Florida, notwithstanding anything contained herein to the contrary:
(a) It is agreed that, in addition to existing indebtedness, any future
advances made by the then holder of the Note to or for the benefit of Borrower
or Xxxxxxxx's permitted assignees, whether such advances are obligatory or are
made at the option of Lender, or otherwise, at any time within twenty (20) years
from the date of this Security Instrument, with interest thereon at the rate
agreed upon at the time of each additional loan or advance, shall be equally
secured with and have the same priority as the Debt and be subject to all of the
terms and provisions of this Security Instrument, whether or not such additional
loan or advance is evidenced by a promissory note of Borrower and whether or not
identified by a recital that it is secured by this Security Instrument; provided
that, although the total amount of the indebtedness that may be secured may
decrease to zero from time to time or may increase from time to time, the
aggregate amount of outstanding Debt so secured at any one time shall not exceed
the sum of two (2) times the Loan Amount, plus interest and disbursements made
for the payment of taxes, levies or insurance on the Property with interest on
such disbursements. It is understood and agreed that this future advance
provision shall not be construed to obligate Lender to make any such additional
loans or advances. It is further agreed that any additional note or notes
executed and delivered under this future advance provision shall be included in
the words "Note" or "Debt" wherever either appears in the context of this
Security Instrument. Borrower, for itself and its successors in title and its
successors and permitted assigns, hereby expressly waives and relinquishes any
rights granted under Section 697.04 of the Florida Statutes, or otherwise, to
limit the amount of indebtedness that may be secured by this Security Instrument
at any time during the term of this Security Instrument. Borrower further
covenants not to file for record any notice limiting the maximum principal
amount that may be secured by this Security Instrument and agrees that any such
notice, if filed, shall be null and void; and except as hereinafter provided, of
no effect. In the event that, notwithstanding the foregoing covenant, Borrower
or its successor in title files for record any notice limiting the maximum
principal amount that may be secured by this Security Instrument in violation of
the foregoing covenant, the Debt shall, at the option of Lender, become
immediately due and payable.
(b) Notwithstanding anything to the contrary contained in this Security
Instrument, Lender shall comply with the requirements of Section 501.137.
Florida Statutes, as applicable, with respect to the payment of Impositions and
insurance premiums from the Basic Carrying Costs Sub-Account so that the maximum
tax discount available may be obtained with regard to the Premises and so that
insurance coverage on the Property does not lapse.
(c) The assignment of leases and rents contained in this Security
Instrument is intended to provide Lender with all the rights and remedies of
lenders pursuant to Section 697.07 of the Florida Statutes (hereinafter "Section
697.07"), as may be amended from time to time. However, in no event shall this
reference diminish, alter, impair, or affect any other rights and remedies of
Lender, including but not limited to, the appointment of a receiver as provided
herein, nor shall any provision in this Section diminish, alter, impair or
affect any rights or powers of the receiver in law or equity or as set forth
herein. In addition, this assignment shall be fully operative without regard to
value of the Property or without regard to the adequacy of the Property to serve
as security for the obligations owed by Borrower to Lender, and shall be in
addition to any rights arising under Section 697.07. Further, except for the
notices required hereunder, if any, Borrower waives any notice of default or
demand for turnover of rents by Xxxxxx,
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together with any rights under Section 697.07 to apply to a court to deposit the
Rents into the registry of the court or such other depository as the court may
designate.
Section 18.37. Certain Matters Relating to Property Located in the State
of Georgia. With respect to the Property which is located in the State of
Georgia, notwithstanding anything contained herein to the contrary:
(a) The terms "mortgage" and "hypothecate" which are contained in the "NOW
THEREFORE" paragraph in the Recitals hereto and in Sections 2.02(q), 2.03,
2.05(b), 2.05(f), 8.01(d), 15.02 and 18.14 hereof shall be deleted.
(b) The "PROVIDED ALWAYS" paragraph in the Recitals hereto shall be
deleted in its entirety and the following provisions shall be inserted in its
place:
Borrower covenants that Xxxxxxxx is lawfully seized and possessed of
the Premises as aforesaid, has good right to convey the same, and that the
same are unencumbered except for the Permitted Encumbrances. Borrower
warrants and will forever defend the title to the Premises against the
claims of all persons whomsoever, except as to the Permitted Encumbrances.
This Deed is intended to operate and is to be construed as a deed
passing the title to the Premises to Lender and is made under those
provisions of the existing laws of the State of Georgia relating to deeds
to secure debt, and not as a mortgage, and is given to secure the payment
of the Note, the final payment on which is due on Maturity, unless
otherwise extended pursuant to the terms of the Note, together with any
and all renewals, modifications, consolidations and extensions of the
indebtedness evidenced thereby, together with the Debt, and together with
any and all additional advances made by Lender to protect or preserve the
Property or the security interests created hereby on the Property, or for
taxes, assessments or insurance premiums as hereinafter provided or for
the performance of any of Borrower's obligations hereunder or for any
other purpose provided herein (whether or not the original Borrower
remains the owner of the Property at the time of such advances).
Should the Debt be paid according to the tenor and effect thereof
when the same become due and payable, and should Xxxxxxxx perform all
covenants contained in this Deed in a timely manner, then this Deed shall
be cancelled and surrendered of record.
(c) The definition of "Security Instrument" in Section 1.01 hereof shall
be deleted in its entirety and the following shall be inserted in its place:
"Security Instrument" means this Deed to Secure Debt, Security
Instrument and Assignment of Rents as originally executed or as it may
hereafter from time to time be supplemented, amended, modified or extended
by one or more indentures supplemental hereto.
(d) The phrase "first mortgage" found in Section 2.06 hereof shall be
deleted and the phrase "first deed to secure debt" shall be inserted in its
place.
(e) Subsection 13.02(a)(vi) shall be deleted in its entirety and the
following shall be inserted in its place:
(vi) sell the Property or any part of the Property at one or more
public sale or sales before the door of the courthouse of the county in
which the Property or any part of the Property is situated, to the highest
bidder for cash, in order to pay the Debt, and all expenses of sale and of
all proceedings in connection therewith, including reasonable attorney's
fees, after advertising the time, place and terms of sale once a week for
four (4) weeks immediately preceding such sale (but without regard to the
number of days) in a newspaper in which Sheriff's sales are advertised in
said county. At any such public sale, Lender may execute and deliver to
the purchaser a conveyance of the Premises or any part of the Premises in
fee
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simple, with full warranties of title and, to this end, Borrower hereby
constitutes and appoints Lender the agent and attorney-in-fact of Borrower
to make such sale and conveyance, and thereby to divest Borrower of all
right, title and equity that Borrower may have in and to the Premises and
to vest the same in the purchaser of purchasers at such sale or sales, and
all the acts and doings of said agent and attorney-in-fact are hereby
ratified and confirmed and any recitals in said conveyance or conveyances
as to facts essential to a valid sale shall be binding upon Borrower. The
aforesaid power of sale and agency hereby granted are coupled with an
interest and are irrevocable by death or otherwise, are granted as
cumulative of the other remedies provided hereby or by law for the
collection of the Debt, and shall not be exhausted by one exercise
thereof, but may be exercised until full payment of all of the Debt. In
the event of any sale under this Security Instrument by virtue of the
exercise of the powers herein granted, or pursuant to any order in any
judicial proceedings or otherwise, the Premises may be sold as an entirety
or in separate parcels and in such manner or order as Lender, in its sole
discretion, may elect, and if Lender so elects, Lender may sell the
personal property covered by this Security Instrument at one or more
separate sales in any manner permitted by the Uniform Commercial Code, and
one or more exercises of the powers herein granted shall not extinguish
nor exhaust such powers, until the entire Property are sold or the Debt is
paid in full.
(f) As this instrument is a deed passing legal title pursuant to the laws
of the State of Georgia, and is not a mortgage, whenever reference herein is
made to the "lien of this Security Instrument", or words of similar import, such
words shall be construed as meaning the security title and interest created and
conveyed by this Deed.
(g) Whenever reference is made herein to "reasonable attorney's fees" or
similar words, such reference shall mean attorney's fees computed based upon the
attorney's normal hourly rates and the amount of time expended, and not the
statutory attorney's fees provided by Official Code of Georgia Annotated Section
13-1-11.
(h) The Maturity Date is the Payment Date occurring in the calendar month
subsequent to the month in which the Closing Date occurs in 2015.
Section 18.38. Certain Matters Relating to Property located in the State
of Illinois. With respect to the Property which is located in the State of
Illinois, notwithstanding anything contained herein to the contrary:
(a) COMPLIANCE WITH ILLINOIS MORTGAGE FORECLOSURE LAW.
If any provision in this Security Instrument is determined to be
inconsistent with any provision of the Illinois Mortgage Foreclosure Law (735
ILCS 5/15-1101 et seq. (1992 State Bar Edition)) (the "IMFL"), the provisions of
the IMFL shall take precedence over the provisions of this Security Instrument,
but shall not invalidate or render unenforceable any other provisions of this
Security Instrument that can be construed in a manner consistent with the IMFL.
If any provision of this Security Instrument shall grant to Lender any
rights or remedies upon an Event of Default which are more limited than the
rights that would otherwise be vested in Lender under the IMFL in the absence of
such provision, Lender shall be vested with the rights granted in the IMFL to
the full extent permitted by law.
Without limiting the generality of the foregoing, all expenses incurred by
Xxxxxx to the extent reimbursable under Sections 15-1510 and 15-1512 of the
IMFL, whether incurred before or after any decree or judgment of foreclosure,
and whether enumerated in this Security Instrument, shall be added to the Debt
secured by this Security Instrument or by the judgment of foreclosure.
Without limiting the generality of the foregoing, this Security Instrument
also secures all future advances made pursuant to the terms of this Security
Instrument or the other Loan Documents made after this Security Instrument is
recorded, including but not limited to all monies so advanced by Lender in
accordance with the terms of this Security Instrument to (A) preserve or restore
the Property, (B) preserve the lien of this Security Instrument
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or the priority thereof or (C) enforce this Security Instrument, and, to the
full extent permitted by Subsection (b)(5) of Section 15-1302 of the IMFL or
other law, shall be a lien from the time this Security Instrument is recorded.
