Attached as Exhibit 10.1 is a form of mortgage entered into with KeyBank
National Association. The Registrant has entered into ten mortgages with KeyBank
National Association, all dated April 25, 2005. These mortgages are all
substantially identical to the form of mortgage filed as an exhibit, except as
follows: (a) the rates on interest range from 5.15% to 5.55% per annum, (b) the
principal amounts of the mortgages range from $1,235,000 to $4,775,000, and (c)
the property secured by each mortgage is a different convenience center.
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OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT, AND FIXTURE FILING
CEDAR-CLYDE LLC,
a Delaware limited liability company
(Borrower)
in favor of
KEYBANK NATIONAL ASSOCIATION,
a national banking association
(Lender)
Dated: April 25, 2005
Location: 1062-1076 W. McPherson Highway, Clyde, Ohio 43410
RECORD AND RETURN TO:
KEYBANK NATIONAL ASSOCIATION
911 Main Street, Suite 1500
Kansas City, Missouri 64105
Attention: Carol Brownfield
Loan No.: 10027097
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TABLE OF CONTENTS
Page
RECITALS...................................................................................1
DEFINITIONS................................................................................1
ARTICLE 1 - GRANTS OF SECURITY.............................................................4
SECTION 1.1 PROPERTY MORTGAGED..................................................4
(a) Land...........................................................4
(b) Additional Land................................................4
(c) Improvements...................................................4
(d) Easements and Appurtenances....................................4
(e) Fixtures and Tangible Personal Property........................4
(f) Leases and Rents...............................................5
(g) Condemnation Awards............................................5
(h) Insurance Proceeds.............................................6
(i) Tax Certiorari.................................................6
(j) Miscellaneous Personal Property................................6
(k) Personal Property As Defined In Uniform Commercial Code........6
(l) Conversion.....................................................6
(m) Other Rights...................................................7
SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS......................................7
SECTION 1.3 SECURITY AGREEMENT..................................................7
SECTION 1.4 PLEDGE OF MONIES HELD...............................................8
SECTION 1.5 COMMON LAW PLEDGE/ASSIGNMENT........................................8
CONDITIONS TO GRANT........................................................................8
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED...................................................8
SECTION 2.1 DEBT................................................................8
ARTICLE 3 - BORROWER COVENANTS.............................................................9
SECTION 3.1 PAYMENT OF DEBT.....................................................9
SECTION 3.2 INCORPORATION BY REFERENCE.........................................10
SECTION 3.3 INSURANCE..........................................................10
(a) Insurance.....................................................10
(i) Property Insurance.....................................10
(ii) Business Interruption..................................11
(iii) Boiler and Machinery...................................11
(iv) Builder's Risk.........................................11
(v) Ordinance/Law Coverage.................................11
(vi) Liability Insurance....................................11
(vii) Workers Compensation Insurance.........................12
(viii) Other Insurance........................................12
(b) Insurance Policies............................................12
(c) Terrorism Coverage............................................12
(d) Compliance With Insurance Requirements........................13
(e) Restoration...................................................13
(f) Blanket Insurance Policies....................................13
i
SECTION 3.4 PAYMENT OF TAXES, ETC..............................................14
SECTION 3.5 TAX AND INSURANCE IMPOUND ACCOUNT..................................14
SECTION 3.6 CONDEMNATION.......................................................15
SECTION 3.7 LEASES AND RENTS...................................................16
SECTION 3.8 MAINTENANCE OF PROPERTY............................................17
SECTION 3.9 WASTE..............................................................17
SECTION 3.10 COMPLIANCE WITH LAWS...............................................17
SECTION 3.11 BOOKS AND RECORDS..................................................18
SECTION 3.12 PAYMENT FOR LABOR AND MATERIALS....................................20
SECTION 3.13 PERFORMANCE OF OTHER AGREEMENTS....................................20
SECTION 3.14 CHANGE OF NAME, IDENTITY OR STRUCTURE..............................20
SECTION 3.15 EXISTENCE..........................................................20
ARTICLE 4 - SPECIAL COVENANTS.............................................................21
SECTION 4.1 PROPERTY USE.......................................................21
SECTION 4.2 ERISA..............................................................21
SECTION 4.3 SINGLE PURPOSE ENTITY..............................................21
SECTION 4.4 RESTORATION AFTER CASUALTY/CONDEMNATION............................25
ARTICLE 5- REPRESENTATIONS AND WARRANTIES.................................................29
SECTION 5.1 WARRANTY OF TITLE..................................................29
SECTION 5.2 AUTHORITY..........................................................30
SECTION 5.3 LEGAL STATUS AND AUTHORITY.........................................30
SECTION 5.4 VALIDITY OF DOCUMENTS..............................................30
SECTION 5.5 LITIGATION.........................................................30
SECTION 5.6 STATUS OF PROPERTY.................................................31
SECTION 5.7 NO FOREIGN PERSON..................................................32
SECTION 5.8 SEPARATE TAX LOT...................................................32
SECTION 5.9 ERISA COMPLIANCE...................................................32
SECTION 5.10 LEASES.............................................................33
SECTION 5.11 FINANCIAL CONDITION; NO PRIOR BANKRUPTCY...........................33
SECTION 5.12 TAXES..............................................................33
SECTION 5.13 MAILING ADDRESS....................................................33
SECTION 5.14 NO CHANGE IN FACTS OR CIRCUMSTANCES................................33
SECTION 5.16 THIRD PARTY REPRESENTATIONS........................................34
SECTION 5.17 ILLEGAL ACTIVITY...................................................34
SECTION 5.18 MANAGEMENT.........................................................34
ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP..................................................35
SECTION 6.1 RELATIONSHIP OF BORROWER AND LENDER................................35
SECTION 6.2 NO RELIANCE ON LENDER..............................................35
SECTION 6.3 NO LENDER OBLIGATIONS..............................................35
SECTION 6.4 RELIANCE OF LENDER ON BORROWER REPRESENTATIONS.....................35
ARTICLE 7 - FURTHER ASSURANCES............................................................35
SECTION 7.1 RECORDING OF SECURITY INSTRUMENT, ETC..............................35
SECTION 7.2 FURTHER ACTS, ETC..................................................36
SECTION 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.............36
SECTION 7.4 ESTOPPEL CERTIFICATES..............................................37
ii
SECTION 7.5 REPLACEMENT DOCUMENTS..............................................38
SECTION 7.6 AMENDED FINANCING STATEMENTS.......................................38
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER....................................38
SECTION 8.1 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT............38
SECTION 8.2 CONDITIONS TO LENDER'S CONSENT.....................................40
ARTICLE 9 - PREPAYMENT; DEFEASANCE........................................................42
ARTICLE 10 - DEFAULT......................................................................42
SECTION 10.1 EVENTS OF DEFAULT..................................................42
SECTION 10.2 LATE CHARGE........................................................45
SECTION 10.3 DEFAULT INTEREST...................................................45
ARTICLE 11 - RIGHTS AND REMEDIES..........................................................45
SECTION 11.1 REMEDIES...........................................................45
SECTION 11.2 APPLICATION OF PROCEEDS............................................47
SECTION 11.3 LENDER RIGHT TO CURE DEFAULTS......................................47
SECTION 11.4 ACTIONS AND PROCEEDINGS............................................48
SECTION 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID...............................48
SECTION 11.6 EXAMINATION OF BOOKS AND RECORDS...................................48
SECTION 11.7 OTHER RIGHTS, ETC..................................................49
SECTION 11.8 LENDER RIGHT TO RELEASE............................................49
SECTION 11.9 VIOLATION OF LAWS..................................................49
SECTION 11.10 RIGHT OF ENTRY.....................................................50
SECTION 11.11 RIGHTS PERTAINING TO SALES.........................................50
SECTION 11.12 RIGHT TO RELEASE INFORMATION.......................................52
ARTICLE 12 - ENVIRONMENTAL HAZARDS........................................................52
SECTION 12.1 ENVIRONMENTAL DEFINITIONS..........................................52
SECTION 12.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.......................54
SECTION 12.3 ENVIRONMENTAL COVENANTS............................................54
SECTION 12.4 LENDER'S RIGHTS....................................................55
ARTICLE 13 - INDEMNIFICATION..............................................................56
SECTION 13.1 GENERAL INDEMNIFICATION............................................56
SECTION 13.2 MORTGAGE AND/OR INTANGIBLE TAX.....................................57
SECTION 13.3 ERISA INDEMNIFICATION..............................................58
SECTION 13.4 ENVIRONMENTAL INDEMNIFICATION......................................58
SECTION 13.5 DUTY TO DEFEND, ATTORNEYS' FEES AND OTHER FEES AND EXPENSES........59
ARTICLE 14 - WAIVERS......................................................................59
SECTION 14.1 WAIVER OF COUNTERCLAIM.............................................59
SECTION 14.2 MARSHALLING AND OTHER MATTERS......................................60
SECTION 14.3 WAIVER OF NOTICE...................................................60
SECTION 14.4 WAIVER OF STATUTE OF LIMITATIONS...................................60
SECTION 14.5 SURVIVAL...........................................................60
SECTION 14.6 WAIVER OF TRIAL BY JURY............................................61
ARTICLE 15 - EXCULPATION..................................................................61
ARTICLE 16 - NOTICES......................................................................61
SECTION 16.1 NOTICES............................................................61
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ARTICLE 17 - APPLICABLE LAW...............................................................62
SECTION 17.1 CHOICE OF LAW/JURISDICTION AND VENUE...............................62
SECTION 17.2 USURY LAWS.........................................................62
SECTION 17.3 PROVISIONS SUBJECT TO APPLICABLE LAW...............................62
SECTION 17.4 INAPPLICABLE PROVISION.............................................63
ARTICLE 18 - SECONDARY MARKET.............................................................63
SECTION 18.1 TRANSFER OF LOAN...................................................63
SECTION 18.2 SECONDARY MARKET TRANSACTIONS......................................63
SECTION 18.3 COOPERATION; LIMITATIONS...........................................64
SECTION 18.4 INFORMATION........................................................64
SECTION 18.5 SEVERANCE..........................................................65
ARTICLE 19 - COSTS........................................................................65
SECTION 19.1 ORIGINATION, ADMINISTRATION, ENFORCEMENT, AND DEFENSE EXPENSES.....65
ARTICLE 20 - CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION..........................66
SECTION 20.1 GENERAL DEFINITIONS................................................66
SECTION 20.2 HEADINGS, ETC......................................................67
SECTION 20.3 RULES OF CONSTRUCTION..............................................67
ARTICLE 21 - MISCELLANEOUS................................................................68
SECTION 21.1 NO ORAL CHANGE.....................................................68
SECTION 21.2 LIABILITY..........................................................68
SECTION 21.3 DUPLICATE ORIGINALS; COUNTERPARTS..................................69
SECTION 21.4 SUBROGATION........................................................69
SECTION 21.5 ENTIRE AGREEMENT...................................................69
SECTION 21.6 LENDER'S RIGHT TO SUBORDINATE......................................69
ARTICLE 22 - LOCAL LAW PROVISIONS.........................................................70
SECTION 22.1 INCONSISTENCIES....................................................70
SECTION 22.2 MATURITY DATE......................................................70
SECTION 22.3 ADVANCES BY LENDER SECURED.........................................70
SECTION 22.4 OPEN-END MORTGAGE..................................................70
ARTICLE 23 - ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS............................70
SECTION 23.1 INCONSISTENCIES....................................................70
SECTION 23.2 INSURANCE ESCROW FUND..............................................70
SECTION 23.3 TAX IMPOUND ACCOUNT................................................71
iv
PREAMBLE
THIS OPEN-END MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT, AND FIXTURE FILING ("SECURITY INSTRUMENT") is made as of April 25,
2005, by and among, CEDAR-CLYDE LLC, a Delaware limited liability company,
having its principal place of business at 44 South Bayles Avenue, Suite 304,
Port Washington, New York 11050, as grantor ("BORROWER," for all purposes of
this Security Instrument, such term shall include any successors or assigns of
Borrower and any future owners of all or any part of the Property), and KEYBANK
NATIONAL ASSOCIATION, a national banking association, having a place of business
at 911 Main Street, Suite #1500, Kansas City, Missouri 64105, as mortgagee
("LENDER," such term includes all successors and assigns and all subsequent
holders, if any, of the Promissory Note that this Security Instrument secures).
PROPERTY ADDRESS: 1062-1076 W. McPherson Highway, Clyde, Ohio 43410
RECITALS
Borrower by its promissory note of even date herewith given to Lender
is indebted to Lender in the principal sum of $2,080,000.00 (the "LOAN") or so
much thereof that as is then outstanding in lawful money of the United States of
America (the note together with all extensions, renewals, modifications,
consolidations, substitutions, replacements, restatements and increases thereof
shall collectively be referred to as the "NOTE"), with interest from the date
thereof at the rates set forth in the Note, principal and interest to be payable
in accordance with the terms and conditions provided in the Note.
Borrower desires to secure the payment of the Debt and the performance
of all of its obligations under the Note and other Loan Documents.
DEFINITIONS
The terms set forth below are defined in the following Loan Documents
or Sections and Subsections of this Security Instrument and when used in this
Security Instrument shall have the meanings set forth in such Loan Documents
(such Loan Documents being incorporated herein by reference for such purposes),
Sections, and Subsections unless the context clearly otherwise requires. Certain
other capitalized words and phrases that are used on a more limited basis are
defined in the Sections in which they are used.
Action: Section 17.1;
Administration and Enforcement Expenses: Section 19.1;
Affiliated Manager Subsection: 8.1(a);
Applicable Laws: Subsection 3.10(a);
Availability Threshold Subsection: 4.4(a);
Bankruptcy Code Subsection: 1.1(f);
Borrower: Preamble and Section 20.1;
Business Day: Section 16.1;
Business Income Insurance: Subsection 3.3(a)(ii);
Business Interruption Period: Subsection 3.3(a)(ii);
Casualty Loss: Section 4.4;
Commercial Property Insurance: Subsection 3.3(a)(i);
Condemnation Action: Section 4.4;
Condemnation Awards: Subsection 1.1(g);
Condemnation Restoration: Section 3.6;
Control: Subsection 8.1(b);
Conversion: Section 18.5;
Debt: Section 2.1;
Decision Power: Subsection 20.3(i);
Default Rate: Note;
Default: Section 3.5(b)
Defeasance: Note;
Encumbrance: Subsection 8.1(a);
Environmental Law: Section 12.1;
Environmental Lien: Section 12.1;
Environmental Reports: Section 12.1;
ERISA: Subsection 4.2(a);
Estimated Rental Income: Subsection 3.3(a)(ii);
Event of Default: Section 10.1;
Financial Statement Reporting Deposit: Note;
Governing State: Section 17.1;
Guarantor: Section 5.5;
Hazardous Substances: Section 12.1;
Impound Account: Section 3.5;
Improvements: Subsection 1.1(c);
Indemnified Parties: Section 13.1;
Indemnitor: Section 5.5;
Institutional Control: Section 12.1;
Insurance Premiums: Subsection 3.3(b);
Insurance Restoration: Subsection 3.3(e);
Insured Property: Subsection 3.3(a)(i);
Interested Parties: Section 18.3;
Investor: Section 18.1;
Land: Subsection 1.1(a);
Late Charges: Note;
Leases: Subsection 1.1(f);
Leasing Report: Subsection 3.11(b);
Lender: Preamble and Section 20.1;
Lender's Underwriting Standards: Subsection 8.2(a);
Liability Insurance: Subsection 3.3(a)(vi);
Loan Application: Section 5.14;
Loan Documents: Subsection 2.1(a);
Loan Sale: Section 18.1;
Loan Splitting: Section 18.5;
Loan Tranching: Section 18.5;
Loan: Recitals;
Losses: Section 13.1;
2
Maturity Date: Note;
Monthly Insurance Impound: Section 3.5;
Monthly Payment: Note;
Monthly Tax Impound: Section 3.5;
Net Proceeds: Subsection 4.4(b);
New Borrower: Subsection 8.2(a)(iv);
New Guarantor: Subsection 8.2(a)(viii);
Non-consolidation Opinion: Section 5.19;
Note: Recitals and Section 20.1;
O&M Plan: Section 12.1;
Other Charges: Subsection 3.4(a);
Participations: Section 18.1;
Permitted Exceptions: Section 5.1;
Personal Property: Subsection 1.1(e);
Policies/Policy: Subsection 3.3(b);
Prepayment Consideration: Note;
Prohibited Transfer: Section 8.1;
Property: Section 1.1 and Section 20.1;
Qualifying Manager: Section 5.18
Rating Agency; Section 5.18
Release: Section 12.1;
Remediation: Section 12.1;
REMIC: Section 18.2;
Rents: Subsection 1.1 (f);
Restoration Consultant: Subsection 4.4(b)(iii);
Restoration Retainage: Subsection 4.4(b)(iv);
Restoration: Section 4.4;
Restoration: Subsection 3.3(d);
Restricted Party: Subsection 8.1(a);
Sale: Subsection 8.1(a);
Sale Officer: Subsection 11.11(a);
Secondary Market Transaction: Section 18.2;
Securities: Section 18.1;
Securitization: Section 18.1;
Security Instrument: Preamble;
Servicing Rights Transfers: Section 18.1;
Special Cause of Loss: Subsection 3.3(a)(i);
Tax Change Acceleration: Subsection 7.3(a);
Taxes: Subsection 3.4(a);
Terrorism Coverage: Subsection 3.3(c);
Transfer Fee: Subsection 8.2(a)(vi);
Uniform Commercial Code: Subsection 1.1(e).
3
ARTICLE 1 - GRANTS OF SECURITY
SECTION 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably deed,
mortgage, grant, bargain, sell, alien, enfeoff, hypothecate, remise, release,
pledge, assign, warrant, transfer, confirm, and convey to Lender a lien on,
pledge of, and security interest in, the following property, rights, interests,
and estates now owned or hereafter acquired by Borrower to the full extent of
Borrower's right, title, and interest therein, including hereafter acquired
rights, interests, and property, and all products and proceeds thereof and
additions and accessions thereto (sometimes collectively referred to herein as
the "PROPERTY"):
(a) Land. The real property described in Exhibit A attached hereto and
made a part hereof (the "LAND"); TOGETHER with
(b) Additional Land. All additional lands, estates, and development
rights now owned or hereafter acquired by Borrower for use in connection with
the Land and the development of the Land that may, from time to time, by
supplemental mortgage or otherwise, be expressly made subject to the lien of
this Security Instrument;
(c) Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (the "IMPROVEMENTS");
(d) Easements and Appurtenances. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys, passages, sewer rights,
water, water courses, water rights and powers, air rights and development
rights, riparian rights, and all estates, rights, titles, interests, privileges,
liberties, servitudes, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or pertaining to the
Land and the Improvements and the reversion and reversions, remainder and
remainders, including any homestead or other claim at law or in equity and any
after-acquired title, franchises, licenses, and any reversions and remainders
thereof, and all land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the Land, to the center line thereof and all
the estates, rights, titles, interests, dower and rights of dower, curtesy and
rights of curtesy, property, possession, claim and demand whatsoever, both at
law and in equity, of Borrower of, in, and to the Land and the Improvements and
every part and parcel thereof, with the appurtenances thereto;
(e) Fixtures and Tangible Personal Property. All inventory, machinery,
furniture, equipment, and fixtures (including all heating, air conditioning,
plumbing, lighting, communications and elevator fixtures) and other property of
every kind and nature whatsoever located upon the Land or the Improvements or
appurtenant thereto or used in connection with the present or future operation
or occupancy of the Land or the Improvements, including all materials intended
for construction, reconstruction, refurbishment, renovation, alterations, and
repairs to the Property (whether stored or located on or off the Property) (all
of the items described in Subsections 1.1(e) through 1.1(m) below are herein
sometimes collectively called the "PERSONAL PROPERTY"), including the right,
title and interest of Borrower in and to any of the Personal Property that may
be subject to any security interests, as defined in the Uniform Commercial Code,
as adopted and enacted by any state or states where any of the Property is
4
located (the "UNIFORM COMMERCIAL CODE") superior in lien to the lien of this
Security Instrument, such Personal Property to include, for example, the
following: (1) all furniture and furnishings, including carpets, rugs and other
floor coverings, draperies, drapery rods and brackets, awnings, window shades,
Venetian blinds, curtains, lighting fixtures, desk chairs, stools, pictures,
lamps, ash trays, waste baskets, clocks, radios, and all other furniture and
furnishings of every kind and nature whatsoever; (2) all cash registers, coin
machines, computers, word processing equipment, adding machines, calculators,
check protectors, postage meters, desks, chairs, tables, room dividers, filing
cabinets, safes, vaults, time clocks, time card machines, and other office
furniture, equipment and supplies of every kind and nature whatsoever; (3) all
right and interest of the Borrower in and to all equipment leases, personal
property leases, conditional sales contracts and similar agreements in and to
the telephone system (including the switching components thereof), television
sets, computer systems, refrigerator/bars, and point of sale computer systems
and/or inventory control systems; (4) all apparatus, machinery, motors, tools,
insurance proceeds, leases, and equipment, including fire sprinklers and alarm
systems, air conditioning, heating, refrigerating, electronic monitoring, window
or structural cleaning rigs, maintenance equipment, equipment for the
extermination or exclusion of vermin or insects, equipment for removal of dust,
debris, snow, refuse or garbage, and all other equipment of every kind; (5)
elevators, fittings, radiators, gas ranges, mechanical equipment, and all
plumbing, heating, lighting, cooking, laundry, ventilating, refrigerating,
incinerating, air conditioning, central energy and sprinkler equipment and
fixtures and appurtenances thereto; and (6) all renewals or replacements of any
of the foregoing, whether or not the same are or shall be attached to the
Improvements;
(f) Leases and Rents. All leases and other agreements affecting or
relating to the use, enjoyment or occupancy of all or any part of the Land or
the Improvements heretofore or hereafter entered into, whether before or after
the filing by or against Borrower of any petition for relief under 11 U.S.C. ss.
