EXHIBIT 10.2.6
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Xxxxx X. Xxxxx, Esquire
Dechert
4000 Bell Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx XX 00000
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Space Above This Line For Recorder's Use
DEED OF TRUST AND
SECURITY AGREEMENT
by
THI OF MARYLAND REAL ESTATE HOLDING CO., LLC
and
THI OF MARYLAND AT BEL PRE, LLC
each a Delaware limited liability company,
and each having an address at
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxxxx 00000
(collectively, as grantor)
to
XXXXX XXXXXX,
an Individual,
having an address at
0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
(as trustee)
for the benefit of
VENTAS REALTY, LIMITED PARTNERSHIP,
a Delaware limited partnership,
having an address at
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
(as beneficiary)
Property: Bel Pre
0000 Xxx Xxx Xxxx, Xxxxxx Xxxxxx, XX
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE MAXIMUM PRINCIPAL
AMOUNT SECURED BY THIS SECURITY AGREEMENT IS $5,425,500.00, WHICH REPRESENTS ONE
HUNDRED FIFTY PERCENT (150%) OF THE ALLOCATED LOAN AMOUNT FOR THE PROPERTY.
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (as amended, restated,
replaced, supplemented or otherwise modified from time to time, this "Security
Instrument") is made as of November 1, 2002, by THI OF MARYLAND REAL ESTATE
HOLDING CO., LLC (the "Fee Owner") and THI OF MARYLAND AT BEL PRE, LLC (the
"Operator"), each a Delaware limited liability company, and each having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx,
Xxxxxxxxxxxx 00000, xxxxxxxxxxxx as grantor (Fee Owner and Operator are referred
to herein individually as, a "Borrower" and collectively as, the "Borrowers")to
XXXXX XXXXXX, an individual, having an address at c/o First American Title
Insurance Company, 0000 Xxxxxxxxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxxxxx, XX
00000 as trustee ("Trustee"), for the benefit of VENTAS REALTY, LIMITED
PARTNERSHIP, a Delaware limited partnership, having an address at 0000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000, as beneficiary (together
with its successors and assigns, "Lender").
W I T N E S S E T H
WHEREAS, this Security Instrument is given to secure a loan (the "Loan")
in the maximum principal sum of FIFTY FIVE MILLION AND NO/100 DOLLARS
($55,000,000.00) or so much thereof as may be advanced pursuant to that certain
Loan Agreement dated as of the date hereof among the Borrowers, certain
Affiliates of the Borrowers named therein (collectively, the "Other Borrowers")
and Lender (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, the "Loan Agreement") and evidenced by
that certain Promissory Note dated the date hereof made by the Borrowers and the
Other Borrowers to Lender (such Note, together with all extensions, renewals,
replacements, components, restatements or modifications thereof being
hereinafter referred to as the "Note");
WHEREAS, each Borrower desires to secure the payment of the Debt (as
defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents (as defined
below); and
WHEREAS, this Security Instrument is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by each Borrower of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions, agreements,
indemnities, representations and warranties of the parties therein, are hereby
incorporated by reference herein as though set forth in full and shall be
considered a part of this Security Instrument (the Loan Agreement, the Note,
this Security Instrument, that certain Assignment of Leases, Rents and Contracts
of even date herewith made by the Borrowers in favor of Lender (the "Assignment
of Leases") and all other documents evidencing or securing the Debt or delivered
in connection with the making of the Loan are hereinafter referred to
collectively as the "Loan Documents").
NOW THEREFORE, in consideration of the making of the Loan by Xxxxxx and
the covenants, agreements, representations and warranties set forth in this
Security Instrument:
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ARTICLE 1 - GRANTS OF SECURITY
Section 1.1. Property Conveyed. Each Borrower does hereby irrevocably
grant, bargain, sell, pledge, assign, warrant, transfer and convey to Trustee
and its successors and assigns, in trust, with Power of Sale and Right of Entry
and Possession, for the benefit of Lender as beneficiary in trust, all of its
right, title and interest in the following property, rights, interests and
estates now owned, or hereafter acquired by such Borrower (collectively, the
"Property").
(a) Land. (i) The real property described in Exhibit A attached
hereto and made a part hereof (the "Land") including, without limitation,
all As Extracted Collateral (as defined in Article 9 of the Uniform
Commercial Code in the jurisdiction where the Land is located (as the
same may be amended, modified or revised from time to time, the "Uniform
Commercial Code")), all minerals, oil, gas and other hydrocarbon
substances on, in or under the Land and (ii) Operator's leasehold
interest created by any and all operating leases to which either Fee
Owner or Operator is now or hereafter a party (collectively, the
"Operating Lease"), together with all right, title and interest in and to
any right pursuant to Section 365(h) of the Bankruptcy Code (as defined
below) or any successor to such Section (x) to possession of any
statutory term of years derived from or incident to the Operating Lease
or (y) to treat the Operating Lease as terminated;
(b) Additional Land. All additional lands, estates and development
rights hereafter acquired by such Borrower for use in connection with the
Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental mortgage or
otherwise be expressly made subject to the lien of this Security
Instrument;
(c) Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter erected or located on the Land
(collectively, the "Improvements");
(d) Easements. All easements, rights-of-way or use, rights, strips
and gores of land, streets, ways, alleys, passages, sewer rights, water,
water courses, water rights and powers, air rights and development
rights, and all estates, rights, titles, interests, privileges,
liberties, servitudes, tenements, hereditaments and appurtenances of any
nature whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the 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 such Borrower of, in and to the Land and the Improvements and
every part and parcel thereof, with the appurtenances thereto;
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(e) Equipment. All "equipment," as such term is defined in the
Uniform Commercial Code, now owned or hereafter acquired by such
Borrower, which is used at or in connection with the Improvements or the
Land or is located thereon or therein (including, but not limited to, all
Software (as defined in the Uniform Commercial Code), appliances,
machinery, equipment, furniture, furnishings, and electronic
data-processing and other office equipment now owned or hereafter
acquired by such Borrower (including, without limitation, all beds,
linens, radios, televisions, carpeting, telephones, cash registers,
computers, lamps, glassware, restaurant and kitchen equipment, all
medical, dental, rehabilitation, therapeutic and paramedic equipment and
supplies), and any and all additions, substitutions and replacements of
any of the foregoing), together with all attachments, components, parts,
equipment, accessions and accessories installed thereon or affixed
thereto (collectively, the "Equipment"). Notwithstanding the foregoing,
Equipment shall not include any property belonging to tenants under
leases except to the extent that any Borrower shall have any right or
interest therein;
(f) Fixtures. All Equipment and Goods (as defined in the Uniform
Commercial Code) now owned, or the ownership of which is hereafter
acquired, by such Borrower which is so related to the Land and
Improvements forming part of the Property that it is deemed fixtures or
real property under the law of the particular state in which the Land is
located, including, without limitation, all building or construction
materials intended for construction, reconstruction, alteration or repair
of or installation on the Land and Improvements, construction equipment,
appliances, machinery, plant equipment, fittings, apparatuses, fixtures
and other items now or hereafter attached to, installed in or used in
connection with (temporarily or permanently) any of the Improvements or
the Land, including, but not limited to, engines, devices for the
operation of pumps, pipes, plumbing, cleaning, call and sprinkler
systems, fire extinguishing apparatuses and equipment, heating,
ventilating, plumbing, laundry, incinerating, electrical, air
conditioning and air cooling equipment and systems, gas and electric
machinery, appurtenances and equipment, pollution control equipment,
security systems, disposals, dishwashers, refrigerators and ranges,
recreational equipment and facilities of all kinds, and water, gas,
electrical, storm and sanitary sewer facilities, utility lines and
equipment (whether owned individually or jointly with others, and, if
owned jointly, to the extent of such Borrower's interest therein) and all
other utilities whether or not situated in easements, all water tanks,
water supply, water power sites, fuel stations, fuel tanks, fuel supply,
and all other structures, together with all accessions, appurtenances,
additions, replacements, betterments and substitutions for any of the
foregoing and the proceeds thereof (collectively, the "Fixtures").
