EXHIBIT 10.24
SPACE ABOVE THIS LINE FOR RECORDER'S USE
THE MAXIMUM INDEBTEDNESS SECURED BY THIS MORTGAGE IS $20,860,000.00.
THIS DOCUMENT DRAFTED BY
AND WHEN RECORDED MAIL TO:
Katten Muchin Zavis Rosenman
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661
Joseph A. Venzon, Esq.
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
This instrument constitutes a Fixture Filing
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (this
"Instrument") is made as of May 12, 2004, and is given by the Mortgagor, STONE
WATER UIS FUNDING LLC, a Delaware limited liability company whose address is c/o
Drawbridge Special Opportunity Fund LLP, 1251 Avenue of the Americas, 16th
Floor, New York, New York 10020 (herein "Borrower"), to the Mortgagee, GREENWICH
CAPITAL FINANCIAL PRODUCTS, INC, a corporation organized and existing under the
laws of the state of Delaware, whose address is 600 Steamboat Road, Greenwich,
Connecticut 06830 (collectively with its successors, assigns and transferees
hereinafter referred to as "Lender").
BORROWER, in consideration of the indebtedness herein recited, irrevocably
grants, conveys, mortgages, warrants and assigns to Lender, with power of sale,
the following described property located in the County of Ramsey, State of
Minnesota, and more particularly described on Exhibit "A" attached hereto and
incorporated herein by reference for all purposes.
TOGETHER with all right, title and interest in and to all buildings,
improvements and tenements now or hereafter erected on the property, and all
heretofore or hereafter vacated alleys and streets abutting the property, and
all easements, rights, appurtenances, rents (subject however to the assignment
of rents to Lender herein), royalties, mineral, oil and gas rights and profits,
water, water rights, and water stock appurtenant to the property, and all
fixtures, machinery, equipment, engines, boilers, incinerators, building
materials, appliances and goods of every nature whatsoever now or hereafter
located in, or on, or used, or intended to be used in connection with the
property, including, but not limited to, those for the purposes of supplying or
distributing heating, cooling, electricity, gas, water, air and light; and all
elevators, and related machinery and equipment, fire prevention and
extinguishing apparatus, security and access control apparatus, plumbing, bath
tubs, water heaters, water closets, sinks, ranges, stoves, refrigerators,
dishwashers, disposals, washers, dryers, awnings, storm windows, storm doors,
screens, blinds, shades, curtains and curtain rods, mirrors, cabinets, paneling,
rugs, attached floor coverings, furniture, pictures, antennas, trees and plants,
tax refunds, trade names, licenses, permits, Borrower's rights to insurance
proceeds, unearned insurance premiums and choses in action; all of which,
including any and all renewals, replacements and additions thereto and
substitutions therefor, shall be deemed to be and remain a part of the real
property covered by this Instrument; and all of the foregoing, together with
said real property (or the leasehold estate in the event this Instrument is on a
leasehold) are herein referred to as the "Property";
TOGETHER with all right, title and interest in, to and under any and all
leases now or hereinafter in existence (as amended or supplemented from time to
time) and covering space in or applicable to the Property (hereinafter referred
to collectively as the "Leases" and singularly as a "Lease"), together with all
rents, earnings, income, profits, deposits, reserves, benefits and advantages
arising from the Property and from said Leases and all other sums due or to
become due under and pursuant thereto, it being intended and agreed that
whenever and however generated, whether now or hereafter, Lender shall have a
continuing security interest in, and/or lien upon, pursuant to 11 U.S.C. Section
552(b), on all of the foregoing, including the immediate and continuing right to
collect all rents, earnings, income, profits, deposits, reserves, fees, charges
and accounts for the use and occupancy of the Property, and together with any
and all guarantees of or under any of said Leases, and together with all rights,
powers, privileges, options and other benefits of Borrower as lessor under the
Leases, including, without limitation, the immediate and continuing right to
receive and collect all rents, income, revenues, issues, profits, condemnation
awards, insurance proceeds, moneys and security payable or receivable under the
Leases or pursuant to any of the provisions thereof, whether as rent or
otherwise, the right to accept or reject any offer made by any tenant pursuant
to its Lease to purchase the Property and any other property subject to the
Lease as therein provided and to perform all other necessary or appropriate acts
with respect to such Leases as agent and attorney-in-fact for Borrower, and the
right to make all waivers and agreements, to give and receive all notices,
consents and releases, to take such action upon the happening of a default under
any Lease, including the commencement, conduct and consummation of proceedings
at law or in equity as shall be permitted under any provision of any Lease or by
any law, and to do any and all other things whatsoever which Borrower is or may
become entitled to do under any such Lease together with all accounts
receivable, contract rights, franchises, interests, estates or other claims,
both at law and in equity, relating to the Property, to the extent not included
in rent earnings and income under any of the Leases;
TOGETHER with all right, title and interest in, to and under any and all
reserve, deposit or escrow accounts (the "Accounts") made pursuant to any Loan
Document (as hereinafter defined) made between Borrower and Lender with respect
to the Property, together with all income, profits, benefits and advantages
arising therefrom, and together with all rights, powers,
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privileges, options and other benefits of Borrower under the Accounts, and
together with the right to do any and all other things whatsoever which Borrower
is or may become entitled to do under the Accounts;
TOGETHER with all agreements, contracts, certificates, guaranties,
warranties, instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all rights therein and
thereto, pertaining to the use, occupancy, construction, management or operation
of the Property and any part thereof and any improvements or respecting any
business or activity conducted on the Property and any part thereof and all
right, title and interest of Borrower therein, including the right to receive
and collect any sums payable to Borrower thereunder and all deposits or other
security or advance payments made by Borrower with respect to any of the
services related to the Property or the operation thereof;
TOGETHER with all servicemarks, logos, copyrights, goodwill, books and
records and all other general intangibles relating to or used in connection with
the operation of the Property;
TOGETHER with all trademarks, tradenames, trade styles, assumed names,
telephone numbers and listing rights, and all other rights and interests in and
to the names and marks used by Borrower in connection with the Property, and all
books and records, accounting systems and all other general intangibles relating
to the operation of the Property; and
TOGETHER with any and all proceeds resulting or arising from any of the
foregoing (the Property, the Leases, the Accounts, and all other property,
whether real, personal, tangible, or intangible, described above, and all
proceeds thereof, may be referred to collectively as the "Collateral").
THIS INSTRUMENT SECURES TO LENDER (a) the repayment of the indebtedness
evidenced by Borrower's Promissory Note dated of even date herewith (together
with any amendments, extensions, modifications, renewals, supplements or
restatements thereof, and any substitutions or replacements therefor, the
"Note") in the principal sum of Twenty Million Eight Hundred Sixty Thousand and
No/100 Dollars ($20,860,000.00), with interest thereon, with the balance of the
indebtedness, if not sooner paid, due and payable on the Maturity Date (as
defined in the Note); (b) the performance of the covenants and agreements of
Borrower contained in an Environmental Indemnity Agreement (herein so-called) by
Borrower and Stonewater Funding LLC, a Delaware limited liability company
("Indemnitor"), in favor of Lender dated of even date herewith; (c) the payment
of all other sums, with interest thereon, advanced by Lender in accordance
herewith to protect the security of this Instrument; and (d) the performance of
the covenants and agreements of Borrower herein contained, or contained in any
other Loan Document, INCLUDING BORROWER'S COVENANT TO REPAY ALL FUTURE ADVANCES
(the Note, this Instrument, and all other documents or instruments given by
Borrower or others and accepted by Lender for purposes of evidencing, securing,
perfecting, or guaranteeing the indebtedness evidenced by the Note, together
with any and all amendments, modifications, renewals, restatements and
substitutions thereof from time to time may be referred to collectively as the
"Loan Documents"). At no time shall the principal amount of the indebtedness,
not including sums advanced in accord herewith to protect the security of this
Instrument, exceed two hundred percent (200%) of the original amount of the
Note. Without
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limitation of the foregoing, the following documents and instruments of even
date herewith are Loan Documents: Assignment of Leases and Rents, Certificate of
Borrower, Environmental Indemnity Agreement, Exceptions to Non-Recourse
Guaranty, Completion/Repair and Security Agreement (if any), Replacement Reserve
and Security Agreement (if any), Tenant Improvement and Leasing Commission
Reserve and Security Agreement (if any), and Conditional Assignment of
Management Agreement (if any).
Borrower covenants that Borrower is lawfully seized of the estate hereby
conveyed and has the right to mortgage, grant, convey and assign the Property
(and, if this Instrument is on a leasehold, that the ground lease is in full
force and effect without modification except as noted above and without default
on the part of either lessor or lessee thereunder), that the Property is
unencumbered, and that Borrower will warrant and defend generally the title to
the Property against all claims and demands, subject to any easements and
restrictions listed in a schedule of exceptions to coverage in any title
insurance policy insuring Lender's interest in the Property.
Borrower represents, warrants, covenants and agrees in favor of Lender as
follows:
SECTION 1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when
due the principal of and interest on the indebtedness evidenced by the Note, any
prepayment and late charges provided in the Note and all other sums secured by
this Instrument.
SECTION 2. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Subject to applicable
law or to a written waiver by Lender, Borrower shall pay to Lender on the day
monthly installments of principal or interest are payable under the Note (or on
another day designated in writing by Lender), until the Note is paid in full, a
sum (herein "Funds") equal to one-twelfth of (a) the yearly taxes and
assessments which may be levied on the Property, (b) the yearly premium
installments for fire and other hazard insurance, rent loss insurance and such
other insurance covering the Property as Lender may require pursuant to this
Instrument, (c) the yearly premium installments for mortgage insurance, if any,
and (d) if this Instrument is on a leasehold, the yearly fixed rents, if any,
under the ground lease, all as reasonably estimated initially and from time to
time by Lender on the basis of assessments and bills and reasonable estimates
thereof. Notwithstanding anything in clause (b) of this Section 2 to the
contrary, so long as the Unisys Lease is in full force and effect and the
insurance required to be maintained by Unisys under the Unisys Lease is in full
force and effect, Borrower shall only be required to pay to Lender with each
monthly installment of principal or interest payable under the Note one-twelfth
of the yearly premiums for the insurance maintained by Borrower pursuant to this
Instrument (and Borrower shall not be required to pay installments of the
premiums for the insurance maintained by Unisys). Any waiver by Lender of a
requirement that Borrower pay such Funds may be revoked by Lender, in Lender's
sole discretion, at any time upon notice in writing to Borrower. Lender may
require Borrower to pay to Lender, in advance, such other Funds for other taxes,
charges, premiums, assessments and impositions in connection with Borrower or
the Property which Lender shall reasonably deem necessary to protect Lender's
interests (herein "Other Impositions"). Unless otherwise provided by applicable
law, Lender may require Funds for Other Impositions to be paid by Borrower in a
lump sum or in periodic installments, at Lender's option. In addition, Borrower
shall reimburse Lender for the reasonable actual costs of an annual search of
the taxes and other liens affecting the Property or for a service which provides
such information (to the extent performed), and the cost of the same shall be
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included in Other Impositions. Lender agrees that, to the extent the tenant
under the Unisys Lease (as defined herein) delivers funds to Lender expressly
indicated by such tenant as being a payment on account of taxes or insurance
premiums, Lender shall credit such amounts against the applicable obligations of
Borrower under this Section 2 (but in the event funds received from the tenant
are insufficient to pay all of Borrower's obligations under this Section 2,
Borrower shall remain liable for the payment in full of all such obligations).
"Unisys Lease" shall mean that certain Lease Agreement entered into as of August
14, 1998 but effective as of June 1, 1998 between Space Center Enterprises, Inc.
(n/k/a Meritex Enterprises Inc.), predecessor in interest to Borrower, as
landlord, and UNISYS Corporation ("Unisys"), as tenant, as amended from time to
time.
Lender shall apply the Funds to pay said rents, taxes, assessments,
insurance premiums and Other Impositions so long as no Event of Default exists.
The Funds shall be held in an interest bearing account, and any interest or
earnings or profits on the Funds shall be added to and become part of the Funds.
Borrower shall be responsible for payment of any federal, state or local income
or other tax applicable to such interest, earnings or profits from investment of
the Funds. Lender shall give to Borrower, without charge, an annual accounting
of the Funds in Lender's normal format showing credits and debits to the Funds
and the purpose for which each debit to the Funds was made. The Funds are
pledged as additional security for the sums secured by this Instrument.
If at any time the amount of the Funds held by Lender shall be less than
the amount deemed necessary by Lender in its reasonable estimation to pay taxes,
assessments, insurance premiums, rents and Other Impositions, as they fall due,
Borrower shall pay to Lender any amount necessary to make up the deficiency
within thirty days after notice from Lender to Borrower requesting payment
thereof.
Upon the occurrence of an Event of Default and during the continuance
thereof, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time of
application (i) to pay rents, taxes, assessments, insurance premiums and Other
Impositions which are now or will hereafter become due, or (ii) as a credit
against sums secured by this Instrument. Upon payment in full of all sums
secured by this Instrument, Lender shall promptly refund to Borrower any Funds
held by Lender. It is intended and agreed by Borrower that whenever and however
generated, as to any and all Funds now or hereafter held by Lender, Lender shall
have a continuing security interest in and/or lien thereon, pursuant to 11
U.S.C. Section 552(b) until application or disposition thereof pursuant to the
terms and provisions of the Loan Documents.
At or prior to the closing of the loan secured by this Instrument, Borrower
shall deposit with Lender a sum of money (the "Borrower Tax Deposit") sufficient
to cover the amount by which the second installment of 2004 real estate taxes
levied on the Property (the "Second Tax Installment") is estimated to exceed the
aggregate monthly deposits of tax installments anticipated to be made pursuant
to clause (a) of this Section 2 prior to the date such Second Tax Installment is
due and payable. The Borrower Tax Deposit shall constitute "Funds" hereunder. At
such time that Borrower delivers to Lender evidence satisfactory to Lender of
the payment in full of the Second Tax Installment, Lender shall return to
Borrower the Borrower Tax Deposit
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(or in the event all or any portion of the Borrower Tax Deposit is required to
be utilized to pay the Second Tax Installment, such portion thereof not utilized
to pay the Second Tax Installment).
SECTION 3. APPLICATION OF PAYMENTS. Upon the occurrence of an Event of Default
and during the continuance thereof, Lender may apply any payments received from
or on behalf of Borrower to any of the obligations of Borrower then due under
the Loan Documents, in any order determined by Lender.
SECTION 4. CHARGES; LIENS. Borrower shall pay all rents, taxes, assessments,
premiums, and Other Impositions attributable to the Property in the manner
provided under Section 2 hereof or, if Lender elects not to collect such rents,
taxes, assessments, premiums and Other Impositions as provided in Section 2, by
Borrower making payment, when due, directly to the payee thereof, or in such
other manner as Lender may designate in writing. Borrower shall promptly furnish
to Lender all notices of amounts due under this Section, and in the event
Borrower shall make payment directly, Borrower shall promptly furnish to Lender
receipts evidencing such payments. Except only for the liens and security
interests in favor of Lender under this Instrument and the other Loan Documents,
which Borrower shall pay and discharge in accordance with the Loan Documents,
Borrower shall discharge or bond over any lien encumbering all or any portion of
or interest in the Property within sixty (60) days after Borrower receives
notice of such lien, irrespective of the priority of the same. Borrower shall
pay, when due, the claims of all persons supplying labor or materials to or in
connection with the Property.
