BEHRINGER HARVARD PACES WEST, LLC,
a Delaware limited liability company, as Borrower
(Borrower)
to
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
a Delaware corporation, as nominee of Lender
(Lender)
___________________________________________
DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT
___________________________________________
Dated: As of April 19, 2006
Securing Note in principal amount of Eighty-Four Million Dollars
($84,000,000.00)
Maturity Date: May 1, 2016
Property Location: Paces West, Atlanta Georgia
MERS MIN: 8000101-0000002930-5
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
THIS DEED TO SECURE DEBT, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (this "Security Instrument") is made as of this 19th day of April,
2006, by BEHRINGER HARVARD PACES WEST, LLC, a Delaware limited liability
company, having its principal place of business c/o Behringer Harvard Funds,
00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 ("Borrower") for the
benefit of MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a Delaware
corporation, having an address at 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000 ("MERS"), as nominee of BEAR XXXXXXX COMMERCIAL MORTGAGE, INC., a
New York corporation, having an address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, as mortgagee ("Lender").
W I T N E S S E T H:
WHEREAS, this Security Instrument is given to secure a loan (the "Loan")
in the principal sum of Eighty-Four Million and No/100 Dollars ($84,000,000.00)
advanced pursuant to that certain Loan Agreement, dated as of the date hereof,
between Borrower and Lender (as the same may hereafter be amended, restated,
replaced, supplemented, renewed, extended or otherwise modified from time to
time, the "Loan Agreement") and evidenced by that certain Promissory Note, dated
the date hereof, made by Borrower in favor of MERS, as nominee of Lender (as the
same may hereafter be amended, restated, replaced, supplemented, renewed,
extended or otherwise modified from time to time, the "Note");
WHEREAS, Borrower desires to secure the payment of the Debt (as defined
in the Loan Agreement) and the performance of all of its obligations under the
Note, the Loan Agreement and the other Loan Documents (as herein defined); and
WHEREAS, this Security Instrument is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement, the Note, and that
certain Assignment of Leases and Rents of even date herewith made by Borrower in
favor of MERS, as nominee of Lender, delivered in connection with this Security
Instrument (as the same may be amended, restated, replaced, supplemented,
renewed, extended or otherwise modified from time to time, the "Assignment of
Leases"), including the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of the parties therein,
are hereby incorporated by reference herein as though set forth in full and
shall be considered a part of this Security Instrument (the Loan Agreement, the
Note, this Security Instrument, the Assignment of Leases and Rents and all other
documents evidencing or securing the Debt (including all additional mortgages,
deeds to secure debt and assignments of leases and rents) or executed or
delivered in connection therewith, are hereinafter referred to collectively as
the "Loan Documents").
NOW THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Security Instrument:
ARTICLE 1 - GRANTS OF SECURITY
SECTION 1.1 PROPERTY CONVEYED. Borrower does hereby irrevocably
grant, bargain, sell, pledge, assign, warrant, transfer and convey to MERS, as
nominee of Lender and its
successors and assigns, with Power of Sale, all of Borrower's right, title and
interest in, to and under the following property, rights, interests and estates
now owned, or hereafter acquired by Borrower (collectively, the "Property"):
(a) LAND. The real property described in EXHIBIT A
attached hereto and made a part hereof (the "Land");
(b) ADDITIONAL LAND. All xxxxxxxxxx xxxxx, xxxxxxx
and development rights hereafter acquired by Borrower for use in connection with
the Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental deed to secure debt or
otherwise be expressly made subject to the lien of this Security Instrument;
(c) IMPROVEMENTS. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter erected or located on the Land
(collectively, the "Improvements");
(d) EASEMENTS. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys, passages, sewer rights,
water, water courses, water rights and powers, air rights and development
rights, and all estates, rights, titles, interests, privileges, liberties,
servitudes, tenements, hereditaments and appurtenances of any nature whatsoever,
in any way now or hereafter belonging, relating or pertaining to the Land and
the Improvements and the reversions and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front of or adjoining
the Land, to the center line thereof and all the estates, rights, titles,
interests, rights of dower, rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Borrower of, in and to the Land
and the Improvements and every part and parcel thereof, with the appurtenances
thereto;
(e) EQUIPMENT. All "equipment," as such term is
defined in Article 9 of the Uniform Commercial Code (as hereinafter defined),
now owned or hereafter acquired by Borrower, which is used at or in connection
with the Improvements or the Land or is located thereon or therein (including,
but not limited to, all machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or hereafter acquired by
Borrower and used at the Improvements or the Land and any and all additions,
substitutions and replacements of any of the foregoing), together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto (collectively, the "Equipment"). Notwithstanding the foregoing,
Equipment shall not include any property belonging to tenants under leases
except to the extent that Borrower shall have any right or interest therein;
(f) FIXTURES. All Equipment now owned, or the
ownership of which is hereafter acquired, by Borrower which is so related to the
Land and Improvements forming part of the Property that it is deemed fixtures or
real property under the law of the particular state in which the Land is
located, including, without limitation, all building or construction materials
intended for construction, reconstruction, alteration or repair of or
installation on the Property, construction equipment, appliances, machinery,
plant equipment, fittings, apparatuses, fixtures and other items now or
hereafter attached to, installed in or used in connection with (temporarily or
permanently) any of the Improvements or the Land, including, but not limited to,
engines,
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devices for the operation of pumps, pipes, plumbing, call and sprinkler systems,
fire extinguishing apparatuses and equipment, heating, ventilating,
incinerating, electrical, air conditioning and air cooling equipment and
systems, gas and electric machinery, appurtenances and equipment, pollution
control equipment, security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds, and water, gas,
electrical, storm and sanitary sewer facilities, utility lines and equipment
(whether owned individually or jointly with others, and, if owned jointly, to
the extent of Borrower's interest therein) and all other utilities whether or
not situated in easements, all water tanks, water supply, water power sites,
fuel stations, fuel tanks, fuel supply, and all other structures, together with
all accessions, appurtenances, additions, replacements, betterments and
substitutions for any of the foregoing and the proceeds thereof (collectively,
the "Fixtures"). Notwithstanding the foregoing, "Fixtures" shall not include any
property which tenants are entitled to remove pursuant to leases except to the
extent that Borrower shall have any right or interest therein;
(g) PERSONAL PROPERTY. All furniture, furnishings,
objects of art, machinery, goods, tools, supplies, appliances, general
intangibles, contract rights, accounts, accounts receivable, franchises,
licenses, certificates and permits, and all other personal property of any kind
or character whatsoever as defined in and subject to the provisions of the
Uniform Commercial Code, whether tangible or intangible, other than Fixtures,
which are now or hereafter owned by Borrower and which are located within or
about the Land and the Improvements, together with all accessories, replacements
and substitutions thereto or therefor and the proceeds thereof (collectively,
the "Personal Property"), and the right, title and interest of Borrower in and
to any of the Personal Property which may be subject to any security interests,
as defined in the Uniform Commercial Code, as adopted and enacted by the state
or states where any of the Property is located (the "Uniform Commercial Code"),
superior in lien to the lien of this Security Instrument and all proceeds and
products of the above;
(h) LEASES AND RENTS. All leases, subleases or
subsubleases, lettings, licenses, concessions or other agreements (whether
written or oral) pursuant to which any Person is granted a possessory interest
in, or right to use or occupy all or any portion of the Land and the
Improvements, and every modification, amendment or other agreement relating to
such leases, subleases, subsubleases, or other agreements entered into in
connection with such leases, subleases, subsubleases, or other agreements and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto,
heretofore or hereafter entered into (collectively, the "Leases"), whether
before or after the filing by or against Borrower of any petition for relief
under the Bankruptcy Code and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including, without limitation,
cash or securities deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional rents, revenues,
issues and profits (including all oil and gas or other mineral royalties and
bonuses) from the Land and the Improvements whether paid or accruing before or
after the filing by or against Borrower of any petition for relief under the
Bankruptcy Code (collectively, the "Rents") and all proceeds from the sale or
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Debt;
(i) CONDEMNATION AWARDS. All Awards, including
interest thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the
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exercise of the right of eminent domain (including, but not limited to, any
transfer made in lieu of or in anticipation of the exercise of the right), or
for a change of grade, or for any other injury to or decrease in the value of
the Property;
(j) INSURANCE PROCEEDS. All Insurance Proceeds in
respect of the Property under any Policies covering the Property, including,
without limitation, the right to receive and apply the proceeds of any Policies,
judgments, or settlements made in lieu thereof, in connection with a Casualty to
the Property;
(k) TAX CERTIORARI. All refunds, rebates or credits
in connection with reduction in Taxes of Other Charges charged against the
Property as a result of tax certiorari or any applications or proceedings for
reduction;
(l) CONVERSION. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including, without limitation,
Insurance Proceeds and Awards, into cash or liquidation claims;
(m) RIGHTS. The right, in the name and on behalf of
Borrower, to appear in and defend any action or proceeding brought with respect
to the Property and to commence any action or proceeding to protect the interest
of Lender in the Property;
(n) AGREEMENTS. All agreements, contracts,
certificates, instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all rights therein and
thereto, respecting or pertaining to the use, occupation, construction,
management or operation of the Land and any part thereof and any Improvements or
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including, without
limitation, the right, upon the happening of any default hereunder, to receive
and collect any sums payable to Borrower thereunder;
(o) TRADEMARKS. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records and all other
general intangibles relating to or used in connection with the operation of the
Property;
(p) ACCOUNTS. All reserves, escrows and deposit
accounts maintained by Borrower with respect to the Property, including, without
limitation (i) all accounts established pursuant to the Cash Management
Agreement and (ii) all accounts established pursuant to the Lockbox Agreement;
together with all deposits or wire transfers made to the Lockbox Account or Cash
Management Account 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; and
(a) OTHER RIGHTS. Any and all other rights of
Borrower in and to the items set forth in Subsections (a) through (p) above.