101 et seq. (the "BANKRUPTCY CODE"), as the same may be amended from time to
time (the "LEASES") and all right, title and interest of Borrower, its
successors and assigns therein and thereunder, including cash or securities
deposited thereunder to secure the performance by the lessees of their
obligations thereunder and all rents, additional rents, royalties, licenses,
payments (including payments pursuant to the exercise of any purchase option by
any tenant under any Lease), fees (including termination fees), revenues,
income, receipts, charges, accounts, accounts receivable, issues and profits and
other benefits (including all oil and gas or other mineral royalties and
bonuses) from the Land or the Improvements whether paid or accruing before or
after the filing by or against Borrower of any petition for relief under the
Bankruptcy Code (collectively, the "RENTS") and all proceeds from the sale or
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Debt;
(g) Condemnation Awards. All awards or payments, including interest
thereon (collectively "CONDEMNATION AWARDS"), which may heretofore and hereafter
be made with respect to the Property, whether from the exercise of the right of
eminent domain (including any transfer made in lieu of or in anticipation of the
exercise of such right), or for a change of grade, inverse condemnation or for
any other injury to or decrease in the value of the Property whether permanent
or temporary;
5
(h) Insurance Proceeds. All proceeds of and any unearned premiums on
any insurance policies covering the Property, including the right to receive and
apply the proceeds of any insurance judgments, or settlements made in lieu
thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits in connection with
a reduction in real estate taxes and assessments charged against the Property as
a result of tax certiorari or any applications or proceedings for reduction;
(j) Miscellaneous Personal Property. All intangible property used in
connection with or generated by, located on or at or pertaining to the Property
including all general intangibles, payment intangibles, software, goodwill,
trademarks, trade names, service marks, logos, copyrights, option rights,
purchase contracts, contract rights or leases of personal property and security
deposits received pursuant thereto, utility contracts, service contracts,
guaranties, warranties, telephone exchange numbers, licenses, government permits
and applications, approvals and other government rights relating to the Property
or the operation of the business thereon; all books and records; deposit
accounts, letter-of-credit rights, accounts, contract rights, instruments,
chattel paper, investment property, all rights of Borrower for payment of money
for property sold, rented or lent, for services rendered, for money lent, or
advances or deposits made; all claims, actions, and causes of action (including
those arising in tort, including commercial tort claims) of Borrower against
others; all agreements, contracts, certificates, instruments (including
promissory notes, guaranties, liens and all writings which evidence a right to
the payment of money), franchises, permits, licenses, plans, specifications and
other documents, now or hereafter entered into, and all rights therein and
thereto; in each case respecting or pertaining to the use, occupation,
construction, management or operation of the Property or any part thereof or
respecting any business or activity conducted on the Property or any part
thereof and all right, title and interest of Borrower therein and thereunder,
including the right to receive and collect any sums payable to Borrower
thereunder; all extensions, improvements, betterments, replacements, renewals,
or additions and accessions to any of the foregoing; and any other intangible
property of Borrower related to the Property; and
(k) Personal Property As Defined In Uniform Commercial Code. In
addition to any other property mentioned in this Section 1.1, all property in
which a security interest may be created pursuant to the Uniform Commercial Code
(or any similar laws) including all goods, inventory, equipment, accounts,
accounts receivable, contract rights, general intangibles, chattel paper,
documents, documents of title, instruments, deposit accounts, letter-of-credit
rights, investment property, tort claims (including commercial tort claims), and
securities located on or generated by or used in connection with the ownership
or operation of the Property;
(l) Conversion. All proceeds of the conversion, voluntary or
involuntary, of any of the foregoing including proceeds of insurance and
Condemnation Awards, into cash or liquidation claims; and
(m) Other Rights. Any and all other rights of Borrower in and to the
items set forth in Subsections (a) through (l) above.
SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS. Borrower hereby absolutely
and unconditionally assigns to Lender Borrower's right, title and interest in
and to all current and future Leases and Rents, it being acknowledged by
6
Borrower that this assignment constitutes, and is intended to constitute a
present, absolute assignment and not an assignment for additional security only.
Nevertheless, subject to the terms of this Section 1.2 and Section 3.7, Lender
grants to Borrower a revocable license to collect and receive the Rents.
Borrower shall hold a portion of the Rents sufficient to discharge all current
sums due on the Debt for use in the payment of such sums.
SECTION 1.3 SECURITY AGREEMENT. This Security Instrument is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Instrument,
Borrower hereby grants to Lender, as security for the Debt, a security interest
in any of the Property that is deemed to be personal property to the full extent
that such property may be subject to the Uniform Commercial Code. This Security
Instrument shall be and is intended to serve as a financing statement under the
Uniform Commercial Code with respect to the Personal Property, and when filed
shall serve as a financing statement for all intents and purposes thereunder.
Borrower authorizes Lender to file financing statements describing the Personal
Property. Subject to the terms and conditions of the Loan Documents, Lender
shall be entitled to all rights and remedies of a "secured party" under the
Uniform Commercial Code. Upon its recording in the real property records, this
Security Instrument shall be effective as a financing statement filed as a
fixture filing and when filed shall serve as a financing statement for all
intents and purposes thereunder. For purposes of this filing, Borrower is the
record owner of the Property. The name and mailing address of Borrower, as
debtor, and the name and mailing address of Lender, as secured party, from which
information concerning this Financing Statement may be obtained, are set forth
in the Preamble of this Security Instrument. The Borrower shall promptly (and in
no event later than thirty (30) days after the occurrence of such event) advise
the Lender in writing of any change in the state of Borrower's organization, or
Borrower's exact legal name.
If any of the Property is deemed to be personal property, this Security
Instrument shall also constitute a security agreement with respect to such
personal property executed by Borrower as debtor in favor of Lender as secured
party. During the continuance of an Event of Default, Lender may, in addition to
and not in derogation of any other rights and remedies of Lender under the Loan
Documents or applicable law, in accordance with Section 9-604 of the Uniform
Commercial Code, as applicable, or other such provisions of the Uniform
Commercial Code, elect (i) to proceed under and have all the rights and remedies
of a secured party under Article 9 of the Uniform Commercial Code and any other
applicable law, or (ii) to proceed as to both the real property and the personal
property in accordance with Lender's rights and remedies in respect of the real
property encumbered by this Security Instrument, whereupon at any foreclosure
sale conducted pursuant to this Security Instrument the Sale Officer acting
hereunder may offer the real and personal property together as part of the same
sale, with bids to be taken on the whole of the real and personal property
rather than separately.
Borrower shall promptly notify Lender of the existence of any
commercial tort claim (as defined in the Uniform Commercial Code) now or
hereafter existing for the benefit of Borrower or the Property, and shall
execute, acknowledge and deliver a security agreement or other documentation,
each in form and substance reasonably satisfactory to Borrower, as Lender shall
from time to time require to acquire and perfect a valid and binding security
interest in such commercial tort claim.
7
SECTION 1.4 PLEDGE OF MONIES HELD. Borrower hereby pledges to Lender
any and all items and monies now or hereafter held by Lender, including any sums
deposited in the Impound Account or any escrow, as additional security for the
Debt until expended or applied as provided in this Security Instrument.
SECTION 1.5 COMMON LAW PLEDGE/ASSIGNMENT. To the extent that the
Uniform Commercial Code does not apply to any item of the Personal Property, it
is the intention of this Security Instrument that Lender have a common law
pledge and/or collateral assignment of such item of Personal Property.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the Property unto and to the use and benefit of
Lender, and the successors and assigns of Lender, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall pay to Lender the Debt at the time and in the manner provided
in the Loan Documents, and shall abide by and comply, subject to the terms of
the Loan Documents, with each and every covenant and condition set forth in the
Loan Documents, these presents and the estate hereby granted shall terminate and
Lender will promptly execute documents in form and substance reasonably
satisfactory to Lender evidencing the release or assignment of this Security
Instrument.
ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
SECTION 2.1 DEBT. This Security Instrument and the grants, assignments,
and transfers made in Article 1 are given for the purpose of securing the
following, in such order of priority as Lender may determine (the "DEBT"):
(a) the payment of the indebtedness and obligations evidenced by or
arising under the following, which, together with all amendments or
modifications thereto and substitutions or replacements thereof are sometimes
herein collectively called the "LOAN DOCUMENTS" or individually a "LOAN
DOCUMENT": this Security Instrument, the Note and all other documents and
instruments executed and/or delivered by or on behalf of Borrower or any
guarantor of the Loan existing now or after the date hereof that evidence,
secure or otherwise relate to the Loan, including any assignments of leases and
rents, other assignments, security agreements, financing statements, guaranties,
indemnity agreements (including environmental indemnity agreements), letters of
credit, or escrow/holdback or similar agreements or arrangements.
(b) the payment of interest, default interest, late charges and other
sums, as provided in the Note, this Security Instrument, or any other Loan
Document;
(c) Prepayment Consideration (as such term is defined in the Note);
8
(d) the payment of all other monies agreed or provided to be paid in
the Note, this Security Instrument, or any other Loan Document;
(e) the payment of all sums advanced pursuant to this Security
Instrument or any other Loan Document to protect and preserve the Property and
the lien and the security interest created hereby or otherwise, it being agreed
by Borrower that any future advances made by Lender to or for the benefit of
Borrower from time to time under the Note or the other Loan Documents and
whether or not such advances are obligatory or are made at the option of Lender,
or otherwise, made for any purpose, and all interest accruing thereon, shall be
equally secured by this Security Instrument and shall have the same priority as
all amounts, if any, advanced as of the date hereof and shall be subject to all
of the terms and provisions of this Security Instrument;
(f) the payment of all loans and advances by Lender, all actual
liabilities, indemnities, damages and claims of any kind or nature (in contract,
tort or otherwise), and costs and expenses (including reasonable attorneys'
fees) incurred by Lender in connection with the Debt or any part thereof, or the
servicing or administration thereof or the enforcement of Lender's remedies in
the collection thereof, any renewal, extension, modification, consolidation,
change, substitution, replacement, restatement or increase of the Debt or any
part thereof, or the acquisition or perfection of the security therefor, whether
made or incurred at the request of Borrower or Lender and whether or not
evidenced by additional promissory notes or other instruments;
(g) the performance of all other obligations of Borrower contained
herein;
(h) the performance of each obligation of Borrower contained in the
Note in addition to the payment of the Debt and in any other Loan Document; and
(i) the performance of each obligation of Borrower contained in any
renewal, extension, modification, consolidation, change, substitution,
replacement for, restatement or increase of all or any part of the Note, this
Security Instrument or any other Loan Document.
ARTICLE 3 - BORROWER COVENANTS
Borrower covenants and agrees that:
SECTION 3.1 PAYMENT OF DEBT. Borrower shall pay the Debt at the time
and in the manner provided in the Note and in this Security Instrument.
SECTION 3.2 INCORPORATION BY REFERENCE. All of the covenants,
conditions and agreements contained in the Note and each other Loan Document are
hereby made a part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.
SECTION 3.3 INSURANCE.
(a) Insurance. Borrower shall obtain and maintain, or cause to
be maintained, insurance for Borrower and the Property providing at
least the following coverages:
9
(i) Property Insurance. Insurance ("COMMERCIAL
PROPERTY INSURANCE") with respect to the Improvements,
including fixtures, machinery, equipment and any other items
of Property (collectively "INSURED PROPERTY") owned by
Borrower and typically insured by a commercial property
insurance policy, insuring against any peril now or hereafter
included within the classification "Special Cause of Loss"
insuring against risks of direct physical loss, in an amount
not less than one hundred percent (100%) of the "Full
Insurable Value" (as hereinafter defined) of the Improvements
and other Insured Property, with an "agreed amount"
endorsement waiving all co-insurance provisions. The term
"Full Insurable Value" shall mean the full replacement cost
value of the Improvements and Insured Property (without taking
into account any depreciation, and exclusive of excavations,
footings and foundations, landscaping and paving) determined
no less frequently than required by Borrower's Commercial
Property Insurance policy at Borrower's sole cost and expense
by an insurer, a recognized independent insurance broker or an
independent appraiser selected by Borrower and reasonably
approved by Lender, but in no event less than the coverage
required to be maintained by Borrower pursuant to the terms of
any Lease. In addition, Borrower shall obtain: (x) if any
portion of the Improvements is currently or at any time in the
future located in a federally designated "special flood hazard
area," flood hazard insurance in an amount equal to the lesser
of (1) the outstanding principal balance of the Note or (2)
the maximum amount of such insurance available under the
National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973 or the National Flood Insurance Reform
Act of 1994, as each may be amended; (y) earthquake or earth
movement insurance in amounts and in form and substance
reasonably satisfactory to Lender in the event that Property
is located in an area with a high degree of seismic activity
(provided that in no event shall such insurance be required if
the Property is located in seismic zones 0, 1 or 2); and (z)
coastal windstorm insurance in amounts and in form and
substance reasonably satisfactory to Lender in the event the
Property is located in any coastal region, provided that the
insurance pursuant to clauses (x), (y) and (z) hereof shall be
on terms consistent with the "SPECIAL CAUSE OF LOSS" insurance
policy required under this subsection (i).
(ii) Business Interruption. Business interruption
and/or loss of "rental income" insurance ("BUSINESS INCOME
INSURANCE") in an amount sufficient to avoid any co-insurance
penalty and to provide proceeds that will cover the estimated
annual gross income as determined by Lender (the "ESTIMATED
RENTAL INCOME") for a period (the "BUSINESS INTERRUPTION
PERIOD") of not less than twelve (12) months from the date of
casualty or loss. In each such case, such Business Income
Insurance policy shall provide that, after the physical loss
to the Improvements and the other Insurable Property has been
repaired, the continued loss of Estimated Rental Income will
be insured during the applicable Business Interruption Period,
and notwithstanding that the policy may expire prior to the
end of such period. The term "rental income" to mean the sum
of (A) the total then ascertainable Rents payable under the
Leases and (B) the total ascertainable amount of all other
amounts to be received by Borrower from third parties which
10
are the legal obligation of the tenants. The amount of
Business Income Insurance coverage shall be adjusted annually
by Lender (based on the rent rolls and other financial reports
delivered by Borrower to Lender) to reflect the projected
rents payable during the next succeeding Business Interruption
Period;
(iii) Boiler and Machinery. If applicable,
comprehensive form boiler and machinery insurance (without
exclusion for explosion), on terms consistent with those set
forth for Commercial Property Insurance in Section 3.3(a)(i)
above;
(iv) Builder's Risk. At all times during which
construction, repairs or alterations are being made with
respect to the Improvements that either affect the structure
of the Improvements or will cost in excess of five percent
(5%) of the value of the Property (A) owner's contingent or
protective liability insurance covering claims not covered by
or under the terms or provisions of the commercial general
liability insurance policy described in Subsection 3.3(a)(vi)
below; and (B) the insurance provided for in Subsection
3.3(a)(i) written in a so-called builder's risk completed
value form (1) on a non-reporting basis, (2) against all risks
insured against pursuant to Subsection 3.3(a)(i), (3)
including permission to occupy the Property, and (4) with an
agreed amount endorsement waiving co-insurance provisions;
(v) Ordinance/Law Coverage. Ordinance or law coverage
and insurance coverage to compensate for the cost of
demolition or rebuilding of the undamaged portion of the
Property along with any reduced value and the increased cost
of construction in amounts as requested by Lender if the
Property is or becomes a legally non-conforming use;
(vi) Liability Insurance. Commercial general
liability insurance ("LIABILITY INSURANCE") on an "occurrence"
form, including bodily injury and property damage liability,
and insurance against any and all claims, including all legal
liability imposed upon Lender and all court costs and legal
fees and expenses, arising out of or connected with the
possession, use, leasing, operation, maintenance or condition
of the Property. Such insurance shall provide commercial
general liability protection in an amount not less than Three
Million Dollars ($3,000,000) each occurrence and annual
aggregate, combined single limit, bodily injury and property
damage;
(vii) Workers Compensation Insurance. If the Property
includes commercial property, worker's compensation insurance
with respect to any employees of Borrower, as required by any
Governmental Authority or any Applicable Law; and
(viii) Other Insurance. Such other insurance with
respect to the Property against loss or damage of the kinds
from time to time customarily insured against and generally
required by institutional lenders for properties comparable to
the Property.
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(b) Insurance Policies. All insurance provided for in
Subsection 3.3(a) hereof shall be obtained under valid and enforceable
policies (the "POLICIES" or in the singular, the "POLICY") issued by
one or more insurers satisfactory to Lender and having a rating of A:V
or better by Best's Key Rating Guide. All insurers providing the
insurance required under this Security Instrument shall be authorized
to issue insurance in the state in which the Property is located. The
Policy referred to in Subsection 3.3(a)(vi) above shall name Lender as
an additional insured and the Policies referred to in Subsection
3.3(a)(i), (ii), (iii) and (iv), and as applicable (viii), above shall
provide that all proceeds be payable to Lender as set forth in Section
4.4 hereof. The Policies referred to in Subsections 3.3(a)(i), (iii),
and (iv) shall also: (1) contain a standard "non-contributory
mortgagee" endorsement or its equivalent relating, inter alia, to
recovery by Lender notwithstanding the negligent or willful acts or
omission of Lender; (2) contain a waiver of subrogation endorsement as
to Lender; and (3) be approved by Lender (such approval not to be
unreasonably withheld, delayed or conditioned) as to amounts, form,
risk coverage, deductibles, loss payees and insureds. All Policies
shall contain (i) a provision that such Policies shall not be cancelled
or terminated, nor shall they expire, without at least thirty (30) days
prior written notice to Lender in each instance; and (ii) effective
waivers by the insurer of all claims for Insurance Premiums against any
loss payees, additional insureds and named insureds (other than
Borrower). Copies of certificates of insurance with respect to all
renewal and replacement Policies shall be delivered to Lender not less
than ten (10) days prior to the expiration date of any of the Policies
required to be maintained hereunder together with evidence of payment
of applicable premiums (the "INSURANCE PREMIUMS"). Copies of such
replacement Policies shall be delivered to Lender promptly after
Borrower's receipt thereof. If Borrower fails to maintain and deliver
to Lender the copies of certificates of insurance required by this
Security Instrument, upon ten (10) days prior written notice to
Borrower, Lender may procure such insurance at Borrower's sole cost and
expense.
(c) Terrorism Coverage. The commercial property and business
income insurance required pursuant to Section 3(a) hereof shall be
required to cover perils of terrorism and acts of terrorism (other than
biological, nuclear, and chemical acts of terrorism) ("TERRORISM
COVERAGE") and Borrower shall maintain Commercial Property Insurance
and Business Income Insurance for loss resulting from perils and acts
of terrorism on terms (including amounts) consistent with those
required under Sections 3.3(a)(i) and (iii) above at all times during
the term of the Loan so long as (A) Lender determines in good faith
that either (I) prudent owners of real estate comparable to the
Property are maintaining same, or (II) prudent institutional lenders
are requiring that such owners of real estate comparable to the
Property maintain such insurance; and (B) if such insurance is
obtainable from any insurer or the United States of America or any
agency or instrumentality thereof and the lack of such insurance in and
of itself will result in a qualification, downgrade or withdrawal of
the then current rating assigned, or to be assigned, or prevent ratings
from being assigned, to the Securities or any class thereof in any
applicable Securitization. If Lender has waived the requirement that
Borrower obtain Terrorism Coverage, Lender may at any time require that
Borrower obtain such Terrorism Coverage upon thirty (30) days written
notice provided that the condition set forth in subsections (A) and (B)
of the foregoing sentence have been satisfied.
12
(d) Compliance With Insurance Requirements. Borrower shall
comply in all material respects with all insurance requirements and
shall not bring or keep or permit to be brought or kept any article
upon any of the Property or cause or permit any condition to exist
thereon which would be prohibited by an insurance requirement, or would
invalidate the insurance coverage required hereunder to be maintained
by Borrower on or with respect to any part of the Property pursuant to
this Section 3.3.
(e) Restoration. If the Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty, Borrower
shall give prompt notice of such damage to Lender and provided that
Borrower shall have received the Net Proceeds, Borrower shall promptly
commence and diligently prosecute the completion of the repair and
restoration of the Property as nearly as possible to the condition the
Property was in immediately prior to such fire or other casualty, with
such alterations as may be reasonably approved by Lender (the
"INSURANCE RESTORATION") and otherwise in accordance with Section 4.4
of this Security Instrument.
(f) Blanket Insurance Policies. The insurance coverage
required under Section 3.3(a) may be effected under a blanket policy or
policies covering the Property and other properties and assets not
constituting a part of the security hereunder; provided that any such
blanket policy shall specify the portion of the total coverage of such
policy that is allocated to the Property, and any sub-limit in such
blanket policy applicable to the Property, and shall in any case comply
in all other material respects with the requirements of this Section
3.3. Lender may make such other requirements with respect to blanket
insurance as Lender may deem appropriate or desirable from time to
time; provided that such requirements are generally required by
institutional lenders for insurance on properties comparable to the
Property.
SECTION 3.4 PAYMENT OF TAXES, ETC.
(a) Subject to Section 3.4(b), Borrower shall pay by their due
date all taxes, assessments, water rates, sewer rents, governmental
impositions, and other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the
Land, now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "TAXES"), all ground rents,
maintenance charges and similar charges, now or hereafter levied or
assessed or imposed against the Property or any part thereof (the
"OTHER CHARGES"), and all charges for utility services provided to the
Property as same become due and payable. Borrower shall deliver to
Lender, promptly following Lender's written request, evidence
reasonably satisfactory to Lender that the Taxes, Other Charges, and
utility service charges have been so paid or are not then delinquent.
Subject to Section 3.4(b), Borrower shall not suffer and shall promptly
cause to be discharged (by bonding, payment or otherwise) any lien or
charge whatsoever that may be a lien or charge against the Property.
(b) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any of the
Taxes, provided that (i) no Event of Default exists under the Note,
13
this Security Instrument or any of the Loan Documents, (ii) Borrower is
permitted to do so under the provisions of any other mortgage, deed of
trust or deed to secure debt affecting the Property (it not being
implied by this clause that any such encumbrance will be permitted),
(iii) such proceeding shall suspend the collection of the Taxes from
Borrower and from the Property or Borrower shall have paid all of the
Taxes under protest, (iv) such proceeding shall be permitted under and
be conducted in accordance with the provisions of any other instrument
to which Borrower is subject and shall not constitute a default
thereunder, (v) neither the Property nor any part thereof or interest
therein will be in reasonably foreseeable danger of being sold,
forfeited, terminated, cancelled or lost, (vi) Borrower shall have set
aside adequate reserves for the payment of the Taxes, together with all
interest and penalties thereon, unless Borrower has paid all of the
Taxes under protest, and (vii) Borrower shall have furnished the
security as may be required in the proceeding, together with all
interest and penalties thereon, taking into consideration the amount in
the Impound Account available for payment of Taxes.