SECTION 5. HAZARD INSURANCE. Borrower shall at all times keep (or cause to be
kept) the improvements now existing or hereafter erected on the Property insured
against all losses, hazards, casualties, liabilities and contingencies as Lender
(and, if this Instrument is on a leasehold, the ground lease) shall reasonably
require and in such amounts and for such periods as Lender shall reasonably
require. Borrower shall purchase and maintain (or cause to be purchased and
maintained) policies of insurance with respect to the Property in such amounts
and covering such risks as shall be reasonably satisfactory to Lender,
including, but not limited to, the following:
(a) Property damage insurance covering loss or damage to the Property
caused by fire, lightning, hail, windstorm, explosion, hurricane (to the extent
available), vandalism, o malicious mischief, acts of terrorism, and such losses,
hazards, casualties, liabilities and contingencies as are normally and usually
covered by fire policies in effect where the Property is located endorsed to
include all of the extended coverage perils and other broad form perils,
including the standard "all risks" clauses. Such policy shall be in an amount
not less than that necessary to comply with any coinsurance percentage
stipulated in the policy, but not less than 100% of the full replacement cost of
the improvements on the Property (without any deduction for depreciation), and
shall contain a replacement cost endorsement. The deductible under such policy,
if any, shall not exceed the lesser of ten percent (10%) of the amount of the
loan secured hereby or $10,000. Further, if any of the improvements or the use
of the Property shall at any time constitute legal nonconforming structures or
uses under current zoning ordinances, such policy shall contain an "Ordinance or
Law Coverage" or "Enforcement" endorsement providing coverage for demolition,
increased cost of construction and inability to rebuild.
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(b) Broad form boiler and machinery insurance in an amount equal to the
lesser of 100% of the full replacement cost of the building (without any
deduction for depreciation) in which the boiler or similar vessel is located, or
$2,000,000. In addition, Lender may require a rider to such policy to extend
such coverage to electrical machinery and equipment, air conditioning,
refrigeration, and mechanical objects.
(c) If the Property is in an area prone to geological phenomena, including,
but not limited to, sinkholes, mine subsidence or earthquakes, insurance
covering such risks in an amount equal to 100% of the full replacement cost of
the improvements on the Property (without any deduction for depreciation), and
with a maximum permissible deductible equal to the lesser of $25,000 or 10% of
the face value of the policy.
(d) Flood insurance if the Property is in an area now or hereafter
designated by the Federal Emergency Management Agency as a Zone "A" & "V"
Special Hazard Area, or such other Special Hazard Area if Lender so requires in
its sole discretion. Such policy shall be in an amount equal to 100% of the full
replacement cost of the improvements on the Property (without any deduction for
depreciation), and shall have a maximum permissible deductible of $3,000.
(e) Business interruption or rent loss insurance in an amount equal to the
gross income or rentals from the Property for an indemnity period of eighteen
months, such amount being adjusted annually.
(f) During any period of reconstruction, renovation or alteration of the
Property in excess of 10% of the Note, a complete value, "All Risks" Builders
Risk form or "Course of Construction" insurance policy in non-reporting form and
in an amount satisfactory to Lender in Lender's reasonable discretion.
(g) Commercial General Liability insurance covering bodily injury and death
in an amount not less than $1,000,000 per occurrence, $2,000,000 in the
aggregate and umbrella coverage of $25,000,000, with no deductible. If Lender
permits such liability coverage to be written on a blanket basis, then such
policy shall provide that the aggregate limit of insurance applies separately to
the Property.
(h) If required by applicable state laws, worker's compensation or
employer's liability insurance in accordance with such laws.
(i) Such other insurance and endorsements, if any, as Lender may reasonably
require from time to time, or which are required by the Loan Documents
Each carrier providing any insurance, or portion thereof, required by this
Section shall be licensed to do business in the jurisdiction or jurisdictions in
which the Property is located, and shall have a claims paying ability rating of
"A" by "S&P", or such equivalent rating by a major rating agency. Borrower shall
cause all insurance (except general public liability insurance) carried in
accordance with this Section to be payable to Lender as a mortgagee and loss
payee and not as a coinsured, and, in the case of all policies of insurance
carried by each lessee for the benefit of Borrower, if any, to cause all such
policies to be payable to Lender as Lender's interest may appear. All premiums
on insurance policies shall be paid, in the manner provided under Section 2
hereof, or in such other manner as Lender may reasonably designate in writing.
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All insurance policies and renewals thereof (i) shall be in a form
reasonably acceptable to Lender, (ii) shall provide for a term of not less than
one year, (iii) shall provide by way of endorsement, rider or otherwise that
such insurance policy shall not be canceled, endorsed, altered, or reissued to
effect a change in coverage unless such insurer shall have first given Lender 30
days prior written notice thereof, (iv) shall include a standard mortgagee
clause in favor of Lender and its successors and assigns, and otherwise in form
reasonably acceptable to Lender, (v) shall provide for claims to be made on an
occurrence basis, except that boiler and machinery coverage may be made on an
accident basis, and (vi) shall contain an agreed value clause updated annually
(if the amount of coverage under such policy is based upon the replacement cost
of the Property). All property damage insurance policies (except for flood and
earthquake policies) must automatically reinstate after each loss.
Lender shall have the right to receive a certified copy of the policy and
certificates of insurance, and Borrower shall promptly furnish to Lender all
renewal notices and all receipts of paid premiums. At least 30 days prior to the
expiration date of a policy, Borrower shall deliver to Lender a renewal policy
in form satisfactory to Lender, together with evidence reasonably satisfactory
to Lender of payment in full of the annual premium therefor (provided Borrower
shall not be required to deliver evidence of payment if Lender has paid such
premium directly pursuant to Section 2 hereof). If this Instrument is on a
leasehold, Borrower shall furnish Lender a duplicate of all policies, renewal
notices, renewal policies and receipts of paid premiums if, by virtue of the
ground lease, the originals thereof may not be supplied by Borrower to Lender.
In the event of loss, Borrower shall give immediate written notice to the
insurance carrier and to Lender. After the occurrence of an Event of Default,
Borrower hereby authorizes and empowers Lender as attorney-in-fact for Borrower
to make proof of loss, to adjust and compromise any claim under insurance
policies, to appear in and prosecute any action arising from such insurance
policies, to collect and receive insurance proceeds, and to deduct therefrom
Lender's actual expenses incurred in the collection of such proceeds; provided
however, that nothing contained in this Section shall require Lender to incur
any expense or take any action hereunder. Borrower further authorizes Lender, at
Lender's option, (a) to hold the balance of such proceeds to be used to
reimburse Borrower for the cost of reconstruction or repair of the Property or
(b) subject to the immediately following paragraph, to apply such proceeds to
the payment of the sums secured by this Instrument whether or not then due, in
any order (subject, however, to the rights of the lessor under the ground lease
if this Instrument is on a leasehold).
Lender shall not exercise Lender's option to apply insurance proceeds to
the payment of the sums secured by this Instrument if all of the following
conditions are met: (i) Borrower is not in breach or default of any covenant or
agreement of this Instrument, the Note or any other Loan Document (provided
Lender will not apply insurance proceeds until all applicable cure periods, if
any, have lapsed); (ii) Lender reasonably determines that there will be
sufficient funds to restore and repair the Property to the Pre-existing
Condition (as hereinafter defined); (iii) Lender agrees in writing that the
rental income of the Property, after restoration and repair of the Property to
the Pre-existing Condition, will be sufficient to meet all operating costs and
other expenses, payments for reserves and loan repayment obligations (including
any obligations under any permitted subordinate financing) relating to the
Property and maintain a debt service coverage ratio of at least 1.3 to 1.0; (iv)
Lender determines that restoration and repair of the Property to the
Pre-existing Condition will be completed within one year of the date of the loss
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or casualty to the Property, but in no event later than six months prior to the
Maturity Date; (v) less than 50 percent of the total floor area of the
improvements has been damaged, destroyed or rendered unusable as a result of
such condemnation or taking; (vi) tenant leases demising in the aggregate at
least 50 percent of the total rentable space in the Property and in effect as of
the date of the occurrence of such condemnation or taking remain in full force
and effect during and after the completion of the restoration and repair of the
Property and Borrower furnishes to Lender evidence satisfactory to Lender that
Unisys shall continue to operate its business at the Property after completion
of such restoration or repair, notwithstanding the occurrence of any such
condemnation or taking; and (vii) Lender is reasonably satisfied that the
Property can be restored and repaired as nearly as possible to the condition it
was in immediately prior to such casualty and in compliance with all applicable
zoning, building and other laws and codes (the "Pre-existing Condition"). If
Lender elects to make the insurance proceeds available for the restoration and
repair of the Property, Borrower agrees that, if at any time during the
restoration and repair, the cost of completing such restoration and repair, as
determined by Lender, exceeds the undisbursed insurance proceeds, Borrower
shall, immediately upon demand by Lender, deposit the amount of such excess with
Lender, and Lender shall first disburse such deposit to pay for the costs of
such restoration and repair on the same terms and conditions as the insurance
proceeds are disbursed.
If the insurance proceeds are held by Lender to reimburse Borrower for the
cost of restoration and repair of the Property, then Borrower shall restore the
Property to the equivalent of its original condition or such other condition as
Lender may approve in writing (such approval not to be unreasonably withheld),
and Borrower shall promptly begin such restoration and at all times thereafter
diligently prosecute such restoration to completion. Lender may, at Lender's
option, condition disbursement of said proceeds on Lender's approval of such
plans and specifications (such approval not to be unreasonably withheld or
delayed) of an architect satisfactory to Lender, contractor's cost estimates,
architect's certificates, waivers of liens, sworn statements of mechanics and
materialmen and such other evidence of costs, percentage completion of
construction, application of payments; and satisfaction of liens as Lender may
reasonably require. If the insurance proceeds are applied to the payment of the
sums secured by this Instrument, any such application of proceeds to principal
shall not extend or postpone the due dates of the monthly installments due under
the Note, under Section 2 hereof, or otherwise under the Loan Documents, or
change the amounts of such installments. If the Property is sold at foreclosure
or pursuant to power of sale or if Lender acquires title to the Property, Lender
shall have all of the right, title and interest of Borrower in and to any
insurance policies and unearned premiums thereon and in and to the proceeds
resulting from any damage to the Property prior to such sale or acquisition.
SECTION 6. PRESERVATION AND MAINTENANCE OF PROPERTY; LEASEHOLDS. Borrower (a)
shall not intentionally commit waste or permit any material impairment or
deterioration of the Property, (b) shall not abandon the Property, (c) shall
restore or repair (or cause to be restored or repaired pursuant to and in
accordance with the terms of the Unisys Lease) promptly and in a good and
workmanlike manner all or any part of the Property to the equivalent of its
original condition, or such other condition as Lender may reasonably approve in
writing, in the event of any damage, injury or loss thereto, whether or not
insurance proceeds are available to cover in whole or in part the costs of such
restoration or repair, (d) shall keep (or cause to be kept pursuant to and in
accordance with the terms of the Unisys Lease) the Property,
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including improvements, fixtures, equipment, machinery and appliances thereon in
good repair and shall replace fixtures, equipment, machinery and appliances on
the Property when necessary to keep such items in good repair, (e) shall comply
with all laws, ordinances, regulations and requirements of any governmental body
applicable to the Property, (f) shall provide for management of the Property by
a property manager approved by Lender, and (g) shall give notice in writing to
Lender of and, unless otherwise directed in writing by Lender, appear in and
defend any action or proceeding purporting to affect the Property, the security
of this Instrument or the rights or powers of Lender. Neither Borrower nor any
tenant or other person shall remove, demolish or alter any improvement now
existing or hereafter erected on the Property or any fixture, equipment,
machinery or appliance in or on the Property except when incident to the
replacement of fixtures, equipment, machinery and appliances with items of like
kind or unless permitted pursuant to the Unisys Lease or a lease approved by
Lender.
SECTION 7. USE OF PROPERTY. Unless required by applicable law or unless Lender
has otherwise agreed in writing, Borrower shall not allow changes in the use for
which all or any part of the Property was intended at the time this Instrument
was executed. Borrower shall not subdivide the Property or initiate or acquiesce
in a change in the zoning classification of the Property without Lender's prior
written consent.
SECTION 8. PROTECTION OF LENDER'S SECURITY. After the occurrence of an Event of
Default, or if any action or proceeding is commenced which affects the Property
or title thereto or the interest of Lender therein, including, but not limited
to, eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, Lender at Lender's option may make such
appearances, disburse such sums and take such action as Lender deems reasonably
necessary to protect Lender's interest (subject to the terms of the Unisys
Lease), including, but not limited to, (i) disbursement of reasonable attorney's
fees, (ii) entry upon the Property to make material repairs, (iii) procurement
of satisfactory insurance as provided herein, (iv) the payment of any taxes
and/or assessments levied against the Property and then due and payable, and (v)
payment of any other amounts contemplated in any of the Loan Documents. Any
amounts disbursed by Lender pursuant to this Section, with interest thereon,
shall become additional indebtedness of Borrower secured by this Instrument.
Unless Borrower and Lender agree to other terms of payment, such amounts shall
be immediately due and payable upon demand and shall bear interest from the date
of disbursement at the rate then applicable to principal under the Note unless
collection from Borrower of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from Borrower under applicable law. Nothing
contained in this Section or elsewhere in any of the Loan Documents shall
require Lender to incur any expense or take any action hereunder.
SECTION 9. INSPECTION. Upon notice to Borrower, Lender may make or cause to be
made reasonable entries upon and inspections of the Property, including, but not
limited to phase I and/or phase II environmental audits and inspections;
provided Lender shall only conduct invasive testing, such as soil borings, if
(x) Lender has been advised by a third-party consultant that the Property may
not be in compliance with environmental laws or laws relating to hazardous
material or (y) an environmental audit deems further testing necessary.
10
SECTION 10. BOOKS AND RECORDS. Borrower shall keep and maintain at all times at
Borrower's address stated herein, or such other place as Lender may reasonably
approve in writing, complete and accurate books of accounts and records adequate
to reflect correctly the results of the operation of the Property and copies of
all written contracts, leases and other instruments which affect the Property.
Such books, records, contracts, leases and other instruments shall be subject to
examination and inspection at any reasonable time by Lender.
Upon request from Lender from time to time, Borrower shall promptly (and in
any event within ten (10) business days of Lender's request) deliver to Lender
financial statements as of the end of the then-prior month for (i) such
then-prior month, (ii) the year to date, and (iii) the 12 month period ending
with such then-prior month, provided Borrower's obligation to provide such
reports shall cease on the later to occur of the date when Lender sells its
entire interest in the Loan Documents, or the 13th full calendar month following
the date hereof. Thereafter, on or before the 30th day after the end of each
three-month fiscal quarter of Borrower (which may include months for which
reports shall have been submitted as required above), Borrower shall deliver to
Lender financial statements for such quarter. Each set of such financial
statements (i) shall consist of not less than a balance sheet for Borrower, a
statement of income and expenses of the Property and a statement of changes in
financial position, (ii) shall be in detail reasonably satisfactory to Lender
and (iii) shall bear a certification in form and substance satisfactory to
Lender to the effect that the applicable statements are true, complete, and
accurate and do not omit to state any material information, and such
certification shall be duly signed by a principal of Borrower. In addition,
Borrower shall deliver to Lender audited Financial Statements for each year end,
on or before the 90th day after the end of each year. All of such financial
statements shall provide information for the applicable month or quarter and on
a year-to-date basis (and at the end of the fourth quarter, for the year).
Borrower shall furnish, together with the foregoing financial statements
and at any other time upon Lender's reasonable request, a rent schedule for the
Property, certified by Borrower, showing the name of each tenant, and for each
tenant, the space occupied, the lease expiration date, the rent payable and the
rent paid.
Borrower shall prepare and submit to Lender, no later than forty-five (45)
days prior to the end of each calendar year, a proposed pro forma budget for the
Property for the succeeding calendar year (the "Annual Budget") for approval by
Lender (such approval not to be unreasonably withheld or delayed), and, promptly
after preparation thereof, any revisions to such Annual Budget. Lender shall
approve such Annual Budget no later than fifteen (15) days prior to the
commencement of the subject calendar year (each Annual Budget approved by Lender
is referred to herein as the "Approved Annual Budget"). The Annual Budget shall
consist of (i) an operating expense budget showing, on a month-by-month basis,
in reasonable detail, each line item of Borrower's anticipated operating income
and operating expenses (on an accrual basis), including amounts required to
establish, maintain and/or increase any monthly payments required hereunder, and
(ii) a capital expense budget showing, on a month-by-month basis, in reasonable
detail, each line item of anticipated capital expenses. Until such time that any
Annual Budget has been approved by Lender, the prior Approved Annual Budget
shall apply for all purposes hereunder (with such adjustments as reasonably
determined by Lender (including increases for any non-discretionary expenses)).
