PREPARED BY AND
WHEN RECORDED MAIL TO:
Glass, XxXxxxxxxx, Xxxxxxxx & Xxxxxxx, LLP 0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
AMENDED AND RESTATED
MORTGAGE AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED MORTGAGE AND SECURITY AGREEMENT (this
"Instrument"), made this ____ day of September, 1997, by USF&G/XXXX XXXXX REALTY
PARTNERS LIMITED PARTNERSHIP, a Maryland limited partnership, having its
principal office and place of business at c/o USF&G, 0000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000 ("Debtor"), to THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation, having its principal office at Prudential
Plaza, 000 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000 ("Secured Party").
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES, EXTENSIONS OF
TIME FOR PAYMENT, AND OTHER MODIFICATIONS IN THE TERMS OF THE OBLIGATIONS.
PORTIONS OF THE COLLATERAL ARE GOODS WHICH ARE OR ARE TO BECOME AFFIXED
TO OR FIXTURES ON THE LAND DESCRIBED IN EXHIBIT A HERETO.
THE COLLATERAL SECURES INDEBTEDNESS EVIDENCED BY THE NOTE SECURED
HEREUNDER IN THE ORIGINAL PRINCIPAL AMOUNT OF EIGHT MILLION FIVE HUNDRED
THOUSAND AND NO/100THS DOLLARS ($8,500,000.00).
NOTE TO CLERK: THIS AMENDED AND RESTATED MORTGAGE RENEWS, RESTATES, AND AMENDS
THAT CERTAIN FLORIDA MORTGAGE AND SECURITY AGREEMENT DATED JUNE 28, 1990,
RECORDED IN OFFICIAL RECORDS BOOK 4196, PAGE 3906, OF THE PUBLIC RECORDS OF
ORANGE COUNTY, FLORIDA (THE "PUBLIC RECORDS") AS AMENDED BY ASSIGNMENT OF
MORTGAGE AND LOAN DOCUMENTS DATED AUGUST 14, 1990, RECORDED IN OFFICIAL RECORDS
BOOK 4208, PAGE 3009 OF THE PUBLIC RECORDS, AS FURTHER MODIFIED BY A PROMISSORY
NOTE AND MORTGAGE RENEWAL AND MODIFICATION AGREEMENT DATED AUGUST 14, 1990,
RECORDED IN OFFICIAL RECORDS BOOK 4208, PAGE 3014, OF THE PUBLIC RECORDS
(COLLECTIVELY THE "ORIGINAL MORTGAGE"), TO THE EXTENT OF THE CURRENT UNPAID
BALANCE OF THE INDEBTEDNESS SECURED BY THE ORIGINAL MORTGAGE IN THE AMOUNT OF
$8,500,000.00. ACCORDINGLY, PURSUANT TO SECTIONS 199.145 AND 201.09, FLORIDA
STATUTES, NO DOCUMENTARY STAMP TAX AND NON-RECURRING INTANGIBLE TAX IS DUE IN
CONNECTION HEREWITH.
RECITALS:
1. Debtor, by its renewal promissory note of even date herewith
("Note"), is indebted to Secured Party in the principal sum of EIGHT MILLION
FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($8,500,000.00) in lawful money of
the United States of America, with interest from the date thereof at the rates
set forth in the Note, principal and interest to be payable in accordance with
the terms and conditions provided in the Note, the final payment of which, if
not sooner paid, is due and payable not later than October 2, 2000. The Renewal
Promissory Note of even date herewith made by Debtor in favor of Secured Party,
in the principal amount of $8,500,000.00 (the "Renewal Note")renews that certain
Consolidation and Renewal Note dated August 14, 1990 (the "Allstate Note"), made
by Debtor in favor of Allstate Life Insurance Company in the principal amount of
$8,500,000.00 as amended and assigned. As per the legend at the beginning of
this Instrument, documentary stamp tax and non-recurring intangible tax was
previously paid with respect to the indebtedness evidenced by the Allstate Note.
2. Debtor desires to secure the payment of and the performance of all
of its obligations under the Note and certain additional Obligations (as
defined in Section 1.01).
IN CONSIDERATION of the principal sum of the Note, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtor hereby:
A. Grants, bargains, sells, assigns, transfers, pledges,
mortgages, warrants, and conveys to Secured Party, and grants Secured Party a
security interest in, all of Debtor's right, title, and interest in the
following property (collectively, the "Collateral"), upon the terms and
conditions hereof and WITH POWER OF SALE pursuant to this Instrument and
applicable law:
(i) That certain tract or parcel of land of which Debtor is
now seized and in possession, situated in Orange County, Florida, and more fully
described in Exhibit A attached hereto and by this reference incorporated herein
("Premises");
(ii) Any and all buildings, constructions, and improvements
now or hereafter erected or located in or on the Premises, including, but not
limited to, all fixtures, attachments, appliances, equipment, machinery, and
other articles now owned by Debtor or hereafter acquired by Debtor and attached
or affixed thereto or located thereon (except the personalty owned by tenants)
(collectively, the "Improvements"), together with all appurtenances and
additions thereto and betterments, renewals, substitutions, and replacements
thereof, all of which shall be deemed and construed to be part of the realty;
(iii) All right, title, and interest of Debtor in and to all
items incorporated as part of or attributed or affixed to any of the Premises,
Improvements, or other real property included in the Collateral or any other
interest of Debtor, whether now owned or hereafter acquired, in, to or relating
to the Premises, Improvements, or such other real property, in such manner that
such items are no longer personal property under the laws of the State of
Florida;
(iv) All easements, rights-of-way, and rights now owned or
hereafter acquired by Debtor and used or usable in connection with the Premises
and the Improvements, or as a means of access thereto, including, without
limiting the generality of the foregoing, all rights pursuant to any trackage
agreement, all rights to the non-exclusive use of common drive entries, all
water and water rights, and all mineral, mining, oil, and gas rights and rights
to produce or share in the production of anything related thereto, together with
all tenements, hereditaments, and appurtenances thereof and thereto;
(v) All right, title, and interest now owned or hereafter
acquired by Debtor in and to any land lying within the right-of-way of any
street, open or proposed, adjoining the Premises, and any and all sidewalks,
alleys, and strips and gores of land adjacent to or used in connection with the
Premises or the Improvements;
(vi) All right, title, and interest of Debtor in, to, and
under all plans, specifications, maps, surveys, studies, reports, permits,
licenses, architectural, engineering and construction contracts, books of
account, insurance policies, and other documents, of whatever kind or character,
relating to the use, construction upon, occupancy, leasing, sale, or operation
of the Premises and/or the Improvements;
(vii) All of the fixtures and personal property described in
Exhibit B attached hereto and by this reference incorporated herein, now owned
or hereafter acquired by Debtor, and all appurtenances and additions thereto and
betterments, renewals, substitutions and replacements thereof; and, if the lien
and security interest granted by this Instrument is subject to any security
interest in said personal property, all right, title, and interest of Debtor,
now or hereafter arising, in and to any and all said property is hereby assigned
to Secured Party, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of Debtor; excluding, however, all
personal property owned by tenants of the Improvements;
(viii) All interests, estates, or other claims or demands in
law and in equity which Debtor now has or may hereafter acquire in the
Collateral;
(ix) All right, title, and interest now owned or hereafter
acquired by Debtor in and to all options to purchase or lease the Premises, the
Improvements or any other Collateral, or any portion thereof or interest
therein, and in and to any greater estate in the Premises, the Improvements, or
any other Collateral; and
(x) All of the estate, interest, right, title, other claim, or
demand, both in law and in equity, including claims or demands with respect to
the proceeds of insurance relating thereto, which Debtor now has or may
hereafter acquire in the Premises, the Improvements or any other Collateral, or
any portion thereof or interest therein, and any and all awards made for the
taking by eminent domain, or by any proceeding or purchase in lieu thereof, of
the whole or any part of the Collateral, including, without limitation, any
award resulting from a change of any streets (whether as to grade, access, or
otherwise) and any award for severance damages; and
B. Assigns, sets over, and transfers to Secured Party:
(i) All leasehold estates, right, title, and interest of
Debtor in and to all ground leases, leases, or subleases covering the Premises,
the Improvements, or any portion thereof, now or hereafter existing or entered
into (collectively, "Leases"), and all right, title, and interest of Debtor
thereunder, including, without limitation, all guaranties thereof, all cash or
security deposits, advance rentals, and all deposits or payments of similar
nature; and
(ii) All rents, proceeds, issues, profits, royalties, income,
and other benefits derived from the Premises or the Improvements or any other
portion of the Collateral (collectively, the "Rents").
TO HAVE AND TO HOLD the Collateral unto the Secured Party and
its successors and assigns forever, subject to the matters described in Exhibit
C attached hereto and by this reference incorporated herein ("Permitted
Encumbrances"), and to all of the terms, conditions, covenants, and agreements
herein set forth, for the security and benefit of Secured Party, and its
successors and assigns, as holders of the Note or any other Obligations.
IN FURTHERANCE OF THE FOREGOING, Debtor hereby warrants,
represents, covenants, and agrees as follows:
ARTICLE I
OBLIGATIONS
Section 1.01 Obligations. This Instrument is executed,
acknowledged, and delivered by Debtor to secure and enforce the following
obligations (collectively, the "Obligations"):
(a) Payment of and performance of all obligations of Debtor under
the Note;
(b) Performance of every obligation, covenant, and agreement of
Debtor arising under or in connection with this Instrument and all other Loan
Documents (as defined in Section 1.02 hereof);
(c) Payment of all sums advanced pursuant to the terms of this
Instrument to protect and preserve the Collateral and the lien and security
interest hereby created therein;
(d) Payment of all sums advanced and costs and expenses incurred
by Secured Party in connection with the Obligations, or any part thereof, any
renewal, extension or change of or substitution for the Obligations or any part
thereof, or the acquisition or perfection of the security therefor, whether made
or incurred at the request of Debtor or Secured Party;
(e) Payment of all other indebtedness and liabilities
and performance of all other obligations of Debtor to Secured Party arising
pursuant to or in connection with this Instrument or any other Loan Document;
and
(f) All renewals, extensions, amendments, modifications,
consolidations, and changes of, or substitutions or replacements for, all or any
part of the items described under clauses (a) through (e) above.
Section 1.02 Loan Documents. This Instrument, the Note, and any
other deed to secure debt, deed of trust, mortgage, collateral mortgage, pledge,
security deed, security agreement, guaranty, or other agreement or instrument
now or hereafter given to evidence or further secure the payment and performance
of any of the Obligations, are herein referred to collectively as the "Loan
Documents."
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Debtor hereby represents and warrants to Secured Party as follows:
Section 2.01 Title. (i) Debtor is seised of the Premises and
Improvements in fee, and has good, marketable, and insurable title to the
Collateral, free and clear of all liens, charges, encumbrances, and security
interests whatsoever, except Permitted Encumbrances; (ii) Debtor has full power
and authority to grant this Instrument; and (iii) Debtor will forever warrant
and defend its title to the Collateral, and the validity, enforceability, and
priority of the lien and security interest created hereby, against the claims of
all persons.
Section 2.02 Legal Status and Authority. Debtor is a limited
partnership duly organized, validly existing, and in good standing under the
laws of its state of organization or incorporation; and is duly qualified to
transact business and is in good standing in the State of Florida; and has all
necessary approvals, governmental and otherwise, and full power and authority to
own its properties (including the Collateral) and carry on its business as now
conducted and proposed to be conducted.
Section 2.03 Validity of Loan Documents.
(a) The execution, delivery, and performance of the Loan Documents and
the borrowing evidenced by the Note (i) are within the corporate/partnership
power of Debtor; (ii) have been authorized by all requisite
corporate/partnership action; (iii) have received all necessary approvals and
consents, corporate, governmental, or otherwise; (iv) will not violate, conflict
with, result in a breach of, or constitute (with notice or lapse of time, or
both) a default under any provision of law, any order or judgment of any court
or governmental authority, the articles of incorporation, bylaws, partnership or
trust agreement, or other governing instrument of Debtor, or any indenture,
agreement, or other instrument to which Debtor is a party or by which it or any
of its property is or may be bound or affected; (v) will not result in the
creation or imposition of any lien, charge, or encumbrance whatsoever upon any
of its properties or assets, except the lien and security interest created
hereby; and (vi) will not require any authorization or license from, or any
filing with, any governmental or other body (except for the recordation of this
Instrument in appropriate land records in the State of Florida and except for
Uniform Commercial Code filings relating to the security interest created
hereby).
(b) The Loan Documents constitute legal, valid, and binding
obligations of Debtor.
Section 2.04 Litigation. There is no action, suit, or proceeding,
judicial, administrative, or otherwise (including any condemnation or similar
proceeding), pending or, to the best knowledge of Debtor, threatened or
contemplated against, or affecting, Debtor or the Collateral.
Section 2.05 Status of Collateral.
(a) The Premises and Improvements are not located in an area identified
by the Secretary of Housing and Urban Development, or any successor thereto, as
an area having special flood hazards pursuant to the National Flood Insurance
Act of 1968 or the Flood Disaster Protection Act of 1973, as amended, or any
successor law, or, if located within any such area, Debtor has obtained and will
maintain the insurance prescribed in Section 3.06 hereof.
(b) Debtor has all necessary certificates, licenses, and other
approvals, governmental and otherwise, necessary for the operation of the
Premises and Improvements and the conduct of its business thereat, and all
required zoning, building code, land use, environmental and other similar
permits or approvals, all of which are in full force and effect as of the date
hereof and not subject to revocation, suspension, forfeiture, or modification.
(c) The Premises and Improvements, and the present and contemplated use
and occupancy thereof, are in full compliance with all applicable zoning
ordinances, building codes, land use, and environmental laws and other similar
laws.
(d) To Debtor's actual knowledge neither Debtor nor, to Debtor's best
knowledge, any tenant of the Premises or the Improvements, or any other person,
has stored or discharged on the Premises or the Improvements, whether with or
without a permit, any hazardous or toxic wastes or substances.
(e) The Premises and Improvements are served by all utilities required
for the contemplated use thereof.
(f) All public roads and streets necessary to serve the Premises and
Improvements for the contemplated use thereof have been completed, are
serviceable, and have been dedicated to and formally accepted by the appropriate
governmental entities.
(g) The Collateral is free from damage caused by fire or other
casualty.
(h) All costs and expenses of any and all labor, materials, supplies,
and equipment used in the construction of the Improvements have been paid in
full, except as otherwise contemplated by the Permitted Encumbrances.
(i) Debtor has paid in full for, and is the owner of, all furnishings,
fixtures, and equipment (other than tenants' property) used in connection with
the operation of the Premises, free and clear of any and all security interests,
liens, or encumbrances, except the Permitted Encumbrances and the lien and
security interest created hereby.
Section 2.06 Tax Status of Debtor. Debtor is not a "foreign
person" within the meaning of Sections 1445 and 7701 of the Internal Revenue
Code of 1986 and the regulations promulgated thereunder.
