Exhibit 10.12
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PR PEMBROKE LLC, as mortgagor
(Borrower)
to
GMAC COMMERCIAL MORTGAGE CORPORATION, as mortgagee
(Lender)
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MORTGAGE AND
SECURITY AGREEMENT
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Dated: April 13, 1999
Location: 0000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX
PREPARED BY AND UPON
RECORDATION RETURN TO:
Xxxxx Xxxxxx Xxxxx Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
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TABLE OF CONTENTS
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Article 1 - GRANTS OF SECURITY 1
Section 1.1 Property Mortgaged 1
Section 1.2 Assignment of Leases and Rents. 3
Section 1.3 Security Agreement. 4
Section 1.4 Pledge of Monies Held. 4
Article 2 - DEBT AND OBLIGATIONS SECURED 4
Section 2.1 Debt. 4
Section 2.2 Other Obligations. 5
Section 2.3 Debt and Other Obligations. 5
Section 2.4 Payments. 5
Article 3 - BORROWER COVENANTS 6
Section 3.1 Payment of Debt. 6
Section 3.2 Incorporation by Reference. 6
Section 3.3 Insurance. 6
Section 3.4 Payment of Taxes, Etc. 10
Section 3.5 Escrow Fund. 11
Section 3.6 Condemnation. 11
Section 3.7 Leases and Rents. 12
Section 3.8 Maintenance of Property. 13
Section 3.9 Waste. 13
Section 3.10 Compliance With Laws. 13
Section 3.11 Books and Records. 14
Section 3.12 Payment For Labor and Materials. 15
Section 3.13 Performance of Other Agreements. 16
Section 3.14 Change of Name, Identity or Structure. 16
Section 3.15 Existence. 16
Article 4 - SPECIAL COVENANTS 16
Section 4.1 Property Use. 16
Section 4.2 ERISA. 16
Section 4.3 Single Purpose Entity. 17
Section 4.4 Restoration After Casualty/Condemnation. 19
Article 5 - REPRESENTATIONS AND WARRANTIES 24
Section 5.1 Warranty of Title. 24
Section 5.2 Authority. 24
Section 5.3 Legal Status and Authority. 24
Section 5.4 Validity of Documents. 24
Page
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Section 5.5 Litigation. 25
Section 5.6 Status of Property. 25
Section 5.7 No Foreign Person. 26
Section 5.8 Separate Tax Lot. 26
Section 5.9 ERISA Compliance. 26
Section 5.10 Leases. 27
Section 5.11 Financial Condition. 27
Section 5.12 Business Purposes. 28
Section 5.13 Taxes. 28
Section 5.14 Mailing Address. 28
Section 5.15 No Change in Facts or Circumstances. 28
Section 5.16 Disclosure. 28
Section 5.17 Third Party Representations. 28
Section 5.18 Illegal Activity. 28
Section 5.19 FUNB Line of Credit. 28
Article 6 - DEBTOR/CREDITOR RELATIONSHIP 29
Section 6.1 Relationship of Borrower and Lender. 29
Section 6.2 Servicing of the Loan. 29
Article 7 - FURTHER ASSURANCES 29
Section 7.1 Recording of Security Instrument, Etc. 29
Section 7.2 Further Acts, Etc. 29
Section 7.3 Changes in Tax, Debt Credit and Documentary Stamp Laws. 30
Section 7.4 Estoppel Certificates. 30
Section 7.5 Flood Insurance. 31
Section 7.6 Splitting of Security Instrument. 31
Section 7.7 Replacement Documents. 31
Section 7.8 Amended Financing Statements. 32
Article 8 - DUE ON SALE/ENCUMBRANCE 32
Section 8.1 No Sale/Encumbrance. 32
Section 8.2 Sale/Encumbrance Defined. 32
Section 8.3 Lender's Rights. 33
Section 8.4 Right to Substitute Property 34
Article 9 - PREPAYMENT 34
Section 9.1 Prepayment Only in Accordance with Note. 34
Article 10 - DEFAULT 34
Section 10.1 Events of Default. 34
Article 11 - RIGHTS AND REMEDIES 35
Section 11.1 Remedies. 36
Page
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Section 11.2 Application of Proceeds. 38
Section 11.3 Right to Cure Defaults. 39
Section 11.4 Actions and Proceedings. 39
Section 11.5 Recovery of Sums Required To Be Paid. 39
Section 11.6 Examination of Books and Records. 39
Section 11.7 Other Rights, Etc. 40
Section 11.8 Right to Release Any Portion of the Property. 40
Section 11.9 Violation of Laws. 40
Section 11.10 Right of Entry. 41
Article 12 - ENVIRONMENTAL HAZARDS 41
Section 12.1 Environmental Representations and Warranties. 41
Section 12.2 Environmental Covenants. 42
Section 12.3 Lender's Rights. 43
Article 13 - INDEMNIFICATION 44
Section 13.1 General Indemnification. 44
Section 13.2 Mortgage and/or Intangible Tax. 45
Section 13.3 ERISA Indemnification. 45
Section 13.4 Environmental Indemnification. 45
Section 13.5 Duty to Defend; Attorneys' Fees and Other Fees
and Expenses. 46
Article 14 - WAIVERS 47
Section 14.1 Waiver of Counterclaim. 47
Section 14.2 Marshalling and Other Matters. 47
Section 14.3 Waiver of Notice. 47
Section 14.4 Waiver of Statute of Limitations. 47
Section 14.5 Sole Discretion of Lender. 47
Section 14.6 Survival. 47
Section 14.7 Waiver of Trial By Jury. 48
Article 15 - EXCULPATION 48
Section 15.1 Exculpation. 48
Section 15.2 Reservation of Certain Rights. 49
Section 15.3 Exceptions to Exculpation. 49
Section 15.4 Recourse. 49
Section 15.5 Bankruptcy Claims. 50
Article 16 - NOTICES 50
Section 16.1 Notices. 50
Article 17 - APPLICABLE LAW 51
Section 17.1 Choice of Law. 51
Section 17.2 Usury Laws. 51
Page
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Section 17.3 Provisions Subject to Applicable Law. 52
Section 17.4 Inapplicable Provision. 52
Article 18 - SECONDARY MARKET 52
Section 18.1 Dissemination of Information. 52
Article 19 - COSTS 53
Section 19.1 Performance at Borrower's Expense. 53
Section 19.2 Attorney's Fees for Enforcement. 53
Article 20 - DEFINITIONS 54
Section 20.1 General Definitions. 54
Section 20.2 Headings, Etc. 54
Article 21 - MISCELLANEOUS PROVISIONS 54
Section 21.1 No Oral Change. 54
Section 21.2 Liability. 54
Section 21.3 Duplicate Originals; Counterparts. 54
Section 21.4 Number and Gender. 55
Section 21.5 Subrogation. 55
Section 21.6 Entire Agreement. 55
Exhibits -
Exhibit A - Description of Land
Definitions
The terms set forth below are defined in the following Sections of this Security
Instrument:
. ADA: Subsection 3.10(a);
. Applicable Law: Subsection 3.10(a);
. Attorneys' Fees/Counsel Fees: Section 20.1, 20.1;
. Bankruptcy Code: Subsection 1.1(f);
. Borrower: Preamble;
. Business Day: Section 16.1;
. Casualty Consultant: Subsection 4.4(b)(iii);
. Casualty Retainage: Subsection 4.4(b)(iii);
. Collateral: Section 1.3;
. Debt: Section 2.1;
. Default Rate: Section 10.3;
. Environmental Indemnity: Subsection 10.1(c);
. Environmental Law: Section 12.1;
. Environmental Liens: Section 12.2;
. Environmental Report: Section 12.1;
. ERISA: Subsection 4.2(a);
. Escrow Fund: Section 3.5;
. Event: Section 19.1;
. Event of Default: Section 10.1;
. Exculpated Parties: Section 15.1;
. Force Majeure: Subsection 4.4(b);
. Guarantor: Section 5.5;
. Hazardous Substances: Section 12.1;
. Improvements: Subsection 1.1(c);
. Indemnified Parties: Section 13.1;
. Indemnitor: Subsection 10.1(c);
. Independent Director: Subsection 4.3(c);
. Insurance Premiums: Subsection 3.3(b);
. Investor: Section 18.1;
. Land: Subsection 1.1(a);
. Lease Guaranty: Subsection 3.7(a);
. Leases: Subsection 1.1(f);
. Lender: Preamble;
. Loan Application: Section 5.15;
. Losses: Section 13.1;
. Net Proceeds: Subsection 4.4(b);
. Net Proceeds Deficiency: Subsection 4.4(b)(v);
. Note: Recitals;
. Obligations: Section 2.3;
. Other Charges: Subsection 3.4(a);
. Other Obligations: Section 2.2;
. Other Security Documents: Section 3.2;
. Participations: 18.1;
. Permitted Exceptions: Section 5.1;
. Person: Section 20.1;
. Personal Property: Subsection 1.1(e);
. Policies/Policy: Subsection 3.3(b), 3.3(b);
. Property: Section 1.1;
. Qualified Insurer: Subsection 3.3(b);
. Rating Agency: Subsection 3.3(b);
. Registrar: Section 18.2;
. Release: Section 12.1;
. Remediation: Section 12.1;
. Rents: Subsection 1.1(f);
. Restoration: Subsection 3.3(d);
. Securities: Section 18.1;
bd Securitization: Section 18.1;
. Security Instrument: Preamble;
. Servicer: Section 6.2;
. SPE Member: Subsection 4.3(b);
. Taxes: Subsection 3.4(a); and
. Uniform Commercial Code: Subsection 1.1(e).
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security Instrument") is
made as of the 13th day of April, 1999, by PR PEMBROKE LLC, a Delaware limited
liability company, having its principal place of business at The Bellevue, Suite
300, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, as mortgagor
("Borrower"), to GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation,
having an address at 000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000-0000, as
mortgagee ("Lender").
RECITALS:
Borrower by its promissory note of even date herewith given to Lender
is indebted to Lender in the principal sum of $16,600,000 in lawful money of the
United States of America (the note together with all extensions, renewals,
modifications, consolidations, substitutions, replacements, restatements and
increases thereof shall collectively be referred to as the "Note"), with
interest from the date thereof at the rates set forth in the Note, principal and
interest to be payable in accordance with the terms and conditions provided in
the Note.
Borrower desires to secure the payment of the Debt (as defined in
Article 2) and the performance of all of its obligations under the Note and the
Other Obligations (as defined in Article 2).
Article - GRANTS OF SECURITY
Section . Property Mortgaged. Borrower does hereby irrevocably (i)
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Lender and to its successors and assigns with power of sale in accordance with
the terms and conditions hereof, for the use and benefit of Lender, and (ii)
grant a security interest to Lender and to its successors and assigns with power
of sale, in accordance with the terms and conditions hereof, for the use and
benefit of Lender, in, the following property, rights, interests and estates now
owned, or hereafter acquired by Borrower (collectively, the "Property"):
() Land. The real property described in Exhibit A attached hereto and
made a part hereof (the "Land");
() Additional Land. All xxxxxxxxxx xxxxx, xxxxxxx and development
rights hereafter acquired by Borrower for use in connection with the Land and
the development of the Land that may, from time to time, by supplemental
mortgage or otherwise be expressly made subject to the lien of this Security
Instrument;
() Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (the "Improvements");
() Easements. All easements, rights-of-way or use, rights, strips and
gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
now or hereafter belonging, relating or pertaining to the Land and the
Improvements and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Land, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtesy and rights of
curtesy, property, possession, claim and demand whatsoever, both at law and in
equity, of Borrower of, in and to the Land and the Improvements and every part
and parcel thereof, with the appurtenances thereto;
() Fixtures and Personal Property. All machinery, equipment, fixtures
(including, but not limited to all heating, air conditioning, plumbing,
lighting, communications and elevator fixtures) and other property of every kind
and nature whatsoever owned by Borrower, or in which Borrower has or shall have
an interest, now or hereafter located upon the Land or the Improvements, or
appurtenant thereto, and used in connection with the present or future operation
and occupancy of the Land and the Improvements and all building equipment,
materials and supplies of any nature whatsoever owned by Borrower, or in which
Borrower has or shall have an interest, now or hereafter located upon the Land
and the Improvements, or appurtenant thereto, or used in connection with the
present or future operation and occupancy of the Land and the Improvements
(collectively, the "Personal Property"), and the right, title and interest of
Borrower in and to any of the Personal Property which may be subject to any
security interests, as defined in the Uniform Commercial Code, as adopted and
enacted by the state or states where any of the Property is located (the
"Uniform Commercial Code"), superior in lien to the lien of this Security
Instrument and all proceeds and products of the above;
() Leases and Rents. All leases and other agreements affecting the use,
enjoyment or occupancy of all or any part of the Land or the Improvements
heretofore or hereafter entered into whether before or after the filing by or
against Borrower of any petition for relief under 11 U.S.C. ss. 101 et seq. (the
"Bankruptcy Code"), as the same may be amended from time to time (the "Leases")
and all right, title and interest of Borrower, its successors and assigns
therein and thereunder, including, without limitation, all guarantees, letters
of credit and any other credit support given by any guarantor in connection
therewith, cash or securities deposited under the Leases to secure the
performance by the lessees of their obligations thereunder and all rents,
additional rents, revenues, issues and profits (including all oil and gas or
other mineral royalties and bonuses) from the Land and the Improvements whether
paid or accruing before or after the filing by or against Borrower of any
petition for relief under the Bankruptcy Code (the "Rents") and all proceeds
from the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Debt;
() Condemnation Awards. All awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including,
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;
() Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the
right to receive and apply the proceeds of any insurance judgments, or
settlements made in lieu thereof, for damage to the Property;
() Tax Certiorari. All refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;
() Rights. The right, in the name and on behalf of Borrower, to
commence any action or proceeding to protect the interest of Lender in the
Property and while an Event of Default (defined in Section 10.1) remains
uncured, to appear in and defend any action or proceeding brought with respect
to the Property;
() Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or respecting any business or
activity conducted on the Land and any part thereof and all right, title and
interest of Borrower therein and thereunder, including, without limitation, the
right, while an Event of Default remains uncured, to receive and collect any
sums payable to Borrower thereunder;
() Intangibles. All accounts, escrows, chattel paper, claims, deposits,
trade names, trademarks, servicemarks, logos, copyrights, goodwill, books and
records and all other general intangibles specific to or used in connection with
the operation of the Property, if any; and
() Conversion. All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including, without limitation, proceeds of
insurance and condemnation awards, into cash or liquidation claims;
() Other Rights. Any and all other rights of Borrower in and to the
items set forth in Subsections (a) through (m) above.
Section . Assignment of Leases and Rents. Borrower hereby absolutely
and unconditionally assigns to Lender Borrower's right, title and interest in
and to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms of
this Section 1.2 and Section 3.7, Lender grants to Borrower a revocable license
to collect and receive the Rents. Borrower shall hold the Rents, or a portion
thereof, sufficient to discharge all current sums due on the Debt, for use in
the payment of such sums.
Section . Security Agreement. This Security Instrument is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Obligations (defined in
Section 2.3), a security interest in the Property to the full extent that the
Property may be subject to the Uniform Commercial Code (said portion of the
Property so subject to the Uniform Commercial Code, the "Collateral").
