Securities and Exchange Commission
Washington, D.C. 20549
_________________________
FORM 8-K
_________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 31, 1998
CV REIT, INC.
(Exact name of registrant as specified in its charter.)
Delaware 1-8073 59-0950354
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification
Incorporation) Number)
100 Century Boulevard, West Palm Beach, Florida 33417
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code: (407) 640-3155.
Item 5. Other Events.
Pursuant to the terms of a Loan and Credit Facility
Agreement dated as of March 31, 1998 (the "Loan Agreement"),
Montgomery CV Realty L.P. entered into a $100,000,000 credit
facility (the "Facility") with GMAC Commercial Mortgage
Corporation ("GMAC"). Draws under the Facility will be used to
fund acquisitions, expansions, renovations, financings and
refinancings of real estate, including reimbursement of equity
advances for any such purposes, and will require compliance with
certain performance covenants. Loans under the Facility will
bear interest at a floating rate equal to the one month LIBOR
rate plus 1.75%, initially 7.43750%.
In connection with the Loan Agreement and the initial draw
under the Facility: (a) Montgomery CV Realty L.P. delivered a
$7,650,000 Promissory Note to GMAC; (b) Century Plaza Associate,
L.P., of whom Montgomery CV Realty L.P. is the sole member of its
sole general partner, will deliver a Mortgage and Security
Agreement to GMAC pursuant to which it will grant GMAC a first
mortgage on Century Plaza Shopping Center, located in the City of
Deerfield Beach, Broward County, Florida (the "Property") and a
security interest in all of its personal property located on the
Property; and (c) the Registrant will guarantee the initial draw
and all future draws under the Facility pursuant to a Guaranty
and Suretyship Agreement. The Registrant is the one hundred
percent (100%) beneficial owner of Montgomery CV Realty Trust,
which in turn holds the general partner interest in and
approximately eighty-two percent (82%) of the limited partner
interests in Montgomery CV Realty L.P.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
5.1 Loan and Credit Facility Agreement dated as of March 31,
1998 by and between Montgomery CV Realty L.P. as Borrower,
Century Plaza Associates, L.P. and CV Reit, Inc., as
guarantors, and GMAC Commercial Mortgage Corporation, as
Lender.
5.2 $7,650,000 Promissory Note dated as of April 9, 1998 from
Montgomery CV Realty L.P. to GMAC Commercial Mortgage
Corporation.
5.3 Mortgage and Security Agreement dated as of April 9, 1998 by
Century Plaza Associates, L.P. to GMAC Commercial Mortgage
Corporation.
5.4 Guaranty and Suretyship Agreement dated as of April 9, 1998
by CV Reit, Inc. to GMAC Commercial Mortgage Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
CV REIT, INC.
(Registrant)
Date: April 15, 1998 /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
5.1 Loan and Credit Facility Agreement dated as of March 31,
1998 by and between Montgomery CV Realty L.P. as Borrower,
Century Plaza Associates, L.P. and CV Reit, Inc., as
guarantors, and GMAC Commercial Mortgage Corporation, as
Lender.
5.2 $7,650,000 Promissory Note dated as of April 9, 1998 from
Montgomery CV Realty L.P. to GMAC Commercial Mortgage
Corporation.
5.3 Mortgage and Security Agreement dated as of April 9, 1998 by
Century Plaza Associates, L.P. to GMAC Commercial Mortgage
Corporation.
5.4 Guaranty and Suretyship Agreement dated as of April 9, 1998
by CV Reit, Inc. to GMAC Commercial Mortgage Corporation.
EXHIBIT 5.1
LOAN AND CREDIT FACILITY AGREEMENT
by and between
MONTGOMERY CV REALTY L.P.
(Borrower),
CENTURY PLAZA ASSOCIATES, L.P.
and
CV REIT, INC.
(Guarantors)
and
GMAC COMMERCIAL MORTGAGE CORPORATION
(Lender)
Date: March 31, 1998
TABLE OF CONTENTS
ARTICLE 1 CERTAIN DEFINITIONS . . . . . . . . . . . . . . . .1
ARTICLE 2 LOANS . . . . . . . . . . . . . . . . . . . . . . .9
2.1 Loans. . . . . . . . . . . . . . . . . . . . . . . . . .9
2.2 Interest . . . . . . . . . . ... . . . . . . . . . . . 10
2.3 Default Interest . . . . . . . . . . . . . . . . . . . 10
2.4 Payments . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Maturity Date. . . . . . . . . . . . . . . . . . . . . 11
2.6 Increased Cost and Reduced Return. . . . . . . . . . . 12
2.7 No Assignment/Due on Sale. . . . . . . . . . . . . . . 12
2.8 Loans After Default. . . . . . . . . . . . . . . . . . 13
2.9 Funding of Facility. . . . . . . . . . . . . . . . . . 13
2.10 Periodic Review. . . . . . . . . . . . . . . . . . . . 14
2.11 Substitution of Projects . . . . . . . . . . . . . . . 14
2.12 Release of Projects. . . . . . . . . . . . . . . . . . 15
ARTICLE 3 CRITERIA AND CONDITIONS . . . . . . . . . . . . . 15
3.1 Loan Criteria. . . . . . . . . . . . . . . . . . . . . 15
3.2 New Loan Conditions. . . . . . . . . . . . . . . . . . 16
3.3 General Conditions . . . . . . . . . . . . . . . . . . 18
3.4 Procedure. . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 19
4.1 Inspections. . . . . . . . . . . . . . . . . . . . . . 19
4.2 Existence, Properties, Etc . . . . . . . . . . . . . . 19
4.3 Payment of Indebtedness, Taxes, Etc. . . . . . . . . . 20
4.4 Financial Statements/Project Reports . . . . . . . . . 20
4.5 Notices. . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Payment of Costs and Expenses. . . . . . . . . . . . . 22
4.7 Security Interest. . . . . . . . . . . . . . . . . . . 23
4.8 Further Assurances . . . . . . . . . . . . . . . . . . 23
4.9 Personalty and Fixtures. . . . . . . . . . . . . . . . 23
4.10 Appraisal. . . . . . . . . . . . . . . . . . . . . . . 23
4.11 Insurance. . . . . . . . . . . . . . . . . . . . . . . 23
4.12 Management Agreement . . . . . . . . . . . . . . . . . 24
4.13 REIT Status. . . . . . . . . . . . . . . . . . . . . . 24
4.14 Net Worth. . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 5 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . 24
5.1 Additional Financing . . . . . . . . . . . . . . . . . 24
5.2 No Waste . . . . . . . . . . . . . . . . . . . . . . . 24
5.3 Negative Pledge. . . . . . . . . . . . . . . . . . . . 25
5.4 Consolidations, Mergers and Acquisitions . . . . . . . 25
5.5 Judgments. . . . . . . . . . . . . . . . . . . . . . . 26
5.6 Use of a Project . . . . . . . . . . . . . . . . . . . 26
5.7 Changes in Ownership/Control.. . . . . . . . . . . . . 26
ARTICLE 6 RESERVES . . . . . . . . . . . . . . . . . . . . 26
6.1 Establishment of Reserves. . . . . . . . . . . . . . . 26
6.2 Reserves as Additional Security and
Source of Repayment. ............................. . 26
6.3 Deposits . . . . . . . . . . . . . . . . . . . . . . . 27
6.4 Disbursements. . . . . . . . . . . . . . . . . . . . . 27
6.5 Use of Insurance Reserve.. . . . . . . . . . . . . . . 27
ARTICLE 7 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 27
7.1 Organization, Power, Etc . . . . . . . . . . . . . . . 27
7.2 Authorization of Borrowing, Etc. . . . . . . . . . . . 28
7.3 Governmental Approval. . . . . . . . . . . . . . . . . 28
7.4 No Material Changes, Etc . . . . . . . . . . . . . . . 28
7.5 Permits. . . . . . . . . . . . . . . . . . . . . . . . 29
7.6 Litigation . . . . . . . . . . . . . . . . . . . . . . 29
7.7 Compliance With Other Instruments, Laws, Etc.. . . . . 29
7.8 Agreements . . . . . . . . . . . . . . . . . . . . . . 29
7.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 29
7.10 Compliance with Law. . . . . . . . . . . . . . . . . . 29
7.11 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . 30
7.12 Financial Statements . . . . . . . . . . . . . . . . . 30
7.13 Place of Business. . . . . . . . . . . . . . . . . . . 30
7.14 Brokerage Commission . . . . . . . . . . . . . . . . . 30
7.15 Utilities. . . . . . . . . . . . . . . . . . . . . . . 30
7.16 Access . . . . . . . . . . . . . . . . . . . . . . . . 30
7.17 Supporting Documents . . . . . . . . . . . . . . . . . 30
7.18 Title to Projects. . . . . . . . . . . . . . . . . . . 31
7.19 Title to Collateral Notes. . . . . . . . . . . . . . . 31
7.20 Leases . . . . . . . . . . . . . . . . . . . . . . . . 31
7.21 Compliance with Environmental Laws . . . . . . . . . . 31
ARTICLE 8 EVENTS OF DEFAULT AND CERTAIN REMEDIES. . . . . . 32
8.1 Default. . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 Cross Default and Cross Collateralization. . . . . . . 33
8.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 Remedies Cumulative. . . . . . . . . . . . . . . . . . 34
ARTICLE 9 LENDER'S DISCLAIMERS - BORROWER'S INDEMNITIES . . 34
9.1 No Obligation by Lender to Operate . . . . . . . . . . 34
9.2 Indemnity by Borrower. . . . . . . . . . . . . . . . . 35
9.3 Relationship of Parties. . . . . . . . . . . . . . . . 36
9.4 Liability of Lender. . . . . . . . . . . . . . . . . . 36
ARTICLE 10 MISCELLANEOUS . . . . . . . . . . . . . . . . . . 36
10.1 Amendment; Waiver. . . . . . . . . . . . . . . . . . . 36
10.2 Severability . . . . . . . . . . . . . . . . . . . . . 37
10.3 Estoppel Certificates. . . . . . . . . . . . . . . . . 37
10.4 Governing Law; Jurisdiction and Venue. . . . . . . . . 37
10.5 Headings . . . . . . . . . . . . . . . . . . . . . . . 37
10.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . 37
10.7 Publicity. . . . . . . . . . . . . . . . . . . . . . . 39
10.8 Survival of Agreement. . . . . . . . . . . . . . . . . 39
10.9 Waiver of Jury Trial.. . . . . . . . . . . . . . . . . 39
10.10 Controlling Document. . . . . . . . . . . . . . . . 40
10.11 Successors. . . . . . . . . . . . . . . . . . . . . 40
10.12 Time.. . . . . . . . . . . . . . . . . . . . . . . . 40
10.13 Changes. . . . . . . . . . . . . . . . . . . . . . . 40
10.14 Counterparts. . . . . . . . . . . . . . . . . . . . 40
10.15 Recitals. . . . . . . . . . . . . . . . . . . . . . 40
LIST OF LOAN SCHEDULES . . . . . . . . . . . . . . . . . . . . 44
List of Exhibits
Exhibits
List of Loan Schedules
Loan Schedules<PAGE>
LOAN AND CREDIT FACILITY AGREEMENT
THIS LOAN AND CREDIT FACILITY AGREEMENT (the "Agreement")
is made as of the 31st day of March, 1998, by and between
MONTGOMERY CV REALTY L.P., a Delaware limited partnership
("Borrower"), CENTURY PLAZA ASSOCIATES, L.P., a Delaware limited
partnership, CV REIT, INC., a Delaware corporation (each, a
"Guarantor" and collectively, "Guarantors") and GMAC COMMERCIAL
MORTGAGE CORPORATION, a California corporation ("Lender").
PRELIMINARY STATEMENTS
a. Borrower has requested Lender to make loans to Borrower
or affiliates of the Borrower with a maximum
outstanding principal amount of One Hundred Million
Dollars ($100,000,000) and Lender has agreed to do so
subject to the terms and conditions set forth herein
and in the other Facility Loan Documents (as defined
below).
b. To secure the Loans and Borrower's obligations under
this Agreement and the Facility Loan Documents,
Borrower has executed and delivered or agreed to
execute and deliver to Lender the Mortgages, as defined
below.
NOW, THEREFORE, in consideration of the premises and the
mutual promises herein contained, the parties intending to be
legally bound agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
The following terms have the following meanings in this
Agreement:
1.1 "Affiliate" shall mean, with respect to any person or
entity, (i) each person or entity that controls, is controlled by
or is under common control with such person or entity, and (ii)
each of such person's or entity's officers, directors, members,
joint venturers and partners.
1.2 "Annual Administration Fee" shall mean $25,000 per
Loan Year.
1.3 "Appraisal" shall mean an appraisal of any Project or
Collateral Note required or ordered by Lender from time to time,
at Borrower's sole cost and expense, in form and substance
acceptable to Lender.
1.4 "Appraised Value" shall have the meaning set forth in
Section 3.1 below.
1.5 "Assignment of Leases" shall mean the Assignment of
Landlord's Interest in Leases and Rents executed by Borrower and
delivered to Lender for each Loan, in form and substance
acceptable to Lender.
1.6 "Assignment of Service Contracts" shall mean the
Collateral Assignment of Maintenance, Management and Service
Contracts executed by Borrower and delivered to Lender for each
Loan, in form and substance acceptable to Lender.
1.7 "Borrower" shall be the entity defined as the
Borrower in the introductory paragraph of this Agreement, or
affiliates of such Borrower. If Borrower is more than one
entity, Borrowers shall have joint and several liability
hereunder.
1.8 "Building" shall mean that certain existing shopping
center complex or other commercial building described in the Loan
Schedule for each Loan.
1.9 "Collateral Note" or "Collateral Notes" shall mean
the note or notes receivable which Borrower pledges as collateral
for a Loan.
1.10 "Commitment Fee" shall mean one percent (1%) of the
maximum Loan amounts available under this Agreement, i.e.,
$1,000,000.
1.11 "Completion/Repair Reserve" shall have the meaning
set forth in Section 6.1.
1.12 "Completion/Repair Agreement" shall mean that certain
Completion/Repair and Security Agreement given by Borrower to
Lender for each Loan.
1.13 "Consulting Engineer" shall mean the engineer, if
any, designated by Lender from time to time with respect to each
Project.
1.14 "Debt Service" shall mean the payments of interest
due under this Agreement.
1.15 "Debt Service Coverage Ratio" shall mean a ratio
derived by dividing Net Operating Income for a twelve-month
period by debt service for a twelve-month period as set forth in
Section 2.9(c).
1.16 "Default Rate" shall have the meaning set forth in
Section 2.3.
1.17 "Environmental Indemnity Agreement" shall mean the
Environmental Indemnity Agreement executed by Borrower and
delivered to Lender for each Loan, in form and substance
acceptable to Lender.
1.18 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, and the regulations promulgated thereunder,
as the same may be amended from time to time.
1.19 "Event of Default" shall have the meaning given to it
in Article 8 below.
1.20 "Exit Fee" shall mean a fee of 1% of the Outstanding
Facility Amount that is being repaid, provided,however, that the
Exit Fee shall be waived (a) dollar for dollar to the extent that
Lender has originated up to $40,000,000 of permanent financing at
market rates for best borrowers for an associated entity of
Borrower, and (b) entirely if the Lender has originated
$40,000,000 or more of permanent financing at market rates for
best borrowers for an associated entity of the Borrower, in which
case, any Exit Fee previously paid to the Lender shall be
refunded to the Borrower.
1.21 "Facility Loan Documents" shall mean this Agreement
and for each Loan, the Note, the Mortgage, the Assignment of
Leases, the Assignment of Service Contracts, the Guaranty, the
Environmental Indemnity Agreement, the Lock Box Agreement and all
other documents, instruments and agreements now existing or
hereafter entered into by Borrower or any other person with
Lender evidencing or securing each of the Loans, as the same may
be amended from time to time. The Facility Loan Documents
executed and delivered by Borrower for each Loan are listed on
the Loan Schedule for each Loan.
1.22 "Final Maturity Date" shall have the meaning set
forth in Section 2.5.
1.23 "Governmental Requirements" shall mean all statutes,
laws, ordinances, rules, regulations, orders, writs, injunctions
or decrees of any governmental authority (whether federal, state
or local) applicable to Borrower or any Project, whether now in
effect or hereafter enacted.
1.24 "Guaranty" shall mean the Guaranty and Surety
Agreement executed by each Guarantor and delivered to Lender for
each Loan, in form and substance acceptable to Lender.
1.25 "Initial Maturity Date" shall have the meaning set
forth in Section 2.5.
1.26 "Improvements" shall mean the Building and other
improvements described in the Loan Schedule for each Loan.
1.27 "Insurance Reserve" shall mean an amount for each
Project that is equal to 6 months of the premiums that Lender
would incur in order to purchase the insurance required by this
Agreement and the Mortgage.
1.28 "Interest Payment Date" shall have the meaning set
forth in Section 2.4(a).
1.29 "Interest Rate" shall have the meaning set forth in
Section 2.2.
1.30 "Land" shall mean the real property described in the
Loan Schedule for each Loan which is the real property covered by
a Mortgage.
1.31 "LIBOR Rate" shall have the meaning set forth in
Section 2.2.
1.32 "Lease" or "Leases" shall mean the leases of space in
each Project acceptable to Lender or otherwise permitted pursuant
to any Facility Loan Document.
1.33 "Loans" shall mean the aggregate outstanding
principal amount advanced under this Agreement to Borrower, which
shall not exceed $100,000,000 at any one time. A "Loan" shall
mean any individual advance of a portion of the outstanding
principal amount advanced pursuant to the terms of this Agreement
which is secured by a separate Project or Projects or Collateral
Note or Collateral Notes.
1.34 "Loan Schedule" shall mean each schedule attached to
this Agreement, numbered 1-1, 2-1, 3-1, etc., for each Loan which
Lender has committed to make, setting forth the amount of the
Loan, description of the Land, Building and Improvements, the
types and amounts of Reserves required, and the Facility Loan
Documents.
1.35 "Loan to Value Ratio" shall mean a ratio derived by
dividing the Outstanding Facility Amount by the aggregate
Appraised Value of the Project or Projects, the appraised value
of the Collateral Note or Collateral Notes, or both, securing the
Loans.
1.36 "Lock Box Agreement" shall mean the lock box
agreement between Borrower, any Affiliate and Lender for each
Loan, granting to Lender the right to cause Tenants to pay the
rents and other sums due from Tenant directly to an account
controlled by Lender upon an Event of Default.
1.37 "Loan Year" shall be each successive twelve calendar
months following the first day of the month immediately
succeeding the date of this Agreement.
1.38 "Maximum Outstanding Facility Amount" shall mean the
maximum amount that can be outstanding at any one time hereunder
as set forth in Section 2.9(b)(i), but in no event more than
$100,000,000.
1.39 "Mortgage" or "Mortgages" shall mean the mortgages or
deeds of trust granted by Borrower for the benefit of Lender for
each Loan, granting to Lender a first priority lien on the Land,
the Building and the Improvements, and granting a security
interest in the Personal Property relating to each Project, and
recorded among the real property records of the jurisdiction in
which the Land is located, as such Mortgage or Mortgages may be
amended from time to time, in form and substance acceptable to
Lender.
1.40 "Net Operating Income" shall mean the gross proceeds
in whatever form or nature for, arising in connection with
ownership of real property and Collateral Notes pledged as
security for a Loan less Operating Expenses, as determined by
Lender.
1.41 "Newly Acquired Project" shall mean a Project being
acquired by Borrower with a Loan.
1.42 "Note" or "Notes" shall mean the promissory notes
from Borrower made payable to the order of Lender for each Loan
in the principal amount set forth on the Loan Schedule for
each Loan, such Notes to be in form and substance acceptable to
Lender.
1.43 "Operating Expenses" shall mean all expenses actually
incurred by Borrower or its property manager with respect to the
ownership, operation, maintenance, repair, leasing and occupancy
of the Projects, determined on the basis of sound accrual basis
accounting practices applied on a consistent basis, including but
not limited to any and all of the following:
(a) general real estate taxes, including funds
deposited in a reserve account not otherwise accounted for under
the accrual method of accounting or not funded by a Loan under
this Agreement, at Lender's request, so long as such funds are
only included at the time of deposit into the account and not at
the time of payment of such taxes;
(b) special assessments or similar charges;
(c) personal property taxes;
(d) costs of utilities, air conditioning and heating
for the Projects, not paid directly by any tenants of the
Projects;
(e) maintenance and repair costs of a non-capital
nature;
(f) operating and management expenses and fees;
(g) premiums payable for insurance carried on or
with respect to the Projects, including funds deposited in a
reserve account not otherwise accounted for under the accrual
method of accounting or not funded by a Loan under this
Agreement, at Lender's request, so long as such funds are only
included at the time of deposit into the account and not at the
time of payment of such premiums;
(h) costs, including leasing commissions,
advertising and promotion costs, to obtain any new Lease or to
extend or renew any existing Lease, and the costs of work
performed to ready tenant space in the Project for new or renewal
occupancy under any Lease, such costs to be amortized over the
primary term of the Lease, together with any exercised renewal
options, to the extent such costs are not counted as an expense
(but excluding any costs for replacements or improvements of a
capital nature);
(i) accounting and audit fees and costs, attorneys'
fees, and other administrative and general expenses and
disbursements, in each case incurred by Borrower in connection
with the operation and management of the Project; and
(j) any portion of gross proceeds approved by Lender
which is deposited during the period in respect of which
Operating Expenses are being determined in a reserve account
for future maintenance and repair costs of the Project not
otherwise accounted for under the accrual method of accounting or
not funded by a Loan under this Agreement (but excluding any
reserves for replacements or improvements of a capital nature).
Notwithstanding anything contained herein, Operating
Expenses shall not include:
(a) foreign, U.S., state and local income taxes,
franchise taxes or other taxes based on income;
(b) depreciation, amortization and any other
non-cash deduction of Borrower for income tax purposes;
(c) payment of principal or interest on or charges
related to any loan of Borrower;
(d) any compensation or fees paid to managing
agents, leasing agents, brokers or other third parties, whether
or not Affiliates of Borrower, which are in excess of the
reasonable and necessary compensation or fees which would be
payable in arms' length transactions for similar services to
third parties in the local geographic area in which such Project
is located (it being understood that management fees equal to or
less than five percent (5%) of gross proceeds actually received
during the period for which such fee is computed are deemed to be
reasonable);
(e) management fees paid to Borrower or an Affiliate
of Borrower exceeding five percent (5%) of gross proceeds
actually received during the period for which such fee is
computed;
(f) distributions to shareholders, partners, members
or other beneficial interests of the Borrower;
(g) any fees attributable to Borrower (including
legal, audit and other ownership expenses) not directly related
to the operation of the Project;
(h) expenses not incurred for the period in question
which did not result in cash disbursements during said period;
(i) costs and expenses relating to the sale or
transfer of all or a part of the Project or any financing;
(j) any improvements to the Project of a capital
nature (as determined in accordance with generally accepted
accounting principles); and
(k) any expenses paid out of any reserve account, as
to which the deposit in such reserve account has already been
included within Operating Expenses.
1.44 "Opinion of Counsel" shall mean an opinion letter
from Borrower's counsel to and for the benefit of Lender and
Lender's counsel, regarding Borrower, the Loan, the
authorization, validity, and enforceability of the Facility Loan
Documents, the authority of Borrower to transact business in the
jurisdiction in which the Project is located and such other
matters as Lender may reasonably request, in form and substance
acceptable to Lender.
1.45 "Outstanding Facility Amount" shall mean the
aggregate amount advanced to Borrower but unpaid in accordance
with the terms and conditions of this Agreement.
1.46 "Permitted Encumbrances" shall mean (i) the lien and
security interest of Lender arising under this Agreement, under
the Mortgage, or under any other Facility Loan Document;
(ii) such matters as are expressly stated as exceptions to title
in any Title Insurance Policy accepted by Lender; (iii) liens for
taxes, assessments, or governmental charges or levies not yet
due and payable, or being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted, provided
that a reserve or other appropriate provision as may be
required by generally accepted accounting principles shall have
been made therefor and no foreclosure, distraint, sale or other
similar proceedings shall have been commenced; (iv) Leases;
and (v) such other matters affecting the Project as Lender may
accept in writing from time to time in Lender's sole discretion.
1.47 "Personal Property" shall mean all of Borrower's now
owned and hereafter acquired personal property and fixtures
located on the Land, in the Building or in the Improvements, or
obtained or held in connection with the Land, Improvements, or
the Loan, regardless of where such personalty is located,
including, but not by way of limitation, all goods, fixtures,
equipment, inventory, products of inventory, accounts, contract
rights, leases, security deposits, letters of credit, proceeds of
letters of credit, chattel paper, general intangibles and
instruments, and all cash and non-cash proceeds thereof,
including but not limited to insurance proceeds.
1.48 "Project(s)" shall mean, for each Loan, the Land, the
Building, Improvements and the Personal Property.
1.49 "Replacement Reserve Agreement" shall mean the
Replacement Reserve and Security Agreement between Borrower and
Lender for each Loan.
1.50 "Reserves" shall mean the Completion/Repair Reserve,
the TI/Leasing Commissions Reserve and the Replacement Reserve
(as defined in Section 6.1).
1.51 "SEC" shall mean the Securities and Exchange
Commission.
1.52 "Supporting Documents" shall mean (i) resolutions or
authorizations of the members of or board of directors of
Borrower and Guarantors, authorizing the execution, delivery and
performance of this Agreement, the borrowing hereunder and the
Facility Loan Documents; (ii) a certificate of Borrower and
Guarantors as to authenticity and completeness of the
organizational documents of Borrower and Guarantors attached
thereto, and as to the incumbency and signatures of the
authorized agent or officer of Borrower and Guarantors
signing the Facility Loan Documents; (iii) a certificate of the
Secretary of State from the state of formation as to the good
standing of Borrower and Guarantors, and documents on file; and
(iv) such additional organizational documents as Lender or
counsel to Lender may reasonably request.
