Exhibit 10.34
LIBRARY SQUARE ASSOCIATES, LLC
(Borrower)
and
COMMONWEALTH LAND TITLE COMPANY
(Trustee)
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
(Lender)
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING
Dated: As of June ___, 2003
Location: 000 Xxxx Xxxxx Xxxxxx
Xxxxxx: Xxx Xxxxxxx
Xxxxx: California
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
TABLE OF CONTENTS
Page
PART I
GENERAL PROVISIONS
1. Payment of Debt and Incorporation of Covenants, Conditions and
Agreements.............................................................4
2. Warranty of Title......................................................4
3. Insurance..............................................................4
4. Casualty...............................................................9
5. Payment of Taxes, Etc.................................................15
6. Tax and Insurance Impound Fund; Deferred Maintenance Escrow Fund;
US Bancorp Escrow Fund; Outstanding Tenant Allowance Escrow Fund;
Replacement/Leasing Escrow Fund.......................................16
7. Alterations...........................................................28
8. Leases and Rents......................................................28
9. Maintenance and Use of Trust Property.................................30
10. Transfer or Encumbrance of the Trust Property.........................31
11. Representations and Covenants Concerning the Borrower and Trust
Property..............................................................38
12. Single Purpose Entity/Separateness....................................44
13. Estoppel Certificates and No Default Affidavits.......................50
14. Controlling Agreement.................................................50
15. Changes in Laws Regarding Taxation....................................51
16. No Credits on Account of the Debt.....................................51
17. Documentary Stamps....................................................51
18. Books and Records.....................................................51
19. Performance of Other Agreements.......................................53
20. Further Acts, Etc.....................................................53
21. Recording of Deed of Trust, Etc.......................................53
22. Reporting Requirements................................................54
23. Events of Default.....................................................54
24. Late Payment Charge...................................................56
25. Right To Cure Defaults................................................56
26. Additional Remedies...................................................56
27. Right of Entry........................................................59
28. Security Agreement....................................................60
29. Actions and Proceedings...............................................61
30. Waiver of Setoff and Counterclaim.....................................61
31. Contest of Certain Claims.............................................61
32. Recovery of Sums Required to be Paid..................................62
33. Marshalling and Other Matters.........................................62
34. Hazardous Substances..................................................62
35. Asbestos..............................................................63
36. Environmental Monitoring..............................................63
37. Handicapped Access....................................................65
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38. Indemnification.......................................................65
39. Notices...............................................................66
40. Authority.............................................................67
41. Waiver of Notice......................................................68
42. Remedies of Borrower..................................................68
43. Sole Discretion of Lender.............................................68
44. Non-Waiver............................................................68
45. No Oral Change........................................................69
46. Liability.............................................................69
47. Inapplicable Provisions...............................................69
48. Headings, Etc.........................................................69
49. Duplicate Originals...................................................69
50. Definitions...........................................................69
51. Homestead.............................................................69
52. Assignments...........................................................69
53. Waiver of Jury Trial..................................................70
54. Governing Law.........................................................70
55. Trustee's Fees; Substitute Trustee....................................71
56. Power of Sale.........................................................72
57. Recourse Provisions...................................................73
58. Cash Management Agreement.............................................75
59. Management of the Trust Property......................................75
60. Servicer..............................................................76
61. Component Notes.......................................................76
62. Mezzanine Loan Option.................................................77
63. Miscellaneous.........................................................78
PART II
STATE SPECIFIC PROVISIONS
64. Principles of Construction............................................79
65. Additional Remedies Provisions........................................80
66. Deed of Trust Not to Secure Environmental Covenants, Obligations,
and Indemnities or Guaranty Obligations...............................82
67. Additional Waivers....................................................83
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INDEX OF DEFINED TERMS
26th Floor Buildout Amount........18
Access Laws.......................65
Additional Monthly Leasing
Escrow Deposit..................19
Affiliate.........................49
Affiliated Manager................31
Asbestos..........................63
Assignment of Leases and Rents....43
Award.............................10
Best...............................8
Blanket Insurance Premium
Financing Arrangement............9
Borrower...........................1
Borrower Parties..................73
Bottom Dollar Guaranty............48
Cash Management Agreement.........75
Casualty...........................9
Casualty Consultant...............13
Casualty Restoration...............9
Casualty Retainage................13
CERCLA............................62
Code..............................68
Collateral........................60
Condemnation......................10
Condemnation Proceeds.............11
Condemnation Restoration..........10
Control...........................35
Controlled........................35
Debt...............................1
Debt Service Coverage Ratio.......52
Deed of Trust......................1
Deferred Maintenance Fund.........17
Delinquency Date..................15
Eligible Institution..............24
Environmental Laws................62
Equipment..........................2
ERISA.............................40
Event of Default..................54
Factory Mutual.....................9
Financing Installment..............9
Funds.............................24
GAAP..............................22
Gross Income from Operations......21
Guarantor.........................31
Hazardous Substances..............62
Improvements.......................1
Indebtedness......................49
Independent Director..............49
Independent Manager...............49
Insolvency Opinion................50
Insurance Premiums.................8
Insurance Proceeds................11
Insured Casualty...................9
Intangibles........................3
Leases.............................2
Leases In Place...................21
Leasing Deposits..................19
Leasing Escrow Fund Catch-Up
Deposit.........................20
Lender.............................1
Lender's Consultant...............63
Letter of Credit..................24
Loan...............................1
Loan Documents.....................4
Major Lease.......................29
Management Agreement..............44
Manager...........................44
Mezzanine Borrower................77
Mezzanine Lender..................77
Mezzanine Loan....................77
Mezzanine Option..................77
Monthly Leasing Escrow Deposit....19
Monthly Replacement Escrow Amount.19
Xxxxx'x............................8
Mortgage Borrower.................77
Mortgage Loan.....................77
Net Operating Income..............21
Net Proceeds......................11
Net Proceeds Deficiency...........14
NOI Trigger Event.................21
Note...............................1
Notices...........................66
OP.................................6
Operating Expenses................22
Other Charges.....................15
Outstanding Tenant Allowance
Amount..........................18
Outstanding Tenant Allowance
Escrow Fund.....................18
Outstanding Tenant Allowance
Obligations.....................18
Permitted Exceptions...............4
Permitted Institutional
Transferee......................35
Permitted Investments.........24, 27
Person............................50
Phase I Report....................62
Policies...........................7
Policy.............................7
Premises...........................1
Rating Agencies...................28
RCRA..............................62
REIT..............................32
Remedial Work.....................64
Rent Roll.........................43
Rentable Space Percentage.........12
Rents..............................3
Replacement Deposits..............19
Replacement/Leasing Escrow Fund...19
Required Leases...................12
Restoration.......................10
Restricted Party..................31
S&P................................7
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Sale or Pledge....................32
Securitization....................28
Servicer..........................76
Servicing Agreement...............76
Significant Casualty...............9
Special Purpose Bankruptcy
Remote Entity...................45
Subordination of Management
Agreement.......................75
Survey............................44
Taking............................10
Tax and Insurance Impound Fund....16
Taxes.............................15
Tenant Estoppels..................43
Terrorism Acts.....................7
Threshold Amount..................28
Transfer..........................32
Trust Property.....................1
Trustee............................1
Uniform Commercial Code............2
Upfront US Bancorp Reserve Amount.17
US Bancorp Escrow Fund............17
US Bancorp Reserve Amount.........17
US Bancorp Space..................18
US Bancorp TI/LC Obligations......17
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EXHIBITS
Exhibit A LEGAL DESCRIPTION
Exhibit B RESERVED
Exhibit C REQUIRED REPAIRS
Exhibit D OUTSTANDING TENANT ALLOWANCE OBLIGATIONS
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DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "DEED OF TRUST"), made as of June __, 2003,
by LIBRARY SQUARE ASSOCIATES, LLC, a Delaware limited liability company, having
its principal place of business at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000 ("BORROWER"), to COMMONWEALTH LAND TITLE COMPANY, a
California corporation, the trustee hereunder, having its mailing address at 000
Xxxx 0xx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("TRUSTEE") for the
benefit of GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation
("LENDER"), having its principal office at 000 Xxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000.
W I T N E S S E T H:
To secure the payment of an indebtedness (a) in the original
principal sum of Two Hundred Fifty-Two Million and No/100 Dollars
($252,000,000), lawful money of the United States of America, to be paid with
interest according to a certain Deed of Trust Note of even date herewith made by
Borrower to Lender (together with all extensions, renewals or modifications
thereof, being hereinafter called the "NOTE", and the loan evidenced by the Note
hereinafter being referred to as the "LOAN") and all other sums due hereunder,
under the other Loan Documents (hereinafter defined) and under the Note (said
indebtedness and interest due under the Note and all other sums due hereunder
under the Note and the other Loan Documents being hereinafter collectively
referred to as the "DEBT"), Borrower has deeded, mortgaged, given, granted,
bargained, transferred, sold, alienated, enfeoffed, conveyed, confirmed,
warranted, pledged, assigned, and hypothecated and by these presents does hereby
deed, mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm,
warrant, pledge, assign and hypothecate unto Trustee (in trust), with power of
sale for the benefit and security of Lender, the real property described in
Exhibit A attached hereto (the "PREMISES") and the buildings, structures,
fixtures, additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located thereon (the
"IMPROVEMENTS");
TOGETHER WITH: all right, title, interest and estate of Borrower now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements, and such property,
rights, interests and estates hereinafter described are collectively referred to
herein as the "TRUST PROPERTY"):
GRANTING CLAUSE ONE
All easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, all rights to oil, gas, minerals,
coal and other substances of any kind or character, and all estates, rights,
titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in
the bed of any street, road, highway, alley or avenue, opened, vacated or
proposed, in front of or adjoining the Premises, to the center line thereof and
all the estates, rights, titles, interests, dower and rights of dower, curtsey
and rights of curtsey, property, possession, claim and demand whatsoever, both
at law and in equity, of Borrower of, in and to the Premises and the
Improvements and every part and parcel thereof, with the appurtenances thereto;
GRANTING CLAUSE TWO
All machinery, furniture, furnishings, equipment, computer software
and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Borrower, or in which Borrower has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Premises and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Borrower, or
in which Borrower has or shall have an interest, now or hereafter located upon
the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation, enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively referred to as the
"EQUIPMENT"), including any leases of any of the foregoing, any deposits
existing at any time in connection with any of the foregoing, and the proceeds
of any sale or transfer of the foregoing, and the right, title and interest of
Borrower in and to any of the Equipment that may be subject to any "security
interests" as defined in the Uniform Commercial Code, as adopted and enacted by
the State or States where any of the Trust Property is located (the "UNIFORM
COMMERCIAL CODE"), superior in lien to the lien of this Deed of Trust;
GRANTING CLAUSE THREE
Awards or payments, including interest thereon, that may heretofore
and hereafter be made with respect to the Premises and the Improvements, whether
from the exercise of the right of eminent domain or condemnation (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of said rights), or for a change of grade, or for any other injury to
or decrease in the value of the Premises and Improvements;
GRANTING CLAUSE FOUR
All leases, subleases and other agreements or arrangements
heretofore or hereafter entered into affecting the use, enjoyment or occupancy
of, or the conduct of any activity upon or in, the Premises and the
Improvements, including any extensions, renewals, modifications or amendments
thereof (the "LEASES") and all rents, rent equivalents, moneys payable as
damages or in lieu of rent or rent equivalents (including, but not limited to,
fees from parking passes), royalties (including, without limitation, all oil and
gas or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and other
deposits), accounts, cash, issues, profits, charges for services rendered, and
other consideration of whatever form or nature received by or paid to or for the
account of or benefit of Borrower or its agents or employees from any and all
sources arising from or attributable to the
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Premises and the Improvements (the "RENTS"), together with 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;
GRANTING CLAUSE FIVE
All proceeds of and any unearned premiums on any insurance policies
covering the Trust Property, including, without limitation, the right to receive
and apply the proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Trust Property;
GRANTING CLAUSE SIX
The right, in the name and on behalf of Borrower, to appear in and
defend any action or proceeding brought with respect to the Trust Property and
to commence any action or proceeding to protect the interest of Lender in the
Trust Property;
GRANTING CLAUSE SEVEN
All accounts (together with all deposits or wire transfers made to
accounts and all cash, checks, drafts, certificates, securities, investment
property, financial assets, instruments and other property held therein from
time to time and all proceeds, products, distributions or dividends or
substitutions thereon and thereof), escrows, documents, instruments, chattel
paper, claims, deposits and general intangibles, as the foregoing terms are
defined in the Uniform Commercial Code, and all franchises, trade names,
trademarks, symbols, service marks, books, records, plans, specifications,
designs, drawings, permits, consents, licenses, management agreements, contract
rights (including, without limitation, any contract with any architect or
engineer or with any other provider of goods or services for or in connection
with any construction, repair, or other work upon the Trust Property),
approvals, actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to the Trust Property), and causes of action
that now or hereafter relate to, are derived from or are used in connection with
the Trust Property, or the use, operation, maintenance, occupancy or enjoyment
thereof or the conduct of any business or activities thereon (hereinafter
collectively referred to as the "INTANGIBLES"); and
GRANTING CLAUSE EIGHT
All proceeds, products, offspring, rents and profits from any of the
foregoing, including, without limitation, those from sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement of any of the
foregoing.
TO HAVE AND TO HOLD the above granted and described Trust Property
unto and to the use and benefit of Lender;
IN TRUST WITH POWER OF SALE, to secure the payment to Lender of the
Debt at the time and in the manner provided for in the Note and in this Deed of
Trust;
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PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Lender the Debt at the time and in
the manner provided in the Note and this Deed of Trust and shall well and truly
abide by and comply with each and every covenant and condition set forth herein,
in the Note and in the other Loan Documents (hereinafter defined) in a timely
manner, these presents and the estate hereby granted shall cease, terminate and
be void;
AND Borrower represents and warrants to and covenants and agrees
with Lender as follows:
PART I
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
AGREEMENTS. Borrower shall pay the Debt at the time and in the manner provided
in the Note and in this Deed of Trust. All the covenants, conditions and
agreements contained in (a) the Note and (b) all and any of the documents
including the Note and this Deed of Trust now or hereafter executed by Borrower
and/or others and by or in favor of Lender, which evidences, secures or
guarantees all or any portion of the payments due under the Note or otherwise is
executed and/or delivered in connection with the Note and this Deed of Trust
(the "LOAN DOCUMENTS") are hereby made a part of this Deed of Trust to the same
extent and with the same force as if fully set forth herein.
2. WARRANTY OF TITLE. Borrower warrants that Borrower has good,
marketable and insurable title to the Trust Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Deed of Trust and to deed, encumber, mortgage, give, grant, bargain, sell,
alienate, enfeoff, convey, confirm, pledge, assign and hypothecate the same and
that Borrower possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Trust Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Deed of Trust (the "PERMITTED
EXCEPTIONS"), or that may otherwise be expressly permitted by the Loan
Documents, and that this Deed of Trust is and will remain a valid and
enforceable first lien on and security interest in the Trust Property, subject
only to said exceptions. Borrower shall forever warrant, defend and preserve
such title and the validity and priority of the lien of this Deed of Trust and
shall forever warrant and defend the same to Lender against the claims of all
persons whomsoever.
3. INSURANCE.
(a) Borrower shall maintain insurance for Borrower and the Property
providing at least the following coverages:
(i) comprehensive all risk insurance on the Improvements and the
Equipment, including contingent liability from Operation of Building Laws,
Demolition Costs and Increased Cost of Construction Endorsements, in each
case (A) in an amount equal to the
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greater of (x) one hundred percent (100%) of the "Full Replacement Cost,"
which for purposes of this Deed of Trust shall mean actual replacement
value (exclusive of costs of excavations, foundations, underground
utilities and footings) with a waiver of depreciation and (y) the original
principal amount of the Loan; (B) containing an agreed amount endorsement
with respect to the Improvements and Equipment waiving all co-insurance
provisions; (C) providing for no deductible in excess of $50,000; and (D)
containing an "Ordinance or Law Coverage" or "Enforcement" endorsement if
any of the Improvements or the use of the Trust Property shall at any time
constitute legal non-conforming structures or uses. In addition, Borrower
shall obtain: (x) Flood Insurance in an amount of not less than
$25,000,000 each occurrence; (y) earthquake insurance in an amount at
least equal to one multiplied by a Probable Maximum Loss of 11% of total
replacement value and a deductible of 5% of the Total Insured Value (which
includes annual rental value) at the Trust Property, and otherwise in form
and substance reasonably satisfactory to Lender; and (z) coastal windstorm
insurance in amounts and in form and substance satisfactory to Lender in
the event the Trust Property is located in any coastal region, provided
that the insurance pursuant to clauses (x), (y) and (z) hereof shall be on
terms consistent with the comprehensive all risk insurance policy required
under this subsection (i) and rental interruption insurance under
subsection (iii);
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon,
in or about the Property, such insurance (A) to be on the so-called
"occurrence" form with a combined limit of not less than Two Million and
No/100 Dollars ($2,000,000) in the aggregate and One Million and No/100
Dollars ($1,000,000) per occurrence; (B) to continue at not less than the
aforesaid limit until required to be changed by Lender in writing by
reason of changed economic conditions making such protection inadequate;
and (C) to cover at least the following hazards: (1) premises and
operations; (2) products and completed operations on an "if any" basis;
(3) independent contractors; (4) blanket contractual liability for all
legal contracts; and (5) liability that may arise from acts of terrorism;
(iii) rental interruption insurance (A) with loss payable to Lender
(allowing reimbursement to Borrower for reasonable operating costs during
the interruption); (B) covering all risks required to be covered by the
insurance provided for in subsection (i) above; (C) containing an
unlimited period of restoration and extended period of indemnity
endorsement which provides that after the physical loss to the
Improvements and Equipment has been repaired, the continued loss of rental
income will be insured until such rental income either returns to the same
level it was at prior to the loss, or the expiration of twelve (12) months
from the date that the Trust Property is repaired or replaced and
operations are resumed, whichever first occurs, and notwithstanding that
the policy may expire prior to the end of such period, provided that the
unlimited period of restoration endorsement may be limited to the length
of time required with the exercise of due diligence and dispatch to
rebuild, repair or replace the damaged or destroyed property; and (D) in
an amount equal to one hundred percent (100%) of the projected gross
income from the Trust Property for a period of twelve (12) months from the
date that the Property is repaired or replaced and operations are resumed.
The amount of such rental interruption insurance shall be determined prior
to the date hereof and at least once each year thereafter based on
Borrower's reasonable
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estimate of the gross income from the Trust Property for the succeeding
twelve (12) month period. Subject to the rights of Lender and subject to
the provisions of paragraph 4(e)(x) below, all proceeds payable to Lender
pursuant to this subsection shall be held by Lender and shall be applied
to the obligations secured by the Loan Documents from time to time due and
payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to
pay the obligations secured by the Loan Documents on the respective dates
of payment provided for in the Note and the other Loan Documents except to
the extent such amounts are actually paid out of the proceeds of such
rental interruption insurance;
(iv) at all times during which structural construction, repairs or
alterations are being made with respect to the Improvements, and only if
the property coverage form does not otherwise apply, (A) owner's
contingent or protective liability insurance covering claims not covered
by or under the terms or provisions of the above mentioned commercial
general liability insurance policy; and (B) the insurance provided for in
subsection (i) above written in a so-called builder's risk completed value
form (1) on a non-reporting basis, (2) against all risks insured against
pursuant to subsection (i) and (iii) above, (3) including permission to
occupy the Trust Property, and (4) with an agreed amount endorsement
waiving co-insurance provisions;
(v) Worker's Compensation insurance, as required by any governmental
authority or any applicable legal requirements and Employer's Liability
Insurance of not less than One Million and No/100 Dollars ($1,000,000) for
each occurrence;
(vi) comprehensive boiler and machinery insurance in an amount of
not less than Fifty Million and No/100 Dollars ($50,000,000) each
occurrence on terms consistent with the commercial property insurance
policy required under subsection (i) and (iii) above;
(vii) umbrella liability insurance in an amount not less than One
Hundred Million and No/100 Dollars ($100,000,000) per occurrence, on terms
consistent with the commercial general liability insurance policy required
under subsection (ii) above, on a portfolio basis naming the Trust
Property and all other properties owned by Xxxxxxx Properties, L.P., a
Maryland limited partnership (the "OP") and/or its Affiliates; provided,
that such insurance may be provided under a blanket insurance Policy so
long as the coverage required pursuant to this clause is not reduced below
the per occurrence limit set forth in this clause;
(viii) motor vehicle liability coverage for all owned and non-owned
vehicles, including rented and leased vehicles containing minimum limits
per occurrence, including umbrella coverage, of Five Million and No/100
Dollars ($5,000,000);
(ix) if the Property is or becomes a legal "non-conforming" use,
ordinance or law coverage and insurance coverage to compensate for the
cost of demolition or rebuilding of the undamaged portion of the Trust
Property along with any reduced value and the increased cost of
construction in amounts as requested by Lender;
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(x) if "certified acts of terrorism", as declared by the United
States Government, are now or hereafter excluded from Borrower's
comprehensive all risk insurance policy or business income coverage,
Borrower shall obtain an endorsement to such policies, or separate
policies, insuring against all such "certified acts of terrorism" (such
acts or events so excluded, "TERRORISM ACTS"), at Borrower's option,
either (A) in an amount not less than Three Hundred Million and No/100
Dollars ($300,000,000) on an aggregate basis covering the Trust Property
and all other properties owned by the OP and/or its Affiliates as of the
date hereof and providing for a deductible not exceeding $1,000,000.00 or
(B) in a total amount not less than Three Hundred and Fifty Million and
No/100 Dollars ($350,000,000) on an aggregate basis covering the Trust
Property and all other properties owned by the OP and/or its Affiliates as
of the date hereof and providing for a deductible of not in excess of 5%
of the full replacement value of the Trust Property; in either case, the
endorsement or policy shall be (x) in form and substance reasonably
satisfactory to Lender; and (y) non-cancelable (to the extent such
non-cancelable insurance is available in the marketplace) (insurance
meeting such requirements being referred to herein as "FULL COVERAGE");
provided the Borrower shall not be required to spend in excess of Three
Million and No/100 Dollars ($3,000,000.00) per annum for such coverage
and, in the event that Full Coverage is not available at a cost of
$3,000,000 per annum, then Borrower shall purchase insurance covering
Terrorism Acts in an amount equal to the principal balance of the Loan,
but shall not be required to maintain the full amount of such coverage if
such coverage is not available at a cost of $3,000,000 per annum or less,
provided that in the event that $3,000,000 is not sufficient to purchase
such coverage in an amount equal to the principal balance of the Loan,
then Borrower shall obtain the greatest amount of coverage obtainable at a
cost of $3,000,000 per annum;
In the event that the limits of insurance in place covering Terrorism Acts on a
portfolio basis are exhausted by damage to a property other than the Trust
Property, then Borrower shall restore the coverage provided for in clause (x)
above (or any lesser amount of coverage that is available if such coverage is
not available), to the extent such insurance is commercially available; and
(xi) upon sixty (60) days' written notice, such other reasonable
insurance and in such reasonable amounts as Lender from time to time may
reasonably request against such other insurable hazards which at the time
are commonly insured against for property similar to the Trust Property
located in or around the region in which the Trust Property is located.
(b) All insurance provided for in paragraph 3(a) shall be obtained
under valid and enforceable policies (collectively, the "POLICIES" or in the
singular, the "POLICY"), and shall be subject to the reasonable approval of
Lender as to insurance companies, amounts, deductibles, loss payees and
insureds. The Policies (or a "cut-through" endorsement, approved by Lender, with
respect to any such Policy) shall be issued by financially sound and responsible
insurance companies authorized to do business in the State and, except in the
case of flood hazard insurance and earthquake insurance, having either (i) a
claims paying ability rating of "A" or better by Standard and Poor's Ratings
Services ("S&P") and an equivalent rating by Xxxxx'x Investors Services, Inc.
("MOODY'S") or (ii) if the Policies are provided through a syndicate of
companies, (A) at least 75% of the coverage and first layer of coverage shall
have a claims
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paying ability rating of "A, X" or better (and the equivalent thereof) by A.M.
Best's Key Rating Guide ("BEST"), (B) no more than 15% of the Policies shall
have a claims paying ability rating of "A, VIII" or less by Best and (C) no more
than 10% of the Policies shall have a claims paying ability rating of "A-, VII"
or less by Best's. The Policies described in paragraph 3(a) (other than those
strictly limited to liability protection) shall designate Lender as loss payee
and Lender shall be an additional named insured, as its interests may appear.
Not less than ten (10) days prior to the expiration dates of the Policies
theretofore furnished to Lender, certificates of insurance evidencing the
Policies accompanied by evidence satisfactory to Lender of payment of the
premiums due thereunder shall be delivered by Borrower to Lender.
(c) Subject to the provisions of paragraph 6 hereof, Borrower shall
pay the premiums for such Policies (the "INSURANCE PREMIUMS") as the same become
due and payable and shall furnish to Lender evidence of the renewal of each of
the Policies with receipts for the payment of the Insurance Premiums or other
evidence of such payment reasonably satisfactory to Lender (provided, however,
that Borrower is not required to furnish such evidence of payment to Lender in
the event that such Insurance Premiums have been paid by Lender pursuant to
paragraph 6 hereof). If Borrower is required to furnish such evidence and
receipts pursuant to the preceding sentence and Borrower does not furnish such
evidence and receipts at least fifteen (15) days prior to the expiration of any
expiring Policy, then Lender may procure, but shall not be obligated to procure,
such insurance and pay the Insurance Premiums therefor, and Borrower agrees to
reimburse Lender for the cost of such Insurance Premiums promptly on demand.
Within thirty (30) Business Days after request by Lender, Borrower shall obtain
such increases in the amounts of coverage required hereunder as may be
reasonably requested by Lender, taking into consideration changes in the value
of money over time, changes in liability laws, changes in prudent customs and
practices of owners of property similar to the Trust Property located in or
around the region in which the Trust Property is located and as may be available
at commercially reasonable rates. Lender acknowledges that the Policies
delivered with respect to the Trust Property as of the date hereof satisfy the
requirements of this paragraph 3. Such approval shall continue in effect until
the expiration or termination of such Policies provided that there is not a
downgrade by S&P, Moody's or Best Insurance Reports of any insurer providing
such Policies and, as a result thereof, Borrower fails to satisfy the rating
criteria set forth in paragraph 3(b). Any renewal or replacement of such
Policies, however, shall require Lender's approval as provided above in this
paragraph 3 unless (i) the companies providing such renewal or replacement
Policies are licensed to do business in the state where the Trust Property is
located and have a claims paying ability rating by S&P, Moody's and Best that
satisfy the requirements set forth in paragraph 3(b) above or that, subject to
the provisions of paragraph 3(e) below, such rating is no less than the rating
as of the date hereof of the company providing the insurance approved by Lender
as of the date hereof, (ii) the coverage provided by such renewal or replacement
Policies is no less than the coverage approved by Lender as of the date hereof,
(iii) such renewal or replacement Policies contain in all material respects the
same terms and conditions as the Policies approved by Lender as of the date
hereof and (iv) Lender has not notified Borrower in accordance with this
paragraph 3 that the requirements for the Policies have changed since the date
hereof.
(d) The insurance coverage required under this paragraph 3 may be
effected under one or more blanket Policies covering the Trust Property and
other property and assets not constituting a part of the Trust Property;
provided that any blanket Policy shall specify, except in
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the case of general liability insurance, the portion of the total coverage of
such blanket Policy that is allocated exclusively to the Trust Property and
shall comply in all respects with the requirements of this paragraph 3. Lender
hereby confirms that it approves (i) the terms of the existing Property
Insurance Sharing Agreement among Borrower and certain of its Affiliates, and
(ii) that the Insurance Premiums are financed through one or more finance
companies (individually and/or collectively, the "BLANKET INSURANCE PREMIUM
FINANCING ARRANGEMENT" ) to whom Borrower pays Borrower's allocable share of the
annual initial deposit and the monthly payments due for each blanket Policy to
the applicable finance company (with respect to each blanket Policy, such
monthly payment, together with one-twelfth (1/12th) of the allocable share of
the annual initial deposit necessary to accumulate such allocable share for such
Policy at least thirty (30) days prior to its due date, each a "FINANCING
INSTALLMENT").
(e) Notwithstanding anything to the contrary contained in this
paragraph 3, Lender shall accept an "all-risk" Policy issued by Factory Mutual
Insurance Company ("FACTORY MUTUAL" ), so long as (I) Factory Mutual maintains a
general policy rating of "BBB" or better and a financial class of "XIV" or
better by Best and a claims paying ability rating of "A+" or better by Fitch,
and (II) in connection with any Securitization, Lender confirms that, in
Lender's reasonable determination based on information provided by any Rating
Agency, the ratings assigned to the portion of the Securitization represented by
the Loan will not be adversely affected as a result of such "all-risk" Policy
being issued by Factory Mutual. In the event that both of the conditions set
forth in clause (I) and (II) above are not being met at all times, then Borrower
shall at all times, at its sole cost and expense, maintain an "all risk" policy
that is otherwise in compliance with all of the applicable provisions of this
paragraph 3 and applicable Rating Agency requirements; provided that Borrower
shall have thirty (30) days (or such shorter period if the existing policies
would lapse prior to the end of such 30-day period) after the earlier of (A) the
failure of the condition in clause (I) above or (B) the date Lender notifies
Borrower of Lender's confirmation pursuant to clause (II) above to obtain an
"all risk" Policy meeting such applicable provisions and requirements (which may
be obtained through the issuance of a so-called "cut-through" endorsement).
4. CASUALTY.
(a) If the Trust Property shall be damaged or destroyed, in whole or
in part, by fire or other casualty (a "CASUALTY"), Borrower shall give prompt
notice thereof to Lender. Following the occurrence of a Casualty, Borrower,
regardless of whether insurance proceeds are available, shall promptly proceed
to restore, repair, replace or rebuild the same to be of at least equal value
and of substantially the same character as prior to such damage or destruction
(a "CASUALTY RESTORATION"), all to be effected in accordance with applicable
law.
(b) If a Casualty covered by any of the Policies (an "INSURED
CASUALTY") occurs where the loss does not exceed $2,500,000, provided no Default
or Event of Default has occurred and is continuing, Borrower may settle and
adjust any claim without the prior consent of Lender; provided such adjustment
is carried out in a competent and timely manner, and Borrower is hereby
authorized to collect and receipt for the Insurance Proceeds (as hereinafter
defined). In the event of an Insured Casualty where the loss exceeds $2,500,000
(a "SIGNIFICANT CASUALTY"), Lender may, in its sole discretion, settle and
adjust any claim without the consent of Borrower and agree with the insurer(s)
in a commercially reasonable manner on the amount to be
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paid on the loss, and the Proceeds shall be due and payable solely to Lender and
held by Lender in the Casualty/Condemnation Subaccount and disbursed in
accordance herewith. If Borrower or any party other than Lender is a payee on
any check representing Proceeds with respect to a Significant Casualty, Borrower
shall immediately endorse, and cause all such third parties to endorse, such
check payable to the order of Lender. Borrower hereby irrevocably appoints
Lender as its attorney-in-fact, coupled with an interest, to endorse such check
payable to the order of Lender. The expenses incurred by Lender in the
settlement, adjustment and collection of the Proceeds shall become part of the
Debt and shall be reimbursed by Borrower to Lender upon demand. Notwithstanding
anything to the contrary contained herein, if in connection with a Casualty any
insurance carrier makes a payment under a property insurance Policy that
Borrower proposes be treated as business or rental interruption insurance, then,
notwithstanding any designation (or lack of designation) by the insurance
carrier as to the purpose of such payment, as between Lender and Borrower, such
payment shall not be treated as business or rental interruption insurance
proceeds unless Borrower has demonstrated to Lender's reasonable satisfaction
that the remaining net Proceeds that will be received from the property
insurance carriers are sufficient to pay 100% of the cost of fully restoring the
Improvements or, if such net Proceeds are to be applied to repay the Debt in
accordance with the terms hereof, that such remaining net Proceeds, together
with any portion of the amount treated as business or rental interruption
insurance that will be paid to Lender, will be sufficient to pay the Debt in
full.
(c) Borrower shall promptly give Lender written notice of the actual
or threatened commencement of any condemnation or eminent domain proceeding (a
"CONDEMNATION") and shall deliver to Lender copies of any and all papers served
in connection with such Condemnation. Following the occurrence of a
Condemnation, Borrower, regardless of whether an Award (hereinafter defined) is
available, shall promptly proceed to restore, repair, replace or rebuild the
same to the extent practicable to be of at least equal value and of
substantially the same character as prior to such Condemnation (a "CONDEMNATION
RESTORATION", together with a Casualty Restoration, collectively a
"RESTORATION"), all to be effected in accordance with applicable law.
(d) Lender is hereby irrevocably appointed as Borrower's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("AWARD") for any taking accomplished
through a Condemnation (a "TAKING") and to make any commercially reasonable
compromise or settlement in connection with any such Condemnation, subject to
the provisions of this Deed of Trust. Notwithstanding the foregoing, Borrower
shall have the right, provided no Default or Event of Default has occurred and
is continuing, to compromise and collect or receive any award that does not
exceed $2,500,000. Notwithstanding any Taking by any public or quasi-public
authority (including, without limitation, any transfer made in lieu of or in
anticipation of such a Taking), Borrower shall continue to pay the Debt at the
time and in the manner provided for in the Note, in this Deed of Trust and the
other Loan Documents and the Debt shall not be reduced unless and until any
Award shall have been actually received and applied by Lender to expenses of
collecting the Award and to discharge of the Debt. Lender shall not be limited
to the interest paid on the Award by the condemning authority but shall be
entitled to receive out of the Award interest at the rate or rates provided in
the Note. Borrower shall cause any Award that is payable to Borrower to be paid
directly to Lender. The expenses incurred by Lender in the adjustment and
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collection of the Award shall become part of the Debt and be secured hereby and
shall be reimbursed by Borrower to Lender upon demand.
(E) RESTORATION. The following provisions shall apply in connection
with the Restoration of the Premises and Improvements:
(i) If the Net Proceeds (hereinafter defined) shall be less than Two
Million Five Hundred Thousand and No/100 Dollars ($2,500,000) and the
costs of completing the Restoration shall be less than Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000), the Net Proceeds will be
disbursed by Lender to Borrower upon receipt, provided that all of the
conditions set forth in paragraph 4(e)(iii)(A) are met and Borrower
delivers to Lender a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance
with the terms of this Deed of Trust.
(ii) If the Net Proceeds are equal to or greater than Two Million
Five Hundred Thousand and No/100 Dollars ($2,500,000) or the costs of
completing the Restoration is equal to or greater than Two Million Five
Hundred Thousand and No/100 Dollars ($2,500,000) Lender shall make the Net
Proceeds available for the Restoration in accordance with the provisions
of this paragraph 4. The term "NET PROCEEDS" for purposes of this
paragraph 4 shall mean: (A) the net amount of all insurance proceeds
received by Lender pursuant to paragraph 3(a)(i), (iv), (vi), (ix) and (x)
(and any similar or comparable types of insurance obtained pursuant to
paragraph 3(a)(xi)) as a result of such damage or destruction, after
deduction of its reasonable costs and expenses (including, but not limited
to, reasonable counsel fees), if any, in collecting same ("INSURANCE
PROCEEDS"), or (B) the net amount of the Award, after deduction of its
reasonable costs and expenses (including, but not limited to, reasonable
counsel fees), if any, actually incurred in collecting same ("CONDEMNATION
PROCEEDS"), whichever the case may be.