SECTION 3.5 TAX AND INSURANCE IMPOUND ACCOUNT. Borrower shall establish
and maintain at all times while this Security Instrument continues in effect an
impound account (the "IMPOUND ACCOUNT") with Lender for payment of Taxes and
Insurance Premiums on the Property and as additional security for the
indebtedness secured hereby. Commencing on the first Monthly Payment Date under
the Note and continuing thereafter on each Monthly Payment Date under the Note,
Borrower shall pay to Lender, concurrently with the Monthly Payment due under
the Note, deposits in an amount equal to one-twelfth (1/12) of the amount of the
annual Taxes that will next become due and payable on the Property (the "MONTHLY
TAX IMPOUND"), plus one-twelfth (1/12) of the amount of the annual Insurance
Premiums that will next become due and payable on insurance policies which
Borrower is required to maintain hereunder (the "MONTHLY INSURANCE IMPOUND"),
each as reasonably estimated and determined by Lender. The Monthly Tax Impound
or Monthly Insurance Impound, and the payments of interest or principal or both,
payable pursuant to the Note, shall be added together and shall be paid as an
aggregate sum by Borrower to Lender. If Lender at any time reasonably determines
that the Monthly Tax Impound or Monthly Insurance Impound is insufficient,
Lender may in its reasonable discretion adjust the required monthly payments of
such amounts, and Borrower shall be obligated to pay the increased amounts for
the Monthly Tax Impound or Monthly Insurance Impound commencing with the next
monthly payment date under the Note. So long as no Event of Default, and no
event that, with notice or the passage of time or the modification or
termination of the automatic stay of Section 362 of the United States Bankruptcy
Code may become an Event of Default ("DEFAULT"), has occurred and is continuing,
all sums in the Impound Account shall be held by Lender in the Impound Account
and used to pay Taxes and Insurance Premiums on or before the applicable due
date. Borrower shall be responsible for ensuring the receipt by Lender, at least
fifteen (15) days prior to the respective due date for payment thereof, of all
bills, invoices and statements for all Taxes and Insurance Premiums to be paid
from the Impound Account, and so long as no Event of Default has occurred and is
continuing, Lender shall pay the governmental authority or other party entitled
thereto directly to the extent funds are available for such purpose in the
Impound Account. In making any payment from the Impound Account, Lender shall be
entitled to rely on any bill, statement or estimate procured from the
appropriate public office or insurance company or agent without any inquiry into
the accuracy of such bill, statement or estimate and without any inquiry into
the accuracy, validity, enforceability or contestability of any tax, assessment,
valuation, sale, forfeiture, tax lien or title or claim thereof. Lender shall
14
pay no interest on funds contained in the Impound Account to Borrower and any
interest or other earnings on funds deposited in the Impound Account shall be
solely for the account of Lender. If the total funds in the Impound Account
shall exceed the amount of payments actually applied by Lender for the purposes
of the Impound Account, such excess may be credited by Lender on subsequent
payments to be made hereunder or, at the option of Lender, refunded to Borrower.
In allocating such excess, Lender may deal with the person shown on the records
of Lender to be the owner of the Property. If, however, the Impound Account
shall not contain sufficient funds to pay the sums required when the same shall
become due and payable, Borrower shall, within ten (10) Business Days after
receipt of written notice thereof, deposit with Lender the full amount of any
such deficiency. The Impound Account shall not constitute a trust fund and may
be commingled with other monies held by Lender.
SECTION 3.6 CONDEMNATION. Borrower shall promptly after obtaining
knowledge thereof, give Lender notice of the actual or threatened commencement
of any condemnation or eminent domain proceeding and shall deliver to Lender
copies of any and all papers received by Borrower in connection with such
proceedings. Lender may participate in any such proceedings to the extent
permitted by law. Borrower shall deliver to Lender all instruments reasonably
requested by it to permit such participation. Borrower shall, at its expense,
diligently prosecute any such proceedings, and shall consult with Lender, its
attorneys and experts, and to the extent reasonably requested cooperate with
them in the carrying on or defense of any such proceedings. Borrower shall not
make any agreement in lieu of condemnation of the Property or any portion
thereof without the prior written consent of Lender in each instance, which
consent shall not be unreasonably withheld or delayed. Notwithstanding any
taking by any public or quasi-public authority through eminent domain or
otherwise (including any transfer made in lieu of or in anticipation of the
exercise of such taking) and whether or not any Condemnation Awards are made
available to Borrower for the completion of the repair and restoration of the
Property as nearly as possible to the condition the Property was in immediately
prior to the condemnation or transfer in lieu of condemnation, with such
alterations as may be reasonably approved by Lender in accordance with Section
4.4 (a "CONDEMNATION RESTORATION"), Borrower shall continue to pay the Debt at
the time and in the manner provided for its payment in the Note and in this
Security Instrument and the Debt shall not be reduced until any Condemnation
Award shall have been actually received and applied by Lender, after the
deduction of actual out of pocket expenses of collection, to the reduction or
discharge of the Debt. Lender shall not be limited to the interest paid on the
Condemnation Awards by the condemning authority but shall be entitled to receive
out of the Condemnation Awards interest at the rate or rates provided herein or
in the Note. Subject to the terms of Article 4, Borrower shall cause
Condemnation Awards payable to Borrower in any condemnation or transfer made in
lieu of or in anticipation of the exercise of such taking to be paid directly to
Lender. Subject to the terms of Article 4, Lender shall apply any such
Condemnation Awards (after deducting any reasonable expenses of collection) to
the reduction or discharge of the Debt (whether or not then due and payable). No
Prepayment Consideration shall be payable solely in connection with the
application of such Condemnation Awards to the Debt; provided, however, that
notwithstanding the foregoing, if an Event of Default is existing as of the date
of the condemnation, then any Condemnation Awards or proceeds applied to the
Debt pursuant to this Section shall be subject to the Prepayment Consideration
computed in accordance with the terms of the Note. For the purposes of
determining whether Prepayment Consideration shall be payable under this Section
15
3.6, a civil or criminal action seeking or resulting in a forfeiture of the
Property shall not be deemed a condemnation or eminent domain proceeding and any
payment made pursuant to or in connection with such forfeiture action is subject
to the payment of Prepayment Consideration. If the Property or any portion
thereof is taken by the power of eminent domain, Borrower shall promptly
commence and diligently prosecute the Condemnation Restoration in accordance
with Section 4.4 of this Security Instrument. If the Property is sold, through
foreclosure or otherwise, prior to the receipt by Lender of the award or
payment, Lender shall have the right, whether or not a deficiency judgment on
the Note shall have been sought, recovered or denied, to receive the
Condemnation Awards or a portion thereof sufficient to fully satisfy the Debt.
SECTION 3.7 LEASES AND RENTS. Borrower shall comply at all times with
that certain Assignment of Leases and Rents of even date herewith executed by
Borrower in favor of Lender, which is incorporated herein by this reference as
though fully set forth herein. All Rents generated by or derived from the
Property shall first be utilized solely for current expenses directly
attributable to the ownership and operation of the Property, including current
expenses relating to Borrower's liabilities and obligations with respect to the
Loan Documents, and none of the Rents generated by or derived from the Property
shall be diverted by Borrower and utilized for any other purpose unless all such
current expenses attributable to the ownership and operation of the Property
have been fully paid and satisfied; provided, however, that the foregoing shall
in no event limit distributions to the members of Borrower in the ordinary
course of business in accordance with the terms of Borrower's operating
agreement.
SECTION 3.8 MAINTENANCE OF PROPERTY. Borrower shall cause the Property
to be maintained in a good and safe condition and repair. The Improvements and
the Personal Property shall not be removed, demolished or materially altered
(unless such Personal Property is replaced with personal property of equal or
better quality) without the consent of Lender, which consent shall not be
unreasonably withheld, delayed or conditioned. Borrower shall promptly repair,
replace or rebuild any part of the Property which may be destroyed by any
casualty, or become damaged, or which may be affected by any proceeding of the
character referred to in Section 3.6 hereof and shall complete and pay for any
structure at any time in the process of construction or repair on the Land.
Borrower shall not initiate, join in, acquiesce in, or consent to any change in
any private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses that may be made of the Property or
any part thereof without the prior written consent of Lender, which consent
shall not be unreasonably withheld, delayed or conditioned. If under applicable
zoning provisions the use of all or any portion of the Property is or shall
become a nonconforming use, Borrower will not cause or permit the nonconforming
use or Improvement to be discontinued or abandoned without the express written
consent of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned.
SECTION 3.9 WASTE. Borrower shall not commit or suffer any intentional
physical waste of the Property ("waste" meaning the diminution in the Property's
value resulting from Borrower's willful failure to manage, maintain, repair and
otherwise operate the Property in a commercially reasonable manner) or make any
change in the use of the Property which will materially increase the risk of
fire or other hazard arising out of the operation of the Property, or take any
action that is likely to invalidate or give cause for cancellation of any
Policy, or do or permit to be done thereon anything that is likely to materially
impair the value of the Property or the security of this Security Instrument.
16
Borrower shall not, without the prior written consent of Lender, which consent
shall not be unreasonably withheld or conditioned, permit any drilling or
exploration for or extraction, removal, or production of any minerals from the
surface or the subsurface of the Land, regardless of the depth thereof or the
method of mining or extraction thereof.
SECTION 3.10 COMPLIANCE WITH LAWS.
(a) Borrower shall promptly comply with all existing and
future federal, state and local laws, orders, ordinances, governmental
rules and regulations or court orders affecting the Property and the
use thereof ("APPLICABLE LAW"), except to the extent that any
non-compliance would not have a material adverse effect on Borrower,
the Property or Borrower's ability to perform its obligations under the
Loan Documents.
(b) Borrower shall maintain all necessary certificates,
licenses and other approvals, governmental and otherwise, necessary for
the operation of the Property and the conduct of its business and all
required zoning, building code, land use, environmental and other
similar permits or approvals, in full force and effect and shall not
intentionally take or omit to take any action that would subject any of
the foregoing to revocation, suspension, forfeiture or modification.
(c) Borrower shall from time to time, upon Lender's reasonable
request, provide Lender with evidence reasonably satisfactory to Lender
that the Property complies with all Applicable Laws or is exempt from
compliance with Applicable Laws.
(d) Lender's approval, if required, of the plans,
specifications, or working drawings for alterations of the Property
shall create no responsibility or liability on behalf of Lender for
their completeness, design, sufficiency or their compliance with
Applicable Laws. The foregoing shall apply to tenant improvements
constructed by Borrower or by any of its tenants. Lender may condition
any such approval, if required, of all alterations the cost of which
will exceed 5% of this Loan upon receipt of a certificate of compliance
with Applicable Laws from an independent architect, engineer, or other
person reasonably acceptable to Lender.
(e) Borrower shall give prompt notice to Lender of the receipt
by Borrower of any notice of the Property's violation of any Applicable
Laws and of the commencement of any proceedings or investigations which
relate to the Property's compliance with Applicable Laws; in each case
if such violation, proceeding or investigation is reasonably likely to
result in a material adverse effect on Borrower, the Property or
Borrower's ability to perform its obligations under the Loan Documents.
(f) After prior written notice to Lender, Borrower, at its own
expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the
Applicable Laws affecting the Property, provided that (i) no Event of
Default has occurred and is continuing; (ii) Borrower is permitted to
do so under the provisions of any other mortgage, deed of trust or deed
to secure debt affecting the Property; (iii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of
17
any other instrument to which Borrower is subject and shall not
constitute a default thereunder; (iv) neither the Property nor any
material part thereof or material interest therein nor any of the
tenants or occupants thereof shall be affected in any material adverse
way as a result of such proceeding; and (v) Borrower shall have
furnished to Lender all other items reasonably requested by Lender.
SECTION 3.11 BOOKS AND RECORDS.
(a) Borrower shall keep adequate books and records of account
in accordance with methods reasonably acceptable to Lender and
consistently applied, and shall furnish to Lender:
(i) Within one hundred twenty (120) days after the
close of each fiscal year of Borrower, Borrower shall deliver
or cause to be delivered to Lender the following financial
reports, each of which shall be certified by the Borrower's
chief financial officer or another person reasonably
acceptable to Lender: (A) an annual rent roll; (B) an annual
operating statement of the Property; and (C) an annual balance
sheet and profit-and-loss statement of Borrower.
(ii) For each Guarantor, Borrower shall deliver, or
cause to be delivered to Lender within one hundred twenty
(120) days after the close of the fiscal year of such
Guarantor (A) an annual balance sheet and profit and loss
statement of such Guarantor certified by such Guarantor's
chief financial officer or another person reasonably
acceptable to Lender if such Guarantor is an entity, or (B) a
signed personal financial statement in a form Lender
reasonably satisfactory to Lender if such Guarantor is an
individual. Lender hereby acknowledges that so long as the
Guarantor is Cedar Shopping Centers Partnership, L.P., the
above-referenced balance sheet and profit and loss statement
shall be provided within the consolidated statements of Cedar
Shopping Centers, Inc.
(iii) Prior to securitization and, in any event for
no longer than the first twelve (12) months after the date of
this Security Instrument, Borrower shall deliver, or cause to
be delivered, upon Lender's reasonable request all of the
following with respect to the previous calendar month within
twenty (20) Business Days after the close of each calendar
month, in each case be certified by the Borrower's chief
financial officer or another person reasonably acceptable to
Lender: (A) monthly rent roll(s); (B) monthly operating
statement(s) of the Property; and (C) year-to-date operating
statement(s) of the Property.
(iv) Beginning thirteen (13) months after the date of
this Security Instrument, Borrower shall deliver, or cause to
be delivered, all of the following with respect to the
previous fiscal quarter (but only with regard to the first
three fiscal quarters of any fiscal year) within sixty (60)
days after the close of each fiscal quarter, all to be
certified by the Borrower's chief financial officer or another
person reasonably acceptable to Lender: (A) a quarterly rent
roll; (B) a quarterly operating statement of the Property; and
(C) a year-to-date operating statement of the Property.
18
(b) Not more frequently than once per 12-month period during
the term of the Note upon Lender's request, Borrower shall deliver to
Lender a report (the "LEASING REPORT") setting forth the minimum
economic terms that Borrower proposes for use in connection with the
standard lease form for leases of portions of the Property during the
subsequent twelve month period beginning upon such anniversary date.
The terms set forth in the Leasing Report shall reflect the prevailing
market conditions for like properties in the locality of the Property.
(c) Borrower shall deliver to Lender annually upon request, in
form satisfactory to Lender, information regarding the sales and/or
receipts of each tenant of the Property who reports such information to
Borrower pursuant to such tenant's Lease.
(d) Borrower and its affiliates shall furnish Lender with such
other additional financial or management information as may, from time
to time, be reasonably required by, and in form and substance
reasonably satisfactory to, Lender, provided that such other additional
financial or management information is (i) generally required by
institutional Lenders with respect to loans comparable to the Loan, or
(ii) required by any Rating Agency rating any securities issued by the
holder of the Loan or any other Interested Party.
SECTION 3.12 PAYMENT FOR LABOR AND MATERIALS. Borrower shall promptly
pay when due all bills and costs for labor, materials, and specifically
fabricated materials incurred in connection with the Property and never permit
to exist beyond the due date thereof in respect of the Property or any part
thereof any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof, without
Lender's prior written consent except for the Permitted Exceptions.
Notwithstanding the foregoing, after prior written notice to Lender, Borrower
may, at its own expense, contest any mechanic's or similar lien affecting the
Property by appropriate legal proceedings, promptly initiated and conducted in
good faith and with due diligence, provided that all of the following conditions
are satisfied in Lender's reasonable discretion: (i) no Event of Default has
occurred and is continuing; (ii) Borrower is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt affecting
the Property; (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Borrower or the
Property is subject and shall not constitute a default thereunder; (iv) neither
the Property, any material part thereof or material interest therein, any of the
tenants or occupants thereof shall be affected in any material adverse way as a
result of such proceeding; (v) if the amount being contested exceeds $2,500.00,
upon the Lender's reasonable request Borrower shall have furnished to Lender
additional security in respect of the lien being contested in an amount
reasonably requested by Lender, but in any event not less than 125% of the
amount of the lien; and (vi) Borrower shall have furnished to Lender all other
items reasonably requested by Lender with respect to such contest.
19
SECTION 3.13 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe
and perform in all material respects each and every term to be observed or
performed by Borrower pursuant to the terms of any agreement or recorded
instrument affecting or pertaining to the Property.
SECTION 3.14 CHANGE OF NAME, IDENTITY OR STRUCTURE. Except as may be
expressly permitted under Article 8, Borrower shall not change Borrower's name,
identity (including its trade name or names) or, if not an individual,
Borrower's corporate, partnership or other structure, its state of organization
or its identification number, without notifying the Lender of such change in
writing at least thirty (30) days prior to the effective date of such change
and, in the case of a change in Borrower's structure, without first obtaining
the prior written consent of the Lender not to be unreasonably withheld.
SECTION 3.15 EXISTENCE. Borrower shall continuously maintain (a) its
existence and shall not dissolve or permit its dissolution, and (b) its rights
to do business in the state where the Property is located.
ARTICLE 4 - SPECIAL COVENANTS
Borrower covenants and agrees that:
SECTION 4.1 PROPERTY USE. The Property shall be used only as a shopping
center and for no other use without the prior written consent of Lender.
SECTION 4.2 ERISA.
(a) Borrower shall not engage in any transaction that would
cause any obligation, or action taken or to be taken, hereunder (or the
exercise by Lender of any of its rights under the Note, this Security
Instrument and any other Loan Document) to be a non-exempt (under a
statutory or administrative class exemption) prohibited transaction
under the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
(b) Borrower further covenants and agrees to deliver to Lender
such certifications or other evidence from time to time throughout the
term of the Security Instrument, as requested by Lender, that (i)
Borrower is not an "employee benefit plan" as defined in Section 3(3)
of ERISA, which is subject to Title I of ERISA, or a "governmental
plan" within the meaning of Section 3(3) of ERISA; (ii) Borrower is not
subject to state statutes regulating investments and fiduciary
obligations with respect to governmental plans; and (iii) one or more
of the following circumstances is true:
(i) Equity interests in Borrower are publicly offered
securities, within the meaning of 29 C.F.R. ss.
2510.3-101(b)(2);
(ii) Less than 25 percent of each outstanding class
of equity interests in Borrower are held by "benefit plan
investors" within the meaning of 29 C.F.R. ss.
2510.3-101(f)(2); or
20
(iii) Borrower qualifies as an "operating company" or
a "real estate operating company" within the meaning of 29
C.F.R. ss. 2510.3-101(c) or (e) or an investment company
registered under The Investment Company Act of 1940.
SECTION 4.3 SINGLE PURPOSE ENTITY.
(a) Limited Purpose. Borrower by execution of this Security Instrument
represents, warrants and covenants that it (i) has been and shall continue to be
organized solely for the limited purpose of acquiring, owning, improving,
leasing, managing, operating, holding for investment and selling or otherwise
disposing of the Property and doing only those things necessary in connection
therewith, (ii) shall not engage in any other business, (iii) shall have no
other purpose, (iv) shall not own or acquire any real property other than the
real estate included in the Property or any personal (tangible or intangible)
property other than personal property included in the Property or in furtherance
of the purposes of Borrower as stated herein, and (v) shall not incur, create,
or assume any indebtedness or liabilities, secured or unsecured, direct or
contingent, other than (A) the Loan and (B) unsecured indebtedness that
represents trade payables or accrued expenses occurring in the normal course of
business of owning and operating the Property that is not evidenced by a
promissory note and is due and payable within sixty (60) days after the date
incurred and which in no event exceeds two percent (2%) of the original
principal amount of the Note.
(b) Prohibited Action. Borrower by execution of this Security
Instrument represents, warrants, and covenants that it has not taken and shall
not take any of the following actions:
(i) take any "BANKRUPTCY ACTION", which is defined as any of
the following actions:
(A) taking any action that is reasonably likely to
cause Borrower to become insolvent;
(B) commencing any case, proceeding or other action
on behalf of Borrower or under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors;
(C) instituting proceedings to have Borrower
adjudicated as bankrupt or insolvent;
(D) consenting to the institution of bankruptcy or
insolvency proceedings against Borrower;
(E) filing a petition or consent to a petition
seeking reorganization, arrangement, adjustment, winding-up, dissolution,
composition, liquidation or other relief on behalf of Borrower of its debts
under any federal or state law relating to bankruptcy;
(F) seeking or consenting to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar
official for Borrower or a substantial portion of its properties;
21
(G) admitting in writing Borrower's inability to pay
debts generally as they become due;
(H) making any assignment for the benefit of
Borrower's creditors; or
(I) taking any action in furtherance of the
foregoing;
(ii) dissolve, liquidate or terminate in whole or in part, or
consolidate with or merge into any person or entity, or sell, transfer or
otherwise dispose of or encumber all or substantially all of its assets or
change its legal structure;
(iii) amend or recommend the amendment of the operating
agreement, certificate of formation, or any other formation or organizational
document of Borrower in any manner which adversely affects Borrower's existence
as a single purpose entity unless (i) Lender consents to such amendment and (ii)
following any securitization of the Loan, the applicable rating agencies confirm
in writing that such change will not result in the qualification, withdrawal or
downgrade of any securities ratings of securities issued by the holder of the
Loan;
(iv) fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if required) under the
applicable laws of the jurisdiction of its organization or formation;
(v) terminate or fail to comply in any material respect with
the provisions of its organizational documents; or
(vi) engage in any business or activity that is not consistent
with the purposes of Borrower as set forth in Section 4.3(a) above.
(c) Separateness Covenants. Except as otherwise expressly required by
any Loan Document, Borrower by execution of this Security Instrument represents,
warrants, and covenants that it shall at all times:
(i) not commingle assets with those of any other entity,
(ii) hold its assets in its own name;
(iii) conduct its own business in its own name;
(iv) maintain its bank accounts, books, records and financial
statements in accordance with generally accepted accounting principles, keep
such bank accounts, books, records and financial statements separate from those
of any other person or entity, and not permit the listing of its assets on the
financial statement of any other person or entity, provided, however, that its
assets may be included in a consolidated financial statement of an Affiliate
provided that (A) appropriate notation shall be made on such consolidated
financial statements to indicate the separateness of it and such Affiliate and
to indicate that its assets and credit are not available to satisfy the debts
and obligations of such Affiliate or any other person or entity and (B) such
assets shall be listed on its own balance sheet;
22
(v) maintain its books, records, resolutions and agreements as
official records;
(vi) pay its own liabilities out of its own funds;
(vii) maintain adequate capital in light of its contemplated
business operations;
(viii) observe all organizational formalities;
(ix) maintain an arm's-length relationship with Affiliates and
enter into transactions with Affiliates only on a commercially reasonable basis;
(x) pay the salaries of only its own employees and maintain a
sufficient number of employees in light of contemplated business operations;
(xi) not guarantee or become obligated for the debts of any
other entity or hold out its credit as being available to satisfy the
obligations of others;
(xii) not acquire the obligations or securities of its
Affiliates or owners, including partners, members or shareholders;
(xiii) not make loans or advances to any other person or
entity;
(xiv) allocate fairly and reasonably any overhead for shared
office space;
(xv) use separate stationery, invoices and checks;
(xvi) file its own tax returns separate from any other entity,
except to the extent that Borrower is treated as a "disregarded entity" for tax
purposes and is not required to file tax returns under applicable law;
(xvii) not pledge its assets for the benefit of any other
person or entity;
(xviii) hold itself out as a separate entity, and not fail to
correct any known misunderstanding regarding its separate identity;
(xix) not identify itself as a division of any other person or
entity;
(xx) not maintain its assets in such a manner that will be
costly or difficult to segregate, ascertain or identify its individual assets
from those of any other person or entity; and
(xxi) observe the single purpose entity and separateness
covenants and requirements set forth herein.
