WELLSFORD CAPITAL PROPERTIES, L.L.C., as mortgagor
(Borrower)
to
LEHMAN BROTHERS HOLDINGS INC., as mortgagee
(Lender)
-----------------------------------------------------------
MORTGAGE AND SECURITY AGREEMENT
-----------------------------------------------------------
Dated: October 22, 1998
Location: 19-23 Keewaydin Drive
Salem, New Hampshire
PREPARED BY AND UPON RECORDATION RETURN TO:
Kelley Drye & Warren LLP
101 Park Avenue
New York NY 10178
Attention: Thomas E. Tether, Esq.
TABLE OF CONTENTS
Page
ARTICLE 1 GRANTS OF SECURITY . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.1 Property Mortgaged . . . . . . . . . . . . . . . . . . .1
Section 1.2 Assignment of Rents. . . . . . . . . . . . . . . . . . .3
Section 1.3 Security Agreement . . . . . . . . . . . . . . . . . . .4
Section 1.4 Pledge of Monies Held. . . . . . . . . . . . . . . . . .4
ARTICLE 2 DEBT AND OBLIGATIONS SECURED . . . . . . . . . . . . . . . . . . .4
Section 2.1 Debt . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 2.2 Other Obligations. . . . . . . . . . . . . . . . . . . .5
Section 2.3 Debt and Other Obligations . . . . . . . . . . . . . . .5
Section 2.4 Payments . . . . . . . . . . . . . . . . . . . . . . . .5
ARTICLE 3 BORROWER COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .6
Section 3.1 Payment of Debt. . . . . . . . . . . . . . . . . . . . .6
Section 3.2 Incorporation by Reference . . . . . . . . . . . . . . .6
Section 3.3 Insurance. . . . . . . . . . . . . . . . . . . . . . . .6
Section 3.4 Payment of Taxes, etc. . . . . . . . . . . . . . . . . 10
Section 3.5 Escrow Fund. . . . . . . . . . . . . . . . . . . . . . 11
Section 3.6 Condemnation . . . . . . . . . . . . . . . . . . . . . 11
Section 3.7 Leases and Rents . . . . . . . . . . . . . . . . . . . 12
Section 3.8 Maintenance of Property. . . . . . . . . . . . . . . . 13
Section 3.9 Waste. . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.10 Compliance With Laws . . . . . . . . . . . . . . . . . 14
Section 3.11 Books and Records. . . . . . . . . . . . . . . . . . . 14
Section 3.12 Payment for Labor and Materials. . . . . . . . . . . . 16
Section 3.13 Management Agreements. . . . . . . . . . . . . . . . . 16
Section 3.14 Performance of Other Agreements. . . . . . . . . . . . 17
Section 3.15 Change of Name, Identity or Structure. . . . . . . . . 18
Section 3.16 Existence. . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 4 SPECIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 18
Section 4.1 Property Use . . . . . . . . . . . . . . . . . . . . . 18
Section 4.2 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . 18
TABLE OF CONTENTS
(continued)
Page
Section 4.3 Single Purpose Entity. . . . . . . . . . . . . . . . . 19
Section 4.4 Restoration. . . . . . . . . . . . . . . . . . . . . . 20
Section 4.5 Lockbox Account. . . . . . . . . . . . . . . . . . . . 26
Section 4.6 Other Debt . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 5 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 26
Section 5.1 Warranty of Title. . . . . . . . . . . . . . . . . . . 26
Section 5.2 Authority. . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.3 Legal Status and Authority . . . . . . . . . . . . . . 27
Section 5.4 Validity of Documents. . . . . . . . . . . . . . . . . 27
Section 5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.6 Status of Property . . . . . . . . . . . . . . . . . . 27
Section 5.7 No Foreign Person. . . . . . . . . . . . . . . . . . . 29
Section 5.8 Separate Tax Lot . . . . . . . . . . . . . . . . . . . 29
Section 5.9 ERISA Compliance . . . . . . . . . . . . . . . . . . . 29
Section 5.10 Leases . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.11 Financial Condition. . . . . . . . . . . . . . . . . . 29
Section 5.12 Business Purposes. . . . . . . . . . . . . . . . . . . 30
Section 5.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.14 Mailing Address. . . . . . . . . . . . . . . . . . . . 30
Section 5.15 No Change in Facts or Circumstances. . . . . . . . . . 30
Section 5.16 Disclosure . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.17 Third Party Representations. . . . . . . . . . . . . . 30
Section 5.18 Illegal Activity . . . . . . . . . . . . . . . . . . . 30
ARTICLE 6 OBLIGATIONS AND RELIANCES. . . . . . . . . . . . . . . . . . . . 30
Section 6.1 Relationship of Borrower and Lender. . . . . . . . . . 30
Section 6.2 No Reliance on Lender. . . . . . . . . . . . . . . . . 30
Section 6.3 No Lender Obligations. . . . . . . . . . . . . . . . . 31
Section 6.4 Reliance . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 7 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.1 Recording of Security Instrument, etc. . . . . . . . . 31
TABLE OF CONTENTS
(continued)
Page
Section 7.2 Further Acts, etc. . . . . . . . . . . . . . . . . . . 32
Section 7.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws32
Section 7.4 Estoppel Certificates. . . . . . . . . . . . . . . . . 32
Section 7.5 Splitting of Security Instrument . . . . . . . . . . . 33
Section 7.6 Replacement Documents. . . . . . . . . . . . . . . . . 34
ARTICLE 8 DUE ON SALE/ENCUMBRANCE. . . . . . . . . . . . . . . . . . . . . 34
Section 8.1 Lender Reliance. . . . . . . . . . . . . . . . . . . . 34
Section 8.2 No Sale/Encumbrance. . . . . . . . . . . . . . . . . . 34
Section 8.3 Sale/Encumbrance Defined . . . . . . . . . . . . . . . 34
Section 8.4 Lender's Rights. . . . . . . . . . . . . . . . . . . . 35
ARTICLE 9 PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.1 Prepayment Before Event of Default . . . . . . . . . . 35
Section 9.2 Prepayment After Event of Default. . . . . . . . . . . 36
ARTICLE 10 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 10.1 Events of Default. . . . . . . . . . . . . . . . . . . 36
Section 10.2 Late Payment Charge. . . . . . . . . . . . . . . . . . 39
Section 10.3 Default Interest . . . . . . . . . . . . . . . . . . . 39
ARTICLE 11 RIGHTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . 39
Section 11.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . 39
Section 11.2 Application of Proceeds. . . . . . . . . . . . . . . . 41
Section 11.3 Right to Cure Defaults . . . . . . . . . . . . . . . . 42
Section 11.4 Actions and Proceedings. . . . . . . . . . . . . . . . 42
Section 11.5 Recovery of Sums Required To Be Paid . . . . . . . . . 42
Section 11.6 Examination of Books and Records . . . . . . . . . . . 42
Section 11.7 Other Rights, etc. . . . . . . . . . . . . . . . . . . 43
Section 11.8 Right to Release Any Portion of the Property . . . . . 43
Section 11.9 Violation of Laws. . . . . . . . . . . . . . . . . . . 43
Section 11.10 Recourse and Choice of Remedies. . . . . . . . . . . . 43
Section 11.11 Right of Entry . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 12 ENVIRONMENTAL HAZARDS . . . . . . . . . . . . . . . . . . . 44
TABLE OF CONTENTS
(continued)
Page
Section 12.1 Environmental Representations and Warranties . . . . . 44
Section 12.2 Environmental Covenants. . . . . . . . . . . . . . . . 46
Section 12.3 Lender's Rights. . . . . . . . . . . . . . . . . . . . 47
ARTICLE 13 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 47
Section 13.1 General Indemnification. . . . . . . . . . . . . . . . 47
Section 13.2 Mortgage and/or Intangible Tax . . . . . . . . . . . . 48
Section 13.3 ERISA Indemnification. . . . . . . . . . . . . . . . . 48
Section 13.4 Environmental Indemnification. . . . . . . . . . . . . 48
Section 13.5 Duty to Defend; Attorneys' Fees and Other Fees and
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 14 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 14.1 Waiver of Counterclaim . . . . . . . . . . . . . . . . 50
Section 14.2 Marshalling and Other Matters. . . . . . . . . . . . . 50
Section 14.3 Waiver of Notice . . . . . . . . . . . . . . . . . . . 50
Section 14.4 Waiver of Statute of Limitations . . . . . . . . . . . 51
Section 14.5 Sole Discretion of Lender. . . . . . . . . . . . . . . 51
Section 14.6 Survival . . . . . . . . . . . . . . . . . . . . . . . 51
Section 14.7 WAIVER OF TRIAL BY JURY. . . . . . . . . . . . . . . . 51
ARTICLE 15 EXCULPATION . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 15.1 Exculpation. . . . . . . . . . . . . . . . . . . . . . 52
Section 15.2 Reservation of Certain Rights. . . . . . . . . . . . . 52
Section 15.3 Exceptions to Exculpation. . . . . . . . . . . . . . . 52
Section 15.4 Recourse . . . . . . . . . . . . . . . . . . . . . . . 53
Section 15.5 Bankruptcy Claims. . . . . . . . . . . . . . . . . . . 53
ARTICLE 16 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 16.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE 17 SERVICE OF PROCESS. . . . . . . . . . . . . . . . . . . . . 54
Section 17.1 Submission to Jurisdiction . . . . . . . . . . . . . . 54
Section 17.2 Jurisdiction Not Exclusive . . . . . . . . . . . . . . 55
ARTICLE 18 APPLICABLE LAW. . . . . . . . . . . . . . . . . . . . . . . 55
Section 18.1 Choice of Law. . . . . . . . . . . . . . . . . . . . . 55
TABLE OF CONTENTS
(continued)
Page
Section 18.2 Usury Laws . . . . . . . . . . . . . . . . . . . . . . 55
Section 18.3 Provisions Subject to Applicable Law . . . . . . . . . 55
ARTICLE 19 SECONDARY MARKET. . . . . . . . . . . . . . . . . . . . . . 55
Section 19.1 Transfer of Loan . . . . . . . . . . . . . . . . . . . 55
ARTICLE 20 COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 20.1 Performance at Borrower's Expense. . . . . . . . . . . 56
Section 20.2 Attorney's Fees for Enforcement. . . . . . . . . . . . 56
ARTICLE 21 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 21.1 General Definitions. . . . . . . . . . . . . . . . . . 57
ARTICLE 22 MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . 57
Section 22.1 No Oral Change . . . . . . . . . . . . . . . . . . . . 57
Section 22.2 Liability. . . . . . . . . . . . . . . . . . . . . . . 57
Section 22.3 Inapplicable Provisions. . . . . . . . . . . . . . . . 57
Section 22.4 Headings, etc. . . . . . . . . . . . . . . . . . . . . 58
Section 22.5 Duplicate Originals; Counterparts. . . . . . . . . . . 58
Section 22.6 Number and Gender. . . . . . . . . . . . . . . . . . . 58
Section 22.7 Entire Agreement . . . . . . . . . . . . . . . . . . . 58
ARTICLE 23 CROSS-COLLATERALIZATION . . . . . . . . . . . . . . . . . . 58
THIS MORTGAGE AND SECURITY AGREEMENT (this "Security Instrument")
is made as of the 22nd day of October, 1998, by WELLSFORD CAPITAL PROPERTIES,
L.L.C., a Delaware limited liability company having its principal place of
business c/o Wellsford Real Properties, Inc., 610 Fifth Avenue, New York, New
York 10020, as mortgagor ("Borrower") to LEHMAN BROTHERS HOLDINGS INC., doing
business as Lehman Capital, a division of Lehman Brothers Holdings Inc., a
Delaware corporation, having an address at 3 World Financial Center, 12th
Floor, New York, New York 10285-1200, as mortgagee ("Lender").
R E C I T A L S:
Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the principal sum of Twenty-Eight Million and
00/100 Dollars ($28,000,000.00) in lawful money of the United States of
America (the note together with all extensions, renewals, modifications,
substitutions and amendments thereof shall collectively be referred to as the
"Note"), with interest from the date thereof at the rates set forth in the
Note, principal and interest to be payable in accordance with the terms and
conditions provided in the Note.
Borrower desires to secure the payment of the Debt (as defined in
Article 2) and the performance of all of its obligations under the Note and
the Other Obligations (as defined in Article 2).
ARTICLE 1
GRANTS OF SECURITY
Section 1.1 Property Mortgaged. Borrower, for consideration paid, does
hereby irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant,
transfer and convey to Lender with MORTGAGE COVENANTS, and grant a security
interest to Lender in, the following property, rights, interests and estates
now owned, or hereafter acquired by Borrower (collectively, the "Property"):
(a) Land. The real property described in Exhibit A attached
hereto and made a part hereof (the "Land");
(b) Additional Land. All additional lands, estates and
development rights hereafter acquired by Borrower for use in connection with
the Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental 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 (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 Borrower of, in and to the Land and
the Improvements and every part and parcel thereof, with the appurtenances
thereto, and all minerals, oils, gas and other hydrocarbon substances thereon
or therein;
(e) Fixtures and Personal Property. All machinery, equipment,
fixtures (including, but not limited to, all heating, air conditioning,
plumbing, lighting, communications and elevator fixtures) and other property
of every kind and nature whatsoever owned by Borrower, or in which Borrower
has or shall have an interest, now or hereafter located upon the Land and the
Improvements, or appurtenant thereto, and usable in connection with the
present or future operation and occupancy of the Land and the Improvements
and all building equipment, materials and supplies of any nature whatsoever
owned by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon the Land and the Improvements, or appurtenant thereto,
or usable in connection with the present or future operation and occupancy of
the Land and the Improvements (collectively, the "Personal Property"), and
the right, title and interest of Borrower in and to any of the Personal
Property which may be subject to any security interests, as defined in the
Uniform Commercial Code, as adopted and enacted by the state or states where
any of the Property is located (the "Uniform Commercial Code"), superior in
lien to the lien of this Security Instrument and all proceeds and products of
the above;
(f) Leases and Rents. All leases and other agreements affecting
the use, enjoyment or occupancy of all or any part of the Land and the
Improvements heretofore or hereafter entered into, whether before or after
the filing by or against Borrower of any petition for relief under 11 U.S.C.
Section 101 et seq., as the same may be amended from time to time (the
"Bankruptcy Code") together with all extensions, renewals, guaranties and/or
modifications of, and substitutions for, the same (the "Leases") and all
right, title and interest of Borrower, its successors and assigns therein and
thereunder, including, without limitation, cash or securities deposited
thereunder to secure the performance by the lessees of their obligations
thereunder and all rents, revenues, issues and profits, royalties, income and
other benefits, including those now due, past due and to become due, under or
by virtue of the Leases, including without limitation, base rents, minimum
rents, additional rents, percentage rents, security deposits, charges for
parking, maintenance, taxes and insurance, deficiency rents and damages
following default, the premium payable by any tenant upon the exercise of a
cancellation privilege provided in any Lease, all proceeds payable under any
policy of insurance covering loss of rent resulting from any destruction or
damage to all or any part of the Property, and all other rights and claims of
any kind which Borrower may have against any tenant or any other occupant of
all or any part of the Property (including all oil and gas or other mineral
royalties and bonuses) from the Land and the Improvements whether paid or
accruing before or after the filing by or against Borrower of any petition
for relief under the Bankruptcy Code (the "Rents") and all proceeds from the
sale or other disposition of the Leases and the right to receive and apply
the Rents to the payment of the Debt;
(g) 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;
(h) Insurance Proceeds. All proceeds of and any unearned premiums
on any insurance policies covering the Property, including, without
limitation, the right to receive and apply the proceeds of any insurance,
judgments, or settlements made in lieu thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits in connection
with a reduction in real estate taxes and assessments charged against the
Property as a result of tax certiorari or any applications or proceedings for
reduction;
(j) Conversion. All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including, without limitation, proceeds
of insurance and condemnation awards, into cash or liquidation claims;
(k) Rights. The right, in the name and on behalf of Borrower, to
appear in and defend any action or proceeding brought with respect to the
Property and to commence any action or proceeding to protect the interest of
Lender in the Property;
(1) Agreements. All agreements, contracts, certificates,
instruments, franchises, permits, licenses, plans, specifications and other
documents, now or hereafter entered into, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements or respecting
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Borrower therein and thereunder, including,
without limitation, the right, upon the happening of any default hereunder,
to receive and collect any sums payable to Borrower thereunder;
(m) 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; and
(n) Other Rights. Any and all other rights of Borrower in and to
the items set forth in Subsections (a) through (m) above.
Section 1.2 Assignment of Rents. Borrower hereby absolutely and
unconditionally assigns to Lender Borrower's right, title and interest in and
to all current and future Leases and Rents; it being intended by Borrower
that this assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject to the terms
of this Section 1.2 and Section 3.7, Lender grants to Borrower a revocable
license to collect and receive the Rents. Borrower shall hold the Rents, or
a portion thereof sufficient to discharge all current sums due on the Debt,
for use in the payment of such sums.
Section 1.3 Security Agreement. This Security Instrument is both a
real property mortgage and a "security agreement" within the meaning of the
Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible
in nature, of Borrower in the Property. By executing and delivering this
Security Instrument, Borrower hereby grants to Lender, as security for the
Obligations (defined in Section 2.3), a security interest in the Personal
Property to the full extent that the Personal Property may be subject to the
Uniform Commercial Code.
Section 1.4 Pledge of Monies Held. Borrower hereby pledges to Lender
any and all monies now or hereafter held by Lender, including, without
limitation, any sums deposited in the Escrow Fund (as defined in Section
3.5), Net Proceeds (as defined in Section 4.4), the Lockbox Account (as
defined in Section 4.5) and condemnation awards or payments described in
Section 4.4, as additional security for the Obligations until expended or
applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto
and to the use and benefit of Lender, and the successors and assigns of
Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Lender the Debt at the time and
in the manner provided in the Note and this Security Instrument, shall well
and truly perform the Other Obligations as set forth in this Security
Instrument and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, these presents and
the estate hereby granted shall cease, terminate and be void.
ARTICLE 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
following, in such order of priority as Lender may determine in its sole
discretion (the "Debt"):
(a) the payment of the indebtedness evidenced by the Note in
lawful money of the United States of America;
(b) the payment of interest, default interest, late charges and
other sums, as provided in the Note, this Security Instrument or the Other
Security Documents (defined below);
(c) the payment of the Prepayment Fee (as defined in the Note);
(d) the payment of all other moneys agreed or provided to be paid
by Borrower in the Note, this Security Instrument or the Other Security
Documents (as defined herein);
(e) the payment of all sums advanced pursuant to this Security
Instrument to protect and preserve the Property and the lien and the security
interest created hereby; and
(f) the payment of all sums advanced and reasonable costs and
expenses incurred by Lender in connection with the Debt or any part thereof,
any renewal, extension, or change of or substitution for the Debt or any part
thereof, or the acquisition or perfection of the security therefor, whether
made or incurred at the request of Borrower or Lender.