11
In addition to the above delivery of financial statements and rent
schedule, Borrower shall deliver to Lender updated versions of such financial
statements at any other time upon Lender's request, including monthly balance
sheets and monthly statements of income and expenses of the Property. Further,
Borrower shall provide to Lender, as soon as the same are available to Borrower,
all financial statements and sales reports received from any tenant at the
Property.
SECTION 11. CONDEMNATION. Borrower shall promptly notify Lender of any action or
proceeding relating to any condemnation or other taking, whether direct or
indirect, of the Property, or part thereof, and Borrower shall appear in and
prosecute any such action or proceeding unless otherwise directed by Lender in
writing. Borrower authorizes Lender, at Lender's option, as attorney-in-fact for
Borrower, to commence, appear in and prosecute, in Lender's or Borrower's name,
any action or proceeding relating to any condemnation or other taking of the
Property, whether direct or indirect, and to settle or compromise any claim in
connection with such condemnation or other taking. The proceeds of any award,
payment or claim for damages, direct or consequential, in connection with any
condemnation or other taking, whether direct or indirect, of the Property, or
part thereof, or for conveyances in lieu of condemnation, are hereby assigned to
and shall be paid to Lender subject, if this Instrument is on a leasehold, to
the rights of lessor under the ground lease.
Borrower authorizes Lender to apply such awards, payments, proceeds or
damages, after the deduction of Lender's expenses incurred in the collection of
such amounts, at Lender's option, to restoration or repair of the Property or to
payment of the sums secured by tins Instrument, whether or not then due, in the
order determined by Lender, with the balance, if any, to Borrower. Unless
Borrower and Lender otherwise agree in writing, any application of proceeds to
principal shall not extend or postpone the due date of the monthly installments
due hereunder or under any of the Loan Documents or change the amount of such
installments. Borrower agrees to execute such further evidence of assignment of
any awards, proceeds, damages or claims arising in connection with such
condemnation or taking as Lender may require.
Lender shall not exercise Lender's option to apply condemnation proceeds to
the payment of the sums secured by this Instrument if all of the following
conditions are met: (i) the cost of restoration will not exceed fifteen percent
(15%) of the amount of the Loan; (ii) Borrower is not in breach or default of
any covenant or agreement of this Instrument, the Note or any other Loan
Document; (iii) Lender reasonably determines that there will be sufficient funds
to restore and repair the Property to the Pre-existing Condition; (iv) Lender
agrees in writing that the rental income of the Property, after restoration and
repair of the Property to the Pre-existing Condition, will be sufficient to meet
all operating costs and other expenses, payments for reserves and loan repayment
obligations (including any obligations under any permitted subordinate financing
actually in place) relating to the Property and maintain a debt service coverage
ratio of at least 1.3 to 1.0; (v) Lender determines that restoration and repair
of the Property to the Pre-existing Condition will be completed within one year
of the date of the loss or casualty to the Property, but in no event later than
six months prior to the Maturity Date; (vi) less than 50 percent of the total
floor area of the improvements has been damaged, destroyed or rendered unusable
as a result of such condemnation or taking; (vii) tenant leases demising in the
aggregate at least 50 percent of the total rentable space in the Property and in
effect as of the date of the occurrence of
12
such condemnation or taking remain in full force and effect during and after the
completion of the restoration and repair of the Property and Borrower furnishes
to Lender evidence satisfactory to Lender that Unisys shall continue to operate
its business at the Property after completion of such restoration or repair,
notwithstanding the occurrence of any such condemnation or taking; and (viii)
Lender is reasonably satisfied that the Property can be restored and repaired to
the Pre-existing Condition. If Lender elects to make the condemnation proceeds
available for the restoration and repair of the Property, Borrower agrees that,
if at any time during the restoration and repair, the cost of completing such
restoration and repair, as determined by Lender, exceeds the undisbursed
condemnation proceeds, Borrower shall, immediately upon demand by Lender,
deposit the amount of such excess with Lender, and Lender shall first disburse
such deposit to pay for the costs of such restoration and repair on the same
terms and conditions as the condemnation proceeds are disbursed.
If the condemnation proceeds are held by Lender to reimburse Borrower for
the cost of restoration and repair of the Property, then Borrower shall restore
the Property to the equivalent of its original condition or such other condition
as Lender may approve in writing, and Borrower shall promptly begin such
restoration and at all times thereafter diligently prosecute such restoration to
completion. Lender may, at Lender's option, condition disbursement of said
proceeds on Lender's approval of such plans and specifications (such approval
not to be unreasonably withheld or delayed) of an architect satisfactory to
Lender, contractor's cost estimates, architect's certificates, waivers of liens
(which may be conditioned upon payment), sworn statements of mechanics and
materialmen and such other evidence of costs, percentage completion of
construction, application of payments; and satisfaction of liens as Lender may
reasonably require. If the condemnation proceeds are applied to the payment of
the sums secured by this Instrument, any such application of proceeds to
principal shall not extend or postpone the due dates of the monthly installments
due under the Note, under Section 2 hereof, or otherwise under the Loan
Documents, or change the amounts of such installments. If the Property is sold
at foreclosure or pursuant to power of sale or if Lender acquires title to the
Property, Lender shall have all of the right, title and interest of Borrower in
and to any awards and proceeds resulting from any condemnation or taking of the
Property prior to such sale or acquisition.
SECTION 12. BORROWER AND LIEN NOT RELEASED. From time to time, Lender may, at
Lender's option, without giving notice to or obtaining the consent of Borrower,
Borrower's successors or assigns or of any junior lienholder or guarantors,
without liability on Lender's part and notwithstanding Borrower's breach of any
covenant or agreement of Borrower in this Instrument, extend the time for
payment of said indebtedness or any part thereof, reduce the payments thereon,
release anyone liable on any of said indebtedness, accept a renewal note or
notes therefor, modify the terms and time of payment of said indebtedness,
release from the lien of this Instrument any part of the Property, take or
release other or additional security, reconvey any part of the Property, consent
to any map or plan of the Property, consent to the granting of any easement,
join in any extension or subordination agreement, and agree in writing with
Borrower to modify the rate of interest or period of amortization of the Note or
change the amount of the monthly installments payable thereunder. Except for the
specific provision being modified, and only to the extent of such modification,
any actions taken by Lender pursuant to the terms of this Section shall not
affect the obligation of Borrower or Borrower's successors or assigns to pay the
sums secured by this Instrument and to observe the covenants of Borrower
13
contained herein, shall not affect the guaranty of any person, corporation,
partnership or other entity for payment of the indebtedness secured hereby, and
shall not affect the lien or priority of lien hereof on the Property. Borrower
shall pay Lender the actual out of pocket costs together with such title
insurance premiums, if any, and reasonable attorney's fees as may be incurred at
Lender's option, for any such action if taken at Borrower's request.
SECTION 13. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT. This Instrument is
intended to be a security agreement pursuant to the Uniform Commercial Code for
any of the items specified above as part of the Collateral which, under
applicable law, may be subject to a security interest pursuant to the Uniform
Commercial Code, and Borrower hereby grants Lender a security interest in said
items. Borrower agrees that Lender may file this Instrument, or a reproduction
thereof, in the real estate records or other appropriate index, as a financing
statement for any of the items specified above as part of the Collateral. For
use of the Instrument as a financing statement under the Uniform Commercial
Code, the Borrower shall be the "Debtor" and Lender shall be the "Secured
Party", and each shall use those addresses set forth in the introduction to this
Instrument. Any reproduction of this Instrument or of any other security
agreement or financing statement shall be sufficient as a financing statement.
In addition, Borrower agrees to execute and deliver to Lender, upon Lender's
request, any financing statements, as well as extensions, renewals and
amendments thereof, and reproductions of this Instrument in such form as Lender
may require to perfect a security interest with respect to said items. Borrower
shall pay all costs of filing such financing statements and any extensions,
renewals, amendments and releases thereof, and shall pay all reasonable actual
costs and expenses of any record searches for financing statements Lender may
reasonably require. Without the prior written consent of Lender, Borrower shall
not create or suffer to be created pursuant to the Uniform Commercial Code any
other security interest in said items, including replacements and additions
thereto. Upon Borrower's breach of any covenant or agreement of Borrower
contained in this Instrument, including the covenants to pay when due all sums
secured by this Instrument, Lender shall have the remedies of a secured party
under the Uniform Commercial Code and, at Lender's option, may also invoke the
remedies provided herein or in any of the Loan Documents, or pursuant to any
applicable law as to such items. In exercising any of said remedies, Lender may
proceed against the items of real property and any items of personal property
specified above as part of the Collateral separately or together and in any
order whatsoever, without in any way affecting the availability of Lender's
remedies under the Uniform Commercial Code or of the remedies provided herein or
in any of the Loan Documents.
SECTION 14. LEASES OF THE PROPERTY. As used herein, "lease" shall mean
"sublease" if this Instrument is on a leasehold. Borrower shall comply with and
observe Borrower's obligations as landlord under all leases of the Property or
any part thereof. Borrower will not lease any portion of the Property for any
use contrary to the existing character of the Property except with the prior
written approval of Lender. In the event that Unisys vacates all or a portion of
the Property at the end of the term of the Unisys Lease, Borrower may execute or
modify, without Lender's prior written consent, any new lease of such space at
the Property vacated by Unisys at the end of the term of the Unisys Lease which
affects less than 20,000 square feet (an "Exempt Lease") provided such lease:
14
(i) has a term which commences no earlier than the day following the
day on which the term of the Unisys Lease expires (with respect to the
space demised by such lease);
(ii) is on a standard lease form pre-approved by Lender;
(iii) is at a net effective rent (after taking into account any free
rent, construction allowances or other concessions granted by landlord) no
less than the fair market rent then prevailing for similar properties and
leases in the market area;
(iv) contains rent or other concessions which are customary and
reasonable for similar properties and leases in the market area;
(v) represents a bona fide arm's length transaction;
(vi) does not permit any use which would violate any provision of any
existing lease or is otherwise inconsistent with the uses and quality of
existing tenants;
(vii) is provided to Lender within ten days after execution;
(viii) as modified or amended does not become a lease which fails to
satisfy the criteria for an Exempt Lease pursuant to this Section;
(ix) as modified or amended does not materially modify the financial
terms of Borrower's standard form of lease or materially reduce the rights
and remedies of Borrower or Lender under said standard lease;
(x) is subordinate by its terms to this Instrument (or is made
subordinate by the terms of Lender's standard form of Subordination,
Non-Disturbance and Attornment Agreement, which form will be provided to
Borrower ("Approved SNDA"); provides that the tenant thereunder is required
to attorn to Lender, such attornment to be effective upon Lender's
acquisition of title to the Property; that the tenant agrees to execute
such further evidences of attornment as Lender may from time to time
request; that the attornment of the tenant shall not be terminated by
foreclosure; that in no event shall Lender, as holder of this Instrument or
as successor landlord, be liable to the tenant for any act or omission of
any prior landlord or for any liability or obligation of any prior landlord
occurring prior to the date that Lender or any subsequent owner acquire
title to the Property; and that, if tenant does not sign an Approved SNDA,
Lender may, at Lender's option, accept or reject such attornment.
Borrower shall be required to obtain Lender's consent, which shall not be
unreasonably withheld, for the creation of any lease and subleases at the
Property other than an Exempt Lease. The request for approval of each proposed
lease shall be made to Lender in writing and Borrower shall furnish to Lender
(and any loan servicer specified from time to time by Lender): (i) such
biographical and financial information about the proposed tenant as Lender may
require in conjunction with its review, (ii) a copy of the proposed form of
lease, and (iii) a summary of the material terms of such proposed lease
(including, without limitation, rental terms and the term of the proposed lease
and any options). Notwithstanding the foregoing, Borrower may, without the
15
consent of Lender, enter into an extension of the Unisys Lease on terms no less
favorable to the landlord thereunder than the existing terms, provided (a) the
term of the Unisys Lease is extended to a date at least three (3) years after
the Maturity Date (as defined in the Note) and (b) at least ten (10) business
days prior to execution of such extension Borrower furnishes to Lender a copy of
the proposed extension agreement and a summary of the material terms of such
proposed extension (including, without limitation, rental terms and the term of
the proposed extension and any options). Within fifteen (15) days of Lender's
receipt from Borrower of a request for approval for a proposed lease together
with all other information required to be delivered therewith, Lender shall
inform Borrower whether Lender has approved or rejected such proposed lease. If
Lender fails to respond within such 15-day period and such failure continues for
five (5) days after Borrower delivers to Lender a reminder notice (which
reminder notice may not be delivered by Borrower until such 15-day period has
lapsed) which states in bold, capitalized type on the first page thereof that
"IF LENDER FAILS TO RESPOND WITHIN FIVE (5) DAYS, LENDER SHALL BE DEEMED TO HAVE
APPROVED THE PROPOSED LEASE DESCRIBED HEREIN", then Lender shall be deemed to
have approved such proposed lease.
As to all leases other than Exempt Leases, Borrower shall not without the
prior written consent of Lender, (i) cancel, amend or modify any such lease,
(ii) approve any assignment, sublease or underlease of any such lease, or (iii)
cancel or modify any guaranty, or release any security deposit or letter of
credit constituting security pertaining to any such lease.
Borrower shall promptly send Lender copies of any notices of default
received from the tenant under any lease; and will enforce (short of terminating
such lease) the performance by the tenant of the tenant's obligations under any
lease.
Except for security deposits, whether an Exempt Lease or otherwise, no
lease shall provide for payment of rent more than one month in advance, and
Borrower shall not under any circumstances collect any such rent more than one
month in advance.
Borrower, at Lender's request, shall furnish Lender with executed copies of
all leases hereafter made of all or any part of the Property, and all leases
hereafter entered into will be in form and substance subject to the approval of
Lender (such approval not to be unreasonably withheld or delayed). All leases of
the Property entered into after the date hereof, or with respect to such leases
a separate agreement in recordable form and substance reasonably satisfactory to
Lender, shall specifically provide that such leases are subordinate to this
Instrument; that the tenant attorns to Lender, such attainment to be effective
upon Lender's acquisition of title to the Property; that the tenant agrees to
execute such further evidences of attornment as Lender may from time to time
reasonably request; that the attornment of the tenant shall not be terminated by
foreclosure; that in no event shall Lender, as holder of this Instrument or as
successor landlord, be liable to the tenant for any act or omission of any prior
landlord or for any liability or obligation of any prior landlord occurring
prior to the date that Lender or any subsequent owner acquire title to the
Property; and that Lender may, at Lender's option, accept or reject such
attornment. Except as otherwise provided in this Section, Borrower shall not,
without Lender's written consent, execute, modify, surrender or terminate,
either orally or in writing, any lease now existing or hereafter made of all or
any part of the Property, permit an assignment or
16
sublease of a lease without Lender's written consent, or request or consent to
the subordination of any lease of all or any part of the Property to any lien
subordinate to this Instrument.
Upon Lender's request, Borrower shall absolutely assign to Lender, by
written instrument satisfactory to Lender, all leases now existing or hereafter
made of all or any part of the Property and all security deposits made by
tenants in connection with such leases of the Property. Notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing,
Borrower shall have the revocable right and revocable license to occupy the
Property as landlord or otherwise and to collect, use and enjoy the rents,
issues and profits and other sums payable under and by virtue of any lease (but
only as the same become due under the provisions of such lease) and to enforce
the covenants of the leases; provided that after any such Event of Default, any
amounts collected by Borrower shall be held by Borrower in trust for the benefit
of Lender for use in the payment of all sums due under the Loan Documents.
SECTION 15. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN BORROWER.