(d) Definitions. As used in this Section, the terms shall have the
meanings set forth herein:
(i) "AFFILIATE" means a person or entity that directly or
indirectly (through one or more intermediaries) controls, is controlled by, or
is under common control of or with, the person or entity specified; and
23
(ii) "CONTROL" means (A) whether directly or indirectly,
ownership or control of the power to vote fifty percent (50%) or more of the
outstanding equity interests of any such entity, (B) the control in any manner
of the election of more than one director or trustee (or persons exercising
similar functions) of such entity, or (C) the possession of the power to direct
or cause the direction of the management and/or policies of such entity, whether
through the ownership of voting securities, by contract, or otherwise.
(e) Injunctive Relief. Borrower by execution of this Security
Instrument acknowledges and agrees with Lender that Lender would be irreparably
damaged if any of the covenants of this Section 4.3 are breached or not
performed in accordance with their specific terms and that monetary damages
would not provide an adequate remedy in such event. Accordingly, it is agreed
that, in addition to any other remedy to which Lender may be entitled, at law or
in equity, Lender shall be entitled to injunctive relief to prevent or remedy
breaches of the provisions of this Section 4.3 and specifically to enforce the
terms and provisions of this Section 4.3.
SECTION 4.4 RESTORATION AFTER CASUALTY/CONDEMNATION. For the purposes
of this Section 4.4, the term "NET PROCEEDS" shall mean, as applicable, (1) the
net amount of all insurance proceeds under the Policies carried pursuant to
Subsections 3.3(a)(i) (Property Insurance), (iii) (Boiler and Machinery), (iv)
(Builder's Risk), (v) (Ordinance/Law Coverage), and (vi) (Personal Property) of
this Security Instrument as a result of such damage or destruction, or (2) the
net amount of all proceeds from insurance or Condemnation Awards relating to the
Condemnation Action, in each case after deduction of Borrower's and Lender's
reasonable actual out of pocket costs and expenses (including reasonable counsel
fees), if any, in collecting the same. If the Property is damaged or destroyed,
in whole or in part, by fire or other casualty (a "CASUALTY LOSS") or if the
Property or any portion thereof is taken, or threatened to be taken, in any
condemnation or eminent domain proceeding (whether instituted or threatened, a
"CONDEMNATION ACTION"), the following provisions shall apply in connection with
any Insurance Restoration or Condemnation Restoration (collectively the
"RESTORATION"):
(a) The Net Proceeds shall be disbursed directly to Borrower
if each of the following conditions are satisfied: (i) the Net Proceeds
do not exceed $50,000.00 ("AVAILABILITY THRESHOLD"), (ii) the cost of
completing the Restoration as reasonably estimated by Borrower is less
than or equal to the Availability Threshold, (iii) no Event of Default
has occurred and is continuing, (iv) the Property and the use thereof
after the Restoration will be in compliance with, and permitted under,
all applicable zoning laws, ordinances, rules and regulations
(including all applicable Environmental Laws), and (v) such Casualty
Loss or Condemnation Action does not materially impair access to the
Property or the Improvements. Borrower shall be permitted and is
obligated to settle any insurance claims with respect to the Net
Proceeds that are, in the aggregate, less than or equal to the
Availability Threshold unless an Event of Default has occurred and is
continuing. Lender shall have the right to participate in and
reasonably approve any settlement for insurance claims with respect to
the Net Proceeds that in the aggregate are equal to or greater than the
Availability Threshold. Borrower hereby grants to Lender an irrevocable
power of attorney coupled with an interest for the purpose of filing
and prosecuting such claim and collecting and making receipt for any
such payment, which such power may be exercised by Lender during the
continuance of an Event of Default. If the Net Proceeds are received by
24
Borrower, such Net Proceeds shall, until the completion of the related
work, be held in trust for Lender. Borrower shall commence and
diligently prosecute to completion the Restoration of the Property to
as nearly as possible the condition it was in immediately prior to such
Casualty Loss or Condemnation Action
(b) If the Net Proceeds are greater than the Availability
Threshold, such Net Proceeds shall, subject to the provisions of the
Leases that are superior to the lien of this Security Instrument or
with respect to which subordination and non-disturbance agreements
binding upon Lender have been entered into which provide for the use
and/or disposition of Net Proceeds, be forthwith paid to Lender to be
held by Lender in a segregated account to be made available to Borrower
for the Restoration in accordance with the provisions of this
Subsection 4.4(b).
(i) The Net Proceeds shall be made available to
Borrower for payment of, or reimbursement of Borrower's actual
out of pocket expenses in connection with, the Restoration,
subject to the following conditions:
(A) no Event of Default has occurred
and is continuing;
(B) Lender is furnished, within a
reasonable period of time prior to request for
initial disbursement, with (i) an estimate of the
costs of the Restoration, which upon Lender's
request, shall be accompanied by an independent
architect's certification as to such costs, and (ii)
appropriate plans and specifications for the
Restoration, which plans and specifications shall be
subject to Lender's approval not to be unreasonably
withheld, conditioned or delayed;
(C) Lender determines that the Net
Proceeds, together with any cash or cash equivalent
deposited by Borrower with Lender, are sufficient to
cover the costs of the Restoration as certified by
the independent architect;
(D) if the Net Proceeds are
insurance proceeds, less than fifty percent (50%) of
the total floor area of the Improvements has been
damaged or destroyed or rendered unusable as a result
of such Casualty Loss, or, if the Net Proceeds are
Condemnation Awards, less than twenty-five percent
(25%) of the Land constituting the Property is taken
and such Land that is taken is located along the
perimeter or periphery of the Property and no portion
of the Improvements is located on such Land;
(E) the fair market value of the
Improvements has been damaged, destroyed or rendered
unusable is less than (1) thirty percent (30%) in the
event of a Casualty Loss or (2) fifteen percent (15%)
in the event of a Condemnation Action;
25
(F) Lender reasonably determines
that any operating deficits, including all scheduled
payments of principal and interest under the Note
that will be incurred with respect to the Property as
a result of the occurrence of any such Casualty Loss
or Condemnation Action, whichever the case may be,
will be covered out of (1) the Net Proceeds, (2) the
proceeds of business interruption and/or loss of
"rental income" insurance, or (3) other funds of
Borrower;
(G) Lender determines that, upon the
completion of the Restoration and related lease-up,
if applicable, the net cash flow of the Property will
be restored to a level sufficient to cover all
carrying costs and operating expenses of the
Property, including debt service on the Note at a
coverage ratio (after deducting replacement reserve
requirements and reserves for tenant improvements and
leasing commissions from net operating income) equal
to or greater than the coverage ratio calculated and
assumed by Lender in connection with the origination
of the Loan or, if lower, the coverage ratio that
existed as of the date immediately preceding such
Casualty Loss or Condemnation Action;
(H) the Restoration can reasonably
be completed on or before the earliest to occur of
(1) twelve (12) months from the date of the Casualty
Loss or Condemnation Action, (2) six (6) months prior
to the Maturity Date (as defined in the Note), (3)
the earliest date required for such completion under
the terms of any Leases, or (4) such time as may be
required under applicable zoning law, ordinance, rule
or regulation in order to repair and restore the
Property to as nearly as possible the condition it
was in immediately prior to such Casualty Loss or
Condemnation Action;
(I) the Property and the use thereof
after the Restoration will be in compliance with, and
permitted under, all applicable zoning laws,
ordinances, rules and regulations (including all
applicable Environmental Laws), except to the extent
that non-compliance would not have a material adverse
effect on the Borrower, Property or Borrower's
ability to perform its obligations under the Loan
Documents; and
(J) such Casualty Loss or
Condemnation Action does not materially impair
post-Restoration access to the Land or the
Improvements.
(ii) The Net Proceeds shall be held by Lender and
constitute additional security for the obligations until
disbursed pursuant to this Subsection 4.4(b). The Net Proceeds
shall be disbursed by Lender to, or as directed by, Borrower
from time to time during the course of the Restoration, upon
receipt of evidence reasonably satisfactory to Lender that (A)
all materials installed and work and labor performed to the
date of such disbursement request (except to the extent that
they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full,
and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to
26
file same, or any other liens or encumbrances of any nature
whatsoever on the Property arising out of the Restoration that
have not either been fully bonded and discharged of record or
in the alternative fully insured to the satisfaction of Lender
by the title company insuring the lien of this Security
Instrument.
(iii) Upon Lender's request, Borrower shall send
Lender copies of the plans and specifications and all permits,
licenses and approvals required or obtained in connection with
the Restoration. With respect to contracts exceeding 50,000,
the identity of the contractors engaged in the Restoration, as
well as the contracts under which they have been engaged,
shall be subject to prior review and approval by Lender and an
independent consulting engineer, architect, or other expert
selected by Lender (the "RESTORATION CONSULTANT"), such
approval not to be unreasonably withheld or delayed. Borrower
shall pay all reasonable out of pocket costs and expenses
incurred by Lender in connection with making the Net Proceeds
available for the Restoration including the reasonable fees
and expenses of Lender's attorneys and the Restoration
Consultant.
(iv) Subject to the terms and conditions of Section
4.4, in no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal
to the costs actually incurred from time to time for work in
place as part of the Restoration, as certified by the
Restoration Consultant, minus the Restoration Retainage. The
term "RESTORATION RETAINAGE" as used in this Subsection 4.4(b)
shall mean an amount equal to ten percent (10%) of the costs
actually incurred for work in place as part of the
Restoration, as certified by the Restoration Consultant. The
Restoration Retainage shall in no event, and notwithstanding
anything to the contrary set forth above in this Subsection
4.4(b), be less than the amount actually held back by Borrower
from contractors, subcontractors and materialmen engaged in
the Restoration. The Restoration Retainage shall not be
released until the Restoration Consultant certifies to Lender
that the Restoration has been completed in accordance with the
provisions of this Subsection 4.4(b) and that all approvals
reasonably necessary for the re-occupancy and use of the
Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives
evidence reasonably satisfactory to Lender that the costs of
the Restoration have been paid in full or will be paid in full
out of the Restoration Retainage, provided, however, that
Lender will release the portion of the Restoration Retainage
being held with respect to any contractor, subcontractor or
materialman engaged in the Restoration as of the date upon
which the Restoration Consultant certifies to Lender that the
contractor, subcontractor or materialman has satisfactorily
completed all work and has supplied all materials in
accordance with the provisions of the contractor's,
subcontractor's or materialman's contract in all material
respects, and the contractor, subcontractor or materialman
delivers the lien waivers and evidence of payment in full of
all sums due to the contractor, subcontractor or materialman
(other than Retainage) as may be reasonably requested by
Lender or by the title company insuring the lien of this
Security Instrument. If required by Lender, the surety
company, if any, that issued a payment or performance bond
with respect to the contractor, subcontractor or materialman
shall approve the release of any such portion of the
Restoration Retainage.
27
(v) Lender shall not be obligated to make
disbursements of the Net Proceeds more frequently than once
every calendar month.
(vi) If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in Lender's
determination, be sufficient to pay in full the balance of the
costs that are estimated by the Restoration Consultant to be
incurred in connection with the completion of the Restoration,
Borrower shall deposit the deficiency (the "NET PROCEEDS
DEFICIENCY") with Lender before any further disbursement of
the Net Proceeds shall be made. The Net Proceeds Deficiency
deposited with Lender shall be held by Lender and shall be
disbursed for costs actually incurred in connection with the
Restoration on the same conditions applicable to the
disbursement of the Net Proceeds, and until so disbursed
pursuant to this Subsection 4.4(b) shall constitute additional
security for the obligations.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Restoration Consultant
certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.4(b), and
the receipt by Lender of evidence satisfactory to Lender that
all costs incurred in connection with the Restoration have
been paid in full, shall be remitted by Lender to Borrower,
provided no Event of Default shall have occurred and shall be
continuing.
(c) All Net Proceeds not required (i) to be made available for
the Restoration pursuant to this Section 4.4 or (ii) to be returned to
Borrower as excess Net Proceeds pursuant to Subsection 4.4(b)(vii)
shall be retained and applied by Lender toward the payment of the Debt
whether or not then due and payable in such order, priority and
proportions as Lender shall deem proper or, at the discretion of
Lender, the same shall be paid, either in whole or in part, to
Borrower. If Lender shall receive and retain Net Proceeds, the lien of
this Security Instrument shall be reduced only by the amount received
and retained by Lender and actually applied by Lender in reduction of
the Debt, and no Prepayment Consideration shall be payable solely in
connection with such application; provided, however, that
notwithstanding the foregoing, if an Event of Default exists as of the
date of such application, then any Net Proceeds applied to the Debt
pursuant to this Section shall be subject to the Prepayment
Consideration computed in accordance with the terms of the Note.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender that:
SECTION 5.1 WARRANTY OF TITLE. Borrower has good, marketable and
indefeasible title to the Property and has the right to mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer, and convey the same and that
Borrower possesses an unencumbered fee simple absolute estate in the Land and
28
the Improvements, and that it owns the Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions shown in the
title insurance policy insuring the lien of this Security Instrument (the
"PERMITTED EXCEPTIONS"), none of which, individually or in the aggregate,
materially (a) interfere with the benefits of the security intended to be
provided by this Security Instrument, (b) affect the value or marketability of
the Property (as it is currently used), (c) impair the use or operation of the
Property for the uses currently made thereof, or (d) impair Borrower's ability
to pay its obligations in a timely manner. Borrower shall, so long as the Loan
shall be in effect, warrant, defend and preserve the title and the validity and
priority of the lien of this Security Instrument and shall forever warrant and
defend the same to Lender against the claims of all persons whomsoever.
SECTION 5.2 AUTHORITY. Borrower (and the undersigned representative of
Borrower, if any) has full power, authority and legal right to execute this
Security Instrument, and to mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey the Property pursuant to the terms hereof and to
keep and observe all of the terms of this Security Instrument on Borrower's part
to be performed.
SECTION 5.3 LEGAL STATUS AND AUTHORITY. Borrower (a) is duly organized,
validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good standing in the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now conducted and proposed to be
conducted. Borrower now has and shall continue to have, so long as the Loan
shall be in effect, the full right, power and authority to operate and lease the
Property, to encumber the Property as provided herein and to perform all of the
other obligations to be performed by Borrower under the Note, this Security
Instrument and the Loan Documents.
SECTION 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery and
performance of the Note, this Security Instrument and the Loan Documents and the
borrowing evidenced by the Note (i) are within the power and authority of
Borrower; (ii) have been authorized by all requisite organizational action;
(iii) have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with, result in a
breach of or constitute (with notice or lapse of time, or both) a default under
any provision of law, any order or judgment of any court or governmental
authority, the articles of incorporation, by-laws, partnership or operating
agreement, or other governing instrument of Borrower, or any indenture,
agreement or other instrument to which Borrower is a party or by which it or any
of its assets or the Property is or may be bound or affected; (v) will not
result in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of its assets, except the lien and security interest created
hereby; and (vi) will not require any authorization or license from, or any
filing with, any governmental or other body (except for the recordation of this
instrument in appropriate land records in the State where the Property is
located and except for Uniform Commercial Code filings relating to the security
interest created hereby), and (b) the Note, this Security Instrument and the
Loan Documents constitute the legal, valid and binding obligations of Borrower
except to the extent limited by applicable bankruptcy, insolvency, liquidation,
conservatorship, receivership or other debtor relief laws affecting the
enforcement of creditor rights generally.
29
SECTION 5.5 LITIGATION. There is no action, suit or proceeding,
judicial, administrative or otherwise (including any condemnation or similar
proceeding), pending or, to the best of Borrower's knowledge, threatened or
contemplated against Borrower, any person guaranteeing the payment of the Debt
or any portion thereof or performance by Borrower of any terms of this Security
Instrument (a "GUARANTOR"), if any, any person liable under that certain
Environmental Indemnity Agreement of even date herewith or any other indemnity
agreement entered into in favor of Lender in connection with the Loan
("INDEMNITOR"), if any, or against or affecting the Property that (a) has not
been disclosed to Lender, and has a material, adverse effect on the Property or
Borrower's, any Guarantor's or any Indemnitor's ability to perform its
obligations under the Note, this Security Instrument or the Loan Documents, or
(b) is not adequately covered by insurance.
SECTION 5.6 STATUS OF PROPERTY.
(a) No portion of the Improvements is located in an area
identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to
the National Flood Insurance Act of 1968 or the Flood Disaster
Protection Act of 1973, or the National Flood Insurance Reform Act of
1994, as each may be amended, or any successor law, or, if any portion
of the Improvements is now or at any time in the future located within
any such area, Borrower has obtained and will maintain the insurance
prescribed in Section 3.3 hereof.
(b) Borrower has obtained all necessary certificates, licenses
and other approvals, governmental and otherwise, necessary for the
operation of the Property and the conduct of its business and all
required zoning, building code, land use, environmental and other
similar permits or approvals, all of which are in full force and effect
as of the date hereof and not subject to revocation, suspension,
forfeiture or modification, except, in each case, as would not have a
material adverse effect on Borrower, the Property or Borrower's ability
to perform its obligations under the Loan Documents.
(c) The Property and the present and contemplated use and
occupancy thereof are in full compliance with all applicable zoning
ordinances, building codes, land use and Environmental Laws and other
similar laws, except to the extent non-compliance would not have a
material adverse effect on Borrower, the Property or Borrower's ability
to perform its obligations under the Loan Documents.
(d) The Property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by
public utilities and the Property has accepted or is equipped to accept
such utility service.
(e) All public roads and streets necessary for service of and
access to the Property for the current or contemplated use thereof have
been completed, are serviceable and all-weather and are physically and
legally open for use by the public.
(f) The Property is served by public water and sewer systems.
30
(g) The Property is free from material damage caused by fire
or other casualty.
(h) All costs and expenses of any and all labor, materials,
supplies and equipment used in the construction of the Improvements
have been paid in full (other than ongoing tenant improvements for
which payment is not yet due).
(i) Borrower has paid in full for, and is the owner of, all
furnishings, fixtures and equipment (other than tenants' property) used
in connection with the operation of the Property, free and clear of any
and all security interests, liens or encumbrances, except the lien and
security interest created hereby.
(j) 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, except, in each
case, as would not have a material adverse effect on Borrower, the
Property or Borrower's ability to perform its obligations under the
Loan Documents.
(k) All security deposits relating to the Leases reflected on
the certified rent roll delivered to Lender have been collected by
Borrower except as noted on the certified rent roll.
(l) Borrower has received no notice of an actual or threatened
condemnation or eminent domain proceeding by any public or quasi-public
authority.
(m) Except as set forth in the survey of the Property
delivered to Lender in connection with the closing of the Loan, all the
Improvements lie within the boundaries of the Property.
SECTION 5.7 NO FOREIGN PERSON. Borrower is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
SECTION 5.8 SEPARATE TAX LOT. The Property is assessed for real estate
tax purposes as one or more wholly independent tax lot or lots, separate from
any adjoining land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together with the
Property or any portion thereof.
SECTION 5.9 ERISA COMPLIANCE.
(a) As of the date hereof and throughout the term of this
Security Instrument, (i) Borrower is not and will not be an "employee
benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, and (ii) the assets of Borrower do not and will not
constitute "plan assets" of one or more such plans for purposes of
Title I of ERISA; and
(b) As of the date hereof and throughout the term of this
Security Instrument, (i) Borrower is not and will not be a
"governmental plan" within the meaning of Section 3(3) of ERISA, and
(ii) transactions by or with Borrower are not and will not be subject
to state statutes applicable to Borrower regulating investments of and
fiduciary obligations with respect to governmental plans.
31
SECTION 5.10 LEASES. Except as disclosed in the rent roll for the
Property delivered to Lender or as otherwise disclosed in writing by Borrower to
Lender, (a) Borrower is the sole owner of the entire lessor's interest in the
Leases; (b) the current terms of the Leases are reflected in the certified rent
roll delivered to Lender; (c) none of the Rents reserved in the Leases have been
assigned or otherwise pledged or hypothecated by Borrower (except to Lender);
(d) none of the Rents have been collected for more than one (1) month in advance
(except a security deposit or first month's rent on execution of a Lease shall
not be deemed rent collected in advance); (e) to Borrower's knowledge the
premises demised under the Leases have been completed and the tenants under the
Leases have accepted the same and have taken possession of the same on a
rent-paying basis; (f) to Borrower's knowledge there exist no offsets or
defenses to the payment of any portion of the Rents; (g) Borrower has received
no notice from any tenant challenging the validity or enforceability of any
Lease; (h) to Borrower's knowledge there are no agreements with the tenants
under the Leases other than expressly set forth in each Lease or in the
estoppels delivered to Lender in connection with the Closing of the Loan; (i)
the Leases are valid and enforceable against Borrower and, to Borrower's
knowledge, the tenants set forth therein; (j) no Lease contains an option to
purchase, right of first refusal to purchase, or any other similar provision;
(k) no person or entity has any possessory interest in, or right to occupy, the
Property except under and pursuant to a Lease; and (l) no brokerage commissions
or finders fees are due and payable regarding any Lease which has not been paid
as of the date hereof.
SECTION 5.11 FINANCIAL CONDITION; NO PRIOR BANKRUPTCY. Borrower is
solvent, and no bankruptcy, reorganization, insolvency or similar proceeding
under any state or federal law with respect to Borrower has been initiated, and
it has received reasonably equivalent value for the granting of this Security
Instrument.
SECTION 5.12 TAXES. Borrower, any Guarantor and any Indemnitor have
filed, or timely obtained extensions for the filing of, all federal, state,
county, municipal, and city income and other tax returns required to have been
filed by them and have paid all taxes and related liabilities which have become
due pursuant to such returns or pursuant to any assessments received by them.
Neither Borrower, any Guarantor nor any Indemnitor knows of any basis for any
additional assessment in respect of any such taxes and related liabilities for
prior years.
SECTION 5.13 MAILING ADDRESS. Borrower's mailing address, as set forth
in the opening paragraph hereof or as changed in accordance with Article 16, is
true and correct.
SECTION 5.14 NO CHANGE IN FACTS OR CIRCUMSTANCES. All information in
the application for the loan submitted to Lender (the "LOAN APPLICATION") and in
all financial statements, rent rolls, reports, certificates and other documents
submitted in connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all material respects as of
the date of submission. There has been no material adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading in any material respect.
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SECTION 5.15 INTENTIONALLY OMITTED.