Section . Pledge of Monies Held. Borrower hereby pledges to Lender, and
grants to Lender a security interest in, any and all monies now or hereafter
held by Lender, including, without limitation, any sums deposited in the Escrow
Fund (defined in Section 3.5) and the Net Proceeds (defined in Section 4.4), as
additional security for the Obligations until expended or applied as provided in
this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property
unto the Lender and its successors and assigns, with power of sale in accordance
with the terms and conditions hereof, for the use and benefit of Lender, and the
successors and assigns of Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note and this Security Instrument, shall well and truly
perform the Other Obligations as set forth in this Security Instrument and shall
well and truly abide by and comply with each and every covenant and condition
set forth herein and in the Note, these presents and the estate hereby granted
shall cease, terminate and be void.
Article - DEBT AND OBLIGATIONS SECURED
Section . Debt. This Security Instrument and the grants, assignments
and transfers made in Article 1 are given for the purpose of securing the
following, in such order of priority as Lender may determine in its sole
discretion (the "Debt"):
() the payment of the indebtedness evidenced by the Note in lawful
money of the United States of America;
() the payment of interest, default interest, late charges and other
sums, as provided in the Note, this Security Instrument or the Other Security
Documents (defined in Section 3.2);
() the payment of any prepayment consideration, defeasance payment,
exit fee or similar fees provided in the Note;
() the payment of all other monies agreed or provided to be paid by
Borrower in the Note, this Security Instrument or the Other Security Documents;
() the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the security
interest created hereby; and
() the payment of all sums advanced and costs and expenses incurred by
Lender in connection with the Debt or any part thereof, any renewal, extension,
modification, consolidation, change, substitution, replacement, restatement or
increase of the Debt or any part thereof, or the acquisition or perfection of
the security therefor, whether made or incurred at the request of Borrower or
Lender.
Section . Other Obligations. This Security Instrument and the grants,
assignments and transfers made in Article 1 are also given for the purpose of
securing the following (the "Other Obligations"):
() the performance of all other obligations of Borrower contained
herein;
() the performance of each obligation of Borrower contained in the Note
in addition to the payment of the Debt and of Borrower and of any Guarantor
(defined in Section 5.5) contained in the Other Security Documents; and
() the performance of each obligation of Borrower and any Guarantor
contained in any renewal, extension, modification, consolidation, change,
substitution, replacement for, restatement or increase of all or any part of the
Note, this Security Instrument or the Other Security Documents.
Section . Debt and Other Obligations. Borrower's obligations for the
payment of the Debt and the performance of the Other Obligations shall be
referred to collectively below as the "Obligations."
Section . Payments. Unless payments are made in the required amount in
immediately available funds at the place where the Note is payable, remittances
in payment of all or any part of the Debt shall not, regardless of any receipt
or credit issued therefor, constitute payment until the required amount is
actually received by Lender in funds immediately available at the place where
the Note is payable (or any other place as Lender, in Lender's sole discretion,
may have established by delivery of written notice thereof to Borrower) and
shall be made and accepted subject to the condition that any check or draft may
be handled for collection in accordance with the practice of the collecting bank
or banks. Acceptance by Lender of any payment in an amount less than the amount
then due shall be deemed an acceptance on account only, and the failure to pay
the entire amount then due shall be and continue to be an Event of Default.
Article - BORROWER COVENANTS
Borrower covenants and agrees with Lender that:
Section . Payment of Debt. Borrower will pay the Debt at the time and
in the manner provided in the Note and in this Security Instrument.
Section . Incorporation by Reference. All the covenants, conditions and
agreements contained in (a) the Note and (b) all and any of the documents other
than the Note or this Security Instrument now or hereafter executed by Borrower
and/or others and by or in favor of Lender, which wholly or partially secure or
guaranty payment of the Note or the other Obligations (the "Other Security
Documents"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.
Section . Insurance.
() Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
coverages:
() Property Insurance. Insurance with respect to the Improvements and
building equipment insuring against any peril included within the classification
"All Risks of Physical Loss" in amounts at all times sufficient to prevent
Lender from becoming a co-insurer within the terms of the applicable policies
and under applicable law, but in any event such insurance shall be maintained in
an amount equal to the full insurable value of the Improvements and building
equipment, the term "full insurable value" to mean the actual replacement cost
of the Improvements and building equipment (without taking into account any
depreciation, and exclusive of excavations, footings and foundations,
landscaping and paving) determined annually by an insurer, a recognized
independent insurance broker or an independent appraiser selected and paid by
Borrower and in no event less than the coverage required pursuant to the terms
of any Lease. Absent such annual adjustment, each policy shall contain inflation
guard coverage insuring that the policy limit will be increased over time to
reflect the effect of inflation. Borrower shall also maintain insurance against
loss or damage to such furniture, furnishings, fixtures, equipment and other
items (whether personalty or fixtures) included in the Property and owned by
Borrower from time to time, to the extent applicable, in the amount of the cost
of replacing the same, in each case, with inflation guard coverage to reflect
the effect of inflation, or annual valuation. Each policy or policies shall
contain a replacement cost endorsement and either an agreed amount endorsement
(to avoid the operation of any co-insurance provisions) or a waiver of any
co-insurance provisions, all subject to Lender's approval. The maximum
deductible shall be $10,000.00;
() Liability Insurance. Comprehensive general liability insurance,
including personal injury, bodily injury, death and property damage liability,
insurance against any and all claims, including all legal liability to the
extent insurable and imposed upon Lender and all court costs and attorneys' fees
and expenses, arising out of or connected with the possession, use, leasing,
operation, maintenance or condition of the Property in such amounts as are
generally available at commercially reasonable premiums and are generally
required by institutional lenders for properties comparable to the Property but
in no event for a combined single limit of less than $5,000,000. During any
construction of the Property, Borrower's general contractor for such
construction shall also provide the insurance required in this Subsection b.
Lender hereby retains the right to periodically review the amount of said
liability insurance being maintained by Borrower and to require an increase in
the amount of said liability insurance should Lender deem an increase to be
reasonably prudent under then existing circumstances;
() Workers' Compensation Insurance. Statutory workers' compensation
insurance with respect to any work on or about the Property covering all persons
subject to the workers' compensation laws of the state in which the Property is
located;
() Business Interruption. Business interruption and/or loss of "rental
income" insurance in an amount sufficient to avoid any co-insurance penalty and
to provide proceeds which will cover a period of not less than one (1) year from
the date of casualty or loss with a six month extended period of indemnity, the
term "rental income" to mean the sum of (A) the total then ascertainable Rents
payable under the Leases and (B) the total ascertainable amount of all other
amounts to be received by Borrower from third parties which are the legal
obligation of the tenants, reduced to the extent such amounts would not be
received because of operating expenses not incurred during a period of
non-occupancy of that portion of the Property then not being occupied. The
amount of coverage shall be adjusted annually to reflect the rents payable
during the succeeding twelve (12) month period.
() Boiler and Machinery Insurance. Broad form boiler and machinery
insurance (without exclusion for explosion) covering all boilers or other
pressure vessels, machinery, and equipment located in, on or about the Property
and insurance against loss of occupancy or use arising from any breakdown in
such amount per accident equal to the replacement value of the improvements
housing the machinery or $2,000,000 or such other amount reasonably determined
by Lender. If one or more large HVAC units is in operation at the Property,
"System Breakdowns" coverage shall be required, as determined by Lender. Minimum
liability coverage per accident must equal the value of such unit(s);
() Flood Insurance. If required by Subsection 5.6(a) hereof, flood
insurance in an amount at least equal to the lesser of (A) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement basis (or the unpaid balance of the indebtedness secured hereby if
replacement cost coverage is not available for the type of building insured); or
(B) the maximum insurance available under the appropriate National Flood
Insurance Administration program. The deductible may not exceed $25,000.
() During the period of any construction, renovation or alteration of
the Improvements, the cost of which exceeds the lesser of 10% of the principal
amount of the Note or $500,000, at Lender's request, a completed value, "All
Risk" Builder's Risk form, or "Course of Construction" insurance policy in
non-reporting form for any Improvements under construction, renovation or
alteration in an amount approved by Lender may be required. During the period of
any construction of any addition to the existing Improvements, a completed
value, "All Risk" Builder's Risk form or "Course of Construction" insurance
policy in non-reporting form, in an amount approved by Lender, shall be
required.
() Other Insurance. Such other insurance with respect to the Property
or on any replacements or substitutions thereof or additions thereto as may from
time to time be required by Lender against other insurable hazards or casualties
which at the time are commonly insured against in the case of property similarly
situated, including, without limitation, sinkhole, mine subsidence, earthquake
and environmental insurance, due regard being given to the height and type of
buildings, their construction, location, use and occupancy.
() All insurance provided for in Subsection 3.3(a) hereof shall be
obtained under valid and enforceable policies (the "Policies" or in the
singular, the "Policy"), and shall be issued by one or more domestic primary
insurer(s) having (i) an investment grade rating of "A" or better ("AA" or
better for Loans of $25 million or more), or a comparable claims paying ability
assigned by S & P of equivalent one or more credit rating agencies approved by
Lender (a "Rating Agency"), (each such insurer shall be referred to below as a
"Qualified Insurer"). All insurers providing insurance required by this Security
Instrument shall be authorized to issue insurance in the state in which the
Property is located. The Policy referred to in Subsection 3.3(a)(ii) above shall
name Lender as an additional named insured and the Policy referred to in
Subsection 3.3(a)(i), (iv), (v) and (vi) above shall provide that all proceeds
be payable to Lender as set forth in Section 4.4 hereof. The Policies referred
to in Subsections 3.3(a)(i), (v) and (vi) shall also contain: (i) a standard
"non-contributory mortgagee" endorsement or its equivalent relating, inter alia,
to recovery by Lender notwithstanding the negligent or willful acts or omission
of Lender. All Policies described in Subsection 3.3(a) above shall contain (i) a
provision that such Policies shall not be canceled or terminated, nor shall they
expire, without at least thirty (30) days' prior
written notice to Lender in each instance; and (ii) include effective waivers by
the insurer of all claims for Insurance Premiums (defined below) against any
mortgage, loss payees, additional insureds and named insureds (other than
Borrower). In the event that the Property or the Improvements constitutes a
legal non-conforming use under applicable building, zoning or land use laws or
ordinances, the policy shall include an ordinance or law coverage endorsement
which will contain Coverage A: "Loss Due to Operation of Law" (with a minimum
liability limit equal to Replacement Cost With Agreed Value Endorsement),
Coverage B: "Demolition Cost" and Coverage C: "Increased Cost of Construction"
coverages. Certificates of insurance with respect to all renewal and replacement
Policies shall be delivered to Lender not less than thirty (30) days prior to
the expiration date of any of the Policies required to be maintained hereunder
which certificates shall bear notations evidencing payment of applicable
premiums (the "Insurance Premiums"). Originals or certificates of such
replacement Policies shall be delivered to Lender promptly after Borrower's
receipt thereof but in any case within thirty (30) days after the effective date
thereof. If Borrower fails to maintain and deliver to Lender copies of the
Policies or certificates of insurance required by this Security Instrument, upon
ten (10) days' prior notice to Borrower, Lender may procure such insurance at
Borrower's sole cost and expense.
() Borrower shall comply with all insurance requirements and shall not
bring or keep or permit to be brought or kept any article upon any of the
Property or cause or permit any condition to exist thereon which would be
prohibited by an insurance requirement, or would invalidate the insurance
coverage required hereunder to be maintained by Borrower on or with respect to
any part of the Property pursuant to this Section 3.3.
() If the Property shall be damaged or destroyed, in whole or in part,
by fire or other casualty, Borrower shall give prompt notice of such damage to
Lender and provided that Borrower shall have received the Net Proceeds, Borrower
shall promptly commence and diligently prosecute the completion of the repair
and restoration of the Property as nearly as possible to the condition the
Property was in immediately prior to such fire or other casualty, with such
alterations as may be approved by Lender (the "Restoration") and otherwise in
accordance with Section 4.4 of this Security Instrument.
() The insurance coverage required under Section 3.3(a) may be effected
under a blanket policy or policies covering the Property and other properties
and assets not constituting a part of the security hereunder; provided that any
such blanket policy shall specify, except in the case of public liability
insurance, the portion of the total coverage of such policy that is allocated to
the Property, and any sublimit in such blanket policy applicable to the
Property, and shall in any case comply in all other respects with the
requirements of this Section 3.3.
() The insurance coverage required under Subsection 3.3(a)(ii) may be
satisfied by a layering of Commercial General Liability, Umbrella and Excess
Liability Policies, but in no event will the Commercial General Liability policy
be written for an amount less than $1,000,000 per occurrences and $2,000,000
aggregate for bodily injury and property damage liability.
() The delivery to Lender of the insurance policies or the certificates
of insurance as provided above shall constitute an assignment of all proceeds
payable under such insurance as relating to the Property by Borrower to Lender
as further security for the indebtedness secured hereby. In the event of
foreclosure of this Security Instrument, or other transfer of title to the
Property in extinguishment in whole or in part of the secured indebtedness, all
right, title and interest of Borrower in and to all proceeds payable under such
policies then in force concerning the Property shall thereupon vest in the
purchaser at such foreclosure, or in Lender or other transferee in the event of
such other transfer of title. Approval of any insurance by Lender shall not be a
representation of the solvency of any insurer or the sufficiency of any amount
of insurance.
() Lender shall not be responsible for nor incur any liability for the
insolvency of the insurer or other failure of the insurer to perform, even
though Lender has caused the insurance to be placed with the insurer after
failure of Borrower to furnish such insurance. Borrower shall not obtain
insurance for the Property in addition to that required by Lender without the
prior written consent of Lender, which consent will not be unreasonably withheld
provided that (i) Lender is named insured on such insurance, (ii) Lender
receives complete copies of all policies evidencing such insurance, and (iii)
such insurance complies with all of the applicable requirements set forth
herein.
Section . Payment of Taxes, Etc. () Subject to the terms and conditions
of Section 3.5 hereof, Borrower shall pay by their due date all taxes,
assessments, water rates, sewer rents, governmental impositions, and other
charges, including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Land, now or hereafter
levied or assessed or imposed against the Property or any part thereof (the
"Taxes"), all ground rents, maintenance charges and similar charges, now or
hereafter levied or assessed or imposed against the Property or any part thereof
(the "Other Charges"), and all charges for utility services provided to the
Property as same become due and payable. Borrower will deliver to Lender,
promptly upon Lender's request, evidence satisfactory to Lender that the Taxes,
Other Charges and utility service charges have been so paid or are not then
delinquent. Borrower shall not suffer and shall promptly cause to be paid and
discharged any lien or charge whatsoever which may be or become a lien or charge
against the Property. Except to the extent sums sufficient to pay all Taxes and
Other Charges have been deposited with Lender in accordance with the terms of
this Security Instrument, Borrower shall furnish to Lender paid receipts for the
payment of the Taxes and Other Charges prior to the date the same shall become
delinquent.