(b) WAIVER OF STATUTORY RIGHTS. BORROWER ACKNOWLEDGES THAT THE TRANSACTION
OF WHICH THIS SECURITY INSTRUMENT IS A PART IS A TRANSACTION WHICH DOES NOT
INCLUDE EITHER AGRICULTURAL REAL ESTATE (AS DEFINED IN SECTION 15-1201 OF THE
IMFL), OR RESIDENTIAL REAL ESTATE (AS DEFINED IN SECTION 15-1219 OF THE IMFL),
AND TO THE FULL EXTENT PERMITTED BY LAW, VOLUNTARILY AND KNOWINGLY WAIVES
BORROWER'S RIGHTS TO REINSTATEMENT AND REDEMPTION AS ALLOWED UNDER SECTION
15-1601(b) OF THE IMFL, AND TO THE FULL EXTENT PERMITTED BY LAW, THE BENEFITS OF
ALL PRESENT AND FUTURE VALUATION, APPRAISEMENT, HOMESTEAD, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS UNDER ANY STATE OR FEDERAL LAW.
(c) FIXTURE FILING. THIS INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS
A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS WHICH
ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE PROPERTY AND IS TO BE FILED
FOR RECORD OR REGISTERED IN THE REAL ESTATE RECORDS OF THE COUNTY IN WHICH THE
PREMISES IS LOCATED. THE ADDRESS OF LENDER [SECURED PARTY] AND THE MAILING
ADDRESS OF BORROWER [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC OR OTHER
REPRODUCTION OF THIS INSTRUMENT OR ANY FINANCING STATEMENT RELATING TO THIS
INSTRUMENT SHALL BE SUFFICIENT AS A FINANCING STATEMENT.
(d) MAXIMUM AMOUNT SECURED. Borrower and Xxxxxx intend that this Security
Instrument shall secure not only sums advanced as of the date hereof but also
all advances provided for in the Loan Documents; provided however that the
maximum amount secured by this Security Instrument shall in no event exceed two
(2) times the Loan Amount.
(e) BUSINESS LOAN. Xxxxxxxx represents and agrees that the obligations
secured hereby constitute a business loan within the purview of such paragraph
1(c) of Section 4 of the Illinois Interest Act, 815 ILCS 205/1 et seq. (1992
State Bar Edition) (or any substitute, amended or replacement statutes)
transacted solely for the purpose of carrying on or acquiring the business of
Borrower, and also constitutes a loan secured by a mortgage which comes within
the purview of subparagraph 1(l) of said Section.
(f) MATURITY DATE. The maturity date of the Loan is the Payment Date
occurring in the calendar month subsequent to the month in which the Closing
Date occurs in 2015.
(g) MORTGAGEE-IN-POSSESSION. In addition to any provision of this Security
Instrument authorizing Lender to take or be placed in possession of the
Premises, or for the appointment of a receiver, Xxxxxx shall have the right, in
accordance with Sections 5/15-1701 and 5/15-1702 of the IMFL, to be placed in
possession of the Premises or at its request to have a received appointed, and
such receiver, or Lender, if and when placed in possession, shall have, in
addition to any other powers provided in this Security Instrument, all powers,
immunities and duties as provided for in Sections 2/15-1701 and 5/15-1702 of the
IMFL.
(h) INSURANCE. Notwithstanding the provisions of Article III hereof, if
Borrower fails to provide Lender evidence of the insurance coverages required
pursuant to the provisions of this Security Instrument, Lender may purchase such
insurance at Borrower's expense to cover Xxxxxx's interest in the Premises. The
insurance may, but need not, protect Xxxxxxxx's interest. The coverages that
Lender purchases may not pay any claim that Borrower makes or any claim that is
made against Borrower in connection with the Premises. Borrower may later cancel
any insurance purchased by Lender but only after providing Lender with evidence
that Borrower has obtained such insurance as required pursuant to Article III of
this Security Instrument. If Xxxxxx purchased insurance for the Premises,
Borrower will be responsible for the costs of such insurance, including, without
limitation, interest and any other charges which Lender may impose in connection
with the placement of the insurance, until the effective
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date of the cancellation and the expiration of the insurance. The cost of the
insurance may be added to the Debt. The cost of the insurance may be more than
the cost of the insurance Borrower may be able to obtain on its own.
Section 18.39. Certain Matters Relating to Property located in the State
of Indiana. With respect to the Property which is located in the State of
Indiana, notwithstanding anything contained herein to the contrary:
(a) The following terms and references (for purposes of this Section only)
shall mean the following:
(i) "Applicable Law" means statutory and case law in the State,
including, but not by way of limitation, Mortgages, Ind. Code 32-29,
Mortgage Foreclosure Actions, Ind. Code 32-30-10, Receiverships, Ind. Code
32-30-5, and the Uniform Commercial Code - Secured Transactions, Ind. Code
26-1-9.1 (the "UCC"), as amended, modified and/or --- recodified from time
to time; provided, however, if by reason of mandatory provisions of law,
the perfection, the effect of perfection or nonperfection, and the
priority of a security interests in any Collateral are governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the
State, "UCC" shall mean the Uniform --- Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to
perfection, effect of perfection or non-perfection, and the priority of
the security interests in any such Collateral.
(ii) "County" means the County in the State in which the Property is
located.
(iii) "County Recorder" means the Recorder of the County.
(iv) "State" means the state in which the Property is located.
(b) Where any provision of this Security Instrument is inconsistent with
any provision of Applicable Law regulating the creation or enforcement of a
security interest in real or personal property, the provisions of Applicable Law
shall take precedence over the provisions of this Security Instrument, but shall
not invalidate or render unenforceable any other provisions of this Security
Instrument that can be construed in a manner consistent with Applicable Law.
(c) Notwithstanding any provision in this Security Instrument relating to
a power of sale or other provision for sale of the Property upon default other
than under a judicial proceeding, any sale of the Property pursuant to this
Security Instrument will be made through a judicial proceeding.
(d) Notwithstanding any provision in this Security Instrument purporting
to irrevocably grant a security interest in the Property, upon the payment and
satisfaction of this Security Instrument and upon the request of Borrower,
Lender will file a release of this Security Instrument or other certification
that this Security Instrument has been satisfied in the office of the recorder
in the County.
(e) In addition to any other obligation secured by this Security
Instrument, this Security Instrument also secures:
future obligations and advances up to the maximum amount of two (2)
times the Loan Amount (whether made as an obligation, made at the
option of Lender, made after a reduction to a zero (0) or other
balance, or made otherwise) to the same extent as if the future
obligations and advances were made on the date of execution of this
Security Instrument; and
future modifications, extensions, and renewals of any indebtedness
or obligations secured by this Security Instrument.
(f) To the extent the Applicable Law limits (i) the availability of the
exercise of any of the remedies set forth herein, including without limitation
the remedies involving the right of Lender to exercise self-help in
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connection with the enforcement of the terms of this Security Instrument, or
(ii) the enforcement of waivers and indemnities made by Borrower, such remedies,
waivers, or indemnities shall be exercisable or enforceable, any provisions in
this Security Instrument to the contrary notwithstanding, if, and to the extent,
permitted by the laws in force at the time of the exercise of such remedies or
the enforcement of such waivers or indemnities at the time of the execution and
delivery of this Security Instrument. Anything contained in this Security
Instrument to the contrary, Lender shall enforce the terms and provisions of
this Security Instrument subject to and in accordance with all applicable Legal
Requirements and Applicable Law.
(g) Anything contained herein or in Ind. Code 32-29-7-5 to the contrary
notwithstanding, no waiver made by Borrower in this Security Instrument, or in
any of the other terms and provisions of the Loan Documents, shall constitute
the consideration for or be deemed to be a waiver or release by Lender of the
right to seek a deficiency judgment against Borrower or any other Person or
entity who may be personally liable for the Debt, which right to seek a
deficiency judgment is hereby reserved, preserved and retained by Lender for its
own behalf and its successors and assigns.
(h) Part of the Property and Collateral is or may become fixtures. It is
intended that as to the fixtures, as such term is defined in Ind. Code
26-1-9.1-102(41), that are part of the Property, this Security Instrument shall
be effective as a continuously perfected financing statement filed pursuant to
Ind. Code 26-1-9.1-515 as a fixture filing from the date of the filing of this
Security Instrument for record with the County Recorder. In order to satisfy
Ind. Code 26-1-9.1-502(a) and Ind. Code 26-1-9.1-502(b), the following
information is hereby provided:
Name of Debtor: Borrower is the "Debtor"
Address of Debtor: See Section 11.01 of this Security Instrument
Type of Organization: limited liability company
State of Organization: Delaware
Organization Number: As set forth on the Signature Page hereof
Name of Secured Party: Lender is the "Secured Party"
Address of Secured Party: See Section 11.01 of this Security Instrument
Record Owner of Property: Borrower
(i) Borrower hereby acknowledges receipt of a copy of this Security
Instrument in compliance with Xxxxxx's obligation to deliver a copy of the
fixture filing to Borrower pursuant to Section 9.1-502(f) of the UCC.
(j) The final maturity date of the obligations secured hereby (including
all extensions permitted pursuant to the terms of the Loan Documents) is the
Payment Date occurring in the calendar month subsequent to the month in which
the Closing Date occurs in 2015.
(k) The Property (i) does not contain any facility or facilities that are
subject to reporting (by either Borrower or any tenant or lessee thereon or
other person or entity in possession or occupancy of any portion thereof) under
Section 312 of the federal Emergency Planning and Community Right-to-Know Act of
1986 (42 U.S.C. Section 11022); (ii) is not the site of any underground storage
tanks; and (iii) is not listed on the Comprehensive Environmental Response,
Compensation and Liability Information System (CERCLIS) in accordance with
Section 116 of CERCLA (42 U.S.C. Section 9616). By reason of the foregoing, the
conveyance made by Borrower to Lender by this Security Instrument is not subject
to the disclosure or other provisions of the Indiana Responsible Property
transfer Law, Ind. Code 13-25-3.
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(l) If Lender exercises its rights under Section 13.02 (a)(viii) hereof
and brings an action to recover judgment under the Note or any guaranty and
during the pendancy of such action brings a separate action under this Security
Instrument, such actions shall be consolidated.
(m) The definition of Property shall include all refunds and rebates with
respect to any tax or utility payments, regardless of the time period to which
they relate.
(n) All attorneys fees and expenses incurred by Borrower in connection
with the enforcement of any of the terms of this Security Instrument shall
include, without limitation, support staff costs and amounts expended in
connection with litigation preparation and computerized research, telephone and
telefax expenses, mileage, depositions, postage, photocopies, process service,
videotapes, environmental testing and audits, environmental reviews and
inspections and environmental clean-up and remediation.
(o) Without limiting the scope of the assignment of Rents contained in
this Security Instrument, the assignment of Rents set forth herein shall
constitute an assignment of rents as set forth in Ind. Code 32-21-4-2 and
thereby creates, and Borrower hereby grants to Lender, a security interest in
the Rents that will be perfected upon the recording of this Security Instrument.
(p) Subject to the terms and provisions of this Security Instrument,
Borrower hereby irrevocably consents to the appointment of a receiver permitted
under Applicable Law, which receiver, when duly appointed, shall have all of the
powers and duties of receivers pursuant to Applicable Law.