(iii) The Net Proceeds shall be made available to Borrower for
Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be continuing;
(B) (1) in the event the Net Proceeds are Insurance Proceeds,
less than thirty percent (30%) of the total floor area of the
Improvements has been damaged, destroyed or rendered unusable as a
result of such fire or other casualty or (2) in the event the Net
Proceeds are Condemnation Proceeds, less than fifteen percent (15%)
of the land constituting the Premises is taken, and such land is
located along the perimeter or periphery of the Premises, and no
portion of the Improvements is located in such land;
(C) The Required Leases (hereinafter defined) and Leases
demising in the aggregate a percentage amount equal to or greater
than the Rentable Space Percentage (hereinafter defined) of the
total rentable space in the Improvements shall remain in full force
and effect during and after the completion of the
-11-
Restoration, notwithstanding the occurrence of any such fire or
other casualty or taking, whichever the case may be, and will
require the tenants thereunder to make all necessary repairs and
restorations thereto at their sole cost and expense. The term (x)
"RENTABLE SPACE PERCENTAGE" shall mean (1) in the event the Net
Proceeds are Insurance Proceeds, a percentage amount equal to
seventy-five percent (75%) and (2) in the event the Net Proceeds are
Condemnation Proceeds, a percentage amount equal to seventy-five
percent (75%) which Rentable Space Percentage shall, in each case,
include each of the Required Leases. For purposes of the foregoing,
the "REQUIRED LEASES" shall mean, collectively, the Leases with
Pacific Enterprises, Xxxxxx & Xxxxxxx LLP, Xxxxxxx & Xxxxxx LLP, US
Bancorp, White & Case LLP and Xxxxx Fargo Bank, National Association
or any replacement Lease executed and delivered in accordance with
the terms and provisions of paragraph 8 hereof with respect to the
space demised to any of the foregoing tenants, provided such
replacement Lease demises not less than 50,000 square feet;
(D) Borrower shall commence the Restoration as soon as
reasonably practicable (but in no event later than ninety (90) days
after such damage or destruction or taking, whichever the case may
be, occurs) and shall diligently pursue the same to satisfactory
completion;
(E) Lender shall be reasonably satisfied that any operating
deficits, including all scheduled payments of principal and interest
under the Note, which will be incurred with respect to the Trust
Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, will be covered out
of (1) the Net Proceeds, (2) the insurance coverage referred to in
paragraph 3(a)(iii), if applicable, or (3) by other funds of
Borrower;
(F) Lender shall be satisfied that the Restoration will be
completed on or before the earliest to occur of (1) six (6) months
prior to the Maturity Date, (2) the earliest date required for such
completion under the terms of any Required Lease, (3) such time as
may be required under applicable zoning law, ordinance, rule or
regulation in order to repair and restore the Property to the
condition it was in immediately prior to such fire or other casualty
or to as nearly as possible the condition it was in immediately
prior to such taking, as applicable or (4) the expiration of the
insurance coverage referred to in paragraph 3(a)(iii);
(G) the Trust Property and the use thereof after the
Restoration will be in compliance with and permitted under all
applicable zoning laws, ordinances, rules and regulations and all
necessary operating or reciprocal easement agreements for the
operation and maintenance of the Property are, or remain, in effect;
(H) the Restoration shall be done and completed by Borrower in
an expeditious and diligent fashion and in compliance with all
applicable governmental laws, rules and regulations (including,
without limitation, all applicable environmental laws); and
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(I) such fire or other casualty or taking, as applicable, does
not result in a material loss of access to the Trust Property.
(iv) Unless such amounts are payable to Borrower pursuant to this
paragraph 4, the Net Proceeds shall be held by Lender in an
interest-bearing account for the benefit of Borrower (which interest shall
be added to and become a part of the Net Proceeds) and, until disbursed in
accordance with the provisions of this paragraph 4, shall constitute
additional security for the Debt and other obligations under the Loan
Documents. The Net Proceeds shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the
Restoration, upon receipt of evidence reasonably satisfactory to Lender
that (A) all materials installed and work and labor performed (except to
the extent that they are to be paid for out of the requested disbursement)
in connection with the Restoration have been paid for in full, and (B)
there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other
liens or encumbrances of any nature whatsoever on the Trust Property
arising out of the Restoration which have not either been fully bonded to
the satisfaction of Lender and discharged of record or in the alternative
fully insured to the reasonable satisfaction of Lender by the title
company issuing the title insurance policy.
(v) All plans and specifications required in connection with any
Restoration following a Casualty or Condemnation resulting in Net Proceeds
of $2,500,000 or more shall be subject to prior review and reasonable
acceptance in all respects by Lender and by an independent consulting
engineer selected by Lender (the "CASUALTY CONSULTANT") provided that if
the correspondence from Borrower to Lender requesting approval of any such
plans and specifications (or contractors, subcontractors or materialmen in
connection therewith) contains a bold faced, conspicuous legend at the top
of the first page stating that "IF YOU FAIL TO RESPOND TO THIS REQUEST FOR
APPROVAL IN WRITING WITHIN 15 BUSINESS DAYS, YOUR APPROVAL SHALL BE DEEMED
GIVEN", and if Lender fails to respond to such request for approval in
writing within fifteen (15) Business Days after receipt by Lender of such
written request, the related plans and specifications and all information
reasonably required in order to adequately review the same, then such
approval will be deemed given. Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required or
obtained in connection with the Restoration. The identity of the
contractors, subcontractors and materialmen engaged in any Restoration
following a Casualty or Condemnation resulting in Net Proceeds of
$2,500,000 or more, as well as the contracts under which they have been
engaged, shall be subject to prior review and acceptance by Lender and the
Casualty Consultant, which acceptance shall not be unreasonably withheld,
conditioned or delayed. All costs and expenses incurred by Lender in
connection with making the Net Proceeds available for the Restoration
including, without limitation, reasonable counsel fees and disbursements
and the Casualty Consultant's fees, shall be paid by Borrower.
(vi) In no event shall Lender be obligated to make disbursements of
the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration,
as certified by the Casualty Consultant, minus the Casualty Retainage. The
term "CASUALTY RETAINAGE" shall mean an amount equal to
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ten percent (10%) of the hard costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant, until
the Restoration has been completed. The Casualty Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in
this paragraph 4(e), be less than the amount actually held back by
Borrower from contractors, subcontractors and materialmen engaged in the
Restoration. The Casualty Retainage shall not be released until the
Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this paragraph 4(e) and
that all approvals necessary for the re-occupancy and use of the Property
have been obtained from all appropriate governmental and
quasi-governmental authorities, and Lender receives evidence satisfactory
to Lender that the costs of the Restoration have been paid in full or will
be paid in full out of the Casualty Retainage; provided, however, that
Lender will release the portion of the Casualty Retainage being held with
respect to any contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant certifies to
Lender that the contractor, subcontractor or materialman has
satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due
to the contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company issuing the title insurance
policy, and Lender receives an endorsement to the title insurance policy
insuring the continued priority of the lien of the this Deed of Trust and
evidence of payment of any premium payable for such endorsement. If
required by Lender, the release of any such portion of the Casualty
Retainage shall be approved by the surety company, if any, which has
issued a payment or performance bond with respect to the contractor,
subcontractor or materialman.
(vii) Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
(viii) If at any time the Net Proceeds or the undisbursed balance
thereof shall not, in the reasonable opinion of Lender in consultation
with the Casualty Consultant, be sufficient to pay in full the balance of
the costs which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower shall deposit
the deficiency (the "NET PROCEEDS DEFICIENCY") with Lender before any
further disbursement of the Net Proceeds shall be made. The Net Proceeds
Deficiency deposited with Lender shall be held by Lender and shall be
disbursed for costs actually incurred in connection with the Restoration
on the same conditions applicable to the disbursement of the Net Proceeds,
and until so disbursed pursuant to this paragraph 4(e) shall constitute
additional security for the Debt and other obligations under the Loan
Documents.
(ix) The excess, if any, of the Net Proceeds and the remaining
balance, if any, of the Net Proceeds Deficiency deposited with Lender
after the Casualty Consultant certifies to Lender that the Restoration has
been completed in accordance with the provisions of this paragraph 4(e),
and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in full,
shall be remitted by Lender to Borrower, provided no Event of Default
shall have
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occurred and shall be continuing under the Note, this Deed of Trust or any
of the other Loan Documents.
(x) Notwithstanding the last sentence of paragraph 3(a)(iii) and
provided no Event of Default exists hereunder, proceeds received by Lender
on account of the rental or business interruption insurance specified in
paragraph 3(a)(iii) above with respect to any Casualty shall be deposited
by Lender directly into the Cash Collateral Account (as defined in the
Cash Management Agreement) and allocated as Rents in accordance with
paragraph 10(a)(i) through (xiv) of the Note but (a) only to the extent it
reflects a replacement for (i) lost Rents that would have been due under
Leases existing on the date of such Casualty, and/or (ii) lost Rents under
Leases that had not yet been executed and delivered at the time of such
Casualty which Borrower has proven to the insurer under the related Policy
would have been due under such Leases (and then only to the extent such
proceeds disbursed by such insurer reflect a replacement for such past due
Rents) and (b) only to the extent necessary to fully make the
disbursements required by paragraph 10(a)(i) through (xiv) of the Note.
All other such proceeds shall be held by Lender and disbursed in
accordance with this paragraph 4(e).
(f) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to paragraph 4(e)(ix) may be retained and applied by Lender toward the payment
of the Debt whether or not then due and payable in such order, priority and
proportions as Lender in its sole discretion shall deem proper, or, at the
discretion of Lender, the same may be paid, either in whole or in part, to
Borrower for such purposes as Lender shall designate, in its discretion. So long
as no Event of Default has occurred and is continuing, any application of Net
Proceeds to the Debt shall not require any payment of the Yield Maintenance
Premium or any other premium or penalty.
5. PAYMENT OF TAXES, ETC. Subject to the provisions of paragraph 6
hereof, Borrower shall pay all taxes, assessments, water rates and sewer rents,
now or hereafter levied or assessed or imposed against the Trust Property or any
part thereof (the "TAXES") on or before the last date prior to which any
interest, late fees or penalties would begin to accrue (the "DELINQUENCY
DATE")and all ground rents, maintenance charges, other impositions, and other
charges, including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Premises, now or hereafter
levied or assessed or imposed against the Trust Property or any part thereof
(the "OTHER CHARGES") as the same become due and payable. Borrower will deliver
to Lender receipts for payment or other evidence satisfactory to Lender that the
Taxes and Other Charges have been so paid or are not then delinquent no later
than the date on which the Taxes and/or Other Charges would otherwise be
delinquent if not paid; provided, however, Borrower shall not be required to
deliver to Lender such evidence of payment with respect to any Taxes or Other
Charges that are paid by Lender pursuant to paragraph 6 hereof. Borrower shall
not suffer and shall promptly cause to be paid and discharged any lien or charge
whatsoever which may be or become a lien or charge against the Trust Property,
and shall promptly pay for all utility services provided to the Trust Property.
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6. TAX AND INSURANCE IMPOUND FUND; DEFERRED MAINTENANCE ESCROW FUND;
US BANCORP ESCROW FUND; OUTSTANDING TENANT ALLOWANCE ESCROW FUND;
REPLACEMENT/LEASING ESCROW FUND.
(a) Borrower shall pay to Lender (i) (A) with respect to Taxes that
are required to be paid prior to December 10, 2003 (which date is the last date
prior to which any interest, late fees or penalties would commence accruing with
respect to Taxes due and payable on November 1, 2003), on the date hereof an
amount equal to $1,059,009 and on each Payment Date (as defined in the Note) up
to and including the Payment Date occurring in November, 2003, an amount equal
to $264,752 and (B) on each Payment Date from and after the Payment Date
occurring in December, 2003, one-twelfth of the Taxes that Lender estimates will
be payable during the next ensuing twelve (12) months in order to accumulate
with Lender sufficient funds to pay all such Taxes at least thirty (30) days
prior to their Delinquency Date, and (ii) (A) on the date hereof, an amount
equal to $192,483 and (B) (1) for so long as the applicable Blanket Insurance
Premium Financing Arrangement remains in full force and effect, on each Payment
Date (as defined in the Note) the Financing Installment for the next occurring
payment under the applicable Blanket Insurance Premium Financing Arrangement
and/or (2) with respect to any Insurance Premiums not covered by a Blanket
Insurance Premium Financing Arrangement, on each Payment Date (as defined in the
Note) one-twelfth of the Insurance Premiums that Lender estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Lender sufficient funds to pay
all such Insurance Premiums at least thirty (30) days prior to the expiration of
the Policies (said amounts in (i) and (ii) above hereinafter called the "TAX AND
INSURANCE IMPOUND FUND"). Lender will apply the Tax and Insurance Impound Fund
to payments of Taxes and Insurance Premiums required to be made by Borrower
pursuant to paragraphs 3 and 5 hereof and/or to payments due to the applicable
finance company under the applicable Blanket Insurance Premium Financing
Arrangement, as applicable. In making any payment relating to the Tax and
Insurance Impound Fund, Lender may do so according to any xxxx, statement or
estimate procured from the appropriate public office (with respect to Taxes) or
insurer or agent (with respect to Insurance Premiums), without inquiry into the
accuracy of such xxxx, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax and Insurance Impound Fund shall exceed the amounts due for Taxes and
Insurance Premiums pursuant to paragraphs 3 and 5 hereof, Lender shall, in its
sole discretion, return any excess to Borrower or credit such excess against
future payments to be made to the Tax and Insurance Impound Fund. In allocating
such excess, Lender may deal with the person shown on the records of Lender to
be the owner of the Trust Property. If at any time Lender determines that the
Tax and Insurance Impound Fund is not or will not be sufficient to pay the items
set forth in (i) and (ii) above, Lender shall notify Borrower of such
determination and Borrower shall increase its monthly payments to Lender by the
amount that Lender estimates is sufficient to make up the deficiency at least
thirty (30) days prior to delinquency of the Taxes and/or expiration of the
Policies, as the case may be. Until expended or applied as above provided, any
amounts in the Tax and Insurance Impound Fund shall constitute additional
security for the Debt. The Tax and Insurance Impound Fund shall not constitute a
trust fund and may be commingled with other monies held by Lender. The Tax and
Insurance Impound Fund shall be held in an interest bearing account in Lender's
name at a financial institution selected by Lender in its sole discretion. All
earnings or interest on the Tax and Insurance Impound Fund
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shall become part of the Tax and Insurance Impound Fund and shall be disbursed
in accordance with this paragraph 6(a). If Lender so elects at any time,
Borrower shall provide, at Borrower's expense, a tax service contract for the
Term issued by a tax reporting agency acceptable to Lender. If Lender does not
so elect, Borrower shall reimburse Lender for the cost of making annual tax
searches throughout the Term.
(b) Borrower shall pay to Lender on the date hereof the sum of Six
Thousand Two Hundred Fifty and No/100 Dollars ($6,250.00) which shall be
deposited with and held by Lender for repairs required to be made to the Trust
Property on or prior to the date that is twelve (12) months from the date
hereof, as such repairs are more particularly described on Exhibit C attached
hereto ("DEFERRED MAINTENANCE FUND"). Lender shall make disbursements from the
Deferred Maintenance Fund as requested by Borrower, and approved by Lender in
its sole discretion, no more frequently than once in any thirty (30) day period
of no less than $1,000.00 upon delivery by Borrower of Lender's standard form of
draw request accompanied by copies of invoices for the amounts requested and, if
required by Lender for requests in excess of $50,000.00 for a single item,
conditional lien waivers and releases from all parties furnishing materials
and/or services in connection with the requested payment. Lender may issue joint
checks payable to Borrower and the contractor or other person to whom payment is
due with respect to any requested payment. Lender may require an inspection of
the Trust Property at Borrower's expense prior to making a monthly disbursement
in order to verify completion of repairs of items in excess of $50,000.00 for
which reimbursement or payment is sought. The Deferred Maintenance Fund shall be
held in an interest bearing account in Lender's name at a financial institution
selected by Lender in its sole discretion. All earnings or interest on the
Deferred Maintenance Fund shall be and become part of such Deferred Maintenance
Fund and shall be disbursed as provided in this paragraph 6(b) Upon completion
of the work set forth in Exhibit C attached hereto, provided no Event of Default
is then continuing, Lender shall disburse to Borrower any and all funds
remaining on deposit in the Deferred Maintenance Fund. Until expended, applied
or released as above provided, the Deferred Maintenance Fund shall constitute
additional security for the Debt. The Deferred Maintenance Fund shall not
constitute a trust fund and may be commingled with other monies held by Lender.
(c) Subject to the provisions of paragraph 6(g) below, Borrower
shall pay to Lender on the date hereof an amount equal to $8,435,154 (the
"UPFRONT US BANCORP RESERVE AMOUNT") which shall be deposited with and held by
Lender for the tenant improvement and leasing commission obligations of Borrower
(the "US BANCORP TI/LC OBLIGATIONS") outstanding on the date hereof with respect
to the US Bancorp Space (the "US BANCORP ESCROW FUND"). In addition to the
Upfront US Bancorp Reserve Amount, Borrower shall deposit the following amounts
into the US Bancorp Escrow Fund: (i) on each Payment Date from and including
April 1, 2004 up to and including March 1, 2005, all Excess Cash Flow (as
defined in the Note), but only until such time as there has been deposited in
the US Bancorp Escrow Fund an additional amount of $1,134,928 for such period
from and after April 1, 2004; and (ii) on each Payment Date from and including
January 1, 2006 up to and including December 1, 2006, all Excess Cash Flow (as
defined in the Note), but only until such time as there has been deposited in
the US Bancorp Escrow Fund an additional amount of $1,659,928 for such period
from and after January 1, 2006 (the foregoing deposits set forth in clauses (i)
and (ii) above, together with the Upfront US Bancorp Reserve Amount, are
hereinafter referred to as the "US BANCORP RESERVE AMOUNT"). Notwithstanding the
foregoing, a portion of the US Bancorp Reserve
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Amount equal to the sum of (i) $368,446 of the amount deposited pursuant to
clause (i) above and the amount deposited pursuant to clause (ii) above
(collectively, the "26TH FLOOR BUILDOUT AMOUNT") shall be used solely for US
Bancorp TI/LC Obligations pertaining to the expansion of the US Bancorp Space to
include the 26th floor at the Trust Property. For purposes hereof, "US BANCORP
SPACE" shall mean that certain space located at the Trust Property consisting of
approximately 130,096 rentable square feet located on floors 1, 2, 24, 25, 28,
29 and 30 of the Improvements and demised under that certain Library Square
Office Lease and Branch Space Lease between Borrower and U.S. Bank, National
Association, dated as of March 27, 2003. Lender shall make disbursements from
the US Bancorp Escrow Fund for any US Bancorp TI/LC Obligations incurred by
Borrower. Lender shall make disbursements as requested by Borrower on a monthly
basis in increments of no less than $1,000.00 upon delivery by Borrower of
Lender's standard form of draw request accompanied by copies of invoices for the
amounts requested for such US Bancorp TI/LC Obligations and, if required by
Lender, for requests in excess of $50,000 (multiple payments made with respect
to one tenant or contractor or other person shall be aggregated for such $50,000
limit), conditional lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment. Lender may
issue joint checks payable to Borrower and the contractor or other person to
whom payment is due with respect to any requested payment. Lender may require an
inspection of the Trust Property at Borrower's expense prior to making a monthly
disbursement in order to verify completion of improvements for which
reimbursement or payment is sought which costs in the aggregate in excess of
$50,000. The US Bancorp Escrow Fund shall be held in an interest bearing account
in Lender's name at a financial institution selected by Lender in its sole
discretion. All earnings or interest on the US Bancorp Escrow Fund shall be and
become part of such US Bancorp Escrow Fund and shall be disbursed as provided in
this paragraph 6(c). Upon payment in full of all US Bancorp TI/LC Obligations,
provided no Event of Default is then continuing, Lender shall disburse to
Borrower any and all funds remaining on deposit in the US Bancorp Escrow Fund.
Until expended, applied or released as above provided, the US Bancorp Escrow
Fund shall constitute additional security for the Debt. The US Bancorp Escrow
Fund shall not constitute a trust fund and may be commingled with other monies
held by Lender.
(d) Subject to the provisions of paragraph 6(g) below, Borrower
shall pay to Lender on the date hereof an amount equal to $1,251,039 (the
"OUTSTANDING TENANT ALLOWANCE AMOUNT") which shall be deposited with and held by
Lender for the tenant improvement and leasing commission obligations of Borrower
(the "OUTSTANDING TENANT ALLOWANCE OBLIGATIONS") outstanding on the date hereof
(as more particularly set forth on Exhibit D attached hereto) with respect to
all space at the Trust Property other than the US Bancorp Space (the
"OUTSTANDING TENANT ALLOWANCE ESCROW FUND"). Lender shall make disbursements
from the Outstanding Tenant Allowance Escrow Fund for any Outstanding Tenant
Allowance Obligations incurred by Borrower. Lender shall make disbursements as
requested by Borrower on a monthly basis in increments of no less than $1,000.00
upon delivery by Borrower of Lender's standard form of draw request accompanied
by copies of invoices for the amounts requested for such Outstanding Tenant
Allowance Obligations and, if required by Lender, for requests in excess of
$50,000 (multiple payments made with respect to one tenant or contractor or
other person shall be aggregated for such $50,000 limit), conditional lien
waivers and releases from all parties furnishing materials and/or services in
connection with the requested payment. Lender may issue joint checks payable to
Borrower and the contractor or other person to whom payment is due with respect
to any requested payment. Lender may require an inspection of the
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Trust Property at Borrower's expense prior to making a monthly disbursement in
order to verify completion of improvements for which reimbursement or payment is
sought which costs in the aggregate in excess of $50,000. The Outstanding Tenant
Allowance Escrow Fund shall be held in an interest bearing account in Lender's
name at a financial institution selected by Lender in its sole discretion. All
earnings or interest on the Outstanding Tenant Allowance Escrow Fund shall be
and become part of such Outstanding Tenant Allowance Escrow Fund and shall be
disbursed as provided in this paragraph 6(d). Upon payment in full of all
Outstanding Tenant Allowance Obligations, provided no Event of Default is then
continuing, Lender shall disburse to Borrower any and all funds remaining on
deposit in the Outstanding Tenant Allowance Escrow Fund. Until expended, applied
or released as above provided, the Outstanding Tenant Allowance Escrow Fund
shall constitute additional security for the Debt. The Outstanding Tenant
Allowance Escrow Fund shall not constitute a trust fund and may be commingled
with other monies held by Lender.
(e) Intentionally Omitted.
(f) (i) Subject to the provisions of paragraph 6(g) below, Borrower
shall pay to Lender (A) on each Payment Date the sum of $21,715 (the "MONTHLY
REPLACEMENT ESCROW AMOUNT") which shall be deposited with and held by Lender for
capital improvements, replacements and repairs required to be made to the Trust
Property during the calendar year and for any other work approved by Lender and
(B) on each Payment Date the sum of $240,665.50 (the "MONTHLY LEASING ESCROW
DEPOSIT"), which shall be deposited with and held by Lender for tenant
improvement and leasing commission obligations incurred following the date
hereof. In addition to the Monthly Replacement Escrow Amount and the Monthly
Leasing Escrow Deposit, Borrower shall deposit into the Replacement/Leasing
Escrow Fund, on each Payment Date from and including July 1, 2004 up to and
including June 1, 2007, an amount equal to $208,333 ("ADDITIONAL MONTHLY LEASING
ESCROW DEPOSIT"; each of the Monthly Replacement Escrow Amounts, each of the
Monthly Leasing Escrow Deposits and each of the Additional Monthly Leasing
Escrow Deposits are collectively hereinafter referred to as the
"REPLACEMENT/LEASING ESCROW FUND") which shall be deposited with and held by
Lender for additional tenant improvement and leasing commission obligations. The
amounts on deposit in the Replacement/Leasing Escrow Fund consisting of Monthly
Replacement Escrow Amounts shall be hereinafter referred to as the "REPLACEMENT
DEPOSITS" and the amounts on deposit in the Replacement/Leasing Escrow Fund
consisting of Monthly Leasing Escrow Deposits and Additional Monthly Leasing
Escrow Deposits shall be hereinafter referred to as the "LEASING DEPOSITS".
Lender may reasonably reassess its estimate of the monthly amount necessary to
be deposited into the Replacement/Leasing Escrow Fund and, upon notice to
Borrower, Borrower shall be required to deposit into the Replacement/Leasing
Escrow Fund each month such reassessed amount. Lender shall make disbursements
from that portion of the Replacement/Leasing Escrow Fund consisting of
Replacement Deposits as requested by Borrower, and approved by Lender in its
sole discretion, no more frequently than once in any thirty (30) day period of
no less than $1,000.00 upon delivery by Borrower of Lender's standard form of
draw request accompanied by copies of invoices for the amounts requested and, if
required by Lender for requests in excess of $50,000.00 for a single item,
conditional lien waivers and releases from all parties furnishing materials
and/or services in connection with the requested payment. Lender shall make
disbursements from that portion of the Replacement/Leasing Escrow Fund
consisting of Leasing Deposits for expenses reasonably
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incurred by Borrower for new Leases, or extensions, modifications or renewals of
existing Leases, entered into by Borrower in accordance with the provisions of
paragraph 8 below, no more frequently than once in any thirty (30) day period in
increments of no less than $1,000.00 upon delivery by Borrower of Lender's
standard form of draw request accompanied by copies of invoices for the amounts
requested for tenant improvements and leasing commissions, the newly executed
Lease, extension, renewal, or modification (if not previously received by
Lender) and, if required by Lender, for requests in excess of $50,000 (multiple
payments made with respect to one tenant or contractor or other person shall be
aggregated for such $50,000 limit), conditional lien waivers and releases from
all parties furnishing materials and/or services in connection with the
requested payment. Notwithstanding anything to the contrary contained herein,
Borrower shall not be entitled to any funds from the Replacement/Leasing Escrow
Fund with respect to any tenant improvements or leasing commissions allocable to
the US Bancorp Space. Lender may issue joint checks payable to Borrower and the
contractor or other person to whom payment is due with respect to any requested
payment. Lender may require an inspection of the Trust Property at Borrower's
expense prior to making a monthly disbursement in order to verify completion of
improvements, replacements or repairs for which reimbursement or payment is
sought which costs in the aggregate in excess of $50,000. The
Replacement/Leasing Escrow Fund shall be held in an interest bearing account in
Lender's name at a financial institution selected by Lender in its sole
discretion. All earnings or interest on the Replacement/Leasing Escrow Fund
shall be and become part of such Replacement/Leasing Escrow Fund and shall be
disbursed as provided in this paragraph 6(f). Until expended or applied as above
provided, the Replacement/Leasing Escrow Fund shall constitute additional
security for the Debt. The Replacement/Leasing Escrow Fund shall not constitute
a trust fund and may be commingled with other monies held by Lender.
(ii) Notwithstanding the foregoing, Borrower shall not be obligated
to make any Monthly Leasing Escrow Deposits or Monthly Replacement Escrow
Amount deposits unless and until an NOI Trigger Event (as hereinafter
defined) occurs (it being agreed and acknowledged that Borrower shall be
obligated to make the Additional Monthly Leasing Escrow Deposits
irrespective of whether an NOI Trigger Event exists). From and after the
occurrence and during the continuance of an NOI Trigger Event, (A)
Borrower shall deposit on each Payment Date all Excess Cash Flow (as
defined in the Note) into the Replacement/Leasing Escrow Fund until the
amount on deposit in the Replacement/Leasing Escrow Fund equals (1) the
sum of (x) the Monthly Leasing Escrow Deposit and (y) the Monthly
Replacement Escrow Amount, multiplied by (z) the number of months that the
Loan has then been outstanding, less (2) any amounts previously expended
by Borrower for tenant improvements, leasing commissions, capital
improvements, replacements and/or repairs for which Borrower would have
otherwise been entitled to disbursements from the Replacement/Leasing
Escrow Fund pursuant to and in accordance with paragraph 6(f)(i) in the
event that Borrower had been making Monthly Leasing Escrow Deposits and
deposits of Monthly Replacement Escrow Amounts pursuant to and in
accordance with paragraph 6(f)(i) and for which Borrower submits to Lender
such invoices or other evidence of such expenditures as Lender may
reasonably require (the amount of such deposit is hereinafter referred to
as the "LEASING ESCROW FUND CATCH-UP DEPOSIT"), (B) from and after the
month immediately following the month in which the amount on deposit in
the Replacement/Leasing Escrow Fund equals the Leasing Escrow Fund
Catch-Up Deposit, Borrower shall deposit on each
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Payment Date the Monthly Leasing Escrow Deposit and the Monthly
Replacement Escrow Amount (C) on the Payment Date occurring in January,
2005, Borrower shall deposit an additional amount in the
Replacement/Leasing Escrow Fund equal to the positive difference, if any,
between (1) $8,800,000 and (2) the amount then on deposit in the
Replacement/Leasing Escrow Fund, (D) on the Payment Date occurring in
January, 2009, Borrower shall deposit an additional amount in the
Replacement/Leasing Escrow Fund equal to the positive difference, if any,
between (1) $9,100,000 and (2) the amount then on deposit in the
Replacement/Leasing Escrow Fund and (E) on the Payment Date occurring in
January, 2010, Borrower shall deposit an additional amount in the
Replacement/Leasing Escrow Fund equal to the positive difference, if any,
between (1) $6,800,000 and (2) the amount then on deposit in the
Replacement/Leasing Escrow Fund.
(ii) For purposes of this paragraph 6(f), (A) "NOI TRIGGER EVENT"
shall mean any period commencing on the date in which it is determined
that the Net Operating Income for the calendar quarter immediately
preceding the date of such calculation is less than $32,000,000 and which
shall be deemed to continue until such time as the Net Operating Income
equals or exceeds $32,000,000 for two consecutive calendar quarters, (B)
"NET OPERATING INCOME" shall mean as of any date, (1) the annualized Gross
Income from Operations (as hereinafter defined) based on Leases In Place
as of the most recently ended calendar quarter less (2) the actual
Operating Expenses incurred during the preceding period of twelve
consecutive calendar months ending on the last day of the most recently
ended calendar quarter (as adjusted pursuant to the definition of
"Operating Expenses" below), as reasonably determined by Lender and in
accordance with current rating agency criteria, (C) "GROSS INCOME FROM
OPERATIONS" shall mean all income, computed in accordance with GAAP (as
hereinafter defined), except as otherwise provided herein, derived from
the ownership and operation of the Trust Property from whatever source,
including, but not limited to, rents, utility charges, escalations,
forfeited security deposits, service fees or charges, license fees,
parking fees, and other pass-throughs or reimbursements paid by tenants
under Leases In Place with respect to the Trust Property of any nature
(adjusted for projected increases in fixed expenses as provided in the
definition of "Expenses" herein) but excluding sales, use and occupancy or
other taxes on receipts required to be accounted for by Borrower to any
government or governmental agency, refunds and uncollectible accounts,
interest on credit accounts, any one-time or other non-periodic payments
by tenants under their respective Leases other than pre-paid rent by
tenants (except that such pre-paid rent shall not be deemed income until
the occurrence of the month in which such pre-paid rent was otherwise
payable), proceeds of casualty insurance and condemnation awards (other
than business interruption or other loss of income insurance) and any
disbursements to Borrower from any escrow fund established pursuant to any
Loan Document, (D) "LEASES IN PLACE" shall mean Leases of space at the
Trust Property under which the tenant has accepted the demised premises,
opened for business and is then obligated to pay rent; provided that
Borrower shall not receive credit for rent payable under such Lease for
the period commencing on the latter to occur of the date that is twelve
(12) months prior to the expiration date of the Lease term or the date
that the renewal or extension option in the Lease, if any, expires, if (1)
the Lease has not been renewed or extended pursuant to and in accordance
with the Lease, or (2) a replacement tenant has not executed a Lease for
all
-21-
or a portion of the space then subject to the related Lease in Place in
accordance with the provisions of this Deed of Trust (but in the case of
this clause (2), Borrower shall only receive credit for rent payable under
such Lease to the extent of the space so re-let), and with respect to
which no bankruptcy proceeding has been commenced against the tenant that
has not been dismissed; provided that if a tenant that has a long-term
unsecured debt rating of at least "BBB-" or its equivalent ("investment
grade") and no worse than a "stable" outlook by any two of S&P, Xxxxx'x
and/or Fitch, such tenant shall not be required to be open for business;
provided, further, that if a Lease In Place is subject to any unescrowed
rent concession or credit, such unescrowed rent concession or credit shall
be deducted from the rent payable under such Lease In Place when
determining the rent payable under such Leases In Place, provided that
such rent concession or credit shall be amortized over the primary lease
term (excluding any extension options), provided such primary lease term
shall be reduced by assuming that any and all lease cancellation options
contained in such Lease are exercised. Above market rents payable under
Leases In Place will be adjusted, in Lender's reasonable determination,
down to the applicable market rents when determining the rent payable
under such Lease In Place if the tenant thereunder is not investment
grade. (For purposes of this paragraph, Xxxxxx & Xxxxxxx LLP and
Affiliates and White & Case LLP will be deemed to constitute investment
grade tenants.), and (E) "OPERATING EXPENSES" shall mean the total of all
expenditures by Borrower, computed in accordance with generally accepted
accounting principles or the method used in connection with the financial
statements of Borrower delivered to Lender in connection with the closing
of the Loan ("GAAP"), except as otherwise provided herein, of whatever
kind relating to the operation, maintenance and management of the Trust
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, telecom costs, ordinary repairs
and maintenance, insurance, license fees, property taxes and assessments,
advertising and marketing expenses, legal (other than costs and expenses
relating to the Loan) and accounting fees, management fees, payroll and
related taxes, computer processing charges, operational equipment or other
lease payments as approved by Lender for expenditures not included in the
Approved Annual Budget (as defined in the Note) for the Trust Property,
and other similar costs (with adjustments thereto with respect to changes
in fixed costs based upon the most recently available information to
Borrower), but excluding capital expenditures for the Trust Property,
tenant improvement costs and leasing commissions for the Trust Property,
depreciation, debt service, contributions to any reserves required under
the Loan Documents and extraordinary, non-recurring expenses. To the
extent that the definitions of Net Operating Income, Gross Income from
Operations, Operating Expenses and Leases in Place deviate from GAAP, the
definitions of such terms contained herein shall govern.
(g) (i) In lieu of making the payments to either of the US Bancorp
Escrow Fund, the Outstanding Tenant Allowance Escrow Fund or the
Replacement/Leasing Escrow Fund, Borrower may deliver to Lender one or more
Letters of Credit (as hereinafter defined) in accordance with the provisions of
this Section 6(g). Additionally, Borrower may deliver to Lender one or more
Letters of Credit in accordance with the provisions of this Section 6(g) in lieu
of deposits previously made to any of the US Bancorp Escrow Fund, the
Outstanding Tenant Allowance Escrow Fund or the Replacement/Leasing Escrow Fund
and upon such delivery, provided that no Event of Default is then continuing,
obtain the release of such amounts
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previously deposited. The aggregate amount of proceeds available to be drawn
under the Letters of Credit and cash on deposit in the US Bancorp Escrow Fund,
the Outstanding Tenant Allowance Escrow Fund or the Replacement/Leasing Escrow
Fund, as applicable, shall at all times be at least equal to the aggregate
amount which Borrower is then required to have on deposit in the US Bancorp
Escrow Fund, the Outstanding Tenant Allowance Escrow Fund and/or the
Replacement/Leasing Escrow Fund, as applicable, pursuant to this Deed of Trust.
Borrower shall give Lender no less than thirty (30) days notice of Borrower's
election to deliver a Letter of Credit and Borrower shall pay to Lender all of
Lender's reasonable out-of-pocket costs and expenses in connection therewith.