Notwithstanding the foregoing, "Fixtures" shall not include any property
which tenants are entitled to remove pursuant to leases except to the
extent that any Borrower shall have any right or interest therein;
(g) Personal Property. All "accounts" (as defined in the Uniform
Commercial Code), Chattel Paper (including Electronic Chattel Paper and
Tangible Chattel Paper), Commercial Tort Claims, Commingled Goods,
Deposit
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Accounts, Documents, General Intangibles, Goods, Instruments, Inventory,
Investment Property, Letter of Credit Rights, Payment Intangibles,
Supporting Obligations (as such terms are defined in the Uniform
Commercial Code), furniture, furnishings, objects of art, machinery,
goods, tools, supplies, appliances, contract rights, accounts receivable,
franchises, licenses, certificates and permits (including any Regulatory
Permits), and all other personal property of any kind or character
whatsoever other than Fixtures, which are now or hereafter owned by such
Borrower and which are located within or about or otherwise relate or
pertain to the Land and the Improvements, together with all accessories,
accessions, replacements and substitutions thereto or therefor and the
proceeds thereof (collectively, together with the Equipment and the
Proceeds, the "Personal Property"), and the right, title and interest of
such Borrower in and to any of the Personal Property which may be subject
to any security interests superior in lien to the lien of this Security
Instrument and all proceeds and products of the above;
(h) Leases and Rents. All leases and other agreements affecting
the use, enjoyment or occupancy of the Land and the Improvements
heretofore or hereafter entered into (including, without limitation, the
Operating Lease, all patient admissions and resident care agreements, all
lettings, subleases, licenses, concessions, tenancies and other occupancy
agreements covering or encumbering all or any portion of the Property),
whether before or after the filing by or against such Borrower of any
petition for relief under 11 U.S.C.ss.101 et seq., as the same may be
amended from time to time (the "Bankruptcy Code") (collectively, the
"Leases") and all right, title and interest of such Borrower, its
successors and assigns therein and thereunder, including, without
limitation, cash or securities deposited thereunder to secure the
performance by the lessees of their obligations thereunder and all rents,
additional rents, revenues (including, without limitation, (i) rights to
payment earned under the Leases for space in the Improvements for the
operation of ongoing businesses, such as restaurants, news stands, xxxxxx
shops, beauty shops and pharmacies and (ii) all other income,
consideration, profits and benefits of any nature arising from the
ownership, possession, use or operation of the Property, including,
without limitation Patient Revenues and Self-Pay Receivables), 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 such Borrower of any petition
for relief under the Bankruptcy Code (collectively, the "Rents") and all
proceeds from the sale or other disposition of the Leases and the right
to receive and apply the Rents to the payment of the Debt;
(i) Condemnation Awards. All awards 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;
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(j) Insurance Proceeds. All proceeds in respect of the Property
under 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;
(k) Tax Certiorari. All refunds, rebates or credits in connection
with reduction in real estate taxes and assessments charged against the
Property as a result of tax certiorari or any applications or proceedings
for reduction;
(l) Rights. The right, in the name and on behalf of either
Xxxxxxxx, to appear in and defend any action or proceeding brought with
respect to the Property and to commence any action or proceeding to
protect the interest of Xxxxxx in the Property;
(m) 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 such
Borrower therein and thereunder, including, without limitation, the
right, upon the happening of any default hereunder, to receive and
collect any sums payable to such Borrower thereunder;
(n) Trademarks. All tradenames, trademarks, servicemarks, logos,
copyrights, goodwill, books and records and all other general intangibles
relating to or used in connection with the operation of the Property;
(o) Proceeds. All proceeds (including, without limitation, all
"proceeds" as defined in the Uniform Commercial Code) of any of the
foregoing, including, without limitation, proceeds of insurance and
condemnation awards, whether cash, liquidation or other claims or
otherwise (collectively, the "Proceeds"); and
(p) Other Rights. Any and all other rights of such Borrower in and
to the items set forth in Subsections (a) through (o) above.
AND without limiting any of the other provisions of this Security
Instrument, to the extent permitted by applicable law, each Borrower expressly
grants to Trustee, as secured party, a security interest in the portion of the
Property which is or may be subject to the provisions of the Uniform Commercial
Code which are applicable to secured transactions; it being understood and
agreed that the Improvements and Fixtures are part and parcel of the Land (the
Land, the Improvements and the Fixtures collectively referred to as the "Real
Property") appropriated to the use thereof and, whether affixed or annexed to
the Real Property or not, shall for the purposes of this Security Instrument be
deemed conclusively to be real estate and conveyed hereby.
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Section 1.2. Assignment of Rents. Each Borrower hereby absolutely and
unconditionally assigns to Lender and Trustee all of its right, title and
interest in and to all current and future Leases and Rents; it being intended by
each Borrower that this assignment constitutes a present, absolute assignment
and not an assignment for additional security only. Nevertheless, subject to the
terms of the Loan Agreement, Collection Account Agreement, Cash Management
Agreement, the Assignment of Leases and Section 7.1(h) of this Security
Instrument, Lender grants to the Borrowers a revocable license to collect,
receive, use and enjoy the Rents. The Borrowers shall hold the Rents, or a
portion thereof sufficient to discharge all current sums due on the Debt, for
use in the payment of such sums.
Section 1.3. Security Agreement. This Security Instrument is both a real
property deed of trust 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
each Borrower in the Property. By executing and delivering this Security
Instrument, each Borrower hereby grants to Lender, as security for the
Obligations (hereinafter defined), a security interest in the Fixtures, the
Equipment, the Personal Property and other property constituting the Property to
the fullest extent that security interests in such property may be granted under
and subject to the Uniform Commercial Code (said portion of the Property so
subject to the Uniform Commercial Code being called the "UCC Collateral"). If an
Event of Default shall occur and be continuing, Lender, in addition to any other
rights and remedies which it may have, shall have and may exercise immediately
and without demand, any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing, the right to take possession of the UCC Collateral
or any part thereof, and to take such other measures as Lender may deem
necessary for the care, protection and preservation of the UCC Collateral. Upon
request or demand of Lender after the occurrence and during the continuance of
an Event of Default, each Borrower shall, at its expense, assemble the UCC
Collateral and make it available to Lender at a convenient place (at the Land if
tangible property) reasonably acceptable to Lender. Each Borrower shall pay to
Lender on demand any and all expenses, including reasonable legal expenses and
attorneys' fees, incurred or paid by Xxxxxx in protecting its interest in the
UCC Collateral and in enforcing its rights hereunder with respect to the UCC
Collateral after the occurrence and during the continuance of an Event of
Default. Any notice of sale, disposition or other intended action by Lender with
respect to the UCC Collateral sent to either Borrower in accordance with the
provisions hereof at least ten (10) business days prior to such action, shall,
except as otherwise provided by applicable law, constitute reasonable notice to
such Borrower. The proceeds of any disposition of the UCC Collateral, or any
part thereof, may, except as otherwise required by applicable law, be applied by
Lender to the payment of the Debt in such priority and proportions as Lender in
its discretion shall deem proper. The principal place of business of each
Borrower (Debtor) is as set forth on page one hereof and the address of Lender
(Secured Party) is as set forth on page one hereof. Each Borrower's location,
for purposes of Section 9-307 of the Uniform Commercial Code, is such Borrower's
state of formation/incorporation/organization as set forth on page one hereof
("Borrower's Jurisdiction").
Section 1.4. Fixture Filing. Certain of the Property is or will become
"fixtures" (as that term is defined in the Uniform Commercial Code) on the Land,
described or referred to in this Security Instrument, and this Security
Instrument, upon being filed for record in the real estate records of the city
or county wherein such Land is situated, shall operate also as a
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financing statement filed as a fixture filing in accordance with the applicable
provisions of said Uniform Commercial Code upon such of the Property that is or
may become fixtures. Alternatively, and/or in addition to the foregoing, Lender
may file a separate financing statement as a fixture filing to evidence the lien
granted hereby.
Section 1.5. Pledges of Monies Held. Each Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of Lender
in connection with the Loan, including, without limitation, any sums deposited
in the Accounts (as defined in the Cash Management Agreement) and Net Proceeds,
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, including
but not limited to, Operator's leasehold interest in the Property unto and to
the use and benefit of Trustee and its successors and assigns, forever;
IN TRUST, WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, to secure
payment to Lender of the Obligations at the time and in the manner provided for
its payment in the Note and in this Security Instrument;
PROVIDED, HOWEVER, these presents are upon the express condition that, if
the Borrowers and the Other Borrowers shall well and truly pay to Lender the
Debt at the time and in the manner provided in the Note, the Loan Agreement and
this Security Instrument, shall well and truly perform the Other Obligations as
set forth in this Security Instrument and shall well and truly abide by and
comply with each and every covenant and condition set forth herein and in the
Note, the Loan Agreement and the other Loan Documents, these presents and the
estate hereby granted shall cease, terminate and be void; provided, however,
that each Borrower's obligation to indemnify and hold harmless Lender pursuant
to the provisions hereof shall survive any such payment or release.
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1. Debt. This Security Instrument and the grants, assignments
and transfers made in Article 1 are given for the purpose of securing the Debt
which by its definition (as set forth in the Loan Agreement) includes, but is
not limited to, the obligations of each Borrower and the Other Borrowers to pay
to Lender the principal and interest owing pursuant to the terms and conditions
of the Note.