AND without limiting any of the other provisions of this Security
Instrument, to the extent permitted by applicable law, Borrower expressly grants
to MERS, as nominee of
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Lender, as secured party, a security interest in the portion of the Property
which is or may be subject to the provisions of the Uniform Commercial Code
which are applicable to secured transactions; it being understood and agreed
that the Improvements and Fixtures are part and parcel of the Land (the Land,
the Improvements and the Fixtures collectively referred to as the "Real
Property") appropriated to the use thereof and, whether affixed or annexed to
the Real Property or not, shall for the purposes of this Security Instrument be
deemed conclusively to be real estate and subject to this Security Instrument.
SECTION 1.2 ASSIGNMENT OF RENTS. Borrower hereby absolutely and
unconditionally assigns to MERS, as nominee of Lender all of Borrower's right,
title and interest in and to all current and future Leases and Rents; it being
intended by Borrower that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only. Nevertheless,
subject to the terms of the Assignment of Leases, the Cash Management Agreement
and Section 7.1(h) of this Security Instrument, Lender grants to Borrower a
revocable license to collect, receive, use and enjoy the Rents and Borrower
shall hold the Rents, or a portion thereof sufficient to discharge all current
sums due on the Debt, for use in the payment of such sums.
SECTION 1.3 SECURITY AGREEMENT. This Security Instrument is both a
real property deed to secure debt and a "security agreement" within the meaning
of the Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Borrower in the Property. By executing and delivering this Security
Instrument, Borrower hereby grants to MERS, as nominee of Lender, as security
for the Obligations (hereinafter defined), a security interest in the Fixtures,
the Equipment and the Personal Property to the full extent that the Fixtures,
the Equipment and the Personal Property may be subject to the Uniform Commercial
Code (said portion of the Property so subject to the Uniform Commercial Code
being called the "Collateral"). If an Event of Default shall occur and be
continuing, Lender, in addition to any other rights and remedies which it may
have, shall have and may exercise immediately and without demand, any and all
rights and remedies granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of the foregoing,
the right to take possession of the Collateral or any part thereof, and to take
such other measures as Lender may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Lender after the
occurrence and during the continuance of an Event of Default, Borrower shall, at
its expense, assemble the Collateral and make it available to Lender at a
convenient place (at the Land if tangible property) reasonably acceptable to
Lender. Borrower shall pay to Lender on demand any and all expenses, including
reasonable legal expenses and attorneys' fees, incurred or paid by Lender in
protecting its interest in the Collateral and in enforcing its rights hereunder
with respect to the Collateral after the occurrence and during the continuance
of an Event of Default. Any notice of sale, disposition or other intended action
by Lender with respect to the Collateral sent to Borrower in accordance with the
provisions hereof at least ten (10) Business Days prior to such action, shall,
except as otherwise provided by applicable law, constitute reasonable notice to
Borrower. The proceeds of any disposition of the Collateral, or any part
thereof, may, except as otherwise required by applicable law, be applied by
Lender to the payment of the Debt in such priority and proportions as Lender in
its discretion shall deem proper. Borrower's (debtor's) principal place of
business is as set forth on page one hereof and the address of Lender (secured
party) is as set forth on page one hereof. Borrower's organizational ID no. is
00-0000000.
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SECTION 1.4 FIXTURE FILING. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, and this Security Instrument, upon being filed for record in the real
estate records of the city or county wherein such fixtures are situated, shall
operate also as a financing statement filed as a fixture filing in accordance
with the applicable provisions of said Uniform Commercial Code upon such of the
Property that is or may become fixtures.
SECTION 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of
Lender, including, without limitation, any sums deposited in the Lockbox
Account, the Cash Management Account, the Reserve Funds and Net Proceeds, as
additional security for the Obligations until expended or applied as provided in
this Security Instrument or other Loan Documents.
SECTION 1.6 Grants to MERS. This Security Instrument and the grants,
assignments and transfers made to MERS in this Article 1 shall inure to MERS
solely in its capacity as Lender's nominee.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto Lender
and to the use and benefit of Lender for its successors and assigns, IN FEE
SIMPLE forever;
WITH THE POWER OF SALE, to secure payment to Lender of the Obligations
at the time and in the manner provided for its payment in the Loan Agreement,
the Note and in this Security Instrument.
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note, the Loan Agreement and this Security Instrument,
shall well and truly perform the Other Obligations as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, the Loan Agreement and
the other Loan Documents, then this Security Instrument shall be cancelled and
terminated; provided, however, that Borrower's obligation to indemnify and hold
harmless Lender pursuant to the provisions hereof shall survive any such payment
or release.
Upon payment in full of the Debt in accordance with the Loan Agreement,
Lender will execute and deliver a release of the lien of this Security
Instrument in customary form.
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
SECTION 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article I are given for the purpose of
securing the Debt.
SECTION 2.2 OTHER OBLIGATIONS. This Security Instrument and the
grants, assignments and transfers made in Article I are also given for the
purpose of securing the following (the "Other Obligations"):
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(a) the performance of all other obligations of
Borrower contained herein;
(b) the performance of each obligation of Borrower
contained in the Loan Agreement and any other Loan Document; and
(c) the performance of each obligation of Borrower
contained in any renewal, extension, amendment, modification, consolidation,
change of, or substitution or replacement for, all or any part of the Note, the
Loan Agreement or any other Loan Document.
SECTION 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations for
the payment of the Debt and the performance of the Other Obligations shall be
referred to collectively herein as the "Obligations."
ARTICLE 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
SECTION 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time
and in the manner provided in the Loan Agreement, the Note and this Security
Instrument.
SECTION 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Security Instrument to the same extent and with the same force as if fully set
forth herein.
SECTION 3.3 INSURANCE. Borrower shall obtain and maintain, or cause
to be maintained, in full force and effect at all times insurance with respect
to Borrower and the Property as required pursuant to the Loan Agreement.
