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ALEXANDER'S REGO SHOPPING CENTER, INC., as mortgagor
(Borrower)
to
THE CHASE MANHATTAN BANK, as mortgagee
(Lender)
---------------------------------------------
AMENDED, RESTATED AND CONSOLIDATED
MORTGAGE AND
SECURITY AGREEMENT
----------------------------------------------
Dated: May 12, 1999
Location: Rego Park Plaza
96-05 Queens Boulevard
Queens, New York
Block: 2084
Lot: 101
County: Queens
PREPARED BY AND UPON
RECORDATION RETURN TO:
MESSRS. CADWALADER, WICKERSHAM & TAFT
100 Maiden Lane
New York, New York 10038
Attention: William P. McInerney, Esq.
File No.: 41853.003
THIS MORTGAGE DOES NOT COVER REAL PROPERTY PRINCIPALLY IMPROVED BY ONE OR MORE
STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESIDENTIAL DWELLING
UNITS, EACH DWELLING UNIT HAVING ITS OWN COOKING FACILITIES.
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TABLE OF CONTENTS
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PAGE
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ARTICLE 1 - GRANTS OF SECURITY
Section 1.1 Property Mortgaged 2
Section 1.2 Assignment of Rents 4
Section 1.3 Security Agreement 5
Section 1.4 Pledge of Monies Held 5
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 Debt 5
Section 2.2 Other Obligations 6
Section 2.3 Debt and Other Obligations 6
Section 2.4 Payments 6
ARTICLE 3 - BORROWER COVENANTS
Section 3.1 Payment of Debt 7
Section 3.2 Incorporation by Reference 7
Section 3.3 Insurance 7
Section 3.4 Payment of Taxes, etc 11
Section 3.5 Escrow Fund 12
Section 3.6 Condemnation 13
Section 3.7 Leases and Rents 14
Section 3.8 Maintenance of Property 17
Section 3.9 Waste 18
Section 3.10 Compliance With Laws 18
Section 3.11 Books and Records 19
Section 3.12 Payment For Labor and Materials 23
Section 3.13 Performance of Other Agreements 24
Section 3.14 Alterations 24
Section 3.15 Non-Consolidation Opinion 25
ARTICLE 4 - SPECIAL COVENANTS
Section 4.1 Property Use 25
Section 4.2 ERISA 25
Section 4.3 Single Purpose Entity 26
Section 4.4 Restoration 29
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ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Section 5.1 Warranty of Title 35
Section 5.2 Authority 36
Section 5.3 Legal Status and Authority 36
Section 5.4 Validity of Documents 36
Section 5.5 Litigation 36
Section 5.6 Status of Property 37
Section 5.7 No Foreign Person 38
Section 5.8 Separate Tax Lot 38
Section 5.9 ERISA Compliance 38
Section 5.10 Leases 38
Section 5.11 Financial Condition 38
Section 5.12 Business Purposes 39
Section 5.13 Taxes 39
Section 5.14 Mailing Address 39
Section 5.15 No Change in Facts or Circumstances 39
Section 5.16 Non-Consolidation Opinion Assumptions 39
Section 5.17 Federal Reserve Regulations 39
Section 5.18 Illegal Activity 40
Section 5.19 Contracts 40
Section 5.20 Investment Company Act 40
ARTICLE 6 - OBLIGATIONS AND RELIANCES
Section 6.1 Relationship of Borrower and Lender 40
Section 6.2 No Reliance on Lender 40
Section 6.3 No Lender Obligations 40
Section 6.4 Reliance 41
ARTICLE 7 - FURTHER ASSURANCES
Section 7.1 Recording of Security Instrument, etc 41
Section 7.2 Further Acts, etc 41
Section 7.3 Changes in Tax, Debt Credit and Documentary Stamp Laws 42
Section 7.4 Estoppel Certificates 42
Section 7.5 Flood Insurance 43
Section 7.6 Splitting of Security Instrument 43
Section 7.7 Replacement Documents 44
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE
Section 8.1 Lender Reliance 44
Section 8.2 No Sale/Encumbrance 44
Section 8.3 Sale/Encumbrance Defined 44
Section 8.4 Lender's Rights 45
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Section 8.5 Permitted Transfers 45
ARTICLE 9 - PREPAYMENT
Section 9.1 Prepayment 47
Section 9.2 Prepayment on Casualty or Condemnation 47
ARTICLE 10 - DEFAULT
Section 10.1 Events of Default 47
Section 10.2 Late Payment Charge 49
Section 10.3 Default Interest 50
ARTICLE 11 - RIGHTS AND REMEDIES
Section 11.1 Remedies 50
Section 11.2 Application of Proceeds 52
Section 11.3 Right to Cure Defaults 52
Section 11.4 Actions and Proceedings 53
Section 11.5 Recovery of Sums Required To Be Paid 53
Section 11.6 Examination of Books and Records 53
Section 11.7 Other Rights, etc 53
Section 11.8 Right to Release Any Portion of the Property 54
Section 11.9 Violation of Laws 54
Section 11.10 Recourse and Choice of Remedies 54
Section 11.11 Right of Entry 55
ARTICLE 12 - ENVIRONMENTAL HAZARDS
Section 12.1 Environmental Representations and Warranties 55
Section 12.2 Environmental Covenants 56
Section 12.3 Lender's Rights 58
ARTICLE 13 - INDEMNIFICATION
Section 13.1 General Indemnification 58
Section 13.2 Mortgage and/or Intangible Tax 59
Section 13.3 ERISA Indemnification 59
Section 13.4 Intentionally Deleted 60
Section 13.5 Duty to Defend; Attorneys' Fees and Other Fees and Expenses 60
ARTICLE 14 - WAIVERS
Section 14.1 Waiver of Counterclaim 60
Section 14.2 Marshalling and Other Matters 60
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Section 14.3 Waiver of Notice 60
Section 14.4 Intentionally Deleted 60
Section 14.5 Sole Discretion of Lender 60
Section 14.6 Survival 61
Section 14.7 WAIVER OF TRIAL BY JURY 61
ARTICLE 15 - EXCULPATION
Section 15.1 Exculpation 61
Section 15.2 Reservation of Certain Rights 62
Section 15.3 Exceptions to Exculpation 62
Section 15.4 Recourse 62
Section 15.5 Bankruptcy Claims 62
ARTICLE 16 - NOTICES
Section 16.1 Notices 63
ARTICLE 17 - SERVICE OF PROCESS
Section 17.1 Consent to Service 64
Section 17.2 Submission to Jurisdiction 65
Section 17.3 Jurisdiction Not Exclusive 65
ARTICLE 18 - APPLICABLE LAW
Section 18.1 Choice of Law 65
Section 18.2 Usury Laws 65
Section 18.3 Provisions Subject to Applicable Law 65
ARTICLE 19 - SECONDARY MARKET
Section 19.1 Sale of Note and Securitization 66
Section 19.2 Securitization Indemnification 68
ARTICLE 20 - COSTS
Section 20.1 Performance at Borrower's Expense 70
Section 20.2 Attorney's Fees for Enforcement 70
ARTICLE 21 - DEFINITIONS
Section 21.1 General Definitions 71
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ARTICLE 22 - MISCELLANEOUS PROVISIONS
Section 22.1 No Oral Change 71
Section 22.2 Liability 71
Section 22.3 Inapplicable Provisions 71
Section 22.4 Headings, etc 71
Section 22.5 Duplicate Originals; Counterparts 72
Section 22.6 Number and Gender 72
Section 22.7 Subrogation 72
Section 22.8 Future Assignment of Mortgage 72
Section 22.9 Brokers 73
Section 22.10 Withholdings 73
ARTICLE 23 - ADDITIONAL NEW YORK PROVISIONS
Section 23.1 Controlling Provisions 73
Section 23.2 Commercial Property 73
Section 23.3 Maximum Principal Indebtedness 73
Section 23.4 Insurance Proceeds 74
Section 23.5 Trust Fund 74
Section 23.6 Section 291-f Agreement 74
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EXHIBITS AND SCHEDULES
----------------------
EXHIBIT A -- Description of Land
EXHIBIT B -- Description of Mortgages
EXHIBIT C -- Form of SNDA
SCHEDULE 1 -- Litigation
SCHEDULE 2 -- Mechanics Liens
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THIS AMENDED, RESTATED AND CONSOLIDATED MORTGAGE AND SECURITY AGREEMENT
(this "SECURITY INSTRUMENT") is made as of the 12th day of May, 1999, by
ALEXANDER'S REGO SHOPPING CENTER, INC., a Delaware corporation, having its
principal place of business at c/o Vornado Realty Trust, Park 80 West, Plaza II,
Saddle Brook, New Jersey 07663 as mortgagor ("BORROWER") to THE CHASE MANHATTAN
BANK, a New York banking corporation, having an address at 380 Madison Avenue,
10th Floor, New York, New York 10017 as mortgagee ("LENDER").
RECITALS:
WHEREAS, Borrower is the fee owner of the real property described on
Exhibit A attached hereto and made a part hereof (hereinafter referred to as the
"LAND") and Lender is the owner and holder of certain mortgages covering the fee
estate in the Land as more particularly described on Exhibit B attached hereto
(hereinafter referred to as the "ORIGINAL MORTGAGES") and of the notes, bonds or
other obligations secured thereby (hereinafter referred to as the "ORIGINAL
NOTES");
WHEREAS, there is now owing on the Original Notes and the Original
Mortgages the unpaid principal sum of EIGHTY TWO MILLION and 00/100 Dollars
($82,000,000.00), together with interest;
WHEREAS, contemporaneously with the execution and delivery of this Security
Instrument, Borrower has executed and delivered to Lender a certain Amended,
Restated and Consolidated Note in the aggregate principal amount of EIGHTY TWO
MILLION and 00/100 Dollars ($82,000,000.00) (the "NOTE"), which Note evidences,
and amends, restates and consolidates into one indebtedness all amounts
presently due and owing in respect of the Original Notes, and is secured by the
Original Mortgages; and
WHEREAS, Borrower and Lender have agreed in the manner hereinafter set
forth (i) to spread the Original Mortgages and the respective liens thereof over
those portions of the Property (as hereinafter defined) not already covered
thereby (ii) to combine, consolidate and coordinate the Original Mortgages and
the respective liens thereof, as spread, into one unified lien in the aggregate
principal amount of EIGHTY TWO MILLION and 00/100 Dollars encumbering the
property and (iii) to modify, amend and restate the terms and provisions of the
Original Mortgages in their entirety.
NOW, THEREFORE, in consideration of the foregoing recitals, which are
incorporated into the operative provisions of this Security Instrument by this
reference, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, Borrower hereby
represents and warrants to and covenants and agrees with Lender as follows:
A. Mortgage Spreader. The Original Mortgages and the respective liens
thereof are hereby spread over those portions of the Property not already
covered thereby.
B. Mortgage Consolidation. The Original Mortgages and the respective
liens thereof, as spread in accordance with Paragraph A above, are hereby
combined and consolidated
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so that together they shall hereafter constitute in law but one mortgage, a
single lien, covering the Property and securing the aggregate principal sum of
EIGHTY TWO MILLION and No/100 Dollars ($82,000,000.00), together with interest
thereon as provided in the Note.
C. Outstanding Indebtedness. The aggregate outstanding indebtedness
evidenced by the Note and secured by this Security Instrument is in the amount
of EIGHTY TWO MILLION and No/100 Dollars ($82,000,000.00), it being understood
that no interest under the Note is accrued and unpaid for the period prior to
the date hereof, but that interest shall accrue from and after the date hereof
at the rate or rates provided in the Note.
D. Amendment and Restatement. The Original Mortgages are hereby
consolidated and completely amended and restated to read as follows:
ARTICLE 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer and convey to
Lender, 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 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, in and to the Land and the Improvements and every part and
parcel thereof, with the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery, equipment,
fixtures (including, but not limited to, all heating, air conditioning,
plumbing,
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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, subleases and other agreements
affecting the use, enjoyment or occupancy of the Land and/or the
Improvements heretofore or hereafter entered into by Borrower and all
extensions, amendments and modifications thereto, 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")(the "LEASES") and all right, title and interest of
Borrower, its successors and assigns therein and thereunder, including,
without limitation, any guaranties of the lessees' obligations thereunder,
cash or securities deposited thereunder to secure the performance by the
lessees of their obligations thereunder and all rents, additional rents,
revenues, issues and profits (including all oil and gas or other mineral
royalties and bonuses) from the Land and the Improvements whether paid or
accruing before or after the filing by or against Borrower of any petition
for relief under the Bankruptcy Code (the "RENTS") and all proceeds from
the sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Debt;
(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. Subject to the rights of any tenants under
the Leases, all refunds, rebates or credits in connection with a reduction
in real estate
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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;
(l) 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 of Borrower's right, title and interest in
all tradenames (excluding the name "Alexander's"), 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) Accounts. All reserves, escrows and deposit accounts which
are required to be established by Borrower for the benefit of Lender
pursuant to the Loan Documents with respect to the Property including,
without limitation, the Lockbox Account (as defined in that certain Cash
Management Agreement (the "CASH MANAGEMENT AGREEMENT"), dated the date
hereof, between Borrower and Lender) and any other account, and all
securities, investments, property and financial assets held therein from
time to time and all proceeds, products, distributions or dividends or
substitutions thereon and thereof.
(o) Other Rights. Any and all other rights of Borrower in and to
the items set forth in Subsections 1.1(a) through 1.1(n) 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, Section 3.7 hereof and the terms and conditions of the Cash
Management Agreement, Lender grants to Borrower a revocable license to collect
and receive the Rents.
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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) and Awards (as defined in Section 3.6), 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 in full, 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 Yield Maintenance Premium (as defined in the
Note), if any;
(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;
(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
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(f) the payment of all sums advanced and costs and expenses incurred by
Lender in connection with the Debt or any part thereof, any renewal,
extension, 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). Notwithstanding anything to the contrary contained in
this Security Instrument, the Note or the Other Security Documents (hereinafter
defined), and provided no Event of Default (hereinafter defined) has occurred
and is continuing, Borrower's obligations with respect to the monthly payment
of principal and interest and amounts due for Taxes (hereinafter defined) and
any other payment reserves established pursuant to this Security Instrument,
the Note or any Other Security Documents shall be deemed satisfied to the
extent sufficient amounts are available in the Lockbox Account established
pursuant to the Cash Management Agreement to satisfy such obligations on the
dates each such payment is required, regardless of whether any of such amounts
are properly applied by Lender.
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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 and 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, 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 outstanding
principal balance of 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 $250,000;
and (D) providing coverage for contingent liability
from Operation of Building Laws, Demolition Costs and
Increased Cost of Construction Endorsements together
with 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 twelve (12) 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;
(ii) commercial general liability insurance against claims
for personal injury, bodily injury, death or property
damage occurring upon, in
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or about the Property, such insurance (A) to be on the
so-called "occurrence" form with a combined single
limit of not less than $2,000,000; (B) to continue at
not less than the aforesaid limit until reasonably
required to be changed by Lender in writing by reason
of changed economic conditions making such protection
inadequate; 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) loss of rents insurance (A) with loss payable jointly
to Lender and Borrower as their interests appear; (B)
covering all risks required to be covered by the
insurance provided for in Subsection 3.3(a)(i); and (C)
in an amount equal to 100% of the projected gross
income from the Property (as reduced to reflect
expenses not incurred during a period of Restoration)
for a period of twenty-four (24) months. The amount of
such loss of rents 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 month period. All insurance proceeds
payable to Lender pursuant to this Subsection
3.3(a)(iii) shall be deposited into the Lockbox Account
and disbursed in accordance with the Cash Management
Agreement; provided, however, that if such insurance
proceeds are disbursed to Lender in an amount
representing losses for a period in excess of one (1)
month, then such insurance proceeds shall be held by
Lender and applied in accordance with the Cash
Management Agreement on a monthly basis in the amount
attributed to the related month by the insurance
company providing such loss of rents insurance.