Section 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 Borrower contained
herein;
(b) the performance of each obligation of Borrower contained in
any other agreement given by Borrower to Lender which is for the purpose of
further securing the obligations secured hereby, and any amendments,
modifications and changes thereto; and
(c) the performance of each obligation of Borrower contained in
any renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Note, this Security
Instrument or the Other Security Documents.
Section 2.3 Debt and Other Obligations. Borrower's obligations for the
payment of the Debt and the performance of the Other Obligations shall be
referred to collectively below as the "Obligations."
Section 2.4 Payments. Unless payments are made in the required amount
in immediately available funds at the place where the Note is payable,
remittances in payment of all or any part of the Debt shall not, regardless
of any receipt or credit issued therefor, constitute payment until the
required amount is actually received by Lender in funds immediately available
at the place where the Note is payable (or any other place as Lender, in
Lender's sole discretion, may have established by delivery of written notice
thereof to Borrower) and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practice of the collecting bank or banks. Acceptance by Lender of any
payment in an amount less than the amount then due shall be deemed an
acceptance on account only, and the failure to pay the entire amount then due
shall be and continue to be an Event of Default (defined below).
ARTICLE 3
BORROWER COVENANTS
Borrower covenants and agrees that:
Section 3.1 Payment of Debt. Borrower will pay the Debt at the time
and in the manner provided in the Note and in this Security Instrument.
Section 3.2 Incorporation by Reference. All the covenants, conditions
and agreements contained in (a) the Note and (b) all and any of the documents
other than the Note or this Security Instrument now or hereafter executed by
Borrower and/or others and by or in favor of Lender, which wholly or
partially secure or guaranty payment of the Note (the "Other Security
Documents"), are hereby made a part of this Security Instrument to the same
extent and with the same force as if fully set forth herein.
Section 3.3 Insurance.
(a) Borrower shall obtain and maintain, or cause to be maintained,
insurance for Borrower and the Property providing at least the following
coverages:
(i) comprehensive all risk insurance on the Improvements and
the Personal Property, including contingent liability from Operation of
Building Laws, Demolition Costs and Increased Cost of Construction
Endorsements, in each case (A) in an amount equal to 100% of the "Full
Replacement Cost," which for purposes of this Security Instrument shall mean
actual replacement value (exclusive of costs of excavations, foundations,
underground utilities and footings) with a waiver of depreciation, but the
amount shall in no event be less than the allocated loan amount for the
Property as set forth in Exhibit A to the Note; (B) containing an agreed
amount endorsement with respect to the Improvements and Personal Property
waiving all co-insurance provisions; (C) providing for no deductible in
excess of the lesser of $10,000.00 and one percent (1%) of the face value of
such policy; and (D) containing an "Ordinance or Law Coverage" or
"Enforcement" endorsement if any of the Improvements or the use of the
Property shall at any time constitute legal non-conforming structures or
uses. The Full Replacement Cost shall be redetermined from time to time (but
not more frequently than once in any twenty-four (24) calendar months) at the
request of Lender by an appraiser or contractor designated and paid by
Borrower and approved by Lender, or by an engineer or appraiser in the
regular employ of the insurer. After the first appraisal, additional
appraisals may be based on construction cost indices customarily employed in
the trade. No omission on the part of Lender to request any such
ascertainment shall relieve Borrower of any of its obligations under this
Subsection. In addition, Borrower shall obtain (y) flood hazard insurance if
any portion of the Improvements is currently or at any time in the future
located in a federally designated "special flood hazard area", such flood
hazard insurance to be in an amount equal to the lesser of (a) the allocated
loan amount for the Property as set forth on Exhibit A to the Note or (b) the
maximum amount of such insurance available under the National Flood Insurance
Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended; and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender in the
event the Property is located in an area with a high degree of seismic
activity, provided that the insurance pursuant to clauses (y) and (z) hereof
shall be on terms consistent with the comprehensive all risk insurance policy
required under this Subsection 3.3(a)(i) except that the deductible on such
insurance shall not be in excess of five percent (5%) of the allocated loan
amount for the Property as set forth on Exhibit A to the Note;
(ii) commercial general liability insurance against claims for
personal injury, bodily injury, death or property damage occurring upon, in
or about the Property, such insurance (A) to be on the so-called "occurrence"
form with a combined single limit of not less than $1,000,000.00; (B) to
continue at not less than the aforesaid limit until required to be changed by
Lender in writing by reason of changed economic conditions making such
protection inadequate as determined by Lender in the exercise of its
reasonable discretion; and (C) to cover at least the following hazards: (1)
premises and operations; (2) products and completed operations on an "if any"
basis; (3) independent contractors; (4) blanket contractual liability for all
written and oral contracts; and (5) contractual liability covering the
indemnities contained in Article 13 hereof to the extent the same is
available;
(iii) business income insurance (A) with loss payable to
Lender; (B) covering all risks required to be covered by the insurance
provided for in Subsection 3.3(a)(i); (C) containing an extended period of
indemnity endorsement which provides that after the physical loss to the
Improvements and Personal Property has been repaired, the continued loss of
income will be insured until such income either returns to the same level it
was at prior to the loss, or the expiration of twenty-four (24) months from
the date of the loss, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period; and (D) in an amount equal
to 100% of the projected gross income from the Property for a period of
twelve (12) months. The amount of such business income insurance shall be
determined prior to the date hereof and at least once each year thereafter
based on Borrower's reasonable estimate of the gross income from the Property
for the succeeding twenty-four (24) month period. All insurance proceeds
payable to Lender pursuant to this Subsection 3.3(a)(iii) shall be held by
Lender and shall be applied to the obligations secured hereunder from time to
time due and payable hereunder and under the Note; provided, however, that
nothing herein contained shall be deemed to relieve Borrower of its
obligations to pay the obligations secured hereunder on the respective dates
of payment provided for in the Note except to the extent such amounts are
actually paid out of the proceeds of such business income insurance;
(iv) at all times during which structural construction,
repairs or alterations are being made with respect to the Improvements (A)
owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the above mentioned commercial
general liability insurance policy; and (B) the insurance provided for in
Subsection 3.3(a)(i) shall be written in a so-called builder's risk completed
value form (1) on a non-reporting basis, (2) against all risks insured
against pursuant to Subsection 3.3(a)(i), (3) including permission to occupy
the Property, and (4) with an agreed amount endorsement waiving co-insurance
provisions;
(v) workers' compensation, subject to the statutory limits of
the state in which the Property is located, and employer's liability
insurance with a limit of at least $1,000,000.00 per accident and per disease
per employee, and $1,000,000.00 for disease aggregate in respect of any work
or operations on or about the Property, or in connection with the Property or
its operation (if applicable);
(vi) comprehensive boiler and machinery insurance, if
applicable, in amounts as shall be reasonably required by Lender on terms
consistent with the comprehensive all risk insurance policy required under
Subsection 3.3(a)(i);
(vii) umbrella liability insurance in an amount not less
than $50,000,000.00 per occurrence on terms consistent with the commercial
general liability insurance policy required under Subsection 3.3(a)(ii);
(viii) motor vehicle liability coverage for all owned and
non-owned vehicles, including rented and leased vehicles containing minimum
limits per occurrence of $1,000,000.00; and
(ix) such other insurance and in such amounts as Lender from
time to time may reasonably request against such other insurable hazards
which at the time are commonly insured against for property similar to the
Property located in or around the region in which the Property is located.
(b) All insurance provided for in Subsection 3.3(a) hereof shall
be obtained under valid and enforceable policies (the "Policies" or in the
singular, the "Policy"), and shall be subject to the reasonable approval of
Lender as to insurance companies, amounts, forms, deductibles, loss payees
and insureds. The Policies shall be issued by financially sound and
responsible insurance companies authorized to do business in the state in
which the Property is located and approved by Lender in the exercise of its
reasonable discretion. The insurance companies must have a rating of "Aa1"
or better for claims paying ability assigned by Moody's Investors Service,
Inc. and a rating from A.M. Best's of at least A:XV, and in the event such
insurance companies are rated by Fitch Investors Service, Inc. and Duff &
Phelps Credit Rating Company, and if there are any Securities (defined in
Section 19.1 below) issued which have been assigned a rating by a credit
rating agency approved by Lender (a "Rating Agency"), the insurance company
shall have a claims paying ability rating by such Rating Agency equal to or
greater than the rating of the highest class of the Securities (each such
insurer shall be referred to below as a "Qualified Insurer"). The Policies
described in Subsections 3.3(a)(i), (iii), (iv)(B) and (vi) shall designate
Lender as loss payee. Not less than thirty (30) days prior to the expiration
dates of the Policies theretofore furnished to Lender pursuant to Subsection
3.3(a), certified copies of the Policies marked "premium paid" or accompanied
by evidence satisfactory to Lender of payment of the premiums due thereunder
(the "Insurance Premiums") shall be delivered by Borrower to Lender;
provided, however, that in the case of renewal Policies, Borrower may furnish
Lender with binders therefor to be followed by the original Policies when
issued.
(c) Borrower shall not obtain (i) any umbrella or blanket
liability or casualty Policy unless, in each case, such Policy is approved in
advance in writing by Lender and Lender's interest is included therein as
provided in this Security Instrument and such Policy is issued by a Qualified
Insurer, or (ii) separate insurance concurrent in form or contributing in the
event of loss with that required in Subsection 3.3(a) to be furnished by, or
which may be reasonably required to be furnished by, Borrower. In the event
Borrower obtains separate insurance or an umbrella or a blanket Policy,
Borrower shall notify Lender of the same and shall cause certified copies of
each Policy to be delivered as required in Subsection 3.3(a). Any blanket
insurance Policy shall specifically allocate to the Property the amount of
coverage from time to time required hereunder and shall otherwise provide the
same protection as would a separate Policy insuring only the Property in
compliance with the provisions of Subsection 3.3(a).
(d) All Policies of insurance provided for or contemplated by
Subsection 3.3(a), except for the Policy referenced in Subsection (a)(v),
shall name Lender and Borrower as the insured or additional insured, as their
respective interests may appear, and in the case of property damage, boiler
and machinery, flood and earthquake insurance, shall contain a so-called New
York standard non-contributing mortgagee clause in favor of Lender providing
that the loss thereunder shall be payable to Lender.
(e) All Policies of insurance provided for in Subsection 3.3(a)
shall contain clauses or endorsements to the effect that:
(i) no act or negligence of Borrower, or anyone acting for
Borrower, or of any tenant under any Lease or other occupant, or failure to
comply with the provisions of any Policy which might otherwise result in a
forfeiture of the insurance or any part thereof, shall in any way affect the
validity or enforceability of the insurance insofar as Lender is concerned;
(ii) the Policy shall not be materially changed (other than to
increase the coverage provided thereby) or cancelled without at least 30
days' written notice to Lender and any other party named therein as an
insured; and
(iii) each Policy shall provide that the issuers thereof
shall give written notice to Lender if the Policy has not been renewed thirty
(30) days prior to its expiration; and
(iv) Lender shall not be liable for any Insurance Premiums
thereon or subject to any assessments thereunder.
(f) Borrower shall furnish to Lender, on or before thirty (30)
days after the close of each of Borrower's fiscal years, a statement
certified by Borrower or a duly authorized officer of Borrower of the amounts
of insurance maintained in compliance herewith, of the risks covered by such
insurance and of the insurance company or companies which carry such
insurance and, if requested by Lender, verification of the adequacy of such
insurance by an independent insurance broker or appraiser acceptable to
Lender.
(g) If at any time Lender is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, Lender
shall have the right, without notice to Borrower, to take such action as
Lender deems necessary to protect its interest in the Property, including,
without limitation, the obtaining of such insurance coverage as Lender in its
sole discretion deems appropriate, and all expenses incurred by Lender in
connection with such action or in obtaining such insurance and keeping it in
effect shall be paid by Borrower to Lender upon demand and until paid shall
be secured by this Security Instrument and shall bear interest in accordance
with Section 10.3 hereof.
(h) If the Property shall be damaged or destroyed, in whole or in
part, by fire or other casualty, Borrower shall give prompt notice of such
damage to Lender and shall promptly commence and diligently prosecute the
completion of the repair and restoration of the Property as nearly as
possible to the condition the Property was in immediately prior to such fire
or other casualty, with such alterations as may be approved by Lender (the
"Restoration") and otherwise in accordance with Section 4.4 of this Security
Instrument. Borrower shall pay all costs of such Restoration whether or not
such costs are covered by insurance. Lender may, but shall not be obligated
to make proof of loss if not made promptly by Borrower.
(i) In the event of foreclosure of this Security Instrument, or
other transfer of title to the Property in extinguishment in whole or in part
of the Debt, all right, title and interest of Borrower in and to such
policies then in force concerning the Property and all proceeds payable
thereunder shall thereupon vest in the purchaser at such foreclosure or
Lender or other transferee in the event of such other transfer of title.
Section 3.4 Payment of Taxes, etc. Borrower shall promptly pay all
taxes, assessments, water rates, sewer rents, governmental impositions, and
other charges, including without limitation vault charges and license fees
for the use of vaults, chutes and similar areas adjoining the Land, now or
hereafter levied or assessed or imposed against the Property or any part
thereof (the "Taxes"), all ground rents, maintenance charges and similar
charges, now or hereafter levied or assessed or imposed against the Property
or any part thereof (the "Other Charges"), and all charges for utility
services provided to the Property as same become due and payable. Borrower
will deliver to Lender, promptly upon Lender's request, evidence satisfactory
to Lender that the Taxes, Other Charges and utility service charges have been
so paid or are not then delinquent. Borrower shall not suffer and shall
promptly cause to be paid and discharged any lien or charge whatsoever which
may be or become a lien or charge against the Property. Except to the extent
sums sufficient to pay all Taxes and Other Charges have been deposited with
Lender in accordance with the terms of this Security Instrument and/or the
Lockbox Agreement, Borrower shall furnish to Lender paid receipts for the
payment of the Taxes and Other Charges prior to the date the same shall
become delinquent. If any Taxes or Other Charges are not paid as herein
provided or pursuant to the Lockbox Agreement, Lender shall have the right to
pay the same, together with any penalty and interest thereon, and the amount
or amounts so paid or advanced shall forthwith be payable by Borrower to
Lender and shall be secured by the lien of this Security Instrument;
provided, however, that Borrower may in good faith contest, at Borrower's own
cost and expenses, by proper legal proceedings, the validity or amount of any
Taxes or Other Charges, on the condition that Borrower first shall, unless
the contested amount is paid in full when due despite such contest, deposit
with Lender, as security for the payment of such contested item, an amount
equal to the contested item plus all penalties and interest which would be
payable if Borrower is ultimately required to pay such contested item, and on
the further condition that no amount so contested may remain unpaid for such
length of time as shall permit the Property, or the lien thereon created by
the item being contested, to be sold for the nonpayment thereof, or as shall
permit an action, either of foreclosure or otherwise, to be commenced by the
holder of any such lien, or as shall permit the Property to be otherwise in
danger of sale, forfeiture or loss by reason of such proceedings. Borrower
will not claim any credit on, or make any deduction from the Debt by reason
of the payment of any Taxes or Other Charges.
Section 3.5 Escrow Fund. In addition to the initial deposits with
respect to Taxes, Premiums and Other Charges made by Borrower to Lender on
the date hereof in accordance with the Lockbox Agreement, Borrower shall pay
to Lender on the first day of each calendar month (a) one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or estimated by
Lender to be payable, during the next ensuing twelve (12) months, (b) one-
twelfth of an amount which would be sufficient to pay the Insurance Premiums
due for the renewal of the coverage afforded by the Policies upon the
expiration thereof and (c) one-twelfth of an amount which would be sufficient
to pay the Other Charges payable, or estimating by Lender to be payable,
during the next ensuing twelve (12) months (the amounts in (a), (b) and (c)
above shall be called the "Escrow Fund"). Borrower agrees to notify Lender
immediately of any changes to the amounts, schedules and instructions for
payment of any Taxes, Insurance Premiums and Other Charges of which it has
obtained knowledge and authorizes Lender or its agent to obtain the bills for
Taxes and Other Charges directly from the appropriate taxing authority or
other appropriate party. The Escrow Fund and the payments of interest or
principal or both, payable pursuant to the Note shall be added together and
shall be paid as an aggregate sum by Borrower to Lender. Lender will apply
the Escrow Fund to payments of Taxes, Insurance Premiums and Other Charges
required to be made by Borrower pursuant to Sections 3.3 and 3.4 hereof. If
the amount of the Escrow Fund shall exceed the amounts due for Taxes,
Insurance Premiums and Other Charges pursuant to Sections 3.3 and 3.4 hereof,
Lender shall, in its discretion, return any excess to Borrower or credit such
excess against future payments to be made to the Escrow Fund. In allocating
such excess, Lender may deal with the person shown on the records of Lender
to be the owner of the Property. If the Escrow Fund is not sufficient to pay
the items set forth in clauses (a), (b) and (c) of this Section 3.5 above,
Borrower shall promptly pay to Lender, upon demand, an amount which Lender
shall estimate as sufficient to make up the deficiency. The Escrow Fund
shall not constitute a trust fund and may be commingled with other monies
held by Lender. No earnings on interest on the Escrow Fund shall be payable
to Borrower. The Escrow Fund shall be established pursuant to the terms and
provisions of the Lockbox Agreement. In the event of any inconsistency
between the terms and provisions of this Section 3.5 and the terms and
provisions of the Lockbox Agreement, the terms and provisions of the Lockbox
Agreement shall control.