SECTION 3.4 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the
Fixtures, the Equipment or the Personal Property, tenant finish and
refurbishment of the Improvements and for the disposal of Fixtures, Equipment or
Personal Property not material to the use or value of the Property as an office
building) without the consent of Lender. Borrower shall promptly repair, replace
or rebuild any part of the Property which may be destroyed by any Casualty or
become damaged, worn or dilapidated or which may be affected by any
Condemnation, and shall complete and pay for any structure at any time in the
process of construction or repair on the Land.
SECTION 3.5 WASTE. Borrower shall not commit or suffer any waste of
the Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or allow the
cancellation of any Policy, or do or permit to be done thereon anything that may
in any way materially impair the value of the Property or the security of this
Security Instrument. Borrower will not, without the prior written consent of
Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the
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subsurface of the Land, regardless of the depth thereof or the method of mining
or extraction thereof.
SECTION 3.6 PAYMENT FOR LABOR AND MATERIALS.
(a) Subject to Section 3.6(b), Borrower will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated materials ("Labor and Material Costs") incurred in connection with
the Property and never permit to exist beyond the due date thereof in respect of
the Property or any part thereof any lien or security interest, even though
inferior to the liens and the security interests hereof, and in any event never
permit to be created or exist in respect of the Property or any part thereof any
other or additional lien or security interest other than the liens or security
interests hereof except for the Permitted Encumbrances and other Liens permitted
pursuant to the Loan Documents.
(b) After prior written notice to Lender, Borrower,
at its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or
validity or application in whole or in part of any of the Labor and Material
Costs, provided that (i) no Event of Default has occurred and is continuing
under the Loan Agreement, the Note, this Security Instrument or any of the other
Loan Documents, (ii) Borrower is permitted to do so under the provisions of any
other mortgage or deed to secure debt affecting the Property, (iii) such
proceeding shall suspend the collection of the Labor and Material Costs from
Borrower and from the Property or Borrower shall have paid all of the Labor and
Material Costs (or such portion thereof as to which collection is not suspended)
under protest, (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower is
subject and shall not constitute a default thereunder, (v) neither the Property
nor any part thereof or interest therein will be in immediate danger of being
sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall have
furnished the security as may be required in the proceeding, or as may be
reasonably requested by Lender to insure the payment of any contested Labor and
Material Costs, together with all interest and penalties thereon.
SECTION 3.7 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe
and perform each and every term, covenant and provision to be observed or
performed by Borrower pursuant to the Loan Agreement, any other Loan Document
and any other agreement or recorded instrument affecting or pertaining to the
Property and any amendments, modifications or changes thereto.
SECTION 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall
not change Borrower's name, identity (including its trade name or names) or, if
not an individual, Borrower's corporate, partnership or other structure without
notifying Lender of such change in writing at least thirty (30) days prior to
the effective date of such change and, in the case of a change in Borrower's
structure, without first obtaining the prior written consent of Lender. Borrower
shall execute and deliver to Lender, prior to or contemporaneously with the
effective date of any such change, any financing statement or financing
statement change required by Lender to establish or maintain the validity,
perfection and priority of the security interest granted herein. At the request
of Lender, Borrower shall execute a certificate in form satisfactory to Lender
listing the trade names under which Borrower intends to operate the
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Property, and representing and warranting that Borrower does business under no
other trade name with respect to the Property.
SECTION 3.9 TITLE. Borrower has good, marketable and insurable fee
simple title to the real property comprising part of the Property and good title
to the balance of such Property, free and clear of all Liens (as defined in the
Loan Agreement) whatsoever except the Permitted Encumbrances (as defined in the
Loan Agreement), such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. The Permitted
Encumbrances in the aggregate do not materially and adversely affect the value,
operation or use of the Property or Borrower's ability to repay the Loan. This
Security Instrument, when properly recorded in the appropriate records, together
with any Uniform Commercial Code financing statements required to be filed in
connection therewith, will create (a) a valid, perfected first priority lien on
that portion of the Property constituting interests in real estate, subject only
to Permitted Encumbrances and the Liens created by the Loan Documents and (b) to
the extent that a security interest therein may be perfected by the filing of
financing statements under the Uniform Commercial Code, perfected security
interests in and to, and perfected collateral assignments of, all personalty
(including, to the extent that they constitute personalty subject to the Uniform
Commercial Code, the Leases), all in accordance with the terms thereof, in each
case subject only to any applicable Permitted Encumbrances, such other Liens as
are permitted pursuant to the Loan Documents and the Liens created by the Loan
Documents. There are no claims for payment for work, labor or materials
affecting the Property which are past due and are or may become a lien prior to,
or of equal priority with, the Liens created by the Loan Documents unless such
claims for payments are being contested in accordance with the terms and
conditions of this Security Instrument.
SECTION 3.10 PARTITION. Notwithstanding anything to the contrary
contained herein, for so long as the Loan is outstanding Borrower shall not
bring an action for partition with respect to such Borrower's ownership interest
in the Property or to compel any sale thereof and each Borrower hereby expressly
waives any and all rights to partition the Property.
ARTICLE 4 - OBLIGATIONS AND RELIANCES
SECTION 4.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of the Loan Agreement, the Note, this Security Instrument and the
other Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of debtor and creditor.
SECTION 4.2 NO RELIANCE ON LENDER. The general partners, members,
principals and (if Borrower is a trust) beneficial owners of Borrower are
experienced in the ownership and operation of properties similar to the
Property, and Borrower and Lender are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Borrower is not relying on Lender's expertise, business acumen or advice in
connection with the Property.
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SECTION 4.3 NO LENDER OBLIGATIONS.
(a) Notwithstanding the provisions of Subsections
1.1(h) and (n) or Section 1.2, Lender is not undertaking the performance of (i)
any obligations under the Leases; or (ii) any obligations with respect to such
agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents.
(b) By accepting or approving anything required to
be observed, performed or fulfilled or to be given to Lender pursuant to this
Security Instrument, the Loan Agreement, the Note or the other Loan Documents,
including, without limitation, any Officer's Certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal, or
Policy, Lender shall not be deemed to have warranted, consented to, or affirmed
the sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
SECTION 4.4 RELIANCE. Borrower recognizes and acknowledges that in
accepting the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, Lender is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in Section 4.1 of the
Loan Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Lender; that such reliance
existed on the part of Lender prior to the date hereof, that the warranties and
representations are a material inducement to Lender in making the Loan; and that
Lender would not be willing to make the Loan and accept this Security Instrument
in the absence of the warranties and representations as set forth in Section 4.1
of the Loan Agreement.
ARTICLE 5 - FURTHER ASSURANCES
SECTION 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time upon Lender's request, will cause this Security
Instrument and any of the other Loan Documents creating a lien or security
interest or evidencing the lien hereof upon the Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect and perfect the lien or security interest hereof
upon, and the interest of Lender in, the Property. Borrower will pay all taxes,
filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of the Note, this
Security Instrument, the other Loan Documents, any note, deed to secure debt or
mortgage supplemental hereto, any security instrument with respect to the
Property and any instrument of further assurance, and any modification or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any deed
to secure debt or mortgage supplemental hereto, any security instrument with
respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited by
law so to do.
SECTION 5.2 FURTHER ACTS, ETC. Borrower will, at the cost of
Borrower, and without expense to Lender, do, execute, acknowledge and deliver
all and every further acts, deeds, conveyances, deeds to secure debt, mortgages,
assignments, notices of assignments, transfers and assurances as Lender shall,
from time to time, reasonably require, for the better assuring,
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conveying, assigning, transferring, and confirming unto Lender the property and
rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed,
pledged, assigned, warranted and transferred or intended now or hereafter so to
be, or which Borrower may be or may hereafter become bound to convey or assign
to Lender, or for carrying out the intention or facilitating the performance of
the terms of this Security Instrument or for filing, registering or recording
this Security Instrument, or for complying with all Legal Requirements.
Borrower, on demand, will execute and deliver, and in the event it shall fail to
so execute and deliver, hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements to evidence more effectively the
security interest of Lender in the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender at
law and in equity, including without limitation, such rights and remedies
available to Lender pursuant to this Section 5.2.