Section 2.07 Bankruptcy. No bankruptcy, reorganization, arrangement,
insolvency, or liquidation proceeding, or any other proceeding for the relief of
debtors, has been instituted by or against Debtor or, if Debtor is a
partnership, any general partner of Debtor.
ARTICLE III
COVENANTS AND AGREEMENTS
Debtor covenants and agrees with Secured Party as follows:
Section 3.01 Payment of Obligations. Debtor shall pay when due and
shall perform the Obligations.
Section 3.02 Continuation of Existence. Debtor shall maintain in
good standing its existence, franchises, rights, and privileges under the laws
of the State of Maryland and its right to transact business in the State of
Florida, and shall not (i) without Secured Party's prior written consent
dissolve, terminate, or otherwise dispose of, directly or indirectly or by
operation of law, all or substantially all of its assets; (ii) reorganize or
change its legal structure without the prior written consent of Secured Party;
or (iii) without Secured Party's prior written consent change its name, the
address of its principal offices, or the name under which Debtor conducts its
business without promptly notifying Secured Party of such change.
Section 3.03 Taxes, Liens, and Other Charges.
(a) Debtor shall pay when due all taxes, liens, assessments, dues,
fines, impositions, and public charges, general and special, ordinary and
extraordinary, of every character (including penalties and interest), now or
hereafter levied or assessed upon or against the Collateral ("Assessments"), and
shall provide Secured Party, within thirty (30) days after the due date of any
such Imposition, with receipts evidencing such payments. Debtor shall also pay
(i) all income, franchise, and other taxes and governmental charges levied,
assessed, or imposed by the United States of America, or any state, any
political subdivision thereof, or any other taxing authority upon Debtor or in
respect of any of the Collateral which, if unpaid, would become a lien or charge
upon the Collateral, or any part thereof; and (ii) all charges made by utility
companies, public or private, for services furnished or used in connection with
the Collateral (together with the Assessments, collectively, "Impositions").
(b) Debtor shall have the right before any delinquency occurs to
contest or object to the amount or validity of any such Imposition by
appropriate legal proceedings, but this right shall not be deemed or construed
in any way as relieving, modifying, or extending Debtor's covenant to pay any
such Imposition at the time and in the manner provided herein unless (A) Debtor
has given prior written notice to Secured Party of Debtor's intent to so contest
or object to an Imposition; and (B) upon Secured Party's written director to
Debtor, Debtor shall demonstrate to Secured Party's reasonable satisfaction that
the legal proceedings shall conclusively operate to prevent the sale of the
Collateral, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings; and (C) either (i) Debtor shall demonstrate
to Secured Party's reasonable satisfaction that Debtor has provided a good and
sufficient undertaking as may be required or permitted by law to accomplish a
stay of any such sale, or (ii) Debtor shall furnish a good and sufficient bond
or surety as requested by, and in form and amount satisfactory to, Secured
Party.
(c) Debtor shall pay all taxes (excluding income, franchise, and
doing business taxes), assessments, charges, expenses, costs, and fees
(including registration and recording fees) levied on, or assessed against
Secured Party, or incurred in connection with any of the Loan Documents. Debtor
shall also pay all stamp and other similar taxes required to be paid in
connection with the Obligations.
(d) In the event of the enactment of or change (including a change in
interpretation) of any applicable law, in any manner changing or modifying the
laws governing (i) the taxation of mortgages or other security instruments or
the debts secured thereby; (ii) the manner of collecting such taxes; or (iii)
reserve or special deposit requirements in respect of loans or other assets held
by Secured Party, so as to adversely affect Secured Party, this Instrument, or
any other Loan Document or the indebtedness secured hereby, Debtor shall
promptly pay any such tax and otherwise compensate Secured Party to the extent
of such detriment; provided, however, that if Debtor fails to make such payment
or any such law prohibits Debtor from making such payment or would penalize
Secured Party in the event of such payment, then the entire principal balance of
the Obligations, together with all interest accrued thereon, and any and all
other sums secured by this Instrument, shall, without notice, become immediately
due and payable at the option of Secured Party.
Section 3.04 Defense of Title and Litigation. If the lien or
security interest created by this Instrument, or the validity, enforceability,
or priority thereof or of this Instrument, or if title or any of the rights of
Debtor or Secured Party in or to the Collateral, shall be endangered or
questioned, or shall be attacked directly or indirectly, or if any action or
proceeding is instituted against Debtor or Secured Party with respect thereto,
Debtor will promptly notify Secured Party thereof and will diligently endeavor
to cure any defect which may be developed or claimed, and will take all
necessary and proper steps for the defense of such action or proceeding,
including the employment of counsel, the prosecution or defense of litigation,
and, subject to Secured Party's approval, the compromise, release, or discharge
of any and all adverse claims. Secured Party (whether or not named as a party to
such actions or proceedings) is hereby authorized and empowered (but shall not
be obligated) to take such additional steps as it may deem necessary or proper
for the defense of any such action or proceeding or the protection of the lien,
security interest, validity, enforceability, or priority of this Instrument, or
of such title or rights, including the employment of counsel, the prosecution or
defense of litigation, the compromise, release, or discharge of such adverse
claims, the purchase of any tax title, and the removal of such prior liens and
security interests. Debtor shall, on demand, reimburse Secured Party for all
expenses (including attorneys' fees and disbursements) incurred by it in
connection with the foregoing matters. All such costs and expenses of Secured
Party, until reimbursed by Debtor, shall be part of the Obligations and shall be
and shall be deemed to be secured by this Instrument.
Section 3.05 Operation and Maintenance of Collateral.
(a) Repair and Maintenance. Debtor will operate and maintain the
Premises, the Improvements, and the other Collateral in good order, repair, and
operating condition ordinary wear and tear excepted; will promptly make all
necessary repairs, renewals, replacements, additions, and improvements thereto,
interior and exterior, structural and nonstructural, foreseen and unforeseen,
or otherwise necessary to ensure that the same as part of the security under
this Instrument shall not in any way be diminished or impaired; and will not
cause or allow any of the Premises, the Improvements, or any other Collateral to
be misused or wasted or to deteriorate. No part of the Improvements shall be
removed, demolished, or structurally or materially altered, nor shall any new
building, structure, facility, or other improvement be constructed on the
Premises without Secured Party's prior written consent.
(b) Replacement of Collateral. Debtor will keep the Premises and the
Improvements fully equipped, and will replace all worn out or obsolete
Collateral with fixtures or personal property comparable thereto when new, and
will not, without Secured Party's prior written consent, remove from the
Premises or the Improvements any fixtures or personalty covered by this
Instrument unless the same is replaced by Debtor with an article of equal
suitability and value when new, owned by Debtor free and clear of any lien or
security interest (other than Permitted Encumbrances and the lien and security
interest created by this Instrument).
(c) Compliance with Laws. Debtor will perform and comply promptly with,
and cause the Collateral to be maintained, used, and operated in accordance
with, any and all (i) present and future laws, ordinances, rules, regulations,
and requirements of every duly-constituted governmental or quasi-governmental
authority or agency applicable to Debtor or the Collateral; (ii) similarly
applicable orders, rules, and regulations of any regulatory, licensing,
accrediting, insurance underwriting or rating organization, or other body
exercising similar functions; (iii) similarly applicable duties or obligations
of any kind imposed under any Permitted Encumbrance or otherwise by law,
covenant, condition, agreement, or easement, public or private; and (iv)
policies of insurance at any time in force with respect to the Collateral. If
Debtor receives any notice that Debtor or the Collateral is in default under or
is not in compliance with any of the foregoing, or notice of any proceeding
initiated under or with respect to any of the foregoing, Debtor will promptly
furnish a copy of such notice to Secured Party.
(d) Zoning; Title Matters. Debtor will not, without the prior written
consent of Secured Party, (i) initiate or support any zoning reclassification of
the Premises or the Improvements, seek any variance under existing zoning
ordinances applicable to the Premises or the Improvements, or use or permit the
use of the Premises and Improvements in a manner which would result in such use
becoming a non-conforming use under applicable zoning ordinances; (ii) modify,
amend, or supplement any of the Permitted Encumbrances; (iii) impose any
restrictive covenants or encumbrances upon the Collateral, execute or file any
subdivision plat affecting the Premises or the Improvements, or consent to the
annexation of the Premises or the Improvements to any municipality; or (iv)
permit or suffer the Premises and the Improvements to be used by the public or
any person in such manner as might make possible a claim of adverse usage or
possession, or of any implied dedication or easement.
(e) No Cooperative or Condominium. Debtor shall not operate or permit
the Premises or the Improvements to be operated as a cooperative, condominium,
or other form of ownership in which the lessees or other occupants thereof
participate in the ownership, control, or management of the Premises,
Improvements, or any part thereof, as lessees, stockholders, or otherwise.
Section 3.06 Insurance.
(a) Casualty Insurance. Debtor shall keep the Premises, the
Improvements, and the other Collateral insured for the benefit of Secured Party
as follows:
(i) against damage or loss by fire and such other hazards
(including lightning, windstorm, hurricane, hail, explosion, riot, riot
attending a strike, civil commotion, vandalism, malicious mischief, aircraft,
vehicle, and smoke) as are covered by an All Risk coverage policy or the
broadest form of extended coverage endorsement as is available from time to
time, in an amount not less than the Obligations unless the full insurable value
(as defined in subsection (h) of this Section) of the Premises and Improvements,
subject to verification by Secured Party, is less;
(ii) rent or business interruption or use and occupancy insurance,
on such basis and in such amounts as shall be satisfactory to Secured Party, and
in any event not less than an amount equal to one (1) year's total income from
the Premises and the Improvements, including, but not limited to, all rent and
all other income (if any) such as tenant reimbursement of operating expenses;
(iii) against damage or loss by flood if the Premises are
located in an area identified by the Secretary of Housing and Urban Development,
or any successor, as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of 1968
or the Flood Disaster Protection Act of 1973, as amended, modified,
supplemented, or replaced from time to time, on such basis and in such amounts
as shall be reasonably required by Secured Party;
(iv) against damage or loss from (i) sprinkler system leakage
and (ii) boilers, boiler tanks, heating and air-conditioning equipment, pressure
vessels, auxiliary piping, and similar apparatus, on such basis and in such
amounts as shall be reasonably required by Secured Party;
(v) during the period of any construction, repair, restoration, or
replacement of the Improvements and any other Collateral, a standard builder's
risk policy with extended coverage for an amount at least equal to the full
insurable value of such Improvements, and other Collateral and worker's
compensation, in statutory amounts; and
(vi) against damage or loss by earthquake on such basis and in such
amounts as shall be reasonably required by Secured Party.
(b) Liability Insurance. Debtor shall also procure and maintain
comprehensive general liability insurance on an occurrence basis covering Debtor
and Secured Party against claims for bodily injury or death or property damage
occurring in, upon, or about or resulting from the Premises, the Improvements,
or any other Collateral, or any street, drive, sidewalk, curb, or passageway
adjacent thereto, in standard form and with such insurance company or companies
and in such amounts as are reasonably approved by Secured Party (but such
coverage or the amount thereof shall in no way limit such indemnification).
(c) Other Insurance. Debtor, at Secured Party's request, shall procure
and maintain such other insurance or such additional amounts of insurance
covering Debtor or the Collateral as Secured Party shall from time to time
require, in its reasonable discretion, including, but not limited to, insurance
against war risks, if and to the extent available, and builder's risk insurance,
if applicable.
(d) Form of Policy. All insurance required under this Section shall be
fully paid for, nonassessable, and the policies therefor shall contain such
provisions, endorsements, and expiration dates as Secured Party shall from time
to time request, in its reasonable discretion, and shall be in such form and
amounts and be issued by such insurance companies doing business in the
jurisdiction in which the Premises are located as shall be approved by Secured
Party. Without limiting the foregoing, all such policies shall have endorsed
thereon, in form acceptable to Secured Party, a standard mortgagee clause,
without contribution, in the name of Secured Party. All such policies shall
provide that the same shall not be canceled, amended, or materially altered
(including by reduction in the scope or limits of coverage) without at least
thirty (30) days' prior written notice to Secured Party.
(e) Original Policies. Debtor shall deliver to Secured Party original
or certified copies of policies evidencing the insurance required under this
Section, and any additional insurance on the Collateral. Debtor shall also
deliver to Secured Party (i) receipts evidencing payment of all premiums on such
policies and (ii) originals or certified copies of any and all renewal policies
with evidence satisfactory to Secured Party of the payment of all premiums due
and payable thereon, at least thirty (30) days prior to the expiration of each
such policy. If original policies and renewal policies are unavailable or if
such coverage is under a blanket policy, Debtor shall deliver to Secured Party
duplicate originals of such policies or, if unavailable, original certificates
from the issuing insurance companies evidencing that such policies are in full
force and effect, together with certified copies of the original policies.
(f) No Separate Insurance. Debtor shall not carry separate or
additional insurance concurrent in form or contributing in the event of loss
with that required under this Section unless endorsed in favor of Secured Party
in accordance with the requirements of this Section and otherwise approved by
Secured Party in all respects.
(g) Transfer of Title. In the event of foreclosure of this Instrument
or other transfer of title or assignment of the Premises and the other
Collateral in extinguishment, in whole or in part, of the Obligations, all
right, title, and interest of Debtor in and to all policies of insurance
required under this Section or otherwise then in force with respect thereto, and
all proceeds payable thereunder and unearned premiums thereon, shall immediately
vest in the purchaser or other transferee of the Premises and the other
Collateral.
(h) Replacement Cost. For purposes of this Section, the term "full
insurable value" shall mean the actual cost of replacing the property in
question, without allowance for depreciation and exclusive of the cost of
excavations, foundations, and footings, as determined from time to time (but not
less often than once every calendar year) by the insurance company or companies
holding such insurance or by an appraiser, engineer, architect, or contractor
proposed by Debtor and approved by said company or companies and Secured Party.
(i) Approval Not Warranty. No approval by Secured Party of any insurer
shall be construed to be a representation, certification, or warranty of its
solvency, and no approval by Secured Party as to the amount, type, and/or form
of any insurance shall be construed to be a representation, certification, or
warranty of its sufficiency.
Section 3.07 Damage and Destruction of Collateral.
(a) Debtor's Obligations. In the event of any damage to or loss or
destruction of the Collateral, (i) Debtor shall promptly notify Secured Party of
such event and take such steps as shall be necessary to preserve any undamaged
portion of the Collateral and (ii) if, pursuant to Section 3.07(b), the
insurance proceeds are applied to the restoration, replacement, or rebuilding of
such Collateral (but regardless whether such insurance proceeds, if any, shall
be sufficient for the purpose), Debtor shall promptly commence to seek, and
diligently seek, building permits and, after obtaining same, shall promptly
commence and diligently pursue to completion the restoration, replacement, and
rebuilding of the Collateral as nearly as possible to its value, condition, and
character immediately prior to such damage, loss, or destruction and in
accordance with plans and specifications approved, and with other provisions for
the preservation of the security hereunder established, by Secured Party.