Borrower shall not be entitled to draw from any such Letter of Credit. Upon
thirty (30) days notice to Lender, Borrower may replace a Letter of Credit with
a cash deposit to any of the US Bancorp Escrow Fund, the Outstanding Tenant
Allowance Escrow Fund or the Replacement/Leasing Escrow Fund. Prior to the
return of a Letter of Credit, Borrower shall deposit an amount equal to the
amount that would have accumulated in any of the US Bancorp Escrow Fund, the
Outstanding Tenant Allowance Escrow Fund or the Replacement/Leasing Escrow Fund,
as applicable, and not been disbursed in accordance with this Deed of Trust if
such Letter of Credit had not been delivered. Each Letter of Credit delivered
under this Deed of Trust shall be additional security for the payment of the
Debt. Upon the occurrence of an Event of Default, Lender shall have the right,
at its option, to draw on any Letter of Credit and to apply all or any part
thereof to the payment of the items for which such Letter of Credit was
established or to apply each such Letter of Credit to payment of the Debt in
such order, proportion or priority as Lender may determine. On the Maturity
Date, any such Letter of Credit may be applied to reduce the Debt. In addition
to any other right Lender may have to draw upon a Letter of Credit pursuant to
the terms and conditions of this Deed of Trust, unless Borrower has deposited
cash in the applicable reserve fund sufficient to replace the Letter of Credit
as provided above, Lender shall have the additional rights to draw in full any
Letter of Credit: (a) with respect to any evergreen Letter of Credit, if Lender
has received a notice from the issuing bank that the Letter of Credit will not
be renewed and a substitute Letter of Credit is not provided at least ten (10)
Business Days prior to the date on which the outstanding Letter of Credit is
scheduled to expire; (b) with respect to any Letter of Credit with a stated
expiration date, if Lender has not received a notice from the issuing bank that
it has renewed the Letter of Credit at least ten (10) Business Days prior to the
date on which such Letter of Credit is scheduled to expire and a substitute
Letter of Credit is not provided at least ten (10) Business Days prior to the
date on which the outstanding Letter of Credit is scheduled to expire; (c) upon
receipt of notice from the issuing bank that the Letter of Credit will be
terminated (except if the termination of such Letter of Credit is permitted
pursuant to the terms and conditions of this Deed of Trust or a substitute
Letter of Credit is provided); or (d) if Lender has received notice that the
bank issuing the Letter of Credit shall cease to be an Eligible Institution (as
hereinafter defined) and Borrower has not provided a substitute Letter of Credit
or deposited cash to replace the Letter of Credit within five (5) days after
Lender has received such notice. In the event that Lender draws in full any
Letter of Credit as a result of any of the events described in clauses (a)-(d)
above, provided there is no Event of Default then continuing, (x) Lender shall
deposit all proceeds of such Letter of Credit in the applicable reserve fund
that was not being funded with monthly cash deposits as a result of such Letter
of Credit having been posted and (y) if the proceeds of such Letter of Credit
exceed the amount that would have otherwise been on deposit in such reserve fund
in the event that Borrower had not posted such Letter of Credit, any excess
amounts shall remain on deposit in such reserve fund and shall be
-23-
credited against Borrower's future deposit obligations into such reserve fund.
Notwithstanding anything to the contrary contained in the above, Lender is not
obligated to draw any Letter of Credit upon the happening of an event specified
in (a), (b), (c) or (d) above and shall not be liable for any losses sustained
by Borrower due to the insolvency of the bank issuing the Letter of Credit if
Lender has not drawn the Letter of Credit.
(ii) For the purposes of this Section 6(g), (A) "LETTER OF CREDIT"
shall mean an irrevocable, unconditional, transferable, clean sight draft
letter of credit acceptable to Lender and the Rating Agencies (either an
evergreen letter of credit or one which does not expire until at least
thirty (30) days after the Maturity Date) for which Borrower shall have no
reimbursement obligation and which reimbursement obligation is not secured
by the Trust Property or any other property pledged to secure the Note in
favor of Lender and entitling Lender to draw thereon in New York, New
York, issued by a domestic Eligible Institution or the U.S. agency or
branch of a foreign Eligible Institution. If at any time the bank issuing
any such Letter of Credit shall cease to be an Eligible Institution,
subject to Borrower's rights under clause (d) of paragraph 6(e)(i) above,
Lender shall have the right to draw down the same in full and hold the
proceeds of such draw in accordance with the applicable provisions hereof
and (B) "ELIGIBLE INSTITUTION" shall mean a federal or state chartered
depository institution or trust company insured by the Federal Deposit
Insurance Corporation the short term unsecured debt obligations or
commercial paper of which are rated at least A-1 by S&P, P-1 by Xxxxx'x,
and F-1+ by Fitch, Inc. in the case of accounts in which funds are held
for thirty (30) days or less or, in the case of Letters of Credit or
accounts in which funds are held for more than thirty (30) days, the long
term unsecured debt obligations of which are rated at least "AA" by Fitch
and S&P and "Aa2" by Xxxxx'x.
(h) Borrower hereby pledges to Lender and grants to Lender a
security interest in any and all monies now or hereafter deposited in the Tax
and Insurance Impound Fund, the Deferred Maintenance Escrow Fund, the US Bancorp
Escrow Fund, the Outstanding Tenant Allowance Escrow Fund and the
Replacement/Leasing Escrow Fund (collectively, the "FUNDS") as additional
security for the payment of the Debt. Upon the occurrence of an Event of Default
and prior to the acceptance of a cure thereof by Lender, Lender shall have no
obligation to disburse any amounts held in the Funds to the Borrower and may
apply any sums then present in such funds to the payment of the Debt in any
order in its sole discretion. All reasonable third party out-of-pocket costs and
expenses incurred by Lender in the disbursement of any of the Funds, if any,
shall be paid by Borrower promptly upon demand. The Funds shall be held in a
segregated account in Lender's name at a financial institution selected by
Lender in its sole discretion. At the direction of Borrower, Lender shall
deposit the amounts held in the Funds in Permitted Investments (as defined
herein) selected by Borrower. All investment earnings on the Funds shall be (i)
added to and become part of its respective Fund, (ii) taxed as income of the
Borrower, (iii) for the benefit of Borrower, subject to Lender's rights pursuant
to this Deed of Trust, and (iv) disbursed in accordance herewith. Lender shall
not be responsible for any losses resulting from the investment of the Funds or
for obtaining any specific level or percentage of earnings on such investment.
(i) (i) Subject to the provisions of subparagraph (i)(ii) below, for
the purposes of this Deed of Trust, the term "PERMITTED INVESTMENTS" shall mean
any one or more
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of the following obligations or securities acquired at a purchase price of not
greater than par, including those issued by Servicer (defined herein), the
trustee under any Securitization or any of their respective affiliates, payable
on demand or having a maturity date not later than the Business Day immediately
prior to the first Payment Date following the date of acquiring such investment
(and in no event having maturities of more than 365 days) and meeting one of the
appropriate standards set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
agency or instrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully guaranteed
obligations), the Farmers Home Administration (certificates of beneficial
ownership), the General Services Administration (participation certificates),
the U.S. Maritime Administration (guaranteed Title XI financing), the Small
Business Administration (guaranteed participation certificates and guaranteed
pool certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (ii) Federal Housing Administration debentures; (iii)
obligations of the following United States government sponsored agencies:
Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit System
(consolidated system wide bonds and notes), the Federal Home Loan Banks
(consolidated debt obligations), the Federal National Mortgage Association (debt
obligations), the Financing Corp. (debt obligations), and the Resolution Funding
Corp. (debt obligations); provided, however, that the investments described in
this clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P, must not have an "r"
highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to liquidation prior to
their maturity; (iv) federal funds, unsecured certificates of deposit, time
deposits, bankers' acceptances and repurchase agreements with maturities of not
more than 365 days of any bank, the short term obligations of which at all times
are rated in the highest short term rating category by each Rating Agency
(defined herein) (or, if not rated by all Rating Agencies, rated by at least one
Rating Agency in the highest short term rating category and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would
not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities issued
in connection with a Securitization or any class thereof); provided, however,
that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to their rating, (C) if
such investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; (v) fully Federal Deposit Insurance
Corporation-insured demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank, the short term obligations
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of which at all times are rated in the highest short term rating category by
each Rating Agency (or, if not rated by all Rating Agencies, rated by at least
one Rating Agency in the highest short term rating category and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities (as defined in the Cooperation Letter) or any class thereof);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity; (vi) debt obligations with
maturities of not more than three hundred sixty-five (365) days and at all times
rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by
at least one Rating Agency and otherwise acceptable to each other Rating Agency,
as confirmed in writing that such investment would not, in and of itself, result
in a downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities or any class thereof) in its highest
long-term unsecured rating category; provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change, (B) if rated by S&P, must
not have an "r" highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to liquidation
prior to their maturity; (vii) commercial paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) with maturities of not more than three hundred sixty-five
(365) days and that at all times is rated by each Rating Agency (or, if not
rated by all Rating Agencies, rated by at least one Rating Agency and otherwise
acceptable to each other Rating Agency, as confirmed in writing that such
investment would not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned to the
Securities or any class thereof) in its highest short-term unsecured debt
rating; provided, however, that the investments described in this clause must
(A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index plus a fixed spread
(if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity; and (viii) other
security, obligation or investment which has been approved as a Permitted
Investment in writing by (a) Lender and (b) each Rating Agency, as evidenced by
a written confirmation that the designation of such security, obligation or
investment as a Permitted Investment will not, in and of itself, result in a
downgrade, qualification or withdrawal of the initial, or, if higher, then
current ratings assigned to the Securities, or any class thereof, by such Rating
Agency; provided, however, that no obligation or security shall be a Permitted
Investment if (A) such obligation or security evidences a right to receive only
interest payments or (B) the right to receive principal and interest payments on
such obligation or security are derived from an underlying investment that
provides a yield to maturity in excess of one hundred twenty percent (120%) of
the yield to maturity at par of such underlying investment. Notwithstanding
anything to the contrary contained herein, the Permitted
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Investments (i) through (ix) above must have a Xxxxx'x rating of (a) "A2 or P-1"
if such investment has a maximum maturity of one (1) month, (b) "A1 and P-1" if
such investment has a maximum maturity of three (3) months, (c) "Aa3 and P-1" if
such investment has a maximum maturity of six (6) months and (d) "AAA and P-1"
if such investment has a maximum maturity of more than six (6) months.
(ii) At any time when Borrower is not permitted under the Loan
Documents to select Permitted Investments, then for the purposes of this Deed of
Trust, the term "PERMITTED INVESTMENTS" shall mean any one or more of the
following obligations or securities acquired at a purchase price of not greater
than par, including those issued by Servicer (defined herein), the trustee under
any Securitization or any of their respective Affiliates, payable on demand or
having a maturity date not later than the Business Day immediately prior to the
first Payment Date following the date of acquiring such investment (and in no
event having maturities of more than 365 days) and meeting one of the
appropriate standards set forth below: (i) obligations of, or obligations fully
guaranteed as to payment of principal and interest by, the United States or any
Person controlled or supervised by and acting as an instrumentality of the
United States pursuant to authority granted by the Congress of the United States
provided such obligations are backed by the full faith and credit of the United
States of America and are one of the following: obligations of the U.S. Treasury
(all direct or fully guaranteed obligations), the General Services
Administration (participation certificates), the Small Business Administration
(guaranteed participation certificates and guaranteed pool certificates) or the
U.S. Department of Housing and Urban Development (local authority bonds);
provided, however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary or
change, (B) if rated by S&P, must not have an "r" highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity; (ii) Federal Housing
Administration debentures; and (iii) obligations of the following United States
government sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations), the Farm Credit System (consolidated system wide bonds and notes),
the Federal Home Loan Banks (consolidated debt obligations) and the Federal
National Mortgage Association (debt obligations); provided, however, that the
investments described in this clause must (A) have a predetermined fixed dollar
of principal due at maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest rate must be tied to
a single interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (D) such investments must not be subject to
liquidation prior to their maturity; provided, however, that no obligation or
security shall be a Permitted Investment if (A) such obligation or security
evidences a right to receive only interest payments or (B) the right to receive
principal and interest payments on such obligation or security are derived from
an underlying investment that provides a yield to maturity in excess of one
hundred twenty percent (120%) of the yield to maturity at par of such underlying
investment. Notwithstanding anything to the contrary contained herein, the
Permitted Investments (i) through (ix) above must have a Xxxxx'x rating of (a)
"A2 or P-1" if such investment has a maximum maturity of one (1) month, (b) "A1
and P-1" if such investment has a maximum maturity of three (3) months, (c) "Aa3
and P-1" if such investment has a maximum maturity of six (6) months and (d)
"AAA and P-1" if such investment has a maximum maturity of more than six (6)
months.
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7. ALTERATIONS. Borrower shall obtain Lender's prior written
consent, which consent shall not be unreasonably withheld or delayed, to any
alterations to the Improvements, the cost of which is reasonably anticipated to
exceed $1,000,000 (the "THRESHOLD AMOUNT") or that will have a material adverse
effect on Borrower's financial condition, the use, operation or value of the
Trust Property or the net operating income with respect to the Trust Property,
other than (a) tenant improvement work performed pursuant to the terms of any
Lease executed on or before the date hereof, (b) tenant improvement work
performed pursuant to the terms and provisions of a Lease executed after the
date hereof and not adversely affecting any structural component of any
Improvements, any utility or HVAC system contained in any Improvements or the
exterior of any building constituting a part of any Improvements (it being
understood that the foregoing provision shall not require Lender's consent to
Tenants' exterior signage pursuant to any Lease approved by Lender in accordance
with the terms and provisions of this Deed of Trust) or (c) alterations
performed in connection with the restoration of the Trust Property after the
occurrence of a Casualty or Condemnation in accordance with the terms and
provisions of this Deed of Trust. If Lender fails to respond to a request for
consent under this paragraph 7 within ten (10) Business Days of receipt thereof,
such consent shall be deemed granted, provided that such request shall have been
accompanied by all information requested by Lender or reasonably necessary for
Lender to evaluate such request and shall have clearly stated, in 14 point type
or greater, that if Lender fails to respond to such request within ten (10)
Business Days, Lender's consent shall be deemed to have been granted. If Lender
refuses to grant such consent, Lender shall specify in writing the reasons for
such refusal. Any approval by Lender of the plans, specifications or working
drawings for alterations of the Trust Property shall not create responsibility
or liability on behalf of Lender for their completeness, design, sufficiency or
their compliance with applicable laws. Lender may condition any such approval
upon receipt of a certificate of compliance with applicable laws from an
independent architect, engineer, or other person reasonably acceptable to
Lender. If the total unpaid amounts due and payable with respect to alterations
to the Improvements (other than such amounts to be paid or reimbursed by tenants
under the Leases or paid from escrow accounts established hereunder) shall at
any time exceed the Threshold Amount, Borrower shall promptly deliver to Lender
as security for the payment of such amounts and as additional security for
Borrower's obligations under the Loan Documents any of the following: (1) cash,
(2) U.S. Treasury securities, (3) other securities having a rating acceptable to
Lender and that the applicable Rating Agencies (hereinafter defined) have
confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any securitization of the Loan (a "SECURITIZATION"),
or if a Securitization has not occurred, any ratings to be assigned in
connection with a Securitization, or (4) a Letter of Credit. Such security shall
be in an amount equal to the excess of the total unpaid amounts with respect to
alterations to the Improvements (other than such amounts to be paid or
reimbursed by tenants under the Leases or from escrow accounts established
hereunder) over the Threshold Amount. Upon completion of the alterations to the
satisfaction of Lender in its reasonable discretion Lender shall promptly return
to Borrower such additional security. For purposes of this Deed of Trust,
"RATING AGENCIES" shall mean, prior to the final Securitization of the Loan,
each of S&P, Xxxxx'x and Fitch, Inc., or any other nationally recognized
statistical rating agency which has been designated by Lender and, after the
final Securitization of the Loan, shall mean any of the foregoing that have
rated any Securities.
8. LEASES AND RENTS.
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(a) Borrower does hereby absolutely and unconditionally assigns to
Lender, all Borrower's right, title and interest in all current and future
Leases and Rents, it being intended by Borrower that this assignment constitutes
a present, absolute assignment and not an assignment for additional security
only. Such assignment to Lender shall not be construed to bind Lender to the
performance of any of the covenants, conditions or provisions contained in any
such Lease or otherwise impose any obligation upon Lender. Borrower agrees to
execute and deliver to Lender such additional instruments, in form and substance
satisfactory to Lender, as may hereafter be requested by Lender to further
evidence and confirm such assignment. Nevertheless, subject to the terms of this
paragraph, Lender grants to Borrower a revocable license to operate and manage
the Trust Property and to collect the Rents. Borrower shall hold the Rents, or a
portion thereof, sufficient to discharge all current sums due on the Debt, in
trust for the benefit of Lender for use in the payment of such sums. Upon the
occurrence of an Event of Default and prior to the acceptance of a cure thereof
by Lender, without the need for notice or demand, the license granted to
Borrower herein shall automatically be revoked, and Lender shall immediately be
entitled to possession of all Rents, whether or not Lender enters upon or takes
control of the Trust Property. Upon the acceptance by Lender of a cure of any
Event of Default, Lender shall reinstate the license granted to Borrower herein.
Lender is hereby granted and assigned by Borrower the right, at its option, upon
revocation of the license granted herein, to enter upon the Trust Property in
person, by agent or by court-appointed receiver to collect the Rents. Any Rents
collected after the revocation of the license may be applied toward payment of
the Debt in such priority and proportions as Lender in its sole discretion shall
deem proper.
(b) All Leases shall be subordinate to this Deed of Trust and the
tenant thereunder shall agree to attorn to Lender either pursuant to the Lease
or a subordination, nondisturbance and attornment agreement executed by such
tenant and Lender. None of the Leases shall contain any option to purchase, any
right of first refusal to purchase or any right to terminate the lease term
(except for termination rights (i) set forth in Leases executed prior to, or on,
the date hereof or (ii) arising from a taking or the destruction of all or
substantially all of the Trust Property or all or substantially all of a
tenant's demised premises). Leases executed after the date hereof shall not
contain any provisions which adversely affect the Trust Property or which might
adversely affect the rights of any holder of the Loan without the prior written
consent of Lender. Each tenant shall conduct business only in that portion of
the Trust Property covered by its lease. Upon request, Borrower shall furnish
Lender with executed copies of all Leases.
(c) Borrower shall not, without the prior consent of Lender, which
consent shall not be unreasonably withheld or conditioned (i) enter into any
Lease of all or any part of the Trust Property in excess of 25,000 rentable
square feet (a "MAJOR LEASE"), (ii) cancel, terminate (other than as a result of
a tenant default thereunder), abridge or otherwise modify the terms of any Major
Lease unless such action is required by the terms thereof, or accept a surrender
thereof, (iii) consent to any assignment of or subletting under any Major Lease
not in accordance with its terms, (iv) cancel, terminate, abridge or otherwise
modify any guaranty of any Major Lease or the terms thereof, (v) accept
prepayments of installments of Rents for a period of more than one (1) month in
advance (other than estimated payments of reimbursable expenses paid by tenants
pursuant to their Leases) or (vi) further assign the whole or any part of the
Leases or the Rents. If Lender fails to respond to a request for consent under
this paragraph 8(c) within ten (10) Business Days of receipt thereof, such
consent shall be deemed granted, provided that such
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request shall have been accompanied by all information requested by Lender or
reasonably necessary for Lender to evaluate such request and shall have clearly
stated, in 14 point type or greater, that if Lender fails to respond to such
request within ten (10) Business Days, Lender's consent shall be deemed to have
been granted. In the event that Lender refuses to grant any such consent, Lender
shall specify in writing the reasons for such refusal. In addition, Borrower
shall not (A) lease all or any part of the Trust Property, (B) cancel, terminate
(other than as a result of a tenant default thereunder), abridge or otherwise
modify the terms of any Lease, or accept a surrender thereof, (C) consent to any
assignment of or subletting under any Lease not in accordance with its terms or
(D) cancel, terminate, abridge or otherwise modify any guaranty of any Lease or
the terms thereof, unless such actions are exercised for a commercially
reasonable purpose in arms-length transactions for market rate terms.
(d) Borrower (i) shall observe and perform all the material
obligations imposed upon the lessor, grantor or licensor, as applicable, under
the Leases and shall not do or permit to be done anything to impair the value of
the Leases as security for the Debt; (ii) shall promptly send copies to Lender
of all notices of default which Borrower shall send or receive thereunder; (iii)
shall enforce all the material terms, covenants and conditions contained in the
Leases upon the part of the lessee, grantee or licensee, as applicable,
thereunder to be observed or performed, short of termination thereof (unless by
reason of default thereunder); (iv) shall not collect any of the Rents (other
than estimated payments of reimbursable expenses paid by tenants pursuant to
their Leases) more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in the Leases or the Rents; (vi)
shall, upon request of Lender, request and use commercially reasonable efforts
to obtain and deliver to Lender tenant estoppel certificates from each
commercial tenant at the Trust Property in form and substance reasonably
satisfactory to Lender, provided that Borrower shall not be required to deliver
such certificates more frequently than two (2) times in any calendar year; and
(vii) shall execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Trust Property
as Lender shall from time to time reasonably require.
(e) All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Borrower and, if
cash, shall be deposited by Borrower at such commercial or savings bank or
banks, or otherwise held in compliance with applicable law, as may be reasonably
satisfactory to Lender. Any bond or other instrument which Borrower is permitted
to hold in lieu of cash security deposits under any applicable legal
requirements shall be maintained in full force and effect in the full amount of
such deposits unless replaced by cash deposits as hereinabove described, shall
(if issued after the date hereof) be fully assignable to Lender and shall, in
all respects, comply with any applicable legal requirements and otherwise be
reasonably satisfactory to Lender. Borrower shall, upon request, provide Lender
with evidence reasonably satisfactory to Lender of Borrower's compliance with
the foregoing. Following the occurrence and during the continuance of any Event
of Default, Borrower shall, upon Lender's request, if permitted by any
applicable legal requirements, turn over to Lender the security deposits (and
any interest theretofore earned thereon) with respect to all or any portion of
the Trust Property, to be held by Lender subject to the terms of the Leases.
9. MAINTENANCE AND USE OF TRUST PROPERTY. Borrower shall cause the Trust
Property to be maintained in a good and safe condition and repair. The
Improvements and the Equipment shall not be removed, demolished or materially
altered without the consent of
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Lender except for (a) tenant improvements permitted to be made without the
consent of Lender pursuant to the express terms of any Lease approved or deemed
approved by Lender pursuant to paragraph 8 hereof, (b) normal replacement of the
Equipment and (c) work required to be made by reason of the occurrence of an
emergency (i.e., an unexpected event which threatens imminent harm to persons or
the Trust Property) and with respect to which it would be impracticable, under
the circumstances, to obtain Lender's prior consent thereto, provided that
Borrower shall notify Lender as promptly as practicable with respect to any such
emergency work performed by Borrower. Borrower shall promptly comply in all
material respects with all laws, orders and ordinances affecting Borrower and
the Trust Property (including, without limitation, Prescribed Laws), or the use
thereof; provided, however, that after prior written notice to Lender, Borrower,
at its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, such law, order
and/or ordinance, provided that (i) no Event of Default has occurred and is
continuing; (ii) such proceeding shall not be prohibited by the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) neither the Trust Property nor
any part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost; (iv) Borrower shall promptly upon final
determination thereof comply with such law, order and/or ordinance and pay all
costs, interest and penalties which may be payable in connection therewith; and
(v) such proceeding shall suspend the requirement of Borrower to comply with
such law, order and/or ordinance. Borrower shall not initiate, join in,
acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Trust Property or any part thereof. If under applicable
zoning provisions the use of all or any portion of the Trust Property is or
shall become a nonconforming use, Borrower will not cause or permit such
nonconforming use to be discontinued or abandoned without the express written
consent of Lender. Borrower shall not (i) change the use of the Trust Property,
(ii) permit or suffer to occur any waste on or to the Trust Property or to any
portion thereof or (iii) take any steps whatsoever to convert the Trust
Property, or any portion thereof, to a condominium or cooperative form of
management, other than in accordance with paragraph 10(i) hereof. Borrower will
not install or permit to be installed on the Premises any underground storage
tank.
10. TRANSFER OR ENCUMBRANCE OF THE TRUST PROPERTY.
(a) Borrower acknowledges that Lender has examined and relied on the
creditworthiness and experience of Borrower in owning and operating properties
such as the Trust Property in agreeing to make the Loan, and that Lender will
continue to rely on Borrower's ownership of the Trust Property as a means of
maintaining the value of the Trust Property as security for repayment of the
Debt. Borrower acknowledges that Lender has a valid interest in maintaining the
value of the Trust Property so as to ensure that, should Borrower default in the
repayment of the Debt, Lender can recover the Debt by a sale of the Trust
Property. For purposes of this paragraph 10, an "AFFILIATED MANAGER" shall mean
any managing agent of the Trust Property (other than Xxxxxxx Services, Inc.) in
which Borrower or the OP or any other guarantor of the Debt (the OP or any other
such guarantor, "GUARANTOR") has, directly or indirectly, any legal, beneficial
or economic interest; a "RESTRICTED PARTY" shall mean Borrower, the Guarantor,
or any Affiliated Manager or any shareholder, partner, member or non-member
manager, or any direct or indirect legal or beneficial owner, of Borrower, the
Guarantor, or any
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Affiliated Manager (other than Xxxxxxx Properties, Inc. (the "REIT" ), any
Permitted Institutional Transferee (as hereinafter defined) or any Person owning
a direct or indirect interest in the REIT, the OP or any Permitted Institutional
Transferee); and a "SALE OR PLEDGE" shall mean a voluntary or involuntary sale,
conveyance, transfer or pledge of a legal or beneficial interest.
(b) Except as expressly permitted pursuant to paragraph 10(h)
hereof, Borrower shall not sell, convey, mortgage, grant, bargain, encumber,
pledge, assign, grant options with respect to, or otherwise transfer or dispose
of (directly or indirectly, voluntarily or involuntarily, by operation of law or
otherwise, and whether or not for consideration or of record) the Trust Property
or any part thereof or any legal or beneficial interest therein or permit a Sale
or Pledge of an interest in any Restricted Party (collectively a "TRANSFER"),
other than pursuant to Leases of space in the Improvements to tenants in
accordance with the provisions of paragraph 8, without the prior written consent
of Lender.
(c) A Transfer shall include, but not be limited to, (i) an
installment sales agreement wherein Borrower agrees to sell the Trust Property
or any part thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Trust Property for other than
actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower's right, title and
interest in and to any Leases or any Rents; (iii) if a Restricted Party is a
corporation, any merger, consolidation or Sale or Pledge of such corporation's
stock or the creation or issuance of new stock such that more than ten percent
(10%) of such corporation's stock shall be vested in a party or parties who are
not stockholders as of the date hereof; (iv) if a Restricted Party is a limited
or general partnership or joint venture, any merger or consolidation of such
Restricted Party or the change, removal, resignation or addition of a general
partner thereof or the Sale or Pledge of the partnership interest of any general
partner of such Restricted Party or any profits or proceeds relating to such
partnership interest, or the Sale or Pledge of limited partnership interests of
such Restricted Party or any profits or proceeds relating to such limited
partnership interests or the creation or issuance of new limited partnership
interests of such Restricted Party; (v) if a Restricted Party is a limited
liability company, any merger or consolidation of such Restricted Party or the
change, removal, resignation or addition of a managing member or non-member
manager (or if no managing member, any member) of such Restricted Party or the
Sale or Pledge of the membership interest of a managing member (or if no
managing member, any member) of such Restricted Party or any profits or proceeds
relating to such membership interest, or the Sale or Pledge of non-managing
membership interests of such Restricted Party or the creation or issuance of new
non-managing membership interests of such Restricted Party such that more than
ten percent (10%) of such limited liability company's non-managing membership
interest shall be vested in a party or parties who are not members as of the
date hereof; (vi) if a Restricted Party is a trust or nominee trust, any merger,
consolidation or the Sale or Pledge of the legal or beneficial interest in a
Restricted Party or the creation or issuance of new legal or beneficial
interests; or (vii) the removal or the resignation of the managing agent
(including, without limitation, an Affiliated Manager) without Lender's consent
other than in accordance with paragraph 59.
(d) 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
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and payable upon Borrower's sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Trust Property in violation of this paragraph 10
without Lender's consent. This provision shall apply to every sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Trust Property
regardless of whether voluntary or not, or whether or not Lender has consented
to any previous sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of the Trust Property.
(e) Lender's consent to one sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Trust Property shall not be deemed to be
a waiver of Lender's right to require such consent to any future occurrence of
same. Any sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of the Trust Property made in contravention of this paragraph shall be
null and void and of no force and effect.
(f) Borrower agrees to bear and shall pay or reimburse Lender on
demand for all reasonable expenses (including, without limitation, reasonable
attorneys' fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Lender in connection with the review, approval
and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
(g) Intentionally Omitted;
(h) Notwithstanding anything to the contrary contained in this
paragraph 10 (including, without limitation, paragraph 10(b) and paragraph
10(c)), the following Transfers shall not require the prior written consent of
Lender:
(i) Transfers of direct or indirect interests in any Restricted
Party provided that the following conditions are satisfied:
A. after taking into account any prior Transfers pursuant
to this subparagraph, whether to the proposed transferee
or otherwise, no such Transfer (or series of Transfers)
shall result in (1) the proposed transferee, together
with all members of his/her immediate family or any
Affiliates thereof, owning in the aggregate (directly,
indirectly or beneficially) more than forty-nine percent
(49%) of the interests in Borrower (or any entity
directly or indirectly holding an interest in Borrower
that is a Restricted Party), or (2) a Transfer in the
aggregate of more than forty-nine percent (49%) of the
interests in Borrower as of the date hereof, except in
either case for Transfers to a direct or indirect
interest holder of Borrower as of the date hereof, or
any Affiliate thereof, provided that if reasonably
requested by Lender or if requested by any Rating
Agency, Borrower shall deliver a non-consolidation
opinion acceptable to Lender and the Rating Agencies
with respect to such transferee which may be relied upon
by Lender, the Rating Agencies and their respective
counsel and successors and assigns;
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B. after giving effect to such Transfer, the REIT shall continue
to own not less than a fifty-one percent (51%) direct general
and/or limited partnership interest in the OP and the REIT
shall continue to Control (hereinafter defined) Borrower and,
subject to the rights of Manager under the Management
Agreement (or any replacement manager under a replacement
management agreement with respect to the Trust Property, each
as approved by Lender in accordance with paragraph 59 of this
Deed of Trust), the day to day operations of the Trust
Property;
C. Borrower shall give Lender notice of such Transfer together
with copies of all instruments effecting such transfer not
less than ten (10) days prior to the date of such Transfer;
D. no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default
shall have occurred and remain uncured;
E. the single purpose nature and bankruptcy remoteness of
Borrower and its shareholders, partners or members after such
transfer, shall satisfy Lender's then current applicable
underwriting criteria and requirements; and
F. Lender shall have received payment of, or reimbursement for,
all costs and expenses incurred by Lender in connection with
such Transfer (including, but not limited to, reasonable
attorneys' fees and costs and expenses of the Rating
Agencies).
Notwithstanding the foregoing, in the event that such Transfer is by a
limited partner of the OP of such limited partner's limited partnership interest
in the OP, then Borrower shall not be required to satisfy subparagraphs (i)(C)
or (i)(F) above so long as Borrower has satisfied subparagraphs (i)(A), (i)(B),
(i)(D) and (i)(E) above.
(ii) Transfers of direct or indirect interests in any Restricted Party to
a Permitted Institutional Transferee (hereinafter defined) provided that the
following conditions are satisfied:
A. no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default
shall have occurred and remain uncured;
B. After such Transfer, fifty-one percent (51%) or greater of the
direct or indirect interests of Borrower shall be owned by a
Permitted Institutional Transferee;
C. Borrower shall deliver to Lender a non-consolidation opinion
acceptable to Lender and the Rating Agencies which may be
relied
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upon by Lender, the Rating Agencies and their respective
counsel and successor and assigns;
D. Lender shall have confirmations in writing from the Rating
Agencies to the effect that such Transfer will not result in a
requalification, downgrade or withdrawal of any current
securities ratings assigned in a Securitization;
E. Borrower shall give Lender notice of such transfer together
with copies of all instruments effecting such transfer not
less than ten (10) days prior to the date of such Transfer;
F. the single purpose nature and bankruptcy remoteness of
Borrower and its shareholders, partners or members after such
Transfer, shall satisfy Lender's then current applicable
underwriting criteria and requirements; and
G. Lender shall have received payment of, or reimbursement for,
all costs and expenses incurred by Lender in connection with
such Transfer (including, but not limited to, reasonable
attorneys' fees and costs and expenses of the Rating
Agencies).
For the purposes of this paragraph the term "PERMITTED INSTITUTIONAL
TRANSFEREE" means (a) one or more of the following: (i) a real estate investment
trust, bank, saving and loan association, investment bank, insurance company,
trust company, commercial credit corporation, pension plan, pension fund or
pension advisory firm, mutual fund, government entity or plan, (ii) investment
company, money management firm or "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended, (iii) an
institution substantially similar to any of the foregoing or (iv) any entity
Controlled (hereinafter defined) by any of the entities described in clauses
(i), (ii) or (iii) above which in each case (A) has total assets (in name or
under management) in excess of $600,000,000 and (except with respect to a
pension advisory firm or similar fiduciary) capital/statutory surplus or
shareholder's equity of $250,000,000 and (B) is regularly engaged in the
business of making or owning commercial real estate loans or operating
commercial mortgage properties or (b) any entity formed for the purpose of
owning or investing in commercial property and issuing syndication interests
that is approved by Lender, such approval not to be unreasonably withheld or
delayed. For purposes of this Section 10 "CONTROL" or "CONTROLLED" means the
ownership, directly or indirectly, in the aggregate of more than fifty percent
(50%) of the beneficial ownership interest of an entity and the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through the ability to exercise
voting power, by contract or otherwise.
(iii) (A) the Transfer or issuance of any securities, options,
warrants or other interests in the REIT or any entity owning an interest
in the REIT, (B) the merger or consolidation of the REIT or (C) the merger
or consolidation of the OP provided that in the case of each of (B) and
(C) above, the surviving entity shall be the REIT and/or the OP, as
applicable, and after giving effect to such merger or consolidation, the
REIT shall
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continue to own not less than a fifty-one percent (51%) direct general and/or
limited partnership interest in the OP and the REIT shall continue to Control
the Borrower and, subject to the rights of Manager under the Management
Agreement (or any replacement manager under a replacement management agreement
with respect to the Trust Property, each as approved by Lender in accordance
with paragraph 59 of this Deed of Trust), the day to day operations of the Trust
Property.
