MACK-CALI REALTY, L.P., a Delaware limited partnership, as mortgagor (Borrower) to THE PRUDENTIAL INSURANCE COMPANY OF AMERICA and VPCM, LLC, as mortgagee (Lender) AMENDED, RESTATED AND CONSOLIDATED MORTGAGE AND SECURITY AGREEMENT Dated: As of January...
Exhibit
10.3
XXXX-XXXX REALTY, L.P., a
Delaware limited partnership, as mortgagor
(Borrower)
to
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA and VPCM,
LLC, as mortgagee
(Lender)
_________________________________
AMENDED,
RESTATED AND CONSOLIDATED MORTGAGE AND SECURITY AGREEMENT
_________________________________
Dated: As
of January 15, 2010
Location: _____________________
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,” AS DEFINED IN N.J. LAWS 0000, XX. 353, IN
TERMS OF SUCH OBLIGATIONS. UPON ANY SUCH MODIFICATION, THIS
INSTRUMENT SHALL HAVE THE BENEFIT OF THE LIEN PRIORITY PROVISIONS OF THAT
LAW.
UPON
RECORDATION RETURN TO:
Xxxxxx &
Bird LLP
One
Atlantic Center
0000
Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx,
Xxxxxxx 00000-0000
Attn: Xxxxxx
X. Xxxxxx, Xx.
|
|
Loan
No. ________ and _________
|
TABLE
OF CONTENTS
Page
ARTICLE I
|
OBLIGATIONS
|
6
|
Section
1.01
|
Obligations
|
6
|
Section
1.02
|
Documents
|
6
|
ARTICLE
II
|
REPRESENTATIONS
AND WARRANTIES
|
6
|
Section
2.01
|
Title, Legal Status and
Authority
|
6
|
Section
2.02
|
Validity of
Documents
|
6
|
Section
2.03
|
Litigation
|
7
|
Section
2.04
|
Status of
Property
|
7
|
Section
2.05
|
Tax Status of
Borrower
|
8
|
Section
2.06
|
Bankruptcy and Equivalent
Value
|
8
|
Section
2.07
|
Disclosure
|
8
|
Section
2.08
|
Illegal
Activity
|
8
|
Section
2.09
|
OFAC
Lists
|
8
|
Section
2.10
|
Property as Single
Asset
|
9
|
ARTICLE
III
|
COVENANTS AND AGREEMENTS
|
9
|
Section
3.01
|
Payment of
Obligations
|
9
|
Section
3.02
|
Continuation of
Existence
|
9
|
Section
3.03
|
Taxes and Other
Charges
|
9
|
Section
3.04
|
Defense of Title, Litigation,
and Rights under Documents
|
10
|
Section
3.05
|
Compliance with Laws and Operation and Maintenance of
Property
|
11
|
Section
3.06
|
Insurance
|
12
|
Section
3.07
|
Damage and Destruction of
Property
|
14
|
Section
3.08
|
Condemnation
|
16
|
Section
3.09
|
Liens and
Liabilities
|
17
|
Section
3.10
|
Tax and Insurance
Deposits
|
17
|
Section
3.11
|
ERISA
|
18
|
Section
3.12
|
Environmental
Representations, Warranties, and Covenants
|
19
|
Section
3.13
|
Electronic
Payments
|
21
|
Section
3.14
|
Inspection
|
21
|
Section
3.15
|
Records, Reports, and
Audits
|
21
|
Section
3.16
|
Borrower’s
Certificates
|
22
|
-ii-
Section
3.17
|
Full Performance
Required; Survival of Warranties
|
23
|
Section
3.18
|
Additional
Security
|
23
|
Section
3.19
|
Further
Acts
|
23
|
Section
3.20
|
Compliance with
Anti-Terrorism Regulations
|
23
|
Section
3.21
|
Compliance with Property as
Single Asset
|
24
|
ARTICLE
IV
|
ADDITIONAL ADVANCES; EXPENSES;
SUBROGATION
|
24
|
Section
4.01
|
Expenses and
Advances
|
24
|
Section
4.02
|
Subrogation
|
25
|
ARTICLE
V
|
SALE,
TRANSFER, OR ENCUMBRANCE OF THE PROPERTY
|
25
|
Section
5.01
|
Due-on-Sale or
Encumbrance
|
25
|
Section
5.02
|
Certain Transfers
Excluded
|
26
|
Section
5.03
|
Merger
|
27
|
Section
5.04
|
Certain Affiliate
Transactions
|
28
|
Section
5.05
|
REIT Participation and
Ownership
|
28
|
ARTICLE
VI
|
DEFAULTS
AND REMEDIES
|
29
|
Section
6.01
|
Events of
Default
|
29
|
Section
6.02
|
Remedies
|
30
|
Section
6.03
|
Expenses
|
32
|
Section
6.04
|
Rights Pertaining to
Sales
|
32
|
Section
6.05
|
Application of
Proceeds
|
32
|
Section
6.06
|
Additional Provisions as to
Remedies
|
33
|
Section
6.07
|
Waiver of Rights and
Defenses
|
33
|
ARTICLE
VII
|
SECURITY
AGREEMENT
|
33
|
Section
7.01
|
Security Agreement
|
33
|
ARTICLE
VIII
|
LIMITATION
ON PERSONAL LIABILITY AND INDEMNITIES
|
34
|
Section
8.01
|
Limited Recourse
Liability
|
34
|
Section
8.02
|
General
Indemnity
|
34
|
Section
8.03
|
Transaction Taxes
Indemnity
|
34
|
Section
8.04
|
ERISA
Indemnity
|
34
|
Section
8.05
|
Environmental and ERISA
Indemnity
|
34
|
Section
8.06
|
Duty to Defend, Costs and
Expenses
|
34
|
Section
8.07
|
Recourse Obligation and
Survival
|
35
|
-iii-
ARTICLE
IX
|
ADDITIONAL
PROVISIONS
|
35
|
Section
9.01
|
Usury Savings
Clause
|
35
|
Section
9.02
|
Notices
|
35
|
Section
9.03
|
Sole Discretion of
Lender
|
36
|
Section
9.04
|
Applicable Law and Submission
to Jurisdiction
|
36
|
Section
9.05
|
Construction of
Provisions
|
36
|
Section
9.06
|
Transfer of
Loan
|
37
|
Section
9.07
|
Miscellaneous
|
38
|
Section
9.08
|
Entire
Agreement
|
38
|
Section
9.9
|
Waiver Of Trial By
Jury
|
38
|
ARTICLE
X
|
LOCAL
LAW PROVISIONS
|
39
|
Section
10.01
|
Inconsistencies
|
39
|
Section
10.02
|
Environmental
Law
|
39
|
Section
10.03
|
Representations and
Warranties
|
39
|
Section
10.04
|
Copy of
Mortgage
|
42
|
Section
10.05
|
Loan Subject to
Modification
|
42
|
-iv-
DEFINITIONS
|
|
The terms
set forth below are defined in the following sections of this Amended, Restated
and Consolidated Mortgage and Security Agreement:
Action
|
Section 9.04
|
Additional
Funds
|
Section 3.07
(c)
|
Affecting
the Property
|
Section 3.12
(a)
|
Affiliate
|
Section
3.22
|
All
|
Section 9.05
(m)
|
Anti-Terrorism
Regulations
|
Section
3.20(b)
|
Any
|
Section 9.05
(m)
|
Assessments
|
Section 3.03
(a)
|
Assignment
|
Recitals,
Section 2 (B)
|
Award
|
Section 3.08
(b)
|
Bankruptcy
Code
|
Recitals,
Section 2 (A) (ix)
|
Borrower
|
Preamble
|
Costs
|
Section 4.01
|
Damage
|
Section 3.07
(a)
|
Default
Rate
|
Section 1.01
(a)
|
Demand
|
Section 9.12
(n)
|
Deposits
|
Section 3.10
|
Documents
|
Section 1.02
|
Environmental
Indemnity
|
Section 8.05
|
Environmental
Law
|
Section 3.12
(a)
|
Environmental
Liens
|
Section 3.12
(b)
|
Environmental
Report
|
Section 3.12
(a)
|
ERISA
|
Section 3.11
|
Event
of Default
|
Section 6.01
|
Executive
Order 13224
|
Section
2.09
|
First
Notice
|
Section
3.15 (b)
|
Flood
Acts
|
Section 2.04
(a)
|
Foreign
Person
|
Section 2.05
|
Grace
Period
|
Section 6.01(c)
|
Hazardous
Materials
|
Section 3.12
(a)
|
Impositions
|
Section 3.10
|
Improvements
|
Recitals,
Section 2 (A) (ii)
|
Include,
Including
|
Section 9.05
(f)
|
Indemnified
Parties
|
Section 8.02
|
Indemnify
|
Section 8.02
|
Individual
Beneficiaries
|
Section
2.09
|
Individual
Shareholders
|
Section
2.09
|
Instrument
|
Preamble
|
Insurance
Premiums
|
Section 3.10
|
Investors
|
Section 9.06
|
Land
|
Recitals,
Section 2 (A) (i)
|
Laws
|
Section 3.05(c)
|
Lease
|
Section 9.05
(k)
|
Leases
|
Recitals,
Section 2 (A) (ix)
|
Lender
|
Preamble
|
Lessee
|
Section 9.05
(k)
|
-v-
Lessor
|
Section 9.05
(k)
|
Loan
|
Recitals,
Section 1
|
Losses
|
Section 8.02
|
Major
Tenants
|
Section 3.08
(d)
|
Microbial
Matter
|
Section 3.12(a)
|
Net
Proceeds
|
Section 3.07
(d)
|
Note
|
Recitals,
Section 1
|
Notice
|
Section 9.02
|
O&M
Plan
|
Section
3.12(b)
|
Obligations
|
Section
1.01
|
OFAC
|
Section
2.09
|
OFAC
Lists
|
Section
2.09
|
OFAC
Violation
|
Section
3.20(c)
|
On
Demand
|
Section 9.05
(n)
|
Organization
State
|
Section 2.01
|
Owned
|
Section 9.05
(l)
|
Permitted
Encumbrances
|
Recitals,
Section 2 (B)
|
Person
|
Section 9.05
(i)
|
Personal
Property
|
Section 6.02
(j)
|
Prepayment
Premium
|
Section 1.01(a)
|
Property
|
Recitals,
Section 2 (A)
|
Property
Payables
|
Section
3.09
|
Property
State
|
Section
2.01
|
Provisions
|
Section 9.05
(j)
|
Rating
Agency
|
Section 9.06
|
Release
|
Section 3.12
(a)
|
Rent
Loss Proceeds
|
Section 3.07
(c)
|
Rents
|
Recitals,
Section 2 (A) (x)
|
Restoration
|
Section 3.07
(a)
|
Revenue
Code
|
Section
2.05
|
Second
Notice
|
Section
3.15 (b)
|
Securities
|
Section 9.06
|
Security
Agreement
|
Section 7.01
|
Taking
|
Section 3.08
(a)
|
Tenant
|
Recitals,
Section 2 (A) (vi)
|
Tenants
|
Section 9.05
(k)
|
Transaction
Taxes
|
Section 3.03
(c)
|
U.C.C.
|
Section 2.02
|
Upon
Demand
|
Section 9.05
(n)
|
Violation
|
Section 3.11
|
-vi-
AMENDED, RESTATED AND
CONSOLIDATED MORTGAGE AND SECURITY AGREEMENT
THIS AMENDED, RESTATED AND
CONSOLIDATED MORTGAGE AND SECURITY AGREEMENT (this “Instrument”) is made as of
January 15, 2010, by XXXX-XXXX REALTY, L.P., a
Delaware limited partnership, having its principal office and place of business
at c/o Xxxx-Xxxx Realty Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx
Xxxxxx 00000, as mortgagor (“Borrower”), to THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation (“Prudential”), and VPCM, LLC, a Virginia limited
liability company (“VPCM”), having an office at c/o Prudential Asset
Resources, Inc., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, Attention: Asset Management
Department; Reference Loan No. _______ and ________, as
mortgagee (collectively, “Lender”).
W I T N E S S E T
H:
WHEREAS, Borrower is the owner
of certain property lying and being in __________, and being more particularly
described on Exhibit A
attached hereto (the “Property”) and known as _________; and
WHEREAS, Borrower is the maker
of that certain Amended and Restated Promissory Note dated as of
November 12, 2004 in the original principal amount of _____________
($_________) and payable to the order of Prudential, and of that certain
Supplemental Promissory Note dated as of November 12, 2004 in the original
principal amount of _____________ ($_________) and payable to the order of
Prudential (collectively, the “Existing Note”; the loan evidenced by the
Existing Note is herein referred to as the “Existing Loan”); and
WHEREAS, the Existing Note and
Existing Loan are secured by a certain Mortgage and Security Agreement dated as
of April 30, 1998 from Borrower in favor of Prudential, recorded in
Mortgage Book ___, Page ___, in the real estate records of __________,
covering the Property, as amended by that certain Modification of Mortgage and
Security Agreement and Assignment of Leases and Rents dated as of
November 12, 2004 between Borrower and Prudential, recorded in Mortgage
Release Book ____, Page ___, and by a certain Supplemental Mortgage
and Security Agreement dated as of November 12, 2004 from Borrower in favor
of Prudential, recorded in Mortgage Book ____, Page ____, in the real
estate records of ________, covering the Property (hereinafter referred to
collectively as the “Existing Security Instrument”), which Existing Security
Instrument is incorporated herein by this reference; and
WHEREAS, Prudential and
Borrower and affiliates of Borrower entered into that certain Amended and
Restated Master Loan Agreement dated as of November 12, 2004 (the “Existing
Loan Agreement”) relating to seven (7) cross-collateralized and cross-defaulted
loans in the aggregate original principal amount of $150,000,000.00 (the
“Existing Loans”), including the Existing Loan evidenced by the Existing Note,
which other loans (other than the Existing Loan evidenced by the Existing Note)
are guaranteed by Borrower pursuant to that certain Amended and Restated
Irrevocable Cross-Collateral Guaranty of Payment and Performance dated as of
November 12, 2004 made by Borrower in favor of Prudential (the “Existing
Cross-Collateral Guaranty”).
WHEREAS, the Existing
Cross-Collateral Guaranty is secured by a certain Second Priority Mortgage and
Security Agreement (hereinafter referred to as the “Cross-Collateral Mortgage”)
dated as of April 30, 1998 from Borrower in favor of Prudential, recorded
in Mortgage Book _____, Page ___, in the real estate records of
__________, covering the Property, as amended by that certain Modification of
Second Priority Mortgage and Security Agreement dated as of November 12,
2004 between Borrower and Prudential, recorded in Mortgage Release
Book _____, Page ____, which Cross-Collateral Mortgage is incorporated
herein by this reference; and
WHEREAS, as of the date
hereof, Prudential has assigned to VPCM a one half interest in and to the
Existing Loans, Existing Note, Existing Security Instrument, Existing Loan
Agreement, Existing Cross-Collateral Guaranty, Cross-Collateral Mortgage and the
other documents that further evidence or secure the indebtedness evidenced and
secured thereby, so that Prudential and VPCM shall be co-lenders with respect to
such indebtedness; and
WHEREAS, Borrower and
affiliates of Borrower have of even date herewith executed and delivered to
Lender an Amended and Restated Loan Agreement (the “Loan Agreement”) relating to
the refinance of the seven (7) cross-collateralized and cross-defaulted Existing
Loans under the Existing Loan Agreement, to amend and restate the terms thereof,
and to re-allocate the loan amounts among the seven (7) cross-collateralized and
cross-defaulted Existing Loans representing additional advances to certain
borrowers under the Loan Agreement and corresponding reductions of loan amounts
to other borrowers under the Loan Agreement (such Existing Loans as so amended
are herein referred to as the “Amended Loans”); and
WHEREAS, in accordance with
the Loan Agreement, Borrower has of even date herewith executed and delivered to
Lender an Amended, Restated and Consolidated Promissory Note in favor of
Prudential in the original principal amount of _____________ ($_________) and an
Amended, Restated and Consolidated Promissory Note in favor of VPCM in the
original principal amount of _____________ ($_________) (collectively, the
“Amended Note”), by which the Existing Note has been amended, restated and
modified to reflect an indebtedness in the original principal amount of
_____________ ($_________); the Amended Note constitutes a modification,
extension and renewal of the Existing Note; and
WHEREAS, the Amended Note and
the loan evidenced thereby are secured by all of the collateral that secures the
Existing Note, including, but not limited to, the Existing Security Instrument
and the other documents that evidence or secure the indebtedness secured thereby
(the “Documents”), but the Amended Note is not secured by the Amended
Cross-Collateral Mortgage (as hereinafter defined); and
WHEREAS, in addition, Borrower
has of even date herewith executed and delivered to Lender an Amended and
Restated Irrevocable Cross-Collateral Guaranty of Payment and Performance (the
“Amended Cross-Collateral Guaranty”), by which the Existing Cross-Collateral
Guaranty has been modified, amended and restated to reflect the guaranty of the
Amended Loans (excluding the Amended Loan evidenced by the Amended Note secured
hereby), and in connection therewith, Borrower has of even date herewith
executed and delivered to Lender an Amended, Restated and Consolidated Second
Priority Mortgage and Security Agreement (Subordinate Mortgage to Secure Cross
Collateral Guaranty) (the “Amended Cross-Collateral Mortgage”); and
WHEREAS, Borrower and Lender
desire to modify the Existing Security Instrument as more particularly
hereinafter set forth, and to confirm that the Existing Security Instrument
secures the Amended Note, and to consolidate and restate entirely all of the
terms of the Existing Security Instrument;
-2-
AGREEMENT
NOW THEREFORE, for and in
consideration of _______ Dollars in hand paid from Lender to Borrower and for
and in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency hereof is
hereby acknowledged, and intending to be legally bound hereby, Borrower and
Lender agree as follows:
I. Amendment,
Not Novation. Neither this
Instrument nor anything contained herein shall be construed as a substitution or
novation of Borrower’s indebtedness to Lender or of the Existing Security
Instrument, which shall remain in full force and effect, as hereby confirmed,
modified, restated, consolidated and renewed. THE PARTIES DO NOT
INTEND THIS MODIFICATION NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND
THIS MODIFICATION AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY BORROWER UNDER OR
IN CONNECTION WITH THE EXISTING NOTE, EXISTING SECURITY INSTRUMENT AND OTHER
DOCUMENTS. FURTHER, THE PARTIES DO NOT INTEND THIS MODIFICATION NOR
THE TRANSACTIONS CONTEMPLATED HEREBY TO AFFECT THE PRIORITY OF ANY OF THE
LENDER’S LIENS IN ANY OF THE COLLATERAL SECURING THE EXISTING NOTE IN ANY WAY,
INCLUDING, BUT NOT LIMITED TO, THE LIENS, SECURITY INTERESTS AND ENCUMBRANCES
CREATED BY THE EXISTING SECURITY INSTRUMENT AND THE OTHER
DOCUMENTS.