(b) Secured Party's Rights; Application of Proceeds. In the event that
any portion of the Collateral is so damaged, destroyed, or lost, and such
damage, destruction, or loss is covered, in whole or in part, by insurance
described in Section 3.06, then (i) Secured Party may, but shall not be
obligated to, make proof of loss if not made promptly by Debtor and is hereby
authorized and empowered by Debtor to settle, adjust, or compromise any claims
for damage, destruction, or loss thereunder; (ii) each insurance company
concerned is hereby authorized and directed to make payment therefor directly to
Secured Party; and (iii) Secured Party shall have the right to apply the
insurance proceeds, first, to reimburse Secured Party for all costs and
expenses, including adjustors' and attorneys' fees and disbursements, incurred
in connection with the collection of such proceeds and, second, subject to
Section 3.07(c), the remainder of such proceeds shall be applied, at Secured
Party's option, either (x) in payment (without premium or penalty) of all or any
part of the Obligations, whether or not then due and payable, in the order and
manner determined by Secured Party (provided that to the extent that any
Obligation shall remain outstanding after such application, such unpaid
Obligation shall continue in full force and effect and Debtor shall not be
excused in the payment thereof), or to the cure of any then current default
hereunder; or (y) to the restoration, replacement, or rebuilding, in whole or in
part, of the portion of the Collateral so damaged, destroyed, or lost, provided
that any insurance proceeds held by Secured Party to be applied to the
restoration, replacement, or rebuilding of the Premises shall be paid out from
time to time upon compliance by Debtor with such provisions and requirements as
may be imposed by Secured Party , which provisions and requirements shall be
customary and typical for construction loan escrows. Secured Party shall pay
interest on insurance proceeds held by Secured Party in an amount and manner
determined solely by Secured Party. Notwithstanding the foregoing, Secured Party
shall have no obligation to pay interest on such funds after the occurrence of
an Event of Default. All such interest shall be added to such funds. In the
event that Debtor shall have received all or any portion of such insurance
proceeds, or any other proceeds in respect of such damage or destruction,
Debtor, upon demand from Secured Party, shall pay to Secured Party an amount
equal to the amount so received by Debtor, to be applied as Secured Party shall
have the right pursuant to clause (iii) of the immediately-preceding sentence.
Notwithstanding anything herein or at law or in equity to the contrary, none of
the insurance proceeds or payments in lieu thereof paid to Secured Party as
herein provided shall be deemed trust funds, and Secured Party shall be entitled
to dispose of such proceeds as provided in this Section. Debtor expressly
assumes all risk of loss, including a decrease in the use, enjoyment, or value
of the Collateral, from any casualty whatsoever, whether or not insurable or
insured against.
(c) Application of Proceeds to Restoration. Anything in this Section
3.07 to the contrary notwithstanding, in the event of an insured loss, Secured
Party shall permit the application of insurance proceeds to restoration of the
Collateral to as good or better condition as existed prior to the damage,
destruction, or loss, in accordance with plans and specifications approved by
Secured Party in its reasonable discretion, if: (i) no more than 30% of the
gross area of the Improvements is directly affected by such damage, destruction,
or loss and the amount of the loss does not exceed 20% of the value of the
Collateral immediately before the damage, destruction or loss; (ii) there is no
Event of Default (as defined in Section 6.01) at the time of such application;
(iii) the insurer does not deny liability to any named insured; (iv) rental loss
insurance is available and in force and effect to offset fully any abatement of
rent to which any lessee of the Premises may be entitled as a result of such
loss; (v) in Secured Party's sole judgment, restoration can be completed within
one (1) year after the damage, destruction, or loss and at least three (3)
months prior to the maturity of the Note.
(d) Disbursement of Proceeds. If Secured Party elects pursuant to
Section 3.07(b) or is required pursuant to Section 3.07(c) to apply insurance
proceeds to restoration, (i) the proceeds may at Secured Party's election be
disbursed in installments by Secured Party or by a disbursing agent
("Depository") selected by Secured Party, and whose fees and expenses shall be
paid by Debtor; (ii) Debtor shall, upon demand by Secured Party from time to
time, deposit with Secured Party or a Depository, in a mutually-acceptable
interest-bearing account, the amount of any deductible under such insurance
coverage and such amounts in excess of the amount from time to time on deposit
as may be necessary to complete such restoration; and (iii) the insurance
proceeds shall be disbursed from time to time as restoration progresses
satisfactorily in Secured Party's reasonable judgment, based upon receipt of
appropriate lien waivers and a certificate of the architect or engineer in
charge of the work, the form and content of such certificate to be reasonably
satisfactory to Secured Party, and title insurance protection against mechanic's
and materialmen's liens. If (i) Secured Party elects to apply the proceeds to
restoration of the Collateral and Debtor refuses or fails to restore the
Collateral; (ii) Debtor shall fail to complete the restoration of the
Collateral; (iii) an Event of Default occurs prior to full disburement of the
insurance proceeds; or (iv) for any reason the proceeds of insurance are not
applied to restoration of the Collateral, any undisbursed portion may, at
Secured Party's option, be applied to the Obligations, whether or not then due
and in any order of priority, and any such application to principal shall be
deemed to be a prepayment of the outstanding principal balance of the Note and
shall be subject to a prepayment premium computed in accordance with the Note.
Section 3.08 Condemnation.
(a) Debtor's Obligations; Proceedings. Promptly upon obtaining
knowledge of any pending or threatened institution of any proceedings for the
condemnation of the Collateral, or any part or interest therein, or of any right
of eminent domain, or of any other proceedings arising out of injury or damage
to or decrease in the value of the Collateral (including any change in any
street, whether as to grade, access, or otherwise), or any part thereof or
interest therein, Debtor will notify Secured Party of the threat or pendency
thereof. Secured Party may participate in any such proceedings (but shall not be
obligated to do so), and Debtor from time to time will execute and deliver to
Secured Party all instruments requested by Secured Party or as may be required
to permit such participation. Debtor shall, at its expense, diligently prosecute
any such proceedings, shall deliver to Secured Party copies of all papers served
in connection therewith, and shall consult and cooperate with Secured Party, its
attorneys and agents, in the carrying on and defense of any such proceedings;
provided that no settlement of any such proceeding shall be made by Debtor
without Secured Party's prior written consent.
(b) Secured Party's Rights to Proceeds. All proceeds of condemnation
awards or proceeds of sale in lieu of condemnation, and all judgments, decrees,
and awards for injury or damage to the Collateral are hereby assigned and shall
be paid to Secured Party. Debtor agrees to execute and deliver such further
assignments thereof as Secured Party may request, and authorizes Secured Party
to collect and receive the same, to give receipts and acquittances therefor, and
to appeal from any such judgment, decree, or award.
(c) Application of Proceeds. Secured Party shall have the right to
apply any proceeds, judgments, decrees, or awards referred to in subsection (b)
of this Section, first, to reimburse Secured Party for all costs and expenses,
including reasonable attorneys' fees and disbursements, actually incurred in
connection with the proceeding in question, and any appeal therefrom, or in the
collection of such amounts, and, second, subject to Section 3.08(d), to apply
the remainder thereof as provided in Sections 3.07(b) and 3.07(d) for insurance
proceeds held by Secured Party, including the waiver of prepayment premium. In
the event that Debtor shall have received all or any portion of such proceeds,
judgments, decrees, or awards, Debtor, upon demand from Secured Party, shall pay
to Secured Party an amount equal to the amount so received by Debtor, to be
applied as Secured Party shall have the right pursuant to this subsection.
Notwithstanding anything herein or at law or in equity to the contrary, none of
the proceeds, judgments, decrees or awards or payments in lieu thereof paid to
Secured Party as herein provided shall be deemed trust funds, and Secured Party
shall be entitled to dispose of such proceeds as provided in this Section.
(d) Application of Proceeds to Restoration. Anything in this Section
3.08 to the contrary notwithstanding, in the event of a limited, partial taking
as hereinafter described, Secured Party shall permit the application of any
condemnation award or other payment to restoration of the Collateral and all
Improvements (including, but not limited to, parking, drives, sidewalks, and
landscaping) located thereon to substantially the same size and character as
theretofore existed, and to as good or better condition, in accordance with
plans and specifications approved by Secured Party in its reasonable discretion,
if: (a) such taking involves less than 20% of the rentable square feet in the
Improvements or less than 10% of the parking spaces, and does not affect access
to the Collateral (or any part thereof) from any public right-of-way; (b) there
is no Event of Default hereunder at the time of such application; (c) the
remaining Collateral continues at all times to comply with all applicable
building, zoning and other land use laws and regulations; (d) in Secured Party's
sole judgment, restoration is practicable and can be completed within one (1)
year after the taking and at least three (3) months prior to the maturity of the
Note; and (e) any and all lessees of the Premises whose leases permit
termination thereof or abatement of rent as a result of such taking agree in
writing to continue their leases without abatement of rent.
(e) Effect on the Obligations. Notwithstanding any condemnation,
taking, or other proceeding referred to in this Section causing injury to or
decrease in value of the Premises (including a change in any street, whether as
to grade, access, or otherwise), or any interest therein, Debtor shall continue
to pay and perform the Obligations as provided herein. Any reduction in the
Obligations resulting from such application shall be deemed to take effect only
on the date of receipt by Secured Party of such proceeds, judgments, decrees or
awards and application against the Obligations, provided that if prior to the
receipt by Secured Party of such proceeds, judgments, decrees, or awards, the
Collateral shall have been sold on foreclosure of this Instrument (or pursuant
to the power of sale granted hereunder), or shall have been transferred by
deed-in-lieu of foreclosure, Secured Party shall have the right to receive the
same to the extent of any deficiency found to be due upon such sale, with legal
fees and disbursements incurred by Secured Party in connection with the
collection thereof.
Section 3.09 Liens and Liabilities.
(a) Discharge of Liens. Debtor shall pay, bond, or otherwise discharge,
from time to time when the same shall become due, all claims and demands of
mechanics, materialmen, laborers, and others which, if unpaid, might result in,
or permit the creation of, a lien or encumbrance on the Collateral, or on the
revenues, rents, issues, income, or profits arising therefrom and, in general,
Debtor shall do, or cause to be done, at Debtor's sole cost and expense,
everything necessary to fully preserve the lien and security interest created by
this Instrument and the priority thereof.
(b) Creation of Liens. Debtor shall not, without Secured Party's prior
written consent, create, place, or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
deed of trust, mortgage, deed to secure debt, voluntary or involuntary lien,
whether statutory, constitutional, or contractual (except for Impositions which
are not yet due and payable), security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Collateral, prior to, on a parity with, or subordinate to the lien of this
Instrument, other than Permitted Encumbrances.
(c) No Consent. Nothing in the Loan Documents shall be deemed or
construed in any way as constituting the consent or request by Secured Party,
express or implied, to any contractor, subcontractor, laborer, mechanic, or
materialman for the performance of any labor or the furnishing of any material
for any improvement, construction, alteration, or repair of the Collateral.
Debtor further agrees that Secured Party does not stand in any fiduciary
relationship to Debtor.
Section 3.10 Tax and Insurance Deposits.
(a) Amount of Deposits. Secured Party may, at any time after an Event
of Default (whether or not subsequently waived or then existing), require for
the balance of the term of the Note that Debtor deposit with Secured Party or
any service or financial institution designated by Secured Party pursuant to
Section 3.10(e) (collectively, a "Depository"), monthly, one-twelfth (1/12) of
the annual Assessments and the premiums for insurance required under Section
3.06, and Debtor shall, accordingly, make such deposits. In addition, if
required by Secured Party, Debtor shall also deposit with the Depository a sum
of money which, together with the aforesaid monthly installments, will be
sufficient to make each of said payments of Assessments and premiums at least
sixty (60) days before such payments are due. If the amount of any such payments
is not ascertainable at the time any such deposit is required to be made, the
deposit shall be made on the basis of Secured Party's estimate thereof, and,
when such amount is fixed for the then-current year, Debtor shall promptly
deposit any deficiency with the Depository.
(b) Use of Deposits. All funds so deposited shall, until so applied,
constitute additional security for the Obligations, shall be held by the
Depository without interest (except to the extent required under applicable
law), may be commingled with other funds of the Depository, and, provided that
no Event of Default (as defined in Section 6.01) shall have occurred and be
continuing hereunder, shall be applied in payment of the aforesaid amounts prior
to their becoming delinquent, but only to the extent that the Depository shall
have such funds on hand, provided that the Depository shall have no obligation
to use said funds to pay (i) any installment of Assessments prior to the last
day on which payment thereof may be made without penalty or interest, or to pay
any insurance premium prior to the due date thereof; or (ii) any of the
aforesaid amounts unless Debtor shall have furnished the Depository with the
bills or invoices therefor in sufficient time to pay the same before any penalty
or interest attaches and before said policies of insurance lapse, as the case
may be. If an Event of Default shall have occurred and be continuing hereunder,
or if the Obligations shall be accelerated as herein provided, all funds so
deposited may, at Secured Party's option, be applied to the Obligations in the
order determined by Secured Party or to cure said Event of Default or as
provided in this Section. In no event shall Debtor claim any credit against the
principal and interest due hereunder for any payment or deposit for taxes or
insurance.
(c) Transfer of Instrument. Upon an assignment or other transfer of
this Instrument, the Depository shall have the right to pay over the balance of
such deposits in its possession to the assignee or other successor, and the
Depository shall thereupon be completely released from all liability with
respect to such deposits, and Debtor or the owner of the Collateral shall look
solely to the assignee or transferee with respect thereto. This provision shall
apply to every transfer of such deposits to a new assignee or transferee.
(d) Transfer of the Premises. Subject to Article V hereof, transfer of
record title to the Premises and any other Collateral shall automatically
transfer to the new owner the beneficial interest in any deposits under this
Section. Upon full payment and satisfaction of this Instrument or, at Secured
Party's option, at any prior time, the balance of amounts deposited in the
Depository's possession shall be paid over to the record owner of the Premises
and such other Collateral, and no other party shall have any right or claim
thereto in any event.
(e) Designated Depository. At Secured Party's request, Debtor agrees to
make the aforesaid deposits with such service or financial institution as
Secured Party may from time to time designate in lieu of Secured Party, and the
fees and costs of such services of such institution shall be borne by Debtor.
(f) Tax Monitoring Service. Secured Party may, at its option, retain
the services of a firm or other person to monitor the payment by Debtor of all
real estate taxes and assessments on or relating to the Collateral, or any part
thereof, and the fees and costs of such firm or other person shall be borne by
Debtor.
Section 3.11 ERISA.