SECTION 5.16 THIRD PARTY REPRESENTATIONS. Each of the representations
and the warranties made by each Guarantor and Indemnitor herein or in any Loan
Document(s) is true and correct in all material respects as of the date made.
SECTION 5.17 ILLEGAL ACTIVITY. No portion of the Property has been or
will be purchased, improved, fixtured, equipped or furnished with proceeds of
any criminal or other illegal activity and to the best of Borrower's knowledge,
there are no illegal activities or activities relating to controlled substances
at the Property.
SECTION 5.18 MANAGEMENT. The Property shall be managed by either (i)
Borrower, Cedar Shopping Centers Partnership, L.P. ("CSCP"), or an affiliate of
Borrower or CSCP, for so long as Borrower or said affiliate of Borrower
possesses sufficient experience in managing and operating commercial properties
similar in size, scope, uses and value as the Property, as reasonably determined
by Lender; or (ii) GBC Property Management L.L.C., or a professional property
management company reasonably approved in writing by Lender. Management by an
affiliate of Borrower or a professional property management company shall be
pursuant to a written agreement reasonably approved by Lender. In no event shall
any manager be removed or replaced (except in the event of a default by manager
under the applicable management agreement), or shall the terms of any management
agreement be materially modified or amended without the prior written consent of
Lender, such consent not to be unreasonably withheld or conditioned. If (i) an
Event of Default has occurred, (ii) a default has occurred under any management
contract then in effect that is not cured within any applicable grace or cure
period, or (iii) any manager of the Property becomes bankrupt or insolvent,
Lender shall have the right to immediately terminate, or to direct Borrower to
immediately terminate, such manager, and to retain, or to direct Borrower to
retain, a new manager reasonably approved by Lender. Lender's approval of a
replacement property manager shall not be unreasonably withheld provided the
proposed property manager is a Qualifying Manager (as hereinafter defined). As
used herein, "QUALIFYING MANAGER" means a reputable and experienced management
organization reasonably satisfactory to Lender, which organization or its
principals possess at least ten (10) years experience in managing commercial
properties similar in size, scope, use and value of the Property and which, on
the date Lender determines whether such management organization is a Qualifying
Manager, (i) manages a quantity of square footage reasonably acceptable to
Lender of the same property type as the Property, and (ii) upon Lender's
request, obtains prior written confirmation from each Rating Agency (as
hereinafter defined) that management of the Property by such management
organization will not cause a downgrading, withdrawal or qualification of the
then current rating of the Securities issued in connection with any
Securitization. As used in this Security Instrument, the term "Rating Agency"
shall mean Standard & Poor's Rating Services, a Division of McGraw-Hill
Companies, Inc., Fitch, Inc., Moody's Investor Service, Inc. or any successor of
the foregoing, or any other nationally recognized statistical rating
organization; in each case then rating any securities issued by a holder of the
Loan.
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ARTICLE 6 - DEBTOR/CREDITOR RELATIONSHIP
SECTION 6.1 RELATIONSHIP OF BORROWER AND LENDER. The relationship
between Borrower and Lender is solely that of debtor and creditor, and Lender
has no fiduciary or other special relationship with Borrower, and no term or
condition of any of the Note, this Security Instrument or the Loan Documents
shall be construed so as to deem the relationship between Borrower and Lender to
be other than that of debtor and creditor.
SECTION 6.2 NO RELIANCE ON LENDER The members, partners, principals or
shareholders of Borrower, as applicable, are experienced in the ownership and
operation of properties similar to the Property, and Borrower and Lender are
relying solely upon such expertise in connection with the ownership and
operation of the Property. Borrower is not relying on Lender's expertise,
business acumen or advice in connection with the Property.
SECTION 6.3 NO LENDER OBLIGATIONS Notwithstanding any provision of the
Loan Documents, Lender is not undertaking the performance of (i) any obligations
under the Leases except as provided in any subordination, non-disturbance and
attornment agreement; or (ii) any obligations with respect to such agreements,
contracts, certificates, instruments, franchises, permits, trademarks, licenses
and other documents. By accepting or approving anything required to be observed,
performed or fulfilled or to be given to Lender pursuant to the Loan Documents,
including any officer's certificate, balance sheet, statement of profit and loss
or other financial statement, survey, appraisal, or insurance policy, Lender
shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or the effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lender.
SECTION 6.4 RELIANCE OF LENDER ON BORROWER REPRESENTATIONS. Borrower
recognizes and acknowledges that in accepting the Loan Documents, Lender is
expressly and primarily relying on the truth and accuracy of the warranties and
representations set forth herein without any obligation to investigate the
Property and notwithstanding any investigation of the Property by Lender; that
such reliance existed on the part of Lender prior to the date hereof; that the
warranties and representations are a material inducement to Lender in accepting
the Loan Documents; and that Lender would not be willing to make the Loan and
accept this Security Instrument in the absence of the warranties and
representations as set forth herein.
ARTICLE 7 - FURTHER ASSURANCES
SECTION 7.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith
upon the execution and delivery of this Security Instrument and thereafter, from
time to time, shall cause this Security Instrument and any of the Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest of Lender in, the
Property. Borrower shall pay all taxes, filing, registration or recording fees,
34
and all reasonable out of pocket expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, this Security
Instrument, the Loan Documents, any note or mortgage supplemental hereto, any
security instrument with respect to the Property and any instrument of further
assurance, and any modification or amendment of the foregoing documents, and all
federal, state, county and municipal taxes, duties, imposts, assessments and
charges arising out of or in connection with the execution and delivery of this
Security Instrument, any mortgage supplemental hereto, any security instrument
with respect to the Property or any instrument of further assurance, and any
modification or amendment of the foregoing documents, except where prohibited by
law so to do.
SECTION 7.2 FURTHER ACTS, ETC. Borrower shall, at the cost of Borrower,
and without expense to Lender, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying, assigning, transferring,
and confirming unto Lender the property and rights hereby mortgaged, granted,
bargained, sold, conveyed, confirmed, pledged, assigned, warranted and
transferred or intended now or hereafter so to be, or which Borrower may be or
may hereafter become bound to convey or assign to Lender, or for carrying out
the intention or facilitating the performance of the terms of this Security
Instrument, including promptly notifying Lender of any commercial tort claim in
which Borrower has an interest and executing any documentation reasonably
required by Lender to create and perfect any security interest in such
commercial tort claim as provided in Section 1.3 hereof, or for filing,
registering or recording this Security Instrument, or for complying with all
Applicable Laws. Borrower, promptly following written demand, shall execute and
deliver and hereby authorizes Lender to execute in the name of Borrower, or
without the signature of Borrower to the extent Lender may lawfully do so, one
or more financing statements, chattel mortgages or other instruments, to
evidence or perfect more effectively the security interest of Lender in the
Property. Borrower grants to Lender an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Lender pursuant to this Section 7.2 or Section 7.1,
exercisable during the continuance of an Event of Default.
SECTION 7.3 CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date
of this Security Instrument that deducts the Debt from the value of the
Property for the purpose of taxation or which imposes a tax, either
directly or indirectly, on the Debt or Lender's interest in the
Property, Borrower shall pay the tax, with interest and penalties
thereon, if any. If Lender is advised by its counsel that the payment
of tax by Borrower would be unlawful or taxable to Lender or
unenforceable or provide the basis for a defense of usury, then Lender
shall have the option to declare the Debt immediately due and payable
(a "TAX CHANGE ACCELERATION") by giving Borrower not less than one
hundred twenty (120) days' written notice of such Tax Change
Acceleration. No Prepayment Consideration shall be payable solely in
connection with a Tax Change Acceleration; provided, however, that
notwithstanding the foregoing, if an Event of Default exists as of the
date of such Tax Change Acceleration, then the Borrower's payment of
the Loan shall be subject to Prepayment Consideration computed in
accordance with the terms of the Note.
35
(b) Borrower shall not claim or demand or be entitled to any
credit or credits on account of the Debt for any part of the Taxes or
Other Charges assessed against the Property, or any part thereof, and
no deduction shall otherwise be made or claimed from the assessed value
of the Property, or any part thereof, for real estate tax purposes by
reason of this Security Instrument or the Debt. If such claim, credit
or deduction shall be required by law, Lender shall have the option, by
written notice of not less than one hundred twenty (120) days, to
declare the Debt immediately due and payable.
(c) If at any time the United States of America, any State
thereof or any subdivision of any such State or other governmental
authorities shall require revenue or other stamps to be affixed to the
Note, this Security Instrument, or any of the Loan Documents or impose
any other tax or charge on the same, Borrower shall pay for the same,
with interest and penalties thereon, if any.
SECTION 7.4 ESTOPPEL CERTIFICATES.
(a) Within ten (10) Business Days after any request by Lender,
Borrower shall furnish Lender or any proposed assignee of the Loan with
a statement, duly acknowledged and certified, setting forth (i) the
original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the rate of interest of the Note, (iv) the terms of
payment and Maturity Date, (v) the date installments of interest and/or
principal were last paid, (vi) that, except as provided in such
statement, there are no Defaults or Events of Default under this
Security Instrument or any of the other Loan Documents, (vii) that the
Loan Documents are valid, legal and binding obligations of Borrower
except to the extent limited by applicable bankruptcy, insolvency,
liquidation, conservatorship, receivership or other debtor relief laws
affecting the enforcement of creditor rights generally, and have not
been modified or if modified, giving particulars of such modification,
(viii) whether any offsets or defenses exist against the obligations
secured hereby and, if any are alleged to exist, a detailed description
thereof, (ix) that all Leases are in full force and effect and
(provided the Property is not a residential multifamily property) have
not been modified (or if modified, setting forth all modifications),
(x) the date to which the Rents thereunder have been paid pursuant to
the Leases, (xi) whether or not, to the best knowledge of Borrower, any
of the lessees under the Leases are in default under the Leases, and,
if any of the lessees are in default, setting forth the specific nature
of all such defaults, (xii) the amount of security deposits held by
Borrower under each Lease and that such amounts are consistent with the
amounts required under each Lease (or if not consistent, an explanation
reasonably satisfactory to Lender as to the amounts and reason for such
inconsistency), and (xiii) as to any other matters reasonably requested
by Lender and reasonably related to the Leases, the obligations secured
hereby, the Property or this Security Instrument.
(b) Within fifteen days after any request by Lender (or such
longer period as may be permitted under the Lease), Borrower shall
furnish Lender with duly executed estoppel certificates from any one or
more lessees as required by Lender attesting to such facts regarding
any Lease as Lender may reasonably require, including attestations that
each Lease covered thereby is in full force and effect with no
knowledge of any defaults thereunder on the part of any party (or if a
default exists, an explanation thereof), that none of the Rents have
36
been paid more than one month in advance, except as security or first
month's rent, and that the lessee claims no defense or offset against
the full and timely performance of its obligations under the Lease.
Notwithstanding the foregoing, if the terms of any Lease do not require
the lessee to deliver an estoppel certificate upon request or provide
for use of a different form, Borrower agrees that it shall use its
reasonable efforts to deliver to Lender, promptly upon request, such an
estoppel certificate with respect to such Lease.
SECTION 7.5 REPLACEMENT DOCUMENTS. Upon receipt of an affidavit of an
officer of Lender as to the loss, theft, destruction or mutilation of the Note
or any Loan Document that is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or Loan Document,
Borrower shall issue, in lieu thereof, a replacement Note or Loan Document,
dated the date of such lost, stolen, destroyed or mutilated Note or Loan
Document in the same principal amount thereof and otherwise of like tenor;
provided that Lender indemnify Borrower for any loss, damages or claims arising
in connection with such loss, theft, destruction, mutilation and replacement.
SECTION 7.6 AMENDED FINANCING STATEMENTS. At the request of the Lender,
Borrower shall execute a certificate in form reasonable satisfactory to the
Lender listing the trade names under which Borrower operates the Property, and
representing and warranting that Borrower does business under no other trade
name with respect to the Property.
ARTICLE 8 - DUE ON SALE/ENCUMBRANCE/CHANGE IN BORROWER
SECTION 8.1 NO SALE/ENCUMBRANCE/CHANGE OF OWNERSHIP WITHOUT CONSENT.
(a) Except as otherwise expressly provided in this Security
Instrument, Borrower shall not cause or permit any of the following
(each a "PROHIBITED TRANSFER") to occur without the prior written
consent of Lender in each instance: the voluntary or involuntary sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment,
grant of any options with respect to, or any other transfer or
disposition of (directly or indirectly, voluntarily or involuntarily,
by operation of law or otherwise, and whether or not for consideration
or of record) of a legal or beneficial interest (each a "SALE OR
ENCUMBRANCE") of the Property or any part thereof, or permit a Sale or
Encumbrance of an interest in Borrower or any shareholder, partner,
member or non-member manager, or any direct or indirect legal or
beneficial owner of Borrower or any non-member manager (each a
"RESTRICTED PARTY"), other than pursuant to Leases of space in the
Improvements to tenants in accordance with the provisions of Section
3.7. A Prohibited Transfer shall include (i) an installment sales
agreement wherein Borrower agrees to sell the Property or any part
thereof for a price to be paid in installments; (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other
than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest
in, Borrower's right, title and interest in and to any Leases or any
Rents; (iii) if a Restricted Party is a corporation, any merger,
consolidation or Sale or Encumbrance of such corporation's stock or the
creation or issuance of new stock in one or a series of transactions;
(iv) if a Restricted Party is a limited or general partnership or joint
37
venture, any merger or consolidation or the change, removal,
resignation or addition of a general partner or the Sale or Encumbrance
of the partnership interest of any general or limited partner or any
profits or proceeds relating to such partnership interests or the
creation or issuance of new limited partnership interests; (v) if a
Restricted Party is a limited liability company, any merger or
consolidation or the change, removal, resignation or addition of a
managing member or non-member manager (or if no managing member, any
member) or the Sale or Encumbrance of the membership interest of a
managing member (or if no managing member, any member) or any profits
or proceeds relating to such membership interest, or the Sale or
Encumbrance of non-managing membership interests or the creation or
issuance of new non-managing membership interests; (vi) if a Restricted
Party is a trust or nominee trust, any merger, consolidation or the
Sale or Encumbrance of the legal or beneficial interest in a Restricted
Party or the creation or issuance of new legal or beneficial interests;
or (vii) the removal or the resignation of any manager (including any
manager in which Borrower has, directly or indirectly, any legal,
beneficial or economic interest (an "AFFILIATED MANAGER")) other than
in accordance with Section 5.18.
(b) Notwithstanding the provisions of Sections 8.1(a), a
transfer by devise or descent or by operation of law upon the death of
a member, partner or shareholder of a Restricted Party shall not be
deemed to be a Prohibited Transfer, nor shall the Sale or Encumbrance,
in one or a series of transactions, of not more than forty-nine percent
(49%) of the stock, limited partnership interests or non-managing
membership interests (as the case may be) in a Restricted Party;
provided, however, no such transfers shall result in a change in
"CONTROL" in the Restricted Party, and as a condition to each such
transfer, Lender shall receive not less than ten (10) Business Days
prior written notice of such proposed transfer. For the purpose of this
Article 8, "Control" shall mean the power to direct the management and
policies of a Restricted Party, directly or indirectly, whether through
the ownership of voting securities or other beneficial interests, by
contract or otherwise. Provided, further, that it is acknowledged that
Cedar Shopping Centers, Inc. is a publicly traded entity and that the
issuance, sale or transfer of interests in Cedar Shopping Centers, Inc.
shall not be deemed to be a Prohibited Transfer, nor shall the
issuance, sale or transfer of limited partnership interests in Cedar
Shopping Centers Partnership, L.P. provided Cedar Shopping Centers,
Inc. remains the general partner of such limited partnership and in
Control of such limited partnership.
SECTION 8.2 CONDITIONS TO LENDER'S CONSENT.
(a) Without limiting Lender's discretion to approve or
disapprove in accordance with Section 8.1 any request from Borrower for
a waiver of the prohibition against Prohibited Transfers, Lender
specifically reserves the right to condition its consent to a
Prohibited Transfer upon the satisfaction of the following minimum
conditions:
(i) Lender has received Borrower's written request for
Lender's consent to a transfer and Lender has
expressly approved such request in writing;
(ii) no Event of Default has occurred and is continuing;
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(iii) Borrower has paid Lender an application fee and a
deposit for legal fees, each in amounts reasonably
determined by Lender. The legal fee deposit shall be
applied towards the legal fees and expenses incurred
by Lender in connection with such request for a
transfer;
(iv) Lender has determined that the proposed new
owner/assignee (the "NEW BORROWER") meets Lender's
Underwriting Standards (as hereinafter defined) in
all material respects;
(v) Lender has determined that the Property meets in all
material respects all of the Lender's Underwriting
Standards related to its financial condition, cash
flow, operating income, physical condition,
management and operation;
(vi) Borrower remits to Lender a fee (the "TRANSFER FEE")
in the amount of one percent (1%) of the outstanding
principal balance of the Debt as of the date such
transfer is consummated;
(vii) New Borrower has executed and delivered such
documentation and agreements evidencing the transfer
and, if applicable, the assumption of the Loan, as
may be reasonably required by Lender, including a
release of Lender, its officers, directors, employees
and agents, from all claims and liability relating to
the transactions evidenced by the Loan Documents
through and including the date of the closing of the
transfer, and an indemnification with respect
thereto. All such documentation shall be in form and
substance reasonably satisfactory to Lender;
(viii) If New Borrower assumes the Loan and a person or
entity associated with New Borrower approved by
Lender in its reasonable discretion (a "NEW
GUARANTOR") agrees to be liable for the obligations
of the current Guarantor or Indemnitor under its
guaranty or indemnity agreement by executing a new
guaranty and environmental indemnity agreement in
substantially similar form to any such existing
agreements, Lender shall release Borrower from its
obligations arising under Loan Documents, and any
current Guarantor or Indemnitor from its obligations
under any guaranty or environmental indemnity
agreement as to acts or events or omissions occurring
or obligations arising after the date of this
Security Instrument, provided however such release
shall not apply to any acts or events or omissions
which occurred prior to the date of the assumption of
the Loan by New Borrower, whether or not the effects
of or damages from such acts or events or omissions
are apparent or ascertainable as of the date of such
assumption;
(ix) If New Borrower assumes the Loan, Lender has
determined that New Borrower is in material
compliance with the covenants set forth in this
Security Instrument, including the covenants in
Section 4.3 hereof, if any;
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(x) Borrower has delivered to Lender, without any cost or
expense to Lender, such endorsements to Lender's
title insurance policy, hazard insurance endorsements
or certificates and other similar materials as Lender
may reasonably deem necessary, all in form and
substance reasonably satisfactory to Lender,
including an endorsement or endorsements to the title
insurance policy insuring the lien of this Security
Instrument, extending the effective date of such
policy to the date of execution and delivery (or, if
later, of recording) of the assumption agreement,
with no additional exceptions added to such policy
and insuring that fee simple title to the Property is
vested in the New Borrower;
(xi) If New Borrower assumes the Loan, Borrower and New
Borrower have furnished, if a corporation,
partnership or other entity copies of all documents
evidencing each such party's capacity and good
standing, and the qualification of the signers to
execute any assumption or other agreement, which
papers shall include certified copies of all
documents relating to the organization and formation
of Borrower, New Borrower and the entities, if any,
which are partners or members, as applicable, of
Borrower or the New Borrower;
(xii) Borrower has reimbursed Lender for all reasonable out
of pocket costs and expenses incurred by Lender in
connection with such transfer (including engineering
and/or architect's fees, environmental studies, title
and UCC searches, credit checks and attorney's fees),
whether or not any requested transfer is approved or
consummated; and
(xiii) Borrower and New Borrower have delivered or caused to
be delivered such other documents and instruments,
including legal opinions, as Lender shall reasonably
determine to be in the best interests of Lender,
including, if required by any pooling and servicing
agreement following a securitization or otherwise
reasonably deemed necessary or desirable by Lender,
the prior written confirmation by each applicable
Rating Agency rating securities issued by the holder
of the Loan that the proposed transfer will not
result in the downgrade, withdrawal or qualification
of the then-current ratings of such securities.
For the purpose of this Section 8.2, "LENDER'S UNDERWRITING STANDARDS" shall
mean the actual commercial loan underwriting standards of KeyBank National
Association (or any successor entity that is then servicing the Loan) in effect
at the time of the proposed transfer, or, if no such standards exist, such
standards which are then customary for a commercial lender in connection with a
mortgage loan of the size and type of the Borrower's loan from Lender secured
hereby.
Notwithstanding any provision in Section 8.2(a) to the contrary, Lender must
exercise reasonable discretion in its determination of whether to give or
withhold its consent to any waiver of a Prohibited Transfer unless said
Prohibited Transfer is a further encumbrance of the Property in which case
Lender may give or withhold its consent in its sole and absolute discretion.
Furthermore, if Lender determines to give said consent, said consent shall not
be unreasonably delayed.
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(b) All reasonable out of pocket expenses incurred by Lender
shall be payable by Borrower whether or not Lender consents to the
Prohibited Transfer. This provision shall apply to every Prohibited
Transfer under Section 8.2 or otherwise, whether or not Lender has
consented to any previous Prohibited Transfer. Lender shall not be
required to demonstrate any actual impairment of its security or any
increased risk of default hereunder in order to declare the Debt
immediately due and payable upon the occurrence of any Prohibited
Transfer without Lender's consent in accordance with Section 8.1.
ARTICLE 9 - PREPAYMENT; DEFEASANCE
The Debt may be prepaid or defeased only in accordance with the terms
of the Note. If Borrower has the right to prepay the Loan pursuant to the terms
of the Note, Lender shall only be obligated to release the lien of this Security
Instrument if the Loan has been paid in full, including the payment of any
Prepayment Consideration if applicable. If Borrower has the right to cause the
Property to be released from the lien of the Security Instrument and the other
Loan Documents pursuant to a Defeasance (as such term may be defined in the
Note), Lender shall only be obligated to release the lien of this Security
Instrument if the Defeasance has been consummated in accordance with the terms
of the Note or the Loan has been paid in full as expressly permitted under the
terms of the Note.
ARTICLE 10 - DEFAULT
SECTION 10.1 EVENTS OF DEFAULT. Borrower acknowledges that Lender has
relied upon all of the terms, covenants or conditions of the Note, this Security
Instrument and the other Loan Documents in making the Loan to Borrower, and that
subject to the terms of this Security Instrument the breach of or default in any
such term, covenant and condition may result in the acceleration of the Debt and
the exercise of Lender's remedies hereunder and under the other Loan Documents.