(a) Except as provided in paragraph (c) of this Section or in Section 32 of
this Instrument, Borrower shall not cause or suffer to occur any sale or
transfer of (i) all or any part of the Property, or any interest therein, or
(ii) beneficial interests in Borrower (if Borrower is not a natural person or
persons but is a corporation, partnership, trust or other legal entity).
(b) For purposes of this Section, a sale or transfer of a beneficial
interest in Borrower shall be deemed to include, but is not limited to:
(i) if Borrower or any general partner of Borrower is a corporation,
the voluntary or involuntary sale, conveyance, transfer or pledge of a
majority of such corporation's stock (or the stock of any corporation
directly or indirectly controlling such corporation) by operation of law or
otherwise, or the creation or issuance of new stock by which an aggregate
of more than 49% of such corporation's stock shall be vested in a party or
parties who are not now stockholders;
(ii) if Borrower or any general partner is a limited liability
company, (a) the change, removal or resignation of a managing member, or
(b) the voluntary or involuntary sale, conveyance, transfer or pledge
(whether by operation of law or otherwise) of a majority of such limited
liability company's membership interests (whether in number or voting
power) or the stock of any corporation directly or indirectly controlling
such limited liability company, or (c) the creation or issuance of new
membership interests by which an aggregate of more than 49% of such limited
liability company's interests (whether in number or voting power) shall be
vested in a party or parties who are not now members;
(iii) if Borrower, or any general partner of Borrower, is a limited or
general partnership, 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;
17
(iv) if Borrower is a limited partnership, the transfer or pledge of a
majority of the limited partnership interests which in the aggregate
constitute more than a 49% interest in Borrower, or any profits or proceeds
relating to such limited partnership interests.
(c) Notwithstanding the foregoing, the following shall not be deemed a
violation of this Section:
(i) a transfer of less than a 49% interest in Borrower, or any
partner, shareholder or member of Borrower, by devise, descent or by
operation of law upon the death of a partner, member or stockholder of
Borrower;
(ii) a transfer of a limited partner, shareholder or non-managing
member interest in Borrower for estate planning purposes to an immediate
family member of such limited partner, shareholder or member, or a trust
for the benefit of an immediate family member;
(iii) a transfer of a general partner or managing member interest in
Borrower for estate planning purposes to an immediate family member of such
partner or member, or a trust for the benefit of an immediate family
member, subject to obtaining Lender's prior written consent, which consent
shall not be unreasonably withheld subject to the criteria set forth in
Subsection (b) of Section 32 of this Instrument; or
(iv) a transfer of all or any part of the Property, or any interest
therein, or beneficial interests in Borrower to any "Fortress Affiliate"
(as defined herein), provided Borrower shall comply with the provisions of
Section 32 in connection with a transfer of all or any part of the
Property. As used herein, a "Fortress Affiliate" means an entity (a) in
which at least 51% of the ownership interests of such entity are owned,
directly or indirectly, by Fortress Investment Group, (b) which is
controlled by Fortress Investment Group and (c) of which the day-to-day
business affairs are managed, directly or indirectly, by Fortress
Investment Group.
SECTION 16. FURTHER ENCUMBRANCES. Except only for the liens and security
interests in favor of Lender under this Instrument and the other Loan Documents,
without Lender's prior written consent, which Lender may withhold in its sole
discretion, Borrower shall not execute, cause, allow or suffer any mortgage,
deed of trust, deed to secure debt, assignment of leases or rents, statutory
lien or other lien (unless Borrower is, in good faith, contesting any such lien,
in which case Borrower shall, in accordance with Section 4 hereof, discharge or
bond over any such lien within sixty (60) days after Borrower receives notice of
such lien), irrespective of its priority, to encumber all or any portion of the
Property or the leases, rents or profits thereof, or any interest in any of the
foregoing.
SECTION 17. GENERAL INDEMNITY. In addition to any other indemnification
obligation set forth elsewhere in the Loan Documents, Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Lender and its shareholders, directors, officers, agents, employees,
contractors, attorneys, servicers, and successors and assigns (the "Indemnified
Parties") from and against any and all claims, suits, liabilities (including,
without
18
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value (provided that, with
respect to diminutions in value, Borrower shall not be liable to Lender for an
amount in excess of the sum of (i) the principal amount of the Note, plus (ii)
interest on the indebtedness evidenced by the Note plus (iii) all other sums
payable to Lender under the Loan Documents), punitive damages incurred by Lender
payable to third parties (other than punitive damages arising as a direct result
of Lender's actions), fines, penalties, charges, fees, expenses, judgments,
awards or amounts paid in settlement, of whatever kind or nature (including, but
not limited to reasonable attorneys' fees and other costs of defense) (the
"Losses") imposed upon or incurred by or asserted against any Indemnified
Parties and directly or indirectly arising out of or in any way relating to any
one or more of the following (but excluding Losses arising out of the
Indemnified Parties' gross negligence or willful misconduct): (a) ownership of
this Instrument or any of the Loan Documents, or ownership of the Property or
any interest therein, or demand for or receipt of any Rents; (b) any amendment
to, or restructuring of, any of the Loan Documents or the obligations evidenced
or secured thereby; (c) any and all lawful action that may be taken by Lender in
connection with the enforcement of the provisions of any of the Loan Documents,
whether or not suit is filed in connection with same, or in connection with
Borrower, any guarantor or indemnitor and/or any member, partner, joint venturer
or shareholder thereof becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to
or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of Borrower to perform or be in compliance with any
of the terms of any of the Loan Documents; (g) performance of any labor or
services or the furnishing of any materials or other property in respect of the
Property or any part thereof; (h) the failure of any person to file timely with
the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients
of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may
be required in connection with this 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 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 Section; (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; or (m) any misrepresentation
made by Borrower in any of the Loan Documents. Any amounts payable to any of the
Indemnified Parties by reason of the application of this Section shall become
immediately due and payable upon demand and shall bear interest at rate then
applicable to principal outstanding under the Note.
SECTION 18. ASSIGNMENT OF RENTS; APPOINTMENT OF RECEIVER; LENDER IN POSSESSION.
As part of the consideration for the indebtedness evidenced by the Note,
Borrower hereby presently, absolutely and unconditionally assigns and transfers
to Lender all the rents and revenues of the Property, including those now due,
past due, or to become due by virtue of any lease or other agreement for the
occupancy or use of all or any part of the Property, regardless of to whom the
rents and revenues of the Property are payable. Borrower hereby
19
authorizes Lender or Lender's agents to collect the aforesaid rents and revenues
and hereby directs each tenant of the Property to pay such rents to Lender or
Lender's agents; provided, however, that prior to written notice given by Lender
to Borrower of an Event of Default, Borrower shall collect and receive all rents
and revenues of the Property as trustee for the benefit of Lender and Borrower,
to apply the rents and revenues so collected to the sums secured by this
Instrument as required by this Instrument, so long as no such Event of Default
has occurred and is continuing, to the account of Borrower, it being intended by
Borrower and Lender that this assignment of rents constitutes an absolute
assignment and not an assignment for additional security only. Upon delivery of
written notice by Lender to Borrower of an Event of Default, and without the
necessity of Lender entering upon and taking and maintaining full control of the
Property in person, by agent or by a court-appointed receiver, Borrower's
license to collect the rents and revenues shall immediately cease and terminate,
and Lender shall immediately be entitled to possession of all rents and revenues
of the Property as specified in this Section as the same become due and payable,
including, but not limited to, rents then due and unpaid, and all such rents
shall immediately upon delivery of such notice be held by Borrower as trustee
for the benefit of Lender only; provided, however, that the written notice by
Lender to Borrower of the breach by Borrower shall contain a statement that
Lender exercises its rights to such rents. Borrower agrees that commencing upon
delivery of such written notice of Borrower's Event of Default by Lender to
Borrower, each tenant of the Property shall make such rents payable to and pay
such rents to Lender or Lender's agents on Lender's written demand to any tenant
therefor, delivered to such tenant personally, by mail or by delivering such
demand to the tenant at its location in the Property, without any liability on
the part of said tenant to inquire further as to the existence of a default by
Borrower. At such time, if any, that such Event of Default is waived by Lender,
Borrower's license to collect rents shall be reinstated.
Borrower hereby covenants that Borrower has not executed any prior
assignment of said rents, that Borrower has not performed, and will not perform,
any acts or has not executed, and will not execute, any instrument which would
prevent Lender from exercising its rights under this Section, and that at the
time of execution of this Instrument there has been no prepayment of any of the
rents of the Property for more than one month prior to the due dates of such
rents. Borrower covenants that Borrower will not hereafter collect or accept
payment of any rents of the Property more than one month prior to the due dates
of such rents. Borrower further covenants that Borrower will execute and deliver
to Lender such further assignments of rents and revenues of the Property as
Lender may from time to time reasonably request.
Borrower agrees that upon or at any time after (i) the occurrence of an
Event of Default hereunder, under the Note or any other Loan Document and during
the continuation thereof, or (ii) the first publication of notice of sale for
the foreclosure of this Instrument pursuant to Minnesota Statutes, Chapter 580,
or (iii) the commencement of an action to foreclose this Instrument pursuant to
Minnesota Statutes, Chapter 581, or (iv) the commencement of any period of
redemption after foreclosure of this Instrument, Lender shall, in any such
event, and at any such time, upon application to the District Court in the
county where the Property or any part thereof is located, by an action separate
from the foreclosure under Chapter 580, in the foreclosure action under Chapter
581 or by independent action (it being understood and agreed that the existence
of a foreclosure under Chapter 580 or a foreclosure action under Chapter 581 is
not a prerequisite to any action for a receiver hereunder), be entitled to the
appointment of a receiver for the rents, issues, profits and all other income of
every kind which shall accrue and be
20
owing for the use or occupation of the Property or any part thereof, whether
before or after foreclosure, or during the full statutory period of redemption,
if any, upon a showing that Borrower has breached any covenant contained in this
Instrument, the Note or the Loan Agreement, including, without limitation, any
covenant relating to any of the following:
(1) Repayment of tenant security deposits, with interest thereon, as
required by Minnesota Statutes, Section 504B.178, if applicable;
(2) Payment when due of prior or current real estate taxes or special
assessments with respect to the Property, or the periodic escrow for
payment of the same;
(3) Payment when due of premiums for insurance of the types required
hereby, or the periodic escrow for payment of the same; or
(4) Keeping of the covenants required of a lessor or licensor pursuant to
Minnesota Statutes, Section 504B.161, Subdivision 1, if applicable.
Lender shall be entitled to the appointment of a receiver without regard to
waste, adequacy of the security or solvency of Borrower. The court shall
determine the amount of the bond to be posted by the receiver. The Lender or the
receiver, who shall be an experienced property manager, shall collect (until the
indebtedness secured hereby is paid in full and, in the case of a foreclosure
sale, during the entire redemption period, if any) the rents, issues, profits
and all other income of any kind from the Property, manage the Property so as to
prevent waste, execute leases within or beyond the period of the receivership,
if approved by the court, and apply all rents, issues, profits and other income
collected by him in the following order:
(a) to payment of all reasonable fees of the receiver, if any, approved by
the court;
(b) to the items listed in clauses (1) through (4) above (to the extent
applicable) in the priority as numbered;
(c) to expenses for normal maintenance, operation and management of the
Property, including but not limited to Lender's out-of-pocket costs
and all other costs and expenses which Lender is entitled to pay or
incur pursuant to the Assignment; and
(d) the balance to Lender to be credited, prior to commencement of
foreclosure, against the indebtedness secured hereby, in such order as
Lender may elect, or to be credited, after commencement of
foreclosure, to the amount required to be paid to effect a
reinstatement prior to foreclosure sale, or to be credited, after a
foreclosure sale, at the option of Lender, at its sole discretion, to
any deficiency or to the amount required to be paid to effect a
redemption, pursuant to Minnesota Statutes, Sections 580.30, 580.23,
581.10, 582.032, 582.32, or their successors, as the case may be, with
any excess to be paid to Borrower; provided, however, that if this
Instrument is not reinstated nor the Property redeemed, as and during
the times provided by said Sections 580.30, 580.23, 581.10, 582.032 or
582.32 or their successors, the entire amount received pursuant
hereto, after deducting therefrom the amounts applied by Lender to any
deficiency, shall be the property
21
of the purchaser of the Property at the foreclosure sale, together
with all or any part of the Property acquired through foreclosure.
The receiver shall file periodic accountings as the court determines are
necessary and a final accounting at the time of his discharge. Lender shall have
the right, at any time and without limitation, as provided in Minnesota
Statutes, Section 582.03, to advance money to the receiver to pay any part or
all of the expenses which the receiver should otherwise pay, if cash were
available from the Property, and all sums so advanced, with interest at a rate
per annum of five percent (5.00%) in excess of the rate provided in the first
paragraph of the Note (the "Default Rate"), shall be a part of the sum required
to be paid to redeem from any foreclosure sale. Said sums shall be proved by the
affidavit of Lender, its agent or attorney, describing the expenses for which
the same were advanced and describing the Property, which must be filed for
record in the office where this Instrument is recorded, and a copy thereof shall
be furnished to the sheriff and the receiver at least ten (10) days before the
expiration of any period of redemption. Until fully paid, the amounts required
to be paid to effect a redemption shall continue to accrue interest at the
Default Rate.
The costs and expenses (including any receiver's fees and attorney's fees)
incurred by Lender pursuant to the powers herein contained shall be immediately
reimbursed by Borrower to Lender on demand, shall be secured hereby and shall
bear interest from the date incurred at the Default Rate. Lender shall not be
liable to account to Borrower for any action taken pursuant hereto, other than
to account for any rents actually received by Lender.
Lender shall not be liable to Borrower, anyone claiming under or through
Borrower or anyone having an interest in the Property by reason of anything done
or left undone by Lender under this Section unless such liability arises as a
direct result of the gross negligence or willful misconduct of Lender.
If the rents of the Property are not sufficient to meet the actual costs,
if any, of taking control of and managing the Property and collecting the rents,
any actual funds expended by Lender for such purposes shall become indebtedness
of Borrower to Lender secured by this Instrument pursuant to Section 8 hereof.
Unless Lender and Borrower agree in writing to other terms of payment, such
amounts shall be payable upon notice from Lender to Borrower requesting payment
thereof and shall bear interest from the date of disbursement at the rate stated
in the Note unless payment of interest at such rate would be contrary to
applicable law, in which event such amounts shall bear interest at the highest
rate which may be collected from Borrower under applicable law.
Any entering upon and taking and maintaining of control of the Property by
Lender or the receiver and any application of rents as provided herein shall not
cure or waive any default hereunder or invalidate any other right or remedy of
Lender under applicable law or provided herein. This assignment of rents of the
Property shall terminate at such time as this Instrument ceases to secure
indebtedness held by Lender.
SECTION 19. DEFAULTS; ACCELERATION; REMEDIES.
Each of the following shall constitute an "Event of Default" under this
Instrument:
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(a) Any failure of Borrower to pay any money as and when due under the Note
or under any of the other Loan Documents;
(b) Any breach of Sections 5, 15, 16, or 29 of this Instrument, or the
Environmental Indemnity Agreement;
(c) Other than as specified in items (a) or (b) above, any breach of any
covenant, representation, warranty, or other obligation of Borrower or any
guarantor or indemnitor under the Note, this Instrument, or any of the other
Loan Documents, which breach is not completely cured on or before the 30th day
after notice of the same from Lender to Borrower; provided however that if the
default is capable of cure but with diligence cannot be cured within such period
of 30 days, and if Borrower shall have given Lender evidence satisfactory to
Lender that Borrower has commenced the cure within such 30-day period and at all
times after such commencement has pursued such cure diligently, then such period
shall be extended for so long as is reasonably necessary, but in no event beyond
the 90th day after the original notice of default.
If Lender shall have the right to exercise any of its remedies by reason of
any default as to which there is no grace period or by reason of expiration of
any grace period without cure of any applicable default, then there shall be no
requirement of notice and time to cure for any other or subsequent default.