II. Priority. Nothing in the
provisions of this Instrument shall be deemed in any way to affect the priority
of the Existing Security Instrument over any other security title, security
instrument, charge, encumbrance or conveyance, or to release or change the
liability of any person who is now or hereafter primarily or secondarily liable
under or on account of the Existing Note.
III. Ratification
and Confirmation, as Amended. As amended
hereby, the Existing Security Instrument shall remain in full force and effect,
provided, however, that all of terms, covenants, conditions, agreements,
warranties, representations and other terms and provisions thereof are hereby
consolidated, amended and restated as set forth herein.
IV. No
Offsets, etc. Borrower hereby
represents, warrants and covenants to Lender that there are no offsets, claim,
counterclaims or defenses at law or in equity against the Existing Loan, the
debt evidenced by the Amended Note, this Instrument, the Existing Security
Instrument, the Documents or the indebtedness secured thereby, and if any such
offset, defense, claim or counterclaim in fact exists, Borrower hereby
irrevocably waives the right to assert such matter at any time and releases
Lender from any and all liability with respect thereto.
V. Modification. All of the terms
and provisions of the Existing Security Instrument are hereby modified and
restated in their entirety as set forth herein, including the forgoing
provisions and the following recitals, representations, warranties, covenants
and agreements:
RECITALS:
1. Borrower,
by the terms of an Amended, Restated and Consolidated Promissory Note in favor
of Prudential in the original principal amount of _____________ ($_________) and
an Amended, Restated and Consolidated Promissory Note in favor of VPCM in the
original principal amount of _____________ ($_________), each executed on the
same date as this Instrument (collectively referenced above as the “Amended
Note”, but hereinafter collectively as the “Note”) and in connection with
the loan (“Loan”) from
Lender to Borrower evidenced by the Note, is indebted to Lender in the principal
sum of _____________ ($_________).
-3-
2. Lender
and Borrower and affiliates of Borrower have entered into that certain Amended
and Restated Master Loan Agreement of even date herewith (the “Loan Agreement”)
relating to seven (7) cross-collateralized and cross-defaulted loans in the
aggregate principal amount of $150,000,000.00, including the Loan evidenced by
the Note, which other loans (other than the Loan evidenced by the Note) are
guaranteed by Borrower pursuant to that certain Amended and Restated Irrevocable
Cross-Collateral Guaranty of Payment and Performance of even date herewith made
by Borrower in favor of Lender (the “Cross-Collateral Guaranty”).
3. Borrower
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). The Maturity Date (as that term is defined in the
Note) of the Note is January 15, 2017.
4. In
addition, Borrower has conveyed to Lender by separate instrument that certain
Amended, Restated and Consolidated Second Priority Mortgage and Security
Agreement (Subordinate Mortgage to Secure Cross Collateral Guaranty) from
Borrower dated as of the date of this Instrument (the “Second Mortgage”), which
Second Mortgage secures the Cross-Collateral Guaranty and the notes referenced
therein and guaranteed thereby (exclusive of the Note secured
hereby).
IN
CONSIDERATION of the principal sum of the Note, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Borrower
irrevocably:
A. Grants,
bargains, sells, assigns, transfers, pledges, mortgages, warrants, and conveys
to Lender, WITH POWER OF SALE, and grants Lender a security interest in, the
following property, rights, interests and estates owned by Borrower
(collectively, the “Property”):
(i) The
real property in ___________ and described in Exhibit A
(“Land”);
(ii) All
buildings, structures and improvements (including fixtures) now or later located
in or on the Land (“Improvements”);
(iii) All
easements, estates, and interests including hereditaments, servitudes,
appurtenances, tenements, mineral and oil/gas rights, water rights, air rights,
development power or rights, rights to the non-exclusive use of common driveway
entries, options, reversion and remainder rights, and any other rights owned by
Borrower and relating to or usable in connection with or access to the
Property;
(iv) All
right, title, and interest owned by Borrower in and to all land lying within the
rights-of-way, roads, or streets, open or proposed, adjoining the Land to the
center line thereof, and all sidewalks, alleys, and strips and gores of land
adjacent to or used in connection with the Property;
(v) All
right, title, and interest of Borrower in, to, and under all plans,
specifications, surveys, studies, reports, permits, licenses,
agreements, contracts, instruments, books of account, insurance policies, and
any other documents relating to the use, construction, occupancy, leasing,
activity, or operation of the Property;
(vi) All
of the fixtures and personal property described in Exhibit B owned
by Borrower and replacements thereof; but excluding all personal
property owned by any tenant (a “Tenant”) of the
Property;
-4-
(vii) All
of Borrower’s right, title and interest in the proceeds (including conversion to
cash or liquidation claims) of (A) insurance relating to the Property and
(B) all awards made for the taking by eminent domain (or by any proceeding
or purchase in lieu thereof ) of the Property, including awards resulting from a
change of any streets (whether as to grade, access, or otherwise) and for
severance damages;
(viii) All
tax refunds, including interest thereon, tax rebates, tax credits, and tax
abatements, and the right to receive the same, which may be payable or available
with respect to the Property;
(ix) All
leasehold estates, ground leases, leases, subleases, licenses, or other
agreements affecting the use, enjoyment or occupancy of the Property now or
later existing [including any use or occupancy arrangements created pursuant to
Title 7 or 11 of the United States Code, as amended from time to time, or any
similar federal or state laws now or later enacted for the relief of debtors
(the “Bankruptcy Code”)]
and all extensions and amendments thereto (collectively, the “Leases”) and all of Borrower’s
right, title and interest under the Leases, including all guaranties
thereof;
(x) All
rents, issues, profits, royalties, receivables, use and occupancy charges
(including all oil, gas or other mineral royalties and bonuses), income and
other benefits now or later derived from any portion or use of the Property
(including any payments received with respect to any Tenant or the Property
pursuant to the Bankruptcy Code) and all cash, security deposits, advance
rentals, or similar payments relating thereto (collectively, the “Rents”) and all proceeds from
the cancellation, termination, surrender, sale or other disposition of the
Leases, and the right to receive and apply the Rents to the payment of the
Obligations; and
(xi) All
of Borrower’s rights and privileges heretofore or hereafter otherwise arising in
connection with or pertaining to the Property, 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 Borrower 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
Property.
B. Absolutely
and unconditionally assigns, sets over, and transfers to Lender all of
Borrower’s right, title, interest and estates in and to the Leases and the
Rents, subject to the terms and license granted to Borrower under that certain
Amended and Restated Assignment of Leases and Rents made by Borrower to Lender
dated the same date as this Instrument (the “Assignment”), which document
shall govern and control the provisions of this assignment.
TO HAVE
AND TO HOLD the Property unto Lender and its successors and assigns forever,
subject to the matters listed in Exhibit C
(“Permitted
Encumbrances”) and the provisions, terms and conditions of this
Instrument.
PROVIDED,
HOWEVER, if Borrower shall pay and perform the Obligations as provided for in
the Documents (defined below) and shall comply with all the provisions, terms
and conditions in the Documents, these presents and the estates hereby granted
(except for the obligations of Borrower set forth in Sections 3.11 and 3.12 and
as set forth in or incorporated by reference in Article VIII hereof) shall
cease, terminate and be void.
IN
FURTHERANCE of the foregoing, Borrower warrants, represents, covenants and
agrees as follows:
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ARTICLE
I - OBLIGATIONS
Section
1.01 Obligations. This
Instrument is executed, acknowledged, and delivered by Borrower to secure and
enforce the following obligations (collectively, the “Obligations”):
(a) Payment
of all obligations, indebtedness and liabilities under the Documents including
(i) the Prepayment Premium (as defined in the Note) (“Prepayment Premium”),
(ii) interest at both the rate specified in the Note and at the Default
Rate (as defined in the Note), if applicable and to the extent permitted by Laws
(defined below), and (iii) renewals, extensions, and amendments of the
Documents;
(b) Performance
of every obligation, covenant, and agreement under the Documents including
renewals, extensions, and amendments of the Documents; and
(c) Payment
of all sums advanced (including costs and expenses) by Lender pursuant to the
Documents including renewals, extensions, and amendments of the
Documents;
Notwithstanding
the foregoing, the Obligations do not include the obligations under the
Cross-Collateral Guaranty and the indebtedness evidenced thereby, which
obligations are secured by the Second Mortgage, which Second Mortgage secures
the Cross-Collateral Guaranty and the notes referenced therein and guaranteed
thereby (exclusive of the Note secured hereby).
Section
1.02 Documents. The
“Documents” shall mean
this Instrument, the Note, the Assignment, and any other written agreement
executed in connection with the Loan (but excluding the Loan application and
Loan commitment) and by the party against whom enforcement is sought, including
those given to evidence or further secure the payment and performance of any of
the Obligations, and any written renewals, extensions, and amendments of the
foregoing, executed by the party against whom enforcement is
sought. All of the provisions of the Documents are incorporated into
this Instrument as if fully set forth in this Instrument.
ARTICLE
II - REPRESENTATIONS AND WARRANTIES
Borrower
hereby represents and warrants to Lender as follows:
Section
2.01 Title, Legal Status and
Authority. Borrower (i) is seised of the Land and
Improvements in fee simple and has good and marketable title to the Property,
free and clear of all liens, charges, encumbrances, and security interests,
except the Permitted Encumbrances; (ii) will forever warrant and
defend its title to the Property and the validity, enforceability, and priority
of the lien and security interest created by this Instrument against the claims
of all persons; (iii) is a Delaware limited partnership duly
organized, validly existing, and in good standing and qualified to transact
business under the laws of its state of organization or incorporation (“Organization State”) and the
state where the Property is located (“Property
State”); and (iv) has all necessary approvals,
governmental and otherwise, and full power and authority to own its properties
(including the Property) and carry on its business.
Section
2.02 Validity of
Documents. The execution, delivery and performance of the
Documents and the borrowing evidenced by the Note (i) are within the power
of Borrower; (ii) have been authorized by all requisite
action; (iii) have received all necessary approvals and
consents; (iv) will not violate, conflict with, breach, or
constitute (with notice or lapse of time, or both) a default under (1) any
law, order or judgment of any court, governmental authority, or the governing
instrument of Borrower or (2) any indenture, agreement, or other instrument
to which Borrower is a party or by which it or any of its property is bound or
affected; (v) will not result in the creation or imposition of
any lien, charge, or encumbrance upon any of its properties or assets except for
those in this Instrument; 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, the Assignment and Uniform
Commercial Code (“U.C.C.”)
filings). The Documents constitute legal, valid, and binding
obligations of Borrower.
-6-
Section
2.03 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 Borrower, threatened or contemplated against, or affecting,
Borrower or the Property which would have a material adverse effect on either
the Property or Borrower’s ability to perform its obligations.
Section
2.04 Status of
Property.
(a) The
Land and Improvements are not located in an area identified by the Secretary of
Housing and Urban Development, or any successor, as an area having special flood
hazards pursuant to the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973, or the National Flood Insurance Reform Act of 1994, as
each have been or may be amended, or any successor law (collectively, the “Flood Acts”) or, if located
within any such area, Borrower has and will maintain the insurance prescribed in
Section 3.06 below.
(b) Borrower
has all necessary (i) certificates, licenses, and other approvals,
governmental and otherwise, for the operation of the Property and the conduct of
its business and (ii) zoning, building code, land use, environmental and
other similar permits or approvals, all of which are currently in full force and
effect and not subject to revocation, suspension, forfeiture, or modification,
except as and to the extent explicitly set forth in the Environmental Report (as
defined below). The Property and its use and occupancy are in full
compliance in all material respects with all Laws and Borrower has received no
notice of any violation or potential violation of the Laws that has not been
remedied or satisfied.
(c) The
Property is served by all utilities (including water and sewer) required for its
use.
(d) All
public roads and streets necessary to serve the Property for its use have been
completed, are serviceable, are legally open, and have been dedicated to and
accepted by the appropriate governmental entities.
(e) The
Property is free from damage caused by fire or other casualty.
(f) All
costs and expenses for labor, materials, supplies, and equipment used in the
construction of the Improvements have been paid in full except for the Permitted
Encumbrances.
(g) Borrower
owns and has paid in full for all furnishings, fixtures, and equipment (other
than Tenants’ property) used in connection with the operation of the Property,
free of all security interests, liens, or encumbrances except the Permitted
Encumbrances and those created by this Instrument.
-7-
(h) The
Property is assessed for real estate tax purposes as one or more wholly
independent tax lot(s), separate from any adjoining land or improvements, and no
other land or improvements is assessed and taxed together with the
Property.
Section
2.05 Tax Status of
Borrower. Borrower is not a “foreign person” within the
meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (the “Revenue
Code”). Borrower further represents and warrants to Lender
that Borrower is not a “disregarded entity” as defined in Section
1.1445-2(b)(2)(iii) of the Income Tax Regulations issued under the Revenue
Code.
Section
2.06 Bankruptcy and Equivalent
Value. No bankruptcy, reorganization, insolvency, liquidation,
or other proceeding for the relief of debtors has been instituted by or against
Borrower, any general partner of Borrower (if Borrower is a partnership), or any
manager or managing member of Borrower (if Borrower is a limited liability
company). Borrower has received reasonably equivalent value for
granting this Instrument.
Section
2.07 Disclosure. Borrower
has disclosed to Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty made herein to be
materially misleading. There has been no adverse change in any
condition, fact, circumstance, or event that would make any such information
materially inaccurate, incomplete or otherwise misleading.
Section
2.08 Illegal
Activity. No portion of the Property has been or will be
purchased, improved, fixtured, equipped or furnished with proceeds of any
illegal activity and, to the best of Borrower’s knowledge, there are no illegal
activities at or on the Property.
Section
2.09 OFAC
Lists. That (i) neither Borrower, nor any persons or
entities holding any legal or beneficial interest whatsoever in Borrower
(whether directly or indirectly), are named on any list of persons, entities,
and governments issued by the Office of Foreign Assets Control of the United
States Department of the Treasury (“OFAC”) pursuant to Executive
Order 13224 – Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism (“Executive Order 13224”), as in
effect on the date hereof, or any similar list issued by OFAC or any other
department or agency of the United States of America (collectively, the “OFAC Lists”); provided,
however, that (A) with respect to individual beneficiaries of any
governmental plans or employee benefit plans holding interests in Borrower
(collectively, the “Individual
Beneficiaries”), the foregoing representations and warranties are limited
to Borrower’s actual knowledge, and (B) with respect to individual
shareholders of any publicly traded company holding an interest in Borrower
(collectively, the “Individual
Shareholders”), the foregoing representations and warranties are limited
to Borrower’s actual knowledge; (ii) neither Borrower, nor any persons or
entities holding any legal or beneficial interest whatsoever in Borrower
(whether directly or indirectly), are included in, owned by, controlled by,
acting for or on behalf of, providing assistance, support, sponsorship, or
services of any kind to, or otherwise associated with any of the persons or
entities referred to or described in the OFAC Lists; provided, however, that
(A) with respect to any Individual Beneficiaries holding a interests in
Borrower, the foregoing representations and warranties are limited to Borrower’s
actual knowledge, and (B) with respect to any Individual Shareholders
holding interests in Borrower, the foregoing representations and warranties are
limited to Borrower’s actual knowledge; (iii) neither any guarantor, nor
any persons or entities holding any legal or beneficial interest whatsoever in
any guarantor (whether directly or indirectly), are named on any OFAC Lists;
provided, however, that (A) with respect to any Individual Beneficiaries
holding interests in any guarantor, the foregoing representations and warranties
are limited to Borrower’s actual knowledge, and (B) with respect to any
Individual Shareholders holding interests in any guarantor, the foregoing
representations and warranties are limited to Borrower’s actual knowledge;
(iv) neither any guarantor, nor any persons or entities holding any legal
or beneficial interest whatsoever in any guarantor (whether directly or
indirectly), are included in, owned by, controlled by, acting for or on behalf
of, providing assistance, support, sponsorship, or services of any kind to, or
otherwise associated with any of the persons or entities referred to or
described in the OFAC Lists; provided, however, that (A) with respect to
any Individual Beneficiaries holding interests in any guarantor, the foregoing
representations and warranties are limited to Borrower’s actual knowledge, and
(B) with respect to any Individual Shareholders holding interests in any
guarantor, the foregoing representations and warranties are limited to
Borrower’s actual knowledge; and (v) neither Borrower nor any guarantor has
knowingly conducted business with or engaged in any transaction with any person
or entity named on any of the OFAC Lists or any person or entity included in,
owned by, controlled by, acting for or on behalf of, providing assistance,
support, sponsorship, or services of any kind to, or otherwise associated with
any of the persons or entities referred to or described in the OFAC
Lists.
-8-
Section
2.10 Property as Single
Asset. That Borrower’s only real estate assets owned by
Borrower (excluding ownership by virtue of limited liability company membership
interests or partnership interests or similar beneficial ownership structures)
are the Property and those additional properties currently owned by Borrower as
disclosed to Lender in writing in connection herewith.