(iv) pledges by the REIT, the OP or any entity holding any direct or
indirect interests in the REIT or the OP of their indirect ownership interests
in Borrower to any Permitted Institutional Transferee providing a corporate line
of credit or other financing to the REIT, the OP or any entity holding any
direct or indirect interests in the REIT or the OP, provided that the indirect
interests in Borrower that are pledged as collateral comprise no more than
thirty-three percent (33%) of the total value of the collateral for such line of
credit or other financing and provided that the following conditions are met:
(A) no Event of Default or event which with the giving of notice or
the passage of time would constitute an Event of Default shall have
occurred and remain uncured; and
(B) Lender shall have received payment of, or reimbursement for, all
costs and expenses incurred by Lender in connection with such pledges
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
(v) transfers by the REIT, the OP and/or their respective Affiliates of up
to seventy-five percent (75%) of the direct or indirect ownership interests in
the Borrower and/or other indirect ownership interests in the Trust Property to
a Permitted Institutional Transferee provided that the following conditions are
met:
(A) no Event of Default or event which with the giving of notice or
the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(B) Lender shall have confirmations in writing from the Rating
Agencies to the effect that such transfers will not result in a
requalification, downgrade or withdrawal of any current securities rating
assigned in a Securitization;
(C) Borrower shall deliver to Lender a non-consolidation opinion
acceptable to Lender and the Rating Agencies which may be relied upon by
Lender, the Rating Agencies and their respective counsel and successor and
assigns;
(D) the REIT and/or its Affiliates shall continue to act as property
manager and leasing agent and manage the day to day operations of the
Trust Property; and
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(E) Lender shall have received payment of, or reimbursement for, all
costs and expenses incurred by Lender in connection with such transfer
(including, but not limited to, reasonable attorneys' fees and costs and
expenses of the Rating Agencies).
(vi) the restructuring of the ownership interests in the Trust Property
held by the REIT, the OP or any entity holding any direct or indirect interests
in the REIT or the OP, provided that the following conditions are met:
(A) no Event of Default or event which with the giving of notice or
the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(B) such restructuring does not reduce the REIT's or the OP's
aggregate ownership interests in the Trust Property;
(C) in the event that such restructuring shall result in any Person,
together with any Affiliates thereof, that prior to such restructuring,
owned in the aggregate (directly, indirectly or beneficially) less than
forty-nine percent (49%) of the interests in Borrower (or any entity
directly or indirectly holding an interest in Borrower), owning in the
aggregate (directly, indirectly or beneficially) more than forty-nine
percent (49%) of the interests in Borrower (or any entity directly or
indirectly holding an interest in Borrower), then Borrower shall deliver a
non-consolidation opinion acceptable to Lender and the Rating Agencies
with respect to such entity which may be relied upon by Lender, the Rating
Agencies and their respective counsel and successors and assigns;
(D) In the event that such restructuring requires a new
non-consolidation opinion pursuant to subparagraph (C) above, Borrower
shall give Lender notice of such restructuring together with copies of all
instruments effecting such restructuring not less than ten (10) days prior
to the date of such restructuring;
(E) In the event that such restructuring requires a new
non-consolidation opinion pursuant to subparagraph (C) above, Lender shall
have received payment of, or reimbursement for, all costs and expenses
incurred by Lender in connection with such restructuring (including, but
not limited to, reasonable attorneys' fees and costs and expenses of the
Rating Agencies).
(vii) pledges of Borrower's interests in equipment and/or fixtures in
connection with purchase money financing of such equipment and/or fixtures,
subject to the requirements of paragraph 12(a)(ii)(P) of this Deed of Trust.
(viii) the dissolution of Bunker Hill Senior Mezzanine, LLC and/or Bunker
Hill Junior Mezzanine, LLC, provided that the following conditions are met:
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(A) no Event of Default or event which with the giving of notice or
the passage of time would constitute an Event of Default shall have
occurred and remain uncured;
(B) a Securitization of the entire Loan has occurred and Lender has
not exercised the Mezzanine Option described in paragraph 62 of this Deed
of Trust; and
(C) Borrower shall have delivered to Lender and the Rating Agencies
satisfactory evidence in writing that the non-consolidation opinion
previously delivered to Lender has not been affected as a result of such
dissolution.
Lender shall respond to any requests made by Borrower pursuant to this
paragraph 10(h) in a prompt manner. In the event that Lender claims that
Borrower has not satisfied any of the requirements of this paragraph 10(h),
Lender shall specify in writing the reason why any conditions are deemed not
satisfied.
11. REPRESENTATIONS AND COVENANTS CONCERNING THE BORROWER AND TRUST
PROPERTY. Borrower represents, warrants and covenants as follows:
(a) Organization and Existence. Borrower is duly organized and validly
existing as a limited liability company in good standing under the laws of
Delaware and is in good standing in all other jurisdictions in which Borrower is
transacting business. Borrower has the power and authority to execute, deliver
and perform the obligations imposed on it under the Loan Documents and to
consummate the transactions contemplated by the Loan Documents.
(b) Authorization. Borrower has taken all necessary actions for the
authorization of the borrowing on account of the Loan and for the execution and
delivery of the Loan Documents, including, without limitation, that those
members of Borrower whose approval is required by the terms of Borrower's
organizational documents have duly approved the transactions contemplated by the
Loan Documents and have authorized execution and delivery thereof by the
respective signatories. To the best of Borrower's knowledge, no other consent by
any local, state or federal agency is required in connection with the execution
and delivery of the Loan Documents.
(c) Valid Execution and Delivery. All of the Loan Documents requiring
execution by Borrower have been duly and validly executed and delivered by
Borrower.
(d) Enforceability. All of the Loan Documents constitute valid, legal and
binding obligations of Borrower and are fully enforceable against Borrower in
accordance with their terms by Lender and its successors, transferees and
assigns, subject only to bankruptcy laws, and general principles of equity,
insolvency, reorganization, arrangement, moratorium, receivership or other
similar laws relating to or affecting the rights of creditors.
(e) No Defenses. The Note, this Deed of Trust and the other Loan Documents
are not subject to any right of rescission, set-off, counterclaim or defense,
nor would the operation of any of the terms of the Note, this Deed of Trust or
any of the other Loan
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Documents, or the exercise of any right thereunder, render this Deed of Trust
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury.
(f) Defense of Usury. Borrower knows of no facts that would support a
claim of usury to defeat or avoid its obligation to repay the principal of,
interest on, and other sums or amounts due and payable under, the Loan
Documents.
(g) No Conflict/Violation of Law. The execution, delivery and performance
of the Loan Documents by the Borrower will not cause or constitute a default
under or conflict with the organizational documents of Borrower, any Guarantor
or any general partner or managing member of Borrower or any Guarantor. The
execution, delivery and performance of the obligations imposed on Borrower under
the Loan Documents will not cause Borrower to be in default, including after due
notice or lapse of time or both, under the provisions of any agreement, judgment
or order to which Borrower is a party or by which Borrower is bound.
(h) Compliance with Applicable Laws and Regulations. All of the
Improvements and the use of the Trust Property comply in all material respects
with, and shall remain in compliance in all material respects with, all
applicable statutes, rules, regulations and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Trust Property,
including all applicable Prescribed Laws (as hereinafter defined) and all
applicable statutes, rules and regulations pertaining to requirements for equal
opportunity, anti-discrimination, fair housing, environmental protection, zoning
and land use. The Improvements comply in all material respects with, and shall
remain in compliance in all material respects with, applicable health, fire and
building codes. Borrower is not aware of any illegal activities relating to
controlled substances on the Trust Property. All certifications, permits,
licenses and approvals, including, without limitation, certificates of
completion and occupancy permits required for the legal use, occupancy and
operation of the Trust Property as an office building have been obtained and are
in full force and effect. All of the Improvements comply with all material
requirements of any applicable zoning and subdivision laws and ordinances. For
the purposes of this Deed of Trust, "PRESCRIBED LAWS" shall mean , collectively,
(i) the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56)
(The USA PATRIOT Act), (ii) Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism,
(iii) the International Emergency Economic Power Act, 50 U.S.C. Section1701 et.
seq. and (iv) all other legal requirements relating to money laundering or
terrorism.
(i) Consents Obtained. All consents, approvals, authorizations, orders or
filings with any court or governmental agency or body, if any, required for the
execution, delivery and performance of the Loan Documents by Borrower have been
obtained or made.
(j) No Litigation. Except as otherwise disclosed to Lender in writing,
there are no pending actions, suits or proceedings, arbitrations or governmental
investigations against the Trust Property, an adverse outcome of which would
materially affect the Borrower's performance under the Note, this Deed of Trust
or the other Loan Documents.
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(k) Title. The Borrower has good and marketable fee simple title to the
Trust Property, and good title to the Equipment, subject to no liens, charges or
encumbrances other than the Permitted Exceptions and liens, charges or
encumbrances otherwise expressly permitted by the Loan Documents. The possession
of the Trust Property has been peaceful and undisturbed and title thereto has
not been disputed or questioned to the best of Borrower's knowledge.
(l) Permitted Exceptions. The Permitted Exceptions do not and will not
materially and adversely affect (1) the ability of the Borrower to pay in full
the principal and interest on the Note in a timely manner or (2) the use of the
Trust Property for the use currently being made thereof, the operation of the
Trust Property as currently being operated or the value of the Trust Property.
(m) First Lien. Upon the execution by the Borrower and the recording of
this Deed of Trust, and upon the filing of UCC-1 financing statements or
amendments thereto, the Lender will have a valid first lien on the Trust
Property and a valid security interest in the Equipment subject to no liens,
charges or encumbrances other than the Permitted Exceptions and liens, charges
or encumbrances otherwise expressly permitted by the Loan Documents.
(n) ERISA. (i) Borrower shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Deed of Trust and the Other
Loan Document) to be a non-exempt (under a statutory or administrative class
exemption) prohibited transaction under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
(ii) Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (A) Borrower is not an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, or a "governmental plan" within the meaning of Section 3(32)
of ERISA; (B) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (C) one or
more of the following circumstances is true:
(x) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R.Section2510.3-101(b)(2);
(y) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R.Section2510.3-101(f)(2); or
(z) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R.Section2510.3-101(c) or
(e) or an investment company registered under The Investment Company Act
of 1940.
(iii) As of the date hereof and throughout the term of this Deed of Trust,
Borrower is not and will not be an "employee benefit plan" as defined in Section
3(3) of ERISA, which is subject to Title I of ERISA, and the assets of Borrower
do not and will not constitute "plan assets" of one or more such plans for
purposes of Title I of ERISA.
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As of the date hereof and throughout the term of this Deed of Trust,
Borrower is not and will not be a "governmental plan" within the meaning
of Section 3(32) of ERISA and transactions by or with Borrower are not and
will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental
plans.
(o) Contingent Liabilities. The Borrower has no known material contingent
liabilities that would materially affect the Borrower's performance under the
Note, this Deed of Trust or the other Loan Documents.
(p) No Other Obligations. The Borrower has no material financial
obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Borrower is a party or by which the
Borrower or the Trust Property is otherwise bound, other than obligations
incurred in the ordinary course of the operation of the Trust Property and other
than obligations under the Leases, this Deed of Trust and the other Loan
Documents.
(q) Fraudulent Conveyance. The Borrower (1) has not entered into the Loan
or any Loan Document with the actual intent to hinder, delay, or defraud any
creditor and (2) received reasonably equivalent value in exchange for its
obligations under the Loan Documents. Giving effect to the Loan contemplated by
the Loan Documents, the fair saleable value of the Borrower's assets exceed and
will, immediately following the execution and delivery of the Loan Documents,
exceed the Borrower's total liabilities, including, without limitation,
subordinated, unliquidated, disputed or contingent liabilities. The fair
saleable value of the Borrower's assets is and will, immediately following the
execution and delivery of the Loan Documents, be greater than the Borrower's
probable liabilities, including the maximum amount of its contingent liabilities
or its debts as such debts become absolute and matured. The Borrower's assets do
not and, immediately following the execution and delivery of the Loan Documents
will not, constitute unreasonably small capital to carry out its business as
conducted or as proposed to be conducted. The Borrower does not intend to, and
does not believe that it will, incur debts and liabilities (including, without
limitation, contingent liabilities and other commitments) beyond its ability to
pay such debts as they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of the Borrower).
(r) Investment Company Act. The Borrower is not (1) an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended; (2) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended; or (3) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
(s) Access/Utilities. The Trust Property has adequate rights of access to
public ways and is served by adequate water, sewer, sanitary sewer and storm
drain facilities. Other than as disclosed on the Survey (as hereinafter
defined), all public utilities necessary to the continued use and enjoyment of
the Trust Property as presently used and enjoyed are located in the public
right-of-way abutting the Trust Property, and all such utilities are connected
so as to
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serve the Trust Property without passing over other property. All roads
necessary for the full utilization of the Trust Property for its current purpose
have been completed and dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the benefit of the Trust
Property.
(t) Taxes Paid. Borrower has filed all federal, state, county and
municipal tax returns required to have been filed by Borrower, and, except as
otherwise disclosed to Lender in writing, has paid all taxes which have become
due pursuant to such returns or to any notice of assessment received by
Borrower, and Borrower has no knowledge of any basis for additional assessment
with respect to such taxes other than a possible reassessment of the Trust
Property for real estate tax purposes resulting from transactions occurring in
connection with the contribution of an indirect interest in the Trust Property
to the OP on or prior to the date hereof.
(u) Single Tax Lot. The Premises consists of a single lot or multiple tax
lots; no portion of said tax lot(s) covers property other than the Premises or a
portion of the Premises and no portion of the Premises lies in any other tax
lot.
(v) Special Assessments. Except as disclosed in the title insurance
policy, there are no pending or, to the knowledge of the Borrower, proposed
special or other assessments for public improvements or otherwise affecting the
Trust Property, nor, to the knowledge of the Borrower, are there any
contemplated improvements to the Trust Property that may result in such special
or other assessments.
(w) Intentionally Omitted.
(x) Intentionally Omitted.
(y) Misstatements of Fact. No statement of fact made in the Loan Documents
contains any untrue statement of a material fact or omits to state any material
fact known to Borrower or its Affiliates necessary to make statements contained
herein or therein not misleading. There is no fact presently known to the
Borrower which has not been disclosed which materially adversely affects, nor as
far as the Borrower can foresee, might materially adversely affect the business,
operations or condition (financial or otherwise) of Borrower.
(z) Condition of Improvements. Except as may be expressly disclosed in the
engineering reports obtained and submitted to Lender, the Trust Property has not
been damaged by fire, water, wind or other cause of loss which has not been
fully restored in all material respects.
(aa) No Insolvency or Judgment. Neither Borrower, nor any general partner
or member of Borrower, nor any Guarantor of the Loan is currently (a) the
subject of or a party to any completed or pending bankruptcy, reorganization or
insolvency proceeding; or (b) the subject of any judgment unsatisfied of record
or docketed in any court of the state in which the Trust Property is located or
in any other court located in the United States. The Loan will not render the
Borrower nor any general partner or member of Borrower insolvent. As used
herein, the term "insolvent" means that the sum total of all of an entity's
liabilities (whether secured or unsecured, contingent or fixed, or liquidated or
unliquidated) is in excess of the value of all such
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entity's non-exempt assets, i.e., all of the assets of the entity that are
available to satisfy claims of creditors.
(bb) No Condemnation. No part of any property subject to the Deed of Trust
has been taken in condemnation or other like proceeding to an extent which would
impair the value of the Trust Property, the Deed of Trust or the Loan or the
usefulness of such property for the purposes for which it is currently being
operated, nor is any proceeding pending, threatened or known to be contemplated
for the partial or total condemnation or taking of the Trust Property.
(cc) No Labor or Materialmen Claims. Except for those improvements and
other work performed in the ordinary course of business with respect to which
any applicable payments are not more than 60 days past due, all parties
furnishing labor and materials for which payment is due and payable as of the
date hereof have been paid in full and, except for such liens or claims insured
against by the policy of title insurance to be issued in connection with the
Loan, there are no mechanics', laborers' or materialmens' liens or claims
outstanding for work, labor or materials affecting the Trust Property, whether
prior to, equal with or subordinate to the lien of the Deed of Trust.
(dd) No Purchase Options. No tenant, person, party, firm, corporation or
other entity has an option to purchase the Trust Property, any portion thereof
or any interest therein other than options, rights of first refusal and similar
rights to lease space in the Improvements granted to a tenant pursuant to its
respective Lease or in another writing otherwise delivered to Lender.
(ee) Leases. The Trust Property is not subject to any Leases other than
the Leases described in the rent roll delivered to Lender in connection with
this Deed of Trust, together with the schedules and the exhibits attached to
such rent roll (collectively, the "RENT ROLL") and any existing subleases
thereunder. No person has any possessory interest in the Trust Property or right
to occupy the same except under and pursuant to the provisions of the Leases
(and any existing subleases thereunder). As of the date hereof (i) the Borrower
is the owner and holder of the landlord's interest under each Lease; (ii) there
are no prior assignments of the landlord's interest in any Lease or any portion
of Rents which are presently outstanding and have priority over the Assignment
of Leases and Rents (the "ASSIGNMENT OF LEASES AND RENTS"), dated the date
hereof, given by Borrower to Lender and intended to be duly recorded; (iii) true
and correct copies of the Leases have been delivered by Borrower to Lender and
the Leases have not been further modified or amended, except as disclosed to
Lender in writing on or prior to the date hereof; (iv) each Lease is in full
force and effect; (v) except as disclosed on the Rent Roll or in any tenant
estoppels delivered to Lender in connection with the Loan (collectively, the
"TENANT ESTOPPELS"), neither Borrower nor, to Borrower's knowledge, any tenant
under any Lease is in default under any of the material terms, covenants or
provisions of the Lease, and, except as disclosed to Lender in writing, Borrower
knows of no event which, but for the passage of time or the giving of notice or
both, would constitute an event of default under any Lease; (vi) except as
expressly set forth in the Leases, the Tenant Estoppels or on the Rent Roll,
there are no offsets or defenses to the payment of any portion of the Rents; and
(vii) except as disclosed on the Rent Roll or in any Tenant Estoppel, all Rents
due and payable under each Lease have been paid in full and, except for
estimated payments of operating expenses and taxes
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made by tenants in accordance with their Leases, no said Rents have been paid
more than one (1) month in advance of the due dates thereof. For purposes of the
preceding sentence, the term "Lease" shall exclude subleases.
(ff) Intentionally Omitted.
(gg) Boundary Lines. Except as disclosed in the survey of the Premises and
Improvements delivered to Lender in connection with the funding of the Loan (the
"SURVEY"), to Borrower's knowledge, (i) all of the Improvements which were
included in determining the appraised value of the Trust Property lie wholly
within the boundaries and building restriction lines of the Trust Property, (ii)
no improvements on adjoining properties encroach upon the Trust Property, and
(iii) no easements or other encumbrances upon the Premises encroach upon any of
the Improvements, so as to materially and adversely affect the value or
marketability of the Trust Property except those which are insured against by
title insurance.
(hh) Survey. To Borrower's knowledge, the Survey does not fail to reflect
any material matter affecting the Premises or the Improvements or the title
thereto.
(ii) Forfeiture. There has not been and shall never be committed by
Borrower or, to Borrower's knowledge, any other person in occupancy of or
involved with the operation or use of the Trust Property any act or omission
affording the federal government or any state or local government the right of
forfeiture as against the Trust Property or any part thereof or any monies paid
in performance of Borrower's obligations under any of the Loan Documents.
(jj) Management Agreement. The Management and Leasing Agreement, dated as
of June __, 2003 (the "MANAGEMENT AGREEMENT"), between Borrower and the OP
("MANAGER") pursuant to which Manager operates the Trust Property is in full
force and effect and there is no default or violation by any party thereunder.
The fee due under the Management Agreement, and the terms and provisions of the
Management Agreement, are subordinate to this Deed of Trust and Manager agrees
to attorn to Lender pursuant to and in accordance with that certain Assignment
and Subordination of Management Agreement dated of even date herewith by and
among Borrower, Manager and Lender. Borrower shall not terminate, cancel,
modify, renew or extend the Management Agreement, or enter into any agreement
relating to the management or operation of the Trust Property with Manager or
any other party, in each case in violation of the Loan Documents, without the
express written consent of Lender, which consent shall not be unreasonably
withheld.
(kk) No Broker. No financial advisors, brokers, underwriters, placement
agents, agents or finders have been dealt with by the Borrower in connection
with the Loan.
12. SINGLE PURPOSE ENTITY/SEPARATENESS.
(a) Borrower represents, warrants and covenants that as of the date
hereof:
(i) Bunker Hill Senior Mezzanine, LLC, a Delaware limited liability
company, is the sole member of Borrower and (ii) Xxxxxx X. Xxxxx and
Xxxxxxx X. Xxxxx are the "springing members" of Borrower.
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(ii) Borrower is, shall be and continue to be until the Debt has
been paid in full, a Special Purpose Bankruptcy Remote Entity. A "SPECIAL
PURPOSE BANKRUPTCY REMOTE ENTITY" means a corporation or limited liability
company which at all times on and after the date hereof:
(A) is organized solely for the purpose of, and is not engaged
and will not engage in any business unrelated to acquiring,
developing, owning, holding, selling, leasing, transferring,
exchanging, managing and operating the Trust Property, borrowing the
Loan and entering into, and performing its obligations under, the
Loan Documents with the Lender, refinancing the Trust Property in
connection with a permitted repayment of the Loan, and transacting
lawful business that is incident, necessary and appropriate to
accomplish the foregoing;
(B) does not have and will not have any assets other than
those related to the Trust Property;
(C) will not engage in, seek or consent to, any dissolution,
winding up, liquidation, consolidation or merger, any sale of all or
substantially all of its assets, any transfer of shareholder or
membership interests in Borrower or any amendment of its articles of
incorporation, articles of organization, certificate of formation or
operating agreement (as applicable) with respect to the matters set
forth in this paragraph in each case except as permitted in the Loan
Documents or consented to by Lender in writing;
(D) if such entity is a corporation, has at least two
Independent Directors (hereinafter defined), and will not cause or
allow the board of directors of such entity to take any action
requiring the unanimous affirmative vote of 100% of the members of
its board of directors unless each Independent Director shall have
participated in such vote;
(E) if such entity is a single member Delaware limited
liability company, has (A) a Board of Managers with at least two
Independent Managers and (B) at least two springing members;
(F) if such entity is (A) a limited liability company, has
articles of organization, a certificate of formation and/or an
operating agreement, as applicable, or (B) a corporation, has a
certificate of incorporation or articles that, in each case,
provides that such entity will not: (1) dissolve, merge, liquidate,
consolidate; (2) sell all or substantially all of its assets or the
assets of any entity in which it has a direct or indirect legal or
beneficial ownership interest; (3) engage in any other business
activity, or amend its organizational documents with respect to the
matters set forth in this paragraph without the consent of the
Lender; or (4) without the affirmative vote of the Independent
Directors and of all other directors of the corporation, or of the
Independent Managers, as applicable, file, a bankruptcy or
insolvency petition or otherwise institute insolvency proceedings
with respect to itself or to any other entity in which it has a
direct or indirect legal or beneficial ownership interest;
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(G) is and covenants to remain solvent and pay its debts and liability
(including, as applicable, shared personnel and overhead expenses) from its
assets as the same shall become due, and is maintaining and covenants to
maintain adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations;
(H) will not fail to correct any known misunderstanding regarding the
separate identity of such entity;
(I) will maintain its accounts, books and records separate from any other
Person and will file its own tax returns to the extent required by law, except
to the extent that it is required or permitted to file consolidated tax returns
by law;
(J) will maintain its own records, books, resolutions and agreements;
(K) will not commingle its funds or assets with those of any other Person;
(L) will hold its assets in its own name;
(M) will maintain its financial statements, accounting records and other
entity documents separate from any other person and will not permit its assets
to be listed as assets on the financial statement of any other entity except as
required by generally accepted accounting principles or by law; provided,
however, that if Borrower's assets are reported on a consolidated basis, any
such consolidated financial statement shall contain a note indicating that
Borrower's separate assets and liabilities are neither available to pay the
debts of the consolidated entity nor constitute obligations of the consolidated
entity;
(N) will pay its own liabilities and expenses, including the salaries of
its own employees, if any, out of its own funds and assets, and will maintain a
sufficient number of employees in light of its contemplated business operations;
(O) will observe all corporate or limited liability company formalities,
as applicable;
(P) has and will have no Indebtedness other than (i) the Loan, (ii)
liabilities incurred in the ordinary course of business relating to the
ownership and operation of the Trust Property (including, but not limited to,
the Financing Installment pursuant to paragraph 3(d) hereof and trade payables)
and the routine administration of Borrower, which do not in the aggregate exceed
Four Million and No/100 Dollars ($4,000,000), and which are not more than sixty
(60) days past the date incurred and which amounts are normal and reasonable
under the circumstances, provided such liabilities are not evidenced by a note
and are paid when due, and (iii) such other liabilities that may be permitted
pursuant to this Deed of Trust (including, but not limited to, liens against the
Trust Property and obligations to tenants under Leases that are executed in
accordance with the terms
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and provisions of paragraph 8 of this Deed of Trust) or the other Loan
Documents;
(Q) will not assume or guarantee or become obligated for the debts of any
other Person or hold out its credit as being available to satisfy the
obligations of any other Person except as permitted pursuant to this Deed of
Trust or the other Loan Documents;
(R) will not acquire obligations or securities of its partners, members or
shareholders or any other Affiliate except as permitted pursuant to this Deed of
Trust or the other Loan Documents;
(S) will allocate fairly and reasonably any overhead expenses that are
shared with any Affiliate, including, but not limited to, paying for shared
office space and services performed by any employee of an Affiliate;
(T) maintains and uses and will maintain and use separate invoices and
checks bearing its name. The invoices and checks utilized by the Special Purpose
Bankruptcy Remote Entity or utilized to collect its funds or pay its expenses
shall bear its own name and shall not bear the name of any other entity unless
such entity is clearly designated as being the Special Purpose Bankruptcy Remote
Entity's agent;
(U) except as permitted pursuant to this Deed of Trust or the other Loan
Documents, will not pledge its assets for the benefit of any other Person;
(V) will hold itself out and identify itself as a separate and distinct
entity under its own name or in a name franchised or licensed to it by an entity
other than an Affiliate of Borrower and not as a division or part of any other
Person;
(W) will maintain its assets in such a manner that it will not be costly
or difficult to segregate, ascertain or identify its individual assets from
those of any other Person;
(X) will not make loans (other than tenant improvement allowances and
other concessions in the nature of loans under the Leases) to any Person or hold
evidence of indebtedness issued by any other person or entity (other than cash
and Permitted Investments or other investment-grade securities issued by an
entity that is not an Affiliate of or subject to common ownership with such
entity);
(Y) will not identify its partners, members or shareholders, or any
Affiliate of any of them, as a division or part of it, and shall not identify
itself as a division of any other Person;
(Z) will not enter into or be a party to, any transaction with its
partners, members, shareholders or Affiliates except (A) in the ordinary course
of its business and on terms which are intrinsically fair, commercially
reasonable and
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are no less favorable to it than would be obtained in a comparable arm's-length
transaction with an unrelated third party and (B) in connection with the Loan
Documents;
(AA) other than with respect to matters covered by an errors and omissions
insurance policy, will not have any obligation to, and will not, indemnify its
partners, officers, directors or members, as the case may be, or any such
obligation will be fully subordinated to the Debt and will not constitute a
claim against it in the event that cash flow in excess of the amount required to
pay the Debt is insufficient to pay such obligation;
(BB) in the case of Borrower, Bunker Hill Senior Mezzanine, LLC and Bunker
Hill Junior Mezzanine, LLC only, will not form, acquire or hold any subsidiary
other than as shown on the organizational chart furnished to Lender in
connection with the Loan;
(CC) except as provided for in any guaranty that is part of the Loan
Documents including that certain Guarantee (Secured Loan) executed by Xxxxxx X.
Xxxxxxx III and certain other parties naming Lender and others as beneficiaries
dated on or about the date hereof (the "BOTTOM DOLLAR GUARANTY)", does not and
will not have any of its obligations guaranteed by any Affiliate;
(DD) will comply with all of the terms and provisions contained in its
organizational documents
(EE) with respect to Borrower only, will not permit any Affiliate or
constituent party independent access to its bank accounts other than with
respect to the Manager in its capacity as Manager pursuant to the Management
Agreement;
(FF) with respect to Borrower only, will continuously maintain its
resolutions, agreements and other instruments regarding the transactions
contemplated by the Loan as official records;
(GG) will reasonably allocate overhead in good faith and consistent with
sound accounting practices;
(HH) with respect to Borrower only, other than the Guaranty and the Bottom
Dollar Guaranty, will not hold out the credit of any other person or entity as
being responsible for its obligations or seek or obtain credit based on the
credit of any other person or entity; and
(II) will make all oral and written communications, including, without
limitation, letters, invoices, purchase orders, contracts, statements, and
applications, solely in the name of Borrower if from Borrower.
(b) Intentionally Omitted.
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(c) For purposes of this Deed of Trust, the following defined terms shall
have the respective meaning:
(i) "AFFILIATE" means, with respect to any person or entity, (a) any
corporation in which such entity or any partner, shareholder, director,
officer, member, or manager of such entity directly or indirectly owns or
controls more than ten percent (10%) of the beneficial interest, (b) any
partnership, joint venture or limited liability company in which such
entity or any partner, shareholder, director, officer, member, or manager
of such entity is a partner, joint venturer or member, (c) any trust in
which such entity or any partner, shareholder, director, officer, member
or manager of such entity is a trustee or beneficiary, (d) any entity of
any type which is directly or indirectly owned or controlled by such
entity or any partner, shareholder, director, officer, member or manager
of such entity, (e) any partner, shareholder, director, officer, member,
manager or employee of such entity, or (f) any Person related by birth,
adoption or marriage to any partner, shareholder, director, officer,
member, manager, or employee of such entity.
(ii) "INDEBTEDNESS" means, for any Person, without duplication: (a)
all indebtedness of such Person, including, but not limited to, amounts
for borrowed money, for amounts drawn under a letter of credit, or for the
deferred purchase price of property for which such Person or its assets is
liable, (b) all unfunded amounts under a loan agreement, letter of credit,
or other credit facility for which such Person would be liable, if such
amounts were advanced under the credit facility, (c) all amounts required
to be paid by such Person as a guaranteed payment to partners or a
preferred or special dividend, including any mandatory redemption of
shares or interests, (d) all indebtedness guaranteed by such Person,
directly or indirectly, (e) all obligations under leases that constitute
capital leases for which such Person is liable, and (f) all obligations of
such Person under interest rate swaps, caps, floors, collars and other
interest hedge agreements, in each case whether such Person is liable
contingently or otherwise, as obligor, Guarantor or otherwise, or in
respect of which obligations such Person otherwise assures a creditor
against loss.
(iii) "INDEPENDENT DIRECTOR" OR "INDEPENDENT MANAGER" means a person
who is not and will not be while serving and for the prior five (5) years
has not been (a) a member (other than as a holder of a potential interest
in a "special purpose" single member limited liability company that was to
vest upon any event pursuant to which the single member ceases to be the
single member of such limited liability company), director (other than an
Independent Director), manager (other than an Independent Manager),
employee, attorney, or counsel of Borrower or its Affiliates, (b) is not a
creditor, customer, supplier or other person who derives any of its
purchases or revenues from its activities with Borrower or its Affiliates,
or (c) is not a member of the immediate family of any member, manager,
employee, attorney, creditor, customer, supplier or other person referred
to above or (d) a person controlling or under the common control of anyone
listed in (a) - (c). A person that otherwise satisfies the foregoing shall
not be disqualified from serving as an Independent Director or Independent
Manager if such individual is at the time of initial appointment, or at
any time while serving as an Independent Director or Independent Manager,
as applicable, an Independent Director or Independent Manager of a
"Special Purpose Entity" affiliated with Borrower.
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(iv) "PERSON" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, trustee, estate, limited
liability company, unincorporated organization, real estate investment
trust, government or any agency or political subdivision thereof, or any
other form of entity.
(d) The representations and warranties set forth in this paragraph 12
shall survive for so long as any amount remains payable to Lender under this
Deed of Trust or any other Loan Document.
(e) All of the assumptions made in that certain substantive
non-consolidation opinion letter dated the date hereof, delivered by Xxx, Castle
and Xxxxxxxxx LLP in connection with the Loan (the "INSOLVENCY OPINION"),
including, but not limited to, any exhibits attached thereto, are true and
correct in all material respects. Borrower has complied and will comply in all
material respects with all of the assumptions made with respect to it in the
Insolvency Opinion. To the best of Borrower's knowledge, each entity other than
the Borrower with respect to which an assumption is made in the Insolvency
Opinion has complied and will comply in all material respects with all of the
assumptions made with respect to it in the Insolvency Opinion.
13. ESTOPPEL CERTIFICATES AND NO DEFAULT AFFIDAVITS. After request by
Lender, Borrower shall within ten (10) days furnish Lender with a statement,
duly acknowledged and certified, setting forth (i) the amount of the original
principal amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the rate of interest of the Note, (iv) the date installments of interest
and/or principal were last paid, (v) any known offsets or defenses to the
payment of the Debt, if any, (vi) that the Note, this Deed of Trust and the
other Loan Documents are valid, legal and binding obligations and have not been
modified or if modified, giving particulars of such modification; and (vii)
reaffirming all representations and warranties of Borrower set forth herein and
in the other Loan Documents as of the date requested by Lender or, to the extent
of any changes to any such representations and warranties, so stating such
changes.
14. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to be the
intent of Borrower, and Lender at all times to comply with applicable state law
or applicable United States federal law (to the extent that it permits Lender to
contract for, charge, take, reserve, or receive a greater amount of interest
than under state law) and that this paragraph 14 (and the similar paragraph
contained in the Note) shall control every other covenant and agreement in this
Deed of Trust and the other Loan Documents. If the applicable law (state or
federal) is ever judicially interpreted so as to render usurious any amount
called for under the Note or under any of the other Loan Documents, or
contracted for, charged, taken, reserved, or received with respect to the Debt,
or if Lender's exercise of the option to accelerate the maturity of the Note, or
if any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable law, then it is Borrower's and Lender's
express intent that all excess amounts theretofore collected by Lender shall be
credited on the principal balance of the Note and all other Debt without any
resulting prepayment penalty or premium (or, if the Note and all other Debt have
been or would thereby be paid in full, refunded to Borrower), and the provisions
of the Note and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the
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recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Lender for the use, forbearance, or detention
of the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
until payment in full so that the rate or amount of interest on account of the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Lender to accelerate the maturity of any interest
that has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
15. CHANGES IN LAWS REGARDING TAXATION. If any law is enacted or adopted
or amended after the date of this Deed of Trust which deducts the Debt from the
value of the Trust Property for the purpose of taxation or which imposes a tax,
either directly or indirectly, on the Debt or Lender's interest in the Trust
Property, Borrower will pay such tax, with interest and penalties thereon, if
any. In the event Lender is advised by counsel chosen by it that the payment of
such tax or interest and penalties by Borrower 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 one
hundred twenty (120) days, to declare the Debt immediately due and payable
without any prepayment consideration except that if an Event of Default has
occurred, then the Borrower shall pay to Lender an additional amount equal to
the Yield Maintenance Premium (as defined in the Note).
16. 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 Taxes or Other Charges assessed against the Trust Property, or any part
thereof, and no deduction shall otherwise be made or claimed from the assessed
value of the Trust Property, or any part thereof, for real estate tax purposes
by reason of this Deed of Trust or the Debt. In the event such claim, credit or
deduction shall be required by law, Lender shall have the option, by written
notice of not less than one hundred twenty (120) days, to declare the Debt
immediately due and payable without any prepayment consideration except that if
an Event of Default has occurred, then the Borrower shall pay to Lender an
additional amount equal to the Yield Maintenance Premium.
17. DOCUMENTARY STAMPS. If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Deed of Trust, or impose any
other tax or charge on the same, Borrower will pay for the same, with interest
and penalties thereon, if any.
18. BOOKS AND RECORDS.
(a) The financial statements heretofore furnished to Lender are, as of the
dates specified therein, complete and correct in all material respects and
fairly present in all material respects the financial condition of the Borrower
and any other persons or entities that are the subject of such financial
statements, and are prepared in accordance with generally accepted accounting
principles. Since the date of such financial statements, there has been no
materially adverse change in the financial condition, operation or business of
Borrower from that set forth in said financial statements.