() After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any of the Taxes, provided that (i) no Event of Default has
occurred and is continuing under the Note, this Security Instrument or any of
the Other Security Documents, (ii) Borrower is
permitted to do so under the provisions of any other mortgage, deed of trust or
deed to secure debt affecting the Property, (iii) such proceeding shall suspend
the collection of the Taxes from Borrower and from the Property or Borrower
shall have paid all of the Taxes under protest, (iv) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Borrower is subject and shall not constitute a default
thereunder, (v) neither the Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated, canceled or lost, (vi)
Borrower shall have set aside adequate reserves for the payment of the Taxes,
together with all interest and penalties thereon, unless Borrower has paid all
of the Taxes under protest, and (vii) Borrower shall have furnished the security
as may be required in the proceeding, or as may be reasonably requested by
Lender to insure the payment of any contested Taxes, together with all interest
and penalties thereon, taking into consideration the amount in the Escrow Fund
available for payment of Taxes.
Section . Escrow Fund. At the option of Lender, Lender may require
Borrower to establish an Escrow Fund (defined below) sufficient to discharge its
obligations for the payment of Insurance Premiums and Taxes pursuant to Sections
3.3 and 3.4 hereof. Initial deposits of Taxes and Insurance Premiums shall be
made by Borrower to Lender in amounts determined by Lender in its discretion on
the date hereof to be held by Lender in escrow. Additionally, Borrower shall pay
to Lender on the tenth (10th) day of each calendar month (a) one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or estimated by
Lender to be payable, upon the due dates established by the appropriate taxing
authority during the next ensuing twelve (12) months and (b) one-twelfth of an
amount which would be sufficient to pay the Insurance Premiums due for the
renewal of the coverage afforded by the Policies upon the expiration thereof
(the initial deposits together with the amounts in (a) and (b) above shall be
called the "Escrow Fund"). Borrower agrees to notify Lender immediately of any
changes to the amounts, schedules and instructions for payment of any Taxes and
Insurance Premiums of which it has obtained knowledge and authorizes Lender or
its agent to obtain the bills for Taxes and Other Charges directly from the
appropriate tax authority. Monthly payments to the Escrow Fund as required
hereunder and the monthly payments of interest or principal or both, payable
pursuant to the Note, shall be added together and shall be paid as an aggregate
sum by Borrower to Lender. Provided there are sufficient amounts in the Escrow
Fund and no Event of Default exists, Lender shall be obligated to pay the Taxes
and Insurance Premiums as they become due on their respective due dates on
behalf of Borrower by applying the Escrow Fund to the payments of such Taxes and
Insurance Premiums required to be made by Borrower pursuant to Sections 3.3 and
3.4 hereof. If the amount of the Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums pursuant to Sections 3.3 and 3.4 hereof, Lender
shall, in its discretion, return any excess to Borrower or credit such excess
against future payments to be made to the Escrow Fund. In allocating such
excess, Lender may deal with the person shown on the records of Lender to be the
owner of the Property. If the Escrow Fund is not sufficient to pay the items set
forth in (a) and (b) above, Borrower shall promptly pay to Lender, upon demand,
an amount which Lender shall reasonably estimate as sufficient to make up the
deficiency. The Escrow Fund shall not constitute a trust fund and may be
commingled with other monies held by Lender.
Section . Condemnation. Borrower shall promptly give Lender notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding and shall deliver to Lender copies of any and all papers served in
connection with such proceedings. Lender may participate in any such proceedings
to the extent permitted by law. Upon an Event of Default, Borrower shall deliver
to Lender all instruments requested by it to permit such participation. Borrower
shall, at its expense, diligently prosecute any such proceedings, and shall
consult with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Borrower shall not make any
agreement in lieu of condemnation of the Property or any portion thereof without
the prior written consent of Lender in each instance, which consent shall not be
unreasonably withheld or delayed in the case of a taking of an insubstantial
portion of the Property. Notwithstanding any taking by any public or
quasi-public authority through eminent domain or otherwise (including, but not
limited to any transfer made in lieu of or in anticipation of the exercise of
such taking), Borrower shall continue to pay the Debt at the time and in the
manner provided for its payment in the Note and in this Security Instrument and
the Debt shall not be reduced until any award or payment therefor shall have
been actually received and applied by Lender, after the deduction of expenses of
collection, to the reduction or discharge of the Debt. Lender shall not be
limited to the interest paid on the award by the condemning authority but shall
be entitled to receive out of the award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is taken by the
power of eminent domain, Borrower shall promptly commence and diligently
prosecute the Restoration of the Property and otherwise comply with the
provisions of in accordance with Section 4.4 of this Security Instrument. If the
Property is sold, through foreclosure or otherwise, prior to the receipt by
Lender of the award or payment, Lender shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive the award or payment, or a portion thereof sufficient to pay the Debt.
Section . Leases and Rents. () Except as otherwise consented to by
Lender, all Leases shall be written on a standard form of lease which shall have
been approved by Lender. Upon request, Borrower shall furnish Lender with
executed copies of all Leases. No material changes may be made to the
Lender-approved standard lease without the prior written consent of Lender,
which consent shall not be unreasonably withheld or delayed. All proposed leases
shall be subject to the prior approval of Lender except that all proposed leases
which (i) are on the same form of lease which has been approved by Lender, (ii)
are the result of an arms-length transaction, (iii) which provide for rental
rates comparable to existing market rates, (iv) where space to be leased does
not exceed more than ten percent (10%) of total rentable space of the Property,
(v) where the proposed tenant is an independent third party not affiliated with
the Borrower, and (vi) do not contain any terms which would materially affect
Lender's rights under this Security Instrument, the Note or the Other Security
Documents, shall not be subject to the prior approval of Lender. Notwithstanding
subsections (ii), (iii) and (v) above, Borrower may lease units to employees of
Borrower, but the aggregate number of units leased to such employees shall not
exceed
1.5% of the total number of units at the Property. Borrower (i) shall
observe and perform all the obligations imposed upon the lessor under the Leases
if the failure to perform or observe the same would materially and adversely
affect the value of the Property taken as a whole and shall not do or permit to
be done anything to impair the value of the Leases as security for the Debt;
(ii) shall promptly send copies to Lender of all notices of default which
Borrower shall send or receive thereunder; (iii) shall enforce in a commercially
reasonable manner all of the terms, covenants and conditions contained in the
Leases upon the part of the lessee thereunder to be observed or performed;
provided, however, with respect to multifamily residential property, a
residential Lease may be terminated in the event of a default by the tenant
thereunder; (iv) shall not collect any of the Rents more than one (1) month in
advance (provided that a security deposit shall not be deemed rent collected in
advance); (v) shall not execute any other assignment of the lessor's interest in
the Leases or the Rents; (vi) shall not (A) materially alter, modify or change
the terms of the Leases without the prior written consent of Lender, which
consent shall not be unreasonably withheld or delayed if the alteration,
modification or change does not materially and adversely affect the value of the
Property taken as a whole and provided further that such Lease, as altered,
modified or changed, is otherwise in compliance with the requirements of this
Security Instrument, or (B) cancel or terminate any Lease (except for defaults
thereunder) of more than ten (10%) percent of the rentable space of the Property
or accept a surrender thereof or convey or transfer or suffer or permit a
conveyance or transfer of the Land or of any interest therein so as to effect a
merger of the estates and rights of, or a termination or diminution of the
obligations of, lessees thereunder; (vii) shall not alter, modify or change the
terms of any guaranty, letter of credit or other credit support with respect to
the Leases (the "Lease Guaranty") or cancel or terminate such Lease Guaranty
without the prior written consent of Lender; and (viii) shall not consent to any
assignment of or subletting under the Leases not in accordance with their terms,
without the prior written consent of Lender. Notwithstanding the foregoing,
subdivisions (ii), (vi), (vii) and (viii) shall not apply to residential Leases
for space in a multifamily residential property.
Section . Maintenance of Property. Borrower shall cause the Property to
be maintained in a good and safe condition and repair. The Improvements and the
Personal Property shall not be removed, demolished or altered if the costs of
same would exceed $500,000 (except for normal replacement of the Personal
Property) without the consent of Lender. Subject to Section 4.4(c) hereof,
Borrower shall promptly repair, replace or rebuild any part of the Property
which may be destroyed by any casualty, or become damaged, worn or dilapidated
or which may be affected by any proceeding of the character referred to in
Section 3.6 hereof and shall complete and pay for any structure at any time in
the process of construction or repair on the Land. Borrower shall not initiate,
join in, acquiesce in, or consent to any change in any private restrictive
covenant, zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Property or any part thereof. If
under applicable zoning provisions the use of all or any portion of the Property
is or shall become a nonconforming use, Borrower will not cause or permit the
nonconforming use or Improvement to be discontinued or abandoned without the
express written consent of Lender.
Section . Waste. Borrower shall not commit or suffer any waste of the
Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way materially impair the value of the Property or the
security of this Security Instrument. Borrower will not, without the prior
written consent of Lender, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of the
Land, regardless of the depth thereof or the method of mining or extraction
thereof.
Section . Compliance With Laws. () Borrower shall promptly comply with
all existing and future federal, state and local laws, orders, ordinances,
governmental rules and regulations or court orders affecting the Property, or
the use thereof including, but not limited to, the Americans with Disabilities
Act ("ADA") (collectively, "Applicable Law").
() Borrower shall from time to time, upon Lender's request, provide
Lender with evidence reasonably satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with Applicable
Laws.
() Notwithstanding any provisions set forth herein or in any document
regarding Lender's approval of alterations of the Property, Borrower shall not
alter the Property in any manner which would materially increase Borrower's
responsibilities for compliance with Applicable Laws without the prior written
approval of Lender. Lender's approval of the plans, specifications, or working
drawings for alterations of the Property shall create no responsibility or
liability on behalf of Lender for their completeness, design, sufficiency or
their compliance with Applicable Laws. The foregoing shall apply to tenant
improvements constructed by Borrower or by any of its tenants. Lender may
condition any such approval upon receipt of a certificate of compliance with
Applicable Laws from an independent architect, engineer, or other person
acceptable to Lender.
() Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any Applicable Laws and of the
commencement of any proceedings or investigations which relate to compliance
with Applicable Laws.
() After prior written notice to Lender, Borrower, at its own expense,
may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the Applicable Laws affecting the Property,
provided that (i) no Event of Default has occurred and is continuing under the
Note, this Security Instrument or any of the Other Security Documents; (ii)
Borrower is permitted to do so under the provisions of any other mortgage, deed
of trust or deed to secure debt affecting the Property; (iii) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Borrower is subject and shall not constitute a
default thereunder; (iv) neither the Property nor any part thereof or interest
therein nor any of the tenants or occupants thereof shall be affected in any
material adverse way as a result of such proceeding; and (v) Borrower shall have
furnished to Lender all other items reasonably requested by Lender.
Section . Books and Records. () Borrower and any Guarantors and
Indemnitors shall keep adequate books and records of account in accordance with
the methods utilized by them as of the date hereof, consistently applied and
furnish to Lender:
() quarterly certified rent rolls signed and dated by Borrower,
detailing the names of all tenants of the Improvements, the portion of
Improvements occupied by each tenant, the base rent and any other charges
payable under each Lease and the term of each Lease, including the expiration
date, and any other information as is reasonably required by Lender, within
forty-five (45) days after the end of each fiscal quarter;
() a quarterly operating statement of the Property detailing the total
revenues received, total expenses incurred, total cost of all capital
improvements, total debt service and total cash flow, together with a balance
sheet for such quarter, to be prepared and certified by Borrower in the form
required by Lender, and if available (i.e., Borrower shall have no obligation to
deliver unless same is available to Borrower), any quarterly operating statement
and/or balance sheet prepared by an independent certified public accountant
within sixty (60) days after the close of each fiscal quarter.
() an annual balance sheet and profit and loss statement of Borrower,
any Guarantors and any Indemnitors, in the form required by Lender, prepared and
certified by the respective Borrower, Guarantor and/or Indemnitor, as
applicable, within ninety (90) days after the close of each fiscal year;
() an annual certified rent roll presented on a quarterly basis
consistent with the quarterly certified rent rolls described above within ninety
(90) days after the close of each fiscal year;
() an annual operating budget presented on a monthly basis consistent
with the annual operating statement described above for the Property and all
proposed capital replacements and improvements at least thirty (30) days prior
to the start of each calendar year; and
() such other financial statements, including monthly operating
statements and rent rolls, as Lender may reasonably request.
() Upon reasonable request from Lender, Borrower and its affiliates
shall furnish to Lender:
() a property management report for the Property, showing the number of
inquiries made and/or rental applications received from tenants or prospective
tenants and deposits received from tenants and any other information requested
by Lender, in reasonable detail and certified by Borrower under penalty of
perjury to be true and complete, but no more frequently than quarterly; and
() an accounting of all security deposits held in connection with any
Lease of any part of the Property, including the name and identification number
of the accounts in which such security deposits are held, the name and address
of the financial institutions in which such security deposits are held and the
name of the person to contact at such financial institution, along with any
authority or release necessary for Lender to obtain information regarding such
accounts directly from such financial institutions.
() Borrower and its affiliates and any Guarantor and Indemnitor shall
furnish Lender with such other additional financial or management information as
may, from time to time, be reasonably required by Lender in form and substance
satisfactory to Lender.
Section . Payment For Labor and Materials. Borrower will promptly pay
when due all bills and costs for labor, materials, and specifically fabricated
materials incurred in connection with the Property and never permit to exist
beyond the due date thereof in respect of the Property or any part thereof any
lien or security interest, even though inferior to the liens and the security
interests hereof, and in any event never permit to be created or exist in
respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof, except for
the Permitted Exceptions (defined in Section 5.1).
Section . Performance of Other Agreements. Borrower shall observe and
perform each and every term to be observed or performed by Borrower pursuant to
the terms of any agreement or recorded instrument affecting or pertaining to the
Property.
Section . Change of Name, Identity or Structure. Borrower will not
change Borrower's name, identity (including its trade name or names) or, if not
an individual, Borrower's corporate, partnership or other structure without
notifying the Lender of such change in writing at least thirty (30) days prior
to the effective date of such change and, in the case of a change in Borrower's
structure, without first obtaining the prior written consent of the Lender.
Section . Existence. Borrower will continuously maintain (a) its
existence and shall not dissolve or permit its dissolution, (b) its rights to do
business in the state where the Property is located and (c) its franchises and
trade names.
Article - SPECIAL COVENANTS
Borrower covenants and agrees with Lender that:
Section . Property Use. The Property shall be used only for multifamily
apartments, and for no other use without the prior written consent of Lender,
which consent may be withheld in Lender's discretion.
Section . ERISA. () It shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note, this Security Instrument and the
Other Security Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
() Borrower further covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of this
Security Instrument, as requested by Lender in its sole discretion, that (i)
Borrower is not an "employee benefit plan" as defined in Section 3(32) of ERISA,
which is subject to Title I of ERISA, or a "governmental plan" within the
meaning of Section 3(32) of ERISA; (ii) Borrower is not subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans; and (iii) one or more of the following circumstances is
true:
(A) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. ss. 2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of equity interests
in Borrower are held by "benefit plan investors" within the meaning
of 29 C.F.R.ss.2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R.ss.2510.3-101(c)
or (e) or an investment company registered under The Investment
Company Act of 1940.