(q) The term "Debt" as defined in this Security Instrument shall include,
without limitation, any judgment(s) or final decree(s) rendered to collect any
money obligations of Borrower to Lender and/or to enforce the performance or
collection of all covenants, agreements, other obligations and liabilities of
the Borrower under this Security Instrument or any or all of the Loan Documents;
provided, however, such Debt shall not include any judgment(s) or final
decree(s) rendered in another jurisdiction, which judgment(s) or final decree(s)
would be unenforceable by an Indiana Court pursuant to Ind. Code 34-54-3-4. The
obtaining of any judgment by Xxxxxx (other than a judgment foreclosing this
Security Instrument) and any levy of any execution under any such judgment upon
the Property shall not affect in any manner or to any extent the lien of this
Security Instrument upon the Property or any part thereof, or any liens, powers,
rights and remedies of Lender, but such liens, powers, rights and remedies shall
continue unimpaired as before until the judgment or xxxx is satisfied.
(r) Notwithstanding anything contained herein or the other Loan Documents
to the contrary, the provisions in this Security Instrument regarding creation,
validity, perfection, priority and enforceability of the lien and security
interests created hereby, all warranties of title contained herein with respect
to the Property and all provisions hereof relating to the realization of the
security covered hereby with respect to the Property shall be governed by
Applicable Law.
Section 18.40. Certain Matters Relating to Property located in the State
of Iowa. With respect to the Property which is located in the State of Iowa,
notwithstanding anything contained herein to the contrary:
(a) In the event of the foreclosure of this Security Instrument and a
subsequent sheriff's sale of the Property, Xxxxxxxx agrees that the redemption
period from said sale, as provided by the statutes of the State of Iowa, may, in
Xxxxxx's sole discretion, be reduced to six months, provided Xxxxxx, in said
foreclosure action, waives any rights to a deficiency judgment against Borrower
which may arise out of the foreclosure proceedings. It is further agreed that in
the event of the finding by court decree in such foreclosure that the real
estate hereinabove referred to has been abandoned by the owners and Persons
personally liable under the Note at the time of the foreclosure, the period of
redemption from the foreclosure sale may in Lender's sole discretion be reduced
to sixty (60) days, provided Lender waives its right to any deficiency judgment
against the Borrower which may arise out of the foreclosure proceedings. Nothing
in this Section (a) shall be construed to limit or otherwise affect any other
redemption provisions contained in Chapter 628 of the Iowa Code.
85
(b) This Security Instrument secures credit in the amount of two (2) times
the Loan Amount. Loans and advances up to this amount, together with interest,
are senior to indebtedness to other creditors under subsequently recorded or
filed mortgages and liens.
(c) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.
(d) Borrower represents and warrants that:
(i) None of the Property constitutes and none of the funds
represented by the Note will be used to purchase: (i) real property which
is a single-family or two-family dwelling occupied or to be occupied by
Borrower; (ii) agricultural products or property used for an agricultural
purpose as defined in Iowa Code Section 535.13; (iii) agricultural lands
defined in Iowa Code Section 12C.1(5) or 175.2(1), or (iv) property used
for agricultural purposes defined in Iowa Code Section 570A.1(2).
(ii) Transactions contemplated by this Security Instrument, the Note
and the other Loan Documents do not constitute a consumer credit
transaction as defined in Iowa Code Section 537.1301.11; and the
transactions contemplated by this Security Instrument, the Note and the
Other Loan Documents are for a business purpose as defined in Iowa Code
Section 535.2(2)(a)(5).
(e) Borrower acknowledges receipt of a copy of this Security Instrument,
the Note and each of the other Loan Documents.
(f) Borrower waives, to the fullest extent permitted by applicable law,
any requirement, whether pursuant to Iowa Rule of Civil Procedure 228 or
otherwise, that the Note must be filed with the clerk of court or otherwise
surrendered at the time judgment is rendered on the Note. Xxxxxxxx further
consents, in any mortgage foreclosure or other action brought on the Note in
Iowa, to the entry of judgment in any such action without the filing of the Note
with the clerk of court or other surrender of the Note.
Section 18.41. Certain Matters Relating to Property Located in the State
of Kansas. With respect to the Property which is located in the State of Kansas,
notwithstanding anything contained herein to the contrary:
(a) Lender may bring an action to foreclose this Security Instrument and
upon appointment of a receiver for the rents (to which Xxxxxx shall have the
right to the immediate appointment, without regard to the adequacy of the
security and Borrower hereby irrevocably consents to such appointment and waives
notice of any application therefore) enter into or upon the Property or any part
thereof either personally or by its agents, nominees or attorneys, and disposes
Borrower and its agents and servants therefrom.
(b) Lender may bring an action in any court of competent jurisdiction to
foreclose this instrument or to enforce any of the covenants and agreements
hereof. The Property may be foreclosed in parts or as an entirety. Lender, upon
application to a court of competent jurisdiction shall to the fullest extent
permitted by law be entitled without notice and without regard to the
sufficiency or value of any security for the indebtedness secured hereby or the
solvency of any party bound for its payment, to the appointment of a receiver to
take possession of and to operate the Property and to collect and apply the
income, rents, issues, profits and revenues thereof. The receiver shall have all
of the rights and powers permitted under the laws of the state within which the
Property is located. Upon the completion of any sale or sales made by the Lender
under or by virtue of this Section, the Lender or any officer of any court
empowered to do so shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument or good and sufficient instruments
conveying, assigning and transferring all estate, right, title and interest in
and to the Property and rights sold. The Lender is hereby appointed the true and
lawful attorney of the Borrower in its name in stead to make all necessary
conveyances, assignments, transfers and deliveries of the Property and rights so
sold and for that purpose, the Lender may execute all necessary instruments of
conveyance, assignment and transfer and may substitute one or more persons with
like power, the Borrower hereby ratifying and confirming all that its said
attorney or such substitute or substitutes shall lawfully do by virtue hereof.
This power of
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attorney shall be deemed to be a power coupled with an interest and not subject
to revocation. Nevertheless, the Borrower, if so requested by the Lender, shall
ratify and confirm any such sale or sales by executing and delivering to the
Lender or to such purchaser or purchasers all such instruments as may be
advisable, in the judgment of the Lender, for that purpose, and as may be
designated in such request. Any such sale or sales made under or by virtue of
this Section whether made under or by virtue of judicial proceedings or of a
judgment or decree of a foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
in equity, or the Borrower in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Borrower and
against any and all persons claiming or who may claim the same, or any part
thereof from, through or under the Borrower. Upon any sale made under or by
virtue of this Section, the Lender may bid for and acquire the Property or any
part thereof and in lieu of paying cash therefor and may make settlement for the
purchase price by crediting upon the indebtedness of the Borrower secured by
this Security Instrument the net sales price after deducting therefrom the
expenses of the sale and the cost of the action and any other sums which the
Lender is authorized to deduct under this Security Instrument. The Lender, upon
so acquiring the Property, or any part thereof, shall be entitled to hold, lease
rent, operate, manage and sell the same in any manner provided by applicable
laws. Lender, at Xxxxxx's option, is authorized to foreclose this Security
Instrument subject to the rights of any tenants of the Property, and the failure
to make any such tenants parties defendants to any such foreclosure proceeding
and to foreclose their rights will not be, nor be asserted by Borrower as a
defense to any proceedings instituted by Xxxxxx to collect the sums secured
hereby.
(c) This Security Instrument secures future advances pursuant to K.S.A.
Section 58-2336.
(d) The loan secured by this Security Instrument is a "Business Loan"
within the meaning of K.S.A. Section 16-207E.
Section 18.42. Certain Matters Relating to Property Located in the State
of Kentucky. With respect to the Property which is located in the Commonwealth
of Kentucky, notwithstanding anything contained herein to the contrary:
(a) The first paragraph of page 1 shall be amended to include "New York
County" in the address of the Lender. KRS 382.430.
(b) The maturity date of the Note is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.
(c) With reference to KRS 382.520, it is acknowledged and agreed that this
Security Instrument secures not only the initial advances under the Note but
also all future advances and all other additional indebtedness, whether direct,
indirect, future, contingent or otherwise, connected with or arising out of the
Note and the Loan Documents, to the extent of not more than two (2) times the
Loan Amount. It shall be a default under this Security Instrument if Borrower
requests a release, in the manner provided by KRS 382.250, of any portion of the
lien securing any of the additional indebtedness secured by this Security
Instrument prior to the date that all of the obligations have been paid and the
Loan Documents have been terminated, and Borrower hereby waives any and all
right to request such a release to the maximum extent permitted by law.
(d) FOR PURPOSES OF THE UNIFORM COMMERCIAL CODE THE FOLLOWING INFORMATION
IS FURNISHED:
(i) The name and address of the record owner of the real estate
described in this instrument is the same as that set forth for Fee Owner
on page 1 hereof:
(ii) The names and addresses of the Debtors (Borrower) is the same
as that set forth for Borrower on page 1 hereof:
87
(iii) The name and address of the Secured Party (Lender) is the same
as that set forth for Lender on page 1 hereof:
(iv) Information concerning the security interest evidenced by this
instrument may be obtained from the Secured Party at its address above.
(v) This document covers goods which are or are to become fixtures.
(vi) The organizational numbers for the Debtors (Borrower) are set
forth on the signature page hereof.
Section 18.43. Certain Matters Relating to Property Located in the State
of Louisiana. With respect to the Property which is located in the State of
Louisiana, notwithstanding anything contained herein to the contrary:
(a) Each reference to a "lien" will include a reference to a "privilege"
"mortgage", and/or "security interest", as appropriate. Each reference to the
appointment and powers of a receiver with respect to any Louisiana property
shall be to a keeper appointed pursuant to this Security Instrument. Each
reference to an "easement" or "easements" will include a reference to a
"servitude" and "servitudes". Each reference to a county will include a
reference to a Louisiana parish. The terms "land", "real property", and "real
estate" will mean "immovable property" as that term is used in the Louisiana
Civil Code. The term "personal property" will mean "movable property" as that
term is used in the Louisiana Civil Code. The term "tangible" property will mean
"corporeal" property as that term is used in the Louisiana Civil Code. The term
"intangible" property will mean "incorporeal" property as that term is used in
the Louisiana Civil Code. References to the "Code" or the "Uniform Commercial
Code" in effect in the State of Louisiana shall be to the Louisiana Commercial
Laws, La. R.S. Section 10:1-101 et seq. The term "fee estate" or "fee simple
title" will mean "full ownership interest" as that term is used in the Louisiana
Civil Code. The term "buildings" shall be deemed to include other constructions.