The occurrence of any one or more of the following events shall constitute an
"EVENT OF DEFAULT" under the Note, this Security Instrument and each of the
other Loan Documents:
(a) Borrower fails to make full and punctual payment of the
Monthly Payment (as defined in the Note) within five (5) Business Days
after the Monthly Payment Date (as defined in the Note);
(b) Borrower fails to make full payment of the Debt when due,
whether on the Maturity Date (as defined in the Note), upon
acceleration or prepayment, or otherwise;
(c) Borrower fails to make full and punctual payment of any
Late Charges (as defined in the Note), costs and expenses due
hereunder, or any other sum of money required to be paid to Lender
hereunder or under the Note or any other Loan Document (other than any
payment described in subclauses (a), (b) or (d) of this Article 10.1),
which failure is not cured on or before the fifth (5th) Business Day
after Lender's written notice to Borrower that such payment is
required; or
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(d) Borrower fails to make the full and punctual payment of
Taxes or Other Charges as required hereby;
(e) Borrower fails to keep the Policies in full force and
effect in accordance with the provisions of this Security Instrument;
(f) if a Prohibited Transfer occurs in violation of the
provisions of Article 8, or Borrower violates or does not comply with
the provisions of Article 12 or 13 of this Security Instrument;
(g) if any representation or warranty of Borrower or any
Guarantor or Indemnitor in any guaranty or in any certificate, report,
financial statement or other instrument or document furnished to Lender
shall have been false or misleading in any material respect when made;
(h) Borrower shall make an assignment for the benefit of
creditors or Borrower is not paying debts as and when the same become
due;
(i) if (i) Borrower or any Guarantor or Indemnitor shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, conservatorship or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any Guarantor or
Indemnitor shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against Borrower or any
Guarantor or Indemnitor any case, proceeding or other action of a
nature referred to in clause (i) above and the same is not dismissed
within ninety (90) days following commencement; or (iii) there shall be
commenced against the Borrower or any Guarantor or Indemnitor any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets and the same is not dismissed within ninety (90)
days following commencement; or (iv) the Borrower or any Guarantor or
Indemnitor shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any
Guarantor or Indemnitor shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become
due;
(j) Borrower shall be in default under any other deed of
trust, mortgage or security agreement covering any part of the Property
whether it be superior or junior in priority to this Security
Instrument (it not being implied by this clause that any such
encumbrance will be permitted);
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(k) the Property becomes subject to any mechanic's,
materialman's or other lien (other than a lien for local real estate
taxes and assessments not then due and payable), and such lien shall
remain undischarged of record (by payment, bonding or otherwise) for a
period of sixty (60) calendar days following receipt by Borrower of
written notice thereof, unless Borrower shall be contesting same in
accordance with the terms of this Security Instrument;
(l) Borrower fails to promptly and diligently cure any
material violations of laws or ordinances affecting the Property;
(m) the occurrence of an event of default under any other Loan
Document and the expiration of any applicable grace or cure period
thereunder;
(n) INTENTIONALLY OMITTED.
(o) if Borrower violates or does not comply with any of the
provisions of Section 4.3 or Article 8 of this Security Instrument; or
(p) Intentionally Omitted.
(q) any breach or default hereunder by Borrower (including
breach of or default under any covenant herein), other than a default
or breach set forth in any of Sections 10.1(a) through (p), if such
breach or default is not cured within thirty (30) days after written
notice from Lender to Borrower (provided that Borrower shall not be
entitled to a cure period hereunder if such breach or default is not
capable of being cured as reasonably determined by Lender), provided
however that (i) if Lender reasonably determines that such breach or
default is capable of being cured but cannot reasonably be cured within
such thirty (30) day period, (ii) Borrower shall have commenced to cure
such default within such thirty (30) day period, and (iii) Borrower is
thereafter diligently and expeditiously proceeding to cure the same,
such thirty (30) day period shall be extended for so long as it shall
require Borrower in the exercise of due diligence to cure such default,
it being agreed that no such extension shall be for a period in excess
of one hundred twenty (120) days, unless, only in the case of cures
that require construction or remedial work, such cure cannot with
diligence be completed within such one hundred twenty (120) day period,
in which case such period shall be extended for an additional one
hundred twenty (120) days or such longer period as Lender shall
reasonably determine.
SECTION 10.2 LATE CHARGE. If any Monthly Payment is not timely paid,
Borrower shall pay any late payment charge required by the Note.
SECTION 10.3 DEFAULT INTEREST. Borrower shall pay, from the date of an
Event of Default through the earlier of the date on which the Event of Default
is cured or the date on which the Debt is paid in full, interest on the unpaid
principal balance of the Note at the Default Rate (as defined in the Note).
ARTICLE 11 - RIGHTS AND REMEDIES
SECTION 11.1 REMEDIES. During the continuance of any Event of Default,
Borrower agrees that Lender may take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Borrower and in and
43
to the Property, including the following actions, each of which may be pursued
concurrently or otherwise, without notice or demand, at such time and in such
order as Lender may determine, without impairing or otherwise affecting the
other rights and remedies of Lender:
(a) declare the entire unpaid Debt to be immediately due and
payable;
(b) institute proceedings, judicial or otherwise, for the
complete foreclosure of this Security Instrument under any applicable
provision of law in which case the Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several
interests or portions and in any order or manner;
(c) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute
proceedings for the partial foreclosure of this Security Instrument for
the portion of the Debt then due and payable, but such proceeding shall
not affect the continuing lien and security interest of this Security
Instrument for the balance of the Debt not then due, which shall remain
unimpaired and without loss of priority;
(d) sell for cash or upon credit the Property or any part
thereof and all estate, claim, demand, right, title and interest of
Borrower therein and rights of redemption thereof, pursuant to power of
sale or otherwise, at one or more sales, as an entity or in parcels, at
such time and place, upon such terms and after such notice thereof as
may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained
herein, in the Note or in the Loan Documents;
(f) recover judgment on the Note either before, during or
after any proceedings for the enforcement of this Security Instrument
or the Loan Documents;
(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property on an ex parte basis (any
required notice of such appointment or any proceeding to appoint the
same being hereby expressly waived) and without regard for the adequacy
of the security for the Debt and without regard for the solvency of
Borrower, any Guarantor, Indemnitor or of any person, firm or other
entity liable for the payment of the Debt;
(h) subject to any applicable law and the terms of the
Assignment of Leases and Rents, the license granted to Borrower under
Section 1.2 shall automatically be revoked and Lender may enter into or
upon the Property, either personally or by its agents, nominees or
attorneys and dispossess Borrower and its agents and servants
therefrom, without liability for trespass, damages or otherwise and
exclude Borrower and its agents or servants wholly therefrom, and take
possession of all books, records and accounts relating thereto and
Borrower agrees to surrender possession of the Property and of such
books, records and accounts to Lender upon demand, and thereupon Lender
may (i) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Property and
44
conduct the business thereat; (ii) complete any construction on the
Property in such manner and form as Lender reasonably deems advisable;
(iii) make alterations, additions, renewals, replacements and
improvements to or on the Property as Lender reasonably deems
advisable; (iv) exercise all rights and powers of Borrower with respect
to the Property, whether in the name of Borrower or otherwise,
including the right to make, cancel, enforce or modify Leases, obtain
and evict tenants, and demand, sue for, collect and receive all Rents
of the Property and every part thereof; (v) require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the
Rents, the fair and reasonable rental value for the use and occupation
of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to
Lender or to such receiver and, in default thereof, Borrower may be
evicted by summary proceedings or otherwise; and (vii) apply the
receipts from the Property to the payment of the Debt, in such order,
priority and proportions as Lender shall deem appropriate after
deducting therefrom all expenses (including reasonable out of pocket
attorneys' fees) incurred in connection with the aforesaid operations
and all amounts necessary to pay the Taxes, Other Charges, insurance
and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lender, its counsel, agents
and employees;
(i) exercise any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including
(i) the right to take possession of the Personal Property or any part
thereof, and to take such other measures as Lender may deem necessary
for the care, protection and preservation of the Personal Property, and
(ii) request Borrower at its expense to assemble the tangible Personal
Property and make it available to Lender at a convenient place
acceptable to Lender. Any notice of sale, disposition or other intended
action by Lender with respect to the Personal Property sent to Borrower
in accordance with the provisions hereof at least ten (10) days prior
to such action, shall constitute reasonable notice to Borrower;
(j) apply any sums then deposited in the Impound Account and
any other sums held in escrow or otherwise by Lender in accordance with
the terms of this Security Instrument or any Loan Document to the
payment of the following items in any order that Lender may determine:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal balance of the
Note;
(iv) amortization of the unpaid principal balance of
the Note; and all other sums payable pursuant to the Note,
this Security Instrument and the Loan Documents, including
advances made by Lender pursuant to the terms of this Security
Instrument;
45
(k) surrender the Policies maintained pursuant to Article 3
hereof, collect the unearned Insurance Premiums and apply such sums as
a credit on the Debt in such priority and proportion as Lender shall
deem proper, and in connection therewith, Borrower hereby appoints
Lender as agent and attorney-in-fact (which is coupled with an interest
and is therefore irrevocable) for Borrower to collect such Insurance
Premiums;
(l) apply the undisbursed balance of any Net Proceeds or any
Net Proceeds Deficiency deposit, together with interest thereon, to the
payment of the Debt in such order, priority and proportions as Lender
shall deem to be appropriate in its discretion;
(m) prohibit Borrower and anyone claiming for or through
Borrower from making use of or withdrawing any sums from any lockbox,
escrow or similar account; or
(n) pursue such other remedies as Lender may have under any of
the Loan Documents or applicable law.
In the event of a sale, by foreclosure, power of sale, or otherwise, of
less than all of the Property, this Security Instrument shall continue as a lien
and security interest on the remaining portion of the Property unimpaired and
without loss of priority. Notwithstanding the provisions of this Section 11.1 to
the contrary, if any Event of Default as described in Subsection 10.1(i)(i) or
(ii) shall occur, the entire unpaid Debt shall be automatically due and payable,
without any further notice, demand or other action by Lender.
SECTION 11.2 APPLICATION OF PROCEEDS. The purchase money proceeds and
avails of any disposition of the Property, or any part thereof, or any other
sums collected by Lender pursuant to the Note, this Security Instrument or the
Loan Documents, may be applied by Lender to the payment of the Debt in such
priority and proportions as Lender in its discretion shall deem proper.
SECTION 11.3 LENDER RIGHT TO CURE DEFAULTS. During the continuance of
any Event of Default, Lender may, but without any obligation to do so and
without notice to or demand on Borrower and without releasing Borrower from any
obligation hereunder, cure the same in such manner and to such extent as Lender
may deem reasonably necessary to protect the security hereof. Lender is
authorized to enter upon the Property for such purposes, or appear in, defend,
or bring any action or proceeding to protect its interest in the Property or to
foreclose this Security Instrument or collect the Debt, and the reasonable cost
and expense thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section 11.3, shall
constitute a portion of the Debt and shall be due and payable to Lender upon
demand. All such costs and expenses incurred by Lender in remedying such Event
of Default or in appearing in, defending, or bringing any such action or
proceeding shall bear interest at the Default Rate (as defined in the Note), for
the period after notice from Lender that such cost or expense was incurred to
the date of payment to Lender. All such costs and expenses incurred by Lender
together with interest thereon calculated at the Default Rate (as defined in the
Note) shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument and the Loan Documents and shall be immediately due and
payable upon demand by Lender therefor.
SECTION 11.4 ACTIONS AND PROCEEDINGS. After the occurrence and during
the continuance of an Event of Default, Lender has the right to appear in and
defend any action or proceeding brought with respect to the Property and to
bring any action or proceeding, in the name and on behalf of Borrower, that
Lender, in its reasonable discretion, decides should be brought to protect its
interest in the Property.
46
SECTION 11.5 RECOVERY OF SUMS REQUIRED TO BE PAID. After the occurrence
and during the continuance of an Event of Default, Lender shall have the right
from time to time to take action to recover any sum or sums that constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of Lender
thereafter to bring an action of foreclosure, or any other action, for Events of
Default existing at the time such earlier action was commenced.
SECTION 11.6 EXAMINATION OF BOOKS AND RECORDS. Lender, its agents,
accountants and attorneys shall have the right during reasonable business hours
and upon prior written notice to examine the records, books, management and
other papers of Borrower or of any Guarantor or Indemnitor which reflect upon
their financial condition, at the Property or at any office regularly maintained
by Borrower, its affiliates or any Guarantor or Indemnitor where the books and
records are located. Lender and its agents shall have the right during
reasonable business hours and upon prior written notice to make copies and
extracts from the foregoing records and other papers. In addition, Lender, its
agents, accountants and attorneys shall have the right to examine and audit the
books and records of Borrower or of any Guarantor or Indemnitor pertaining to
the income, expenses and operation of the Property during reasonable business
hours upon prior written notice at any office of Borrower, its affiliates or any
Guarantor or Indemnitor where the books and records are located.
SECTION 11.7 OTHER RIGHTS, ETC.
(a) The failure of Lender to insist upon strict performance of
any term hereof shall not be deemed to be a waiver of any term of this
Security Instrument. Borrower shall not be relieved of Borrower's
obligations hereunder by reason of (i) the failure of Lender to comply
with any request of Borrower, any Guarantor or any Indemnitor to take
any action to foreclose this Security Instrument or otherwise enforce
any of the provisions hereof or of the Note or the Loan Documents, (ii)
the release, regardless of consideration, of the whole or any part of
the Property, or of any person liable for the Debt or any portion
thereof, or (iii) any agreement or stipulation by Lender extending the
time of payment or otherwise modifying or supplementing the terms of
the Note, this Security Instrument or the Loan Documents.
(b) It is agreed that the risk of loss or damage to the
Property is on Borrower, and Lender shall have no liability whatsoever
for decline in value of the Property, for failure to maintain the
Policies, or for failure to determine whether insurance in force is
adequate as to the amount of risks insured unless and until Lender, its
nominee, designee or affiliate acquires title to the Property through a
foreclosure, trustee's sale or deed in lieu of foreclosure. Possession
by Lender shall not be deemed an election of judicial relief, if any
such possession is requested or obtained, with respect to any Property
or collateral not in Lender's possession.
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(c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender, in its
discretion, may elect. Lender may take action to recover the Debt, or
any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Lender thereafter to foreclose this Security
Instrument. The rights of Lender under this Security Instrument shall
be separate, distinct and cumulative and none shall be given effect to
the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of
any other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every right
and remedy now or hereafter afforded at law or in equity.
SECTION 11.8 LENDER RIGHT TO RELEASE. Lender may release any portion of
the Property or any portion of the Debt for such consideration as Lender may
require without, as to the remainder of the Property or the Debt, in any way
impairing or affecting the lien or priority of this Security Instrument, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall have been reduced by
the actual monetary consideration, if any, received by Lender for such release,
and may accept by assignment, pledge or otherwise any other property in place
thereof as Lender may require without being accountable for so doing to any
other lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
SECTION 11.9 VIOLATION OF LAWS. If the Property is not in compliance
with Applicable Laws and such non-compliance is reasonably likely to result in a
material adverse effect on Borrower or the Property, or Borrower's ability to
perform its obligations under the Loan Documents, Lender may impose additional
requirements upon Borrower in connection herewith including monetary reserves or
financial equivalents.
SECTION 11.10 RIGHT OF ENTRY. Lender and its agents shall have the
right upon prior written notice to Borrower to enter and inspect the Property at
all reasonable times upon notice to Borrower.
SECTION 11.11 RIGHTS PERTAINING TO SALES. The following provisions
shall, to the extent permitted by law, apply to any sale or sales of all or any
portion of the Property under or by virtue of this Security Instrument, whether
under any power of sale herein granted or by virtue of judicial proceedings or
of a judgment or decree of foreclosure and sale:
(a) The public officer or other person conducting such sale
(herein called the "SALE OFFICER") may conduct any number of sales from
time to time. The power of sale shall not be exhausted by any one or
more of such sales as to any part of the Property that has not been
sold or by any sale that is not completed or is defective until the
Debt has been paid in full.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such
postponed or adjourned sale, and such sale may be completed at the time
and place so announced without further notice.
(c) Lender is hereby appointed the true and lawful
attorney-in-fact of Borrower, which appointment is irrevocable and
shall be deemed to be coupled with an interest, in Borrower's name and
stead, to make all necessary conveyances, assignments, transfers and
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deliveries of the Property and rights so sold, and for that purpose
Lender may execute all necessary instruments to accomplish the same,
and may substitute one or more persons with like power, and Borrower
hereby ratifies and confirms all that said attorney or such substitute
or substitutes shall lawfully do by virtue thereof. Nevertheless,
Borrower, if requested by Lender, shall ratify and confirm any such
sale or sales by executing and delivering to Lender or such purchaser
or purchasers, as applicable, all such instruments as may be advisable,
in Lender's judgment, for the purposes designated in such request.
(d) Any and all statements of fact or other recitals made in
any of the instruments referred to in Subsection 11.11(c) given by
Lender concerning nonpayment of the Debt, occurrence of any Event of
Default, any declaration by Lender that all or any of the Debt is due
and payable, any request to sell, any representation that notice of
time, place and terms of sale and property or rights to be sold was
duly given, or that any other act or thing was duly done by Lender,
shall be taken as prima facie evidence of the truth of the facts so
stated and recited.
(e) The receipt by Sale Officer of the purchase money paid at
any such sale, or the receipt of any other person authorized to give
the same, shall be sufficient discharge therefor to any purchaser of
any property or rights sold as aforesaid, and no purchaser, or its
representatives, grantees or assigns, after paying such purchase price
and receiving such receipt, shall be bound to see to the application of
such purchase price or any part thereof upon or for any trust or
purpose of this Security Instrument or, in any manner whatsoever, be
answerable for any loss, misapplication or non-application of any such
purchase money, or part thereof, or be bound to inquire as to the
authorization, necessity, expediency or regularity of any such sale.
(f) Any such sale or sales shall operate to divest all of the
estate, right, title, interest, claim and demand whatsoever, whether at
law or in equity, of Borrower in and to the properties and rights so
sold, and shall be a perpetual bar both at law and in equity against
Borrower and any and all persons claiming or who may claim the same, or
any part thereof, by, through or under Borrower to the fullest extent
permitted by applicable law.
(g) Upon any such sale or sales, Lender may bid for and
acquire the Property and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the Debt the
amount of the bid made therefor, after deducting therefrom the expenses
of the sale, the cost of any enforcement proceeding hereunder and any
other sums that Lender is authorized to charge to Borrower under the
terms of the Note, this Security Instrument, or any other Loan Document
to the extent necessary to satisfy such bid.
(h) If Borrower, or any person claiming by, through or under
Borrower, shall transfer or refuse or fail to surrender possession of
the Property after any sale thereof, then Borrower or such person shall
be deemed a tenant at sufferance of the purchaser at such sale, subject
to eviction by means of unlawful detainer proceedings or other
appropriate proceedings, and to any other right or remedy available
hereunder or under applicable law.
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(i) Upon any such sale, it shall not be necessary for Sale
Officer, Lender or any public officer acting under execution or order
of court to have present or constructively in its possession any or all
of the Property.
(j) In the event of any sale referred to in this Subsection
11.11, the entire Debt, if not previously due and payable, immediately
thereupon shall, notwithstanding anything to the contrary in the Note,
this Security Instrument or any other Loan Document, become due and
payable.
(k) This instrument shall be effective as a mortgage. If a
sale hereunder shall be commenced by Sale Officer, Lender may, at any
time before the sale of the Property, direct the Sale Officer to
abandon the sale, and may institute suit for the collection of the Debt
or part thereof and for the foreclosure of this Security Instrument. If
Lender shall institute suit for the collection of the Debt or part
thereof, and for the foreclosure of this Security Instrument, Lender
may at any time before the entry of final judgment in said suit dismiss
the same (or part thereof) and direct the Sale Officer to sell the
Property in accordance with the provisions of this Security Instrument.
Lender may pursue its rights and remedies against any guarantor or
other party liable for any of the obligations in such a suit for
foreclosure or by separate suit, whether or not the Sale Officer is
also pursuing a sale under the terms hereof.
SECTION 11.12 RIGHT TO RELEASE INFORMATION. During the continuance of
any Event of Default, Lender may forward to any broker, prospective purchaser of
the Property or the Loan, or other person or entity as Lender reasonably
determines to be necessary or desirable, all documents and information which
Lender now has or may hereafter acquire relating to the Debt, Borrower, any
Guarantor, any Indemnitor, the Property and any other matter in connection with
the Loan, whether furnished by Borrower, any Guarantor, any Indemnitor or
otherwise, as Lender reasonably determines to be necessary or desirable.
Borrower irrevocably waives any and all rights it may have to limit or prevent
such disclosure, including any right of privacy or any claims arising therefrom.
ARTICLE 12 - ENVIRONMENTAL HAZARDS
SECTION 12.1 ENVIRONMENTAL DEFINITIONS. The following terms shall have
meanings set forth herein for the purposes of this Article 12 and the other
Articles of this Security Instrument:
"ENVIRONMENTAL LAW" shall mean any present, and for the
purposes of Sections 12.2, 12.3 and 13.4 only, future, federal, state
and local laws, statutes, ordinances, rules, regulations and the like,
as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability
for or costs of Remediation or prevention of Releases of Hazardous
Substances or relating to liability for or costs of other actual or
threatened danger to human health or the environment. "Environmental
Law" includes the following statutes, as amended, any successor
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thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like
addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the
Resource Conservation and Recovery Act (including Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the
Safe Drinking Water Act; the Occupational Safety and Health Act; the
Federal Water Pollution Control Act; the Federal Insecticide, Fungicide
and Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation Act.
"Environmental Law" also includes any present, and for the purposes of
Sections 12.2, 12.3 and 13.4 only, future, federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as
common law, conditioning transfer of property upon a negative
declaration or other approval of a governmental authority of the
environmental condition of the Property; requiring notification or
disclosure of Releases of Hazardous Substances or other environmental
condition of the Property to any governmental authority or other person
or entity, whether or not in connection with transfer of title to or
interest in property.
"ENVIRONMENTAL LIENS" shall mean all liens and other
encumbrances imposed pursuant to any Environmental Law, whether due to
any act or omission of Borrower or any other person or entity.
"ENVIRONMENTAL REPORTS" shall mean any Phase I, Phase II or
other written reports resulting from any environmental assessments of
the Property delivered to Lender at or prior to the closing of the
Loan.
"HAZARDOUS SUBSTANCES" shall mean, but shall not be limited
to, any and all substances (whether solid, liquid or gas) (i) defined,
listed, or otherwise classified as pollutants, hazardous wastes,
hazardous substances, hazardous materials, extremely hazardous wastes,
or words of similar meaning or regulatory effect under any present, or
for the purposes of Sections 12.2, 12.3 and 13.4 only, future,
Environmental Laws or (ii) that may have a negative impact on human
health or the environment, including petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls,
lead, radon, radioactive materials, flammables, explosives, medical and
infectious waste, mold, fungus and spores present in the air and in and
on the physical components of the Property.