(a) Debtor covenants and agrees to deliver to Secured Party such
certifications or other evidence from time to time throughout the term of this
Instrument, as requested by Secured Party in its sole discretion, that (i)
Debtor is not an "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
"governmental plan" within the meaning of Section 3(32) of ERISA; and (ii)
Debtor is not subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans; and (iii) one or more of the
following circumstances is true:
(1) Equity interests in Debtor are publicly offered securities, within
the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(2) Less than twenty-five percent (25%) of all equity interests in
Debtor are held by "benefit plan investors" within the meaning of 29 C.F.R.
Section 2510.3-101(f)(2); or
(3) Debtor qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e).
Debtor represents and warrants to Secured Party that, as of the date
hereof and throughout the term of this Instrument, (aa) Debtor is not an
"employee benefit plan" (as defined above) which is subject to Title I of ERISA;
(bb) the assets of the Debtor do not constitute "plan assets" of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101; (cc) Debtor is
not a "governmental plan" within the meaning of Section 3(32) of ERISA; and (dd)
transactions by or with Debtor are not subject to state statutes regulating
investments of and fiduciary obligations with respect to governmental plans.
(b) Any of the following shall constitute an Event of Default under
this Instrument, entitling Secured Party to exercise any and all remedies to
which it may be entitled under the Loan Documents:
(i) The failure of any representation or warranty made by Debtor
in this Section 3.11 to be true and correct in all respects; or
(ii) The failure of Debtor to provide Secured Party with the
written certification and evidence referred to in Section 3.11(a) above; or
(iii) The consummation by Debtor of a transaction which would
cause this Instrument or any exercise of Secured Party's rights under the Loan
Documents to constitute a non-exempt prohibited transaction under ERISA or a
violation of a state statute regulating governmental plans, subjecting Secured
Party to liability for violation of ERISA or such state statute.
(c) Debtor shall indemnify Secured Party and defend and hold Secured
Party harmless from and against all loss, cost, damage, and expense (including,
without limitation, attorneys' fees and costs incurred in the investigation,
defense, and settlement of claims and 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
Secured Party's sole discretion) that Secured Party may incur, directly or
indirectly, as a result of a default under Section 3.11(a). This indemnity shall
survive any termination, satisfaction, or foreclosure of this Instrument and
shall not be subject to the limitation on personal liability set forth in
Article VIII hereof.
(d) Anything in the Loan Documents to the contrary notwithstanding, no
sale, assignment, or transfer of any direct or indirect interest in the Debtor
shall be permitted which would negate Debtor's representations in this Section
3.11 or cause this Instrument (or any exercise of Secured Party's rights under
the Loan Documents) to constitute a violation of any provision of ERISA or of
any applicable state statute regulating a governmental plan, as determined in
the sole discretion of Secured Party.
(e) Anything in the Loan Documents to the contrary notwithstanding, no
direct or indirect transfer of the Premises or Improvements, or any interest
therein, including, without limitation, a junior lien or leasehold interest,
shall be permitted which would cause this Instrument (or any exercise of Secured
Party's rights under the Loan Documents) to constitute a violation of ERISA or
any applicable state statute regulating a governmental plan, as determined in
the sole discretion of Secured Party.
(f) Anything in this Instrument to the contrary notwithstanding, not
less than fifteen (15) days before consummation of any permitted transfer of
title to the Premises and Improvements or of an interest in Debtor, or any
direct or indirect right, title, or interest in either of them, or of the
placing of any lien or encumbrance on the Premises and Improvements, Debtor
shall obtain from the proposed transferee or lienholder a representation to
Secured Party in form and substance satisfactory to Secured Party that Section
3.11(a) will be true after the transfer, and further provided that any proposed
lienholder agrees that any direct or indirect transfer of its lien or any
interest therein will be governed by this Section 3.11.
Section 3.12 Environmental Matters.
(a) Hazardous Waste. At its sole cost and expense, Debtor shall comply
with all federal, state, and local laws, rules, regulations, and orders with
respect to the discharge, generation, removal, transportation, storage, and
handling of hazardous or toxic wastes, materials, contaminants, or substances,
pay immediately when due the cost of removal of any such wastes, materials,
contaminants, or substances, and keep the Collateral free of any lien imposed
pursuant to such laws, rules, regulations, and orders. Without limiting the
generality of the foregoing sentence, Debtor shall not use, store, discharge, or
transport on the Premises or Improvements, or permit to be used, discharged,
transported, or installed on the Premises or Improvements, hazardous or toxic
substances, materials, contaminants, or wastes in underground or above-ground
storage tanks, drums, or other containers except in compliance with all
applicable laws, rules, regulations, and orders. Debtor shall maintain the
integrity of all storage tanks and drums on the Premises or Improvements during
the term of the Loan. Secured Party may from time to time inspect or audit the
Premises and Improvements with respect to the condition of any storage tanks and
drums. In the event Debtor fails to do so, Secured Party may declare this
Instrument to be in default. In addition, Debtor hereby grants Secured Party and
its employees and agents an irrevocable and non-exclusive license, subject to
the rights of tenants, to enter the Premises and the Improvements to inspect, to
conduct testing, and, upon expiration of the applicable cure period under this
Instrument, to remove the hazardous or toxic wastes, materials, contaminants, or
substances. The costs of such testing and removal shall immediately become due
to Secured Party and shall be secured by this Instrument. Debtor shall indemnify
Secured Party and hold Secured Party harmless from and against all loss,
liability, damage, claim, judgment, cost, and expense (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of claims) that Secured Party may incur as a result of or in
connection with the assertion against Secured Party of any claim relating to the
presence or removal of any hazardous or toxic waste, materials, contaminants, or
substance referred to in this paragraph, or compliance or failure to comply with
any federal, state, or local laws, rules, regulations, or orders relating
thereto; provided, however, that this indemnity shall not apply if Debtor can
conclusively prove that (i) the contamination of the Collateral was caused
solely by actions, conditions, or events that occurred after the date that
Secured Party (or any purchaser at a foreclosure sale) actually acquired title
to the Collateral and (ii) the contamination of the Collateral was not caused by
the direct or indirect actions of Debtor, any partner(s) of Debtor, or any agent
of Debtor.
(b) Asbestos. Debtor shall not install or permit to be installed on the
Premises or the Improvements friable asbestos or any substance containing
asbestos and deemed hazardous by federal, state, or local laws, rules,
regulations, or orders respecting such material. With respect to any such
material currently or hereafter present on the Premises or the Improvements,
Debtor shall promptly comply with such federal, state, or local laws, rules,
regulations, or orders, at Debtor's expense. If a program of encapsulation,
enclosure, deferred removal, or alternate form of abatement of hazardous
asbestos is agreed upon, Debtor shall, upon request from Secured Party, provide
periodic inspection or audits for asbestos contaminants. If the level of
contamination exceeds guidelines established by applicable laws, rules,
regulations, or orders, or exceeds levels or criteria deemed safe by a
consultant satisfactory to Secured Party and Secured Party's architectural and
engineering staff, Debtor shall immediately bring the Premises and Improvements
into compliance with such guidelines, levels, and/or criteria. If Debtor shall
fail to so comply with the provisions of this subsection, Secured Party may
declare this Instrument to be in default. In addition, Debtor hereby grants
Secured Party and its employees and agents an irrevocable and non-exclusive
license, subject to the rights of tenants, to enter the Premises and the
Improvements to inspect, conduct testing, and, upon expiration of the applicable
cure period under this Instrument, to remove friable asbestos or any substance
containing asbestos and deemed hazardous by federal, state, or local laws,
rules, regulations, or orders respecting such material. The costs of such
inspection, testing, and removal shall immediately become due to Secured Party
and shall be secured by this Instrument. Debtor shall indemnify Secured Party
and hold Secured Party harmless from and against all loss, liability, damage,
claim, judgment, cost, and expense (including, without limitation, attorneys'
fees and costs incurred in the investigation, defense, and settlement of claims)
that Secured Party may incur as a result of or in connection with the assertion
against Secured Party of any claim relating to the presence or removal of any
asbestos substance referred to in this paragraph, or compliance or failure to
comply with any federal, state, or local laws, rules, regulations, or orders
relating thereto; provided, however, that this indemnity shall not apply if
Debtor can conclusively prove that (i) the contamination of the Collateral was
caused solely by actions, conditions, or events that occurred after the date
that Secured Party (or any purchaser at a foreclosure sale) actually acquired
title to the Collateral and (ii) the contamination of the Collateral was not
caused by the direct or indirect actions of Debtor, any partner(s) of Debtor, or
any agent of Debtor.
(c) Polychlorinated Biphenyls. Debtor shall not use, discharge,
transport, or install on the Premises or Improvements, or permit to be used,
discharged, transported, or installed on the Premises or Improvements, any
polychlorinated biphenyls ("PCB") or materials containing PCB. If, during the
term of the Loan, either the Premises or the Improvements is found to be out of
compliance with any applicable federal, state, and local laws, rules,
regulations, or orders with respect to PCB, Secured Party may declare this
Instrument to be in default. In addition, Debtor hereby grants to Secured Party
and its employees and agents an irrevocable and nonexclusive license, subject to
the rights of tenants, to enter the Premises and Improvements from time to time
to inspect, conduct testing, and/or audit the Premises and the Improvements with
respect to electrical equipment which may contain PCB and, upon expiration of
the applicable cure period under this Instrument, cause the Premises and the
Improvements to be in compliance with such laws, rules, regulations, or orders.
The costs of such inspection, testing, audit, and the costs of so bringing the
Premises and/or the Improvements into compliance, shall immediately become due
to Secured Party and shall be secured by this Instrument. Debtor shall indemnify
Secured Party and hold Secured Party harmless from and against all loss,
liability, damage, claim, judgment, cost, and expense (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of claims) that Secured Party may incur as a result of or in
connection with the assertion against Secured Party of any claim relating to the
presence or removal of PCB, or compliance with any federal, state, or local
laws, rules, regulations, or orders relating thereto; provided, however, that
this indemnity shall not apply if Debtor can conclusively prove that (i) the
contamination of the Collateral was caused solely by actions, conditions, or
events that occurred after the date that Secured Party (or any purchaser at a
foreclosure sale) actually acquired title to the Collateral and (ii) the
contamination of the Collateral was not caused by the direct or indirect actions
of Debtor, any partner(s) of Debtor, or any agent of Debtor.
(d) Recourse Obligation. Anything herein to the contrary
notwithstanding, the indemnification obligations of Debtor under paragraphs (a),
(b), and (c) of this Section 3.12 shall be full recourse obligations of Debtor
and shall survive repayment of the Note and any termination, satisfaction, or
foreclosure of this Instrument.
Section 3.13 Note Payment Facility. All payments of principal,
premium (if any), and interest on the Note shall be made by Debtor by electronic
funds transfer from a bank account established and maintained by Debtor for this
purpose, if possible; otherwise, Debtor may make all payments due by check on
the same terms and conditions are provided herein. Debtor hereby covenants and
agrees to establish and maintain such an account with a depository satisfactory
to Secured Party, in Secured Party's sole discretion, for so long as the Note
and the indebtedness evidenced thereby shall be outstanding, and further agrees
to direct in writing the depository of such account to so transmit such payments
on or before their respective due dates to the account of Secured Party at such
depository as shall be designated in writing by Secured Party. Secured Party
shall have the right, after thirty (30) days' written notice to Debtor, to
require Debtor to select a different depository. All costs of establishing and
maintaining such accounts and all costs of such electronic funds transfer shall
be paid by Debtor.
Section 3.14 Inspection. Debtor shall allow Secured Party and its
authorized representatives, or agents, including third-party property
appraisers, environmental engineers, architects, engineers, and Secured Party's
employees, to enter upon the Collateral and conduct tests and to enter upon and
inspect the Collateral, or any part thereof, at all reasonable times, and shall
assist Secured Party and such representatives or agents in effecting said
inspection.
Section 3.15 Records, Reports, and Audits.
(a) Maintenance of Records. Debtor shall keep and maintain, in
accordance with sound accounting principles, complete and accurate books and
records in which full and correct entries shall be made with respect to all
operations of or transactions involving the Collateral.
(b) Reports Concerning Entities. Annually, Debtor shall furnish to
Secured Party the financial information as follows:
(i) Financial statements of Debtor for the most current fiscal
year sworn (which shall hereinafter mean certified as being true, correct, and
accurate by an authorized person, partner, or officer) by Debtor or Certified
Public Accountant ("C.P.A.") audited; and
(ii) If applicable, financial statements of the general partner(s),
any guarantors or sureties of the Note, sworn by the delivering party or C.P.A.
audited.
The financial statements referenced in Subsection 3.15(b)(i) and (ii) above must
include a schedule of all related debt and all contingent liabilities.
(c) Reports Concerning the Collateral. Annually, Debtor shall furnish
to Secured Party operating information on the Collateral as follows:
(i) Annual operating statements for the Collateral (including
income and expenses, an annual rents schedule) sworn by Debtor or C.P.A.
audited; and
(ii) Copies of paid tax receipts for the Collateral for the most
recent tax year; and
(iii) A certified rent roll; and
(iv) A schedule showing the Debtor's tax basis in the Collateral.
(d) Delivery of Reports. All of the reports, statements, and items
required under this Section 3.15 shall be prepared in accordance with
generally-accepted accounting principles, consistently applied, and must be in
form and substance satisfactory to Secured Party. Debtor agrees to provide
Secured Party with such additional financial, management, or other information
regarding Debtor, any general partner of Debtor, or the Collateral, as Secured
Party may request. All of the reports, statements, and items required under this
Section 3.15 must be received each year this Instrument is in force by the date
which is one hundred twenty (120) days after the end of the Debtor's fiscal
year. If any one report, statement, or item is not received by Secured Party on
this due date, a late fee of Five Hundred and No/100 Dollars ($500.00) shall be
due and payable by Debtor.
(e) Inspection of Records. Debtor shall allow Secured Party or its
authorized representatives at all reasonable times and upon reasonable notice
to examine and make copies of all such books and records and all supporting data
therefor at Debtor's principal place of business or at such other place where
such books, records, and data may be located. Debtor shall assist Secured Party
or such representative in effecting such examination. Within two (2) years after
Secured Party's receipt of any such report, statement, or item, Secured Party
may, upon at least five (5) days' prior written notice to Debtor, inspect and
make copies of Debtor's or any general partner of Debtor's books, records, and
income tax returns with respect to the Collateral, for the purpose of verifying
any such reports, statements, or items.