Upon the occurrence and during the continuance of any Event of Default,
Lender may, at Lender's option, declare all of the sums secured by this
Instrument to be immediately due and payable without further demand, and may
exercise any and all remedies permitted hereunder, under any of the Loan
Documents, or pursuant to applicable law. Without limitation of the foregoing,
Lender is hereby granted a power of sale and may invoke the power of sale
granted herein. Borrower acknowledges that the power of sale herein granted may
be exercised by Lender without prior judicial hearing. Borrower has the right to
bring an action to assert the non-existence of a breach or any other defense of
Borrower to acceleration and sale. Lender shall be entitled to collect from
Borrower all actual costs and expenses incurred in pursuing such remedies,
including, but not limited to, reasonable attorney's fees and costs of
environmental reports, appraisals, documentary evidence, abstracts, and title
reports.
Without limiting the generality of the foregoing, Lender may, upon
compliance by Lender of any requirements of applicable law:
(i) enter and take possession of the Property or any part thereof,
exclude Borrower and all persons claiming under Borrower wholly or partly
therefrom, and operate, use, manage and control the same, or cause the same
to be operated by a person selected by Lender, and upon such entry, from
time to time, at the expense of Borrower and of the Property, make all such
repairs, replacements, alterations, additions or improvements thereto as
Lender may deem proper, and collect and receive the rents, revenues,
issues, profits, royalties, income and be authorized to incur under the
provisions of this Instrument and applicable law, the remainder to be
applied to the
23
payment, performance and discharge of the obligations secured by this
Instrument in such order as Lender may determine until the same have been
paid in full;
(ii) institute an action for the foreclosure of this Instrument and
the sale of the Property pursuant to the judgment or decree of a court of
competent jurisdiction;
(iii) foreclose this Instrument by action or advertisement, pursuant
to the statutes of the State of Minnesota in which case made and provided,
power being expressly granted to sell the Property at public auction and
convey the same to the purchaser in fee simple and, out of the proceeds
arising from such sale, to pay all indebtedness secured hereby with
interest, and all legal costs and charges of such foreclosure and the
maximum attorneys fees permitted by law, which costs, charges and fees the
Borrower agrees to pay;
(iv) take all steps to protect and enforce the rights of Lender under
this Instrument by suit for specific performance of any covenant herein
contained, or in aid of the execution of any power herein granted or for
the enforcement of any other rights; and/or
(v) exercise any or all of the rights and remedies available to a
secured party under the Uniform Commercial Code, including the right to (A)
enter the Property and take possession of the Collateral without demand or
notice and without prior judicial hearing or legal proceedings, which
Borrower hereby expressly waives, (B) require Borrower to assemble the
Collateral, or any portion thereof, and make it available to Lender at a
place or places designated by Lender and reasonably convenient to both
parties and (C) sell all or any portion of the Collateral at public or
private sale, without prior notice to Borrower except as otherwise required
by law (and if notice is required by law, after ten days' prior written
notice), at such place or places and at such time or times and in such
manner and upon such terms, whether for cash or on credit, as Lender in its
sole discretion may determine. As to any property subject to Article 9 of
the Uniform Commercial Code included in the Property, Lender may proceed
under the Uniform Commercial Code or proceed as to both the real property
and personal property in accordance with the provisions of this Instrument
and the rights and remedies that Lender may have at law or in equity, in
respect of the Property, and treat both the real property and personal
property included in the Property as one parcel or package of security.
Borrower shall have the burden of proving that any sale pursuant to this
Section or pursuant to the Uniform Commercial Code was conducted in a
commercially unreasonable manner.
Any deed delivered to the purchaser at any sale pursuant hereto may be
without any covenant or warranty, expressed or implied. The recitals in the deed
shall be prima facie evidence of the truth of the statements made therein. The
proceeds of any sale made either under the power of sale hereby given or under a
judgment, order or decree made in any action to foreclose or to enforce this
Instrument shall be applied in the following order: (a) to all actual costs and
expenses of the sale, including, but not limited to, fees for any foreclosure
services, reasonable attorney's fees and costs of title evidence; (b) to all
sums secured by this Instrument
24
in such order as Lender, in Lender's sole discretion, directs; and (c) the
excess, if any, to the person or persons legally entitled thereto.
Borrower shall not at any time (a) insist upon, plead or in any manner
whatever claim or take any benefit or advantage of any applicable present or
future stay, extension or moratorium law or (b) claim, take or insist upon any
benefit or advantage of any present or future law providing for the valuation or
appraisal of the Property prior to any sale or sales thereof which may be made
under or by virtue of the provisions of this Instrument; and Borrower hereby
waives all benefit or advantage of any such law or laws. Borrower hereby waives
any and all rights and equities of redemption from sale under any judgment of
foreclosure of this Instrument and all notice or notices of seizure, and all
right to have the Property marshaled upon any foreclosure hereof. Lender shall
not be obligated to pursue or exhaust its rights or remedies as against any part
of the Property before proceeding against any other part thereof and Borrower
hereby waives any right or claim of right to have Lender proceed in any
particular order. Borrower hereby waives and releases all errors, defects and
imperfections in any proceedings instituted by Lender under this Instrument.
Anything to the contrary herein or elsewhere notwithstanding, Lender may
cease or suspend any and all performance required of Lender under the Loan
Documents upon and during the continuance of any Event of Default.
SECTION 20. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower shall
voluntarily file a petition under Title 11 of the U.S. Code (the "Act"), as such
Act may from time to time be amended, or under any similar or successor Federal
statute relating to bankruptcy, insolvency, arrangements or reorganizations, or
under any state bankruptcy or insolvency act, or file an answer in any
involuntary proceeding admitting insolvency or inability to pay debts, or if
Borrower shall fail to obtain a vacation of involuntary proceedings brought for
the reorganization, dissolution or liquidation of Borrower, within 120 days of
the filing of such involuntary proceeding, or if Borrower shall be adjudged a
bankrupt, or if a trustee or receiver shall be appointed for Borrower or
Borrower's property, or if the Property shall become subject to the jurisdiction
of a Federal bankruptcy court or similar state court, or if Borrower shall make
an assignment for the benefit of Borrower's creditors, or if there is an
attachment, execution or other judicial seizure of any portion of Borrower's
assets and such seizure is not discharged within 60 days, then Lender may, at
Lender's option, declare all of the sums secured by this Instrument to be
immediately due and payable without prior notice to Borrower, and Lender may
invoke any remedies permitted or provided for herein or in any of the Loan
Documents or pursuant to applicable law. Any reasonable attorney's fees and
other actual expenses incurred by Lender in connection with Borrower's
bankruptcy or any of the other aforesaid events shall be additional indebtedness
of Borrower secured by this Instrument pursuant to Section 8 hereof.
SECTION 21. REMEDIES CUMULATIVE. Each remedy provided in this Instrument is
distinct and cumulative to all other rights or remedies under this Instrument or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
25
SECTION 22. WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby waives the right
to assert any statute of limitations as a bar to the enforcement of the lien of
this Instrument or to any action brought to enforce the Note or any other
obligation secured by this Instrument.
SECTION 23. WAIVER OF MARSHALLING. Notwithstanding the existence of any other
security interest in the Property held by Lender or by any other party, Lender
shall have the right to determine the order in which any or all of the Property
shall be subjected to the remedies provided herein. Lender shall have the right
to determine the order in which any or all portions of the indebtedness secured
hereby are satisfied from the proceeds realized upon the exercise of the
remedies provided herein. Borrower, any party who consents to this Instrument
and any party who now or hereafter acquires a security interest in the Property
and who has actual or constructive notice hereof hereby waives any and all right
to require the marshalling of assets in connection with the exercise of any of
the remedies permitted by applicable law or provided herein.
SECTION 24. RELEASE. Upon payment of all sums secured by this Instrument, Lender
shall release this Instrument. Borrower shall pay all reasonable actual costs
incurred by Lender in connection with the release of this Instrument.
SECTION 25. ADDITIONAL BORROWER COVENANTS.
(a) Borrower shall perform and complete (or cause to be performed and
completed) the following work at the Property in a workmanlike and lien-free
manner by June 30, 2004: exterior painting; scrape, prime and paint rooftop
cooling tower support structures, steel stairs at south end of building,
exterior stair and dock area handrails and rusted exterior service doors and
frames.
(b) Borrower has entered into a certain Escrow and Disbursement Agreement
(the "Escrow Agreement") dated as of May 12, 2004, by and between Meritex
Enterprises, Inc. ("Meritex"), Borrower and First American Title Insurance
Company. Borrower shall cause Meritex to perform and complete all "Remaining
Landlord Improvements" (as such term is defined in the Escrow Agreement) in
accordance with and as required under the Unisys Lease. If at any time pursuant
to Section 10 of the Escrow Agreement Borrower becomes entitled to utilize the
funds in the Improvement Escrow Account (as such term is defined in the Escrow
Agreement), Borrower shall promptly thereafter perform and complete (or cause to
be performed and completed) the Remaining Landlord Improvements in accordance
with and as required under the Unisys Lease. If at any time pursuant to Section
10 of the Escrow Agreement Borrower becomes entitled to receive the funds in the
Improvement Escrow Account prior to the performance and completion of the
Remaining Landlord Improvements (other than reimbursements for work performed by
Borrower), Borrower shall deposit or cause to be deposited such funds with
Lender for deposit into the Replacement Reserve established pursuant to the
Replacement Reserve and Security Agreement, and such funds shall be disbursed in
accordance with the terms and provisions of the Replacement Reserve and Security
Agreement upon Borrower's performance and completion of the Remaining Landlord
Improvements in accordance with and as required under the Unisys Lease.
26
SECTION 26. NONRECOURSE LOAN. Subject to the provisions of this Section, and
notwithstanding any provision of the Loan Documents other than this Section, the
personal liability of Borrower, and of Indemnitor and any general partner of
Borrower, to pay the principal of and interest on the debt evidenced by the Note
and any other agreement evidencing Borrower's obligations under the Note shall
be limited to (a) the Collateral, (b) the personal property described in and
pledged under any Loan Document other that this Instrument, and (c) the rents,
profits, issues, products and income of the Property, including any received or
collected by or on behalf of Borrower after an Event of Default. Notwithstanding
the foregoing, Borrower, Indemnitor and any general partner of Borrower shall be
folly and personally, jointly and severally, liable for payment and performance
of all obligations set forth in the Loan Documents, including the payment of all
principal, interest, and other amounts under the Note, in the event of (i) the
occurrence of an Event of Default under Sections 15 or 16 (unless the Event of
Default under Section 16 is the existence of a mechanics' lien against the
Property) of this Instrument, or (ii) the occurrence of any condition or event
described in Section 20 (other than any involuntary bankruptcy proceedings, so
long as neither Borrower nor any affiliate of Borrower has arranged, solicited,
induced, financed or colluded with others in the filing of such involuntary
petition, case or proceeding).
Further, Borrower, Indemnitor and any general partner of Borrower shall be
personally liable in the amount of any loss, damage or cost resulting from (a)
fraud or intentional misrepresentation by Borrower or Indemnitor in connection
with obtaining the loan evidenced by the Note, (b) any intentional physical
waste of any portion of the Property or any other collateral securing the loan
evidenced by the Note by Borrower, (c) misappropriation of insurance proceeds,
condemnation awards, or other sums or payments attributable to the Property not
applied in accordance with the provisions of the Loan Documents, (d) all rents,
profits, issues, products and income of the Property received or collected by or
on behalf of Borrower after an Event of Default and not applied to payment of
principal and interest due under the Note, and to the payment of actual and
reasonable operating expenses of the Property, as they become due or payable
(except to the extent that such application of such funds is prevented by
bankruptcy, receivership, or similar judicial proceeding in which Borrower is
legally prevented from directing the disbursement of such sums), (e)
misappropriation (including failure to turn over to Lender on demand following
an Event of Default) of tenant security deposits and rents collected in advance,
or of funds held by Borrower for the benefit of another party, (f) failure to
pay transfer fees and charges due Lender in connection with any subordinate
financing, or in connection with any transfer of all or any part of the
Property, or any interest therein, or transfer of any beneficial interest in
Borrower (if Borrower is not a natural person or persons but is a corporation,
partnership, limited liability company, trust or other legal entity), (g)
failure by Borrower, Indemnitor, any general partner of Borrower, or any other
indemnitor or guarantor to comply with the covenants, obligations, liabilities,
warranties and representations contained in the Environmental Indemnity
Agreement or otherwise pertaining to environmental matters, (h) in the event
Lender has waived (or Borrower has failed to pay) the monthly collection for
real and personal property taxes, assessments, insurance premiums, or ground
rents, then failure by Borrower to pay any or all such taxes, assessments,
premiums and rents, to the extent of any rents, issues, profits and/or income
collected by Borrower in excess of normal and verifiable operating expenses of
the Property, (i) any management fee taken by Borrower or any principal or
affiliate of Borrower after an Event of Default, (j) termination of the Unisys
Lease as a result of a landlord default thereunder, (k) the occurrence of an
Event of Default under Section 29, to
27
the extent such breach is reasonably likely to result in substantive
consolidation or (1) the occurrence of an Event of Default under Section 16 as a
result of the existence of a mechanics' lien against the Property.
No provision of this Section shall (i) affect the enforcement of the
Environmental Indemnity Agreement or any guaranty or similar agreement executed
in connection with the debt evidenced by the Note, (ii) release or reduce the
debt evidenced by the Note, (iii) impair the lien of this Instrument, (iv)
impair the rights of Lender to enforce any provisions of this Instrument, (v)
limit Lender's ability to obtain a deficiency judgment or judgment on the Note
or otherwise against Borrower to the extent necessary to obtain any amount for
which Borrower may be liable in accordance with this Section.
SECTION 27. REPRESENTATIONS OF BORROWER. Borrower hereby represents and warrants
to Lender the following:
(a) Organization. Borrower is a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
formation, and is qualified to do business as a limited liability company in the
state where the Property is located. There are no proceedings or actions
pending, threatened in writing or contemplated for the liquidation, termination
or dissolution of Borrower.
(b) Rent Roll. Borrower has delivered to Lender a certified Rent Roll (the
"Rent Roll"), which constitutes a true, correct, and complete list of each and
every lease affecting the Property, together with all extensions and amendments
thereof (the "Existing Leases"); Borrower has delivered to Lender a true,
correct, and complete copy of each of the Existing Leases; and there are no
other leases, assignments, modifications, extensions, renewals, or other
agreements of any kind whatsoever (written or oral) outstanding with respect to
the leases or the Property.
(c) Leases. Unless otherwise specified in the Rent Roll:
(i) the Existing Leases are in full force and effect;
(ii) Borrower has not given any notice of default to any tenant under
an Existing Lease (an "Existing Tenant") which remains uncured;
(iii) to the best of Borrower's knowledge, no Existing Tenant has any
set off, claim or defense to the enforcement of any Existing Lease;
(iv) no Existing Tenant is in arrears in the payment of rent,
additional rent or any other charges whatsoever due under any Existing
Lease; or, to the knowledge of Borrower, is materially in default in the
performance of any other obligations of such Existing Tenant under the
applicable Existing Lease; and
(v) Borrower has completed all work or alterations required of the
landlord or lessor under each Existing Lease; and all of the other
obligations of landlord or lessor under the Existing Leases have been
performed.
28
(d) Rents. The Rent Roll truly and completely discloses all annual and
monthly rents payable by all Existing Tenants, including, to the best of
Borrower's knowledge, all percentage rents, if any, expiration dates of the
Existing Leases, and the amount of security deposit being held by Borrower under
each Existing Lease, if any; and Borrower has not granted any Existing Tenant
any rent concessions (whether in form of cash contributions, work agreements,
assumption of an Existing Tenant's other obligations, or otherwise) or
extensions of time whatsoever not reflected in such Rent Roll.
(e) Lease Issues. There are no legal proceedings commenced (or, to the best
of the knowledge of Borrower, threatened) against Borrower by any Existing
Tenant; no rental in excess of one month's rent has been prepaid under any of
the Existing Leases; each of the Leases is valid and binding on Borrower and, to
the best of Borrower's knowledge, the other parties thereto in accordance with
its terms; and the execution of this Instrument and the other Loan Documents
will not constitute an event of default under any of the Existing Leases.