The phrase "covenant or other right running with the land" shall be deemed to
include a real right or a recorded lease of immovable property. The term
"condemnation" means "expropriation" as that term is used in Louisiana law. The
term "conveyance in lieu of foreclosure" or "action in lieu thereof" will mean
"giving in payment" as that term is used in Louisiana law. The term "joint and
several" will mean "solidary" as that term is used in the Louisiana Civil Code.
The term "statute of limitations" means prescriptive period or preemptive
period.
(b) For the purposes of the recitals and the other provisions of this
Security Instrument, it is understood that, subject to the terms hereof,
Borrower by these presents and by the execution and delivery hereof, does hereby
specially mortgage, affect, hypothecate, pledge and assign to Lender forever (to
the extent legally permitted), and grant Lender a continuing security interest
in, all right, title and interest of Xxxxxxxx in and to all of the Property.
(c) It is agreed that this Security Instrument shall secure not only the
sums advanced as of the date hereof, but any other advances whether obligatory
or otherwise, whether provided for in the Note, this Security Instrument or in
the Loan Documents. It is further agreed as to all such obligations both present
and future, this Security Instrument shall have effect between the parties from
the time this Security Instrument is established and as to third persons from
the time this Security Instrument is filed for registry; provided, however, that
the maximum amount of the obligations that may be outstanding at any time and
from time to time and secured hereby is $500,000,000.00.
(d) The Debt secured by this Security Instrument has a maturity date that
is the Payment Date occurring in the calendar month subsequent to the month in
which the Closing Date occurs in 2015.
(e) Borrower will not by act or omission change or permit to be changed
the zoning of the Premises from its current zoning classification.
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(f) Upon the occurrence of an Event of Default under this Security
Instrument, power is granted to Lender to commence a Louisiana executory process
foreclosure proceeding, and to have all or any part of the Property immediately
seized and sold with or without appraisal, in regular session of court or in
vacation, in accordance with applicable Louisiana law, without the necessity of
further demanding payment from Borrower or of notifying Borrower or placing
Borrower in default. For purposes of foreclosure under Louisiana executory
process procedures, Borrower acknowledges the indebtedness secured hereby
whether now existing or arising hereafter and confesses judgment in Xxxxxx's
favor up to the full amount of Xxxxxxxx's obligations secured by this Security
Instrument, in principal, interest, late charges, attorney's fees and other fees
and charges, and all other amounts secured under this Security Instrument. To
the extent permitted under applicable Louisiana law, Borrower additionally
waives: (a) the benefit of appraisal as provided in Articles 2332, 2336, 2723
and 2724 of the Louisiana Code of Civil Procedure, and all other laws with
regard to appraisal upon judicial sale; (b) the demand and three (3) days' delay
as provided under Article 2721 of the Louisiana Code of Civil Procedure; (c) the
notice of seizure as provided under Articles 2293 and 2721 of the Louisiana Code
of Civil Procedure; (d) the three (3) days' delay provided under Articles 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other benefits
provided under Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other Articles not specifically mentioned above. Borrower
waives all homestead and other exemptions from seizure. These remedies are in
addition to all others provided under Louisiana law.
(g) Upon, or at any time after the filing of a complaint to foreclose this
Security Instrument, the court in which such complaint is filed may appoint a
keeper of the Property pursuant to the provisions of La. R.S. 9:Section 5136 et
seq., as amended from time to time. Such keeper shall have all powers and
authorities that may be exercised by keepers under the laws of the State as now
or hereafter existing, and shall be compensated in accordance with such laws.
All fees, compensation and other amounts due a keeper hereunder shall be a part
of the Debt and shall be secured by this Security Instrument. References in this
Security Instrument and the Assignment to a "receiver" or words of similar
import shall include a keeper appointed pursuant to the provisions of this
Section.
(h) For purposes of La. R.S. Sections 9:5555 and 5556, Borrower
acknowledges that none of the Debt evidences indebtedness or instruments
paraphed for identification with this Security Instrument. For purposes of
Louisiana Civil Code article 3298, La. R.S. Section 9:4401 and other applicable
law, this Security Instrument has been granted to secure the present and future
Debt, up to $500,000,000.00, whether now existing or hereafter arising, of
whatever nature and kind, whatsoever. This Security Instrument shall remain in
effect until cancelled by a written cancellation signed by Xxxxxx.
(i) The reference in Section 13.02(b) hereof to "fee simple" shall be
deemed to mean "fee (full ownership)" and the reference to Section 13.02(b)
hereof to "deed with special warranty of title" shall be deemed to mean "deed
with waiver of warranty of title."
(j) The phrase "power of sale or otherwise" found in Section 13.02(a)(vi)
hereof shall be deleted and the phrase "applicable Louisiana law" shall be
inserted in its place.
(k) The phrase "whether made under the power of sale herein granted or
under or by virtue of judicial proceedings or a judgment or decree of
foreclosure and sale" found in Sections 13.02(d), 13.02(e) and 13.02(f) shall be
deleted and the phrase "whether by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale or otherwise in accordance with applicable
Louisiana law" shall be inserted in its place.
(l) Xxxxxxxx agrees to provide to all applicable insurers notice of the
collateral assignment made by Xxxxxxxx in clause (g) of the description of the
Property contained in this Security Instrument.
(m) Any and all declarations of facts made by authentic act before a
notary public in the presence of two witnesses by a person declaring that such
facts lie within his knowledge, shall constitute authentic evidence of such
facts for the purpose of executory process. Xxxxxxxx specifically agrees that
such an affidavit by a representative of Lender as to the existence, amount,
terms and maturity of the Debt and of a default thereunder shall constitute
authentic evidence of such facts for the purpose of executory process.
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(n) Borrower represents that the Note evidences an indebtedness incurred
for a business or commercial purpose.
Section 18.44. Certain Matters Relating to Property Located in Maine. With
respect to the Property located in the State of Maine, notwithstanding anything
contained herein to the contrary:
(a) Lender shall have the STATUTORY POWER OF SALE as described in Title
33, Maine Revised Statutes Annotated, Section 501-A, as amended from time to
time, which is expressly incorporated herein by reference.
(b) All references in this Security Instrument to any obligation of
Borrower to pay attorney fees and disbursements shall include, without
limitation, attorney fees and disbursements incurred in any bankruptcy
proceedings.
(c) This Security Instrument secures indebtedness and obligations arising
from a commercial loan and none of the proceeds shall be used for primarily
personal, family or household purposes.
(d) This Security Instrument constitutes, among other things, a fixture
filing. Borrower is the debtor and Xxxxxxxx's address is 000 Xxxxx Xxxxxxx Xxxx
Xxxxx, Xxxx, Xxxxxxx 00000. Borrower is the record owner of the Premises.
(e) NO ORAL AGREEMENT. UNDER MAINE LAW, NO PROMISE, CONTRACT, OR AGREEMENT
TO LEND MONEY, EXTEND CREDIT, FORBEAR FROM COLLECTION OF A DEBT, OR MAKE ANY
OTHER ACCOMMODATION FOR THE REPAYMENT OF A DEBT FOR MORE THAN $250,000.00 MAY BE
ENFORCED IN COURT AGAINST LENDER UNLESS IT IS IN WRITING AND SIGNED BY XXXXXX.
ACCORDINGLY, XXXXXXXX CANNOT ENFORCE ANY ORAL PROMISE UNLESS IT IS CONTAINED IN
LOAN DOCUMENTS SIGNED BY XXXXXX, NOR CAN ANY CHANGE, FORBEARANCE OR OTHER
ACCOMMODATION RELATING TO THE DEBT, THIS LOAN, THIS SECURITY INSTRUMENT OR THE
OTHER LOAN DOCUMENTS BE ENFORCED, UNLESS IT IS IN WRITING AND SIGNED BY XXXXXX.
(f) This Security Instrument is an open-ended mortgage that secures
existing indebtedness, "future advances," "protective advances," and "contingent
obligations" as such terms are defined in 33 M.R.S.A. Section 505, as the same
may be amended. The maximum aggregate amount of all debts or obligations secured
by this Security Instrument, including future advances but excluding protective
advances, shall not at any time exceed the total amount of two (2) times the
Loan Amount.
Section 18.45. Certain Matters Relating to Property Located in the State
of Massachusetts. With respect to the Property which is located in the State of
Massachusetts, notwithstanding anything contained herein to the contrary:
(a) Borrower hereby, as continuing security for payment or performance of
its obligations under the Note and the other Loan Documents in accordance with
the terms thereof, grants with MORTGAGE COVENANTS and assigns to Lender, and
grants to Lender a continuing security interest in and to all the Property.
(b) This Security Instrument is upon the STATUTORY CONDITION and upon the
further condition that all covenants and agreements on the part of Borrower
herein undertaken shall be kept and fully and seasonably performed and that no
breach of any other of the covenants or conditions specified herein shall be
permitted, for any breach of which, upon the occurrence of an Event of Default
Lender shall have the STATUTORY POWER OF SALE together with all other remedies
now or hereafter permitted by law.
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(c) This Security Instrument has been executed as a sealed instrument as
of the date first above written.
Section 18.46. Certain Matters Relating to Property Located in the State
of Michigan. With respect to the Property which is located in the State of
Michigan, notwithstanding anything contained herein to the contrary:
(a) Lender shall have all the rights, benefits and privileges set forth in
this Security Instrument subject to the provisions of MCLA 554.231, MCLA 544.211
et seq. and MCLA 565.81 et seq. It is the intention of the parties that the
provisions of this Security Instrument, and all of the rights and powers granted
or reserved to Lender hereunder, shall be construed and enforced to the broadest
extent permissible under applicable Michigan law governing assignments of leases
and rents including, without limitation, MCLA 554.231 et seq. Any provision
contained herein which would, as drafted, violate any provision of, or be in any
respect unenforceable under, Michigan law shall be automatically deemed to be
modified to the extent necessary, consistent with its purpose, to render such
provision enforceable under Michigan law.