ARTICLE III - COVENANTS AND
AGREEMENTS
Borrower
covenants and agrees with Lender as follows:
Section
3.01 Payment of
Obligations. Borrower shall timely pay and cause to be
performed the Obligations.
Section
3.02 Continuation of
Existence. Except as and to the extent expressly permitted by
and in accordance with the terms of Article V hereof, Borrower shall not
(a) dissolve, terminate, or otherwise dispose of, directly, indirectly or
by operation of law, all or substantially all of its
assets; (b) reorganize or change its legal structure without
Lender’s prior written consent; (c) change its name, address, or
the name under which Borrower conducts its business without promptly notifying
Lender; or (d) do anything to cause the representations in
Section 2.02 to become untrue.
Section
3.03 Taxes and Other
Charges.
(a) Payment of
Assessments. Borrower shall pay when due all taxes, liens,
assessments, utility charges (public or private and including sewer fees),
ground rents, maintenance charges, dues, fines, impositions, and public and
other charges of any character (including penalties and interest) assessed
against, or which could become a lien against, the Property (“Assessments”) and in all
events prior to the date any fine, penalty, interest or charge for nonpayment
may be imposed. Unless Borrower is making deposits per
Section 3.10, Borrower shall provide Lender with receipts evidencing such
payments (except for income taxes, franchise taxes, ground rents, maintenance
charges, and utility charges) within thirty (30) days after their due
date.
(b) Right to
Contest. So long as no Event of Default (defined below) has
occurred and is continuing, Borrower may, prior to delinquency and at its sole
expense, contest any Assessment, but this shall not change or extend Borrower’s
obligation to pay the Assessment as required above unless (i) Borrower
gives Lender prior written notice of its intent to contest an
Assessment; (ii) Borrower demonstrates to Lender’s reasonable
satisfaction that (A) the Property will not be sold to satisfy the
Assessment prior to the final determination of the legal proceedings,
(B) Borrower has taken such actions as are required or permitted to
accomplish a stay of any such sale, and (C) Borrower has either
(1) furnished a bond or surety (satisfactory to Lender in form and amount)
sufficient to prevent a sale of the Property, or (2) at Lender’s option,
deposited one hundred fifty percent (150%) of the full amount necessary to pay
any unpaid portion of the Assessments with Lender; and
(iii) such proceeding shall be permitted under any other instrument to
which Borrower or the Property is subject (whether superior or inferior to this
Instrument); provided, however, that the foregoing shall not restrict
the contesting of any income taxes, franchise taxes, ground rents, maintenance
charges, and utility charges.
-9-
(c) Documentary Stamps and Other
Charges. Borrower shall pay all taxes, assessments, charges,
expenses, costs and fees (including registration and recording fees and revenue,
transfer, stamp, intangible and any similar taxes) (collectively, the “Transaction Taxes”) required
in connection with the making and/or recording of the Documents. If
Borrower fails to pay the Transaction Taxes after demand, Lender may (but is not
obligated to) pay these and Borrower shall reimburse Lender on demand for any
amount so paid with interest at the applicable interest rate specified in the
Note, which shall be the Default Rate unless prohibited by Laws.
(d) Changes in Laws Regarding
Taxation. If any law (i) deducts from the value of real
property for the purpose of taxation any lien or encumbrance thereon,
(ii) taxes mortgages or debts secured by mortgages for federal, state or
local purposes or changes the manner of the collection of any such existing
taxes, and/or (iii) imposes a tax, either directly or indirectly, on any of
the Documents or the Obligations, Borrower shall, if permitted by law, pay such
tax within the statutory period or within twenty (20) days after demand by
Lender, whichever is less; provided, however, that if, in
the opinion of Lender, Borrower is not permitted by law to pay such taxes,
Lender shall have the option to declare the Obligations immediately due and
payable (without any Prepayment Premium) upon sixty (60) days’ notice to
Borrower.
(e) No Credits on Account of the
Obligations. Borrower will not claim or be entitled to any
credit(s) on account of the Obligations for any part of the Assessments and no
deduction shall be made or claimed from the taxable value of the Property for
real estate tax purposes by reason of the Documents or the
Obligations. If such claim, credit, or deduction is required by law,
Lender shall have the option to declare the Obligations immediately due and
payable (without any Prepayment Premium) upon sixty (60) days' notice to
Borrower.
Section
3.04 Defense of Title,
Litigation, and Rights under Documents. Borrower
shall forever warrant, defend and preserve Borrower’s title to the
Property, the validity, enforceability and priority of this Instrument and the
lien or security interest created thereby, and any rights of Lender under the
Documents against the claims of all persons, and shall promptly notify Lender of
any such claims. Lender (whether or not named as a party to such
proceedings) is 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 proceeding or the protection of the lien, security interest, validity,
enforceability, or priority of this Instrument, title to the Property, or any
rights of Lender under the Documents, including the employment of counsel, the
prosecution and/or defense of litigation, the compromise, release, or discharge
of such adverse claims, the purchase of any tax title, the removal of any such
liens and security interests, and any other actions Lender deems necessary to
protect its interests. Borrower authorizes Lender to take any actions
required to be taken by Borrower, or permitted to be taken by Lender, in the
Documents in the name and on behalf of Borrower. Borrower shall
reimburse Lender on demand for all expenses (including attorneys’ fees) incurred
by it in connection with the foregoing and Lender’s exercise of its rights under
the Documents. All such expenses of Lender, until reimbursed by
Borrower, shall be part of the Obligations, bear interest from the date of
demand at the Default Rate, and shall be secured by this
Instrument.
-10-
Section
3.05 Compliance with Laws and
Operation and Maintenance of Property.
(a) Repair and
Maintenance. Borrower will operate and maintain the Property
in good order, repair, and operating condition. Borrower will
promptly make all necessary repairs, replacements, additions, and improvements
necessary to ensure that the Property shall not in any way be diminished or
impaired. Borrower will not cause or allow any of the Property to be
misused, wasted, or to deteriorate and Borrower will not abandon the
Property. No new building, structure, or other improvement shall be
constructed on the Land nor shall any material part of the Improvements be
removed, demolished, or structurally or materially altered, without Lender’s
prior written consent (except for non-structural tenant improvements required or
permitted to be constructed pursuant to Leases approved or deemed approved by
Lender pursuant to the Assignment, or within the Minimum Leasing Requirements as
provided by the Assignment).
(b) Replacement of
Property. Borrower will keep the Property fully equipped and
will replace all worn out or obsolete personal property in a commercially
reasonable manner with comparable fixtures or personal
property. Borrower will not, without Lender’s prior written consent,
remove any personal property covered by this Instrument unless the same is
replaced by Borrower in a commercially reasonable manner with a comparable
article (i) owned by Borrower free and clear of any lien or security
interest (other than the Permitted Encumbrances and those created by this
Instrument) or (ii) leased by Borrower (A) with Lender’s prior written
consent (or, as to articles with a total lease cost, in the aggregate for the
Property, of not more than $5,000 in lease obligations, with written notice to
Lender together with a copy of the applicable lease) or (B) if the replaced
personal property was leased at the time of execution of this
Instrument.
(c) Compliance with
Laws. Borrower shall comply with and shall cause the Property
to be maintained, used, and operated in compliance with all (i) present and
future laws, Environmental Laws (defined below), ordinances, regulations, rules,
orders and requirements (including zoning and building codes) of any
governmental or quasi-governmental authority or agency applicable to Borrower or
the Property (collectively, the “Laws”); (ii) orders,
rules, and regulations of any regulatory, licensing, accrediting, insurance
underwriting or rating organization, or other body exercising similar functions;
(iii) duties or obligations of any kind imposed under any Permitted
Encumbrance or by law, covenant, condition, agreement, or easement, public or
private; and (iv) policies of insurance at any time in force with respect
to the Property. If proceedings are initiated or Borrower receives
notice that Borrower or the Property is not in compliance with any of the
foregoing, Borrower will promptly send Lender notice and a copy of the
proceeding or violation notice. Without limiting Lender’s rights and
remedies under Article VI or otherwise, if Borrower or the Property are not
in compliance with all Laws, Lender may impose additional requirements upon
Borrower including monetary reserves or financial equivalents.
(d) Zoning and Title
Matters. Borrower shall not, without Lender’s prior written
consent, (i) initiate or support any zoning reclassification of the
Property or variance under existing zoning
ordinances; (ii) modify or supplement any of the Permitted
Encumbrances; (iii) impose any restrictive covenants or
encumbrances upon the Property; (iv) execute or file any
subdivision plat affecting the Property; (v) consent to the
annexation of the Property to any municipality; (vi) permit the
Property to be used by the public or any person in a way that might make a claim
of adverse possession or any implied dedication or easement
possible; (vii) cause or permit the Property to become a
non-conforming use under zoning ordinances or any present or future
non-conforming use of the Property to be discontinued; or
(viii) fail to comply with the terms of the Permitted
Encumbrances.
-11-
Section
3.06 Insurance.
(a) Property and Time Element
Insurance. Borrower shall keep the Property insured for the benefit
of Borrower and Lender (with Lender named as mortgagee) by (i) a special
form property insurance policy with an agreed amount endorsement for full
replacement cost (defined below) without any coinsurance provisions or
penalties, or the broadest form of coverage available, in an amount sufficient
to prevent Lender from ever becoming a coinsurer under the policy or Laws, and
with a deductible not to exceed One Hundred Thousand Dollars ($100,000.00);
(ii) a policy or endorsement insuring against acts of terrorism (subject to
the terms in the two sentences at the end of this subsection) (“Terrorism
Insurance”); (iii) a policy or endorsement insuring against claims
applicable to the presence of Microbial Matter (as defined in
Section 3.12(a) hereof); (iv) a policy or endorsement providing
business income insurance (including business interruption insurance and extra
expense insurance and/or rent insurance) on an actual loss sustained basis in an
amount equal to at least one (1) year’s total income from the Property including
all Rents plus
all other pro forma annual income such as percentage rent and tenant
reimbursements of fixed and operating expenses, which business interruption
insurance shall also provide coverage as aforesaid for any additional hazards as
may be required pursuant to the terms of this Instrument; (v) a policy or
endorsement insuring against damage by flood if the Property is located in a
Special Flood Hazard Area identified by the Federal Emergency Management Agency
or any successor or related government agency as a 100 year flood plain
currently classified as Flood Insurance Rate Map Zones “A”, “AO”, “AH”,
“A1-A30”, “AE”, “A99”, “V”, “V1-V30”, and “VE”, in an amount equal to the
original amount of the Note; (vi) a policy or endorsement covering against
damage or loss from (A) sprinkler system leakage and (B) boilers,
boiler tanks, HVAC systems, heating and air-conditioning equipment, pressure
vessels, auxiliary piping, and similar apparatus, in the amount reasonably
required by Lender; (vii) during the period of any construction, repair,
restoration, or replacement of the Property, a standard builder’s risk policy
with extended coverage in an amount at least equal to the full replacement cost
of such Property, and worker’s compensation, in statutory amounts; and
(viii) a policy or endorsement covering against damage or loss by
earthquake and other natural phenomenon in the amounts reasonably required by
Lender. “Full
replacement cost” shall mean the one hundred percent (100%) replacement
cost of the Property, without allowance for depreciation and exclusive of the
cost of excavations, foundations, footings, and value of land, and shall be
subject to verification by Lender. Full replacement cost will be
determined, at Borrower’s expense, periodically upon policy expiration or
renewal by the insurance company or an appraiser, engineer, architect, or
contractor approved by said company and Lender. Lender will only
require such Terrorism Insurance that is (y) normal and customary for
similar properties, and (z) available at commercially reasonable rates (as
defined in the following sentence). Notwithstanding the above,
Borrower’s obligation to provide Terrorism Insurance shall be limited to
providing the amount of coverage for the Properties that can be obtained by
paying an amount not to exceed one and one half (1.5) times the premium that
would otherwise be charged for a special form property insurance policy (if such
policy is a blanket policy, the premium allocated to the Property) excluding
terrorism coverage, in the aggregate; however, Borrower shall not be obligated
to obtain terrorist coverage if any coverage cannot be obtained for such
amount).
(b) Liability and Other
Insurance. Borrower shall maintain commercial general
liability insurance with per occurrence limits of $1,000,000, a
products/completed operations limit of $2,000,000, and a general aggregate limit
of $2,000,000, with an excess/umbrella liability policy of not less than
$10,000,000 per occurrence and annual aggregate covering Borrower, with Lender
named as an additional insured, against claims for bodily injury or death or
property damage occurring in, upon, or about the Property or any street, drive,
sidewalk, curb, or passageway adjacent thereto. In addition to any
other requirements, such commercial general liability and excess/umbrella
liability insurance shall provide insurance against acts of terrorism and
against claims applicable to the presence of Microbial Matter, or such coverages
shall be provided by separate policies or endorsements. The insurance
policies shall also include operations and blanket contractual liability
coverage which insures contractual liability under the indemnifications set
forth in Section 8.02 below (but such coverage or the amount thereof shall
in no way limit such indemnifications). Upon request, Borrower shall
also carry additional insurance or additional amounts of insurance covering
Borrower or the Property as Lender shall reasonably require.
-12-
(c) Form of
Policy. All insurance required under this Section shall be
fully paid for, non-assessable, and the policies shall contain such provisions,
endorsements, and expiration dates as Lender shall reasonably
require. The policies shall be issued by insurance companies
authorized to do business in the Property State, approved by Lender, and must
have and maintain a current financial strength rating of “A-, X” (or higher)
from A.M. Best or equivalent (or if a rating by A.M. Best is no longer
available, a similar rating from a similar or successor service). In
addition, all policies shall (i) include a standard mortgagee clause,
without contribution, in the name of Lender, (ii) provide that they shall
not be canceled, amended, or materially altered (including reduction in the
scope or limits of coverage) without at least thirty (30) days’ prior written
notice to Lender except in the event of cancellation for non-payment of premium,
in which case only ten (10) days’ prior written notice will be given to Lender,
and (iii) include a waiver of subrogation clause. The property
insurance waiver of subrogation clause shall be substantially equivalent to the
following: “The Company may require from the Insured an assignment of all rights
of recovery against any party for loss to the extent that payment therefor is
made by the Company, but the Company shall not acquire any rights of recovery
which the Insured has expressly waived prior to loss, nor shall such waiver
affect the Insured’s rights under this policy”. The liability
insurance waiver of subrogation clause shall be substantially equivalent to the
following: “It is agreed that the insurance company, in the event of a payment
under this policy, waives its right of subrogation against any principal where a
waiver has been included as part of a contractual undertaking by the insured
prior to the occurrence or offense”.
(d) Original Policies and
Renewals. Borrower shall deliver to Lender (i) original
or certified copies of all policies (and renewals) required under this Section
and (ii) receipts evidencing payment of all premiums on such policies at
least thirty (30) days prior to their expiration. If original and
renewal policies are unavailable or if coverage is under a blanket policy,
Borrower shall deliver duplicate originals, or, if unavailable, original
XXXXX 28 (2003/10) and XXXXX 25-S certificates (or equivalent
certificates) evidencing that such policies are in full force and effect
together with certified copies of the original policies. Without
limiting Lender’s other rights with respect to the foregoing obligations, if,
within fifteen (15) days prior to the expiration of the current applicable
policy, Lender has not received the foregoing items in form and substance
acceptable to Lender (as being in compliance with the terms of this Instrument),
Lender may retain a commercial property insurance consultant to assist Lender in
obtaining adequate evidence that the required insurance coverage is in effect,
and Borrower shall (i) cooperate with such consultant in confirming that
adequate evidence that the required insurance coverage is in effect, and
(ii) pay all of the costs and expenses of such consultant (not to exceed
$700 in any calendar year).
(e) General
Provisions. Borrower 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 Lender as per this
Section and approved by Lender in all respects. In the event of
foreclosure of this Instrument or other transfer of title or assignment of the
Property in extinguishment, in whole or in part, of the Obligations, all right,
title, and interest of Borrower in and to all policies of insurance then in
force regarding the Property (applicable only to the Property, and not to any
other properties covered by such blanket policies that are not encumbered by a
mortgage held by Lender) and all proceeds payable thereunder and unearned
premiums thereon shall immediately vest in the purchaser or other transferee of
the Property. No approval by Lender of any insurer shall be construed
to be a representation, certification, or warranty of its
solvency. No approval by Lender as to the amount, type, or form of
any insurance shall be construed to be a representation, certification, or
warranty of its sufficiency. Borrower shall comply with all insurance
requirements and shall not cause or permit any condition to exist which would be
prohibited by any insurance requirement or would invalidate the insurance
coverage on the Property.
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(f) Waiver of
Subrogation. A waiver of subrogation shall be obtained by
Borrower from its insurers and, consequently, Borrower for itself, and on behalf
of its insurers, hereby waives and releases any and all right to claim or
recover against Lender, its officers, employees, agents and representatives, for
any loss of or damage to Borrower, other Persons, the Property, Borrower’s
property or the property of other Persons from any cause required to be insured
against by the provisions of this Instrument or otherwise insured against by
Borrower.
Section
3.07 Damage and Destruction of
Property.
(a) Borrower’s
Obligations. If any damage to, loss, or destruction of the
Property occurs (any “Damage”), (i) Borrower
shall promptly notify Lender and take all necessary steps to preserve any
undamaged part of the Property and (ii) if the insurance proceeds are made
available for Restoration (defined below) (but regardless of whether any
proceeds are sufficient for Restoration), Borrower shall promptly commence and
diligently pursue to completion the restoration, replacement, and rebuilding of
the Property as nearly as possible to its value and condition immediately prior
to the Damage or a Taking (defined below) in accordance with plans and
specifications approved by Lender (“Restoration”). Borrower
shall comply with other reasonable requirements established by Lender to
preserve the security under this Instrument.