Section 2.2. 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"):
(a) the performance of all other obligations of each Borrower
contained herein;
(b) the performance of each obligation of each Borrower and the
Other Borrowers contained in the Loan Agreement and any other Loan Document;
and
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(c) the performance of each obligation of each Borrower and the
Other Borrowers contained in any renewal, extension, amendment,
modification, consolidation, change of, or substitution or replacement
for, all or any part of the Note, the Loan Agreement or any other Loan
Document.
Section 2.3. Debt and Other Obligations. Each Borrower's obligations for
the payment of the Debt and the performance of the Other Obligations shall be
referred to collectively herein as the "Obligations."
ARTICLE 3 - BORROWER COVENANTS
Each Borrower covenants and agrees that:
Section 3.1. Payment of Debt. Xxxxxxxx will pay the Debt at the time and
in the manner provided in the Loan Agreement, the Note and the Loan Documents.
Section 3.2. Incorporation by Reference. All the covenants, conditions
and agreements contained in (a) the Loan Agreement, (b) the Note and (c) all and
any of the other Loan Documents, are hereby made a part of this Security
Instrument to the same extent and with the same force as if fully set forth
herein.
Section 3.3. Insurance. Borrower shall obtain and maintain, or cause to
be maintained, in full force and effect at all times insurance with respect to
Borrower and the Property as required pursuant to the Loan Agreement.
Section 3.4. Maintenance of Property. Borrower shall cause the Property
to be maintained in a good and safe condition and repair. The Improvements, the
Fixtures, the Equipment and the Personal Property shall not be removed,
demolished or materially altered (except for normal replacement of the Fixtures,
the Equipment or the Personal Property, tenant finish and refurbishment of the
Improvements) without the reasonable consent of Lender, which consent shall not
be unreasonably withheld. Borrower shall promptly repair, replace or rebuild any
part of the Property which may be destroyed by any Casualty, or become damaged,
worn or dilapidated or which may be affected by any Condemnation, and shall
complete and pay for any structure at any time in the process of construction or
repair on the Land.
Section 3.5. Waste. Borrower shall not commit or suffer any material
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy, or do or permit to be done thereon anything that
may in any way materially impair the value of the Property or the security of
this Security Instrument. Borrower will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.6. Payment for Labor and Materials.
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(a) Borrower will promptly pay when due all bills and costs for
labor, materials, and specifically fabricated materials ("Labor and Material
Costs") incurred in connection with the Property and never permit to exist
beyond the due date thereof in respect of the Property or any part thereof any
lien or security interest, even though inferior to the liens and the security
interests hereof, and in any event never permit to be created or exist in
respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof except for
the Permitted Encumbrances.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any of the Labor and Material Costs, provided
that (i) no Event of Default has occurred and is continuing under the Loan
Agreement, the Note, this Security Instrument or any of the other Loan
Documents, (ii) Borrower is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure debt affecting the Property, (iii)
such proceeding shall suspend the collection of the Labor and Material Costs
from Borrower and from the Property or Borrower shall have paid all of the Labor
and Material Costs 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, and (vi) Borrower shall
have furnished the security as may be required in the proceeding, or as may be
reasonably requested by Xxxxxx to insure the payment of any contested Labor and
Material Costs, together with all interest and penalties thereon.
Section 3.7. Performance of Other Agreements. Borrower shall observe and
perform each and every term, covenant and provision to be observed or performed
by Borrower pursuant to the Loan Agreement, any other Loan Document and any
other agreement or recorded instrument affecting or pertaining to the Property
and any amendments, modifications or changes thereto.
Section 3.8. Change of Name, Identity, Structure or Address. Borrower
shall not change Xxxxxxxx's name, identity (including its trade name or names),
principal place of business, organization (from that on page one hereof),
Borrower's Jurisdiction, or, if not an individual, Borrower's corporate,
partnership or other structure without notifying Lender of such change in
writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower's structure or Borrower's Jurisdiction,
without first obtaining the prior written consent of Xxxxxx. Borrower shall
execute and deliver to Lender, prior to or contemporaneously with the effective
date of any such change, any financing statement or financing statement change
required by Lender to establish or maintain the validity, perfection and
priority of the security interest granted herein. At the request of Xxxxxx,
Borrower shall execute a certificate in form satisfactory to 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.
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ARTICLE 4 - OBLIGATIONS AND RELIANCES
Section 4.1. Relationship of Borrower and Xxxxxx. The relationship
between any Borrower and Xxxxxx is solely that of debtor and creditor, and
Xxxxxx has no fiduciary or other special relationship with any Borrower, and no
term or condition of any of the Loan Agreement, the Note, this Security
Instrument and the other Loan Documents shall be construed so as to deem the
relationship between any Borrower and Lender to be other than that of debtor and
creditor.
Section 4.2. No Reliance on Lender. The general partners, members,
principals and (if any Borrower is a trust) beneficial owners of each Borrower
are experienced in the ownership and operation of properties similar to the
Property, and each Borrower and Lender are relying solely upon such expertise
and business plan in connection with the ownership and operation of the
Property. No Borrower is relying on Xxxxxx's expertise, business acumen or
advice in connection with the Property.
Section 4.3. No Lender Obligations.
(a) Notwithstanding the provisions of Subsections 1.1(h) and (m)
or Section 1.2 hereof, Lender is not undertaking the performance of (i) any
obligations under the Leases; or (ii) any obligations with respect to such
agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents.
(b) By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to this Security
Instrument, the Loan Agreement, the Note or the other Loan Documents, including,
without limitation, any officer's certificate, balance sheet, statement of
profit and loss or other financial statement, survey, appraisal, or insurance
policy, Lender shall not be deemed to have warranted, consented to, or affirmed
the sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
Section 4.4. Reliance. Each Borrower recognizes and acknowledges that in
accepting the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, Lender is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in Article III of the
Loan Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Xxxxxx; that such reliance
existed on the part of Lender prior to the date hereof, that the warranties and
representations are a material inducement to Lender in making the Loan; and that
Xxxxxx would not be willing to make the Loan and accept this Security Instrument
in the absence of the warranties and representations as set forth in Article III
of the Loan Agreement.
ARTICLE 5 - FURTHER ASSURANCES
Section 5.1. Recording of Security Instrument, etc. Each 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 Loan Documents creating a lien or security interest or evidencing the
lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
10
required by Xxxxxx for 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. Each Borrower will pay all taxes,
filing, registration or recording fees, and all expenses incident to the
preparation, execution, acknowledgment and/or recording of the Note, this
Security Instrument, the other Loan Documents, any financing statements
evidencing Xxxxxx's lien in the Property, any note, deed of trust or mortgage
supplemental hereto, any security instrument with respect to the Property and
any instrument of further assurance, and any modification, continuation, or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security Instrument, any deed
of trust or mortgage supplemental hereto, any security instrument with respect
to the Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
Section 5.2. Further Acts, etc. Each Borrower will, at its own cost, and
without expense to Lender, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, deeds of trust, 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 and Trustee the property and rights hereby deeded,
granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which any Borrower may be
or may hereafter become bound to convey or assign to Trustee or 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 evidencing the lien created hereby), or for complying with all
Legal Requirements. Pursuant to its signature hereunder, and in connection with
Xxxxxx's filing initial financing statements (and/or fixture filings),
amendments, continuations, and terminations in all such jurisdictions and with
all such governmental authorities as Lender deems desirable (to evidence the
lien granted Lender hereunder), each Borrower hereby confirms that the Lender is
a person entitled to file a record, and each Borrower has authorized all such
filings, within the meaning of Section 9-509 of the Uniform Commercial Code.
Each Borrower grants to Lender an irrevocable power of attorney coupled with an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Lender at law and in equity, including without limitation
such rights and remedies available to Lender pursuant to this Section 5.2.
Section 5.3. Changes in Tax, Debt, Credit and Documentary Stamp Laws.
(a) If any law is enacted or adopted or amended after the date
of this Security Instrument which deducts the Debt from the value of the
Property for the purpose of taxation or which imposes a tax, either directly or
indirectly, on the Debt or Xxxxxx's interest in the Property, each Borrower will
pay the tax, with interest and penalties thereon, if any. If Xxxxxx is advised
by counsel chosen by it that the payment of tax by such Xxxxxxxx would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury then Lender shall have the option by written notice of not less
than one hundred twenty (120) days to declare the Debt immediately due and
payable.