1.53 "Survey" shall mean a current, as-built survey
prepared at Borrower's expense in accordance with the survey
requirements previously supplied to Borrower by Lender, by a
licensed surveyor who shall certify thereon that the location of
the Improvements is in compliance with all set-back lines and
other applicable restrictions and such other certifications
as Lender may request.
1.54 "Tenant" shall refer to each tenant under a Lease.
1.55 "Tenant's Documents" shall mean as to each Lease, an
estoppel certificate and a subordination, non-disturbance and
attornment agreement, in form and substance acceptable to
Lender, executed at Lender's option by the Tenant (and any
subtenant or assignee of the Tenant) and delivered to Lender.
1.56 "TI/Leasing Commissions Agreement" shall mean that
certain Tenant Improvements/Leasing Commissions and Security
Agreement given by Borrower to Lender for each Loan.
1.57 "Title Company" shall mean Chicago Title Insurance
Company, which is the title insurance company that has issued or
will issue the title insurance commitment for a lender's
policy covering the Land and Improvements on the Land and shall
issue the Title Insurance Policy, and all necessary endorsements
thereto, or such other title insurance company as may be
acceptable to Lender.
1.58 "Title Insurance Policy" shall mean the mortgagee
policy of title insurance issued in standard ALTA 1970 (amended
1984) form by the Title Company, at Borrower's sole cost and
expense, to insure the lien and first priority of the Mortgage
with respect to the Land and Improvements on the Land, without
exceptions as to mechanics' liens or survey and with no other
exceptions objectionable to Lender.
1.59 "Total Acquisition Costs" shall mean the cost to
purchase a Newly Acquired Project, including commissions, due
diligence costs, transfer tax and all standard closing costs.
1.60 "Underwriting Fee" shall mean a fee of $3,500 for
each Project securing funds under this Agreement, payable at the
time of funding the advance, in immediately available funds;
provided however, the maximum cumulative Underwriting Fee
chargeable during the term of this Agreement shall not exceed
$35,000.
1.61 "Use of Proceeds" shall mean the use of any Loan
hereunder which satisfies Lender's underwriting standards in
Lender's discretion, predominantly in connection with the
acquisition, expansion and renovation, financing and refinancing
of real estate (including reimbursement of equity advanced by
Borrower for any of the aforementioned purposes).
In addition, any demand, approval or decision to be given
or made hereunder in "Lender's discretion" shall be given or made
in Lender's sole, absolute and subjective discretion.
ARTICLE 2
LOANS
2.1 Loans. Lender agrees, upon the terms and subject to
the conditions hereinafter set forth, to make the Loans to
Borrower in the maximum principal amount of One Hundred
Million Dollars ($100,000,000) and Borrower agrees to pay the
amounts due hereunder and otherwise comply with the terms and
conditions hereof. The proceeds of the Loans will be advanced
from time to time set forth herein until the last day of the
twenty-fourth full month following the date of execution of this
Agreement. Loans advanced under this Agreement are
non-revolving, provided, however, if Borrower purchases the
Project located in Chalfont, Pennsylvania and the two Projects
located in Marlton, New Jersey (the "Chalfont and Marlton
Projects") utilizing Loans advanced under this Agreement and the
Chalfont and Marlton Projects are permanently financed by Lender
within ninety (90) days following the date of this Agreement,
then the amount of the Loans advanced for the purchase of the
Chalfont and Marlton Projects and repaid by Borrower hereunder
may be re-advanced provided that the aggregate principal amount
outstanding at any one time shall not exceed One Hundred Million
Dollars ($100,000,000) and provided further that Borrower has
complied with all terms and conditions of this Agreement.
2.2 Interest. Interest on so much of the principal
balance of the Loans as may be outstanding from time to time
shall accrue at a floating rate equal to the one month LIBOR
Rate plus 1.75% (the "Interest Rate"). The "LIBOR Rate" shall be
the one month rate available to money center banks in the London
Interbank Market. The Interest Rate shall be computed on a
360-day year base and shall be adjusted as of the first day of
each month. The initial Interest Rate shall be set three
business days prior to the date hereof. In no event shall the
Interest Rate charged with respect to this Agreement exceed the
maximum rate of interest permitted by applicable law from time to
time. If LIBOR based rates are no longer available, the Interest
Rate shall be based on a comparable index and spread as set forth
in the Note.
The Borrower acknowledges that the Interest Rate
applicable to this Agreement shall be recalculated monthly and
shall change as the LIBOR Rate is from time to time adjusted.
2.3 Default Interest. Following an Event of Default
under this Agreement or the Facility Loan Documents, the
Outstanding Facility Amount, at the option of Lender, shall bear
interest at the one month LIBOR Rate plus 4% (the "Default
Rate"), from the date of the Event of Default until such Event of
Default is cured. The Default Rate shall also be recalculated
monthly and shall change as the LIBOR rate is from time to time
adjusted.
2.4 Payments.
(a) Interest accrued on so much of the Loans as may
be outstanding from time to time shall be due and payable by
Borrower monthly in arrears commencing on the date hereof and
continuing on the first day of each consecutive month prior to
the Maturity Date (an "Interest Payment Date"). The "Required
Monthly Payment" (as defined in the Notes) shall be adjusted and
computed monthly and sent to Borrower in accordance with the
provisions of the Notes.
(b) The Annual Administration Fee shall be due and
payable annually, in advance, within ten days of the first day of
each Loan Year commencing on the date hereof and continuing until
the Maturity Date; provided, however, the Annual Administration
Fee for any Loan Year shall not be required so long as the
minimum amount of each Loan is at least $2,500,000 and the number
of Loans is 15 or less.
(c) Borrower shall pay one-half, i.e. $500,000, of
the Commitment Fee on or before the date of this Agreement and
one-half, i.e. $500,000, of the Commitment Fee at the earlier of
(i) the first day of the nineteenth month after the date of this
Agreement or (ii) the next Interest Payment Date after any amount
over $50,000,000 has been advanced by Lender pursuant to this
Agreement. The parties recognize that, because Lender shall only
advance with respect to Collateral Notes, sixty-five (65%)
percent of appraised value, it may not be possible for Borrower
to borrow the full $100,000,000 maximum principal balance
permitted to be borrowed in accordance with Section 2.1 hereof,
notwithstanding that the Outstanding Facility Amount otherwise
meets the Loan to Value and Debt Service Coverage Criteria
contained in Section 3.1 hereof. If, on the last day of the
twenty-fourth full month following the date of execution of this
Agreement, the Outstanding Facility Amount is less than
$100,000,000 solely as a result of the maximum amount permitted
to be advanced as a result of calculating the Outstanding
Facility Amount utilizing the sixty-five (65%) percent ratio for
advances attributable to the Collateral Notes (the other Loan
Criteria having been met), then the portion of the Commitment Fee
that has been paid by Borrower to Lender allocable to the
difference between $100,000,000 and the Outstanding Facility
Amount (the "Reimbursed Amount") shall be reimbursed to Borrower;
provided, however, the Reimbursed Amount shall not exceed
$35,000.
(d) Borrower shall have the right to prepay in whole
or in part the Outstanding Facility Amount, on any Interest
Payment Date, provided that: (i) the prepayment shall be made
upon thirty days prior written notice to Lender; (ii) the
prepayment amount shall be at least one million dollars
($1,000,000), with any additional amount of such prepayment in
fifty thousand dollar ($50,000) increments; and (iii) Borrower
shall pay the Exit Fee.
2.5 Maturity Date. All outstanding and unpaid principal
of the Outstanding Facility Amount for Loans made during the
first twelve (12) months following the date of this Agreement,
and all accrued but unpaid interest thereon, unless sooner paid,
shall be due and payable in full on December 1, 2000 (the
"Initial Maturity Date"). All outstanding and unpaid principal
of the Outstanding Facility Amount for Loans made during the
second twelve (12) months following the date of this Agreement,
and all accrued but unpaid interest thereon, unless sooner paid,
shall be due and payable in full on April 1, 2001 (the "Final
Maturity Date").
2.6 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of
any applicable law, rule, or regulation, or any change therein,
or any change in the interpretation or administration thereof
by any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
compliance by the Lender with any request or directive (whether
or not having the force of law) of any such authority, central
bank, or comparable agency shall subject Lender to any tax, duty
or other charge with respect to the Loans, or shall change the
basis of taxation of payments to Lender of the principal of or
interest on the Loans or any other amounts due under the Notes or
this Agreement in respect of the Loans or its obligation to make
the Loans (except for changes in the rate of tax on the overall
net income of the Lender) and the result of the foregoing is to
increase the cost to Lender of making or maintaining the Loans,
or to reduce the amount of any sum received or receivable by
Lender under the Notes or this Loan Agreement with respect
thereto, by an amount reasonably deemed by the Lender to be
material, then, within fifteen days after demand by Lender,
Borrower shall pay to Lender such additional amount or amounts as
will compensate Lender for such increased cost or reduction.
(b) Lender will promptly notify Borrower of any
event of which it has knowledge, occurring after the date hereof,
which will entitle Lender to compensation pursuant to this
Section. A certificate of Lender claiming compensation under
this Section, setting forth the additional amount or amounts to
be paid to it hereunder and evidence reasonably substantiating
Lender's claim for compensation shall be conclusive in the
absence of manifest error. In determining such amount, Lender
may use any reasonable averaging and attribution methods.
(c) Nothing in this Section shall preclude Borrower
from repaying the Loans in full, including all accrued interest
and the Exit Fee, in lieu of paying such additional amount or
amounts as are required under this Section.
2.7 No Assignment/Due on Sale. This Agreement is
executed for the sole benefit of Lender as additional security
for the Loans, and no right to the benefits of this Agreement or
to any advances of the Loans shall be assignable in whole or in
part by Borrower except upon written consent by Lender. Other
than as provided in Section 2.11 and Section 2.12, Borrower
may not transfer or sell, directly, or indirectly, any or all of
the Projects or any interest therein. Lender, in its discretion,
may waive any condition or requirement hereof. Neither the Loans
nor any right to an advance hereunder shall be subject to the
process of any court upon legal action by or against the Borrower
or by or against anyone claiming by, through, or under it. No
Loan shall be made under this Agreement until Borrower complies
with each and every one of the provisions hereof; provided,
however, that nothing herein contained shall be considered as in
any way modifying, affecting, or subordinating the obligations
heretofore given or to be given by Borrower as security for the
Loans, and the same shall be and remain in full force, tenor, and
effect, this Agreement being intended only as evidence of and
additional security and protection for the Loans and to assure to
Lender that the proceeds of the Loans shall be used for the
permitted Use of Proceeds.
2.8 Loans After Default. Upon the occurrence and during
the continuation of an Event of Default under this Agreement,
whether or not declared to be such by Lender, Lender shall
have the right to withhold all further advances.
2.9 Funding of Facility.
(a) Advances. Each Loan under this Agreement shall
be a minimum amount of one million dollars ($1,000,000) with any
additional amounts of such Loan in fifty thousand
($50,000) dollar increments. No Loan under this Agreement shall
be permitted after the twenty-fourth (24th) month after the date
of this Agreement.
(b) Maximum Outstanding Facility Amount/Loan Amount.
(i) The Maximum Outstanding Facility Amount shall not
exceed the sum of (i) seventy-five (75%) percent of the Appraised
Value (as hereinafter defined) of the Projects which are
collateral for the Loans; (ii) sixty-five (65%) percent of the
appraised value of Collateral Notes pledged as collateral for the
Loans; and (iii) one hundred (100%) percent of the Reserves and
the Insurance Reserve.
(ii) Provided the Loan Criteria in Section 3.1 are met and
the Maximum Outstanding Facility Amount is not exceeded, for
Newly Acquired Projects, each Loan shall not exceed the higher of
(A) seventy-five (75%) percent of the Appraised Value, or (B) one
hundred (100%) percent of the Total Acquisition Costs.
(c) Debt Service Coverage/Outstanding Facility
Amount. The minimum Debt Service Coverage Ratio for the
Outstanding Facility Amount shall be 1.30. The Debt Service
Coverage Ratio will be recalculated quarterly or upon the making
of any Loan utilizing the average interest rate of the daily
closing yield of the benchmark 10-year Treasury Note as
published by the Wall Street Journal for the preceding three
months, plus 175 basis points using a 30-year amortization
schedule.
2.10 Periodic Review. The Loan to Value Ratio (described
in Section 3.1(b)) and Debt Service Coverage/Outstanding Facility
Amount (described in Section 2.9(c)) tests are maintenance tests
and will be certified by Borrower and verified by Lender in
addition to the Borrower's covenants contained in Section 2.9
above, (i) quarterly, no later than forty-five days following the
end of each calendar quarter (such certification shall include
schedules demonstrating such compliance), (ii) upon each request
for a Loan, and (iii) upon the substitution, addition or release
of collateral.
To the extent either the Loan to Value Ratio or the Debt
Service Coverage/Outstanding Facility Amount tests is not met at
any time during the term of this Agreement, the Borrower,
within ten (10) days of receiving notice from the Lender, must
identify additional collateral, and within forty-five (45) days
of such identification (the "45-day period") subject to the
Lender's due diligence review of such additional collateral, the
Borrower shall provide such additional collateral to Lender,
pursuant to the guidelines listed in Section 2.11 herein. If the
Lender notifies the Borrower during the 45-day period that the
offered additional collateral is not acceptable to the Lender,
then Borrower shall repay within thirty days thereof, without
penalty except for the reimbursement to Lender of any costs
actually incurred as a result of the prepayment, including
without limitation, the Exit Fee, on amounts then outstanding
under this Agreement an amount so that the tests described in
Section 2.9(c) and 3.1(b) are met. The Borrower shall pay all of
the Lender's costs and expenses for the due diligence review of
the identified additional collateral, whether or not such
additional collateral is accepted by the Lender.
2.11 Substitution of Projects. Borrower may substitute or
add other existing, operational commercial properties or
Collateral Notes in exchange for the release of Projects which
are not Newly Acquired Projects from its Mortgage, provided that
the criteria and conditions in Article 3 hereof have been
satisfied, such substitution or exchange is evidenced by
documents satisfactory to Lender and Lender's counsel and
immediately following the substitution or addition of such
Project, all covenants, terms and conditions of this Agreement
are met, including but not limited to the Debt Service
Coverage/Outstanding Facility Amount and Loan to Value Ratio
tests. The Debt Service Coverage/Outstanding Facility Amount and
Loan to Value Ratio tests shall be subject to underwriting by
Lender prior to the closing of any Loan for an
additional/substitute Project. Expenses associated with loan
documentation and with Lender's review of the
substitute/additional Projects, including due diligence,
reasonable legal and consulting costs, will be paid by Borrower,
and the documentation will be consistent with that required
pursuant to Article 3 hereof. Borrower shall pay Lender the
Underwriting Fee per Project plus costs incurred by Lender for
any third party reports and out of pocket expenses.
Notwithstanding any of the above, Lender will have the absolute
right to reject any proposed substitute/additional Project in its
sole discretion.
2.12 Release of Projects. Any of the Projects may be
released as security for this Agreement upon: (i) not less than
thirty days prior written notice to Lender; (ii) payment of
the portion of the Outstanding Facility Amount secured by the
Project being released (without regard being given to
cross-collateralization) so that the Debt Service
Coverage/Outstanding Facility Amount and Loan to Value Ratio
tests are met for the remaining Projects securing this
Agreement; (iii) payment of the Exit Fee; and (iv) payment of all
costs and expenses of Lender incurred in documenting the release,
including reasonable legal, title and recording costs.
ARTICLE 3
CRITERIA AND CONDITIONS
The obligation of Lender to make the Loans is subject to
the following criteria and conditions precedent, each of which
applies to every Loan unless expressly otherwise set forth
herein, and the satisfaction of each of which shall be determined
by Lender in its sole discretion:
3.1 Loan Criteria. The criteria for making Loans under
this Agreement are as follows:
(a) Debt Service Coverage. The minimum Debt Service
Coverage Ratio for each Project for which a Loan is made under
this Agreement shall be 1.20 and the minimum Debt Service
Coverage Ratio for the Outstanding Facility Amount shall be 1.30.
(b) Loan to Value Ratio. The Loan to Value Ratio
shall not exceed seventy-five (75%) percent; provided, that, for
the purpose of establishing value for the Loan to Value
Ratio only, (i) real property collateral shall be valued at one
hundred (100%) percent of Appraised Value, (ii) Collateral Notes
shall be valued at one hundred (100%) percent of appraised value,
and (iii) any cash collateral, including the Reserves and the
Insurance Reserve, shall be valued at face value. The "Appraised
Value" shall be based on MAI Appraisals no more than twelve
months old commissioned by Borrower, completed by an licensed MAI
appraiser acceptable to Lender, in its sole discretion. If
Lender shall have commissioned or caused the Borrower to
commission new Appraisals, the Appraised Value, for purposes of
ascertaining the Loan to Value Ratio only, shall be the value
determined in such revised Appraisal, whether such Appraisal
indicates a higher Appraised Value or a lower Appraised
Value.
Borrower shall permit Lender to commission updated
Appraisals of the Projects (i) each Loan Year, (ii) upon an Event
of Default, and (iii) at the request of Borrower. All
Appraisals shall be at the Borrower's sole cost and expense.
3.2 New Loan Conditions. The following shall be
conditions precedent to the first advance under any Loan being
made pursuant to the terms of this Agreement (except as waived
by Lender):
(a) Loan Criteria. The Loan shall meet the criteria
for a Loan as set forth above in Section 3.1.
(b) Loan Documents. Borrower and any other party to
the Facility Loan Documents shall have executed and delivered to
Lender all of the Facility Loan Documents requested by Lender.
(c) Due Diligence. Not less than thirty (30) days
prior to funding an advance for a Loan, Borrower will provide the
following to Lender for its review and approval:
(i) Supporting Documents. Borrower shall have
delivered the Supporting Documents to Lender.
(ii) Opinion of Counsel. Borrower shall
have delivered the Opinion of Counsel to Lender for such Loan.
(iii) Insurance Policies. Lender shall have
received counterpart originals of each insurance policy (or
satisfactory certificates of insurance) required under this
Agreement or any other of the Facility Loan Documents. All such
insurance policies shall be in form and substance, and in
amounts, satisfactory to Lender, and shall be endorsed as
required by the Mortgage and this Agreement. Minimum coverage
amounts are: (i) 100% full replacement cost, (ii) one-year rent
loss or business interruption, (iii) flood and earthquake as
required by Lender (with deductible less than or equal to 5% of
Appraised Value), (iv) commercial general liability with
$1,000,000 minimum combined single limit, (v) umbrella liability
with $5,000,000 minimum, (vi) boiler and machinery at limits
acceptable to Lender, (vii) workmen's compensation with limits
acceptable to Lender, or as required by applicable laws, (viii)
auto coverage with limits acceptable to Lender, and (ix) fidelity
and errors and omissions coverage at limits acceptable to Lender.
Insurance carriers must be fully licensed in the applicable
jurisdiction(s) and acceptable to Lender. Currently Lender's
standards require the insurance carriers to be "A" rated for
claims paying ability by Moody's, S & P, Fitch or Duff & Phelps.
If not rated by these rating agencies, each insurance carrier is
required to have a minimum policy rating of "A" and minimum
financial class of "VIII" by AM Best Co.
(iv) Tenant's Documents. Borrower shall
have delivered copies of the Leases to Lender and each Tenant of
a Lease shall have executed and delivered to Lender the
Tenant's Documents.
(v) Permits. All necessary permits and
other governmental and private authorizations and approvals for
the use and occupancy of the Project shall have been obtained.
(vi) Title Insurance. The Borrower will
obtain a commitment to issue a Title Insurance Policy and
endorsements (as required below) from a nationally-recognized
title insurance company insuring the enforceability and priority
of the lien of the Mortgages subject only to certain permitted
exceptions as reviewed and approved by Lender. The Title
Insurance Policy will contain such endorsements as may be
reasonably required by Lender including tie-in, first loss,
revolving credit and "last dollar" endorsements if such
endorsements are available in a particular state where a Project
is located, in an amount equal to 100% of the Loan for each
Project.
(vii) Engineering/Environmental Reports.
Borrower shall have delivered an engineering report and an
environmental report that is no more than six months old at the
time of delivery and both must be in forms and contain certain
information acceptable to Lender in its sole discretion.
(viii) Survey. Borrower shall have delivered
or have caused to be delivered the Survey to Lender for the
Project securing the Loan which is: (x) certified by a licensed
surveyor; (y) dated within sixty days prior to closing, and (z)
satisfactory to Lender in its sole discretion.
(ix) Appraisal. Borrower shall have
delivered or have caused to be delivered an MAI Appraisal to
Lender for the Project or an appraisal acceptable to Lender for
the Collateral Note securing the Loan.
(x) Management Agreement. Borrower shall
have delivered to Lender a copy of a management agreement between
Borrower and the company that will manage the Project, which
agreement is satisfactory to Lender.
(xi) Compliance with Laws. Borrower shall
have delivered or have caused to be delivered to Lender evidence,
satisfactory to Lender in its sole discretion, that Borrower
and the Project are in compliance with all Governmental
Requirements.
(xii) Zoning. Borrower shall have delivered
or have caused to be delivered to Lender evidence, satisfactory
to Lender in its sole discretion, of the Project's compliance
with applicable zoning and land use laws, ordinances and
regulations and if any of the Projects are a legal non-conforming
use, evidence that such Project may be rebuilt after a casualty
to the same condition, size and location as such Project was
immediately prior to the casualty; provided, however, if
applicable zoning and land use law prohibit rebuilding or if
Borrower decides to not rebuild, the Borrower shall repay in full
the Loan related to such Project. No Exit Fee shall be
applicable to any such repayment pursuant to this paragraph.
(xiii) Additional Information. All other
information or documentation required by Lender to underwrite the
Loan which meets Lender's underwriting standards.
(d) Underwriting Fee. Borrower shall have paid to
Lender the Underwriting Fee.
(e) All the general conditions listed in Section 3.4
shall have been satisfied.
(f) Special Conditions. Borrower shall have
complied with the special conditions for any Loan set forth on
the Loan Schedule for such Loan.
(g) Lender's Underwriting Criteria. The Loan shall
meet all of Lender's underwriting criteria, as established by
Lender, in its discretion.
3.3 General Conditions.
(a) Representations and Warranties. As of the date
any Loan is made hereunder, the representations and warranties
set forth in Article 7 hereof shall be true and correct on and
as of such time with the same effect as though such
representations and warranties had been made on and as of such
time, except to the extent that such representations and
warranties expressly relate to an earlier date.
(b) Covenants. Borrower shall have fulfilled each
and every of the covenants of this Agreement (including, but not
limited to, the affirmative covenants set forth in Article 4 of
this Agreement and the negative covenants set forth in Article 5
of this Agreement) and the other Facility Loan Documents.
(c) No Default. As of the date the Loan is made, no
Event of Default (as defined in Article 8 of this Agreement), nor
any event that, with the passage of time or the giving of
notice, or both, would become an Event of Default, shall have
occurred and be continuing.
(d) No Adverse Change. There shall not have
occurred any material adverse change in Borrower's financial
position, since the date of this Agreement, nor any condition,
event, or act that, in any case or in the aggregate, would affect
in a material adverse manner Borrower's ability to repay the
Loans.
3.4 Procedure. From time to time throughout the term of
this Agreement, the Borrower may submit an application and
submission package to the Lender for a Loan. Lender shall
review such application and submission package and determine
whether such application meets the Loan criteria set forth in
Section 3.1 and all of Lender's other underwriting requirements,
in Lender's sole discretion. If Lender determines that a
particular application and loan submission meets the criteria for
a Loan as set forth above and meets all of Lender's other
underwriting requirements, then Lender shall issue a funding
commitment for such Loan. Provided that all of the conditions
precedent set forth in Section 3.2 have been satisfied, and
Borrower has otherwise complied with all of the terms and
conditions of this Loan Agreement, such Loan shall close on a
date mutually agreed upon by Borrower and Lender.
ARTICLE 4
AFFIRMATIVE COVENANTS
Borrower and Guarantors, as the case may be, covenant and
agree that from the date hereof and until payment in full of all
amounts owed by Borrower to Lender, unless Lender shall
otherwise consent in writing:
4.1 Inspections. Borrower shall permit the Lender and
such other persons as Lender may designate to visit and inspect
any Project, to examine the books, records and documents
relating to such Project and take copies and extracts therefrom
and to discuss the affairs of Borrower with independent
accountants of Borrower at such times and as often as Lender may
reasonably request. Borrower hereby authorizes its officers,
employees and independent accountants to discuss with Lender such
affairs of Borrower. Lender shall have no obligation to
make any such inspections.
4.2 Existence, Properties, Etc. Borrower will (a) do or
cause to be done all things necessary to preserve and keep in
full force and effect its trust, limited liability company,
partnership or corporate existence, as applicable; and (b) do or
cause to be done all things necessary to obtain, extend,
preserve, renew, and keep in full force and effect the rights,
licenses, permits, franchises, patents, copyrights, trademarks,
and trade names material to the conduct of its business; maintain
and operate such business in substantially the manner in which
it is presently conducted and operated; comply in all material
respects with all Governmental Requirements; and at all times
maintain, preserve, and protect all property material to the
conduct of such business and keep such property in good repair,
working order, and condition and from time to time make, or cause
to be made, all needful and proper repairs, renewals,
additions, improvements, and replacements thereto necessary in
order, that the business carried on in connection therewith may
be properly conducted at all times. Borrower shall not
abandon any Project.
4.3 Payment of Indebtedness, Taxes, Etc. Borrower will
(a) pay all of its indebtedness and obligations promptly and in
accordance with normal terms and (b) pay and discharge or
cause to be paid and discharged promptly all taxes, assessments,
and governmental charges or levies imposed upon it or upon its
income and profits, or upon any of its property, real,
personal or mixed, or upon any part thereof, before the same
shall become in default, as well as all lawful claims for labor,
materials, and supplies or otherwise which, if unpaid, might
become a lien or charge upon such properties or any part thereof;
provided, however, Borrower shall not be required to pay and
discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy, or claim so long as the validity
thereof shall be contested in good faith by appropriate
proceedings and Borrower shall have set aside on its books
adequate reserves with respect to any such tax, assessment,
charge, levy, or claim, so contested.