(b) Lender’s
Rights. If any Damage occurs and some or all of it is covered
by insurance, then (i) Lender may, but is not obligated to, make proof of
loss if not made promptly by Borrower and Lender is authorized and empowered by
Borrower to settle, adjust, or compromise any claims for the Damage
[notwithstanding the foregoing provisions of this subsection (b)(i), so long as
no Event of Default (or event which with the passage of time or the giving of
notice or both would be an Event of Default) has occurred and is continuing at
any time during such settlement, adjustment or compromise, Lender shall provide
Borrower with written notice of any settlement, adjustment or compromise of such
claim made solely by Lender]; (ii) each insurance company
concerned is authorized and directed to make payment directly to Lender for the
Damage; and (iii) Lender may apply the insurance proceeds in any
order it determines (1) to reimburse Lender for all Costs (defined below)
related to collection of the proceeds and (2) subject to
Section 3.07(c) and at Lender’s option, to (A) payment (without any
Prepayment Premium) of all or part of the Obligations, whether or not then due
and payable, in the order determined by Lender (provided that if any Obligations
remain outstanding after this payment, the unpaid Obligations shall continue in
full force and effect and Borrower shall not be excused in the payment
thereof); (B) the cure of any default under the
Documents; or (C) the Restoration. Notwithstanding
the foregoing, if there shall then be no Event of Default (or event which with
the passage of time or the giving of notice or both would be an Event of
Default), Borrower shall have the right to settle, adjust or compromise any
claim for Damage if the total amount of such claim is less than $122,500.00 (the
“Borrower Claim
Threshold”), provided, that, Borrower promptly uses the full amount of
such insurance proceeds for Restoration of the Damage and provides evidence
thereof to Lender in a manner acceptable to Lender. Any insurance
proceeds held by Lender shall be held without the payment of interest
thereon. If Borrower receives any insurance proceeds for the Damage,
Borrower shall promptly deliver the proceeds to
Lender. Notwithstanding anything in this Instrument or at law or in
equity to the contrary, none of the insurance proceeds paid to Lender shall be
deemed trust funds and Lender may dispose of these proceeds as provided in this
Section. Borrower expressly assumes all risk of loss from any Damage,
whether or not insurable or insured against.
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(c) Application of Proceeds to
Restoration. Notwithstanding the following provisions of this
subsection (c), so long as no Event of Default (or event which with the passage
of time or the giving of notice or both would be an Event of Default) has
occurred and is continuing, if the amount of the Damage is in an amount that is
less than the Borrower Claim Threshold, such insurance proceeds shall be paid
directly to Borrower and used by Borrower to repair and restore the Property,
provided that Borrower shall use such funds to repair and restore the Property,
and shall provide Lender with such information and reports with respect thereto
as Lender may require. Lender shall make the Net Proceeds (defined
below) available to Borrower for Restoration if: (i) there shall then be no
Event of Default; (ii) Lender shall be satisfied that
(A) Restoration can and will be completed within one (1) year after the
Damage occurs and at least one (1) year prior to the maturity of the Note and
(B) Leases which are terminated or terminable as a result of the Damage
cover an aggregate of less than ten percent (10%) of the total rentable square
footage contained in the Property at the closing of the Loan or such Tenants
agree in writing to continue their Leases; (iii) Borrower shall
have entered into a general construction contract acceptable in all respects to
Lender for Restoration, which contract must include provision for retainage of
not less than ten percent (10%) until final completion of the
Restoration; and (iv) in Lender’s reasonable judgment, after
Restoration has been completed the net cash flow of the Property will be
sufficient to cover all costs and operating expenses of the Property, including
payments due and reserves required under the
Documents. Notwithstanding any provision of this Instrument to the
contrary, Lender shall not be obligated to make any portion of the Net Proceeds
available for Restoration (whether as a result of Damage or a Taking) unless, at
the time of the disbursement request, Lender has determined in its reasonable
discretion that (y) Restoration can be completed at a cost which does not exceed
the aggregate of the remaining Net Proceeds and any funds deposited with Lender
by Borrower (“Additional
Funds”) and (z) the aggregate of any loss of rental income insurance
proceeds which the carrier has acknowledged to be payable (“Rent Loss Proceeds”) and any
funds deposited with Lender by Borrower are sufficient to cover all costs and
operating expenses of the Property, including payments due and reserves required
under the Documents.
(d) Disbursement of
Proceeds. If Lender elects or is required to make insurance
proceeds or the Award (defined below), as the case may be, available for
Restoration, Lender shall, through a disbursement procedure established by
Lender, periodically make available to Borrower in installments the net amount
of all insurance proceeds or the Award, as the case may be, received by Lender
after deduction of all reasonable costs and expenses incurred by Lender in
connection with the collection and disbursement of such proceeds (“Net Proceeds”) and, if any,
the Additional Funds; subject to receipt of the documentation
required by such disbursement procedure and subject to a minimum draw amount to
be determined by Lender and Borrower, Lender shall make such disbursements
available on a monthly basis. The amounts periodically disbursed to
Borrower shall be based upon the amounts currently due under the construction
contract for Restoration and Lender’s receipt of (i) appropriate lien
waivers, (ii) a certification of the percentage of Restoration completed by
an architect or engineer acceptable to Lender, and (iii) title insurance
protection against materialmen’s and mechanic’s liens. At Lender’s
election, a disbursing agent selected by Lender shall disburse such funds, and
Borrower shall pay such agent’s reasonable fees and expenses. The Net
Proceeds, Rent Loss Proceeds, and any Additional Funds shall constitute
additional security for the Loan and Borrower shall execute, deliver, file
and/or record, at its expense, such instruments as Lender requires to grant to
Lender a perfected, first-priority security interest in these
funds. If the Net Proceeds are made available for Restoration and
(x) Borrower refuses or fails to complete the Restoration, (y) an
Event of Default occurs, or (z) the Net Proceeds or Additional Funds are
not applied to Restoration, then any undisbursed portion may, at Lender’s
option, be applied to the Obligations in any order of priority, and any such
application to principal shall be deemed a voluntary prepayment subject to the
Prepayment Premium.
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Section
3.08 Condemnation.
(a) Borrower’s
Obligations. Borrower will promptly notify Lender of any
threatened or instituted proceedings for the condemnation or taking by eminent
domain of the Property including any change in any street (whether as to grade,
access, or otherwise) (a “Taking”). Borrower
shall, at its expense, (i) diligently prosecute these proceedings,
(ii) deliver to Lender copies of all papers served in connection therewith,
and (iii) consult and cooperate with Lender in the handling of these
proceedings. No settlement of these proceedings shall be made by
Borrower without Lender’s prior written consent. Lender may
participate in these proceedings (but shall not be obligated to do so) and
Borrower will sign and deliver all instruments requested by Lender to permit
this participation.
(b) Lender’s Rights to
Proceeds. All condemnation awards, judgments, decrees, or
proceeds of sale in lieu of condemnation (“Award”) are assigned and shall
be paid to Lender. Borrower authorizes Lender to collect and receive
them, to give receipts for them, to accept them in the amount received without
question or appeal, and/or to appeal any judgment, decree, or
award. Borrower will sign and deliver all instruments requested by
Lender to permit these actions.
(c) Application of
Award. Lender may apply any Award in any order it determines
(1) to reimburse Lender for all Costs related to collection of the Award
and (2) subject to Section 3.08(d) and at Lender’s option, to
(A) payment (without any Prepayment Premium) of all or part of the
Obligations, whether or not then due and payable, in the order determined by
Lender (provided that if any Obligations remain outstanding after this payment,
the unpaid Obligations shall continue in full force and effect and Borrower
shall not be excused in the payment thereof); (B) the cure of any default
under the Documents; or (C) the Restoration. If Borrower
receives any Award, Borrower shall promptly deliver such Award to
Lender. Notwithstanding anything in this Instrument or at law or in
equity to the contrary, none of the Award paid to Lender shall be deemed trust
funds and Lender may dispose of these proceeds as provided in this
Section.
(d) Application of Award to
Restoration. Notwithstanding anything to the contrary set
forth hereinabove, Lender shall permit the application of the Award to
Restoration if: (i) no more than (A) twenty percent (20%)
of the gross area of the Improvements or (B) ten percent (10%) of the
parking spaces is affected by the Taking, (ii) the amount of the loss does
not exceed twenty percent (20%) of the original amount of the Note;
(iii) the Taking does not affect access to the Property from any public
right-of-way; (iv) there is no Event of Default at the time of the Taking
or the application of the Award; (v) after Restoration, the Property and
its use will be in compliance with all Laws; (vi) in Lender’s reasonable
judgment, Restoration is practical and can be completed within one (1) year
after the Taking and at least one (1) year prior to the maturity of the Note;
(vii) the Tenants listed in Exhibit D
(“Major Tenants”) agree
in writing to continue their Leases without abatement of rent;
(viii) Borrower shall have entered into a general construction contract
acceptable in all respects to Lender for Restoration, which contract must
include provision for retainage of not less than ten percent (10%) until final
completion of the Restoration; and (ix) in Lender’s reasonable judgment,
after Restoration has been completed the net cash flow of the Property will be
sufficient to cover all costs and operating expenses of the Property, including
payments due and reserves required under the Documents. Any portion
of the Award that is in excess of the cost of any Restoration permitted above,
may, in Lender’s sole discretion, be applied against the Obligations or paid to
Borrower. If the Award is disbursed to Borrower under the provisions
of this Section 3.08(d), then such Award shall be disbursed to Borrower in
accordance with the terms and conditions of Section 3.07(d).
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(e) Effect on the
Obligations. Notwithstanding any Taking, Borrower shall
continue to pay and perform the Obligations as provided in the
Documents. Any reduction in the Obligations due to application of the
Award shall take effect only upon Lender’s actual receipt and application of the
Award to the Obligations. If the Property shall have been foreclosed,
sold pursuant to any power of sale granted hereunder, or transferred by
deed-in-lieu of foreclosure prior to Lender’s actual receipt of the Award,
Lender may apply the Award received to the extent of any deficiency upon such
sale and Costs incurred by Lender in connection with such sale.
Section
3.09 Liens and
Liabilities. Borrower shall pay when due all claims and
demands of mechanics, materialmen, laborers and others for any work performed or
materials delivered for the Property or the Improvements (collectively, “Property Payables”); provided,
however, Borrower shall have the right to contest in good faith any such claim
or demand, so long as it does so diligently, by appropriate proceedings and
without prejudice to Lender and provided that neither the Property nor any
interest therein would be in any danger of sale, loss or forfeiture as a result
of such proceeding or contest. In the event that a mechanic’s or
materialman's lien or similar proceeding is filed against the Property, or a
claim is filed against Borrower or any Recourse Parties, and Borrower shall
contest such lien, proceeding or claim, Borrower shall promptly notify Lender of
such contest and thereafter shall, upon Lender’s request, promptly provide a
bond, cash deposit or other security satisfactory to Lender to protect Lender’s
interest and security should the contest be unsuccessful. If Borrower
shall fail to immediately discharge or provide security against any such lien,
proceeding or claim as aforesaid, Lender may do so and any and all expenses
incurred by Lender, together with interest thereon at the Default Rate from the
date advanced by Lender until actually paid by Borrower, shall be immediately
paid by Borrower on demand and shall be secured by this Instrument and by all
other Documents securing all or any part of the Obligations. Nothing
in the Documents shall be deemed or construed as constituting the consent or
request by Lender, 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 Property. Borrower further agrees that Lender does not
stand in any fiduciary relationship to Borrower. Any contributions
made, directly or indirectly, to Borrower by or on behalf of any of its
partners, members, principals or any party related to such parties shall be
treated as equity and shall be subordinate and inferior to the rights of Lender
under the Documents.
Section
3.10 Tax and Insurance
Deposits. At Lender’s option (exercisable only (i) if the
Debt Service Coverage (as defined in the Loan Agreement) as to all Properties
(as defined in the Loan Agreement) shall be less than 1.75 to 1.00, or
(ii) there shall be an Event of Default under the Documents, or
(iii) in the event that Borrower fails to timely deliver to Lender evidence
of payment of Assessments or insurance premiums as required by
Section 3.03(a) and Section 3.06(d), respectively), Borrower shall
make monthly deposits (“Deposits”) with Lender equal
to one-twelfth (1/12th) of
the annual Assessments (except for income taxes, franchise taxes, ground rents,
maintenance charges and utility charges) and the premiums for insurance required
under Section 3.06 (the “Insurance Premiums”) together
with amounts sufficient to pay these items thirty (30) days before they are due
(collectively, the “Impositions”). Lender
shall estimate the amount of the Deposits until ascertainable. At
that time, Borrower shall promptly deposit any deficiency. Borrower
shall promptly notify Lender of any changes to the amounts, schedules and
instructions for payment of the Impositions. Borrower authorizes
Lender or its agent to obtain the bills for Assessments directly from the
appropriate tax or governmental authority. All Deposits are pledged
to Lender and shall constitute additional security for the
Obligations. The Deposits shall be held by Lender without interest
(except to the extent required under Laws) and may be commingled with other
funds. If (i) there is no Event of Default at the time of
payment, (ii) Borrower has delivered bills or invoices to Lender for the
Impositions in sufficient time to pay them when due, and (iii) the Deposits
are sufficient to pay the Impositions or Borrower has deposited the necessary
additional amount, then Lender shall pay the Impositions prior to their due
date. Any Deposits remaining after payment of the Impositions shall,
at Lender’s option, be credited against the Deposits required for the following
year or paid to Borrower. If an Event of Default occurs, the Deposits
may, at Lender’s option, be applied to the Obligations in any order of
priority. Any application to principal shall be deemed a voluntary
prepayment subject to the Prepayment Premium. Borrower shall not
claim any credit against the principal and interest due under the Note for the
Deposits. Upon an assignment or other transfer of this Instrument,
Lender may pay over the Deposits in its possession to the assignee or transferee
and then it shall be completely released from all liability with respect to the
Deposits. Borrower shall look solely to the assignee or transferee
with respect thereto. This provision shall apply to every transfer of
the Deposits to a new assignee or transferee. Subject to
Article V, a transfer of title to the Land shall automatically transfer to
the new owner the beneficial interest in the Deposits. Upon full
payment and satisfaction of this Instrument or, at Lender’s option, at any prior
time, the balance of the Deposits in Lender’s possession shall be paid over to
the record owner of the Land and no other party shall have any right or claim to
the Deposits. Lender may transfer all its duties under this Section
to such servicer or financial institution as Lender may periodically designate
and Borrower agrees to make the Deposits to such servicer or
institution.
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Section
3.11 ERISA.
(a) Borrower
understands and acknowledges that, as of the date hereof, the source of funds
from which Lender is extending the Loan will include one or more of the
following accounts: (i) an “insurance company general account,” as that
term is defined in Prohibited Transaction Class Exemption (“PTE”) 95-60 (60 Fed. Reg.
35925 (Jul. 12, 1995)), as to which Lender meets the conditions for relief in
Sections I and IV of PTE 95-60; (ii) pooled and single client insurance
company separate accounts, which are subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”); and (iii) one or
more insurance company separate accounts maintained solely in connection with
fixed contractual obligations of the insurance company, under which the amounts
payable or credited to the plan are not affected in any manner by the investment
performance of the separate account.
(b) Borrower
represents and warrants to Lender that (i) Borrower is not an “employee
benefit plan” as defined in Section 3(3) of ERISA, or a “governmental plan”
within the meaning of Section 3(32) of ERISA; (ii) Borrower is not a
“party in interest”, as defined in Section 3(14) of ERISA, other than as a
service provider or an affiliate of a service provider, to any employee benefit
plan that has invested in a separate account described in
Section 3.11(a)(ii) above, from which funds have been derived to make the
Loan, or if so, the execution of the Documents and making of the Loan thereunder
do not constitute nonexempt prohibited transactions under ERISA;
(iii) Borrower is not subject to state statutes regulating investments and
fiduciary obligations with respect to governmental plans, or if subject to such
statutes, is not in violation thereof in the execution of the Documents and the
making of the Loan thereunder; (iv) the assets of Borrower do not
constitute “plan assets” of one or more plans within the meaning of 29 C.F.R.
Section 2510.3-101; and (v) one or more of the following circumstances
is true: (1) equity interests in Borrower 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 Borrower
are held by “benefit plan investors” within the meaning of 29 C.F.R.
Section 2510.3-101(f)(2); or (3) Borrower qualifies as an “operating
company,” a “venture capital operating company” or a “real estate operating
company” within the meaning of 29 C.F.R. Section 2510.3-101(c), (d) or (e),
respectively.
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(c) Borrower
shall deliver to Lender such certifications and/or other evidence periodically
requested by Lender, in its sole discretion, to verify the representations and
warranties in Section 3.11(b) above. Failure to deliver these
certifications or evidence, breach of these representations and warranties, or
consummation of any transaction which would cause this Instrument or any
exercise of Lender’s rights under this Instrument to (i) constitute a
non-exempt prohibited transaction under ERISA or (ii) violate ERISA or any
state statute regulating governmental plans (collectively, a “Violation”), shall be an Event
of Default. Notwithstanding anything in the Documents to the
contrary, no sale, assignment, or transfer of any direct or indirect right,
title, or interest in Borrower or the Property (including creation of a junior
lien, encumbrance or leasehold interest) shall be permitted which would, in
Lender’s opinion, negate Borrower’s representations in this Section or cause a
Violation. At least fifteen (15) days before consummation of any of
the foregoing, Borrower shall obtain from the proposed transferee or lienholder
(i) a certification to Lender that the representations and warranties of
this Section 3.11 will be true after consummation and (ii) an
agreement to comply with this Section 3.11.
Section
3.12 Environmental
Representations, Warranties, and Covenants .