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(b) Borrower will maintain full and accurate books of accounts and other
records reflecting the results of the operations of the Trust Property and will
furnish to Lender on or before forty-five (45) days after the end of each
calendar quarter the following items, each certified by Borrower as being true
and correct in all material respects: (i) a written statement (rent roll) dated
as of the last day of each such calendar quarter identifying each of the Leases
(excluding subleases) by the term, space occupied, rental required to be paid,
security deposit paid, any rental concessions, and a report identifying any
defaults or payment delinquencies thereunder; (ii) monthly and year to date
operating statements prepared for each calendar month during each such calendar
quarter, noting Net Operating Income, Gross Income from Operations, and
Operating Expenses, and including an itemization of actual (not pro forma)
capital expenditures and other information necessary and sufficient under
generally accepted accounting practices to fairly represent the financial
position and results of operation of the Trust Property during such calendar
month, all in form satisfactory to Lender; (iii) a property balance sheet for
each such calendar quarter; (iv) a comparison of the budgeted income and
expenses and the actual income and expenses for year to date together with a
detailed explanation of any variances of five percent (5%) or more between
budgeted and actual amounts for such year to date period; and (v) a calculation
reflecting the Debt Service Coverage Ratio (as hereinafter defined) as of the
last day of each such calendar quarter. Until a Securitization has occurred,
Borrower shall furnish monthly each of the items listed in the immediately
preceding sentence within thirty (30) days after the end of such month. Within
one hundred twenty (120) days following the end of each calendar year (provided,
however, if requested by Lender, Borrower shall use commercially reasonable
efforts to provide Lender with any unaudited annual statements prior to such
date), Borrower shall furnish statements of its financial affairs and condition
including a balance sheet and a statement of profit and loss for the Borrower in
such detail as Lender may reasonably request, and setting forth the financial
condition and the income and expenses for the Trust Property for the immediately
preceding calendar year, which statements shall be prepared by Borrower.
Borrower's annual financial statements shall include (x) a list of the tenants,
if any, occupying more than twenty (20%) percent of the total floor area of the
Improvements, and (y) a breakdown showing the year in which each Lease then in
effect expires and the percentage of total floor area of the Improvements and
the percentage of base rent with respect to which Leases shall expire in each
such year, each such percentage to be expressed on both a per year and a
cumulative basis. Borrower's annual financial statements shall be accompanied by
a certificate executed by a financial officer of Borrower or the REIT, as
applicable, stating that each such annual financial statement presents fairly
the financial condition of the Trust Property being reported upon and shall be
audited by a "Big Four" accounting firm or other independent certified public
accountant reasonably acceptable to Lender, which audited financial statements
may be in the form of schedules to the audited consolidated financial statements
of the REIT. Each such annual financial statement shall be prepared in
accordance with generally accepted accounting principles consistently applied or
the method used in connection with the financial statements delivered to Lender
in connection with the closing of the Loan. At any time and from time to time
Borrower shall deliver to Lender or its agents such other financial data as
Lender or its agents shall reasonably request with respect to the ownership,
maintenance, use and operation of the Trust Property.
(c) For the purposes of this Deed of Trust, the term "DEBT SERVICE
COVERAGE RATIO" shall mean a ratio for the applicable period in which: (A) the
numerator is the Net Operating Income (excluding interest on credit accounts)
for such period as set forth in the
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statements required hereunder and (B) the denominator is the aggregate amount of
principal and interest due and payable for such period under the Note.
19. PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and perform
each and every material term to be observed or performed by Borrower pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Trust Property.
20. FURTHER ACTS, ETC. Borrower will, at the cost of Borrower, and without
expense to Lender, do, execute, acknowledge and deliver all and every such
further acts, deeds, conveyances, mortgages, assignments, notices of assignment,
Uniform Commercial Code financing statements or continuation statements,
transfers and assurances as Lender shall, from time to time, require, for the
better assuring, conveying, assigning, transferring, and confirming unto Lender
the property and rights hereby deeded, mortgaged, given, granted, bargained,
sold, alienated, enfeoffed, conveyed, confirmed, pledged, assigned and
hypothecated or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Deed of Trust
or for filing, registering or recording this Deed of Trust or for facilitating
the sale of the Loan and the Loan Documents as described in paragraph 61 below.
Borrower, promptly upon 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 other instruments, to evidence more effectively the
security interest of Lender in the Trust Property. Upon foreclosure, the
appointment of a receiver or any other relevant action, Borrower will, at the
cost of Borrower and without expense to Lender, cooperate fully and completely
to effect the assignment or transfer of any license, permit, agreement or any
other right necessary or useful to the operation of or the Trust Property.
Borrower grants to Lender and Trustee upon the occurrence of an Event of Default
and prior to the acceptance of a cure thereof by Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Lender and Trustee at law and in
equity, including, without limitation, such rights and remedies available to
Lender and Trustee pursuant to this paragraph.
21. RECORDING OF DEED OF TRUST, ETC. Borrower forthwith upon the execution
and delivery of this Deed of Trust and thereafter, from time to time, will cause
this Deed of Trust, and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Trust Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or security interest
hereof upon, and the interest of Lender in, the Trust Property. Borrower will
pay all filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Trust
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 Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Trust
Property or any instrument of further assurance, except where prohibited by law
so to do. Borrower shall hold harmless and indemnify Lender, its successors and
assigns, against any liability incurred by reason of the imposition of any tax
on the making and recording of this Deed of Trust.
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22. REPORTING REQUIREMENTS. Borrower agrees to give prompt notice to
Lender of the insolvency or bankruptcy filing of Borrower or the death,
insolvency or bankruptcy filing of any Guarantor.
23. EVENTS OF DEFAULT. The Debt shall become immediately due and payable
at the option of Lender upon the happening of any one or more of the following
events of default (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt that is due on a Payment Date is not paid
on or before the related Payment Date or, for any payment other than payments
due on a Payment Date, the date on which such payment is due;
(b) subject to Borrower's right to contest as provided herein, if any of
the Taxes are not paid prior to the date that any interest, late fees or other
penalties would accrue thereon or any of the Other Charges are not paid when the
same are due and payable (unless sums equaling the amount of Taxes and Other
Charges then due and payable have been delivered to Lender in accordance with
paragraph 6 hereof);
(c) if the Policies are not kept in full force and effect, or if the
Policies or certificates evidencing such Policies are not delivered to Lender
within fifteen (15) days after request;
(d) except as expressly permitted by the terms of this Deed of Trust or
the other Loan Documents, if Borrower transfers or encumbers any portion of the
Trust Property without Lender's prior written consent;
(e) if any representation or warranty of Borrower, or of any Guarantor,
made herein or in any other Loan Document or in any certificate, report,
financial statement or other instrument or document furnished to Lender in
connection with the Loan shall have been false or misleading in any material
respect when made, provided that if such misrepresentation was not intentional,
is susceptible to cure and Lender will not be adversely affected by a delay in
enforcing its remedy under the Loan Documents, Borrower shall have thirty (30)
days after notice thereof to cure such default;
(f) if Borrower or any Guarantor shall make an assignment for the benefit
of creditors or if Borrower shall generally not be paying its debts as they
become due;
(g) if a receiver (other than a receiver appointed by Lender), liquidator
or trustee of Borrower or of any Guarantor shall be appointed or if Borrower or
any Guarantor 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 or any Guarantor or if any
proceeding for the dissolution or liquidation of Borrower or of any Guarantor
shall be instituted; however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Borrower or such Guarantor,
upon the same not being discharged, stayed or dismissed within ninety (90) days;
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(h) if Borrower shall be in default under any other deed of trust or
security agreement covering any part of the Trust Property whether it be
superior or junior in lien to this Deed of Trust;
(i) subject to Borrower's right to contest as provided herein, if the
Trust Property becomes subject to any mechanic's, materialman's or other lien
that is not otherwise permitted by the Loan Documents and such lien is not
removed of record within thirty (30) days of the filing or recording of such
lien (except a lien for local real estate taxes and assessments or special taxes
not then due and payable);
(j) if Borrower fails to cure properly any violations of laws or
ordinances affecting or which may be interpreted to affect the Trust Property
within thirty (30) days after Borrower first receives notice of any such
violations; provided, however, that if such violation is reasonably susceptible
of cure, but not within such thirty (30) day period and the applicable law or
ordinance permits such longer period within which to cure such violation, then
Borrower shall be permitted up to an additional sixty (60) days to cure such
violation provided that Borrower diligently and continuously pursues such cure;
(k) except as permitted in this Deed of Trust, the alteration,
improvement, demolition or removal of any of the Improvements without the prior
consent of Lender;
(l) if Borrower shall continue to be in default under any term, covenant,
or provision of the Note or any of the other Loan Documents, beyond applicable
notice and/or cure periods contained in those documents;
(m) if Borrower fails to cure a default under any other term, covenant or
provision of this Deed of Trust within thirty (30) days after Borrower first
receives notice of any such default; provided, however, if such default is
reasonably susceptible of cure, but not within such thirty (30) day period, then
Borrower may be permitted up to an additional sixty (60) days to cure such
default provided that Borrower diligently and continuously pursues such cure;
(n) if without Lender's prior written consent, except as otherwise
expressly permitted by the Loan Documents, (i) the Management Agreement is
terminated, (ii) the ownership, management or control of Manager is transferred,
(iii) there is a material change in the Management Agreement, or (iv) there
shall be a material default by Borrower under the Management Agreement that is
not cured within any applicable notice or cure period provided under the
Management Agreement;
(o) if Borrower ceases to continuously operate the Trust Property or any
material portion thereof as an office building for any reason whatsoever (other
than temporary cessation in connection with any repair or renovation thereof
undertaken with the consent of Lender);
(p) if any of the assumptions contained in the Insolvency Opinion, or in
any other "non-consolidation" opinion delivered to Lender in connection with the
Loan, or in any other "non-consolidation" delivered subsequent to the closing of
the Loan, is or shall become untrue in any respect; or
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(q) if Borrower fails to comply with the covenants as to Prescribed Laws
set forth in paragraph 9 hereof.
24. LATE PAYMENT CHARGE. If any portion of the Debt is not paid on or
before the date on which such payment is due after the expiration of any
applicable grace period, Borrower shall pay to Lender upon demand an amount
equal to the lesser of five percent (5%) of such due and unpaid portion of the
Debt or the maximum amount permitted by applicable law in order to defray a
portion of the expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment, and such amount shall be secured by this Deed of Trust.
25. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default
and prior to the acceptance of a cure thereof by Lender or if Borrower fails to
make any payment (including, without limitation, any required payments for
taxes, insurance or to discharge any liens with respect to the Property) or to
do any act as herein provided, Lender may, but without any obligation to do so
and without notice to or demand on Borrower and without releasing Borrower from
any obligation hereunder, make or do the same in such manner and to such extent
as Lender may deem necessary to protect the security hereof. Lender is
authorized to enter upon the Trust Property for such purposes or appear in,
defend, or bring any action or proceeding to protect its interest in the Trust
Property or to foreclose this Deed of Trust or collect the Debt, and the cost
and expense thereof (including reasonable attorneys' fees and disbursements to
the extent permitted by law), with interest at the Default Rate (as defined in
the Note) for the period after notice from Lender that such cost or expense was
incurred to the date of payment to Lender, shall constitute a portion of the
Debt, shall be secured by this Deed of Trust and the other Loan Documents and
shall be due and payable to Lender upon demand.
26. ADDITIONAL REMEDIES. (a) Upon the occurrence of any Event of Default,
subject to the requirements and limitations of applicable law, Lender or Trustee
may take such action, without notice or demand, as it deems advisable to protect
and enforce its rights against Borrower and in and to the Trust Property by
Lender itself or through Trustee or otherwise, including, without limitation,
the following actions, each of which may be pursued concurrently or otherwise,
at such time and in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Lender:
(i) declare the entire Debt to be immediately due and payable;
(ii) institute a proceeding or proceedings, judicial or nonjudicial,
by advertisement or otherwise, for the complete foreclosure of this Deed
of Trust in which case the Trust Property or any interest therein may be
sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Deed of Trust for the portion of the Debt then
due and payable, subject to the continuing lien of this Deed of Trust for
the balance of the Debt not then due;
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(iv) sell for cash or upon credit the Trust Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to the power
of sale contained herein or otherwise, at one or more sales, as an
entirety or in parcels, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, or in any of the other Loan Documents;
(vi) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Deed of Trust;
(vii) apply for the appointment of a trustee, receiver, liquidator
or conservator of the Trust Property, without notice and without regard
for the adequacy of the security for the Debt and without regard for the
solvency of the Borrower, any Guarantor or of any person, firm or other
entity liable for the payment of the Debt;
(viii) enforce Lender's interest in the Leases and Rents and enter
into or upon the Trust Property, 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 Trust Property and conduct the business thereat; (B) complete
any construction on the Trust Property in such manner and form as Lender
deems advisable; (C) make alterations, additions, renewals, replacements
and improvements to or on the Trust Property; (D) exercise all rights and
powers of Borrower with respect to the Trust Property, whether in the name
of Borrower or otherwise, including, without limitation, the right to
make, cancel, enforce or modify Leases, obtain and evict tenants, and
demand, xxx for, collect and receive all Rents; and (E) apply the receipts
from the Trust Property to the payment of the Debt, after deducting
therefrom all expenses (including reasonable attorneys' fees and
disbursements) incurred in connection with the aforesaid operations and
all amounts necessary to pay the taxes, assessments insurance and other
charges in connection with the Trust Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents
and employees;
(ix) 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 any portion of the Trust Property
occupied by Borrower and require Borrower to vacate and surrender
possession to Lender of the Trust Property or to such receiver and, in
default thereof, evict Borrower by summary proceedings or otherwise; or
(x) pursue such other rights and remedies as may be available at law
or in equity or under the Uniform Commercial Code including without
limitation the right to receive and/or establish a lock box for all Rents
proceeds from the Intangibles and any other receivables or rights to
payments of Borrower relating to the Trust Property.
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In the event of a sale, by foreclosure or otherwise, of less than all of
the Trust Property, this Deed of Trust shall continue as a lien on the remaining
portion of the Trust Property.
(b) The proceeds of any sale made under or by virtue of this paragraph,
together with any other sums which then may be held by Lender under this Deed of
Trust, whether under the provisions of this paragraph or otherwise, shall be
applied by Lender to the payment of the Debt in such priority and proportion as
Lender in its sole discretion shall deem proper.
(c) Except as may be prohibited by applicable law, Lender may adjourn from
time to time any sale by it to be made under or by virtue of this Deed of Trust
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 law, Lender or Trustee, 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 pursuant hereto, Lender, or
an 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. Lender and Trustee
are hereby irrevocably appointed the true and lawful attorney of Borrower, in
its name and stead, to make all necessary conveyances, assignments, transfers
and deliveries of the Trust Property and rights so sold and for that purpose
Lender and Trustee may execute all necessary instruments of conveyance,
assignment and transfer, and may substitute one or more persons with like power,
Borrower hereby ratifying and confirming all that its said attorney or such
substitute or substitutes shall lawfully do by virtue hereof. Except as may be
prohibited by applicable law, any sale or sales made under or by virtue of this
paragraph, whether made under the power of sale herein granted or under or by
virtue of judicial proceedings or of 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
properties and rights so sold, and shall be a perpetual bar both at law and in
equity against Borrower and against any and all persons claiming or who may
claim the same, or any part thereof from, through or under Borrower.
(e) Upon any sale made under or by virtue of this paragraph, whether made
under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Lender may bid
for and acquire the Trust 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
costs of the action and any other sums which Lender is authorized to deduct
under this Deed of Trust.
(f) Except as may be prohibited by applicable law, no recovery of any
judgment by Lender and no levy of an execution under any judgment upon the Trust
Property or upon any other property of Borrower shall affect in any manner or to
any extent the lien of this Deed of Trust upon the Trust Property or any part
thereof, or any liens, rights, powers or
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remedies of Lender hereunder, but such liens, rights, powers and remedies of
Lender shall continue unimpaired as before.
(g) Lender may terminate or rescind any proceeding or other action brought
in connection with its exercise of the remedies provided in this paragraph at
any time before the conclusion thereof, as determined in Lender's sole
discretion and without prejudice to Lender.
(h) Lender may resort to any remedies and the security given by the Note,
this Deed of Trust or the Loan Documents in whole or in part, and in such
portions and in such order as determined by Lender's sole discretion. Except as
may be prohibited by applicable law, no such action shall in any way be
considered a waiver of any rights, benefits or remedies evidenced or provided by
the Note, this Deed of Trust or any of the other Loan Documents. The failure of
Lender or Trustee to exercise any right, remedy or option provided in the Note,
this Deed of Trust or any of the other Loan Documents shall not be deemed a
waiver of such right, remedy or option or of any covenant or obligation secured
by the Note, this Deed of Trust or the other Loan Documents. No acceptance by
Lender of any payment after the occurrence of any Event of Default and no
payment by Lender of any obligation for which Borrower is liable hereunder shall
be deemed to waive or cure any Event of Default with respect to Borrower, or
Borrower's liability to pay such obligation. Except as may be prohibited by
applicable law, no sale of all or any portion of the Trust Property, no
forbearance on the part of Lender or Trustee, and no extension of time for the
payment of the whole or any portion of the Debt or any other indulgence given by
Lender or Trustee to Borrower, shall operate to release or in any manner affect
the interest of Lender in the remaining Trust Property or the liability of
Borrower to pay the Debt. No waiver by Lender or Trustee shall be effective
unless it is in writing and then only to the extent specifically stated. All
costs and expenses of Lender and Trustee in exercising the rights and remedies
under this paragraph 26 (including reasonable attorneys' fees and disbursements
to the extent permitted by law), shall be paid by Borrower immediately upon
notice from Lender or Trustee, with interest at the Default Rate for the period
after notice from Lender or Trustee and such costs and expenses shall constitute
a portion of the Debt and shall be secured by this Deed of Trust.
(i) The interests and rights of Lender under the Note, this Deed of Trust
or in any of the other 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
Trust Property or any portion thereof; or (iii) any release or indulgence
granted to any maker, endorser, Guarantor or surety of any of the Debt.
27. RIGHT OF ENTRY. In addition to any other rights or remedies granted
under this Deed of Trust, Lender, Trustee and their agents, during the Term,
shall have the right upon reasonable notice to Borrower to enter and inspect the
Trust Property during normal business hours in a manner which does not
unreasonably interfere with tenants or occupants thereof. The cost of such
inspections or audits shall be borne by Borrower should Lender determine that an
Event of Default exists, including the cost of all follow up or additional
investigations or inquiries deemed reasonably necessary by Lender. The cost of
such inspections, if not paid for by Borrower promptly upon demand, may be added
to the principal balance of the sums due
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under the Note and this Deed of Trust and shall bear interest thereafter until
paid at the Default Rate if not paid within five (5) days after such demand.
28. SECURITY AGREEMENT.
(a) This Deed of Trust is both a real property mortgage and a "security
agreement" within the meaning of the Uniform Commercial Code. The Trust Property
includes both real and personal property and all other rights and interests,
whether tangible or intangible in nature, of Borrower in the Trust Property.
Borrower by executing and delivering this Deed of Trust has granted and hereby
grants to Lender and Trustee, as security for the Debt, a security interest in
the Trust Property to the full extent that the Trust Property may be subject to
the Uniform Commercial Code (said portion of the Trust Property so subject to
the Uniform Commercial Code being called in this paragraph the "COLLATERAL").
This Deed of Trust shall also constitute a "fixture filing" for the purposes of
the Uniform Commercial Code. As such, this Deed of Trust covers all items of the
Collateral that are or are to become fixtures. Information concerning the
security interest herein granted may be obtained from the parties at the
addresses of the parties set forth in the first paragraph of this Deed of Trust.
(b) If an Event of Default shall occur, Lender and Trustee, in addition to
any other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing, the right to take possession of the
Collateral or any part thereof, and to take such other measures as Lender or
Trustee may deem necessary for the care, protection and preservation of the
Collateral. Upon request or demand of Lender or Trustee, Borrower shall at its
expense assemble the Collateral and make it available to Lender and Trustee at a
convenient place acceptable to Lender. Borrower shall pay to Lender and Trustee
on demand any and all expenses, including attorneys' fees and disbursements,
incurred or paid by Lender and Trustee in protecting the interest in the
Collateral and in enforcing the rights hereunder with respect to the Collateral.
Any notice of sale, disposition or other intended action by Lender and Trustee
with respect to the Collateral sent to Borrower in accordance with the
provisions hereof at least ten (10) Business Days prior to such action, shall
constitute commercially 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 sole
discretion shall deem proper. In the event of any change in name, identity or
structure of Borrower, Borrower shall notify Lender and Trustee thereof and
promptly after request shall execute (if necessary), file and record such
Uniform Commercial Code forms as are necessary to maintain the priority of
Lender's lien upon and security interest in the Collateral, and shall pay all
expenses and fees in connection with the filing and recording thereof. If Lender
shall require the filing or recording of additional Uniform Commercial Code
forms or continuation statements, Borrower shall, promptly after request,
execute (if necessary), file and record such Uniform Commercial Code forms or
continuation statements as Lender shall deem necessary, and shall pay all
expenses and fees in connection with the filing and recording thereof, it being
understood and agreed, however, that no such additional documents shall increase
Borrower's obligations under the Note, this Deed of Trust and any of the other
Loan Documents. Borrower hereby irrevocably appoints Lender as its
attorney-in-fact, coupled with an interest, to file with the appropriate
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public office on its behalf any financing or other statements signed only by
Lender, as secured party, in connection with the Collateral covered by this Deed
of Trust.
29. ACTIONS AND PROCEEDINGS. Lender or Trustee has the right to appear in
and defend any action or proceeding brought with respect to the Trust Property
and to bring any action or proceeding, in the name and on behalf of Borrower,
which Lender, in its sole discretion, decides should be brought to protect their
interest in the Trust Property. Lender shall, at its option, be subrogated to
the lien of any deed of trust or other security instrument discharged in whole
or in part by the Debt, and any such subrogation rights shall constitute
additional security for the payment of the Debt.
30. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under this Deed of
Trust, the Note and the other Loan Documents shall be payable without setoff,
counterclaim or any deduction whatsoever. Borrower hereby waives the right to
assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Lender or
Trustee is a participant, or arising out of or in any way connected with this
Deed of Trust, the Note, any of the other Loan Documents, or the Debt.
31. CONTEST OF CERTAIN CLAIMS. Notwithstanding the provisions of
paragraphs 5 and 23 hereof, Borrower shall not be in default for failure to pay
or discharge Taxes, Other Charges or mechanic's or materialman's lien asserted
against the Trust Property if, and so long as, (a) Borrower shall have notified
Lender of same within five (5) Business Days of obtaining knowledge thereof; (b)
Borrower shall diligently and in good faith contest the same by appropriate
legal proceedings which shall operate to prevent the enforcement or collection
of the same and the sale of the Trust Property or any part thereof, to satisfy
the same; (c) Borrower shall have furnished to Lender a cash deposit (which may
consist in whole or in part of funds contained in an existing reserve previously
established by Borrower in connection with the Loan for the specific purpose of
paying the items being contested), or an indemnity bond satisfactory to Lender
with a surety reasonably satisfactory to Lender, in an amount equal to one
hundred twenty-five percent (125%) of the amount of the Taxes, Other Charges or
mechanic's or materialman's lien claim, plus a reasonable additional sum to pay
all costs, interest and penalties that may be imposed or incurred in connection
therewith, to assure payment of the matters under contest and to prevent any
sale or forfeiture of the Trust Property or any part thereof; (d) Borrower shall
promptly upon final determination thereof pay the amount of any such Taxes,
Other Charges or claim so determined, together with all costs, interest and
penalties which may be payable in connection therewith; (e) the failure to pay
the Taxes, Other Charges or mechanic's or materialman's lien claim does not
constitute a default under any other deed of trust, mortgage or security
interest covering or affecting any part of the Trust Property; and (f)
notwithstanding the foregoing, Borrower shall immediately upon request of Lender
pay (and if Borrower shall fail so to do, Lender may, but shall not be required
to, pay or cause to be discharged or bonded against) any such Taxes, Other
Charges or claim notwithstanding such contest, if in the opinion of Lender, the
Trust Property or any part thereof or interest therein may be in danger of being
sold, forfeited, foreclosed, terminated, cancelled or lost. Lender may pay over
any such cash deposit or part thereof to the claimant entitled thereto at any
time when, in the reasonable judgment of Lender, the entitlement of such
claimant is established.
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32. RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have the right from
time to time to take action to recover any sum or sums which constitute a part
of the Debt as the same become due, without regard to whether or not the balance
of the Debt shall be due, and without prejudice to the right of Lender or
Trustee 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.
33. MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to the extent
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Trust Property or any part
thereof or any interest therein. Further, Borrower hereby expressly waives any
and all rights of redemption from sale under any order or decree of foreclosure
of this Deed of Trust on behalf of Borrower, and on behalf of each and every
person acquiring any interest in or title to the Trust Property subsequent to
the date of this Deed of Trust and on behalf of all persons to the extent
permitted by applicable law.
34. HAZARDOUS SUBSTANCES. Borrower hereby represents and warrants to
Lender that, to Borrower's knowledge, except as disclosed in the report, dated
March 7, 2003, prepared by Certified Environments, Inc. (the "PHASE I REPORT")
and delivered to Lender in connection with the Loan: (a) the Trust Property is
not in violation of any local, state, federal or other governmental authority,
statute, ordinance, code, order, decree, law, rule or regulation pertaining to
or imposing liability or standards of conduct concerning environmental
regulation, contamination or clean-up including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), the Resource Conservation and Recovery Act, as amended ("RCRA"), the
Emergency Planning and Community Right-to-Know Act of 1986, as amended, the
Hazardous Substances Transportation Act, as amended, the Solid Waste Disposal
Act, as amended, the Clean Water Act, as amended, the Clean Air Act, as amended,
the Toxic Substance Control Act, as amended, the Safe Drinking Water Act, as
amended, the Occupational Safety and Health Act, as amended, any state
super-lien and environmental clean-up statutes and all rules and regulations
adopted in respect to the foregoing laws whether presently in force or coming
into being and/or effectiveness hereafter (collectively, "ENVIRONMENTAL LAWS");
(b) the Trust Property is not subject to any private or governmental lien or
judicial or administrative notice or action or inquiry, investigation or claim
relating to hazardous and/or toxic, dangerous and/or regulated, substances,
wastes, materials, raw materials which include hazardous constituents,
pollutants or contaminants including without limitation, petroleum, tremolite,
anthlophylie, actinolite or polychlorinated biphenyls and any other substances
or materials which are included under or regulated by Environmental Laws or
which are considered by scientific opinion to be otherwise dangerous in terms of
the health, safety and welfare of humans (collectively, "HAZARDOUS SUBSTANCES");
(c) no Hazardous Substances are or have been (including the period prior to
Borrower's acquisition of the Trust Property) discharged, generated, treated,
disposed of or stored on, incorporated in, or removed or transported from the
Trust Property other than in compliance with all Environmental Laws; (d) no
Hazardous Substances are present in, on or under any nearby real property which
could migrate to or otherwise affect the Trust Property and which would
reasonably be likely to result in a requirement under applicable Environmental
Laws to remediate the Trust Property; and (e) no underground storage tanks exist
on any of the Trust Property. So long as Borrower owns or is in possession of
the Trust Property, Borrower (i) shall keep or cause the Trust Property to
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be kept free from Hazardous Substances except those in compliance with all
Environmental Laws or any permits issued with respect thereto, (ii) shall
promptly notify Lender if Borrower shall become aware of any Hazardous
Substances on the Trust Property and/or if Borrower shall become aware that the
Trust Property is in violation of any Environmental Laws and/or if Borrower
shall become aware of any condition on the Trust Property which shall pose a
threat to the health, safety or welfare of humans, and (iii) shall remove or
remediate such Hazardous Substances and/or cure such violations and/or remove or
remediate such threats, as applicable, as required by law (or as shall be
reasonably required by Lender in the case of removal or remediation which is not
required by law, but in response to the opinion of a licensed hydrogeologist,
licensed environmental engineer or other qualified consultant engaged by Lender
("LENDER'S CONSULTANT") provided that such removal, remediation or cure is
reasonably necessary to eliminate imminent danger to the health, safety or
welfare of humans and would customarily be performed by prudent owners of
properties similar to the Trust Property in similar circumstances), promptly
after Borrower becomes aware of same, at Borrower's sole expense.
Notwithstanding anything to the contrary in this paragraph, the Borrower,
Manager and/or tenants on the Trust Property may use and store ordinary amounts
of Hazardous Substances at the Trust Property if such use or storage is in
connection with business supplies used by Borrower, a tenant in accordance with
the terms of its Lease or by Manager pursuant to the Management Agreement or is
in connection with the ordinary cleaning and maintenance of the Trust Property
so long as such use and storage (A) does not violate any applicable
Environmental Laws and (B) is not the subject of any specific recommendations in
the Phase I Report that would prohibit such use or storage. Nothing herein shall
prevent Borrower from recovering such expenses from any other party that may be
liable for such removal or cure. The obligations and liabilities of Borrower
under this paragraph 34 shall survive any termination, satisfaction, or
assignment of this Deed of Trust and the exercise by Lender of any of its rights
or remedies hereunder, including, without limitation, the acquisition of the
Trust Property by foreclosure or a conveyance in lieu of foreclosure.
35. ASBESTOS. Borrower represents and warrants that to Borrower's
knowledge no asbestos or any substance or material containing asbestos
("ASBESTOS") is located on the Trust Property except as may have been disclosed
in the Phase I Report delivered to Lender in connection with the Loan. Borrower
shall not install in the Trust Property, nor permit to be installed in the Trust
Property, Asbestos and shall remove any Asbestos promptly upon discovery to the
satisfaction of Lender, at Borrower's sole expense. Borrower shall in all
instances comply with, and ensure compliance by all occupants of the Trust
Property with, all applicable federal, state and local laws, ordinances, rules
and regulations with respect to Asbestos, and shall keep the Trust Property free
and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Borrower receives any notice or advice from any
governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Trust Property, Borrower shall promptly notify
Lender. The obligations and liabilities of Borrower under this paragraph 35
shall survive any termination, satisfaction, or assignment of this Deed of Trust
and the exercise by Lender of any of its rights or remedies hereunder, including
but not limited to, the acquisition of the Trust Property by foreclosure or a
conveyance in lieu of foreclosure.
36. ENVIRONMENTAL MONITORING. Borrower shall give prompt written notices
to Lender of: (a) any proceeding or inquiry by any party with respect to the
presence of any
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Hazardous Substance or Asbestos on, under, from or about the Trust Property, (b)
all claims made or threatened by any third party against Borrower or the Trust
Property relating to any loss or injury resulting from any Hazardous Substance
or Asbestos, and (c) Borrower's discovery of any occurrence or condition on any
real property adjoining or in the vicinity of the Trust Property that could
reasonably be expected to cause the Trust Property to be subject to any
investigation or cleanup pursuant to any Environmental Law. Borrower shall
permit Lender to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated with respect to the Trust Property in
connection with any actual or alleged violation of Environmental Law or the
presence of Hazardous Substance at the Trust Property, and Borrower shall pay
all reasonable attorneys' fees and disbursements incurred by Lender in
connection therewith. Upon Lender's request, at any time and from time to time
while this Deed of Trust is in effect but not more frequently than once per
calendar year, unless Lender has determined (in the exercise of its good faith
judgment) that reasonable cause exists for the performance of an environmental
inspection or audit of the Trust Property, Borrower shall provide at Borrower's
sole expense, (i) an inspection or audit of the Trust Property prepared by a
licensed hydrogeologist or licensed environmental engineer approved by Lender
indicating the presence or absence of Hazardous Substances on, in or near the
Trust Property, and (ii) an inspection or audit of the Trust Property prepared
by a duly qualified engineering or consulting firm approved by Lender,
indicating the presence or absence of Asbestos on the Trust Property; provided,
however, any such inspection or audit requested by Lender, during the Term, in
excess of one (1) inspection during each five (5) year period commencing upon
the date hereof, shall be performed at Lender's expense unless an Event of
Default exists or Lender has determined (in the exercise of its good faith and
judgment) that reasonable cause exists for the performance of an environmental
inspection or audit. If Borrower fails to provide such inspection or audit
within sixty (60) days after such request Lender may order same, and Borrower
hereby grants to Lender and its employees and agents access to the Trust
Property and a license to undertake such inspection or audit upon reasonable
prior notice to Borrower and in a manner that does not unreasonably interfere
with tenants or occupants thereof. The cost of such inspection or audit obtained
by Lender upon Borrower's failure to do so shall bear interest from the date
such costs are incurred by Lender until paid at the Default Rate and shall be
due and payable by Borrower to Lender within ten (10) days after demand, and if
not so paid, may be added to the Debt. In the event that any environmental site
assessment report prepared in connection with such inspection or audit
recommends that an operations and maintenance plan be implemented for Asbestos
or any Hazardous Substance, Borrower shall cause such operations and maintenance
plan to be prepared and implemented at Borrower's expense upon request of
Lender. In the event that any investigation, site monitoring, containment
cleanup, removal, restoration, or other work of any kind is reasonably necessary
under an applicable Environmental Law (the "REMEDIAL Work"), Borrower shall
promptly commence and thereafter diligently prosecute to completion all such
Remedial Work, provided that in any event Borrower shall complete such Remedial
Work within the time required by applicable Environmental Law. All Remedial Work
shall be performed by contractors approved in advance by Lender, and under the
supervision of a consulting engineer approved by Lender. All costs and expenses
of such Remedial Work shall be paid by Borrower including, without limitation,
Lender's reasonable attorneys' fees and disbursements incurred in connection
with monitoring or review of such Remedial Work. In the event Borrower shall
fail to timely commence, or cause to be commenced, or fail to diligently
prosecute to completion, such Remedial Work, Lender may, but shall not be
required to, cause such Remedial Work to be
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performed, and all costs and expenses thereof, or incurred in connection
therewith, shall bear interest from the date such costs are incurred by Lender
until paid at the Default Rate and shall be due and payable by Borrower to
Lender within ten (10) days after demand, and if not so paid, may be added to
the Debt.
37. HANDICAPPED ACCESS.
(a) Borrower agrees that the Trust Property shall at all times comply to
the extent applicable with the requirements of the Americans with Disabilities
Act of 1990, the Fair Housing Amendments Act of 1988 (if applicable), all state
and local laws and ordinances related to handicapped access and all rules,
regulations, and orders issued pursuant thereto including, without limitation,
the Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively "ACCESS LAWS").
(b) Notwithstanding any provisions set forth herein or in any other
document regarding Lender's approval of alterations of the Trust Property,
Borrower shall not alter the Trust Property in any manner which would increase
Borrower's responsibilities for compliance with the applicable Access Laws
without the prior written approval of Lender except for tenant improvements
constructed by Borrower or by any of its tenants that are otherwise permitted by
the terms of this Deed of Trust or the other Loan Documents. Lender may
condition any such approval upon receipt of a certificate of Access Law
compliance from an architect, engineer, or other person acceptable to Lender.
(c) Borrower agrees to give prompt notice to Lender of the receipt by
Borrower of any complaints related to violation of any Access Laws and of the
commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws.