4.4 Financial Statements/Project Reports. Borrower will
maintain full and accurate books of account and other records
reflecting the results of the operations of each Project in which
full, true and correct entries in accordance with generally
accepted accounting principles, applied on a consistent basis,
prepared on an accrual basis and stating that all dealings or
transactions with respect to such Project, and Lender and its
designees shall have the right to audit such books, at the
expense of Borrower, to verify the reports and statements
delivered under this Agreement. Borrower and Guarantors will
furnish, or cause to be furnished, to Lender:
(i) On or before forty-five (45) days
after the end of each calendar quarter, consolidated (including
Montgomery CV Realty L.P.) unaudited financial statements; (ii)
on or before one hundred five (105) days after the end of each
calendar year, annual consolidated (including Montgomery CV
Realty L.P.) audited financial statements; (iii) copies of all
other quarterly and annual filings with the SEC and other
publicly released information concurrent with such filing or
public release; (iv) on or before forty-five (45) days after the
end of each calendar quarter, unaudited balance sheets and cash
flow statements for each Project, such reports to be in such form
and in reasonable detail as Lender may request, setting forth the
financial condition and the income and expenses for each Project
for the immediately preceding calendar quarter, and a certificate
executed by Borrower certifying that such report is a true,
complete and correct representation of each Project's operations
for the period covered thereby; (v) within forty-five (45) days
after the end of each calendar quarter, a written statement (rent
roll) certified as true, correct and complete by Borrower,
containing the information specified below as to each of the
Leases; (vi) immediate notice of any material adverse change in
any Project's financial condition or business prospects; (vii) on
or before fifteen (15) days prior to the start of each calendar
year an annual budget for each Project for the next calendar
year, in form and substance acceptable to Lender; and (viii)
upon request of Lender, and at Borrower's expense, such other
operating, financial and credit information as Lender may
reasonably request with respect to each Project.
All statements required to be furnished pursuant to (i),
(ii) and (iii) above shall be prepared in accordance with
generally accepted accounting principles. The rent roll
specified in clause (v) above shall contain the following:
tenant name, suite or unit number, square feet of leased
space or other designation related to the size of the unit,
commencement and expiration date, lease renewal options, the date
rental payments began, number of months of free rent (if
applicable) or other concessions, base rent, escalation
provisions (if applicable), vacancies and recent rental
activities, and other pertinent information, or may be in such
other form as Lender approves in its discretion. At any time and
from time to time Borrower shall deliver to Lender such other
financial data as Lender shall reasonably request with respect to
the ownership, maintenance, use and operation of each Project,
and Lender shall have the right, at reasonable times and upon
reasonable notice, to audit, examine, and make copies or extracts
of Borrower's books of account and records relating to each
Project, all of which shall be maintained and made available to
Lender and Lender's representatives for such purpose at the
address specified herein for Borrower or at such other location
as Lender may approve. Upon Lender's request, Borrower shall
also furnish Lender with convenient facilities and copies of all
books and records necessary for an audit of such statements.
In the event Borrower fails to furnish or cause to be
furnished any required statement or report within fifteen (15)
days after the due date specified above, then Lender may, at the
expense of Borrower, cause a certified public accountant
designated by Lender to prepare such balance sheets and
statements and the costs thereof shall become part of the
principal secured hereby until repaid with interest at the
Default Rate.
4.5 Notices.
(a) Notice of Default. In the event Borrower or any
Affiliate or agent of Borrower knows of any Event of Default
which shall have occurred or knows of the occurrence of any
event which, upon notice or lapse of time or both, would
constitute an Event of Default, Borrower shall promptly furnish
to Lender a written statement as to such occurrence, specifying
the nature and extent thereof and the action (if any) which is
proposed to be taken with respect thereto.
(b) Notice of Litigation. Borrower and Guarantors
shall promptly give Lender notice in writing of all litigation
and of all proceedings before any governmental or regulatory
agencies which, if adversely determined, would materially affect
Borrower's or Guarantors's financial or operating condition.
Upon Lender's request from time to time Borrower and Guarantors
shall provide Lender with a current list of all litigation or
other proceedings pending against Borrower and Guarantors.
4.6 Payment of Costs and Expenses.
(a) The Loans shall be made without cost or expense
to Lender. Borrower will pay all costs and expenses (including
fees of outside attorneys and the fees of any Consulting
Engineer) incurred by Lender for preparation of the Facility Loan
Documents, perfecting the security interests of Lender in the
collateral, and all other reasonable expenses related to the
Loans, whether such expenses are incurred before or after the
date of this Agreement, and regardless of whether any Loan is
made and including all such cost and expenses as may be
incurred by Lender in collecting the Loans. Without limiting the
generality of the foregoing, Borrower agrees to pay on demand all
recordation taxes, filing or recording fees, transfer taxes,
certificate of title fees, and all other governmental
assessments, taxes, charges, and fees that may be due upon the
filing or recording of any financing statement, security
agreement, mortgage, document, or like instrument for purposes of
documenting or perfecting Lender's security interests in any of
Borrower's personal property.
(b) Lender shall be entitled to all costs and
expenses of collection and actual attorneys' fees incurred by
Lender to enforce the terms of this Agreement, and/or the
Facility Loan Documents, including, without limitation, those
expenses and fees which may be incurred in connection with the
appointment of a receiver and all appearances in bankruptcy or
insolvency proceedings such as in connection with seeking
attorneys' fees and disbursements for out-of-court workouts and
settlements or for enforcement of rights under any state or
federal statute, including, without limitation, relief from stay
in a bankruptcy proceeding, (i) if after default this Agreement
or any Notes are placed in the hands of an attorney or attorneys
for collection; (ii) if Lender finds it necessary or desirable
upon default to secure the services or advice of one or more
attorneys with regard to collection of this Agreement or any
Notes against Borrower or any other party liable thereto; or
(iii) if Lender seeks to have any Project abandoned by any estate
in bankruptcy, or attempts to have any stay or injunction
prohibiting the enforcement or collection of this Agreement or
any Notes, prohibiting the foreclosure of any Mortgage or
prohibiting the enforcement of any Mortgage (or any other
Facility Loan Document) lifted by any bankruptcy or other court,
and any subsequent proceedings or appeals from any order or
judgment entered in any such proceeding. If Lender shall be made
a party to or shall intervene in any action or proceeding,
whether in court or before any governmental agency affecting any
Project, or the title thereto or the interest of Lender under a
Mortgage, including, without limitation, any form of condemnation
or eminent domain proceeding, Lender shall be reimbursed by
Borrower immediately upon demand for all costs, charges and
attorneys' fees incurred by Lender in any such case, and the same
shall be secured by the Mortgages as a further charge and lien
upon the Projects. In any action brought under or arising out of
this Agreement, Borrower hereby consents to the jurisdiction of
any competent court within the Commonwealth of Pennsylvania and
to service of process by any means authorized by the law
of the such Commonwealth. Borrower specifically acknowledges
that, due to the complexity of the Loans, the real estate
development sophistication of Borrower and the difficulties
contemplated in enforcement of Lender's remedies, Lender, to
protect its interest properly and completely in the event of
Borrower's default, shall be entitled to retain attorneys of
Lender's choice at such attorneys' customary fee rates and that
Lender shall be entitled to complete and full reimbursement for
such fees irrespective of any schedule, formula or other
guidelines for attorney's fees, whether described as reasonable
or otherwise, whether set by any law or court, appellate or
trial, bankruptcy or other insolvency tribunal.
4.7 Security Interest. To further secure this Agreement
and the Loan made hereunder, Borrower, hereby grants, transfers,
assigns and conveys to Lender a security interest in the
Personal Property. Borrower agrees to execute such further
documents, financing statements and other instruments as may be
reasonably requested by Lender in order to perfect the
security interests granted herein. To the extent that possession
of the Personal Property is necessary or advisable to perfect the
security interest, Borrower shall deliver such Personal Property
to Lender upon Lender's request. Borrower agrees to provide such
evidence as Lender shall request from time to time as to the
perfection and first priority of such security interests and
liens.
4.8 Further Assurances. Borrower will execute any and
all further documents and take all further actions which may be
required under applicable law, or which Lender may request,
to grant, preserve, protect, and perfect Lender's first priority
security interest in the Personal Property.
4.9 Personalty and Fixtures. Borrower will deliver to
Lender, on demand, copies of any contracts, bills of sale,
statements, receipted vouchers or agreements in Borrower's
possession under which Borrower claims title to any materials,
fixtures or articles incorporated in the Improvements or subject
to the lien of any of the Mortgages.
4.10 Appraisal. Lender may commission, from time to time
and at any time, but not more frequently than once during each
Loan Year unless there has been an Event of Default hereunder, or
Borrower requests such Appraisal, a current Appraisal, which
shall be made at Borrower's sole cost and expense of any or all
of the Projects or Collateral Notes.
4.11 Insurance.
(a) Required Coverages. Borrower shall at all times
maintain the policies of property, liability, business
interruption, workers' compensation and flood and earthquake
insurance that are required pursuant to Section 3.2(iii) and each
Mortgage.
(b) Evidence of Insurance Coverage. Prior to the
making of any Loan, and at the time of any change in the amount
or scope of coverage provided under any insurance policy (or
any change in insurance company), and from time to time upon
Lender's request, Borrower shall deliver to Lender counterpart
originals, properly endorsed, of each policy of insurance that
Borrower is required to maintain under this Agreement, together
with receipts evidencing the payment of the premium for each such
policy. If a counterpart original of the insurance policy
cannot be obtained from the insurer, then Lender shall accept an
original certificate of insurance in lieu of a counterpart
original of the insurance policy provided that (a) such
certificate is in form and substance satisfactory to Lender and
(b) the insurance company issuing the certificate expressly
authorizes Lender in writing to rely upon such certificate.
Borrower shall deliver to Lender like evidence of the renewals of
all insurance policies required under this Agreement at least
thirty (30) days in advance of the expiration of the same,
stamped "Paid" by the agent or company issuing same.
4.12 Management Agreement. Borrower shall at all times
maintain a management agreement for the management and operation
of each Project which management agreement is satisfactory to
Lender.
4.13 REIT Status. CV Reit, Inc. shall maintain REIT
status under the Internal Revenue Code during the term of this
Agreement; provided however, that CV Reit, Inc. may merge with
Montgomery CV Realty Trust during the term of this Agreement,
provided that (i) Borrower has given Lender at least thirty (30)
days notice of such merger and (ii) Lender has reviewed
and is satisfied with financial statements of CV Reit, Inc. and
Montgomery CV Realty Trust current as of the time of the merger.
4.14 Net Worth. Guarantors shall maintain a net worth
during the term of this Agreement of no less than Sixty Seven
Million Dollars ($67,000,000).
ARTICLE 5
NEGATIVE COVENANTS
Borrower and Guarantors, as the case may be, covenant and
agree that, from the date hereof and until payment in full of all
amounts owed by Borrower to Lender, unless Lender shall otherwise
consent in writing:
5.1 Additional Financing. Borrower shall not incur
other indebtedness secured by any Project.
5.2 No Waste. Borrower shall not commit, permit or
suffer any waste of any Project.
5.3 Negative Pledge. Borrower and Guarantors will not
create, incur, assume, or suffer to exist any mortgage, pledge,
security interest, conditional sale, or other title retention
agreement, encumbrance or other lien upon any Personal Property,
Land or Project, now owned or hereafter acquired, of Borrower or
Guarantors (the sale with recourse of receivables or any "sale
and lease back" of any fixed assets being deemed to be the giving
of a lien thereon for money borrowed), other than Permitted
Encumbrances. Borrower and Guarantors will not mortgage or in
any manner encumber any Land or Project or any part thereof, or
permit or suffer to exist thereon any mortgage, lien, or
encumbrance of any character (other than the legal operation and
effect of the Mortgage from Lender pursuant to the terms hereof)
other than the Permitted Encumbrances, and if any such mortgage,
lien, or encumbrance shall become effective in relation to any
Project or the Land or any part thereof, Borrower and Guarantors
will forthwith pay, bond over or otherwise discharge the same.
Notwithstanding the foregoing, Borrower and Guarantors shall not
be prohibited from (i) purchasing encumbered assets or exchanging
operating partnership units for encumbered or unencumbered
property, or (ii) refinancing encumbered assets provided that,
with respect to subparagraph (ii), Lender is given a customary
right of first offer, including but not limited to, the
following:
(a) Borrower or the Guarantor, as the case may be,
shall first provide a written request for such refinancing to
Lender including the desired term for such refinancing;
(b) Lender shall have fifteen (15) days after
receipt of such request from Borrower or a Guarantor to notify
Borrower or such Guarantor of the terms and conditions upon which
Lender could provide such refinancing (which, among other terms,
will provide that refinancing will be non-recourse with customary
carveouts); and
(c) Borrower or the Guarantor, as the case may be,
shall notify Lender, within thirty (30) days of receipt of such
terms and conditions from Lender, that Borrower or the
Guarantor, as the case may be, (i) will refinance with Lender
upon such terms and conditions, (ii) will refinance with another
lender because it was able to obtain better terms and provisions
(which terms and provisions may not necessarily include a lower
interest rate) from such other lender, together with proof
thereof (which proof need not include a loan commitment), or
(iii) will not refinance the debt.
5.4 Consolidations, Mergers and Acquisitions. Borrower
will not merge or consolidate with or into any corporation or
other entity or acquire any going business or group of assets
which together constitute an operating business, or enter into
any consolidation, recapitalization, or reorganization, or invest
in or advance funds to any subsidiary or affiliated corporation.
Lender may, at its sole discretion, approve a merger to which
Borrower is the surviving and controlling entity.
5.5 Judgments. Borrower and Guarantors will not permit
any judgment entered against them or any one of them to remain
unsatisfied for a period of more than sixty (60) days after
the judgment has become final and unappealable.
5.6 Use of a Project. Unless required by applicable law,
Borrower shall not (a) except for any change in use approved by
Lender, allow changes in the use for which all or part of the
Project is being used, or (b) initiate a change in the zoning
classification of the Land.
5.7 Changes in Ownership/Control. Transfers of interest
in the Borrower or the Guarantors which would result in "changes
in management" (as hereinafter defined) or "changes
in control" (as hereinafter defined) shall not be permitted
without the prior written consent of Lender. "Changes in
Management" shall mean removal of a majority of the members of
the Board of Directors of CV Reit, Inc. or the termination of the
employment of the president of CV Reit, Inc. "Changes in
Control" shall mean, with respect to CV Reit, Inc. (i) the
issuance in a public offering of shares of voting common stock,
or (ii) the issuance of units in the operating partnership which
if fully redeemed into shares of voting common stock of CV Reit,
Inc. would in either instance constitute a transfer of more than
50% of the issued and outstanding shares of voting common stock
of CV Reit, Inc.
ARTICLE 6
RESERVES
6.1 Establishment of Reserves. Borrower may be required
to set aside at the closing of any Loan hereunder, in a
segregated eligible account designed by Lender, (i) 125% of any
amounts required to correct deferred maintenance or to complete
required environmental remediation, as determined by Lender's
internal underwriting department (the "Completion/Repair
Reserve"); (ii) tenant improvement and leasing commission
reserves in amounts as determined by Lender's internal
underwriting department (the "TI/Leasing Commissions Reserve");
(iii) replacement reserves in amounts as determined by Lender's
internal underwriting department (the "Replacement Reserve"); and
(iv) the Insurance Reserve. The Completion/Repair Reserve,
TI/Leasing Commissions Reserve and the Replacement Reserve are
hereinafter referred to collectively as the "Reserves").
6.2 Reserves as Additional Security and Source of
Repayment.
(a) Borrower assigns and grants a security interest
in the Reserves and the Insurance Reserve to Lender as additional
security for all of Borrower's obligations under the Facility
Loan Documents.
(b) On the Final Maturity Date, Lender may, without
notice to Borrower or to any other person or entity, and whether
or not an Event of Default shall have occurred, apply all funds
in the Reserves and the Insurance Reserve or any one of them to
payment of accrued interest and principal payable under any Notes
then outstanding.
6.3 Deposits. Borrower shall deposit into the
Completion/Repair Reserve, the TI/Leasing Commissions Reserve,
the Replacement Reserve and the Insurance Reserve the sums set
forth on the Loan Schedule for each Loan on the dates indicated
thereon.
6.4 Disbursements. Disbursement from the
Completion/Repair Reserve shall be governed by the
Completion/Repair Agreement. Disbursements from the TI/Leasing
Commissions Reserve shall be governed by the TI/Leasing
Commissions Agreement. Disbursements from the Replacement
Reserve shall be governed by the Replacement Reserve
Agreement.
6.5 Use of Insurance Reserve. If Borrower fails to
maintain the insurance required by this Agreement or fails to
submit the evidence required by this Agreement of maintenance of
such insurance, or if any insurance required to be maintained by
the Mortgage or the evidence required by the Mortgage of
maintenance of such insurance is not submitted to Lender, then,
upon three (3) days notice to Borrower, Lender may use the
Insurance Reserve to purchase insurance satisfactory to Lender in
its discretion and may require that Borrower make monthly
deposits to the Insurance Reserve in an amount satisfactory to
Lender. Borrower shall, within ten (10) days of receipt of
notice from Lender that Lender has used the Insurance Reserve
pursuant to this Section, replenish the Insurance Reserve to its
original amount.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Borrower and Guarantors, as the case may be, make the
following representations and warranties, each for themselves
only, to Lender on the date hereof and at the time any Loan is
made, and with respect to each such Loan. If Borrower or
Guarantors, as the case may be, are unable to make one or more of
the representations or warranties each for themselves contained
in this Article with respect to any requested Loan such inability
shall constitute a failure to satisfy the condition precedents
set forth in Section 3.3 with respect to such requested Loan.
7.1 Organization, Power, Etc. Borrower (i) is a limited
partnership, validly existing and in good standing under the laws
of Delaware, (ii) has the power and authority to own its
properties and assets and to carry on its business as now
conducted, and (iii) has the power to execute, deliver and
perform each of the Facility Loan Documents and each agreement or
instrument contemplated thereby to which it is or will be a
party. CV Reit, Inc. (i) is a corporation validly existing and
in good standing under the laws of Delaware, and (ii) has the
power to execute, deliver and perform each of the Facility Loan
Documents and each agreement or instrument contemplated thereby
to which it is or will be a party. Montgomery CV Realty L.P. (i)
is a limited partnership, validly existing and in good standing
under the laws of Delaware, and (ii) has the power to execute,
deliver and perform each of the Facility Loan Documents and each
agreement or instrument contemplated thereby to which it is or
will be a party.
7.2 Authorization of Borrowing, Etc. The borrowings
hereunder and the execution, delivery and performance of each of
the Facility Loan Documents have been duly authorized by
all requisite action on the part of Borrower and Guarantors or
and will not (i) contravene any provision of law, any order of
any court or other agency of government, which contravention
could reasonably be expected to have a material adverse effect
upon the prospects, profits, or financial or operating condition
of Borrower or Guarantors or Borrower's or Guarantors' ability
to perform the obligations under the Facility Loan Documents, or
(ii) contravene the operating agreement, partnership agreement,
articles of incorporation or any indenture, trust agreement,
other agreement, or instrument binding upon Borrower or
Guarantors, which contravention could reasonably be expected to
have a material adverse effect upon the prospects, profits, or
financial or operating condition of Borrower or Guarantors or
Borrower's or Guarantors' ability to perform the obligations
under the Facility Loan Documents, or (iii) be in conflict with,
result in the breach of or constitute (with due notice or lapse
of time or both) a default under any such indenture, agreement,
or other instrument binding upon Borrower or Guarantors, which
default or breach could reasonably be expected to have a material
adverse effect upon the prospects, profits, or financial or
operating condition of Borrower or Guarantors or Borrower's
or Guarantors' ability to perform the obligations under the
Facility Loan Documents, or (iv) result in the creation or
imposition of any lien, charge, or encumbrance of any nature
whatsoever upon any of the property or assets of Borrower or
Guarantors, except pursuant to the Facility Loan Documents.
7.3 Governmental Approval. No action or consent of, or
registration or filing with, any governmental agency, bureau,
commission, or court is required to be made by Borrower or
Guarantors under existing law in connection with the execution,
delivery, and performance by Borrower or Guarantors of this
Agreement, the borrowings hereunder or the execution and
delivery by Borrower or Guarantors of any of the Facility Loan
Documents.
7.4 No Material Changes, Etc. There has occurred no
materially adverse change in the financial condition or business
of the Borrower or Guarantors as shown on or reflected in the
financial statements delivered to the Lender in connection with
the Loans.
7.5 Permits. The Borrower possesses licenses, permits,
and federal, state, or local governmental approvals required for
the conduct of its business and the operation of each
Project, except building and occupancy permits for currently
vacant space, which will be obtained in due course.
7.6 Litigation.
(a) On the date of this Agreement, there are no
actions, suits, or proceedings at law or in equity or by or
before any governmental instrumentality or other agency pending
against Borrower other than as disclosed on Exhibit A hereto,
and, to Borrower's and Guarantors' knowledge, there are no such
actions, suits, or proceedings threatened against or
Affecting Borrower or guarantors or any property or rights of
Borrower or Guarantors which if adversely determined would have a
material adverse effect upon the prospects, profits, or
financial or operating condition of Borrower or Guarantors.
(b) Borrower and Guarantors are not in default with
respect to any judgment, order, writ, injunction, decree, demand,
rule, or regulations of any court, arbitrator, grand jury,
or of any governmental agency.
7.7 Compliance With Other Instruments, Laws, Etc..
Borrower and Guarantors are not in violation of any provision of
their organizational documents, by-laws, or any agreement or
instrument to which they may be subject or by which they or any
of their properties may be bound, or any decree, order, judgment,
statute, license, rule or regulation in a manner that
could result in the imposition of substantial penalties or which
affect in a material adverse manner the financial condition,
properties or business of the Borrower or Guarantors.
7.8 Agreements. Borrower and Guarantors are not a party
to, or bound by, any contract or instrument, or subject to any
charter or other corporate restriction, which materially
adversely affects the business, property, assets, operations or
condition, financial or otherwise, of Borrower or Guarantors.
7.9 Taxes. Borrower and Guarantors have filed and will
continue to file all United States income tax returns and all
state and local income tax returns that are required to be filed,
and have paid, or made adequate provisions for the payment of,
all taxes that have or may become due pursuant to said returns or
pursuant to any assessment received by Borrower or Guarantors,
except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided.
7.10 Compliance with Law. Borrower and Guarantors are in
compliance with all Governmental Requirements of any domestic or
foreign government or any instrumentality or agency thereof,
having jurisdiction over the conduct of their businesses or the
ownership of their properties. The use of each Project for the
purposes intended will not violate in any material respect any
environmental, ecological, subdivision, zoning, use, or other
ordinance, law, or regulation or any agreement applicable to such
Project.
7.11 ERISA. Based upon ERISA and published
interpretations thereunder, Borrower and any employee plan, are
in compliance in all material respects with ERISA.
7.12 Financial Statements. Each financial statement of
Borrower and Guarantors delivered heretofore, concurrently
herewith or hereafter to Lender was and will be prepared in
conformity with the requirements of Section 4.4 hereof, or other
good accounting principles approved by Lender in writing, applied
on a basis consistent with that of previous statements and fairly
presents the financial condition of Borrower and Guarantors
(including all contingent liabilities) as of the date thereof and
for the period covered thereby, and there has been no material
adverse change in Borrower's or Guarantors' financial condition
subsequent to the date of the most recent financial statement of
Borrower and Guarantors delivered to Lender.
7.13 Place of Business. On the date of this Agreement,
the address of Borrower's chief executive office and chief place
of business is Plymouth Plaza, 580 West Germantown Pike,
Suite 200, Plymouth Meeting, PA 19462, which is the mailing
address for Borrower.
7.14 Brokerage Commission. Borrower has not made any
agreement or taken any action that may cause anyone to become
entitled to a commission or finder's fee directly attributable
to the making of the Loans.
7.15 Utilities. All utility services necessary for the
use of each Project are now available and connected to each
Project, including water, storm, and sanitary sewer facilities,
gas (if available to properties in the same area as each
Project), electrical and telephone.
7.16 Access. Each Project currently has adequate roads
and sources of ingress and egress to permit such Project to be
used for its intended purposes.
7.17 Supporting Documents. Each Supporting Document
prepared by or on behalf of Borrower or Guarantors and delivered
to Lender is true, accurate, correct, and complete in all
respects. To Borrower's and Guarantors' knowledge, each
Supporting Document prepared by the Secretary of State or any
other governmental authority and delivered to Lender by or on
behalf of Borrower or Guarantors is true, accurate, correct, and
complete in all respects.
7.18 Title to Projects. Borrower owns absolutely free and
clear of any chattel mortgages, conditional bills of sale, or
other liens or encumbrances other than Permitted Encumbrances,
the Personal Property, the Land, and the Improvements of each
Project. No financing statement under the Uniform Commercial
Code which names Borrower has been filed, and Borrower has not
signed any financing statement or any security agreement
authorizing any secured party thereunder to file any such
financing statement, except in favor of Lender or with
respect to Permitted Encumbrances.
7.19 Title to Collateral Notes. Borrower owns absolutely
free and clear of any encumbrances the Collateral Notes.
7.20 Leases. Borrower has provided Lender with a rent
roll dated not more than thirty (30) days prior to the date of
execution of the Note with respect to all Leases of any portion
of each Project. As of the date of this Agreement, there has
been no material adverse change in the income set forth in the
rent roll. The Leases reflected on such rent roll constitute the
sole agreements and understandings relating to leasing or
licensing of space at each Project. There are no occupancies,
rights, privileges or licenses in or to each Project other
than(i) pursuant to the Leases reflected on the rent roll and
the Leases reflected on the rent roll are in full force
and effect, in accordance with their respective terms, without a
material number of payment defaults or any other material default
thereunder, and (ii) as set forth on the Schedule for any
particular Loan. The rent roll accurately and completely sets
forth all rents payable by and security, if any, deposited by
tenants, no tenant having paid more than one month's rent in
advance. No leasing, brokerage or like commissions, fees or
payment are due from Borrower in respect of the Leases, except as
set forth on the Loan Schedule for each Loan.