(f) Security Deposits. Except as set forth on the Rent Roll, Borrower
currently holds the security deposits (if any) specified in the Existing Leases
and has not given any credit, refund, or set off against such security deposits
to any person.
(g) No Residential Units. There are no residential units in the Property,
and no portion of the Property is an apartment or other unit subject to any form
or rent control, stabilization or regulation; and no person presently occupies
any part of the Property for dwelling purposes.
(h) No Undisclosed Tenants. Except for Borrower, there are no persons or
entities legally occupying space in the Property as tenants other than the
persons or entities specifically named in the Existing Leases.
(i) Title. Except as specifically listed in the schedule of exceptions to
coverage in the title policy insuring Lender's interest in the Property,
Borrower is now in possession of the Property; Borrower's possession of the
Property is peaceable and undisturbed; Borrower does not know any facts by
reason of which any claim to the Property, or any part thereof, might arise or
be set up adverse to Borrower; and the Property is free and clear of (i) any
lien for taxes (except real property taxes not yet due and payable for the
calendar year in which this Instrument is being executed), and (ii) any
easements, rights-of-way, restrictions, encumbrances, liens or other exceptions
to title by mortgage, decree, judgment, agreement, instrument, or, to the
knowledge of Borrower, proceeding in any court.
(j) Liens. All charges for labor, materials or other work of any kind
furnished in connection with the construction, improvement, renovation or
rehabilitation of the Property at Borrower's request or any portion thereof have
been, or concurrently with the closing of the loan secured by this Instrument
will be, paid in full, and, to the best of Borrower's knowledge, no unreleased
affidavit claiming a lien against the Property, or any portion thereof, for the
supplying of labor, materials or services for the construction of improvements
on the Property has been executed or recorded in the mechanic's lien or other
appropriate records in the county in which the Property is located.
29
(k) Compliance with Law. To the best of Borrower's knowledge, the Property
and the current and contemplated uses of the Property are in compliance with all
applicable federal, state and municipal laws, rules, regulations and ordinances,
applicable restrictions, zoning ordinances, building codes and regulations,
building lines and easements, including, without limitation, federal and state
environmental protection law and the Americans with Disabilities Act of 1990,
the Fair Housing Amendments Act of 1988, all state and local laws or ordinances
related to handicapped access, and any statute, rule, regulation, ordinance, or
order of governmental bodies or regulatory agencies, or any order or decree of
any court adopted or enacted with respect thereto; no governmental authority
having jurisdiction over any aspect of the Property has made a claim or
determination that there is any such violation; the Property is not included in
any area identified by the Secretary of Housing and Urban Development pursuant
to the Flood Disaster Protection Act of 1973, as amended, as an area having
special flood hazards; and all permits, licenses and the like which are
necessary for the operation of the Property have been issued and are in full
force and effect.
(l) Adverse Changes. There have been no material adverse changes, financial
or otherwise, in the condition of Borrower from that disclosed to Lender in the
loan application submitted to Lender by Borrower, or in any supporting data
submitted in connection with the Loan, and all of the information contained
therein was true and correct when submitted and is now substantially and
materially true and correct on the date hereof.
(m) Claims, Litigation. There is no claim, litigation or condemnation
proceeding pending, or, to the knowledge of Borrower, threatened in writing,
against the Property or Borrower, which would affect the Property or Borrower's
ability to perform its obligations in the connection with the Loan.
(n) Single Purpose. Borrower does not own any real property or assets other
than the Property and does not operate any business other than the management
and operation of the Property.
(o) Bankruptcy. No proceeding in bankruptcy or insolvency has ever been
instituted by or against Borrower, Indemnitor, Drawbridge Special Opportunities
Fund LP ("Drawbridge") or the general partner in Drawbridge, and no such
proceeding is now pending or, to the best of Borrower's knowledge, contemplated.
(p) Solvency. Borrower is, and if there are any general partners or members
of Borrower, such partners or members are, solvent pursuant to the laws of the
United States, as reflected by the entries in Borrower's books and records and
as reflected by the actual facts.
(q) Enforceability of Loan Documents. The Loan Documents have been duly
authorized, executed and delivered by Borrower and constitute valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
respective terms. No approval, consent, order or authorization of any
governmental authority and no designation, registration, declaration or filing
with any governmental authority is required in connection with the execution and
delivery of the Note, this Instrument or any other Loan Document. Neither
Borrower nor any guarantor or indemnitor has any defense or offset to the
enforcement of any Loan Document, or any claim against Lender. Neither Borrower
nor any guarantor or
30
indemnitor has any right whatsoever against Lender other than the express
contractual obligations of Lender set forth in the Loan Documents. Any rights or
claims contrary to this provision, whether known or unknown, are hereby
expressly waived.
(r) Non-contravention. The execution and delivery of the Loan Documents
will not violate or contravene in any way the articles of incorporation or
bylaws or partnership agreement, articles of organization or operating agreement
as the case may be, of Borrower or any indenture, agreement or instrument to
which Borrower is a party or by which it or its property may be bound, or be in
conflict with, result in a breach of or constitute a default under any such
indenture, agreement or other instrument, result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any of the
property or assets of Borrower, except as contemplated by the provisions of such
Loan Documents, and no action or approval with respect thereto by any third
person is required.
(s) Homestead. No part of the Property is all or a part of Borrower's
homestead or the homestead of anyone.
(t) Utilities. The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by public
utilities and the Property has accepted or is equipped to accept such utility
service.
(u) Public Roads. To the best of Borrower's knowledge, all public roads and
streets necessary for service of and access to the Property for the current or
contemplated use thereof have been completed, are serviceable and all-weather
and are physically and legally open for use by the public.
(v) Water and Sewers. The Property is serviced by public water and sewer
systems,
(w) Damage. The Property is free from damage caused by fire or other
casualty.
(x) Waste Disposal. To the best of Borrower's knowledge, except as
disclosed in any environmental report obtained by Lender in connection with the
loan secured by this Instrument, all liquid and solid waste disposal, septic and
sewer systems located on the Property are in a good and safe condition and
repair and in compliance with all applicable laws.
(y) Embargoed Person. At all times throughout the term of the Loan,
including after giving effect to any transfers permitted pursuant to the Loan
Documents, (a) none of the funds or other assets of Borrower, general partner of
Borrower and Indemnitor constitute property of, or are beneficially owned,
directly or indirectly, by any person, entity or government subject to trade
restrictions under U.S. law, including, but not limited to, the International
Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq., The Trading with
the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations
promulgated thereunder with the result that the investment in Borrower, general
partner of Borrower or Indemnitor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan made by the Lender is in violation
of law ("Embargoed Person"); (b) no Embargoed Person has any interest of any
nature whatsoever in Borrower, general partner of Borrower or Indemnitor, as
applicable, with the result that the investment in Borrower, general partner of
Borrower or Indemnitor (as applicable (whether directly or indirectly), is
prohibited by law or the Loan is in violation of the law; and
31
(c) none of the funds of Borrower, general partner of Borrower or Indemnitor, as
applicable, have been derived from any unlawful activity with the result that
the investment in Borrower, general partner of Borrower or Indemnitor, as
applicable (whether directly or indirectly), is prohibited by law or the Loan is
in violation of the law.
SECTION 28. BORROWER'S ADDITIONAL COVENANTS. Borrower hereby covenants, agrees
and undertakes as follows:
(a) Alterations of Property. Except as permitted under the Unisys Lease,
Borrower shall not undertake or commence any alterations of any improvements on
the Property the cost of which is in excess of five percent of the then original
principal amount of the Note, without the prior written consent of Lender (such
consent not to be unreasonably withheld, conditioned or delayed).
(b) Further Assurances. Borrower shall from time to time, at the reasonable
request of Lender, (i) promptly correct any defect, error or omission which may
be discovered in the contents of this Instrument or in any other Loan Document
or in the execution or acknowledgment thereof; (ii) execute, acknowledge,
deliver and record and/or file such further documents or instruments (including,
without limitation, further mortgages, security agreements, financing
statements, continuation statements, assignments of rents or leases and
environmental indemnity agreements) and perform such further acts and provide
such further assurances as may be reasonably necessary, desirable or proper, in
Lender's opinion, to carry out more effectively the purposes of this Instrument
and such other instruments and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof or thereof to be
covered hereby or thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements, or appurtenances to the
Property; provided that such documents or instruments do not materially increase
Borrower's liability under the Loan Documents; and (iii) execute, acknowledge,
deliver, procure, and file and/or record any document or instrument (including
specifically, but without limitation, any financing statement) deemed advisable
by Lender to protect the liens and the security interests herein granted against
the rights or interests of third persons; provided that such documents or
instruments do not materially increase Borrower's liability under the Loan
Documents. Borrower shall not be required to pay any costs of Lender connected
with any of the foregoing in this paragraph.
(c) Mortgage Taxes. Borrower shall at any time any law shall be enacted
imposing or authorizing the imposition of any tax upon this Instrument, or upon
any rights, titles, liens or security interests created hereby, or upon the
obligations secured hereby or any part thereof, promptly pay all such taxes;
provided that, if such law as enacted makes it unlawful for Borrower to pay such
tax, Borrower shall not pay nor be obligated to pay such tax, and in the
alternative, Borrower may, in the event of the enactment of such a law, and
must, if it is unlawful for Borrower to pay such taxes, prepay the obligations
secured hereby in full within 60 days after demand therefor by Lender.
(d) Minerals. Borrower shall not permit any drilling or exploration for or
extraction, removal or production of any mineral, natural element, compound or
substance from the surface or subsurface of the Property regardless of the depth
thereof or the method of mining or extraction thereof.
32
(e) Maintenance of Borrower Name, Structure. Borrower shall not change its
name, identity, structure or employer identification number during the term of
the Loan without the prior written consent of Lender not to be unreasonably
withheld.
(f) Costs and Expenses. Borrower shall pay within ten (10) business days of
demand all reasonable and bona fide out-of-pocket costs, fees and expenses and
other expenditures, including, but not limited to, reasonable attorneys' fees
and expenses, paid or incurred by Lender to third parties incident to this
Instrument or any other Loan Document (including, but not limited to, reasonable
attorneys' fees and expenses in connection with the negotiation, preparation and
execution hereof and of any other Loan Document and any amendment hereto or
thereto, any release hereof, any consent, approval or waiver hereunder or under
any other Loan Document, the making of any advance under the Note, and any suit
to which Lender is a party involving this Instrument or the Property) or
incident to the enforcement of the obligations secured hereby or the exercise of
any right or remedy of Lender under any Loan Document. In the event of any
dispute, action or lawsuit regarding the terms hereof or the terms of any other
Loan Document, the prevailing party will have the right to recover from the
other party all court costs and reasonable attorneys' fees and disbursements
incurred with respect thereto, in addition to all other applicable damages and
costs.
(g) Compliance with Laws. Borrower shall maintain and keep the Property in
compliance with all applicable laws.
SECTION 29. COVENANTS WITH RESPECT TO SINGLE PURPOSE, INDEBTEDNESS, OPERATIONS,
FUNDAMENTAL CHANGES OF BORROWER. Borrower represents, warrants and covenants as
of the date of hereof, and until such time as the indebtedness secured hereby is
paid in full, that Borrower:
(i) does not own and will not own any assets other than the Property
(including incidental personal property necessary for the operation thereof
and proceeds therefrom);
(ii) is not engaged and will not engage in any business, directly or
indirectly, other than the ownership, management and operation of the
Property;
(iii) will not enter into any contract or agreement with any partner,
member, shareholder, trustee, beneficiary, principal or affiliate of
Borrower except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length
basis with third parties other than such affiliate;
(iv) has not incurred and will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any obligation),
other than (i) the obligations secured by this Instrument, and (ii) trade
payables or accrued expenses incurred in the ordinary course of business of
operating the Property;
(v) has not made and will not make any loan or advances to any person
or entity;
33
(vi) is and reasonably expects to remain solvent and pay its own
liabilities, indebtedness, and obligations of any kind from its own
separate assets as the same shall become due [this representation is made
only as of the date hereof);
(vii) has done or caused to be done and will do all things necessary
to preserve its existence, and will not, nor will any partner, member,
shareholder, trustee, beneficiary, or principal amend, modify or otherwise
change its partnership certificate, partnership agreement, articles of
incorporation, by-laws, articles of organization, operating agreement, or
other organizational documents in any manner;
(viii) shall continuously maintain its existence and be qualified to
do business in all states necessary to carry on its business, specifically
including in the case of Borrower, the state where the Property is located;
(ix) will conduct and operate its business as presently conducted and
operated;
(x) will maintain books and records and bank accounts separate from
those of its partners, members, shareholders, trustees, beneficiaries,
principals, affiliates, and any other person or entity;
(xi) will be, and at all times will hold itself out to the public as,
a legal entity separate and distinct from any other (including any of its
partners, members, shareholders, trustees, beneficiaries, principals and
affiliates), and not as a department or division of any entity;
(xii) will file its own tax returns or consolidated returns but will
note that its assets are not available to creditors of affiliates;
(xiii) has and reasonably expects to maintain adequate capital for the
normal obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations [this
representation is made only as of the date hereof);
(xiv) will not seek, acquiesce in, or suffer or permit its
liquidation, dissolution or winding up, in whole or in part;
(xv) will not enter into any transaction of merger or consolidation,
or acquire by purchase or otherwise all or substantially all of the
business or assets of, or any stock of beneficial ownership of, any person
or entity;
(xvi) will not commingle or permit to be commingled its funds or other
assets with those of any other person or entity;
(xvii) has and will maintain its assets in such a manner that it is
not costly or difficult to segregate, ascertain or identify its individual
assets from those of any other person or entity;
34
(xviii) except as expressly provided for in the Loan Documents, does
not and will not hold itself out to be responsible for the debts or
obligations of any other person or entity;
(xix) except as expressly provided for in the Loan Documents, has not
and will not guarantee or otherwise become liable on or in connection with
any obligation of any other person or entity;
(xx) shall not do any act which would make it impossible to carry on
its ordinary business;
(xxi) will not possess or assign the Property for other than a
business or company purpose;
(xxii) shall not hold title to its assets other than in its name;
(xxiv) shall comply with all (and shall not suffer to be inaccurate
any) of the assumptions, statements, certifications, representations,
warranties and covenants regarding or made by Borrower contained in or
appended to any opinion of Borrower's legal counsel delivered in connection
with the transaction in which the Loan Documents are executed;
(xxv) shall not, without the unanimous consent of its board of
directors (including the Outside Director), institute proceedings for
itself to be adjudicated bankrupt or insolvent; consent to the institution
of a bankruptcy or insolvency proceedings against it; file a petition
seeking, or consent to, reorganization or relief under any applicable
federal or state law relating to bankruptcy; consent to the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) for itself or a substantial part of its property; make any
assignment for the benefit of creditors; or admit in writing its inability
to pay its debts generally as they become due;
(xxvi) shall not, without the unanimous consent of its board of
directors (including the Outside Director), (A) liquidate or dissolve, in
whole or in part; (B) consolidate, merge or enter into any form of
consolidation with or into any other person or entity, nor convey, transfer
or lease its assets substantially as an entirety to any person or entity
nor permit any person or entity to consolidate, merge or enter into any
form of consolidation with or into itself; or (C) amend any provisions of
its organizational documents containing provisions similar to those
contained in this Section 29; and
(xxvii) shall at all times maintain on its board of directors at least
one independent director (an "Outside Director"), who shall be reasonably
satisfactory to Lender and shall not have been at the time of such
individual's appointment as Outside Director, and may not have been at any
time during the preceding five years, (1) a shareholder, member, officer,
director, partner or employee of Borrower or any of its shareholders,
members, partners, subsidiaries or affiliates, (2) a customer of, or
supplier to, Borrower or any of its shareholders, members, partners,
subsidiaries or affiliates, (3) a person controlling or under common
control with any such shareholder, director, partner, member, supplier or
35
customer, or (4) a member of the immediate family of any such shareholder,
member, officer, director, partner, employee, supplier or customer.