Section . Single Purpose Entity. () It has not and shall not:
() engage in any business or activity other than the ownership,
operation and maintenance of the Property, and activities incidental thereto;
() acquire or own any material assets other than (A) the Property, and
(B) such incidental Personal Property as may be necessary for the operation of
the Property;
() merge into or consolidate with any person or entity or dissolve,
terminate or liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure, without in
each case Lender's consent;
() fail to preserve its existence as an entity duly organized, validly
existing and in good standing (if applicable) under the laws of the jurisdiction
of its organization or formation, or without the prior written consent of
Lender, amend, modify, terminate or fail to comply with the provisions of
Borrower's Partnership Agreement, Articles or Certificate of Incorporation,
Operating Agreement or similar organizational documents, as the case may be, as
same may be further amended or supplemented, if such amendment, modification,
termination or failure to comply would adversely affect the ability of Borrower
to perform its obligations hereunder, under the Note or under the Other Security
Documents;
() own any subsidiary or make any investment in, any person or entity
without the consent of Lender;
() commingle its assets with the assets of any of its general partners,
members, shareholders, affiliates, principals or of any other person or entity;
() incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Debt and trade payables
incurred in the ordinary course of business, provided same are paid when due;
() fail to maintain its records, books of account and bank accounts
separate and apart from those of the general partners, members, shareholders,
principals and affiliates of Borrower, the affiliates of a general partner or
member, or shareholder of Borrower, and any other person or entity;
() enter into any contract or agreement with any general partner,
member, shareholder, principal or affiliate of Borrower, Guarantor or
Indemnitor, or any general partner, member, principal or affiliate thereof,
except upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arms- length basis with third
parties other than any general partner, member, shareholder, principal or
affiliate of Borrower, Guarantor or Indemnitor, or any general partner, member,
principal or affiliate thereof;
() seek the dissolution or winding up in whole, or in part, of
Borrower;
() maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from those
of any general partner, member, shareholder, principal or affiliate of Borrower,
or any general partner, member, shareholder, principal or affiliate thereof or
any other person;
() hold itself out to be responsible for the debts of another person;
() make any loans or advances to any third party, including any general
partner, member, shareholder, principal or affiliate of Borrower, or any general
partner, principal or affiliate thereof;
() fail to file its own tax returns;
() agree to, enter into or consummate any transaction which would
render Borrower unable to furnish the certification or other evidence referred
to in Section 4.2(b) hereof;
() fail either to hold itself out to the public as a legal entity
separate and distinct from any other entity or person or to conduct its business
solely in its own name in order not (A) to mislead others as to the identity
with which such other party is transacting business, or (B) to suggest that
Borrower is responsible for the debts of any third party (including any general
partner, principal or affiliate of Borrower, or any general partner, principal
or affiliate thereof);
() fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations; or
() file or consent to the filing of any petition, either voluntary or
involuntary, to take advantage of any applicable insolvency, bankruptcy,
liquidation or reorganization statute, or make an assignment for the benefit of
creditors.
() If Borrower is a limited partnership or a limited liability company,
each general partner or at least one member (the "SPE Member") of Borrower, as
applicable, is a corporation or limited liability company whose sole asset is
its interest in Borrower and each general partner or the SPE Member of Borrower,
as applicable, will at all times comply, and will cause Borrower to comply, with
each of the covenants, terms and provisions contained in Section 4.3(a) as if
such representation, warranty or covenant was made directly by such general
partner or SPE Member. Only the SPE Member may be designated as a manager under
the law where the Borrower is organized.
() Borrower shall at all times cause there to be at least one duly
appointed member of the board of directors (an "Independent Director") of each
general partner of Borrower (or of the SPE Member of Borrower) reasonably
satisfactory to Lender who shall not have been at the time of such individual's
initial appointment, and may not have been at any time during the preceding five
years, and shall not be at any time while serving as a director of the general
partner (or SPE Member) either (i) a shareholder of, or an officer, director
(other than an Independent Director), partner or employee of, Borrower or any of
its shareholders, partners, members, subsidiaries or affiliates, (ii) a customer
of, or supplier to, Borrower or any of its shareholders, partners, members,
subsidiaries or affiliates, (iii) a person or other entity controlling or under
common control with any such shareholder, officer, director, partner, member,
employee, supplier or customer, or (iv) a member of the immediate family of any
such shareholder, officer, director, partner, member, employee, supplier or
customer. As used herein, the term "control": means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policy of a person or entity, whether through ownership of voting securities, by
contract or otherwise.
() Borrower shall not cause or permit the board of directors of the
general partner of Borrower (or of the SPE Member of Borrower) to take any
action which, under the terms of any certificate of incorporation, bylaws or any
voting trust agreement with respect to any common stock, requires a vote of the
board of directors of the general partner of Borrower (or the SPE Member of
Borrower) unless at the time of such action there shall be at least one member
of the board of directors who is an Independent Director.
Section . Restoration After Casualty/Condemnation. In the event of a
casualty or a taking by eminent domain, the following provisions shall apply in
connection with the Restoration of the Property:
() If (i) the Net Proceeds (defined below) do not exceed $500,000
("Casualty Amount"); (ii) the costs of completing the Restoration as reasonably
estimated by Borrower shall be less than or equal to the Casualty Amount; (iii)
no Event of Default shall have occurred and be continuing under the Note, this
Security Instrument or any of the Other Security Documents; (iv) the Property
and the use thereof after the Restoration will be in compliance with, and
permitted under, all applicable zoning laws, ordinances, rules and regulations
(including, without limitation, all applicable Environmental Laws (defined in
Section 12.1); and (v) such fire or other casualty or taking, as applicable,
does not materially impair access to the Property or the Improvements, then the
Net Proceeds will be disbursed directly to Borrower and Borrower shall commence
and diligently prosecute to completion, subject to Force Majeure (defined
herein), the Restoration of the Property to as nearly as possible the condition
it was in immediately prior to such fire or other casualty or to such taking.
Except upon the occurrence and continuance of an Event of Default, Borrower
shall settle any insurance claims with respect to the Net Proceeds which in the
aggregate are less than or equal to the Casualty Amount. Lender shall have the
right to participate in and reasonably approve any settlement for insurance
claims with respect to the Net Proceeds which in the aggregate are equal to or
greater than the Casualty Amount. If an Event of Default shall have occurred and
be continuing, Borrower hereby irrevocably empowers Lender, in the name of
Borrower as its true and lawful attorney-in-fact, to file and prosecute such
claim and to collect and to make receipt for any such payment. If the Net
Proceeds are received by Borrower, such Net Proceeds shall, until the completion
of the related work, be held in trust for Lender and shall be segregated from
other funds of Borrower to be used to pay for the cost of the Restoration in
accordance with the terms hereof.
() If the Net Proceeds are greater than the Casualty Amount, such Net
Proceeds shall, subject to the provisions of the Leases that are superior to the
lien of this Security Instrument or with respect to which subordination,
non-disturbance agreements binding upon Lender have entered into concerning the
deposits of Net Proceeds, be forthwith paid to Lender to be held by Lender in a
segregated account to be made available to Borrower for the Restoration in
accordance with the provisions of this Subsection 4.4(b). Subject to Section
4.4(c) hereof, Borrower shall commence and diligently prosecute to
completion, subject to Force Majeure (defined below), the Restoration (in the
case of a taking, to the extent the Property is capable of being restored). The
term "Net Proceeds" for purposes of this Section 4.4 shall mean: (i) the net
amount of all insurance proceeds received by Lender under the Policies carried
pursuant to Subsections 3.3(a)(i), (iv), (v), (vi) and (vii) of this Security
Instrument as a result of such damage or destruction, after deduction of its
reasonable costs and expenses (including, but not limited to reasonable counsel
fees), if any, in collecting the same, or (ii) the net amount of all awards and
payments received by Lender with respect to a taking referenced in Section 3.6
of this Security Instrument, after deduction of its reasonable costs and
expenses (including, but not limited to reasonable counsel fees), if any, in
collecting the same, whichever the case may be. The term "Force Majeure" for the
purpose of this Section 4.4 shall have the following meaning: Borrower shall be
excused for the period of any delay in the performance of any obligations
hereunder when prevented from so doing by cause or causes beyond Borrower's
control such as, without limitation, all labor disputes, civil commotion, war,
war-like operations, invasion, rebellion, hostilities, military or usurped
power, sabotage, governmental regulations or controls, fire or other casualty,
inability to obtain any materials or services, and acts of God.
() If the Net Proceeds are greater than the Casualty Amount, the Net
Proceeds shall be made available to Borrower for payment of, or reimbursement of
Borrower's expenses in connection with, the Restoration, subject to the
following conditions:
(A) no Event of Default shall have occurred and be continuing under
the Note, this Security Instrument or any of the Other Security
Documents;
(B) Lender shall, within a reasonable period of time prior to
request for initial disbursement, be furnished with an estimate
of the cost of the Restoration accompanied by an independent
architect's certification as to such costs and appropriate
plans and specifications for the Restoration;
(C) the Net Proceeds, together with any cash or cash equivalent
deposited by Borrower with Lender, are sufficient to cover the
cost of the Restoration as such costs are certified by the
independent architect;
(D) (1) in the event that the Net Proceeds are insurance proceeds,
less than fifty percent (50%) of the total floor area of the
Improvements has been damaged or destroyed, or rendered
unusable as a result of such fire or other casualty; or (2) in
the event that the Net Proceeds are condemnation awards, less
than fifty percent (50%) of the Land constituting the Property
is taken, such Land that is taken is located along the
perimeter or periphery of the Property and no portion of the
Improvements is located in such Lands;
(E) Lender shall be satisfied that any operating deficits,
including all scheduled payments of principal and interest
under the Note which will be incurred with respect to the
Property as a result of the occurrence of any such fire or
other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, or (2) other funds of
Borrower;
(F) Lender shall be satisfied that, upon the completion of the
Restoration and related lease-up, if applicable, the net cash
flow of the Property will be restored to a level sufficient to
cover all carrying costs and operating expenses of the
Property, including, without limitation, debt service on the
Note at a coverage ratio (on a "normalized" basis, i.e., after
deducting replacement reserve requirements and reserves for
tenant improvements and leasing commissions from net operating
income, whether or not such sums are escrowed with Lender) of
at least 1.30 : 1.0 (assuming an interest rate equal to 9.0%
per annum), or, if lower, the coverage ratio which existed as
of the date immediately preceding such casualty or taking as
the case may be;
(G) the Restoration can reasonably be completed on or before the
earliest to occur of (1) six (6) months prior to the Maturity
Date (as defined in the Note), (2) the earliest date required
for such completion under the terms of any Lease and (3) such
time as may be required under applicable zoning law, ordinance,
rule or regulation in order to repair and restore the Property
to as nearly as possible the condition it was in immediately
prior to such fire or other casualty or to such taking, as
applicable;
(H) the Property and the use thereof after the Restoration will be
in compliance with, and permitted under, all applicable zoning
laws, ordinances, rules and regulations (including, without
limitation, all applicable Environmental Laws (defined in
Section 12.1)); and
(I) such fire or other casualty or taking, as applicable, does not
materially impair access to the Property or the Improvements.
() If the Net Proceeds exceed the Casualty Amount, the Net Proceeds
shall be held by Lender and, until disbursed in accordance with the provisions
of this Subsection 4.4(b), shall constitute additional security for the
Obligations. The Net Proceeds other than the Net Proceeds paid under the Policy
described in Subsection 3.3(a)(iv) shall be disbursed by Lender to, or as
directed by, Borrower from time to time during the course of the Restoration,
upon receipt of evidence satisfactory to Lender that (A) all materials installed
and work and labor performed (except to the extent that they are to be paid for
out of the requested disbursement) in connection with the Restoration have been
paid for in full, and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to file same, or any
other liens or encumbrances of any nature whatsoever on the Property arising out
of the Restoration which have not either been fully bonded and discharged of
record or in the alternative fully insured to the satisfaction of Lender by the
title company insuring the lien of this Security Instrument.
() If the Net Proceeds exceed the Casualty Amount, Lender shall have
the use of the plans and specifications and all permits, licenses and approvals
required or obtained in connection with the Restoration. If the Net Proceeds
exceed the Casualty Amount, the identity of the contractors, subcontractors and
materialmen engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior review and acceptance by
Lender and an independent consulting engineer selected by Lender (the "Casualty
Consultant"), such acceptance not to be unreasonably withheld or delayed. All
costs and expenses incurred by Lender in connection with making the Net Proceeds
available for the Restoration including, without limitation, reasonable counsel
fees and disbursements and the Casualty Consultant's fees, shall be paid by
Borrower.
In no event shall Lender be obligated to make disbursements of the Net
Proceeds in excess of an amount equal to the costs actually incurred from time
to time for work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term "Casualty Retainage"
as used in this Subsection 4.4(b) shall mean an amount equal to 10% of the costs
actually incurred for work in place as part of the Restoration, as certified by
the Casualty Consultant, until such time as the Casualty Consultant certifies to
Lender that 50% of the required Restoration has been completed. There shall be
no Casualty Retainage with respect to costs actually incurred by Borrower for
work in place in completing the last 50% of the required Restoration. The
Casualty Retainage shall in no event, and notwithstanding anything to the
contrary set forth above in this Subsection 4.4(b), be less than the amount
actually held back by Borrower from contractors, subcontractors and materialmen
engaged in the Restoration. The Casualty Retainage shall not be released until
the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Subsection 4.4(b) and that
all approvals necessary for the re-occupancy and use of the Property have been
obtained from all appropriate governmental and quasi-governmental authorities,
and Lender receives evidence satisfactory to Lender that the costs of the
Restoration have been paid in full or will be paid in full out of the Casualty
Retainage, provided, however, that Lender will release the portion of the
Casualty Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman
has satisfactorily completed all work and has supplied all materials in
accordance with the provisions of the contractor's, subcontractor's or
materialman's contract, and the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably requested by
Lender or by the title company insuring the lien of this Security Instrument. If
required by Lender, the release of any such portion of the Casualty Retainage
shall be approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or materialman.
() Lender shall not be obligated to make disbursements of the Net
Proceeds more frequently than once every calendar month.
() If at any time the Net Proceeds or the undisbursed balance thereof
shall not, in the opinion of Lender, be sufficient to pay in full the balance of
the costs which are estimated by the Casualty Consultant to be incurred in
connection with the completion of the Restoration, Borrower shall deposit the
deficiency (the "Net Proceeds Deficiency") with Lender before any further
disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with Lender shall be held by Lender and shall be disbursed for costs
actually incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Subsection 4.4(b) shall constitute additional security for the
Obligations.
() The excess, if any, of the Net Proceeds and the remaining balance,
if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty
Consultant certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.4(b), and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred in connection
with the Restoration have been paid in full, shall be remitted by Lender to
Borrower, provided no Event of Default shall have occurred and shall be
continuing under the Note, this Security Instrument or any of the Other Security
Documents.
() All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant
to Subsection 4.4(b)(vi) shall be retained and applied by Lender toward the
payment of the Debt whether or not then due and payable in such order, priority
and proportions as Lender in its discretion shall deem proper or, at the
discretion of Lender, the same shall be paid, either in whole or in part, to
Borrower. If Lender shall receive and retain Net Proceeds, the lien of this
Security Instrument shall be reduced only by the amount received and retained by
Lender, and notwithstanding anything to the contrary contained herein, Borrower
shall have no further obligation thereafter to commence or complete the
Restoration.