Section 3.6 Condemnation. Borrower shall promptly give Lender notice
of the actual or threatened commencement of any condemnation or eminent
domain proceeding and shall deliver to Lender copies of any and all papers
served in connection with such proceedings. Lender may participate in any
such proceedings, and Borrower shall from time to time deliver to Lender all
instruments requested by it to permit such participation. Borrower shall, at
its expense, diligently prosecute any such proceedings, and shall consult
with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking
by any public or quasi-public authority through eminent domain or otherwise
(including but not limited to any transfer made in lieu of or in anticipation
of the exercise of such taking), Borrower shall continue to pay the Debt at
the time and in the manner provided for its payment in the Note and in this
Security Instrument and the Debt shall not be reduced until any award or
payment therefor shall have been actually received and applied by Lender,
after the deduction of reasonable expenses of collection, to the reduction or
discharge of the Debt. Lender shall not be limited to the interest paid on
the award by the condemning authority but shall be entitled to receive out of
the award interest at the rate or rates provided herein or in the Note. If
the Property or any portion thereof is taken by a condemning authority,
Borrower shall promptly commence and diligently prosecute the Restoration of
the Property and otherwise comply with the provisions of Section 4.4 of this
Security Instrument. If the Property is sold, through foreclosure or
otherwise, prior to the receipt by Lender of the award or payment, Lender
shall have the right, whether or not a deficiency judgment on the Note shall
have been sought, recovered or denied, to receive the award or payment, or a
portion thereof sufficient to pay the Debt.
Section 3.7 Leases and Rents.
(a) Except as otherwise consented to by Lender, all Leases shall
be written on the standard form of lease which shall have been approved by
Lender (the "Standard Lease Form"). Upon request, Borrower shall furnish
Lender with executed copies of all Leases. No material changes may be made
to the Standard Lease Form without the prior written consent of Lender. In
addition, all renewals of Leases and all proposed leases shall provide for
rental rates and terms comparable to existing local market rates and terms
and shall be arms-length transactions with bona fide, independent third party
tenants. All proposed leases and renewals of existing Leases shall be
subject to the prior approval of Lender and its counsel, at Borrower's
expense. All Leases shall provide that they are subordinate to this Security
Instrument and that the lessee agrees to attorn to Lender, provided that,
upon request of any proposed tenant in connection with any proposed Lease in
excess of 5,000 rentable square feet, Lender will agree not to disturb the
tenant's possession of the premises demised thereunder for so long as the
tenant is not in default under the Lease beyond the expiration of any
applicable notice or grace period pursuant, and subject, to the terms and
provisions of a subordination, non-disturbance and attornment agreement in
Lender's customary form (or in the form provided in the Lease or by Tenant,
if reasonably acceptable to Lender) (an "SNDA") in respect of such Lease.
Borrower (i) shall observe and perform all the obligations imposed upon the
lessor under the Leases and shall not do or permit to be done anything to
impair the value of the Leases as security for the Debt; (ii) shall promptly
send copies to Lender of all notices of default which Borrower shall send or
receive thereunder; (iii) shall enforce all of the terms, covenants and
conditions contained in the Leases upon the part of the lessee thereunder to
be observed or performed, short of termination thereof; Borrower may
terminate, however, Minor Leases as the result of a default by lessee
thereunder; (iv) shall not collect any of the Rents more than one (1) month
in advance; (v) shall not execute any other assignment of the lessor's
interest in the Leases or the Rents; (vi) except as expressly permitted
herein, shall not alter, modify or change the terms of the Leases without the
prior written consent of Lender, or cancel or terminate the Leases or accept
a surrender thereof or convey or transfer or suffer or permit a conveyance or
transfer of the Land or of any interest therein so as to effect a merger of
the estates and rights of, or a termination or diminution of the obligations
of, lessees thereunder; (vii) shall not alter, modify or change the terms of
any guaranty, letter of credit or other credit support with respect to the
Leases (the "Lease Guaranty") or cancel or terminate such Lease Guaranty
without the prior written consent of Lender; and (viii) shall not consent to
any assignment of or subletting under the Leases not in accordance with their
terms, without the prior written consent of Lender.
(b) Notwithstanding the provisions of Subsection (a) above,
renewals of existing commercial Leases and proposed leases for commercial
space shall not be subject to the prior approval of Lender provided all of
the following conditions are satisfied: (i) the renewal Lease or series of
leases or proposed lease or series of leases covers less than 5,000 rentable
square feet, in the aggregate (any such lease or series of leases demising
less than 5,000 rentable square feet of the Property being hereinafter
referred to as a "Minor Lease"), (ii) the renewal Lease or series of leases
or proposed lease or series of leases shall be written on the standard form
of Lease which shall have been approved by Lender, (iii) no rent credits,
free rents or concessions have been granted under the renewal Lease or
proposed lease which are inconsistent with customary leasing practices in the
local market in which the Property is located, (iv) the renewal Lease or
proposed lease shall provide for rental rates and terms comparable to
existing local market rates and terms, (v) the renewal Lease or proposed
lease shall be an arms-length transaction with a bona fide, independent third
party tenant, and (vi) the renewal Lease or proposed lease shall satisfy such
additional criteria as shall be reasonably required by Lender in its sole
discretion and of which Borrower has been notified by Lender. Borrower shall
deliver to Lender copies of all Leases which are entered into pursuant to the
preceding sentence together with Borrower's certification that it has
satisfied all of the conditions of the preceding sentence within thirty (30)
days after the execution of the Lease.
(c) To the extent permitted by law, Borrower shall promptly
deposit with Lender any and all monies representing security deposits under
the Leases, whether or not Borrower actually received such monies (the
"Security Deposits"). Lender shall hold the Security Deposits in accordance
with the terms of the respective Lease, and shall only release the Security
Deposits in order to return a tenant's Security Deposit to such tenant if
such tenant is entitled to the return of the Security Deposit under the terms
of the Lease and is not otherwise in default under the Lease. To the extent
required by Applicable Laws (defined below), Lender shall hold the Security
Deposits in an interest-bearing account selected by Lender in its sole
discretion (it being understood that (i) Lender or Servicer shall have no
obligation to maximize the return or yield on any sums so invested, and (ii)
any such interest shall constitute additional security for the Obligations).
In the event Lender is not permitted by law to hold the Security Deposits,
Borrower shall deposit the Security Deposits into an account with a federally
insured institution as approved by Lender.
Section 3.8 Maintenance of Property. Borrower shall cause the Property
to be maintained in a good and safe condition and repair, reasonable wear and
tear excepted. The Improvements and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of
the Personal Property) without the consent of Lender. Borrower shall
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated or which
may be affected by any proceeding of the character referred to in Section 3.6
hereof and shall complete and pay for any structure at any time in the
process of construction or repair on the Land. Borrower shall not initiate,
join in, acquiesce in, or consent to any change in any private restrictive
covenant, zoning law or other public or private restriction, limiting or
defining the uses which may be made of the Property or any part thereof. If
under applicable zoning provisions the use of all or any portion of the
Property is or shall become a nonconforming use, Borrower will not cause or
permit the nonconforming use to be discontinued or abandoned without the
express written consent of Lender.
Section 3.9 Waste. Borrower shall not commit or suffer any waste of
the Property or make any change in the use of the Property which will in any
way materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way 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 3.10 Compliance With Laws.
(a) Borrower shall promptly comply with all existing and future
federal, state and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting the Property, or the use thereof
including, but not limited to, the Americans with Disabilities Act ("ADA")
(collectively, the "Applicable Laws").
(b) Borrower shall from time to time, upon Lender's request,
provide Lender with evidence satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with
Applicable Laws.
(c) Notwithstanding any provisions set forth herein or in any
document regarding Lender's approval of alterations of the Property, Borrower
shall not alter the Property in any manner which would increase Borrower's
responsibilities for compliance with Applicable Laws without the prior
written approval of Lender. Lender's approval of the plans, specifications,
or working drawings for alterations of the Property shall create no
responsibility or liability on behalf of Lender for their completeness,
design, sufficiency or their compliance with Applicable Laws. The foregoing
shall apply to tenant improvements constructed by Borrower or by any of its
tenants. Lender may condition any such approval upon receipt of a
certificate of compliance with Applicable Laws from an independent architect,
engineer, or other person acceptable to Lender.
(d) Borrower shall give prompt notice to Lender of the receipt by
Borrower of any notice related to a violation of any Applicable Laws and of
the commencement of any proceedings or investigations which relate to
compliance with Applicable Laws.
(e) Borrower will take appropriate measures to prevent and will
not engage in or knowingly permit any illegal activities at the Property.
Section 3.11 Books and Records.
(a) Borrower and any Guarantors (as defined in Subsection 10.1 (e)
and Indemnitors (as defined in Subsection 10.1 (k)), if any, shall keep
adequate books and records of account in accordance with generally accepted
accounting principles, consistently applied ("GAAP"), or in accordance with
other methods acceptable to Lender in its sole discretion, consistently
applied and furnish to Lender:
(i) monthly operating statements of the Property together
with a property balance sheet for such month, prepared and certified by
Borrower in the form required by Lender, detailing the revenues received, the
expenses incurred and the net operating income before and after debt service
(principal and interest) and major capital improvements for that month and
containing appropriate year to date information, and containing a comparison
for such quarter with the annual budget delivered pursuant to Subsection
3.11(a)(v), within thirty (30) days after the end of such month;
(ii) monthly certified rent rolls signed and dated by
Borrower, detailing the names of all tenants of the Improvements, the portion
of Improvements occupied by each tenant, the base rent and any other charges
payable under each Lease and the term of each Lease, including the expiration
date, and any other information as is reasonably required by Lender, within
thirty (30) days after the end of such month;
(iii) an annual operating statement of the Property
detailing the total revenues received, total expenses incurred, total cost of
all capital improvements, total debt service and total cash flow, and
containing a comparison for such period with the annual budget delivered
pursuant to Subsection 3.11(a)(v), to be prepared and certified by Borrower
in the form required by Lender, or if required by Lender, an audited annual
operating statement prepared and certified by an independent certified public
accountant acceptable to Lender, within ninety (90) days after the close of
each fiscal year of Borrower;
(iv) an annual balance sheet and profit and loss statement of
Borrower, any Guarantors and any Indemnitors in the form required by Lender,
prepared and certified by the respective Borrower, Guarantors and/or
Indemnitors, or if required by Lender, audited financial statements prepared
by an independent certified public accountant acceptable to Lender, within
ninety (90) days after the close of each fiscal year of Borrower, Guarantors
and Indemnitors, as the case may be;
(v) an annual operating budget presented on a monthly basis
consistent with the quarterly and annual operating statements described above
for the Property, including cash flow projections for the upcoming year, and
all proposed capital replacements and improvements at least fifteen (15) days
prior to the start of each calendar year; and
(vi) copies of Borrower's federal income tax returns within
fifteen (15) days of the date such returns are filed.
(b) Upon reasonable request from Lender (but, provided no Event of
Default shall have occurred and be continuing, not more than two (2) times in
any twelve (12) month period) Borrower, its affiliates, any Guarantor and any
Indemnitor shall furnish to Lender:
(i) a property management report for the Property, showing
the number of inquiries made and/or rental applications received from tenants
or prospective tenants and deposits received from tenants and any other
information reasonably requested by Lender, in reasonable detail and
certified by Borrower (or an officer, general partner or principal of
Borrower if Borrower is not an individual) to be true and complete; and
(ii) an accounting of all security deposits held in connection
with any Lease of any part of the Property, including the name and
identification number of the accounts in which such security deposits are
held, the name and address of the financial institutions in which such
security deposits are held and the name of the person to contact at such
financial institution, along with any authority or release necessary for
Lender to obtain information regarding such accounts directly from such
financial institutions.
(c) Borrower, its affiliates, any Guarantor and any Indemnitor
shall furnish Lender with such other additional financial or management
information as may, from time to time, be reasonably required by Lender in
form and substance satisfactory to Lender.
(d) Borrower, its affiliates, any Guarantor and any Indemnitor
shall furnish to Lender and its agents convenient facilities for the
examination and audit of any such books and records. Within a reasonable
time after request by Lender, Borrower, its affiliates, any Guarantor and any
Indemnitor shall provide any other information with respect to the Property
and the financial condition of Borrower, its affiliates, any Guarantor and
any Indemnitor as Lender may from time to time request.
Section 3.12 Payment for Labor and Materials. Borrower will promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never
permit to exist beyond the due date thereof in respect of the Property or any
part thereof any lien or security interest, even though inferior to the liens
and the security interests hereof, and in any event never permit to be
created or exist in respect of the Property or any part thereof any other or
additional lien or security interest other than the liens or security
interests hereof, except for the Permitted Exceptions (defined below).
Section 3.13 Management Agreements.
(a) If the Improvements are operated under the terms and
conditions of that certain management agreement dated April 1, 1998 between
Wellsford Capital (predecessor-in-interest to Borrower), as owner, and
Trammel Crow Operations, Inc. (the "Manager"), the owner's interest in which
was assigned to Borrower by that certain instrument of assignment dated as of
the date hereof (hereinafter, together with any renewals or replacements
thereof, being referred to as the "Management Agreement"), which Management
Agreement has been approved by Lender, Borrower shall (i) diligently perform
and observe all of the terms, covenants and conditions of the Management
Agreement on the part of Borrower to be performed and observed to the end
that all things shall be done which are necessary to keep unimpaired the
rights of Borrower under the Management Agreement and (ii) promptly notify
Lender of the giving of any notice to Borrower of any default by Borrower in
the performance or observance of any of the terms, covenants or conditions of
the Management Agreement on the part of Borrower to be performed and observed
and deliver to Lender a true copy of each such notice. Borrower shall not
surrender the Management Agreement, consent to the assignment by the Manager
of its interest under the Management Agreement (to the extent such consent is
required by the Management Agreement), or terminate or cancel the Management
Agreement or modify, change, supplement, alter or amend the Management
Agreement, in any respect, either orally or in writing, and Borrower hereby
assigns to Lender as further security for the payment of the Debt and for the
performance and observance of the terms, covenants and conditions of this
Security Instrument, all the rights, privileges and prerogatives of Borrower
to surrender the Management Agreement or to terminate, cancel, modify,
change, supplement, alter or amend the Management Agreement in any respect,
and any such surrender of the Management Agreement or termination,
cancellation, modification, change, supplement, alteration or amendment of
the Management Agreement without the prior consent of Lender shall be void
and of no force and effect. If Borrower shall default in the performance or
observance of any material term, covenant or condition of the Management
Agreement on the part of Borrower to be performed or observed, then, without
limiting the generality of the other provisions of this Security Instrument,
and without waiving or releasing Borrower from any of its obligations
hereunder, Lender shall have the right, but shall be under no obligation, to
pay any sums and to perform any act or take any action as may be appropriate
to cause all the terms, covenants and conditions of the Management Agreement
on the part of Borrower to be performed or observed to be promptly performed
or observed on behalf of Borrower, to the end that the rights of Borrower in,
to and under the Management Agreement shall be kept unimpaired and free from
default. Lender and any person designated by Lender shall have, and are
hereby granted, the right to enter upon the Property at any time and from
time to time for the purpose of taking any such action. If the Manager under
the Management Agreement shall deliver to Lender a copy of any notice sent to
Borrower of default under the Management Agreement, such notice shall
constitute full protection to Lender for any action taken or omitted to be
taken by Lender in good faith, in reliance thereon. Borrower shall, from
time to time, use its best efforts to obtain from the Manager under the
Management Agreement such certificates of estoppel with respect to compliance
by Borrower with the terms of the Management Agreement as may be requested by
Lender. Borrower shall exercise each individual option, if any, to extend or
renew the term of the Management Agreement upon demand by Lender made at any
time within one (1) year of the last day upon which any such option may be
exercised, and Borrower hereby expressly authorizes and appoints Lender its
attorney-in-fact to exercise any such option in the name of and upon behalf
of Borrower, which power of attorney shall be irrevocable and shall be deemed
to be coupled with an interest. Any sums expended by Lender pursuant to this
Section 3.13 shall bear interest at the Default Rate (hereinafter defined)
from the date such cost is incurred to the date of payment to Lender, shall
be deemed to constitute a portion of the Debt, shall be secured by the lien
of this Security Instrument and the Other Security Documents and shall be
immediately due and payable upon demand by Lender therefor.
(b) Without limitation of the foregoing, if (i) the Manager shall
become insolvent, or (ii) an Event of Default shall occur and be continuing,
then Lender, at its option, may require Borrower to engage a bona fide,
independent third party management agent approved by Lender in its sole
discretion (the "New Manager") to manage the Property. The New Manager shall
be engaged by Borrower pursuant to a written management agreement that
complies with the terms hereof and is otherwise satisfactory to Lender in all
respects.
Section 3.14 Performance of Other Agreements. Borrower shall observe
and perform each and every term to be observed or performed by Borrower
pursuant to the terms of any agreement or recorded instrument affecting or
pertaining to the Property, or given by Borrower to Lender for the purpose of
further securing an obligation secured hereby and any amendments,
modifications or changes thereto.
Section 3.15 Change of Name, Identity or Structure. Borrower will not
change Borrower's name, identity (including its trade name or names) or, if
not an individual, Borrower's corporate, partnership or other structure
without notifying Lender of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Borrower's structure, without first obtaining the prior written consent of
Lender. Borrower will execute and deliver to Lender, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Lender to establish or
maintain the validity, perfection and priority of the security interest
granted herein. At the request of Lender, Borrower shall execute a
certificate in form satisfactory to Lender listing the trade names under
which Borrower intends to operate the Property, and representing and
warranting that Borrower does business under no other trade name with respect
to the Property.
Section 3.16 Existence. Borrower will continuously maintain its
existence and its rights to do business in the state where the Property is
located together with its franchises and trade names.
ARTICLE 4
SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 Property Use. The Property shall be used only for
commercial office space, and for no other use without the prior written
consent of Lender, which consent may be withheld in Lender's sole and
absolute discretion.
Section 4.2 ERISA.
(a) It shall not engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by
Lender of any of its rights under the Note, this Security Instrument and the
Other Security Documents) to be a non-exempt (under a statutory or
administrative class exemption) prohibited transaction under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the term
of the Security Instrument, as requested by Lender in its sole discretion,
that (i) Borrower is not an "employee benefit plan" as defined in Section
3(3) of ERISA, which is subject to Title I of ERISA, or a "governmental plan"
within the meaning of Section 3(32) of ERISA; (ii) Borrower is not subject to
state statutes regulating investments and fiduciary obligations with respect
to governmental plans; and (iii) one or more of the following circumstances
is true:
(I) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
(II) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan investors" within the
meaning of 29 C.F.R. Section 2510.3-101(f)(2); or
(III) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c) or (e) or an investment company registered under The
Investment Company Act of 1940.