SECTION 30. NOTICE. All notices given under this Agreement shall be in writing,
and sent to the other party at its address set forth below or at such other
address as such party may designate by notice to the other party and shall be
deemed given on the earliest of (i) actual receipt, duly evidenced by any
commercially reasonable means, (ii) three Business Days after mailing, by
certified or registered U.S. Mail, return receipt requested, postage prepaid,
(iii) one Business Day after timely delivery, fee prepaid, to a national
overnight delivery service (such as FedEx, Purolater Courier, U.P.S. Next Day
Air), (iv) the date of transmission of notice sent by telecopier or facsimile
machine (with a copy thereof sent in accordance with clause (ii) above) provided
notice was transmitted on a Business Day, otherwise notice shall be deemed given
on the next Business Day. The applicable addresses are as follows:
To Borrower:
Stonewater UIS Funding LLC
c/o Drawbridge Special Opportunities Fund LLP
1251 Avenue of the Americas, 16th Floor
New York, New York 10021
Attn: Kevin Treacy
Facsimile No.: (212)798-6099
With a Copy to:
Stonewater Partners
22 Deer Creek Lane
Mt. Kisco, New York 10549
Attn: Jeffrey Toporek
Facsimile No.: (914) 470-4011
With a Copy to:
Solomon and Weinberg LLP
685 Third Avenue, 30th Floor
New York, New York 10017
Attn: Howard R. Shapiro, Esq.
Telephone No.: (212)605-1000
Facsimile No.: (212) 605-0999
To Lender:
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
36
Greenwich, Connecticut 06830
Attn: Commercial Mortgage Loan Department
Telephone No.: (203)618 2373
Facsimile No.: (203)629 8363
With a Copy to:
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attn: Legal Department
Telephone No.: (203) 625 6065
Facsimile No.: (203) 629 5718
And to:
Katten Muchin Zavis Rosenman
525 W. Monroe Street, Suite 1600
Chicago, Illinois 60661
Attn: Daniel J. Perlman, Esq.
Telephone No.: (312) 902-5200
Facsimile No.: (312) 902-1061
A "Business Day" is any day other than a Saturday or Sunday on which the Lender
is open for business. Borrower hereby requests that any notice of default or
notice of sale in any judicial or nonjudicial foreclosure proceeding be mailed
to Borrower at its address as specified herein.
SECTION 31. UNIFORM INSTRUMENT; GOVERNING LAW; SEVERABILITY. This form of
instrument combines uniform covenants for national use and non-uniform covenants
with limited variations by jurisdiction to constitute a uniform security
instrument covering real property and related fixtures and personal property.
This Instrument shall be governed by the law of the jurisdiction in which the
Property is located, In the event that any provision of this Instrument or the
Note conflicts with applicable law, such conflict shall not affect other
provisions of this Instrument or the Note which can be given effect without the
conflicting provisions, and to this end the provisions of this Instrument and
the Note are declared to be severable. In the event that any applicable law
limiting the amount of interest or other charges permitted to be collected from
Borrower is interpreted so that any charge provided for in this Instrument or in
the Note, whether considered separately or together with other charges levied in
connection with this Instrument and the Note, violates such law, and Borrower is
entitled to the benefit of such law, such charge is hereby reduced to the extent
necessary to eliminate such violation. The amounts, if any, previously paid to
Lender in excess of the amounts payable to Lender pursuant to such charges as
reduced shall be applied by Lender to reduce the principal of the indebtedness
evidenced by the Note. For the purposes of determining whether any applicable
law limiting the amount of interest or other charges permitted to be collected
from Borrower has been violated, all indebtedness which is secured by this
Instrument or evidenced by the Note and which constitutes interest, as well as
all other charges levied in connection with such
37
indebtedness which constitute interest, shall be deemed to be allocated and
spread over the stated term of the Note. Unless otherwise required by applicable
law, such allocation and spreading shall be effected in such a manner that the
rate of interest computed thereby is uniform throughout the stated term of the
Note.
SECTION 32. ASSUMABILITY.
(a) So long as no Event of Default exists under the Note, this Instrument
or any other Loan Document, in the event Borrower desires to transfer all of the
Property to another party (the "Transferee"), including without limitation, a
Fortress Affiliate, and have the Transferee assume all of Borrower's obligations
under the Note, this Instrument and all of the other Loan Documents, and
replacement guarantors and indemnitors assume all of the obligations of the
indemnitors and guarantors of the Loan Documents (collectively, the "Transfer
and Assumption"), Borrower, subject to the terms of this Section, may make a
written application to Lender for Lender's consent to the Transfer and
Assumption, subject to the conditions set forth in this Section. Together with
such written application (and afterwards if requested by Lender), Borrower will
submit to Lender true, correct and complete copies of any and all information
and documents of any kind requested by Lender concerning the Property,
Transferee and/or Borrower, together with any review fee required by Lender, in
Lender's sole discretion (or in the event the proposed Transferee is a Qualified
Institutional Transferee (as defined below) or a Fortress Affiliate, in Lender's
reasonable discretion).
(b) Lender may grant or withhold its consent to a Transfer and Assumption
in Lender's sole and absolute discretion (or in the event the proposed
Transferee is a Qualified Institutional Transferee, in Lender's reasonable
discretion), and may require, inter alia, that:
(i) Lender receives an opinion from counsel acceptable to Lender that
(x) such Transfer and Assumption shall not affect, in any way, the
enforceability of the Loan Documents or the lien status, and (y) that the
Transferee complies in all respects with the provisions of Section 29 of
this Instrument and such other conditions concerning the organizational
structure of the Transferee as were required by Lender at the time of the
making of the Loan;
(ii) Borrower has submitted to Lender true, correct and complete
copies of any and all information and documents of any kind requested by
Lender concerning the Property, Transferee and/or Borrower;
(iii) the Transferee, in Lender's sole judgment (or in the event the
proposed Transferee is a Qualified Institutional Transferee, in Lender's
reasonable judgment), has sufficient experience in managing assets similar
in size and type to the Property;
(iv) in Lender's sole judgment (or in the event the proposed
Transferee is a Qualified Institutional Transferee, in Lender's reasonable
judgment), the Transferee and the partners, members or shareholders of the
Transferee are financially sound or have sufficient financial resources to
manage the Property for the term of the Loan;
(v) if the Loan has been placed, or Lender plans to place the Loan, in
an offering of Securities (as defined herein), Lender receives written
confirmation from the
38
rating agencies that the Transfer and Assumption will not result in any
downgrade, qualification or withdrawal of the ratings assigned to the pool
and assets in which the Loan has been placed;
(vi) the replacement guarantors and indemnitors shall be satisfactory
to Lender in Lender's sole discretion (or in the event the proposed
Transferee is a Qualified Institutional Transferee, in Lender's reasonable
discretion); and
(vii) Borrower has paid any review fee required by Lender.
There shall not be a limit on the number of Transfers and Assumptions Lender
will consent to, provided the requirements of this Section 32(b) are satisfied
with respect to each such Transfer and Assumption. Notwithstanding anything in
this Section 32(b) to the contrary, Lender shall not withhold its consent to a
transfer to a Fortress Affiliate, provided Borrower shall comply with the
requirements of clauses (i), (ii), (v), (vii) and, to the extent there will be a
replacement guarantor or indemnitor in connection with the Transfer and
Assumption, (vi) of this Section 32(b) in connection with any such transfer to a
Fortress Affiliate.
(c) If Lender consents to the Transfer and Assumption, the Transferee
and/or Borrower as the case may be, shall immediately deliver the following to
Lender:
(i) Borrower shall deliver to Lender an assumption fee in the amount
of one percent (1%) of the then unpaid principal balance of the Loan;
(ii) Borrower, Transferee, and the original and replacement guarantors
and indemnitors shall execute and deliver to Lender any and all documents
required by Lender, in form and substance required by Lender, in Lender's
sole discretion (the "Assumption Documents") and the original guarantors
shall be released with respect to any obligations under the Loan Documents
arising on or after the date of the closing of the Transfer and Assumption;
and
(iii) Borrower shall cause to be delivered to Lender, an endorsement
to the mortgagee policy of title insurance then insuring the lien created
by this Instrument in form and substance reasonably acceptable to Lender
(the "Endorsement").
(d) Borrower shall pay to Lender on demand all reasonable actual costs and
expenses incurred by Lender in connection with any proposed or actual Transfer
and Assumption (irrespective of whether or not the same is consented to or
occurs), including without limitation recording costs, title insurance
endorsement premiums, and the reasonable fees and expenses of attorneys,
accountants and rating agencies. At Lender's option, payment of such costs and
expenses shall be a condition to Lender's consent.
(e) Notwithstanding anything contained in this Section to the contrary,
except based on Lender's written agreement to the Transfer and Assumption and
Borrower's and Transferee's compliance with all of the terms and provisions of
this Section, the terms and provisions of this Section shall in no way amend or
modify the terms and provisions contained in Section 15 of this Instrument.
39
(f) Notwithstanding anything to the contrary in clause (i) of Section 32(c)
above, Lender shall waive the assumption fee in connection with the first
Transfer and Assumption provided the Transferee under such first Transfer and
Assumption is a Qualified Institutional Transferee (as defined herein) or a
Fortress Affiliate. As used herein, a "Qualified Institutional Transferee" shall
mean (1) a real estate investment trust, real estate opportunity fund, hedge
fund, investment bank, insurance company, trust company, commercial credit
corporation, pension plan, pension fund or pension advisory firm, mutual fund,
government entity or plan or an institution substantially similar to any of the
foregoing (each an "Institution") that (A) together with all entities controlled
by or under common control with such Institution, owns or has under management
in excess of 2,000,000 square feet of office or industrial space (not including
the Property), (B) has a Net Worth (as defined herein) of at least
$200,000,000.00 and (C) has at least ten (10) years' experience, and is
regularly engaged in, owning and operating commercial office properties
similar to the Property or (2) an entity wholly owned and controlled by an
entity satisfying the requirements of clause (1) above. "Net Worth" shall mean
the fair market value of an Institution's total assets including all interests
in properties owned directly or indirectly by such Institution (excluding the
Property), less all liabilities, as determined by Lender in its reasonable
discretion based on the financial statements delivered to Lender in connection
with the proposed Transfer and Assumption. The term "liabilities" shall include,
without limitation, (i) indebtedness secured by liens on assets with respect to
which Net Worth is being computed, (ii) deferred liabilities, and (iii)
obligations under leases which have been capitalized. The waiver described in
this Section 32(f) shall only be available in connection with the first Transfer
and Assumption and shall not be available (and the provisions contained in this
Section 32(f) shall be null and void) with respect to any subsequent Transfer
and Assumption, regardless of whether or not the assumption fee was waived by
Lender in connection with the first Transfer and Assumption.
SECTION 33. RESTRUCTURING LOAN, SECONDARY MARKET TRANSACTIONS.
(a) SECONDARY MARKET TRANSACTIONS GENERALLY. Lender shall have the right to
engage in one or more Secondary Market Transactions, and to structure and
restructure all or any part of the Loan, including without limitation in
multiple tranches, as a wraparound loan, or for inclusion in a REMIC or other
Securitization. Without limitation, Lender shall have the right to cause the
Note and this Instrument to be split into a first and a second mortgage loan in
whatever proportion Lender determines, and thereafter to engage in Secondary
Market Transactions with respect to all or any part of the indebtedness and loan
documentation. Borrower acknowledges that it is the intention of the parties
that all or a portion of the Loan will be securitized and that all or a portion
of the Loan (either itself, or in combination with other loans) will be rated by
one or more Rating Agencies. Borrower further acknowledges that additional
structural modifications may be required to satisfy issues raised by any Rating
Agencies.
(b) COOPERATION; LIMITATIONS. Borrower shall use all reasonable efforts and
cooperate reasonably and in good faith with Lender in effecting any such
restructuring or Secondary Market Transaction. Such cooperation shall include
without limitation, executing and delivering such reasonable amendments to the
Loan Documents as Lender may request, provided however that no such amendment
shall on an over-all basis modify (i) the interest rate payable under the Note;
(ii) the stated maturity date of the Note, (iii) the amortization of the
principal
40
amount of the Note, (iv) any other economic terms of the Loan, or (v) the
non-recourse provisions of the Loan. Such cooperation also shall include using
commercially reasonable efforts to obtain such certificates and assurances from
governmental entities and others as Lender may request. Borrower shall not be
required to provide additional collateral that was not initially contemplated by
the parties to effect any such restructuring or Secondary Market Transaction.
All reasonable actual costs and expenses of Borrower's cooperation as described
herein shall be at the expense of Lender.
(c) INFORMATION. Borrower shall provide such information and documents
relating to Borrower and its principals, the manager of the Property, the
Property and the business and operations of all of the foregoing as Lender may
reasonably request in connection with any such Secondary Market Transaction.
Lender shall be permitted to share all such information with the investment
banking firms, Rating Agencies, accounting firms, law firms, other third party
advisory firms, potential investors, and other parties involved in any proposed
Secondary Market Transaction. Any such information may be incorporated into
offering documents for the Secondary Market Transactions. Lender and all of the
aforesaid third-party advisors and professional firms and investors shall be
entitled to rely upon such information, and Borrower shall indemnify, defend,
and hold harmless Lender from and against any losses, claims, damages and
liabilities that arise out of or are based upon any actual untrue or misleading
statement of material fact contained in such information or the actual omission
of any material fact without which such information is materially misleading and
which Borrower should have reasonably determined was necessary to be included.
Lender may publicize the existence of the Loan in connection with Lender's
Secondary Market Transaction activities or otherwise.
(d) ADDITIONAL PROVISIONS. In any Secondary Market Transaction, Lender may
transfer its obligations under the Loan Documents (or may transfer the portion
thereof corresponding to the transferred portion of the obligations of
Borrower), and thereafter Lender shall be relieved of any obligations under the
Loan Documents arising after the date of said transfer with respect to the
transferred interest. Each transferee investor shall be deemed to be a "Lender"
under the applicable Loan Documents.
(e) CERTAIN DEFINITIONS. As used herein, the following terms have the
meanings indicated:
"Loan" means all obligations of Borrower under the Loan Documents.
"Rating Agency" shall mean any of Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., Moody's Investors Service,
Duff & Phelps Credit Rating Co., Fitch, Inc., or any other
nationally-recognized statistical rating organization designated by Lender
in its sole discretion.
"Secondary Market Transaction" means any of (i) the sale, assignment,
or other transfer of all or any portion of the Loan or the Loan Documents
or any interest therein to one or more investors, (ii) the sale,
assignment, or other transfer of one or more participation interests in the
Loan or Loan Documents to one or more investors, or (iii) the transfer or
deposit of all or any portion of the Loan or Loan Documents to or with one
or more trusts or other entities which may sell certificates or other
instruments to
41
investors evidencing an ownership interest in the assets of such trust or
the right to receive income or proceeds therefrom.
"Securitization" shall mean a rated offering of securities
representing direct or indirect interests in one or more mortgage loans or
the right to receive income therefrom.
SECTION 34. SUCCESSORS AND ASSIGNS BOUND. This Instrument and the other Loan
Documents shall be binding upon and inure to the benefit of Borrower and Lender
and their respective successors and assigns forever, subject to Section 15
hereof.. Notwithstanding the foregoing, Lender shall have no liability under any
of the Loan Documents for any matter arising after Lender transfers its interest
in the Note to any successor. However, Lender shall continue to have the benefit
of all rights having accrued under the Loan Documents theretofore, and all
rights under all obligations of indemnification set forth in the Loan Documents
for matters arising theretofore, then, and thereafter.
SECTION 35. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in
exercising any right or remedy hereunder, or otherwise afforded by applicable
law, shall not be a waiver of or preclude the exercise of any right or remedy.