(b) Neither Borrower will 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
11
Property, or any part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Property, or any part thereof, for real
estate tax purposes by reason of this Security Instrument or the Debt. If such
claim, credit or deduction shall be required by law, Lender shall have the
option, by written notice of not less than one hundred twenty (120) days, to
declare the Debt immediately due and payable.
(c) If at any time the United States of America, any State
thereof or any subdivision of any such State shall require revenue or other
stamps to be affixed to the Note, this Security Instrument, or any of the other
Loan Documents or impose any other tax or charge on the same, each Borrower will
pay for the same, with interest and penalties thereon, if any.
Section 5.4. Splitting of Deed of Trust. 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, each Borrower,
upon written request of Xxxxxx, shall execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered by the then owner of the Property, to
Lender and/or its designee or designees substitute notes and security
instruments in such principal amounts, aggregating not more than the then unpaid
principal amount of the Note, and containing terms, provisions and clauses
similar to those contained herein and in the Note, and such other documents and
instruments as may be reasonably required by Xxxxxx.
Section 5.5. Replacement Documents. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any other Loan Document which is not of public record, and, in the case of
any such mutilation, upon surrender and cancellation of such Note or other Loan
Document, each Borrower will issue, in lieu thereof, a replacement Note or other
Loan Document, dated the date of such lost, stolen, destroyed or mutilated Note
or other Loan Document in the same principal amount thereof and otherwise of
like tenor.
ARTICLE 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1. Lender Reliance. Each Borrower acknowledges that Xxxxxx has
examined and relied on the experience of each Borrower and its general partners,
members, principals and (if such Borrower is a trust) beneficial owners in
owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Xxxxxxxx's ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Each Borrower acknowledges
that Lender has a valid interest in maintaining the value of the Property so as
to ensure that, should Borrower default in the repayment of the Debt or the
performance of the Other Obligations, Lender can recover the Debt by a sale of
the Property.
Section 6.2. No Transfer. Neither Borrower shall permit or suffer any
Transfer to occur, unless permitted by the Loan Agreement or unless Lender shall
consent thereto in writing.
Section 6.3. Transfer Defined. As used in this Article 6 "Transfer" shall
mean any voluntary or involuntary sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge,
12
assignment, or transfer of: (a) all or any part of the Property or any estate or
interest therein including, but not be limited to, (i) an installment sales
agreement wherein any Borrower agrees to sell the Property or any part thereof
for a price to be paid in installments, (ii) an agreement by any Borrower
leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder and its affiliates or (iii) a sale,
assignment or other transfer of, or the grant of a security interest in, any
Borrower's right, title and interest in and to any Leases or any Rents; or (b)
any ownership interest in (i) any Borrower, (ii) SPE Equity Owner or (iii) any
indemnitor or guarantor of any Obligations or (iv) any corporation, partnership,
limited liability company, trust or other entity owning, directly or indirectly,
any interest in any Borrower or any indemnitor or guarantor of any Obligations.
Section 6.4. Lender's Rights. Without obligating Lender to grant any
consent under Section 6.2 hereof which Lender may grant or withhold in its sole
discretion, Lender reserves the right to condition the consent required
hereunder upon (a) a modification of the terms hereof and of the Loan Agreement,
the Note or the other Loan Documents; (b) an assumption of the Loan Agreement,
the Note, this Security Instrument and the other Loan Documents; (c) payment of
all of Lender's expenses incurred in connection with such transfer; (d) receipt
of Rating Agency Confirmation; (e) the delivery of a nonconsolidation opinion
reflecting the proposed transfer satisfactory in form and substance to Lender;
(f) the proposed transferee's continued compliance with the representations and
covenants set forth in the Loan Agreement; (g) the delivery of evidence
satisfactory to Lender that the single purpose nature and bankruptcy remoteness
of each Borrower, its shareholders, partners or members, as the case may be,
following such transfers are in accordance with the standards of the Rating
Agencies; (h) the proposed transferee's ability to satisfy Lender's then-current
underwriting standards; or (i) such other conditions as Lender shall determine
in its reasonable discretion to be in the interest of Xxxxxx, including, without
limitation, the creditworthiness, reputation and qualifications of the
transferee with respect to the Loan and the Property. 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 a Transfer without Xxxxxx's consent. This provision shall apply to
every Transfer, other than any Transfer permitted pursuant to the Loan
Agreement, regardless of whether voluntary or not, or whether or not Lender has
consented to any previous Transfer.
ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1. Remedies. Upon the occurrence and during the continuance of
any Event of Default, each Borrower agrees that Lender or Trustee, or both, may
take such action, without notice or demand, as it deems advisable to protect and
enforce its rights against such 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 or Trustee
may determine, in their sole discretion, without impairing or otherwise
affecting the other rights and remedies of Lender or Trustee:
(a) declare the entire unpaid Debt to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument under any applicable provision of law,
in which case the
13
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;
(c) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Security Instrument for the portion of the Debt then due and
payable, subject to the continuing lien and security interest of this Security
Instrument for the balance of the Debt not then due, unimpaired and without loss
of priority;
(d) sell for cash or upon credit the Property or any part thereof and
all estate, claim, demand, right, title and interest of any Borrower therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entirety or in parcels, at such time and place, upon such
terms and after such notice thereof, all as may be required or permitted by law;
and, without limiting the foregoing:
(i) In connection with any sale or sales hereunder, Lender or
the Trustee shall be entitled to elect to treat any of the Property which
consists of a right in action or which is property that can be severed
from the Real Property covered hereby or any improvements without causing
structural damage thereto as if the same were personal property, and
dispose of the same in accordance with applicable law, separate and apart
from the sale of Real Property. Where the Property consists of Real
Property, Personal Property, Equipment or Fixtures, whether or not such
Personal Property or Equipment is located on or within the Real Property,
Lender and/or the Trustee shall be entitled to elect to exercise its
rights and remedies against any or all of the Real Property, Personal
Property, Equipment and Fixtures and the fee and/or leasehold interest
therein in such order and manner as is now or hereafter permitted by
applicable law;
(ii) Lender and/or the Trustee shall be entitled to elect to
proceed against any or all of the Real Property, Personal Property,
Equipment and Fixtures and the fee and/or leasehold interest therein in
any manner permitted under applicable law; and if Lender and/or the
Trustee so elects pursuant to applicable law, the power of sale herein
granted shall be exercisable with respect to all or any of the Real
Property, Personal Property, Equipment and Fixtures and the fee and/or
leasehold interest therein covered hereby, as designated by Lender and/or
the Trustee and Trustee is hereby authorized and empowered to conduct any
such sale of any Real Property, Personal Property, Equipment and Fixtures
and the fee and/or leasehold interest therein in accordance with the
procedures applicable to Real Property;
(iii) Should Lender and/or the Trustee elect to sell any portion
of the Property which is Real Property or which is Personal Property,
Equipment or Fixtures that the Lender and/or the Trustee has elected
under applicable law to sell together with Real Property in accordance
with the laws governing a sale of Real Property, Lender and/or the
Trustee shall give such notice of Event of Default, if any, and election
to sell as may then be required by law. Thereafter, upon the expiration
of such time and the giving of such notice of sale as may then
14
be required by law, and without the necessity of any demand on any
Borrower, Lender and/or the Trustee at the time and place specified in the
notice of sale, shall sell such Real Property or part thereof at public
auction to the highest bidder for cash in lawful money of the United
States. Lender or the Trustee may from time to time postpone any sale
hereunder by public announcement thereof at the time and place noticed
therefor;
(iv) If the Property consists of several lots, parcels or items of
property, Lender or the Trustee shall, subject to applicable law, (A)
designate the order in which such lots, parcels or items shall be offered
for sale or sold, or (B) elect to sell such lots, parcels or items through
a single sale, or through two or more successive sales, or in any other
manner Lender or the Trustee designates. Any Person, other than the
Trustee, including any Borrower or Lender, may purchase at any sale
hereunder. Should Lender or the Trustee desire that more than one sale or
other disposition of the Property be conducted, Lender or the Trustee
shall, subject to applicable law, cause such sales or dispositions to be
conducted simultaneously, or successively, on the same day, or at such
different days or times and in such order as Lender or the Trustee may
designate, and no such sale shall terminate or otherwise affect the lien of
this Security Instrument on any part of the Property not sold until all the
Debt has been paid in full. In the event Lender or the Trustee elects to
dispose of the Property through more than one sale, except as otherwise
provided by applicable law, each Borrower agrees to pay the costs and