38. INDEMNIFICATION. In addition to any other indemnifications provided
herein or in the other Loan Documents, Borrower shall protect, defend, indemnify
and save harmless Lender and Trustee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable attorneys'
fees and disbursements), imposed upon or incurred by or asserted against Lender
or Trustee by reason of (a) ownership of this Deed of Trust, the Trust Property
or any interest therein or receipt of any Rents; (b) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Trust Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (c) any use,
nonuse or condition in, on or about the Trust Property or any part thereof or on
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (d) any failure on the part of Borrower to perform or comply with any
of the terms of this Deed of Trust; (e) performance of any labor or services or
the furnishing of any materials or other property in respect of the Trust
Property or any part thereof; (f) the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release of any
Hazardous Substance or Asbestos on, from, or affecting the Trust Property; (g)
any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Substance or Asbestos; (h)
any lawsuit brought or threatened, settlement reached, or government order
relating to such Hazardous Substance or Asbestos; (i) any violation of the
Environmental Laws, which are based upon or in any way related to such Hazardous
Substance
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or Asbestos including, without limitation, the costs and expenses of any
Remedial Work, attorney and consultant fees and disbursements, investigation and
laboratory fees, court costs, and litigation expenses; (j) any failure of the
Trust Property to comply with any Access Laws; (k) any representation or
warranty made in the Note, this Deed of Trust or any of the other Loan Documents
being false or misleading in any material respect as of the date such
representation or warranty was made; (l) any claim by brokers, finders or
similar persons claiming to be entitled to a commission in connection with the
Loan, any Lease or other transaction involving the Trust Property or any part
thereof under any legal requirement or any liability asserted against Lender
with respect thereto; and (m) the claims of any lessee of any or any portion of
the Trust Property or any person acting through or under any lessee or otherwise
arising under or as a consequence of any Lease. Notwithstanding the foregoing,
Borrower shall not be liable under such indemnification to the extent such
liabilities, obligations, claims, demands, damages, penalties, causes of action,
losses, fines, costs or expenses result from the gross negligence, willful
misconduct or illegal acts of Lender or Lender's agents or from any Hazardous
Substance or Asbestos introduced onto the Trust Property by Lender or its agents
or which are introduced onto the Trust Property by a third party after
foreclosure or conveyance in lieu of foreclosure or actual possession of the
Trust Property by Lender or its agents and such indemnification shall not inure
to the benefit of any future owner of the Trust Property other than Lender, its
nominees and their respective Affiliates or the purchaser of the Trust Property
by foreclosure of the Deed of Trust or deed in lieu thereof. Any amounts payable
to Lender or Trustee by reason of the application of this paragraph shall be
secured by this Deed of Trust and shall become immediately due and payable and
shall bear interest at the Default Rate from the date loss or damage is
sustained by Lender or Trustee until paid if not paid within five (5) days of
demand therefor. The obligations and liabilities of Borrower under this
paragraph 38 shall survive any termination, satisfaction, or assignment of this
Deed of Trust and the exercise by Lender of any of its rights or remedies
hereunder, including, but not limited to, the acquisition of the Trust Property
by foreclosure or a conveyance in lieu of foreclosure.
39. NOTICES. Any notice, report, demand or other instrument authorized or
required to be given or furnished ("NOTICES") shall be in writing and shall be
given as follows: (a) by hand delivery; (b) by deposit in the United States mail
as first class certified mail, return receipt requested, postage paid; (c) by
overnight nationwide commercial courier service; or (d) by telecopy transmission
(other than for notices of default) with a confirmation copy to be delivered by
duplicate notice in accordance with any of clauses (a)-(c) above, in each case,
addressed to the party intended to receive the same at the following
address(es):
Lender:
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Mortgage Loan Department
Telecopier: (000) 000-0000
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with copies to:
Cadwalader, Xxxxxxxxxx & Xxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
Borrower:
Library Square Associates, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx III and
Xxxx X. Lammas, Esq.
Telecopier: (000) 000-0000
with a copy to:
Xxx, Castle & Xxxxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
Trustee:
Commonwealth Land Title Company
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Any party may change the address to which any such Notice is to be
delivered, by furnishing ten (10) days written notice of such change to the
other parties in accordance with the provisions of this paragraph 39. Notices
shall be deemed to have been given on the date they are actually received;
provided, that the inability to deliver Notices because of a changed address of
which no Notice was given, or rejection or refusal to accept any Notice offered
for delivery shall be deemed to be receipt of the Notice as of the date of such
inability to deliver or rejection or refusal to accept delivery. Notice for
either party may be given by its respective counsel. Additionally, notice from
Lender may also be given by the Servicer.
40. AUTHORITY.
(a) Borrower represents and warrants that it has full power, authority and
right to execute, deliver and perform its obligations pursuant to this Deed of
Trust, and to deed, mortgage, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, warrant, pledge, hypothecate and assign the Trust Property
pursuant to the terms hereof and to keep and observe all of the terms of this
Deed of Trust on Borrower's part to be performed.
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(b) Borrower represents and warrants that Borrower is not a "foreign
person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended, and applicable Treasury Department regulations, including
temporary regulations (the "Code").
41. WAIVER OF NOTICE. Borrower shall not be entitled to any notices of any
nature whatsoever from Lender or Trustee except with respect to matters for
which this Deed of Trust or the other Loan Documents specifically and expressly
provide for the giving of notice by Lender or Trustee to Borrower and except
with respect to matters for which Lender or Trustee is required by applicable
law to give notice, and Borrower hereby expressly waives the right to receive
any notice from Lender or Trustee with respect to any matter for which this Deed
of Trust or the other Loan Documents do not specifically and expressly provide
for the giving of notice by Lender or Trustee to Borrower.
42. REMEDIES OF BORROWER. Other than with respect to instances in which
Lender has acted in bad faith, in the event that a claim or adjudication is made
that Lender has acted unreasonably or unreasonably delayed acting in any case
where by law or under the Note, this Deed of Trust or any of the other Loan
Documents, it has an obligation to act reasonably or promptly, neither Lender
nor Trustee shall be liable for any monetary damages, and Borrower's remedies
shall be limited to injunctive relief or declaratory judgment.
43. SOLE DISCRETION OF LENDER. Wherever pursuant to this Deed of Trust,
Lender exercises any right given to it to consent or not consent or approve or
disapprove, or any arrangement or term is to be satisfactory to Lender, the
decision of Lender to consent or not consent, 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 expressly and specifically provided herein.
44. NON-WAIVER. The failure of Lender to insist upon strict performance of
any term hereof shall not be deemed to be a waiver of any term of this Deed of
Trust. Borrower shall not be relieved of Borrower's obligations hereunder by
reason of (a) the failure of Lender to comply with any request of Borrower or
Guarantor to take any action to foreclose this Deed of Trust or otherwise
enforce any of the provisions hereof or of the Note, or the other Loan
Documents, (b) the release, regardless of consideration, of the whole or any
part of the Trust Property, or of any person liable for the Debt or any portion
thereof, or (c) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this Deed
of Trust or any of the other Loan Documents. Lender may resort for the payment
of the Debt to any other security held by Lender in such order and manner as
Lender, in its sole discretion, may elect. Lender or Trustee may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Lender or Trustee thereafter to foreclosure
this Deed of Trust. The rights and remedies of Lender or Trustee under this Deed
of Trust shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender or Trustee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lender or Trustee shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled to
every right and remedy now or hereafter afforded at law or in equity.
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45. NO ORAL CHANGE. This Deed of Trust, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act or failure to act on the part of Borrower or Lender, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
46. LIABILITY. If Borrower consists of more than one person or entity, the
obligations and liabilities of each such person or entity hereunder shall be
joint and several. Subject to the provisions hereof requiring Lender's consent
to any transfer of the Trust Property, this Deed of Trust shall be binding upon
and inure to the benefit of Borrower and Lender and their respective successors
and assigns forever.
47. INAPPLICABLE PROVISIONS. If any term, covenant or condition of the
Note or this Deed of Trust is held to be invalid, illegal or unenforceable in
any respect, the Note and this Deed of Trust shall be construed without such
provision.
48. HEADINGS, ETC. The headings and captions of various paragraphs of this
Deed of Trust 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.
49. DUPLICATE ORIGINALS. This Deed of Trust may be executed in any number
of duplicate originals and each such duplicate original shall be deemed to be an
original.
50. DEFINITIONS. Unless the context clearly indicates a contrary intent or
unless otherwise specifically provided herein, words used in this Deed of Trust
may be used interchangeably in singular or plural form and the word "Borrower"
shall mean "each Borrower and any subsequent owner or owners of the Trust
Property or any part thereof or any interest therein," the word "Lender" shall
mean "Lender and any subsequent holder of the Note," the word "Trustee" shall
mean "Trustee and any subsequent holder of this Deed of Trust," the word "Note"
shall mean "the Note and any other evidence of indebtedness secured by this Deed
of Trust," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, and the words "Trust Property" shall include
any portion of the Trust Property and any interest therein and the words
"attorneys' fees" shall include any and all reasonable attorneys' fees,
paralegal and law clerk fees, including, without limitation, fees at the
pre-trial, trial and appellate levels incurred or paid by Lender in protecting
its interest in the Trust Property and Collateral and enforcing its rights
hereunder. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
51. HOMESTEAD. Borrower hereby waives and renounces all homestead and
exemption rights provided by the Constitution and the laws of the United States
and of any state, in and to the Trust Property as against the collection of the
Debt, or any part hereof.
52. ASSIGNMENTS. Lender shall have the right to assign or transfer its
rights under this Deed of Trust without limitation. Any assignee or transferee
shall be entitled to all the benefits afforded Lender under this Deed of Trust.
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53. WAIVER OF JURY TRIAL. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THIS DEED OF TRUST, OR THE OTHER LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY BORROWER.
54. GOVERNING LAW. (A) THIS DEED OF TRUST WAS NEGOTIATED IN THE STATE OF
NEW YORK, AND MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK,
AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH
STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS DEED OF TRUST AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO
PRINCIPLES OF CONFLICT LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION,
AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND
PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING
UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN THIS PARAGRAPH 54(A) ABOVE, BORROWER HEREBY
UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY
OTHER JURISDICTION GOVERNS THIS DEED OF TRUST AND THE NOTE, AND THIS DEED OF
TRUST AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
(B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER
ARISING OUT OF OR RELATING TO THIS DEED OF TRUST MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN XXX XXXX XX XXX XXXX, XXXXXX XX XXX
XXXX
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PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER
WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR
FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR
PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT CORPORATION TRUST
COMPANY, 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AUTHORIZED AGENT TO
ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN
NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID
ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN
THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF
NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS
OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK
(WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS
FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF
ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS
DISSOLVED WITHOUT LEAVING A SUCCESSOR.
55. TRUSTEE'S FEES; SUBSTITUTE TRUSTEE.
(a) Borrower shall pay all costs, fees and expenses incurred by Trustee
and Trustee's agents and counsel in connection with the performance by Trustee
of Trustee's duties hereunder and all such costs, fees and expenses shall be
secured by this Deed of Trust.
(b) Trustee shall be under no duty to take any action hereunder except as
expressly required hereunder or by law, or to perform any act which would
involve Trustee in any expense or liability or to institute or defend any suit
in respect hereof, unless properly indemnified to Trustee's reasonable
satisfaction. Trustee, by acceptance of this Deed of Trust, covenants to perform
and fulfill the trusts herein created, being liable, however, only for willful
negligence or misconduct, and hereby waives any statutory fee and agrees to
accept reasonable compensation, in lieu thereof, for any services rendered by
Trustee in accordance with the terms hereof. Lender may remove Trustee at any
time or from time to time and select a successor trustee. In the event of the
death, removal, resignation, refusal to act, or inability to act of Trustee, or
in its sole discretion for any reason whatsoever, Lender may, without notice and
without specifying any reason therefor and without applying to any court, select
and appoint a successor trustee, by an instrument recorded wherever this Deed of
Trust is recorded and all powers, rights, duties and authority of Trustee, as
aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Lender. The procedure
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provided for in this paragraph for substitution of Trustee shall be in addition
to and not in exclusion of any other provisions for substitution, by law or
otherwise.
56. POWER OF SALE.
(a) Upon the occurrence of an Event of Default, Trustee, or the agent or
successor of Trustee, at the request of Lender, shall sell or offer for sale the
Trust Property in such portions, order and parcels as Lender may determine with
or without having first taken possession of same, to the highest bidder for cash
at one or more public auctions in accordance with the terms and provisions of
the law of the State in which the Trust Property is located. Such sale shall be
made at the area within the courthouse of the county in which the Trust Property
(or any portion thereof to be sold) is situated (whether the parts or parcels
thereof, if any, in different counties are contiguous or not, and without the
necessity of having any personal property hereby secured present at such sale)
which is designated by the applicable court of such County as the area in which
public sales are to take place, or, if no such area is designated, at the area
at the courthouse designated in the notice of sale as the area in which the sale
will take place, on such day and at such times as permitted under applicable law
of the State where the Trust Property is located, after advertising the time,
place and terms of sale and that portion of the Trust Property in accordance
with such law, and after having served written or printed notice of the proposed
sale by certified mail on each Borrower obligated to pay the Note and other
secured indebtedness secured by this Deed of Trust according to the records of
Lender in accordance with applicable law. The affidavit of any person having
knowledge of the facts to the effect that such service was completed shall be
prima facie evidence of the fact of service.
At any such public sale, Trustee may execute and deliver in the name of
Borrower to the purchaser a conveyance of the Trust Property or any part of the
Trust Property in fee simple. In the event of any sale under this Deed of Trust
by virtue of the exercise of the powers herein granted, or pursuant to any order
in any judicial proceeding or otherwise, the Trust Property may be sold in its
entirety or in separate parcels and in such manner or order as Lender in its
sole discretion may elect, and if Lender so elects, Trustee may sell the
personal property covered by this Deed of Trust at one or more separate sales in
any manner permitted by the Uniform Commercial Code of the State in which the
Trust Property is located, and one or more exercises of the powers herein
granted shall not extinguish or exhaust such powers, until all the Trust
Property is sold or the Note and other secured indebtedness is paid in full. If
the Note and other secured indebtedness is now or hereafter further secured by
any chattel mortgages, pledges, contracts or guaranty, assignments of lease, or
other security instruments, Lender at its option may exhaust the remedies
granted under any of said security instruments either concurrently or
independently, and in such order as Lender may determine.
(b) Upon any foreclosure sale or sales of all or any portion of the Trust
Property under the power herein granted, Lender may bid for and purchase the
Trust Property and shall be entitled to apply all or any part of the Debt as a
credit to the purchase price.
(c) In the event of a foreclosure or a sale of all or any portion of the
Trust Property under the power herein granted, the proceeds of said sale shall
be applied, in whatever order Lender in its sole discretion may decide, to the
expenses of such sale and of all proceedings in connection therewith (including,
without limitation, attorneys' fees and expenses), to fees and
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expenses of Trustee (including, without limitation, Trustee's attorneys' fees
and expenses), to insurance premiums, liens, assessments, taxes and charges
(including, without limitation, utility charges advanced by Lender), to payment
of the outstanding principal balance of the Debt, and to the accrued interest on
all of the foregoing; and the remainder, if any, shall be paid to Borrower, or
to the person or entity lawfully entitled thereto.
57. RECOURSE PROVISIONS. Subject to the qualifications below, Lender shall
not enforce the liability and obligation of Borrower or its constituent members,
partners, shareholders, directors, employees or agents or the direct or indirect
constituent members, partners, shareholders, directors, employees or agents
thereof (collectively, the "BORROWER PARTIES") or any other Person, to perform
and observe the obligations contained in this Deed of Trust, the Note or any of
the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against any of the Borrower Parties or any other Person, except
that Lender may bring a foreclosure action, an action for specific performance
or any other appropriate action or proceeding to enable Lender to enforce and
realize upon the Trust Property, the Rents or any other collateral given to
Lender pursuant to this Deed of Trust and the other Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against the Borrower Parties only to
the extent of their interest in the Trust Property, the Rents and in any other
collateral given to Lender, and Lender, by accepting this Deed of Trust, the
Note and the other Loan Documents, agrees that it shall not xxx for, seek or
demand any deficiency judgment against any of the Borrower Parties or any other
Person in any such action or proceeding under or by reason of or in connection
with this Deed of Trust, the Note or any of the other Loan Documents. The
provisions of this paragraph shall not, however, (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by this Deed of
Trust, the Note or any of the other Loan Documents; (ii) impair the right of
Lender to name any of the Borrower Parties, as a party defendant in any action
or suit for foreclosure and sale under this Deed of Trust; (iii) affect the
validity or enforceability of any guaranty made in connection with the Loan or
any rights and remedies of Lender thereunder; (iv) impair the right of Lender to
obtain the appointment of a receiver; (v) impair the enforcement of the
Assignment of Leases and Rents executed in connection herewith; or (vi)
constitute a waiver of the right of Lender to enforce the liability and
obligation of Borrower (but not against any members of Borrower or their direct
or indirect constituent members or partners or any other Person), by money
judgment or otherwise, to the extent of any loss, damage, cost, expense,
liability, claim or other obligation incurred by Lender (including attorneys'
fees and costs reasonably incurred) arising out of or in connection with the
following:
(a) fraud or intentional misrepresentation by Borrower or any Guarantor in
connection with the Loan;
(b) intentional physical waste (including, but not limited to, waste due
to gross negligence) by Borrower or any affiliate thereof; provided, however,
such physical waste shall exclude wear and tear to the Trust Property that
occurs in the ordinary course of business of the Trust Property by Borrower or
any affiliate thereof;
(c) the material breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous Substance
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Indemnification Agreement of even date herewith given by Borrower to Lender or
in this Deed of Trust concerning Environmental Laws, Hazardous Substances and
Asbestos;
(d) the removal or disposal by Borrower or any affiliate thereof of any
portion of the Trust Property after an Event of Default, unless such portion of
the Trust Property is replaced by an item of equal or greater value as
determined by Lender in its reasonable discretion;
(e) the misapplication or conversion by Borrower or any affiliate thereof
of (i) any insurance proceeds paid by reason of any loss, damage or destruction
to the Trust Property, (ii) any awards or other amounts received in connection
with the condemnation of all or a portion of the Trust Property, (iii) any Rents
following an Event of Default or (iv) any Rents paid more than one month in
advance;
(f) failure to pay charges for labor or materials or taxes or other
charges that can create liens superior to the lien of this Deed of Trust on any
portion of the Trust Property unless such taxes or other charges are being
contested in accordance herewith; and
(g) any security deposits collected by Borrower or any affiliate thereof
with respect to the Trust Property which are not delivered to Lender upon a
foreclosure of the Trust Property or action in lieu thereof, except to the
extent any such security deposits were applied in accordance with the terms and
conditions of any of the Leases prior to the occurrence of the Event of Default
that gave rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan Documents (i)
Lender shall not be deemed to have waived any right which Lender may have under
Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy
Code to file a claim for the full amount of the Debt secured by this Deed of
Trust or to require that all collateral shall continue to secure all of the Debt
owing to Lender in accordance with the Loan Documents, and (ii) the Debt shall
become fully recourse to Borrower (but not its members or other direct or
indirect constituent members or partners or any other Person) in the event that:
(A) the first full Monthly Payment Amount (as defined in the Note) under the
Note is not paid when due; (B) other than in connection with a default under
paragraph 12(a)(ii)(G) hereof, Borrower fails to maintain its status as a
Special Purpose Bankruptcy Remote Entity in accordance with the provisions of
this Deed of Trust and such failure results in the substantive consolidation of
Borrower with another Person; (C) except as otherwise permitted pursuant to the
Loan Documents, Borrower fails to obtain Lender's prior written consent to any
subordinate financing or other voluntary lien encumbering the Trust Property;
(D) except as otherwise permitted pursuant to the Loan Documents, Borrower fails
to obtain Lender's prior written consent to any assignment, transfer, or
conveyance of the Trust Property or any interest therein as and to the extent
required by this Deed of Trust; or (E) (1) a receiver (other than a receiver
appointed by Lender), liquidator or trustee of Borrower or Guarantor shall be
appointed which is not dismissed within ninety (90) days, or (2) if any petition
for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy
law, or any similar federal or state law, shall be filed by Borrower or
Guarantor, or (3) if Borrower or Guarantor files an answer consenting to, or
otherwise joining in, any involuntary petition for bankruptcy, reorganization or
arrangement pursuant to federal bankruptcy law, or any similar federal or state
law filed against it by any other Person, or is
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found pursuant to a final, unappealable order of a court of competent
jurisdiction to have solicited or caused to be solicited creditors to file any
involuntary petition for bankruptcy, reorganization or arrangement pursuant to
federal bankruptcy law, or any similar federal or state law against Borrower or
Guarantor, or (4) if Borrower or Guarantor are found, pursuant to a final
unappealable order of a court of competent jurisdiction, to have been in
collusion with creditors that initiate a bankruptcy action or proceeding against
Borrower or Guarantor.
58. CASH MANAGEMENT AGREEMENT. On or before the date hereof Borrower
covenants and agrees to enter into one or more servicing account agreements,
lockbox servicing agreements and/or cash management agreements acceptable to
Lender between Borrower, Manager, Lender and, as applicable, one or more certain
financial institutions (together with any modification, amendment, substitution
or replacement thereof, hereinafter collectively referred to as the "CASH
MANAGEMENT AGREEMENT"). All Rents shall be applied as set forth in the Cash
Management Agreement and the escrows and reserves required hereunder shall be
funded as provided therein. The Borrower shall pay all costs and expenses
required under the Cash Management Agreement. Upon the occurrence and during the
continuance of an Event of Default, Lender may apply any sums then held pursuant
to the Cash Management Agreement to the payment of the Debt in any order in its
sole discretion. Until expended or applied, amounts held pursuant to the Cash
Management Agreement shall constitute additional security for the Debt.
59. MANAGEMENT OF THE TRUST PROPERTY.
(a) Borrower shall maintain, or cause to be maintained, the Management
Agreement in full force and effect and timely perform all of Borrower's
obligations thereunder and enforce performance of all obligations of the
Manager, thereunder, and except as otherwise permitted by the Loan Documents,
not permit the termination or amendment of the Management Agreement unless the
prior written consent of Lender is first obtained, which consent shall not be
unreasonably withheld, conditioned or delayed. Borrower shall cause the Manager
to enter into an assignment and subordination of the management agreement in
form satisfactory to Lender (the "SUBORDINATION OF MANAGEMENT AGREEMENT"). The
Subordination of Management Agreement shall assign and subordinate the Manager's
interests in the Trust Property and all fees and other rights of the Manager
pursuant to the Management Agreement to the rights of Lender. Upon an Event of
Default, Borrower shall, at Lender's request made at any time while such Event
of Default continues, terminate, or cause the termination of, the Management
Agreement. Borrower shall not enter into any agreement relating to the
management of the Trust Property with any party without the express written
consent of Lender (which consent shall not be unreasonably withheld to the
extent that such manager is an affiliate of Borrower); provided, however, with
respect to a new manager such consent may also be conditioned upon Borrower
delivering evidence (i) in writing from the applicable Rating Agencies to the
effect that such new manager and management agreement will not result in a
downgrade, withdrawal or qualification of the respective ratings then in effect
for any Securities issued in connection with a Securitization, and (ii)
satisfactory to Lender (which shall include, at the request of Lender, a legal
non-consolidation opinion acceptable to Lender) that the single purpose nature
and bankruptcy remoteness of Borrower, its shareholders, partners or members, as
the case may be, after the engagement of the new manager are in accordance with
the requirements of Rating Agencies. If at any time Lender consents to the
appointment of a new manager, such new
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manager and Borrower shall, as a condition of Lender's consent, execute an
assignment and subordination of such management agreement in the form then used
by Lender.
(b) The Borrower, upon the request of Lender, shall terminate the Manager,
without penalty or fee, if at any time during the Loan (a) the Manager shall
become insolvent or a debtor in any bankruptcy or insolvency proceeding, (b)
there exists an Event of Default for which Lender has not accepted a cure
thereof or (c) the Maturity Date has occurred and the Loan has not been repaid.
At such time as the Manager may be removed pursuant to and in accordance with
the terms and provisions of the Loan Documents, a replacement manager and
management agreement acceptable to Lender and the applicable Rating Agencies in
their sole discretion shall assume management of the Property and shall receive
a property management fee not to exceed the then current market rates.
60. SERVICER. At the option of Lender, the Loan may be serviced by a
servicer and/or trustee (collectively, the "SERVICER") selected by Lender and
Lender may delegate all or any portion of its responsibilities under this Deed
of Trust and the other Loan Documents to the Servicer pursuant to a servicing or
other agreement (the "SERVICING AGREEMENT") between Lender and Servicer.
Borrower shall be responsible for any set-up fees or any other costs and
expenses relating to or arising under the Servicing Agreement; provided,
however, that such fees and expenses do not exceed one (1) basis point per
annum. Lender agrees that the Servicing Agreement shall require the Servicer to
act within the specified time periods set forth in the Loan Documents,
including, but not limited to, in providing consents or approvals as required
under the terms thereof.
61. COMPONENT NOTES. Lender, without in any way limiting Lender's other
rights hereunder, in its sole and absolute discretion, shall have the right, at
no cost or expense to Borrower, at any time prior to or in connection with a
Securitization to require Borrower to execute and deliver "component" notes
(including senior and junior notes), which notes may be paid in such order of
priority as may be designated by Lender, provided that (i) the aggregate
principal amount of such "component" notes shall equal the outstanding principal
balance of the Loan immediately prior to the creation of such "component" notes,
(ii) the weighted average interest rate of all such "component" notes shall on
the date created equal the interest rate which was applicable to the Loan
immediately prior to the creation of such "component" notes, (iii) the debt
service payments on all such "component" notes shall on the date created equal
the debt service payment which was due under the Loan immediately prior to the
creation of such component notes, (iv) the maturity date, the amortization
schedule and the other terms and provisions of each of the "component" notes
shall be identical in substance and substantially similar in form to the Note
and the other Loan Documents and (v) the original note that is replaced by such
component notes shall be delivered to Borrower. Borrower shall cooperate with
all reasonable requests of Lender in order to establish the "component" notes
and shall execute and deliver such documents in compliance with this paragraph
61 as shall reasonably be required by Lender and any Rating Agency in connection
therewith, all in form and substance reasonably satisfactory to Lender and
satisfactory to any Rating Agency, including, without limitation, the severance
of security documents if requested. In the event Borrower fails to execute and
deliver such documents to Lender within ten (10) Business Days following notice
of such request by Lender, Borrower hereby absolutely and irrevocably appoints
Lender as its true and lawful attorney, coupled with an interest, in its name
and stead to make and execute all
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documents reasonably necessary to effect such transactions, Borrower ratifying
all that such attorney shall do by virtue thereof. Upon the execution of all
such component notes created under this paragraph 61, Lender shall return or
cause to be returned to Borrower the original note that was fully substituted
with such component notes.
It shall be an Event of Default under this Deed of Trust, the Note and the
other Loan Documents if Borrower fails to comply with any of the terms,
covenants or conditions of this Section 61 after expiration of ten (10) Business
Days after notice thereof.
62. MEZZANINE LOAN OPTION. Lender shall have the right, at no cost or
expense to Borrower, at any time to divide the Loan into two parts (the
"MEZZANINE OPTION"): a mortgage loan (the "MORTGAGE LOAN") and a mezzanine loan
(the "MEZZANINE LOAN"). The principal amount of the Mortgage Loan plus the
principal amount of the Mezzanine Loan shall equal the outstanding principal
balance of the Loan immediately prior to the creation of the Mortgage Loan and
the Mezzanine Loan. In effectuating the foregoing, Lender or its designee (in
its capacity as the lender under the Mezzanine Loan, the "MEZZANINE LENDER")
will make a loan to the equity owner(s) of Borrower ("MEZZANINE BORROWER");
Mezzanine Borrower will contribute the amount of the Mezzanine Loan to Borrower
(in its capacity as Borrower under the Mortgage Loan, "MORTGAGE BORROWER") and
Mortgage Borrower will apply the contribution to pay down the Loan to its
Mortgage Loan amount, without prepayment penalty or fee. The Mortgage Loan and
the Mezzanine Loan will be on the same terms and subject to the same conditions
set forth in the Loan Documents except as follows:
Lender (in its capacity as the lender under the Mortgage Loan, the
"MORTGAGE LENDER") shall have the right to establish different interest rates
and debt service payments for the Mortgage Loan and the Mezzanine Loan and to
require the payment of the Mortgage Loan and the Mezzanine Loan in such order of
priority as may be designated by Lender; provided, that (i) the total loan
amounts for the Mortgage Loan and the Mezzanine Loan shall equal the amount of
the Loan immediately prior to the creation of the Mortgage Loan and the
Mezzanine Loan, (ii) the weighted average interest rate of the Mortgage Loan and
the Mezzanine Loan shall on the date created equal the interest rate which was
applicable to the Loan immediately prior to creation of a Mortgage Loan and a
Mezzanine Loan, (iii) the debt service payments on the Mortgage Loan note and
the Mezzanine Loan note shall on the date created equal the debt service payment
which was due under the Loan immediately prior to creation of a Mortgage Loan
and a Mezzanine Loan, and (iv) the note under the Mortgage Loan and the note
under the Mezzanine Loan shall have the same term and amortization schedule as
the Loan prior to the creation of the Mortgage Loan and the Mezzanine Loan.
Mezzanine Borrower shall be a special purpose, bankruptcy remote entity
pursuant to applicable Rating Agency criteria and shall own directly or
indirectly one hundred percent (100%) of Mortgage Borrower. The security for the
Mezzanine Loan shall be a pledge of one hundred percent (100%) of Mezzanine
Borrower's direct and indirect ownership interests in Mortgage Borrower.
Mezzanine Borrower and Mortgage Borrower shall cooperate with all
reasonable requests of Lender in order to convert the Loan into a Mortgage Loan
and a Mezzanine Loan and shall execute and deliver such documents in compliance
with this paragraph 62 as shall
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reasonably be required by Lender and any Rating Agency in connection therewith,
including, without limitation, the delivery of non-consolidation opinions and
the modification of organizational documents and loan documents. In the event
Mortgage Borrower and/or Mezzanine Borrower fail to execute and deliver such
documents to Lender within ten (10) Business Days following such request by
Lender, Mortgage Borrower and/or Mezzanine Borrower, as applicable, hereby
absolutely and irrevocably appoint Lender as their true and lawful attorney,
coupled with an interest, in their name and xxxxx to make and execute all
documents reasonably necessary to effect such transactions, Mortgage Borrower
and/or Mezzanine Borrower, as applicable, ratifying all that such attorney shall
do by virtue thereof.
It shall be an Event of Default under this Deed of Trust, the Note and the
other Loan Documents if Borrower fails to comply with any of the terms,
covenants or conditions of this Section 62 after expiration of thirty (30) days
after notice thereof.
63. MISCELLANEOUS.
(a) Any consent or approval by Lender in any single instance shall not be
deemed or construed to be Lender's consent or approval in any like matter
arising at a subsequent date, and the failure of Lender to promptly exercise any
right, power, remedy, consent or approval provided herein or at law or in equity
shall not constitute or be construed as a waiver of the same nor shall Lender be
estopped from exercising such right, power, remedy, consent or approval at a
later date. Any consent or approval requested of and granted by Lender pursuant
hereto shall be narrowly construed to be applicable only to Borrower and the
matter identified in such consent or approval and no third party shall claim any
benefit by reason thereof, and any such consent or approval shall not be deemed
to constitute Lender a venturer or partner with Borrower nor shall privity of
contract be presumed to have been established with any such third party. If
Lender deems it to be in its best interest to retain assistance of persons,
firms or corporations (including, without limitation, attorneys, title insurance
companies, appraisers, engineers and surveyors) with respect to a request for
consent or approval, Borrower shall reimburse Lender for all costs reasonably
incurred in connection with the employment of such persons, firms or
corporations.
(b) Borrower covenants and agrees that during the Term, unless Lender
shall have previously consented in writing, (a) Borrower will take no action
that would cause it to become an "employee benefit plan" as defined in 29 C.F.R.
Section 2510.3-101, or "assets of a governmental plan" subject to regulation
under the state statutes, and (b) Borrower will not sell, assign or transfer the
Trust Property, or any portion thereof or interest therein, to any transferee
that does not execute and deliver to Lender its written assumption of the
obligations of this covenant. Borrower further covenants and agrees to protect,
defend, indemnify and hold Lender harmless from and against all loss, cost,
damage and expense (including without limitation, all attorneys' fees and excise
taxes, costs of correcting any prohibited transaction or obtaining an
appropriate exemption) that Lender may incur as a result of Borrower's breach of
this covenant. This covenant and indemnity shall survive the extinguishment of
the lien of this Deed of Trust by foreclosure or action in lieu thereof;
furthermore, the foregoing indemnity shall supersede any limitations on
Borrower's liability under any of the Loan Documents.
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(c) The Loan Documents contain the entire agreement between Borrower and
Lender relating to or connected with the Loan. Any other agreements relating to
or connected with the Loan not expressly set forth in the Loan Documents are
null and void and superseded in their entirety by the provisions of the Loan
Documents.
(d) Borrower hereby covenants and agrees not to commit, or to knowingly
permit or suffer to exist any act, omission or circumstance affording any right
of forfeiture. In furtherance thereof, Borrower hereby indemnifies Lender and
agrees to defend and hold Lender harmless from and against any loss, damage or
injury by reason of the breach of the covenants and agreements or the
representations and warranties set forth in this paragraph. Without limiting the
generality of the foregoing, the filing of formal charges or the commencement of
proceedings which are not promptly dismissed against Borrower or all or any part
of the Trust Property under any federal or state law for which forfeiture of the
Trust Property or any part thereof or of any monies paid in performance of
Borrower's obligations under the Loan Documents is a likely result, shall, at
the election of Lender, constitute an Event of Default hereunder without notice
or opportunity to cure.
(e) Borrower acknowledges that, with respect to the Loan, Borrower is
relying solely on its own judgment and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Lender or any parent, subsidiary or affiliate of Lender.
Borrower acknowledges that Lender engages in the business of real estate
financings and other real estate transactions and investments which may be
viewed as adverse to or competitive with the business of the Borrower or its
Affiliates. Borrower acknowledges that it is represented by competent counsel
and has consulted counsel before executing the Loan Documents.
(f) Borrower covenants and agrees to pay Lender upon receipt of written
notice from Lender, all reasonable costs and expenses (including reasonable
attorneys' fees and disbursements) incurred by Lender in connection with (i) the
preparation, negotiation, execution and delivery of this Deed of Trust and the
other Loan Documents; (ii) Borrower's performance of and compliance with
Borrower's respective agreements and covenants contained in this Deed of Trust
and the other Loan Documents on its part to be performed or complied with after
the date hereof; (iii) Lender's performance and compliance with all agreements
and conditions contained in this Deed of Trust and the other Loan Documents on
its part to be performed or complied with after the date hereof; (iv) the
negotiation, preparation, execution and delivery of any consents, amendments,
waivers or other modifications to this Deed of Trust and the other Loan
Documents; and (v) the filing and recording fees and expenses, title insurance
fees and expenses, and other similar expenses incurred in creating and
perfecting the lien in favor of Lender pursuant to this Deed of Trust and the
other Loan Documents.
PART II
STATE SPECIFIC PROVISIONS
64. PRINCIPLES OF CONSTRUCTION. In the event of any inconsistencies
between the terms and provisions of this Part II Deed of Trust and Part I of
this Deed of Trust, the terms and provisions of this Part II shall govern and
control.
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65. ADDITIONAL REMEDIES PROVISIONS. Lender shall have the following
remedies under this Deed of Trust, in addition to any other remedies stated in
this Deed of Trust (all of which are cumulative and nonexclusive):
(a) Judicial Action. Bring an action in any court of competent
jurisdiction to foreclose this Deed of Trust or to obtain specific performance
of any covenant or agreement contained herein or in the other Loan Documents.
(b) Foreclosure By Power of Sale.
(i) Should Lender elect to foreclose by exercise of the power of
sale herein contained, Lender shall deliver to Trustee a written
declaration of default and demand for sale, and shall deposit with Trustee
this Deed of Trust and the Note and such receipts and evidence of
expenditures made and secured hereby as Trustee may require.