(a) Environmental
Representations and Warranties. Borrower represents and
warrants, to the best of Borrower’s knowledge (after due inquiry and
investigation, consisting of the Borrower's existing environmental reports with
respect to the Property as delivered to Lender) and additionally based upon the
environmental site assessment reports of the Property (collectively, the “Environmental Report”), that
except as fully disclosed in the Environmental Report delivered to and approved
by Lender: (i) there are no Hazardous Materials (defined below)
or underground storage tanks affecting the Property (“affecting the Property” shall
mean “in, on, under, stored, used or migrating to or from the Property”) except
for (A) routine office, cleaning, janitorial, maintenance and other
materials and supplies necessary to operate the Property or used in connection
with general office uses for its current use (or relating to historic uses
disclosed in the Environmental Report) and (B) Hazardous Materials that are
(1) in compliance with Environmental Laws (defined below), (2) have
all required permits, and (3) are in only the amounts necessary to operate
the Property or necessary in connection with the general office uses of any
Tenant at the Property; (ii) there are no present or threatened
Releases (defined below) of Hazardous Materials in violation of any
Environmental Law affecting the Property (and no past Releases of Hazardous
Materials in material violation of any Environmental Law affecting the
Property); (iii) there is no present non-compliance with
Environmental Laws or with permits issued pursuant thereto (and no past material
non-compliance with Environmental Laws or with permits issued pursuant
thereto); (iv) Borrower does not know of, and has not received,
any written or oral notice or communication from any person relating to
Hazardous Materials affecting the Property in violation of Environmental
Laws; and (v) Borrower has provided to Lender, in writing, all
material information relating to environmental conditions affecting the Property
known to Borrower or contained in Borrower’s files. “Environmental Law” means any
present and future federal, state and local laws, statutes, ordinances, rules,
regulations, standards, policies and other government directives or
requirements, as well as common law, that apply to Borrower or the Property and
relate to Hazardous Materials including the Comprehensive Environmental
Response, Compensation and Liability Act and the Resource Conservation and
Recovery Act. “Hazardous Materials” shall
mean petroleum and petroleum products and compounds containing them, including
gasoline, diesel fuel and oil; explosives, flammable
materials; radioactive materials; polychlorinated
biphenyls (“PCBs”) and
compounds containing them; lead and lead-based paint; Microbial
Matter, infectious substances, asbestos or asbestos-containing materials in any
form that is or could become friable; underground or above-ground
storage tanks, whether empty or containing any substance; any
substance the presence of which on the Property is prohibited by any federal,
state or local authority; any substance that requires special
handling; and any other material or substance now or in the future
defined as a “hazardous substance,” “hazardous material”, “hazardous waste”,
“toxic substance”, “toxic pollutant”, “contaminant”, or “pollutant” within the
meaning of any Environmental Law. “Release” of any Hazardous
Materials includes any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, pumping, pouring, escaping, dumping, disposing or other
movement of Hazardous Materials. “Microbial Matter” shall mean
the presence of fungi or bacterial matter which reproduces through the release
of spores or the splitting of cells, including, but not limited to, mold, mildew
and viruses, whether or not such Microbial Matter is living.
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(b) Environmental
Covenants. Borrower covenants and agrees that Borrower shall
comply with (and shall use reasonable efforts to cause all occupants at the
Property to comply with, as such covenants applies to each such occupant) the
following: (i) all use and operation of the Property shall be in
compliance with all Environmental Laws and required permits; (ii) there
shall be no Releases of Hazardous Materials affecting the Property in violation
of Environmental Laws; (iii) there shall be no Hazardous Materials
affecting the Property except (A) routine office, cleaning, janitorial
supplies, maintenance and other materials and supplies necessary to operate the
Property or used in connection with general office uses, (B) in compliance
with all Environmental Laws, (C) in compliance with all required permits,
and (D) (1) in only the amounts necessary to operate the Property, (2)
necessary in connection with the general office uses of any Tenant at the
Property, or (3) as shall have been fully disclosed to and approved by
Lender in writing; (iv) the Property shall be kept free and clear of all
liens and encumbrances imposed by any Environmental Laws due to any act or
omission by Borrower or any person (the “Environmental Liens”);
(v) Borrower shall, at its sole expense, fully and expeditiously cooperate
in a reasonably prompt manner with the Lender in all activities performed under
Section 3.12(c) including providing all relevant information and making
knowledgeable persons available for interviews; (vi) Borrower shall, at its
sole expense, (A) perform any environmental site assessment or other
investigation of environmental conditions at the Property upon Lender’s request
based on Lender’s reasonable belief that the Property is not in compliance with
all Environmental Laws, (B) share with Lender the results and reports of
such site assessment or investigation and Lender and the applicable Indemnified
Parties (defined below) shall be entitled to rely on such results and reports,
and (C) complete any remediation of Hazardous Materials affecting the
Property or other actions required by any Environmental Laws;
(vii) Borrower shall use diligent efforts to enforce the obligations of
each Tenant or other user of the Property to refrain from violation of any
Environmental Law; (viii) Borrower shall promptly notify Lender in writing
after it becomes aware of (A) the presence, Release, or threatened Release
of Hazardous Materials affecting the Property in violation of Environmental
Laws, (B) any non-compliance of the Property with any Environmental Laws,
(C) any actual or potential Environmental Lien, (D) any required or
proposed remediation of environmental conditions relating to the Property, or
(E) any written or oral communication or notice from any person relating to
Hazardous Materials affecting the Property, or any oral communication relating
to or alleging any violation or potential violation of Environmental Law, and
(ix) if an Asbestos Operation and Maintenance Plan and any other Operation
and Maintenance Plan (collectively, the “O&M Plan”) is in effect
(or required by Lender to be implemented) at the time of the closing of the
Loan, then Borrower shall, at its sole expense, implement and continue the
O&M Plan (with any modifications required to comply with applicable Laws),
until payment and full satisfaction of the Obligations.
(c) Lender’s Rights.
Lender and any person designated by Lender may enter the Property to assess the
environmental condition of the Property and its use including
(i) conducting any environmental assessment or audit (the scope of which
shall be determined by Lender) and (ii) taking samples of soil, groundwater
or other water, air, or building materials, and conducting other invasive
testing at all reasonable times when (A) a default has occurred under the
Documents beyond any applicable grace or cure period provided therein,
(B) Lender reasonably believes that a Release has occurred at or affecting
the Property which may be in material violation of Environmental Laws or the
Property is not in material compliance with all Environmental Laws, or
(C) the Loan is being considered for sale (any out-of-pocket expenses
incurred in connection with the entry under clause (C) only shall be at Lender’s
expense). Borrower shall cooperate with and provide access to Lender
and such person.
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Section
3.13 Electronic Payments
. Unless directed otherwise in writing by Lender, all payments
due under the Documents shall be made by electronic funds transfer debit entries
to Borrower’s account at an Automated Clearing House member bank satisfactory to
Lender or by similar electronic transfer process selected by
Lender. Each payment due under the Documents shall be initiated by
Lender through the Automated Clearing House network (or similar electronic
process) for settlement on the Due Date (as defined in the Note) for the
payment. Borrower shall, at Borrower’s sole cost and expense, direct
its bank in writing to permit such electronic fund transfer debit entries (or
similar electronic transfer) to be made by Lender. Prior to each
payment Due Date under the Documents, Borrower shall deposit and/or maintain
sufficient funds in Borrower’s account to cover each debit entry. Any
charges or costs, if any, by Borrower’s bank for the foregoing shall be paid by
Borrower.
Section
3.14 Inspection. Borrower
shall allow Lender and any person designated by Lender to enter upon the
Property and conduct tests or inspect the Property at all reasonable
times. Borrower shall assist Lender and such person in effecting said
inspection.
Section
3.15 Records, Reports, and
Audits.
(a) Records and
Reports. Borrower shall maintain, in accordance with generally
accepted accounting principles (“GAAP”), complete and accurate books and records
with respect to all operations of or transactions involving the
Property. Borrower shall furnish Lender (i) annual financial
statements for the Xxxx-Xxxx Realty Corporation (the “REIT Corporation”), and
Lender agrees that as to annual financial statements for the REIT Corporation,
delivery to Lender within thirty (30) days after filing with the United States
Securities and Exchange Commission (“SEC”) all financial reports to be filed by
the REIT Corporation, Xxxx—Cali Realty, L.P. (together with any partnership
which is hereafter the operating partnership for the REIT Corporation, the
“Operating Partnership”) and their subsidiaries with the SEC, including all 10Q,
10K and 8K reports, shall be acceptable, and (ii) annual operating
statements for the Property [and Lender agrees that as to operating statements
for the Property, the unaudited consolidating financial statement schedule of
all individual property operations of the REIT Corporation and the Operating
Partnership, or that portion of such financial statement schedule relating to
the Property, in the format set forth in the Loan Agreement shall be acceptable]
prepared in accordance with generally accepted accounting principles and
certified by an authorized person, partner or official, together with such
additional information as Lender may reasonably request. Borrower
shall furnish Lender annual financial statements for any Major Tenants which are
not publicly traded companies (including those listed in the Loan Agreement),
and, upon written request of Lender, with respect to any other Major Tenants, in
each case to the extent Borrower has the right to obtain such statements under
the applicable Lease (and Borrower agrees that Borrower will pursue obtaining
such statements actively and diligently), together with such additional
information as Lender may reasonably request. As to financial
statements of such tenants (a “Tenant Statement”), in the event of any failure
of Borrower to deliver a Tenant Statement, the $500.00 per month per statement
late fee owing with respect to late financial statements as set forth below
shall increase after any 12 months of delinquency as to any such Tenant
Statement by an additional $250 per month per statement ($750 for months 13
through 24, $1000 for months 24 through 36, and so on). Without
limiting the obligation to pay the late fees as set forth in the preceding
sentence, Lender shall have the right to deliver to Borrower a notice of default
from Lender under this Instrument and the Documents for Borrower's failure to
obtain and deliver a Tenant Statement for any month when any such Tenant
Statement remains outstanding, provided, however, that Borrower shall be
entitled to cure such failure either by the delivery of such Tenant Statement
within thirty (30) days after such notice (in which event the underlying failure
shall be cured) from Lender or by the delivery to such tenant within thirty (30)
days after such notice from Lender of written notice (a “Tenant Default Notice”)
of such tenant's default under the terms of tenant's lease (in which event the
underlying failure shall not be cured but the failure shall not ripen into an
Event of Default hereunder unless in a succeeding month a new notice of default
is sent by Lender to Borrower and Borrower thereafter fails to so cure such
default) (and provided, further, however, that Lender agrees that Borrower shall
not be obligated to terminate a tenant's lease solely on account of such failure
of such tenant to comply with such obligation), and Borrower shall deliver to
Lender copies of all correspondence received by or sent by or on behalf of
Borrower or its agents with respect to such Tenant Statements.
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(b) Delivery of
Reports. All of the reports, statements, and items required
under this Section shall be (i) certified as being true, correct, and
accurate by an authorized person, partner, or officer of the delivering party
or, at the deliverer’s option, audited by a Certified Public Accountant;
(ii) prepared in accordance with GAAP and satisfactory to Lender in form
and substance; and (iii) delivered within the deadlines set forth
above. If any one report, statement, or item is not received by
Lender on its due date, a late fee of Five Hundred and No/100 Dollars ($500.00)
per month shall be due and payable by Borrower. If any one report,
statement, or item is not received within thirty (30) days after written notice
from Lender to Borrower that such report, statement or items was not received by
its due date, Lender may immediately declare an Event of Default under the
Documents. Borrower shall (i) provide Lender with such
additional financial, management, or other information regarding Borrower, any
general partner of Borrower, or the Property, as Lender may reasonably request
(including, but not limited to, copies of statements from the Clearing Bank, as
defined in that certain Cash Management Agreement between Borrower and Lender of
even date herewith, with respect to collections in each of the accounts
comprising Property Account A, as defined in such Cash Management
Agreement), and (ii) upon Lender’s request, deliver all items required by
Section 3.15 in an electronic format (i.e. on computer disks) or by
electronic transmission acceptable to Lender.
(c) Inspection of
Records. Borrower shall allow Lender or any person designated
by Lender to examine, audit, and make copies of all such books and records and
all supporting data at the place where these items are located at all reasonable
times after reasonable advance notice; provided that no notice shall
be required after any default under the Documents. Borrower shall
assist Lender in effecting such examination. Upon five (5) days’
prior notice, Lender may inspect and make copies of Borrower’s or any general
partner of Borrower’s income tax returns with respect to the Property for the
purpose of verifying any items referenced in this Section.
Section
3.16 Borrower’s
Certificates. Within fifteen (15) days after Lender’s request, Borrower
shall furnish a written certification to Lender and any Investors (defined
below) as to (a) the amount of the Obligations
outstanding; (b) the interest rate, terms of payment, and
maturity date of the Note; (c) the date to which payments have
been paid under the Note; (d) whether any offsets or defenses
exist against the Obligations and a detailed description of any
listed; (e) whether 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 Rents have been
paid; (g) whether, to the best knowledge of Borrower, any
defaults exist under the Leases and a detailed description of any
listed; (h) the security deposit held by Borrower under each
Lease and that such amount is the amount required under such
Lease; (i) whether there are any defaults (or events which with
the passage of time and/or giving of notice would constitute a default) under
the Documents and a detailed description of any
listed; (j) whether the Documents are in full force and
effect; and (k) any other matters reasonably requested by Lender
related to the Leases, the Obligations, the Property, or the
Documents. For all non-residential properties and promptly upon
Lender’s request, Borrower shall use its best efforts to deliver a written
certification to Lender and Investors from Tenants specified by
Lender that: (a) their Leases are in full force and
effect; (b) there are no defaults (or events which with the
passage of time and/or the giving of notice would constitute a default) under
their Leases or, if any exist, a detailed description of any
listed; (c) none of the Rents have been paid more than one month
in advance; (d) there are no offsets or defenses against the
Rents or, if any exist, a detailed description of any
listed; and (e) any other matters reasonably requested by Lender
related to the Leases; provided, however, that Borrower shall not
have to pay money to a Tenant to obtain such certification, but it will deliver
a landlord’s certification for any certification it cannot obtain.
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Section
3.17 Full Performance
Required; Survival of Warranties. All
representations and warranties of Borrower in the Loan application or made in
connection with the Loan shall survive the execution and delivery of the
Documents and Borrower shall not perform any action, or permit any action to be
performed, which would cause any of the warranties and representations of
Borrower to become untrue in any manner, except for such actions as may be
expressly permitted by the terms and conditions of this Instrument or any of the
other Documents.
Section
3.18 Additional
Security. No other security now existing or taken later to
secure the Obligations shall be affected by the execution of the Documents and
all additional security shall be held as cumulative. The taking of
additional security, execution of partial releases, or extension of the time for
the payment obligations of Borrower shall not diminish the effect and lien of
this Instrument and shall not affect the liability or obligations of any maker
or guarantor. Neither the acceptance of the Documents nor their
enforcement shall prejudice or affect Lender’s right to realize upon or enforce
any other security now or later held by Lender. Lender may enforce
the Documents or any other security in such order and manner as it may determine
in its discretion.
Section
3.19 Further
Acts. Borrower shall take all necessary actions to
(i) keep valid and effective the lien and rights of Lender under the
Documents and (ii) protect the lawful owner of the
Documents. Promptly upon request by Lender and at Borrower’s expense,
Borrower shall execute additional instruments and take such actions as Lender
reasonably believes are necessary or desirable to (a) maintain or grant
Lender a first-priority, perfected lien on the Property, (b) grant to
Lender, to the fullest extent permitted by Laws, the right to foreclose on, or
transfer title to, the Property non-judicially, (c) correct any error or
omission in the Documents; and (d) effect the intent of the Documents,
including filing/recording the Documents, additional mortgages or deeds of
trust, financing statements, and other instruments.
Section
3.20 Compliance with
Anti-Terrorism Regulations.
(a) Borrower
hereby covenants and agrees that neither Borrower nor any guarantor, nor any
persons or entities holding any legal or beneficial interest whatsoever in
Borrower or any guarantor (whether directly or indirectly), other than
(i) Individual Shareholders and (ii) limited partners in Xxxx-Xxxx
Realty, L.P., will knowingly conduct business with or engage in any transaction
with any person or entity named on any of the OFAC Lists or any person or entity
included in, owned by, controlled by, acting for or on behalf of, providing
assistance, support, sponsorship, or services of any kind to, or otherwise
associated with any of the persons or entities referred to or described in the
OFAC Lists. Borrower will not grant any consent or permission, nor
direct, any Individual Shareholders or limited partners in Xxxx-Xxxx Realty,
L.P. to conduct business with or engage in any transaction with any person or
entity named on any of the OFAC Lists or any person or entity included in, owned
by, controlled by, acting for or on behalf of, providing assistance, support,
sponsorship, or services of any kind to, or otherwise associated with any of the
persons or entities referred to or described in the OFAC Lists, and should
Borrower become aware of any such activity, Borrower shall promptly report such
activity as and to the extent required by applicable law.
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(b) Borrower
hereby covenants and agrees that it will comply at all times with the
requirements of Executive Order 13224; the International Emergency Economic
Powers Act, 50 U.S.C. Sections 1701-06; the United and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Pub. L. 107-56; the Iraqi Sanctions Act, Pub. L. 101-513, 104 Stat.
2047-55; the United Nations Participation Act, 22 U.S.C. Section 287c; the
Antiterrorism and Effective Death Penalty Act, (enacting 8 U.S.C.
Section 219, 18 U.S.C. Section 2332d, and 18 U.S.C.
Section 2339b); the International Security and Development Cooperation Act,
22 U.S.C. Section 2349 aa-9; the Terrorism Sanctions Regulations, 31 C.F.R.
Part 595; the Terrorism List Governments Sanctions Regulations, 31 C.F.R. Part
596; and the Foreign Terrorist Organizations Sanctions Regulations, 31 C.F.R.
Part 597 and any similar laws or regulations currently in force or hereafter
enacted (collectively, the “Anti-Terrorism
Regulations”).
(c) Borrower
hereby covenants and agrees that if it becomes aware or receives any notice that
Borrower, any guarantor or the Property, or any person or entity holding any
legal or beneficial interest whatsoever (whether directly or indirectly) in
Borrower, any guarantor or in the Property, is named on any of the OFAC Lists
(such occurrence, an “OFAC
Violation”), Borrower will immediately (i) give notice to Lender of
such OFAC Violation, and (ii) comply with all Laws applicable to such OFAC
Violation (regardless of whether the party included on any of the OFAC Lists is
located within the jurisdiction of the United States of America), including,
without limitation, the Anti-Terrorism Regulations, and Borrower hereby
authorizes and consents to Lender’s taking any and all steps Lender deems
necessary, in its sole discretion, to comply with all Laws applicable to any
such OFAC Violation, including, without limitation, the requirements of the
Anti-Terrorism Regulations (including the “freezing” and/or “blocking” of
assets).