expenses of each such sale and of any judicial proceedings wherein such
sale may be made;
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Note, the Loan Agreement or in the other Loan Documents;
(f) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Security Instrument or the other Loan
Documents;
(g) apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Debt and without regard for the solvency of any
Borrower, any guarantor, indemnitor with respect to the Loan or of any Person,
liable for the payment of the Debt;
(h) the license granted to the Borrowers under Section 1.2 hereof shall
automatically be revoked and Lender may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess each Borrower
and its agents and servants therefrom, without liability for trespass, damages
or otherwise and exclude each Borrower and its agents or servants wholly
therefrom, and take possession of all books, records and accounts relating
thereto and each Borrower agrees to surrender possession of the Property and of
such books, records and accounts to Lender upon demand, and thereupon Lender may
(i) use, operate, manage, control, insure, maintain, repair, restore and
otherwise deal with all and every part of the Property and conduct the
15
business thereat; (ii) complete any construction on the Property in such manner
and form as Lender deems advisable; (iii) make alterations, additions, renewals,
replacements and improvements to or on the Property; (iv) exercise all rights
and powers of any Borrower with respect to the Property, whether in the name of
such Borrower or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for,
collect and receive all Rents of the Property and every part thereof; (v)
require each 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 such Borrower;
(vi) require each Borrower to vacate and surrender possession of the Property to
Lender or to such receiver and, in default thereof, such Borrower may be evicted
by summary proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment of the Debt, in such order, priority and proportions as
Lender shall deem appropriate in its sole discretion after deducting therefrom
all expenses (including reasonable attorneys' fees) incurred in connection with
the aforesaid operations and all amounts necessary to pay the Taxes, Other
Charges, insurance 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;
(i) exercise any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing: (i) the right to take possession of the Fixtures,
the Equipment and the Personal Property, or any part thereof, and to take such
other measures as Lender may deem necessary for the care, protection and
preservation of the Fixtures, the Equipment and the Personal Property, and (ii)
request each Borrower at its expense to assemble the Fixtures, the Equipment and
the Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended action
by Lender with respect to the Fixtures, the Equipment and/or the Personal
Property sent to any Borrower in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable
notice to such Borrower;
(j) apply any sums then deposited or held in escrow or otherwise by or on
behalf of Lender in accordance with the terms of the Loan Agreement, this
Security Instrument or any other Loan Document to the payment of the following
items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of the Note;
(iv) Amortization of the unpaid principal balance of the Note;
(v) All other sums payable pursuant to the Note, the Loan
Agreement, this Security Instrument and the other Loan Documents, including
without
16
limitation advances made by Xxxxxx pursuant to the terms of this Security
Instrument;
(k) pursue such other remedies as Lender may have under applicable law;
(l) apply the undisbursed balance of any Net Proceeds Deficiency deposit,
together with interest thereon, to the payment of the Debt in such order,
priority and proportions as Lender shall deem to be appropriate in its
discretion; or
(m) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument as it relates to Fee Owner's fee
interest in the Property without foreclosing on that portion of the Property
which constitutes Operator's leasehold interest therein. Notwithstanding the
foregoing, Operator agrees that Lender may, in its sole discretion, terminate
any and all operating leases to which either Fee Owner or Operator is now or
hereafter may be a party.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Security Instrument shall continue as a lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
Section 7.2. Application of Proceeds. The purchase money, proceeds and
avails of any disposition of the Property, and or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
other Loan Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall deem proper, to
the extent consistent with law.
Section 7.3. Right to Cure Defaults. Upon the occurrence and during the
continuance of any Event of Default or if any Borrower fails to make any payment
or to do any act as herein provided, Lender may, but without any obligation to
do so and without notice to or demand on any Borrower and without releasing any
Borrower from any obligation hereunder, make or do the same in such manner and
to such extent as Lender may deem necessary to protect the security hereof.
Lender is authorized to enter upon the Property for such purposes, or appear in,
defend, or bring any action or proceeding to protect its interest in the
Property or to foreclose this Security Instrument or collect the Debt, and the
cost and expense thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section 7.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Xxxxxx in remedying such Event
of Default or such failed payment or act or in appearing in, defending, or
bringing any such action or proceeding shall bear interest at the Default Rate,
for the period after notice from Lender that such cost or expense was incurred
to the date of payment to Lender. All such costs and expenses incurred by Lender
together with interest thereon calculated at the Default Rate shall be deemed to
constitute a portion of the Debt and be secured by this Security Instrument and
the other Loan Documents and shall be immediately due and payable upon demand by
Lender therefor.
Section 7.4. Actions and Proceedings. Lender or Trustee has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action
17
or proceeding, in the name and on behalf of any Borrower, which Xxxxxx, in its
discretion, decides should be brought to protect its interest in the Property.
Section 7.5. Recovery of Sums Required To be Paid. Lender shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender or Trustee thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by any Borrower existing at the time such
earlier action was commenced.
Section 7.6. Examination of Books and Records. At reasonable times and
upon reasonable notice, Lender, its agents, accountants and attorneys shall have
the right to examine the records, books, management and other papers of any
Borrower which reflect upon its financial condition, at the Property or at any
office regularly maintained by such Borrower where the books and records are
located. Lender and its agents shall have the right to make copies and extracts
from the foregoing records and other papers. In addition, at reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of any Borrower
pertaining to the income, expenses and operation of the Property during
reasonable business hours at any office of such Borrower where the books and
records are located. This Section 7.6 shall apply throughout the term of the
Note and without regard to whether an Event of Default has occurred and is
continuing.
Section 7.7. Other Rights, Etc.
(a) The failure of Lender or Trustee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Security Instrument. Neither Borrower shall be relieved of its obligations
hereunder by reason of (i) the failure of Lender or Trustee to comply with any
request of any Borrower or any guarantor or indemnitor with respect to the Loan
to take any action to foreclose this Security Instrument or otherwise enforce
any of the provisions hereof or of the Note or the other Loan Documents, (ii)
the release, regardless of consideration, of the whole or any part of the
Property, or of any person liable for the Debt or any portion thereof, or (iii)
any agreement or stipulation by Lender extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Security
Instrument or the other Loan Documents.
(b) It is agreed that the risk of loss or damage to the Property
is on each 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 Xxxxxx 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 Xxxxxx's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Xxxxxx in such order and manner as Lender, in its discretion,
may elect. Lender or Trustee may take action to recover the Debt, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
Lender or Trustee thereafter to foreclose this Security Instrument. The rights
of Lender or Trustee under this Security Instrument shall be separate,
18
distinct and cumulative and none shall be given effect to the exclusion of the
others. No act of Lender or Trustee shall be construed as an election to proceed
under any one provision herein to the exclusion of any other provision. Neither
Lender nor Trustee shall be limited exclusively to the rights and remedies
herein stated but shall be entitled to every right and remedy now or hereafter
afforded at law or in equity.
Section 7.8. Right to Release Any Portion of the Property. Lender may
release any portion of the Property for such consideration as Lender may require
without, as to the remainder of the Property, in any way impairing or affecting
the lien or priority of this Security Instrument, or improving the position of
any subordinate lienholder with respect thereto, except to the extent that the
obligations hereunder shall have been reduced by the actual monetary
consideration, if any, received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place thereof as Lender
may require without being accountable for so doing to any other lienholder. This
Security Instrument shall continue as a lien and security interest in the
remaining portion of the Property. Notwithstanding the forgoing, upon full
payment of all Debt, at the time and manner provided in the Loan Documents, this
conveyance or lien shall be null and void and upon demand therefor following
such payment, a release of this Security Instrument shall be promptly provided
by Lender to the Borrowers, at the sole cost and expense of the Borrowers.
Section 7.9. Violation of Laws. If the Property is not in material
compliance with Legal Requirements, Lender may impose additional requirements
upon each Borrower in connection herewith including, without limitation,
monetary reserves or financial equivalents.