SECTION 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended
after the date of this Security Instrument which deducts the Debt from the value
of the Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender's interest in the Property (other
than the inclusion of such amounts as income for income tax purposes or taxes on
Lender's capital), Borrower will pay the tax, with interest and penalties
thereon, if any. If Lender is advised by counsel chosen by it that the payment
of tax by Borrower would be unlawful or taxable to Lender or unenforceable or
provide the basis for a defense of usury then Lender shall have the option by
written notice of not less than one hundred twenty (120) days to declare the
Debt immediately due and payable. If so accelerated, Borrower shall repay the
Loan without premium or penalty.
(b) Borrower will not claim or demand or be entitled
to any credit or credits on account of the Debt for any part of the Taxes or
Other Charges assessed against the Property, or any part thereof, and no
deduction shall otherwise be made or claimed from the assessed value of the
Property, or any part thereof, for real estate tax purposes by reason of this
Security Instrument or the Debt. If such claim, credit or deduction shall be
required by law, Lender shall have the option, by written notice of not less
than one hundred twenty (120) days, to declare the Debt immediately due and
payable. If so accelerated, Borrower shall repay the Loan without premium or
penalty.
(c) If at any time the United States of America, any
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note, this Security Instrument, or any of the
other Loan Documents or impose any other tax or charge on the same, Borrower
will pay for the same, with interest and penalties thereon, if any.
SECTION 5.4 SEVERING OF SECURITY INSTRUMENT. This Security
Instrument and the Note shall, at any time until the same shall be fully paid
and satisfied, at the sole election of Lender, be severed into two or more notes
and two or more security instruments in such denominations as Lender shall
determine in its sole discretion, each of which shall cover all or a portion of
the Property to be more particularly described therein. To that end, Borrower,
upon written request of Lender, shall execute, acknowledge and deliver, or cause
to be executed, acknowledged and
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delivered by the then owner of the Property, to Lender and/or its designee or
designees substitute notes and security instruments in such principal amounts,
aggregating not more than the then unpaid principal amount of this Security
Instrument, and containing terms, provisions and clauses similar to, and no more
onerous to Borrower than, those contained herein and in the Note, and such other
documents and instruments as may be required by Lender; provided that Borrower's
obligations are not materially increased thereby.
SECTION 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of
an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any other Loan Document which is not of public record, and, in the case
of any such mutilation, upon surrender and cancellation of such Note or other
Loan Document, Borrower will issue, in lieu thereof, a replacement Note or other
Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note
or other Loan Document in the same principal amount thereof and otherwise of
like tenor.
ARTICLE 6 - DUE ON SALE/ENCUMBRANCE
SECTION 6.1 LENDER RELIANCE. Borrower acknowledges that Lender has
examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, and will
continue to rely on Borrower's ownership of the Property as a means of
maintaining the value of the Property as security for repayment of the Debt and
the performance of the Other Obligations. Borrower acknowledges that Lender has
a valid interest in maintaining the value of the Property so as to ensure that,
should Borrower default in the repayment of the Debt or the performance of the
Other Obligations, Lender can recover the Debt by a sale of the Property.
SECTION 6.2 NO SALE/ENCUMBRANCE. Neither Borrower nor any Restricted
Party shall Transfer the Property or any part thereof or any interest therein or
permit or suffer the Property or any part thereof or any interest therein to be
Transferred other than as expressly permitted pursuant to the terms of the Loan
Agreement.
ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT
SECTION 7.1 REMEDIES. Upon the occurrence and during the continuance
of any Event of Default, Borrower agrees that Lender may take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Borrower and in and to the Property, including, but not limited
to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Lender may determine, in its sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Lender:
(a) declare the entire unpaid Debt to be immediately
due and payable;
(b) institute proceedings, judicial or otherwise,
for the complete foreclosure of this Security Instrument under any applicable
provision of law, in which case the Property or any interest therein may be sold
for cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;
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(c) with or without entry, to the extent permitted
and pursuant to the procedures provided by applicable law, institute proceedings
for the partial foreclosure of this Security Instrument for the portion of the
Debt then due and payable, subject to the continuing lien and security interest
of this Security Instrument for the balance of the Debt not then due, unimpaired
and without loss of priority;
(d) sell for cash or upon credit the Property or any
part thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an 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;
(e) institute an action, suit or proceeding in
equity for the specific performance of any covenant, condition or agreement
contained herein, in the Note, the Loan Agreement or in the other Loan
Documents;
(f) recover judgment on the Note either before,
during or after any proceedings for the enforcement of this Security Instrument
or the other Loan Documents;
(g) apply for the appointment of a receiver,
trustee, liquidator or conservator of the Property, without notice and without
regard for the adequacy of the security for the Debt and without regard for the
solvency of Borrower, any Guarantor, Indemnifying Person with respect to the
Loan or of any Person liable for the payment of the Debt;
(h) the license granted to Borrower under Section
1.2 hereof shall automatically be revoked and Lender may enter into or upon the
Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its agents or servants
wholly therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the Property and
of such books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (ii) complete any construction on the Property in such manner and form
as Lender deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights
and powers of Borrower with respect to the Property, whether in the name of
Borrower or otherwise, including, without limitation, the right to make, cancel,
enforce or modify Leases, obtain and evict tenants, and demand, xxx for, collect
and receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lender or
to such receiver and, in default thereof, Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as Lender shall
deem appropriate in its sole discretion after deducting therefrom all expenses
(including reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the Taxes, Other Charges, Insurance
Premiums and other expenses in connection with the Property, as well
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as just and reasonable compensation for the services of Lender, its counsel,
agents and employees;
(i) exercise any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing: (i) the right to take
possession of the Fixtures, the Equipment, the Personal Property or any part
thereof, and to take such other measures as Lender may deem necessary for the
care, protection and preservation of the Fixtures, the Equipment, the Personal
Property, and (ii) request Borrower at its expense to assemble the Fixtures, the
Equipment, the Personal Property and make it available to Lender at a convenient
place acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Fixtures, the Equipment, the Personal
Property sent to Borrower in accordance with the provisions hereof at least ten
(10) days prior to such action, shall constitute commercially reasonable notice
to Borrower;
(j) apply any sums then deposited or held in escrow
or otherwise by or on behalf of Lender in accordance with the terms of the Loan
Agreement, this Security Instrument or any other Loan Document to the payment of
the following items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of the Note;
(iv) Amortization of the unpaid principal balance of the
Note;
(v) All other sums payable pursuant to the Note, the Loan
Agreement, this Security Instrument and the other Loan Documents,
including without limitation advances made by Lender pursuant to the
terms of this Security Instrument;
(k) pursue such other remedies as Lender may have
under applicable law; or
(l) apply the undisbursed balance of any Net
Proceeds Deficiency deposit, together with interest thereon, to the payment of
the Debt in such order, priority and proportions as Lender shall deem to be
appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Security Instrument shall continue as a lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
SECTION 7.2 APPLICATION OF PROCEEDS. The purchase money, proceeds
and avails of any disposition of the Property, and or any part thereof, or any
other sums collected by Lender pursuant to the Note, this Security Instrument or
the other Loan Documents, may be applied by
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Lender to the payment of the Debt in such priority and proportions as Lender in
its discretion shall deem proper.
SECTION 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and during
the continuance of any Event of Default, 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 any payment or do any act required
of Borrower hereunder in such manner and to such extent as Lender may deem
necessary to protect the security hereof. Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 7.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period after notice from Lender that such
cost or expense was incurred to the date of payment to Lender. All such costs
and expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.
SECTION 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to appear
in and defend any action or proceeding brought with respect to the Property and
to bring any action or proceeding, in the name and on behalf of Borrower, which
Lender, in its discretion, decides should be brought to protect its interest in
the Property.