Section 4.3 Single Purpose Entity. Borrower has not and shall not:
(a) engage in any business or activity other than the ownership,
operation and maintenance of the Property (and the Additional Property
(hereinafter defined)), and activities incidental thereto;
(b) acquire or own any material assets other than (i) the Property
and Additional Property, and (ii) such incidental Personal Property as may be
necessary for the operation of the Property and the Additional Property;
(c) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part, transfer or otherwise
dispose of all or substantially all of its assets or change its legal
structure, without in each case Lender's consent;
(d) fail to preserve its existence as an entity duly organized,
validly existing and in good standing (if applicable) under the laws of the
jurisdiction of its organization or formation, or without the prior written
consent of Lender, amend, modify, terminate or fail to comply with the
provisions of Borrower's Partnership Agreement, Articles or Certificate of
Incorporation or similar organizational documents, as the case may be, as
same may be further amended or supplemented, if such amendment, modification,
termination or failure to comply would adversely affect the ability of
Borrower to perform its obligations hereunder, under the Note or under the
Other Security Documents;
(e) own any subsidiary or make any investment in, any person or
entity without the consent of Lender;
(f) commingle its assets with the assets of any of its general
partners, affiliates, principals or of any other person or entity;
(g) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Debt, except in the
ordinary course of its business of owning and operating the Property and the
Additional Property, provided that such debt is paid when due:
(h) become insolvent and fail to pay its debts and liabilities
from its assets as the same shall become due:
(i) fail to maintain its records, books of account and bank
accounts separate and apart from those of the general partners, principals
and affiliates of Borrower, the affiliates of a general partner of Borrower,
and any other person or entity;
(j) enter into any contract or agreement with any general partner,
principal or affiliate of Borrower, Guarantor or Indemnitor, or any general
partner, principal or affiliate thereof, except upon terms and conditions
that are intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than any general
partner, principal or affiliate of Borrower, Guarantor or Indemnitor, or any
general partner, principal or affiliate thereof;
(k) seek the dissolution or winding-up in whole, or in part, of
Borrower;
(1) maintain its assets in such a manner that it will be costly or
difficult to segregate, ascertain or identify its individual assets from
those of any member, general partner, principal or affiliate of Borrower, or
any member, general partner, principal or affiliate thereof or any other
person;
(m) hold itself out to be responsible for the debts of another
person;
(n) make any loans or advances to any third party, including any
member, general partner, principal or affiliate of Borrower, or any general
partner, principal or affiliate thereof;
(o) fail to file its own tax returns;
(p) agree to, enter into or consummate any transaction which would
render Borrower unable to furnish the certification or other evidence
referred to in Section 4.2(b) hereof;
(q) fail either to hold itself out to the public as a legal entity
separate and distinct from any other entity or person or to conduct its
business solely in its own name in order not (i) to mislead others as to the
identity with which such other party is transacting business, or (ii) to
suggest that Borrower is responsible for the debts of any third party
(including any general partner, principal or affiliate of Borrower, or any
general partner, principal or affiliate thereof);
(r) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations; or
(s) file or consent to the filing of any petition, either
voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for
the benefit of creditors.
The foregoing covenants shall apply to the members, general
partners or principal shareholders of Borrower when appropriate as determined
by Lender.
Section 4.4 Restoration. The following provisions shall apply in
connection with the Restoration of the Property:
(a) If the Net Proceeds shall be less than $200,000.00 and the
costs of completing the Restoration shall be less than $200,000.00, the Net
Proceeds will be disbursed by Lender to Borrower upon receipt, provided that
all of the conditions set forth in Subsection 4.4(b)(i) are met and Borrower
delivers to Lender a written undertaking to expeditiously commence and to
satisfactorily complete with due diligence the Restoration in accordance with
the terms of this Security Instrument.
(b) If the Net Proceeds are equal to or greater than $200,000.00
or the costs of completing the Restoration are equal to or greater than
$200,000.00, Lender shall make the Net Proceeds available for the Restoration
in accordance with the provisions of this Subsection (b). The term "Net
Proceeds" for purposes of this Section 4.4 shall mean: (i) the net amount of
all insurance proceeds received by Lender pursuant to Subsections 3.3(b)(i),
(iv), (vi) and (vii) of this Security Instrument as a result of such damage
or destruction, after deduction of its reasonable costs and expenses
(including, but not limited to, reasonable counsel fees), if any, in
collecting same ("Insurance Proceeds"), or (ii) the net amount of all awards
and payments received by Lender with respect to a taking referenced in
Section 3.6 of this Security Instrument, after deduction of its reasonable
costs and expenses (including, but not limited to, reasonable counsel fees),
if any, in collecting same ("Condemnation Proceeds"), whichever the case may
be.
(i) The Net Proceeds shall be made available to Borrower for
the Restoration provided that each of the following conditions are met:
(A) no Event of Default shall have occurred and be
continuing under the Note, this Security Instrument or any of the
Other Security Documents;
(B) in the event the Net Proceeds are (1) Insurance
Proceeds, less than fifty percent (50%) of the total floor area of
the Improvements has been damaged, destroyed, or rendered unusable
as a result of such fire or other casualty or (2) Condemnation
Proceeds, less than ten (10%) of the land constituting the Property
is taken, and such land is located along the perimeter or periphery
of the Property, and no portion of the Improvements is located in
such land;
(C) Leases demising in the aggregate a percentage amount
equal to or greater than the Rentable Space Percentage (hereinafter
defined) of the total rentable space in the Property which has been
demised under executed and delivered Leases in effect as of the
date of the occurrence of such fire or other casualty or taking,
whichever the case may be, shall remain in full force and effect
during and after the completion of the Restoration. The term
"Rentable Space Percentage" shall mean (1) in the event the Net
Proceeds are Insurance Proceeds, a percentage amount equal to fifty
percent (50%) and (2) in the event the Net Proceeds are
Condemnation Proceeds, a percentage amount equal to ninety percent
(90%);
(D) Borrower shall commence the Restoration as soon as
reasonably Practicable (but in no event later than sixty (60) days
after such damage or destruction or taking, whichever the case may
be, occurs) and shall diligently pursue the same to satisfactory
completion;
(E) Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and
interest under the Note and the Applicable Interest Rate (as
defined in the Note), which will be incurred with respect to the
Property as a result of the occurrence of any such fire or other
casualty or taking, whichever the case may be, will be covered out
of (1) the Net Proceeds, (2) the insurance coverage referred to in
Subsection 3.3(a)(iii), if applicable, or (3) by other funds of
Borrower;
(F) Lender shall be satisfied that, upon the completion
of the Restoration, the Debt Service Coverage Ratio (as defined
herein) shall be at least 1.30 to 1.0, as determined by Lender in
its sole and absolute discretion:
(G) Lender shall be satisfied that the Restoration will
be completed on or before the earliest to occur of (1) six (6)
months prior to the Maturity Date (as defined in the Note), (2)
twelve (12) months after the occurrence of such fire or other
casualty or taking, whichever the case may be, (3) the earliest
date required for such completion under the terms of any Leases
which are required in accordance with the provisions of this
Subsection 4.4(b) to remain in effect subsequent to the occurrence
of such fire or other casualty or taking, whichever the case may
be, and the completion of the Restoration or (4) such time as may
be required under applicable zoning law, ordinance, rule or
regulation in order to repair and restore the Property to the
condition it was in immediately prior to such fire or other
casualty or to as nearly as possible the condition it was in
immediately prior to such taking, as applicable;
(H) the Property and the use thereof after the
Restoration will be in compliance with and permitted under all
applicable zoning laws, ordinances, rules and regulations (or, to
the extent the Property Constituted a permitted non-conforming use,
will continue to constitute a permitted con-conforming use);
(I) the Restoration shall be done and completed by
Borrower in an expeditious and diligent fashion and in compliance
with all applicable governmental laws, rules and regulations
(including, without limitation, all applicable Environmental Laws)
defined below; and
(J) such fire or other casualty or taking, as applicable,
does not result in the loss of access to the Property or the
Improvements.
The term "Debt Service Coverage Ratio" as used herein
shall mean the ratio of (a) the NOI (hereinafter defined) produced
by the operation of the Property and the Additional Property during
the twelve (12) calendar month period immediately preceding the
calculation to (b) the aggregate required debt service payments
that would be due and payable with respect to the Property and the
Additional Property for the twelve (12) calendar month period
immediately following the calculation.
The term "NOI" as used herein shall mean the gross income
derived from the operation of the Property and the Additional
Property, less Expenses (hereinafter defined). NOI shall include
only Rents and such other income, including any rent loss or
business income insurance proceeds, laundry, parking, vending or
concession income and any expenditure relating to the maintenance
or operation of the Property and the Additional Property paid by
Borrower which is reimbursed by tenants under written leases (a
"Tenant Pass-Through") (such as, by way of example, reimbursements
for proportionate share of property taxes and operating expenses),
which are actually received by Borrower or its agents or
representatives and Expenses actually paid or payable on an accrual
basis during the twelve (12) month period ending one month prior to
the date on which the NOI is being calculated, as set forth on
operating statements satisfactory to Lender. NOI shall be
calculated on a cash basis in accordance with customary accounting
principles applicable to real estate.
Notwithstanding the foregoing, NOI shall not include (a)
condemnation or insurance proceeds (excluding rent or business
income insurance proceeds); (b) any proceeds from the sale,
exchange, transfer, financing or refinancing of all or any portion
of the Property or any Additional Property; (c) amounts received
from tenants as a security deposit; or (d) any other type of income
otherwise includable in NOI but paid directly by any tenant to a
person or entity other than Borrower or its agents or
representatives.
The term "Expenses" as used herein shall mean the
aggregate of the following items: (a) real estate taxes, general
and special assessments or similar charges; (b) sales, use and
personal property taxes; (c) management fees of not less than 3% of
gross income derived from the operation of the Property and the
Additional Property and disbursements for management services,
whether such services are performed at the Property or the
Additional Property or off-site; (d) wages, salaries, pension costs
and all fringe and other employee-related benefits and expenses, up
to and including (but not above) the level of the on-site manager,
engaged in the repair, operation and maintenance of the Property
and the Additional Property and service to tenants and on-site
personnel engaged in audit and accounting functions performed by
Borrower; (e) insurance premiums including, but not limited to,
casualty, liability, rent and fidelity insurance premiums; (f) cost
of all electricity, oil, gas, water, steam, HVAC and any other
energy, utility or similar item and overtime services, the cost of
building and cleaning supplies, and all other administrative,
management, ownership, operating, advertising, marketing and
maintenance expenses incurred in connection with the operation of
the Property and the Additional Property; (g) cost of necessary
cleaning, repair, replacement, maintenance, decoration or painting
of existing improvements on the Property and the Additional
Property (including, without limitation, parking lots and
roadways), of like kind and quantity or such kind or quality which
is necessary to maintain the Property and the Additional Property
to the same standards as competitive properties of similar size and
location of the Property and the Additional Property, as
applicable, together with adequate reserves for the repair and
replacement of capital improvements on the Property and the
Additional Property acceptable to Lender; (h) the cost of such
other maintenance materials, HVAC repairs, parts and supplies, and
all equipment to be used in the ordinary course of business, which
is not capitalized in accordance with GAAP; (i) legal, accounting
and other professional expenses incurred in connection with the
Property and the Additional Property; (j) casualty losses to the
extent not reimbursed by a third party; (k) all amounts that should
be reserved, as reasonably determined by Borrower with approval by
the Lender in its reasonable discretion, for repair or maintenance
of the Property and the Additional Property and to maintain the
value of the Property and the Additional Property, including
replacement reserves; and (1) cost of leasing commissions and
tenant concessions payable to tenants pursuant to Leases in effect
at the Property. The Expenses shall be based on the above-
described items actually incurred or payable on an accrual basis in
accordance with GAAP by Borrower during the twelve (12) month
period ending one month prior to the date on which the NOI is to be
calculated (except the capital expenses and reserves set forth in
Subsection (g) above), with customary adjustments for items such as
taxes and insurance which accrue but are paid periodically, as
adjusted by Lender to reflect projected adjustments for the
subsequent twelve (12) month period beginning on the date on which
the NOI is to be calculated.
Notwithstanding the foregoing, the term "Expenses" shall
not include (i) depreciation or amortization or any other non-cash
item of expense unless approved by Lender; (ii) interest,
principal, fees, costs and expense reimbursements of Lender in
administrating the loan evidenced by the Note or exercising
remedies under this Security Instrument or the Other Security
Documents; or (iii) any expenditure (other than leasing commissions
and tenant concessions) properly treated as a capital item under
GAAP and such expenditure is treated by Borrower as a capital item
in Borrower's financial statements.
(ii) The Net Proceeds shall be held by Lender and, until
disbursed in accordance with the provisions of this Subsection 4.4(b), shall
constitute additional security for the Obligations. The Net Proceeds shall
be disbursed by Lender to, or as directed by, Borrower from time to time
during the course of the Restoration. Upon receipt of evidence satisfactory
to Lender that (A) all materials installed and work and labor performed
(except to the extent that they are to be paid for out of the requested
disbursement) in connection with the Restoration have been paid for in full,
and (B) there exist no notices of pendency, stop orders, mechanic's or
materialman's liens or notices of intention to file same, or any other liens
or encumbrances of any nature whatsoever on the Property arising out of the
Restoration which have not either been fully bonded to the satisfaction of
Lender and discharged of record or in the alternative fully insured to the
satisfaction of Lender by the title company insuring the lien of this
Security Instrument.
(iii) All plans and specifications required in connection
with the Restoration shall be subject to prior review and reasonable
acceptance in all respects by Lender and by an independent consulting
engineer selected by Lender (the "Casualty Consultant"). Lender shall have
the use of the plans and specifications and all permits, licenses and
approvals required or obtained in connection with the Restoration. The
identity of the contractors, subcontractors and materialmen engaged in the
Restoration, as well as the contracts under which they have been engaged,
shall be subject to prior review and reasonable acceptance by Lender and the
Casualty Consultant. All costs and expenses incurred by Lender in connection
with making the Net Proceeds available for the Restoration including, without
limitation, reasonable counsel fees and disbursements and the Casualty
Consultant's fees, shall be paid by Borrower.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to the costs
actually incurred from time to time for work in place as part of the
Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term "Casualty Retainage" as used in this Subsection (b)
shall mean an amount equal to 10% of the costs actually incurred for work in
place as part of the Restoration, as certified by the Casualty Consultant,
until the Restoration has been completed. The Casualty Retainage shall in no
event, and notwithstanding anything to the contrary set forth above in this
Subsection (b), be less than the amount actually held back by Borrower from
contractors, subcontractors and materialmen engaged in the Restoration. The
Casualty Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed in accordance
with the provisions of this Subsection (b) and that all approvals necessary
for the re-occupancy and use of the Property have been obtained from all
appropriate governmental and quasi-governmental authorities, and Lender
receives evidence satisfactory to Lender that the costs of the Restoration
have been paid in full or will be paid in full out of the Casualty Retainage,
provided, however, that Lender will release the portion of the Casualty
Retainage being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or
materialman has satisfactorily completed all work and has supplied all
materials in accordance with the provisions of the contractor's,
subcontractor's or materialman's contract, and the contractor, subcontractor
or materialman delivers the lien waivers (conditioned only upon payment) or
evidence of payment in full of all sums due to the contractor, subcontractor
or materialman as may be reasonably requested by Lender or by the title
company insuring the lien of this Security Instrument. If required by
Lender, the release of any such portion of the Casualty Retainage shall be
approved by the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or
materialman.
(v) Lender shall not be obligated to make disbursements of
the Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the opinion of Lender, be sufficient to pay in
full the balance of the costs which are estimated by the Casualty Consultant
to be incurred in connection with the completion of the Restoration, Borrower
shall deposit the deficiency (the "Net Proceeds Deficiency") with Lender
before any further disbursement of the Net Proceeds shall be made. The Net
Proceeds Deficiency deposited with Lender shall be held by Lender and shall
be disbursed for costs actually incurred in connection with the Restoration
on the same conditions applicable to the disbursement of the Net Proceeds,
and until so disbursed pursuant to this Subsection 4.4(b) shall constitute
additional security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency deposited with
Lender after the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this Subsection
4.4(b), and the receipt by Lender of evidence satisfactory to Lender that all
costs incurred in connection with the Restoration have been paid in full,
shall be remitted by Lender to Borrower, provided no Event of Default shall
have occurred and shall be continuing under the Note, this Security
Instrument or any of the Other Security Documents.
(c) All Net Proceeds not required (i) to be made available for the
Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Subsection 4.4(b)(vii) may be retained and applied by Lender
toward the payment of the Debt whether or not then due and payable in such
order, priority and proportions as Lender in its discretion shall deem proper
or, at the discretion of Lender, the same may be paid, either in whole or in
part, to Borrower for such purposes as Lender shall designate, in its
discretion. If Lender shall receive and retain Net Proceeds, the lien of
this Security Instrument shall be reduced only by the amount thereof received
and retained by Lender and actually applied by Lender in reduction of the
Debt
Section 4.5 Lockbox Account. Borrower shall cause all rents to be
deposited as provided in the Lockbox Agreement (as hereinafter defined).
Section 4.6 Other Debt. Borrower will not incur or permit to exist any
indebtedness for borrowed money or guarantee the obligations of another
person or entity other than the Debt.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
Section 5.1 Warranty of Title. Borrower has good title to the Property
and has the right to mortgage, grant, bargain, sell, pledge, assign, warrant,
transfer and convey the same and that Borrower possesses an unencumbered fee
simple absolute estate in the Land and the Improvements and that it owns the
Property free and clear of all liens, encumbrances and charges whatsoever
except for those exceptions shown in the title insurance policy insuring the
lien of this Security Instrument (the "Permitted Exceptions"). Borrower
shall forever warrant, defend and preserve the title and the validity and
priority of the lien of this Security Instrument and shall forever warrant
and defend the same to Lender against the claims of all persons whomsoever.
Section 5.2 Authority. Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's
part to be performed.
Section 5.3 Legal Status and Authority. Borrower (a) is duly
organized, validly existing and in good standing under the laws of its state
of organization or incorporation; (b) is duly qualified to transact business
and is in good standing in the state where the Property is located; and (c)
has all necessary approvals, governmental and otherwise, and full power and
authority to own the Property and carry on its business as now conducted and
proposed to be conducted. Borrower now has and shall continue to have the
full right, power and authority to operate and lease the Property, to
encumber the Property as provided herein and to perform all of the other
obligations to be performed by Borrower under the Note, this Security
Instrument and the Other Security Documents.