Section 7.10. Recourse and Choice of Remedies. Notwithstanding any other
provision of this Security Instrument or the Loan Agreement, including, without
limitation, Section 11.22 of the Loan Agreement, Lender and other Indemnified
Parties (as hereinafter defined) are entitled to enforce the obligations of any
Borrower and any guarantor and indemnitor contained in Sections 9.2 and 9.3
herein and Section 9.2 of the Loan Agreement without first resorting to or
exhausting any security or collateral and without first having recourse to the
Note or any of the Property, through foreclosure, exercise of a power of sale or
acceptance of a deed in lieu of foreclosure or otherwise, and in the event
Lender commences a foreclosure action against the Property, or otherwise causes
Trustee to exercise the power of sale pursuant to this Security Instrument,
Lender is entitled to pursue a deficiency judgment with respect to such
obligations against any Borrower and any guarantor or indemnitor with respect to
the Loan. The provisions of Sections 9.2 and 9.3 herein and Section 9.2 of the
Loan Agreement are exceptions to any non-recourse or exculpation provisions in
the Loan Agreement, the Note, this Security Instrument or the other Loan
Documents, and any Borrower and any guarantor or indemnitor with respect to the
Loan are fully and personally liable for the obligations pursuant to Sections
9.2 and 9.3 herein and Section 9.2 of the Loan Agreement. The liability of any
Borrower and any guarantor or indemnitor with respect to the Loan pursuant to
Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement is not limited
to the original principal amount of the Note. Notwithstanding the foregoing,
nothing herein shall inhibit or prevent Lender or Trustee from foreclosing or
exercising a power of sale pursuant to this Security Instrument or exercising
any other rights and remedies pursuant to the Loan Agreement, the Note, this
Security Instrument and the other Loan Documents, whether simultaneously with
foreclosure proceedings or in any other sequence. A separate action or actions
may be brought and prosecuted against
19
any Borrower pursuant to Sections 9.2 and 9.3 herein and Section 9.2 of the Loan
Agreement, whether or not action is brought against any other Person or whether
or not any other Person is joined in the action or actions. In addition, Xxxxxx
shall have the right but not the obligation to join and participate in, as a
party if it so elects, any administrative or judicial proceedings or actions
initiated in connection with any matter addressed in the Environmental
Indemnity.
Section 7.11. Right of Entry. Upon reasonable notice to the Borrowers,
Lender and its agents shall have the right to enter and inspect the Property at
all reasonable times.
ARTICLE 8 INTENTIONALLY OMITTED
ARTICLE 9 - INDEMNIFICATION
Section 9.1. General Indemnification. Each Borrower shall, at its sole
cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to reasonable
attorneys' fees and other costs of defense) (collectively, the "Losses") imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (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, the Loan Agreement, this Security Instrument, or any
other Loan Documents; (c) any and all lawful action that may be taken by Lender
in connection with the enforcement of the provisions of this Security Instrument
or the Loan Agreement or the Note or any of the other Loan Documents, whether or
not suit is filed in connection with same, or in connection with any Borrower,
any guarantor or indemnitor and/or any partner, joint venturer or shareholder
thereof becoming a party to a voluntary or involuntary federal or state
bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or
death of persons or loss of or damage to property occurring in, on or about the
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of any Borrower to perform or be in compliance with
any of the terms of this Security Instrument; (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 1099-B, Statement for Recipients
of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may
be required in connection with this Security Instrument, or to supply a copy
thereof in a timely fashion to the recipient of the proceeds of the transaction
in connection with which this Security Instrument is made; (i) any failure of
the Property to be in compliance with any Legal Requirements; (j) the
enforcement by any Indemnified Party of the provisions of this Article 9; (k)
any and all claims and demands whatsoever which may be asserted against Lender
by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; (1)
the payment of any commission, charge or brokerage fee to anyone claiming
through any Borrower which may be
20
payable in connection with the funding of the Loan; or (m) any misrepresentation
made by any Borrower in this Security Instrument or any other Loan Document. Any
amounts payable to Lender by reason of the application of this Section 9.1 shall
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid. For purposes of
this Article 9, the term "Indemnified Parties" means Lender and any Person who
is or will have been involved in the origination of the Loan, any Person who is
or will have been involved in the servicing of the Loan secured hereby, any
Person in whose name the encumbrance created by this Security Instrument is or
will have been recorded, persons and entities who may hold or acquire or will
have held a full or partial interest in the Loan secured hereby (including, but
not limited to, investors or prospective investors in the Securities, as well as
custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan secured hereby for the benefit of third parties) as
well as the respective directors, officers, shareholders, partners, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not limited to any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and 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 9.2. Mortgage and/or Intangible Tax. Each 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 Loan Documents, but
excluding any income, franchise or other similar taxes.
Section 9.3. ERISA Indemnification. Each Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in Xxxxxx's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 3.1.8 or 4.2.11 of the Loan Agreement.
Section 9.4. Intentionally Omitted.
Section 9.5. Duty to Defend; Attorneys' Fees and Other Fees and Expenses.
Upon written request by any Indemnified Party, each Borrower shall defend such
Indemnified Party (if requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include any Borrower and any Indemnified Party and such
Borrower and Indemnified Party shall have reasonably concluded that there are
any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to such Borrower, such
Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
21
behalf of such Indemnified Party, provided that no compromise or settlement
shall be entered without such Xxxxxxxx's consent, which consent shall not be
unreasonably withheld. Upon demand, such Borrower shall pay or, in the sole and
absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
ARTICLE 10 - WAIVERS
Section 10.1. Waiver of Counterclaim. To the extent permitted by
applicable law, each Borrower hereby waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Lender arising out of or in any way connected with this
Security Instrument, the Loan Agreement, the Note, any of the other Loan
Documents, or the Obligations.
Section 10.2. Marshalling and Other Matters. To the fullest extent
permitted by applicable law, each Borrower, for itself and its successors and
assigns, hereby waives the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, each 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 such Borrower, and on
behalf of each and every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.
Section 10.3. Waiver of Notice. To the extent permitted by applicable law,
neither Borrower shall be entitled to any notices of any nature whatsoever from
Lender or Trustee except with respect to matters for which this Security
Instrument specifically and expressly provides for the giving of notice by
Lender or Trustee to such Borrower and except with respect to matters for which
Lender or Trustee is required by applicable law to give notice, and each
Borrower hereby expressly waives the right to receive any notice from Lender or
Trustee with respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Lender or Trustee
to such Borrower.
Section 10.4. Waiver of Statute of Limitations. To the extent permitted by
applicable law, each Borrower hereby expressly waives and releases to the
fullest extent permitted by law, the pleading of any statute of limitations as a
defense to payment of the Debt or performance of its Other Obligations.
Section 10.5. Survival. The indemnifications made pursuant to Sections
9.1, 9.2 and 9.3 herein and the representations and warranties, covenants, and
other obligations arising under the Environmental Indemnity, shall continue
indefinitely in full force and effect and shall survive and shall in no way be
impaired by: any satisfaction, release 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 Xxxxxx's rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
22
exercise of any rights and remedies pursuant to the Loan Agreement, the Note or
any of the other Loan Documents, any transfer of all or any portion of the
Property (whether by any Borrower or by Lender following foreclosure or
acceptance of a deed in lieu of foreclosure or at any other time), any amendment
to this Security Instrument, the Loan Agreement, the Note or the other Loan
Documents, and any act or omission that might otherwise be construed as a
release or discharge of any Borrower from the obligations pursuant hereto.
ARTICLE 11 - EXCULPATION
The provisions of Section 11.22 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
ARTICLE 12 - NOTICES
All notices or other written communications hereunder shall be delivered in
accordance with Section 11.6 of the Loan Agreement.
ARTICLE 13 - APPLICABLE LAW
Section 13.1. Governing Law. This Security Instrument shall be governed and
construed in accordance with the laws of the State in which the Land is located.
Section 13.2. Usury Laws. Notwithstanding anything to the contrary, (a) all
agreements and communications between any Borrower and Lender are hereby and
shall automatically be limited so that, after taking into account all amounts
deemed interest, the interest contracted for, charged or received by Lender
shall never exceed the maximum lawful rate or amount, (b) in calculating whether
any interest exceeds the lawful maximum, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of the Borrowers to Lender, and (c) if through any contingency or
event, Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of the Borrowers to
Lender, or if there is no such indebtedness, shall immediately be returned to
the Borrowers.
Section 13.3. Provisions Subject to Applicable Law. All rights, powers and
remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
ARTICLE 14 - DEFINITIONS
All capitalized terms not defined herein shall have the respective meanings
set forth in the Loan Agreement. Unless the context clearly indicates a contrary
intent or unless otherwise
23
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
"Property" shall include any portion of the Property and any interest therein,
and the phrases "attorneys' fees", "legal fees" and "counsel fees" shall include
any and all 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 Xxxxxx in protecting its interest in
the Property, the Leases and the Rents and enforcing its rights hereunder.
ARTICLE 15 - MISCELLANEOUS PROVISIONS
Section 15.1. No Oral Change. This Security Instrument, and any provisions
hereof, may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of any Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
Section 15.2. Successors and Assigns. This Security Instrument shall be
binding upon and inure to the benefit of each Borrower and Xxxxxx and their
respective successors and assigns forever.
Section 15.3. Inapplicable Provisions. If any term, covenant or condition
of the Loan Agreement, the Note or this Security Instrument is held to be
invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note
and this Security Instrument shall be construed without such provision.
Section 15.4. Headings, etc. The headings and captions of various Sections
of this Security Instrument are for convenience of reference only and are not to
be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
Section 15.5. Intentionally Omitted.