(b) THIS SECURITY INSTRUMENT IS A "FUTURE ADVANCE MORTGAGE" PURSUANT TO
M.C.L.A. 565.901. ALL FUTURE ADVANCES UNDER THIS SECURITY INSTRUMENT OR UNDER
ANY OF THE LOAN DOCUMENTS SHALL HAVE THE SAME PRIORITY AS IF THE FUTURE ADVANCE
WAS MADE ON THE DATE THAT THIS SECURITY INSTRUMENT WAS RECORDED. THIS SECURITY
INSTRUMENT SHALL SECURE ALL INDEBTEDNESS OF BORROWER, ITS SUCCESSORS AND
ASSIGNS, UNDER THIS SECURITY INSTRUMENT, WHENEVER AND HOWEVER INCURRED. NOTICE
IS HEREBY GIVEN THAT THE INDEBTEDNESS SECURED HEREBY MAY INCREASE AS A RESULT OF
ANY DEFAULTS HEREUNDER BY BORROWER DUE TO, FOR EXAMPLE AND WITHOUT LIMITATION,
UNPAID INTEREST OR LATE CHARGES, UNPAID TAXES OR UNPAID INSURANCE PREMIUMS WHICH
LENDER ELECTS TO ADVANCE PURSUANT TO THE TERMS OF THIS SECURITY INSTRUMENT,
DEFAULTS UNDER LEASES THAT LENDER ELECTS TO CURE, ATTORNEYS' FEES OR COSTS
INCURRED IN ENFORCING THE LOAN DOCUMENTS OR OTHER EXPENSES INCURRED BY LENDER IN
PROTECTING THE PREMISES, THE SECURITY OF THIS SECURITY INSTRUMENT OR XXXXXX'S
RIGHTS AND INTERESTS.
(c) In the event of a default under this Security Instrument, power is
granted to Lender to sell the Property or any part thereof at public auction and
to convey same to the purchaser after notice as required by the statutes of the
State of Michigan for foreclosure of mortgages by advertisement being Sections
600.3201, et seq., Michigan Compiled Laws, as amended.
(d) This Security Instrument contains a power of sale which permits Lender
to cause the Property to be sold by advertisement rather than pursuant to court
action; and Borrower hereby voluntarily and knowingly waives any right Lender
may have by virtue of any applicable constitutional provision or statute to any
notice or court hearing prior to the exercise of the power of sale, except as
may be expressly required by the Michigan statute governing foreclosures by
advertisement. By execution of the Mortgage, Xxxxxxxx represents and
acknowledges that the meaning and the consequences of the foregoing have been
discussed as fully as desired by Borrower with Xxxxxxxx's legal counsel.
(e) As additional security for the Debt and performance of the covenants
and agreements herein and in any other agreement contained, pursuant to Michigan
Compiled Laws 554.231 et seq., as amended, Borrower hereby assigns and conveys
to Lender and grants Lender security interests in any and all leases, written or
unwritten, of the Property or any part thereof, heretofore, now or hereafter
entered into and demising any part of the Property, and all rents, issues,
income and profits derived from the use of the Property or any portion thereof,
whether due or to become due.
(f) Xxxxxxxx's failure, refusal or neglect to pay any taxes levied against
the Property or any insurance premiums due upon policies of insurance covering
the Property, shall constitute waste under Michigan Compiled Laws 600.2927, and
Lender shall have a right to appointment of a receiver of the Property and of
the earnings,
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income and profits thereof, with such powers as the Court making such
appointment confers, and Xxxxxxxx hereby irrevocably consents to such
appointment in such event, and agrees to pay Xxxxxx's costs and expenses
incurred in such proceeding, including reasonably attorneys fees. Payment by
Xxxxxx for and on behalf of Borrower of any delinquent taxes, assessments, or
insurance premiums payable by Borrower under the terms of this Security
Instrument shall not cure the default herein described, nor shall it in any
manner impair Xxxxxx's right to the appointment of a receiver as set forth
herein.
(g) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.
Section 18.47. Certain Matters Relating to Property Located in Minnesota.
The following provisions shall apply with respect to the Property located in the
State of Minnesota (the "Property"):
(a) Acceleration; Foreclosure. If any Event of Default has occurred and is
continuing, Lender may, at its option, exercise one or more of the following
rights and remedies (and any other rights and remedies available to it):
(i) Lender may exercise all of their rights under paragraph (b)
below.
(ii) Lender shall have and may exercise, with respect to all
Fixtures, all the rights and remedies accorded upon default to a secured
party under the Uniform Commercial Code as in effect in the State of
Minnesota. If notice to Borrower of the intended disposition of such
property is required by law in a particular instance, such notice shall be
deemed commercially reasonable if given to Borrower (in the manner
specified in Section 11.01) at least 10 calendar days prior to the date of
intended disposition. Borrower shall pay on demand all costs and expenses
incurred by Xxxxxx in exercising such rights and remedies, including but
not limited to reasonable attorneys' fees and legal expenses.
(iii) Lender may (and is hereby authorized and empowered to)
foreclose this Security Instrument by action or advertisement pursuant to
the statutes of the State of Minnesota in such case made and provided,
power being expressly granted to sell the Property at public auction and
convey the same to the purchaser in fee simple and, out of the proceeds
arising from such sale, to pay all indebtedness secured hereby, with
interest, and all legal costs and charges of such foreclosure and the
maximum attorneys' fees permitted by law, which costs, charges and fees
Xxxxxxxx agrees to pay.
(b) Assignment of Rents and Leases.
(i) Upon the occurrence of any Event of Default Lender may, at its
option, in addition to the other remedies set forth in paragraph (a)
above:
(A) in the name, place and stead of Borrower and without
becoming a mortgagee-in-possession (i) enter upon, manage and
operate the Property or retain the services of one or more
independent contractors to manage and operate all or any part of the
Property; (ii) make, enforce, modify and accept surrender of the
Lease; (iii) obtain or evict tenants, collect, sue for, fix or
modify all tolls, rents, issues, profits, products, revenues and
other income of the Property and every part thereof and enforce all
rights of Borrower under the Lease; and (iv) perform any and all
other acts that may be necessary or proper to protect the security
of this Security Instrument.
(B) with or without exercising the rights set forth in
subparagraph (A) above, give or require Borrower to give notice of
any or all tenants authorizing and directing them to pay all Rents
directly to Lender; and
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(C) without regard to any waste, adequacy of the security or
solvency of Borrower, apply for the appointment of a receiver of the
Property, to which appointment Borrower hereby consents, whether or
not foreclosure proceedings have been commenced under this Security
Instrument and whether or not a foreclosure sale has occurred.
The exercise of any of the foregoing rights or remedies and the application of
the Rents pursuant to paragraph (ii) shall not cure or waive any Event of
Default (or notice of default) under this Security Instrument or invalidate any
act done pursuant to such notice.
(ii) All Rents collected by Lender or any receiver each month shall
be applied as follows:
(A) to payment of all reasonable fees of the receiver approved
by the court;
(B) to payment of all tenant security deposits then owing
pursuant to the provisions of Minnesota Statutes Section 504B.178;
(C) to payment of all prior or current real estate taxes and
special assessments with respect to the Property, or if this
Security Instrument or any other instrument relating to the Debt
requires periodic escrow payments for such taxes and assessments, to
the escrow payments then due;
(D) to payment of all premiums then due for insurance required
by the provisions of this Security Instrument, or if this Security
Instrument or any other instrument relating to the Debt requires
periodic escrow payments for such premiums, to the escrow payments
then due;
(E) to payment of expenses incurred for normal maintenance of
the Property;
(F) if received prior to any foreclosure sale of the Property,
to Lender for payment of the Debt, but no such payment made after
acceleration of the Debt shall affect such acceleration;
(G) if received during or with respect to the period of
redemption following a foreclosure sale of the Property:
(1) if the purchaser at the foreclosure sale is not
Lender, first to Lender to the extent of any deficiency of the sale
proceeds to repay Debt and second to the purchaser to be retained as
a credit to the redemption price, but if the Property is not
redeemed, then to the purchaser of the Property;
(2) if the purchaser at the foreclosure sale is Lender,
to Lender to the extent of any deficiency of the sale proceeds to
repay the Debt, and the balance to be retained by Lender as a credit
to the redemption price, but if the Property is not redeemed, then
to Lender, whether or not any such deficiency exists.
The rights and powers of Lender under this paragraph (b) and the
application of Rents under this paragraph (b) shall continue until
expiration of the redemption period from any foreclosure sale, whether or
not any deficiency remains after the foreclosure sale.
(c) Fixture Filing. From the date of its recording, this Security
Instrument shall be effective as a financing statement files as a fixture filing
with respect to the Fixtures. For this purpose, the following information is set
forth:
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(i) The name and address of the record owner of the real estate
described in this instrument is the same as that set forth for Borrower on
page 1 hereof:
(ii) the name and address of the Debtor (Borrower) is the same as
that set forth for Borrower on page 1 hereof:
(iii) the name and address of the Secured Party (Lender) is the same
as that set forth for Lender on page 1 hereof:
(iv) This document covers goods which are or are to become fixtures.
(v) The Debtor named above is the record owner of the real estate
described herein.
(d) Intentionally Omitted.
(e) Acknowledgment Regarding Future Advances. To the extent that this
Security Instrument secures indebtedness other than the Note, the amount of such
indebtedness is not currently known.
Xxxxxx acknowledges that it is aware of the provisions of Minnesota Statutes
Section 287.05, subd. 5, and intends to comply with the requirements contained
therein.
Section 18.48. Certain Matters Relating to Property Located in the State
of New Hampshire. With respect to the Property which is located in the State of
New Hampshire, notwithstanding anything contained herein to the contrary:
(a) This Security Interest is granted with the STATUTORY POWER OF SALE.
(b) Upon the occurrence and during the continuance of an Event of Default,
Lender may, at Lender's option, by Lender itself, or otherwise, pursuant to the
STATUTORY POWER OF SALE, sell the Property consisting of real estate and
personalty situated thereon, and all estate, right, title, and interest of
Borrower therein, at one or more sales, as an entirety or in parcels, with such
elements of real and/or personal property, and at such time and place in any
municipality in which any of the Premises is located at the Premises, and upon
such terms as Lender may deem expedient, or as may be required by applicable
law. In the event of a sale by foreclosure pursuant to the STATUTORY POWER OF
SALE of less than all of the Property, this Security Instrument shall continue
as a lien and security interest on the remaining portion of the Property.
(c) The maximum principal amount of the Debt, including present and future
obligations, which may be secured by the lien of this Security Instrument on the
Property located in New Hampshire at any one time is $250,000,000), plus
interest, costs and advances made by Lender to protect or preserve the Premises
or the lien of this Security Instrument, or for taxes, assessments or insurance
premiums as herein provided.
Section 18.49. Certain Matters Relating to Property Located in the State
of New Jersey. With respect to the Property which is located in the State of New
Jersey, notwithstanding anything contained herein to the Contrary:
(a) Borrower represents and warrants that (i) all filings and submissions
or other action required pursuant to the New Jersey Industrial Site Recovery
Act, N.J.S.A. 13:1K-6, et seq., as modified ("ISRA"), if any, in connection with
the Loan, have been made or taken and (ii) the Property is not located within a
"freshwater wetlands" or a "transition area," each as defined by N.J.S.A.
13:9B-3, and is not subject to the terms of the New Jersey Freshwater Wetlands
Protection Act, as amended, N.J.S.A. 13:9B-1 et. seq., or the rules and
regulations promulgated thereunder.