Notwithstanding anything to the contrary contained in
this Subsection 3.3(a)(iii), Borrower shall not be
deemed relieved 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 loss of rents 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)
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
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Property, and (4) with an agreed amount endorsement or
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 per accident and per disease per employee,
and $1,000,000 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;
(vii) if any portion of the Improvements is at any time
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, the Flood
Disaster Protection Act of 1973 or the National Flood
Insurance Reform Act of 1994, as each may be amended,
or any successor law (the "FLOOD INSURANCE ACTS"),
flood hazard insurance in an amount equal to the lesser
of (A) the principal balance of the Note, and (B) the
maximum limit of coverage available for the Property
under the Flood Insurance Acts;
(viii) earthquake, sinkhole and mine subsidence insurance, if
required, in amounts, form and substance satisfactory
to Lender, provided that the insurance pursuant to this
Subsection (viii) shall be on terms consistent with the
all risk insurance policy required under Subsection
3.3(a)(i);
(ix) umbrella liability insurance in an amount not less than
Fifty Million and No/100 Dollars ($50,000,000) per
occurrence on terms consistent with the commercial
general liability insurance policy required under
Subsection 3.3(a)(ii) above; and
(x) 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"), in such forms and, from time to time after the date
hereof, in such amounts as may from time to time be satisfactory to Lender,
issued by financially sound and responsible insurance companies authorized to
do business in the state in which the Property is located and reasonably
approved by Lender (each such insurer shall be referred to below
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as a "QUALIFIED INSURER"). The insurance companies must have a general policy
rating of A or better and a financial class of VIII or better by A.M. Best
Company, Inc. and a claims paying ability rating of "A" (or its equivalent) or
better by at least two (2) of the credit rating agencies (each a "RATING
AGENCY") rating the Securities (one of which will be Standard & Poor's if they
are rating the Securities and one of which shall be Moody's Investors Service,
Inc. if they are rating the Securities), or if only one Rating Agency is rating
the Securities, then only by such Rating Agency. Not less than ten (10) days
prior to the expiration dates of the Policies theretofore furnished to Lender
pursuant to Subsection 3.3(a), certified copies of the Policies or renewal
certificates of insurance 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 certified copies of the Policies when
issued.
(c) Borrower shall be permitted to obtain the insurance required
pursuant to this Security Instrument by the use of an umbrella or blanket
liability or casualty Policy, provided that, in each case, such Policy is
approved in advance in writing by Lender, which approval shall not be
unreasonably withheld or delayed and Lender's interest is included therein as
provided in this Security Instrument and such Policy is issued by a Qualified
Insurer. Except to the extent permitted pursuant to Section 3.3(a) hereof,
Borrower shall not obtain 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. The
umbrella policy in effect on the date hereof is approved by Lender. 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 3.3(a)(v),
shall name Lender as an additional insured and Borrower as the insured or
additional insured, as their respective interests may appear, and in the case
of property damage, boiler and machinery, and flood 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 jointly to Lender
and Borrower as their interests may appear.
(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
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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 ten (10) 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 ten (10) 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 described
in this Security Instrument, 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 (other than
tenant improvements required to be restored by tenants pursuant to their
Leases) and shall cause any tenants under Leases at the Property to repair
and restore any tenant improvements damaged by such fire or other casualty
to the extent such tenant is required to perform such repair or
restoration pursuant to the applicable Lease, 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
"CASUALTY RESTORATION") and otherwise in accordance with Section 4.4 of
this Security Instrument. Borrower shall pay all costs of such Casualty
Restoration whether or not such costs are covered by insurance.
Section 3.4 PAYMENT OF TAXES, ETC.
(a) Borrower shall promptly pay all taxes, assessments, water
rates, sewer rents, governmental impositions, and other charges, including
without limitation vault
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19
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 of record (or bonded and discharged of record) any
lien or charge whatsoever which may be or become a lien or charge against
the Property. Except to the extent sums sufficient to pay all Taxes and
Other Charges have been deposited with Lender in accordance with the terms
of this Security Instrument, Borrower shall furnish to Lender paid
receipts for the payment of the Taxes and Other Charges prior to the date
the same shall become delinquent.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the amount or validity
or application in whole or in part of any of the Taxes or Other Charges,
provided that (i) no Event of Default has occurred and is continuing under
the Note, this Security Instrument or any of the Other Security Documents,
(ii) Borrower is not restricted from doing so under the provisions of any
other mortgage, deed of trust or deed to secure debt affecting the
Property, (iii) such proceeding shall suspend the collection of the Taxes
or Other Charges, as applicable, from Borrower and from the Property or
Borrower shall have paid all of the Taxes or Other Charges, as applicable,
under protest, (iv) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other instrument to
which Borrower is subject and shall not constitute a default thereunder,
(v) neither the Property nor any part thereof or interest therein will be
in danger of being sold, forfeited, terminated, cancelled or lost, (vi)
Borrower shall have deposited with Lender adequate reserves for the
payment of the Taxes or Other Charges, as applicable, together with all
interest and penalties thereon, unless Borrower has paid all of the Taxes
or Other Charges, as applicable, under protest, and (vii) Borrower shall
have furnished the security as may be required in the proceeding, or as
may be requested by Lender to insure the payment of any contested Taxes or
Other Charges, as applicable, together with all interest and penalties
thereon.
Section 3.5 ESCROW FUND. In addition to the initial deposits
with respect to Taxes and Insurance Premiums made by Borrower to Lender on the
date hereof to be held by Lender in escrow, Borrower shall pay to Lender on the
tenth 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 and (b) at the option of Lender, if
the liability or casualty Policy maintained by Borrower covering the Property
shall not constitute an approved blanket or umbrella Policy pursuant to
Subsection 3.3(c) hereof, or Lender shall require Borrower to obtain a separate
Policy pursuant to Subsection 3.3(c) hereof, one-twelfth of an amount which
would be sufficient to pay the Insurance Premiums due for the renewal of the
coverage afforded by the Policies upon the expiration thereof (the amounts in
(a) and (b) above shall be called the "ESCROW FUND"). In the event Lender shall
elect to collect payments in
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escrow for Insurance Premiums, Borrower shall pay to Lender an initial deposit
to be determined by Lender, in its sole discretion, to increase the amounts in
the Escrow Fund to an amount which, together with anticipated monthly escrow
payments, shall be sufficient to pay all Insurance Premiums and Taxes as they
become due. Borrower agrees to notify Lender immediately of any changes to the
amounts, schedules and instructions for payment of any Taxes and Insurance
Premiums of which it has or obtains knowledge and authorizes Lender or its
agent to obtain the bills for Taxes and Other Charges directly from the
appropriate taxing authority. 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 and Insurance Premiums required to be made by
Borrower pursuant to Sections 3.3 and 3.4 hereof. If the amount of the Escrow
Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Sections 3.3 and 3.4 hereof, Lender shall, in its discretion, return any excess
to Borrower or credit such excess against future payments to be made to the
Escrow Fund. In allocating such excess, Lender may deal with the person shown
on the records of Lender to be the owner of the Property. If the Escrow Fund is
not sufficient to pay the items set forth in (a) and (b) above, Borrower shall
promptly pay to Lender, upon demand, an amount which Lender shall estimate as
sufficient to make up the deficiency. The Escrow Fund shall bear interest at
money market rates selected by Lender and such interest shall be added to and
become part of the Escrow Fund and disbursed or applied in the same manner and
subject to the same terms and conditions as all other funds in the Escrow Fund,
as more particularly described above. All earnings on the Escrow Fund shall be
taxed as income of the Borrower and shall be for the benefit of Borrower,
subject to Lender's rights pursuant to this Agreement. Lender shall not be
responsible for any specific level or percentage of earnings on such
investment. Borrower shall be responsible for the costs associated with
administering the Escrow Fund, and such reasonable costs may be credited
against such Escrow Fund. Notwithstanding anything to the contrary contained in
this Section 3.5, and provided no Event of Default has occurred and is
continuing, Borrower's obligations to make payments to the Escrow Fund shall be
deemed satisfied to the extent that sufficient funds are deposited in the
Lockbox Account to satisfy such obligations on the date such payment is
required, regardless of whether any such amounts are so applied by Lender.
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. 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), and whether or not any Award (as defined
herein) is made available to the Borrower for Restoration in accordance with
Section 4.4, 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 (an "AWARD")
shall have been actually received and applied by Lender, after the deduction of
expenses of collection, to the reduction or discharge of the Debt. Lender shall
not be limited to the interest paid on the award by the condemning authority
but shall be entitled to receive out of the award interest at the rate or rates
provided herein or in the Note. Borrower shall cause the Award to be paid
directly to Lender, which Lender will disburse pursuant to Section 4.4 hereof.
In the event that the Property, or any portion thereof is taken by any
condemning authority, Borrower shall promptly proceed to restore, repair,
replace or rebuild the Property (other than tenant
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improvements required to be restored by tenants pursuant to their Leases) and
shall cause any tenants under Leases at the Property to restore, repair,
replace or rebuild the Property to the extent such tenant is required to
perform such restoration, repair or replacement pursuant to the applicable
Lease, in a workman-like manner to the extent practicable to be of at least
equal value and substantially the same character as prior to such condemnation
or eminent domain proceeding (the "CONDEMNATION RESTORATION"; the Casualty
Restoration and the Condemnation Restoration collectively referred to as the
"RESTORATION") in accordance with all Applicable Laws (as hereinafter defined)
affecting the use, repair and restoration of the Property. 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) Borrower shall (i) enforce all of the material obligations,
terms, covenants and conditions contained in the Leases upon the part of
the lessees thereunder to be observed or performed and (ii) timely perform
and observe, or cause to be performed or observed, all of the material
obligations, terms, covenants and conditions required to be performed and
observed by Borrower under the Leases such that there will be no material
and adverse impairment of the value of (A) the Property or (B) Lender's
interest under this Security Instrument. Borrower shall deliver to Lender
within five (5) Business Days after Borrower receives or delivers the
same, a copy of each notice of default or termination that Borrower
receives or delivers in connection with the Leases.
(b) Borrower shall, or shall cause the property manager to, manage
and operate the Property in a prudent manner and not enter into any Lease
after the date hereof (including the renewal or extension on or after the
date hereof of any Lease entered into prior to the date hereof if the rent
payable during such renewal or extension, or a formula to compute such
rent, is not provided for in such Lease, such a renewal or extension being
hereinafter defined as a "RENEWAL LEASE") without the consent of Lender;
provided, however, Lender's consent shall not be required if (i) such
Lease provides for rental rates and terms that constitute good and
prudent business practice and are comparable to then existing local market
rates and terms (taking into account the type and quality of the tenant
and then prevailing practices with respect to tenant concessions and
incentives for comparable properties) as of the date such Lease is
executed by Borrower, (ii) such Lease complies with all of the terms and
provisions of this Security Instrument, including, but not limited to,
this Section 3.7, (iii) Borrower promptly delivers a copy of such Lease to
Lender after execution and receipt of the same, certified by Borrower to
be a true, correct and complete copy or duplicate of such Lease and (iv)
such Lease will not materially adversely affect the fair market value of
the Property.
(c) Borrower shall not amend, modify or waive the provisions of
any Lease without the consent of Lender, which consent shall not be
unreasonably withheld or delayed; provided, however, Lender's consent
shall not be required if such amendment, modification or waiver (i) does
not have a material adverse effect upon the value of the Property or the
ability of Borrower to satisfy its obligations hereunder or under the Note
or the Other Security Documents, (ii) does not amend, modify or waive any
of the
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22
material terms of the Lease, including, but not limited to, any provisions
that would directly reduce the rent or any additional rent or reduce the
term of the Lease, or effectively have such result, (iii) complies with
the requirements of this Security Instrument and any lease subordination
agreement binding upon Lender with respect to such Lease and (iv) is
promptly delivered to Lender together with a Borrower's certification that
such amendment, modification or waiver is a true, correct and complete
copy and is in compliance with the requirements hereof. In addition to
the foregoing, Borrower shall not amend, modify or waive the provisions of
any Lease that would directly reduce the rent or any additional rent or
reduce the term of the Lease, or effectively have such result without
written confirmation from each Rating Agency that such action, in and of
itself, will not result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with
any Securitization or if a Securitization has not occurred, any ratings to
be assigned in connection with a Securitization.
(d) Notwithstanding anything to the contrary contained in
Subsection 3.7(b) or 3.7(c) above, Borrower may not terminate, or permit
the termination of, any Lease or accept surrender of all, or any portion
of, the space demised under any Lease without the prior written
confirmation from each Rating Agency that such action, in and of itself,
will not result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with
any Securitization or if a Securitization has not occurred, any ratings to
be assigned in connection with a Securitization, provided that any fee or
payment received by Borrower in connection therewith shall be paid to
Lender and held by Lender and, provided that no Event of Default has
occurred and is continuing under the Note, this Security Instrument or
Other Security Documents, disbursed by Lender to the applicable claimant
to pay leasing commissions with respect to re-leasing the space demised
under such terminated Lease, costs incurred by Borrower with respect to
improvements to such space, tenant allowances and any other costs incurred
by Borrower in connection with re-leasing such space. The disbursement of
such fee or payment shall be subject to the delivery of (x) evidence
reasonably satisfactory to Lender that Borrower has leased such space in
accordance with this Section 3.7 and a certificate executed by an officer
of Borrower certifying such fact and certifying that any work which is the
subject of the requested disbursement has been completed in a workmanlike
manner and (y) copies of invoices and itemized bills indicating the
amounts due to such claimants; provided, however, if Borrower submits
evidence reasonably acceptable to Lender that all costs with respect to
re-leasing such space have been paid in full, Lender shall disburse to
Borrower any remaining portion of the termination fee. Notwithstanding
anything to the contrary contained in this Section 3.7(d) Borrower may
terminate a Lease without the prior written confirmation from any Rating
Agency if a material default exists on the part of the tenant under such
Lease beyond any applicable notice and cure periods and Borrower obtains
Lender's prior written consent to such termination, which consent shall
not be unreasonably withheld or delayed.
(e) Notwithstanding anything to the contrary contained in
Subsection 3.7(b) or 3.7(c) above, Borrower shall not enter into any Lease
with any affiliate unless (i) the space is for the use and occupancy of
one or more of such affiliates and (ii) the material terms of such Lease
comply with the requirements set forth in Subsection 3.7(b) hereof;
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23
provided, however, a reasonable amount of office space, not to exceed 500
net leaseable square feet, may be leased to the Manager at less than fair
market rental or at no rental, at Borrower's discretion, for the purpose
of management of the Property. Borrower, or an affiliate of Borrower,
shall have the right, subject to the provisions of this Security
Instrument, to acquire any such Lease by way of assignment, surrender,
acquisition or further sublease.
(f) Notwithstanding anything to the contrary contained in
Subsection 3.7(b) or 3.7(c) above, Borrower shall not receive or collect,
or permit the receipt or collection of, any rental or other payments under
any Lease more than one (1) month in advance of the period in respect of
which they are to accrue, except that (i) in connection with the execution
and delivery of any Lease or of any amendment to any Lease, rental
payments thereunder may be collected and received in advance in an amount
not in excess of one (1) month's rent and a security deposit (including
advance rents as or in lieu of a security deposit) may be required
thereunder (provided that such deposits are maintained in accordance with
applicable law and in accordance with Subsection 3.7(i) hereof), and (ii)
Borrower may receive and collect escalation, percentage rent, additional
rent and other charges in accordance with the terms of each Lease.
(g) Borrower shall not enter into any Lease after the date hereof
that does not contain a provision whereby the tenant agrees at the request
and option of Lender either (i) that its Lease shall be subordinate to
this Security Instrument and that the tenant shall attorn under the Lease
to any entity obtaining title to the Property, which subordination and
attornment may be conditioned on delivery of a reasonable and customary
nondisturbance agreement, or (ii) that its Lease shall be senior to this
Security Instrument and that the tenant shall attorn under the Lease to
any entity obtaining title to the Property. Lender shall execute and
deliver to the tenant under any Lease or Renewal Lease executed without
the approval of Lender pursuant to Section 3.7(b), or with Lender's
approval, a non-disturbance and attornment agreement (an "SNDA")
substantially in the form attached hereto as Exhibit C, with such
modifications as Lender may reasonably approve within fifteen (15)
Business Days after such tenant's execution and delivery of the same,
provided, that (A) Borrower has delivered the related Lease or Renewal
Lease to Lender on or prior to the date that the tenant thereunder
delivers to Lender the SNDA executed in connection therewith, (B) such
Lease or Renewal Lease is for 5,000 or more rentable square feet and (C)
no Event of Default exists hereunder, under the Note or under the Other
Security Documents.
(h) Borrower shall be responsible for all reasonable out-of-pocket
expenses incurred by Lender in connection with the review and approval
required pursuant to this Section.
(i) Upon the occurrence and during the continuance of an Event of
Default, to the extent permitted by law, Borrower shall promptly deposit
with Lender any and all monies actually received by Borrower as security
deposits under the Leases or credited to tenant by Borrower as a security
deposit under a Lease (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
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24
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. 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.
(j) Any (i) Lease or Renewal Lease that requires Lender's approval
pursuant to Section 3.7(b) and (ii) amendment or modification of a Lease
that requires Lender's approval pursuant to Section 3.7(c), but not the
prior written confirmation of any Rating Agency, shall be sent to Lender
in an envelope labeled "PRIORITY" and shall state at the top of the first
page in bold lettering "LENDER'S RESPONSE IS REQUIRED WITHIN FIFTEEN (15)
BUSINESS DAYS OF RECEIPT OF THIS NOTICE PURSUANT TO THE TERMS OF A
MORTGAGE BETWEEN THE UNDERSIGNED AND LENDER". Such Lease, Renewal Lease,
amendment or modification shall be deemed approved if Lender shall not
have notified Borrower in writing of its disapproval (together with a
statement of the grounds of such disapproval) within fifteen (15) Business
Days after Lender has received such Lease, Renewal Lease, amendment or
modification, as applicable.