(ii) Upon receipt of notice from Lender, Trustee shall cause to be
recorded, published and delivered to Borrower such notice of default and
election to sell as is then required by law. Trustee shall, without demand
on Borrower, after lapse of such time as may then be required by law and
after recordation of such notice of default and after notice of sale
having been given as required by law, sell the Trust Property at the time
and place of sale fixed by it in said notice of sale, either as a whole,
or in separate lots or parcels or items and in such order as Lender may
direct Trustee so to do, at public auction to the highest bidder for cash
in lawful money of the United States payable at the time of sale. Trustee
shall deliver to such purchaser or purchasers thereof its good and
sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any
matter or fact shall be prima facie evidence of the truthfulness thereof.
Any person, including without limitation Borrower, Trustee or Lender, may
purchase at such sale, and Borrower hereby covenants to warrant and defend
the title of such purchaser or purchasers.
(iii) Subject to applicable law, Trustee may postpone the sale of
all or any portion of the Property by public announcement at the time and
place of sale, and from time to time thereafter may postpone such sale by
public announcement or subsequently noticed sale, and without further
notice make such sale at the time fixed by the last postponement, or may,
in its discretion, give a new notice of sale.
(c) Unified Sale of Real Property, Fixtures and Personal Property.
Notwithstanding any other provisions of this Deed of Trust, Lender may elect to
proceed against any or all of the real property, personal property and fixtures
constituting the Trust Property in any manner permitted under UCC Section
9501(4)(a) or any successor statute thereof; and if the Lender elects to proceed
in the manner permitted under UCC Section 9501(4)(a)(ii) or any successor
statute thereof, Lender may further elect to proceed by judicial or nonjudicial
foreclosure with respect to all or any of the real property, personal property
and fixtures covered hereby, as designated by Lender, and Lender or the Trustee
(as applicable) are hereby authorized and empowered to conduct any such sale of
any real property, personal property and fixtures in accordance with the
procedures applicable to real property. Where the Trust Property consists of
real property and personal property, any reinstatement of the Debt secured
hereby, following an
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Event of Default and an election by the Lender to accelerate the maturity of
said obligation, which is made by Borrower or any other person or entity
permitted to exercise the right of reinstatement under Section 2924c of the
California Civil Code or any successor statute, shall not invalidate, rescind or
otherwise affect any sale, disposition or other proceeding held or conducted
with respect to any personal property or fixtures prior to such reinstatement.
(d) Receiver. Lender shall be entitled, as a matter of absolute right and
without regard to the value of any security for the Debt or the solvency of any
person liable therefor, to the appointment of a receiver for the Trust Property
upon ex parte application to any court of competent jurisdiction. Borrower
waives any right to any hearing or notice of hearing prior to the appointment of
a receiver. Such receiver and his agents shall be empowered (i) to take
possession of the Trust Property and any businesses conducted by Borrower or any
other person thereon and any business assets used in connection therewith and,
if the receiver deems it appropriate, to operate the same, (ii) to exclude
Borrower and Borrower's agents, servants, and employees from the Trust Property,
(iii) to collect the rents, issues, profits, and income therefrom, (iv) to
complete any construction which may be in progress, (v) to do such maintenance
and make such repairs and alterations as the receiver deems necessary, (vi) to
use all stores of materials, supplies, and maintenance equipment on the Trust
Property and replace such items at the expense of the receivership estate, (vii)
to pay all taxes and assessments against the Trust Property, all premiums for
insurance thereon, all utility and other operating expenses, and all sums due
under any prior or subsequent encumbrance, and (viii) generally to do anything
which Borrower could legally do if Borrower were in possession of the Trust
Property. All expenses incurred by the receiver or his agents shall constitute a
part of the Debt. Any revenues collected by the receiver shall be applied first
to the expenses of the receivership, including attorneys' fees incurred by the
receiver and by Lender, together with interest thereon at the Default Rate from
the date incurred until repaid, and the balance shall be applied toward the Debt
or in such other manner as the court may direct. Unless sooner terminated with
the express consent of Lender or by court order, any such receivership will
continue until the Debt has been discharged in full, or until title to the Trust
Property has passed after foreclosure sale and all applicable periods of
redemption have expired. Lender's rights hereunder include its rights under
California Code of Civil Procedure Section 564, as such section may be amended
from time to time.
(e) UCC. Exercise any or all rights and remedies granted to a secured
party upon default under the UCC, in such order and in such manner as Lender, in
its sole discretion but subject to applicable law, may determine, including,
without limiting the generality of the foregoing: (i) the right to take
possession of the personal property or any part thereof, and to take such other
measures as Lender may deem necessary for the care, protection and preservation
of the personal property, and (ii) the right to require Borrower at its expense
to assemble the personal property and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale, disposition or other
intended action by Lender with respect to the personal property sent to Borrower
in accordance with the provisions hereof at least ten (10) Business Days prior
to such action, shall constitute commercially reasonable notice to Borrower.
(f) Action for Breach of Contract. In accordance with California Code of
Civil Procedure Section 736, as such section may be amended from time to time,
Lender may bring an action for breach of contract against Borrower for breach of
any "environmental
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provision" (as such term is defined in such section) made by Borrower herein or
in any other Loan Document, for the recovery of damages and/or for the
enforcement of the environmental provision.
(g) Waiver of Security. In accordance with California Code of Civil
Procedure Section 726.5, as such Section may be amended from time to time,
Lender may waive the security of this Deed of Trust as to any parcel of the
Trust Property that is "environmentally impaired" or is an "affected parcel" (as
such terms are defined in such Section), and as to any personal property
attached to such parcel, and thereafter may exercise against Borrower, to the
extent permitted by such Section 726.5 and subject to paragraph 57 hereof, the
rights and remedies of an unsecured creditor, including reduction of Lender's
claim against Borrower to judgment, and any other rights and remedies permitted
by law. In the event the Lender elects, in accordance with California Code of
Civil Procedure Section 726.5, to waive all or part of the security of this Deed
of Trust and proceed against Borrower on an unsecured basis, the valuation of
the real property, the determination of the environmentally impaired status of
such security and any cause of action for a money judgment shall, at the request
of Lender, be referred to a referee in accordance with California Code of Civil
Procedure Sections 638 et seq. Such referee shall be an independent and
unaffiliated M.A.I. appraiser selected by Lender and approved by Borrower, which
approval shall not be unreasonably withheld or delayed. The decision of such
referee shall be binding upon both Borrower and Lender, and judgment upon the
award rendered by such referee shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645. Borrower shall pay all reasonable costs and expenses
incurred by Lender in connection with any proceeding under California Code of
Civil Procedure Section 726.5, as such section may be amended from time to time.
(h) Other. Exercise all other rights, remedies and recourses granted under
the Loan Documents or otherwise available at law or in equity.
(i) Separate Sales. The Trust Property may be sold in one or more parcels
and in such manner and order as Lender, in its sole discretion, may direct
Trustee so to do. A sale of less than the whole of the Trust Property or any
defective or irregular sale made hereunder shall not exhaust the power of sale
provided for herein, and subsequent sales may be made hereunder until all
obligations secured hereby have been satisfied, or the entire Trust Property
sold, without defect or irregularity.
(j) Credit Bids. At any sale or disposition of any or all of the Trust
Property held or made under the power of sale granted in this Deed of Trust or
in connection with judicial proceedings, or by virtue of a judgment and decree
of foreclosure and sale, if Lender is the purchaser at such sale or disposition
Lender shall have the right to offset its bid at such sale to the extent of the
Debt, including the portion of the Debt attributable to the expenses of sale,
costs of any action and other sums for which Borrower is obligated to pay or
reimburse Lender or Trustee under this Deed of Trust.
66. DEED OF TRUST NOT TO SECURE ENVIRONMENTAL COVENANTS, OBLIGATIONS, AND
INDEMNITIES OR GUARANTY OBLIGATIONS. Notwithstanding anything in this Deed of
Trust to the contrary, this Deed of Trust is not intended to, and by the express
provisions hereof, does not
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secure (a) any environmental (i) covenant, (ii) obligation or (iii) indemnity of
Borrower made or provided herein, or in the Environmental and Hazardous
Substance Indemnification Agreement executed simultaneously herewith, or (b) the
obligations of any (i) Guarantor of any Debt or (ii) third party indemnitor
under the Environmental and Hazardous Substance Indemnification Agreement or
under any other indemnity.
67. ADDITIONAL WAIVERS.
(a) Borrower has read and hereby approves the Note, this Deed of Trust,
the other Loan Documents and all other agreements and documents relating
thereto. Borrower acknowledges that it has been represented by counsel of its
choice to review this Deed of Trust, the Note, the other Loan Documents and all
other documents relating thereto and said counsel has explained and Borrower
understands the provisions thereof, or that Borrower has voluntarily declined to
retain such counsel.
(b) Borrower hereby expressly waives diligence, demand, presentment,
protest and notice of every kind and nature whatsoever (unless as otherwise
required under this Deed of Trust or the other Loan Documents) and waives any
right to require Lender to enforce any remedy against any Guarantor, endorser or
other person whatsoever prior to the exercise of its rights and remedies
hereunder or otherwise. Borrower waives any right to require Lender to: (i)
proceed or exhaust any collateral security given or held by Lender in connection
with the Debt; (ii) give notice of the terms, time and place of any public or
private sale of any real or personal property security for the Debt or other
guaranty of the Debt; or (iii) pursue any other remedy in Lender's power
whatsoever.
(c) Until all Debt shall have been paid in full, Borrower: (i) shall not
have any right of subrogation to any of the rights of Lender against any
Guarantor, maker or endorser; (ii) waives any right to enforce any remedy which
Lender now has or may hereafter have against any other Guarantor, maker or
endorser; and (iii) waives any benefit of, and any other right to participate
in, any collateral security for the Debt or any guaranty of the Debt now or
hereafter held by Lender.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, Borrower has executed this instrument the day and year
first above written.
BORROWER:
LIBRARY SQUARE ASSOCIATES, LLC, a Delaware limited
liability company
By: Bunker Hill Senior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: Bunker Hill Junior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: New BHE, LLC,
a Delaware limited liability company,
its sole member
By: Xxxxxxx Properties, L.P.,
a Maryland limited partnership,
its sole member
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its sole general partner
By: _____________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ______________ )
On _________, ___, 2003, before me, _____________________________, a
notary public for said state, personally appeared ______________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
Witness my hand and official seal.
Signature:__________________________________
My commission expires:_______________________
[Notary Seal]
EXHIBIT A
LEGAL DESCRIPTION
EXH. A-1
EXHIBIT B
RESERVED
EXH. B-1
EXHIBIT C
REQUIRED REPAIRS
EXH. C-1
EXHIBIT D
OUTSTANDING TENANT ALLOWANCE OBLIGATIONS
EXH. D-1
CASH MANAGEMENT AGREEMENT
(this "AGREEMENT"),
dated as of June ___, 2003
among
LIBRARY SQUARE ASSOCIATES, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
("BORROWER"),
XXXXXXX PROPERTIES, L.P.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
(the "MANAGER")
and
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
(together with its successors and
assigns, the "LENDER")
and
WACHOVIA BANK, NATIONAL ASSOCIATION
8739 Research Drive, URP4
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
(the "DEPOSIT BANK")
WHEREAS, pursuant to that certain Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Fixture Filing, dated as of the date hereof
(the "DEED OF TRUST"), made by Borrower, as trustor for the benefit of Lender,
as beneficiary, the Lender has provided financing (the "LOAN") to the Borrower
secured by the property owned by the Borrower and described in the Deed of Trust
(collectively, the "PROPERTY"); and
WHEREAS, the Lender shall deliver to the bank (the "CLEARING BANK")
maintaining the operating account of the Borrower (the "CLEARING ACCOUNT") a
Clearing Bank Instruction Letter in the form attached as Exhibit A hereto
(together with any modifications, amendments or replacements thereof, the
"INSTRUCTION LETTER"), which provides that all Rents (as defined in the Deed of
Trust) be deposited in such Clearing Account upon delivery of the Instruction
Letter, and swept periodically into the accounts established hereunder.
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS.
(a) As used herein the following capitalized terms shall have the
respective meanings set forth below:
"ACCOUNT PROCEEDS" shall mean any and all Rents and other revenue in
connection with the Property that is deposited by any Clearing Bank, the
Borrower, the Manager or otherwise into the Cash Collateral Account from time to
time.
"BORROWER REMAINDER ACCOUNT" shall mean the account of Borrower to
which monies in the Borrower Remainder Sub-account are allocated in accordance
with the terms hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
day on which commercial banks in New York, New York or the City in which the
Deposit Bank is located are required or permitted by law to be closed.
"CASH COLLATERAL ACCOUNT" shall have the meaning ascribed to such term
in Section 2 hereof.
"CERTIFICATES" means the securities issued in connection with a
Securitization of the Loan.
"CLEARING ACCOUNT" shall have the meaning given such term in the
Recitals.
"CLEARING BANK" shall have the meaning given such term in the Recitals.
"COLLATERAL" shall mean each of the items pledged by Borrower in
Section 6(c) hereof.
"COLLECTION PERIOD" with respect to any Payment Date, shall mean the
period of days from the Payment Date occurring during the month immediately
preceding the Payment Date to the day immediately preceding such Payment Date.
With respect to the first Payment Date, the Collection Period shall commence on
and include the date hereof and end on and include the day immediately preceding
such first Payment Date.
"DEED OF TRUST" shall have the meaning given such term in the Recitals.
"DEPOSIT BANK" shall mean Wachovia Bank, National Association or such
other bank or banks selected by the Lender to maintain the Cash Collateral
Account.
"ELIGIBLE ACCOUNT" either (i) an account or accounts maintained with an
Eligible Bank or (ii) a Trust Account. Eligible Accounts shall bear interest.
"ELIGIBLE BANK" shall mean a bank that (i) satisfies the Rating
Criteria and (ii) insures deposits held by such bank through the Federal Deposit
Insurance Corporation.
"INSTRUCTION LETTER" shall have the meaning ascribed to such term in
the Recitals.
"LOAN" shall have the meaning ascribed to such term in the Recitals.
"LOAN DOCUMENTS" shall have the meaning set forth for such term in the
Deed of Trust.
"LOAN SATISFACTION EVENT" shall mean the satisfaction in full of the
Obligations.
"LOAN SUB-ACCOUNTS" shall have the meaning ascribed to such term in
Section 2(c).
"MONTHLY PAYMENT AMOUNT" shall have the meaning given to such term in
the Note.
"NOTE" shall mean that certain Deed of Trust Note of even date
herewith, made by the Borrower in favor of Lender, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.
"OBLIGATIONS" shall mean any and all debt, liabilities and obligations
of the Borrower to the Lender pursuant to or in connection with the Loan,
whether now or hereafter existing, including without limiting the generality of
the foregoing, the indebtedness evidenced by the Note, all interest accruing
thereon, and any and all debt, liabilities and obligations of the Borrower under
the Loan Documents.
"OPERATING EXPENSES" shall mean, collectively, Cash Expenses (as
defined in the Note) and Extraordinary Expenses (as defined in the Note).
"PAYMENT DATE" shall have the meaning given to such term in the Note.
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"PERMITTED INVESTMENTS" shall have the meaning given to such term in
the Deed of Trust.
"PERSON" shall mean any individual, sole proprietorship, partnership,
limited liability partnership, joint venture, trust, unincorporated
organization, association, corporation, limited liability company, institution,
entity, party or government (whether territorial, national, federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).
"PROPERTY" shall have the meaning ascribed to such term in the
Recitals.
"RATING AGENCIES" shall mean (i) any nationally-recognized statistical
rating organizations that provide a rating on any Certificates on the date of
issuance of the Certificates or (ii) prior to the issuance of the Certificates,
Moody's (as defined in the Deed of Trust), S&P (as defined in the Deed of Trust)
and any other nationally-recognized statistical rating organizations that have
been designated by the Lender in its sole discretion.
"RATING CRITERIA" with respect to any Person, shall mean that (i) the
short-term unsecured debt obligations of such Person are rated at least "A-1" by
S&P, "P-1" by Moody's and, if rated by another Rating Agency, are rated in an
equivalent category by such other Rating Agency, if deposits are held by such
person for a period of less than 30 days, or (ii) the long-term unsecured debt
obligations of such Person are rated at least "AA-" by S&P, "Aa2" by Moody's
and, if rated by another Rating Agency, are rated in an equivalent category by
such other Rating Agency, if deposits are held by such person for a period of 30
days or more.
"RECONCILIATION DATE" shall mean, as applicable, January 31st, April
30th, July 31st, and October 31st of each year that the Loan remains
outstanding.
"RENTS" shall have the meaning ascribed to such term in the Deed of
Trust.
"SECURITIZATION" shall have the meaning given to such term in the Deed
of Trust.
"SERVICER" shall mean a servicer or account administrator of the Lender
designated by and acting for the benefit of the Lender.
"TRUST ACCOUNT" shall mean a segregated trust account maintained by a
corporate trust department of a federal depository institution or a state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit similar to Title 12 of the Code of Federal Regulations Section
9.10(B) which has corporate trust powers and is acting in its fiduciary
capacity.
(b) The meanings given to capitalized terms defined herein shall be
equally applicable in both singular and plural forms of such terms.
(c) Capitalized terms used and not defined herein shall have the
respective meanings given to such terms in the Deed of Trust.
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SECTION 2. ESTABLISHMENT OF THE CASH COLLATERAL ACCOUNT.
(a) The Lender has established and will maintain while the Loan is
outstanding a cash collateral account (which account shall be an Eligible
Account or may be a book-entry sub-account of an Eligible Account) at the
Deposit Bank (the "CASH COLLATERAL ACCOUNT") which shall be entitled "Greenwich
Capital Financial Products, Inc. as Beneficiary of Library Square Associates,
LLC Cash Collateral Account". In connection with a Securitization, the Lender
shall have the right to cause Deposit Bank to entitle the Cash Collateral
Account with such other designation as the Lender may select in its reasonable
discretion to reflect such assignment or transfer. The Lender shall, or shall
cause the Servicer to, cause the Deposit Bank to deposit into the Cash
Collateral Account, all Rents and other amounts transferred to the Deposit Bank
from the Clearing Bank.
(b) The Cash Collateral Account shall be an interest bearing Eligible
Account. The interest rate with respect to funds held in the Cash Collateral
Account shall be the rate for such deposits as is customarily paid by the
Deposit Bank. All interest income or other earnings on funds, if any, remaining
in the Cash Collateral Account shall be for the benefit of the Borrower and
credited to, and become a part of, the Cash Collateral Account. The Cash
Collateral Account shall be assigned the federal tax identification number of
the Borrower, which number is 00-0000000. Borrower shall provide Lender or the
Deposit Bank, at any time upon request of Lender, with a Form W-8 or W-9 to
evidence Borrower is not subject to any back-up withholding under the United
States Internal Revenue Code. Prior to application in accordance with the terms
hereof, all amounts in the Cash Collateral Account shall remain an asset of
Borrower, subject to the lien and security interest granted Lender hereunder,
and subject to all of the terms and conditions of this Agreement and the other
Loan Documents.
(c) The following sub-accounts (collectively, the "LOAN SUB-ACCOUNTS")
of the Cash Collateral Account shall be maintained on a ledger-entry basis:
(i) "US Bancorp TI/LC Escrow Sub-account";
(ii) "Deferred Maintenance Escrow Sub-account";
(iii) "Outstanding Tenant Allowance Escrow Sub-account";
(iv) "Outstanding Xxxxxx & Xxxxxxx Obligations Escrow
Sub-account";
(v) "Tax and Insurance Impound Fund Sub-account";
(vi) "Monthly Debt Service Sub-account";
(vii) "Replacement/Leasing Escrow Sub-account";
(viii) "Operating Expense Sub-account";
(ix) "Borrower Remainder Sub-account";
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(x) "Junior Management Fee Subaccount";
(xi) "Casualty and Condemnation Proceeds Sub-account"; and
(xii) "Extraordinary Receipts Sub-account".
Amounts allocated to the Loan Sub-accounts shall be disbursed in
accordance with the terms of this Agreement and the Deed of Trust.
(d) (i) The Lender shall deliver one or more executed Instruction
Letters to the Clearing Bank. If the Clearing Bank shall request any changes,
modifications or supplements to any Instruction Letter to conform to the
Clearing Bank's customary practice or requirements, as the same may change from
time to time, then if such changes, modifications or supplements are reasonably
acceptable to Lender, Borrower shall execute and deliver to Lender such
instruments as the Clearing Bank shall reasonably request to effectuate such
modifications or changes. In the event the Borrower fails to execute such
Instruction Letter as provided above within three (3) Business Days after
receipt of written request for such execution, Borrower hereby appoints the
Lender as its attorney-in-fact with full authority to enter into replacement
Instruction Letter(s) and to execute on behalf of the Borrower any new modified
Instruction Letter acceptable to the proposed Clearing Bank. All costs and
expenses incurred by the Lender to negotiate and execute any modified
Instruction Letter shall be paid by the Borrower.
(ii) If the Clearing Bank fails to perform its obligations as set forth
in the Instruction Letter, then, upon the request of Lender, within ten (10)
Business Days, the Borrower will establish a new Eligible Account (which shall
become the Clearing Account) at a bank selected by the Borrower and reasonably
acceptable to Lender and shall cause all funds in the existing Clearing Account
to be transferred to the new Clearing Account and any future Rents from the
Property to be deposited in such new Clearing Account.
(iii) In the event that Borrower requests that a new Clearing Account
be established (which new Clearing Account shall be an Eligible Account), and
Lender consents to such change, which consent shall not be unreasonably withheld
or delayed, Borrower shall, prior to the establishment of such account, execute
a replacement Instruction Letter to cover the new account, which replacement
Instruction Letter shall be in the form of the Instruction Letter annexed hereto
as Exhibit A with such changes thereto as may be requested by such new Clearing
Bank in order to conform such Instruction Letter with such new bank's customary
practice. The existing Clearing Account shall remain in effect until Borrower
has executed a replacement Instruction Letter for the new Clearing Account and
the new Clearing Bank has acknowledged receipt of such replacement Instruction
Letter and has agreed to comply with the instructions contained therein by
executing an Acknowledgment in the form of Schedule I attached to Exhibit A
attached hereto, and Borrower may rescind its request for a new Clearing Account
in the event Borrower does not approve of any changes to the form of the
Instruction Letter annexed hereto as Exhibit A requested by such new Clearing
Bank.
(e) The Lender or the Servicer shall, at the direction of Borrower,
direct the Deposit Bank to invest amounts allocated to the Cash Collateral
Account in Permitted Investments selected by the Borrower. All earnings on such
Permitted Investments on funds
-5-
allocated to the Cash Collateral Account shall be (a) added to and become part
of the Cash Collateral Account, (b) taxed as income of the Borrower, (c) for the
benefit of the Borrower, subject to Lender's rights pursuant to this Agreement,
and (d) remitted to Borrower jointly once per calendar quarter, provided that no
Event of Default has occurred and is continuing, to the extent not already
disbursed or applied in accordance with this Agreement. Borrower shall have
liability for any loss in investments of funds that are invested in Permitted
Investments and no such loss or liability shall affect Borrower's obligations to
make all payments and deposits required to be made by Borrower under the Loan
Documents. Notwithstanding anything to the contrary in this Agreement or in any
of the other Loan Documents, upon the occurrence and during the continuance of
an Event of Default, Borrower shall have no right to select Permitted
Investments.
(f) It is the intention of the parties hereto that the entire amounts
deposited in the Cash Collateral Account (or as much thereof as the Lender may
reasonably arrange to invest) may be invested in Permitted Investments selected
by the Borrower, and, in such event, that the Cash Collateral Account shall be a
so-called "zero balance" account (unless it is a Trust Account). All funds in
the Cash Collateral Account that are invested in a Permitted Investment are
deemed to be held in the Cash Collateral Account for all purposes of the Deed of
Trust and the other Loan Documents.
(g) In order to further secure the performance by the Borrower of the
Obligations and as a material inducement for the Lender to make the Loan in
accordance with the terms of the Loan Documents, the Borrower hereby (i)
requests that the Cash Collateral Account be established on its behalf at the
Deposit Bank in the name set forth above and (ii) acknowledges that (A) the Cash
Collateral Account will be subject to the sole dominion, control and discretion
of the Lender (which may be exercised through the Servicer), subject to the
terms, covenants and conditions of this Agreement and the Deed of Trust, (B) the
Lender shall have the sole right to make withdrawals or transfers of funds from
the Cash Collateral Account and (C) neither the Borrower nor any other Person
claiming on behalf of or through the Borrower shall have any right or authority,
whether express or implied, to make use of, or withdraw any funds, investments
or other properties from, the Cash Collateral Account, or to give any
instructions with respect to the Cash Collateral Account.
(h) Deposit Bank will send a monthly report to Borrower (in a manner
consistent with Deposit Bank's standard practice) by regular U.S. mail at the
Borrower's address specified above, which monthly report shall specify the
balance of, and credits and charges to, the Cash Collateral Account and each
Sub-account thereof for each calendar day of the previous month. Deposit Bank
will send to the Lender (in a manner consistent with Deposit Bank's standard
practices), by regular U.S. mail at the Lender's address specified, copies of
all correspondence, notices, account statements and other information (but not
canceled checks) which Deposit Bank is obligated to send to Borrower. Deposit
Bank also agrees to provide to each of Borrower and the Lender (as a service
under this Agreement) copies of account statements and other account
information, including account balances, by telephone and by computer
communication, to the extent practicable and as shall have been requested by
Borrower or by Lender. Borrower shall be deemed at all times to have consented
to Deposit Bank's release of such account information to Lender. Deposit Bank's
liability for failure to comply with this Section shall not exceed the cost of
providing such information.
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SECTION 3. ALLOCATION AND DISBURSEMENT OF FUNDS IN THE CASH COLLATERAL ACCOUNT.
(a) With respect to each Collection Period, the Lender or the Servicer
shall allocate, and shall cause the Deposit Bank to allocate, from time to time
during such Collection Period the amounts deposited in the Cash Collateral
Account in the order and priority set forth in paragraph 10 of the Note, such
allocation to be done promptly upon receipt of any deposits. Amounts deposited
in the Deferred Maintenance Fund pursuant to paragraph 6(b) of the Deed of Trust
shall be allocated to the Deferred Maintenance Escrow Sub-account. Amounts
deposited in the US Bancorp Escrow Fund pursuant to paragraph 6(c) of the Deed
of Trust shall be allocated to the US Bancorp TI/LC Escrow Sub-account. Amounts
deposited in the Outstanding Tenant Allowance Escrow Fund pursuant to paragraph
6(d) of the Deed of Trust shall be allocated to the Outstanding Tenant Allowance
Escrow Sub-account. Amounts deposited in the Tax and Insurance Impound Fund
pursuant to paragraph 6(a) of the Deed of Trust shall be allocated to the Tax
and Insurances Impound Fund Sub-account. Amounts deposited in the
Replacement/Leasing Escrow Fund pursuant to paragraph 6(f) of the Deed of Trust
shall be allocated to the Replacement/Leasing Escrow Sub-account.
(b) Each Collection Period, the Lender or the Servicer shall disburse
or cause the Deposit Bank to disburse:
(i) Amounts allocated to the Tax and Insurance Impound Fund
Sub-account as set forth in paragraph 6(a) of the Deed of Trust;
(ii) Amounts allocated to the Deferred Maintenance Escrow
Sub-account as set forth in paragraph 6(b) of the Deed of Trust;
(iii) Amounts allocated to the US Bancorp TI/LC Escrow
Sub-account as set forth in paragraph 6(c) of the Deed of Trust;
(iv) Amounts allocated to the Outstanding Tenant Allowance
Escrow Sub-account as set forth in paragraph 6(d) of the Deed of Trust;
(v) Amounts allocated to the Monthly Debt Service Sub-account
to the Lender on the related Payment Date;
(vi) Amounts allocated to the Replacement/Leasing Escrow
Sub-account as set forth in paragraph 6(f) of the Deed of Trust;
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(vii) Amounts allocated to the Operating Expense Sub-account
on each Business Day to the following bank account (the "OPERATING ACCOUNT")
(the amount to be sent to such Operating Account to be determined in accordance
with paragraph 10(a)(v)-(vii) of the Note and pursuant to the Approved Annual
Budget for Borrower as such Approved Annual Budget may be adjusted in accordance
with paragraph 10(d) of the Note):
Bank: U.S. Bank
ABA #: 000-000-000
Attention: Xxx Xxxxxxxxx
Fax: (000) 000-0000
Account: Library Square Associates, LLC, Operating Acct BMO
Account #: 153454148260
(viii) Amounts allocated to the Junior Management Fee
Sub-account to the following bank account:
Bank: Bank of the West
ABA #: 000-000-000
Attention: Xxx Xxxxxx
Fax: (000) 000-0000
Account: Xxxxxxx Properties, L.P.
Account #: 729-003749
(ix) Amounts allocated to the Borrower Remainder Sub-account
to the following bank account:
Bank: U.S. Bank
ABA #: 000-000-000
Attention: Xxx Xxxxxxxxx
Fax: (000) 000-0000
Account: Library Square Associates, LLC, Borrower Remainder
Account #: 153454148278
SECTION 4. FEES.
(a) The Borrower agrees to pay the fees of the Clearing Bank and
Deposit Bank in accordance with the customary fees charged by the Clearing Bank
and Deposit Bank for the services described herein, as such fees are established
from time to time.
(b) Upon the request of the Borrower, the Clearing Bank and Deposit
Bank shall include their fees and the payment status thereof in an account
analysis statement.
SECTION 5. TERMINATION.
(a) The Lender may replace the Deposit Bank with a new Deposit Bank
upon five days' notice to the Borrower. The Borrower hereby agrees that it shall
take all reasonable action necessary to facilitate the transfer of the
respective obligations, duties and rights of the Deposit Bank to the successor
thereof selected by the Lender in its sole discretion.
-8-
(b) The Lender shall terminate this Agreement upon the occurrence of a
Loan Satisfaction Event and return to Borrower all monies then held in the Cash
Collateral Account promptly after liquidating all Permitted Investments.
(c) This Agreement may be terminated by Deposit Bank at any time on not
less than thirty (30) days' prior written notice to each of the Borrower and the
Lender. Deposit Bank's rights to receive reimbursement from the Borrower under
Section 4 of this Agreement and Borrower's indemnification of Deposit Bank under
Section 14 of this Agreement shall survive any termination of this Agreement.
Upon termination of this Agreement, all funds remaining in the Cash Collateral
Account shall be forwarded by Deposit Bank directly to Lender, unless Deposit
Bank shall have received written instruction from the Lender prior to the
expiration of the thirty (30) day period set forth above directing Deposit Bank
to send such funds to the Borrower or another depository institution approved in
writing by the Lender and the Borrower.
SECTION 6. MATTERS CONCERNING THE BORROWER.
(a) Borrower hereby represents, warrants and covenants to Lender that:
(i) Intentionally deleted.
(ii) The Borrower or the Manager shall, within three (3)
Business Days of the date hereof or within three (3) Business Days of the date
such accounts are opened, whichever is later, instruct all Persons that
presently or hereafter maintain open accounts with Borrower or the Manager, or
with whom the Manager or the Borrower presently or hereafter does business on an
"accounts receivable" basis with respect to the Property, to deliver all
payments due under such accounts to the Clearing Bank at a lock box address at
the Clearing Bank (the "LOCK BOX ADDRESS") in the form of checks or equivalent
instruments for the payment of money. Neither the Borrower nor the Manager shall
direct any such Person to make payments due under such accounts in any other
manner.
(iii) Pursuant to an instruction letter in the form of Exhibit
B hereto (a "LESSEE PAYMENT DIRECTION LETTER"), the Borrower or the Manager
shall, within three (3) Business Days of the date hereof, notify and advise, or
will, for Leases executed after the date hereof, promptly notify and advise,
each tenant of the Property (collectively, the "TENANTS") under each lease with
respect to the Property (whether such lease is presently effective or executed
after the date hereof), to send directly to the Lockbox Address promptly when
due all payments, whether in the form of checks, cash, drafts, money orders or
any other type of payment whatsoever of rent or any other item payable to the
Borrower as landlord under such Leases. The foregoing requirements need not be
satisfied with respect to any Lease executed after the date hereof to the extent
the terms and conditions of the Lessee Payment Direction Letter are incorporated
in the applicable Lease.
(iv) If notwithstanding the provisions of this Section 6(a),
Borrower or Manager (or any affiliate thereof) receives any Rents then (x)
Borrower or Manager (or such affiliate) shall be deemed to hold such Rents in
trust for Lender and (y) Borrower or Manager
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shall deposit with the Clearing Bank within one (1) Business Day of receipt all
such Rents received by Borrower or Manager (or such affiliate).
(b) Upon request of Lender, Borrower shall deliver to Lender such
evidence as Lender may reasonably request to evidence that Borrower is complying
with the provisions of this Section 6(a). Without the prior written consent of
the Lender, neither the Borrower nor the Manager shall (i) terminate, amend,
revoke or modify any Lessee Payment Direction Letter in any manner or (ii)
direct or cause any Tenant to pay any amount in any manner other than as
provided specifically in the Lessee Payment Direction Letter.
(c) The Borrower hereby pledges, transfers and assigns to the Lender,
and grants to the Lender, as additional security for the payment and performance
of the Obligations, a continuing perfected first priority security interest in
and to, and a first lien upon, (i) the Cash Collateral Account, the Clearing
Account, the Operating Account and all of the Borrower's right, title and
interest in and to all cash, property or rights transferred to or deposited
therein from time to time, (ii) all earnings, investments and securities held in
the Cash Collateral Account in accordance with this Agreement and (iii) any and
all proceeds of the foregoing. This Agreement and the pledge, assignment and
grant of security interest made hereby shall secure payment of all amounts
payable by the Borrower to the Lender under the Note and the other Obligations.
The Borrower acknowledges that the Servicer, Clearing Bank and Deposit Bank are
acting as the agent of, and at the direction of, the Lender in connection with
the subject matter of this Agreement. The Borrower further agrees to execute,
acknowledge, deliver, file or do at its sole cost and expense, all other acts,
assignments, notices, agreements or other instruments as the Lender may
reasonably require in order to effectuate, assure, convey, secure, assign,
transfer and convey unto the Lender any of the rights granted by this Agreement
and to more fully perfect and protect any lien or security interest granted
hereby.
(d) In its sole discretion, the Borrower may, from time to time deposit
amounts into the Cash Collateral Account in respect of any Loan Sub-account
and/or the Operating Account from sources of the Borrower other than those
received by the Clearing Bank with respect to the then-current Collection
Period; provided, that if the Borrower deposits such amounts, the amounts
deposited shall be subject to all of the terms hereof as if not separately
deposited by the Borrower, and may not be withdrawn except as otherwise provided
for in this Agreement. Nothing contained herein shall impair or otherwise limit
Borrower's obligations to timely make the payments (including, without
limitation, interest and principal) required by the Note, the Deed of Trust and
the other Loan Documents, it being understood that such payments shall be so
timely made in accordance with the Loan Documents regardless of the amounts on
deposit in the Clearing Account or Cash Collateral Account.
(e) The Borrower hereby covenants and agrees that amounts allocated to
the Operating Expense Sub-account with respect to the payment of operating
expenses or capital expenditures shall be used only for payment of checks made
by the Borrower for the payment of operating expenses or capital expenditures
incurred in the ownership and operation of the Property and reasonably approved
by the Lender or permitted by the Loan Documents. In any month, Borrower shall
be entitled to receive and use for Cash Expenses an amount in excess of the
budgeted amount ("BUDGET VARIANCES") for such month set forth in the Approved
Annual Budget by requesting the same in writing not less than three (3) Business
Days prior to the first
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day of the Collection Period during which such Budget Variances are to be
disbursed so long as the aggregate amount of all such Budget Variances so
requested by Borrower in any month does not exceed an amount that, together with
any Budget Variances previously disbursed to Borrower in such calendar year, is
greater than five percent (5%) of the total budgeted expenditures (excluding any
contingency line item) for such calendar year as set forth in the then current
Approved Annual Budget.