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(b) This Security Instrument shall be governed by and construed in
accordance with the laws of the State of New York, provided, however, that (i)
matters of title to the Property located in New Jersey, (ii) matters of
creation, perfection and priority of the lien of this Security Instrument and
(iii) those procedural issues of foreclosure, deed in lieu of foreclosure or
sale, which are required to be governed by the laws of the State of New Jersey
shall be governed by the laws of New Jersey and construed in accordance
therewith.
(c) BORROWER HEREBY ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS SECURITY
INSTRUMENT WITHOUT CHARGE.
(x) Xxxxxxxx agrees, and it is so intended that this Security Instrument
is subject to Modification as set forth in N.J.S.A. 46:9-8.1, et seq.
(e) Borrower shall not conduct or cause or permit to be conducted on the
Property any activity which constitutes an Industrial Establishment (as such
term is defined in ISRA) without the prior written consent of Lender. In the
event that the provisions of ISRA become applicable to the Property subsequent
to the date hereof, Borrower shall give prompt written notice thereof to Lender
and shall take immediate requisite action to insure full compliance therewith.
Xxxxxxxx shall deliver to Lender copies of all correspondence, notices and
submissions that it sends to or receives from the New Jersey Department of
Environmental Protection in connection with such ISRA compliance. Borrower's
obligation to comply with ISRA shall, notwithstanding its general applicability,
also specifically apply to sale, transfer, closure or termination of operations
associated with any foreclosure action, including, without limitation, a
foreclosure action brought with respect to this Security Instrument. In
connection with the purchase of the Property, Xxxxxxxx required that the seller
of the Property comply with the provisions of ISRA and the seller did comply
therewith.
(f) The Property has not been and is not now being used as a Major
Facility (as defined in the Environmental Statutes), and Borrower shall not use
the Property as a Major Facility in the future without the prior written consent
of Lender. If Borrower ever becomes an owner or operator of a Major Facility,
then Borrower shall furnish the New Jersey Department of Environmental
Protection with all the information required by N.J.S.A. 58:10-23.11d, and shall
duly file with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return, and shall pay all taxes due
therewith, in accordance with N.J.S.A. 58:10-23, 11b.
(g) Borrower represents and warrants that the loans or other financial
accommodations included as obligations secured by this Security Instrument were
obtained solely for the purpose of carrying on or acquiring a business or
commercial investment and not for residential, consumer or household purposes.
Section 18.50. Certain Matters Relating to Property Located in the State
of New York. With respect to the Property which is located in the State of New
York, notwithstanding anything contained herein to the contrary:
(a) Borrower represents that this Security Instrument does not encumber
property principally improved or to be improved by one or more structures
containing in the aggregate not more than six (6) residential dwelling units.
(b) Pursuant to Section 13 of the lien law of New York, Xxxxxxxx shall
receive the advances secured hereby and shall hold the right to receive such
advances as a trust fund to be applied first for the purpose of paying the cost
of any improvement and shall apply such advances first to the payment of the
cost of any such improvements on the Property before using any part of the total
of the same for any other purpose.
(c) Lender shall have all of the rights against lessees of the Property as
set forth in Section 291(f) of the Real Property Law of New York.
(d) The provisions of subsection 4 of Section 254 of the New York Real
Property Law covering the insurance of buildings against loss by fire and the
application of Insurance Proceeds shall not apply to this Security
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Instrument. In the event of any conflict, inconsistency or ambiguity between the
provisions of Article III hereof and the provisions of subsection 4 of Section
254 of the New York Real Property Law covering the insurance of buildings
against loss by fire and the application of Insurance Proceeds, the provisions
of Article III shall control.
(e) (i) In the event of any sale or transfer of the Property, or any part
thereof, including any sale or transfer by reason of foreclosure of this
Security Instrument or any prior or subordinate mortgage or by deed in lieu of
any such foreclosure, Borrower shall timely and duly complete, execute and
deliver to Lender all forms and supporting documentation required by any taxing
authority to estimate and fix any tax payable by reason of such sale or transfer
or recording of the deed evidencing such sale or transfer, including any New
York State Real Estate Transfer Tax payable pursuant to Article 31 of the New
York Tax Law and New York City Real Property Transfer Tax payable pursuant to
Chapter 21, Title 11 of the New York City Administrative Code (individually, a
"Transfer Tax" and collectively, the "Transfer Taxes").
(ii) Borrower shall pay the Transfer Taxes that may hereafter become
due and payable with respect to any sale or transfer of the Property
described in this Article, and in default of such payment, Lender may pay
the same and the amount of such payment shall be added to the Debt secured
hereby and, unless incurred in connection with a foreclosure of this
Security Instrument or deed in lieu of such foreclosure, shall be secured
by this Security Instrument.
(iii) Borrower hereby irrevocably constitutes and appoints Lender as
its attorney-in-fact, coupled with an interest, to prepare and deliver any
questionnaire, statement, affidavit or tax return in connection with any
Transfer Tax applicable to any foreclosure or deed in lieu of foreclosure
described in this Article.
(iv) Borrower shall indemnify and hold harmless Lender against (i)
any and all liability incurred by Lender for the payment of any Transfer
Tax with respect to any transfer of the Property by reason of foreclosure,
and (ii) any and all expenses incurred by Xxxxxx in connection therewith
including, without limitation, interest, penalties and attorneys' fees.
(v) The obligation to pay the Transfer Taxes and indemnify Lender
under this Section is a personal obligation of Borrower, whether or not
Borrower is personally obligated to pay the Debt secured by this Security
Instrument, and shall be binding upon and enforceable against the
distributees, successors and assigns of Borrower with the same force and
effect as though each of them had personally executed and delivered this
Security Instrument, notwithstanding any exculpation provision in favor of
Borrower with respect to the payment of any other monetary obligations
under this Security Instrument.
(vi) In the event that Xxxxxxxx fails or refuses to pay a tax
payable by Borrower with respect to a sale or transfer by reason of a
foreclosure of this Security Instrument in accordance with this Section,
the amount of the tax, any interest or penalty applicable thereto and any
other amount payable pursuant to Xxxxxxxx's obligation to indemnify Lender
under this Section may, at the sole option of Lender, be paid as an
expense of the sale out of the proceeds of the mortgage foreclosure sale.
(vii) The provisions of this Section shall survive any transfer and
the delivery of the deed affecting such transfer. Nothing in this Section
shall be deemed to grant to Borrower any greater rights to sell, assign or
otherwise transfer the Premises than are expressly provided in Article IX
nor to deprive Lender of any right to refuse to consent to any transaction
referred to in this Section.
(f) The clauses and covenants contained in this Security Instrument that
are construed by Section 254 of the New York Real Property Law shall be
construed as provided in those sections (except as provided in Subsection (d) of
this Section and Article III hereof). The additional clauses and covenants
contained in this Security Instrument shall afford rights supplemental to and
not exclusive of the rights conferred by the clauses and covenants construed by
Section 254 and shall not impair, modify, alter or defeat such rights (except as
provided in Subsection (d) of this Section and Article III hereof),
notwithstanding that such additional clauses and covenants
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may relate to the same subject matter or provide for different or additional
rights in the same or similar contingencies as the clauses and covenants
construed by Section 254. The right of Lender arising under the clauses and
covenants contained in this Security Instrument shall be separate, distinct and
cumulative and none of them shall be in exclusion of the others. No act of
Lender shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision, anything herein or otherwise to
the contrary notwithstanding. In the event of any inconsistencies between the
provisions of Section 254 and the provisions of this Security Instrument, the
provisions of this Security Instrument shall prevail.
(g) Notwithstanding anything to the contrary in this Security Instrument,
the maximum amount of principal indebtedness secured by this Security Instrument
or which under any contingency may be secured by this Security Instrument is
125% of the Allocated Loan Amount for the Property.
(h) At Borrower's request, and upon (a) Borrower's prepayment of the Debt
in full, whether by prepayment or otherwise and (b) payment by Borrower of
Lender's reasonable counsel fees and disbursements and other reasonable costs,
if any, and provided Borrower (a) refinances the Loan through any institution
other than Lender, or (b) sells any of the Premises, and an institution other
than Lender is involved in the financing of such sale, Xxxxxx shall deliver an
assignment of the Note, this Security Instrument to Borrower's designee without
recourse, representation or warranty, together with the Note (or an affidavit of
lost note) duly endorsed by Xxxxxx to Borrower's designee.
Section 18.51. Certain Matters Relating to Property Located in the State
of Ohio. With respect to the Property which is located in the State of Ohio,
notwithstanding anything contained herein to the contrary:
(a) This Security Instrument is an Open-End Mortgage, and Borrower and
Lender intend that this Security Instrument shall secure not only the sums
advanced as of the date hereof, but also the unadvanced balance of the Note,
which sums Lender is obligated to advance, and in addition shall secure any and
all advances provided for in the Loan Documents to the fullest extent provided
for under Section 5301.232 of the Ohio Revised Code; provided, however, that the
maximum amount of the principal portion of the Debt that may be outstanding at
any time is $500,000,000.00. In addition to any other debt or obligation secured
hereby, this Security Instrument shall also secure unpaid balances of advances
made with respect to the Property for the payment of taxes, assessments,
insurance premiums, and costs incurred for the protection of the Premises to the
fullest extent provided for under Section 5301.233 of the Ohio Revised Code.
(b) The following is hereby inserted after the definition of the word
"Debt" in the "NOW THEREFORE" paragraph found in the Recitals hereto:
as well as to secure the unpaid balance of advances made by Lender for the
payment of taxes, assessments, insurance premiums, and costs incurred for
the protection of the Property to the fullest extent provided for under
Section 5301.233 of the Ohio Revised Code.
(c) The following is hereby inserted at the end of Section 18.14 of this
Security Instrument as an additional subparagraph:
(c) The name of the "debtor" is the "Borrower" identified on page 1
hereof; and the name of the "secured party" is the "Lender" identified on
page 1 hereof; the mailing address of the "secured party" from which
information concerning the security interests may be obtained and the
mailing address of the "debtor" are as set forth in the preamble of this
Security Instrument; and a statement indicating the types, or describing
the items, of collateral is set forth hereinabove in the granting clauses.
Borrower is the owner of the real property constituting the "Premises"
encumbered by this Security Instrument.
(d) Xxxxxx shall be and hereby is authorized and empowered to do, as
mortgagee, all things provided to be done in the mechanics' lien laws of the
State of Ohio (including Section 1311.14 of the Ohio Revised Code), and all acts
amendatory or supplementary thereto.
97
(e) The maturity date of the Loan is the Payment Date occurring in the
calendar month subsequent to the month in which the Closing Date occurs in 2015.