Article - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section . Warranty of Title. Borrower has good and marketable title to
the Property and has the right to mortgage, grant, bargain, sell, pledge,
assign, warrant, transfer and convey the same and Borrower possesses an
unencumbered fee simple absolute estate in the Land and the Improvements and
owns the Property free and clear of all liens, encumbrances and charges
whatsoever except for those exceptions shown in the title insurance policy
insuring the lien of this Security Instrument (the "Permitted Exceptions"). The
Permitted Exceptions do not materially interfere with the use and operations of
the Property. Borrower shall forever warrant, defend and preserve the title and
the validity and priority of the lien of this Security Instrument and shall
forever warrant and defend the same to Lender against the claims of all persons
whomsoever.
Section . Authority. Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part
to be performed.
Section . Legal Status and Authority. Borrower (a) is duly organized,
validly existing and in good standing under the laws of its state of
organization; (b) is duly qualified to transact business and is in good standing
in the State where the Property is located; and (c) has all necessary approvals,
governmental and otherwise, and full power and authority to own the Property and
carry on its business as now conducted and proposed to be conducted. Borrower
now has and shall continue to have the full right, power and authority to
operate and lease the Property, to encumber the Property as provided herein and
to perform all of the other obligations to be performed by Borrower under the
Note, this Security Instrument and the Other Security Documents.
Section . Validity of Documents. (a) The execution, delivery and
performance of the Note, this Security Instrument and the Other Security
Documents and the borrowing evidenced by the Note (i) are within the power and
authority of Borrower; (ii) have been authorized by all requisite organizational
action; (iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) to the best of Borrower's knowledge, will not
violate, conflict with, result in a breach of or constitute (with notice or
lapse of time, or both) a default under any provision of law (including, without
limitation, any usury laws), any order or judgment of any court or governmental
authority, the articles of incorporation, by-laws, partnership or operating
agreement, or other governing instrument of Borrower, or any indenture,
agreement or other instrument to which Borrower is a party or by which it or any
of its assets or the Property is or may be bound or affected; (v) will not
result in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of its assets, except the lien and security interest created
hereby; and (vi) to the best of Borrower's knowledge, will not require any
authorization or license from, or any filing with, any governmental or other
body (except for the recordation of this instrument in appropriate land records
in the State where the Property is located and except for Uniform Commercial
Code filings relating to the security interest created hereby), and (b) the
Note, this Security Instrument and the Other Security Documents constitute the
legal, valid and binding obligations of Borrower.
Section . Litigation. There is no action, suit or proceeding, judicial,
administrative or otherwise (including any condemnation or similar proceeding),
pending or, to the best of Borrower's knowledge, threatened or contemplated
against Borrower, any person guaranteeing the payment of the Debt or any portion
thereof or performance by Borrower of any terms of this Security Instrument (a
"Guarantor"), if any, an Indemnitor (defined in Subsection 10.1(c)), if any, or
against or affecting the Property that (a) has not been disclosed to Lender, and
has a material, adverse effect on the Property or Borrower's, any Guarantor's or
any Indemnitor's ability to perform its obligations under the Note, this
Security Instrument or the Other Security Documents, or (b) is not adequately
covered by insurance, each as determined by Lender in its sole and absolute
discretion.
Section . Status of Property. () No portion of the Improvements is
located in an area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, or the National Flood Insurance Reform Act of 1994, as each may be
amended, or any successor law, or, if any portion of the Improvements is now or
at any time in the future located within any such area, Borrower has obtained
and will maintain the insurance prescribed in Section 3.3 hereof.
() Borrower has obtained all necessary certificates, licenses and other
approvals, governmental and otherwise, necessary for the operation of the
Property and the conduct of its business and all required zoning, building code,
land use, environmental and other similar permits or approvals, all of which are
in full force and effect as of the date hereof and, to the best of Borrower's
knowledge, not subject to revocation, suspension, forfeiture or modification.
() To the best of Borrower's knowledge, and except as expressly set
forth in that certain Property Condition Survey of the Property, dated April 1,
1999, by Environmental Management Group, and that certain Phase I Environmental
Site Assessment of the Property dated March 31, 1999, prepared by Environmental
Management Group, the Property and the present and contemplated use and
occupancy thereof are in full compliance with all Applicable Laws, including,
without limitation, zoning ordinances, building codes, land use and
Environmental Laws, laws relating to the disabled (including but not limited to,
the ADA) and other similar laws.
() The Property is served by all utilities required for the current or
contemplated use thereof. All utility service is provided by public utilities
and the Property has accepted or is equipped to accept such utility service.
() To the best of Borrower's knowledge, all public roads and streets
necessary for service of and access to the Property for the current or
contemplated use thereof have been completed, are serviceable and all-weather
and are physically and legally open for use by the public.
() The Property is served by public water and sewer systems.
() The Property is free from damage caused by fire or other casualty.
() All costs and expenses of any and all labor, materials, supplies and
equipment used in the construction of the Improvements have been paid in full.
() Borrower has paid in full for, and is the owner of, all furnishings,
fixtures and equipment (other than tenants' property) used in connection with
the operation of the Property, free and clear of any and all security interests,
liens or encumbrances, except the lien and security interest created hereby.
() To the best of Borrower's knowledge, all liquid and solid waste
disposal, septic and sewer systems located on the Property are in a good and
safe condition and repair and in compliance with all Applicable Laws.
() All security deposits relating to the Leases reflected on the
certified rent roll delivered to Lender have been collected by Borrower except
as noted on the certified rent roll.
() Borrower has received no notice of an actual or threatened
condemnation or eminent domain proceeding by any public or quasi-public
authority.
() All the Improvements lie within the boundaries of the Property.
Section . No Foreign Person. Borrower is not a "foreign person" within
the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as
amended and the related Treasury Department regulations, including temporary
regulations.
Section . Separate Tax Lot. The Property is assessed for real estate
tax purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together with the
Property or any portion thereof.
Section . ERISA Compliance. () As of the date hereof and throughout the
term of this Security Instrument, (i) Borrower is not and will not be an
"employee benefit plan" as defined in Section 3(32) of ERISA, which is subject
to Title I of ERISA, and (ii) the assets of Borrower do not and will not
constitute "plan assets" of one or more such plans for purposes of Title I of
ERISA; and
() As of the date hereof and throughout the term of this Security
Instrument, (i) Borrower is not and will not be a "governmental plan" within the
meaning of Section 3(32) of ERISA, and (ii) transactions by or with Borrower are
not and will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.
Section . Leases. Except as disclosed in the certified rent roll for
the Property delivered to and approved by Lender, or as otherwise set forth on
Exhibit B hereof, (a) Borrower is the sole owner of the entire lessor's interest
in the Leases; (b) the Leases are valid and enforceable; (c) the terms of all
alterations, modifications and amendments to the Leases are reflected in the
certified rent roll delivered to and approved by Lender; (d) none of the Rents
reserved in the Leases have been assigned or otherwise pledged or hypothecated
(except to Lender); (e) none of the Rents have been collected for more than one
(1) month in advance (provided that a security deposit shall not be deemed rent
collected in advance); (f) the premises demised under the Leases have been
completed and the tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (g) to the best of Borrower's
knowledge, there exist no offsets or defenses to the payment of any portion of
the Rents; (h) Borrower has received no notice from any tenant challenging the
validity or enforceability of any Lease; (i) all payments due under the Leases
are current and are consistent with the certified rent roll for the Property
delivered to and approved by Lender; (j) to the best of Borrower's knowledge, no
tenant under any Lease is in default thereunder, or is a debtor in any
bankruptcy, reorganization, insolvency or similar proceeding, or has
demonstrated a history of payment problems which suggest financial difficulty;
(k) there are no agreements with the tenants under the Leases other than
expressly set forth in each Lease; (l) the Leases are valid and enforceable
against Borrower and, to the best of Borrower's knowledge, the tenants set forth
therein; (m) no Lease contains an option to purchase, right of first refusal to
purchase, or any other similar provision; (n) to the best of Borrower's
knowledge, no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease; (o) each Lease (other
than a residential Lease) is subordinate to this Security Instrument, either
pursuant to its terms or a recorded subordination agreement; and (p) to the best
of Borrower's knowledge, no brokerage commissions or finders fees are due and
payable regarding any Lease.
Section . Financial Condition. () Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state or
federal law with respect to Borrower has been initiated, (b) it has received
reasonably equivalent value for the granting of this Security Instrument, and
(c) the granting of this Security Instrument does not constitute a fraudulent
conveyance.
Section . Business Purposes. The loan evidenced by the Note is solely
for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.
Section . Taxes. Borrower, any Guarantor and any Indemnitor have filed
all federal, state, county, municipal, and city income and other tax returns
required to have been filed by them and have paid all taxes and related
liabilities which have become due pursuant to such returns or pursuant to any
assessments received by them. Neither Borrower, any Guarantor nor any Indemnitor
knows of any basis for any additional assessment in respect of any such taxes
and related liabilities for prior years.
Section . Mailing Address. Borrower's mailing address, as set forth in
the opening paragraph hereof or as changed in accordance with Article 16, is
true and correct.
Section . No Change in Facts or Circumstances. All information in the
application for the loan submitted to Lender (the "Loan Application") and in all
financing statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all material respects.
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 . Disclosure. To the best of Borrower's knowledge, 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.
Section . Third Party Representations. To the best of Borrower's
knowledge, each of the representations and the warranties made by each Guarantor
and Indemnitor herein or in any Other Security Document(s) is true and correct
in all material respects.
Section . Illegal Activity. To the best of Borrower's knowledge, no
portion of the Property has been or will be purchased, improved, fixtured,
equipped or furnished with proceeds of any criminal or other illegal activity
and to the best of Borrower's knowledge, there are no illegal activities or
activities relating to controlled substance at the Property.
Section . FUNB Line of Credit. No more than five (5) Business Days
after the expiration or earlier termination of, or concurrently with the giving
of notice by PREIT Associates, L.P. to the public that an event of default has
occurred under, that certain Revolving Credit Loan Agreement between PREIT
Associates, L.P. and Corestates Bank, N.A., as agent (predecessor-in-interest to
First Union National Bank, as agent), and First Trust Savings Bank, Fleet Bank,
N.A. and PNC Bank, as lenders, dated September 30, 1997, Borrower shall notify
Lender in writing of same.
Article - DEBTOR/CREDITOR RELATIONSHIP
Section . Relationship of Borrower and Lender. The relationship between
Borrower and Lender is solely that of debtor and creditor, and Lender has no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Note, this Security Instrument and the Other Security Documents
shall be construed so as to deem the relationship between Borrower and Lender to
be other than that of debtor and creditor.
Section . Servicing of the Loan. At the option of Lender, the loan
secured hereby may be serviced by a servicer/trustee (the "Servicer") selected
by Lender and Lender may delegate all or any portion of its responsibilities
under the Note, this Security Instrument, and the Other Security Documents to
the Servicer.
Article - FURTHER ASSURANCES
Section . Recording of Security Instrument, Etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, will cause this Security Instrument and any of the Other Security
Documents creating a lien or security interest or evidencing the lien hereof
upon the Property and each instrument of further assurance to be filed,
registered or recorded in such manner and in such places as may be required by
any present or future law in order to publish notice of and fully to protect and
perfect the lien or security interest hereof upon, and the interest of Lender
in, the Property. Borrower will pay all taxes, filing, registration or recording
fees, and all expenses incident to the preparation, execution, acknowledgment
and/or recording of the Note, this Security Instrument, the Other Security
Documents, any note or mortgage supplemental hereto, any security instrument
with respect to the Property and any instrument of further assurance, and any
modification or amendment of the foregoing documents, and all federal, state,
county and municipal taxes, duties, imposts, assessments and charges arising out
of or in connection with the execution and delivery of this Security Instrument,
any mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
Section . Further Acts, Etc. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender, the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security Instrument, or
for complying with all Applicable Laws. Borrower, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence or perfect more effectively the security interest of Lender in the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Lender pursuant to this Section 7.2.
Section . Changes in Tax, Debt Credit and Documentary Stamp Laws. () If
any law is enacted or adopted or amended after the date of this Security
Instrument which deducts the Debt from the value of the Property for the purpose
of taxation or which imposes a tax, either directly or indirectly, on the Debt
or Lender's interest in the Property, Borrower will pay the tax, with interest
and penalties thereon, if any. If Lender is advised by counsel chosen by it that
the payment of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender shall
have the option by written notice of not less than ninety (90) days to declare
the Debt immediately due and payable.
() Borrower will not claim or demand or be entitled to any credit or
credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this Security Instrument
or the Debt. If such claim, credit or deduction shall be required by law, Lender
shall have the option, by written notice of not less than ninety (90) days, to
declare the Debt immediately due and payable.
() If at any time the United States of America, any State thereof or
any subdivision of any such State shall require revenue or other stamps to be
affixed to the Note, this Security Instrument, or any of the Other Security
Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
Section . Estoppel Certificates. () After request by Lender, Borrower,
within twenty (20) days, shall furnish Lender or any proposed assignee with a
statement, duly acknowledged and certified, setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal amount of the
Note, (iii) the rate of interest of the Note, (iv) the terms of payment and
maturity date of the Note, (v) the date installments of interest and/or
principal were last paid, (vi) that, except as provided in such statement, there
are no defaults or events which with the passage of time or the giving of notice
or both, would constitute an event of default under the Note or the Security
Instrument, (vii) that the Note and this Security Instrument are valid, legal
and binding obligations and have not been modified or if modified, giving
particulars of such modification, (viii) whether any offsets or defenses exist
against the obligations secured hereby and, if any are alleged to exist, a
detailed description thereof, (ix) that all Leases are in full force and effect
and (provided the Property is not a residential multifamily property) have not
been modified (or if modified, setting forth all modifications), (x) the date to
which the Rents thereunder have been paid pursuant to the Leases, (xi) whether
or not, to the best knowledge of Borrower, any of the lessees under the Leases
are in default under the Leases, and, if any of the lessees are in default,
setting forth the specific nature of all such defaults, (xii) the amount of
security deposits held by Borrower under each Lease and that such amounts are
consistent with the amounts required under each Lease, and (xiii) as to any
other matters reasonably requested by Lender and reasonably related to the
Leases, the obligations secured hereby, the Property or this Security
Instrument.
() Upon any transfer or proposed transfer contemplated by Section 18.1
hereof, at Lender's request, Borrower, any Guarantors and any Indemnitors shall
provide an estoppel certificate to the Investor (defined in Section 18.1) or any
prospective Investor confirming the accuracy of information provided by such
person to Lender under or in respect of this Security Instrument.
() After written request by Borrower not more than twice annually,
Lender shall furnish Borrower a statement setting forth (i) the amount of the
original principal amount of the Note, (ii) the unpaid principal amount of the
Note, (iii) the rate of interest of the Note, (iv) the balance of the sums in
the Escrow Fund, if any, and (v) to the best of Lender's knowledge, whether
Borrower is currently in default.