(k) Any termination of a Lease that requires Lender's approval
pursuant to Section 3.7(d), but not the prior written confirmation of any
Rating Agency, shall be sent to Lender in an envelope labeled "PRIORITY"
and shall state at the top of the first page in bold lettering "LENDER'S
RESPONSE IS REQUIRED WITHIN TEN (10) BUSINESS DAYS OF RECEIPT OF THIS
NOTICE PURSUANT TO THE TERMS OF A MORTGAGE BETWEEN THE UNDERSIGNED AND
LENDER". Such termination request shall be deemed approved if Lender shall
not have notified Borrower in writing of its disapproval (together with a
statement of the grounds of such disapproval) within ten (10) Business
Days after Lender has received such request for termination.
Section 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements and the Personal Property shall not be removed, demolished or
materially altered (except for normal replacement of the Personal Property)
without the consent of Lender; provided, however, that, Borrower and/or tenants
under Leases shall be permitted to make tenant improvements, and/or prepare the
premises to be demised for occupancy by a tenant, pursuant to the terms and
conditions of Leases approved by Lender or not required to be approved by
Lender pursuant to Section 3.7 hereof. Whether or not Net Proceeds (as defined
herein) are made available for a Restoration in accordance with Section 4.4
hereof, Borrower shall promptly repair, replace or rebuild any part of the
Property which may be destroyed by any casualty, or become damaged, worn or
dilapidated or which may be affected by any proceeding of the character
referred to in Section 3.6 hereof and shall complete and pay for any structure
at any time in the process of construction or repair on the Land. Borrower
shall not initiate, join in, acquiesce in, or consent to any change in any
private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Property or
any part thereof. If under applicable zoning provisions the use of all or any
portion of the Property is or shall become a nonconforming use, Borrower will
not cause or permit the nonconforming use to be discontinued
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25
or abandoned without the express written consent of Lender; provided, however,
Lender's consent shall not be required if (a) a nonconforming use is
discontinued or abandoned due to (i) a change in, or termination of, a tenant's
use of the demised premises in accordance with the terms and conditions of the
related Lease (which Lease exists as of the date hereof or is hereafter
approved or not required to be approved by Lender in accordance with Section
3.7 hereof), (ii) the expiration of a Lease in accordance with the terms and
conditions of the Lease or (iii) the discontinuance of operation by a tenant
pursuant to the terms and conditions of the related Lease (which Lease exists
as of the date hereof or is hereafter approved or not required to be approved
by Lender in accordance with Section 3.7 hereof), or (b) such discontinuance or
abandonment of the nonconforming use will not have a material adverse effect
upon the value or the net operating income of the Property.
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 materially and adversely 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 comply, and cause all tenants to comply, with all
existing and future federal, state and local laws, orders, ordinances,
governmental rules and regulations or court orders affecting, or which may
be interpreted to affect, the Property or the use thereof ("APPLICABLE
LAWS") on or prior to the date required thereby; provided, however, it
shall not be an Event of Default hereunder if it is the obligation of a
tenant pursuant to the applicable Lease to comply with such Applicable
Laws and Borrower promptly after receiving actual notice of any
noncompliance with such Applicable Laws commences and diligently pursues
its rights against such tenant and causes such tenant to comply with such
Applicable Laws within a reasonable time and the failure to comply with
the Applicable Laws for such period of time does not (i) impose civil or
criminal liability on Borrower or Lender or (ii) materially and adversely
effect the Property or Borrower.
(b) Borrower shall from time to time, upon Lender's request, provide
Lender with evidence reasonably satisfactory to Lender that the Property
complies with all Applicable Laws or is exempt from compliance with
Applicable Laws.
(c) Intentionally deleted.
(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.
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(e) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the Applicable Laws
affecting the Property, provided that (i) no Event of Default has occurred
and is continuing under the Note, this Security Instrument or any of the
Other Security Documents; (ii) Borrower is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt
affecting the Property; (iii) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument to
which Borrower or the Property is subject and shall not constitute a
default thereunder; (iv) neither the Property, any part thereof or
interest therein, any of the tenants or occupants thereof, nor Borrower
shall be affected in any material adverse way as a result of such
proceeding; (v) non-compliance with the Applicable Laws shall not impose
civil or criminal liability on Borrower or Lender; (vi) Borrower shall
have furnished the security as may be required in the proceeding or by
Lender to ensure compliance by Borrower with the Applicable Laws; and
(vii) Borrower shall have furnished to Lender all other items reasonably
requested by Lender.
Section 3.11 BOOKS AND RECORDS.
(a) Borrower shall keep adequate books and records of account in
accordance with generally accepted accounting principles ("GAAP"), or in
accordance with other methods acceptable to Lender in its sole discretion,
consistently applied and furnish to Lender:
(i) quarterly certified rent rolls signed and dated by
Borrower, detailing the names of all tenants of the
Improvements, the portion of Improvements occupied by each
tenant, the base rent and any other charges payable under
each Lease and the term of each Lease, including the
expiration date, and any other information as is
reasonably required by Lender, within sixty (60) days
after the end of each calendar quarter;
(ii) quarterly operating statements of the Property, prepared
and certified by Borrower in substantially the same form
as previously submitted by Borrower in connection with the
closing of the Loan or such other form as may be
reasonably acceptable to 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 quarter
and containing appropriate year to date information,
within sixty (60) days after the end of each calendar
quarter;
(iii) an audited 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 in substantially the same
form as previously submitted in connection with the
closing of the Loan or such other form as may be
reasonably acceptable to Lender, prepared and certified by
an
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independent certified public accountant reasonably
acceptable to Lender, within one hundred and twenty (120)
days after the close of each fiscal year of Borrower;
(iv) an audited annual balance sheet and profit and loss
statement of Borrower in substantially the same form as
previously submitted in connection with the closing of the
Loan or such other form as may be reasonably acceptable to
Lender, prepared and certified by an independent certified
public accountant reasonably acceptable to Lender, within
one hundred and twenty (120) days after the close of each
fiscal year of Borrower; and
(v) an annual operating budget consistent with the annual
operating statement 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 fiscal
year.
(b) Intentionally Omitted.
(c) Borrower shall furnish Lender with such other additional
financial or management information (including State and Federal tax
returns) as may, from time to time, be reasonably required by Lender in
form and substance reasonably satisfactory to Lender. Lender acknowledges
that Borrower may file a consolidated State and Federal tax return with
Alexander's Inc. and its consolidated subsidiaries.
(d) Borrower shall furnish to Lender and its agents, upon reasonable
prior notice, convenient facilities during normal business hours for the
examination and audit of any such books and records.
(e) Any reports, statements or other information required to be
delivered under this Security Instrument shall be delivered in paper form
and in the event that Lender requires financial statements in connection
with Subsection (f) below because the Loan together with any Affiliated
Loans (hereinafter defined) equal or exceed 20% of the aggregate principal
amount of all mortgage loans included in a Securitization, Borrower shall
deliver such reports, statements and other information (i) on a diskette,
and (ii) if requested by Lender and within the capabilities of Borrower's
data systems without change or modification thereto, in electronic form
and prepared using Microsoft Word for Windows or WordPerfect for Windows
files (which files may be prepared using a spreadsheet program and saved
as word processing files).
(f) If requested by Lender, Borrower shall provide Lender with the
following financial statements if, at the time a preliminary or final
prospectus is being prepared for a Securitization, it is expected that the
principal amount of the Loan together with any Affiliated Loans at the
time of Securitization may, or if the principal amount of the Loan and any
Affiliated Loans at any time during which the Loan is included in a
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Securitization does, equal or exceed 20% of the aggregate principal amount
of all mortgage loans included or expected to be included, as applicable,
in the Securitization:
(i) Not later than 35 days after request by Lender, a
balance sheet with respect to the Property for the two
most recent fiscal years, meeting the requirements of
Section 210.3-01 of Regulation S-X of the Securities Act
and statements of income and statements of cash flows
with respect to the Property for the three most recent
fiscal years, meeting the requirements of Section
210.3-02 of Regulation S-X, and, to the extent that such
balance sheet is more than 135 days old as of the date
of the document in which such financial statements are
included, interim financial statements of the Property
meeting the requirements of Section 210.3-01 and
210.3-02 of Regulation S-X (all of such financial
statements, collectively, the "STANDARD STATEMENTS");
provided, however, that with respect to a Property
(other than properties that are hotels, nursing homes,
or other properties that would be deemed to constitute a
business and not real estate under Regulation S-X or
other legal requirements) that has been acquired by
Borrower from an unaffiliated third party (such
Property, "ACQUIRED PROPERTY"), as to which the other
conditions set forth in Section 210.3-14 of Regulation
S-X for provision of financial statements in accordance
with such Section have been met, in lieu of the Standard
Statements otherwise required by this section, Borrower
shall instead provide the financial statements required
by such Section 210.3-14 of Regulation S-X ("ACQUIRED
PROPERTY STATEMENTS").
(ii) Not later than 35 days after the end of each fiscal
quarter following the date hereof, a balance sheet of
the Property as of the end of such fiscal quarter,
meeting the requirements of Section 210.3-01 of
Regulation S-X, and statements of income and statements
of cash flows of the Property for the period commencing
following the last day of the most recent fiscal year
and ending on the date of such balance sheet and for the
corresponding period of the most recent fiscal year,
meeting the requirements of Section 210.3-02 of
Regulation S-X (provided, that if for such corresponding
period of the most recent fiscal year Acquired Property
Statements were permitted to be provided hereunder
pursuant to Subsection (i) above, Borrower shall instead
provide Acquired Property Statements for such
corresponding period).
(iii) Not later than 80 days after the end of each fiscal year
following the date hereof, a balance sheet of the
Property as of the end of such fiscal year, meeting the
requirements of Section 210.3-01 of Regulation S-X, and
statements of income and statements of cash flows of the
Property for such fiscal year, meeting the requirements
of Section 210.3-02 of Regulation S-X.
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(iv) Within (10) ten Business Days after notice from the
Lender in connection with the Securitization of this
Loan, such additional financial statements, such that,
as of the date (each an "OFFERING DOCUMENT DATE") of
each Disclosure Document, Borrower shall have provided
Lender with all financial statements as described in
Subsection (f)(i) above; provided that the fiscal year
and interim periods for which such financial statements
shall be provided shall be determined as of such
Offering Document Date.
(g) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with summaries of the financial statements referred to in
Section 3.11(f) hereof if, at the time a preliminary or final prospectus
is being prepared for a Securitization, it is expected that the principal
amount of the Loan and any Affiliated Loans at the time of Securitization
may, or if the principal amount of the Loan and any Affiliated Loans at
any time during which the Loan and any Affiliated Loans are included in a
Securitization does, equal or exceed 10% (but is less than 20%) of the
aggregate principal amount of all mortgage loans included or expected to
be included, as applicable, in a Securitization. Such summaries shall meet
the requirements for "summarized financial information," as defined in
Section 210.1-02(bb) of Regulation S-X, or such other requirements as may
be determined to be necessary or appropriate by Lender.
(h) All financial statements provided by Borrower hereunder pursuant
to Section 3.11(f) and (g) hereof shall be prepared in accordance with
GAAP, and shall meet the requirements of Regulation S-X and other
applicable legal requirements. All financial statements referred to in
Subsections 3.11(f)(i) and 3.11(f)(iii) above shall be audited by (i) a
"Big Five" accounting firm or (ii) other nationally recognized independent
accountants acceptable to Lender, in accordance with Regulation S-X and
all other applicable legal requirements, shall be accompanied by the
manually executed report of the independent accountants thereon, which
report shall meet the requirements of Regulation S-X and all other
applicable legal requirements, and shall be further accompanied by a
manually executed written consent of the independent accountants, in form
and substance acceptable to Lender, to the inclusion of such financial
statements in any Disclosure Document and any Exchange Act Filing and to
the use of the name of such independent accountants and the reference to
such independent accountants as "experts" in any Disclosure Document and
Exchange Act Filing (as defined below), all of which shall be provided at
the same time as the related financial statements are required to be
provided. All financial statements (audited or unaudited) provided by
Borrower under this Section 3.11 shall be certified by the chief financial
officer or administrative member of Borrower, which certification shall
state that such financial statements meet the requirements set forth in
the first sentence of this Section 3.11(h).
(i) If requested by Lender, Borrower shall provide Lender, promptly
upon request, with any other or additional financial statements, or
financial, statistical or operating information, as required pursuant to
Regulation S-X or any amendment, modification or replacement thereto or
other legal requirements in connection with any Disclosure Document or any
filing under or pursuant to the Exchange Act in connection
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with or relating to a Securitization (hereinafter an "EXCHANGE ACT
FILING") or as shall otherwise be reasonably requested by the Lender.
(j) In the event Lender determines, in connection with a
Securitization, that the financial statements required in order to comply
with Regulation S-X or other legal requirements are other than as provided
herein, then notwithstanding the provisions of Section 3.11(f), (g) and
(h) hereof, Lender may request, and Borrower shall promptly provide, such
combination of Acquired Property Statement and/or Standard Statements or
such other financial statements as Lender determines to be necessary or
appropriate for such compliance.
(k) The term "AFFILIATED LOAN" shall mean any loan made by Lender to
a parent, subsidiary or such other entity affiliated to Borrower.
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
(y) the Permitted Exceptions (defined below) and (z) the mechanics liens set
forth on Schedule 2 attached hereto; provided, however, after prior written
notice to Lender, Borrower, at its own expense, may contest by appropriate
legal, administrative or other proceeding promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any bill or cost or lien thereof provided that (a) no Event
of Default has occurred and is continuing under the Note, this Security
Instrument or any Other Security Documents, (b) such proceeding shall suspend
the collection thereof from Borrower, Lender and the Property, (c) if required
by Lender, and not otherwise deposited with the title company insuring the lien
of this Security Instrument or the court having jurisdiction over such
proceeding as required thereby, the deposit with Lender of adequate reserves in
an amount not less than Borrower's obligations being contested and any
additional interest, charge or penalty arising from such contest, (c) neither
the Property nor any part thereof or interest therein would be in any danger of
being sold, forfeited or lost if Borrower pays the amount or satisfies the
condition being contested, and Borrower would have the opportunity to so pay or
satisfy, and shall do so, if required, in the event of Borrower's failure to
prevail in the contest, (d) in the case of any instrument of record affecting
the Property or any part thereof, the contest or failure to perform under any
such instrument shall not result in the placing of any lien on the Property or
any part thereof unless such lien is bonded by Borrower in an amount not less
than the amount of the lien or such other amount as may be required by Lender
and (e) except to the extent Borrower has deposited sufficient security with
Lender, neither the failure to pay or perform any obligation which Borrower is
permitted to contest under this Section 3.12 nor an adverse determination of any
such contest shall result in a material adverse effect on the value or operation
of the Property or any part or interest therein. If a negotiated settlement of
any tax liability or other claim being contested pursuant to this Section 3.12
has been agreed upon by the applicable parties or a court of competent
jurisdiction has issued a non-appealable order determining the amount of the tax
liability or claim being contested, Lender shall release any funds held with
respect to such tax liability or claim to the
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applicable taxing authority or claimant, as applicable, and any remaining funds
to the Borrower provided that (i) Borrower delivers a certificate from an
officer directing Lender to pay the amount specified in the settlement or
order, in each case with a copy of the settlement or order attached and (ii) no
Event of Default has occurred and is then continuing under the Note, this
Security Instrument or the Other Security Documents.