SECTION 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
SECTION 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine the records, books, management and other papers of
Borrower which reflect upon the financial condition of the Property or of any
Borrower owning a 20% or greater undivided interest therein, at the Property or
at any office regularly maintained by Borrower where the books and records are
located. Lender and its agents shall have the right to make copies and extracts
from the foregoing records and other papers. In addition, at reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Borrower pertaining
to the income, expenses and operation of the Property during reasonable business
hours at any office of Borrower where the books and records are located. This
Section 7.6 shall apply throughout the term of the Note and without regard to
whether an Event of Default has occurred or is continuing.
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SECTION 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to insist
upon strict performance of any term hereof shall not be deemed to be a waiver of
any term of this Security Instrument. Borrower shall not be relieved of
Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower or any Guarantor or Indemnifying Person with
respect to the Loan to take any action to foreclose this Security Instrument or
otherwise enforce any of the provisions hereof or of the Note or the other Loan
Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any person liable for the Debt or any portion
thereof, or (iii) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this
Security Instrument or the other Loan Documents.
(a) It is agreed that the risk of loss or damage to
the Property is on Borrower, and Lender shall have no liability whatsoever for
decline in value of the Property, for failure to maintain the Policies, or for
failure to determine whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial
relief if any such possession is requested or obtained with respect to any
Property or collateral not in Lender's possession.
(b) Lender may resort for the payment of the Debt to
any other security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender thereafter to foreclose this Security Instrument. The rights of
Lender under this Security Instrument shall be separate, distinct and cumulative
and none shall be given effect to the exclusion of the others. No act of Lender
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision. Lender shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
SECTION 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.
SECTION 7.9 VIOLATION OF LAWS. If the Property is not in material
compliance with Legal Requirements, Lender may impose additional requirements
upon Borrower in connection herewith including, without limitation, monetary
reserves or financial equivalents.
SECTION 7.10 RECOURSE AND CHOICE OF REMEDIES. The provisions of
Section 9.4 of the Loan Agreement are hereby incorporated by reference into this
Security Instrument to the same extent and with the same force as if fully set
forth herein.
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SECTION 7.11 RIGHT OF ENTRY. Upon reasonable notice to Borrower,
Lender and its agents shall have the right to enter and inspect the Property at
all reasonable times.
SECTION 7.12 REFERENCES TO LENDER. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, all references
herein to "Lender" shall be deemed to collectively or individually (as the
context requires) refer to Lender or to MERS, acting on behalf of and at the
sole direction of Lender in its capacity as Lender's nominee, as each of their
interests may appear; provided, that, unless Lender, in its sole discretion,
shall determine otherwise, only Lender (and not MERS) shall be deemed to be
"Lender" with respect to (a) any consent or similar approval right granted to
Lender hereunder or under any of the other Loan Documents (including, without
limitation, any consent or similar approval right that is deemed granted if not
approved or denied within a specified time period), (b) any items, documents or
other information required to be delivered to Lender hereunder or under any of
the other Loan Documents (other than notices expressly required to be sent to
MERS) or (c) any future funding or other obligations of Lender to Borrower or
any affiliate of Borrower hereunder or under any of the other Loan Documents, if
any.
SECTION 7.13 FAILURE TO ACT. Notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, the failure of MERS to
take any action hereunder or under any of the other Loan Documents, other than
such acts as it may be required to take under applicable law by virtue of its
capacity as lienholder or secured party of record, shall not (a) be deemed to be
a waiver of any term or condition of this Security Instrument or any of the
other Loan Documents, or (b) adversely affect any rights of Lender hereunder or
under any of the other Loan Documents.
ARTICLE 8 - ENVIRONMENTAL HAZARDS
SECTION 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Except as
otherwise disclosed by that certain Phase I environmental report (or Phase II
environmental report, if required) delivered to Lender by Borrower in connection
with the origination of the Loan (such report is referred to below as the
"Environmental Report"), to Borrower's Knowledge (a) there are no Hazardous
Substances (defined below) or underground storage tanks in, on, or under the
Property, except those that are (i) in compliance with Environmental Laws
(defined below) and with permits issued pursuant thereto (to the extent such
permits are required under Environmental Law), (ii) de-minimis amounts necessary
to operate the Property for the purposes set forth in the Loan Agreement which
will not result in an environmental condition in, on or under the Property and
which are otherwise permitted under and used in compliance with Environmental
Law and (iii) fully disclosed to Lender in writing pursuant the Environmental
Report; (b) there are no past, present or threatened Releases (defined below) of
Hazardous Substances in, on, under or from the Property which has not been fully
remediated in accordance with Environmental Law; (c) there is no threat of any
Release of Hazardous Substances migrating to the Property; (d) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property which has not been fully
remediated in accordance with Environmental Law; (e) Borrower does not know of,
and has not received, any written or oral notice or other communication from any
Person (including but not limited to a Governmental Authority) relating to
Hazardous Substances or Remediation (defined below) thereof, of possible
liability of any Person pursuant to any
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Environmental Law, other environmental conditions in connection with the
Property, or any actual or potential administrative or judicial proceedings in
connection with any of the foregoing; and (f) Borrower has truthfully and fully
disclosed to Lender, in writing, any and all information relating to
environmental conditions in, on, under or from the Property that is known to
Borrower and has provided to Lender all information that is contained in
Borrower's files and records, including, but not limited to, any reports
relating to Hazardous Substances in, on, under or from the Property and/or to
the environmental condition of the Property.
"ENVIRONMENTAL LAW" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the environment, relating
to Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
Environmental Law includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act. Environmental Law also includes, but is not limited
to, any present and future federal, state and local laws, statutes, ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the Property; requiring notification
or disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other Person, whether
or not in connection with transfer of title to or interest in property; imposing
conditions or requirements relating to Hazardous Substances in connection with
permits or other authorization for lawful activity; relating to nuisance,
trespass or other causes of action in respect of Hazardous Substances related to
the Property; or, to the extent arising out of the presence of Hazardous
Substances, relating to wrongful death, personal injury, or property or other
damage in connection with any physical condition or use of the Property.
"HAZARDOUS SUBSTANCES" include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purpose of cleaning or
other maintenance or operations and otherwise in compliance with all
Environmental Laws.
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"RELEASE" of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances.
"REMEDIATION" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to clean-up, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance, any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit,
sampling and testing, laboratory or other analysis, or evaluation relating to
any Hazardous Substances or to anything referred to in Article 8.
SECTION 8.2 ENVIRONMENTAL COVENANTS. Borrower covenants and agrees
that: (a) Borrower shall use commercially reasonable efforts to ensure that all
uses and operations on or of the Property shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) Borrower shall use
commercially reasonable efforts to prevent any Releases of Hazardous Substances
in, on, under or from the Property; (c) Borrower shall not permit any Hazardous
Substances in, on, or under the Property, except those that are (i) in
compliance with all Environmental Laws and with permits issued pursuant thereto
(to the extent such permits are required by Environmental Law), (ii) de-minimis
amounts necessary to operate the Property for the purposes set forth in the Loan
Agreement which will not result in an environmental condition in, on or under
the Property and which are otherwise permitted under and used in compliance with
Environmental Law and (iii) fully disclosed to Lender in writing; (d) Borrower
shall keep the Property free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other Person (the "Environmental Liens"); (e) Borrower shall, at
its sole cost and expense, fully and expeditiously cooperate in all activities
pursuant to Section 8.3 below, including but not limited to providing all
relevant information and making knowledgeable persons available for interviews;
(f) Borrower shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
the Property, pursuant to any reasonable written request of Lender made in the
event that Lender has reason to believe that an environmental hazard exists on
the Property (including but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials and substances whether
solid, liquid or gas), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (g) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender made in the event
that Lender has reason to believe that an environmental hazard exists on the
Property to (i) reasonably effectuate Remediation of any condition (including
but not limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (ii) comply with any Environmental Law; (iii) comply with any
directive from any Governmental Authority; and (iv) take any other reasonable
action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act with respect to Hazardous Substances that materially
increases the dangers to human health or the environment, poses an unreasonable
risk of harm to any Person (whether on or off the Property), impairs or may
impair the value of the Property, is contrary to any requirement of any insurer,
constitutes a public or private nuisance, constitutes waste, or violates any
covenant, condition, agreement or easement applicable to the Property; and (i)
Borrower shall immediately
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notify Lender in writing of (A) any presence or Releases or threatened Releases
of Hazardous Substances in, on, under, from or migrating towards the Property;
(B) any non-compliance with any Environmental Laws related in any way to the
Property; (C) any actual or potential Environmental Lien; (D) any required or
proposed Remediation of environmental conditions relating to the Property; and
(E) any written notice or other written communication of which Borrower becomes
aware from any source whatsoever (including but not limited to a governmental
entity) relating in any way to Hazardous Substances or Remediation thereof,
possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Article 8.