Section 3.16 Debtor's Certificates. Debtor, within ten (10) days
after Secured Party's request, shall furnish to Secured Party a written
statement, duly acknowledged, certifying to Secured Party and/or any proposed
assignee of this Instrument, as to (a) the amount of the Obligations then owing
under this Instrument; (b) the terms of payment and maturity date of the
Obligations; (c) the date to which interest has been paid under the Note; (d)
whether any offsets or defenses exist against the Obligations and, if any are
alleged to exist, a detailed description thereof; (e) that all Leases are in
full force and effect and have not been modified (or if modified, setting forth
all modifications); (f) the date to which the rent, additional rent, and other
charges thereunder have been paid; (g) whether or not, to the best knowledge of
Debtor, any of the lessees under the Leases are in default under the Leases,
and, if any of the lessees are in default, setting forth the specific nature of
all such defaults; and (h) as to any other matters reasonably requested by
Secured Party and reasonably related to the Leases, the Obligations, the
Collateral, or this Instrument. Secured Party, within thirty (30) days after
Debtor's request, shall furnish to Debtor a written statement, duly
acknowledged, certifying to Debtor, to the best of Secured Party's knowledge, as
to the outstanding amount of the Indebtedness and whether or not any Events of
Default exist under the Loan Documents.
Section 3.17 Full Performance Required; Survival of Warranties. All
representations, warranties, and covenants of Debtor contained in any loan
application or made to Secured Party in connection with the Obligations secured
hereby or contained in this Instrument or any other Loan Document, or
incorporated by reference herein or therein, shall survive the execution and
delivery of this Instrument and, except as and to the extent otherwise provided
in Sections 3.11 and 3.12, shall remain continuing obligations, warranties, and
representations of Debtor so long as any portion of the Obligations remains
outstanding; and Debtor shall fully and faithfully satisfy and perform all such
Obligations, representations, warranties, and covenants.
Section 3.18 Additional Security. No other security now existing or
hereafter taken to secure the Obligations shall be impaired or affected by the
execution of this Instrument; and all additional security shall be taken,
considered, and held as cumulative. The taking of additional security, execution
of partial releases of the security, or any extension of the time of payment of
the indebtedness shall not diminish the force, effect, or lien of this
Instrument and shall not affect or impair the liability of any maker, surety,
guarantor, or endorser for the payment of said indebtedness. Neither the
acceptance of this Instrument nor its enforcement, whether by court action or
pursuant to the powers herein contained, shall prejudice or in any manner affect
Secured Party's right to realize upon or enforce any other security now or
hereafter held by Secured Party, it being agreed that Secured Party shall be
entitled to enforce this Instrument and any other security now or hereafter held
by Secured Party in such order and manner as it may in its absolute discretion
determine.
Section 3.19 Further Acts. Debtor shall do and perform all acts
necessary to keep valid and effective the charges and lien hereof, to carry into
effect its objective and purposes, and to protect the lawful owner of the Note
and the other Obligations. Promptly upon request by Secured Party, and at
Debtor's expense, Debtor shall execute, acknowledge, and deliver to Secured
Party such other and further instruments and do such other acts as in the
reasonable opinion of Secured Party may be necessary or desirable to (a) grant
to Secured Party the highest available perfected lien on all of the Collateral;
(b) correct any defect, error, or omission which may be discovered in the
contents of this Instrument or any other Loan Document; (c) identify more fully
and subject to the liens, encumbrances, and security interests and assignments
created hereby any property intended by the terms hereof to be covered hereby
(including, without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Collateral); (d) assure the first priority
hereof and thereof; and (e) otherwise effect the intent of this Instrument.
Without limiting the generality of the foregoing, Debtor shall promptly and,
insofar as not contrary to applicable law, at Debtor's own expense, record,
re-record, file, and refile in such offices, at such times and as often as may
be necessary, this Instrument, additional mortgages and deeds of trust, and
every other instrument in addition or supplemental hereto, including applicable
financing statements, as may be necessary to create, perfect, maintain, and
preserve the liens, encumbrances, and security interests intended to be created
hereby and the rights and remedies of Secured Party hereunder. Upon request by
the Secured Party, Debtor shall supply evidence of fulfillment of each of the
covenants herein contained concerning which a request for such evidence has been
made.
ARTICLE IV
Additional Advances; Expenses; Indemnity
Section 4.01 Additional Advances and Disbursements. Debtor agrees
that, if Debtor shall default in any of its Obligations to pay any amount or to
perform any action, including its obligation under Section 3.03 to pay
Impositions and under Section 3.06 to procure, maintain, and pay premiums on the
insurance policies referred to therein, then Secured Party shall have the right,
but not the obligation, in Debtor's name or in its own name, and without notice
to Debtor, to advance all or any part of such amounts or to perform any or all
such actions, and, for such purpose and to the extent permitted by applicable
law, Debtor expressly grants to Secured Party, in addition and without prejudice
to any other rights and remedies hereunder, the right to enter upon and take
possession of the Collateral to such extent and as often as it may deem
necessary or desirable to prevent or remedy any such default. No such advance or
performance shall be deemed to have cured such default by Debtor or any Event of
Default with respect thereto. All sums advanced, all Collection Expenses (as
hereinafter defined), and all expenses incurred by Secured Party in connection
with such advances or actions, and all other sums advanced or expenses incurred
by Secured Party hereunder or under applicable law (whether required or optional
and whether indemnified hereunder or not) shall be part of the Obligations,
shall bear interest at the rate stated in the Note for payments from and after
maturity (the "Default Rate"), and shall be secured by this Instrument. Secured
Party, upon making any such advance, shall be subrogated to all of the rights of
the person receiving such advance.
Section 4.02 Other Expenses.
(a) Debtor shall pay or, on demand, reimburse Secured Party for the
payment of all appraisal fees, recording and filing fees, taxes, brokerage fees
and commissions, abstract fees, title insurance premiums and fees, Uniform
Commercial Code search fees, escrow fees, attorneys' fees and disbursements, and
all other costs and expenses of every character incurred by Debtor or Secured
Party in connection with the granting, administration, enforcement, and closing
(including the preparation of the Loan Documents) of the transactions
contemplated hereunder or under the other Loan Documents, or otherwise
attributable or chargeable to Debtor as owner of the Collateral.
(b) Debtor shall pay or, on demand, reimburse Secured Party for the
payment of any costs or expenses (hereinafter referred to collectively as
"Collection Expenses"), including third-party appraisal fees and expenses,
environmental engineers' fees and expenses, the cost of environmental testing
and preparation of environmental reports, architects' fees and expenses,
engineers' fees and expenses, travel costs of Secured Party's employees, agents,
and representatives, and reasonable attorneys' fees and expenses incurred or
expended in connection with or incidental to (i) any default or Event of Default
by Debtor hereunder or (ii) the exercise or enforcement by or on behalf of
Secured Party of any of its rights or remedies or Debtor's obligations under
this Instrument or under the other Loan Documents, including the enforcement,
compromise, or settlement of this Instrument or the Obligations or the defense,
assertion of the rights and claims of Secured Party hereunder in respect
thereof, by litigation or otherwise.
Section 4.03 Indemnity.
(a) Debtor agrees to indemnify and hold harmless Secured Party from and
against any and all losses, liabilities, suits, obligations, fines, damages,
judgments, penalties, claims, charges, costs, and expenses (including attorneys'
fees and disbursements) which may be imposed on, incurred or paid by or asserted
against Secured Party by reason or on account of, or in connection with, (i) any
default or Event of Default by Debtor hereunder or under the other Loan
Documents; (ii) Secured Party's exercise of any of its rights and remedies, or
the performance of any of its duties, hereunder or under the other Loan
Documents to which Debtor is a party; (iii) the construction, reconstruction, or
alteration of the Collateral or any part thereof; (iv) any negligence or willful
misconduct of Debtor, any lessee of the Premises, or any of their respective
agents, contractors, subcontractors, servants, employees, licensees, or
invitees; (v) any accident, injury, death or damage to any person or property
occurring in, on, or about the Premises or the Improvements, or any street,
drive, sidewalk, curb, or passageway adjacent thereto; or (vi) any other
transaction arising out of or in any way connected with the Collateral (or any
part thereof) or the Loan Documents, except for the willful misconduct or gross
negligence of the indemnified person. Notwithstanding the generality of the
foregoing, Debtor shall indemnify and hold harmless Secured Party for reasonable
attorneys fees and costs imposed on, incurred or paid by or asserted against
Secured Party by reason or on account of, or in connection with the enforcement
or preservation of Secured Party's rights hereunder, whether incurred before or
during trial, on appeal, in arbitration or mediation or in bankruptcy
proceedings, including without limitation any attorneys fees and costs incurred
in connection with any bankruptcy proceeding initialed by Debtor or by Debtor's
creditors. Any amount payable to Secured Party under this Section shall be
deemed a demand obligation, shall be part of the Obligations, shall bear
interest at the Default Rate, and shall be secured by this Instrument.
(b) Debtor's obligations under this Section shall not be affected by
the absence or unavailability of insurance covering the same or by the failure
or refusal by any insurance carrier to perform any obligation on its part under
any such policy of covering insurance. If any claim, action, or proceeding is
made or brought against Secured Party which is subject to the indemnity set
forth in this Section, Debtor shall resist or defend against the same, if
necessary in the name of Secured Party, by attorneys for Debtor's insurance
carrier (if the same is covered by insurance) or otherwise by attorneys approved
by Secured Party. Notwithstanding the foregoing, Secured Party, in its
discretion, may engage its own attorneys to resist or defend, or assist therein,
and Debtor shall pay, or, on demand, shall reimburse Secured Party for the
payment of, the fees and disbursements of said attorneys.
Section 4.04 Interest After Default. Except as otherwise expressly
provided in any Loan Document, if any payment due hereunder or under any other
Loan Document is not paid in full when due, whether on any stated due date, any
accelerated due date, or on demand or any other time specified under any of the
provisions hereof or thereof, then the same shall bear interest hereunder at the
Default Rate from the due date until paid, and such interest shall be added to
and become a part of the Obligations and shall be secured hereby.
ARTICLE V
Sale, Transfer, or Encumbrance of the Collateral
Section 5.01 Due-on-Sale or Encumbrance. In the event that Debtor,
without the prior written consent of Secured Party (which consent may be
withheld for any reason or for no reason including, but not limited to, the
failure of the prospective transferee of the Collateral to reach an agreement in
writing with Secured Party increasing the interest payable on the Obligations to
such rate or changing any other terms of the Obligations as Secured Party shall
request), shall sell, convey, assign, transfer, or otherwise dispose of or be
divested of its title to, or, shall convey security title to or otherwise
encumber or caused to be encumbered, the Collateral or any part thereof or any
interest therein in any manner or way, whether voluntary or involuntary, or in
the event of (a) any merger, consolidation, or dissolution involving, or the
sale or transfer of all or substantially all of the assets of, Debtor or any
general partner of Debtor; (b) the transfer (at one time or over any period of
time) of 10% or more of the voting stock of (i) a corporate Debtor, (ii) any
corporate general partner of Debtor, or (iii) any corporation which is the
direct or indirect owner of 10% or more of the voting stock of Debtor or any
general partner of Debtor; (c) the transfer of any general partnership interest
in Debtor or in any partnership which is a direct or indirect general partner of
Debtor; or (d) the conversion of any such general partnership interest to a
limited partnership interest, then the entire balance of the Obligations,
together with any prepayment premium due under the Note and any other sums
secured hereby, shall, without notice and without any period of cure, become
immediately due and payable at the option of Secured Party. This provision shall
not apply to transfers of title or interest under any will or testament or
applicable law of descent. This provision does not prohibit the transfer of any
existing limited partnership interest in (i) Debtor, (ii) any partner of Debtor,
or (iii) any partner of a partner of Debtor or transfers of general partnership
interests so long as USF&G Realty Partners, Inc. and/or Xxxx Xxxxx Realty
Partners, Inc. (each a "General Partner") and/or a wholly-owned affiliate of
either General Partner, alone or in concert, have discretion or control over the
affairs and business affairs of the Debtor at least equivalent to the discretion
and control held by the General Partners as of the date of this Instrument.
The consent of Secured Party required hereunder may be refused by
Secured Party in its sole discretion and for any reason (including without
limitation the possibility of a violation of ERISA) or may be predicated upon
any terms, conditions and covenants deemed advisable or necessary in the sole
discretion of Secured Party, including but not limited to the right to change
the interest rate, date of maturity or payments of principal and/or interest on
the Note, to require payment of any amount as additional consideration as a
transfer fee or otherwise and, if a transfer, to require assumption of the
obligations under the Loan Documents.
In the event (a) Debtor, without the prior written consent of Secured
Party (which consent may be withheld for any reason and for no reason), shall
mortgage, convey security title to, or otherwise encumber or cause to be
encumbered, the Premises or Improvements or any part thereof or any interest
therein in any manner or way, whether voluntary or involuntary, and (b)
thereafter, Debtor or any partner of Debtor or any partner of a partner of the
Debtor shall (i) file with any bankruptcy court of competent jurisdiction or be
the subject of any petition under Title 11 of the U.S. Code, as amended (the
"Bankruptcy Code"); (ii) be the subject of any order for relief issued under the
Bankruptcy Code; (iii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or other relief for debtors; (iv)
have sought or consented to or acquiesced in the appointment of any trustee,
receiver, conservator, or liquidator; or (v) be the subject of any order,
judgment, or decree entered by any court of competent jurisdiction approving a
petition filed against such party for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future federal or state act or law relating to bankruptcy,
insolvency, or relief for debtors, THEN DEBTOR HEREBY STIPULATES AND AGREES THAT
THIS CONSTITUTES "CAUSE" UNDER SECTION 362(d) OF THE BANKRUPTCY CODE TO LIFT THE
AUTOMATIC STAY, AND, SUBJECT TO COURT APPROVAL, SECURED PARTY SHALL THEREUPON BE
ENTITLED AND DEBTOR IRREVOCABLY CONSENTS TO RELIEF FROM ANY AUTOMATIC STAY
IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR OTHERWISE, TO ALLOW THE
SECURED PARTY TO EXERCISE ALL RIGHTS AND REMEDIES AVAILABLE TO SECURED PARTY
INCLUDING, BUT NOT LIMITED TO, FORECLOSURE, AS PROVIDED IN THE LOAN DOCUMENTS
AND AS OTHERWISE PROVIDED BY LAW, AND DEBTOR HEREBY IRREVOCABLY WAIVES ITS RIGHT
TO OBJECT TO SUCH RELIEF.