7.21 Compliance with Environmental Laws. Borrower
warrants and represents that (i) based upon an environmental
Phase I site assessment of any Project, no hazardous substance,
pollutant or contaminant (as defined in Section 101 of the
Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA), 42 U.S.C. 9601, as amended by the Superfund
Amendments and Re-authorization Act of 1986 (Pub. L. No. 99-499,
100 Stat. 1613 (1986) (SARA) or 40 CFR Part 261, whichever is
applicable) is present on any Project other than in compliance
with applicable local, state and federal laws, and (ii) Borrower
has not been identified in any litigation, administrative
proceedings or investigation as a responsible party for
any liability under the above referenced laws. Borrower
covenants that it will not use, generate, treat, store, dispose
of, or otherwise introduce any hazardous substances, pollutants,
contaminants, hazardous waste, residual waste, solid waste or
substance (as used or defined in clauses (i) or (ii) above) into
or on each Project (except in quantities not in violation of any
laws and necessary for the day to day operation of such Project)
and will not cause, suffer, allow, or permit anyone else to do
so, in violation of any applicable statute, law, ordinance, rule
or regulation.
ARTICLE 8
EVENTS OF DEFAULT AND CERTAIN REMEDIES
8.1 Default. The occurrence of any of the following
shall be an Event of Default:
(a) Borrower fails to make any payment on account of
the principal amount of any Note or of interest thereon or any
other amount due under any Facility Loan Document after the same
becomes due and payable (subject to any applicable cure period);
or
(b) Any representation, warranty, or statement made by
Borrower, Guarantors or others in, under, or pursuant to the
Facility Loan Documents or any affidavit or other instrument
executed or delivered with respect to the Facility Loan Documents
is determined by Lender to be false or misleading in any material
respect as of the date hereof or thereof or shall become so at
any time prior to the repayment in full of the Loans; or
(c) Borrower sells, abandons, transfers or disposes
all or any part of any Project or any interest therein, or
permits or suffers the sale, assignment or transfer of any
interests in Borrower, other than in accordance with Sections
2.11 and 2.12, without the prior written
consent of Lender; or
(d) Any Project is, in the judgment of Lender,
materially injured or destroyed, by fire or otherwise, and is not
otherwise required to be restored pursuant to the terms of the
Mortgage and Borrower does not bring the Outstanding Facility
Amount into compliance with the Loan to Value Ratio requirement
pursuant to Section 3.1 and Debt Service Coverage/Outstanding
Facility Amount requirement pursuant to Section 2.9, within 30
days of such occurrence; or
(e) Any court of competent jurisdiction shall sign
an order (i) adjudicating Borrower or a Guarantor bankrupt, (ii)
appointing a trustee or receiver of the Project, or of a
substantial part of the property of Borrower or a Guarantor, or
(iii) approving a petition for, or effecting, an arrangement in
bankruptcy, or any other judicial modification or alteration of
the rights of Lender or of other creditors of Borrower or a
Guarantor; or if Borrower or a Guarantor shall (A) file any
petition or (B) consent to any other action seeking any such
judicial order; or if Borrower shall make an assignment for the
benefit of creditors or shall admit in writing inability to pay
debts generally as they become due; or
(f) If Borrower, Guarantors or their members, board
of directors or stockholders shall institute any proceedings for
the dissolution or liquidation of Borrower or Guarantors or
fail to secure and protect their ability to do business in the
state where any of the Projects are located; or
(g) Unless adequately covered by insurance in the
sole opinion of Lender, the entry of a final judgment for the
payment of money involving more than $100,000 against
Borrower or a Guarantor, and the failure of the Borrower or
Guarantors to cause the same to be discharged or bonded off to
the satisfaction of Lender within sixty (60) days from the date
the order, decree or process under which or pursuant to which
such judgment was entered; or
(h) A material adverse change occurs in the
financial condition of Borrower or Guarantors or the business,
management or control (as defined in Section 5.7 hereof) of
Borrower or Guarantors which is not corrected to the reasonable
satisfaction of Lender; or
(i) Any litigation is initiated or, to their
knowledge, threatened against Borrower or a Guarantor which, in
the sole opinion of Lender, is likely to have a material adverse
effect on the financial condition or business of the Borrower or
a Guarantor; or
(j) Borrower shall fail to keep in full force and
effect any permit or approval issued by any governmental
authority necessary for the construction, occupancy or use of
each Project or with respect to the matters contemplated hereby,
and either Borrower fails to take all appropriate action to
reinstate such permit or approval within five (5) days after
demand by Lender, or such permit or approval cannot be
reinstated; or
(k) Borrower or a Guarantor fails to observe or
perform any other term, condition or covenant of any Note, any
Mortgage, this Agreement or any of the other Facility Loan
Documents, and such failure shall continue for more than fifteen
(15) days after notice from Lender of such failure, or, if such
failure cannot be cured within such fifteen (15) day period,
and provided that Borrower commences such fifteen (15) day period
and thereafter proceeds diligently, such additional time as is
required, but in no event more than sixty (60) days.
8.2 Cross Default and Cross Collateralization. The
security for the Loans shall be the Projects and Collateral Notes
set forth on the Loan Schedules attached hereto, as amended,
supplemented or modified, which Loans are evidenced by a Note for
each Loan, and secured by a Mortgage for each Loan, all of which
are cross defaulted and cross collateralized.
8.3 Remedies. Upon the occurrence of an Event of
Default:
(a) Lender shall have no further obligation to make
any additional Loans to Borrower, and Lender may declare any or
all of the Notes to be forthwith due and payable, whereupon the
Notes shall become forthwith due and payable, in each case both
as to outstanding principal and interest, without presentment,
protest, or other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding;
(b) Upon the occurrence of an Event of Default
specified in Section 8.1(a), Lender may charge Borrower for late
payment for each month during which a delinquency exists the
lesser of (i) the Default Rate or (ii) the maximum amount
permitted by applicable state law; and
(c) Upon the occurrence of an Event of Default
specified in Section 8.1(a), Lender may enforce the Lock Box
Agreement.
8.4 Remedies Cumulative. The rights and remedies of
Lender upon the occurrence of an Event of Default set forth
herein are in addition to the rights and remedies contained
elsewhere in the Facility Loan Documents, and available at law
and in equity. No failure by Lender to exercise and no delay in
exercising any right, power, or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power, or privilege hereunder
preclude any other further exercise thereof or the exercise of
any other right, power, or privilege. Each waiver shall be
strictly construed.
ARTICLE 9
LENDER'S DISCLAIMERS - BORROWER'S INDEMNITIES
Lender has no liability or obligation whatsoever or
howsoever in connection with any Project or the development
thereof or work performed thereon, and has no obligation except
to disburse the Loan proceeds, the Reserves and the escrowed
funds as herein agreed. Lender is not obligated to inspect the
Improvements nor is Lender liable, and under no circumstances
whatsoever shall Lender be or become liable, for the performance
or default of any contractor or subcontractor, or for any failure
to construct, complete, protect or insure any Project, or any
part thereof, or for the payment of any cost or expense incurred
in connection therewith, or for the performance or nonperformance
of any obligation of Borrower to Lender nor to any other
person, firm or entity without limitation. Nothing, including
without limitation any disbursement of Loan proceeds nor
acceptance of any document or instrument, shall be construed as
such a representation or warranty, express or implied, on
Lender's part.
9.1 No Obligation by Lender to Operate. Any term or
condition of any of the Facility Loan Documents to the contrary
notwithstanding, Lender shall not have, and by its execution
and acceptance of this Agreement hereby expressly disclaims, any
obligation or responsibility for the management, conduct or
operation of the business and affairs of Borrower or Guarantors.
Any term or condition of the Facility Loan Documents which
permits Lender to disburse funds, whether from the proceeds of
the Loan, the Reserves or otherwise, or to take or refrain from
taking any action with respect to Borrower, Guarantors, any
Project or any other collateral for repayment of the Loan, shall
be deemed to be solely to permit Lender to audit and review the
management, operation and conduct of the business and affairs of
Borrower and to maintain and preserve the security given by
Borrower to Lender for the Loan, and may not be relied
upon by any other person. Further, Lender shall not have, has
not assumed and by its execution and acceptance of this Agreement
hereby expressly disclaims any liability or responsibility for
the payment or performance of any indebtedness or obligation of
Borrower or Guarantors and no term or condition of the Facility
Loan Documents shall be construed otherwise. Borrower hereby
expressly acknowledges that no term or condition of the Facility
Loan Documents shall be construed so as to deem the relationship
between Borrower and Lender to be other than that of a borrower
and lender, and Borrower shall at all times represent that the
relationship between Borrower and Lender is solely that of a
borrower and lender. Borrower hereby indemnifies and agrees to
hold Lender harmless from and against any cost, expense or
liability incurred or suffered by Lender as a result of any
assertion or claim of any obligation or responsibility of Lender
for the management, operation and conduct of the business and
affairs of Borrower, or as a result of any assertion or claim of
any liability or responsibility of Lender for the payment or
performance of any indebtedness or obligation of Borrower.
9.2 Indemnity by Borrower. BORROWER HEREBY INDEMNIFIES
LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, AND AGENTS FROM, AND HOLDS EACH OF THEM
HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, COSTS, AND EXPENSES TO WHICH ANY OF THEM MAY BECOME
SUBJECT, INSOFAR AS SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES,
COSTS, AND EXPENSES ARISE FROM OR RELATE TO ANY OF THE FACILITY
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY OR
FROM ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING.
WITHOUT INTENDING TO LIMIT THE REMEDIES AVAILABLE TO LENDER WITH
RESPECT TO THE ENFORCEMENT OF ITS INDEMNIFICATION RIGHTS AS
STATED HEREIN OR AS STATED IN ANY FACILITY LOAN DOCUMENT, IN THE
EVENT ANY CLAIM OR DEMAND IS MADE OR ANY OTHER FACT COMES TO THE
ATTENTION OF LENDER IN CONNECTION WITH, RELATING OR PERTAINING
TO, OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, WHICH LENDER REASONABLY BELIEVES MIGHT INVOLVE OR LEAD
TO SOME LIABILITY OF LENDER, BORROWER SHALL, IMMEDIATELY UPON
RECEIPT OF WRITTEN NOTIFICATION OF ANY SUCH CLAIM OR DEMAND,
ASSUME IN FULL THE PERSONAL RESPONSIBILITY FOR AND THE DEFENSE OF
ANY SUCH CLAIM OR DEMAND AND PAY IN CONNECTION THEREWITH ANY
LOSS, DAMAGE, DEFICIENCY, LIABILITY OR OBLIGATION, INCLUDING,
WITHOUT LIMITATION, LEGAL FEES AND COURT COSTS INCURRED IN
CONNECTION THEREWITH. IN THE EVENT OF COURT ACTION IN CONNECTION
WITH ANY SUCH CLAIM OR DEMAND, BORROWER SHALL ASSUME IN FULL THE
RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION AND SHALL
IMMEDIATELY SATISFY AND DISCHARGE ANY FINAL DECREE OR JUDGMENT
RENDERED THEREIN. LENDER MAY, IN ITS SOLE DISCRETION, MAKE ANY
PAYMENTS SUSTAINED OR INCURRED BY REASON OF ANY OF THE FOREGOING;
AND BORROWER SHALL IMMEDIATELY REPAY TO LENDER, IN CASH, THE
AMOUNT OF SUCH PAYMENT, WITH INTEREST THEREON AT THE MAXIMUM RATE
OF INTEREST PERMITTED BY APPLICABLE LAW FROM THE DATE OF SUCH
PAYMENT. LENDER SHALL HAVE THE RIGHT TO JOIN BORROWER AS A PARTY
DEFENDANT IN ANY LEGAL ACTION BROUGHT AGAINST LENDER, AND
BORROWER HEREBY CONSENTS TO THE ENTRY OF AN ORDER MAKING BORROWER
A PARTY DEFENDANT TO ANY SUCH ACTION.
9.3 Relationship of Parties. THE RELATIONSHIP BETWEEN
BORROWER AND LENDER IS, AND AT ALL TIMES SHALL REMAIN, SOLELY
THAT OF DEBTOR AND CREDITOR, AND SHALL NOT BE, OR BE CONSTRUED TO
BE, A JOINT VENTURE, EQUITY VENTURE, PARTNERSHIP OR OTHER
RELATIONSHIP OF ANY NATURE.
9.4 Liability of Lender. Lender shall not be liable
hereunder for any act or omission by it, in the absence of fraud,
gross negligence or intentional misconduct. Lender shall incur
no liability to Borrower by acting upon any certificate or other
paper believed by it to be genuine and purporting to be assigned
by the proper party or with respect to anything which Lender
may do or refrain from doing unless it amounts to fraud or gross
negligence. Lender may consult with counsel selected by it, and
any action taken or suffered in good faith by it in accordance
with the opinion of such counsel shall be full justification and
protection to it.
ARTICLE 10
MISCELLANEOUS
10.1 Amendment; Waiver. No amendment or waiver of any
provision of this Agreement or any Notes, nor consent to any
departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by Lender. Any
such waiver, consent, or approval shall be effective only in the
specific instance and for the purpose for which given. No
notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in the same,
similar, or other circumstances. No waiver by Lender of any
breach or default of or by Borrower under this Agreement shall be
deemed a waiver of any other previous breach or default or any
thereafter occurring. In no event shall the delay of
enforcement of any rights or remedies available to Lender, or any
other indulgence, be construed as a waiver of rights or remedies
unless the same shall be agreed to in writing by Lender.
10.2 Severability. Any provision of this Agreement
prohibited by the laws of any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
or modified to conform with such laws, without invalidating the
remaining provisions of this Agreement, and any such prohibition
in any jurisdiction shall not invalidate such provisions in
any other jurisdiction.
10.3 Estoppel Certificates. After request by Lender,
Borrower, within ten (10) days, shall furnish Lender or any
proposed assignee with a statement, duly acknowledged and
certified, setting forth (i) the amount of the original principal
amount of the Note, (ii) the unpaid principal amount of the Note,
(iii) the rate of interest of the Note, (iv) the terms of payment
and maturity date of the Note, (v) the date installments of
interest and/or principal were last paid, (vi) that, except as
provided in such statement, there are no defaults or events which
with the passage of time or the giving of notice or both, would
constitute an event of default under the Note, (vii) that the
Note is a valid, legal and binding obligation and has not been
modified or if modified, giving particulars of such modification,
(viii) whether any offsets or defenses exist against the
obligations of Borrower and, if any are alleged to exist, a
detailed description thereof, and (ix) as to any other matters
reasonably requested by Lender.
10.4 Governing Law; Jurisdiction and Venue. Borrower
hereby acknowledges, consents and agrees that the provisions of
this Agreement and the other Facility Loan Documents shall
be interpreted and construed in accordance with the laws of the
Commonwealth of Pennsylvania. Borrower hereby consents to the
jurisdiction and venue of the United States District Court for
the Eastern District of Pennsylvania in any proceeding instituted
to enforce this Agreement, the Note or any of the obligations
evidenced in the Facility Loan Documents and hereby waives any
objections to such jurisdiction and venue.
10.5 Headings. The Article and Section headings in this
Agreement are for convenience only and shall not affect the
construction hereof.
10.6 Notices. No notice or other communication shall be
deemed given unless sent in the manner, and to the persons,
specified in this Section. All notices and other communications
hereunder shall be in writing and shall be deemed given (a) upon
receipt if delivered personally (unless subject to clause(b)) or
if mailed by registered or certified mail, (b) at noon on the
date after dispatch if sent by overnight courier or (c) upon the
completion of transmission (which is confirmed telephonically by
the receiving party) if transmitted by telecopy or other means of
facsimile which provides immediate or near immediate transmission
to compatible equipment in the possession of the recipient, and
in any case to the parties at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party
as will be specified by like notice):
If to Borrower: Montgomery CV Realty L.P.
Plymouth Plaza
580 W. Germantown Pike, Suite 200
Plymouth Meeting, Pennsylvania 19426
Attention: Paul Zambrotta
Telecopy Number: (610) 834-8110
with a copy to: Stanley S. Cohen, Esquire
Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, 10th Floor
Philadelphia, PA 19103-3291
Telecopy Number: (215) 299-2150
if to Guarantors: CV Reit, Inc.
c/o Hilcoast Development Corp.
100 Century Boulevard
West Palm Beach, FL 33417
Telecopy Number: (561) 640-3160
and
Century Plaza Associates, L.P.
c/o Hilcoast Development Corp.
100 Century Boulevard
West Palm Beach, FL 33417
Telecopy Number: (561) 640-3160
with a copy to: Stanley S. Cohen, Esquire
Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, 10th Floor
Philadelphia, PA 19103-3291
Telecopy Number: (215) 299-2150
If to Lender: GMAC Commercial Mortgage Corporation
650 Dresher Road
P.O. Box 1015
Horsham, Pennsylvania 19044
Attention: Loan Servicing Department
Telecopy Number: (215) 328-1378
Notwithstanding the foregoing, any notice in fact received
shall be effective as of the time of receipt.
10.7 Publicity. Except as required by law, Borrower,
without the express written consent of Lender, shall not
advertise or otherwise disclose, other than to its agents, the
fact that the type and amount of financing contemplated under
this Agreement has been provided for Borrower by Lender.
10.8 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making
by Lender of the Loan and the execution and delivery to Lender of
any Notes and shall continue in full force and effect so long as
the Note or any amount due hereunder is outstanding and
unpaid.
10.9 Waiver of Jury Trial. BORROWER WAIVES ALL RIGHTS TO
TRIAL BY JURY OF ANY AND ALL CLAIMS, COUNTERCLAIMS, AND DEFENSES
ARISING UNDER THIS AGREEMENT, THE NOTES, THE OTHER FACILITY LOAN
DOCUMENTS, OR ANY OTHER AGREEMENT OR AGREEMENTS BETWEEN BORROWER
AND LENDER AT ANY TIME, INCLUDING ANY SUCH AGREEMENTS, WHETHER
WRITTEN OR ORAL, MADE OR ALLEGED TO HAVE BEEN MADE AT ANY TIME
PRIOR TO THE DATE HEREOF, AND ALL AGREEMENTS MADE HEREAFTER OR
OTHERWISE. IN MAKING THIS WAIVER BORROWER ACKNOWLEDGES AND
AGREES THAT ANY AND ALL SUCH CLAIMS, COUNTERCLAIMS, AND DEFENSES
SHALL BE HEARD BY A JUDGE OF A COURT OF COMPETENT JURISDICTION,
WITHOUT A JURY. BORROWER ACKNOWLEDGES AND AGREES THAT THIS
WAIVER OF TRIAL BY JURY IS A MATERIAL ELEMENT OF THE
CONSIDERATION FOR THIS AGREEMENT. BORROWER ACKNOWLEDGE THAT THIS
IS A WAIVER OF A LEGAL RIGHT AND THAT THIS WAIVER IS MADE
KNOWINGLY AND VOLUNTARILY AFTER CONSULTATION WITH, OR THE
OPPORTUNITY TO CONSULT WITH, COUNSEL OF ITS CHOICE.
10.10 Controlling Document. In the event of a conflict
between the terms and conditions of this Agreement and the terms
and conditions of any other Facility Loan Document, the
terms and conditions of this Agreement shall control.
10.11 Successors. This Agreement shall be binding upon
and inure to the benefit of Borrower, any Guarantor, their
successors, and those assigns consented to in writing by Lender,
and upon Lender, its successors and assigns. Any assignment
attempted by Borrower without the written consent of Lender shall
be void. Wherever the word "Lender" is used herein it shall
be deemed to include also the successors and assigns of Lender,
and the word "Borrower" shall include the successors of Borrower
and shall include those assignees of Borrower consented to
in writing by Lender. No consent by Lender of an assignment by
Borrower shall release Borrower as a party primarily obligated
and liable under the terms of this Agreement unless Borrower
shall be released specifically by Lender in writing. No consent
by Lender to an assignment shall be deemed to be a waiver of the
requirement of consent by Lender of each and every further
assignment, as a condition precedent to the effectiveness of such
assignment.
10.12 Time. Time is of the essence of this Agreement and
each and every term, covenant, and condition herein.
10.13 Changes. This Agreement may not be changed or
terminated orally.
10.14 Counterparts. This Agreement may be executed in
any number of counterparts, and each such counterpart shall be
deemed to be an original, but all of which shall constitute one
and the same instrument.
10.15 Recitals. The Recitals to this Agreement are a
part of this Agreement and are incorporated herein.
IN WITNESS WHEREOF, and intending to be legally bound
hereby, Borrower, Guarantors and Lender have executed this Loan
and Credit Facility Agreement under seal as of the day
and year first above written.
BORROWER:
MONTGOMERY CV REALTY L.P., a Delaware
limited partnership
By: Montgomery CV Realty Trust, its sole
general partner
By: /s/ Louis P. Meshon, Sr.
Name: Louis P. Meshon, Sr.
Title: Managing Trustee
GUARANTORS:
CV REIT, INC., a Delaware corporation
By: /s/ Louis P. Meshon, Sr.
Name: Louis P. Meshon, Sr.
Title: President and Chief Executive
Officer
CENTURY PLAZA ASSOCIATES, L.P., a Delaware
limited partnership
By: CP General Partner LLC, a Delaware
limited liability company, its
sole general partner
By: /s/ Louis P. Meshon, Sr.
Name: Louis P. Meshon, Sr.
Title: President
By: Montgomery CV Realty L.P., a Delaware
limited partnership, its sole member
By: Montgomery CV Realty Trust, its sole
general partner
By: /s/ Louis P. Meshon, Sr.
Name: Louis P. Meshon, Sr.
Title: Managing Trustee
LENDER:
GMAC COMMERCIAL MORTGAGE CORPORATION,
a California corporation
By: /s/ Avis Tsuya
Name: Avis Tsuya
Its: Vice President
EXHIBIT 5.2
NOTE
$7,650,000 Philadelphia, Pennsylvania
April 9, 1998
FOR VALUE RECEIVED, the undersigned, MONTGOMERY CV REALTY
L.P., a Delaware limited partnership having an address at
Plymouth Plaza, 580 West Germantown Pike, Suite 200, Plymouth
Meeting, Pennsylvania 19426 ("Borrower"), hereby promises to pay
to the order of GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation, having an address at 650 Dresher Road,
P.O. Box 1015, Horsham, Pennsylvania 19044-8015 ("Lender"), its
successors and permitted assigns as holder of this Note (Lender,
its successors and permitted assigns, being hereinafter sometimes
referred to collectively as "Holder"), at Lender's address set
forth above or at such other place or to such other person as may
be designated in writing to Borrower by Lender, the principal sum
of Seven Million Six Hundred Fifty Thousand Dollars ($7,650,000)
(the "Loan"), together with interest on the unpaid balance
thereof at the rates hereinafter set forth.
ON THE TERMS AND SUBJECT TO THE CONDITIONS which are
hereinafter set forth:
Section 1. Interest Rate and Payment Dates.
1.1 Initial Rate and Initial Payment. Interest shall
accrue on the balance of the principal amount outstanding
hereunder from time to time from and after the date hereof at the
rate of 7.43750% per annum until the first Rate Adjustment Date
(as defined below). On each successive Rate Adjustment Date, the
rate of interest at which interest accrues shall be adjusted to
the then applicable LIBOR Rate (as defined below) for the
calendar month commencing on such date. Interest for the period
beginning on the date of the first advance hereunder and ending
on and including the last day of the month in which this Note is
dated shall be payable on the date hereof. Interest shall be
calculated on the basis of a 360-day year and shall be charged on
the principal balance outstanding from time to time for the
actual number of days elapsed.
1.2 Rate Adjustment Date. The interest rate shall be
adjusted on the dates (each being a "Rate Adjustment Date")
described in this paragraph. The first Rate Adjustment Date
shall be May 1, 1998, and subsequent Rate Adjustment Dates shall
fall on the first day of each subsequent calendar month
thereafter.
1.3 Default Interest Rate. If Borrower fails to make any
payment of principal, interest or fees on the date on which such
payment becomes due and payable, whether at maturity or by
acceleration, such payment shall bear interest beginning on the
eleventh day following the date which such amount became due and
payable until paid at the fluctuating rate (the "Default Rate")
which is four (4) percentage points above the then applicable
LIBOR Rate, but in no event shall the rate of interest payable
hereunder exceed the highest rate allowed by law.
1.4 LIBOR Rate. The LIBOR Rate shall mean the rate per
annum determined solely by Holder as of each Rate Adjustment
Date, and shall be one and seventy-five one-hundredths percent
(1.75%) per annum in excess of one month LIBOR (stated as a
number out to five decimal places), determined in the manner set
forth below. On each Rate Adjustment Date, Holder will determine
one month LIBOR from the appropriate Bloomberg display page,
available as of the close of business on the last business day of
the month immediately preceding the Rate Adjustment Date. In the
event Bloomberg ceases publication or ceases to publish one month
LIBOR, Holder shall select a comparable publication to determine
one month LIBOR and provide notice thereof to Borrower. LIBOR
may or may not be the lowest rate based upon the market for U.S.
Dollar deposits in the London Interbank Eurodollar Market at
which Holder prices loans on the date on which the LIBOR Rate is
determined by Holder as set forth above.
1.5 LIBOR Rate Adjustments. This Note shall bear interest
at the rate set forth above or at the applicable LIBOR Rate until
a new LIBOR Rate is determined on each Rate Adjustment Date in
accordance with the provisions hereof; provided, however, that,
if Holder at any time determines, in its sole discretion, that it
has miscalculated the amount of the monthly payment of interest,
then Holder shall give notice to Borrower of the corrected amount
of such monthly payment (and the corrected amount of the LIBOR
Rate, if applicable) and (a) if the corrected amount of such
monthly payment represents an increase thereof, then Borrower
shall, within ten (10) calendar days thereafter, pay to Holder
any sums that Borrower would have otherwise been obligated under
this Note to pay to Holder had the amount of such monthly payment
not been miscalculated, or (b) if the corrected amount of such
monthly payment represents a decrease thereof and Borrower is not
otherwise in breach or default under any of the terms and
provisions of this Note or the Mortgage (as defined below), then
Borrower shall, within (10) calendar days thereafter be paid the
sums that Borrower would not have otherwise been obligated to pay
to Holder had the amount of such monthly payment not been
miscalculated.