(f) With respect to any agreement by Borrower in this Security Instrument
or in any other Loan Document to pay Xxxxxx's attorneys' fee and disbursements
incurred in connection with the Loan, Xxxxxxxx agrees that each Loan Document is
a "contract of indebtedness" and that the attorneys' fees and disbursements
referenced are those which are a reasonable amount, all as contemplated by Ohio
Revised Code Section 1301.21, as such Section may hereafter be amended. Xxxxxxxx
further agrees that the indebtedness incurred in connection with the Loan is not
incurred for purposes that are primarily personal, family or household and
confirms that the total amount owed on the contract of indebtedness exceeds One
Hundred Thousand and No/100 Dollars ($100,000.00).
Section 18.52. Certain Matters Relating to Property Located in Oklahoma.
With respect to Property located in the State of Oklahoma, notwithstanding
anything contained herein to the contrary:
(a) Without in any way limiting the other provisions of this Security
Instrument, but in addition thereto and in amplification thereof, upon the
occurrence of any Event of Default which has not been waived, Borrower hereby
confers on Lender the power to sell the Property, and the interests of persons
therein, in the manner and pursuant to the procedures set forth in the "Oklahoma
Power of Sale Mortgage Foreclosure Act" (46 O.S. Sections 40-49), as said Act
may be amended from time to time, or pursuant to other applicable statutory or
judicial authority. If no cure is effected within the statutory time limits,
Lender may accelerate the indebtedness secured hereby without further notice
(the aforementioned statutory cure period shall run concurrently with any
contractual provision for notice before acceleration of debt) and may then
proceed in the manner and subject to the conditions of the above-referenced
statutes to send to Borrower and other necessary parties a notice of sale and
may sell and convey the Property in accordance with the above-referenced laws.
Lender may enforce this Security Instrument by exercising said power of sale or
at Xxxxxx's sole option by judicial foreclosure proceedings as provided by law.
No action of Lender based upon the provisions contained herein or in the
Oklahoma Power of Sale Mortgage Foreclosure Act, including, without limitation,
the giving of the notice of intent to foreclose by power of sale or the notice
of sale, shall constitute an election of remedies which would preclude Lender
from pursuing judicial foreclosure before or at any time after commencement of
the power of sale foreclosure procedure. If Lender institutes judicial
proceedings to enforce this Security Instrument, Borrower hereby waives or does
not waive, at the sole option of Lender, appraisement of the Property, said
option to be exercised by Xxxxxx at the time judgment is rendered or at any time
prior thereto. Borrower fully understands the consequences of conferring on
Lender the above-described power of sale, and if Lender elects to enforce this
Security Instrument by exercising said power of sale, Borrower hereby expressly
waives to the fullest extent permitted by law any right to a judicial hearing
prior to the sale of the Property. As often as any proceedings may be taken to
foreclose this Security Instrument, whether pursuant to the power of sale herein
conferred or by judicial proceedings, or to foreclose the security interest
herein granted to Xxxxxx, Xxxxxxxx agrees to pay to Xxxxxx, in addition to all
other sums due, all costs and expenses, including reasonable attorney fees,
incurred by Xxxxxx.
(b) It is specifically understood that the obligation of the Borrower to
pay certain filing, registration and recording charges and all taxes, duties,
imposts, assessments and charges set forth in Section 4.01(c) of the Security
Instrument specifically includes payment of and the Borrower specifically agrees
to pay all additional Oklahoma Real Estate Mortgage Tax and certification fees
charged in connection with the Security Interest recorded in Oklahoma.
(c) A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY
ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE.
(d) The Maturity Date of the Debt is July 1, 2015.
98
Section 18.53. Certain Matters Relating to Property Located in the
Commonwealth of Pennsylvania. With respect to the Property which is located in
the Commonwealth of Pennsylvania, notwithstanding anything contained herein to
the contrary:
(a) FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY AND EXERCISING
THE OTHER REMEDIES PROVIDED IN THIS SECTION, BORROWER HEREBY AUTHORIZES THE
PROTHONOTARY OR ANY ATTORNEY OF THE COURT OF RECORD WITHIN THE COMMONWEALTH OF
PENNSYLVANIA TO APPEAR FOR BORROWER TO FILE AN AGREEMENT FOR ENTERING IN ANY
COURT OF COMPETENT JURISDICTION AN AMICABLE ACTION FOR CONFESSION OF JUDGMENT IN
EJECTMENT AGAINST BORROWER AND ALL PERSONS CLAIMING UNDER BORROWER FOR
POSSESSION OF THE PROPERTY, FOR WHICH THIS SECURITY INSTRUMENT OR A TRUE CORRECT
COPY THEREOF SHALL BE A SUFFICIENT WARRANT, WHEREUPON, IF LENDER SO DESIRES, A
WRIT OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDINGS
WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE
BEEN COMMENCED THE SAME SHALL BE TERMINATED AND POSSESSION REMAIN IN OR BE
RESTORED TO BORROWER, LENDER SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT OR
DEFAULTS TO BRING ONE OR MORE AMICABLE ACTION OR ACTIONS AS HEREINBEFORE SET
FORTH TO RECOVER POSSESSION BY CONFESSION OF JUDGMENT AS AFORESAID. THE
AUTHORITY AND POWER TO APPEAR AND CONFESS JUDGMENT IN EJECTMENT AGAINST BORROWER
SHALL NOT BE EXHAUSTED BY THE INITIAL EXERCISE THEREOF AND MAY BE EXERCISED AS
OFTEN AS LENDER SHALL FIND IT NECESSARY AND DESIRABLE AND THIS SECURITY
INSTRUMENT SHALL BE A SUFFICIENT WARRANT THEREFORE. IN THE EVENT OF ANY JUDGMENT
CONFESSED AGAINST BORROWER HEREUNDER IS STRICKEN OR OPENED UPON APPLICATION BY
OR ON THE COMPANY'S BEHALF FOR ANY REASON, XXXXXX IS HEREBY AUTHORIZED AND
EMPOWERED TO AGAIN APPEAR FOR AND CONFESS JUDGMENT IN EJECTMENT AGAINST BORROWER
IN EJECTMENT, AS PROVIDED FOR HEREIN, IF DOING SO WILL CURE ANY ERRORS OR
DEFECTS IN SUCH PRIOR PROCEDURES.
BY SIGNING THIS INSTRUMENT, XXXXXXXX HEREBY ACKNOWLEDGES THAT XXXXXXXX HAS
READ THIS SECURITY INSTRUMENT (INCLUDING WITHOUT LIMITATION THE CONFESSION SET
FORTH HEREIN), HAS HAD THE OPPORTUNITY TO HAVE THE SAME REVIEWED BY LEGAL
COUNSEL, UNDERSTANDS THE SAME, AND AGREES TO THE PROVISIONS CONTAINED HEREIN,
INCLUDING, WITHOUT LIMITATION, THE CONFESSION OF JUDGMENT PROVISIONS AND
UNDERSTANDS THAT A CONFESSION OF JUDGMENT CONSTITUTES A WAIVER OR RIGHTS
BORROWER OTHERWISE WOULD HAVE TO PRIOR NOTICE AND A HEARING BEFORE A JUDGMENT IS
ENTERED AGAINST BORROWER AND WHICH MAY RESULT IN A COURT JUDGMENT AGAINST
BORROWER WITHOUT PRIOR NOTICE OR HEARING.
BORROWER HEREBY AUTHORIZES AND EMPOWERS THE PROTHONOTARY OR ANY ATTORNEY
OR ANY COURT OF RECORDS OR THE SHERIFF (OR THE LAWFUL DESIGNEE OF THE SHERIFF)
WITHIN ANY COUNTY OF THE COMMONWEALTH OF PENNSYLVANIA OR ELSEWHERE, TO TAKE ALL
ACTION ALLOWED BY OR PROVIDED FOR IN THE PENNSYLVANIA RULES OF CIVIL PROCEDURE
OR OTHER APPLICABLE RULES OF CIVIL PROCEDURE TO EXECUTE ON ANY JUDGMENT ENTERED
AGAINST BORROWER PURSUANT TO THE CONFESSION OF JUDGMENT SET FORTH ABOVE WITHOUT
PRIOR NOTICE OR HEARING OF ANY NATURE WHATSOEVER, WAIVING ALL LAWS EXEMPTING
REAL OR PERSONAL PROPERTY FROM EXECUTION TO THE EXTENT THAT SUCH LAWS MAY
LAWFULLY BE WAIVED. NO SINGLE EXERCISE OF THE FOREGOING POWER TO EXECUTE ON
JUDGMENTS WITHOUT A HEARING SHALL BE DEEMED TO EXHAUST THE POWER, WHETHER OR NOT
ANY SUCH EXERCISE SHALL BE HELD BY ANY COURT TO BE VALID, VOIDABLE OR VOID, BUT
THE POWER SHALL CONTINUE UNDIMINISHED AND IT MAY BE EXERCISED FROM TIME TO TIME
AS OFTEN AS THE AGENT SHALL ELECT.
(b) This Security Instrument is an Open-End Mortgage. This Security
Instrument secures, and the Debt include, future advances. All advances and
indebtedness arising and occurring from time to time under this
99
Security Instrument shall be secured hereby. The maximum amount of indebtedness
(as defined in 42 Pa. Stat. Section 8143, which term excludes interest and
excludes advances and expenses made by Lender to protect its interest in the
Property) outstanding at any time which is secured by this Security Instrument
is 125% of the Allocated Loan Amount for the Property. Borrower hereby covenants
and agrees that it will not exercise, and hereby waives, its right under 42 Pa.
Stat. Section 8143(c) to limit the indebtedness secured by this Security
Instrument.
(c) This Security Instrument secures, and the Debt include, (i) all
advances made by Lender with respect to any of the Property for the payment of
Basic Carrying Costs or other costs incurred for the protection of any of the
Property or the lien of this Security Instrument, (ii) all expenses incurred by
Lender by reason of an Event of Default hereunder and (iii) all advances made by
Lender to enable completion of construction of the Property. As provided in 42
Pa. Stat. Section 8144, this Security Instrument shall constitute a lien on the
Property from the time this Security Instrument is left of record (or, if this
is a purchase money mortgage, from the time of delivery hereof to Lender) for,
among other things, all such advances and expenses, plus interest thereon,
regardless of the time when such advances are made or such expenses are
incurred. All notices to be given to Lender pursuant to 42 Pa. Stat. Section
8143 shall be given as set forth in Section 11.01 hereof.