SECTION 8.3 LENDER'S RIGHTS. In the event that Lender has reason to
believe that an environmental hazard exists on the Property that does not, in
Lender's sole discretion, endanger any tenants or other occupants of the
Property or their guests or the general public or materially and adversely
affect the value of the Property, upon reasonable notice from Lender, Borrower
shall, at Borrower's expense, promptly cause an engineer or consultant
satisfactory to Lender to conduct an environmental assessment or audit (the
scope of which shall be determined in Lender's sole and absolute discretion) and
take any samples of soil, groundwater or other water, air, or building materials
or any other invasive testing requested by Lender and promptly deliver the
results of any such assessment, audit, sampling or other testing; provided,
however, if such results are not delivered to Lender within a reasonable period
or if Lender has reason to believe that an environmental hazard exists on the
Property that, in Lender's sole judgment, endangers any tenant or other occupant
of the Property or their guests or the general public or may materially and
adversely affect the value of the Property, upon reasonable notice to Borrower,
Lender and any other Person designated by Lender, including but not limited to
any receiver, any representative of a governmental entity, and any environmental
consultant, shall have the right, but not the obligation, to enter upon the
Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in Lender's sole and absolute discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and reasonably
conducting other invasive testing. Borrower shall cooperate with and provide
Lender and any such Person designated by Lender with access to the Property.
ARTICLE 9 - INDEMNIFICATION
SECTION 9.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to reasonable
attorneys' fees and other costs of defense) (collectively, the "Losses") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following, except, in each case, to the extent arising out of any Indemnified
Party's gross negligence or willful misconduct: (a) ownership of this Security
Instrument, the Property or any interest
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therein or receipt of any Rents; (b) any amendment to, or restructuring of, the
Debt, the Note, the Loan Agreement, this Security Instrument, or any other Loan
Documents; (c) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of this Security Instrument,
the Loan Agreement, the Note or any of the other Loan Documents, whether or not
suit is filed in connection with same, or in connection with Borrower, any
Guarantor or Indemnifying Person and/or any partner, joint venturer or
shareholder thereof becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to
or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of Borrower to perform or be in compliance with any
of the terms of this Security Instrument, the Note, the Loan Agreement or any of
the other Loan Documents; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with the Internal
Revenue Service an accurate Form 0000-X, Xxxxxxxxx for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with this Security Instrument, or to supply a copy thereof in a
timely fashion to the recipient of the proceeds of the transaction in connection
with which this Security Instrument is made; (i) any failure of the Property to
be in compliance with any Legal Requirements; (j) the enforcement by any
Indemnified Party of the provisions of this Article 9; (k) any and all claims
and demands whatsoever which may be asserted against Lender by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in any Lease; (l) the payment of
any commission, charge or brokerage fee to anyone claiming through Borrower
which may be payable in connection with the funding of the Loan; or (m) any
misrepresentation made by Borrower in this Security Instrument or any other Loan
Document. Any amounts payable to Lender by reason of the application of this
Section 9.1 shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article 9, the term "Indemnified Parties" means Lender and
any Person who is or will have been involved in the origination of the Loan, any
Person who is or will have been involved in the servicing of the Loan secured
hereby, any Person in whose name the encumbrance created by this Security
Instrument is or will have been recorded, any Person who may hold or acquire or
will have held a full or partial interest in the Loan secured hereby (including,
but not limited to, investors or prospective investors in the Securities, as
well as custodians, trustees and other fiduciaries who hold or have held a full
or partial interest in the Loan secured hereby for the benefit of third parties)
as well as the respective directors, officers, shareholders, partners,
employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any and all of
the foregoing (including, but not limited to, any other Person who holds or
acquires or will have held a participation or other full or partial interest in
the Loan, whether during the term of the Loan or as a part of or following a
foreclosure of the Loan and any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender's assets and business).
SECTION 9.2 SECURITY INSTRUMENT AND/OR INTANGIBLE TAX. Borrower
shall, at its sole cost and expense, protect, defend, indemnify, release and
hold harmless the Indemnified Parties from and against any and all Losses
imposed upon or incurred by or asserted against any
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Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of this Security Instrument,
the Note or any of the other Loan Documents, but excluding any income, franchise
or other similar taxes.
SECTION 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.
SECTION 9.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses and costs of Remediation
(whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including but not limited to
sampling, testing, and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas) imposed upon or
incurred by or asserted against any Indemnified Parties, and arising out of or
in any way relating to any one or more of the following: (a) any presence of any
Hazardous Substances in, on, above, or under the Property; (b) any past, present
or threatened Release of Hazardous Substances in, on, above, under or from the
Property; (c) any activity by Borrower, any Person affiliated with Borrower or
any tenant or other user of the Property in connection with any actual, proposed
or threatened use, treatment, storage, holding, existence, disposition or other
Release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any time located in, under, on or
above the Property; (d) any activity by Borrower, any Person affiliated with
Borrower or any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past or present
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by Borrower, any Affiliate of
Borrower or any tenant or other user of the Property to comply with any order of
any Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
Section 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in accepting
any Hazardous Substance for transport to disposal or treatment facilities,
incineration vessels or sites
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selected by Borrower or such other users, from which there is a Release, or a
threatened Release of any Hazardous Substance which causes the incurrence of
costs for Remediation; (k) any personal injury, wrongful death, or property
damage arising under any statutory or common law or tort law theory, including
but not limited to damages assessed for the maintenance of a private or public
nuisance or for the conducting of an abnormally dangerous activity on or near
the Property (in each case, to the extent arising out of the presence of
Hazardous Substances); and (l) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to Article 8. This indemnity shall
survive any termination, satisfaction or foreclosure of this Security
Instrument, subject to the provisions of Section 10.5. Notwithstanding the
foregoing, Borrower shall have no liability for any Losses imposed upon or
incurred by or asserted against any Indemnified Parties and described in this
SECTION 9.4 to the extent that such Losses arose solely by actions, conditions
or events relating to the Hazardous Substances placed in, on, above or under the
Property after the date that Lender or any Affiliate or nominee of Lender (or
any purchaser at a foreclosure sale) actually acquired title to the Property and
were not caused by the direct or indirect actions of Borrower or any officer or
director of Borrower or any employee, agent, contractor or Affiliate of
Borrower.
SECTION 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Borrower and any Indemnified Party and
Borrower and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Borrower, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement shall be
entered without Borrower's consent, which consent shall not be unreasonably
withheld. Upon demand, Borrower shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified Parties for
the payment of reasonable fees and disbursements of attorneys, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
ARTICLE 10 - WAIVERS
SECTION 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted by
applicable law, Borrower hereby waives the right to assert a counterclaim, other
than a mandatory or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with this Security
Instrument, the Loan Agreement, the Note, any of the other Loan Documents, or
the Obligations.
SECTION 10.2 MARSHALLING AND OTHER MATTERS. To the extent permitted
by applicable law, Borrower hereby waives the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower hereby
expressly waives any and all rights of redemption from sale under any order or
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decree of foreclosure of this Security Instrument on behalf of Borrower, and on
behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.