Section 3.13 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 3.14 ALTERATIONS. Borrower shall obtain Lender's prior
written consent, which consent shall not be unreasonably withheld or delayed,
to any alterations to the Improvements that may have a material adverse effect
on Borrower's financial condition, the use, operation or value of the Property
or the net operating income with respect to the Property, other than (a) tenant
improvement work performed pursuant to the terms of any Lease executed on or
before the date hereof or approved by Lender after the date hereof, (b) tenant
improvement work performed pursuant to the terms and provisions of a Lease
executed after the date hereof for which the approval of Lender is not required
and not adversely affecting any structural component of any Improvements, any
utility or HVAC system contained in any Improvements or the exterior of any
building constituting a part of any Improvements, or (c) alterations performed
in connection with the restoration of the Property after the occurrence of a
casualty or condemnation in accordance with the terms and provisions of this
Security Instrument. Any approval by Lender of the plans, specifications, or
working drawings for alterations of the Property shall not create
responsibility or liability on behalf of Lender for their completeness, design,
sufficiency or their compliance with Applicable Laws. Lender may condition any
such approval upon receipt of a certificate of compliance with Applicable Laws
from an independent architect, engineer, or other person reasonably acceptable
to Lender. If the total unpaid amounts due and payable with respect to
alterations to the Improvements (other than such amounts to be paid or
reimbursed by tenants under the Leases) shall at any time exceed One Million
and 00/100 Dollars ($1,000,000.00) (the "THRESHOLD AMOUNT"), Borrower shall
promptly deliver to Lender as security for the payment of such amounts and as
additional security for Borrower's obligations under the Loan Documents any of
the following: (i) cash, (ii) U.S. Treasury securities, (iii) other securities
having a rating acceptable to Lender and that the applicable Rating Agencies
have confirmed in writing will not, in and of itself, result in a downgrade,
withdrawal or qualification of the initial, or, if higher, then current ratings
assigned in connection with any Securitization (as defined herein) or if a
Securitization has not occurred, any ratings to be assigned in connection with
a Securitization, (iv) a completion bond and performance bond or (v) a Letter
of Credit (hereinafter defined). Such security shall be in an amount equal to
the excess of the total unpaid amounts with respect to alterations to the
Improvements (other than such amounts to be paid or reimbursed by tenants under
the Leases) over the Threshold Amount (the "EXCESS AMOUNT") and may be reduced
from time to time upon Borrower's request as the Excess Amount decreases as
determined in the reasonable discretion of Lender. For purposes of the
foregoing, "LETTER OF CREDIT" shall mean a clean, irrevocable, unconditional,
transferable letter of credit payable on sight draft only, with an initial
expiration date of not less than one (1) year and with automatic renewals for
one (1) year periods, for which Borrower shall have no reimbursement obligation
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and which reimbursement obligation is not secured by the Property or any other
property pledged to secure the Note, in favor of Lender and entitling Lender to
draw thereon in New York, New York or in such other city as Lender may
determine, issued by a domestic bank or the U.S. agency or branch of a foreign
bank, which (A) has a long-term unsecured debt rating at the time such letter
of credit is delivered and throughout the term of such letter of credit, of not
less than "AA" or "Aa", as applicable, as assigned by the Rating Agencies and
(B) the applicable Rating Agencies have confirmed in writing will not, in and
of itself, result in a downgrade, withdrawal or qualification of the initial,
or, if higher, then current ratings assigned in connection with any
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization.
Section 3.15 NON-CONSOLIDATION OPINION. Borrower has complied
and will comply with each of the assumptions made with respect to it in that
certain substantive non-consolidation opinion letter, dated the date hereof,
and the certificates contained in any Borrower's certificate referenced
therein, delivered by Borrower's counsel in connection with the Loan and any
subsequent non-consolidation opinion delivered in accordance with the terms and
conditions of this Security Instrument (the "NON-CONSOLIDATION OPINION"),
including, but not limited to, any exhibits attached thereto. Each entity other
than Borrower with respect to which an assumption is made in the
Non-Consolidation Opinion, including, but not limited to, any exhibits attached
thereto, has complied and will comply with each of the assumptions made with
respect to it in the Non-Consolidation Opinion, including, but not limited to,
any exhibits attached thereto.
ARTICLE 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
Section 4.1 PROPERTY USE. The Property shall be used as a
shopping center and related uses thereto, 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(3) 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:
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(A) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. Section
2510.3-101(b)(2);
(B) Less than 25 percent of each outstanding class of equity
interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. Section
2510.3-101(f)(2); or
(C) Borrower qualifies as an "operating company" or a "real
estate operating company" within the meaning of 29
C.F.R. 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 represents,
warrants and covenants as follows:
(a) The purpose for which the Borrower is organized
shall be limited solely to (A) owning, holding, selling, leasing,
transferring, exchanging, operating and managing the Property, (B)
entering into the Note, this Security Instrument and the Other Security
Documents with the Lender, (C) refinancing the Property in connection with
a permitted repayment of the Debt, and (D) transacting any and all lawful
business for which a Borrower may be organized under its constitutive law
that is incident, necessary and appropriate to accomplish the foregoing.
(b) Borrower does not own and will not own any asset or
property other than (i) the Property, (ii) incidental personal property
necessary for and used or to be used in connection with the ownership or
operation of the Property, and (iii) the proceeds, rents, issues and
profits thereof.
(c) Borrower will not engage in any business other than
the ownership, management and operation of the Property.
(d) Borrower will not enter into any contract or
agreement with any affiliate of the Borrower, any constituent party of
Borrower, any owner of the Borrower, or any affiliate of any constituent
party, except upon terms and conditions that are commercially reasonable
and substantially similar to those that would be available on an
arms-length basis with third parties not affiliated with the Borrower or
its constituent party.
(e) Borrower has not incurred (which is still
outstanding) and will not incur any indebtedness other than (i) the Debt,
(ii) trade payables incurred in the ordinary course of its business of
owning and operating the Property (including, but not limited to, amounts
currently payable by or on behalf of Borrower to suppliers, contractors,
mechanics, vendors, materialmen or other persons providing property or
services to Borrower or the Property, or in connection with the ownership,
management, operation, leasing, cleaning, maintenance, repair,
replacement, improvement, alteration or restoration of the Property),
which are not more than sixty (60) days past the date due and do not in
the aggregate exceed $1,000,000.00, with trade creditors and in amounts as
are normal and reasonable under the circumstances, provided such debt is
not evidenced by a note, (iii) indebtedness incurred in the ordinary
course of business in the financing of equipment and other
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personal property used on the Property requiring payments, in the
aggregate, of less than $100,000 per year, (iv) indebtedness incurred with
respect to the Property pursuant to that certain Real Estate Retention
Agreement, dated July 20, 1992, by and among Vornado, Inc. (as predecessor
to Vornado Realty Trust), Keen Realty Consultants, Inc., Alexander's Inc.
and such other subsidiaries of Alexander's Inc., as assumed by Borrower
pursuant to that certain Assignment and Assumption of Contracts, dated the
date hereof between Alexander's Rego Park Center, Inc. and Borrower, which
indebtedness is equal to approximately $1,200,000.00 as of the date hereof
and will not increase as a result of any activities of Alexander's Inc. or
its subsidiaries with respect to any property other than the Property;
provided, however such indebtedness shall only be payable after the
payment of debt service on the Loan and all other expenses incurred in
connection with the operation of the Property and (v) indebtedness
incurred in connection with the management of the Property pursuant to
that certain Management Agreement, dated May __, 1999, between Borrower
and Vornado Management Corp. No indebtedness other than the Debt may be
secured (subordinate or pari passu) by the Property.
(f) Borrower has not made and will not make any loans
or advances to any entity or person (including any affiliate or
constituent party, or any affiliate of any constituent party), and shall
not acquire obligations or securities of its affiliates or any constituent
party; provided, however, that Borrower shall be permitted to make loans
to unaffiliated tenants under Leases if such loans are made in the
ordinary course of business and the proceeds of such loans are used solely
for the purpose of making the demised premises at the Property ready for
occupancy by such tenant or to pay for other costs relating to such
tenant's leasing of space in the Property.
(g) Borrower is and will remain solvent and Borrower
will pay its debts and liabilities (including, as applicable, shared
personnel and overhead expenses) from its assets prior to the expiration
of any applicable grace or extension periods.
(h) Borrower has done or caused to be done and will do
all things necessary to observe organizational formalities and preserve
its existence, and Borrower will not, nor will Borrower permit any
constituent party to amend, modify or otherwise change the partnership
certificate, partnership agreement, articles of incorporation and bylaws,
operating agreement, trust or other organizational documents of Borrower
or such constituent party in any way which will violate the covenants
contained in this Section 4.3, without the prior written consent of
Lender.
(i) Borrower will maintain all of its books, records,
financial statements and bank accounts separate from those of its
affiliates and any constituent party. Borrower's assets will not be listed
as assets on the financial statement of any other entity, except as
required by generally accepted accounting principles. Borrower will not
file a consolidated federal income tax return except with Alexander's,
Inc. and its consolidated subsidiaries and if Borrower does not file a
consolidated tax return it will file its own tax return. Borrower shall
maintain its books, records, resolutions and agreements as official
records.
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(j) Borrower will be, and at all times will hold itself
out to the public as, a legal entity separate and distinct from any other
entity (including any affiliate of Borrower, any constituent party of
Borrower, or any affiliate of any constituent party), shall correct any
known misunderstanding regarding its status as a separate entity, shall
conduct business in its own name, shall not identify itself or any of its
affiliates as a division or part of the other and shall maintain and
utilize separate stationery, invoices and checks.
(k) Borrower will 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.
(l) Neither Borrower nor any constituent party will
seek the dissolution, winding up, liquidation, consolidation or merger in
whole or in part, or the sale of material assets of the Borrower (except
in connection with the payment in full of the Debt and the release of the
lien hereof in accordance with the terms and conditions of the Note, this
Security Instrument and the Other Security Documents).
(m) Borrower will not commingle the funds of Borrower
with those of any affiliate or constituent party, or any affiliate of any
constituent party, or any other person, and will not participate in any
cash management system with any such party.
(n) Borrower will not commingle its assets with those
of any other person or entity and will hold all of its assets in its own
name.
(o) Borrower will not guarantee or become obligated for
the debts of any other entity or person and does not and will not hold
itself out as being responsible for the debts or obligations of any other
person.
(p) Borrower shall at all times cause there to be at
least one duly appointed member of the board of directors (an "INDEPENDENT
DIRECTOR") of Borrower reasonably satisfactory to Lender who is not at the
time of initial appointment and has not been at any time during the
preceding five (5) years, and shall not be at any time while serving as a
director of the corporation: (a) a stockholder, director, officer,
employee, partner, member, attorney or counsel of Borrower or any
affiliate; (b) a customer, supplier or other person who derives any of its
purchases or revenues from its activities with Borrower or any affiliate,
other than a person as to whom the corporation or any affiliate pays
reasonable and customary compensation or fees solely for acting as an
Independent Director, process agent and for the provision of general
corporate structuring and incorporation services; (c) a person or other
entity controlling or under common control with any such stockholder,
partner, member, customer, supplier or other person; or (d) a member of
the immediate family of any such stockholder, director, officer, employee,
partner, member, customer, supplier or other person. (As used herein, the
term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of management, policies or activities of
a person or entity, whether through ownership of voting securities, by
contract or otherwise.)
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(q) Borrower shall not cause or permit the board of
directors of Borrower to take any action which, under the terms of any
certificate of formation or operating agreement, requires the vote of
the Independent Director of Borrower unless at the time of such action
there shall be at least one Independent Director.
(r) Borrower shall conduct its business so that the
assumptions made with respect to Borrower in the Non-Consolidation
Opinion shall be true and correct in all respects.
(s) Borrower shall allocate fairly and reasonably any
overhead expenses that are shared with an affiliate, including paying
for office space and services performed by any employee of an
affiliate.
(t) The stationery, invoices, and checks utilized by
Borrower or utilized to collect its funds or pay its expenses shall
bear its own name and shall not bear the name of any other entity
unless such entity is clearly designated as being Borrower's agent.
(u) Borrower shall not pledge its assets for the
benefit of any other person or entity, other than with respect to the
Debt.
(v) Borrower shall pay the salaries of its own
employees, if any, from its own funds.
(w) Borrower shall maintain a sufficient number of
employees in light of its contemplated business operations.
Section 4.4 RESTORATION. The following provisions shall apply
in connection with the Restoration of the Property:
(a) If the Net Proceeds (defined below) shall be
less than $4,000,000 and the costs of completing the
Restoration shall be less than $4,000,000, 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 $4,000,000 or the costs of completing the Restoration is
equal to or greater than $4,000,000, Lender shall make the
Net Proceeds available for Restoration in accordance with
this Section 4.4. The term "NET PROCEEDS" for the purposes of
this Section 4.4 shall mean: (i) the net amount of all
insurance proceeds received by Lender pursuant to Subsections
3.3(a)(i), (iv), (vi), (vii), (viii) and, as applicable, (x)
of this Security Instrument as a result of such damage or
destruction, after deduction of the reasonable costs and
expenses (including, but not limited to, reasonable counsel
fees), if any, of collecting the same ("INSURANCE PROCEEDS")
or (ii) the net amount of the Award, 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.
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(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) (1) in the event that the
Net Proceeds are Insurance
Proceeds, less than
seventy-five percent (75%)
of the total floor area of
the Improvements has been
damaged or destroyed as a
result of such fire or
other casualty or (2) in
the event that the Net
Proceeds are Condemnation
Proceeds, less than five
percent (5%) of the total
floor area of the building
and less than twenty-five
percent (25%) of floor
area of the garage has
been taken in connection
with the related
condemnation or eminent
domain proceeding and
after such condemnation or
eminent domain proceeding,
Borrower shall be able to
satisfy all parking
requirements contained in
the Leases in effect as of
the date of the occurrence
of condemnation or eminent
domain proceeding;
(C) Leases demising in the
aggregate at least 50% 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 by
condemnation or eminent
domain proceeding, shall
remain in full force and
effect during and after
the completion of the
Restoration, which
requirement shall include
evidence satisfactory to
Lender that Sears Roebuck
& Co. (if Sears Roebuck &
Co. was a lessee
immediately prior to such
casualty or condemnation)
shall continue to operate
its retail store at the
Property after completion
of the Restoration;
(D) Borrower shall commence
the Restoration as soon as
reasonably practicable
(but in no event later
than ninety (90) days
after such damage or
destruction, or taking by
condemnation or eminent
domain proceeding, occurs)
and shall diligently
pursue the same to
satisfactory completion;
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(E) Lender shall be reasonably
satisfied that any
operating deficits which
will be incurred with
respect to the Property as
a result of the occurrence
of any such fire or other
casualty, or taking by
condemnation or eminent
domain proceeding, will be
covered out of (1) the Net
Proceeds, (2) the
insurance coverage
referred to in Subsection
3.3(a)(iii), or (3) by
other funds of, or
available to, Borrower;
(F) Lender shall be reasonably
satisfied that, upon the
completion of the
Restoration, the gross
cash flow and the net cash
flow of the Property will
be restored to a level
sufficient to cover all
carrying costs and
operating expenses of the
Property, including,
without limitation, debt
service on the Note at a
coverage ratio (after
deducting all required
reserves as required by
Lender from net operating
income) of at least 1.10
to 1.0, which coverage
ratio shall be determined
by Lender in its sole and
absolute discretion on the
basis of the Applicable
Interest Rate (as defined
in the Note);
(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)
eighteen (18) months after
the date required to
commence the Restoration
pursuant to Subsection
4.4(b)(i)(D), but in no
event after the expiration
of the loss of rents
insurance which is
required to be maintained
pursuant to Subsection
3.3(a)(iii) hereof, (3)
such time as may be
required under applicable
zoning law, ordinance,
rule or regulation in
order to repair and
restore the Property to
substantially the same
condition it was in
immediately prior to such
fire or other casualty, or
taking by condemnation or
eminent domain proceeding
or (4) 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)(i)(C) to remain in
effect subsequent to the
occurrence of such fire or
other casualty, or taking
by condemnation or eminent
domain preceding, and the
completion of the
Restoration;
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(H) the Property and the use
thereof after the
Restoration will be in
material compliance with
and permitted under all
applicable zoning laws,
ordinances, rules and
regulations;
(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 a temporary loss
of access to the Property
or the Improvements which
cannot be restored in
connection with the
Restoration.
(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 (subject to applicable
retainages), 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
reasonable satisfaction of Lender
and discharged of record or in the
alternative fully insured to the
reasonable satisfaction of Lender
by the title company insuring the
lien of this Security Instrument.
(iii) If the Net Proceeds are equal to or
greater than $5,000,000, all plans
and specifications (other than
those setting forth the restoration
of leasehold improvements to be
performed by applicable tenants
under Leases) required in
connection with the Restoration
shall be subject to prior review
and acceptance (which shall not be
unreasonably withheld) in all
respects by Lender and the Casualty
Consultant (as defined herein);
which plans and specifications
shall be deemed approved in the
event that Lender shall not have
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notified Borrower in writing of its
disapproval (together with a
statement of the grounds of such
disapproval) within forty-five (45)
days after Borrower has submitted
such plans and specifications to
Lender for approval. After an Event
of Default, Lender shall have the
use of the plans and specifications
(whether or not approved in
connection with the preceding
sentence) and all permits, licenses
and approvals required or obtained
in connection with the Restoration.