Section 5.4 Validity of Documents. (a) The execution, delivery and
performance of the Note, this Security Instrument and the Other Security
Documents and the borrowing evidenced by the Note (i) are within the
corporate/partnership/limited liability power of Borrower; (ii) have been
authorized by all requisite corporate/partnership/limited liability company
action; (iii) have received all necessary approvals and consents, corporate,
governmental, judicial or otherwise; (iv) will not violate, conflict with,
result in a breach of or constitute (with notice or lapse of time, or both) a
default under any provision of law, any order or judgment of any court or
governmental authority, the articles of incorporation, by-laws, partnership,
operating or trust agreement, or other governing instrument of Borrower, or
any indenture, agreement or other instrument to which Borrower is a party or
by which it or any of its assets or the Property is or may be bound or
affected; (v) will not result in the creation or imposition of any lien,
charge or encumbrance whatsoever upon any of its assets, except the lien and
security interest created hereby; and (vi) will not require any authorization
or license from, or any filing with, any governmental, judicial or other body
(except for the recordation of this instrument in appropriate land records in
the state where the Property is located and except for Uniform Commercial
Code filings relating to the security interest created hereby); and (b) the
Note, this Security Instrument and the Other Security Documents constitute
the legal, valid and binding obligations of Borrower.
Section 5.5 Litigation. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of Borrower's knowledge, threatened or
contemplated against, or affecting, Borrower, a Guarantor, if any, an
Indemnitor, if any, or the Property that has not been disclosed to Lender or
is not adequately covered by insurance, as determined by Lender in its sole
and absolute discretion.
Section 5.6 Status of Property.
(a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any successor
thereto as an area having special flood hazards pursuant to the National
Flood Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as
amended, or any successor law, or, if located within any such area, Borrower
has obtained and will maintain the insurance prescribed in Section
3.3(a)(i)(y) hereof.
(b) To Borrower's best knowledge, Borrower has obtained all
necessary certificates, licenses and other approvals, governmental, judicial
and otherwise, necessary for the operation of the Property and the conduct of
its business and all required zoning, building code, land use, environmental
and other similar permits or approvals, all of which are in full force and
effect as of the date hereof and not subject to revocation, suspension,
forfeiture or modification.
(c) To Borrower's best knowledge, and except as disclosed in the
engineering report obtained by Lender in connection with this Security
Instrument, the Property and the present and contemplated use and occupancy
thereof are in full compliance with all Applicable Laws, including, without
limitation, zoning ordinances, building codes, land use and environmental
laws, laws relating to the disabled (including, but not limited to, the ADA)
and other similar laws.
(d) To Borrower's best knowledge, and except as disclosed in the
engineering report obtained by Lender in connection with this Security
Instrument, the Property is served by all utilities required for the current
or contemplated use thereof. All utility service is provided by public
utilities and the Property has accepted or is equipped to accept such utility
service.
(e) All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally
open for use by the public.
(f) The Property is served by public water and sewer systems.
(g) The Property is free from damage caused by fire or other
casualty.
(h) All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements have been
paid in full.
(i) Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property) used in
connection with the operation of the Property, free and clear of any and all
security interests, liens or encumbrances, except the lien and security
interest created hereby.
(j) To Borrower's best knowledge, all liquid and solid waste
disposal, septic and sewer systems located on the Property are in a good and
safe condition and repair and in compliance with all Applicable Laws.
(k) Except as disclosed in the surveys delivered to Lender by
Borrower in connection with this Security Instrument, all Improvements lie
within the boundary of the Land.
Section 5.7 No Foreign Person. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of
1986, as amended, and the related Treasury Department regulations, including
temporary regulations.
Section 5.8 Separate Tax Lot. The Property is assessed for real estate
tax purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or
lots, and no other land or improvement is assessed and taxed together with
the Property or any portion thereof.
Section 5.9 ERISA Compliance.
(a) As of the date hereof and throughout the term of this Security
Instrument, (i) Borrower is not and will not be an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and
(ii) the assets of Borrower do not and will not constitute "plan assets" of
one or more such plans for purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of this Security
Instrument (i) Borrower is not and will not be a "governmental plan" within
the meaning of Section 3(32) of ERISA and (ii) transactions by or with
Borrower are not and will not be subject to state statutes applicable to
Borrower regulating investments of and fiduciary obligations with respect to
governmental plans.
Section 5.10 Leases. (a) Borrower is the sole owner of the entire
lessor's interest in the Leases; (b) the Leases are valid and enforceable;
(c) the terms of all alterations, modifications and amendments to the Leases
are reflected in the certified occupancy statement delivered to and approved
by Lender; (d) none of the Rents reserved in the Leases have been assigned or
otherwise pledged or hypothecated; (e) none of the Rents have been collected
for more than one (1) month in advance; (f) the premises demised under the
Leases have been completed and the tenants under the Leases have accepted the
same and have taken possession of the same on a rent-paying basis; (g) except
as disclosed in the estoppel certificates delivered to Lender by tenants
under Leases at the Property in connection with the execution and delivery of
this Security Instrument, there exist no offsets or defenses to the payment
of any portion of the Rents; (h) no Lease contains an option to purchase,
right of first refusal to purchase, or any other similar provision; (i) no
person or entity has any possessory interest in, or right to occupy, the
Property except under and pursuant to a Lease; and (j) except as previously
disclosed to Lender in writing, each Lease is subordinate to this Security
Instrument, either pursuant to its terms or a recorded subordination
agreement.
Section 5.11 Financial Condition. (a) Borrower is solvent, and no
bankruptcy, reorganization, insolvency or similar proceeding under any state
or federal law with respect to Borrower has been initiated, and (b) it has
received reasonably equivalent value for the granting of this Security
Instrument.
Section 5.12 Business Purposes. The loan evidenced by the Note is
solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.
Section 5.13 Taxes. Borrower, any Guarantor and any Indemnitor have
filed all federal, state, county, municipal, and city income and other tax
returns required to have been filed by them and have paid all taxes and
related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by them. Neither Borrower, any
Guarantor nor any Indemnitor knows of any basis for any additional assessment
in respect of any such taxes and related liabilities for prior years.
Section 5.14 Mailing Address. Borrower's mailing address, as set forth
in the opening paragraph hereof or as changed in accordance with the
provisions hereof, is true and correct.
Section 5.15 No Change in Facts or Circumstances. All information in
the application for the loan submitted to Lender (the "Loan Application") and
in all financing statements, rent rolls, reports, certificates and other
documents submitted in connection with the Loan Application or in
satisfaction of the terms thereof, are accurate, complete and correct in all
respects. There has been no adverse change in any condition, fact,
circumstance or event that would make any such information inaccurate,
incomplete or otherwise materially misleading.
Section 5.16 Disclosure. Borrower has disclosed to Lender all material
facts and has not failed to disclose any material fact that could cause any
representation or warranty made herein to be materially misleading.
Section 5.17 Third Party Representations. Each of the representations
and the warranties made herein or in any Other Security Document(s) by (i)
Guarantor and (ii) Indemnitor, is true and correct in all material respects.
Section 5.18 Illegal Activity. No portion of the Property has been or
will be purchased with proceeds of any illegal activity.
ARTICLE 6
OBLIGATIONS AND RELIANCES
Section 6.1 Relationship of Borrower and Lender. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of any of the Note, this Security Instrument and the Other Security
Documents shall be construed so as to deem the relationship between Borrower
and Lender to be other than that of debtor and creditor.
Section 6.2 No Reliance on Lender. The general partners, principals
and (if Borrower is a trust) beneficial owners of Borrower are experienced in
the ownership and operation of properties similar to the Property, and
Borrower and Lender are relying solely upon such expertise and business plan
in connection with the ownership and operation of the Property. Borrower is
not relying on Lender's expertise, business acumen or advice in connection
with the Property.
Section 6.3 No Lender Obligations.
(a) Notwithstanding the provisions of Subsections 1.1(f) and
1.1(1) or Section 3.7, 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 Note or the Other Security 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 6.4 Reliance. Borrower recognizes and acknowledges that in
accepting the Note, this Security Instrument and the Other Security
Documents, Lender is expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in Article 5 without
any obligation to investigate the Property and notwithstanding any
investigation of the Property by Lender; that such reliance existed on the
part of Lender prior to the date hereof; that the warranties and
representations are a material inducement to Lender in accepting the Note,
this Security Instrument and the Other Security Documents; and that Lender
would not be willing to make the loan evidenced by the Note, this Security
Instrument and the Other Security Documents and accept this Security
Instrument in the absence of the warranties and representations as set forth
in Article 5.
ARTICLE 7
FURTHER ASSURANCES
Section 7.1 Recording of Security Instrument, etc. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter,
from time to time, will cause this Security Instrument and any of the Other
Security Documents creating a lien or security interest or evidencing the
lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully
to protect and perfect the lien or security interest hereof upon, and the
interest of Lender in, the Property. Borrower will pay all taxes, filing,
registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, this Security
Instrument, the Other Security Documents, any note or mortgage supplemental
hereto, any security instrument with respect to the Property and any
instrument of further assurance, and any modification or amendment of the
foregoing documents, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Security Instrument, any mortgage
supplemental hereto, any security instrument with respect to the Property or
any instrument of further assurance, and any modification or amendment of the
foregoing documents, except where prohibited by law so to do.
Section 7.2 Further Acts, etc. Borrower will, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices
of assignments, transfers and assurances as Lender shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be
or may hereafter become bound to convey or assign to Lender, or for carrying
out the intention or facilitating the performance of the terms of this
Security Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Applicable Laws. Borrower, on demand,
will execute and deliver and hereby authorizes Lender to execute in the name
of Borrower upon Borrower's failure to comply with Lender's demand for a
period in excess of fifteen (15) days, or without the signature of Borrower
to the extent Lender may lawfully do so, one or more financing statements,
chattel mortgages or other instruments, to evidence more effectively the
security interest of Lender in the Property. Borrower grants to Lender an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to Lender
at law and in equity, including without limitation such rights and remedies
available to Lender pursuant to this Section 7.2.
Section 7.3 Changes in Tax, Debt, Credit and Documentary Stamp Laws.
(a) If any law is enacted or adopted or amended after the date of
this Security Instrument which deducts the Debt from the value of the
Property for the purpose of taxation or which imposes a tax, either directly
or indirectly, on the Debt or Lender's interest in the Property, Borrower
will pay the tax, with interest and penalties thereon, if any. If Lender is
advised by counsel chosen by it that the payment of tax by Borrower would be
unlawful or taxable to Lender or unenforceable or provide the basis for a
defense of usury, then Lender shall have the option by written notice of not
less than ninety (90) days to declare the Debt immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit
or credits on account of the Debt for any part of the Taxes or Other Charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this Security
Instrument or the Debt. If such claim, credit or deduction shall be required
by law, Lender shall have the option, by written notice of not less than
ninety (90) 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
Security Documents or impose any other tax or charge on the same, Borrower
will pay for the same, with interest and penalties thereon, if any.
Section 7.4 Estoppel Certificates.
(a) After request by Lender, Borrower, within ten (10) days, shall
furnish Lender or any proposed assignee with a statement, duly acknowledged
and certified, setting forth (i) the amount of the original principal amount
of the Note, (ii) the unpaid principal amount of the Note, (iii) the rate of
interest of the Note, (iv) the terms of payment and maturity date of the
Note, (v) the date installments of interest and/or principal were last paid,
(v) that, except as provided in such statement, there are no defaults or
events which with the passage of time or the giving of notice or both, would
constitute an event of default under the Note or the Security Instrument,
(vi) that the Note and this Security Instrument are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification, (vii) whether any offsets or defenses exist against the
obligations secured hereby and, if any are alleged to exist, a detailed
description thereof, (viii) that all Leases are in full force and effect and
(provided the Property is not a residential multifamily property) have not
been modified (or if modified, setting forth all modifications), (ix) the
date to which the Rents thereunder have been paid pursuant to the Leases, (x)
whether or not, to the best knowledge of Borrower, any of the lessees under
the Leases are in default under the Leases, and, if any of the lessees are in
default, setting forth the specific nature of all such defaults, (xi) the
amount of security deposits held by Borrower under each Lease and that such
amounts are consistent with the amounts required under each Lease, and (xii)
as to any other matters reasonably requested by Lender and reasonably related
to the Leases, the obligations secured hereby, the Property or this Security
Instrument.
(b) To the extent required of lessees under any Leases, Borrower
shall deliver to Lender, and, otherwise, Borrower shall use commercially
reasonable efforts to deliver to Lender, promptly upon request, duly executed
estoppel certificates from any one or more lessees as required by Lender
attesting to such facts regarding the Lease as Lender may require, including
but not limited to attestations that the Lease is in full force and effect
with no defaults thereunder on the part of any party, that none of the Rents
have been paid more than one month in advance, and that the lessee claims no
defense or offset against the full and timely performance of its obligations
under the Lease, provided, however, that Borrower shall be deemed to have
satisfied its obligations pursuant to the terms of this subparagraph (b) if
it obtains from the lessee under the Lease an estoppel certificate in the
form required by the Lease. To the extent any lessee shall refuse or fail to
so deliver an estoppel certificate as aforesaid, Borrower shall deliver to
Lender the required estoppel certificate which shall further provide an
explanation as to why the lessee failed or refused to deliver the estoppel
certificate.
(c) Upon any transfer or proposed transfer contemplated by Section
19.1 hereof, at Lender's request, Borrower, any Guarantors and any
Indemnitors shall provide an estoppel certificate to the Investor (defined in
Section 19.1) or any prospective Investor in such form, substance and detail
as Lender, such Investor or prospective Investor may reasonably require.
Section 7.5 Splitting of Security Instrument. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, and at Lender's cost and expense,
be split or divided into two or more notes and two or more security
instruments, each of which shall cover all or a portion of the Property to be
more particularly described therein. To that end, Borrower, upon written
request of Lender, shall execute, acknowledge and deliver, 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 this Security Instrument, 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 Lender,
provided that none of the foregoing instruments shall alter the monetary
terms contained in the Note, this Security Instrument or the Other Security
Documents or increase the obligations or decrease the rights of Borrower,
Guarantor or any Indemnitor in respect of the loan secured hereby. In such
event, in any instance where the consent of Lender is required under this
Security Instrument, Borrower shall be required to obtain only the consent of
the holder of the security instrument having the highest lien priority;
provided, however, that the foregoing shall not limit Borrower's obligation
to obtain the written agreement of the holder of each and every such security
instrument to the extent any waiver of rights of any of the holder(s) thereof
is requested by Borrower, or in the case of any modification or amendment to
any such security instrument.
Section 7.6 Replacement Documents. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the
Note or any Other Security Document which is not of public record, and, in
the case of any such mutilation, upon surrender and cancellation of such Note
or Other Security Document, Borrower will issue, in lieu thereof, a
replacement Note or Other Security Document, dated the date of such lost,
stolen, destroyed or mutilated Note or Other Security Document in the same
principal amount thereof and otherwise of like tenor.
ARTICLE 8
DUE ON SALE/ENCUMBRANCE
Section 8.1 Lender Reliance. Borrower acknowledges that Lender has
examined and relied on the experience of Borrower and its general partners,
members, principals and (if Borrower is a trust) beneficial owners in owning
and operating properties such as the Property in agreeing to make the loan
secured hereby, and will continue to rely on Borrower's ownership of the
Property as a means of maintaining the value of the Property as security for
repayment of the Debt and the performance of the Other Obligations. Borrower
acknowledges that Lender has a valid interest in maintaining the value of the
Property so as to ensure that, should Borrower default in the repayment of
the Debt or the performance of the Other Obligations, Lender can recover the
Debt by a sale of the Property.
Section 8.2 No Sale/Encumbrance. Borrower agrees that Borrower shall
not, without the prior written consent of Lender, sell, convey, mortgage,
grant, bargain, encumber, pledge, assign, or otherwise transfer the Property
or any part thereof or permit the Property or any part thereof to be sold,
conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred.
Section 8.3 Sale/Encumbrance Defined. A sale, conveyance, mortgage,
grant, bargain, encumbrance, pledge, assignment, or transfer within the
meaning of this Article 8 shall be deemed to include, but not be limited to,
(a) an installment sales agreement wherein Borrower agrees to sell the
Property or any part thereof for a price to be paid in installments; (b) an
agreement by Borrower leasing all or a substantial part of the Property for
other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (c)
if Borrower, any Guarantor, any Indemnitor, or any general partner, member or
principal shareholder of Borrower, Guarantor or Indemnitor is a corporation,
the voluntary or involuntary sale, conveyance, transfer or pledge of such
corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or the
creation or issuance of new stock by which an aggregate of more than 10% of
such corporation's stock shall be vested in a party or parties who are not
now stockholders; and (d) if Borrower, any Guarantor or Indemnitor or any
partner or member of Borrower, any Guarantor or Indemnitor is a limited or
general partnership, limited liability company or joint venture, the change,
removal or resignation of a general partner or managing partner or managing
member, or the transfer or pledge of the partnership or membership interest
of any partner or member or any profits or proceeds relating to such
partnership or membership interest. Notwithstanding the foregoing, (i) with
the prior written consent of Lender, any member in Borrower shall be
permitted to transfer its membership interest to any other member in Borrower
as of the date of this Security Instrument, (ii) transfers of stock in
Wellsford Real Properties, Inc. ("WRP") shall not require Lender's consent,
nor shall Lender's consent be required to any merger, consolidation or other
combination of WRP or the direct or indirect sale, lease, exchange, or
transfer of all or substantially all of the assets of WRP in one transaction
or in a series of related transactions, and (iii) transfers of ownership
interests in Wellsford Capital shall not require Lender's consent so long as
Wellsford Real Properties, Inc. continues to own a majority interest and
maintain management control over Wellsford Capital.
Section 8.4 Lender's Rights. Lender reserves the right to condition
the consent required hereunder upon a modification of the terms hereof and on
assumption of the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a transfer
fee of not less than one percent (1%) of the principal balance of the Note
and all of Lender's expenses incurred in connection with such transfer, the
approval by a Rating Agency of the proposed transferee, the proposed
transferee's continued compliance with the covenants set forth in Sections
4.2 and 4.3 hereof, or such other conditions as Lender shall determine in its
sole discretion to be in the interest of Lender. Lender shall not be
required to demonstrate any actual impairment of its security or any
increased risk of default hereunder in order to declare the Debt immediately
due and payable upon Borrower's sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property without Lender's
consent in such cases where such consent is required. This provision shall
apply to every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property regardless of whether
voluntary or not, or whether or not Lender has consented to any previous
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
or transfer of the Property.
ARTICLE 9
PREPAYMENT
Section 9.1 Prepayment Before Event of Default. The Debt may be
prepaid only in strict accordance with the express terms and conditions of
the Note including the payment of any prepayment consideration.