(f) On or before the last day of each calendar quarter, Borrower shall
prepare and deliver to Lender a financial statement (the "ACTUAL EXPENDITURE
STATEMENT") in form and substance satisfactory to Lender in all material
respects setting forth all amounts expended for Operating Expenses during the
immediately preceding calendar quarter, including showing variances from budget
and setting forth a short explanation of any variance in excess of ten percent
(10%) of the budget line item in question and identifying any payment made to an
affiliate and the reasons therefor. Each Actual Expenditure Statement shall be
certified by an officer of Borrower or the REIT as being true, correct and
complete in all material respects and include a certification that all amounts
transferred to the Operating Account pursuant to this Agreement were expended
for Operating Expenses substantially in accordance with this Agreement or shall
be credited against or returned to the Cash Collateral Account as provided
below. Borrower shall promptly deliver to Lender such further documentation
(including, without limitation, invoices, canceled checks or copies of
contracts) and information as Lender may reasonably request regarding any
payments described in the Actual Expenditure Statement. On each Reconciliation
Date during the term of the Loan, if the Actual Expenditure Statements for the
immediately preceding calendar quarter indicate that the Operating Expenses
actually incurred and paid during such calendar quarter, plus the amount
necessary to maintain the Operating Account Balance Floor (as hereinafter
defined) in the Operating Account as of the last day of such calendar quarter,
were less than the amount disbursed to the Operating Account during such
calendar quarter (the positive difference in the amount disbursed to the
Operating Account and the amount actually spent on Operating Expenses is
hereafter referred to as the "EXPENSE SURPLUS"), then the funds allocated for
Operating Expenses to be disbursed to the Operating Expense Sub-account on the
next occurring Payment Date in accordance with the Approved Annual Budget (as
defined in the Note) (the "ALLOCATED DISBURSEMENT AMOUNT") shall be reduced by
an amount equal to the Expense Surplus; provided, further, that if the Allocated
Disbursement Amount is less than the Expense Surplus, then Borrower, prior to
the next occurring Payment Date, shall deposit into the Cash Collateral Account
the amount by which the Expense Surplus exceeds the Allocated Disbursement
Amount (the "ALLOCATION SURPLUS"). If Borrower shall fail to, within the
described required time periods, (i) so deposit any such Allocation Surplus into
the Cash Collateral Account, or (ii) provide the Actual Expenditure Statements
required by the terms hereof or (iii) after written request of Lender, provide
evidence of expenditures or (iv) provide to Lender the items described in
paragraph 18(b) of the Deed of Trust in accordance with the terms of such
paragraph 18(b) and (in the case of any of (i), (ii), (iii) or (iv)) such
failure continues for ten (10) or more days after notice of such failure, then
in addition to any other remedies which Lender may have with respect thereto,
Lender may elect not to fund the Operating Expense Sub-account from monies in
the Cash Collateral Account or Lender may continue to hold the funds in the
Operating Expense Sub-account until such failure is cured.
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SECTION 7. CERTAIN MATTERS REGARDING THE LENDER.
(a) The parties agree that the Deposit Bank shall pay over to the
Lender all amounts deposited in any account maintained hereunder on demand,
provided, that in making such demand, the Lender gives notice to Borrower of
such demand, in writing, signed by the Lender or an authorized agent thereof,
and that an Event of Default under the Deed of Trust has occurred and is
continuing. Notwithstanding the foregoing, the Borrower shall not be deemed to
have waived any rights the Borrower may have against the Lender if it is
determined that the Lender acted improperly.
(b) Upon the occurrence and during the continuance of an Event of
Default, Lender may exercise in respect of the Collateral all rights and
remedies available to Lender hereunder or under the other Loan Documents or
otherwise available at law or in equity. Without limiting the generality of the
foregoing or the provisions of paragraph (a) above, upon the occurrence and
during the continuance of an Event of Default, Borrower acknowledges and agrees
that it will have no further right to request or otherwise require Lender to
disburse funds from the Clearing Account or the Cash Collateral Account in
accordance with the terms of this Agreement, it being agreed that Lender may, at
its option, (i) direct the Deposit Bank to continue to hold the funds in the
Cash Collateral Account and/or (ii) continue from time to time to apply all or
any portion of the funds held in the Cash Collateral Account to any payment(s)
which such funds could have been applied to prior to such Event of Default (or
to pay Cash Expenses, Net Capital Expenditures (as defined in the Note) and
Extraordinary Expenses directly), to the extent and in such order and manner as
Lender in its sole discretion may determine, and/or (iii) direct that the
Deposit Bank or Clearing Bank from time to time disburse all or any portion of
the funds held in the Cash Collateral Account or other Collateral then or
thereafter held by the Deposit Bank or Clearing Bank, as applicable, to Lender,
in which event Lender may apply the funds held in the Cash Collateral Account or
other Collateral to the Obligations in any order and in such manner as Lender
may determine in its sole discretion.
(c) Upon the occurrence and during the continuance of any Event of
Default, Lender may, at any time or from time to time, subject to the
requirements of applicable law, collect, appropriate, redeem, realize upon or
otherwise enforce its rights with respect to the Collateral, and without the
need to institute any legal action, make demand, exhaust any other remedies or
otherwise proceed to enforce its rights, provided that Lender gives notice to
Borrower, in writing, that an Event of Default has occurred and is continuing.
(d) No failure on the part of Lender to exercise, and no delay in
exercising, any right under this Agreement or the Deed of Trust shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right under this Agreement or the other Loan Documents. The remedies provided in
this Agreement, the Note, the Deed of Trust and the other Loan Documents are
cumulative and not exclusive of any remedies provided at law or in equity.
SECTION 8. MATTERS CONCERNING THE DEPOSIT BANK.
(a) Borrower hereby authorizes and directs Deposit Bank to comply, and
Deposit Bank agrees to comply, with instructions originated by the Lender in
accordance with
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this Agreement directing the disposition of funds from time to time in the Cash
Collateral Account or as to any other matters relating to the Cash Collateral
Account without further consent by Borrower, but subject to the terms of this
Agreement.
(b) All defenses of Deposit Bank under the Agreement and Articles 3, 4,
and 4A of the Uniform Commercial Code (as adopted in the State where the
respective Account is located) as to the payment and collection of items shall
also be applicable to and enforceable against the Lender. Each of Borrower and
the Lender hereby authorizes and instructs Deposit Bank to supply Borrower's or
the Lender's endorsement, as appropriate, to any items that Deposit Bank
receives and deposits for collection to the Cash Collateral Account.
(c) Deposit Bank will not exercise any security interest (except for
the security interest provided in Section 4-210 of the Uniform Commercial Code
as adopted in the State where the Cash Collateral Account is located), lien,
right of setoff, deduction, recoupment or banker's lien or any other interest in
or against the Cash Collateral Account, and Deposit Bank hereby subordinates any
such security interest, lien or right which it may have against the Cash
Collateral Account, except that Deposit Bank may set off and charge against the
Cash Collateral Account for (i) the face amount of each Returned Item
(hereinafter defined), (ii) all usual and customary service charges, (iii)
account maintenance fees, (iv) transfer fees, (v) out-of-pocket fees and
expenses incurred by Deposit Bank in connection with the enforcement of this
Agreement, (vi) adjustments or corrections of posting or encoding errors, and
(vii) any other items normally chargeable to an account, whether incurred before
or after the date of this Agreement. As used in this Agreement, "RETURN ITEM"
shall mean (i) any items deposited into the Cash Collateral Account either
before or after the date of this Agreement and returned unpaid or otherwise
uncollected, whether for insufficient funds or for any other reason, and without
regard to the timeliness of such return or the occurrence or timeliness of any
drawee's notice of nonpayment; (ii) any items subject to a claim against Deposit
Bank for breach of transfer or presentment warranty under the Uniform Commercial
Code (as adopted in the State where the Cash Collateral Account is located),
(iii) any ACH entry credited to the Cash Collateral Account and returned unpaid
or subject to an adjustment entry under applicable clearing house rules, whether
for insufficient funds or for any other reason, and without regard to the
timeliness of such return or adjustment; (iv) any credit to the Cash Collateral
Account from a merchant card transaction against which a contractual demand for
chargeback has been made; and (v) any credit to the Cash Collateral Account made
in error.
(d) Deposit Bank shall be entitled to rely conclusively upon any notice
or instruction it receives from the Lender and which Deposit Bank believes in
good faith to be a notice or instruction from the Lender, and Deposit Bank shall
have no obligation to investigate or verify the authenticity or correctness of
any such notice or instruction. Deposit Bank shall have no liability to Borrower
for honoring any instruction Deposit Bank receives from the Lender regarding the
Cash Collateral Account. Deposit Bank shall be fully discharged from liability
with respect to any funds on deposit in the Cash Collateral Account to the
extent that Deposit Bank honors and follows instructions it receives from the
Lender and transfers any of such funds to, or on the instructions of, the
Lender.
(e) In the event a third party shall assert an adverse claim by legal
process against the Cash Collateral Account or any sums on deposit therein,
whether such claim shall
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arise by tax lien, execution of judgment, attachment, garnishment, levy, claim
of a trustee in bankruptcy or debtor-in-possession, or a competing lien creditor
or other judicial or regulatory order or process (each, a "CLAIM"), Deposit Bank
may, in addition to other remedies it may possess under this Agreement or at law
or in equity, (i) suspend disbursements from the Cash Collateral Account
reasonably sufficient to satisfy such Claim without any liability until Deposit
Bank shall have received an appropriate court order or other assurances
acceptable to Deposit Bank in its sole discretion establishing that funds may
continue to be disbursed according to instructions then applicable to the Cash
Collateral Account, and/or (ii) immediately interplead all such funds in the
Cash Collateral Account into the registry of the appropriate court located in
the State where the Cash Collateral Account is maintained, and Borrower and the
Lender, jointly and severally, shall pay promptly all of Deposit Bank's costs,
expenses and attorneys' reasonable fees incurred in connection with such Claim.
If a bankruptcy or insolvency proceeding shall have been commenced by or against
Borrower, Deposit Bank shall be entitled to refuse to permit deposits to, or
withdrawals and/or transfers from, the Cash Collateral Account without any
liability until Deposit Bank shall have received an appropriate court order or
other assurances acceptable to Deposit Bank in its sole discretion establishing
that continued deposits to, or withdrawals and/or transfers from, the Cash
Collateral Account are authorized and do not and will not violate any law,
regulation, or order of any court.
SECTION 9. CASUALTY AND CONDEMNATION PROCEEDS SUB-ACCOUNT; EXTRAORDINARY
RECEIPTS SUB-ACCOUNT.
Notwithstanding anything to the contrary contained herein, the
following items of Rents shall be deposited and held in the Loan Sub-accounts
described below and shall be applied in the order of priority set forth in this
Section 9, and Borrower shall advise Lender at the time of receipt thereof of
the nature of such Receipt so that Lender shall have sufficient time to instruct
the Deposit Bank to deposit and hold such amounts in the appropriate Loan
Sub-account:
(a) Proceeds of any insurance, including, without limitation, rent or
business interruption insurance, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Deed of Trust applicable thereto.
(b) Condemnation awards, which amounts shall be deposited in the
Casualty and Condemnation Proceeds Sub-account and shall be applied (by
instructions of Lender or Servicer to the Deposit Bank) in accordance with the
provisions of the Deed of Trust applicable thereto.
(c) Real estate tax refunds (net of any reasonable and customary fees
and disbursements of tax certiorari counsel deducted from such refund to pay
such counsel's fee), which amount shall be deposited in the Extraordinary
Receipts Sub-account and shall thereafter be transferred (by instructions of
Lender to the Deposit Bank) to the Operating Account to the extent required to
pay refunds due to any tenants of the Property (based on a certificate of
Borrower as to the tenants entitled to receive such refunds and the amounts
thereof), except Lender reserves the right to pay (or have the Servicer pay) any
such tenant directly using monies so deposited in the Extraordinary Receipts
Sub-account, in lieu of transferring such monies to the
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Operating Account for such payment. Lender or Servicer shall apply any excess,
after the aforesaid payment, as if ordinary Rents deposited in the Cash
Collateral Account.
(d) Damages or other payments in excess of $250,000 in settlement of
claims by Borrower against any tenant in connection with the Property and
arising out of such tenant's Lease, including, without limitation, pertaining to
any rejection, termination or cancellation of any Lease (including in any
bankruptcy case), Lease buy-out, and surrender payments from tenants or any
holdover rents or use and occupancy fees from tenants or former tenants shall be
deposited in the Extraordinary Receipts Sub-account. With respect to any monies
deposited in the Extraordinary Receipts Sub-account pursuant to this paragraph
(d), Lender shall direct Deposit Bank to apply the amount so deposited (or the
portion thereof specified below) as if ordinary Rents to be applied in
accordance with the terms of this Agreement for the month in question as
follows: (i) if the amount so deposited was paid under or with respect to a
Lease, either (x) each month, that portion of the amount so deposited that
equals the total amount paid divided by the number of months remaining in the
term of such Lease (at the time of any such cancellation, termination or
rejection) or (y) if Borrower shall satisfy Lender that the event resulting in
such payment did not materially adversely affect the fair market value of the
Property and that the Property would satisfy a Debt Service Coverage Ratio test
at least equal to 1.10:1.0 (provided that such Debt Service Coverage Ratio test
shall exclude any rents from the Lease from which such payments were received
and which payments are the subject of the requested disbursement), the entire
amount so deposited shall, provided no Event of Default is then continuing, be
disbursed on the next Payment Date to the Borrower Remainder Sub-account and
(ii) with respect to any other amount deposited in the Extraordinary Receipts
Sub-account pursuant to this paragraph (d), (x) if insufficient funds exist
during any month to make all payments to be made for such month prior to the
disbursement to the Borrower Remainder Sub-account, the portion of the amount so
deposited as is necessary to eliminate any such deficiency or (y) if Borrower
shall satisfy Lender that the event resulting in such payment did not materially
adversely affect the fair market value of the Property and that the Property
would satisfy a Debt Service Coverage Ratio test at least equal to 1.10:1.0
(provided that such Debt Service Coverage Ratio test shall exclude any rents
from the Lease from which such payments were received and which payments are the
subject of the requested disbursement), the entire amount so deposited shall,
provided no Event of Default is then continuing, be disbursed on the next
Payment Date to the Borrower Remainder Sub-account.
(e) All sums paid with respect to a modification of any Lease or
otherwise paid in connection with Borrower taking any action under any Lease
(e.g., granting a consent) or waiving any provision thereof, but only to the
extent any such payment exceeds $250,000 (if such sums paid do not exceed
$250,000, such payment shall be deposited in the Clearing Account and applied as
ordinary Rents) shall be deposited in the Extraordinary Receipts Sub-account and
shall be applied (by instruction of Lender or Servicer to Deposit Bank) as
provided in any consent of Lender given in connection with any such action, or,
if no such direction is given, shall (i) in the case of any modification which
reduces the rent paid under any Lease or shortens the term of such Lease, either
(x) be applied as Rents available for distribution in accordance with the
provisions of this Agreement for the month in question only as to that portion
of the amount so deposited with Lender as Lender, in its reasonable discretion,
shall determine represents reduced rent or lost rent in the applicable month
under any such Lease as a result of any such modification or (y) if Borrower
shall satisfy Lender that the event resulting in
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such payment did not materially adversely affect the fair market value of the
Property and that the Property would satisfy a Debt Service Coverage Ratio test
at least equal to 1.10:1.0 (provided that such Debt Service Coverage Ratio test
shall exclude any rents from the Lease from which such payments were received
and which payments are the subject of the requested disbursement), the entire
amount so deposited shall, provided no Event of Default is then continuing, be
disbursed on the next Payment Date to the Borrower Remainder Sub-account and
(ii) in all other cases, only be applied as Rents available for distribution in
accordance with the provisions of this Agreement for the month in question if
and to the extent either subclause (x) or (y) of paragraph (d)(ii) above shall
be applicable.
If the fees and disbursements of tax certiorari counsel described in
paragraph (c) above shall not have been deducted from the real estate tax
refunds by such counsel prior to payment of such refunds to Borrower, then such
fees and disbursements may be paid as part of Cash Expenses, provided such fees
and disbursements are commercially reasonable. References to application of any
amounts received by Borrower by reason of any action taken by Borrower under or
with respect to a Lease, or otherwise, is not intended in any manner to allow
Borrower to take such action in prohibition of any other provision of the Loan
Documents. Except as expressly set forth in any judgment of any court exercising
jurisdiction thereover or in any agreement with the Tenant approved by Lender,
Lender shall in its reasonable judgment determine the amount of any payment
described in paragraph (d) that falls within clause (i)(x) or (ii)(x) thereof as
opposed to clause (i)(y) or (ii)(y) thereof.
SECTION 10. OPERATING ACCOUNT. On the date hereof, Borrower shall deposit in the
Operating Account an amount equal to $500,000 (the "OPERATING ACCOUNT BALANCE
FLOOR"), which amount shall be funded with the proceeds of the Loan and which
may be used by Borrower from time to time to pay Operating Expenses at the
Property in accordance with the terms of this Agreement and the other Loan
Documents. If, as a result of payment of Operating Expenses at the Property in
accordance with the terms of this Agreement and the other Loan Documents, the
amount on deposit in the Operating Account shall at any time be less than the
Operating Account Balance Floor, then the amount to be disbursed to the
Operating Account pursuant to and in accordance with Section 3(b)(vi) hereof
shall be increased by an amount necessary to achieve a balance in the Operating
Account of no less than the Operating Account Balance Floor.
SECTION 11. SUCCESSORS AND ASSIGNS; ASSIGNMENTS; AGENTS.
(a) This Agreement shall bind and inure to the benefit of and be
enforceable by the Borrower, the Lender and the Manager and their respective
successors and assigns.
(b) The Lender shall have the right to assign or transfer rights and
obligations under this Agreement without limitation. Any assignee or transferee
of Lender shall be entitled to all the benefits afforded the Lender under this
Agreement; provided, that such assignee or transferee shall upon written request
deliver to the other parties hereto written confirmation that such assignee or
transferee agrees to be bound by the terms of this Agreement and is also the
assignee or transferee of the Note and the other Loan Documents.
(c) The Borrower shall have the right to assign and transfer its rights
and obligations hereunder only with the prior written consent of the Lender.
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(d) Any duties or actions of the Lender hereunder may be performed by
the Lender or its agent(s), including without limitation, any Servicer or
trustee in a Securitization, which includes the Loan.
SECTION 12. AMENDMENT.
This Agreement may be amended from time to time in writing by all
parties hereto. All amendments to this Agreement shall be in writing.
SECTION 13. NOTICES.
Notices to the parties hereto shall be addressed and delivered in the
manner set forth in the Deed of Trust. Unless otherwise expressly provided
herein, all such notices, to be effective, shall be in writing (including by
facsimile), and shall be deemed to have been duly given or made (a) when
delivered by hand or by nationally recognized overnight carrier, (b) upon
receipt after being deposited in the mail, certified mail and postage prepaid or
(c) in the case of facsimile notice, when sent and electronically confirmed,
addressed as set forth above.
SECTION 14. LIMITATION ON LIABILITY.
(a) Lender shall not be liable for any acts, omissions, errors in
judgment or mistakes of fact or law, including, without limitation, acts,
omissions, errors or mistakes with respect to the Collateral, except for those
arising as a result of Lender's active gross negligence, illegal acts or willful
misconduct. Without limiting the generality of the foregoing, except as
otherwise expressly provided for herein or as required by applicable law, Lender
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not Lender has or is deemed to
have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other right pertaining to any
Collateral. Lender is hereby authorized by Borrower to act on any written
instruction believed by Lender in good faith to have been given or sent by
Borrower.
(b) The provisions of Section 57 of the Deed of Trust are hereby
incorporated by reference as if fully set forth herein.
(c) Deposit Bank will use the due care in performing its duties and
responsibilities under this Agreement and shall only be responsible for the loss
that a court having jurisdiction over the Cash Collateral Account shall have
determined, in a final and unappealable judgment, had been incurred by Borrower
or the Lender solely as a result of Deposit Bank's gross negligence or willful
misconduct. Deposit Bank shall have no liability to any party for failure of, or
delay in, its performance under this Agreement as a result of any act of God,
fire, other catastrophe, force majeure, electrical or computer or
telecommunications failure, any event beyond the control of Deposit Bank, or
fraud committed by any third party. Nothing in this Agreement shall create any
agency, fiduciary, joint venture or partnership relationship between Deposit
Bank and Borrower or the Lender. Borrower hereby indemnifies Deposit Bank and
holds it harmless against any loss, damage or expense (including attorneys'
reasonable fees and expenses, court costs and other expenses) including, but not
limited to, unpaid charges, fees, and Returned Items for which the Lender and/or
Borrower originally
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received credit or remittance, which loss, damage or expense Deposit Bank may
suffer as a result of entering into, or acting pursuant to, this Agreement,
honoring any instruction Deposit Bank receives from the Lender with respect to
the Cash Collateral Account or, to the extent required by this Agreement, not
honoring any instructions it receives from Borrower with respect to the Cash
Collateral Account, except for those losses, damages, or expenses that a court
having jurisdiction shall have determined in a final and unappealable judgment
resulted solely from Deposit Bank's gross negligence or willful misconduct. In
no event shall Deposit Bank be liable to any other party under this Agreement
for lost profits or special, indirect, exemplary, consequential or punitive
damages, even if Deposit Bank shall have been advised of the possibility of such
damages.
SECTION 15. MORTGAGEE-IN-POSSESSION.
Borrower hereby confirms and agrees that notwithstanding the provisions
of this Agreement, Borrower retains sole control of the operation and
maintenance of the Property, subject to the obligations of Borrower under the
Deed of Trust, the Assignment of Leases and Rents and the other Loan Documents,
and Lender is not and shall not be deemed to be a mortgagee in possession.
SECTION 16. GOVERNING LAW.
WITH REGARD TO THE OPERATION OF THE CASH COLLATERAL ACCOUNT AND THE
PAYMENT OF CHECKS AND OTHER ITEMS AGAINST THE CASH COLLATERAL ACCOUNT, THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA. WITH REGARD TO ISSUES OF PERFECTION, PRIORITY AND
SECURITY INTEREST, REGARDLESS OF ANY PROVISION IN ANY OTHER AGREEMENT, FOR
PURPOSES OF THE UCC (AS DEFINED IN THE DEED OF TRUST), DEPOSIT BANK AGREES THAT
NEW YORK SHALL BE DEEMED TO BE DEPOSIT BANK'S JURISDICTION (WITHIN THE MEANING
OF SECTIONS 8-110 AND 9-304 OF THE UCC), EXCEPT AS SET FORTH ABOVE, THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 17. DUPLICATE ORIGINALS; COUNTERPARTS.
This Agreement may be executed in any number of duplicate originals and
each duplicate original shall be deemed to be an original. This Agreement may be
executed in several counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a single
Agreement. The failure of any party hereto to execute this Agreement, or any
counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.
SECTION 18. WAIVER OF JURY TRIAL. EXCEPT AS MAY BE PROHIBITED BY APPLICABLE LAW,
EACH OF THE LENDER, DEPOSIT BANK AND BORROWER IRREVOCABLY WAIVES THE RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY COUNTERCLAIM) OF ANY
TYPE IN WHICH THE
-18-
LENDER, DEPOSIT BANK OR BORROWER IS A PARTY AS TO ALL MATTERS ARISING DIRECTLY
OR INDIRECTLY OUT OF THIS AGREEMENT.
[NO FURTHER TEXT ON THIS PAGE]
-19-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
several counterparts (each of which shall be deemed an original) as of the date
first above written.
BORROWER:
LIBRARY SQUARE ASSOCIATES, LLC, a Delaware limited liability
company
By: Bunker Hill Senior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: Bunker Hill Junior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: New BHE, LLC,
a Delaware limited liability company,
its sole member
By: Xxxxxxx Properties, L.P.,
a Maryland limited partnership,
its sole member
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its sole general partner
By: ______________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
MANAGER:
XXXXXXX PROPERTIES, L.P.,
a Maryland limited partnership
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its sole general partner
By: _____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
LENDER:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation
By: _____________________________________
Name:
Title:
DEPOSIT BANK:
WACHOVIA BANK, NATIONAL ASSOCIATION,
a national bank association
By: ______________________________________
Name:
Title:
EXHIBIT A
CLEARING BANK INSTRUCTION LETTER
[TO BE SIGNED BY BORROWER AND BANK AT LOAN CLOSING]
___________, 2003
[Clearing Bank Name and Address]
Re: Library Tower, Los Angeles, California
Ladies and Gentlemen:
Library Square Associates, LLC, a Delaware limited liability company
(the "BORROWER"), has entered into that certain Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing (the "DEED OF TRUST"),
dated as of _________, 2003, given by Borrower for the benefit of Greenwich
Capital Financial Products, Inc. (together with its successors and assigns, the
"LENDER"), pursuant to which the Lender has provided financing to the Borrower
secured by the Deed of Trust encumbering that certain property described in the
caption of this letter (the "PROPERTY"). The Property is currently being managed
by __________________ (the "MANAGER").
Currently, the Borrower maintains the following account (the "CLEARING
ACCOUNT") with you:
Name: Library Square Associates, LLC
Account No.: 729-012054
The Borrower hereby notifies you that the Lender has required that it
implement certain automatic clearing and processing functions and hereby
instructs you, commencing on the date hereof (the "SWEEP COMMENCEMENT DATE"), to
disburse all revenues from the Property ("REVENUES") deposited in the Clearing
Account from time to time in accordance with the following terms and provisions:
Promptly upon receipt of this letter, you shall establish a post office
box address in which the Borrower shall cause all Revenues in the form of
checks, money orders and similar instruments to be deposited. Within one
Business Day (as defined below) of receipt, you, as the "CLEARING BANK," shall
receive and process all Revenues and shall deposit the same into the Clearing
Account. Checks made payable to the Borrower, the Manager, or the Clearing
Account shall be deemed suitable for deposit in the Clearing Account. Items
deposited with Clearing Bank that are returned for insufficient or uncollected
funds will be redeposited the first time. Items returned unpaid a second time
shall be processed in accordance with the standard procedures of the Clearing
Bank.
The Clearing Account shall be an account of each Borrower but shall be
under the sole dominion and control of the Lender and any servicer (a
"SERVICER") or other designee of the Lender named below or in a subsequent
written notice from the Lender. The Clearing Account
EXH. A-1
shall be assigned the federal tax identification number of the Borrower, which
number is 00-0000000. You shall hold amounts on deposit in the Clearing Account
as agent for the Lender and shall not commingle such amounts with any other
amounts held by you on behalf of the Lender, the Borrower or any other person or
entity. If, in accordance with standard operating procedures, the Clearing
Account may be established as a trust account for the benefit of the Lender,
Borrower directs that the Clearing Account be maintained as such an account.
The Borrower hereby notifies the Clearing Bank that, in accordance with
the Deed of Trust, the Clearing Account and all amounts held therein from time
to time, and all renewals, replacements and substitutions therefor, have been
irrevocably pledged to the Lender as additional security for the loan evidenced
by the Deed of Trust. In connection with such pledge, the Borrower hereby waives
all right of withdrawal from the Clearing Account.
The Borrower hereby irrevocably instructs and authorizes you, beginning
on the first business day after the Sweep Commencement Date, to disburse on each
business day of each week via the ACH System, if available, or otherwise by wire
transfer, all amounts constituting available funds on deposit in the Clearing
Account to the following account:
[Name of Servicer's Bank]
[Address of Servicer's Bank]
[Address of Servicer's Bank]
ABA No.:______________
Account No.:____________
Name: [Library Square Associates, LLC Cash Collateral Account]
If transferring such amounts by the ACH System and if required by
Clearing Bank, each such transfer shall be initiated by the Lender or by the
Servicer. If the Clearing Bank provides electronic data transfer services, the
Clearing Bank shall provide the Lender and the Servicer access to the Clearing
Bank's electronic data transfer system for purposes of effecting such transfers.
At any time that funds may not be transferred as described above in this
paragraph, the Clearing Bank shall transfer amounts by wire transfer of
immediately available funds.
The instructions set forth herein are irrevocable and are not subject
to modification in any manner, except that the Lender or the Servicer may, by
written notice to you, amend the instructions contained herein.
In the event that the Clearing Bank fails to acknowledge that its
procedures with respect to the Clearing Account are governed by this letter due
to an objection to the terms hereof or otherwise, the Borrower hereby appoints
the Lender as its attorney-in-fact with full authority to make reasonable
changes to this letter and to execute on behalf of the Borrower any new modified
letter acceptable to the proposed Clearing Bank.
In accordance with the Clearing Bank's procedures, the Clearing Bank
shall maintain a record of all deposits and transfers from the Clearing Account
and furnish statements to Borrower and Lender, on a monthly basis, of all such
transactions.
EXH. A-2
Clearing Bank assumes no duty to discharge any obligation of Borrower
to Lender or others. If Clearing Bank disburses payments later than set forth
herein, its liability for making late disbursements shall not exceed the amount
of interest which would have been paid on such funds if they had been deposited
in the Clearing Account in a timely manner. Clearing Bank shall not be
responsible for any consequential, incidental, indirect or special damage which
would exceed this amount in connection with any such disbursements deemed late,
including, but not limited to, disbursements deemed late resulting from Clearing
Bank's acts, nor shall Clearing Bank be responsible for any claim, loss,
liability, cost, expense or delay caused by equipment breakdown, electrical or
mechanical failure, causes beyond Clearing Bank's reasonable control, the
failure of either party to give Clearing Bank clear and explicit notices and
instructions, or damages caused (in whole or in part) by the party seeking
redress. Borrower and Lender understand and agree that the Clearing Account and
the fees charged by Clearing Bank have been established in contemplation of the
limitation on Clearing Bank's liability set forth in this paragraph.
Except for events of Clearing Bank's negligence or willful misconduct
(and in any such event, subject to the damage limitations set forth above),
Borrower agrees to indemnify, defend and hold Clearing Bank, its parent,
affiliates, subsidiaries, and their respective officers, employees and agents
harmless from and against all claims, actions, damages, losses, liabilities and
expenses (including reasonable attorney's fees and court costs) arising out of
Clearing Bank's actions or omissions pursuant to this Agreement.
The parties hereto agree that Clearing Bank's sole responsibility to
Lender, Borrower, Manager or any third party for errors made by Clearing Bank in
processing any Rents shall be to process a correcting entry in the next
regularly scheduled processing of the work after receipt of notification from
Lender or its designee, Borrower or any third party.
Clearing Bank shall make every reasonable effort to deliver the
advices, copies and reports required by this Instruction Letter by the mutually
agreed upon time but does not guarantee a specific delivery time. Accordingly,
Clearing Bank's sole responsibility to Lender or any third party with respect to
the time of delivery of the advices, copies and reports required by this
Instruction Letter shall be to deliver such advices, copies and reports as close
to the mutually agreed upon time as may be reasonably practicable.
If Clearing Bank is unable to debit the Clearing Account for any reason
or if the Clearing Account contains insufficient funds from which to reimburse
itself on a particular business day for any of the charges to the Clearing
Account set forth on Schedule 2 attached hereto, Clearing Bank is entitled to
recover the insufficiency from incoming funds deposited into the Clearing
Account that business day. If, upon the next business day, the Clearing Account
continues to contain insufficient funds, Borrower agrees to reimburse Clearing
Bank promptly upon receiving Clearing Bank's notice of the same.
Matters not covered by this letter shall be determined in accordance
with the customary procedures of the Clearing Bank and in the event of a
conflict between the terms of this letter and the customary procedures of the
Clearing Bank, the terms of this letter shall govern.
EXH. A-3
The undersigned also notifies you that the name and address of the
current Servicer with respect to the Cash Management Agreement is:
[Name of Servicer]
[Address of Servicer]
[Address of Servicer]
Attention: _______________
Telephone: _______________
Facsimile: _______________
If you have any questions concerning this letter or the Cash Management
Agreement, please contact __________ of the Lender at (___) ___-____ or
___________ of the Servicer at (___) ___-____.
The address of the current Manager is:
---------------------
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
EXH. A-4
Please acknowledge receipt of this letter and your agreement to the
terms described herein by executing and returning to the Borrower an
acknowledgment in the form of Schedule 1 hereto.
BORROWER:
LIBRARY SQUARE ASSOCIATES, LLC, a Delaware limited liability
company
By: Bunker Hill Senior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: Bunker Hill Junior Mezzanine, LLC,
a Delaware limited liability company,
its sole member
By: New BHE, LLC,
a Delaware limited liability company,
its sole member
By: Xxxxxxx Properties, L.P.,
a Maryland limited partnership,
its sole member
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its sole general partner
By:_________________________
Name:
Title:
EXH. A-5
ACKNOWLEDGED AND AGREED:
GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware
corporation
By: __________________________________________________
Name:
Title:
XXX. X-0
XXXXXXXX 0
XXXX XX XXXXXXXXXXXXXX
___________ __, 0000
Xxxxxxx Xxxxxx Associates, LLC
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Greenwich Capital Financial Products, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Reference is made to that certain Clearing Bank Instruction Letter,
dated ____________, 2003 (the "INSTRUCTION LETTER") from Library Square
Associates, LLC (the "BORROWER"). I, [____________], on behalf of
________________ (the "BANK"), hereby acknowledge receipt of the instructions
set forth in the Instruction Letter and notice of the pledges and security
interest described therein. The Bank hereby agrees to perform the instructions
set forth in the Instruction Letter upon the delivery by Greenwich Capital
Financial Products, Inc. (the "LENDER") of the Instruction Letter.
[INSERT SIGNATURE BLOCK OF BANK]
LOCK BOX ADDRESS:
Library Square Associates, LLC
X.X. Xxx 000000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
SCH. 1-1
SCHEDULE 2
CLEARING BANK FEES
SCH. 2-1
EXHIBIT B
FORM OF LESSEE PAYMENT DIRECTION LETTER
[MANAGER LETTERHEAD]
[Date]
[Addressee]
Re: Payment Direction Letter for [Property]
Dear [______]:
[BORROWER], the owner of the [PROPERTY] (the "PROPERTY"), has mortgaged
the Property to Greenwich Capital Financial Products, Inc. (together with its
successors and assigns, the "LENDER") and has agreed that all rents due for the
Property will be paid directly to a bank selected by the Lender. Therefore, from
and after [DATE], all rent to be paid by you under the [LEASE] between you and
[BORROWER/MANAGER] (the "LEASE") should be sent directly to the following
address:
[Clearing Bank Name]
[Lockbox Address]
All checks should be made out to the "[BORROWER]".
These payment instructions cannot be withdrawn or modified without the
prior written consent of the Lender or its agent (the "SERVICER"), or pursuant
to a joint written instruction from the Borrower and the Lender or the Servicer.
Until you receive written instructions from the Lender or the Servicer, continue
to send all rent payments due under the Lease to [Clearing Bank Name]. All rent
payments must be delivered to [Clearing Bank Name] no later than the day on
which such amounts are due under the Lease.
EXH. B-1
If you have any questions concerning this letter, please contact
[______] at [______]. We appreciate your cooperation in this matter.
XXXXXXX PROPERTIES, L.P.,
a Maryland limited partnership
By: Xxxxxxx Properties, Inc.,
a Maryland corporation,
its sole general partner
By: ________________________________________
Name:
Title:
EXH. B-2