Section 5.02 Permitted Transfers Without Fee. Notwithstanding Section
5.01, the original Debtor, and any transferee of the original Debtor permitted
below, may engage in the transactions described below after at least fifteen
(15) days' prior written notice to Secured Party, provided that all of the
following conditions are met: (i) there is no default under the Loan Documents
(or event which with the passage of time or the giving of notice or both would
be a default); (ii) the proposed transferee complies with and delivers the ERISA
certification and indemnification agreement described herein (or, if the
statements required by the certification are not true with respect to the
proposed transferee, Secured Party shall have received such evidence as it may
require in its sole discretion to determine that the proposed transfer is not
and would not render the Loan a prohibited transaction under ERISA); (iii) if
all of the Collateral is transferred, the proposed transferee shall have signed
an assumption agreement acceptable to Secured Party with respect to the Loan
Documents; (iv) the proposed transferee shall have provided such information
about the proposed transferee as requested by Secured Party, and Secured Party
shall have approved the proposed transferee, including, but not limited to, a
review of the proposed transferee's creditworthiness, good character and
reputation, and demonstrated ability and experience (by itself or through its
manager) in the ownership, operation, and leasing of property similar to the
Collateral; and (v) payment by Debtor or the proposed transferee of (1) all
costs and expenses incurred by Secured Party for the processing of said transfer
including a processing fee, (2) any documentary stamp taxes, intangibles taxes,
recording fees, and other costs and expenses required in connection with the
assumption agreement and any modification of the Loan Documents, and (3) all
other costs and expenses (including attorneys' fees and expenses for Secured
Party's outside counsel) of the preparation of the assumption agreement and any
modification of the Loan Documents. Provided all of the foregoing conditions are
fulfilled with respect to each such transfer, Debtor may engage in the following
transaction:
General partnership interests in Debtor may be transferred
so long as USF&G Realty Partners, Inc. and/or Xxxx Xxxxx Realty
Partners, Inc. and/or a wholly-owned affiliate of either remain
the only controlling general partners of Debtor.
ARTICLE VI
Defaults and Remedies
Section 6.01 Events of Default. The term "Event of Default,"
as used in this Instrument, shall mean the occurrence of any of the following
events:
(a) if Debtor shall fail to pay when the same shall become due and
payable any sum required to be paid under the Note, hereunder or under any other
Loan Document, whether of principal, interest, premium, fees, or otherwise;
provided, however, that Debtor shall have five (5) days after written notice of
such default from Secured Party to cure such default; and provided further, that
if Secured Party shall give one (1) notice of default within any twelve (12)
month period, Debtor shall have no further right to any notice of monetary
default; or
(b) except as provided in subsections (a), (d), (e), (f), (g), (h),
(l), and (n) hereof, if default shall be made in the performance or observance
of any other provision contained in the Loan Documents, beyond the applicable
grace period therefor or, if no such grace period is applicable, if the default
has not been remedied within thirty (30) days after written notice thereof shall
have been given to Debtor; provided, however, that if the default is, in Secured
Party's reasonable judgment, of such a nature that it cannot reasonably be cured
within said thirty (30) day period, Debtor shall have such additional time for
cure as Secured Party may, in its reasonable discretion, approve in writing
after receipt by Secured Party within said thirty (30) day period of a written
request by Debtor therefor; or
(c) if any representation made herein or in any other Loan Document
(including any mortgage loan application or any certificate delivered in
connection with any of the foregoing), or otherwise made by or on behalf of
Debtor in connection with the transactions contemplated under the Loan
Documents, shall be false or misleading in any material respect as of the date
on which such representation was made or deemed to be remade; or
(d) the Collateral (or any part thereof), or any legal, beneficial, or
equitable interest therein, shall be sold, transferred, or encumbered in
breach of Article V hereof; or
(e) if any other event occurs which, under the terms of the Loan
Documents, would permit Secured Party after the expiration of any applicable
notice and cure period to accelerate the Obligations; or
(f) if Debtor shall become insolvent, or shall make a transfer in fraud
of creditors, or shall make an assignment for the benefit of its creditors, or
shall not be able to pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts as they become due; or
(g) if any bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceeding, or any other proceedings for the relief of debtors, is
instituted by or against Debtor, and, if instituted against Debtor, is allowed
or consented to or is not dismissed within sixty (60) days after such
institution; or
(h) if any of the events referred to in subsections (f) and (g) of this
Section shall occur with respect to any general partner of Debtor or any
guarantor of payment of any part of the Obligations or of any portion of
Debtor's obligations under the Loan Documents; or
(i) if Debtor abandons the Premises or the Improvements; or
(j) if the Collateral shall be taken, attached, or sequestered on
execution or other process of law in any action against Debtor; or
(k) if there shall have occurred any default, event of default, or
non-performance under the terms of any of the Leases by Debtor, which default,
event of default, or non-performance shall not have been cured within any
applicable grace period therefor under the applicable Lease; or
(l) if Debtor shall fail at any time to obtain, provide, maintain, keep
in force, or deliver to Secured Party the insurance policies required by Section
3.06 hereof, and such failure shall continue for five (5) days after written
notice; or
(m) if any claim of priority (except a claim based upon a Permitted
Encumbrance) to this Instrument or any other document or instrument securing the
Obligations by title, lien, or otherwise shall be upheld by any court of
competent jurisdiction or shall be consented to by Debtor; or
(n) (i) the consummation by Debtor of a transaction which would cause
the loan evidenced by the Note, this Instrument, or any exercise of Secured
Party's rights under the Loan Documents, to constitute a non-exempt prohibited
transaction under ERISA or a violation of a state statute regulating
governmental plans, subjecting Secured Party to liability for violation of ERISA
or such state statute; (ii) the failure of any representation or warranty made
by Debtor under Section 3.11 of this Instrument to be true and correct in all
respects; or (iii) the failure of Debtor to provide Secured Party with the
written certifications and evidence required by Section 3.11 of this Instrument.
Section 6.02 Remedies. Upon the occurrence of any one or more
Events of Default, Secured Party may (but shall not be obligated to), in
addition to any rights or remedies available to it hereunder or under the other
Loan Documents, take such action personally or by its agents or attorneys, with
or without entry and without notice, demand, presentment, or protest (each and
all of which are hereby waived), as it deems necessary or advisable to protect
and enforce Secured Party's rights and remedies against Debtor and in and to the
Collateral, including the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such order as Secured Party may
determine, in its sole discretion, without impairing or otherwise affecting its
rights or remedies:
(a) declare the entire balance of the Obligations (including the entire
principal balance thereof, all accrued and unpaid interest, and any premium and
late charges thereon, and all other such sums secured hereby) to be immediately
due and payable, and upon any such declaration the entire unpaid balance of the
Obligations shall become and be immediately due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by Debtor, anything in the Loan Documents to the
contrary notwithstanding; or
(b) institute a proceeding or proceedings, judicial or otherwise, for
the complete foreclosure of this Instrument under any applicable provision of
law; or
(c) institute a proceeding or proceedings for the partial foreclosure
of this Instrument under any applicable provision of law for the portion of the
Obligations then due and payable, subject to the lien and security interest
created by this Instrument continuing unimpaired and without loss of priority so
as to secure the balance of the Obligations not then due and payable; or
(d) institute, at its option, a proceeding or proceedings for the
foreclosure, whether complete or partial, of this Instrument subject to the
rights of any lessees of the Premises, and the failure of Secured Party to make
any such lessees parties to any such foreclosure proceedings and to foreclose
their rights shall not be, nor be asserted to by Debtor, a defense at any
proceedings instituted by Secured Party to collect the Obligations; or
(e) to the extent permitted under applicable law, elect to treat the
fixtures included in the Collateral either as real property or as personal
property, or both, and proceed to exercise such rights as apply thereto; or
(f) institute an action, suit, or proceeding in equity for the specific
performance of any of the provisions contained in the Loan Documents; or
(g) apply for the appointment of a receiver, custodian, trustee,
liquidator, or conservator of the Collateral, to be vested with the fullest
powers permitted under applicable law, as a matter of right and without regard
to or the necessity to disprove the adequacy of the security for the Obligations
or the solvency of Debtor or any other person liable for the payment of the
Obligations, and Debtor and each other person so liable waives or shall be
deemed to have waived such necessity, and consents or shall be deemed to have
consented to such appointment; or
(h) subject to the provisions and restrictions of any applicable law,
enter upon the Premises and the Improvements, and exclude Debtor and its agents
and servants wholly therefrom, without liability for trespass, damages, or
otherwise, and take possession of all books, records, and accounts relating
thereto and all other Collateral, and Debtor agrees to surrender possession of
the Collateral and of such books, records, and accounts to Secured Party on
demand after the happening of any Event of Default; and having and holding the
same may use, operate, manage, preserve, control, and otherwise deal therewith
and conduct the business thereof, either personally or by its superintendents,
managers, agents, servants, attorneys or receivers, without interference from
Debtor; and upon each such entry and from time to time thereafter may, at the
expense of Debtor and the Collateral, without interference by Debtor and as
Secured Party may deem advisable, (i) either by purchase, repair, or
construction, maintain and restore the Collateral; (ii) insure or reinsure the
same; (iii) make all necessary or proper repairs, renewals, replacements,
alterations, additions, betterments, and improvements thereto and thereon; (iv)
complete the construction of the Improvements and, in the course of such
completion, may make such changes in the contemplated or completed Improvements
as it may deem advisable; and (v) in every such case in connection with the
foregoing have the right to exercise all rights and powers of Secured Party with
respect to the Collateral, either in Debtor's name or otherwise, including the
right to make, terminate, cancel, enforce, or modify Leases, obtain and evict
tenants and subtenants on such terms as Secured Party shall deem advisable, and
to take any actions described in subsection (j) of this Section; or
(i) subject to the provisions and restrictions of any applicable law,
may, with or without the entrance upon the Premises, collect, receive, xxx for,
and recover in its own name all Rents and cash collateral derived from the
Premises, and after deducting therefrom all costs, expenses, and liabilities of
every character incurred by Secured Party in collecting the same and in using,
operating, managing, preserving, and controlling the Premises, and otherwise in
exercising Secured Party's rights under subsection (g) of this Section,
including all amounts necessary to pay Impositions, insurance premiums, and
other charges in connection with the Premises, as well as compensation for the
services of Secured Party and its attorneys, agents, and employees, apply the
remainder as provided in Section 6.05; or
(j) release any portion of the Collateral for such consideration as
Secured Party may require without, as to the remainder of the Collateral, in any
way impairing or affecting the lien or priority of this Instrument, or improving
the position of any subordinate lienholder with respect thereto, except to the
extent that the Obligations shall have been reduced by the actual monetary
consideration, if any, received by Secured Party for such release, and may
accept by assignment, pledge, or otherwise any other property in place thereof
as Secured Party may require without being accountable for so doing to any other
lienholder; or
(k) may take all actions permitted under the Uniform Commercial Code of
the jurisdiction in which the Collateral is located; or
(l) may take any other action, or pursue any other right or remedy, as
Secured Party may have under applicable law, and Debtor does hereby agree that
Secured Party may so act.
In the event that Secured Party shall exercise any of the rights or
remedies set forth in subsections (h) and (i) of this Section, Secured Party
shall not be deemed to have entered upon or taken possession of the Collateral
except upon the exercise of its option to do so, evidenced by its demand and
overt act for such purpose, nor shall it be deemed a beneficiary or mortgagee in
possession by reason of such entry or taking possession. Secured Party shall not
be liable to account for any action taken pursuant to any such exercise other
than for rents actually received by such party, nor liable for any loss
sustained by Debtor resulting from any failure to let the Premises, or from any
other act or omission of Secured Party except to the extent such loss is caused
by the willful misconduct or bad faith of such party. Debtor hereby consents to,
ratifies, and confirms the exercise by Secured Party of said rights and
remedies, and appoints Secured Party as its attorney-in-fact, which appointment
shall be deemed to be coupled with an interest and irrevocable, for such
purposes.
Section 6.03 Expenses. In any proceeding, judicial or otherwise, to
foreclose this Instrument or enforce any other remedy of Secured Party under the
Loan Documents, there shall be allowed and included as an addition to and a part
of the Obligations in the decree for sale or other judgment or decree all
Collection Expenses and all other expenditures and expenses, including
reasonable attorneys' fees, which may be paid or incurred in connection with the
exercise by Secured Party of any of its rights and remedies provided or referred
to in Section 6.02, or any comparable provision of any other Loan Document,
together with interest thereon at the rate specified in the Note, and the same
shall be part of the Obligations and shall be secured by this Instrument.
Section 6.04 Rights Pertaining to Sales. Subject to the provisions or
other requirements of law, the following provisions shall apply to any sale or
sales of the Collateral under or by virtue of this Article VI, whether made by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale:
(a) Secured Party may conduct any number of sales from time to time of
all or portions of the Collateral and as an entirety or in separate tracts or
units (regardless of the manner in which the Collateral is classified), and
Debtor hereby waives any right which it may have to require the Collateral (or
any part thereof) to be sold as separate tracts or units in the event of
foreclosure or sale.
(b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or adjourned
sale without further notice.
(c) After each sale, Secured Party, or an officer of any court
empowered to do so, shall execute and deliver to the purchaser or purchasers at
such sale a good and sufficient instrument or instruments granting, conveying,
assigning, and transferring all right, title, and interest of Debtor (including
all rights of redemption) in and to the property and rights sold (but without
any covenant or warranty, express or implied), and shall receive the proceeds of
said sale or sales and apply the same as herein provided. Secured Party is
hereby appointed the true and lawful attorney-in-fact of Debtor, which
appointment is irrevocable and shall be deemed to be coupled with an interest,
in Debtor's name and stead, to make all necessary conveyances, assignments,
transfers, and deliveries of the property and rights so sold, and for that
purpose Secured Party may execute all necessary instruments of conveyance,
assignment, transfer, and delivery, and may substitute one or more persons with
like power, Debtor hereby ratifying and confirming all that said attorney or
such substitute or substitutes shall lawfully do by virtue thereof.
Nevertheless, Debtor, if requested by Secured Party, shall ratify and confirm
any such sale or sales by executing and delivering to Secured Party or such
purchaser or purchasers all such instruments as may be advisable, in Secured
Party's judgment, for the purposes as may be designated in such request.
(d) Any and all statements of fact or other recitals made in any of the
instruments referred to in subsection (c) of this Section given by Secured Party
as to nonpayment of the Obligations, or as to the occurrence of any Event of
Default, or as to Secured Party having declared all or any of the Obligations to
be due and payable, or as to the request to sell, or as to notice of time,
place, and terms of sale and of the property or rights to be sold having been
duly given, or as to the refusal, failure, or inability to act of Secured Party,
or as to the appointment of any substitute or successor Secured Party, or as to
any other act or thing having been duly done by Debtor, Secured Party, or by
such substitute or successor Secured Party, shall be taken as conclusive and
binding against all persons as to evidence of the truth of the facts so stated
and recited. Secured Party may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale so held,
including the posting of notices and the conduct of sale, but in the name and on
behalf of Secured Party.
(e) The receipt of Secured Party for the purchase money paid at any
such sale, or the receipt of any other person authorized to receive the same,
shall be sufficient discharge therefor to any purchaser of any property or
rights sold as aforesaid, and no such purchaser, or its representatives,
grantees, or assigns, after paying such purchase price and receiving such
receipt, shall be bound to see to the application of such purchase price, or any
part thereof, upon or for any trust or purpose of this Instrument or, in any
manner whatsoever, be answerable for any loss, misapplication, or
non-application of any such purchase money, or part thereof, or be bound to
inquire as to the authorization, necessity, expediency, or regularity of any
such sale.