(d) Upon
Lender’s request from time to time during the term of the Loan, Borrower agrees
to deliver a certification confirming that the representations and warranties
set forth in Section 2.09 above remain true and correct as of the date of
such certificate and confirming Borrower’s and any guarantor’s compliance with
this Section 3.20.
Section
3.21 Compliance with Property as
Single Asset. Borrower hereby covenants and agrees that
(i) during the term of the Loan, Borrower shall not own any assets in
addition to the Property, (ii) the Property shall remain as a single
property or project, and (iii) during the term of the Loan, the Property
shall generate substantially all of the gross income of Borrower and there shall
be no substantial business being conducted, either directly or indirectly, by
Borrower other than the business of owning and operating the Property and the
activities incidental thereto.
ARTICLE
IV - ADDITIONAL ADVANCES; EXPENSES; SUBROGATION
Section
4.01 Expenses and
Advances. Borrower shall pay all reasonable appraisal,
recording, filing, registration, brokerage (exclusive of any brokerage fees or
commissions incurred solely by Lender), abstract, title insurance (including
premiums), title searches and examinations, surveys and similar data and
assurances with respect to title, U.C.C. search, escrow, attorneys’ (both
in-house staff and retained attorneys, except that payment would not be required
for in house staff for routine loan servicing performed in the ordinary course
of business and for the performance of which Lender is not routinely reimbursed
by other borrowers in the ordinary course of Lender’s business), engineers’,
environmental engineers’, environmental testing, and architects’ fees, costs
(including travel), expenses, and disbursements incurred by Borrower or Lender
and reasonable fees charged by Lender in connection with the granting, closing
(except that payment would not be required for in house staff for the granting
and closing of the Loan), servicing (other than routine loan servicing performed
in the ordinary course of business and for the performance of which Lender is
not routinely reimbursed by other borrowers in the ordinary course of Lender’s
business), and enforcement of (a) the Loan and the Documents or
(b) attributable to Borrower as owner of the Property. The term
“Costs” shall mean any
of the foregoing incurred in connection with (a) any default by Borrower
under the Documents, (b) the routine (other than routine loan servicing
performed in the ordinary course of business and for the performance of which
Lender is not routinely reimbursed by other borrowers in the ordinary course of
Lender’s business) servicing of the Loan in response to requests by Borrower, or
(c) the exercise, enforcement, compromise, defense, litigation, or
settlement of any of Lender’s rights or remedies under the Documents or relating
to the Loan or the Obligations. If Borrower fails to pay any amounts
or perform any actions required under the Documents, Lender may (but shall not
be obligated to) advance sums to pay such amounts or perform such
actions. Borrower grants Lender the right to enter upon and take
possession of the Property to prevent or remedy any such failure and the right
to take such actions in Borrower’s name. No advance or performance
shall be deemed to have cured a default by Borrower. All
(a) sums advanced by or payable to Lender per this Section or under
applicable Laws, (b) except as expressly provided in the Documents,
payments due under the Documents which are not paid in full when due, and
(c) Costs, shall: (i) be deemed demand obligations,
(ii) bear interest from the date of demand at the Default Rate until paid
if not paid on demand, (iii) be part of, together with such interest, the
Obligations, and (iv) be secured by the Documents. Lender, upon
making any such advance, shall also be subrogated to rights of the person
receiving such advance.
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Section
4.02 Subrogation. If
any proceeds of the Note were used to extinguish, extend or renew any
indebtedness on the Property, then, to the extent of the funds so used,
(a) Lender shall be subrogated to all rights, claims, liens, titles and
interests existing on the Property held by the holder of such indebtedness and
(b) these rights, claims, liens, titles and interests are not waived but
rather shall (i) continue in full force and effect in favor of Lender and
(ii) are merged with the lien and security interest created by the
Documents as cumulative security for the payment and performance of the
Obligations.
ARTICLE
V - SALE, TRANSFER, OR ENCUMBRANCE OF THE PROPERTY
Section
5.01 Due-on-Sale or
Encumbrance. It shall be an Event of Default and, at the sole
option of Lender, Lender may accelerate the Obligations and the entire
Obligations (including any Prepayment Premium) shall become immediately due and
payable, if, without Lender’s prior written consent (which consent may be given
or withheld for any or for no reason or given conditionally, in Lender’s sole
discretion) any of the following shall occur:
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(i)
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Borrower
shall sell, convey, assign, transfer, dispose of or otherwise be divested
of its title to the Property;
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(ii)
|
Borrower
shall mortgage, convey security title to, or otherwise encumber or cause
to be encumbered the Property or any interest therein in any manner or way
(whether direct or indirect, voluntary or involuntary);
or
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(iii)
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in
the event of:
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(a)
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except
as set forth below in Section 5.02, 5.03 and 5.04 below, any merger,
consolidation or dissolution involving, or the sale or transfer of all or
substantially all of the assets of, Borrower or of any general partner of
Borrower (or of Xxxx-Xxxx Realty Corporation or the then existing
operating partnership of Xxxx-Xxxx Realty
Corporation);
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(b)
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except
as set forth below in Section 5.02, 5.03 and 5.04 below, the transfer
(at one time or over any period of time) of 49% or more
of:
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(1)
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(x)
any ownership interests in the Borrower, regardless of the type or form of
entity of Borrower, (y) the voting stock or ownership interest of any
corporation or limited liability company which is, respectively, general
partner or managing member of Borrower or any corporation or limited
liability company directly or indirectly owning 49% or more of any such
corporation or limited liability company, or (z) the ownership
interests of any owner of fifty percent (50%) or more of the beneficial
interests of Borrower if Borrower is a trust;
or
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(2)
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except
as provided in Section 5.02, 5.03 and 5.04 below, any general
partnership, managing member or controlling interest in (x) Borrower,
(y) an entity which is in Borrower’s chain of ownership and which is
derivatively liable for the obligations of Borrower, or (z) any
entity that has the right to participate directly or indirectly in the
control of the management or operations of Borrower;
or
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(c)
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except
as set forth in Section 5.02, 5.03 and 5.04 below, in the event of
the conversion of any general partnership interest in Borrower to a
limited partnership interest, if Borrower is a partnership;
or
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(d)
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except
as set forth in Section 5.02, 5.03 and 5.04 below, in the event of
any change, removal, or resignation of any general partner of Borrower, if
Borrower is a partnership; or
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(e)
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except
as set forth in Section 5.02, 5.03 and 5.04 below, in the event of
any change, removal, addition, or resignation of a managing member of
Borrower (or if no managing member, any member), if Borrower is a limited
liability company;
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(f)
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Borrower
shall (i) obtain any secured or unsecured debt except for customary and
reasonable short-term trade payables (including, without limitation,
equipment leases) obtained and repaid in the ordinary course of Borrower’s
business or (ii) guarantee, or otherwise agree to be liable for (whether
conditionally or unconditionally), any obligation of any person or
entity.
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This
provision shall not apply to transfers of title or interest under any will (or
applicable law of descent) or transfers of limited partnership interests to
other wholly owned subsidiaries of the Xxxx-Xxxx Realty Corporation (the “REIT
Corporation”) or Xxxx—Cali Realty, L.P. (together with any partnership that is
hereafter the operating partnership for the REIT Corporation, the “Operating
Partnership”).
Section
5.02 Certain Transfers
Excluded. Notwithstanding the foregoing and subject to
Section 5.03 and 5.04 below, Section 5.01 shall not apply to transfers
of publicly traded REIT stock in the REIT Corporation, and Section 5.01
shall not apply to transfers of limited partnership interests in the Operating
Partnership or to the admission of additional limited partners in the Operating
Partnership.
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Section
5.03 Merger. Notwithstanding
the foregoing and subject to Section 5.05 below, so long as the Loan is
still secured by this Instrument, if no Event of Default (or event which with
the passage of time or the giving of notice or both would be an Event of
Default) has occurred and is continuing, Lender agrees that, upon forty five
(45) days prior written request of Borrower, Lender shall consent to the
transfer of beneficial interests in the Borrower in connection with any merger
of the REIT Corporation or the Operating Partnership into another Person,
if:
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(i)
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the
proposed transferee [the “Successor Entity”; as used herein, such term
includes the surviving party from such merger other than the Operating
Partnership, REIT Corporation or an entity controlled by the shareholders
of the REIT Corporation and/or unit holders of the Operating Partnership
(in which event no such consent shall be required)] of the Property is a
United States person;
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(ii)
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Borrower
pays Lender a non-refundable servicing fee (of $25,000.00) at the time of
the request, and an additional fee equal to 0.25% of the outstanding
principal balance of the Loan (less the $25,000.00 paid at the time of the
request) at the time of the
transfer;
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(iii)
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at
Lender's option, Lender's title policy is endorsed to verify the first
priority of this Instrument at Borrower's expense (to bring forward the
effective date thereof and set forth the current schedule of subordinate
matters with respect to title, provided, however, that if any element of
such endorsement shall require payment of a new full title premium, Lender
agrees to accept a title company certification or title report in lieu of
such element);
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(iv)
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the
Successor Entity expressly assumes all obligations applicable to the
Operating Partnership or the REIT Corporation under the Documents and
executes any documents reasonably required by Lender, and all of these
documents are reasonably satisfactory in form and substance to
Lender;
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(v)
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Borrower
shall deliver to Lender copies of all transfer documents and merger
documents (to the extent Borrower is permitted by law to reveal such
documents);
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(vi)
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the
Successor Entity complies with and delivers the ERISA Certificate and
Indemnification Agreement described in the guidelines with respect thereto
then applicable to Lender's mortgage loans (the “Guidelines”) and the
Successor Entity provides representations and warranties satisfactory to
Lender regarding the Anti-Terrorism Lists and the Anti-Terrorism and
Anti-Money Laundering Laws in accordance with the guidelines with respect
thereto then applicable to Lender's mortgage
loans;
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(vii)
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Borrower
or the Successor Entity pays all reasonable fees, costs, and expenses
incurred by Lender in connection with the proposed transfer, including,
without limitation, all legal (for both outside counsel and Lender's staff
attorneys), accounting, title insurance, documentary stamps taxes,
intangibles taxes, mortgage taxes, recording fees, and appraisal fees,
whether or not the transfer is actually
consummated.
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Section
5.04 Certain Affiliate
Transactions. Notwithstanding the foregoing and subject to
Section 5.05 below, Lender agrees that, upon fifteen (15) days prior
written request of Borrower, Borrower, and any transferee of Borrower permitted
below, may engage in the transactions described below, provided that all of the
following conditions are met:
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(i)
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there
is no Event of Default under the Documents (or event which with the
passage of time or the giving of notice or both would be an Event of
Default);
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(ii)
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the
transferee (or successor entity) expressly assumes all applicable
obligations under the Documents and executes any documents reasonably
required by Lender, and all of these documents are satisfactory in form
and substance to Lender;
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(iii)
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Lender
reasonably approves the form and content of all transfer documents, and
Lender is furnished with a certified copy of the recorded transfer
documents;
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(iv)
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the
transferee complies with and delivers the ERISA Certificate and
Indemnification Agreement described in the Guidelines and the transferee
provides representations and warranties satisfactory to Lender regarding
the Anti-Terrorism Lists and the Anti-Terrorism and Anti-Money Laundering
Laws in accordance with the guidelines with respect thereto then
applicable to Lender's mortgage
loans;
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(v)
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Borrower
pays Lender a non-refundable servicing fee (of $1,000.00 per Property) at
the time of the request; and
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(vi)
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payment
by Borrower or the proposed transferee (or successor entity) of
(1) all costs and expenses incurred by Lender for the processing of
said transfer including a processing fee; (2) any documentary stamp
taxes, intangible taxes, recording fees, and other costs and expenses
required in connection with the assumption agreement and any modification
of the Documents, and (3) all other costs and expenses (including
attorneys' fees and expenses for Lender's staff attorneys and outside
counsel) of the preparation of the assumption agreement and any
modification of the Documents.
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Provided
all of the foregoing conditions are fulfilled with respect to each such
transfer, Borrower may engage in the following transactions, and the provisions
of this Section shall not apply to (and no other provision of the Documents
shall prohibit, subject to compliance with Section 5.05):
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(a)
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the
Borrower shall have the right to merge with the Operating Partnership,
with the result that the Operating Partnership shall then be the Borrower
on such Loan; and
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(b)
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the
Borrower shall have the right to transfer a Property to another wholly
owned subsidiary of the REIT Corporation or the Operating
Partnership.
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Section
5.05 REIT Participation and
Ownership. At all times, (a) the REIT Corporation (and/or
a wholly owned qualified REIT subsidiary), or, after a merger transaction
involving the REIT Corporation in accordance with Section 5.03 above, the
Successor Entity to the REIT Corporation, shall at all times remain the sole
general partner (or the sole general partners) of the Operating Partnership, and
(b) the REIT Corporation and the Operating Partnership, or, after a merger
transaction in accordance with Section 5.03 above, the Successor Entity,
shall own, directly or indirectly through qualified REIT subsidiaries, 100% of
the Borrower.
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ARTICLE
VI - DEFAULTS AND REMEDIES
Section
6.01 Events of
Default. The following shall be an “Event of
Default”:
(a) if
Borrower fails to make any payment required under the Documents when due and
such failure continues for five (5) days after written
notice; provided, however, that if
Lender gives one (1) notice of such a default within any twelve (12) month
period, Borrower shall have no further right to any notice of such a default
during the next following twelve (12) month period; provided,
further, however, Borrower shall have no right to any such notice upon the
maturity date of the Note;
(b) except
for defaults listed in the other subsections of this Section 6.01, if
Borrower fails to perform or comply with any other provision contained in the
Documents that is capable of cure by the payment of money and the default is not
cured within fifteen (15) days of Lender providing written notice
thereof; provided, however, that if Lender gives one (1) notice of
such a default within any twelve (12) month period, Borrower shall have no
further right to any notice of such a default during the next following twelve
(12) month period;
(c) except
for defaults listed in the other subsections of this Section 6.01, if
Borrower fails to perform or comply with any other provision contained in the
Documents and the default is not cured within thirty (30) days after Lender
providing written notice thereof (the “Grace
Period”); provided, however, that Lender may extend the Grace
Period up to an additional sixty (60) days (for a total of ninety (90) days from
the date of default) if (i) Borrower immediately commences and diligently
pursues the cure of such default and delivers (within the Grace Period) to
Lender a written request for more time and (ii) Lender determines in good
faith that (1) such default cannot be cured within the Grace Period but can
be cured within ninety (90) days after the default, (2) no lien or security
interest created by the Documents will be impaired prior to completion of such
cure, and (3) Lender’s immediate exercise of any remedies provided
hereunder or by law is not necessary for the protection or preservation of the
Property or Lender’s security interest;
(d) if
any representation made (i) in connection with the Loan or the Obligations
or (ii) in the Loan application or Documents shall be false or misleading
in any material respect;
(e) if
any default under Article V occurs;
(f) if
Borrower shall (i) become insolvent, (ii) make a transfer in fraud of
creditors, (iii) make an assignment for the benefit of its creditors,
(iv) not be able to pay its debts as such debts become due, or
(v) admit in writing its inability to pay its debts as they become
due;
(g) if
any bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding, or any other proceedings for the relief of debtors, is instituted by
or against Borrower, and, if instituted against Borrower, is allowed, consented
to, or not dismissed within the earlier to occur of (i) ninety (90) days
after such institution or (ii) the filing of an order for
relief;
(h) if
any of the events in Sections 6.01 (f) or (g) shall occur with
respect to any (i) managing member of Borrower (if Borrower is a limited
liability company), (ii) general partner of Borrower (if Borrower is a
partnership), or (iii) guarantor of payment and/or performance of any of
the Obligations;
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(i) if
the Property shall be taken, attached, or sequestered on execution or other
process of law in any action against Borrower;
(j) if
any default occurs under the Environmental Indemnity (defined below) and such
default is not cured within any applicable grace period in that
document;
(k) if
Borrower shall fail at any time to obtain, maintain, renew, or keep in force the
insurance policies required by Section 3.06 within ten (10) days after
written notice;
(l) if
Borrower shall be in default under any other mortgage, deed of trust, deed to
secure debt, or security agreement covering any part of the Property, whether it
be superior or junior in lien to this Instrument;
(m) if
any claim of priority (except based upon a Permitted Encumbrance) to the
Documents by title, lien, or otherwise shall be upheld by any court of competent
jurisdiction or shall be consented to by Borrower;
(n) (i) the
consummation by Borrower of any transaction which would cause (A) the Loan
or any exercise of Lender’s rights under the Documents to constitute a
non-exempt prohibited transaction under ERISA or (B) a violation of a state
statute regulating governmental plans; (ii) the failure of any
representation in Section 3.11 to be true and correct in all
respects; or (iii) the failure of Borrower to provide Lender
with the written certifications required by Section 3.11; or
(o) (i) the
consummation by Borrower of any transaction which would cause an OFAC Violation;
(ii) the failure of any representation in Section 2.09 to be true and
correct in all respects; or (iii) the failure of Borrower to comply with
the provisions of Section 3.20, unless such default is cured within the
lesser of (A) fifteen (15) days after written notice of such default to
Borrower or (B) the shortest cure period, if any, provided for under any
Laws applicable to such matters (including, without limitation, the
Anti-Terrorism Regulations).