Section 9.2 Prepayment After Event of Default. If a Default Prepayment
(defined below) occurs, Borrower shall pay to Lender the entire Debt,
including without limitation, the Prepayment Fee; provided, however, that
Borrower shall have no obligation to pay the Prepayment Fee unless the
obligation to make the Default Prepayment occurs during the Closed Period (as
defined in the Note). For purposes of this Section 9.2, the term "Default
Prepayment" shall mean a prepayment of the principal amount of the Note made
after the occurrence of any Event of Default or an acceleration of the
Maturity Date (as defined in the Note) under any circumstances, including,
without limitation, a prepayment occurring in connection with reinstatement
of this Security Instrument provided by statute under foreclosure proceedings
or exercise of a power of sale, any statutory right of redemption exercised
by Borrower or any other party having a statutory right to redeem or prevent
foreclosure, any sale in foreclosure or under exercise of a power of sale or
otherwise.
ARTICLE 10
DEFAULT
Section 10.1 Events of Default. The occurrence of any one or more of
the following events shall constitute an "Event of Default":
(a) if any portion of the Debt is not paid on or before the fifth
(5th) day after the same is due or if the entire Debt is not paid on or
before the Maturity Date;
(b) if any of the Taxes or Other Charges is not paid when the same
is due and payable except to the extent sums sufficient to pay such Taxes and
Other Charges have been deposited with Lender in accordance with the terms of
this Security Instrument and/or the Lockbox Agreement;
(c) if the Policies are not kept in full force and effect (for any
reason other than the failure to pay the premiums therefor to the extent sums
sufficient to pay the same have been deposited with Lender pursuant to this
Security Instrument and/or the Lockbox Agreement and have not been so paid or
applied by Lender), or if the Policies are not delivered to Lender upon
request or Borrower has not delivered evidence of the renewal of the Policies
thirty (30) days prior to their expiration as provided in Section 3.3(b);
(d) if Borrower violates or does not comply with any of the
provisions of Sections 3.7 or 4.3 or Articles 8, 12 or 13;
(e) if any representation or warranty of Borrower, Indemnitor or
any person guaranteeing payment of the Debt or any portion thereof or
performance by Borrower of any of the terms of this Security Instrument (a
"Guarantor"), or any general partner, member, principal or beneficial owner
of any of the foregoing, made herein or in the Environmental Indemnity
(defined below) or any guaranty, or in any certificate, report, financial
statement or other instrument or document furnished to Lender shall have been
false or misleading in any material respect when made;
(f) if (i) Borrower or any general partner or member of Borrower,
or any Guarantor or Indemnitor shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, conservatorship
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Borrower or any general partner or member of Borrower, or any
Guarantor or Indemnitor shall make a general assignment for the benefit of
its creditors; or (ii) there shall be commenced against Borrower or any
general partner or member of Borrower, or any Guarantor or Indemnitor any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of ninety (90) days; or (iii) there shall be commenced
against Borrower or any general partner or member of Borrower, or any
Guarantor or Indemnitor any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of any
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within ninety (90) days from the entry
thereof; or (iv) Borrower or any general partner or member of Borrower, or
any Guarantor or Indemnitor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) Borrower or any general
partner or member of Borrower, or any Guarantor or Indemnitor shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due;
(g) if Borrower shall be in default under any other mortgage, deed
of trust, deed to secure debt or other security agreement covering any part
of the Property whether it be superior or junior in lien to this Security
Instrument;
(h) if the Property becomes subject to any mechanic's,
materialman's or other lien other than a lien for local real estate taxes and
assessments not then due and payable and the lien shall remain undischarged
of record (by payment, bonding or otherwise) for a period of thirty (30) days
following Borrower's receipt of notice of the filing thereof;
(i) if any federal tax lien is filed against the Property and same
is not discharged of record within thirty (30) days following Borrower's
receipt of notice of the filing thereof;
(j) if (i) Borrower fails to timely provide Lender with the
written certification and evidence referred to in Section 4.2(b) hereof, or
(ii) Borrower consummates a transaction which would cause this Security
Instrument or Lender's exercise of its rights under this Security Instrument,
the Note or the Other Security Documents to constitute a nonexempt prohibited
transaction under ERISA or result in a violation of a state statute
regulating governmental plans, subjecting Lender to liability for a violation
of ERISA or a state statute;
(k) if any default occurs under any guaranty or indemnity executed
in connection herewith including, without limitation, (1) that certain
Conditional Guarantee dated the date hereof given by Wellsford Capital, a
Maryland real estate investment trust ("Wellsford Capital" or "Guarantor") to
Lender, and (2) that certain Environmental Indemnity Agreement dated the date
hereof given by Borrower and Wellsford Capital (collectively, "Indemnitors")
to Lender, and such default continues beyond the expiration of any applicable
notice and grace periods, if any;
(1) if any default occurs under that certain Lockbox Pledge and
Security Agreement dated the date hereof by and between Lender, Hatfield
Philips Inc. (the "Servicer") and Borrower (the "Lockbox Agreement") and such
default continues after the expiration of applicable notice and grace period,
if any;
(m) if any default occurs under (i) that certain Mortgage and
Security Agreement dated as of the date hereof given by Borrower to Lender
(the "Canton Security Instrument") encumbering certain real property located
in Canton, Massachusetts and more particularly described therein (the "Canton
Property"), (ii) that certain Mortgage and Security Agreement dated as of the
date hereof given by Borrower to Lender (the "Philadelphia Security
Instrument") encumbering certain real property located in Philadelphia,
Pennsylvania as more particularly described therein (the "Philadelphia
Property"), (iii) that certain Mortgage and Security Agreement dated as of
the date hereof given by Borrower to Lender (the "West Chester Security
Instrument") encumbering certain real property located in West Chester,
Pennsylvania as more particularly described therein (the "West Chester
Property"), (iv) that certain Mortgage and Security Agreement dated the date
hereof given by Borrower to Lender (the "Piscataway Security Instrument")
encumbering certain real property located in Piscataway, New Jersey (the
"Piscataway Property"), (v) that certain Mortgage and Security Agreement
dated as of the date hereof given by Borrower to Lender (the "Cherry Hill
Security Instrument") encumbering certain real property located in Cherry
Hill, New Jersey (the "Cherry Hill Property"), and (vi) that certain
Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing for Commercial Purposes dated the date hereof given by Borrower to
Fidelity National Title Insurance Company, as trustee, for the use and
benefit of Lender, as beneficiary (the "Santa Monica Security Instrument")
encumbering Borrower's leasehold estate in certain real property located in
Santa Monica, California and more particularly described therein (the "Santa
Monica Property") (the Canton Security Instrument, the Philadelphia Security
Instrument, the West Chester Security Instrument, the Piscataway Security
Instrument, the Cherry Hill Security Instrument and the Santa Monica Security
Instrument are sometimes herein referred to collectively as the "Additional
Security Instruments"; the Canton Property, the Philadelphia Property, the
West Chester Property, the Piscataway Property, the Cherry Hill Property and
the Santa Monica Property are sometimes herein referred to collectively as
the "Additional Property"); or
(n) if for more than ten (10) days after notice from Lender,
Borrower shall continue to be in default under any other term, covenant or
condition of the Note, this Security Instrument or the Other Security
Documents in the case of any default which can be cured by the payment of a
sum of money or for thirty (30) days after notice from Lender in the case of
any other default, provided that if such default cannot reasonably be cured
within such thirty (30) day period and Borrower shall have commenced to cure
such default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, such thirty (30) day period shall be
extended for so long as it shall require Borrower in the exercise of due
diligence to cure such default, it being agreed that no such extension shall
be for a period in excess of one hundred twenty (120) days.
Section 10.2 Late Payment Charge. If any monthly installment of
principal and interest is not paid on or before the tenth (10th) day after
the date on which it is due, Borrower shall pay to Lender upon demand an
amount equal to the lesser of five percent (5%) of such unpaid portion of the
outstanding monthly installment of principal and interest then due or the
maximum amount permitted by applicable law, to defray the expense incurred by
Lender in handling and processing such delinquent payment and to compensate
Lender for the loss of the use of such delinquent payment, and such amount
shall be secured by this Security Instrument and the Other Security
Documents.
Section 10.3 Default Interest. Borrower does hereby agree that upon
the occurrence of an Event of Default, Lender shall be entitled to receive
and Borrower shall pay interest on the entire principal amount of the Note at
a rate (the "Default Rate") equal to the lesser of (i) the Interest Rate (as
defined in the Note) plus five percent (5%) or (ii) the maximum interest rate
permitted by applicable law. The Default Rate shall be computed from the
occurrence of the Event of Default until the earlier of the date upon which
the Event of Default is cured or the date upon which the Debt is paid in
full. Interest calculated at the Default Rate shall be added to the Debt,
and shall be deemed secured by this Security Instrument. This clause,
however, shall not be construed as an agreement or privilege to extend the
date of the payment of the Debt, nor as a waiver of any other right or remedy
accruing to Lender by reason of the occurrence of any Event of Default.
ARTICLE 11
RIGHTS AND REMEDIES
Section 11.1 Remedies. Upon the occurrence of any Event of Default,
Borrower agrees that Lender may take such action, without notice or demand,
as it deems advisable to protect and enforce its rights against Borrower and
in and to the Property, including, but not limited to, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in
such order as Lender may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Instrument under any applicable provision of law
in which case the Property or any interest therein may be sold for cash or
upon credit in one or more parcels or in several interests or portions and in
any order or manner;
(c) with or without entry, to the extent permitted and pursuant to
the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Security Instrument for the portion of the Debt
then due and payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Debt not then due, unimpaired
and without loss of priority;
(d) sell for cash or upon credit the Property or any part thereof
and all estate, claim, demand, right, title and interest of Borrower therein
and rights of redemption thereof, pursuant to power of sale or otherwise, at
one or more sales, as an entity or in parcels, at such time and place, upon
such terms and after such notice thereof as may be required or permitted by
law;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note or in the Other Security Documents;
(f) recover judgment on the Note either before, during or after
any proceedings for the enforcement of this Security Instrument or the Other
Security Documents;
(g) as a matter of right, have a receiver, trustee, liquidator or
conservator of the Property appointed, without notice and without regard for
the adequacy of the security for the Debt and without regard for the solvency
of Borrower, any Guarantor, Indemnitor or of any person, firm or other entity
liable for the payment of the Debt;
(h) subject to any applicable law, the license granted to Borrower
under Section 1.2 shall automatically be revoked and Lender may enter into or
upon the Property, either personally or by its agents, nominees or attorneys
and dispossess Borrower and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude Borrower and its
agents or servants wholly therefrom, and take possession of all books,
records and accounts relating thereto and Borrower agrees to surrender
possession of the Property and of such books, records and accounts to Lender
upon demand, and thereupon Lender may (i) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every part
of the Property and conduct the business thereat; (ii) complete any
construction on the Property in such manner and form as Lender deems
advisable; (iii) make alterations, additions, renewals, replacements and
improvements to or on the Property; (iv) exercise all rights and powers of
Borrower with respect to the Property, whether in the name of Borrower or
otherwise, including, without limitation, the right to make, cancel, enforce
or modify Leases, obtain and evict tenants, and demand, sue for, collect and
receive all Rents of the Property and every part thereof; (v) require
Borrower to pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lender
or to such receiver and, in default thereof, Borrower may be evicted by
summary proceedings or otherwise; and (vii) apply the receipts from the
Property to the payment of the Debt, in such order, priority and proportions
as Lender shall deem appropriate in its sole discretion after deducting
therefrom all expenses (including reasonable attorneys' fees) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
Taxes, Other Charges, insurance 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 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
Personal Property, and (ii) request Borrower at its expense to assemble the
Personal Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Personal Property sent to Borrower in
accordance with the provisions hereof at least five (5) days prior to such
action, shall constitute commercially reasonable notice to Borrower;
(j) apply any sums then deposited in the Escrow Fund and any other
sums held in escrow or otherwise by Lender in accordance with the terms of
this Security Instrument, the Lockbox Agreement or any Other Security
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, this
Security Instrument and the Other Security Documents, including without
limitation advances made by Lender pursuant to the terms of this Security
Instrument;
(k) surrender the Policies maintained pursuant to Article 3
hereof, collect the unearned Insurance Premiums and apply such sums as a
credit on the Debt in such priority and proportion as Lender in its
discretion shall deem proper, and in connection therewith, Borrower hereby
appoints Lender as agent and attorney-in-fact (which is coupled with an
interest and is therefore irrevocable) for Borrower to collect such Insurance
Premiums;
(l) pursue such other remedies as Lender may have under applicable
law, including, without limitation, the STATUTORY POWER OF SALE;
(m) 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
(n) notwithstanding any other provisions set forth herein and
without limitation thereof, this Security Instrument is upon the STATUTORY
CONDITIONS, for any breach of which the Lender shall have the STATUTORY POWER
OF SALE.
In the event of a sale, by foreclosure, power of sale, or otherwise, of less
than all of the Property, this Security Instrument shall continue as a lien
and security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section
11.1 to the contrary, if any Event of Default as described in clauses (i) or
(ii) of Subsection 10.1(f) shall occur, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand or other
action by Lender.
Section 11.2 Application of Proceeds. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or
the Other Security Documents, may be applied by Lender to the payment of the
Debt in such priority and proportions as Lender in its discretion shall deem
proper.
Section 11.3 Right to Cure Defaults. Upon the occurrence of any Event
of Default or if 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 Borrower and without releasing 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 11.3,
shall constitute a portion of the Debt and shall be due and payable to Lender
upon demand. All such costs and expenses incurred by Lender in remedying
such Event of Default or 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 Security Documents and
shall be immediately due and payable upon demand by Lender therefor.
Section 11.4 Actions and Proceedings. Lender has the right to appear
in and defend any action or proceeding brought with respect to the Property
and to bring any action or proceeding, in the name and on behalf of Borrower,
which Lender, in its discretion, decides should be brought to protect its
interest in the Property.
Section 11.5 Recovery of Sums Required To Be Paid. Lender shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice to
the right of Lender thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Borrower existing at the time such
earlier action was commenced.
Section 11.6 Examination of Books and Records. Lender, its agents,
accountants and attorneys shall have the right, upon reasonable advance
notice and at reasonable times, to examine the records, books, management and
other papers of Borrower and its affiliates or of any Guarantor or Indemnitor
which reflect upon their financial condition, at the Property or at any
office regularly maintained by Borrower, its affiliates or any Guarantor or
Indemnitor where the books and records are located. Lender and its agents
shall have the right to make copies and extracts from the foregoing records
and other papers. In addition, Lender, its agents, accountants and attorneys
shall have the right upon reasonable advance notice and at reasonable times
to examine and audit the books and records of Borrower and its affiliates or
of any Guarantor or Indemnitor pertaining to the income, expenses and
operation of the Property during reasonable business hours at any office of
Borrower, its affiliates or any Guarantor or Indemnitor where the books and
records are located. This Section 11.6 shall apply throughout the term of
the Note and without regard to whether an Event of Default has occurred or is
continuing.
Section 11.7 Other Rights, etc.
(a) The failure of Lender to insist upon strict performance of any
term hereof shall not be deemed to be a waiver of any term of this Security
Instrument. Borrower shall not be relieved of Borrower's obligations
hereunder by reason of (i) the failure of Lender to comply with any request
of Borrower, any Guarantor or any Indemnitor to take any action to foreclose
this Security Instrument or otherwise enforce any of the provisions hereof or
of the Note or the Other Security Documents, (ii) the release, regardless of
consideration, of the whole or any part of the Property, or of any person
liable for the Debt or any portion thereof, or (iii) any agreement or
stipulation by Lender extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Security Instrument or the Other
Security Documents.
(b) It is agreed that the risk of loss or damage to the Property
is on Borrower, and Lender shall have no liability whatsoever for decline in
value of the Property, for failure to maintain the Policies, or for failure
to determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with respect to any
Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Lender thereafter to foreclose this Security Instrument. The rights
of Lender under this Security Instrument shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No
act of Lender shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Lender shall not
be limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded at law or in
equity.
Section 11.8 Right to Release Any Portion of the Property. Lender may
release any portion of the Property for such consideration as Lender may
require without, as to the remainder of the Property, in any way impairing or
affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof
as Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 11.9 Violation of Laws. If the Property is not in compliance
with Applicable Laws, Lender may impose additional requirements upon Borrower
in connection herewith including, without limitation, monetary reserves or
financial equivalents.
Section 11.10 Recourse and Choice of Remedies. Notwithstanding any
other provision of this Security Instrument, including but not limited to
Article 15 hereof, Lender and other Indemnified Parties (defined in Section
13.1 below) are entitled to enforce the obligations of Borrower, Guarantor
and Indemnitor contained in Sections 13.2 and 13.3 and 13.4 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 or
acceptance of a deed in lieu of foreclosure or otherwise, and in the event
Lender commences a foreclosure action against the Property, Lender is
entitled to pursue a deficiency judgment with respect to such obligations
against Borrower, Guarantor and Indemnitor. The provisions of Sections 13.2
and 13.3, 13.4 and 15.3 are exceptions to any non-recourse or exculpation
provisions in the Note, this Security Instrument or the Other Security
Documents, and Borrower, Guarantor and Indemnitor are fully and personally
liable for the obligations pursuant to Sections 13.2 and 13.3, 13.4 and 15.3.
The liability of Borrower, Guarantor and Indemnitor are not limited to the
original principal amount of the Note. Notwithstanding the foregoing,
nothing herein shall inhibit or prevent Lender from foreclosing pursuant to
this Security Instrument or exercising any other rights and remedies pursuant
to the Note, this Security Instrument and the Other Security Documents,
whether simultaneously with foreclosure proceedings or in any other sequence.
A separate action or actions may be brought and prosecuted against Borrower,
whether or not action is brought against any other person or entity or
whether or not any other person or entity is joined in the action or actions.
In addition, Lender 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
Article 12 or Section 13.4.
Section 11.11 Right of Entry. Lender and its agents shall have the
right to enter and inspect the Property at all reasonable times.
ARTICLE 12
ENVIRONMENTAL HAZARDS
Section 12.1 Environmental Representations and Warranties. To the best
of Borrower's knowledge, after due inquiry: (a) there are no Hazardous
Substances (defined below) or underground storage tanks in, on, or under the
Property, except those that are both (i) in compliance with Environmental
Laws (defined below) and with permits issued pursuant thereto and (ii) fully
disclosed to Lender in writing pursuant to the written reports resulting from
the environmental assessments of the Property delivered to Lender (the
"Environmental Report"); (b) there are no past, present or threatened
Releases (defined below) of Hazardous Substances in, on, under or from the
Property except as described in the Environmental Report; (c) there is no
threat of any Release of Hazardous Substances migrating to the Property
except as described in the Environmental Report; (d) there is no past or
present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property except as described in the
Environmental Report; (e) Borrower does not know of, and has not received,
any written or oral notice or other communication from any person or entity
(including but not limited to a governmental entity) relating to Hazardous
Substances or Remediation (defined below) thereof, of possible liability of
any person or entity pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's
files and records, including but not limited to any reports relating to
Hazardous Substances in, on, under or from the Property and/or to the
environmental condition of the Property.