1.6 LIBOR Unascertainable. Anything herein to the contrary
notwithstanding, if (i) on any date on which the LIBOR Rate would
otherwise be set Holder shall have determined in good faith
(which determination shall be conclusive) that (A) adequate and
reasonable means do not exist for ascertaining one month LIBOR,
or (B) a contingency has occurred which materially and adversely
affects the London Interbank Eurodollar Market at which Holder
prices loans on the date on which the LIBOR Rate is determined by
Holder as set forth above, or (ii) at any time Holder shall have
determined in good faith (which determination shall be
conclusive) that the making, maintenance or funding of any part
of the Loan has been made impracticable or unlawful by compliance
by Holder in good faith with any applicable law, regulation or
guideline or interpretation or administration thereof by any
governmental authority charged with the interpretation or
administration thereof or with any request or directive of any
such governmental authority (whether or not having the force of
law); then, and in any such event, Holder may notify Borrower of
such determination. Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is
given) the obligation of Holder to charge interest to Borrower at
the LIBOR Rate shall be suspended until Holder shall have later
notified Borrower of Holder's determination in good faith (which
determination shall be conclusive) that the circumstances giving
rise to such previous determination no longer exist.
1.7 Treasury Rate. If Holder notifies Borrower of a
determination under Section 1.6 hereof, the LIBOR Rate shall
automatically be converted to the Treasury Rate as of the date
specified in such notice (and accrued interest thereon shall be
due and payable on such date). "Treasury Rate" shall mean a rate
equal to the "Index" of the weekly average yield on United States
Treasury Securities adjusted to a constant maturity of one year,
as made available by the Federal Reserve Board 45 days prior to
each Rate Adjustment Date (the "Yield"), plus or minus, as the
case may be, the difference between the Yield and the last
available LIBOR Rate (stated as a number out to five decimal
places).
1.8 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change therein, or
any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
compliance by the Holder with any request or directive (whether
or not having the force of law) of any such authority, central
bank, or comparable agency shall subject Holder to any tax, duty
or other charge with respect to the Loan, or shall change the
basis of taxation of payments to Holder of the principal of or
interest on the Loan or any other amounts due under the Notes or
in respect of the Loan or its obligation to make the Loan (except
for changes in the rate of tax on the overall net income of the
Holder) and the result of the foregoing is to increase the cost
to Holder of making or maintaining the Loan, or to reduce the
amount of any sum received or receivable by Holder under this
Note with respect thereto, by an amount reasonably deemed by
Holder to be material, then, within fifteen days after demand by
Holder, Borrower shall pay to Holder such additional amount or
amounts as will compensate Holder for such increased cost or
reduction.
(b) Holder will promptly notify Borrower of any
event of which it has knowledge, occurring after the date hereof,
which will entitle Holder to compensation pursuant to this
Section. A certificate of Holder claiming compensation under
this Section, setting forth the additional amount or amounts to
be paid to it hereunder and evidence reasonably substantiating
Holder's claim for compensation shall be conclusive in the
absence of manifest error. In determining such amount, Holder
may use any reasonable averaging and attribution methods.
Section 2. Interest Payments. Commencing on May 1, 1998,
and continuing on the first day of each calendar month thereafter
through and including the Maturity Date (as defined below),
interest shall be due and payable by Borrower to Holder hereunder
in arrears at the applicable LIBOR Rate (or the Treasury Rate, if
applicable) determined as of the immediately preceding Rate
Adjustment Date, on the then outstanding principal balance of the
Loan. Lender will use its best efforts to deliver to Borrower
prior to the first of each month an invoice which sets forth the
amount of interest due to Lender.
Section 3. Application of Payments. Payments made by
Borrower on account hereof shall be applied first toward any Late
Fees (as defined below) or other fees and charges due hereunder,
second toward payment of any interest due at the Default Rate,
third toward payment of any interest due at the then applicable
LIBOR Rate set forth in Section 1.4 hereof (or the Treasury Rate,
if applicable), and fourth toward payment of principal.
Notwithstanding the foregoing, if any advances made by Holder
under the terms of any instruments securing this Note have not
been repaid, any payments made may, at the option of Holder, be
applied first to repay such advances, and interest thereon, with
the balance, if any, applied as set forth in the preceding
sentence.
Section 4. Maturity Date. Anything in this Note to the
contrary notwithstanding, the entire unpaid balance of the
principal amount thereof and all interest accrued thereon
(including, without limitation, interest accruing at the Default
Rate), all Late Fees (hereinafter defined) and all other amounts
due hereunder and under any other instrument or document
evidencing or securing the Loan which has been executed by
Borrower and/or others and by or in favor of Holder
(collectively, the "Loan Documents"), shall, unless sooner paid,
and except to the extent that payment thereof is sooner demanded
in accordance with the terms of the Loan Documents, be and become
due and payable on December 1, 2000 (the "Maturity Date").
Section 5. Prepayment. Prepayment of the Loan in full or
in part shall be permitted only in accordance with the Loan
Agreement (the "Loan Agreement") dated as of March 31, 1998 by
and between Borrower, Century Plaza Associates, L.P. and CV Reit,
Inc., as guarantors (each a "Guarantor") and Holder as the Loan
Agreement may be amended, supplemented, replaced or otherwise
modified from time to time.
Section 6. Method of Payment. All payments to be made
under this Note shall be paid directly to Holder in lawful tender
of the United States of America. Each such payment shall be paid
by 1:00 p.m. at Horsham, Pennsylvania, time on the date such
payment is due, except if such date is not a business day such
payment shall then be due on the first business day after such
date, but interest shall continue to accrue until the date
payment is received. Any payment received after 1:00 p.m.
Horsham, Pennsylvania, time shall be deemed to have been received
on the immediately following business day for all purposes,
including, without limitation, the accrual of interest on
principal.
Section 7. Security. The debt evidenced by this Note is
secured by, among other things, a Mortgage and Security Agreement
(the "Mortgage") of even date herewith and intended to be
recorded in the office of the Recorder of Deeds for Broward
County, Florida by and between Century Plaza Associates, L.P. and
Holder, covering all of that real property in such county which
is described in Exhibit A thereto (the "Property"), and other
property, as more particularly described therein, as the same may
be amended, supplemented, replaced or otherwise modified from
time to time.
Section 8. Default.
8.1 Events of Default.
The entire outstanding principal sum of this Note,
together with all interest accrued and unpaid thereon and all
other sums due under the Mortgage, the Loan Documents and this
Note (all such sums hereinafter collectively referred to as the
"Debt"), or any portion thereof, shall without notice become
immediately due and payable at the option of Holder if any
payment required under this Note is not paid within ten (10) days
of the date when due or on the happening of any other default,
after the expiration of any applicable notice and grace periods,
herein or under the terms of the Mortgage or the Loan Documents
(hereinafter each an "Event of Default"). Time is of the essence
in this Note, the Mortgage and the Loan Documents. All of the
terms, covenants and conditions contained in the Mortgage and the
Loan Documents are hereby made part of this Note to the same
extent and with the same force as if they were fully set forth
herein. In the event that Holder employs counsel to collect the
Debt or to protect or foreclose the security hereof, Borrower
also agrees to pay on demand all costs of collection incurred by
Holder, including reasonable attorneys' fees for the services of
counsel whether or not suit be brought.
Borrower does hereby agree that upon the occurrence of
an Event of Default which is not cured within any applicable
grace or notice period, or upon the failure of Borrower to pay
the Debt in full on the Maturity Date, Holder shall be entitled
to receive and Borrower shall pay interest on the entire unpaid
principal sum at "Default Rate". The Default Rate shall be
computed from the occurrence of the Event of Default until the
actual receipt and collection of the Debt. This charge shall be
added to the Debt, and shall be deemed secured by the Mortgage.
This clause, however, shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Holder by reason
of the occurrence of any Event of Default. In the event the
Default Rate would otherwise exceed the maximum rate permitted by
applicable law, the Default Rate shall be the maximum rate
permitted by applicable law.
8.2 No Impairment of Rights; Premium Due. Nothing in this
Section shall be deemed in any way to alter or impair any right
which Holder has under this Note or the Mortgage, or any of the
other Loan Documents or at law or in equity, to accelerate such
debt on the occurrence of any Event of Default provided herein or
therein, whether or not relating to this Note. Upon the
acceleration of this Note because of an Event of Default, Holder
shall be entitled to receive, in addition to all other amounts
due Holder, the Exit Fee (as defined in the Loan Agreement).
8.3 Late Fees. Without limiting the generality of the
foregoing provisions of this Section, if any sum payable under
this Note is not paid within ten (10) days after the date on
which it becomes due and payable, Borrower shall thereupon
automatically become obligated immediately to pay to Holder a
late charge equalling five (5%) percent of the amount of such
payment ("Late Fees"), which shall be due and payable immediately
thereupon, to defray the expenses incurred by Holder in handling
and processing such delinquent payment and to compensate Holder
for the loss of the use of such delinquent payment and such
amount shall be secured by the Mortgage and the Loan Documents.
Section 9. Costs of Enforcement. Borrower shall pay to
Holder on demand by the latter the amount of any and all expenses
incurred by Holder in enforcing its rights hereunder or under the
Mortgage and/or the other Loan Documents following an Event of
Default, including but not limited to the expense of collecting
any amount owed hereunder, and of any and all reasonable
attorneys' fees incurred by Holder in connection with such
default, whether suit be brought or not, or in protecting the
security hereof. Such expenses shall be added to the principal
amount hereof, shall be secured by the Mortgage and shall accrue
interest at the Default Rate.
Section 10. Borrower's Waiver of Certain Rights. Borrower
hereby waives the exercise of any and all exemption rights which
it holds at law or in equity with respect to the debt evidenced
by this Note, and of any and all rights which it holds at law or
in equity to have or receive any presentment, protest, demand and
notice of dishonor, protest, demand and nonpayment as a condition
to Holder's exercise of any of its rights under this Note or the
Loan Documents.
Section 11. Extensions. The Maturity Date and/or any other
date by which any payment is required to be made hereunder may be
extended by Holder from time to time in the exercise of its sole
discretion, without in any way altering or impairing Borrower's
liability hereunder.
Section 12. General.
12.1 Applicable Law. This Note shall be given effect and
construed by application of the laws of the Commonwealth of
Pennsylvania, and any action or proceeding arising hereunder, and
each of Holder and Borrower submits (and waives all rights to
object) to non-exclusive personal jurisdiction in the
Commonwealth of Pennsylvania, for the enforcement of any and all
obligations under this Note and the Loan Documents except that if
any such action or proceeding arises under the Constitution, laws
or treaties of the United States of America, or if there is a
diversity of citizenship between the parties thereto, so that it
is to be brought in a United States District Court, it shall be
brought in the United States District Court for the Eastern
District of Pennsylvania or any successor federal court having
original jurisdiction.
12.2 Headings. The headings of the Sections, subsections,
paragraphs and subparagraphs hereof are provided herein for and
only for convenience of reference, and shall not be considered in
construing their contents.
12.3 Construction. As used herein, (a) the term "person"
means a natural person, a trustee, a corporation, a limited
liability company, a partnership and any other form of legal
entity, and (b) all references made (i) in the neuter, masculine
or feminine gender shall be deemed to have been made in all such
genders, (ii) in the singular or plural number shall be deemed to
have been made, respectively, in the plural or singular number as
well, and (iii) to any Section, subsection, paragraph or
subparagraph shall, unless therein expressly indicated to the
contrary, be deemed to have been made to such Section,
subsection, paragraph or subparagraph of this Note.
12.4 Severability. No determination by any court,
governmental body or otherwise that any provision of this Note or
any amendment hereof is invalid or unenforceable in any instance
shall affect the validity or enforceability of (a) any other such
provision, or (b) such provision in any circumstance not
controlled by such determination. Each such provision shall be
valid and enforceable to the fullest extent allowed by, and shall
be construed wherever possible as being consistent with,
applicable law.
12.5 No Waiver. Holder shall not be deemed to have waived
the exercise of any right which it holds hereunder unless such
waiver is made expressly and in writing. No delay or omission by
Holder in exercising any such right (and no allowance by Holder
to Borrower of an opportunity to cure a default in performing its
obligations hereunder) shall be deemed a waiver of its future
exercise. No such waiver made as to any instance involving the
exercise of any such right shall be deemed a waiver as to any
other such instance, or any other such right. Further,
acceptance by Holder of all or any portion of any sum payable
under, or partial performance of any covenant of, this Note, the
Mortgage or any of the other Loan Documents, whether before, on,
or after the due date of such payment or performance, shall not
be a waiver of Holder's right either to require prompt and full
payment and performance when due of all other sums payable or
obligations due thereunder or hereunder or to exercise any of
Holder's rights and remedies hereunder or thereunder.
12.6 Waiver of Jury Trial; Service of Process; Court Costs.
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO WHICH BORROWER AND HOLDER MAY BE PARTIES ARISING OUT OF, IN
CONNECTION WITH, OR IN ANY WAY PERTAINING TO, THIS NOTE AND/OR
ANY OF THE LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING BUT
NOT LIMITED TO CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE
BY BORROWER, AND BORROWER HEREBY REPRESENTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS
AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS
NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL
COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
BORROWER AGREES TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY'S
FEES INCURRED BY HOLDER IN CONNECTION WITH ENFORCING ANY
PROVISION OF THIS NOTE.
12.7 Offset. Upon the occurrence of an Event of Default,
Holder may set-off against any principal and interest owing
hereunder, any and all credits, money, stocks, bonds or other
security or property of any nature whatsoever on deposit with, or
held by, or in the possession of, Holder, to the credit of or for
the account of Borrower, without notice to or consent of Borrower
or any Guarantor, provided that Holder shall give subsequent
notice to Borrower of any such set-off.
12.8 Non-Exclusivity of Rights and Remedies. None of the
rights and remedies herein conferred upon or reserved to Holder
is intended to be exclusive of any other right or remedy
contained herein or in any of the Loan Documents and each and
every such right and remedy shall be cumulative and concurrent,
and may be enforced separately, successively or together, and may
be exercised from time to time as often as may be deemed
necessary or desirable by Holder.
12.9 Incorporation by Reference. All of the agreements,
conditions, covenants and provisions contained in each of the
Loan Documents are hereby made a part of this Note to the same
extent and with the same force and effect as if they were fully
set forth herein. Borrower covenants and agrees to keep and
perform, or cause to be kept and performed, all such agreements,
conditions, covenants and provisions strictly in accordance with
their terms.
12.10 Joint and Several Liability. If Borrower consists of
more than one person and/or entity, each such person and/or
entity agrees that its liability hereunder is joint and several.
12.11 Business Purpose. Borrower represents and warrants
that the Loan is being obtained solely for the purpose of
acquiring or carrying on a business, professional or commercial
activity and is not for personal, agricultural, family or
household purposes.
12.12 Interest Limitation. This Note is subject to the
express condition that at no time shall Borrower be obligated or
required to pay interest on the Loan and other sums due hereunder
or any portion thereof at a rate which could subject Lender 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 Note, Borrower is at any time required or obligated to pay
interest on the Loan and other sums due hereunder or any portion
thereof at a rate in excess of such maximum rate, the rate of
interest under this 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 the maximum rate shall be deemed to have been payments
in reduction of principal and not on account of the interest due
hereunder.
12.13 Modification. This Note may not be modified,
amended, extended, changed, discharged, terminated or waived
orally or by any act or failure to act on the part of Borrower or
Holder, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment,
extension, change, discharge, termination or waiver is sought.
12.14 Time of the Essence. Time is strictly of the essence
of this Note.
12.15 Negotiable Instrument. Borrower agrees that this
Note shall be deemed a negotiable instrument, even though this
Note may not otherwise qualify, under applicable law, absent this
paragraph, as a negotiable instrument. Borrower agrees that
Holder shall have the right to transfer, sell and assign this
Note, the Mortgage and the Loan Documents, and the obligations
hereunder, provided that Holder shall promptly give Borrower
subsequent notice of such transfer, sale or assignment.
12.16 Interest Rate After Judgment. If judgment is entered
against Borrower on this Note, the amount of the judgment entered
(which may include principal, interest, fees, Late Fees and
costs) shall bear interest at the Default Rate, to be determined
on the date of the entry of the judgment.
12.17 Relationship. Borrower and Holder intend that the
relationship between them shall be solely that of creditor and
debtor. Nothing contained in this Note or in any of the other
Loan Documents shall be deemed or construed to create a
partnership, tenancy-in-common, joint tenancy, joint venture or
co-ownership by or between Borrower and Holder.
12.18 Waiver of Automatic Stay. BORROWER HEREBY AGREES
THAT, IN CONSIDERATION OF HOLDER'S AGREEMENT TO MAKE THE LOAN AND
IN RECOGNITION THAT THE FOLLOWING COVENANT IS A MATERIAL
INDUCEMENT FOR HOLDER TO MAKE THE LOAN, IN THE EVENT THAT
BORROWER SHALL (I) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT
JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER ANY SECTION
OR CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED
("BANKRUPTCY CODE"), OR SIMILAR LAW OR STATUTE; (II) BE THE
SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE BANKRUPTCY CODE
OR SIMILAR LAW OR STATUTE; (III) FILE OR BE THE SUBJECT OF ANY
PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER
ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS; (IV) HAVE
SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY
TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR; OR (V) BE THE
SUBJECT OF AN ORDER, JUDGMENT OR DECREE ENTERED BY ANY COURT OF
COMPETENT JURISDICTION APPROVING A PETITION FILED AGAINST ANY
BORROWER FOR ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER
ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY OR RELIEF FOR DEBTORS, THEN, SUBJECT TO
COURT APPROVAL, HOLDER SHALL THEREUPON BY ENTITLED AND BORROWER
HEREBY IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST, AND AGREES
TO STIPULATE TO RELIEF FROM ANY AUTOMATIC STAY OR OTHER
INJUNCTION IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE, OR
SIMILAR LAW OR STATUTE (INCLUDING, WITHOUT LIMITATION, RELIEF
FROM ANY EXCLUSIVE PERIOD SET FORTH IN SECTION 1121 OF THE
BANKRUPTCY CODE) OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE
RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO HOLDER AS PROVIDED IN
THIS NOTE AND THE LOAN DOCUMENTS, AND AS OTHERWISE PROVIDED BY
LAW, AND BORROWER HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO OBJECT
TO SUCH RELIEF.
12.19 Notices. All notices or other written communications
hereunder shall be given and become effective as provided in the
Loan Agreement.
IN WITNESS WHEREOF, Borrower has executed this Note or
caused it to be executed on its behalf by its duly authorized
representatives, the day and year first above written, and the
obligations under this Note shall be binding upon Borrower's
successors and assigns.
MONTGOMERY CV REALTY L.P., a Delaware
limited partnership
By: Montgomery CV Trust, its sole
general partner
By: /s/Louis P. Meshon,Sr.
Name:Louis P. Meshon, Sr.
Title:Managing Trustee
EXHIBIT 5.3
CENTURY PLAZA ASSOCIATES, L.P., as mortgagor
(Mortgagor)
to
GMAC COMMERCIAL MORTGAGE CORPORATION, as mortgagee
(Lender)
___________________________________
MORTGAGE AND
SECURITY AGREEMENT
___________________________________
Dated: April 9, 1998
Location: Broward County, Florida
Parcel Identification No.
Commonly known as Century Plaza
PREPARED BY, WITH THE ADVICE
OF LOCAL COUNSEL, AND UPON
RECORDATION RETURN TO:
Tina R. Makoulian, Esquire
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, Pennsylvania 19103
TABLE OF CONTENTS
Page
Article 1 - GRANTS OF SECURITY . . . . . . . . . . . . . . . . 1
Section 1.1 Property Mortgaged. . . . . . . . . . . . . . . 1
Section 1.2 Assignment of Leases and Rents. . . . . . . . 4
Section 1.3 Security Agreement. . . . . . . . . . . . . . 4
Section 1.4 Pledge of Monies Held. . . . . . . . . . . . . 4
Article 2 - OBLIGATIONS SECURED. . . . . . . . . . . . . . . . 5
Section 2.1 Debt. . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 Debt and Other Obligations. . . . . . . . . . 6
Article 3 - MORTGAGOR COVENANTS. . . . . . . . . . . . . . . . 6
Section 3.1 Performance of Obligations. . . . . . . . . . 6
Section 3.2 Incorporation by Reference. . . . . . . . . . 6
Section 3.3 Insurance. . . . . . . . . . . . . . . . . . . 6
Section 3.4 Payment of Taxes, Etc. . . . . . . . . . . . . 11
Section 3.5 Escrow Fund. . . . . . . . . . . . . . . . . . 12
Section 3.6 Condemnation. . . . . . . . . . . . . . . . . 12
Section 3.7 Leases and Rents. . . . . . . . . . . . . . . 13
Section 3.8 Maintenance of Property. . . . . . . . . . . . 14
Section 3.9 Waste. . . . . . . . . . . . . . . . . . . . . 14
Section 3.10 Compliance With Laws. . . . . . . . . . . . . 15
Section 3.11 Books and Records. . . . . . . . . . . . . . 16
Section 3.12 Payment For Labor and Materials. . . . . . . 16
Section 3.13 Performance of Other Agreements. . . . . . . 16
Section 3.14 Existence. . . . . . . . . . . . . . . . . . 16
Article 4 - SPECIAL COVENANTS. . . . . . . . . . . . . . . . . 16
Section 4.1 Property Use. . . . . . . . . . . . . . . . . 16
Section 4.2 Restoration After Casualty/Condemnation . . . . 16
Article 5 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 21
Section 5.1 Warranty of Title. . . . . . . . . . . . . . . 21
Section 5.2 Authority. . . . . . . . . . . . . . . . . . . 22
Section 5.3 Legal Status and Authority. . . . . . . . . . 22
Section 5.4 Validity of Documents. . . . . . . . . . . . . 22
Section 5.5 Litigation. . . . . . . . . . . . . . . . . . 23
Section 5.6 Status of Property. . . . . . . . . . . . . . 23
Section 5.7 No Foreign Person. . . . . . . . . . . . . . . 24
Section 5.8 Separate Tax Lot. . . . . . . . . . . . . . . 24
Section 5.9 ERISA Compliance. . . . . . . . . . . . . . . 24
Section 5.10 Leases. . . . . . . . . . . . . . . . . . . . 25
Section 5.11 Financial Condition. . . . . . . . . . . . . 25
Section 5.12 Taxes. . . . . . . . . . . . . . . . . . . . 26
Section 5.13 No Change in Facts or Circumstances. . . . . 26
Section 5.14 Disclosure. . . . . . . . . . . . . . . . . . 26
Section 5.15 Third Party Representations. . . . . . . . . 26
Section 5.16 Illegal Activity. . . . . . . . . . . . . . . 26
Article 6 - FURTHER ASSURANCES . . . . . . . . . . . . . . . . 26
Section 6.1 Recording of Security Instrument, Etc. . . . . 26
Section 6.2 Further Acts, Etc. . . . . . . . . . . . . . . 27
Section 6.3 Changes in Tax, Debt Credit and Documentary
Stamp
Laws. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6.4 Estoppel Certificates. . . . . . . . . . . . . 28
Section 6.5 Flood Insurance. . . . . . . . . . . . . . . . 29
Section 6.6 Replacement Documents. . . . . . . . . . . . . 29
Section 6.7 Amended Financing Statements. . . . . . . . . 29
Article 7 - DUE ON SALE/ENCUMBRANCE. . . . . . . . . . . . . . 29
Section 7.1 No Sale/Encumbrance . . . . . . . . . . . . . . 29
Section 7.2 Sale/Encumbrance Defined. . . . . . . . . . . 29
Section 7.3 Lender's Rights. . . . . . . . . . . . . . . . 30
Article 8 - PREPAYMENT . . . . . . . . . . . . . . . . . . . . 31
Section 8.1 Prepayment Only in Accordance with Note.. . . . 31
Article 9 - DEFAULT. . . . . . . . . . . . . . . . . . . . . . 31
Section 9.1 Events of Default. . . . . . . . . . . . . . . 31
Article 10 - RIGHTS AND REMEDIES . . . . . . . . . . . . . . . 33
Section 10.1 Remedies. . . . . . . . . . . . . . . . . . . 33
Section 10.2 Application of Proceeds. . . . . . . . . . . 36
Section 10.3 Right to Cure Defaults. . . . . . . . . . . . 37
Section 10.4 Actions and Proceedings. . . . . . . . . . . 37
Section 10.5 Recovery of Sums Required To Be Paid. . . . . 37
Section 10.6 Examination of Books and Records. . . . . . . 37
Section 10.7 Other Rights, Etc. . . . . . . . . . . . . . 38
Section 10.8 Right to Release Any Portion of the
Property. . . . . . . . . . . . . . . . . . 38
Section 10.9 Violation of Laws. . . . . . . . . . . . . . 39
Section 10.10 Right of Entry. . . . . . . . . . . . . . . 39
Article 11 - ENVIRONMENTAL HAZARDS . . . . . . . . . . . . . . 39
Section 11.1 Environmental Representations and
Warranties. . . . . . . . . . . . . . . . . 39
Section 11.2 Environmental Covenants. . . . . . . . . . . 41
Section 11.3 Lender's Rights. . . . . . . . . . . . . . . 42
Article 12 - INDEMNIFICATION . . . . . . . . . . . . . . . . . 42
Section 12.1 General Indemnification. . . . . . . . . . . 42
Section 12.2 Mortgage and/or Intangible Tax. . . . . . . . 44
Section 12.3 ERISA Indemnification. . . . . . . . . . . . 44
Section 12.4 Duty to Defend; Attorneys' Fees and Other
Fees and Expenses. . . . . . . . . . . . . . 44
Article 13 - WAIVERS . . . . . . . . . . . . . . . . . . . . . 45
Section 13.1 Waiver of Counterclaim. . . . . . . . . . . . 45
Section 13.2 Marshalling and Other Matters. . . . . . . . 45
Section 13.3 Waiver of Notice. . . . . . . . . . . . . . . 45
Section 13.4 Sole Discretion of Lender. . . . . . . . . . 45
Section 13.5 Survival. . . . . . . . . . . . . . . . . . . 45
Section 13.6 Waiver of Trial By Jury. . . . . . . . . . . 46
Article 14 - Intentionally Omitted . . . . . . . . . . . . . . 46
Article 15 - NOTICES . . . . . . . . . . . . . . . . . . . . . 46
Section 15.1 Notices. . . . . . . . . . . . . . . . . . . 46
Article 16 - APPLICABLE LAW. . . . . . . . . . . . . . . . . . 47
Section 16.1 Choice of Law. . . . . . . . . . . . . . . . 47
Section 16.2 Usury Laws. . . . . . . . . . . . . . . . . . 47
Section 16.3 Provisions Subject to Applicable Law. . . . . 48
Section 16.4 Inapplicable Provision. . . . . . . . . . . . 48
Article 17 - SECONDARY MARKET. . . . . . . . . . . . . . . . . 48
Section 17.1 Dissemination of Information. . . . . . . . . 48
Article 18 - COSTS . . . . . . . . . . . . . . . . . . . . . . 49
Section 18.1 Performance at Mortgagor's Expense. . . . . . 49
Section 18.2 Attorneys' Fees for Enforcement. . . . . . . 50
Article 19 - DEFINITIONS . . . . . . . . . . . . . . . . . . . 50
Section 19.1 General Definitions. . . . . . . . . . . . . 50
Section 19.2 Headings, Etc. . . . . . . . . . . . . . . . 50
Article 20 - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . 51
Section 20.1 No Oral Change. . . . . . . . . . . . . 51
Section 20.2 Liability. . . . . . . . . . . . . . . . . . 51
Section 20.3 Duplicate Originals; Counterparts. . . . . . 51
Section 20.4 Number and Gender. . . . . . . . . . . . . . 51
Section 20.5 Subrogation. . . . . . . . . . . . . . . . . 51
Section 20.6 Entire Agreement. . . . . . . . . . . . . . . 51
Article 21 - PERFORMANCE BY MONTGOMERY . . . . . . . . . . . . 52
Article 22 - LOCAL LAW PROVISIONS. . . . . . . . . . . . . . . 52
Exhibits -
Exhibit A - Description of Land
Exhibit B - Local Law Provisions
Definitions
The terms set forth below are defined in the following Sections
of this Security Instrument:
a. ADA: Subsection 3.10(a);
b. Applicable Law: Subsection 3.10(a);
c. Attorneys' Fees/Counsel Fees: Section 19.1, 19.1;
d. Bankruptcy Code: Subsection 1.1(f);
e. Borrower: Preamble;
f. Casualty Consultant: Subsection 4.2(b)(iii);
g. Casualty Retainage: Subsection 4.2(b)(iv);
h. Collateral: Section 1.3;
i. Debt: Recitals;
j. Environmental Indemnity: Subsection 10.1(c);
k. Environmental Law: Section 11.1;
l. Environmental Liens: Section 11.2;
m. Environmental Report: Section 11.1;
n. Escrow Fund: Section 3.5;
o. Event: Section 18.1;
p. Event of Default: Section 9.1;
q. Exculpated Parties: Section ?;
r. Force Majeure: Subsection 4.2(b);
s. Guarantor: Section 5.5;
t. Hazardous Substances: Section 11.1;
u. Improvements: Subsection 1.1(c);
v. Indemnified Parties: Section 12.1;
w. Indemnitor: Subsection 10.1(c);
x. Insurance Premiums: Subsection 3.3(b);
y. Investor: Section 17.1;
z. Land: Subsection 1.1(a);
aa. Lease Guaranty: Subsection 3.7(a);
bb. Leases: Subsection 1.1(f);
cc. Lender: Preamble;
dd. Loan Application: Section 5.13;
ee. Losses: Section 12.1;
ff. Net Proceeds: Subsection 4.2(b);
gg. Net Proceeds Deficiency: Subsection 4.2(b)(vi);
hh. Note: Recitals;
ii. Obligations: Section 2.2;
jj. Other Charges: Subsection 3.4(a);
kk. Other Security Documents: Section 3.2;
ll. Participations: 17.1;
mm. Permitted Exceptions: Section 5.1;
nn. Person: Section 19.1;
oo. Personal Property: Subsection 1.1(e);
pp. Policies/Policy: Subsection 3.3(b), 3.3(b);
qq. Property: Section 1.1;
rr. Qualified Insurer: Subsection 3.3(b);
ss. Rating Agency: Subsection 3.3(b);
tt. Release: Section 11.1;
uu. Remediation: Section 11.1;
vv. Rents: Subsection 1.1(f);
ww. Restoration: Subsection 3.3(d);
xx. Securities: Section 17.1;
bd Securitization: Section 17.1;
yy. Security Instrument: Preamble;
zz. Taxes: Subsection 3.4(a); and
aaa. Uniform Commercial Code: Subsection 1.1(e).