Section . Flood Insurance. After Lender's request, Borrower shall
deliver evidence satisfactory to Lender that no portion of the Improvements is
situated in a federally designated "special flood hazard area" or, if it is,
that Borrower has obtained insurance meeting the requirements of Section
3.3(a)(vi).
Section . Splitting of Security Instrument. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more security instruments, each of which shall cover all or a
portion of the Property to be more particularly described therein. To that end,
Borrower, upon written request of Lender, shall execute, acknowledge and deliver
to Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount secured by this Security Instrument, and containing terms,
provisions and clauses no less favorable to Borrower than those contained herein
and in the Note, and such other documents and instruments as may be required by
Lender to effect the splitting of the Note and this Security Instrument.
Section . Replacement Documents. Upon receipt of an affidavit
of an officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any Other Security Document which is not of public record, and, in the
case of any such mutilation, upon surrender and cancellation of such Note or
Other Security Document, Borrower will issue, in lieu thereof, a replacement
Note or Other Security Document, dated the date of such lost, stolen, destroyed
or mutilated Note or Other Security Document in the same principal amount
thereof and otherwise of like tenor. Borrower shall not be responsible to Lender
for Lender's fees and expenses incurred in connection with the transactions
contemplated in this Section 7.7.
Section . Amended Financing Statements. Borrower will execute and
deliver to the Lender, prior to or contemporaneously with the effective date of
any such change, any financing statement or financing statement change required
by the Lender to establish or maintain the validity, perfection and priority of
the security interest granted herein. At the request of the Lender, Borrower
shall execute a certificate in form satisfactory to the Lender listing the trade
names under which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect to
the Property.
Article - DUE ON SALE/ENCUMBRANCE
Section . No Sale/Encumbrance. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property or
any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred. Notwithstanding the foregoing, the Property may be
transferred with the prior written consent of Lender which consent shall not be
unreasonably withheld in the case of a proposed transferee whose entity status,
creditworthiness and management ability meet standards consistently applied by
Lender for approval of borrowers for similar properties under mortgage loans
secured by similar properties, provided that (i) only one such transfer shall be
permitted during the term of the Note, (ii) prior to the effective date of the
transfer, the transferee shall execute and deliver to Lender a written
assumption agreement in form and substance acceptable to Lender in its sole
discretion, (iii) a transfer fee equal to one quarter of one percent (.25%) of
the outstanding principal balance of the Note shall be paid by Borrower to
Lender upon notice being given to Borrower of approval of the proposed transfer
(unless the proposed transferee is an affiliate of Borrower, in which event no
transfer fee shall be due and payable), (iv) no transfer shall be permitted
hereunder if an Event of Default, or an event which with the giving of notice or
lapse of time or both could become an Event of Default, has occurred and is
continuing, and (v) such transferee shall be a single purpose bankruptcy remote
entity and Borrower shall cause to be delivered to Lender a non-consolidation
opinion or an update of the same, in form and substance reasonably acceptable to
Lender, upon Lender's request to do so. Borrower agrees that Borrower shall not
incur any debt, secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than the Debt and trade payables incurred in
the ordinary course of business in connection with the operation of the
Property, provided same are paid when due.
Section . Sale/Encumbrance Defined. A sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer within the meaning
of this Article 8 shall be deemed to include, but not be limited to (a) an
installment sales agreement wherein Borrower agrees to sell the Property or any
part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and to any Leases or any Rents; (c) if Borrower or any general partner or
managing member (or if no managing member, any member) of Borrower is a
corporation, the voluntary or involuntary sale, conveyance, transfer or pledge
of such corporation's stock (or the stock of any corporation directly or
indirectly controlling such corporation by operation of law or otherwise) or the
creation or issuance of new stock by which an aggregate of more than 49% of such
corporation's stock shall be vested in a party or parties who are not now owners
of more than 49% of such corporation's stock; (d) if Borrower or any general
partner or managing member (or if no managing member, any member) of Borrower is
a limited or general partnership or joint venture, the change, removal or
resignation of a general partner or the transfer or pledge of the partnership
interest of any general partner or any profits or proceeds relating to such
partnership interest or the transfer or pledge of any partnership
interest of any limited partner or any profits or proceeds relating to any such
partnership interest, which, whether singly or in the aggregate, result in more
than 49% of the beneficial interests in Borrower, or the profits or proceeds
relating thereto, having been transferred or pledged; and (e) if Borrower or any
general partner or member of Borrower is a limited liability company, the
change, removal or resignation of a managing member or the transfer of the
membership interest of a managing member or any profits or proceeds relating to
such membership interest or the transfer or pledge of any membership interest of
any other member or any profits or proceeds relating to any such membership
interest, which, whether singly or in the aggregate, result in more than 49% of
the beneficial interests in Borrower, or the profits or proceeds relating
thereto, having been transferred or pledged. Notwithstanding the foregoing, the
following transfers shall not be deemed to be a sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment or transfer within the meaning
of this Article 8: (a) transfer by devise or descent or by operation of law upon
the death of a member, general partner or stockholder of Borrower, any Guarantor
or Indemnitor or any member or general partner thereof, (b) a sale, transfer or
hypothecation of a membership, partnership or shareholder interest in Borrower,
whichever the case may be, by a current member, general partner or shareholder,
as applicable, to an immediate family member (i.e., parents, spouses, siblings,
children or grandchildren) of such member, general partner or shareholder, or to
a trust for the benefit of an immediate family member of such member, general
partner or shareholder, and (c) a change in the form of organizational structure
or name of Borrower, provided that there is no transfer or change in the
ownership interests in Borrower, and provided further that Borrower shall remain
in full compliance with Section 4.3 of this Security Instrument, provided that,
as to each of clauses (a), (b) and (c) of this sentence, with respect to any
such sale, transfer, hypothecation or change in organizational structure,
Borrower shall deliver a non-consolidation opinion or an update of the same, in
form and substance reasonably satisfactory to Lender, upon Lender's request to
do so.
Section . Lender's Rights. Lender reserves the right to condition the
consent required hereunder upon a modification of the terms hereof and on
assumption of the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a transfer fee
and all of Lender's expenses incurred in connection with such transfer, or such
other conditions as Lender shall determine in its sole discretion to be in the
interest of Lender. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Borrower's sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer of the Property without Lender's consent. This provision shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether voluntary or not,
or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property.
Section . Right to Substitute Property. The terms and conditions of
this Article 8 shall be subject to Borrower's rights pursuant to that certain
letter dated the date hereof from Lender to Borrower regarding Borrower's rights
to substitute security for the Debt. Inquiries regarding the aforementioned
letter shall be made to Borrower at the address set forth in Article 16 below.
Article - PREPAYMENT
Section . Prepayment Only in Accordance with Note. The Debt may be
prepaid only in strict accordance with the express terms and conditions of the
Note including, without limitation, payment of the Prepayment Consideration if
applicable.
Article - DEFAULT
Section . Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
() if any Event of Default (as defined in the Note, for purposes of
this Section 10.1(a) only) occurs under Section 4.01(a) of the Note;
() if Borrower violates or does not comply with any of the provisions
of Sections 3.7, 4.3 or 8.1 or if any general partner or the SPE Member of
Borrower violates or does not comply with any of the provisions of Section 4.3;
() if any representation or warranty of Borrower, Indemnitor (as
defined in that certain Environmental Indemnity Agreement dated as of the date
hereof (the "Environmental Indemnity") or any Guarantor, or any member, general
partner, principal or beneficial owner of any of the foregoing, made herein or
in the Environmental Indemnity or in any guaranty, or in any certificate,
report, financial statement or other instrument or document furnished to Lender
shall have been false or misleading in any material respect when made;
() if any default occurs under any guaranty or indemnity executed in
connection herewith and such default continues after the expiration of
applicable grace periods, if any;
() except for the specific defaults set forth in this Section 10.1, any
other default hereunder or any of the Other Security Documents by Borrower,
which default is not cured (i) in the case of any default which can be cured by
the payment of a sum of money, within five (5) days after written notice from
Lender to Borrower, or (ii) in the case of any other default, within thirty (30)
days after written notice from Lender to Borrower; provided that if such default
cannot reasonably be cured within such thirty (30) day period and Borrower shall
have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it shall require Borrower in
the exercise of due diligence to cure such default, it being agreed that no such
extension shall be for a period in excess of one hundred twenty (120) days,
unless, only in the case of cures that require construction or remedial work,
such cure cannot with diligence be completed within such one hundred twenty
(120) day period, in which case such period shall be extended for an additional
one hundred twenty (120) days;
() if Borrower or any Guarantor or Indemnitor shall make an assignment
for the benefit of creditors or if Borrower shall generally not be paying its
debts as they become due; or
() if the Policies are not kept in full force and effect, or Borrower
has not delivered evidence of the renewal of the Policies ten (10) days prior to
their expiration as provided in Section 3.3(b); or
() if (i) Borrower or any Guarantor or Indemnitor shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any Guarantor or Indemnitor shall make a general
assignment for the benefit of its creditors'; or (ii) there shall be commenced
against Borrower or any Guarantor or Indemnitor any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of ninety (90) days;
or (iii) there shall be commenced against the Borrower or any Guarantor or
Indemnitor any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of any order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within ninety (90) days from the entry thereof; or (iv) the
Borrower or any Guarantor or Indemnitor shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
Guarantor or Indemnitor shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due.
Article - RIGHTS AND REMEDIES
Section . Remedies. () Upon the occurrence of any Event of Default,
Borrower agrees that Lender, may take such action, without notice or demand, as
it deems advisable to protect and enforce the rights of Lender against Borrower
and in and to the Property, including, but not limited to the following actions,
each of which may be pursued concurrently or otherwise, at such time and in such
order as Lender may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Lender:
() declare the entire unpaid Debt to be immediately due and payable;
() institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument under any applicable provision of law in
which case the Property or any interest therein may be sold for cash or upon
credit in one or more parcels or in several interests or portions and in any
order or manner;
() with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Security Instrument for the portion of the Debt then due and
payable, subject to the continuing lien and security interest of this Security
Instrument for the balance of the Debt not then due, unimpaired and without loss
of priority;
() sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law;
() subject to the provisions of Article 15, institute an action, suit
or proceeding in equity for the specific performance of any covenant, condition
or agreement contained herein, in the Note or in the Other Security Documents;
() subject to the provisions of Article 15, recover judgment on the
Note either before, during or after any proceedings for the enforcement of this
Security Instrument or the Other Security Documents;
() apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Debt and without regard for the solvency of Borrower,
any Guarantor, Indemnitor or of any person, firm or other entity liable for the
payment of the Debt;
() subject to any applicable law, the license granted to Borrower under
Section 1.2 shall automatically be revoked and Lender may enter into or upon the
Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its agents or servants
wholly therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the Property and
of such books, records and accounts to Lender upon demand, and thereupon Lender
may (A) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the business
thereat; (B) complete any construction on the Property in such manner and form
as Lender deems
advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Property; (D) exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise, including, without limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand, xxx for, collect and
receive all Rents of the Property and every part thereof; (E) require Borrower
to pay monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation of such
part of the Property as may be occupied by Borrower; (F) require Borrower to
vacate and surrender possession of the Property to Lender or to such receiver
and, in default thereof, Borrower may be evicted by summary proceedings or
otherwise; and (G) apply the receipts from the Property to the payment of the
Debt, in such order, priority and proportions as Lender shall deem appropriate
in its sole discretion after deducting therefrom all expenses (including
reasonable attorneys' fees) incurred in connection with the aforesaid operations
and all amounts necessary to pay the Taxes, Other Charges, insurance and other
expenses in connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents and employees;
() exercise any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing: (A) the right to take possession of the Collateral
or any part thereof, and to take such other measures as Lender may deem
necessary for the care, protection and preservation of the Collateral, and (B)
request Borrower at its expense to assemble the Collateral 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 Collateral
sent to Borrower in accordance with the provisions hereof at least five (5) days
prior to such action, shall constitute commercially reasonable notice to
Borrower;
() apply any sums then deposited in the Escrow Fund and any other sums
held in escrow or otherwise by Lender in accordance with the terms of this
Security Instrument or any Other Security Document to the payment of the
following items in any order in its sole and absolute discretion:
(A) Taxes and Other Charges;
(B) Insurance Premiums;
(C) Interest on the unpaid principal balance of the Note;
(D) amortization of the unpaid principal balance of the Note; and all
other sums payable pursuant to the Note, this Security Instrument
and the Other Security Documents, including, without limitation,
advances made by Lender pursuant to the terms of this Security
Instrument;
() surrender the Policies maintained pursuant to Article 3 hereof,
collect the unearned Insurance Premiums and apply such sums as a credit on the
Debt in such priority and proportion as Lender in its discretion shall deem
proper, and in connection therewith, Borrower hereby appoints Lender as agent
and attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Borrower to collect such Insurance Premiums;
() apply the undisbursed balance of any Net Proceeds or any Net
Proceeds Deficiency deposit, together with interest thereon, to the payment of
the Debt in such order, priority and proportions as Lender shall deem to be
appropriate in its discretion;
() prohibit Borrower and anyone claiming on behalf of or through
Borrower from making use of or withdrawing any sums from any lockbox or similar
account, if any;
() pursue such other remedies as Lender may have under applicable law.
() In the event of a sale, by foreclosure, power of sale, or otherwise,
of less than all of the Property, this Security Instrument shall continue as a
lien and security interest on the remaining portion of the Property unimpaired
and without loss of priority. Notwithstanding the provisions of this Section
11.1 to the contrary, if any Event of Default as described in Subsection 10.1
(h)(i) or (ii) shall occur, the entire unpaid Debt shall be automatically due
and payable, without any further notice, demand or other action by Lender.
() Lender may adjourn from time to time any sale by it to be made under
or by virtue of this Security Instrument by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Lender, without further
notice or publication, may make such sale at the time and place to which the
same shall be so adjourned.
() Upon any sale made under or by virtue of this Section 11.1, whether
made under a power of sale or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, Lender may bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Debt the net sales price
after deducting therefrom the expenses of the sale and costs of the action and
any other sums which Lender is authorized to deduct under this Security
Instrument.
Section . Application of Proceeds. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
Other Security Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper.
Section . Right to Cure Defaults. Upon the occurrence of any Event of
Default, Lender may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder, cure the same in such manner and to such extent as Lender may deem
necessary to protect the security hereof. Lender is authorized to enter upon the
Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this Section 11.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate
(as defined in the Note), for the period after notice from Lender that such cost
or expense was incurred to the date of payment to Lender. All such costs and
expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the Other Security Documents and shall be
immediately due and payable upon demand by Lender therefor.
Section . Actions and Proceedings. After the occurrence and during the
continuance of an Event of Default, Lender has the right to appear in and defend
any action or proceeding brought with respect to the Property and to bring any
action or proceeding, in the name and on behalf of Borrower, which Lender, in
its discretion, decides should be brought to protect its interest in the
Property.
Section . Recovery of Sums Required To Be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower existing at the time such earlier action was
commenced.