If the Net Proceeds are equal to or
greater than $5,000,000, the
identity of the contractors,
subcontractors and materialmen
engaged in the Restoration, as well
as the contracts under which they
have been engaged, shall be subject
to prior review and acceptance
(which shall not be unreasonably
withheld or delayed) by Lender and
the Casualty Consultant; which
persons and contracts shall be
deemed approved in the event that
Lender shall not have notified
Borrower in writing of its
disapproval (together with a
statement of the grounds of such
disapproval) within forty-five (45)
days after Borrower has submitted
the identity of such persons and
such contracts to Lender for
approval. Plans and specifications
and/or identities and contracts
submitted to Lender for its
approval in accordance with this
Subsection 4.4(b)(iii) shall be
sent in an envelope labeled
"PRIORITY" and shall state at the
top of the first page in bold
lettering "LENDER'S RESPONSE IS
REQUIRED WITHIN FORTY-FIVE DAYS OF
RECEIPT OF THIS NOTICE PURSUANT TO
THE TERMS OF A MORTGAGE BETWEEN THE
UNDERSIGNED AND LENDER." 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 an
independent consulting engineer
selected by Lender (the "CASUALTY
CONSULTANT"), minus the Casualty
Retainage. The term "Casualty
Retainage" as used in this
Subsection 4.4(b) shall mean an
amount equal to 10% of the costs
actually incurred for work in place
as part of the Restoration, as
certified by the Casualty
Consultant, until such time as the
Casualty Consultant certifies to
Lender that Net Proceeds
representing 50% of the required
Restoration have been disbursed.
There shall be no
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41
Casualty Retainage with respect to
costs actually incurred by Borrower
for work in place in completing the
last 50% of the required
Restoration. The Casualty Retainage
shall in no event, and
notwithstanding anything to the
contrary set forth above in this
Subsection 4.4(b), be less than the
amount actually held back by
Borrower from contractors,
subcontractors and materialmen
engaged in the Restoration. The
Casualty Retainage shall not be
released until the Casualty
Consultant certifies to Lender that
the Restoration has been completed
in accordance with the provisions
of this Subsection 4.4(b) and that
all approvals necessary for the
re-occupancy and use of the
Property have been obtained from
all appropriate governmental and
quasi-governmental authorities, and
Lender receives evidence
satisfactory to Lender that the
costs of the Restoration have been
paid in full or will be paid in
full out of the Casualty Retainage,
provided, however, that Lender will
release the portion of the Casualty
Retainage being held with respect
to any contractor, subcontractor or
materialman engaged in the
Restoration as of the date upon
which the Casualty Consultant
certifies to Lender that the
contractor, subcontractor or
materialman has satisfactorily
completed all work and has supplied
all materials in accordance with
the provisions of the contractor's,
subcontractor's or materialman's
contract, and the contractor,
subcontractor or materialman
delivers the lien waivers and
evidence of payment in full of all
sums due to the contractor,
subcontractor or materialman as may
be reasonably requested by Lender
or by the title company insuring
the lien of this Security
Instrument. If required by Lender,
the release of any such portion of
the Casualty Retainage shall be
approved by the surety company, if
any, which has issued a payment or
performance bond with respect to
the contractor, subcontractor or
materialman.
(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 reasonable
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
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42
Deficiency deposited with Lender
shall be held by Lender and shall
be disbursed solely for costs
actually incurred in connection
with the Restoration on the same
conditions applicable to the
disbursement of the Net Proceeds
pursuant to the terms and
conditions of this Section 4.4, 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.
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") and
the Leases. 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. Notwithstanding the above, the Property is subject to certain
mechanics liens set forth on Schedule 2 attached hereto, for which Borrower has
posted the
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43
amount of funds required by the title company insuring this Security Instrument
to insure over such mechanics liens.
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/company power of Borrower; (ii) have been authorized by
all requisite corporate/partnership/company action; (iii) have received all
necessary approvals and consents, corporate, governmental or otherwise; (iv)
will not violate, conflict with, result in a breach of or constitute (with
notice or lapse of time, or both) a default under any provision of law, any
order or judgment of any court or governmental authority, the articles of
incorporation, by-laws, partnership or trust agreement, articles of
organization, operating agreement, or other governing instrument of Borrower,
or any indenture, agreement or other instrument to which Borrower is a party or
by which it or any of its assets or the Property is or may be bound or
affected; (v) will not result in the creation or imposition of any lien, charge
or encumbrance whatsoever upon any of its assets, except the lien and security
interest created hereby; and (vi) will not require any authorization or license
from, or any filing with, any governmental or other body (except for the
recordation of this Security 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, except as may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally.
Section 5.5 LITIGATION. Except as disclosed on Schedule 1
attached hereto, 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 or the Property which would have a material
adverse effect on the Property or Borrower's ability to pay the Debt as and
when due.
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44
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 Flood Insurance
Acts or, if any portion of the Improvements is located within such area,
Borrower has obtained and will maintain the insurance prescribed in Section 3.3
hereof.
(b) To the best of Borrower's knowledge, after due inquiry
and investigation, Borrower has obtained all necessary certificates, licenses
and other approvals, governmental and otherwise, necessary for Borrower's
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 currently subject to revocation, suspension, forfeiture or modification.
(c) To the best of Borrower's knowledge, after due inquiry
and investigation, there are no violations of any applicable zoning ordinances,
building codes, land use and environmental laws or other similar laws
applicable to the Property or the use and occupancy thereof which would have a
material adverse effect on the value, operation or net operating income of the
Property.
(d) The Property is served by all utilities required for the
current 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 (i) the lien and security
interest created hereby, (ii) commercially reasonably equipment leases having
payments that do not exceed $100,000 per year and (iii) the liens set forth on
Schedule 2 attached hereto.
(j) 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 material compliance with all Applicable Laws.
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45
Section 5.7 NO FOREIGN PERSON. Borrower is not a "foreign
person" within the meaning of Sections 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 improvements 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(3) 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 and in full force and effect; (c) all of the Leases are arms-length
agreements with bona fide, independent third parties, other than as permitted
pursuant to Section 3.7(e) hereof; (d) no party under any Lease is in material
default beyond notice and grace periods contained in their respective Leases;
(e) all Rents due have been paid in full; (f) the terms of all alterations,
modifications and amendments to the Leases are reflected in the certified rent
roll delivered to and approved by Lender; (g) none of the Rents reserved in the
Leases have been assigned or otherwise pledged or hypothecated (other than with
respect to loans that are no longer outstanding); (h) none of the Rents have
been collected for more than one (1) month in advance; (i) 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;
(j) to the best of Borrower's knowledge, there exist no offsets or defenses to
the payment of any portion of the Rents; (k) no Lease contains an option to
purchase the Property or any portion thereof, right of first refusal to
purchase the Property or any portion thereof, or any other similar purchase
provision; (l) no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease and that certain
Management Agreement, dated February 1,1996, between Borrower and Kinney on the
Hudson, Inc.; and (m) each Lease is subordinate to this Security Instrument,
either pursuant to its terms or a subordination agreement.
Section 5.11 FINANCIAL CONDITION. Borrower (a) has not
entered into the transaction or executed the Note, this Security Instrument or
any Other Security Document with the actual intent to hinder, delay or defraud
any creditor and (b) received reasonably equivalent value in exchange for its
obligations under such documents. Giving effect to the Loan, the fair
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46
saleable value of Borrower's assets exceeds and will, immediately following the
making of the Loan, exceed Borrower's total liabilities, including, without
limitation, subordinated, unliquidated, disputed and contingent liabilities.
The fair saleable value of Borrower's assets is and will, immediately following
the making of the Loan, be greater than Borrower's probable liabilities,
including the maximum amount of its contingent liabilities on its debts as such
debts become absolute and matured. Borrower's assets do not and, immediately
following the making of the Loan will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed to be conducted.
Borrower does not intend to, and does not believe that it will, incur debt and
liabilities (including contingent liabilities and other commitments) beyond its
ability to pay such debt and liabilities as they mature (taking into account
the timing and amounts of cash to be received by Borrower and the amounts to be
payable on or in respect of obligations of Borrower). Except as expressly
disclosed to Lender in writing, no petition in bankruptcy has been filed
against Borrower or any related entity thereof, or any principal, general
partner or member thereof, in the last seven (7) years, and neither Borrower
nor any related entity thereof, nor any principal, general partner or member
thereof, in the last seven (7) years has ever made an assignment for the
benefit of creditors or taken advantage of any insolvency act for the benefit
of debtors, other than the May 15, 1992 filing by Alexander's Inc.
Section 5.12 BUSINESS PURPOSES. The loan evidenced by the
Note secured by the Security Instrument and the Other Security Documents (the
"LOAN") is solely for the business purpose of Borrower, and is not for
personal, family, household, or agricultural purposes.
Section 5.13 TAXES. Borrower has 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.
Borrower knows of no 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 all financing statements, rent rolls, reports, certificates
and other documents submitted in connection with the closing of the Loan are
accurate, complete and correct in all respects. There has been no material
adverse change in any condition, fact, circumstance or event that would make
any such information inaccurate, incomplete or otherwise misleading.
Section 5.16 NON-CONSOLIDATION OPINION ASSUMPTIONS. All
of the assumptions made in the Non-Consolidation Opinion, including, but not
limited to, any exhibits attached thereto, are true and correct.
Section 5.17 FEDERAL RESERVE REGULATIONS. No part of the
proceeds of the Loan will be used for the purpose of purchasing or acquiring
any "margin stock" within the meaning of Regulation U of the Board of Governors
of the Federal Reserve System or for any
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other purpose which would be inconsistent with such Regulation U or any other
Regulations of such Board of Governors, or for any purposes prohibited by Legal
Requirements or by the terms and conditions of this Security Instrument, the
Note or the Other Security Documents.
Section 5.18 ILLEGAL ACTIVITY. No portion of the
Property has been or will be purchased with proceeds of any illegal activity.
Section 5.19 CONTRACTS. All contracts, agreements,
consents, waivers, documents and writings of every kind or character at any
time to which Borrower is a party to be delivered to Lender pursuant to any of
the provisions of this Security Instrument are valid and enforceable against
Borrower and, to the best knowledge of Borrower, are enforceable against all
other parties (with the exception of Lender) thereto, and, to Borrower's actual
knowledge, in all respects are what they purport to be and, to the best
knowledge of Borrower, to the extent that any such writing shall impose any
obligation or duty on the party thereto or constitute a waiver of any rights
which any such party might otherwise have, said writing shall be valid and
enforceable against said party in accordance with its terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or similar laws affecting the rights of creditors generally.
Section 5.20 INVESTMENT COMPANY ACT. Borrower is not
(a) an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended;
(b) a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended; or (c)
subject to any other federal or state law or regulation which purports to
restrict or regulate its ability to borrow money.
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 members, 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 (l) or
Section 1.2, 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.
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(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 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, upon the written request of Lender, 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,
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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, provided, that such action shall not
alter the material terms of the Loan Documents. Borrower, on demand, will
execute and deliver and hereby authorizes Lender to execute in the name of
Borrower or without the signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or other instruments,
to evidence 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;
provided, however, that, Lender shall not exercise such power of attorney prior
to the expiration of (a) thirty (30) days after written notice to Borrower or
(b) such shorter period if deemed reasonably necessary by Lender in order to
preserve such rights and remedies.
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 upon written notice
to Borrower 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, upon written notice to
Borrower 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
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amount of the Note, (iii) the rate of interest of the Note, (iv) the terms
of payment and maturity date of the Note, (v) the date installments of
interest and/or principal were last paid, (vi) that, except as provided in
such statement, to Borrower's knowledge there are no defaults or events
which with the passage of time or the giving of notice or both, would
constitute an Event of Default under the Note or the Security Instrument,
(vii) that the Note and this Security Instrument are valid, legal and
binding obligations (subject to bankruptcy, insolvency, or other similar
laws affecting the rights of creditors generally) and have not been
modified or if modified, giving particulars of such modification, (viii)
whether any offsets or defenses exist against the obligations secured
hereby and, if any are alleged to exist, a detailed description thereof,
(ix) that all Leases (as updated in such statement) are in full force and
effect and, except as permitted pursuant to the terms and conditions of
this Security Instrument, have not been modified (or if otherwise modified,
setting forth all such modifications), (x) the date to which the Rents
thereunder have been paid pursuant to the Leases, (xi) whether or not, to
the best knowledge of Borrower, any of the lessees under the Leases are in
material default under the Leases, and, if any of the lessees are in
default, setting forth the specific nature of all such defaults, (xii) the
amount of security deposits held by Borrower under each Lease and that such
amounts are consistent with the amounts required under each Lease, and
(xiii) as to any other matters reasonably requested by Lender and
reasonably related to the Leases, the obligations secured hereby, the
Property or this Security Instrument.
(b) Borrower shall request and use its reasonable efforts to deliver
to Lender, promptly upon request, but not more often than once per twelve
(12) month period, duly executed estoppel certificates from any one or more
lessees as required by Lender attesting to such facts regarding the Lease
as Lender may reasonably require, including but not limited to attestations
that each Lease covered thereby is in full force and effect with, to the
best of their knowledge no defaults thereunder on the part of any party
(except as set forth therein), 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
(except as set forth therein); provided, however, that Borrower shall not
be required to deliver to Lender an estoppel certificate from a tenant
requiring more information than such tenant is obligated to provide
pursuant to the terms and conditions of the related Lease.
(c) Upon any transfer or proposed transfer contemplated by Section
19.1 hereof, at Lender's request, Borrower shall provide an estoppel
certificate to the Investor (defined in Section 19.1), or any prospective
Investor who has committed to purchase, in such form, substance and detail
as Lender, such Investor or prospective Investor may require.
Section 7.5 FLOOD INSURANCE. After Lender's request, Borrower shall
deliver evidence satisfactory to Lender that no portion of the Improvements is
situated in a federally designated "special flood hazard area" or if it is, that
Borrower has obtained insurance meeting the requirements of Section 3.3(a)(vii).
Section 7.6 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
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of Lender, be split or divided into two or more notes and two or more security
instruments, each of which shall cover all or a portion of the Property to be
more particularly described therein. To that end, Borrower, upon written request
of Lender, shall execute, acknowledge and deliver, 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.
Section 7.7 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 (i) with respect to any Other Security Document, Borrower
will issue, in lieu thereof, a replacement Other Security Document, dated the
date of such lost, stolen, destroyed or mutilated Other Security Document in the
same principal amount thereof and otherwise of like tenor and (ii) with respect
to the Note, Borrower will execute a reaffirmation of the Debt as evidenced by
such Note, acknowledging that the Note was lost, stolen, destroyed, or
mutilated, and that such Debt continues to be an obligation and liability of
Borrower as set forth in the Note, a copy of which shall be attached to such
reaffirmation.
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 principals in owning
and operating properties such as the Property in agreeing to make the Loan, 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 (collectively, a
"TRANSFER") within the meaning of this Article 8 shall be deemed to include, but
not be limited to, (a) an installment sales agreement wherein Borrower agrees to
sell the Property or any part thereof for a price to be paid in installments;
(b) an agreement by Borrower leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Borrower's right, title and interest in and to any Leases or any Rents; (c) if
Borrower or any general or limited partner or member of Borrower is a
corporation, the voluntary or involuntary sale, conveyance, transfer or pledge
of such corporation's stock (or the stock of any corporation directly or
indirectly controlling such
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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; (d) if Borrower or
any general or limited partner or member of Borrower is a limited or general
partnership or joint venture, the change, removal or resignation of a general
partner or managing partner or the transfer or pledge of the partnership
interest of any general partner or managing partner or any profits or proceeds
relating to such partnership interest or the voluntary or involuntary sale,
conveyance, transfer or pledge of limited partnership interests (or the limited
partnership interests of any limited partnership directly or indirectly
controlling such limited partnership by operation of law or otherwise) or the
creation or issuance of new limited partnership interests, by which an aggregate
of more than 10% of such limited partnership interests are held by parties who
are not currently limited partners; and (e) if Borrower or any general or
limited partner or member of Borrower is a limited liability company, the
change, removal or resignation of a managing member/director or the transfer of
the membership interest of any managing member or any profits or proceeds
relating to such membership interest or the voluntary or involuntary sale,
conveyance, transfer or pledge of membership interests (or the membership
interests of any limited liability company directly or indirectly controlling
such limited liability company by operation of law or otherwise) or the creation
or issuance of new membership interests, by which an aggregate of more than 10%
of such membership interests are held by parties who are not currently members.