"Environmental Law" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the environment,
relating to Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or relating to
liability for or costs of other actual or threatened danger to human health
or the environment. "Environmental Law" includes, but is not limited to, the
following statutes, as amended, any successor/hereto, and any regulations
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency
Planning and Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource Conservation and Recovery Act (including but
not limited to Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic
Substances Control Act; the Safe Drinking Water Act; the Occupational Safety
and Health Act, the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation
Act. "Environmental Law" also includes, but is not limited to, any present
and future federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a governmental
authority of the environmental condition of the property; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental authority or
other person or entity, whether or not in connection with transfer of title
to or interest in property; imposing conditions or requirements in connection
with permits or other authorization for lawful activity; relating to
nuisance, trespass or other causes of action related to the Property; and
relating to wrongful death, personal injury, or property or other damage in
connection with any physical condition or use of the Property.
"Hazardous Substances" include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future Environmental Laws or that may
have a negative impact on human health or the environment, including but not
limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials,
flammables and explosives.
"Release" of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances.
"Remediation" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to clean up, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring,
assessment, audit, sampling and testing, laboratory or other analysis, or
evaluation relating to any Hazardous Substances or to anything referred to in
Article 12.
Section 12.2 Environmental Covenants. Borrower covenants and agrees
that: (a) all uses and operations on or of the Property, whether by Borrower
or any other person or entity, shall be in compliance with all Environmental
Laws and permits issued pursuant thereto; (b) there shall be no Releases of
Hazardous Substances in, on, under or from the Property that shall not be
remediated in accordance with all applicable Environmental Laws within sixty
(60) days of the occurrence thereof; (c) there shall be no Hazardous
Substances in, on, or under the Property, except those that are both (1) in
compliance with all Environmental Laws and with permits issued pursuant
thereto and (2) fully disclosed to Lender in writing; (d) Borrower shall keep
the Property free and clear of all liens and other encumbrances imposed
pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other person or entity (the "Environmental Liens"); (e)
Borrower shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to Section 12.3 below, including but not
limited to providing all relevant information and making knowledgeable
persons available for interviews; (f) Borrower shall, at its sole cost and
expense, perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
written request of Lender following a Release of a Hazardous Substance upon
the Property or Lender's receipt of notice from Borrower pursuant to clause
(i) below (including but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials and substances
whether solid, liquid or gas), and share with Lender the reports and other
results thereof, and Lender and other Indemnified Parties shall be entitled
to rely on such reports and other results thereof; (g) Borrower shall, at its
sole cost and expense, comply with all reasonable written requests of Lender
to (1) reasonably effectuate Remediation of any condition (including but not
limited to a Release of a Hazardous Substance) in, on, under or from the
Property; (2) comply with any Environmental Law; (3) comply with any
directive from any governmental authority; and (4) take any other reasonable
action necessary or appropriate for protection of human health or the
environment; (h) Borrower shall not do or allow any tenant or other user of
the Property to do any act that materially increases the dangers to human
health or the environment, poses an unreasonable risk of harm to any person
or entity (whether on or off the Property), impairs or may impair the value
of the Property, is contrary to any requirement of any insurer, constitutes a
public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property; and (i) Borrower
shall immediately notify Lender in writing of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws
related in any way to the Property; (C) any actual or potential Environmental
Lien; (D) any required or proposed Remediation of environmental conditions
relating to the Property; and (E) any written or oral notice or other
communication of which Borrower becomes aware from any source whatsoever
(including but not limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability of any person
or entity pursuant to any Environmental Law, other environmental conditions
in connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Article
12. Any failure of Borrower to perform its obligations pursuant to this
Section 12.2 shall constitute bad faith waste with respect to the Property.
Section 12.3 Lender's Rights. Lender and any other person or entity
designated by Lender, including but not limited to any receiver, any
representative of a governmental entity, and any environmental consultant,
shall have the right, but not the obligation, to enter upon the Property at
all reasonable times to assess any and all aspects of the environmental
condition of the Property and its use, including but not limited to
conducting any environmental assessment or audit (the scope of which shall be
determined in Lender's sole and absolute discretion) and taking samples of
soil, groundwater or other water, air, or building materials, and conducting
other invasive testing, provided that Lender or its designee shall repair any
physical damage to the Property caused by such invasive testing. Borrower
shall cooperate with and provide access to Lender and any such person or
entity designated by Lender.
ARTICLE 13
INDEMNIFICATION
Section 13.1 General Indemnification. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in
settlement, punitive damages, foreseeable and unforeseeable consequential
damages, of whatever kind or nature (including but not limited to attorneys'
fees and other costs of defense) (the "Losses") imposed upon or incurred by
or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any one or more of the following
(except to the extent any such Losses result from the willful misconduct or
gross negligence of Lender or such Indemnified Parties): (a) ownership of
this Security Instrument, the Property or any interest therein or receipt of
any Rents; (b) any amendment to, or restructuring of, the Debt, and the Note,
this Security Instrument, or any Other Security Documents; (c) any and all
lawful action that may be taken by Lender in connection with the enforcement
of the provisions of this Security Instrument or the Note or any of the Other
Security Documents, whether or not suit is filed in connection with same, or
in connection with Borrower, any Guarantor or Indemnitor and/or any partner,
joint venturer or shareholder thereof becoming a party to a voluntary or
involuntary federal or state bankruptcy, insolvency or similar proceeding;
(d) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (e) any use, nonuse or condition in, on or about the
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (f) any failure on the
part of Borrower to perform or be in compliance with any of the terms of this
Security Instrument; (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 the Security Instrument, or to supply a copy
thereof in a timely fashion to the recipient of the proceeds of the
transaction in connection with which this Security Instrument is made; (i)
any failure of the Property to be in compliance with any Applicable Laws; (j)
the enforcement by any Indemnified Party of the provisions of this Article
13; (k) any and all claims and demands whatsoever which may be asserted
against Lender by reason of any alleged obligations or undertakings on its
part to perform or discharge any of the terms, covenants, or agreements
contained in any Lease; (1) the payment of any commission, charge or
brokerage fee to anyone which may be payable in connection with the funding
of the loan evidenced by the Note and secured by this Security Instrument
(Lender, by its acceptance hereof, represents that no mortgage broker has
been retained by Lender in connection with the making of the loan evidenced
by the Note); or (m) any misrepresentation made by Borrower in this Security
Instrument or any Other Security Document. Any amounts payable to Lender by
reason of the application of this Section 13.1 shall become immediately due
and payable and shall bear interest at the Default Rate from the date loss or
damage is sustained by Lender until paid. For purposes of this Article 13,
the term "Indemnified Parties" means Lender and any person or entity who is
or will have been involved in the origination of the loan secured hereby, any
person or entity who is or will have been involved in the servicing of the
loan secured hereby, any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded, persons
and entities who may hold or acquire or will have held a full or partial
interest in 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 or entity who holds
or acquires or will have held a participation or other full or partial
interest in the loan secured hereby or the Property, whether during the term
of the loan secured hereby or as a part of or following a foreclosure of the
loan secured hereby 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 13.2 Mortgage and/or Intangible Tax. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making
and/or recording of this Security Instrument, the Note or any of the Other
Security Documents.
Section 13.3 ERISA Indemnification. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited transaction or
in the sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in Lender's sole
discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections 4.2 or 5.9 or Subsection 4.3(p).
Section 13.4 Environmental Indemnification. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but
not limited to sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or
more of the following: (a) any presence of any Hazardous Substances in, on,
above, or under the Property; (b) any past, present or threatened Release of
Hazardous Substances in, on, above, under or from the Property; (c) any
activity by Borrower, any person or entity affiliated with Borrower or any
tenant or other user of the Property in connection with any actual, proposed
or threatened use, treatment, storage, holding, existence, disposition or
other Release, generation, production, manufacturing, processing, refining,
control, management, abatement, removal, handling, transfer or transportation
to or from the Property of any Hazardous Substances at any time located in,
under, on or above the Property; (d) any activity by Borrower, any person or
entity affiliated with Borrower or any tenant or other user of the Property
in connection with any actual or proposed Remediation of any Hazardous
Substances at any time located in, under, on or above the Property, whether
or not such Remediation is voluntary or pursuant to court or administrative
order, including but not limited to any removal, remedial or corrective
action; (e) any past or present non-compliance or violations of any
Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with the Property or operations thereon, including but not limited
to any failure by Borrower, any person or entity affiliated with Borrower or
any tenant or other user of the Property to comply with any order of any
governmental authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 12 and
this Section 13.4; (h) any past, present or threatened injury to, destruction
of or loss of natural resources in any way connected with the Property,
including but not limited to costs to investigate and assess such injury,
destruction or loss; (i) any acts of Borrower or other users of the Property
in arranging for disposal or treatment, or arranging with a transporter for
transport for disposal or treatment, of Hazardous Substances owned or
possessed by such Borrower or other users, at any facility or incineration
vessel owned or operated by another person or entity and containing such or
any similar Hazardous Substance; (j) any acts of Borrower or other users of
the Property, in accepting any Hazardous Substances for transport to disposal
or treatment facilities, incineration vessels or sites selected by Borrower
or such other users, from which there is a Release, or a threatened Release
of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property damage
arising under any statutory or common law or tort law theory, including but
not limited to damages assessed for the maintenance of a private or public
nuisance or for the conducting of an abnormally dangerous activity on or near
the Property; and (1) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to Article 12.
The foregoing indemnity shall survive the payment of the Note, the
exercise of a power of sale in respect of the Property, the foreclosure of
this Security Instrument or the acceptance of a deed in lieu of the
foreclosure of this Security Instrument for a period of two (2) years (the
"Environmental Survival Period"), and, except as hereinafter provided, any
claim not brought within the Environmental Survival Period shall be deemed
waived. Notwithstanding the foregoing, upon the payment in full of the Note
and the performance by Borrower of all other Obligations and the release or
discharge of record by Lender of this Security Instrument, the foregoing
indemnity shall be of no further force or effect upon Borrower's delivery to
Lender of an environmental report, prepared by an environmental consultant
satisfactory to Lender, showing that no Releases have occurred upon the
Property which have not been remediated in accordance with all applicable
Environmental Laws and that the Property is otherwise in compliance in all
material respects with all Environmental Laws; provided, however, that,
notwithstanding anything contained herein to the contrary, in the event such
environmental report, or any other environmental report obtained by Lender,
shall disclose that a Release occurred upon the Property which has not been
remediated in compliance in all material respects with all applicable
Environmental Laws or that the Property is not in compliance in all material
respects with all Environmental Laws, the foregoing indemnity shall fully
survive indefinitely. Nothing herein shall be deemed to impose any liability
upon Borrower for any Release of Hazardous Substances, or any violation of
Environmental Laws, occurring solely subsequent to (A) a transfer of the
Property in accordance with the terms of Article 8 hereof, provided that the
transferee shall execute and deliver to the Lender an indemnification
substantially in the form of this Section 13.4, (B) the payment in full of
the Note and the performance by Borrower of all other Obligations and the
release or discharge of record by Lender of this Security Instrument, (C) the
exercise of any power of sale in respect of the Property, or (D) the
foreclosure of this Security Instrument or the acceptance of a deed in lieu
of foreclosure of this Security Instrument.
Section 13.5 Duty to Defend; Attorneys' Fees and Other Fees and
Expenses. Upon written request by any Indemnified Party, Borrower shall
defend such Indemnified Party (if requested by any Indemnified Party, in the
name of the Indemnified Party) by attorneys and other professionals approved
by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified
Parties may, in their sole and absolute discretion, engage their own
attorneys and other professionals to defend or assist them, and, at the
option of Indemnified Parties, their attorneys shall control the resolution
of claim or proceeding. Upon demand, Borrower shall pay or, in the sole and
absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
ARTICLE 14
WAIVERS
Section 14.1 Waiver of Counterclaim. Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim,
in any action or proceeding brought against it by Lender arising out of or in
any way connected with this Security Instrument, the Note, any of the Other
Security Documents, or the Obligations.
Section 14.2 Marshalling and Other Matters. Borrower hereby waives, to
the extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement and redemption laws now or hereafter in force
and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Borrower
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Security Instrument on behalf of
Borrower, and on behalf of each and every person acquiring any interest in or
title to the Property subsequent to the date of this Security Instrument and
on behalf of all persons to the extent permitted by applicable law.
Section 14.3 Waiver of Notice. Borrower shall not be entitled to any
notices of any nature whatsoever from Lender except with respect to matters
for which this Security Instrument specifically and expressly provides for
the giving of notice by Lender to Borrower and except with respect to matters
for which Lender is required by applicable law to give notice, and Borrower
hereby expressly waives the right to receive any notice from Lender with
respect to any matter for which this Security Instrument does not
specifically and expressly provide for the giving of notice by Lender to
Borrower.
Section 14.4 Waiver of Statute of Limitations. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to Payment of the Debt or
performance of its Other Obligations.
Section 14.5 Sole Discretion of Lender. Wherever pursuant to this
Security Instrument (a) Lender exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lender, or
(c) any other decision or determination is to be made by Lender, the decision
of Lender to approve or disapprove, all decisions that arrangements or terms
are satisfactory or not satisfactory and all other decisions and
determinations made by Lender, shall be in the sole and absolute discretion
of Lender and shall be final and conclusive, except as may be otherwise
expressly and specifically provided herein.
Section 14.6 Survival. The indemnifications made pursuant to Sections
13.2, 13.3 and 13.4 and the representations and warranties, covenants, and
other obligations arising under Article 12, shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired by:
any satisfaction or other termination of this Security Instrument, any
assignment or other transfer of all or any portion of this Security
Instrument or Lender's interest in the Property (but, in such case, shall
benefit both Indemnified Parties and any assignee or transferee), any
exercise of Lender's rights and remedies pursuant hereto including but not
limited to foreclosure or acceptance of a deed in lieu of foreclosure, any
exercise of any rights and remedies pursuant to the Note or any of the Other
Security Documents, any transfer of all or any portion of the Property
(whether by Borrower or by Lender following foreclosure or acceptance of a
deed in lieu of foreclosure or at any other time), any amendment to this
Security Instrument, the Note or the Other Security Documents, and any act or
omission that might otherwise be construed as a release or discharge of
Borrower from the obligations pursuant hereto.
Section 14.7 WAIVER OF TRIAL BY JURY. BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE
OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS,
EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
ARTICLE 15
EXCULPATION
Section 15.1 Exculpation. Except as otherwise provided, Lender shall
not enforce the liability and obligation of Borrower to perform and observe
the obligations contained in the Note or this Security Instrument by any
action or proceeding wherein a money judgment shall be sought against
Borrower, except that Lender may bring a foreclosure action, action for
specific performance or other appropriate action or proceeding to enable
Lender to enforce and realize upon this Security Instrument, the Other
Security Documents, and the interest in the Property, the Rents and any other
collateral given to Lender created by this Security Instrument and the Other
Security Documents; provided, however, that any judgment in any action or
proceeding shall be enforceable against Borrower only to the extent of
Borrower's interest in the Property, in the Rents and in any other collateral
given to Lender. Lender, by accepting the Note and this Security Instrument,
agrees that it shall not, except as otherwise provided in Sections 15.2 and
15.3, sue for, seek or demand any deficiency judgment against Borrower in any
action or proceeding, under or by reason of or under or in connection with
the Note, the Other Security Documents or this Security Instrument.
Section 15.2 Reservation of Certain Rights. The provisions of Section
15.1 shall not (a) constitute a waiver, release or impairment of any
obligation evidenced or secured by the Note, the Other Security Documents or
this Security Instrument; (b) impair the right of Lender to obtain a
deficiency judgment in any action or proceeding in order to preserve its
rights and remedies, including, without limitation, foreclosure, nonjudicial
foreclosure, or the exercise of a power of sale, under the Additional
Security Instruments; however, Lender agrees that it shall not enforce such
deficiency judgment against any assets of Borrower other than the Additional
Property or in the exercise of its rights and remedies under the Additional
Security Instruments; (c) impair the right of Lender to name Borrower as a
party defendant in any action or suit for judicial foreclosure and sale under
this Security Instrument; (d) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection
with the Note, this Security Instrument, or the Other Security Documents; (e)
impair the right of Lender to obtain the appointment of a receiver; (f)
impair the enforcement of the Assignment of Leases and Rents executed in
connection herewith; (g) impair the right of Lender to obtain a deficiency
judgment or judgment on the Note against Borrower if necessary to obtain any
insurance proceeds or condemnation awards to which Lender would be otherwise
entitled under this Security Instrument, provided, however, Lender shall only
enforce such judgment against the insurance proceeds and/or condemnation
awards; or (h) impair the right of Lender to enforce the provisions of
Sections 11.10, 13.1, 13.2, 13.3 and 13.4 of this Security Instrument.
Section 15.3 Exceptions to Exculpation. Notwithstanding the provisions
of this Article 15 to the contrary, Borrower shall be personally liable to
Lender for the Losses it incurs due to: (i) fraud or material
misrepresentation by Borrower or any other person or entity in connection
with the execution and the delivery of the Note, this Security Instrument or
the Other Security Documents; (ii) Borrower's gross negligence or willful
misconduct with respect to the management and operation of the Property
and/or Borrower's financial affairs; (iii) Borrower's removal or disposal of
any Personal Property after an Event of Default; (iv) Borrower's failure to
pay Taxes, Insurance Premiums, Other Charges (except to the extent that sums
sufficient to pay such amounts have been deposited with Lender pursuant to
the terms of this Security Instrument and/or the Lockbox Agreement), charges
for labor or materials or other charges that can create liens on the
Property; (v) Borrower or Guarantor or any party acting at the behest of
Borrower or Guarantor challenges the validity or enforceability of the Note,
this Security Instrument or Other Security Documents and/or Borrower or
Guarantor or any party acting at the behest of Borrower or Guarantor asserts
defenses (other than (A) the defense of payment in full of the Obligations,
provided that no other Event of Default has occurred and is continuing, or
(B) a defense made in good faith as to the improper exercise of Lender's
remedies under the Note, this Security Instrument or the Other Security
Documents, provided that no Event of Default has occurred and is continuing
at the time of Lender's exercise of such remedies) to the validity or
enforceability of the Note, this Security Instrument or Other Security
Documents, in each case solely for the purpose of delaying, hindering or
impairing Lender's rights and remedies under the Note, this Security
Instrument or Other Security Documents; (vi) Borrower or any party acting at
Borrower's behest misapplies or misappropriates Rents, tenant security
deposits, insurance proceeds or condemnation awards; or (vii) Borrower's
failure to comply with the provisions of Sections 3.3, 3.9, 4.2, 4.3, 12.1,
12.2, 13.1, 13.2, 13.3, 13.4 or 13.5 of this Security Instrument.