Section
6.02 Remedies. If
an Event of Default occurs, Lender or any person designated by Lender may (but
shall not be obligated to) take any action (separately, concurrently,
cumulatively, and at any time and in any order) permitted under any Laws,
without notice, demand, presentment, or protest (all of which are hereby
waived), to protect and enforce Lender’s rights under the Documents or Laws
including the following actions:
(a) accelerate
and declare the entire unpaid Obligations immediately due and payable, except
for defaults under Section 6.01 (f), (g), (h), or (i) which shall
automatically make the Obligations immediately due and payable;
(b) judicially
or otherwise, (i) completely foreclose this Instrument or
(ii) partially foreclose this Instrument for any portion of the Obligations
due and the lien and security interest created by this Instrument shall continue
unimpaired and without loss of priority as to the remaining Obligations not yet
due;
(c) sell
for cash or upon credit the Property and all right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale;
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(d) recover
judgment on the Note either before, during or after any proceedings for the
enforcement of the Documents and without any requirement of any action being
taken to (i) realize on the Property or (ii) otherwise enforce the
Documents;
(e) seek
specific performance of any provisions in the Documents;
(f) apply
for the appointment of a receiver, custodian, trustee, liquidator, or
conservator of the Property without (i) notice to any person,
(ii) regard for (A) the adequacy of the security for the Obligations
or (B) the solvency of Borrower or any person liable for the payment of the
Obligations; and Borrower and any person so liable waives or shall be
deemed to have waived the foregoing and any other objections to the fullest
extent permitted by Laws and consents or shall be deemed to have consented to
such appointment;
(g) with
or without entering upon the Property, (i) exclude Borrower and any person
from the Property without liability for trespass, damages, or otherwise,
(ii) take possession of, and Borrower shall surrender on demand, all books,
records, and accounts relating to the Property, (iii) give notice to
Tenants or any person, make demand for, collect, receive, xxx for, and recover
in its own name all Rents and cash collateral derived from the
Property; (iv) use, operate, manage, preserve, control, and
otherwise deal with every aspect of the Property including (A) conducting
its business, (B) insuring it, (C) making all repairs, renewals,
replacements, alterations, additions, and improvements to or on it,
(D) completing the construction of any Improvements in manner and form as
Lender deems advisable, and (E) executing, modifying, enforcing, and
terminating new and existing Leases on such terms as Lender deems advisable and
evicting any Tenants in default; (v) apply the receipts from the
Property to payment of the Obligations, in any order or priority determined by
Lender, after first deducting all Costs, expenses, and liabilities incurred by
Lender in connection with the foregoing operations and all amounts needed to pay
the Impositions and other expenses of the Property, as well as just and
reasonable compensation for the services of Lender and its attorneys, agents,
and employees; and/or (vi) in every case in connection with the
foregoing, exercise all rights and powers of Borrower or Lender with respect to
the Property, either in Borrower’s name or otherwise;
(h) release
any portion of the Property for such consideration, if any, as Lender may
require without, as to the remainder of the Property, 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 actually reduced, and Lender may accept by assignment, pledge, or
otherwise any other property in place thereof as Lender may require without
being accountable for so doing to any other lienholder;
(i) apply
any Deposits to the following items in any order and in Lender’s sole
discretion: (A) the Obligations, (B) Costs,
(C) advances made by Lender under the Documents, and/or
(D) Impositions;
(j) take
all actions permitted under the U.C.C. of the Property State including
(i) the right to take possession of all tangible and intangible personal
property now or hereafter included within the Property (“Personal Property”) and take
such actions as Lender deems advisable for the care, protection and preservation
of the Personal Property and (ii) request Borrower at its expense to
assemble the Personal Property and make it available to Lender at a convenient
place acceptable to Lender. Any notice of sale, disposition or other
intended action by Lender with respect to the Personal Property sent to Borrower
at least five (5) days prior to such action shall constitute commercially
reasonable notice to Borrower; or
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(k) take
any other action permitted under any Laws.
If Lender
exercises any of its rights under Section 6.02(g), Lender shall not
(a) be deemed to have entered upon or taken possession of the Property
except upon the exercise of its option to do so, evidenced by its demand and
overt act for such purpose; (b) be deemed a beneficiary or
mortgagee in possession by reason of such entry or taking
possession; nor (c) be liable (i) to account for any action
taken pursuant to such exercise other than for Rents actually received by
Lender, (ii) for any loss sustained by Borrower resulting from any failure
to lease the Property, or (iii) any other act or omission of Lender except
for losses caused by Lender’s willful misconduct or gross
negligence. Borrower hereby consents to, ratifies, and confirms the
exercise by Lender of its rights under this Instrument and appoints Lender 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. All
Costs, expenses, or other amounts paid or incurred by Lender in the exercise of
its rights under the Documents, together with interest thereon at the applicable
interest rate specified in the Note, which shall be the Default Rate unless
prohibited by Laws, shall be (a) part of the Obligations, (b) secured
by this Instrument, and (c) allowed and included as part of the Obligations
in any foreclosure, decree for sale, power of sale, or other judgment or decree
enforcing Lender’s rights under the Documents.
Section
6.04 Rights Pertaining to
Sales. To the extent permitted under (and in accordance with)
any Laws, the following provisions shall, as Lender may determine in its sole
discretion, apply to any sales of the Property under Article VI, whether by
judicial proceeding, judgment, decree, power of sale, foreclosure or
otherwise: (a) Lender may conduct a single sale of the Property
or multiple sales of any part of the Property in separate tracts or in any other
manner as Lender deems in its best interests and Borrower waives any right to
require otherwise; (b) if Lender elects more than one sale of the Property,
Lender may at its option cause the same to be conducted simultaneously or
successively, on the same day or on such different days or times and in such
order as Lender may deem to be in its best interests, no such sale shall
terminate or otherwise affect the lien of this Instrument on any part of the
Property not then sold, and Borrower shall pay the costs and expenses of each
such sale; (c) 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 or such sale may occur, without further
notice, at the time fixed by the last postponement or a new notice of sale may
be given; and (d) Lender may acquire the Property and, in lieu of paying
cash, may pay by crediting against the Obligations the amount of its bid, after
deducting therefrom any sums which Lender is authorized to deduct under the
provisions of the Documents. After any such sale, Lender shall
deliver to the purchaser at such sale a deed conveying the property so sold, but
without any covenant or warranty, express or implied. The recitals in
any such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any Person, including Borrower or Lender, may
purchase at such sale.
Section
6.05 Application of
Proceeds. Any proceeds received from any sale or disposition
under Article VI or otherwise, together with any other sums held by Lender,
shall, except as expressly provided to the contrary, be applied in the order
determined by Lender to: (a) payment of all Costs and expenses
of any enforcement action or foreclosure sale, transfer of title by power of
sale or otherwise (if applicable), including interest thereon at the applicable
interest rate specified in the Note, which shall be the Default Rate unless
prohibited by Laws, (b) all taxes, Assessments, and other charges unless
the Property was sold subject to these items; (c) payment of the
Obligations in such order as Lender may elect; (d) payment of
any other sums secured or required to be paid by Borrower; and
(e) payment of the surplus, if any, to any person lawfully entitled to
receive it. Borrower and Lender intend and agree that during any
period of time between any foreclosure judgment that may be obtained and the
actual foreclosure sale that the foreclosure judgment will not extinguish the
Documents or any rights contained therein including the obligation of Borrower
to pay all Costs and to pay interest at the applicable interest rate specified
in the Note, which shall be the Default Rate unless prohibited by
Laws.
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Section
6.06 Additional Provisions as to
Remedies. No failure, refusal, waiver, or delay by Lender to
exercise any rights under the Documents upon any default or Event of Default
shall impair Lender’s rights or be construed as a waiver of, or acquiescence to,
such or any subsequent default or Event of Default. No recovery of
any judgment by Lender and no levy of an execution upon the Property or any
other property of Borrower shall affect the lien and security interest created
by this Instrument and such liens, rights, powers, and remedies shall continue
unimpaired as before. Lender 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 Lender
may deem advisable, and no such action shall be construed as a waiver of any of
the liens, rights, or benefits granted hereunder. Acceptance of any
payment after any Event of Default shall not be deemed a waiver or a cure of
such Event of Default and such acceptance shall be deemed an acceptance on
account only. If Lender has started enforcement of any right by
foreclosure, sale, entry, or otherwise and such proceeding shall be
discontinued, abandoned, or determined adversely for any reason, then Borrower
and Lender shall be restored to their former positions and rights under the
Documents with respect to the Property, subject to the lien and security
interest hereof.
Section
6.07 Waiver of Rights and
Defenses. To the fullest extent Borrower may do so under Laws,
Borrower (a) will not at any time insist on, plead, claim, or take the
benefit of any statute or rule of law now or later enacted providing for any
appraisement, valuation, stay, extension, moratorium, redemption, or any statute
of limitations; (b) for itself, its successors and assigns, and
for any person ever claiming an interest in the Property (other than Lender),
waives and releases all rights of redemption, reinstatement, valuation,
appraisement, notice of intention to mature or declare due the whole of the
Obligations, all rights to a marshaling of the assets of Borrower, including the
Property, or to a sale in inverse order of alienation, in the event of
foreclosure (or extinguishment by transfer of title by power of sale) of the
liens and security interests created under the
Documents; (c) shall not be relieved of its obligation to pay
the Obligations as required in the Documents nor shall the lien or priority of
the Documents be impaired by any agreement renewing, extending, or modifying the
time of payment or the provisions of the Documents (including a modification of
any interest rate), unless expressly released, discharged, or modified by such
agreement. Regardless of consideration and without any notice to or
consent by the holder of any subordinate lien, security interest, encumbrance,
right, title, or interest in or to the Property, Lender may (a) release any
person liable for payment of the Obligations or any portion thereof or any part
of the security held for the Obligations or (b) modify any of the
provisions of the Documents without impairing or affecting the Documents or the
lien, security interest, or the priority of the modified Documents as security
for the Obligations over any such subordinate lien, security interest,
encumbrance, right, title, or interest.
ARTICLE
VII - SECURITY AGREEMENT
Section
7.01 Security
Agreement. This Instrument constitutes both a real property
mortgage and a “security
agreement” within the meaning of the U.C.C. The Property
includes real and personal property and all tangible and intangible rights and
interest of Borrower in the Property. Borrower grants to Lender, as security for
the Obligations, a security interest in the Personal Property to the fullest
extent that the Personal Property may be subject to the
U.C.C. Borrower authorizes Lender to file any financing or
continuation statements and amendments thereto relating to the Personal Property
without the signature of Borrower if permitted by Laws.
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ARTICLE VIII - LIMITATION ON PERSONAL LIABILITY
AND INDEMNITIES
Section
8.01 Limited Recourse
Liability. The provisions of Paragraph 8 and
Paragraph 9 of the Note are incorporated into this Instrument as if such
provisions were set forth in their entirety in this Instrument.
Section
8.02 General
Indemnity. Borrower agrees that while Lender has no liability
to any person in tort or otherwise as lender and that Lender is not an owner or
operator of the Property, Borrower shall, at its sole expense, protect, defend,
release, indemnify and hold harmless (“indemnify”) the Indemnified
Parties from any Losses (defined below) imposed on, incurred by, or asserted
against the Indemnified Parties, directly or indirectly, arising out of or in
connection with the Property, Loan, or Documents, including
Losses; provided, however, that the foregoing indemnities shall not
apply to any Losses caused by the gross negligence or willful misconduct of the
Indemnified Parties. The term “Losses” shall mean any claims,
suits, liabilities (including strict liabilities), actions, proceedings,
obligations, debts, damages, losses (including, without limitation, unrealized
loss of value of the Property), Costs, expenses, fines, penalties, charges,
fees, judgments, awards, and amounts paid in settlement of whatever kind
including attorneys’ fees (both in-house staff and retained attorneys) and all
other costs of defense. The term “Indemnified Parties” shall
mean (a) Lender, (b) any prior owner or holder of the Note,
(c) any existing or prior servicer of the Loan, (d) the officers,
directors, shareholders, partners, members, employees and trustees of any of the
foregoing, and (e) the heirs, legal representatives, successors and assigns
of each of the foregoing.
Section
8.03 Transaction Taxes
Indemnity. Borrower shall, at its sole expense, indemnify the
Indemnified Parties from all Losses imposed upon, incurred by, or asserted
against the Indemnified Parties or the Documents relating to Transaction
Taxes.
Section
8.04 ERISA
Indemnity. Borrower shall, at its sole expense, indemnify the
Indemnified Parties against all Losses imposed upon, incurred by, or asserted
against the Indemnified Parties (a) as a result of a Violation, (b) in
the investigation, defense, and settlement of a Violation, (c) as a result
of a breach of the representations in Section 3.11 or default thereunder,
(d) in correcting any prohibited transaction or the sale of a prohibited
loan, and (e) in obtaining any individual prohibited transaction exemption
under ERISA that may be required, in Lender’s sole discretion.
Section
8.05 Environmental and ERISA
Indemnity. Borrower and other persons, if any, have executed
and delivered the Environmental and ERISA Indemnity Agreement dated the date
hereof to Lender (“Environmental
Indemnity”).
Section
8.06 Duty to Defend, Costs and
Expenses. Upon request, whether Borrower’s obligation to
indemnify Lender arises under Article VIII or in the Documents, Borrower
shall defend the Indemnified Parties (in Borrower’s or the Indemnified Parties’
names) by attorneys and other professionals reasonably approved by the
Indemnified Parties. Notwithstanding the foregoing, the Indemnified
Parties may, in their sole discretion, engage their own attorneys and
professionals to defend or assist them and, at their option, their attorneys
shall control the resolution of any claims or proceedings. Upon
demand, Borrower shall pay or, in the sole discretion of the Indemnified
Parties, reimburse and/or indemnify the Indemnified Parties for all Costs
imposed on, incurred by, or asserted against the Indemnified Parties by reason
of any items set forth in this Article VIII and/or the enforcement or
preservation of the Indemnified Parties’ rights under the
Documents. Any amount payable to the Indemnified Parties under this
Section shall (a) be deemed a demand obligation, (b) be part of the
Obligations, (c) bear interest from the date of demand at the Default Rate,
until paid if not paid on demand, and (d) be secured by this
Instrument.
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Section
8.07 Recourse Obligation and
Survival. Notwithstanding anything to the contrary in the
Documents and in addition to the recourse obligations in the Note, the
obligations of Borrower under Sections 8.03, 8.04, 8.05, and 8.06 shall be
a full recourse obligation of Borrower, shall not be subject to any limitation
on personal liability in the Documents, and shall survive (a) repayment of
the Obligations, (b) any termination, satisfaction, transfer of title by
power of sale, assignment or foreclosure of this Instrument, (c) the
acceptance by Lender (or any nominee) of a deed in lieu of foreclosure,
(d) a plan of reorganization filed under the Bankruptcy Code, or
(e) the exercise by the Lender of any rights in the
Documents. Borrower’s obligations under Article VIII 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
under any applicable insurance policy.
ARTICLE IX - ADDITIONAL
PROVISIONS
Section
9.01 Usury Savings
Clause. All agreements in the Documents are expressly limited
so that in no event whatsoever shall the amount paid or agreed to be paid under
the Documents for the use, forbearance, or detention of money exceed the highest
lawful rate permitted by Laws. If, at the time of performance,
fulfillment of any provision of the Documents shall involve transcending the
limit of validity prescribed by Laws, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity. If Lender
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 (a) shall be
canceled automatically or (b) if paid, such excess shall be
(i) credited against the principal amount of the Obligations to the extent
permitted by Laws or (ii) rebated to Borrower if it cannot be so credited
under Laws. Furthermore, all sums paid or agreed to be paid under the
Documents for the use, forbearance, or detention of money shall to the extent
permitted by Laws be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Obligations does not exceed the maximum lawful rate
of interest from time to time in effect and applicable to the Obligations for so
long as the Obligations are outstanding.
Section
9.02 Notices. Any
notice, request, demand, consent, approval, direction, agreement, or other
communication (any “notice”) required or permitted
under the Documents shall be in writing and shall be validly given if sent by a
nationally-recognized courier that obtains receipts, delivered personally by a
courier that obtains receipts, or mailed by United States certified mail (with
return receipt requested and postage prepaid) addressed to the applicable person
as follows:
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If
to Borrower:
Xxxx-Xxxx
Realty, L.P.
c/o
Xxxx-Xxxx Realty Corporation
000 Xxxxxxxx
Xxxxxx
Xxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxxxxxx
X. Xxxxx
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And
To:
Xxxx-Xxxx
Realty, L.P.
c/o
Xxxx-Xxxx Realty Corporation
000 Xxxxxxxx
Xxxxxx
Xxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxxx
Xxxxxxxxx
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With
a copy of notices sent to Borrower to:
General
Counsel
Xxxx-Xxxx
Realty Corporation
000 Xxxxxxxx
Xx.
Xxxxxx,
Xxx Xxxxxx 00000
Attention: Xxxxx
X. Xxxxxx
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If
to Lender:
THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA and VPCM, LLC
c/o Prudential
Asset Resources, Inc.
0000 Xxxx
Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention: Asset
Management Department; Reference Loan
No. 706 108 236 and 706 108 266
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With
a copy of notices sent to Lender to:
THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA
c/o Prudential
Asset Resources, Inc.
0000 Xxxx
Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention: Legal
Department; Reference Loan No. 706 108 236 and
706 108 266
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Each
notice shall be effective upon being so sent, delivered, or mailed, but the time
period for response or action shall run from the date of receipt as shown on the
delivery receipt. Refusal to accept delivery or the inability to
deliver because of a changed address for which no notice was given shall be
deemed receipt. Any party may periodically change its address for
notice and specify up to two (2) additional addresses for copies by giving the
other party at least ten (10) days’ prior notice.
Section
9.03 Sole Discretion of
Lender. Except as otherwise expressly stated, whenever
Lender’s judgment, consent, or approval is required or Lender shall have an
option or election under the Documents, 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 and absolute discretion of Lender.