Section 15.6. Subrogation. If any or all of the proceeds of the Note have
been used to extinguish, extend or renew any indebtedness heretofore existing
against the Property, then, to the extent of the funds so used, Lender shall be
subrogated to all of the rights, claims, liens, titles, and interests existing
against the Property heretofore held by, or in favor of, the holder of such
indebtedness and such former rights, claims, liens, titles, and interests, if
any, are not waived but rather are continued in full force and effect in favor
of Xxxxxx 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 any Borrower's obligations hereunder, under the Loan Agreement, the Note and
the other Loan Documents and the performance and discharge of the Other
Obligations.
Section 15.7. Entire Agreement. The Note, the Loan Agreement, this Security
Instrument and the other Loan Documents constitute the entire understanding and
agreement between the Borrowers and Lender with respect to the transactions
arising in connection with the
24
Debt and supersede all prior written or oral understandings and agreements
between the Borrowers and Lender with respect thereto. Each Borrower hereby
acknowledges that, except as incorporated in writing in the Note, the Loan
Agreement, this Security Instrument and the other Loan Documents, there are not,
and were not, and no persons are or were authorized by Lender to make, any
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of the Note, the
Loan Agreement, this Security Instrument and the other Loan Documents.
Section 15.8. Limitation on Lender's Responsibility. No provision of this
Security Instrument shall operate to place any obligation or liability for the
control, care, management or repair of the Property upon Lender, nor shall it
operate to make Lender responsible or liable for any waste committed on the
Property by the tenants or any other Person, or for any dangerous or defective
condition of the Property, or for any negligence in the management, upkeep,
repair or control of the Property resulting in loss or injury or death to any
tenant, licensee, employee or stranger. Nothing herein contained shall be
construed as constituting Lender a "mortgagee in possession."
Section 15.9. Waiver of Right to Trial by Jury.
EACH BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE
TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS
SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH BORROWER, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. XXXXXX IS EACH HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.
Section 15.10. Secondary Market. Lender may sell, transfer and deliver the
Note and assign this Security Instrument and the other Loan Documents to one or
more investors in the secondary mortgage market ("Investors"). In connection
with such sale, Lender may retain or assign responsibility for servicing the
Loan, including the Note, this Security Instrument or the other Loan Documents,
or may delegate some or all of such responsibility and/or obligations to a
servicer including, but not limited to, any subservicer or master servicer, on
behalf of the Investors. All references to Lender herein shall refer to and
include any such servicer to the extent applicable.
Section 15.11. Cross-Collateralization. Without limitation to any other
right or remedy provided to Lender or Trustee in this Security Instrument or any
of the other Loan Documents, each Borrower acknowledges and agrees that (i) upon
the occurrence of an Event of Default, to the fullest extent permitted by law,
Lender or Trustee shall have the right to pursue all of its rights and remedies
in one proceeding, or separately and independently in separate proceedings which
Lender or Trustee, in its sole and absolute discretion, shall determine from
time to time, (ii) neither Lender nor Trustee is required to xxxxxxxx assets,
sell any collateral for
25
the Loan in any inverse order of alienation, or be subjected to any "one action"
or "election of remedies" law or rule, (iii) the exercise by Lender or Trustee
of any remedies against any collateral for the Loan will not impede Lender or
Trustee from subsequently or simultaneously exercising remedies against other
collateral for the Loan; (iv) all Liens and other rights, remedies and
privileges provided to Lender or Trustee in the Loan Documents or otherwise
shall remain in full force and effect until Lender or Trustee has exhausted all
of its remedies against the collateral for the Loan and all of the collateral
for the Loan has been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Loan; and (v) all of the Properties shall remain security
for the performance of all of the obligations of each Borrower hereunder, under
the Note and under any of the other Loan Documents.
Section 15.12. Joint and Several Liability. If more than one Person has
executed this Security Instrument as "Borrower," the representations, covenants,
warranties and obligations of all such Persons hereunder shall be joint and
several. Each Borrower further acknowledges and agrees that it shall be jointly
and severally liable for the obligations of all the Other Borrowers under the
Loan Documents.
ARTICLE 16 - DEED OF TRUST PROVISIONS
Section 16.1. Concerning the Trustee. Trustee shall be under no duty to
take any action hereunder except as expressly required hereunder or by law, or
to perform any act which would involve Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Trustee's reasonable satisfaction. Trustee, by acceptance of this Security
Instrument, covenants to perform and fulfill the trusts herein created, being
liable, however, only for willful negligence or misconduct, and hereby waives
any statutory fee and agrees to accept reasonable compensation, in lieu thereof,
for any services rendered by Trustee in accordance with the terms hereof.
Trustee may resign at any time upon giving thirty (30) days' notice to the
Borrowers and to Lender. Lender may remove Trustee at any time or from time to
time and select a successor trustee. In the event of the death, removal,
resignation, refusal to act, or inability to act of Trustee, or in its sole
discretion for any reason whatsoever Lender may, without notice and without
specifying any reason therefor and without applying to any court, select and
appoint a successor trustee, by an instrument recorded wherever this Security
Instrument is recorded and all powers, rights, duties and authority of Trustee,
as aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Xxxxxx. The procedure provided
for in this paragraph for substitution of Trustee shall be in addition to and
not in exclusion of any other provisions for substitution, by law or otherwise.
Section 16.2. Trustee's Fees. Each Borrower shall pay all reasonable costs,
fees and expenses incurred by Trustee and Trustee's agents and counsel in
connection with the performance by Trustee of Trustee's duties hereunder and all
such costs, fees and expenses shall be secured by this Security Instrument.
Section 16.3. Certain Rights. With the approval of Xxxxxx, Trustee shall
have the right to take any and all of the following actions: (i) to select,
employ, and advise with counsel (who may be, but need not be, counsel for
Xxxxxx) upon any matters arising hereunder, including
26
the preparation, execution, and interpretation of the Loan Agreement, the Note,
this Security Instrument or the other Loan Documents, and shall be fully
protected in relying as to legal matters on the advice of counsel, (ii) to
execute any of the trusts and powers hereof and to perform any duty hereunder
either directly or through his agents or attorneys, (iii) to select and employ,
in and about the execution of his duties hereunder, suitable accountants,
engineers and other experts, agents and attorneys-in-fact, either corporate or
individual, not regularly in the employ of Trustee, and Trustee shall not be
answerable for any act, default, negligence, or misconduct of any such
accountant, engineer or other expert, agent or attorney-in-fact, if selected
with reasonable care, or for any error of judgment or act done by Trustee in
good faith, or be otherwise responsible or accountable under any circumstances
whatsoever, except for Trustee's gross negligence or bad faith, and (iv) any and
all other lawful action as Lender may instruct Trustee to take to protect or
enforce Xxxxxx's rights hereunder. Trustee shall not be personally liable in
case of entry by Trustee, or anyone entering by virtue of the powers herein
granted to Trustee, upon the Property for debts contracted for or liability or
damages incurred in the management or operation of the Property. Trustee shall
have the right to rely on any instrument, document, or signature authorizing or
supporting an action taken or proposed to be taken by Trustee hereunder,
believed by Trustee in good faith to be genuine. Trustee shall be entitled to
reimbursement for actual expenses incurred by Trustee in the performance of
Xxxxxxx's duties hereunder and to reasonable compensation for such of Trustee's
services hereunder as shall be rendered.
Section 16.4. Retention of Money. All moneys received by Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by applicable law) and Trustee shall
be under no liability for interest on any moneys received by Trustee hereunder.
Section 16.5. Perfection of Appointment. Should any deed, conveyance, or
instrument of any nature be required from any Borrower by any Trustee or
substitute trustee to more fully and certainly vest in and confirm to the
Trustee or substitute trustee such estates rights, powers, and duties, then,
upon request by the Trustee or substitute trustee, any and all such deeds,
conveyances and instruments shall be made, executed, acknowledged, and delivered
and shall be caused to be recorded and/or filed by such Borrower.
Section 16.6. Succession Instruments. Any substitute trustee appointed
pursuant to any of the provisions hereof shall, without any further act, deed,
or conveyance, become vested with all the estates, properties, rights, powers,
and trusts of its or his predecessor in the rights hereunder with like effect as
if originally named as Trustee herein; but nevertheless, upon the written
request of Lender or of the substitute trustee, the Trustee ceasing to act shall
execute and deliver any instrument transferring to such substitute trustee, upon
the trusts herein expressed, all the estates, properties, rights, powers, and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer and
deliver any of the property and moneys held by such Trustee to the substitute
trustee so appointed in the Trustee's place.
27
ARTICLE 17 - STATE-SPECIFIC PROVISIONS
Section 17.1. Principles of Construction. In the event of any
inconsistencies between the terms and conditions of this Article 17 and the
other terms and conditions of this Security Instrument, the terms and conditions
of this Article 17 shall control and be binding.