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security
Instrument") is made as of the 31st day of March 1998, by CENTURY
PLAZA ASSOCIATES, L.P., a Delaware limited partnership, having
its principal place of business at 100 Century Boulevard, West
Palm Beach, Florida 33417 as mortgagor ("Mortgagor") to
GMAC COMMERCIAL MORTGAGE CORPORATION, a California corporation,
having an address at 650 Dresher Road, Horsham, Pennsylvania
19044-8015, as mortgagee ("Lender").
RECITALS:
Montgomery CV Realty L.P. ("Montgomery") by its
promissory note of even date herewith (the note together with all
extensions, renewals, modifications, consolidations,
substitutions, replacements, restatements and increases thereof
shall collectively be referred to as the "Note") given to Lender
is indebted to Lender in the principal sum of $7,650,000
in lawful money of the United States of America, (the
indebtedness evidenced by the Note, together with all interest,
default interest, late charges and other sums agreed or provided
to be paid by Montgomery in the Note or the Loan Agreement (as
hereinafter defined), is hereinafter collectively referred to as
the "Debt") 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.
Montgomery and Lender have entered into a Loan and
Credit Facility Agreement of even date herewith (as the same may
be amended, modified or restated, the "Loan Agreement"), setting
forth the agreements and understandings of Montgomery and
Lender with respect to the Debt and other loans made by Lender to
Montgomery.
Mortgagor, by its guaranty of even date herewith given
to Lender (the "Guaranty") for good and valuable consideration
the receipt of which is hereby acknowledged, has agreed to
guaranty the payment of the Debt and the performance of all
of Montgomery's obligations under the Note and the other
Obligations (as defined in Article 2) and Mortgagor desires to
secure its obligations under the Guaranty.
Article 1 - GRANTS OF SECURITY
Section 1.1 Property Mortgaged. Mortgagor does hereby
irrevocably (i) mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey to Lender and to its successors and
assigns in accordance with the terms and conditions hereof, for
the use and benefit of Lender, and (ii) grant a security interest
to Lender and to its successors and assigns in the following
property, rights, interests and estates now owned, or hereafter
acquired by Mortgagor (collectively, the "Property"):
(a) Land. The real property described in Exhibit A
attached hereto and made a part hereof (the "Land");
(b) Additional Land. All additional lands, estates
and development rights hereafter acquired by Mortgagor 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. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front
of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower,
curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Mortgagor of, in
and to the Land and the Improvements and every part and parcel
thereof, with the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery,
equipment, fixtures (including, but not limited to all heating,
air conditioning, plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature
whatsoever owned by Mortgagor, or in which Mortgagor has or shall
have an interest, now or hereafter located upon the Land or the
Improvements, or appurtenant thereto, and used in connection with
the present or future operation and occupancy of the Land and the
Improvements and all building equipment, materials and
supplies of any nature whatsoever owned by Mortgagor, or in which
Mortgagor has or shall have an interest, now or hereafter located
upon the Land and the Improvements, or appurtenant thereto, or
used in connection with the present or future operation and
occupancy of the Land and the Improvements (collectively, the
"Personal Property"), and the right, title and interest of
Mortgagor in and to any of the Personal Property which may be
subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states
where any of the Property is located (the "Uniform Commercial
Code"), superior in lien to the lien of this Security Instrument
and all proceeds and products of the above;
(f) Leases and Rents. All leases and other agreements
affecting the use, enjoyment or occupancy of all or any part of
the Land or the Improvements heretofore or hereafter entered into
whether before or after the filing by or against Mortgagor of any
petition for relief under 11 U.S.C. 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 Mortgagor,
its successors and assigns therein and thereunder, including,
without limitation, all guarantees, letters of credit and any
other credit support given by any guarantor in connection
therewith, cash or securities deposited under the Leases to
secure the performance by the lessees of their obligations
thereunder and all rents, additional rents, revenues, issues and
profits (including all oil and gas or other mineral royalties and
bonuses) from the Land and the Improvements whether paid or
accruing before or after the filing by or against Mortgagor of
any petition for relief under the Bankruptcy Code (the "Rents")
and all proceeds from the sale or other disposition of the Leases
and the right to receive and apply the Rents to the payment of
the Debt;
(g) Condemnation Awards. All awards or payments,
including interest thereon, which may heretofore and hereafter be
made with respect to the Property, whether from the exercise of
the right of eminent domain (including, but not limited to any
transfer made in lieu of or in anticipation of the exercise of
the right), or for a change of grade, or for any other injury to
or decrease in the value of the Property;
(h) Insurance Proceeds. All proceeds of and any
unearned premiums on any insurance policies covering the
Property, including, without limitation, the right to receive and
apply the proceeds of any insurance judgments, or settlements
made in lieu thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits
in connection with a reduction in real estate taxes and
assessments charged against the Property as a result of tax
certiorari or any applications or proceedings for reduction;
(j) Rights. The right, in the name and on behalf of
Mortgagor, to commence any action or proceeding to protect the
interest of Lender in the Property and while an Event of Default
(defined in Section 10.1) remains uncured, to appear in and
defend any action or proceeding brought with respect to the
Property;
(k) Agreements. All agreements, contracts,
certificates, instruments, franchises, permits, licenses, plans,
specifications and other documents, now or hereafter entered
into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements
or respecting any business or activity conducted on the Land and
any part thereof and all right, title and interest of Mortgagor
therein and thereunder, including, without limitation, the right,
while an Event of Default remains uncured, to receive and collect
any sums payable to Mortgagor thereunder;
(l) Intangibles. All accounts, escrows, chattel
paper, licenses, claims, deposits, trade names, trademarks,
servicemarks, logos, copyrights, goodwill, books and records and
all other general intangibles specific to or used in connection
with the operation of the Property, if any;
(m) Conversion. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims; and
(n) Other Rights. Any and all other rights of
Mortgagor in and to the items set forth in Subsections (a)
through (m) above.
Section 1.2 Assignment of Leases and Rents. Mortgagor
hereby absolutely and unconditionally assigns to Lender
Mortgagor's right, title and interest in and to all
current and future Leases and Rents; it being intended by
Mortgagor that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only.
Nevertheless, subject to the terms of this Section 1.2 and
Section 3.7, Lender grants to Mortgagor a revocable license to
collect and receive the Rents. Mortgagor shall hold the
Rents, or a portion thereof, sufficient to discharge all current
sums due on the Debt, for use in the payment of such sums.
Section 1.3 Security Agreement. This Security
Instrument is both a real property mortgage and a "security
agreement" within the meaning of the Uniform Commercial Code.
The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in
nature, of Mortgagor in the Property. By executing and
delivering this Security Instrument, Mortgagor hereby grants to
Lender, as security for the Obligations (defined in Section 2.3),
a security interest in the Property to the full extent that the
Property may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial
Code, the "Collateral").
Section 1.4 Pledge of Monies Held. Mortgagor hereby
pledges to Lender, and grants to Lender a security interest in,
any and all monies now or hereafter held by Lender, including,
without limitation, any sums deposited in the Escrow Fund
(defined in Section 3.5) and the Net Proceeds (defined in Section
4.2(b)), as additional security for the Obligations until
expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described
Property unto the Lender and its successors and assigns forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Montgomery shall well and truly pay to Lender
the Debt at the time and in the manner provided in the Note and
this Security Instrument, and Montgomery and Mortgagor
shall well and truly perform the Other Obligations as set forth
in this Security Instrument and shall well and truly abide by and
comply with each and every covenant and condition set forth
herein and in the Note, these presents and the estate hereby
granted shall cease, terminate and be void.
Article 2 - OBLIGATIONS SECURED
Section 2.1 Debt. This Security Instrument and the
grants, assignments and transfers made in Article 1 are given for
the purpose of securing the following, in such order of priority
as Lender may determine in its sole discretion:
(a) the performance of all of Mortgagor's obligations
under the Guaranty;
(b) the payment of all sums advanced pursuant to this
Security Instrument to protect and preserve the Property and the
lien and the security interest created hereby;
(c) the payment of all sums advanced and costs and
expenses incurred by Lender in connection with the Debt or any
part thereof, any renewal, extension, modification,
consolidation, change, substitution, replacement, restatement or
increase of the Debt or any part thereof, or the acquisition or
perfection of the security therefor;
(d) the performance of all obligations of Mortgagor
contained herein;
(e) the performance of each obligation of Montgomery
contained in the Note in addition to the payment of the Debt and
of Montgomery, Mortgagor and of any Guarantor (defined in Section
5.5) contained in the Other Security Documents;
(f) the performance of each obligation of Montgomery,
Mortgagor and any Guarantor 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 the Other Security Documents; and
(g) the payment of all sums advanced and costs and
expenses incurred by Lender pursuant to the Loan Agreement,
including without limitation, future loans from Lender to
Montgomery or an affiliate of Montgomery.
Section 2.2 Debt and Other Obligations. Mortgagor's
obligations for the payment of the Debt and the performance of
the obligations shall be referred to collectively below as the
"Obligations."
Article 3 - MORTGAGOR COVENANTS
Mortgagor covenants and agrees with Lender that:
Section 3.1 Performance of Obligations. Mortgagor
will perform all of its obligations under the Guaranty at the
time and in the manner provided in the Guaranty and in this
Security Instrument.
Section 3.2 Incorporation by Reference. All the
covenants, conditions and agreements contained in (a) the Note,
(b) the Loan Agreement, and (c) all and any of the documents
other than the Note, the Loan Agreement or this Security
Instrument now or hereafter executed by Montgomery, Mortgagor
and/or others and by or in favor of Lender, which wholly or
partially secure or guaranty payment of the Note or the
obligations (the "Other Security Documents"), are hereby made a
part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.
Section 3.3 Insurance.
(a) Mortgagor shall obtain and maintain, or cause to
be maintained, insurance for Mortgagor and the Property providing
at least the following coverages:
(i) Property Insurance. Insurance with
respect to the Improvements and building equipment insuring
against any peril included within the classification "All Risks
of Physical Loss" in amounts at all times sufficient to prevent
Lender from becoming a co-insurer within the terms of the
applicable policies and under applicable law, but in any event
such insurance shall be maintained in an amount equal to 100% of
the full insurable value of the Improvements and building
equipment, the term "full insurable value" to mean the actual
replacement cost of the Improvements and building equipment
(without taking into account any depreciation, and exclusive of
excavations, footings and foundations, landscaping and
paving) determined annually by an insurer, a recognized
independent insurance broker or an independent appraiser selected
and paid by Mortgagor and in no event less than the coverage
required pursuant to the terms of any Lease. Absent such annual
adjustment, each policy shall contain inflation guard coverage
insuring that the policy limit will be increased over time to
reflect the effect of inflation. Mortgagor shall also maintain
insurance against loss or damage to such furniture, furnishings,
fixtures, equipment and other items (whether personalty or
fixtures) included in the Property and owned by Mortgagor from
time to time, to the extent applicable, in the amount of the cost
of replacing the same, in each case, with inflation guard
coverage to reflect the effect of inflation, or annual valuation.
Each policy or policies shall contain a replacement cost
endorsement and either an agreed amount endorsement (to avoid the
operation of any co-insurance provisions) or a waiver of any
co-insurance provisions, all subject to Lender's approval. The
maximum deductible shall be $10,000.00;
(ii) Liability Insurance. Comprehensive
general liability insurance, including personal injury, bodily
injury, death and property damage liability, insurance against
any and all claims, including all legal liability to the extent
insurable and imposed upon Lender and all court costs and
attorneys' fees and expenses, arising out of or connected with
the possession, use, leasing, operation, maintenance or condition
of the Property in such amounts as are generally available at
commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Property
but in no event for a combined single limit of less than
$1,000,000. During any construction of the Property,
Mortgagor's general contractor for such construction shall also
provide the insurance required in this Subsection (a) Lender
hereby retains the right to periodically review the amount of
said liability insurance being maintained by Mortgagor and to
require an increase in the amount of said liability insurance
should Lender deem an increase to be reasonably prudent under
then existing circumstances;
(iii) Workers' Compensation Insurance.
Statutory workers' compensation insurance with respect to any
work on or about the Property covering all persons subject to
the workers' compensation laws of the state in which the Property
is located;
(iv) Business Interruption. Business
interruption and/or loss of "rental income" insurance in an
amount sufficient to avoid any co-insurance penalty and to
provide proceeds which will cover a period of not less than one
(1) year from the date of casualty or loss, 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 Mortgagor from third
parties which are the legal obligation of the tenants, reduced to
the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy
of that portion of the Property then not being occupied.
The amount of coverage shall be adjusted annually to reflect the
rents payable during the succeeding twelve (12) month period.
(v) Boiler and Machinery Insurance. Broad
form boiler and machinery insurance (without exclusion for
explosion) covering all boilers or other pressure vessels,
machinery, and equipment located in, on or about the Property and
insurance against loss of occupancy or use arising from any
breakdown in such amount per accident equal to the replacement
value of the improvements housing the machinery or $2,000,000 or
such other amount reasonably determined by Lender. If one or
more large HVAC units is in operation at the Property, "System
Breakdowns" coverage shall be required, as determined by
Mortgagee. Minimum liability coverage per accident must equal
the value of such unit(s);
(vi) Flood Insurance. If required by
Subsection 5.6(a) hereof, flood insurance in an amount at least
equal to the lesser of (A) the minimum amount required, under the
terms of coverage, to compensate for any damage or loss on a
replacement basis (or the unpaid balance of the indebtedness
secured hereby if replacement cost coverage is not available for
the type of building insured); or (B) the maximum insurance
available under the appropriate National Flood Insurance
Administration program. The maximum deductible shall be less
than or equal to 5% of the Appraised Value (as defined in the
Loan Agreement) of the Property or a higher minimum amount as
required by the Federal Emergency Management Agency or other
applicable law.
(vii) During the period of any construction,
renovation or alteration of the Improvements which exceeds the
lesser of 10% of the principal amount of the Note or $500,000, at
Lender's request, a completed value, "All Risk" Builder's Risk
form, or "Course of Construction" insurance policy in
non-reporting form for any Improvements under construction,
renovation or alteration in an amount approved by Lender may be
required. During the period of any construction of any addition
to the existing Improvements, a completed value, "All Risk"
Builder's Risk form or "Course of Construction" insurance policy
in non-reporting form, in an amount approved by Lender, shall be
required.
(viii) Other Insurance. Such other insurance
with respect to the Property or on any replacements or
substitutions thereof or additions thereto as may from time to
time be required by Lender against other insurable hazards or
casualties which at the time are commonly insured against in the
case of property similarly situated, including, without
limitation, sinkhole, mine subsidence, earthquake and
environmental insurance, due regard being given to the height and
type of buildings, their construction, location, use and
occupancy.
(b) All insurance provided for in Subsection 3.3(a)
hereof shall be obtained under valid and enforceable policies
(the "Policies" or in the singular, the "Policy"), and shall
be issued by one or more domestic primary insurer(s) having (i)
an investment grade rating or a claims paying ability assigned by
one or more credit rating agencies approved by Lender
(a "Rating Agency") and (ii) a general policy rating of A or
better and a financial class of VI or better by A.M. Best
Company, Inc. (each such insurer shall be referred to below as
a "Qualified Insurer"). All insurers providing insurance
required by 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)(ii) above shall name
Lender as an additional named insured and the Policy referred to
in Subsection 3.3(a)(i), (iv), (v) and (vi) 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), (v) and (vi) shall also contain: (i) 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; (ii) to the
extent available at commercially reasonable rates, a waiver of
subrogation endorsement as to Lender; and (iii) an endorsement
providing for a deductible per loss of an amount not
more than that which is customarily maintained by prudent owners
of similar properties in the general vicinity of the Property,
but in no event in excess of $250,000. All Policies
described in Subsection 3.3(a) above 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)
include effective waivers by the insurer of all claims for
Insurance Premiums (defined below) against any loss payees,
additional insureds and named insureds (other than Mortgagor).
In the event that the Property or the Improvements constitutes a
legal non-conforming use under applicable building, zoning or
land use laws or ordinances, the policy shall include an
ordinance or law coverage endorsement which will contain Coverage
A: "Loss Due to Operation of Law" (with a minimum liability
limit equal to Replacement Cost With Agreed Value Endorsement),
Coverage B: "Demolition Cost" and Coverage C: "Increased Cost
of Construction" coverages. Certificates of insurance with
respect to all renewal and replacement Policies shall be
delivered to Lender not less than thirty (30) days prior to the
expiration date of any of the Policies required to be maintained
hereunder which certificates shall bear notations evidencing
payment of applicable premiums (the "Insurance Premiums").
Originals or certificates of such replacement Policies shall be
delivered to Lender promptly after Mortgagor's receipt thereof
but in any case within thirty (30) days after the effective date
thereof. If Mortgagor fails to maintain and deliver to Lender
the original Policies or certificates of insurance required by
this Security Instrument, upon ten (10) days' prior
notice to Mortgagor, Lender may procure such insurance at
Mortgagor's sole cost and expense.
(c) Mortgagor shall comply 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
Mortgagor on or with respect to any part of the Property pursuant
to this Section 3.3.
(d) If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Mortgagor shall give
prompt notice of such damage to Lender and provided that
Mortgagor shall have received the Net Proceeds, Mortgagor shall
promptly commence and diligently prosecute the completion of the
repair and restoration of the Property as nearly as possible to
the condition the Property was in immediately prior to such
fire or other casualty, with such alterations as may be approved
by Lender (the "Restoration") and otherwise in accordance with
Section 4.4 of this Security Instrument.
(e) 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, except in the case of public
liability insurance, the portion of the total coverage of
such policy that is allocated to the Property, and any sublimit
in such blanket policy applicable to the Property, and shall in
any case comply in all other respects with the requirements of
this Section 3.3.
(f) The insurance coverage required under Subsection
3.3(a)(ii) may be satisfied by a layering of Comprehensive
General Liability, Umbrella and Excess Liability Policies, but in
no event will the Comprehensive General Liability policy be
written for an amount less than $5,000,000 combined single limit
for bodily injury and property damage liability.
(g) The delivery to Lender of the insurance policies
or the certificates of insurance as provided above shall
constitute an assignment of all proceeds payable under
such insurance as relating to the Property by Mortgagor to Lender
as further security for the indebtedness secured hereby. In the
event of foreclosure of this Security Instrument, or other
transfer of title to the Property in extinguishment in whole or
in part of the secured indebtedness, all right, title and
interest of Mortgagor in and to all proceeds payable under
such policies then in force concerning the Property shall
thereupon vest in the purchaser at such foreclosure, or in Lender
or other transferee in the event of such other transfer of title.
Approval of any insurance by Lender shall not be a representation
of the solvency of any insurer or the sufficiency of any amount
of insurance.
(h) Lender shall not be responsible for nor incur any
liability for the insolvency of the insurer or other failure of
the insurer to perform, even though Lender has caused the
insurance to be placed with the insurer after failure of
Mortgagor to furnish such insurance. Mortgagor shall not obtain
insurance for the Property in addition to that required by Lender
without the prior written consent of Lender, which consent will
not be unreasonably withheld provided that (i) Lender is named
insured on such insurance, (ii) Lender receives complete copies
of all policies evidencing such insurance, and (iii) such
insurance complies with all of the applicable requirements set
forth herein.
Section 3.4 Payment of Taxes, Etc. (a) Mortgagor
shall pay by their due date all taxes, assessments, water rates,
sewer rents, governmental impositions, and other charges,
including, without limitation, vault charges and license fees for
the use of vaults, chutes and similar areas adjoining the Land,
now or hereafter levied or assessed or imposed against the
Property or any part thereof (the "Taxes"), all ground rents,
maintenance charges and similar charges, now or hereafter levied
or assessed or imposed against the Property or any part thereof
(the "Other Charges"), and all charges for utility services
provided to the Property as same become due and payable.
Mortgagor will deliver to Lender, promptly upon Lender's request,
evidence satisfactory to Lender that the Taxes, Other Charges and
utility service charges have been so paid or are not then
delinquent. Mortgagor shall not suffer and shall promptly cause
to be paid and discharged any lien or charge whatsoever which may
be or become a lien or charge against the Property. Except
to the extent sums sufficient to pay all Taxes and Other Charges
have been deposited with Lender in accordance with the terms of
this Security Instrument, Mortgagor shall furnish to Lender paid
receipts for the payment of the Taxes and Other Charges prior to
the date the same shall become delinquent.
(b) After prior written notice to Lender, Mortgagor,
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
has occurred and is continuing under the Note, the Loan
Agreement, this Security Instrument or any of the Other Security
Documents, (ii) Mortgagor is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure
debt affecting the Property, (iii) such proceeding shall suspend
the collection of the Taxes from Mortgagor and from the Property
or Mortgagor 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 Mortgagor is subject and shall not constitute a default
thereunder, (v) neither the Property nor any part thereof or
interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost, (vi) Mortgagor shall have set
aside adequate reserves for the payment of the Taxes, together
with all interest and penalties thereon, unless Mortgagor has
paid all of the Taxes under protest, and (vii) Mortgagor shall
have furnished the security as may be required in the proceeding,
or as may be reasonably requested by Lender to insure the payment
of any contested Taxes, together with all interest and penalties
thereon, taking into consideration the amount in the Escrow Fund
available for payment of Taxes.