Section 15.4 Recourse. Notwithstanding the foregoing, the agreement of
Lender not to pursue recourse liability as set forth in Section 15.1 above
SHALL BECOME NULL AND VOID and shall be of no further force and effect in the
event (1) Borrower defaults under Sections 8.2 or 8.3 of this Security
Instrument, (2) a voluntary bankruptcy or insolvency proceeding is filed or
instituted by Borrower or Guarantor, or an involuntary bankruptcy or
insolvency proceeding is filed or instituted against Borrower or Guarantor
which is not dismissed within ninety (90) days of the filing thereof (except
if such involuntary proceeding is brought by Lender), or (3) any financial
information concerning Borrower or Guarantor provided in the Note, this
Security Instrument or the Other Security Documents or otherwise in order to
induce Lender to make the loan evidenced by the Note is fraudulent in any
respect, contains any fraudulent information or misrepresents in any material
respect the financial condition of Borrower or any Guarantor or Indemnitor.
Section 15.5 Bankruptcy Claims. Nothing herein shall be deemed to be a
waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the Bankruptcy Code to file a claim for
the full amount of the Debt secured by this Security Instrument or to require
that all collateral shall continue to secure all of the Debt owing to Lender
in accordance with the Note, this Security Instrument and the Other Security
Documents.
ARTICLE 16
NOTICES
Section 16.1 Notices. All notices or other written communications
hereunder shall be deemed to have been properly given (i) upon delivery, if
delivered in person or by facsimile transmission with receipt acknowledged by
the recipient thereof, (ii) one (1) Business Day (defined below) after having
been deposited for overnight delivery with any reputable overnight courier
service, or (iii) three (3) Business Days after having been deposited in any
post office or mail depository regularly maintained by the U.S. Postal
Service and sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to Borrower: Wellsford Capital Properties, L.L.C.
c/o Wellsford Real Properties, Inc.
610 Fifth Avenue, New York, New York 10020
Attention: Gregory F. Hughes
Facsimile No.: 212-333-2323
Confirmation No.: 212-333-2300
With a copy to: Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Attention: Dennis M. Sughrue, Esq.
Facsimile No.: (212) 541-1490
Confirmation No.: (212) 541-2009
If to Lender: Lehman Brothers Holdings Inc.
3 World Financial Center - 12th Floor
New York, New York 10295-1200
Attention: Charles W. Schoenherr
Facsimile No.: (212) 528-6680
Confirmation No.: (212) 526-5069
With a copy to: Kelley Drye & Warren LLP
101 Park Avenue
New York, NY 10178
Attention: James J. Kirk, Esq.
Facsimile No.: (2112) 808-7897
Confirmation No.: (212) 808-7623
or addressed as such party may from time to time designate by written notice
to the other parties.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Subsection 16.1, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in New
York, New York.
ARTICLE 17
SERVICE OF PROCESS
Section 17.1 Submission to Jurisdiction. With respect to any claim or
action arising hereunder or under the Note or the Other Security Documents,
Borrower (a) irrevocably submits to the nonexclusive jurisdiction of the
courts of the State of New York and the state where the Property is located
and the United States District Court located in the Borough of Manhattan in
New York, New York and the county in which the Property is located, and
appellate courts from any thereof, and (b) irrevocably waives any objection
which it may have at any time to the laying on venue of any suit, action or
proceeding arising out of or relating to this Security Instrument brought in
any such court, irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient
forum.
Section 17.2 Jurisdiction Not Exclusive. Nothing in this Security
Instrument will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.
ARTICLE 18
APPLICABLE LAW
Section 18.1 Choice of Law. This Security Instrument shall be
governed, construed, applied and enforced in accordance with the laws of the
state in which the Property is located and the applicable laws of the United
States of America.
Section 18.2 Usury Laws. This Security Instrument and the Note are
subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Debt at a rate which could subject the
holder of the Note to either civil or criminal liability as a result of being
in excess of the maximum interest rate which Borrower is permitted by
applicable law to contract or agree to pay. If by the terms of this Security
Instrument or the Note, Borrower is at any time required or obligated to pay
interest on the Debt at a rate in excess of such maximum rate, the rate of
interest under the Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of
such maximum rate shall be applied and shall be deemed to have been payments
in reduction of the principal balance of the Note. All sums paid or agreed
to be paid to Lender for the use, forbearance, or detention of the Debt
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term of the Note until
payment in full so that the rate or amount of interest on account of the Debt
does not exceed the maximum lawful rate of interest from time to time in
effect and applicable to the Debt for so long as the Debt is outstanding.
Section 18.3 Provisions Subject to Applicable Law. All rights, powers
and remedies provided in this Security Instrument may be exercised only to
the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so
that they will not render this Security Instrument invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected
thereby.
ARTICLE 19
SECONDARY MARKET
Section 19.1 Transfer of Loan. Lender may, at any time, and without
the consent of Borrower, but at Lender's sole cost and expense, sell,
transfer or assign the Note, this Security Instrument and the Other Security
Documents, and any or all servicing rights with respect thereto, or grant
participations therein or issue mortgage pass-through certificates or other
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"). Lender may forward to each
purchaser, transferee, assignee, servicer, participant, investor in such
Securities or any Rating Agency rating such Securities (all of the foregoing
entities collectively referred to as the "Investor") and each prospective
Investor, all documents and information which Lender now has or may hereafter
acquire relating to the Debt and to Borrower, any Guarantor, any Indemnitor
and the Property, whether furnished by Borrower, any Guarantor, any
Indemnitor or otherwise, as Lender determines necessary or desirable.
Borrower, any Guarantor and any Indemnitor agree to cooperate with Lender in
connection with any transfer made or any Securities created pursuant to this
Section 19.1, including, without limitation, the delivery of an estoppel
certificate required in accordance with Subsection 7.4(c) hereof and such
other documents as may be reasonably requested by Lender; provided that such
cooperation shall not alter the monetary terms of the Note, this Security
Instrument or the Other Security Documents, or increase the obligations, or
decrease the rights, of Borrower, any Guarantor or any Indemnitor hereunder
or thereunder. Borrower shall also furnish and Borrower, any Guarantor and
any Indemnitor consent to Lender furnishing to such Investors or such
prospective Investors or Rating Agency any and all information concerning the
Property, the Leases, the financial condition of Borrower, any Guarantor and
any Indemnitor as may be requested by Lender, any Investor or any prospective
Investor or Rating Agency in connection with any sale, transfer or
participation interest.
ARTICLE 20
COSTS
Section 20.1 Performance at Borrower's Expense. Borrower acknowledges
and confirms that Lender shall impose certain administrative processing
and/or commitment fees in connection with (a) the extension, renewal,
modification, amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining certain consents, waivers
and approvals with respect to the Property, or (d) the review of any Lease or
proposed lease or the preparation or review of any subordination, non-
disturbance agreement (the occurrence of any of the above shall be called an
"Event"). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or
any part thereof, whether required by law, regulation, Lender or any
governmental or quasi-governmental authority. Borrower hereby acknowledges
and agrees to pay, immediately, with or without demand, all such fees (as the
same may be increased or decreased from time to time), and any additional
fees of a similar type or nature which may be imposed by Lender from time to
time, upon the occurrence of any Event or otherwise, provided that such fees
shall be customary and reasonable for the work undertaken. Wherever it is
provided for herein that Borrower pay any costs and expenses, such costs and
expenses shall include, but not be limited to, all reasonable legal fees and
disbursements of Lender, whether of retained firms, the reimbursement for the
expenses of in-house staff or otherwise.
Section 20.2 Attorney's Fees for Enforcement. (a) Borrower shall pay
all reasonable legal fees incurred by Lender in connection with (i) the
preparation of the Note, this Security Instrument and the Other Security
Documents and (ii) the items set forth in Section 20.1 above, and (b)
Borrower shall pay to Lender on demand any and all expenses, including legal
expenses and attorneys' fees, incurred or paid by Lender in protecting its
interest in the Property or Personal Property or in collecting any amount
payable hereunder or in enforcing its rights hereunder with respect to the
Property or Personal Property, whether or not any legal proceeding is
commenced hereunder or thereunder and whether or not any default or Event of
Default shall have occurred and is continuing, together with interest thereon
at the Default Rate from the date paid or incurred by Lender until such
expenses are paid by Borrower.
ARTICLE 21
DEFINITIONS
Section 21.1 General Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words
used in this Security Instrument may be used interchangeably in singular or
plural form and the word "Borrower" shall mean "each Borrower and any
subsequent owner or owners of the Property or any part thereof or any
interest therein," the word "Lender" shall mean "Lender and any subsequent
holder of the Note," the word "Note" shall mean "the Note and any other
evidence of indebtedness secured by this Security Instrument," the word
"person" shall include an individual, corporation, partnership, trust,
limited liability company, unincorporated association, government,
governmental authority, and any other entity, the word "Property" shall
include any portion of the Property and any interest therein, and the phrases
"attorneys' fees", "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 Lender in protecting its interest in the Property,
the Leases and the Rents and enforcing its rights hereunder.
ARTICLE 22
MISCELLANEOUS PROVISIONS
Section 22.1 No Oral Change. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part
of Borrower or Lender, but only by an agreement in writing signed by the
party against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Section 22.2 Liability. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint
and several. This Security Instrument shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns
forever.
Section 22.3 Inapplicable Provisions. If any term, covenant or
condition of the Note or this Security Instrument is held to be invalid,
illegal or unenforceable in any respect, the Note and this Security
Instrument shall be construed without such provision.
Section 22.4 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 22.5 Duplicate Originals; Counterparts. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security
Instrument may be executed in several counterparts, each of which
counterparts shall be deemed an original instrument and all of which together
shall constitute a single Security Instrument. The failure of any party
hereto to execute this Security Instrument, or any counterpart hereof, shall
not relieve the other signatories from their obligations hereunder.
Section 22.6 Number and Gender. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
Section 22.7 Entire Agreement. The Note, this Security Instrument and
the Other Security Documents constitute the entire understanding and
agreement between Borrower and Lender with respect to the transactions
arising in connection with the Debt and supersede all prior written or oral
understandings and agreements between Borrower and Lender with respect
thereto. Borrower hereby acknowledges that, except as incorporated in
writing in the Note, this Security Instrument and the Other Security
Documents, there are not, and were not, and no persons are or were authorized
by Lender to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the transaction
which is the subject of the Note, this Security Instrument and the Other
Security Documents.
ARTICLE 23
CROSS-COLLATERALIZATION
Section 23.1 Cross Collateralization. Borrower acknowledges that the
Debt is secured by this Security Instrument together with the Additional
Security Instruments encumbering the Additional Property, all as more
specifically set forth in the Note. Upon the occurrence of an Event of
Default, Lender shall have the right to institute a proceeding or proceedings
for the total or partial foreclosure of this Security Instrument and the
Additional Security Instruments whether by court action, power of sale or
otherwise, under any applicable provision of law, including, without
limitation, the STATUTORY POWER OF SALE, for all of the Debt or the portion
of the Debt allocated to the Property as set forth in Exhibit A to the Note,
and the liens and the security interests created by the Additional Security
Instruments shall continue in full force and effect without loss of priority
as liens and security interests securing the payment of that portion of the
Debt then due and payable but still outstanding. Borrower acknowledges and
agrees that the Property and the Additional Property are located in one or
more states and counties, and therefore Lender shall be permitted to enforce
payment of the Debt and the performance of any term, covenant or condition of
the Note, this Security Instrument, the other Security Documents or the
Additional Security Instruments and exercise any and all rights and remedies
under the Note, this Security Instrument, the Other Security Documents or the
Additional Security Instruments, or as provided by law or at equity, by one
or more proceedings, whether contemporaneous, consecutive or both, to be
determined by Lender, in its sole discretion, in any one or more of the
states or counties in which the Property or the Additional Property is
located. Neither the acceptance of this Security Instrument, the Other
Security Documents or the Additional Security Instruments nor the enforcement
thereof in any one state or county, whether by court action, foreclosure,
power of sale or otherwise, shall prejudice or in any way limit or preclude
enforcement by court action, foreclosure, power of sale or otherwise, of the
Note, this Security Instrument, the Other Security Documents, or any
Additional Security Instrument through one or more additional proceedings in
that state or county or in any other atate or county. Any and all sums
received by Lender under the Note, this Security Instrument, and the Other
Security Documents shall be applied to the Debt in such order and priority as
Lender shall determine, in its sole discretion, without regard to the
allocated loan amounts set forth on Exhibit A to the Note or the appraised
value of the Property or the Additional Property.
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower as of the day and year first above written.
WELLSFORD CAPITAL PROPERTIES, L.L.C., a Delaware
limited liability company
By: Wellsford Capital, a Maryland real estate
investment trust, its Managing Member
By: /s/ Gregory F. Hughes
------------------------------------
Name: Gregory F. Hughes
Title: Vice President and Assistant
Treasurer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 21st day of October, 1998, before me personally came Gregory
F. Hughes, to me known to be the individual who executed the foregoing
instrument, and who, being duly sworn by me, did depose and say that he is
the Vice President and Assistant Treasurer of Wellsford Capital, a Maryland
real estate investment trust, which trust is the managing member of Wellsford
Capital Properties, L.L.C., a Delaware limited liability company; and that he
had authority to sign the same; and that he acknowledged to me that he
executed the same in such capacity as the act and deed of said limited
liability company for the uses and purposes therein mentioned.
/s/ Frantz Michaud
---------------------
Frantz Michaud
Notary Public
Exhibits
Exhibit A Description of Land
PARCEL 1:
Beginning at a point on the easterly sideline of Keewaydin Drive in the City
of Salem, New Hampshire at the southwesterly corner of the granted premises
at land now or formerly of Robert B. Ross; thence
Northeasterly a distance of Six Hundred Five and Twenty-Nine
Hundredths (605.29) feet to a point; thence
S 24 degree - 57 - 30"W a distance of Three Hundred Twenty-Five (325.00) feet
to a point; thence
S 65 degree - 02' - 30"W a distance of Six Hundred Eighty-Nine and Fifty-
Seven Hundredths (689.57) feet to a point; and
thence
N 10 degree - 25' - 10"W a distance of Three Hundred Thirty-Five and Seventy-
Five Hundredths (335.75) feet to a point of
beginning, or as otherwise bounded and described.
The above described parcel of land contains an area of 210,414 square feet or
4.83 acres, more or less, in said Salem and is shown as lot 29-B on a plan
entitled "Plan of Land in Salem, New Hampshire, prepared for TA Associates
Realty One Limited Partnership," dated June, 1984, prepared by Allen &
Demurjian, Inc., and recorded with the Rockingham County (New Hampshire)
Registry of Deeds as Plan No. D12590, which plan was revised April 25, 1985,
and, as revised, recorded with the Rockingham County Registry of Deeds as
Plan No. 13605.
PARCEL 2:
Beginning at a point on the easterly sideline of Keewaydin Drive in the City
of Salem, New Hampshire at the northwesterly corner of the premises described
below, at land formerly of TA Associates Realty One Limited Partnership, such
other land being Parcel 1 described above; thence
Northeasterly a distance of Six Hundred Eighty-Nine and Fifty-Seven
Hundredths (689.57) feet to a point; thence
S 24 degree - 57' - 30"E a distance of Six Hundred Ninety-Seven and Eighty-
Five Hundredths (697.85) feet to a point; thence
S 77 degree - 55' - 20"W a distance of Five Hundred Four and Sixty-Three
Hundredths (504.63) feet; thence
Northwesterly a distance of Forty-Four and Fifty Hundredths (44.50)
feet to a point; thence
Southwesterly a distance of Three Hundred and Thirty-Seven Hundredths
(300.37) feet to a point of curvature; thence
Northwesterly and curving to the left along the arc of a curve having a
radius of Seventy-Five (75.00) feet, a length of Twenty-
Nine and Thirty-Two Hundredths (29.32) feet to a point;
thence
Northwesterly and curing to the right along the arc of a curve having a
radius of Fifty (50.00) feet, a length of Forty-Three and
Eighty-One Hundredths (43.81) feet to a point; and thence
N 10 degree - 25' - 10"W a distance of Four Hundred Ten and Fifty-Eight
Hundredths (410.58) feet to the point of beginning,
or as otherwise bounded and described.
The above described parcel of land in Salem in shown as Lot 29-A on the Plan,
and as shown on the revised plan recorded as Plan No. 13605 in the Rockingham
County Registry of Deeds, contains an area of 444,880 square feet or 10.2
acres, more or less.
PARCEL 3:
Beginning at a point of curvature on the easterly sideline of Keewaydin Drive
in the City of Salem, New Hampshire at the northwesterly corner of the
granted premises at land formerly of TA Associates Realty One Limited
Partnership, such other land being Parcel 2 described above; thence
N 79 degree - 45' - 23"E a distance of Three Hundred and Thirty-Seven
Hundredths (300.37) feet to a point; thence
S 12 degree - 24' - 29"E a distance of Five Hundred Eighty-One and Ninety-
Nine Hundredths (581.99) feet to a point; thence
N 67 degree - 40' - 50"W a distance of One Hundred Twelve and Fifty-Seven
Hundredths (112.57) feet to a point; thence
S 82 degree - 01' - 50"W a distance of Two Hundred Ninety-Two and Forty-Seven
Hundredths (292.47) feet to a point; thence
N 10 degree - 25' - 10"W a distance of Three Hundred Ninety-Nine and Twenty
Hundredths (399.20) feet to a point of curvature;
and thence
Northeasterly and curving to the left along the arc of a curve
having a radius of Seventy-Five (75.00) feet, a
length of One Hundred Fifty-Four and Twenty-One
Hundredths (154.21) feet to the point of beginning,
or as otherwise bounded and described.
The above described parcel of land contains an area of 189,953 square feet or
4.4 acres, more or less in said Salem and is shown as lot 29-1 on a plan
entitled "Plan of Land in Salem, New Hampshire, prepared for TA Associates
Realty One Limited Partnership," dated June, 1984, prepared by Allen &
Demurjian, Inc., recorded with the Rockingham County (New Hampshire) Registry
of Deeds as Plan No. D12590, and on that same plan, as revised April 25,
1985, and recorded as plan No. 13605 in the Rockingham County Registry of
Deeds.