"INSTITUTIONAL CONTROL" shall mean any legal or physical
restrictions or limitations on the use of, or access to, the Property
to eliminate or minimize potential exposures to any Hazardous
Substance, to prevent activities that could interfere with the
effectiveness of any Remediation , or to ensure maintenance of a level
of risk to human health or the environment, including physical
modifications to the Property such as slurry walls, capping, hydraulic
controls for ground water, or point of use water treatment, restrictive
covenants, environmental protection easements, or property use
limitations.
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"O&M PLAN" shall mean any operations and maintenance plan with
respect to any asbestos or asbestos containing materials,
polychlorinated biphenyls and compounds containing them, lead and
lead-based paid, mold, fungus and spores at the Property, which plan
may be required by Lender if recommended by the Environmental Report or
any other environmental assessment or audit hereafter made of the
Property as may be permitted or required herein or in any other Loan
Documents, or if required by Environmental Law or Governmental
Authority. Any required O&M Plan shall be in form and substance
reasonably satisfactory to Lender and be prepared by an environmental
consultant reasonably satisfactory to Lender.
"RELEASE" of any Hazardous Substance includes any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or
other movement of Hazardous Substances.
"REMEDIATION" includes any response, remedial removal, or
corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any enrollment
or participation of the Property within any state's voluntary cleanup
or similar program, any actions to prevent, cure or mitigate any
Release of any Hazardous Substance, any action to comply with any
Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit,
sampling and testing, laboratory or other analysis, or evaluation
relating to any Hazardous Substances or to anything referred to in this
Article 12.
SECTION 12.2 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES. Borrower
represents and warrants, that, to the best of Borrower's knowledge after due
inquiry and investigation: (a) except as disclosed in the Environmental Report
obtained in connection with the origination of the Loan, there are no Hazardous
Substances or underground storage tanks in, on, or under the Property, except
those that are in compliance with applicable Environmental Laws and with permits
issued pursuant thereto, if any; (b) there are no past or present Releases of
Hazardous Substances in violation of any Environmental Law or which would
require Remediation by a Governmental Authority in, on, under or from the
Property except as described in the Environmental Report; (c) there is no past
or present non-compliance with Environmental Laws, or with permits issued
pursuant thereto, in connection with the Property except as described in the
Environmental Report; (d) Borrower does not know of, and has not received, any
written notice or other communication from any person or entity (including a
governmental entity) relating to Hazardous Substances or Remediation thereof, of
possible liability of any person or entity pursuant to any Environmental Law,
other environmental conditions in connection with the Property, or any actual
administrative or judicial proceedings in connection with any of the foregoing
except as previously disclosed in writing to Lender; (e) Borrower has truthfully
provided to Lender, in writing, any and all information relating to
environmental conditions in, on, under or from the Property that is known to
Borrower and that is contained in Borrower's files and records, including any
reports relating to Hazardous Substances in, on, under or from the Property
and/or to the environmental condition of the Property; and (f) there are no
Institutional Controls on or affecting the Property except as disclosed in the
Environmental Report.
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SECTION 12.3 ENVIRONMENTAL COVENANTS. Borrower covenants and agrees
that so long as the Borrower owns, manages, is in possession of, or otherwise
controls the operation of the Property: (a) all uses and operations on or of the
Property, whether by Borrower or any other person or entity, shall be in
compliance with all Environmental Laws and permits issued pursuant thereto; (b)
there shall be no Releases of Hazardous Substances in, on, under or from the
Property in violation of Environmental Laws; (c) there shall be no Hazardous
Substances in, on, or under the Property, except those that are in compliance
with all Environmental Laws and with permits issued pursuant thereto, if and to
the extent required; (d) Borrower shall keep the Property free and clear of all
Environmental Liens; (e) Borrower shall, at its sole cost and expense, fully and
expeditiously cooperate in all activities pursuant to Section 12.4 below,
including providing all relevant information and making knowledgeable persons
available for interviews; (f) Borrower shall, at its sole cost and expense,
perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
reasonable written request of Lender after Lender has reason to reasonably
believe this Section 12.3 has been violated (including sampling, testing and
analysis of soil, water, air, building materials and other materials and
substances whether solid, liquid or gas, and the preparation of any O&M Plan
required by Lender), and share with Lender the reports and other results
thereof, and Lender and other Indemnified Parties shall be entitled to rely on
such reports and other results thereof; (g) Borrower shall, at its sole cost and
expense, comply with all reasonable written requests of Lender to (i) reasonably
effectuate Remediation of any condition (including a Release of a Hazardous
Substance in violation of Environmental Laws or the correction of any conditions
identified in any O&M Plan) in, on, under or from the Property, (ii) comply with
any Environmental Law, and (iii) comply with any directive from any governmental
authority with respect to Hazardous Substances in, on, under or from the
Property or Remediation thereof; (h) Borrower shall not do or allow any tenant
or other user of the Property to do any act that materially increases the
dangers to human health or the environment, poses an unreasonable risk of harm
to any person or entity (whether on or off the Property), materially impairs or
may reasonably be expected to materially impair the value of the Property, is
contrary to any requirement of any insurer, constitutes a public or private
nuisance, constitutes waste, or violates any covenant, condition, agreement or
easement applicable to the Property; and (i) Borrower shall notify Lender in
writing promptly after it has become aware of (A) any presence or Releases or
threatened Releases of Hazardous Substances in, on, under, from or migrating
towards the Property which is required to be reported to a governmental
authority under any Environmental Law, (B) any actual Environmental Lien
affecting the Property, (C) any required Remediation of environmental conditions
relating to the Property, and (D) any written notice or other communication of
which Borrower becomes aware from any source whatsoever (including a
governmental entity) relating in any way to Hazardous Substances in, on, from or
under the Property or Remediation thereof, reasonably likely liability of any
person or entity pursuant to any Environmental Law, in connection with the
Property, or any actual or threatened administrative or judicial proceedings in
connection with anything referred to in this Article 12, (j) Borrower shall not
allow any Institutional Control to be imposed on the Property from and after the
date hereof; and (k) Borrower shall take all acts necessary to preserve its
status, if applicable, as an "innocent landowner", "contiguous property owner",
or "prospective purchaser" as to the Property and as those terms are defined in
CERCLA; provided, however, that this covenant does not limit or modify any of
Borrower's other duties or obligations under this Security Instrument.
53
SECTION 12.4 LENDER'S RIGHTS. Lender, its environmental consultant, and
any other person or entity designated by Lender, including any receiver and any
representative of a governmental entity, shall have the right, but not the
obligation, at intervals of not less than one year, or more frequently if the
Lender reasonably believes that Section 12.3 hereof has been violated, after
prior written notice to Borrower, to enter upon the Property at all reasonable
times to assess any and all aspects of the environmental condition of the
Property and its use, including conducting any environmental assessment or audit
of the Property or portions thereof to confirm Borrower's compliance with the
provisions of this Article 12 and performance of any Remediation required under
any O&M Plan, and Borrower shall cooperate in all reasonable ways with Lender in
connection with any such audit. Such audit shall be performed in a manner so as
to minimize interference with the conduct of business at the Property. If such
audit discloses that a violation of or a liability under any Environmental Law
exists or if such audit was required or prescribed by law, regulation or
governmental or quasi-governmental authority, Borrower shall pay all reasonable
out of pocket costs and expenses incurred in connection with such audit;
otherwise, the costs and expenses of such audit shall, notwithstanding anything
to the contrary set forth in this Section, be paid by Lender.
ARTICLE 13 - INDEMNIFICATION
SECTION 13.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all actual claims, suits,
liabilities (including strict liabilities), actions, proceedings, obligations,
debts, damages, losses, costs, expenses, fines, penalties, charges, fees,
expenses, judgments, awards or amounts paid in settlement (including attorneys'
fees and other costs) (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 any Indemnified Party's gross negligence or willful misconduct):
(a) ownership, servicing or administration of this Security Instrument, the
Property or any interest therein or the receipt of any Rents or other income or
proceeds from the Property; (b) claims of any third parties with respect to any
amendment to, or restructuring of, the Debt, and the Note, this Security
Instrument, or any other Loan Document; (c) any and all lawful actions that may
be taken by Lender in connection with the enforcement of the provisions of this
Security Instrument or the Note or any other Loan Document, whether or not suit
is filed in connection with same, or in connection with Borrower, any Guarantor
or Indemnitor 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 (provided, however, if
Lender, its nominee, designee or affiliate acquires title to the Property
through a foreclosure, trustee's sale or deed in lieu of foreclosure (each a
"FORECLOSURE ACQUISITION"), Borrower shall not be liable for any loss
attributable to such occurrences, events or activities first occurring after the
date of the Foreclosure Acquisition ("FORECLOSURE ACQUISITION DATE"), provided
such occurrence, event or activity is unrelated to any occurrence, event or
activity which existed prior to the Foreclosure Acquisition Date); (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 (provided, however, if a Foreclosure Acquisition occurs, Borrower shall
not be liable for any loss attributable to such occurrences, events or
activities first occurring after the Foreclosure Acquisition Date, provided such
54
occurrence, event or activity is unrelated to any occurrence, event or activity
which existed prior to the Foreclosure Acquisition Date); (f) any failure on the
part of Borrower to perform or be in compliance with any of the terms of this
Security Instrument; (g) performance of any labor or services or the furnishing
of any materials or other property in respect of the Property or any part
thereof; (h) the failure of any person to file timely with the Internal Revenue
Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real
Estate, Broker and Barter Exchange Transactions, which may be required in
connection with the Security Instrument, or to supply a copy thereof in a timely
fashion to the recipient of the proceeds of the transaction in connection with
which this Security Instrument is made; (i) any failure of the Property to be in
compliance with any Applicable Laws; (j) the enforcement by any Indemnified
Party of the provisions of this Article 13; (k) any and all claims and demands
whatsoever that 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 or otherwise (provided,
however, if a Foreclosure Acquisition occurs, Borrower shall not be liable for
any loss attributable to such occurrences, events or activities first occurring
after the Foreclosure Acquisition Date, provided such occurrence, event or
activity is unrelated to any occurrence, event or activity which existed prior
to the Foreclosure Acquisition Date); (l) any and all claims (including lender
liability claims) or demands by Borrower or any third parties, including any
Guarantor or Indemnitor that do not result in a final judgment in favor of the
person asserting the same; (m) the payment of any commission, charge or
brokerage fee to anyone which may be payable in connection with the funding of
the loan evidenced by the Note and secured by this Security Instrument; or (n)
any representation made by Borrower in this Security Instrument or other Loan
Document not being true and correct in all material respects as of the date
made.
Any amounts payable to Lender by reason of the application of this
Article 13 shall become within five (5) Business Days of notice of such amounts
to Borrower due and payable and shall bear interest at the Default Rate (as
defined in the Note) from the date of such notice or damage is sustained by
Lender until paid, and be secured by this Security Instrument and the other Loan
Documents. The obligations and liabilities of Borrower under this Article 13
shall survive any termination, satisfaction, or assignment of this Security
Instrument and the exercise by Lender of any of its rights or remedies hereunder
including the acquisition of the Property by foreclosure or a conveyance in lieu
of foreclosure.
As used in this Security Instrument, the term "INDEMNIFIED PARTIES"
means Lender and any person or entity who is or will have been involved in the
origination of this Loan, any person or entity who is or will have been involved
in the servicing of this Loan (whether or not such person or entity has any
ownership interest therein), any person or entity in whose name the encumbrance
created by this Security Instrument is or will have been recorded, persons and
entities who may hold or acquire or will have held a full or partial interest in
this Loan (including Investors in the Securities (as such terms are defined in
Section 18.1 hereof), as well as custodians, trustees and other fiduciaries who
hold or have held a full or partial interest in this Loan for the benefit of
third parties) as well as the respective directors, officers, shareholders,
members, partners, employees, agents, attorneys, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including any other person or
entity who holds or acquires or will have held a participation or other full or
partial interest in this Loan or the Property, whether during the term of this
Loan or as a part of or following a foreclosure of this Loan and including any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).
55
SECTION 13.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses imposed upon or incurred
by or asserted against any Indemnified Parties and directly or indirectly
arising out of or in any way relating to any tax on the making and/or recording
of this Security Instrument, the Note or any of the other Loan Documents.
SECTION 13.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost
and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including reasonable
attorneys' fees and reasonable out of pocket costs incurred in the
investigation, defense, and settlement of Losses incurred in correcting any
prohibited transaction or in the sale of a prohibited loan, and in obtaining any
individual prohibited transaction exemption under ERISA that may be required, in
Lender's reasonable discretion) that Lender may incur, directly or indirectly,
as a result of a default under Section 4.2 or 5.9.
SECTION 13.4 ENVIRONMENTAL INDEMNIFICATION.
(a) Borrower shall, at its sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties
from and against any and all Losses and costs of Remediation (whether
or not performed voluntarily or required under any O&M Plan),
engineers' fees, environmental consultants' fees, and costs of
investigation (including sampling, testing and analysis of soil, water,
air, building materials and other materials and substances whether
solid, liquid or gas) imposed upon or incurred by or asserted against
any Indemnified Parties, and arising out of or in any way relating to
any one or more of the following, unless caused by the gross negligence
or willful misconduct of any Indemnified Party: (a) any presence of any
Hazardous Substances in, on, above or under the Property; (b) any past,
present or threatened release of Hazardous Substances in, on, above,
under or from the Property; (c) any activity by Borrower, any person or
entity affiliated with Borrower or tenant or other users of the
Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to
or from the Property of any Hazardous Substances at any time located
in, under, on or above the Property; (d) any activity by Borrower, any
person or entity affiliated with Borrower or tenant or other users of
the Property in connection with any actual or proposed Remediation of
any Hazardous Substances at any time located in, under, on or above the
Property, whether or not such Remediation is voluntary or required
under any O&M Plan or pursuant to court or administrative order,
including any removal, remedial or corrective action; (e) any past,
present or threatened violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the
Property or operations thereon, including any failure by Borrower, any
person or entity affiliated with Borrower or tenant or other users of
the Property to comply with any order of any governmental authority in
56
connection with Environmental Laws; (f) the imposition, recording or
filing of any Environmental Lien encumbering the Property; (g) any
administrative processes or proceedings or judicial proceedings in any
way connected with any matter addressed in Article 12 and this Section
13.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property,
including costs to investigate and assess such injury, destruction or
loss; (i) any acts of Borrower or other users of the Property in
arranging for disposal or treatment, or arranging with a transporter
for transport for disposal or treatment, of Hazardous Substances owned
or possessed by such Borrower or other users, at any facility or
incineration vessel owned or operated by another person or entity and
containing such or similar Hazardous Substance; (j) any acts of
Borrower or other users of the Property, in accepting any Hazardous
Substances for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower or such other users,
from which there is a Release, or a threatened Release of any Hazardous
Substance which causes costs for Remediation to be incurred; (k) any
personal injury, wrongful death, or property damage caused by Hazardous
Substances arising under any statutory or common law or tort law
theory, including damages assessed for the maintenance of a private or
public nuisance or for the conducting of an abnormally dangerous
activity on or near the Property; and (l) any representation or
warranty set forth in Article 12 being untrue in any material respect
as of the date made, or any breach or failure to perform any covenants
or other obligations pursuant to Article 12.
(b) The indemnity provided in this Section 13.4 shall not be
included in any exculpation of Borrower from personal liability
provided in this Security Instrument or in any of the other Loan
Documents. Further, Borrower's obligations under this Section 13.4
shall survive (in perpetuity) the closing and disbursement of the funds
evidenced by the Note, payment of the Note, payment and performance of
the Obligations, any release, reconveyance, discharge or foreclosure of
this Security Instrument, conveyance by deed in lieu of foreclosure,
and any subsequent conveyance of the Property (except for such losses
attributable to such occurrences, events or activities by any party
other than Borrower or its affiliates first occurring after the
Foreclosure Acquisition Date, provided such occurrence, event or
activity is unrelated to any occurrence, event or activity which
existed prior to the Foreclosure Acquisition Date). Nothing in this
Section 13.4 shall be deemed to deprive Lender of any rights or
remedies provided to it elsewhere in this Security Instrument or the
other Loan Documents or otherwise available to it under law. Borrower
waives and releases Lender and all other Indemnified Parties from any
rights or defenses Borrower may have under common law or Environmental
Laws for liability arising or resulting from the presence, use or
Release of Hazardous Materials except to the extent caused by the gross
negligence or willful misconduct of the Indemnified Party seeking
indemnification hereunder.
SECTION 13.5 DUTY TO DEFEND, ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals reasonably approved
by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified
Parties may engage their own attorneys and other professionals to defend or
assist them, and, at the option of Indemnified Parties, their attorneys shall
control the resolution of any claim or proceeding. Upon demand, Borrower shall
pay or reimburse, the Indemnified Parties for the payment of reasonable fees and
disbursements of attorneys, accountants, financial advisors, engineers,
environmental consultants, laboratories and other professionals in connection
therewith.
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ARTICLE 14 - WAIVERS
SECTION 14.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Lender arising out of or in any
way connected with this Security Instrument, the Note, any of the other Loan
Documents, or the Debt.
SECTION 14.2 MARSHALLING AND OTHER MATTERS. Borrower hereby waives, to
the extent permitted by law, the benefit of all homestead, appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of or in connection with any
sale hereunder of the Property or any part thereof or any interest therein.
Further, Borrower hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security Instrument on
behalf of Borrower, and on behalf of each and every person acquiring any
interest in or title to the Property subsequent to the date of this Security
Instrument and on behalf of all persons to the extent permitted by Applicable
Law, and hereby waives any defense Borrower might assert or have by reason of
Lender's failure to make any tenant or lessee of the Property a party defendant
in any foreclosure proceeding or action instituted by Lender.
SECTION 14.3 WAIVER OF NOTICE. To the extent permitted by Applicable
Law, Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Security Instrument or any
other Loan Document specifically and expressly provides for the giving of notice
by Lender to Borrower and except with respect to matters for which Lender is
required by Applicable Law to give notice, and Borrower hereby expressly waives
the right to receive any notice from Lender with respect to any matter for which
this Security Instrument or any other Loan Document does not specifically and
expressly provide for the giving of notice by Lender to Borrower.
SECTION 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly waives and releases to the fullest extent permitted by law, the
pleading of any statute of limitations as a defense to payment of the Debt or
performance of its other obligations under this Security Instrument.
SECTION 14.5 SURVIVAL. Except as hereinafter specifically set forth
below, the representations and warranties, covenants, and other obligations
arising under Article 12 shall in no way be impaired by: any satisfaction or
other termination of this Security Instrument, any assignment or other transfer
of all or any portion of this Security Instrument or Lender's interest in the
Property in accordance with Article 18 hereof (but, in such case, shall benefit
both Indemnified Parties and any assignee or transferee), any exercise of
Lender's rights and remedies pursuant hereto, including foreclosure or
acceptance of a deed in lieu of foreclosure, any exercise of any rights and
remedies pursuant to the Note or any other Loan Document, any transfer of all or
any portion of the Property (whether by Borrower or by Lender following
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foreclosure or acceptance of a deed in lieu of foreclosure or at any other
time), any amendment to this Security Instrument, the Note or any other Loan
Documents, and any act or omission that might otherwise be construed as a
release or discharge of Borrower from the obligations pursuant hereto.
SECTION 14.6 WAIVER OF TRIAL BY JURY. BORROWER AND LENDER HEREBY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE,
RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE
APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY
INSTRUMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTS OR OMISSIONS OF BORROWER OR
LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.
ARTICLE 15 - EXCULPATION
To the extent of any conflict between the provisions of this Security
Instrument and Section 21 of the Note, the provisions of Section 21 of the Note
shall control.
ARTICLE 16 - NOTICES
SECTION 16.1 NOTICES. Any notice required or permitted to be given
hereunder must be in writing and given (a) by depositing same in the United
States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested; (b) by delivering the
same in person to such party; (c) by transmitting a facsimile copy to the
correct facsimile number of the intended recipient (with a second copy to be
sent to the intended recipient by any other means permitted under this Section
16.1); or (d) by depositing the same into the custody of a nationally recognized
overnight delivery service addressed to the party to be notified. In the event
of mailing, notices shall be deemed effective three (3) Business Days after
posting; in the event of overnight delivery, notices shall be deemed effective
on the next Business Day following deposit with the delivery service; in the
event of personal service or facsimile transmissions, notices shall be deemed
effective when delivered. For purposes of notice, the addresses of the parties
shall be as set forth in the Preamble to this Security Instrument. A copy of any
notice sent, transmitted or delivered to Lender shall also be delivered to
Daniel Flanigan, Esq., Polsinelli Shalton Welte Suelthaus, 700 W. 47th Street,
Suite 1000, Kansas City, Missouri 64112, facsimile number: (816) 753-1536 and a
copy of any notice sent, transmitted or delivered to Borrower shall also be
delivered to Stuart Widowski, Esq., 44 South Bayles Avenue, Port Washington, New
York 11050, facsimile number: (516) 767-6497, provided however, that the failure
to send such copies shall not impair the effect of the notice sent, transmitted
or delivered. From time to time, either party may designate another address than
the address set forth in the Preamble by giving the other party no less than ten
(10) days advance notice of such change of address in accordance with the notice
provisions hereof.
For purposes of this Subsection, "BUSINESS DAY" shall mean a day on
which commercial banks are not authorized or required by law to close in the
State in which the Land is located or in the state of New York.
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ARTICLE 17 - APPLICABLE LAW
SECTION 17.1 CHOICE OF LAW/JURISDICTION AND VENUE. This Security
Instrument shall be governed, construed, applied and enforced in accordance with
the laws of the state where the Land is located without regard to the conflicts
of law provisions thereof ("GOVERNING STATE"). Borrower and Lender hereby
consent to personal jurisdiction in the Governing State. JURISDICTION AND VENUE
OF ANY ACTION BROUGHT TO ENFORCE THIS SECURITY INSTRUMENT OR ANY OTHER LOAN
DOCUMENT OR ANY ACTION RELATING TO THE LOAN OR THE RELATIONSHIPS CREATED BY OR
UNDER THE LOAN DOCUMENTS ("ACTION") SHALL, AT THE ELECTION OF LENDER, BE IN (AND
IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE
ELECTION OF LENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE
JURISDICTION LOCATED IN THE GOVERNING STATE. BORROWER AND LENDER HEREBY CONSENT
AND SUBMIT TO THE PERSONAL JURISDICTION OF THE STATE COURTS OF THE GOVERNING
STATE AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE IN CONNECTION WITH
ANY ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY
OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH GOVERNING STATE FOR PURPOSES
OF ANY ACTION. Borrower and Lender hereby waive and agree not to assert, as a
defense to any Action or a motion to transfer venue of any Action, (i) any claim
that it is not subject to such jurisdiction, (ii) any claim that any Action may
not be brought against it or is not maintainable in those courts or that this
Security Instrument may not be enforced in or by those courts, or that it is
exempt or immune from execution, (iii) that the Action is brought in an
inconvenient forum, or (iv) that the venue for the Action is in any way
improper.