Section 18.54. Certain Matters Relating to Property Located in the State
of Rhode Island. With respect to the Property located in the State of Rhode
Island, notwithstanding anything contained herein to the contrary:
(a) The following is hereby added to the last paragraph on page 1
beginning "NOW THEREFORE" after the phrase "mortgage and confirm to" on the 5th
line at the top of page 2:
Xxxxxx, WITH MORTGAGE COVENANTS, and grants a security interest in.
(b) Paragraph (d) of the granting clause is hereby amended by adding the
following phrase immediately after the phrase "all of which":
are goods that are or are to become fixtures.
(c) The following is hereby added to the last paragraph of the granting
clause of this Security Instrument beginning "All of the foregoing items" and
immediately after the phrase "of Borrower therein":
to the extent assignable under applicable law,
(d) The following is hereby added at the end of the definition
"Environmental Statute" in this Security Instrument immediately before the
phrase "and all rules, regulations and guidance documents promulgated or
published thereunder":
the Hazardous Waste Management Act of 1978, R.I.G.L. Section
23-19.1-1, et seq., as amended, and the Industrial Property
Remediation and Reuse Act, R.I.G.L. Section 23-19.14-1, et seq., as
amended
(e) The following is hereby added to the beginning of the penultimate
sentence in Section 7.01(a) and at the beginning of Section 7.01(d) of this
Security Instrument:
To the extent permitted by applicable law,
(f) The following is hereby added at the beginning of Section 13.02(a) of
this Security Instrument:
This Security Instrument is upon the STATUTORY CONDITION, and upon
the further condition that all covenants of Borrower contained in
this Security Instrument, the Loan Documents and/or any other
documents evidencing the Debt, shall be kept
100
and performed, and for any breach of said STATUTORY CONDITION or
further condition, Lender shall have the STATUTORY POWER OF SALE.
Said STATUTORY CONDITION and STATUTORY POWER OF SALE, as well as the
MORTGAGE COVENANTS contained in the granting clause of this Security
Instrument, are those contained in the General Laws of the State of
Rhode Island.
Provided further however, to the extent permitted by law,
publication, pursuant to said STATUTORY POWER OF SALE, of notice of
the time and place of sale may, in Xxxxxx's sole discretion, be made
by publishing the same at least once each week for three (3)
successive weeks in a public newspaper published daily in the City
of Providence, Rhode Island and not as otherwise provided in said
STATUTORY POWER OF SALE.
It is expressly understood and agreed to by Xxxxxxxx and Lender that
the power of sale contained in this Security Instrument shall, in
the event that the Property is comprised of separate lots or parcels
of land, survive the foreclosure of any portion of the Property and
may be exercised on different occasions to separately foreclose each
and every lot or parcel of land comprising the Property until all of
the Property has been foreclosed in accordance with applicable law
and the terms of this Security Instrument.
(g) Section 13.04 of this Security Instrument is hereby amended by
deleting the phrase "month-to-month tenant" and substituting "tenant at
sufferance."
(h) Section 13.13 is hereby amended to add a new subsection (e) as
follows:
(e) Compliance with Rhode Island Law. To the extent that the
provisions of this Security Instrument as to the creation, perfection,
priority, enforcement and foreclosure of the liens and security interests
created in this Security Instrument are inconsistent with Rhode Island law
(including, without limitation, R.I.G.L. Section 6A-9-101 et seq., Section
34-11-20, Section 34-11-21, Section 34-11-22, and Section 34-27-2), Rhode
Island law shall take precedence over the provisions of this Security
Instrument but shall not invalidate or render unenforceable any other
provisions of this Security Instrument that can be construed in a manner
consistent with Rhode Island law.
(i) Section 18.14 of this Security Instrument is hereby amended by adding
a new subsection (c) as follows:
(c) Part of the Property and Collateral is or may become fixtures.
It is intended that, as to such fixtures, this Security Instrument shall
be effective as a financing statement filed as a fixture filing from the
date of the recording of this Security Instrument for record with the
Records of Land Evidence of the Town/City in which the Premises is
located. The information in this Section is provided in order that this
Security Instrument shall comply with the requirements of the Uniform
Commercial Code in effect in Rhode Island, for a mortgage instrument to be
filed as a financing statement pursuant to R.I.G.L. Section 6A-9-502. For
the purposes of said statute, (i) Borrower is the "Debtor" and its name
and mailing address are set forth on page 1 and Section 11.01 of this
Security Instrument and (ii) Lender is "Secured Party" and its name and
mailing address from which information concerning the security interest
granted herein may be obtained are as set forth on page 1 and Section
11.01 of this Security Instrument. A statement describing the portion of
the Property and Collateral comprising goods or other personal property
that may now be or hereafter become fixtures hereby secured is set forth
in the granting clauses hereof. The record owner of the Property is Fee
Owner.
(j) The following is hereby added at the end of Section 18.14 of this
Security Instrument:
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All of the foregoing rights and remedies of Lender contained in this
Section 18.14 shall be exercised in accordance with and to the
fullest extent permitted under the UCC.
(k) The following phrase is hereby added to the second sentence in Section
18.16 and the first sentence of Section 18.17 and 18.19 of this Security
Instrument:
To the fullest extent permitted by applicable law,
(l) Section 18.22 of this Security Instrument is hereby amended by adding
the following at the end of said Section 18.22:
Notwithstanding the foregoing, the Loan secured by this Security
Instrument will be fully advanced at closing and does not include a
revolving credit component or open-end mortgage for purposes of
Rhode Island law.
Section 18.55. Certain Matters Relating to Property Located in the State
of South Carolina. With respect to the Property located in the State of South
Carolina, notwithstanding anything contained herein to the contrary:
(a) COMPLIANCE WITH SOUTH CAROLINA MORTGAGE FORECLOSURE LAW:
(i) If any provision of this Security Instrument is determined to be
inconsistent with any provisions of the South Carolina Code of Laws (1976)
(the "SCCL") as deal with Mortgage Foreclosures or the South Carolina
Rules of Civil Procedure (the "SCRCP"), the SCCL and SCRCP shall take
precedence over the provisions of this Security Instrument, but shall not
invalidate or render unenforceable any other provisions of this Security
Instrument that can be construed in a manner consistent with the SCCL or
SCRCP.
(ii) Section 3.01 shall be amended to add the following sentence at
the end of said paragraph: "Provided, however, that in no instance shall
Lender require Borrower to purchase casualty insurance on the Property in
excess of the replacement cost of the Improvements."
(iii) Section 13.13(a) shall be amended to add the following
sentence at the end of said paragraph: "Provided, however, that any such
termination or recision shall be in accordance with and subject to the
provisions of South Carolina Code of Laws (1976) as deal with Mortgage
Foreclosures and the South Carolina Rules of Civil Procedure.
(iv) Pursuant to Section 29-3-50 of the SCCL, this Security
Instrument secures future advances which may be made by Xxxxxx, provided
that the total amount of indebtedness secured hereunder may not exceed the
maximum principal amount of two (2) times the Loan Amount, plus interest
thereon, attorney's fees and court costs, together with such other
advances as may be authorized by law.
(v) Interest secured under this Security Instrument may include,
without limitation, deferred or capitalized interest to the extent
provided in the Note.
(vi) WAIVER OF APPRAISAL. The laws of South Carolina provide that in
any real estate foreclosure proceeding a defendant against whom a personal
judgment is taken or asked may within thirty days after the sale of the
Property apply to the court for an order of appraisal. The statutory
appraisal value as approved by the Court would be substituted for the high
bid and may decrease the amount of any deficiency owing in connection with
the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE
STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL
FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED
VALUE OF THE PROPERTY.
102
(b) As to those items of the Collateral which are or shall become affixed
to the Property, and all products and proceeds thereof, this Security Instrument
is and shall be effective as a Financing Statement filed as a fixture filing as
and from the date of its recordation in the real estate records of the County in
which the Property is situated. The name of the record owner of the Property is
the Borrower identified on the first page of the Security Instrument. The name
and address of Xxxxxxxx, as debtor, is set forth on the first page of this
Security Instrument. The name and address of Xxxxxx, as secured party, and from
whom information concerning the security interest created herein may be
obtained, is set forth on the first page of this Security Instrument. The
provisions of the granting clauses (b) through (p) on pages 2 through 4 of this
Security Instrument describe the types and items of the Collateral affixed or to
be affixed to the Property.
Section 18.56. Certain Matters Relating to Property Located in the State
of Vermont. With respect to the Property which is located in the State of
Vermont, notwithstanding anything contained herein to the contrary:
(a) Borrower hereby grants Lender a power of sale to foreclose this
Security Instrument pursuant to Vt. Stat. Xxx. Tit. 12, Sections 4531(a) -
4533(a)(Supp. 2004), as such provision may be amended from time to time, and
Lender may, to the extent permitted by law, with or without first taking
possession, sell the Property, in whole or, to the extent permitted by law, in
part, at public auction in the State of Vermont, or at such place as may be
required by law, and may adjourn such sale from time to time by announcement at
the time and place appointed for such sale or adjourned sale, and upon such
sale, Lender may make and deliver to any purchaser a good and sufficient deed,
conveyance, or bill of sale, and good and sufficient receipts for the purchase
money, and do and perform all other acts as may be necessary fully to carry into
effect this power of sale.
(b) If Xxxxxx should employ attorneys or incur other expenses for the
enforcement or performance or observance of any obligation, right or agreement
herein contained, Xxxxxxxx agrees that it will on demand therefore reimburse the
reasonable fees of such attorneys and such other expenses so incurred. Any
provision herein to the contrary notwithstanding, Xxxxxxxx agrees in the event
of foreclosure of the Security Instrument or the lien of the security interest
granted herein, it shall pay the entire amount of reasonable attorneys' fees
incurred by Xxxxxx, its successors or assigns in connection with any such
foreclosure, and that the amount of such fees are expressly not limited by the
provisions of Rule 80.1(f) of the Vermont Rules of Civil Procedure.
Section 18.57. Certain Matters Relating to Property Located in Wisconsin.
With respect to Property located in the State of Wisconsin, notwithstanding
anything contained herein to the contrary:
(a) Xxxxxxxx agrees that, to the extent permitted by law, upon waiving the
right to a deficiency judgement, this Security Instrument may be foreclosed by
Xxxxxx, at it option, pursuant to the provisions of Section 846.103(2) of
Wisconsin Statues, or any successor thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Xxxxxxxx has duly executed this Security Instrument
the day and year first above written.
Borrower's Organizational Number: BORROWER:
20-28483969904 AREC 8, LLC,
a Delaware limited liability company
By: /s/ Xxxx X. Xxxxxx
--------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
Borrower's Organizational Number: UHIL 8, LLC,
a Delaware limited liability company
20-28483969852
By: /s/ Xxxx X. Xxxxxx
---------------------
Name: Xxxx X. Xxxxxx
Title: Treasurer