Section . Examination of Books and Records. Lender, its agents,
accountants and attorneys shall have the right upon prior written notice to
examine the records, books, management and other papers of Borrower and its
affiliates or of any Guarantor or Indemnitor which reflect upon their financial
condition, at the Property or at any office regularly maintained by Borrower,
its affiliates or any Guarantor or Indemnitor where the books and records are
located. Lender and its agents shall have the right upon notice to make copies
and extracts from the foregoing records and other papers. In addition, Lender,
its agents, accountants and attorneys shall have the right to examine and audit
the books and records of Borrower and its affiliates or of any Guarantor or
Indemnitor pertaining to the income, expenses and operation of the Property
during reasonable business hours at any office of Borrower, its affiliates or
any Guarantor or Indemnitor where the books and records are located.
Section . Other Rights, Etc. () The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Security Instrument. Borrower shall not be relieved
of Borrower's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower, any Guarantor or any Indemnitor to take any
action to foreclose this Security Instrument or otherwise enforce any of the
provisions hereof or of the Note or the Other Security Documents, (ii) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof, or (iii) any
agreement or stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security Instrument or
the Other Security Documents.
() It is agreed that the risk of loss or damage to the Property is on
Borrower, and Lender shall have no liability whatsoever for decline in value of
the Property, for failure to maintain the Policies, or for failure to determine
whether insurance in force is adequate as to the amount of risks insured.
Possession by Lender shall not be deemed an election of judicial relief, if any
such possession is requested or obtained, with respect to any Property or
collateral not in Lender's possession.
() Lender may resort for the payment of the Debt to any other security
held by Lender in such order and manner as Lender, in its discretion, may elect.
Lender may take action to recover the Debt, or any portion thereof, or to
enforce any covenant hereof without prejudice to the right of Lender thereafter
to foreclose this Security Instrument. The rights of Lender under this Security
Instrument shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision. Lender shall not be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
Section . Right to Release Any Portion of the Property. Lender, may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property.
Section . Violation of Laws. If the Property is not in compliance with
Applicable Laws, Lender may impose additional requirements upon Borrower in
connection herewith including, without limitation, monetary reserves or
financial equivalents.
Section . Right of Entry. Lender and its agents shall have the right
upon prior written notice to enter and inspect the Property at all reasonable
times upon not less than five (5) Business Days' notice (except in the case of
emergencies when no notice shall be required) to Borrower.
Article - ENVIRONMENTAL HAZARDS
Section . Environmental Representations and Warranties.
Borrower represents and warrants, except as set forth in that certain Phase I
Environmental Site Assessment of the Property dated March 31, 1999, prepared by
Environmental Management Group, and information that Borrower knows, that: (a)
there are no Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Property, except those that are both (i) in compliance with
Environmental Laws (defined below) and with permits issued pursuant thereto, if
any, and (ii) fully disclosed to Lender in writing pursuant to the written
reports resulting from the environmental assessments of the Property delivered
to Lender (the "Environmental Report"); (b) there are no past or present
Releases (defined below) of Hazardous Substances in violation of any
Environmental Law or which would require Remediation (defined below) by a
Governmental Authority in, on, under or from the Property except as described in
the Environmental Report; (c) there is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in connection with
the Property except as described in the Environmental Report; (d) Borrower does
not know of, and has not received, any written or oral notice or other
communication from any person or entity (including, but not limited to a
governmental entity) relating to Hazardous Substances or Remediation thereof, of
possible liability of any person or entity pursuant to any Environmental Law,
other environmental conditions in connection with the Property, or any actual
administrative or judicial proceedings in connection with any of the foregoing;
and (e) Borrower has truthfully and fully provided to Lender, in writing, any
and all information relating to environmental conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including, but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property. "Environmental Law" means any present, and for the
purposes of Sections 12.2. 12.3 and 13.4 only, future, federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
"Environmental Law" includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous
Substances Transportation Act; the Resource Conservation and Recovery Act
(including, but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation Act.
"Environmental Law" also includes, but is not limited to, any present, and for
the purposes of Sections 12.2, 12.3 and 13.4 only, future, federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law: conditioning transfer of property upon a negative declaration or
other approval of a governmental authority of the environmental condition of the
property; requiring notification or disclosure of Releases of Hazardous
Substances or other environmental condition of the Property to any governmental
authority or other person or entity, whether or not in connection with transfer
of title to or interest in property. "Hazardous Substances" include but are not
limited to any and all substances (whether solid, liquid or gas) (i) defined,
listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present, or for the purposes of Sections
12.2. 12.3 and 13.4 only, future, Environmental Laws or (ii) that may have a
negative impact on human health or the environment, including, but not limited
to petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives. "Release" of any Hazardous Substance includes, but is not limited to
any release, deposit, discharge, emission, leaking, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping or disposing
of Hazardous Substances. "Remediation" includes, but is not limited to any
response, remedial removal, or corrective action, any activity to cleanup,
detoxify, decontaminate, contain or otherwise remediate any Hazardous Substance,
any actions to prevent, cure or mitigate any Release of any Hazardous Substance,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances.
Section . Environmental Covenants. Borrower covenants and agrees that
so long as the Borrower owns, manages, is in possession of, or otherwise
controls the operation of the Property: (a) all uses and operations on or of the
Property, whether by Borrower or any other person or entity, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto; (b)
there shall be no Releases of Hazardous Substances in, on, under or from the
Property; (c) there shall be no Hazardous Substances in, on, or under the
Property, except those that are in compliance with all Environmental Laws and
with permits issued pursuant thereto, if and to the extent required; (d)
Borrower shall keep the Property free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to any act
or omission of Borrower or any other person or entity (the "Environmental
Liens"); (e) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 12.3 below,
including, but not limited to providing all relevant information and making
knowledgeable persons available for
interviews; (f) Borrower shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of environmental conditions
in connection with the Property, pursuant to any reasonable written request of
Lender after Lender has reason to believe this Section 12.2 has been violated
(including, but not limited to sampling, testing and analysis of soil, water,
air, building materials and other materials and substances whether solid, liquid
or gas), and share with Lender the reports and other results thereof, and Lender
and other Indemnified Parties (defined in Section 13.1) shall be entitled to
rely on such reports and other results thereof; (g) Borrower shall, at its sole
cost and expense, comply with all reasonable written requests of Lender to (i)
reasonably effectuate Remediation of any condition (including, but not limited
to a Release of a Hazardous Substance) in, on, under or from the Property, (ii)
comply with any Environmental Law, (iii) comply with any directive from any
governmental authority, and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (h) Borrower
shall not do or allow any tenant or other user of the Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any person or entity (whether on or off the
Property), impairs or may impair the value of the Property, is contrary to any
requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Borrower shall immediately notify Lender in
writing promptly after it has become aware of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property which is required to be reported to a governmental
authority under any Environmental Law, (B) any actual Environmental Lien
affecting the Property, (C) any required Remediation of environmental conditions
relating to the Property, and (D) any written or oral notice or other
communication of which Borrower becomes aware from any source whatsoever
(including, but not limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability of any person or
entity pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or threatened administrative or
judicial proceedings in connection with anything referred to in this Article 12.
Section . Lender's Rights. Lender, its environmental consultant, and
any other person or entity designated by Lender, including, but not limited to
any receiver and any representative of a governmental entity, shall have the
right, but not the obligation, at intervals of not less than one year, or more
frequently if the Lender reasonably believes that a Hazardous Substance or other
environmental condition violates or threatens to violate any Environmental Law,
after notice to Borrower, to enter upon the Property at all reasonable times to
assess any and all aspects of the environmental condition of the Property and
its use, including, but not limited to conducting any environmental assessment
or audit of the Property or portions thereof to confirm Borrower's compliance
with the provisions of this Article 12, and Borrower shall cooperate in all
reasonable ways with Lender in connection with any such audit. Such audit shall
be performed in a manner so as to minimize interference with the conduct of
business at the Property. If such audit discloses that a violation of or a
liability under any Environmental Law exists or if such audit was required or
prescribed by law, regulation or governmental or quasi-governmental authority,
Borrower shall pay all costs and expenses incurred in connection with such
audit; otherwise, the costs and expenses of such audit shall, notwithstanding
anything to the contrary set forth in this Section, be paid by Lender.
Article - INDEMNIFICATION
Section . General Indemnification. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, or punitive damages, of whatever kind or nature (including, but not
limited to attorneys' fees and other costs of defense) (the "Losses") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following (but excluding Losses arising out of Lender's gross negligence or
willful misconduct): (a) ownership of this Security Instrument, the Property or
any interest therein or receipt of any Rents; (b) any amendment to, or
restructuring of, the Debt, and the Note, this Security Instrument, or any Other
Security Documents; (c) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of this Security Instrument or
the Note or any of the Other Security Documents, whether or not suit is filed in
connection with same, or in connection with Borrower, any Guarantor or
Indemnitor and/or any member, partner, joint venturer or shareholder thereof
becoming a party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (f) any failure on
the part of Borrower to perform or be in compliance with any of the terms of
this Security Instrument or the Other Security Documents; (g) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (h) the failure of any person to
file timely with the Internal Revenue Service an accurate Form 0000-X, Xxxxxxxxx
for Recipients of Proceeds from Real Estate, Broker and Barter Exchange
Transactions, which may be required in connection with the Security Instrument,
or to supply a copy thereof in a timely fashion to the recipient of the proceeds
of the transaction in connection with which this Security Instrument is made;
(i) any failure of the Property to be in compliance with any Applicable Laws;
(j) the enforcement by any Indemnified Party of the provisions of this Article
13; (k) any and all claims and demands whatsoever which may be asserted against
Lender by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants, or agreements contained in any
Lease; (l) the payment of any commission, charge or brokerage fee to anyone
which may be payable in connection with the funding of the loan evidenced by the
Note and secured by this Security Instrument; or (m) any misrepresentation made
by Borrower in this Security Instrument, the Other Security Documents, or any
documents or information provided pursuant to Section 18.1 hereof. Any amounts
payable to Lender by reason of the application of this Section 13.1 shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid. For purposes of this
Article 13, the term "Indemnified Parties" means Lender and any person or entity
who is or will have been involved in the origination of this loan, any person or
entity who is or will have been involved in the servicing of this loan, any
person or entity in whose name the encumbrance created by this Security
Instrument is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in this loan (including,
but not limited to Investors or prospective Investors in the Securities, as well
as custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in this loan for the benefit of third parties) as well as the
respective directors, officers, shareholders, members, partners, employees,
agents, servants, representatives, affiliates, subsidiaries, participants,
successors and assigns of any and all of the foregoing (including, but not
limited to any other person or entity who holds or acquires or will have held a
participation or other full or partial interest in this loan or the Property,
whether during the term of this loan or as a part of or following a foreclosure
of this loan and including, but not limited to any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender's assets
and business).
Section . Mortgage and/or Intangible Tax. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the Other Security Documents or
in connection with a transfer of all or a portion of the Property pursuant to a
foreclosure, deed in lieu of foreclosure or otherwise.
Section . ERISA Indemnification. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses (including, without limitation,
attorneys' fees and costs incurred in the investigation, defense, and settlement
of Losses incurred in correcting any prohibited transaction or in the sale of a
prohibited loan, and in obtaining any individual prohibited transaction
exemption under ERISA that may be required, in Lender's sole discretion) that
Lender may incur, directly or indirectly, as a result of a default under
Sections 4.2 or 5.9.
Section . Environmental Indemnification. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses and costs of Remediation
(whether or not performed voluntarily), reasonable engineers' fees, reasonable
environmental consultants' fees, and costs of investigation (including, but not
limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
arising out of or in any way relating to any one or more of the following,
unless caused by the gross negligence or willful misconduct of any Indemnified
Party: (a) any presence of any Hazardous Substances in, on, above or under the
Property; (b) any past, present or threatened Release of Hazardous Substances
in, on, above, under or from the Property; (c) any activity by Borrower, any
person or entity affiliated with Borrower or tenant or other users of the
Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Property of any
Hazardous Substances at any time located in, under, on or above the Property;
(d) any activity by Borrower, any person or entity affiliated with Borrower or
tenant or other users of the Property in connection with any actual or proposed
Remediation of any Hazardous Substances at any time located in, under, on or
above the Property, whether or not such Remediation is voluntary or pursuant to
court or administrative order, including, but not limited to any removal,
remedial or corrective action; (e) any past, present or threatened violations of
any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including, but not limited
to any failure by Borrower, any person or entity affiliated with Borrower or
tenant or other users of the Property to comply with any order of any
governmental authority in connection with Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 12 and
this Section 13.4; (h) any past, present or threatened injury to, destruction of
or loss of natural resources in any way connected with the Property, including,
but not limited to costs to investigate and assess such injury, destruction or
loss; (i) any acts of Borrower or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Borrower or other users, at any facility or incineration vessel owned or
operated by another person or entity and containing such or similar Hazardous
Substance; (j) any acts of Borrower or other users of the Property, in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users, from
which there is a Release, or a threatened Release of any Hazardous Substance
which causes the incurrence of costs for Remediation; (k) any personal injury,
wrongful death, or property damage caused by Hazardous Substances arising under
any statutory or common law or tort law theory, including, but not limited to
damages assessed for the maintenance of a private or public nuisance or for the
conducting of an abnormally dangerous activity on or near the Property; and (l)
any intentional misrepresentation in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 12.
Section . Duty to Defend; Attorneys' Fees and Other Fees and Expenses.
Upon written request by any Indemnified Party, Borrower shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may,
in their sole and absolute discretion, engage their own attorneys and other
professionals to defend or assist them, and, at the option of Indemnified
Parties, their attorneys shall control the resolution of claim or proceeding.
Upon demand, Borrower shall pay or, in the sole and absolute discretion of the
Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.
Article - WAIVERS
Section . Waiver of Counterclaim. Borrower hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
action or proceeding brought against it by Lender arising out of or in any way
connected with this Security Instrument, the Note, any of the Other Security
Documents, or the Obligations.
Section . Marshalling and Other Matters. Borrower hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, Borrower hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Instrument on behalf of Borrower, and on behalf of
each and every person acquiring any interest in or title to the Property
subsequent to the date of this Security Instrument and on behalf of all persons
to the extent permitted by Applicable Law.
Section . Waiver of Notice. To the extent permitted by Applicable Law,
Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by Lender to
Borrower and except with respect to matters for which Lender is required by
Applicable Law to give notice, and Borrower hereby expressly waives the right to
receive any notice from Lender with respect to any matter for which this
Security Instrument does not specifically and expressly provide for the giving
of notice by Lender to Borrower.
Section . Waiver of Statute of Limitations. Borrower hereby expressly
waives and releases to the fullest extent permitted by law, the pleading of any
statute of limitations as a defense to payment of the Debt or performance of its
Other Obligations.
Section . Sole Discretion of Lender. Wherever pursuant to this Security
Instrument (a) Lender exercises any right given to it to approve or disapprove,
(b) any arrangement or term is to be satisfactory to Lender, or (c) any other
decision or determination is to be made by Lender, the decision of Lender to
approve or disapprove all decisions that arrangements or terms are satisfactory
or not satisfactory, and all other decisions and determinations made by Lender,
shall be in the sole and absolute discretion of Lender and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.