SECTION 17.2 USURY LAWS. This Security Instrument and the Note are
subject to the express condition that at no time shall Borrower be obligated or
required to pay interest on the Debt at a rate which could subject the holder of
the Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Borrower is permitted by applicable law to
contract or agree to pay. If by the terms of this Security Instrument or the
Note, Borrower is at any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate and all prior interest payments in excess of such maximum rate shall be
applied and shall be deemed to have been payments in reduction of the principal
balance of the Note. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the Debt shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate of
interest from time to time in effect and applicable to the Debt for so long as
the Debt is outstanding.
SECTION 17.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Instrument invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any Applicable Law.
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SECTION 17.4 INAPPLICABLE PROVISION. If any term of this Security
Instrument or any application thereof shall be invalid or unenforceable, the
remainder of this Security Instrument and any other application of the term
shall not be affected thereby.
ARTICLE 18 - SECONDARY MARKET
SECTION 18.1 TRANSFER OF LOAN. Lender may at any time, (a) sell,
transfer or assign the Note, this Security Instrument, and the other Loan
Documents (a "LOAN SALE"), (b) any or all servicing rights with respect thereto
("SERVICING RIGHTS TRANSFERS"), (c) grant participations therein
("PARTICIPATIONS"), or (d) issue mortgage pass-through certificates or other
securities ("SECURITIES") evidencing a beneficial interest in a rated or unrated
public offering or private placement (a "SECURITIZATION"). Lender may forward to
each purchaser, transferee, assignee, servicer, participant, or investor
(including any broker or authorized representative thereof) in such Loan Sale,
Servicing Rights Transfers, Participations or Securities (collectively, the
"INVESTOR") or any Rating Agency rating such Securities, each prospective
Investor, and any organization maintaining databases on the underwriting and
performance of commercial mortgage loans, all documents and information that
Lender now has or may hereafter acquire relating to the Debt, Borrower, any
Guarantor, any Indemnitor, the Property and any other matter relating to the
Loan, whether furnished by Borrower, any Guarantor, any Indemnitor or otherwise,
as Lender reasonably determines necessary or desirable. Borrower irrevocably
waives any and all rights it may have to limit or prevent such disclosure,
including any right of privacy or any claims arising therefrom.
SECTION 18.2 SECONDARY MARKET TRANSACTIONS. Lender shall have the right
to engage in one or more Secondary Market Transactions (as hereinafter defined)
with respect to the Loan, and to structure and restructure all or any part of
the Loan, including in multiple tranches, as a wraparound loan, or for inclusion
in a "real estate mortgage investment conduit" (a "REMIC") within the meaning of
Section 860D of the Internal Revenue Code of 1986, as amended, or other
Securitization. Without limitation, Lender shall have the right to cause the
Note and the Security Instrument to be split into a first and a second mortgage
loan, or into one or more loans secured by mortgages in whatever proportion
Lender determines provided that in no event shall such split result in a change
in the applicable interest rate (except as set forth in Section 18.5) or any
other economic term, 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
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 provided that such modifications will not result in a change
of any economic terms. As used herein, "SECONDARY MARKET TRANSACTION" means any
of (i) the sale, assignment, or other transfer of all or any portion of the Debt
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 Debt or Loan Documents to one or more Investors, (iii) the transfer or
deposit of all or any portion of the Debt or Loan Documents to or with one or
more trusts or other entities which may sell certificates or other instruments
to Investors evidencing an ownership interest in the assets of such trust or the
right to receive income or proceeds therefrom or (iv) any other Securitization
backed in whole or in part by the Loan or any interest therein.
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SECTION 18.3 COOPERATION; LIMITATIONS. Borrower shall, at Lender's cost
and expense, cooperate in good faith with Lender in effecting any such
restructuring or Secondary Market Transaction. Such cooperation shall include
executing and delivering such amendments to the Loan Documents and the
organizational documents of Borrower and any constituent entities as Lender or
any Rating Agency then rating the securities issued by the holder of the Loan,
purchaser, transferee, assignee, trustee, servicer or potential Investor (the
Rating Agencies and all of the foregoing parties are herein collectively
referred to as "INTERESTED PARTIES") may reasonably request, provided however,
that no such amendment shall modify (i) the interest rate payable under the Note
(except as set forth in Section 18.5); (ii) the stated maturity date of the
Note, (iii) the amortization of the principal amount of the Note, (iv) any other
material economic terms of the Loan, (v) the non-recourse provisions of the Loan
or (vi) any provision, the effect of which would increase Borrower's obligations
or decrease Borrower's rights under the Loan Documents other than to a de
minimis extent. Such cooperation also shall include using commercially
reasonable efforts to obtain such certificates and assurances from governmental
entities and others as Lender may reasonably request. Borrower shall not be
required to provide additional collateral that was not initially contemplated by
the Loan Documents to effect any such restructuring or Secondary Market
Transaction. Borrower shall not be required to pay any third party costs and
expenses incurred by Borrower or Lender in connection with any such Secondary
Market Transaction.
SECTION 18.4 INFORMATION. Borrower, at its sole cost and expense, shall
provide such access to personnel and such information and documents relating to
Borrower, its constituent persons or entities, any Guarantor or Indemnitor, the
Property and the business and operations of all of the foregoing and at Lender's
cost and expense, such opinions of counsel as Lender may reasonably request or
as any Rating Agency or any other Interested Party may request (and in form and
substance reasonably acceptable to Lender and acceptable to each Interested
Party) in connection with any such Secondary Market Transaction including
updated financial information, appraisals, market studies, environmental reviews
(Phase I's and, if appropriate, Phase II's), property condition reports and
other due diligence investigations together with appropriate verification of
such updated information and reports through letters of auditors and
consultants, all at Lender's cost and expense and, as of the closing date of the
Secondary Market Transaction, updated representations and warranties made in the
Loan Documents and such additional representations and warranties as any Rating
Agency or other Interested Party may request. If requested by any Rating Agency
or reasonably required by Lender, provide revisions or "bringdowns" to any
opinions delivered at Closing , or if reasonably required by Lender or required
by any Rating Agency or other Interested Party new versions of such opinions,
addressed to Lender, any trustee under any Securitization backed in whole or in
part by the Loan, any Rating Agency that assigns a rating to any securities in
connection therewith. Lender shall be permitted to share all such information
with the investment banking firms, Rating Agencies then rating the securities in
connection with the Secondary Market Transaction, accounting firms, law firms,
other third party advisory firms, potential investors, servicers and other
service providers and other parties involved in any proposed Secondary Market
Transaction. Borrower understands that any such information may be incorporated
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into any offering circular, prospectus, prospectus supplement, private placement
memorandum or other offering documents for any Secondary Market Transaction.
Lender and all of the aforesaid third-party advisors and professional firms and
investors shall be entitled to rely upon such information; provided that in no
event shall Borrower be responsible for the accuracy of any information provided
by a third party.
SECTION 18.5 SEVERANCE. In connection with any Secondary Market
Transaction, Borrower shall, at the request of Lender and at Lender's sole cost
and expense (a) sever the Loan into two or more portions in such individual
amounts as Lender may determine, each of which portion shall be secured by a
mortgage lien on the Property ("LOAN SPLITTING") or (b) sever the Loan into two
or more tranches in such individual amounts as Lender may determine ("LOAN
TRANCHING"; Loan Splitting and Loan Tranching are collectively referred to
herein as a "CONVERSION"). To effectuate a Loan Split, Borrower, shall, promptly
following written request of Lender, execute, acknowledge and deliver to Lender
and/or its designee or designees substitute notes and security instruments in
such principal amounts, aggregating not more than the then unpaid principal
amount secured by this Security Instrument, and containing terms, provisions and
clauses no less favorable to Borrower than those contained herein and in the
Note, and such other documents and instruments as may be reasonably required by
Lender to effect the splitting of the Note and this Security Instrument. Any
such Loan Tranching shall be evidenced by Lender's then standard form "A/B
Loan". Any Conversion shall not preclude any further Conversion or modification
of the Loan by agreement of Borrower and Lender. In the event any portion of the
Loan is converted into an "A/B Loan", the interest rate on any one or more
components of the Loan may be changed at Lender's request provided that the
weighted average interest rate of all components of the Loan shall in no event
exceed at any time during the term of the Loan the interest rate set forth in
the Note. Borrower shall cooperate with all of Lender's reasonable requests made
in connection with a Conversion and shall deliver such documents as Lender may
reasonably request in connection therewith, including any opinion letters which
Lender may reasonably request, all of which shall be in form and substance
reasonably acceptable to Lender. The aggregate of the principal amount of all
such portions shall in no event exceed the then principal balance of the Loan.
ARTICLE 19 - COSTS
SECTION 19.1 ORIGINATION, ADMINISTRATION, ENFORCEMENT, AND DEFENSE
EXPENSES. Borrower shall pay Lender, within five (5) Business Days after written
demand, all Administration and Enforcement Expenses (as hereinafter defined) now
or hereafter incurred by Lender, together with interest thereon at the Default
Rate from the date Lender delivers notice thereof to Borrower until such fees
and expenses are paid by Borrower, whether or not an Event of Default or Default
then exists. For the purpose of this Security Instrument, "ADMINISTRATION AND
ENFORCEMENT EXPENSES" shall mean all reasonable out of pocket fees and expenses
incurred at any time or from time to time by Lender, including legal (whether
for the purpose of advice, negotiation, documentation, defense, enforcement or
otherwise), accounting, financial advisory, auditing, rating agency, appraisal,
valuation, title or title insurance, engineering, environmental, collection
agency, or other expert or consulting or similar services, in connection with:
(a) the origination of the Loan, including the negotiation and preparation of
this Security Instrument, any other Loan Document and any amendments or
modifications of the Loan or the Loan Documents (except to the extent that
Article 18 hereof expressly provides that Lender shall be responsible for the
63
costs thereof), whether or not consummated; (b) the administration, servicing or
enforcement of the Loan or the Loan Documents (except to the extent that Article
18 hereof expressly provides that Lender shall be responsible for the costs
thereof), including any request for interpretation or modification of the Loan
Documents or any matter related to the Loan or the servicing thereof (which
shall include the consideration of any requests for consents, waivers,
modifications, approvals, lease reviews or similar matters and any proposed
transfer of the Property or any interest therein), (c) any litigation, contest,
dispute, suit, arbitration, mediation, proceeding or action (whether instituted
by or against Lender, including actions brought by or on behalf of Borrower or
Borrower's bankruptcy estate or any indemnitor or guarantor of the Loan or any
other person) in any way relating to the Loan or the Loan Documents including in
connection with any bankruptcy, reorganization, insolvency, or receivership
proceeding; (d) any attempt to enforce any rights of Lender against Borrower or
any other person that may be obligated to Lender by virtue of any Loan Document
whether or not litigation is commenced in pursuance of such rights; and (e)
protection, enforcement against, or liquidation of the Property or any other
collateral for the Loan, including any attempt to inspect, verify, preserve,
restore, collect, sell, liquidate or otherwise dispose of or realize upon the
Loan, the Property or any other collateral for the Loan. All Administration and
Enforcement Expenses shall be additional Debt hereunder secured by the Property,
and may be funded, if Lender so elects, after prior written notice to Borrower
if no Event of Default exists, by Lender paying the same to the appropriate
persons and thus making an advance on Borrower's behalf. Other than in
connection with a securitization, Borrower further acknowledges and confirms
that it shall be responsible for the payment of all costs of reappraisal of the
Property or any part thereof, whether required by law, regulation, Lender or any
governmental or quasi-governmental authority. Wherever it is provided for herein
that Borrower pay any costs and expenses, such costs and expenses shall include
all reasonable out of pocket legal fees and disbursements of Lender.
ARTICLE 20 - CERTAIN DEFINITIONS, HEADINGS, RULE OF CONSTRUCTION
SECTION 20.1 GENERAL DEFINITIONS. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Security Instrument may be used interchangeably in singular or plural
form and the word "Borrower" shall mean "individually and collectively, jointly
and severally, each Borrower (if more than one) and any subsequent owner or
owners of the Property or any part thereof or any interest therein and Borrower
in its capacity as debtor-in-possession after the commencement of a proceeding
under the Bankruptcy Code; "Lender" shall mean "Lender and any subsequent holder
of the Note," the word "Note" shall mean "the Note and any other evidence of
indebtedness secured by this Security Instrument," the word "person" shall
include an individual, corporation, limited liability company, partnership,
trust, unincorporated association, government, governmental authority, and any
other entity, the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees" and "counsel fees" shall
include any and all attorneys', paralegal and law clerk fees and disbursements,
including fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender (a) in protecting its interest in the Property, the
Leases and the Rents, (b) relating to or arising out of any lawsuit or
proceeding brought by or against Lender in any court or other forum (including
actions or proceedings brought by or on behalf of Borrower's bankruptcy estate
or any guarantor or indemnitor) relating to the Loan or the Loan Documents, or
(c) in enforcing its rights under this Security Instrument. No provision herein
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or in any other Loan Document referring to the continuance of an Event of
Default shall be interpreted as implying that Borrower or any other party has
any right to cure an Event of Default and an Event of Default shall continue
unless and until it is expressly waived in writing by Lender. With respect to
any reference herein or in any other Loan Document to "reasonable out of pocket"
expenses, costs, charges or fees: (i) charges of rating agencies, governmental
entities and other third parties that are outside the control of Lender shall
not be subject to a reasonableness standard; and (ii) customary fees charged by
a loan servicer shall be deemed to be out of pocket expenses.
SECTION 20.2 HEADINGS, ETC. The headings and captions of various
Sections of this Security Instrument are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.
SECTION 20.3 RULES OF CONSTRUCTION.
The following rules of construction shall be applicable for all
purposes of this Security Instrument and all documents or instruments
supplemental hereto, unless the context otherwise clearly requires:
(a) The terms "include," "including" and similar terms shall
be construed as if followed by the phrase "without being limited to";
(b) any pronoun used herein shall be deemed to cover all
genders, and words importing the singular number shall mean and include
the plural number, and vice versa;
(c) all captions to the Sections hereof are used for
convenience and reference only and in no way define, limit or describe
the scope or intent of, or in any way affect, this Security Instrument;
(d) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or";
(e) the words "hereof", "herein", "hereby", "hereunder", and
similar terms in this Security Instrument refer to this Security
Instrument as a whole and not to any particular provision or section of
this Security Instrument;
(f) an Event of Default shall "continue" or be "continuing"
until such Event of Default has been waived in writing by Lender;
(g) No inference in favor of or against any party shall be
drawn from the fact that such party has drafted any portion hereof or
any other Loan Document;
(h) The cover page (if any) of, all recitals set forth in, and
all Exhibits to, this Security Instrument are hereby incorporated
herein; and
(i) Wherever Lender's judgment, consent, approval or
discretion is required under this Security Instrument or any other Loan
Document for any matter or thing or Lender shall have an option,
election, or right of determination or any other power to decide any
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matter relating to the terms and conditions of this Security
Instrument, including any right to determine that something is
satisfactory or not ("DECISION POWER"), such Decision Power shall be
exercised in the sole and absolute discretion of Lender unless
otherwise expressly stated to be reasonably exercised or not to be
unreasonably withheld or conditioned. Such Decision Power and each
other power granted to Lender upon this Security Instrument or any
other Loan Document may be exercised by Lender or by any authorized
agent of Lender (including any servicer and/or attorney-in-fact), and
Borrower hereby expressly agrees to recognize the exercise of such
Decision Power by such authorized agent.
ARTICLE 21 - MISCELLANEOUS
SECTION 21.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, including the provisions of this Section, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Borrower or Lender, but only by an
agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought, and the parties hereby: (a) expressly agree that it shall not be
reasonable for any of them to rely on any alleged, non-written amendment to this
Security Instrument; (b) irrevocably waive any and all right to enforce any
alleged, non-written amendment to this Security Instrument; and (c) expressly
agree that it shall be beyond the scope of authority (apparent or otherwise) for
any of their respective agents to agree to any non-written modification of this
Security Instrument.
SECTION 21.2 LIABILITY. If Borrower consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint and
several. Under no circumstances whatsoever shall Borrower or Lender have any
liability for consequential or incidental damages under this Security Instrument
or any other Loan Document except as expressly provided in the Loan Documents.
Lender shall have no duties or responsibilities except those expressly set forth
in this Security Instrument and the other Loan Documents. Neither Lender nor any
of its officer, directors, employees or agents shall be liable for any action
taken or omitted by them as such hereunder or in connection herewith, unless
caused by their gross negligence or willful misconduct. This Security Instrument
shall be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.
SECTION 21.3 DUPLICATE ORIGINALS; COUNTERPARTS. This Security
Instrument may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Security Instrument
may be executed in several counterparts, each of which counterpart shall be
deemed an original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto to execute this
Security Instrument, or any counterpart hereof, shall not relieve the other
signatories from their obligations hereunder.
SECTION 21.4 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
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such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's obligations hereunder, under the Note and any other Loan
Document, and the performance and discharge of the obligations.
SECTION 21.5 ENTIRE AGREEMENT. The Note, this Security Instrument and
any other Loan Document constitute the entire understanding and agreement
between Borrower and Lender with respect to the transactions arising in
connection with the Debt and supersede all prior written or oral understandings
and agreements between Borrower and Lender with respect thereto. Borrower hereby
acknowledges that, except as incorporated in writing in the Note, this Security
Instrument and any other Loan Document, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, this Security
Instrument and any other Loan Document.
SECTION 21.6 LENDER'S RIGHT TO SUBORDINATE. Lender may, at its
election, subordinate the lien of this Security Instrument and any or all of
Lender's rights, titles or interests hereunder to any lien, leasehold interest,
easement, plat, covenant, restriction, dedication, encumbrance or other matter
affecting the Property or any part thereof by recording a written declaration of
such subordination in the office of the register or recorder of deeds or similar
filing officer for the county in which the Land is located. If foreclosure sale
occurs hereunder after the recording of any such declaration, the title received
by the purchaser at such sale shall be subject to the matters specified in such
declaration, but such declaration shall not otherwise affect the validity or
terms of this Security Instrument or any other Loan Document or the priority of
any lien or security interest created hereunder or under any other Loan
Document. Without limitation of the foregoing, Lender shall have the right to
unilaterally modify any Loan Document to release any lien on any portion of the
Property.
ARTICLE 22 - LOCAL LAW PROVISIONS
SECTION 22.1 INCONSISTENCIES. In the event of any inconsistencies
between the terms and conditions of this Article 22 and the other provisions of
this Security Instrument (other than the terms and provisions of Article 23),
the terms and conditions of this Article 22 shall control and be binding.
SECTION 22.2 MATURITY DATE. The maturity date of the principal sum of
the Note secured by this Security Instrument is May 1, 2015.
SECTION 22.3 ADVANCES BY LENDER SECURED. Without limiting the
generality of any other provisions of this Security Instrument, during the
continuance of an Event of Default hereunder, Lender may, but without any
obligation to do so, make advances with respect to the Property for Taxes, Other
Charges, Insurance Premiums or costs incurred for the protection of the
Property, and any such advances shall be secured by this Security Instrument.
SECTION 22.4 OPEN-END MORTGAGE. Borrower and Lender intend that this
Security Instrument comply with Division (A) of Ohio Revised Code ss. 5301.232.
In that regard, Borrower and Lender intend that, in addition to any other debtor
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obligations secured hereby, this Security Instrument shall secure unpaid
balances of loan advances made after this Security Instrument is delivered to
the Recorder for record. The maximum amount of unpaid loan indebtedness secured
hereby, exclusive of interest thereon, which may be outstanding at any time is
$2,080,000.00.
ARTICLE 23 - ADDITIONAL OR SPECIAL PROVISIONS OR MODIFICATIONS
SECTION 23.1 INCONSISTENCIES. In the event of any inconsistencies
between the terms and conditions of this Article 23 and the other provisions of
this Security Instrument, the terms and conditions of this Article 23 shall
control and be binding.
SECTION 23.2 INSURANCE ESCROW FUND. So long as Borrower maintains
blanket policies of insurance in accordance with Section 3.3 hereof, the
provisions of Section 3.5 hereof with regard to the Monthly Insurance Impound
shall not be applicable, until and unless Lender elects to apply such provisions
following (i) the issuance by any insurer or its agent of any notice of
cancellation, termination, or lapse of any insurance coverage required under
Section 3.3 hereof, (ii) any cancellation, termination, or lapse of any
insurance coverage required under Section 3.3 hereof whether or not any notice
is issued, (iii) Lender having not received from Borrower evidence of insurance
coverages as required by and in accordance with the terms of Section 3.3 hereof,
or (iv) during the continuance of any Event of Default.
SECTION 23.3 TAX IMPOUND ACCOUNT. Lender agrees to waive the
requirement of the Monthly Tax Impound provided in Section 3.5 so long as the
following conditions are satisfied at all times as determined by Lender in its
sole discretion: (i) Cedar Shopping Centers, Inc. maintains a shareholder equity
level of at least $100,000,000.00; (ii) no Event of Default exists; (iii)
Borrower furnishes evidence to Lender of timely payment on or prior to due date
at least thirty (30) Business Days prior to the due dates of all such Taxes. If
Borrower shall fail to satisfy any of the foregoing requirements, Lender may by
written notice to Borrower, reinstate the provisions of Section 3.5 relating to
an Monthly Tax Impound.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed by
Borrower the day and year first above written.
BORROWER: CEDAR-CLYDE LLC,
a Delaware limited liability company
By: Cedar Shopping Centers Partnership, L.P., a
Delaware limited partnership, its member
By: Cedar Shopping Centers, Inc., a
Maryland corporation, its general
partner
By: /s/ Brenda J. Walker
--------------------
Name: Brenda J. Walker
Title: Vice President
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State of New York
County of New York
The foregoing instrument was acknowledged before me this April __, 2005
by Brenda J. Walker of Cedar Shopping Centers, Inc., a Maryland corporation, the
general partner of Cedar Shopping Centers Partnership, L.P., a Delaware limited
partnership, the sole member of Cedar-Clyde LLC, a Delaware limited liability
company, on behalf of the said entities.
___________________________________________
Notary Public
This Instrument Prepared By:
Maribeth S. McMahon
POLSINELLI SHALTON WELTE SUELTHAUS
700 W. 47th Street, Suite 1000
Kansas City, Missouri 64112
(816)753-1000
FAX (816) 753-1536
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EXHIBIT A
(Description of Land)
ALL of that certain lot, piece or parcel of land, with the buildings
and improvements thereon, situate, lying and being