(f) Any such sale or sales shall operate to divest all of the estate,
right, title, interest, claim, and demand whatsoever, whether at law or in
equity, of Debtor in and to the properties and rights so sold, and shall be a
perpetual bar both at law and in equity against Debtor, and any and all persons
claiming or who may claim the same, or any part thereof or any interest therein,
by, through or under Debtor to the fullest extent permitted by applicable law.
(g) Upon any such sale or sales, Secured Party may bid for and acquire
the Collateral and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting against the Obligations the amount of the bid made
therefor, after deducting therefrom the expenses of the sale (including
reasonable attorneys' fees), the cost of any enforcement proceeding hereunder,
and any other sums which Secured Party is authorized to deduct under the terms
hereof, to the extent necessary to satisfy such bid.
(h) In the event that Debtor, or any person claiming by, through, or
under Debtor, shall transfer or refuse or fail to surrender possession of the
Collateral after any sale thereof, then Debtor or such person shall be deemed a
tenant at sufferance of the purchaser at such sale, subject to eviction by means
of forcible entry and detainer proceedings, or subject to any other right or
remedy available hereunder or under applicable law.
(i) Upon any such sale, it shall not be necessary for Secured Party or
any public officer acting under execution or order of court to have present at
the sale or constructively in its possession any of the Collateral.
(j) In the event a foreclosure hereunder shall be commenced by Secured
Party, Secured Party may, at any time before the sale of the Collateral, abandon
the sale and may institute suit for the collection of the Obligations and for
the foreclosure of this Instrument, or in the event that Secured Party should
institute a suit for collection of the Obligations and for the foreclosure of
this Instrument, Secured Party may, at any time before the entry of final
judgment in said suit, dismiss the same and sell the Collateral in accordance
with the provisions of this Instrument.
Section 6.05 Application of Proceeds. The purchase money, proceeds,
or avails of any sale referred to in Section 6.04, together with any other sums
which may be held by Secured Party hereunder, whether under the provisions of
this Article VI or otherwise, shall, except as herein expressly provided to the
contrary, be applied in the order determined by Secured Party, to the following
items:
First: To the payment of all Collection Expenses and all the costs and
expenses of any such sale, including compensation to Secured Party, its agents
and counsel, and of any judicial proceeding wherein the same may be made, and of
all expenses, liabilities, and advances made or incurred by Secured Party
hereunder (including reasonable attorneys' fees), together with interest thereon
as provided in the Note, and all taxes, assessments, and other charges, except
any taxes, assessments, or other charges subject to which the Collateral shall
have been sold.
Second: To the payment in full of the Obligations (including
principal, interest, premium, and fees) in such order as Secured Party may
elect.
Third: To the payment of any other sums secured hereunder or required
to be paid by Debtor pursuant to any provision of the Loan Documents.
Fourth: To the extent permitted by applicable law, to be set aside by
Secured Party as adequate security in its judgment for the payment of sums which
would have been paid by application under clauses First through Third above to
Secured Party, arising out of an obligation or liability with respect to which
Debtor has agreed to indemnify Secured Party, but which sums are not yet due and
payable or liquidated.
Fifth: To the payment of the surplus, if any, to whomsoever may be
lawfully entitled to receive the same.
Section 6.06 Additional Provisions as to Remedies.
(a) No right or remedy herein conferred upon or reserved to Secured
Party is intended to be exclusive of any other right or remedy, and each and
every such right or remedy shall be cumulative and continuing, shall be in
addition to every other right or remedy given hereunder, or under the other Loan
Documents or now or hereafter existing at law or in equity, and may be exercised
from time to time and as often as may be deemed expedient by Secured Party.
(b) No delay or omission by Secured Party to exercise any right or
remedy hereunder upon any default or Event of Default shall impair such
exercise, or be construed to be a waiver of any such default or Event of
Default, or an acquiescence therein.
(c) The failure, refusal, or waiver by Secured Party of its right to
assert any right or remedy hereunder upon any default or Event of Default or
other occurrence shall not be construed as waiving such right or remedy upon any
other or subsequent default or Event of Default or other occurrence.
(d) Secured Party shall not have any obligation to pursue any rights or
remedies it may have under any other agreement prior to pursuing its rights or
remedies hereunder or under the other Loan Documents.
(e) No recovery of any judgment by Secured Party and no levy of an
execution upon the Collateral (or any part thereof) or any other property of
Debtor shall affect, in any manner or to any extent, the lien and security
interest created by this Instrument upon and in the Collateral, or any liens,
security interests, rights, powers, or remedies of Secured Party hereunder, and
such liens, rights, powers, and remedies shall continue unimpaired as before.
(f) Secured Party may resort to any security given by this Instrument
or any other security now given or hereafter existing to secure the Obligations,
in whole or in part, in such portions and in such order as Secured Party may
deem advisable, and no such action shall be construed as a waiver of any of the
liens, rights, or benefits granted hereunder.
(g) Acceptance of any payment after the occurrence of any default or
Event of Default shall not be deemed a waiver or a cure of such default or Event
of Default, and acceptance of any payment less than any amount then due shall be
deemed an acceptance on account only.
(h) In the event that Secured Party shall have proceeded to enforce any
right or remedy hereunder by foreclosure, sale, entry, or otherwise, and such
proceeding shall be discontinued, abandoned, or determined adversely for any
reason, then Debtor and Secured Party shall be restored to their former
positions and rights hereunder with respect to the Collateral, subject to the
lien and security interest hereof.
Section 6.07 Waiver of Rights and Defenses. To the full extent
Debtor may do so, Debtor agrees with Secured Party as follows:
(a) Debtor will not at any time insist on, plead, claim, or take the
benefit or advantage of any statute or rule of law now or hereafter in force
providing for any appraisement, valuation, stay, extension, moratorium, or
redemption, or of any statute of limitations, and Debtor, for itself and its
heirs, devisees, representatives, successors, and assigns, and for any and all
persons ever claiming an interest in the Collateral (other than Secured Party),
hereby, to the extent permitted by applicable law, waives and releases all
rights of redemption, valuation, appraisement, notice of intention to mature or
declare due the whole of the Obligations, and all rights to a marshaling of the
assets of Debtor, including the Collateral, or to a sale in inverse order of
alienation, in the event of foreclosure of the liens and security interests
created hereunder.
(b) Debtor shall not be relieved of its obligation to pay the
Obligations at the time and in the manner provided herein and in the other Loan
Documents, nor shall the lien or priority of this Instrument or any other Loan
Documents be impaired by any of the following actions, non-actions, or
indulgences by Secured Party:
(i) any failure or refusal by Secured Party to comply with any
request by Debtor (X) to consent to any action by Debtor or (Y) to take any
action to foreclose this Instrument or otherwise enforce any of the provisions
hereof or of the other Loan Documents;
(ii) any release, regardless of consideration, of the whole or any
part of the Collateral or any other security for the Obligations, or any person
liable for payment of the Obligations;
(iii) any waiver by Secured Party of compliance by Debtor with
any provision of this Instrument or the other Loan Documents, or consent by
Secured Party to the performance by Debtor of any action which would otherwise
be prohibited thereunder or to the failure by Debtor to take any action which
would otherwise be required hereunder or thereunder; and
(iv) any agreement or stipulation between Secured Party and Debtor,
or, with or without Debtor's consent, between Secured Party and any subsequent
owner or owners of the Collateral (or any part thereof), or any other security
for the Obligations, renewing, extending, or modifying the time of payment or
the terms of this Instrument or any of the other Loan Documents (including a
modification of any interest rate), and in any such event Debtor shall continue
to be obligated to pay the Obligations at the time and in the manner provided
herein and in the other Loan Documents, as so renewed, extended, or modified,
unless expressly released and discharged by Secured Party.
(c) Regardless of consideration, and without the necessity for any
notice to or consent by the holder of any subordinate lien, security interest,
encumbrance, right, title, or interest in or to the Collateral (or any part
thereof), Secured Party may release any person at any time liable for the
payment of the Obligations or any portion thereof or any part of the security
held for the Obligations, and may extend the time of payment or otherwise modify
the terms of this Instrument or of any of the Loan Documents, including a
modification of the interest rate payable on the principal balance of the Note,
without in any manner impairing or affecting this Instrument or the lien and
security interest thereof or the priority of this Instrument, as so extended and
modified, as security for the Obligations over any such subordinate lien,
security interest, encumbrance, right, title, or interest.
ARTICLE VII
Satisfaction and Cancellation
Section 7.01 Satisfaction and Cancellation. If the Obligations
shall be paid as the same become due and payable, then and in that event only
all rights hereunder (except for the rights and obligations set forth in
Sections 3.11, 3.12 and 4.03 hereof) shall terminate and the Collateral shall
become wholly released and cleared of the liens, security interests,
conveyances, and assignments evidenced hereby, upon receipt by Secured Party of
evidence satisfactory to it that the foregoing conditions have been satisfied,
at Debtor's sole cost and expense. In such event Secured Party shall, at the
request of Debtor, promptly deliver to Debtor, in recordable form, all such
documents as shall be necessary to cause this Instrument to be satisfied and
canceled of record and to release the Collateral from the liens, security
interests, conveyances, and assignments created or evidenced hereby.
ARTICLE VIII
Limitation on Personal Liability
Section 8.01 Limited Recourse Liability. Except to the extent set
forth in this Section 8.01 and Section 8.02 of this Instrument, neither the
Debtor nor any general partner(s) of Debtor (singularly or collectively, the
"Exculpated Parties") shall have any personal liability for any of the sums due
under the Note, the Obligations, or any obligations set forth in the Loan
Documents (collectively, the "Loan"). Notwithstanding the preceding sentence,
Secured Party may bring a foreclosure action or other appropriate action to
enforce the Loan Documents or realize upon and protect the Collateral
(including, without limitation, naming the Exculpated Parties in the actions)
and in addition THE EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY FOR:
(a) any indemnity, guaranty, master lease or similar instrument
furnished in connection with the Loan (including, without limitation, the
provisions of Section 3.11 and Section 3.12 of this Instrument);
(b) any assessments and taxes (accrued and/or payable) with respect to
the Collateral;
(c) any security deposits of tenants (i) not turned over to Secured
Party upon foreclosure, sale (pursuant to power of sale), or conveyance in lieu
thereof, or (ii) not turned over to a receiver or trustee for the Collateral
after his/her appointment;
(d) any insurance proceeds or condemnation awards neither turned over
to Secured Party nor used in compliance with Section 3.07 of this Instrument;
(e) waste of the Collateral;
(f) any rents or other income from the Collateral received by any of
the Exculpated Parties after a default under the Loan Documents and not
otherwise applied to the indebtedness evidenced by the Note or to the current
(not deferred) operating expenses of the Collateral; PROVIDED, HOWEVER, THAT THE
EXCULPATED PARTIES SHALL HAVE PERSONAL LIABILITY for amounts paid as expenses to
a person or entity related to or affiliated with any of the Exculpated Parties
unless the payments are expressly permitted in the Loan Documents;
(g) Debtor's failure to maintain any letter of credit required under
the Loan Documents or otherwise in connection with the Loan; or
(h) all legal fees, including the allocated costs of Secured Party's
staff attorneys, and other expenses incurred by Secured Party in enforcing the
Loan Documents if Debtor contests, delays, or otherwise hinders or opposes
(including, without limitation, the filing of a bankruptcy) any of Secured
Party's enforcement actions.
Section 8.02 Full Recourse Liability. Notwithstanding the
provisions of Section 8.01 of this Instrument, the EXCULPATED PARTIES SHALL HAVE
PERSONAL LIABILITY for all sums due under the Note, the Obligations, and all
obligations set forth in the Loan Documents if:
(a) there shall be any breach or violation of Article V of this
Instrument; or
(b) there shall be any fraud or material misrepresentation by any of
the Exculpated Parties in connection with the Collateral, the Loan Documents,
the Loan Application, or any other aspect of the Loan; or
(c) the Collateral or any part thereof shall become an asset in (i) a
voluntary bankruptcy or insolvency proceeding or (ii) an involuntary bankruptcy
or insolvency proceeding which (A) results in the entry of an order for relief
against Debtor or the Collateral which is not fully stayed within seven (7)
business days after the entry thereof, or (B) is not dismissed within ninety
(90) days of filing; provided, however, that this Section 8.02(c) shall not
apply if an involuntary bankruptcy is filed by Secured Party.
ARTICLE IX
Additional Provisions
Section 9.01 Usury Savings Clause. All agreements in this
Instrument and in the other Loan Documents are expressly limited so that in no
contingency or event whatsoever, whether by reason of advancement or
acceleration of maturity of the Obligations, or otherwise, shall the amount paid
or agreed to be paid hereunder for the use, forbearance, or detention of money
exceed the highest lawful rate permitted under applicable usury laws. If, from
any circumstance whatsoever, fulfillment of any provision of the Loan Documents,
at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity and if, from any
circumstance whatsoever, Secured Party shall ever receive as interest an amount
which would exceed the highest lawful rate, the receipt of such excess shall be
deemed a mistake and shall be canceled automatically, or, if theretofore paid,
such excess shall be credited against the principal amount of the Obligations to
which the same may lawfully be credited, and any portion of such excess not
capable of being so credited shall be rebated to Debtor.
Section 9.02 Severability. If all or any portion of any provision
of this Instrument or the other Loan Documents shall be held to be invalid,
illegal, or unenforceable in any respect, then such invalidity, illegality, or
unenforceability shall not affect any other provision hereof or thereof, and
such provision shall be limited and construed in such jurisdiction as if such
invalid, illegal, or unenforceable provision, or portion thereof, were not
contained herein or therein.
Section 9.03 Notices. Any notice, demand, consent, approval,
direction, agreement, or communication (any "Notice") required or permitted
hereunder or under the other Loan Documents shall be in writing and shall be
validly given if sent by a nationally-recognized courier that obtains receipts,
delivered personally by a reputable courier that obtains receipts, or mailed by
United States mail, certified mail, return receipt requested, postage prepaid,
addressed as follows to the person entitled to receive the same:
(a) If to Debtor:
USF&G/XXXX XXXXX REALTY PARTNERS LIMITED PARTNERSHIP
c/o USF&G, 0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Trainer
With a copy to:
USF&G/XXXX XXXXX REALITY PARTNERS LIMITED PARTNERSHIP
c/o USF&G, 0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxx, Esq.