Section 8.4 LENDER'S RIGHTS. Lender reserves the right to condition
the consent required pursuant to this Article 8 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 all of
Lender's Expenses, incurred in connection with such Transfer (including, without
limitation, Lender's reasonable attorneys' fees and expenses), payment, other
than with respect to a transfer permitted pursuant to Section 8.5 hereof, of a
transfer fee in an amount equal to $40,000 and a $10,000 processing fee, the
confirmation in writing by a Rating Agency that the proposed transferee will
not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned in connection with any
Securitization, or if a Securitization has not occurred, any ratings to be
assigned in connection with a Securitization, delivery of evidence that the
proposed transferee continues to comply with the covenants set forth in this
Security Instrument, including, without limitation, the covenants in Section 4.3
hereof (which evidence shall include a legal non-consolidation opinion
acceptable to Lender), or such other conditions as Lender shall determine in its
sole discretion to be in the interest of Lender. All of Lender's expenses
incurred and, except with respect to a Transfer pursuant to Section 8.5 hereof,
the $10,000 processing fee shall be payable by Borrower whether or not Lender
consents to the Transfer, excluding a Transfer pursuant to Section 8.5 hereof.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon a Transfer without Lender's consent. This
provision shall apply to every Transfer regardless of whether voluntary or not,
or whether or not Lender has consented to any previous Transfer.
Section 8.5 PERMITTED TRANSFERS. Notwithstanding anything to the
contrary in this Article 8, and provided that no Event of Default has occurred
and is continuing, Lender's prior written consent shall not be required with
respect to (a) Transfers of interest in Borrower between and among Borrower's
partners, members or shareholders, (b) Transfers of interests in
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Borrower's partners, members or shareholders between and among the partners,
members or shareholders thereof, (c) Transfers of interests of Borrower or in
Borrower's partners, members or shareholders to an immediate family member
(which shall be limited to a spouse, parent, child and grandchild) of such
partner, member or shareholder or to trusts formed for the benefit of immediate
family members of such partner, member or shareholder, (d) Transfers by devise
or descent or by operation of law upon the death of a partner, member or
shareholder, (e) Transfers of limited partnership interests, non-managing
membership interests or shareholder interests in Borrower up to an aggregate of
49% of such interest in Borrower; provided, however, that, in each such case,
(i) Lender must receive (except in the case of (d) above) sixty (60) days prior
written notice of any Transfer pursuant to this Section 8.5, (ii) Alexander's,
Inc. must retain at least a 51% direct ownership interest in Borrower or if the
prior written confirmation that such Transfer, in and of itself, will not result
in a downgrade, withdrawal or qualification of the initial, or, if higher, then
current ratings assigned in connection with any Securitization or if a
Securitization has not occurred, any ratings to be assigned in connection with
any Securitization is obtained, a 51% indirect ownership interest in Borrower,
(iii) such transfer shall not result in a change of control of Borrower or in
the day-to-day operations and management of the Property, and (iv) if requested
by Lender, Lender shall have received evidence satisfactory to it (which shall
include a legal non-consolidation opinion acceptable to Lender) that the single
purpose nature and bankruptcy remoteness of Borrower, its shareholders, partners
or members, as the case may be, following such transfers are in accordance with
the standards of the Rating Agencies. In addition, Lender's consent shall not be
required with respect to the following Transfers: (A) any transfer of an
ownership interest (directly or indirectly) in Borrower (or any successor or
other controlling entity of Borrower) that (I) occurs by reason of Borrower's
merging or consolidating with another person or (II) results in a Transfer to an
entity that is controlled, directly or indirectly, by an affiliate of Borrower,
provided that with respect to each such Transfer pursuant to this Subsection
8.5(A), (x) Lender receives sixty (60) days prior written notice of such
Transfer, (y) each Rating Agency has provided prior written confirmation that
such Transfer, in and of itself, will not result in a downgrade, withdrawal or
qualification of the initial, or, if higher, then current ratings assigned in
connection with any Securitization or if a Securitization has not occurred, any
ratings to be assigned in connection with any Securitization and (z) Lender
shall have received, if it requests, evidence satisfactory to Lender (which
shall include a legal non-consolidation opinion acceptable to Lender) that the
single purpose nature and bankruptcy remoteness of Borrower, its shareholders,
partners and members, as the case may be, following such Transfer, are in
accordance with the standards of the Rating Agencies; and (B) any transfer of an
ownership interest in any corporation other than Borrower, the outstanding
voting stock of which is listed on the New York Stock Exchange, the American
Stock Exchange or NASDAQ or, with respect to any such corporation, the transfer
of limited partnership interests in an operating partnership in which such
corporation is a general partner provided that such limited partnership does not
own a direct interest in Borrower; provided, that, if any Transfer pursuant to
Subsections (A) or (B) above occur and a successor manager to the manager of the
Property as of the date hereof is appointed, such successor manager must be a
reputable and experienced professional management company having under
management, at the time of the proposed transfer, at least six (6) regional
shopping centers or "power centers" comprising an aggregate of at least five (5)
million square feet of gross leaseable area (exclusive of the Property),
substantial experience in the management of regional malls, shopping centers or
"power centers" and each Rating Agency shall have provided prior written
confirmation that
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such Transfer, in and of itself, will not result in a downgrade, withdrawal or
qualification of the initial, or, if higher, then current ratings assigned in
connection with any Securitization or if a Securitization has not occurred, any
ratings to be assigned in connection with any Securitization. Any costs and
expenses incurred by Lender in connection with this Section 8.5 shall be paid by
Borrower.
ARTICLE 9 - PREPAYMENT
Section 9.1 PREPAYMENT. The Debt may be prepaid only in strict
accordance with the express terms and conditions of the Note including the
payment of any Yield Maintenance Premium that may be due.
Section 9.2 PREPAYMENT ON CASUALTY OR CONDEMNATION. Provided no Event
of Default has occurred and is continuing under the Note, this Security
Instrument or the Other Security Documents, in the event of any prepayment of
the Debt pursuant to the terms of Sections 3.3, 3.6 or 4.4 hereof, no fee or
other premium or consideration, including any Yield Maintenance Premium, shall
be due in connection therewith, but Borrower shall be responsible for all
interest which would have accrued on the principal balance of the Note after the
prepayment date to and including the next occurring ninth day of a calendar
month following the prepayment date, if such prepayment occurs on a date which
is not the tenth day of a month, and all other amounts due under the Note, this
Security Instrument and the Other Security Documents.
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 prior to the date the
same is due;
(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;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to Lender promptly after request;
(d) if Borrower, violates or does not comply with any of the
provisions of Section 4.3 or Article 8, including, but not limited to, if
Borrower shall fail to comply with the provisions of its articles or
certificate of incorporation; provided, however, that in the event of a
breach of Section 4.3, such a breach shall not constitute an Event of
Default so long as (i) such breach is inadvertent, immaterial and
non-recurring and (ii) if such breach is curable, Borrower shall promptly
cure such breach;
(e) if any representation or warranty of Borrower, or any member,
general partner, principal or beneficial owner of any of Borrower, made
herein or in the Environmental Indemnity (defined below), or in any
certificate, report, financial
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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 managing member/director or general partner
of Borrower shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, conservatorship or
relief of debtors, seeking to have an order for relief entered with respect
to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or the Borrower or any managing member or general partner of
Borrower shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against Borrower or any managing member or
general partner of Borrower any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of ninety (90) days; or
(iii) there shall be commenced against the Borrower or any managing member
or general partner of Borrower any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of any order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within ninety (90)
days from the entry thereof; or (iv) the Borrower or any managing member or
general partner of Borrower shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or any
managing member or general partner of Borrower 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 (i) as provided in Section 3.12 hereof or (ii) 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;
(i) if any federal tax lien is filed against Borrower, any member or
general partner of Borrower or the Property and same is not discharged of
record within thirty (30) days after same is filed;
(j) intentionally deleted;
(k) if (i) Borrower fails to timely provide Lender with the written
certification and evidence referred to in Section 4.2 hereof, or (ii)
Borrower consummates a transaction which would cause the Security
Instrument or Lender's exercise of its rights under this
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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;
(l) if Borrower shall fail to reimburse Lender on demand, with
interest calculated at the Default Rate, for all Insurance Premiums or
Taxes, together with interest and penalties imposed thereon, paid by Lender
pursuant to this Security Instrument;
(m) if Borrower shall fail to deliver to Lender, within twenty (20)
days after request by Lender, the estoppel certificates required pursuant
to the terms of Subsections 7.4(a) and (c);
(n) if Borrower shall fail to deliver to Lender, (i) the statements
referred to in Section 3.11(f) hereof in accordance with the terms thereof
or (ii) any statements referred to in Section 3.11, other than those
referred to in Section 3.11(f) hereof, within thirty (30) days after
request by Lender upon Borrower's failure to provide such statements as
required pursuant to Section 3.11 hereof;
(o) if any default occurs under that certain environmental indemnity
agreement dated the date hereof given by Borrower to Lender (the
"ENVIRONMENTAL INDEMNITY") and such default continues after the expiration
of applicable notice and grace periods, if any;
(p) intentionally deleted;
(q) if any of the assumptions contained in the Non-Consolidation
Opinion, including, but not limited to, any exhibits attached thereto, were
not true and correct in all material respects as of the date of such
Non-Consolidation Opinion or thereafter shall become untrue or incorrect in
any material respect; or
(r) 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, Borrower shall be permitted such
additional time as it shall require Borrower in the exercise of due
diligence to cure such default.
Section 10.2 LATE PAYMENT CHARGE. If any monthly installment of
principal and interest is not paid on or prior to 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
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delinquent payment, and such amount shall be secured by this Security Instrument
and the Other Security Documents.
Section 10.3 DEFAULT INTEREST. Borrower will pay, from the date of an
Event of Default through 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 on the unpaid
principal balance of the Note at a per annum rate equal to the lesser of (a)
four percent (4%) plus the Applicable Interest Rate (as defined in the Note),
and (b) the maximum interest rate which Borrower may by law pay or Lender may
charge and collect (the "DEFAULT RATE").
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, including, but not limited to, in accordance
with the terms and provisions of Article 14 of the New York Real Property
Actions and Proceedings Law;
(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) subject to Article 15 hereof, 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;
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(g) apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency
of Borrower or of any person, firm or other entity liable for the payment
of the Debt;
(h) subject to any applicable law, 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 or any Other Security Document to the payment of
the following items in any order in its uncontrolled discretion:
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(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; or
(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.
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 clause (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
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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 upon
notice to Borrower, which Lender, in its reasonable 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 to examine the records, books,
management and other papers of Borrower which reflect upon its financial
condition, at the Property or at any office regularly maintained by Borrower
where the books and records are located. Lender and its agents shall have the
right to make copies and extracts from the foregoing records and other papers.
In addition, Lender, its agents, accountants and attorneys shall have the right
to examine and audit the books and records of Borrower pertaining to the income,
expenses and operation of the Property during reasonable business hours at any
office of Borrower where the books and records are located.
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 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
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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. Subject to applicable law, 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. Subject to applicable law, 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 contained in Sections
13.2 and 13.3 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. The provisions of Sections 13.2 and 13.3 are
exceptions to any non-recourse or exculpation provisions in the Note, this
Security Instrument or the Other Security Documents, and Borrower is fully and
personally liable for the obligations pursuant to Sections 13.2 and 13.3. The
liability of Borrower is not limited to the original principal amount of the
Note. Notwithstanding the foregoing, subject to applicable law, 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
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administrative or judicial proceedings or actions initiated in connection with
any matter addressed in Article 12.
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. Borrower
represents and warrants, based upon an environmental assessment of the Property
and information that Borrower knows or should reasonably have known, that except
as disclosed to Lender in the Environmental Report (herein defined): (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 if required pursuant to said
Environmental Laws, have permits issued pursuant thereto and (ii) other than
Hazardous Substances that consist of cleaning or other products commonly used in
connection with the routine maintenance and repair of the Property or the
ordinary use of the Property as a shopping center, or otherwise fully disclosed
to Lender in writing pursuant to the written reports resulting from the
environmental assessments of the Property and other documentation delivered to
Lender (collectively, 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) at, adjacent to, or in connection
with, the Property, of possible liability of any person or entity pursuant to
any Environmental Law at, adjacent to, or in connection with, the Property,
other environmental conditions in connection with the Property, or any actual or
threatened administrative or judicial proceedings in connection with any of the
foregoing; and (f) Borrower has provided to Lender, in writing, any and all
material information relating to environmental conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and records, including but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property. "Environmental Law" means any applicable present and
future (during the term of this Security Instrument) federal, state and local
laws, statutes, ordinances, rules and regulations, as well as common law,
relating to the protection of 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 the environment. "Environmental Law" includes, but is not
limited to, the following statutes, as amended, any successor thereto, and any
regulations promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous Substances
Transportation Act; the Resource
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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 Rivers
and Harbors Appropriation Act. "Environmental Law" also includes, but is not
limited to, any applicable present and future (during the term of the Security
Instrument) federal, state and local laws, statutes, ordinances, rules and
regulations, 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; and imposing
conditions or requirements in connection with permits or other authorization for
lawful activity relating to environmental matters. "HAZARDOUS SUBSTANCES" means
any and all substances (whether solid, liquid or gas) defined, listed, or
otherwise regulated as pollutants, hazardous wastes, hazardous substances,
hazardous materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future (during the term of this Security
Instrument) Environmental Laws, 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 means any release, deposit, discharge,
emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement of Hazardous
Substances that is not in compliance with applicable Environmental Laws or a
valid permit issued pursuant thereto. "Remediation" means any response,
remedial, removal, or corrective action, any activity to cleanup, detoxify,
decontaminate, contain or otherwise remediate any Hazardous Substance, any
actions to prevent, cure or mitigate any Release of any Hazardous Substance, any
action to comply with any Environmental Laws or with any permits issued pursuant
thereto, any inspection, investigation, study, monitoring, assessment, audit,
sampling and testing, laboratory or other analysis, or evaluation relating to
any Hazardous Substances 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, provided, however, that, as set forth in
the Environmental Report, Sears, Roebuck & Co. is required to obtain a
certificate of operation for the boiler it operates at the Property and Borrower
shall use commercially reasonable efforts to cause Sears, Roebuck & Co. to file
an application for such certificate of operation and to diligently pursue such
application; (b) there shall be no Releases of Hazardous Substances in, on,
under or from the Property; (c) there shall be no Hazardous Substances in, on,
or under the Property, except those that are both (i) in compliance with all
Environmental Laws and with permits issued pursuant thereto and (ii) other than
Hazardous Substances that consist of cleaning or other products used in
connection with the routine maintenance and repair of the Property or the
ordinary use of the Property as a shopping center, or otherwise 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
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expeditiously cooperate in all activities pursuant to Section 12.3 below,
including but not limited to providing all reasonably relevant information and
making knowledgeable persons available for reasonable interviews; (f) Borrower
shall, at its sole cost and expense, perform any environmental site assessment
or other investigation of environmental conditions relating to the Property (an
"ENVIRONMENTAL ASSESSMENT"), pursuant to any reasonable written request of
Lender (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
Borrower shall use commercially reasonable efforts to cause the consultant to
agree that Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; provided, however, that Borrower shall
be responsible for the cost of such an Environmental Assessment no more often
than once per twelve (12) month period unless Lender shall have a reasonable
basis to believe that an environmental condition exists that is reasonably
likely to result in a violation of Environmental Laws or the imposition of
liability thereunder; (g) Borrower shall, at its sole cost and expense, comply
with all reasonable written requests of Lender to (i) reasonably effectuate
Remediation of any condition (including but not limited to a Release of a
Hazardous Substance) in, on, under or from the Property; (ii) comply with any
Environmental Law; (iii) comply with any directive from any governmental
authority; provided, that, in any such event, if Borrower meets the Contest
Requirements (as defined herein), Borrower shall have the right, at is own
expense, to defend against or challenge any such governmental directives or
requirements in accordance with applicable law; and (iv) take any other
reasonable action necessary or appropriate for protection of the environment;
provided, that, in any such event, Borrower shall have the right to defend
against or challenge any such governmental directives or requirements in
accordance with applicable law; (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 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
promptly 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 of which it has knowledge; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any threatened, or
the imposition of any actual, Environmental Lien; (D) any Remediation of
environmental conditions relating to the Property required or proposed by any
governmental regulatory entity; and (E) any written or oral notice or other
communication 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, or other environmental conditions, in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with environmental matters relating to the
Property. For the purposes of this Security Instrument, the term "CONTEST
REQUIREMENTS" shall mean: (i) Borrower has delivered prior written notice to
Lender of its intention to contest such directive, (ii) no Event of Default has
occurred and is continuing under the Note, this Security Instrument or any of
the Other Security Documents; (iii) Borrower is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt affecting
the Property; (iv) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower or the
Property is
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subject and shall not constitute a default thereunder; (v) neither the Property,
any part thereof or interest therein, any of the tenants or occupants thereof,
nor Borrower shall be affected in any material adverse way as a result of such
proceeding; (vi) non-compliance with the directive shall not impose civil or
criminal liability on Borrower or Lender; (vii) in the event that cost of
compliance with the governmental directives or requirements will equal or exceed
$1,000,000,00 in the reasonable discretion of Lender, Borrower shall have
furnished the security as may be required by Lender to ensure compliance by
Borrower with the directive; and (viii) Borrower shall have furnished to Lender
all other items reasonably requested by Lender.