Section 3.5 Escrow Fund. At the option of Lender,
Lender may require Mortgagor to establish an Escrow Fund (defined
below) sufficient to discharge its obligations for the payment of
Insurance Premiums and Taxes pursuant to Sections 3.3 and
3.4 hereof. Initial deposits of Taxes and Insurance Premiums
shall be made by Mortgagor to Lender in amounts determined by
Lender in its discretion on the date hereof to be held
by Lender in escrow. Additionally, Mortgagor shall pay to Lender
on the first day of each calendar month (a) one-twelfth of an
amount which would be sufficient to pay the Taxes payable, or
estimated by Lender to be payable, upon the due dates established
by the appropriate taxing authority during the next ensuing
twelve (12) months and (b) one-twelfth of an amount which would
be sufficient to pay the Insurance Premiums due for the renewal
of the coverage afforded by the Policies upon the expiration
thereof (the initial deposits together with the amounts in (a)
and (b) above shall be called the "Escrow Fund"). Mortgagor
agrees to notify Lender immediately of any changes to the
amounts, schedules and instructions for payment of any Taxes and
Insurance Premiums of which it has obtained knowledge and
authorizes Lender or its agent to obtain the bills for Taxes and
Other Charges directly from the appropriate tax authority.
Provided there are sufficient amounts in the Escrow Fund and no
Event of Default exists, Lender shall be obligated to pay the
Taxes and Insurance Premiums as they become due on their
respective due dates on behalf of Mortgagor by applying the
Escrow Fund to the payments of such Taxes and Insurance
Premiums required to be made by Mortgagor pursuant to Sections
3.3 and 3.4 hereof. If the amount of the Escrow Fund shall
exceed the amounts due for Taxes and Insurance Premiums pursuant
to Sections 3.3 and 3.4 hereof, Lender shall, in its discretion,
return any excess to Mortgagor or credit such excess against
future payments to be made to the Escrow Fund. In allocating
such excess, Lender may deal with the person shown on the records
of Lender to be the owner of the Property. If the Escrow Fund is
not sufficient to pay the items set forth in (a) and (b) above,
Mortgagor shall promptly pay to Lender, upon demand, an amount
which Lender shall reasonably estimate as sufficient to make up
the deficiency. The Escrow Fund shall not constitute a trust fund
and may be commingled with other monies held by Lender. Unless
otherwise required by Applicable Law (defined in Section
3.0), no earnings or interest on the Escrow Fund shall be payable
to Mortgagor.
Section 3.6 Condemnation. Mortgagor shall promptly
give Lender notice of the actual or threatened commencement of
any condemnation or eminent domain proceeding and shall deliver
to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such
proceedings to the extent permitted by law. Upon an Event of
Default, Mortgagor shall deliver to Lender all instruments
requested by it to permit such participation. Mortgagor shall,
at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such
proceedings. Mortgagor 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 in the case of a
taking of an insubstantial portion of the Property.
Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including, but not
limited to any transfer made in lieu of or in anticipation of the
exercise of such taking), Montgomery shall continue to pay
the Debt at the time and in the manner provided for its payment
in the Note and in this Security Instrument and the Debt shall
not be reduced until any award or payment therefor shall have
been actually received and applied by Lender, after the deduction
of expenses of collection, to the reduction or discharge of the
Debt. Lender shall not be limited to the interest paid on the
award by the condemning authority but shall be entitled to
receive out of the award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is
taken by the power of eminent domain, Mortgagor shall promptly
commence and diligently prosecute the Restoration of the Property
and otherwise comply with the provisions of 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 award or payment, or
a portion thereof sufficient to pay the Debt.
Section 3.7 Leases and Rents. (a) Except as
otherwise consented to by Lender, all Leases shall be written on
a standard form of lease which shall have been approved by
Lender. Upon request, Mortgagor shall furnish Lender with
executed copies of all Leases. No material changes may be made
to the Lender-approved standard lease without the prior written
consent of Lender, which consent shall not be unreasonably
withheld or delayed. All proposed leases shall be subject to the
prior approval of Lender except that all proposed leases which
(i) are on the same form of lease which has been approved by
Lender, (ii) are the result of an arms-length transaction, (iii)
which provide for rental rates comparable to existing market
rates, (iv) where space to be leased does not exceed more than
ten percent (10%) of total rentable space of the Property, (v)
where the proposed tenant is an independent third party not
affiliated with the Mortgagor, and (vi) do not contain any terms
which would materially affect Lender's rights under this Security
Instrument, the Note or the Other Security Documents, shall not
be subject to the prior approval of Lender. Mortgagor (i) shall
observe and perform all the obligations imposed upon the lessor
under the Leases if the failure to perform or observe the same
would materially and adversely affect the value of the Property
taken as a whole and shall not do or permit to be done anything
to impair the value of the Leases as security for the Debt;
(ii) shall promptly send copies to Lender of all notices of
default which Mortgagor shall send or receive thereunder; (iii)
shall enforce in a commercially reasonable manner all of the
terms, covenants and conditions contained in the Leases upon the
part of the lessee thereunder to be observed or performed; (iv)
shall not collect any of the Rents more than one (1) month in
advance (provided that a security deposit shall not be deemed
rent collected in advance); (v) shall not execute any other
assignment of the lessor's interest in the Leases or the Rents;
(vi) shall not (A) materially alter, modify or change the terms
of the Leases without the prior written consent of Lender, which
consent shall not be unreasonably withheld or delayed if the
alteration, modification or change does not materially and
adversely affect the value of the Property taken as a whole and
provided further that such Lease, as altered, modified or
changed, is otherwise in compliance with the requirements of this
Security Instrument, or (B) cancel or terminate any Lease (except
for defaults thereunder) of more than ten (10%) percent of the
rentable space of the Property or accept a surrender thereof or
convey or transfer or suffer or permit a conveyance or transfer
of the Land or of any interest therein so as to effect a merger
of the estates and rights of, or a termination or diminution of
the obligations of, lessees thereunder; (vii) shall not alter,
modify or change the terms of any guaranty, letter of credit or
other credit support with respect to the Leases (the "Lease
Guaranty") or cancel or terminate such Lease Guaranty without the
prior written consent of Lender; and (viii) shall not consent to
any assignment of or subletting under the Leases not in
accordance with their terms, without the prior written consent of
Lender.
Section 3.8 Maintenance of Property. Mortgagor shall
cause the Property to be maintained in a good and safe condition
and repair. The Improvements and the Personal Property shall not
be removed, demolished or materially altered (except for normal
replacement of the Personal Property) without the consent of
Lender. Mortgagor shall promptly repair, replace or rebuild any
part of the Property which may be destroyed by any casualty, or
become damaged, worn or dilapidated or which may be affected by
any proceeding of the character referred to in Section 3.6 hereof
and shall complete and pay for any structure at any time in the
process of construction or repair on the Land. Mortgagor
shall not initiate, join in, acquiesce in, or consent to any
change in any private restrictive covenant, zoning law or other
public or private restriction, limiting or defining the uses
which may be made of the Property or any part thereof. If under
applicable zoning provisions the use of all or any portion of the
Property is or shall become a nonconforming use, Mortgagor will
not cause or permit the nonconforming use or Improvement to be
discontinued or abandoned without the express written consent of
Lender.
Section 3.9 Waste. Mortgagor shall not commit or
suffer any waste of the Property or make any change in the use of
the Property which will in any way materially increase the risk
of fire or other hazard arising out of the operation of the
Property, or take any action that might invalidate or give cause
for cancellation of any Policy, or do or permit to be done
thereon anything that may in any way impair the value of the
Property or the security of this Security Instrument. Mortgagor
will not, without the prior written consent of Lender, permit any
drilling or exploration for or extraction, removal, or production
of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or
extraction thereof.
Section 3.10 Compliance With Laws. (a) Mortgagor
shall promptly comply with all existing and future federal, state
and local laws, orders, ordinances, governmental rules and
regulations or court orders affecting the Property, or the use
thereof including, but not limited to, the Americans with
Disabilities Act ("ADA") (collectively, "Applicable Law").
(b) Mortgagor shall from time to time, upon Lender's
request, provide Lender with evidence reasonably satisfactory to
Lender that the Property complies with all Applicable Laws or is
exempt from compliance with Applicable Laws.
(c) Notwithstanding any provisions set forth herein or
in any document regarding Lender's approval of alterations of
the Property, Mortgagor shall not alter the Property in any
manner which would materially increase Mortgagor's
responsibilities for compliance with Applicable Laws without the
prior written approval of Lender. Lender's approval of the
plans, specifications, or working drawings for alterations of the
Property shall create no responsibility or liability on behalf of
Lender for their completeness, design, sufficiency or their
compliance with Applicable Laws. The foregoing shall apply to
tenant improvements constructed by Mortgagor or by any of its
tenants. Lender may condition any such approval upon receipt of
a certificate of compliance with Applicable Laws from an
independent architect, engineer, or other person acceptable to
Lender.
(d) Mortgagor shall give prompt notice to Lender of
the receipt by Mortgagor of any notice related to a violation of
any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws.
(e) After prior written notice to Lender, Mortgagor,
at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due
diligence, the Applicable Laws affecting the Property, provided
that (i) no Event of Default has occurred and is continuing under
the Note, the Loan Agreement, this Security Instrument or any of
the Other Security Documents; (ii) Mortgagor 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
Mortgagor is subject and shall not constitute a default
thereunder; (iv) neither the Property nor any part thereof or
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) Mortgagor shall have furnished to
Lender all other items reasonably requested by Lender.
Section 3.11 Books and Records. Borrower and any
Guarantors shall furnish to Lender the financial statements and
project reports required by and in the manner set forth in
Section 4.4 of the Loan Agreement.
Section 3.12 Payment For Labor and Materials.
Mortgagor will promptly pay when due all bills and costs for
labor, materials, and specifically fabricated materials
incurred in connection with the Property and never permit to
exist beyond the due date thereof in respect of the Property or
any part thereof any lien or security interest, even
though inferior to the liens and the security interests hereof,
and in any event never permit to be created or exist in respect
of the Property or any part thereof any other or additional
lien or security interest other than the liens or security
interests hereof, except for the Permitted Exceptions (defined in
Section 5.1) or liens for which Mortgagor has provided
security or a bond acceptable to Lender.
Section 3.13 Performance of Other Agreements.
Mortgagor shall observe and perform each and every term to be
observed or performed by Mortgagor pursuant to the terms of any
agreement or recorded instrument affecting or pertaining to the
Property.
Section 3.14 Existence. Mortgagor will continuously
maintain (a) its existence and shall not dissolve or permit its
dissolution, (b) its rights to do business in the state where the
Property is located and (c) its franchises and trade names.
Article 4 - SPECIAL COVENANTS
Mortgagor covenants and agrees with Lender that:
Section 4.1 Property Use. The Property shall be used
only for a commercial shopping center (which may include, without
limitation, medical and other professional offices) and for no
other use without the prior written consent of Lender, which
consent may be withheld in Lender's discretion.
Section 4.2 Restoration After Casualty/Condemnation.
In the event of a casualty or a taking by eminent domain, the
following provisions shall apply in connection with the
Restoration of the Property:
(a) If (i) the Net Proceeds (defined below) do not
exceed $250,000 ("Casualty Amount"); (ii) the costs of completing
the Restoration as reasonably estimated by Mortgagor shall be
less than or equal to the Casualty Amount; (iii) no Event of
Default shall have occurred and be continuing under the Note, the
Loan Agreement, this Security Instrument or any of the Other
Security Documents; (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, without limitation, all applicable
Environmental Laws (defined in Section 12.1); and (v) such fire
or other casualty or taking, as applicable, does not materially
impair access to the Property or the Improvements (unless, in
Lender's opinion, the damage can be repaired by use of the Net
Proceeds) then the Net Proceeds will be disbursed directly to
Mortgagor and Mortgagor shall commence and diligently prosecute
to completion, subject to Force Majeure (defined herein), the
Restoration of the Property to as nearly as possible the
condition it was in immediately prior to such fire or other
casualty or to such taking. Except upon the occurrence and
continuance of an Event of Default, Mortgagor shall settle any
insurance claims with respect to the Net Proceeds which in the
aggregate are less than or equal to the Casualty Amount.
Lender shall have the right to participate in and reasonably
approve any settlement for insurance claims with respect to the
Net Proceeds which in the aggregate are equal to or
greater than the Casualty Amount. If an Event of Default shall
have occurred and be continuing, Mortgagor hereby irrevocably
empowers Lender, in the name of Mortgagor as its true and lawful
attorney-in-fact, to file and prosecute such claim and to collect
and to make receipt for any such payment. If the Net Proceeds
are received by Mortgagor, such Net Proceeds shall, until the
completion of the related work, be held in trust for Lender and
shall be segregated from other funds of Mortgagor to be used to
pay for the cost of the Restoration in accordance with the terms
hereof.
(b) If the Net Proceeds are greater than the Casualty
Amount, 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, non-disturbance
agreements binding upon Lender have been entered into concerning
the deposits of Net Proceeds, be forthwith paid to Lender to be
held by Lender in a segregated account to be made available
to Mortgagor for the Restoration in accordance with the
provisions of this Subsection 4.2(b). Mortgagor shall commence
and diligently prosecute to completion, subject to Force Majeure
(defined below), the Restoration (in the case of a taking, to the
extent the Property is capable of being restored). The term "Net
Proceeds" for purposes of this Section 4.2 shall mean: (i) the
net amount of all insurance proceeds received by Lender under the
Policies carried pursuant to Subsections 3.3(a)(i), (iv), (v),
(vi) and (vii) of this Security Instrument as a result of such
damage or destruction, after deduction of its reasonable costs
and expenses (including, but not limited to reasonable counsel
fees), if any, in collecting the same, or (ii) the net amount of
all awards and payments received by Lender with respect
to a taking referenced in Section 3.6 of this Security
Instrument, after deduction of its reasonable costs and expenses
(including, but not limited to reasonable counsel fees), if any,
in collecting the same, whichever the case may be. The term
"Force Majeure" for the purpose of this Section 4.4 shall have
the following meaning: Mortgagor shall be excused
for the period of any delay in the performance of any obligations
hereunder when prevented from so doing by cause or causes beyond
Mortgagor's control such as, without limitation, all labor
disputes, civil commotion, war, war-like operations, invasion,
rebellion, hostilities, military or usurped power, sabotage,
governmental regulations or controls, fire or other
casualty, inability to obtain any materials or services, and acts
of God.
(i) The Net Proceeds shall be made available to Mortgagor
for payment of, or reimbursement of Mortgagor's expenses in
connection with, the Restoration, subject to the following
conditions:
(A) no Event of Default shall have occurred and
be continuing under the Note, the Loan Agreement, this Security
Instrument or any of the Other Security Documents;
(B) Lender shall, within a reasonable period of
time prior to request for initial disbursement, be furnished with
an estimate of the cost of the Restoration accompanied by an
independent architect's certification as to such costs and
appropriate plans and specifications for the Restoration;
(C) the Net Proceeds, together with any cash or
cash equivalent deposited by Mortgagor with Lender, are
sufficient to cover the cost of the Restoration as such costs are
certified by the independent architect;
(D) (1) in the event that 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 fire or other casualty; or
(2) in the event that the Net Proceeds are condemnation
awards, less than fifty percent (50%) of the Land constituting
the Property is taken, such Land that is taken is located along
the perimeter or periphery of the Property and no portion of the
Improvements is located in such Lands;
(E) Lender shall be satisfied that any operating
deficits, including all scheduled payments of principal and
interest under the Note which will be incurred with respect to
the Property as a result of the occurrence of any such fire or
other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, or (2) other funds of
Montgomery;
(F) Lender shall be satisfied 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, without limitation, debt
service coverage requirements set forth in the Loan Agreement;
(G) the Restoration can reasonably be completed
on or before the earliest to occur of (1) six (6) months prior to
the Maturity Date (as defined in the Note), (2) the earliest date
required for such completion under the terms of any Lease and (3)
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 fire or other casualty or to such
taking, as applicable;
(H) the Property and the use thereof after the
Restoration will be in compliance with, and permitted under, all
applicable zoning laws, ordinances, rules and regulations
(including, without limitation, all applicable
Environmental Laws (defined in Section 12.1); and
(I) such fire or other casualty or taking, as
applicable, does not materially impair access to the Property or
the Improvements.
(ii) The Net Proceeds shall be held by Lender and, until
disbursed in accordance with the provisions of this Subsection
4.2(b), shall constitute additional security for the
Obligations. The Net Proceeds other than the Net Proceeds paid
under the Policy described in Subsection 3.3(a)(iv) shall be
disbursed by Lender to, or as directed by, Mortgagor from
time to time during the course of the Restoration, upon receipt
of evidence satisfactory to Lender that (A) all materials
installed and work and labor performed (except to the extent
that they are to be paid for out of the requested disbursement)
in connection with the Restoration have been paid for in full,
and (B) there exist no notices of pendency, stop orders,
mechanic's or materialman's liens or notices of intention to file
same, or any other liens or encumbrances of any nature whatsoever
on the Property arising out of the Restoration which have not
either been fully bonded 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) Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required
or obtained in connection with the Restoration. The
identity of the contractors, subcontractors and materialmen
engaged in the Restoration, as well as the contracts under which
they have been engaged, shall be subject to prior review
and acceptance by Lender and an independent consulting engineer
selected by Lender (the "Casualty Consultant"), such acceptance
not to be unreasonably withheld or delayed. All costs and
expenses incurred by Lender in connection with making the Net
Proceeds available for the Restoration including, without
limitation, reasonable counsel fees and disbursements
and the Casualty Consultant's fees, shall be paid by Mortgagor.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to
the costs actually incurred from time to time for
work in place as part of the Restoration, as certified by the
Casualty Consultant, minus the Casualty Retainage. The term
"Casualty Retainage" as used in this Subsection 4.2(b) shall
mean an amount equal to 10% of the costs actually incurred for
work in place as part of the Restoration, as certified by the
Casualty Consultant, until such time as the Casualty
Consultant certifies to Lender that 50% of the required
Restoration has been completed. There shall be no Casualty
Retainage with respect to costs actually incurred by Mortgagor
for work in place in completing the last 50% of the required
Restoration. The Casualty Retainage shall in no event, and
notwithstanding anything to the contrary set forth above
in this Subsection 4.2(b), be less than the amount actually held
back by Mortgagor from contractors, subcontractors and
materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.2(b)
and that all approvals necessary for the re-occupancy and use of
the Property have been obtained from all appropriate governmental
and quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty
Retainage, provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant
certifies to Lender that the contractor, subcontractor or
materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the
contractor's, subcontractor's or materialman's contract, and the
contractor, subcontractor or materialman delivers the lien
waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company insuring the lien of
this Security Instrument. If required by Lender, the release of
any such portion of the Casualty Retainage shall be approved by
the surety company, if any, which has issued a payment or
performance bond with respect to the contractor, subcontractor or
materialman.
(v) Lender shall not be obligated to make disbursements of
the Net Proceeds more frequently than once every calendar month.
(vi) If at any time the Net Proceeds or the undisbursed
balance thereof shall not, in the opinion of Lender, be
sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection
with the completion of the Restoration, Mortgagor 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 4.2(b) shall
constitute additional security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and the
remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Casualty Consultant certifies
to Lender that the Restoration has been completed in accordance
with the provisions of this Subsection 4.2(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 Mortgagor, provided no Event
of Default shall have occurred and shall be continuing under the
Note, the Loan Agreement, this Security Instrument or any of the
Other Security Documents.
(c) All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Mortgagor
as excess Net Proceeds pursuant to Subsection 4.2(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 in its discretion shall deem proper or,
at the discretion of Lender, the same shall be paid,
either in whole or in part, to Mortgagor. 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.
Article 5 - REPRESENTATIONS AND WARRANTIES
Mortgagor represents and warrants to Lender that:
Section 5.1 Warranty of Title. Mortgagor has good and
marketable title to the Property and has the right to mortgage,
grant, bargain, sell, pledge, assign, warrant,
transfer and convey the same and that Mortgagor possesses an
unencumbered fee simple absolute estate in the Land and the
Improvements and that it owns the Property free and
clear of all liens, encumbrances and charges whatsoever except
for those exceptions shown in the title insurance policy insuring
the lien of this Security Instrument (the "Permitted
Exceptions"). The Permitted Exceptions do not materially
interfere with the security intended to be provided by this
Security Instrument or the use and operations of the
Property. Mortgagor shall forever warrant, defend and preserve
the title and the validity and priority of the lien of this
Security Instrument and shall forever warrant and defend the
same to Lender against the claims of all persons whomsoever.
Upon the recordation of this Security Instrument and the filing
of a Uniform Commercial Code Financing Statement in
the office of the Secretary of State for the state where the
Property is located, the Lender will have a first priority
perfected security interest in all personal property owned by
Mortgagor.
Section 5.2 Authority. Mortgagor (and the undersigned
representative of Mortgagor, 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
Mortgagor's part to be performed.
Section 5.3 Legal Status and Authority. Mortgagor (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. Mortgagor now has
and shall continue to have the full right, power and authority to
operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to be
performed by Mortgagor under this Security Instrument and the
Other Security Documents.
Section 5.4 Validity of Documents. (a) The execution,
delivery and performance of this Security Instrument and the
Guaranty (i) are within the power and authority of Mortgagor;
(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
(including, without limitation, any usury laws), 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 Mortgagor, or any indenture,
agreement or other instrument to which Mortgagor 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) this Security
Instrument and the Guaranty constitute the legal, valid and
binding obligations of Mortgagor.
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
Mortgagor's knowledge, threatened or contemplated against
Mortgagor, any person guaranteeing the payment of the Debt or any
portion thereof or performance by Mortgagor of any terms of this
Security Instrument (a "Guarantor"), if any, an Indemnitor
(defined in Subsection 10.1(d)), 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 Mortgagor's,
any Guarantor's or any Indemnitor's ability to perform its
obligations under the Note, the Loan Agreement, this Security
Instrument or the Other Security Documents, or (b) is not
adequately covered by insurance, each as determined by Lender in
its sole and absolute discretion.
Section 5.6 Status of Property. (a) No portion of the
Improvements is located in an area identified by the Secretary of
Housing and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, 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, Mortgagor has obtained and will maintain the
insurance prescribed in Section 3.3 hereof.
(b) Except building and occupancy permits for
currently vacant space, Mortgagor 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.
(c) The Property and the present and contemplated use
and occupancy thereof do not and will not violate in any material
respect all Applicable Laws, including, without limitation,
zoning ordinances, building codes, land use and Environmental
Laws, laws relating to the disabled (including but not limited
to, the ADA) and other similar laws.
(d) The Property is served by all utilities required
for the current or contemplated use thereof. All utility service
is provided by public utilities and the Property has accepted or
is equipped to accept such utility service.
(e) All public roads and streets necessary for service
of and access to the Property for the current or contemplated use
thereof have been completed, are serviceable and all-weather and
are physically and legally open for use by the public.
(f) The Property is served by public water and sewer
systems.
(g) The Property is free from damage caused by fire or
other casualty.
(h) All costs and expenses of any and all labor,
materials, supplies and equipment used in the construction of the
Improvements have been paid in full.
(i) Mortgagor 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.
(k) All security deposits relating to the Leases
reflected on the certified rent roll delivered to Lender have
been collected by Mortgagor except as noted on the certified rent
roll.
(l) Mortgagor has received no notice of an actual or
threatened condemnation or eminent domain proceeding by any
public or quasi-public authority.
(m) All the Improvements lie within the boundaries of
the Property.
Section 5.7 No Foreign Person. Mortgagor 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)
Mortgagor 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 Mortgagor 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) Mortgagor
is not and will not be a "governmental plan" within the meaning
of Section 3(3) of ERISA, and (ii) transactions by or with
Mortgagor are not and will not be subject to state statutes
applicable to Mortgagor regulating investments of and fiduciary
obligations with respect to governmental plans.
Section 5.10 Leases. Except as disclosed in the rent
roll for the Property delivered to and approved by Lender, (a)
Mortgagor is the sole owner of the entire lessor's
interest in the Leases; (b) the Leases are valid and enforceable;
(c) the terms of all alterations, modifications and amendments to
the Leases are reflected in the certified rent roll delivered to
and approved by Lender; (d) none of the Rents reserved in the
Leases have been assigned or otherwise pledged or hypothecated
(except to Lender); (e) none of the Rents have been collected for
more than one (1) month in advance (provided that a security
deposit shall not be deemed rent collected in advance); (f) the
premises demised under the Leases have been completed and the
tenants under the Leases have accepted the same and
have taken possession of the same on a rent-paying basis; (g)
there exist no offsets or defenses to the payment of any portion
of the Rents; (h) Mortgagor has received no notice from any
tenant challenging the validity or enforceability of any Lease;
(i) there are no agreements with the tenants under the Leases
other than expressly set forth in each Lease; (j) the Leases are
valid and enforceable against Mortgagor and the tenants set forth
therein; (k) no Lease contains an option to purchase, right of
first refusal to purchase, or any other similar provision; (l) no
person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease and
except for parking rights alleged to be held by an adjacent
religious institution; (m) each Lease is subordinate to this
Security Instrument, either pursuant to its terms or a recorded
subordination agreement; (n) no Lease has the benefit of a
non-disturbance agreement that would be considered unacceptable
to prudent institutional lenders; and (o) no brokerage
commissions or finders fees are due and payable regarding any
Lease, except as reflected in the certified rent roll
delivered to and approved by Lender.
Section 5.11 Financial Condition. (a) Mortgagor is
solvent, and no bankruptcy, reorganization, insolvency or similar
proceeding under any state or federal law with respect to
Mortgagor has been initiated, and (b) the granting of this
Security Instrument does not constitute a fraudulent conveyance.