Section 17.2. Financing Statement. This Security Instrument shall also be
effective as a financing statement covering minerals or the like (including oil
and gas) and accounts subject to Subsection (3) of Section 9-103 of the Maryland
Uniform Commercial Code, as amended, and similar provisions (if any) of the
Uniform Commercial Code as enacted in any other state where the Property is
situated which will be financed at the wellhead or minehead of the xxxxx or
mines located on the Property and is to be filed for record in the real estate
records of each county where any part of the Property is situated. This Security
Instrument shall also be effective as a financing statement covering any other
property and may be filed in any other appropriate filing or recording office.
Section 17.3. Release. If and when the Borrowers have paid all of the Debt,
as the same becomes due and payable, and all of the covenants, warranties,
undertakings and agreements in this Security Instrument are kept and performed,
and all obligations, if any, of Lender for future advances have been terminated,
then, and in that event only, all rights under this Security Instrument shall
terminate (except to the extent expressly provided herein with respect to
indemnifications, representations and warranties and other rights which are to
continue following the release hereof), and the Trustee, upon request by Xxxxxx,
will provide a release of this Security Instrument to the Borrowers. The
Borrowers shall be responsible for the recordation of such release and payment
of any recording costs associated therewith.
Section 17.4. Additional Remedies. In addition to any other rights they may
have at law or in equity, following an Event of Default hereunder, (i) Trustee
may take possession of and sell the Property, or any part thereof requested by
Xxxxxx to be sold, and in connection therewith each Borrower hereby (A) assents
to the passage of a decree for the sale of the Property by the equity court
having jurisdiction, and (B) authorizes and empowers Trustee to take possession
of and sell (or in case of the default of any purchaser to resell) the Property,
or any part thereof, all in accordance with the laws or rules of court of the
State of Maryland relating to deeds of trust, including any amendments thereof,
or additions thereto, which do not materially change or impair the remedy. In
connection with any foreclosure, Lender and/or Trustee may (y) procure such
title reports, surveys, tax histories and appraisals as they deem necessary, and
(z) make such repairs and additions to the Property as they deem advisable,
subject to the terms and provisions contained in the Leases (if any), all of
which shall constitute Expenses (hereinafter defined). In the case of any sale
under this Security Instrument, by virtue of judicial proceedings or otherwise,
the Property may be sold as an entirety or in parcels, by one sale or by several
sales, and any fixtures or collateral encumbered by this Security Instrument may
be sold at the same sale as the Property or in one or more sales, as may be
deemed by Trustee to be appropriate and without regard to any right of any
Borrower or any other person to the marshalling of assets, for cash, on credit
or for other property, for immediate or future delivery, and for such price or
prices and on such terms having first given such notice prior to the sale of
such time, place and terms by publication in at least one newspaper published or
having general circulation in the county or counties in which the Property is
located or at such time or times as may be required
28
by the laws of the State of Maryland or rule of court of the State of Maryland,
and such other times and by such other methods, if any, as Trustee, in its sole
discretion, shall deem advantageous and proper. "Expenses" means all costs and
expenses of any nature whatsoever incurred at any time and from time to time
(whether before or after an Event of Default) by Lender or Trustee in exercising
or enforcing any rights, powers and remedies provided in this Security
Instrument or any of the other Loan Documents, including, without limitation,
attorneys' fees, court costs, receivers' fees, management fees and costs
incurred in the repair, maintenance and operation of, or taking possession of
the Property, subject to the terms and provisions contained in the Leases (if
any) as to the costs for maintenance and repair, or selling, the Property.
Section 17.5. Foreclosure. Any sale of Property hereunder may be made at
public auction, at such time or times, at such place or places, upon such terms
and conditions and after such previous public notice as Trustee shall deem
appropriate and advantageous and as required by the laws of the State of
Maryland. Upon the terms of such sale being complied with, Trustee shall convey
to, and at the cost of, the purchaser or purchasers the interest of such
Borrower in the Property so sold, free and discharged of and from all estate,
title or interest of such Borrower, at law or in equity, such purchaser or
purchasers being hereby discharged from all liability to see to the application
of the purchase money. Lender and any affiliate thereof may be a purchaser of
the Property or of any part thereof or of any interest therein at any public
sale thereof, whether pursuant to foreclosure or power of sale or otherwise
hereunder, without forfeiting its right to collect any deficiency from any
Borrower; and Lender may apply upon the purchase price the Debt secured hereby
owing to Lender. Lender, upon any such purchase, shall acquire good title to the
properties so purchased, free of the lien of this Security Instrument and free
of all rights of redemption in any Borrower and free of all liens and
encumbrances subordinate to this Security Instrument. The proceeds of such sale
or sales under this Security Instrument, whether under the assent to a decree,
the power of sale, or by equitable foreclosure, shall be held by Trustee and
applied as follows: (i) first (A) all Expenses incurred in connection with such
sale or in preparing the Property for such sale and of obtaining possession
including, among other things, counsel fees reasonably incurred shall be allowed
and paid out of the proceeds of such sale or sales as the court having
jurisdiction may deem proper, (B) the Trustee's Commission (hereinafter defined)
and expenses and (C) all taxes, levies, assessments or other charges relating to
the Property which have or in the opinion of Trustee may have, priority over the
lien of this Security Instrument, including the pro rata portion thereof
applicable to the taxable period during which any payment is made pursuant to
this subsection; (ii) second, to pay all of the Debt and all interest then due
and accrued thereon, which shall include interest through the date of
ratification of the auditor's account; (iii) third, to pay the amount of any
liens of record inferior to this Security Instrument, together with lawful
interest, and lawful claims of third parties against the proceeds of any sale;
and (iv) lastly, to pay the surplus, if any, to any Borrower or any person or
entity entitled thereto unless otherwise required by law or directed by a court
of competent jurisdiction. In the event that the proceeds of any such sale or
sales, together with all other monies at the time held by Trustee under this
Security Instrument, are insufficient to pay the foregoing costs and expenses,
Lender may, at its sole option, advance such sums as Lender in its sole and
absolute discretion shall determine for the purpose of paying all or any part of
such costs and expenses, and all such sums so advanced shall be (A) a lien
against the Property, (B) added to the amount due under the Note and secured by
this Security Instrument, and (C) payable on demand with interest at the rate of
interest applicable to the principal balance of the
29
Note, from and including the date each such advance is made. In any event, each
Borrower shall be liable to Lender for any deficiency if the proceeds of any
such sale or sales are insufficient to pay, in full, all amounts to be
distributed pursuant to the clause (i) above. The Borrowers shall pay to Trustee
a commission in the amount of two and one half percent (2.5%) of the
then-outstanding debt secured hereby if the Property is advertised for sale
under the provisions of this Security Instrument and is not sold, and the
Borrowers shall also pay or reimburse Trustee for all of Trustee's expenses and
disbursements hereunder regardless of whether the Property is sold (the
"Trustee's Commission").
[NO FURTHER TEXT ON THIS PAGE]
30
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed under seal
by each Borrower as of the day and year first above written.
THI OF MARYLAND REAL ESTATE,
HOLDING CO.,LLC, a Delaware limited liability
company
By: /s/ XXXXXXX X. XXXXXXXX (SEAL)
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice-President
THI OF MARYLAND AT BEL PRE, LLC, a
Delaware limited liability company
By: /s/ XXXXXXX X. XXXXXXXX (SEAL)
-------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice-President
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On October 30, 2002, before me, a Notary Public in and for said state,
personally appeared Xxxxxxx X. Xxxxxxxx, personally known to me or proved to me
on the basis of satisfactory evidence to be the person whose name is subscribed
to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their capacity, and that by his/her/their signature on the
instrument, the person, or the entity upon behalf of which the person acted,
executed the instrument.
/s/ XXXXXX XXXX
----------------------------
Notary Public:
My commission expires: 6-30-03
[Notary Seal]
ACKNOWLEDGMENT
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On October 30, 2002, before me, a Notary Public in and for said state,
personally appeared Xxxxxxx X. Xxxxxxxx, personally known to me or proved to me
on the basis of satisfactory evidence to be the person(s) whose name(s) is (are)
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their capacity(ies), and that by his/her/their
signature(s) on the instrument, the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
/s/ XXXXXX XXXX
----------------------------
Notary Public:
My commission expires: 6-30-03
[Notary Seal]
ATTORNEY'S CERTIFICATE
I HEREBY CERTIFY that the within instrument was prepared by or under the
supervision of the undersigned, an attorney duly admitted to practice before the
Court of Appeals of Maryland.
/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------
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