SECTION 10.3 WAIVER OF NOTICE. To the extent permitted by applicable
law, Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Security Instrument or any
other Loan Document specifically and expressly provides for the giving of notice
by Lender to Borrower and except with respect to matters for which Lender is
required by applicable law to give notice, and Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Security Instrument does not specifically and expressly provide for the
giving of notice by Lender to Borrower.
SECTION 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent
permitted by applicable law, Borrower hereby expressly waives and releases to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its Other Obligations.
SECTION 10.5 SURVIVAL. The indemnifications made pursuant to Sections
9.3 and 9.4 herein and the representations and warranties, covenants, and other
obligations arising under Article 8, shall continue indefinitely in full force
and effect and shall survive and shall in no way be impaired by any of the
following: any satisfaction or other termination of this Security Instrument,
any assignment or other transfer of all or any portion of this Security
Instrument or Lender's interest in the Property (but, in such case, shall
benefit both Indemnified Parties and any assignee or transferee), any exercise
of Lender's rights and remedies pursuant hereto including, but not limited to,
foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of any
rights and remedies pursuant to the Loan Agreement, the Note or any of the other
Loan Documents, any transfer of all or any portion of the Property (whether by
Borrower or by Lender following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument,
the Loan Agreement, the Note or the other Loan Documents, and any act or
omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto.
ARTICLE 11 - EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
ARTICLE 12 - NOTICES
All notices or other written communications hereunder shall be delivered
in accordance with Section 10.6 of the Loan Agreement.
Notices to Lender hereunder and under any of the other Loan Documents
shall include a copy thereof to Lender (to be addressed and delivered in
accordance with Section 10.6 of the Loan Agreement) and shall be sent as
follows:
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Lender: MERS Commercial
X.X. Xxx 0000
Xxxxx, Xxxxxxxx 00000-0000
ARTICLE 13 - APPLICABLE LAW
SECTION 13.1 GOVERNING LAW. This Security Instrument shall be
governed in accordance with the terms and provisions of Section 10.3 of the Loan
Agreement.
SECTION 13.2 USURY LAWS. Notwithstanding anything to the contrary,
(a) all agreements and communications between Borrower and Lender are hereby and
shall automatically be limited so that, after taking into account all amounts
deemed interest, the interest contracted for, charged or received by Lender
shall never exceed the Maximum Legal Rate or amount, (b) in calculating whether
any interest exceeds the Maximum Legal Rate, all such interest shall be
amortized, prorated, allocated and spread over the full amount and term of all
principal indebtedness of Borrower to Lender, and (c) if through any contingency
or event, Lender receives or is deemed to receive interest in excess of the
Maximum Legal Rate, any such excess shall be deemed to have been applied toward
payment of the principal of any and all then outstanding indebtedness of
Borrower to Lender, or if there is no such indebtedness, shall immediately be
returned to Borrower.
SECTION 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If any
term of this Security Instrument or any application thereof shall be invalid or
unenforceable, the remainder of this Security Instrument and any other
application of the term shall not be affected thereby.
ARTICLE 14 - DEFINITIONS
All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Security Instrument may be used interchangeably in singular or plural form
and the word "Borrower" shall mean "each Borrower and any subsequent owner or
owners of a fee interest in the Property or any part thereof," the word "Lender"
shall mean "Lender and any subsequent holder of the Note," the word "Note" shall
mean "the Note and any other evidence of indebtedness secured by this Security
Instrument," the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees", "legal fees" and
"counsel fees" shall include any and all reasonable attorneys', paralegal and
law clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels actually incurred or
paid by Lender in protecting its interest in the Property, the Leases and the
Rents and enforcing its rights hereunder.
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ARTICLE 15 - MISCELLANEOUS PROVISIONS
SECTION 15.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
SECTION 15.2 SUCCESSORS AND ASSIGNS. This Security Instrument shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
SECTION 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is held to
be invalid, illegal or unenforceable in any respect, the Loan Agreement, the
Note and this Security Instrument shall be construed without such provision.
SECTION 15.4 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.
SECTION 15.5 NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
SECTION 15.6 SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Loan Agreement, the
Note and the other Loan Documents and the performance and discharge of the Other
Obligations.
SECTION 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement, this
Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Borrower and Lender with respect to the
transactions arising in connection with the Debt and supersede all prior written
or oral understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Note, the Loan Agreement, this Security Instrument and the other Loan
Documents.
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XXXXXXX 00.0 XXXXXXXXXX XX LENDER'S RESPONSIBILITY. No provision of
this Security Instrument shall operate to place any obligation or liability for
the control, care, management or repair of the Property upon Lender, nor shall
it operate to make Lender responsible or liable for any waste committed on the
Property by the tenants or any other Person, or for any dangerous or defective
condition of the Property, or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee or stranger. Nothing herein contained shall be
construed as constituting Lender a "mortgagee in possession."
ARTICLE 16 - STATE-SPECIFIC PROVISIONS
SECTION 16.1 PRINCIPLES OF CONSTRUCTION. In the event of any
inconsistencies between the terms and conditions of this Article 16 and the
terms and conditions of this Instrument, the terms and conditions of this
Article 16 shall control and be binding.
SECTION 16.2 POWER OF SALE.
(a) Upon the occurrence and continuation of an Event
of Default, Lender, or the agent or successor of Lender, may, at its option,
sell or offer for sale the 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 sales in accordance with the
terms and provisions of the law of the State of Georgia. Such sale shall be made
before the door of the courthouse on the steps thereof or as otherwise
prescribed in the county in which the 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) on such day and at such times as
permitted under applicable law of the State of Georgia, after advertising the
time, place and terms of sale and that portion of the Property in accordance
herewith and such law. The time, place and terms of any such sale shall be
advertised once a week for four (4) consecutive weeks, immediately prior to the
date of sale (but without regard to the number of days elapsed intervening
between the date of publication of the first advertisement and the date of sale)
in a newspaper in which sheriff's sales are advertised in said county. In the
event of any such public sale pursuant to the aforesaid power of sale and
agency, Borrower shall be deemed a tenant holding over and shall forthwith
deliver possession of the Property to the purchaser or purchasers at such sale
or be summarily dispossessed according to provisions of law applicable to
tenants holding over. At any such public sale, Lender may execute and deliver in
the name of Borrower to the purchaser a conveyance of the Property or any part
of the Property in fee simple. Borrower hereby constitutes and appoints Lender
the agent and attorney-in-fact of Borrower to make such sale and conveyance, and
thereby to divest Borrower of all right, title and equity that Borrower may have
in and to the Property and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and
attorney-in-fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be binding
upon Borrower. The aforesaid power of sale and agency hereby granted are coupled
with an interest and are irrevocable by death or otherwise, are granted as
cumulative of the other remedies provided hereby or by law for collection of the
Obligations and shall not be exhausted by one exercise thereof but may be
exercised until full payment of all of the Obligations. In the event of any sale
under this Security Instrument by virtue of the exercise of the powers herein
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granted, or pursuant to any order in any judicial proceeding or otherwise, the
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,
Lender may sell the personal Property covered by this Security Instrument at one
or more separate sales in any manner permitted by the Uniform Commercial Code,
and one or more exercises of the powers herein granted shall not extinguish or
exhaust such powers, until all of the 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, deeds to secure
debt or deeds of trust, pledges, contracts or guaranties, 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) In case Lender shall have proceeded to enforce
any right, power or remedy under this Security Instrument by foreclosure, entry
or otherwise or in the event Lender commences advertising of the intended
exercise of the sale under power provided hereunder, and such proceeding or
advertisement shall have been withdrawn, discontinued or abandoned for any
reason, then in every such case (i) Borrower and Lender shall be restored to
their former positions and rights, (ii) all rights, powers and remedies of
Lender shall continue as if no such proceeding had been taken, (iii) each and
every Event of Default declared or occurring prior or subsequent to such
withdrawal, discontinuance or abandonment shall be deemed to be a continuing
Event of Default, and (iv) neither this Security Instrument, nor the Note, nor
the Obligations, nor any other Loan Document shall be or shall be deemed to have
been reinstated or otherwise affected by such withdrawal, discontinuance or
abandonment; and Borrower hereby expressly waives the benefit of any statute or
rule of law now provided, or which may hereafter be provided, which would
produce a result contrary to or in conflict with this sentence.