Section . Survival. Except as hereinafter specifically set forth below,
the representations and warranties, covenants, and other obligations arising
under Article 12 shall in no way be impaired by: any satisfaction or other
termination of this Security Instrument, any assignment or other transfer of all
or any portion of this Security Instrument or Lender's interest in the Property
(but, in such case, shall benefit both Indemnified Parties and any assignee or
transferee), any exercise of Lender's rights and remedies pursuant hereto
including, but not limited to foreclosure or acceptance of a deed in lieu of
foreclosure, any exercise of any rights and remedies pursuant to the Note or any
of the Other Security Documents, any transfer of all or any portion of the
Property (whether by Borrower or by Lender, following foreclosure or acceptance
of a deed in lieu of foreclosure or at any other time), any amendment to this
Security Instrument, the Note or the Other Security Documents, and any act or
omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto. All obligations and liabilities of
Borrower under Article 12 shall cease and terminate on the first (1st)
anniversary of the date of payment to Lender in cash of the entire Debt,
provided that contemporaneously with or subsequent to such payment, Borrower, at
its sole cost and expense, delivers to Lender an environmental audit of the
Property in form and substance, and prepared by a qualified environmental
consultant, reasonably satisfactory in all respects to Lender and indicating the
Property is in full compliance with all applicable Environmental Laws.
Section . Waiver of Trial By Jury. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE OTHER
SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
Article - EXCULPATION
Section . Exculpation. Notwithstanding anything to the contrary
contained in this Security Instrument or in any Other Security Document (but
subject to the provisions of Sections 15.2, 15.3, 15.4 and 15.5), Lender shall
not enforce the liability and obligation of Borrower to perform and observe the
obligations contained in the Note or this Security Instrument by any action or
proceeding to collect damages or wherein a money judgment or any deficiency
judgment or order or any judgment establishing any personal obligation or
liability shall be sought against Borrower or any principal director, officer,
employee, beneficiary, shareholder, partner, member, trustee, agent or affiliate
of Borrower or any person owning, directly or indirectly, any legal or
beneficial interest in Borrower, or any successors or assigns of any of the
foregoing (collectively, the "Exculpated Parties"). Lender may bring a
foreclosure action, action for specific performance or other appropriate action
or proceeding to enable Lender to enforce and realize upon this Security
Instrument, the Other Security Documents, and the interest in the Property, the
Rents and any other collateral given to Lender created by this Security
Instrument and the Other Security Documents; provided, however, subject to the
provisions of Sections 15.2, 15.3, 15.4 and 15.5, that any judgment in any
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender in connection with the Note. Lender, by accepting the Note and
this Security Instrument, agrees that it shall not, except as otherwise provided
below, xxx for or demand any deficiency judgment against Borrower or any of the
Exculpated Parties in any action or proceeding, under or by reason of or under
or in connection with the Note, the Other Security Documents or this Security
Instrument.
Section . Reservation of Certain Rights. The provisions of Section 15.1
shall not (a) constitute a waiver, release or impairment of the Obligations; (b)
impair the right of Lender to name Borrower as a party defendant in any action
or suit for judicial foreclosure and sale under this Security Instrument; (c)
affect the validity or enforceability of any indemnity, guaranty, master lease
or similar instrument made in connection with the Note, this Security
Instrument, or the Other Security Documents; (d) impair the ability of Lender to
obtain the appointment of a receiver; or (e) impair the enforcement of the
Assignment of Leases and Rents executed in connection herewith.
Section . Exceptions to Exculpation. Notwithstanding the
provisions of Article 15.1 to the contrary, Borrower and Indemnitor shall be
personally liable to Lender on a joint and several basis for the Losses Lender
incurs due to: (a) fraud or intentional misrepresentation by Borrower or any
other person or entity in connection with the execution and the delivery of the
Note, this Security Instrument or the Other Security Documents; (b) Borrower's
misapplication or misappropriation of Rents received by Borrower after the
occurrence and during the continuance of an Event of Default; (c) Borrower's
misapplication or misappropriation of tenant security deposits or Rents
collected in advance; (d) the misapplication or misappropriation of insurance
proceeds or condemnation awards after the occurrence and during the continuance
of an Event of Default; (e) any fees or commissions paid by Borrower after the
occurrence and during the continuance of an Event of Default to any principal,
affiliate or general partner of Borrower, Indemnitor or Guarantor in violation
of the terms of the Note, this Security Instrument or the Other Security
Documents; (f) gross negligence or criminal acts perpetrated by it resulting in
forfeiture, seizure or loss of any portion of the security; (g) any failure by
Borrower or Indemnitor to comply with the terms and provisions of Section 13.4
hereof or of the Environmental Indemnity; (h) any failure by Borrower or any
general partner or the SPE Member of Borrower to comply with the terms and
provisions of Section 4.3 hereof; or (i) any sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment or transfer of the Property or any part
thereof, within the meaning of Article 8 hereof, without the prior written
consent of Lender.
Section . Recourse. Notwithstanding the foregoing, the
agreement of Lender not to pursue recourse liability as set forth in Section
15.1 above SHALL BECOME NULL AND VOID and shall be of no further force and
effect in the event (i) Borrower fails to comply with the terms and conditions
of Section 4.3, 8.1, 8.2 or 8.3, (ii) the Property or any part thereof shall
become an asset in (A) a voluntary bankruptcy or insolvency proceeding, or (B)
an involuntary bankruptcy or insolvency proceeding commenced by any Person
(other than Lender) and Borrower fails to use its best efforts to obtain a
dismissal of such proceedings, or (iii) Borrower or any Guarantor or Indemnitor
fails to comply with the terms and provisions of Section 3.11 hereof within
thirty (30) days after written notice from Lender to Borrower (which notice
shall be a second notice given after the expiration of any notice given pursuant
to Section 10.1(e)); provided, however, so long as PREIT Associates, L.P., a
Delaware limited partnership, maintains that certain line of credit with First
Union National Bank, as agent, pursuant to that certain Revolving Credit Loan
Agreement with Corestates Bank, N.A. (predecessor-in-interest to First Union
National Bank), as agent, and First Trust Savings Bank, Fleet Bank, N.A. and PNC
Bank, as lenders, dated September 30, 1997 (or another credit arrangement
containing market standard financial covenants for net worth, leverage and
liquidity), the occurrence of any of the events referred to in subsections
(i)-(iii) above shall not create recourse liability against Borrower or any
Guarantor or Indemnitor.
Section . Bankruptcy Claims. Nothing herein shall be deemed to be a
waiver of any right which Lender may have under Sections 506(a), 506(b), 1111(b)
or any other provisions of the U.S. Bankruptcy Code to file a claim for the full
amount of the Debt secured by this Security Instrument or to require that all
collateral shall continue to secure all of the Debt owing to Lender in
accordance with the Note, this Security Instrument and the Other Security
Documents.
Article - NOTICES
Section . Notices. All notices or other written
communications hereunder shall be deemed to have been properly given (a) upon
delivery, if delivered in person or by facsimile transmission with receipt
acknowledged by the recipient thereof, (b) one (1) Business Day (defined below)
after having been deposited for overnight delivery with any reputable overnight
courier service, or (c) three (3) Business Days after having been deposited in
any post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to Borrower: PR Pembroke LLC
c/o PREIT-XXXXX
Attn: Xxxxxxx X. Xxxx
The Bellevue, Suite 300
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
with a copy to: Drinker Xxxxxx & Xxxxx LLP
Philadelphia National Bank Building
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxx Xxxxx, Esq.
Facsimile No. (000) 000-0000
If to Lender: GMAC Commercial Mortgage Corporation
000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Executive Vice President,
Commercial Loan Servicing
Facsimile No. (000) 000-0000
With a copy to: Commercial Capital Initiatives, Inc.
Wall Street Plaza
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager - Loan Administration
Facsimile No. (000) 000-0000
and
Xxxxx Cummis Radin Tischman Xxxxxxx & Xxxxx, P.A.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Facsimile No. (000) 000-0000
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional
or different addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in the
State of New York.
Article - APPLICABLE LAW
Section . Choice of Law. THIS SECURITY INSTRUMENT SHALL BE GOVERNED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE
THE LAND IS LOCATED AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section . Usury Laws. This Security Instrument and the Note are subject
to the express condition that at no time shall Borrower be obligated or required
to pay interest on the Debt at a rate which could subject the holder of the Note
to either civil or criminal liability as a result of being in excess of the
maximum interest rate which Borrower is permitted by applicable law to contract
or agree to pay. If by the terms of this Security
Instrument or the Note, Borrower is at any time required or obligated to pay
interest on the Debt at a rate in excess of such maximum rate, the rate of
interest under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Note. All sums paid or agreed to be
paid to Lender for the use, forbearance, or detention of the Debt shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Note until payment in full so that
the rate or amount of interest on account of the Debt does not exceed the
maximum lawful rate of interest from time to time in effect and applicable to
the Debt for so long as the Debt is outstanding.
Section . Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any Applicable Law.
Section . Inapplicable Provision. If any term of this Security
Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term
shall not be affected thereby.
Article - SECONDARY MARKET
Section . Dissemination of Information. If Lender determines
at any time to sell, transfer or assign the Note, this Security Instrument and
the Other Security Documents, and any or all servicing rights with respect
thereto, or to grant participations therein (the "Participations") or issue
mortgage pass-through certificates or other securities (such sale and/or
issuance, the "Securitization") evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"), Lender may
forward to each purchaser, transferee, assignee, servicer, participant,
investor, or their respective successors in such Participations and/or
Securities (collectively, the "Investor") or any Rating Agency rating such
Securities and each prospective Investor, all documents and information which
Lender now has or may hereafter acquire relating to the Debt and to Borrower,
any Guarantor, any Indemnitors and the Property (including, without limitation,
all financial statements), which shall have been furnished by Borrower, any
Guarantor or any Indemnitors, as Lender determines necessary or desirable.
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, without limitation, the delivery of an estoppel certificate
required in accordance with Subsection 7.4(c) hereof and such other documents as
may be reasonably requested by Lender and, upon Lender's reasonable request,
meeting with any Rating Agency for due diligence purposes. Borrower shall also
furnish and
Borrower, any Guarantor and any Indemnitor consent to Lender furnishing to such
Investors or such prospective Investors or any Rating Agency any and all
information concerning the Property, the Leases, the financial condition of
Borrower, any Guarantor and any Indemnitor as may be requested by Lender, any
Investor or any prospective Investor or Rating Agency in connection with any
sale, transfer or Participation, provided, however, PREIT Associates, L.P. and
Pennsylvania Real Estate Investment Trust shall only be required under this
Section 18.1 to disclose information that is deemed to be "public" information.
Borrower shall not be responsible for Lender's fees and expenses incurred in
connection with the transactions contemplated by this Section 18.1. Lender shall
reimburse Borrower for the reasonable actual out-of-pocket third party costs
incurred by Borrower in excess of $1,500.00 in connection with the transactions
contemplated by this Section 18.1. Borrower shall deliver on the date hereof, at
Borrower's sole cost and expense, a nonconsolidation opinion, and within ten
(10) Business Days after demand of Lender, an update of same (which update
Borrower will not be required to provide more than once), each in form and
substance and delivered by counsel acceptable to Lender and the Rating Agency
rating or proposed to rate the Securities, as may be required by Lender and/or
such Rating Agency. Borrower's failure to deliver the opinions required hereby
shall constitute an Event of Default hereunder.
Article - COSTS
Section . Performance at Borrower's Expense. Borrower acknowledges and
confirms that Lender shall impose certain administrative processing and/or
commitment fees in connection with (a) the extension, renewal, modification,
amendment and termination of its loans, (b) the release or substitution of
collateral therefor, provided, however, no commitment fee shall be imposed in
connection with the substitution of collateral, (c) obtaining certain consents,
waivers and approvals with respect to the Property, or (d) the review of any
Lease or proposed Lease or the preparation or review of any subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event"). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses, such costs and expenses shall include, but not be limited
to, all legal fees and disbursements of Lender (whether of retained firms, the
reimbursement for the expenses of in-house staff or otherwise) and all costs and
expenses of Lender, if any.
Section . Attorney's Fees for Enforcement. (a) Borrower shall pay all
legal fees incurred by Lender in connection with (i) the preparation of the
Note, this Security Instrument and the Other Security Documents; and (ii) the
items set forth in Section 19.1 above, and (b) Borrower shall pay to Lender on
demand any and all expenses, including legal expenses and attorneys' fees,
incurred or paid by Lender in protecting its interest in the Property or the
Collateral or in collecting any amount payable hereunder or in enforcing its
rights hereunder with respect to the Property or the Collateral, whether or not
any legal proceeding is commenced hereunder or thereunder and whether or not any
default or Event of Default shall have occurred and is continuing, together with
interest thereon at the Default Rate from the date paid or incurred by Lender
until such expenses are paid by Borrower.
Article - DEFINITIONS
Section . General Definitions. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument may be used interchangeably in singular
or plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any interest
therein," the word "Lender" shall mean "Lender and any subsequent holder of the
Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, limited liability company, partnership,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees" and "counsel fees" shall
include any and all attorneys', paralegal and law clerk fees and disbursements,
including, but not limited to fees and disbursements at the pre-trial, trial and
appellate levels incurred or paid by Lender in protecting its interest in the
Property, the Leases and the Rents and enforcing its rights under this Security
Instrument.
Section . Headings, Etc. The headings and captions of various Sections
of this Security Instrument are for convenience of reference only and are not to
be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Article - MISCELLANEOUS PROVISIONS
Section . No Oral Change. This Security Instrument, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower, or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
Section . Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Security Instrument shall be binding upon and inure to the benefit
of Borrower and Lender and their respective successors and assigns forever.
Section . Duplicate Originals; Counterparts. This Security Instrument
may be executed in any number of duplicate originals and each duplicate original
shall be deemed to be an original. This Security Instrument may be executed in
several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single Security
Instrument.
Section . Number and Gender. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section . Subrogation. If any or all of the proceeds of the Note have
been used to extinguish, extend or renew any indebtedness heretofore existing
against the Property, then, to the extent of the funds so used, Lender shall be
subrogated to all of the rights, claims, liens, titles, and interests existing
against the Property heretofore held by, or in favor of, the holder of such
indebtedness and such former rights, claims, liens, titles, and interests, if
any, are not waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest created herein as
cumulative security for the repayment of the Debt, the performance and discharge
of Borrower's obligations hereunder, under the Note and the Other Security
Documents and the performance and discharge of the Other Obligations.
Section . Entire Agreement. The Note, this Security Instrument and the
Other Security Documents constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Debt and supersede all prior written or oral understandings
and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security
Instrument and the Other Security Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, this Security
Instrument and the Other Security Documents.
[Signatures Appear on the Next Page]
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower as of the date first above written.
BORROWER:
PR PEMBROKE LLC,
a Delaware limited liability company
By: PR Pembroke Manager LLC,
its manager
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Authorized Signatory
STATE OF )
) SS:
COUNTY OF )
The foregoing instrument was acknowledged before me this 13th day of April,
1999, by Xxxxxxx X. Xxxx, the Authorized Signatory of PR Pembroke Manager LLC,
manager of PR PEMBROKE LLC, a Delaware limited liability company, manager on
behalf of said company.
/s/ Illegible
----------------------------------
EXHIBIT A
(Description of Land)
ALL of that certain lot, piece or parcel of land, with the buildings and
improvements thereon, situate, lying and being