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxx Xxxxx Xxxxxx & Xxxxxxx
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
(b) If to Secured Party:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA Prudential Capital
Group Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Mortgage Loan Customer Service
Reference Loan No. 6 102 045
With a copy to:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA Prudential Capital
Group Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Regional Counsel
Reference Loan No. 6 102 045
Any notices, demands, or requests (a "notice") required to be made
under this Instrument shall comply with the requirements of this Section. Each
notice shall be in writing and sent (a) by depositing it with the United States
postal service, or any official successor thereto, certified or registered mail,
return receipt requested, with adequate postage prepaid; (b) by depositing it
with a reputable overnight courier service from whom a receipt is available; or
(c) by personal delivery, provided a signed receipt is obtained. Each notice
shall be effective upon being so deposited in the case of (a) and (b) above or
upon delivery in the case of item (c) above, but the time period in which a
response to any notice must be given or any action taken with respect thereto
shall commence to run from the date of receipt of the notice by the addressee
thereof, as evidenced by the return receipt. Rejection or other refusal by the
addressee to accept or receipt the delivery, or the inability to deliver because
of a changed address of which no notice was given, shall be deemed to be the
receipt of the notice sent. Any party shall have the right from time to time to
change the address or individual's attention to which notices to it shall be
sent and to specify up to two (2) additional addresses to which copies of the
notices to it shall be sent by giving the other party hereto at least ten (10)
days' prior notice thereof.
Section 9.04 Right to Deal. In the event that ownership of the
Collateral (or any part thereof) becomes vested in a person other than Debtor,
Secured Party may, without notice to Debtor, deal with such successor or
successors in interest with reference to this Instrument or the Obligations in
the same manner as with Debtor, without in any way vitiating or discharging
Debtor's liability hereunder or for the payment of the Obligations or being
deemed a consent to such vesting.
Section 9.05 No Merger.
(a) If both the lessor's and the lessee's interest under any Lease
shall at any time become vested in any one person, this Instrument and the lien
and security interest created hereby shall not be destroyed or terminated by the
application of the doctrine of merger, and, in such event, Secured Party shall
continue to have and enjoy all of the rights and privileges of Secured Party
hereunder as to each separate estate.
(b) Upon foreclosure of the lien created hereby on the Collateral (or
any part thereof), as herein provided, any Leases then existing shall not be
destroyed or terminated by application of the doctrine of merger or as a matter
of law or as a result of such foreclosure unless Secured Party or any purchaser
at the foreclosure sale shall so elect by notice to the lessee in question.
Section 9.06 Applicable Law. This Instrument shall be governed by
and construed in accordance with the law of the State of Florida.
Section 9.07 Appointment of Secured Party. Debtor hereby appoints
Secured Party as its attorney-in-fact, which appointment is irrevocable and
shall be deemed to be coupled with an interest, with respect to the execution,
acknowledgment, delivery, and filing or recording for and in the name of Debtor
of any of the documents or instruments referred to in Sections 3.04 and 3.19.
Section 9.08 Sole Discretion of Secured Party. Except as otherwise
expressly provided herein, whenever Secured Party's judgment, consent, or
approval is required hereunder for any matter, or Secured Party shall have an
option or election hereunder, such judgment, the decision as to whether or not
to consent to or approve the same, or the exercise of such option or election
shall be in the sole discretion of Secured Party.
Section 9.09 Provisions as to Covenants and Agreements. All of
Debtor's covenants and agreements hereunder shall run with the land, and time is
of the essence with respect thereto.
Section 9.10 Matters to be in Writing. This Instrument cannot be
altered, amended, modified, terminated, or discharged except in a writing signed
by the party against whom enforcement of such alteration, amendment,
modification, termination, or discharge is sought. No waiver, release, or other
forbearance by Secured Party will be effective against Secured Party unless it
is in a writing signed by Secured Party, and then only to the extent expressly
stated.
Section 9.11 Submission to Jurisdiction. Without limiting the right
of Secured Party to bring any action or proceeding against the undersigned or
its property arising out of or relating to the Obligations (an "Action") in the
courts of other jurisdictions, Debtor hereby irrevocably submits to the
jurisdiction of any Florida state court or federal court sitting in the State of
Florida, and Debtor hereby irrevocably agrees that any Action may be heard and
determined in such Florida state court or in such federal court. Debtor hereby
irrevocably waives, to the fullest extent that it may effectively do so, the
defense of an inconvenient forum to the maintenance of any Action in such
jurisdiction. Debtor hereby irrevocably agrees that the summons and complaint or
any other process in any Action in any jurisdiction may be served by mailing to
any of the addresses set forth herein or by hand-delivery to a person of
suitable age and discretion at any such address. Such service will be complete
on the date such process is so mailed or delivered, and Debtor will have thirty
(30) days from such completion of service in which to respond in the manner
provided by law. Debtor may also be served in any other manner permitted by law,
in which event Debtor's time to respond shall be as provided by law.
Section 9.12 Construction of Provisions. The following rules of
construction shall be applicable for all purposes of this Instrument, and all
documents or instruments supplemental hereto, unless the context otherwise
requires:
(a) All references herein to numbered Articles or Sections or to
lettered Exhibits are references to the Articles and Sections hereof and the
Exhibits annexed to this Instrument, unless expressly otherwise designated in
context.
(b) The terms "include," "including," and similar terms shall be
construed as if followed by the phrase "without being limited to."
(c) The term "Collateral" and the term "Premises" shall be construed
as if followed by the phrase "or any part thereof."
(d) The term "Obligations" shall be construed as if followed by the
phrase "or any other sums secured hereby, or any part thereof."
(e) Words of masculine, feminine, or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa.
(f) The term "person" shall include natural persons, firms,
partnerships, corporations, and any other public and private legal entities.
(g) The term "provisions," when used with respect hereto or to any
other document or instrument, shall be construed as if preceded by the phrase
"terms, covenants, agreements, requirements, conditions, and/or."
(h) All Article, Section, and Exhibit captions herein are used for
convenience and reference only and in no way define, limit, or describe the
scope or intent of, or in any way affect, this Instrument.
(i) No inference in favor of or against any party shall be drawn from
the fact that such party has drafted any portion thereof.
(j) The cover page of and all recitals set forth in, and all Exhibits
to, this Instrument are hereby incorporated in this Instrument.
(k) All obligations of Debtor hereunder shall be performed and
satisfied by or on behalf of Debtor at Debtor's sole cost and expense.
(1) The term "lease" shall mean "tenancy, subtenancy, lease, sublease,
or rental agreement," the term "lessor" shall mean "landlord, sublandlord,
lessor, and sublessor," and the term "lessee" shall mean "tenant, subtenant,
lessee, and sublessee."
Section 9.13 Successors and Assigns. The provisions hereof shall be
binding upon Debtor, and the heirs, devisees, representatives, successors, and
assigns of Debtor, including successors in interest of Debtor in and to all or
any part of the Collateral, and shall inure to the benefit of Secured Party and
its heirs, successors, substitutes, and assigns. All references in this
Instrument to Debtor or Secured Party shall be construed as including all of
such other persons with respect to the person referred to. Where two or more
persons have executed this Instrument, the obligations of such persons shall be
joint and several, except to the extent the context clearly indicates otherwise.
Secured Party shall have the right in its sole discretion at any time during the
term of this Instrument (a) to sell, assign, syndicate, or otherwise transfer
and/or dispose of all or any portion of its interest in the Note and the
Obligations and (b) to submit to Secured Party's assignees the financial data
and all other information being furnished by Debtor to Secured Party under the
terms of this Instrument.
Section 9.14 Counterparts. This Instrument may be executed in any
number of counterparts, with the same effect as if all parties hereto had
executed the same document. All such counterparts shall be construed together
and shall constitute one instrument, but in making proof hereof it shall only be
necessary to produce one such counterpart.
WAIVER OF TRIAL BY JURY. DEBTOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM FILED BY EITHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THIS
INSTRUMENT, THE LOAN DOCUMENTS, OR ANY ACTS OR OMISSIONS OF SECURED PARTY IN
CONNECTION THEREWITH.
IN WITNESS WHEREOF, the undersigned have executed and sealed this
Instrument the day first set forth above.
BORROWER:
WITNESSES: USF&G/XXXX XXXXX REALTY PARTNERS
LIMITED PARTNERSHIP, a Maryland
limited partnership
_____________________________
Signature By: USF&G Realty Partners, Inc., a
Print Name:__________________ Maryland corporation, General
Partner
By:_____________________________
_____________________________ Name:____________________
Signature Title:___________________
Print Name:__________________
Attest:_________________________
Name:____________________
Title:___________________
[CORPORATE SEAL]
STATE OF _______________
COUNTY OF _____________
The foregoing instrument was acknowledged before me, this
__________________, by ________________, as ___________ of __________________,
a___________ ___________. He is personally known to me or has produced driver's
license no. ________ issued by the State of ________ as identification.
Notary Public
My Commission Expires:
Exhibit A
LEGAL DESCRIPTION OF PREMISES
Parcel 12, ORANGEWOOD NEIGHBORHOOD 2, according to the plat thereof recorded in
Plat Book 17, Pages 81 through 87, of the Public Records of Orange County,
Florida.
Exhibit B
DESCRIPTION OF PERSONAL PROPERTY SECURITY
1. All machinery, apparatus, goods, equipment, materials, fittings,
fixtures, chattels, and tangible personal property, and all appurtenances and
additions thereto and betterments, renewals, substitutions, and replacements
thereof, now owned or hereafter acquired by Debtor, wherever situate, and now or
hereafter located on, attached to, contained in, or used or usable in connection
with the real property described in Exhibit A attached hereto and incorporated
herein (the "Premises"), and all improvements located thereon (the
"Improvements") or placed on any part thereof, though not attached thereto,
including all screens, awnings, shades, blinds, curtains, draperies, carpets,
rugs, furniture and furnishings, heating, electrical, lighting, plumbing,
ventilating, air-conditioning, refrigerating, incinerating and/or compacting
plants, systems, fixtures and equipment, elevators, hoists, stoves, ranges,
vacuum and other cleaning systems, call systems, sprinkler systems and other
fire prevention and extinguishing apparatus and materials, motors, machinery,
pipes, ducts, conduits, dynamos, engines, compressors, generators, boilers,
stokers, furnaces, pumps, tanks, appliances, equipment, fittings, and fixtures.
2. All funds, accounts, deposits, instruments, documents, contract
rights, general intangibles, notes, and chattel paper arising from or by virtue
of any transaction related to the Premises, the Improvements, or any of the
personal property described in this Exhibit B.
3. All permits, licenses, franchises, certificates, and other rights
and privileges now held or hereafter acquired by Debtor in connection with the
Premises, the Improvements, or any of the personal property described in this
Exhibit B.
4. All right, title, and interest of Debtor in and to the name and
style by which the Premises and/or the Improvements is known, including
trademarks and trade names relating thereto.
5. The following items of tangible personal property: See Exhibit B-1,
if any, attached hereto and incorporated herein.
6. All right, title, and interest of Debtor in, to, and under all
plans, specifications, maps, surveys, reports, permits, licenses, architectural,
engineering and construction contracts, books of account, insurance policies,
and other documents of whatever kind or character, relating to the use,
construction upon, occupancy, leasing, sale, or operation of the Premises and/or
the Improvements.
7. All interests, estates, or other claims or demands, in law and in
equity, which Debtor now has or may hereafter acquire in the Premises, the
Improvements, or the personal property described in this Exhibit B.
8. All right, title, and interest now owned or hereafter acquired by
Debtor in and to all options to purchase or lease the Premises, the
Improvements, or any other personal property described in this Exhibit B, or any
portion thereof or interest therein, and in and to any greater estate in the
Premises, the Improvements, or any of the personal property described in this
Exhibit B.
9. All of the estate, interest, right, title, other claim or demand,
both in law and in equity, including claims or demands with respect to the
proceeds of insurance relating thereto, which Debtor now has or may hereafter
acquire in the Premises, the Improvements, or any of the personal property
described in this Exhibit B, or any portion thereof or interest therein, and any
and all awards made for the taking by eminent domain, or by any proceeding or
purchase in lieu thereof, of the whole or any part of such property, including
without limitation, any award resulting from a change of any streets (whether as
to grade, access, or otherwise) and any award for severance damages.
10. All right, title, and interest of Debtor in and to all contracts,
permits, certificates, licenses, approvals, utility deposits, utility capacity,
and utility rights issued, granted, agreed upon, or otherwise provided by any
governmental or private authority, person or entity relating to the ownership,
development, construction, operation, maintenance, marketing, sale, or use of
the Premises and/or the Improvements, including all of the Debtor's rights and
privileges hereto or hereafter otherwise arising in connection with or
pertaining to the Premises and/or the Improvements, including, without limiting
the generality of the foregoing, all water and/or sewer capacity, all water,
sewer and/or other utility deposits or prepaid fees, and/or all water and/or
sewer and/or other utility tap rights or other utility rights, any right or
privilege of Debtor under any loan commitment, lease, contract, Declaration of
Covenants, Restrictions and Easements or like instrument, Developer's Agreement,
or other agreement with any third party pertaining to the ownership,
development, construction, operation, maintenance, marketing, sale, or use of
the Premises and/or the Improvements.
AND ALL PROCEEDS AND PRODUCTS OF THE FOREGOING PERSONAL PROPERTY DESCRIBED IN
THIS EXHIBIT B.
A PORTION OF THE ABOVE DESCRIBED GOODS ARE OR ARE TO BE AFFIXED TO THE REAL
PROPERTY DESCRIBED IN EXHIBIT A.
THE DEBTOR IS THE RECORD TITLE HOLDER AND OWNER OF THE REAL PROPERTY DESCRIBED
IN EXHIBIT A.
Exhibit C
PERMITTED EXCEPTIONS
1. Taxes and assessments for the year 1997 and subsequent years.
2. Petition filed in Official Records Books 1948, page 639, Public Records of
Orange County, Florida.
3. Notice of Restrictions on Real Estate files in official Records Book 2244,
page 736, Public Records of Orange County, Florida.
4. Declaration of Covenants Conditions and Restrictions for "Westwood Lakes
Subdivision", filed in Official Records Book 3790, page 2732, amended by
Amendment in Official Records Book 3827, page 1018 and amended by Amendment
in Official Records Book 4115, page 4648, of the Public Records of Orange
County, Florida.
5. Amendment to a Resolution, for a Special Purpose Lighting District for
Orangewood, Westwood Unit One, filed in Official Records Book 3799, page
2320, Public Records of Orange County, Florida, said Resolution further
amended in Restated Resolution recorded in Official Records Book 5077,
page 3941.
6. Matters Per Plat as set forth in that certain plat thereof recorded in Plat
Book 17, Pages 81 through 87, of the Public Records of Orange County,
Florida.
7. Grant of Easement by Florida Land Company, a Florida corporation, filed in
Official Records Book 3819, page 439, Public Records of Orange County,
Florida.
8. Distribution Easement by Cambridge Development Group, Inc., a Florida
corporation, filed in Official Records Book 4082, page 3233, Public Records
of Orange County, Florida.
9. Cable Television Installation Agreement by American Television and
Communication Corporation d/b/a Cablevision of Central Florida and Cambridge
Development Group, Inc., filed in Official Records Book 4123, page 3744,
Public Records of Orange County, Florida.
10. Rstrictive Convenants as set forth in that certain Special Warranty Deed,
filed in Official Records Book 4039, page 3812, Public Records of Orange
County, Florida.
11. Rights of tenants under recorded leases.