(c) Upon any foreclosure sale or sales of all or any
portion of the Property under the power herein granted, Lender may bid for and
purchase the Property and shall be entitled to apply all or any part of the
Obligations as a credit to the purchase price.
(d) In the event of a foreclosure or a sale of all
or any portion of the 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 reasonable out-of-pocket expenses of such sale and of all
proceedings in connection therewith (including, without limitation, reasonable
attorneys' fees actually incurred), to insurance premiums, liens, assessments,
taxes and charges (including, without limitation, utility charges advanced by
Lender), to payment of the Obligations, and to 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.
SECTION 16.3 WAIVER OF NOTICE AND HEARING. TO THE EXTENT ALLOWED BY
LAW BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE UNDER THE CONSTITUTION OF THE
STATE OF GEORGIA OR THE CONSTITUTION OF THE UNITED STATES OF AMERICA TO NOTICE
(EXCEPT AS EXPRESSLY REQUIRED BY THE TERMS OF ANY LOAN DOCUMENT) OR TO A
JUDICIAL HEARING PRIOR TO THE EXERCISE OF ANY RIGHT OR REMEDY PROVIDED BY THIS
SECURITY INSTRUMENT AND BORROWER WAIVES ITS RIGHTS, IF ANY, TO SET ASIDE OR
INVALIDATE ANY SALE DULY
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CONSUMMATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECURITY INSTRUMENT ON THE
GROUND (IF SUCH BE THE CASE) THAT THE SALE WAS CONSUMMATED WITHOUT A PRIOR
JUDICIAL HEARING. ALL WAIVERS BY BORROWER IN THIS PARAGRAPH HAVE BEEN GIVEN
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY, AFTER BORROWER HAS BEEN FIRST INFORMED
BY COUNSEL OF ITS OWN CHOOSING AS TO POSSIBLE ALTERNATIVE RIGHTS, AND HAVE BEEN
GIVEN AS AN INTENTIONAL RELINQUISHMENT AND ABANDONMENT OF A KNOWN RIGHT AND
PRIVILEGE.
SECTION 16.4 DEED TO SECURE DEBT. This Security Instrument is a deed
and security agreement passing legal title pursuant to the laws of the State of
Georgia governing loan or security deeds and security agreements, and is not a
mortgage. The use of the terms "Borrower" and "Lender" are for reference
purposes only, and shall not be construed in any manner to make this instrument
a mortgage. Any reference herein to the "lien of this Instrument" or words of
similar import shall be deemed to mean the security title, security interest and
lien created by this Security Instrument.
SECTION 16.5 FEES. Whenever in any of the Loan Documents Borrower is
obligated to pay the legal fees of Lender's counsel, such obligation shall be
limited to the reasonable fees of Lender's counsel which are actually incurred
and not the statutory percentages provided in the Official Code of Georgia
ss.13-1-11.
[NO FURTHER TEXT ON THIS PAGE]
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IN WITNESS WHEREOF, this Security Instrument has been executed by
Borrower under seal as of the day and year first above written.
BORROWER:
BEHRINGER HARVARD PACES WEST, LLC,
a Delaware limited liability company
By: ______________________________
Xxxxxx X. Xxxxxxx, III
Secretary
Attest:__________________________
[CORPORATE SEAL]
GEORGIA'S NOTARY ACKNOWLEDGEMENT:
Signed, sealed and delivered
In the presence of:
________________________________
Witness
________________________________
Notary Public
Date Commission Expires:
(Seal)
EXHIBIT A
ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN LAND XXX 000 XX XXX 00XX
XXXXXXXX AND 2ND SECTION OF XXXX COUNTY, GEORGIA AND BEING MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
BEGINNING AT A 1/2 INCH REBAR SET AT THE INTERSECTION FORMED BY THE INTERSECTION
BY THE NORTHERLY RIGHT OF WAY OF PACES FERRY ROAD (R/W VARIES) AND THE WEST LINE
OF LAND LOT 885; THENCE NORTH 01 DEGREES 10 MINUTES 34 SECONDS EAST A DISTANCE
OF 568.74 FEET TO A 1/2 INCH REBAR SET; THENCE NORTH 87 DEGREES 11 MINUTES 35
SECONDS EAST A DISTANCE OF 563.45 FEET TO A 1/2 INCH REBAR SET; THENCE SOUTH 02
DEGREES 54 MINUTES 56 SECONDS EAST A DISTANCE OF 282.91 FEET TO A POINT; THENCE
NORTH 88 DEGREES 04 MINUTES 20 SECONDS EAST A DISTANCE OF 7.89 FEET TO A POINT;
THENCE SOUTH 02 DEGREES 46 MINUTES 45 SECONDS EAST A DISTANCE OF 62.64 FEET TO A
POINT; THENCE SOUTH 55 DEGREES 28 MINUTES 15 SECONDS EAST A DISTANCE OF 181.68
FEET TO A 1/2 INCH REBAR SET; THENCE SOUTH 05 DEGREES 27 MINUTES 42 SECONDS EAST
A DISTANCE OF 134.96 FEET TO A POINT ON THE NORTHERLY RIGHT OF WAY OF PACES
FERRY ROAD ( R/W VARIES); THENCE ALONG THE NORTHERLY RIGHT OF WAY OF PACES FERRY
ROAD SOUTH 84 DEGREES 36 MINUTES 16 SECONDS WEST A DISTANCE OF 78.81 FEET TO A
1/2 INCH REBAR SET; THENCE CONTINUING ALONG SAID RIGHT OF WAY SOUTH 83 DEGREES
33 MINUTES 34 SECONDS WEST A DISTANCE OF 127.40 FEET TO A 1/2 INCH REBAR SET ;
THENCE LEAVING SAID RIGHT OF WAY AND RUNNING NORTH 14 DEGREES 37 MINUTES 08
SECONDS WEST A DISTANCE OF 178.56 FEET TO A 3/4 INCH OPEN TOP PIPE FOUND; THENCE
NORTH 65 DEGREES 17 MINUTES 32 SECONDS WEST A DISTANCE OF 123.74 FEET TO A 3/4
INCH OPEN TOP PIPE FOUND; THENCE SOUTH 75 DEGREES 25 MINUTES 40 SECONDS WEST A
DISTANCE OF 50.01 FEET TO A 1/2 INCH REBAR SET; THENCE SOUTH 15 DEGREES 11
MINUTES 32 SECONDS EAST A DISTANCE OF 58.58 FEET TO A 1/2 INCH REBAR FOUND;
THENCE SOUTH 04 DEGREES 02 MINUTES 37 SECONDS EAST A DISTANCE OF 173.22 FEET TO
A 1/2 INCH REBAR SET ON THE NORTHERLY RIGHT OF WAY OF PACES FERRY ROAD ( R/W
VARIES); THENCE ALONG SAID RIGHT OF WAY AND FOLLOWING THE ARC OF A CURVE TO THE
RIGHT A DISTANCE OF 294.01 FEET, SAID ARC HAVING A RADIUS OF 1517.58 FEET AND
BEING SUBTENDED BY A CHORD BEARING OF NORTH 87 DEGREES 28 MINUTES 06 SECONDS
WEST AND A CHORD DISTANCE OF 293.55 FEET TO A 1/2 INCH REBAR SET; THENCE
CONTINUING ALONG SAID RIGHT OF WAY NORTH 81 DEGREES 57 MINUTES 05 SECONDS WEST A
DISTANCE OF 86.50 FEET TO A 1/2 INCH REBAR SET AT THE INTERSECTION OF SAID
NORTHERLY RIGHT OF WAY AND THE WESTERLY LINE OF LAND XXX 000 XXX XXX XXXXX XX
XXXXXXXXX.
XXX. A-1