Section
9.04 Applicable Law and
Submission to Jurisdiction. The Documents shall be governed by
and construed in accordance with the laws of the Property State and the
applicable laws of the United States of America. Without limiting
Lender’s right to bring any action or proceeding against Borrower or the
Property relating to the Obligations (an “Action”) in the courts of
other jurisdictions, Borrower irrevocably (a) submits to the jurisdiction
of any state or federal court in the Property State, (b) agrees that any
Action may be heard and determined in such court, and (c) waives, to the
fullest extent permitted by Laws, the defense of an inconvenient forum to the
maintenance of any Action in such jurisdiction.
Section
9.05 Construction of
Provisions. The following rules of construction shall apply
for all purposes of this Instrument unless the context otherwise
requires: (a) all references to numbered Articles or Sections or
to lettered Exhibits are references to the Articles and Sections hereof and the
Exhibits annexed to this Instrument and such Exhibits are incorporated into this
Instrument as if fully set forth in the body of this
Instrument; (b) all Article, Section, and Exhibit captions are
used for convenience and reference only and in no way define, limit, or in any
way affect this Instrument; (c) 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; (d) no inference in favor of or against
any party shall be drawn from the fact that such party has drafted any portion
of. this Instrument; (e) all obligations of Borrower hereunder
shall be performed and satisfied by or on behalf of Borrower at Borrower’s sole
expense; (f) the terms “include,” “including,” and similar terms
shall be construed as if followed by the phrase “without being limited
to”; (g) the terms “Property”, “Land”, “Improvements”, and “Personal Property” shall be
construed as if followed by the phrase “or any part
thereof”; (h) the term “Obligations” shall be
construed as if followed by the phrase “or any other sums secured hereby, or
any part thereof”; (i) the term “person” shall include natural
persons, firms, partnerships, limited liability companies, trusts, corporations,
governmental authorities or agencies, and any other public or private legal
entities; (j) 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, and/or
conditions”; (k) 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 “Tenants” or “lessee” shall mean “tenant, subtenant, lessee, and
sublessee”; (l) the term “owned” shall mean “now owned or later
acquired”; (m) the terms “any” and “all” shall mean “any or all”; and
(n) the term “on
demand” or “upon
demand” shall mean “within five (5) business days after
written notice”.
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Section
9.06 Transfer of
Loan.
(a) Lender
may, at any time, (i) sell, transfer or assign the Documents and any
servicing rights with respect thereto or (ii) grant participations therein
or issue mortgage pass-through certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement
(collectively, the “Securities”). Lender
may forward to any purchaser, transferee, assignee, servicer, participant, or
investor in such Securities (collectively, “Investors”), to any Rating
Agency (defined below) rating such Securities and to any prospective Investor,
all documents and information which Lender now has or may later acquire relating
to the Obligations, Borrower, any guarantor, any indemnitor(s), the Leases and
the Property, whether furnished by Borrower, any guarantor, any indemnitor(s) or
otherwise, as Lender determines advisable, provided that such parties shall be
subject to any Confidentiality Agreement then in effect between Lender and
Borrower or Guarantor with respect to this Loan, if any. Borrower,
any guarantor and any indemnitor agree to cooperate with Lender in connection
with any transfer made or any Securities created pursuant to this Section
including the delivery of an estoppel certificate in accordance with
Section 3.16 and such other documents as may be reasonably requested by
Lender. Borrower shall also furnish consent of any borrower, any
guarantor and any indemnitor in order to permit Lender to furnish such Investors
or such prospective Investors or such Rating Agency with any and all information
concerning the Property, the Leases, the financial condition of Borrower, any
guarantor and any indemnitor, as may be reasonably requested by Lender, any
Investor, any prospective Investor or any Rating Agency and which may be
complied with without undue expense, provided that such parties shall be subject
to any Confidentiality Agreement that is entered into by Lender with any such
borrower, guarantor or indemnitor that is specific to this
Loan. “Rating Agency” shall mean any one or more credit rating
agencies approved by Lender.
(b) Borrower
agrees that upon any assignment or transfer of the Documents by Lender to any
third party, Lender shall have no obligations or liabilities under the
Documents, such third party shall be substituted as the lender under the
Documents for all purposes and Borrower shall look solely to such third party
for the performance of any obligations under the Documents or with respect to
the Loan.
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Section
9.07 Miscellaneous. If
any provision of the Documents shall be held to be invalid, illegal, or
unenforceable in any respect, this shall not affect any other provisions of the
Documents and such provision shall be limited and construed as if it were not in
the Documents. If title to the Property becomes vested in any person
other than Borrower, Lender may, without notice to Borrower, deal with such
person regarding the Documents or the Obligations in the same manner as with
Borrower without in any way vitiating or discharging Borrower’s liability under
the Documents or being deemed to have consented to the vesting. If
both the lessor’s and lessee’s interest under any Lease ever becomes 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 Lender shall continue to have and enjoy all its rights and
privileges as to each separate estate. Upon foreclosure (or transfer
of title by power of sale) of this Instrument, none of the Leases shall be
destroyed or terminated as a result of such foreclosure (or sale), by
application of the doctrine of merger or as a matter of law, unless Lender takes
all actions required by law to terminate the Leases as a result of foreclosure
(or sale). All of Borrower’s covenants and agreements under the
Documents shall run with the land and time is of the
essence. Borrower appoints Lender 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, filing or recording for
and in the name of Borrower of any of the documents listed in
Sections 3.04, 3.19, 4.01 and 6.02. The Documents cannot be
amended, terminated, or discharged except in a writing signed by the party
against whom enforcement is sought. No waiver, release, or other
forbearance by Lender will be effective unless it is in a writing signed by
Lender and then only to the extent expressly stated. The provisions
of the Documents shall be binding upon Borrower and its heirs, devisees,
representatives, successors, and assigns including successors in interest to the
Property and inure to the benefit of Lender and its heirs, successors,
substitutes, and assigns. Where two or more persons have executed the
Documents, the obligations of such persons shall be joint and several, except to
the extent the context clearly indicates otherwise. The Documents may
be executed in any number of counterparts with the same effect as if all parties
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. Upon receipt
of an affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of any Document which is not of public record, and, in the case of
any mutilation, upon surrender and cancellation of the Document, Borrower will
issue, in lieu thereof, a replacement Document, dated the date of the lost,
stolen, destroyed or mutilated Document containing the same
provisions. Any reviews, inspections, reports, approvals or similar
items conducted, made or produced by or on behalf of Lender with respect to
Borrower, the Property or the Loan are for loan underwriting and servicing
purposes only, and shall not constitute an acknowledgment, representation or
warranty of the accuracy thereof, or an assumption of liability with respect to
Borrower, Borrower’s contractors, architects, engineers, employees, agents or
invitees, present or future tenants, occupants or owners of the Property, or any
other party.
Section
9.08 Entire
Agreement. Except as provided in Section 3.17,
(a) the Documents constitute the entire understanding and agreement between
Borrower and Lender with respect to the Loan and supersede all prior written or
oral understandings and agreements with respect to the Loan including the Loan
application and Loan commitment and (b) Borrower is not relying on any
representations or warranties of Lender except as expressly set forth in the
Documents.
SECTION
9.09 WAIVER OF TRIAL BY
JURY. EACH OF BORROWER AND LENDER 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, THE DOCUMENTS, OR ANY
ALLEGED ACTS OR OMISSIONS OF LENDER OR BORROWER IN CONNECTION
THEREWITH.
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ARTICLE X - LOCAL LAW
PROVISIONS
Section
10.01 Inconsistencies. In
the event of any inconsistencies between the terms and conditions of this
Article X and any other terms of this Instrument the terms and conditions of
this Article X shall control and be binding.
Section
10.02 Environmental
Law. The following is hereby added to Section 3.12(a)
immediately after the words “within the meaning of any Environmental
Law”:
“including,
without limitation, any substance that is a “hazardous substance” or “hazardous
waste” under the New Jersey Spill Compensation and Control Act, the New Jersey
Industrial Site Recovery Act or the New Jersey Solid Waste Management Act of
N.J.A.C. 7:26C-1.3.”
Section
10.03 Representations and
Warranties. The following is hereby added as
Section 3.12(d):
(d) “New Jersey Spill Act and
ISRA. Without limitation of the provisions of
Section 3.12, Borrower hereby makes the following additional
representations, warranties and covenants:
A. Representations and
Warranties.
(i) To
the best of Borrower's knowledge, after due inquiry and investigation,
consisting of the Environmental Report, except as disclosed in the Environmental
Report, the Property has not been used to refine, produce, store, handle,
transfer, process, transport, generate, manufacture, treat or dispose of “Hazardous Substances”, as such
term is defined in N.J.S.A. 58:10-23.11b(k) (and references to the term
Hazardous Substance in this Subsection (d)(A)(i) shall have the meanings
set forth therein), in violation of Environmental Laws and Borrower has not in
the past, nor does Borrower intend in the future, to use such real property
(including the Property) for the purpose of refining, producing, storing,
handling, transferring, processing, transporting, generating, manufacturing,
treating or disposing of any such Hazardous Substances in violation of
Environmental Laws. In addition, none of the other real property
owned and/or occupied by Borrower and located in the State of New Jersey has
been so used as described in the preceding sentence in any manner that could
have a Material Adverse Effect on Borrower, or, to the extent that any such
property is so used, such use is conducted by Borrower in material good faith
compliance with all Environmental Laws; as used in this
Section 3.12(d), the term “Material Adverse Effect” means, with respect to
any Person, a material adverse effect on the ability of Borrower to perform its
obligations hereunder. Notwithstanding anything herein to the
contrary, customary quantities of any routine office, cleaning, janitorial
supplies, maintenance and other materials and supplies used stored or handled in
the ordinary course of Borrower's business or the business of its Tenants shall
not be deemed a Hazardous Substance or Hazardous Waste for purposes of this
subsection 3.12(d)(A)(i), subsection 3.12(d)(A)(v) or subsection
3.12(d)(A)(vi).
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(ii) Except
as disclosed in the Environmental Report, the Property has not, to the best of
Borrower's knowledge, after due inquiry and investigation, consisting of the
Environmental Report, been used as, or is now being used as, a “Major Facility” as defined in
N.J.S.A. 58:10-23.11b(l). None of the other real property owned
and/or occupied by Borrower and located in the State of New Jersey (including
the Property) has, to the best of Borrower's knowledge, been used as, or is now
being used as, a “Major
Facility” as defined in N.J.S.A. 58:10-23.11b(l) in any manner that could
have a Material Adverse Effect on Borrower, and, to the extent that any such
property is a “Major Facility”, such use is conducted by Borrower in material
good faith compliance with all Environmental Laws.
(iii) To
the best of Borrower's knowledge, after due inquiry and investigation, no lien
has been attached to the Property or any revenues or any real or personal
property owned by Borrower and located in the State of New Jersey (including the
Property) as a result of the chief executive of the New Jersey Spill
Compensation Fund expending monies from such fund to pay for “Damages”, as such term is
defined in N.J.S.A. 58:10-23.11(g) and/or “Cleanup and Removal Costs”, as
such term is defined in N.J.S.A. 58:10-23.11b(d), arising from an intentional or
unintentional action or omission of Borrower or any previous or present owner,
operator or Tenant of the Property, resulting in the Release of Hazardous
Substances into the waters of the State of New Jersey or onto the lands of the
State of New Jersey, or into waters outside the jurisdiction of the State of New
Jersey when damage may result to the lands, waters, fish, shellfish, wildlife,
biota, air and other natural resources owned, managed, held in trust or
otherwise controlled by and within the jurisdiction of the State of New
Jersey; as to the foregoing relating to assets of Borrower other than
the Property, such representation is hereby modified to be applicable only in
any manner or to any extent that could have a Material Adverse Effect on
Borrower.
(iv) Except
as disclosed in the Environmental Report, Borrower has not received a summons,
citation, directive, letter or other communication, written or oral from the New
Jersey Department of Environmental Protection concerning any intentional or
unintentional action or omission on Borrower's part resulting in the Release of
Hazardous Substances into the waters or onto the lands of the State of New
Jersey, or into the waters outside the jurisdiction of the State of New Jersey
resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air
and other natural resources owned, managed, held in trust or otherwise
controlled by and within the jurisdiction of the State of New Jersey with
respect to the Property, and, with respect to the other real property owned
and/or occupied by Borrower and located in the State of New Jersey Borrower has
not received the items described above in any manner or to any extent that could
have a Material Adverse Effect on Borrower.
(v) To
the best of Borrower's knowledge, after due inquiry and investigation,
consisting of the Environmental Report, except as disclosed in the Environmental
Report, the Property has not been used to generate, manufacture, refine,
transport, treat, store, handle, dispose of, produce, transfer, or process
“Hazardous Substances” or “Hazardous Wastes”, as such terms are defined in
N.J.A.C. 7:26C-1.3 in violation of Environmental Laws, and Borrower does not
intend to use any of its real property (including the Property) for such
purposes. In addition, none of the other real property owned and/or
occupied by Borrower and located in the State of New Jersey has been so used as
described in the preceding sentence in any manner that could have a Material
Adverse Effect on Borrower; to the extent that any such property is
so used to generate, manufacture, refine, transport, treat, store, handle,
dispose of, produce, transfer, or process “Hazardous Substances” or “Hazardous
Wastes” as aforesaid, such use is conducted by Borrower in material good faith
compliance with all Environmental Laws.
(vi) Except
as otherwise disclosed in the Environmental Report, if and to the extent
required by applicable law, Borrower has conducted an on-site inspection of the
Property, including a geohydrological survey of soil and sub-surface conditions
as well as other tests, to determine the presence of “Hazardous Substances” or
“Hazardous Wastes”, as such terms are defined in N.J.A.C. 7:26C-1.3, and except
as disclosed in the Environmental Report, Borrower has not found evidence of the
presence of any such “Hazardous Substances” or “Hazardous Wastes” on or in the
Property in violation of Environmental Laws.
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(vii) Except
as disclosed in the Environmental Report, Borrower is not required to comply
with the provisions of the New Jersey Industrial Site Recovery Act (N.J.S.A.
13:1K-6 et
seq.) with
respect to the Property.
B. Covenants. As
to the following covenants, should there be any claim of violation hereof by
Lender on account of properties of Borrower other than the Property, Lender
agrees that there shall be no Event of Default hereunder so long as Borrower, at
no expense to Lender, diligently contests in all reasonable respects any
enforcement action with respect to the following items as permitted by law, and
provided that Borrower demonstrates to Lender's reasonable satisfaction that any
adverse determination shall not have a Material Adverse Effect on
Borrower:
(i) Borrower
shall not cause or permit to exist, as a result of an intentional or
unintentional action or omission on its part, a Release of a Hazardous Substance
into waters of the State of New Jersey, or into waters outside the jurisdiction
of the State of New Jersey when damage may result to the lands, waters, fish,
shellfish, wildlife, biota, air and other natural resources owned, managed, held
in trust or otherwise controlled by and within the jurisdiction of the State of
New Jersey, unless such Release is pursuant to and in compliance with the
conditions of a permit issued by the appropriate federal or state governmental
authorities.
(ii) The
Property will not be used as a Major Facility after completion of any
construction, renovation, restoration and other developmental work that Borrower
may undertake thereon. If Borrower shall own or operate any real
property located in the State of New Jersey that is used as a Major Facility,
Borrower shall duly file or cause to be duly filed with the Director of the
Division of Taxation in the New Jersey Department of the Treasury, a tax report
or return and shall pay or make provision for the payment of all taxes due
therewith, all in accordance with and pursuant to N.J.S.A.
58:10-23.11h.
(iii) In
the event that there shall be filed a lien against the Property by the New
Jersey Department of Environmental Protection, pursuant to and in accordance
with the provision of N.J.S.A. 58:10-23.11f(f), as a result of the chief
executive of the New Jersey Spill Compensation Fund having expended monies from
such fund to pay for Damages and/or Cleanup and Removal Costs arising from an
intentional or unintentional action or omission of Borrower resulting in the
Release of Hazardous Substances into the waters of the State of New Jersey or
onto lands from which it might flow or drain into such waters, then Borrower
shall, within thirty (30) days from the date that Borrower is given notice that
the lien has been placed against the Property, or within such shorter period of
time in the event that the State of New Jersey has commenced steps to cause the
Property to be sold pursuant to the lien, either (A) pay the claim and remove
the lien from the Property, or (B) furnish (1) a bond satisfactory to Lender in
the amount of the claim out of which the lien arises, (2) a cash deposit in the
amount of the claim out of which the lien arises, or (3) other security
satisfactory to Lender in an amount sufficient to discharge the claim out of
which the lien arises.
(iv) Should
Borrower cause or permit any intentional or unintentional action or omission
resulting in the Release of Hazardous Substances into the waters or onto the
lands of the State of New Jersey, or into the waters outside the jurisdiction of
the State of New Jersey resulting in damage to the lands, waters, fish,
shellfish, wildlife, biota, air or other natural resources owned, managed or
held in trust or otherwise controlled by and within the jurisdiction of the
State of New Jersey, without having obtained a permit issued by the appropriate
governmental authorities, Borrower shall promptly clean up such Release in
accordance with the provisions of the New Jersey Spill Compensation and Control
Act and all other applicable laws.
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(v) To
the extent Borrower is required, as owner of the Property, to comply with ISRA
at any time, Borrower shall comply fully with ISRA. To the extent
that a landlord is required to comply with ISRA by reason of “closure of
operations” of a tenant, Borrower shall comply fully with ISRA upon the closure
of operations by any tenant at the Property.”
Section
10.04 Copy of
Mortgage. Borrower represents and warrants that it has
received a true copy of this Instrument without charge.
Section
10.05 Loan Subject to
Modification. This Instrument is subject to “modification” as
such term is defined in N.J.S.A. 46:9-8.1 et seq. and shall be subject
to the priority provisions thereof.
IN
WITNESS WHEREOF, the undersigned have executed this Instrument as of the day
first set forth above.
BORROWER:
XXXX-XXXX REALTY, L.P.,
a Delaware limited partnership
By:XXXX-XXXX
REALTY CORPORATION, a Maryland corporation, General Partner
By: ______________________
Name: Xxxxx
Xxxxxxxxx
Title: Executive
Vice President and Chief Financial Officer
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