Section 12.3 LENDER'S RIGHTS. If an Event of Default exists or in the
event that Borrower shall have failed to undertake the Environmental Assessment
reasonably requested by Lender pursuant to paragraph 12.2(f) above, then 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 using a nationally recognized environmental consultant
reasonably acceptable to Borrower. 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, 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 arising out of or in any way relating to any one or more of the
following: (a) ownership of this Security Instrument, the Property or any
interest therein or receipt of any Rents; (b) any amendment to, or restructuring
of, the Debt, and the Note, 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 and/or any member, partner,
joint venturer or shareholder thereof becoming a party to a voluntary or
involuntary federal or state bankruptcy, insolvency or similar proceeding; (d)
any accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(e) any use, nonuse or condition in, on or about the Property or any part
thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (f) any failure on the part of Borrower to
perform or be in compliance with any of the terms of this Security Instrument;
(g) performance of any labor or services or the furnishing of any materials or
other
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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; (l) the payment of any commission, charge or brokerage
fee to anyone which may be payable in connection with the funding of the Loan
evidenced by the Note and secured by this Security Instrument; or (m) any
misrepresentation made by Borrower in this Security Instrument or any Other
Security Document; provided, however, that Borrower shall not be liable to an
Indemnified Party for any Losses caused by the gross negligence or willful
misconduct of such Indemnified Party. 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, any person or entity who is or
will have been involved in the servicing of the Loan, any person or entity in
whose name the encumbrance created by this Security Instrument is or will have
been recorded, persons and entities who may hold or acquire or will have held a
full or partial interest in the Loan (including, but not limited to, Investors
or prospective Investors in the Securities, as well as custodians, trustees and
other fiduciaries who hold or have held a full or partial interest in the Loan
for the benefit of third parties) as well as the respective directors, officers,
shareholders, partners, members, 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 or the Property, whether during
the term of the Loan or as a part of or following a foreclosure of the Loan and
including, but not limited to, any successors by merger, consolidation or
acquisition of all or a substantial portion of Lender's assets and business).
Section 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).
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Section 13.4 INTENTIONALLY DELETED.
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 INTENTIONALLY DELETED.
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.
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Section 14.6 SURVIVAL. The indemnifications made pursuant to
Subsection 13.3 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. The representations and warranties,
covenants, and other obligations arising under Article 12, shall continue until
the satisfaction of the debt; provided, however, that, Borrower shall not be
responsible for environmental conditions arising after the point in time that
Lender takes actual possession of the Property by foreclosure or a deed in lieu
thereof.
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. Notwithstanding anything to the contrary
contained in this Security Instrument or any other document or certificate
executed in connection with the Loan or any Securitization (but subject to the
exceptions expressly provided herein) none of Borrower, any member of Borrower,
any partner, member, shareholder, director, officer, employee or agent of
Borrower or of any such member, and any legal representative, heir, estate,
successor or assign of any of the foregoing, shall have any personal liability
for any payment which is or may be payable hereunder or under any other loan
document, or for the performance of any covenants contained in, or for any other
claims arising under or with respect hereto or any other loan document, it being
understood that all of Borrower's obligations shall be enforceable only against
Borrower's interest in the Property, the rents and other collateral given to
Lender in accordance herewith. 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 (i) a foreclosure action or other appropriate action or
proceeding to enable Lender to 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 and (ii) an action
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for injunctive relief enjoining Borrower from violating this Security
Instrument, 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 Section
11.10, 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 name Borrower as a party defendant
in any action or suit for judicial foreclosure and sale under this Security
Instrument; (c) affect the validity or enforceability of any indemnity,
guaranty, master lease or similar instrument made in connection with the Note,
this Security Instrument, or the Other Security Documents; (d) impair the right
of Lender to obtain the appointment of a receiver; (e) impair the enforcement of
the Assignment of Leases and Rents executed in connection herewith; or (f)
impair the right of Lender to enforce the provisions of Sections 11.10, 13.2 and
13.3 of this Security Instrument.
Section 15.3 EXCEPTIONS TO EXCULPATION. Notwithstanding the provisions
of this Article to the contrary, Borrower (but not its members, partners or
shareholders except to the extent any such member, partner or shareholder is
liable for Losses due to its own fraud or intentional misrepresentation) shall
be personally liable to Lender for the Losses it incurs due to: (i) fraud or
intentional misrepresentation by Borrower or any agent acting on behalf of
Borrower in connection with the execution and the delivery of the Note, this
Security Instrument or the Other Security Documents; (ii) Borrower's
misapplication or misappropriation of Rents received by Borrower after the
occurrence of an Event of Default; (iii) Borrower's misappropriation of tenant
security deposits or Rents collected in advance; (iv) the misapplication or the
misappropriation of insurance proceeds or condemnation awards; (v) Borrower's
failure to pay Taxes, Other Charges, but only to the extent such Other Charges
may be superior to the lien of this Security Instrument (except to the extent
that sums sufficient to pay such amounts have been deposited in escrow with
Lender pursuant to the terms of this Security Instrument); (vi) intentionally
omitted; (vii) any act of arson by Borrower, any principal, affiliate, member or
general partner thereof; (viii) any fees or commissions paid by Borrower to any
principal, affiliate, member or general partner of Borrower in violation of the
terms of the Note, this Security Instrument or the Other Security Documents; or
(ix) Borrower's failure to comply with the provisions of Sections 4.2, 12.1 and
12.2 of this Security Instrument.
Section 15.4 RECOURSE. Notwithstanding the foregoing, the agreement of
Lender not to pursue recourse liability against Borrower as set forth in Section
15.1 above SHALL BECOME NULL AND VOID (but not as to Borrower's members,
partners or shareholders) and shall be of no further force and effect in the
event of Borrower's default under Sections 8.1, 8.2, 8.3 or 8.4.
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
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provisions of the U.S. Bankruptcy Code to file a claim for the full amount of
the Debt secured by this Security Instrument or to require that all collateral
shall continue to secure all of the Debt owing to Lender in accordance with the
Note, this Security Instrument and the Other Security Documents.
ARTICLE 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 and confirmed by telephone by sender, (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: Alexander's Rego Shopping Center, Inc.
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Chief Financial Officer
Facsimile No.: (201) 587-0600
With a copy to: Whitman Breed Abbott & Morgan LLP
200 Park Avenue
New York, New York 10166
Attention: Patricia Van B. Madsen
Facsimile No.: (212) 351-3131
and
Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Vice President for Real Estate
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If to Lender: The Chase Manhattan Bank
c/o Chase Commercial Mortgage Banking Corp.
Servicing Department
380 Madison Avenue, 10th Floor
New York, New York 10017
Attention: Ms. Janice Smith
Facsimile No.: (212) 622-3553
and
The Chase Manhattan Bank
Legal Department
270 Park Avenue, 39th Floor
New York, New York 10017
Attention: Ronald A. Wilcox, Esq.
Facsimile No.: (212) 270-2934
With a copy to: Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
Attention: William P. McInerney, Esq.
Facsimile No.: (212) 504-6666
or addressed as such party may from time to time designate by written notice to
the other parties.
Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.
For purposes of this Subsection, "Business Day" shall mean a day on
which commercial banks are not authorized or required by law to close in New
York, New York.
ARTICLE 17 - SERVICE OF PROCESS
Section 17.1 CONSENT TO SERVICE.
(a) Borrower will maintain a place of business or an agent for service
of process in New York, New York and give prompt notice to Lender of the
address of such place of business and of the name and address of any new
agent appointed by it, as appropriate. Borrower further agrees that the
failure of its agent for service of process to give it notice of any
service of process will not impair or affect the validity of such service
or of any judgment based thereon. If, despite the foregoing, there is for
any reason no agent for service of process of Borrower available to be
served, and if it at that time has no place of business in New York, New
York, then Borrower irrevocably consents to service of process by
registered or certified mail, postage prepaid, to it at its address given
in or pursuant to the first paragraph hereof.
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(b) Borrower initially and irrevocably designates its Chief Financial
Officer, with offices on the date hereof at c/o Vornado Realty Trust, Park
80 West, Plaza II, Saddle Brook, New Jersey 07663, to receive for and on
behalf of Borrower service of process in New York, New York with respect to
this Security Instrument.
Section 17.2 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 United States District Court located in the
Borough of Manhattan in New York, New York, 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 17.3 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 DEEMED
TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, PROVIDED HOWEVER, THAT WITH RESPECT TO
THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN OF THIS SECURITY
INSTRUMENT, AND THE DETERMINATION OF DEFICIENCY JUDGMENTS, THE LAWS OF THE STATE
WHERE THE PROPERTY IS LOCATED SHALL APPLY.
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
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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 SALE OF NOTE AND SECURITIZATION.
At the request of the holder of the Note and, to the extent not
already required to be provided by Borrower under the Note, this Security
Instrument or the Other Security Documents, Borrower shall, and shall cause its
affiliates to, cooperate in good faith with the holder of the Note and any
purchaser, transferee, assignee, servicer, participant or other potential
investor (collectively, the "INVESTOR") or by the Rating Agencies in connection
with one or more sales, transfers or assignments of the Loan, or grants of
participation interests therein, in connection with a securitization of such
Note or interests therein (such sale and/or securitization, the
"SECURITIZATION") involving the issuance of rated or unrated single-class or
multi-class securities (the "SECURITIES") secured by or evidencing direct or
indirect ownership interests in, among other things, the Note and the Security
Instrument. Such efforts shall include, without limitation, to:
(a) (i) provide such financial and other information with respect to
the Property, Borrower, any entity directly owning a ten percent
(10%) or greater interest in Borrower (each and collectively, the
"PRINCIPAL"), and any property manager as necessary or
appropriate in connection with the Securitization (including,
without limitation, audited or unaudited financial statements),
provided, however, if Principal is a corporation whose voting
stock is listed on the New York Stock Exchange, the American
Stock Exchange or NASDAQ, Borrower shall only be required to
provide public information with respect to such Principal, (ii)
provide such public financial and other public information with
respect to Vornado Realty Trust if such entity owns, directly or
indirectly, a ten percent (10%) or greater interest in Borrower
as necessary or appropriate in connection with the
Securitization, (iii) provide budgets relating to the Property
and (iv) perform or permit or cause to be performed or permitted
such site inspections, appraisals, market studies, environmental
reviews and reports (Phase I's and, if appropriate, Phase II's),
engineering reports and other due diligence investigations of the
Property, as may be requested by the holder of the Note, the
Rating Agencies and/or Investors in the Securities, or as may be
necessary or appropriate in connection with the Securitization
(such information in clauses (i), (ii), (iii) and (iv) being
collectively referred to as the "PROVIDED INFORMATION"), together
with appropriate verification and/or consents with respect to the
Provided Information through letters of auditors or opinions of
counsel of
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independent attorneys acceptable to the holder of the Note and
the Rating Agencies;
(b) Intentionally Omitted;
(c) cause counsel to render opinions, which may be relied upon by the
holder of the Note, the Rating Agencies Investors and/or other
participants in the Securitization and their respective counsel,
agents and representatives, as to non-consolidation, fraudulent
conveyance, and true sale or any other opinion customary in
securitization transactions with respect to the Property,
Borrower, Principal, and their respective affiliates, which
counsel and opinions shall be satisfactory to the holder of the
Note and the Rating Agencies;
(d) if required by the Rating Agencies, use commercially reasonable
efforts to obtain and deliver to Lender such additional tenant
estoppel letters, subordination agreements or other agreements
from parties to agreements that affect the Property, which
estoppel letters, subordination agreements or other agreements
shall be in the form required pursuant to the existing Leases or
such other form as may be reasonably satisfactory to Lender and
the Rating Agencies and/or Investors in the Securities;
(e) reaffirm the representations and warranties contained in the Loan
Documents as of the closing date of the Securitization with
respect to the Property, Borrower, Principal, the Note, Security
Instrument and Other Security Documents as may be requested by
the holder of the Note, the Rating Agencies and/or Investors in
the Securities and as are consistent with the facts covered by
such representations and warranties as they exist on the date
thereof, including the representations and warranties made in the
Note, Security Instrument and Other Security Documents; and
(f) execute such amendments to the Note, Security Instrument, Other
Security Documents and organizational documents as may be
requested by the holder of the Note, the Rating Agencies and/or
Investors in the Securities or otherwise to effect the
Securitization; provided, however, that Borrower shall not be
required to (i) modify or amend the Note, Security Instrument or
any Other Security Documents if such modification or amendment
would (A) change the interest rate, the stated maturity or the
amortization of principal set forth in the Note or (B) have a
material adverse effect on Borrower or (ii) modify or amend any
organizational documents if such modification or amendment would
have a material adverse effect on Borrower.
All third party costs and expenses incurred in connection with
Borrower's compliance with requests made under this Section 19.1 and Borrower's
attorneys' fees in connection with new opinions, new organizational documents or
new Loan Documents required to be delivered pursuant to this Section 19.1 shall
be paid by Lender; provided, however
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Borrower shall be responsible for all other attorneys' fees incurred by Borrower
in connection with its compliance with this Article 19, including, but not
limited to, attorneys' fees incurred as a result of Lender's request for
modifications, updates or clarifications with respect to legal opinions,
organizational documents or Loan Documents.
Section 19.2 SECURITIZATION INDEMNIFICATION.
(a) Borrower understands that certain of the Provided Information may
be included in disclosure documents in connection with the Securitization,
including, without limitation, a prospectus, prospectus supplement, or private
placement memorandum, collateral term sheets, structured term sheets and
computational materials (each, a "DISCLOSURE DOCUMENT") and may also be included
in filings with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the "SECURITIES ACT"), or the Securities
Exchange Act of 1934, as amended (the "EXCHANGE Act"), or provided or made
available to Investors in the Securities, the Rating Agencies, and service
providers relating to the Securitization. In the event that such Disclosure
Document is required to be revised prior to the sale of all Securities, Borrower
will cooperate upon request, with the holder of the Note in updating the
Disclosure Document by providing all current information necessary to keep the
Disclosure Document accurate and complete in all material respects.
(b) Borrower agrees to provide in connection with each of (i) a
preliminary and a private placement memorandum and/or (ii) a preliminary and
final prospectus or prospectus supplement, as applicable, an indemnification
certificate (A) certifying that Borrower has carefully examined in each such
memorandum or prospectus, as applicable, all sections containing information
relating to the Property, Borrower or Principal, and that such information
included therein (collectively, the "SECURITIZATION INFORMATION"), does not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading with respect to the
Property, Borrower or Principal, (B) indemnifying Lender (and for purposes of
this Section 19.2, Lender hereunder shall include its officers, directors and
employees), the person who acts as depositor, issuer and/or registrant who may
have filed a registration statement relating to the Securitization, each
underwriter or placement agent involved in the Securitization, each of their
respective directors and officers and each person or entity who controls such
person within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively, the "INDEMNIFIED GROUP"), for any losses,
claims, damages or liabilities (collectively, the "LIABILITIES") to which any of
the Indemnified Group may become subject insofar as the Liabilities arise out of
or are based upon any untrue statement of any material fact contained in the
Securitization Information or arise out of or are based upon the omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading and (C) agreeing to reimburse each person in the
Indemnified Group for any reasonable legal or other expenses incurred by each
such person in connection with investigating or defending the Liabilities;
provided, however, that Borrower will be liable in any such case under clauses
(B) or (C) above only to the extent that any such Liability arises out of or is
based upon any Provided Information or upon the omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or any other information furnished
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to Lender or any other person in the Indemnified Group by or on behalf of
Borrower in connection with the preparation of any Disclosure Document or in
connection with the underwriting of the Debt, including, without limitation,
financial statements of Borrower or Principal, operating statements, rent rolls,
environmental site assessment reports and property condition reports with
respect to the Property. Nothing contained herein shall impose liability upon
Borrower for any Liability arising out of or based upon an untrue statement of,
or an omission to state, any material fact contained in any statement, report or
document provided to Lender on behalf of Borrower by a party who is not an
affiliate of Borrower (a "THIRD PARTY REPORT") unless Borrower has actual
knowledge that such Third Party Report contains such untrue statement or
omission. The term "ACTUAL KNOWLEDGE" when used in the preceding sentence shall
not imply or require Borrower to make any independent investigations of any
facts or circumstances. Nothing contained herein shall impose liability upon
Borrower for any Liability arising out of or based upon an untrue statement of,
or omission to state, any material fact contained in any projections or
forecasts provided to Lender by Borrower, provided such projections or forecasts
were made in good faith. This indemnity agreement is in addition to any
liability which Borrower may otherwise have.