The acceptance by Lender of payment of any sum secured by this Instrument after
the due date of such payment shall not be a waiver of Lender's right to either
require prompt payment when due of all other sums so secured or to declare a
default for failure to make prompt payment. The procurement of insurance or the
payment of taxes or other liens or charges by Lender shall not be a waiver of
Lender's right to accelerate the maturity of the indebtedness secured by this
Instrument, nor shall Lender's receipt of any awards, proceeds or damages,
whether as proceeds of insurance or condemnation awards or otherwise, operate to
cure or waive Borrower's default in payment of sums secured by this Instrument.
SECTION 36. ESTOPPEL CERTIFICATE. Borrower and Lender each shall within fifteen
days of a written request from Lender furnish Lender with a written statement,
duly acknowledged, setting forth the sums secured by this Instrument and any
right of set-off, counterclaim or other defense which exists against such sums
and the obligations of this Instrument and attaching true, correct and complete
copies of the Note, this Instrument and any other Loan Documents and any and all
modifications, amendments and substitutions thereof.
SECTION 37. WAIVER OF JURY TRIAL. EACH OF BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONJUNCTION WITH THE NOTE, THIS INSTRUMENT, ANY OTHER LOAN DOCUMENT, ANY OTHER
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY.
SECTION 38. MISCELLANEOUS.
(a) No Oral Change. No provision of this Instrument or any of the other
Loan Documents may be modified, amended, waived, extended, changed, discharged
or terminated
42
orally or by any act or failure to act on the part of Borrower or Lender, except
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.
(b) Liability. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder and under the other
Loan Documents shall be joint and several.
(c) Captions. The captions and headings of the Sections, paragraphs, and
other provisions of this Instrument are for convenience only and are not to be
used to interpret or define the provisions hereof.
(d) Duplicate Originals; Counterparts. This Instrument and any of the Loan
Documents may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Instrument and any of
the Loan Documents may be executed in multiple counterparts.
(e) Number and Gender. Whenever the context may require, any pronouns used
herein or in any of the Loan Documents shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns
shall include the plural and vice versa.
(f) 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 performance and repayment of the obligations secured hereby.
(g) Entire Agreement. The Note, this Instrument and the other Loan
Documents constitute the entire understanding and agreement between Borrower and
Lender pertaining to the subject matter hereof and thereof, and supersede all
prior written or oral understandings and agreements between Borrower and Lender
with respect thereto, including the prior agreements evidenced by any
application or commitment issued in connection with this transaction. Borrower
hereby acknowledges that, except as incorporated in writing in the Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which is the subject
of the Loan Documents, except only to the extent expressly set forth in the Loan
Documents.
(h) Action through Agents. In exercising any rights hereunder or under any
of the Loan Documents or taking any actions provided for herein or therein,
Lender may act through its employees, agents or independent contractors as
authorized by Lender.
(i) Maturity Date. The maturity date of the indebtedness secured by this
Instrument is June 1, 2014; provided that if the "Payment Date" (as defined in
the Note) is changed pursuant
43
to the Note, the maturity date shall be the "New Payment Date" (as defined in
the Note) occurring in June 2014.
SECTION 39. WAIVER OF CONSTITUTIONAL RIGHTS. BORROWER UNDERSTANDS AND AGREES
THAT IF AN EVENT OF DEFAULT SHALL OCCUR, LENDER HAS THE RIGHT, INTER ALIA, TO
FORECLOSE THIS INSTRUMENT BY ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES,
CHAPTER 580, AS HEREAFTER AMENDED, OR PURSUANT TO ANY SIMILAR OR REPLACEMENT
STATUTE HEREAFTER ENACTED; THAT IF LENDER ELECTS TO FORECLOSE BY ADVERTISEMENT,
IT MAY CAUSE THE PROPERTY, OR ANY PART THEREOF, TO BE SOLD AT PUBLIC AUCTION;
THAT NOTICE OF SUCH SALE MUST BE PUBLISHED AND GIVEN PERSONALLY TO THE PERSONS
IN POSSESSION OF THE PROPERTY AS PROVIDED BY STATUTE; THAT BORROWER WILL HAVE
SUCH PERIOD AS IS PROVIDED BY MINNESOTA STATUTES, SECTION 580.23 OR 582.032, AS
APPLICABLE, OR ANY AMENDMENT THERETO, OR ANY SIMILAR OR REPLACEMENT STATUTE
HEREAFTER ENACTED, TO REDEEM THE PROPERTY SO SOLD BY PAYING THE SALE PRICE, ANY
TAXES, ASSESSMENTS AND INSURANCE PREMIUMS PAID BY THE PURCHASER AT SUCH SALE,
AND OTHER SUMS PERMITTED BY LAW, TOGETHER WITH INTEREST THEREON FROM THE DATE OF
SALE OR PAYMENT AT THE HIGHEST RATE PERMITTED BY LAW.
BORROWER FURTHER UNDERSTANDS THAT IN THE EVENT OF SUCH EVENT OF DEFAULT
LENDER MAY TAKE POSSESSION OF THE PROPERTY WHICH IS SUBJECT TO THE SECURITY
INTEREST HEREINBEFORE GRANTED AND DISPOSE OF THE SAME BY SALE OR OTHERWISE IN
ONE OR MORE PARCELS, PROVIDED THAT AT LEAST TEN (10) DAYS' PRIOR NOTICE OF SUCH
DISPOSITION MUST BE GIVEN TO BORROWER, ALL AS PROVIDED FOR BY THE MINNESOTA
UNIFORM COMMERCIAL CODE, AS HEREAFTER AMENDED, OR BY ANY SIMILAR OR REPLACEMENT
STATUTE HEREAFTER ENACTED.
BORROWER FURTHER UNDERSTANDS THAT UNDER THE CONSTITUTION OF THE UNITED
STATES IT MAY HAVE THE RIGHT TO NOTICE AND HEARING BEFORE THE PROPERTY MAY BE
SOLD AND THAT THE PROCEDURE FOR FORECLOSURE BY ADVERTISEMENT DESCRIBED ABOVE
DOES NOT INSURE THAT NOTICE WILL BE GIVEN TO BORROWER, AND NEITHER SAID
PROCEDURE FOR FORECLOSURE BY ADVERTISEMENT NOR THE MINNESOTA UNIFORM COMMERCIAL
CODE REQUIRES ANY HEARING OR OTHER JUDICIAL PROCEEDING.
BORROWER HEREBY RELINQUISHES, WAIVES AND GIVES UP ANY CONSTITUTIONAL RIGHTS
TO NOTICE AND HEARING BEFORE SALE OF THE PROPERTY AND EXPRESSLY CONSENTS AND
AGREES THAT THE PROPERTY MAY BE FORECLOSED BY ADVERTISEMENT AND THAT THE PORTION
THEREOF WHICH IS SUBJECT TO THE SECURITY INTEREST HEREINBEFORE GRANTED MAY BE
DISPOSED OF PURSUANT TO THE UNIFORM COMMERCIAL CODE, ALL AS DESCRIBED ABOVE.
44
BORROWER ACKNOWLEDGES THAT IT IS REPRESENTED BY LEGAL COUNSEL; THAT BEFORE
SIGNING THIS DOCUMENT THIS SECTION 39 AND ITS CONSTITUTIONAL RIGHTS WERE FULLY
EXPLAINED BY SUCH COUNSEL AND THAT IT UNDERSTANDS THE NATURE AND EXTENT OF THE
RIGHTS WAIVED HEREBY AND THE EFFECT OF SUCH WAIVER.
SECTION 40. FIXTURE FINANCING STATEMENT. The filing of this Instrument shall
constitute a filing of a financing statement in the office wherein it is filed
and a carbon, photographic or other reproduction of this document may also be
filed as a financing statement.
Name and Address of Debtor: Stonewater UIS Funding LLC 1251 Avenue of the
Americas, 16th Floor New York, New York 10021
Name and Address of Secured
Party: Greenwich Capital Financial Products, Inc. 600
Steamboat Road Greenwich, Connecticut 06830
Description of the types
(or items) of property
covered by this financing
statement: All fixtures, machinery, equipment, engines,
boilers, incinerators, building materials,
appliances and goods of every nature whatsoever
now or hereafter located in, or on, or used, or
intended to be used in connection with the
property, including, but not limited to, those for
the purposes of supplying or distributing heating,
cooling, electricity, gas, water, air and light;
and all elevators, and related machinery and
equipment, fire prevention and extinguishing
apparatus, security and access control apparatus,
plumbing, bath tubs, water heaters, water closets,
sinks, ranges, stoves, refrigerators, dishwashers,
disposals, washers, dryers, awnings, storm
windows, storm doors, screens, blinds, shades,
curtains and curtain rods, mirrors, cabinets,
paneling, rugs, attached floor coverings,
furniture, pictures, antennas, trees and plants
now or hereafter located on and used in connection
with the operation of the Property of whatsoever
type or nature whether now owned or hereafter
acquired by Borrower, including all replacements,
repairs and substitutions thereto and proceeds
thereof.
Description of real estate
to which all or part of the
collateral
45
is attached or upon
which it is located: See attached Exhibit A.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
46
IN WITNESS WHEREOF, Borrower has executed this Instrument or has caused the
same to be executed by its representatives thereunto duly authorized.
BORROWER:
STONEWATER UIS FUNDING LLC, a
Delaware limited liability company
By: /s/ CONSTANTINE DAKOLIAS
------------------------------------
Name: CONSTANTINE DAKOLIAS
Its: AUTHORIZED SIGNATORY
ACKNOWLEDGMENTS
STATE OF NEW YORK )
) SS.
COUNTY OF NASSALL )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared Constantine M. Dakolias, by me known to be the Authorized Signatory of
Stonewater UIS Funding, LLC, a Delaware limited liability company ("Borrower"),
who is personally known to me to be the same person whose name is subscribed to
the foregoing instrument as such ______________________ of Borrower
_______________________ and who, being duly sworn, stated that she, being
authorized so to do, signed and delivered the foregoing Instrument as such
____________________ of Borrower as his/her own free and voluntary act and as
the free and voluntary act of Borrower, for the uses and purposes therein set
forth.
WITNESS my hand and Notary Seal this 10th day of May, 2004.
/s/ JASMEEN BLOCKER
----------------------------------------
Notary Public
JASMEEN BLOCKER
Notary Public, State of New York
No. 01BL6047869
Qualified in Nassall Country
Commission Expires September 11.20.06
Exhibit A
Legal Description
Parcel 1:
The South 1024 feet of the West 700 feet of the Northwest Quarter of Section 8,
Township 29, Range 23, Ramsey County, Minnesota.
Parcel 2:
Non-exclusive easement for pedestrian and vehicular access, ingress and egress,
as contained in Declaration of Roadway Easement dated _________________, 2004,
recorded ________________, 2004, as Document No._________________.
May 12, 2004
Greenwich Capital Financial Products, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Re: $20,860,000.00 loan (the "Loan") from Greenwich Capital Financial Products,
Inc. ("Lender") to Stonewater UIS Funding LLC ("Borrower")
Ladies and Gentlemen:
In connection with the closing of the referenced transaction, as a condition
precedent to the closing of the Loan, Borrower was obligated to develop an
operations and maintenance program with respect to the presence of asbestos and
lead-based paint at the Project (the "O&M Program"). All capitalized words used
but not otherwise defined herein shall have the meanings set forth in the
Operations and Maintenance Agreement between Borrower and Lender dated of even
date herewith.
As of the date hereof, Borrower has not yet developed an O&M Program. As an
accommodation to Borrower, Lender has agreed that this condition precedent to
the making of the Loan may be satisfied by Borrower following the closing and
funding of the Loan. In order to induce Lender to make the Loan, Borrower agrees
to deliver or cause to be delivered to Lender within sixty (60) days after the
date hereof an O&M Program reasonably satisfactory in form and substance to
Lender.
This letter agreement may not be modified, amended, changed or terminated
orally, but only by a written agreement signed by the party against whom the
enforcement thereof is sought. This letter agreement shall be binding upon and
inure to the benefit of the Lender and Borrower, the indemnitors and their
respective permitted successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Greenwich Capital Financial Products, Inc.
May 12, 2004
Page 2
This letter agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.
Very truly yours,
BORROWER:
STONEWATER UIS FUNDING LLC, a
Delaware limited liability company
By: /s/ Illegible
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED TO
THIS ______ DAY OF MAY, 2004.
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Greenwich Capital Financial Products, Inc.
May 12, 2004
Page 2
This letter agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.
Very truly yours,
BORROWER:
STONEWATER UIS FUNDING LLC, a
Delaware limited liability company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED TO
THIS 12th DAY OF MAY, 2004.
GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation
By: /s/ DAVID M. MURDOON
---------------------------------
Name: DAVID M. MURDOON
Title: MANAGING DIRECTOR
OPERATIONS AND MAINTENANCE AGREEMENT
THIS OPERATIONS AND MAINTENANCE AGREEMENT ("Agreement") is made as of
the 12th day of May, 2004, by STONEWATER UIS FUNDING LLC, a Delaware limited
liability company ("Borrower") in favor of GREENWICH CAPITAL FINANCIAL PRODUCTS,
INC., a Delaware corporation, its successors, transferees and assign ("Lender").
RECITALS:
This Agreement is being executed in connection with Lender's making a
mortgage loan to Borrower in the original principal amount of $20,860,000.00
(the "Loan").
The Loan is evidenced by a Promissory Note of even date herewith, made
by Borrower and is secured by, among other things, a Mortgage, Assignment of
Rents and Security Agreement ("Instrument") of the same date, which encumbers
certain real property and improvements more particularly described therein (the
"Project").
As a condition of making the Loan, Lender has required Borrower to
develop an operations and maintenance program for the Project with respect to
the presence of asbestos and lead-based paint (the "O & M Program"). The O & M
Program developed by Borrower, and approved by Lender, is attached hereto as
Exhibit A and is by this reference made a part of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual promises
contained in this Agreement, the receipt and sufficiency of which are
acknowledged, Borrower and Lender agree as follows:
1. Compliance with O & M Program. Borrower hereby covenants and agrees
that, during the term of the Loan, including any extension or renewal thereof,
Borrower shall comply in all respects with the terms and conditions of the O & M
Program. Notwithstanding anything foregoing in this Section 1 to the contrary,
for so long as the Unisys Lease (as defined in the Instrument) is in full force
and effect, (a) the obligations of Borrower under this Agreement shall be
subject to the terms and provisions of the Unisys Lease, and (b) Borrower shall
be required to comply with the terms and conditions of the O & M Program only to
the extent Borrower takes any action permitted to be taken by Borrower under the
Lease.
2. Default Under Note and Security Instrument. Borrower hereby acknowledges
and agrees that if Borrower fails to comply in all respects with the terms and
conditions of the O & M Program, Borrower will be in default under the Note and
Security Instrument, in which event the entire unpaid principal balance of the
Note, accrued interest and any other sums due Lender under the Note will become
immediately due and payable at Lender's option, all in accordance with the terms
and conditions of the Note and the Security Instrument.
3. Successors and Assigns Bound. This Agreement shall be binding upon
Borrower and Lender and their respective successors and assigns, and shall inure
to the benefit of and may be enforced by Lender and its successors, transferees
and assigns. Borrower shall not assign any of its rights and obligations under
this Agreement without the prior written consent of Lender.
4. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota, and applicable federal law.
5. No Waiver. Lender's requirement that the Borrower develop and comply
with the O & M Program shall not be deemed to constitute a waiver or a
modification of any of the Borrower's covenants and agreements with respect to
Hazardous Materials or Hazardous Materials Law as set forth in the Environmental
Indemnity Agreement or the Instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower has executed this Agreement on the date
and year first written above.
BORROWER:
STONEWATER UIS FUNDING LLC, a
Delaware limited liability company
By: /s/ CONSTANTINE DAKOLIAS
------------------------------------
Name: CONSTANTINE DAKOLIAS
Title: AUTHORIZED SIGNATORY
EXHIBIT A
O&M PROGRAM
(to be attached)