(c) In connection with filings under the Exchange Act, Borrower
agrees to indemnify (i) each person in the Indemnified Group for Liabilities to
which each such person may become subject insofar as the Liabilities arise out
of or are based upon an untrue statement or an omission to state in the Provided
Information a material fact necessary in order to make the statements in the
Provided Information, in light of the circumstances under which they were made,
not misleading and (ii) each person in the Indemnified Group for any legal or
other expenses incurred by each such person in connection with defending or
investigating the Liabilities.
(d) Promptly after receipt by a party seeking indemnification
hereunder of notice of the commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made under this Section
19.2, such party will notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent that
failure to notify causes prejudice to the indemnifying party. In the event that
any action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled, jointly with any other indemnifying party, to participate therein and,
to the extent that it (or they) may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel satisfactory to
such indemnified party. After notice from the indemnifying party to such
indemnified party under this Section 19.2, the indemnifying party shall be
responsible for any reasonable legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there are any legal
defenses available to it and/or other indemnified parties that are different
from or in addition to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. The indemnifying
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party shall not be liable for the expenses of more than one separate counsel
unless an indemnified party shall have reasonably concluded that there may be
legal defenses available to it that are different from or additional to those
available to another indemnified party.
(e) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 19.2(b)
or (c) is for any reason held to be unenforceable, unavailable or insufficient
to hold harmless an indemnified party in respect of any Liabilities which would
otherwise be indemnifiable under Section 19.2(b) or (c), each indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such Liabilities; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, the following factors
shall be considered: (i) the relative knowledge and access to information
concerning the matter with respect to which a claim was asserted; (ii) the
opportunity to correct and prevent any statement or omission; and (iii) any
other equitable considerations appropriate in the circumstances. Lender and
Borrower hereby agree that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation.
(f) The liabilities and obligations of Borrower hereunder shall
survive the termination of the Note, Security Instrument and Other Security
Documents and the satisfaction and discharge of the Debt.
(g) Each person in the Indemnified Group is an intended third party
beneficiary of the obligations of Borrower herein.
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 the Loan, (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
reasonable 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 within ten (10) days
after demand therefor all such reasonable fees (as the same may be increased or
decreased from time to time), and any additional reasonable out of pocket 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 (other than those fees and costs
specifically excluded from the responsibility of Borrower in Section 19.1
hereof). 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.
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
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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 reasonable 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, limited liability company, trust, unincorporated
association, government, governmental authority, and any other entity, the word
"Property" shall include any portion of the Property and any interest therein,
and the phrases "attorneys' fees" and "counsel fees" shall include any and all
attorneys', paralegal and law clerk fees and disbursements, including, but not
limited to, fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in the Property, the
Leases and the Rents and enforcing its rights 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.
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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 SUBROGATION. If any or all of the proceeds of the Note
have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Note and the Other
Security Documents and the performance and discharge of the Other Obligations.
Section 22.8 FUTURE ASSIGNMENT OF MORTGAGE. If a prepayment or
defeasance is permitted under this Security Instrument or upon payment on the
Maturity Date, then, upon not less than thirty (30) days written notice to
Lender by Borrower and provided that the Security Instrument continues to secure
a bona fide obligation of the Borrower, Lender agrees to assign the Note, the
Security Instrument and the Other Security Documents all without recourse,
covenant or warranty of any nature, express or implied, to any party designated
by Borrower (other than Borrower or a nominee of Borrower) provided that
Borrower shall have first caused the payment (in the event of a prepayment) to
Lender of an amount equal to the Obligations (including, without limitation, all
unpaid principal, interest and any Yield Maintenance Premium due) or (in the
event of a defeasance) the Borrower has either (x) complied with the provisions
of Article 5 of the Note or (y) caused to be assigned to Lender by a party
designated by Borrower an assignment of a substitute note to be secured by the
U.S. Obligations delivered (such substitute note to have the same term, interest
rate, unpaid principal balance and all other material terms and conditions of
the Note) and complied with all other provisions of Article 5 of the Note. In
addition, any such assignment shall be conditioned on the following: (a) payment
by Borrower of (i) Lender's then customary administrative fee for processing
assignments of mortgage; (ii) the reasonable expenses of Lender incurred in
connection therewith; and (iii) Lender's reasonable attorney's fees for the
preparation, delivery and performance of such an assignment; (b) Borrower shall
have caused the delivery of an executed Statement of Oath under Section 275 of
the New York Real Property Law; (c) such an assignment is not then prohibited by
any federal, state or local law, rule, regulation, order, or by any other
governmental authority; (d) such assignment is not a prohibited transaction for
any REMIC Trust formed pursuant to a Securitization and will not disqualify such
REMIC Trust as a "real estate mortgage investment conduit" within the meaning of
the Code solely as a result of such assignment, and (e) Borrower shall provide
such other items, information and documents
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reasonably necessary in the determination of Lender to effectuate such
assignment. Borrower shall be responsible for all taxes, recording fees and
other charges payable in connection with any such assignments.
Subject to the requirements set forth above in this section, Borrower
and Lender shall cooperate to effect any proposed assignment in any other manner
satisfactory to both Lender and Borrower.
Section 22.9 BROKERS. Lender hereby represents that it has dealt with
no broker in connection with this transaction.
Section 22.10 WITHHOLDINGS. If, pursuant to the terms of this Security
Agreement, the Loan is transferred to any transferee which is organized under
the laws of any jurisdiction other than the United States or any state thereof,
the transferor shall cause such transferee, concurrently with the effectiveness
of such transfer, (a) to furnish to the transferor and Borrower either United
States Internal Revenue Service Form 4224 or United States Internal Revenue
Service Form 1001 (wherein such transferee claims entitlement to complete
exemption from United States federal withholding tax on all interest payments
hereunder) and (b) to agree, for the benefit of the transferor and Borrower, to
provide the transferor and Borrower a new United States Internal Revenue Service
Form 4224 or United States Internal Revenue Service Form 1001 upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and regulations and
amendments duly executed and completed by such transferee, and to comply from
time to time with all applicable United States laws and regulations with regard
to such withholding tax exemption. However, in the event that any change in law,
rule, regulation, treaty or directive, or in the interpretation or application
thereof (a "LAW CHANGE"), has occurred prior to the date on which any delivery
pursuant to the preceding sentence would otherwise be required which renders
such forms inapplicable, or which would prevent such transferee from duly
completing and delivering any such forms, such transferee shall not be obligated
to deliver such forms but shall, promptly following such Law Change, but in any
event prior to the time the next payment hereunder is due following such Law
Change, advise Borrower in writing whether it is capable of receiving payments
without any deduction withholding of taxes.
ARTICLE 23 - ADDITIONAL NEW YORK PROVISIONS
Section 23.1 CONTROLLING PROVISIONS. In the event of any
inconsistencies between the terms and conditions of Articles 1-22 of this
Security Instrument and Article 23, the terms of Article 23 shall control and be
binding.
Section 23.2 COMMERCIAL PROPERTY. Borrower represents that this
Security Instrument does not encumber real property principally improved or to
be improved by one or more structures containing in the aggregate not more than
six residential dwelling units, each having its own separate cooking facilities.
Section 23.3 MAXIMUM PRINCIPAL INDEBTEDNESS. Notwithstanding anything
to the contrary contained herein, the maximum amount of principal indebtedness
secured by the
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Security Instrument or which under any contingency may be secured by the
Security Instrument is $82,000,000.00.
Section 23.4 INSURANCE PROCEEDS. In the event of any conflict,
inconsistency or ambiguity between the provisions of Sections 3.3 and 4.4 hereof
and the provisions of Subsection 4 of Section 254 of the Real Property Law of
New York covering the insurance of buildings against loss by fire, the
provisions of Sections 3.3 and 4.4 hereof shall control.
Section 23.5 TRUST FUND. Pursuant to Section 13 of the lien law of New
York, Borrower shall receive the advances secured hereby and shall hold the
right to receive such advances as a trust fund to be applied first for the
purpose of paying the cost of any improvement and shall apply such advances
first to the payment of the cost of any such improvement on the Property before
using any part of the total of the same for any other purpose.
Section 23.6 SECTION 291-F AGREEMENT. This Security Agreement is
intended to be, and shall operate as, the agreement described in Section 291-f
of the Real Property Law of the State of New York and shall be entitled to the
benefits afforded thereby. Borrower shall (unless such notice is contained in
such tenant's Lease) deliver notice of this Security Agreement in form and
substance acceptable to Lender, to all present and future holders of any
interest in any Lease, by assignment or otherwise, and shall take such other
action as may now or hereafter be reasonably required to afford Lender the full
protections and benefits of Section 291-f. Borrower shall request the recipient
of any such notice to acknowledge the receipt thereof.
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DEFINITIONS
The terms set forth below are defined in the following Sections of
this Security Instrument:
(a) Affiliated Loan: Article 3, Subsection 3.11(k);
(b) Applicable Laws: Article 3, Subsection 3.10(a);.Approval Lease:
Article 3, Subsection 3.7(c);
(c) Acquired Property: Article 3, Subsection 3.11(f)(i);
(d) Acquired Property Statements: Article 3, Subsection 3.11(f)(i);
(e) Award: Article 3, Section 3.6;
(f) Attorneys' Fees/Counsel Fees: Article 21, Section 21.1;
(g) Bankruptcy Code: Article 1, Subsection 1.1(f);
(h) Borrower: Preamble, and Article 21, Section 21.1;
(i) Business Day: Article 16, Section 16.1;
(j) Cash Management Agreement: Article 1, Subsection 1.1(n);
(k) Casualty Consultant: Article 4, Subsection 4.4(b)(iii);
(l) Casualty Restoration: Article 3, Subsection 3.3(h);
(m) Casualty Retainage: Article 4, Subsection 4.4(b)(iv);
(n) Condemnation Proceeds: Article 4, Section 4.4;
(o) Condemnation Restoration: Article 3, Subsection 3.6;
(p) Contest Requirements: Article 12, Section 12.2;
(q) Debt: Article 2, Section 2.1;
(r) Default Rate: Article 10, Section 10.3;
(s) Disclosure Document: Article 19, Section 19.1;
(t) Environmental Indemnity: Article 10, Subsection 10.1(q);
(u) Environmental Law: Article 12, Section 12.1;
(v) Environmental Liens: Article 12, Subsection 12.2(d);
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(w) Environmental Report: Article 12, Subsection 12.1(a)
(x) ERISA: Article 4, Subsection 4.2(a);
(y) Escrow Fund: Article 3, Section 3.5;
(z) Event: Article 20, Section 20.1;
(aa) Event of Default: Article 10, Section 10.1;
(bb) Excess Amount: Article 3; Section 3.14;
(cc) Exchange Act Filing: Article 3, Subsection 3.11(i);
(dd) Flood Insurance Acts: Article 3, Subsection 3.3(a)(vii);
(ee) Full Replacement Cost: Article 3, Subsection 3.3(a)(i)(A);
(ff) GAAP: Article 3, Subsection 3.11(a);
(gg) Hazardous Substances: Article 12, Section 12.1;
(hh) Improvements: Article 1, Subsection 1.1(c);
(ii) Indemnified Group: Article 19, Section 19.2;
(jj) Indemnified Parties: Article 13, Section 13.1;
(kk) Insurance Premiums: Article 3, Subsection 3.3(b);
(ll) Insurance Proceeds: Article 4, Section 4.4;
(mm) Investor: Article 19, Section 19.1;
(nn) Law: Article 1, Subsection 1.1(a);
(oo) Law Change: Article 22, Subsection 22.10;
(pp) Leases: Article 1, Subsection 1.1(f);
(qq) Lender: Preamble and Article 21, Section 21.1;
(rr) Letter of Credit: Article 3, Section 3.14;
(ss) Liabilities: Article 19; Section 19.2
(tt) Loan: Article 5, Subsection 5.12;
(uu) Loan Application: Article 5, Section 5.15;
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(vv) Lockbox Account: Article 1, Subsection 1.1(a)(n);
(ww) Losses: Article 13, Section 13.1;
(xx) Net Proceeds: Article 4, Subsection 4.4(b);
(yy) Net Proceeds Deficiency: Article 4, Subsection 4.4(b)(vi);
(zz) Non-Consolidation Opinion: Article 3, Subsection 3.15;
(aaa) Note: Article 21, Section 21.1;
(bbb) Obligations: Article 2, Section 2.3;
(ccc) Offering Document Date: Article 3, Subsection 3.11(f)(iv);
(ddd) Other Charges: Article 3, Subsection 3.4(a);
(eee) Other Obligations: Article 2, Section 2.2;
(fff) Other Security Documents: Article 3, Section 3.2;
(ggg) Permitted Exceptions: Article 5, Section 5.1;
(hhh) Person: Article 21, Section 21.1;
(iii) Personal Property: Article 1, Subsection 1.1(e);
(jjj) Policies/Policy: Article 3, Subsection 3.3(b);
(kkk) Property: Article 1, Section 1.1 and Article 21, Section 21.1;
(lll) Qualified Insurer: Article 3, Subsection 3.3(b);
(mmm) Rating Agency: Article 3, Subsection 3.3(b);
(nnn) Release: Article 12, Section 12.1;
(ooo) Remediation: Article 12, Section 12.1;
(ppp) Rents: Article 1, Subsection 1.1(f);
(qqq) Restoration: Article 3, Subsection 3.6;
(rrr) Securities: Article 19, Section 19.1;
(sss) Securities Act: Article 19, Section 19.1;
(ttt) Securitization Information: Article 19, Section 19.2;
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(uuu) Security Deposits: Article 3, Subsection 3.7(f);
(vvv) Security Instrument: Preamble;
(www) SNDA: Article 3, Subsection 3.7(g);
(xxx) Standard Statements: Article 3, Subsection 3.11(f)(i);
(yyy) Taxes: Article 3, Subsection 3.4(a);
(zzz) Threshold Amount" Article 3, Section 3.14;
(aaaa) Transfer: Article 8, Subsection 8.3; and
(bbbb) Uniform Commercial Code: Article 1, Subsection 1.1(e).
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower the day and year first above written.
BORROWER:
ALEXANDER'S REGO SHOPPING CENTER, INC.,
a Delaware corporation
By: /s/ Brian Kurtz
-----------------------------------------
Name: Brian Kurtz
Title: Treasurer and Secretary
LENDER:
THE CHASE MANHATTAN BANK,
a New York banking corporation
By: /s/ Dean C. Ravosa
-----------------------------------------
Name: Dean C. Ravosa
Title: Vice President
87
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ______ day of May, 1999, before me personally came
________________________, to me known, who, being by me duly sworn, did depose
and say that he resides at____________________________________________________
___________________________________________________________; that he is the
______________________________ of Alexander' Rego Shopping Center, Inc. which is
the corporation that executed the foregoing instrument and that he signed his
name thereto by authority of the ___________________________________________ of
said corporation as such_____________________________ .
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88
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ______ day of May, 1999, before me personally came
________________________, to me known, who, being by me duly sworn, did depose
and say that he resides at____________________________________________________
___________________________________________________________; that he is the
______________________________ of The Chase Manhattan Bank, which is the
corporation that executed the foregoing instrument and that he signed his name
thereto by authority of the ___________________________________________ of said
corporation as such _____________________.
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89
EXHIBIT A
(DESCRIPTION OF LAND)
90
EXHIBIT B
DESCRIPTION OF MORTGAGES
91
EXHIBIT C
FORM OF SUBORDINATION AGREEMENT
92
SCHEDULE 1
LITIGATION
NONE.
93
SCHEDULE 2
MECHANICS LIENS
BONDED AND DISCHARGED LIENS PRESENTLY SUBJECT TO LITIGATION
NAME OF LIENOR AMOUNT OF LIEN AMOUNT OF BOND FILE DATE
- -------------------------------------------------------------------------------------------------------------------------------
C. Raimondo and Sons Construction $ 1,044,963.00 $ 1,149,459.00 7/9/96
- -------------------------------------------------------------------------------------------------------------------------------
Avon Contractors, Inc. $ 257,899.25 $ 283,689.17 5/3/96
- -------------------------------------------------------------------------------------------------------------------------------
UNBONDED ACTIVE LIENS WITH FIXED BOND AMOUNTS
NAME OF LIENOR AMOUNT OF LIEN AMOUNT OF BOND FILE DATE
- -------------------------------------------------------------------------------------------------------------------------------
J. United Electrical Contracting Corp. $ 123,734.00 $ 136,117.00 9/3/97 - 9/2/98
- -------------------------------------------------------------------------------------------------------------------------------
Metro Steel Erectors $ 23,375.06 $ 25,712.00 9/4/97 - 8/28/98
- -------------------------------------------------------------------------------------------------------------------------------
Winco Corp. $ 30,000.00 $ 33,000.00 11/10/97 - 10/29/98
- -------------------------------------------------------------------------------------------------------------------------------