Section 5.12 Taxes. Mortgagor, any Guarantor and any
Indemnitor have filed all federal, state, county, municipal, and
city income and other tax returns required to have been filed by
them and have paid all taxes and related liabilities which have
become due pursuant to such returns or pursuant to any
assessments received by them. Neither Mortgagor, 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 No Change in Facts or Circumstances. All
information in the application for the loan submitted to Lender
(the "Loan Application") and in all financing statements, rent
rolls, reports, certificates and other documents submitted in
connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all
respects. There has been no adverse change in any condition,
fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading.
Section 5.14 Disclosure. Mortgagor has disclosed to
Lender all material facts and has not failed to disclose any
material fact that could cause any representation or
warranty made herein to be materially misleading.
Section 5.15 Third Party Representations. Each of the
representations and the warranties made by each Guarantor and
Indemnitor herein or in any Other Security Document(s) is true
and correct in all material respects.
Section 5.16 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 Mortgagor's knowledge, there
are no illegal activities or activities relating to controlled
substance at the Property.
Article 6 - FURTHER ASSURANCES
Section 6.1 Recording of Security Instrument, Etc.
Mortgagor forthwith upon the execution and delivery of this
Security Instrument and thereafter, from time to time, will cause
this Security Instrument and any of the Other Security Documents
creating a lien or security interest or evidencing the lien
hereof upon the Property and each instrument of further assurance
to be filed, registered or recorded in such manner and in
such places as may be required by any present or future law in
order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest
of Lender in, the Property. Mortgagor will pay all taxes,
filing, registration or recording fees, and all expenses incident
to the preparation, execution, acknowledgment and/or recording of
the Note, this Security Instrument, the Other Security Documents,
any note or mortgage supplemental hereto, any security instrument
with respect to the Property and any instrument of further
assurance, and any modification or amendment of the foregoing
documents, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security
instrument with respect to the Property or any instrument of
further assurance, and any modification or amendment of the
foregoing documents, except where prohibited by law so to do.
Section 6.2 Further Acts, Etc. Mortgagor will, at the
cost of Mortgagor, 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
Mortgagor may be or may hereafter become bound to convey or
assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Security
Instrument or for filing, registering or recording this Security
Instrument, or for complying with all Applicable Laws.
Mortgagor, on demand, will execute and deliver and hereby
authorizes Lender to execute in the name of Mortgagor or without
the signature of Mortgagor 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. Mortgagor 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 6.2.
Section 6.3 Changes in Tax, Debt Credit and
Documentary Stamp Laws. (a) If on or after the date hereof, the
adoption of any applicable law, rule, or regulation, or any
change therein, or any change in the interpretation or
administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation
or administration thereof, or compliance by the Lender with any
request or directive (whether or not having the force of law) of
any such authority, central bank, or comparable agency shall
subject Lender to any tax, duty or other charge with respect to
the Debt, or shall change the basis of taxation of payments to
Lender of the principal of or interest on the Debt or any other
amounts due under the Note or in respect of the Debt or its
obligation to advance the Debt (except for changes in the rate of
tax on the overall net income of the Lender) and the result of
the foregoing is to increase the cost to Lender of making or
maintaining the Debt, or to reduce the amount of any sum received
or receivable by Lender under the Note with respect thereto, by
an amount reasonably deemed by Lender to be material, then,
within fifteen days after demand by Lender, Mortgagor shall pay
to Lender such additional amount or amounts as will compensate
Lender for such increased cost or reduction.
(b) Lender will promptly notify Mortgagor of
any event of which it has knowledge, occurring after the date
hereof, which will entitle Lender to compensation pursuant to
this Section. A certificate of Lender claiming compensation
under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and evidence reasonably
substantiating Lender's claim for compensation shall be
conclusive in the absence of manifest error. In determining such
amount, Lender may use any reasonable averaging and attribution
methods.
Section 6.4 Estoppel Certificates. (a) After request
by Lender, Mortgagor, within ten (10) days, shall furnish Lender
or any proposed assignee with a statement, duly acknowledged and
certified, setting forth (i) that, except as provided in such
statement, there are no defaults or events which with the passage
of time or the giving of notice or both, would constitute an
event of default under this Security Instrument, (ii) that this
Security Instrument is a valid, legal and binding obligation and
has not been modified or if modified, giving particulars of such
modification, (iii) whether any offsets or defenses exist against
the obligations secured hereby and, if any are alleged to exist,
a detailed description thereof, (iv) that all Leases are in full
force and effect and have not been modified (or if modified,
setting forth all modifications), (v) the date to which the Rents
thereunder have been paid pursuant to the Leases, (vi) whether or
not, to the best knowledge of Mortgagor, 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, (vii) the amount of security deposits held by
Mortgagor under each Lease and that such amounts are consistent
with the amounts required under each Lease, and (viii) 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) Mortgagor shall deliver to Lender, promptly upon
request, duly executed estoppel certificates from any one or more
lessees as required by Lender attesting to such facts regarding
the Lease as Lender may require, including, but not limited to
attestations that each Lease covered thereby is in full force and
effect with no defaults thereunder on the part of any party (or
if any defaults thereunder are alleged, setting forth
the specific nature of such defaults), that none of the Rents
have been paid more than one month in advance, except as
security, and that the lessee claims no defense or offset against
the full and timely performance of its obligations under the
Lease.
(c) Upon any transfer or proposed transfer
contemplated by Section 17.1 hereof, at Lender's request,
Mortgagor, Montgomery, any Guarantors and any Indemnitors
shall provide an estoppel certificate to the Investor (defined in
Section 17.1) or any prospective Investor confirming the accuracy
of information provided by such person to Lender under or in
respect of this Security Instrument.
Section 6.5 Flood Insurance. After Lender's request,
Mortgagor shall deliver evidence satisfactory to Lender that no
portion of the Improvements is situated in a federally designated
"special flood hazard area" or, if it is, that Mortgagor has
obtained insurance meeting the requirements of Section
3.3(a)(vi).
Section 6.6 Replacement Documents. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any Other Security
Document which is not of public record, and, in the case of any
such mutilation, upon surrender and cancellation of such Note or
Other Security Document, Montgomery and/or Mortgagor will issue,
in lieu thereof, a replacement Note or Other Security
Document, dated the date of such lost, stolen, destroyed or
mutilated Note or Other Security Document in the same principal
amount thereof and otherwise of like tenor; provided, however,
Montgomery shall not be required to issue a replacement Note
unless Lender provides adequate assurance or an indemnity to
Montgomery.
Section 6.7 Amended Financing Statements. Mortgagor
will execute and deliver to the Lender, prior to or
contemporaneously with the effective date of any such
change, any financing statement or financing statement change
required by the Lender to establish or maintain the validity,
perfection and priority of the security interest granted
herein. At the request of the Lender, Mortgagor shall execute a
certificate in form satisfactory to the Lender listing the trade
names under which Mortgagor intends to operate the Property, and
representing and warranting that Mortgagor does business under no
other trade name with respect to the Property.
Article 7 - DUE ON SALE/ENCUMBRANCE
Section 7.1 No Sale/Encumbrance. Except as otherwise
provided in the Loan Agreement, Mortgagor agrees that Mortgagor
shall not, without the prior written consent of Lender, sell,
convey, mortgage, grant, bargain, encumber, pledge, assign, or
otherwise transfer the Property or any part thereof or permit the
Property or any part thereof to be sold, conveyed, mortgaged,
granted, bargained, encumbered, pledged, assigned, or otherwise
transferred.
Section 7.2 Sale/Encumbrance Defined. A sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer within the meaning of this Article 7
shall be deemed to include, but not limited to (a) an installment
sales agreement wherein Mortgagor agrees to sell the Property or
any part thereof for a price to be paid in installments; (b) an
agreement by Mortgagor 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, Mortgagor's right, title and
interest in and to any Leases or any Rents; (c) if Mortgagor, any
Guarantor, any Indemnitor, or any general partner or managing
member (or if no managing member, any member) of Mortgagor,
Guarantor or Indemnitor is a corporation, (i) the voluntary or
involuntary sale, conveyance or transfer of such corporation's
stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or
the creation or issuance of new stock by which an aggregate of
more than 50% of such corporation's stock shall be vested in a
party or parties who are not now owners of more than 50% of such
corporation's stock, or (ii) the pledge of any such corporation's
stock; (d) if Mortgagor, any Guarantor or Indemnitor or any
general partner or managing member (or if no managing member, any
member) of Mortgagor, any Guarantor or Indemnitor is a limited or
general partnership or joint venture, the change, removal or
resignation of a general partner or the transfer or pledge of the
partnership interest of any general partner or any profits or
proceeds relating to such partnership interest; and (e) if
Mortgagor, any Guarantor, any Indemnitor or any general partner
or member of Mortgagor, any Guarantor or any Indemnitor is a
limited liability company, the change, removal or resignation of
a managing member (or if no managing member, any member) or the
transfer or pledge 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. Notwithstanding
the foregoing, the following transfers shall not be deemed to be
a sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment or transfer within the meaning of this Article
7: (a) transfer by devise or descent or by operation of law upon
the death of a member, general partner or stockholder of
Mortgagor, any Guarantor or Indemnitor or any member or general
partner thereof, and (b) a sale, transfer or hypothecation of a
membership, partnership or shareholder interest in Mortgagor,
whichever the case may be, by a current member, general
partner or shareholder, as applicable, to an immediate family
member (i.e., parents, spouses, siblings, children or
grandchildren) of such member, general partner or shareholder, or
to a trust for the benefit of an immediate family member of such
member, general partner or shareholder, provided that, with
respect to any such sale or transfer, Mortgagor shall deliver
a non-consolidation opinion or an update of the same, in form and
substance reasonably satisfactory to Lender, upon Lender's
request to do so. To the extent that the definitions
contained in this Section 7.2 are inconsistent with the Loan
Agreement, then the provisions of the Loan Agreement shall
govern.
Section 7.3 Lender's Rights. Lender reserves the
right to condition the consent required hereunder upon a
modification of the terms hereof and on assumption of
the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a
transfer fee and all of Lender's expenses incurred in
connection with such transfer, or such other conditions as Lender
shall determine in its sole discretion to be in the interest of
Lender. Lender shall not be required to demonstrate any
actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due
and payable upon Mortgagor's sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer of the
Property without Lender's consent. This provision shall apply to
every sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property regardless of
whether voluntary or not, or whether or not Lender has consented
to any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the
Property.
Article 8 - PREPAYMENT
Section 8.1 Prepayment Only in Accordance with Note.
The Debt may be prepaid only in strict accordance with the
express terms and conditions of the Note and the
Loan Agreement including, without limitation, payment of the Exit
Fee (as defined in the Loan Agreement) if applicable.
Article 9 - DEFAULT
Section 9.1 Events of Default. The occurrence of any
one or more of the following events shall constitute an "Event of
Default":
(a) if any portion of the Debt is not paid on the date
when due (subject to any applicable cure period), or if the
entire Debt is not paid on or before the Maturity
Date;
(b) if Mortgagor violates or does not comply with any
of the provisions of Sections 3.7 or 8.1;
(c) if any representation or warranty of Montgomery,
Mortgagor, Indemnitor (as defined in that certain Environmental
Indemnity Agreement dated as of the date hereof (the
"Environmental Indemnity") or any Guarantor, or any member,
general partner, principal or beneficial owner of any of the
foregoing, made herein or in the Environmental Indemnity or 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;
(d) if any default occurs under any guaranty or
indemnity executed in connection herewith and such default
continues after the expiration of applicable grace
periods, if any;
(e) except for the specific defaults set forth in this
Section 9.1 any other default hereunder or under the Note, the
Loan Agreement or any of the Other Security Documents by
Montgomery or Mortgagor, which default is not cured within
fifteen (15) days after written notice from Lender to Montgomery;
provided that if such default cannot reasonably be cured within
such fifteen (15) day period and Montgomery or Mortgagor shall
have commenced to cure such default within such fifteen (15) day
period and thereafter diligently and expeditiously proceeds to
cure the same, such fifteen (15) day period shall be
extended for so long as it shall require Montgomery or Mortgagor
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 sixty (60) days;
(f) if Montgomery, Mortgagor, any Guarantor or
Indemnitor shall make an assignment for the benefit of creditors
or if Montgomery or Mortgagor shall generally not be paying its
debts as they become due; or
(g) if the Policies are not kept in full force and
effect, or Montgomery or Mortgagor has not delivered evidence of
the renewal of the Policies ten (10) days prior to their
expiration as provided in Section 3.3(b); or
(h) If the Property is, in the judgment of Lender,
materially injured or destroyed, by fire or otherwise, and is not
otherwise required to be restored pursuant to the terms of
Section 4.2 hereof and Montgomery does not bring the Outstanding
Facility Amount (as defined in the Loan Agreement) into
compliance with the loan-to-value and debt service coverage
requirements of Sections 2.9 and 3.1 of the Loan Agreement,
within thirty (30) days of such occurrence; or
(i) Any court of competent jurisdiction shall sign an
order (i) adjudicating Mortgagor, Montgomery or a Guarantor
bankrupt, (ii) appointing a trustee or receiver of
the Property, or of a substantial part of the Property of
Mortgagor, Montgomery or a Guarantor or (iii) approving a
petition for, or effecting, an arrangement in bankruptcy, or
any other judicial modification or alteration of the rights of
Lender or of other creditors of Mortgagor, Montgomery or a
Guarantor; or if Mortgagor, Montgomery or a Guarantor shall
(A) file any petition or (B) consent to any other action seeking
any such judicial order; or
(j) If Mortgagor, Montgomery or any Guarantor or their
members, board of directors or stockholders shall institute any
proceedings for the dissolution or liquidation of Mortgagor,
Montgomery or such Guarantor or fail to secure and protect their
ability to do business in the state where the Property is
located; or
(k) Unless adequately covered by insurance in the sole
opinion of Lender, the entry of a final judgment for the payment
of money involving more than $100,000 against Mortgagor,
Montgomery or a Guarantor, and the failure of Mortgagor,
Montgomery or such Guarantor to cause the same to be discharged
or bonded off to the satisfaction of Lender within sixty (60)
days from the date the order, decree or process under which or
pursuant to which such judgment was entered; or
(l) A material adverse change occurs in the financial
condition of Mortgagor, Montgomery or any Guarantor or the
business, or Changes in Management or Changes in Control (as
defined in the Loan Agreement) of Mortgagor, Montgomery or any
Guarantor, which is not corrected to the reasonable satisfaction
of Lender; or
(m) Any litigation is initiated or threatened against
Mortgagor, Montgomery or a Guarantor which, in the sole opinion
of Lender, is likely to have a material adverse affect on the
financial condition or business of Mortgagor, Montgomery
or such Guarantor; or
(n) Mortgagor shall fail to keep in full force and
effect any permit or approval issued by any governmental
authority necessary for the construction, occupancy or
use of the Property or with respect to the matters contemplated
hereby, and either Mortgagor fails to take all appropriate action
to reinstate such permit or approval within five days after
demand by Lender, or such permit or approval cannot be
reinstated; or
(o) An Event of Default occurs under any other loan
from Lender to Montgomery or an affiliate of Montgomery.
Article 10 - RIGHTS AND REMEDIES
Section 10.1 Remedies. (a) Upon the occurrence of any
Event of Default, Mortgagor agrees that Lender may take such
action, without notice or demand, as it deems advisable to
protect and enforce the rights of Lender against Mortgagor and
Montgomery and in and to the Property, including, but not limited
to the following actions, each of which may be pursued
concurrently or otherwise, at such time and in such order as
Lender may determine, in its sole discretion, without impairing
or otherwise affecting the other rights and remedies of Lender:
(i) declare the entire unpaid Debt to be
immediately due and payable;
(ii) 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;
(iii) with or without entry, to the extent permitted
and pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of this
Security Instrument for the portion of the Debt then due and
payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Debt
not then due, unimpaired and without loss of priority;
(iv) sell for cash or upon credit the Property or any
part thereof and all estate, claim, demand, right, title and
interest of Mortgagor therein and rights of redemption
thereof, 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;
(v) subject to the provisions of Article 14,
institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement
contained herein, in the Note or in the Other Security Documents;
(vi) subject to the provisions of Article 14, recover
judgment on the Note either before, during or after any
proceedings for the enforcement of this Security
Instrument or the Other Security Documents;
(vii) apply for the appointment of a receiver,
trustee, liquidator or conservator of the Property, without
notice and without regard for the adequacy of the security for
the Debt and without regard for the solvency of Mortgagor,
Montgomery, any Guarantor, Indemnitor or of any person, firm or
other entity liable for the payment of the Debt;
(viii) subject to any applicable law, the license
granted to Mortgagor 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 Mortgagor and its agents and servants therefrom,
without liability for trespass, damages or otherwise and
exclude Mortgagor and its agents or servants wholly therefrom,
and take possession of all books, records and accounts relating
thereto and Mortgagor agrees to surrender possession
of the Property and of such books, records and accounts to Lender
upon demand, and thereupon Lender may (A) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal
with all and every part of the Property and conduct the business
thereat; (B) complete any construction on the Property in such
manner and form as Lender deems advisable; (C) make alterations,
additions, renewals, replacements and improvements to or
on the Property; (D) exercise all rights and powers of Mortgagor
with respect to the Property, whether in the name of Mortgagor or
otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and
demand, sue for, collect and receive all Rents of the Property
and every part thereof; (E) require Mortgagor 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
Mortgagor; (F) require Mortgagor to vacate and surrender
possession of the Property to Lender or to such receiver and, in
default thereof, Mortgagor may be evicted by summary proceedings
or otherwise; and (G) apply the receipts from the Property to the
payment of the Debt, in such order, priority and proportions as
Lender shall deem appropriate in its sole discretion after
deducting therefrom all expenses (including reasonable attorneys'
fees) incurred in connection with the aforesaid operations and
all amounts necessary to pay the Taxes, Other Charges, insurance
and other expenses in connection with the Property, as well as
just and reasonable compensation for the services of Lender, its
counsel, agents and employees;
(ix) exercise any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the
foregoing: (A) the right to take possession of the Collateral or
any part thereof, and to take such other measures as Lender may
deem necessary for the care, protection and preservation of the
Collateral, and (B) request Mortgagor at its expense to assemble
the Collateral 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 Collateral
sent to Mortgagor in accordance with the provisions hereof at
least five (5) days prior to such action, shall constitute
commercially reasonable notice to Mortgagor;
(x) apply any sums then deposited in the Escrow
Fund and any other sums held in escrow or otherwise by Lender in
accordance with the terms of this Security Instrument or any
Other Security Document to the payment of the following items in
any order in its sole and absolute discretion:
(A) Taxes and Other Charges;
(B) Insurance Premiums;
(C) Interest on the unpaid principal balance of
the Note;
(D) amortization of the unpaid principal balance
of the Note; and all other sums payable pursuant to the Note,
this Security Instrument and the Other Security Documents,
including, without limitation, advances made by Lender pursuant
to the terms of this Security Instrument;
(xi) surrender the Policies maintained pursuant to
Article 3 hereof, collect the unearned Insurance Premiums and
apply such sums as a credit on the Debt in such priority and
proportion as Lender in its discretion shall deem proper, and in
connection therewith, Mortgagor hereby appoints Lender as agent
and attorney-in-fact (which is coupled with an interest and is
therefore irrevocable) for Mortgagor to collect such Insurance
Premiums;
(xii) 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;
(xiii) prohibit Mortgagor and anyone claiming on
behalf of or through Mortgagor from making use of or withdrawing
any sums from any lock box account;
(xiv) pursue such other remedies as Lender may have
under applicable law.
(b) In the event of a sale, by foreclosure 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 10.1 to
the contrary, if any Event of Default as described in
Subsection 9.1 (i) shall occur, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand
or other action by Lender.
(c) Lender may adjourn from time to time any sale by
it to be made under or by virtue of this Security Instrument by
announcement at the time and place appointed for such sale or for
such adjourned sale or sales; and, except as otherwise provided
by any applicable provision of law, Lender, without further
notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(d) Upon any sale made under or by virtue of this
Section 10.1, whether made under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure
and sale, Lender may bid for and acquire the Property or any part
thereof and in lieu of paying cash therefor may make settlement
for the purchase price by crediting upon the Debt the net sales
price after deducting therefrom the expenses of the sale and
costs of the action and any other sums which Lender is authorized
to deduct under this Security Instrument.
Section 10.2 Application of Proceeds. The purchase
money, proceeds and avails of any disposition of the Property, or
any part thereof, or any other sums collected by Lender pursuant
to the Note, this Security Instrument or the Other Security
Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall
deem proper.
Section 10.3 Right to Cure Defaults. Upon the
occurrence of any Event of Default, Lender may, but without any
obligation to do so and without notice to or demand on Mortgagor
and without releasing Mortgagor from any obligation hereunder,
cure the same in such manner and to such extent as Lender may
deem necessary to protect the security hereof. Lender is
authorized to enter upon the Property for such purposes, or
appear in, defend, or bring any action or proceeding to protect
its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section
10.3, 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, for the
period after notice from Lender that such cost or expense was
incurred to the date of payment to Lender. All such
costs and expenses incurred by Lender together with interest
thereon calculated at the Default Rate shall be deemed to
constitute a portion of the Debt and be secured by this
Security Instrument and the Other Security Documents and shall be
immediately due and payable upon demand by Lender therefor.
Section 10.4 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 Mortgagor,
which Lender, in its discretion, decides should be brought to
protect its interest in the Property.
Section 10.5 Recovery of Sums Required To Be Paid.
Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as
the same become due, without regard to whether or not the balance
of the Debt shall be due, and without prejudice to the right of
Lender thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Mortgagor or Montgomery
existing at the time such earlier action was commenced.
Section 10.6 Examination of Books and Records.
Lender, its agents, accountants and attorneys shall have the
right upon prior written notice to examine the records, books,
management and other papers of Mortgagor, Montgomery and any
Guarantor or Indemnitor which reflect upon their financial
condition, at the Property or at any office regularly maintained
by Mortgagor, Montgomery or any Guarantor or Indemnitor
where the books and records are located. Lender and its agents
shall have the right upon 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 Mortgagor, Montgomery or of
any Guarantor or Indemnitor pertaining to the income, expenses
and operation of the Property during reasonable business
hours at any office of Mortgagor, Montgomery or any Guarantor or
Indemnitor where the books and records are located.
Section 10.7 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. Mortgagor shall not be relieved of Mortgagor's
obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Mortgagor, Montgomery, any Guarantor
or any Indemnitor to take any action to foreclose this Security
Instrument or otherwise enforce any of the provisions hereof or
of the Note or the Other Security Documents, (ii) the release,
regardless of consideration, of the whole or any part
of the Property, or of any person liable for the Debt or any
portion thereof, or (iii) any agreement or stipulation by Lender
extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Security Instrument or
the Other Security Documents.
(b) It is agreed that the risk of loss or damage to
the Property is on Mortgagor, and Lender shall have no liability
whatsoever for decline in value of the Property, for failure to
maintain the Policies, or for failure to determine whether
insurance in force is adequate as to the amount of risks insured.
Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with
respect to any Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to
any other security held by Lender in such order and manner as
Lender, in its discretion, may elect. Lender may take action to
recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of
Lender under this Security Instrument shall be separate, distinct
and cumulative and none shall be given effect to the exclusion of
the others. No act of Lender shall be construed as an election
to proceed under any one provision herein to the exclusion of any
other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every
right and remedy now or hereafter afforded at law or in equity.
Section 10.8 Right to Release Any Portion of the
Property. Lender may release any portion of the Property for
such consideration as Lender may require without, as to the
remainder of the Property, in any way impairing or affecting the
lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall have
been reduced by the actual monetary consideration, if any,
received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place
thereof as Lender may require without being accountable for so
doing to any other lienholder. This Security Instrument shall
continue as a lien and security interest in the remaining portion
of the Property.
Section 10.9 Violation of Laws. If the Property is
not in compliance with Applicable Laws, Lender may impose
additional requirements upon Mortgagor in connection herewith
including, without limitation, monetary reserves or financial
equivalents.
Section 10.10 Right of Entry. Lender and its agents
shall have the right upon prior written notice to enter and
inspect the Property at all reasonable times upon not
less than five (5) Business Days' notice (except in the case of
emergencies when no notice shall be required) to Mortgagor.
Article 11 - ENVIRONMENTAL HAZARDS
Section 11.1 Environmental Representations and
Warranties. Mortgagor represents and warrants, based upon an
environmental Phase I site assessment of the Property and
information that Mortgagor knows, that: (a) there are no
Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and
with permits issued pursuant thereto, if any, and (ii) fully
disclosed to Lender in writing pursuant to the written reports
resulting from the environmental assessments of the Property
delivered to Lender (the "Environmental Report"); (b) there are
no past or present Releases (defined below) of Hazardous
Substances in violation of any Environmental Law or which
would require Remediation (defined below) 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) Mortgagor does not
know of, and has not received, any written or oral notice or
other communication from any person or entity (including, but not
limited to a governmental entity) relating to Hazardous
Substances or Remediation 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; and (e) Mortgagor has truthfully and fully
provided to Lender, in writing, any and all information relating
to environmental conditions in, on, under or from the Property
that is known to Mortgagor and that is contained in Mortgagor's
files and records, including, but not limited to any reports
relating to Hazardous Substances in, on, under or from the
Property and/or to the environmental condition of the Property.
"Environmental Law" means any present, and for the purposes of
Sections 11.2, 11.3 and 12.4 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, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability
Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including, but not limited to
Subtitle I relating to underground storage tanks);
the Solid Waste Disposal Act; the Clean Water Act; the Clean Air
Act; the Toxic Substances Control Act; the Safe Drinking Water
Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation
Act. "Environmental Law" also includes, but is not
limited to, any present, and for the purposes of Sections 11.2,
11.3 and 12.4 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.
"Hazardous Substances" include but are not 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 11.2. 11.3
and 12.4 only, future, Environmental Laws or (ii) that may have a
negative impact on human health or the environment, including,
but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated
biphenyls, lead, radon, radioactive materials, flammables and
explosives. "Release" of any Hazardous Substance includes, but
is not limited to any release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing or other movement
of Hazardous Substances. "Remediation" includes, but is not
limited to any response, remedial removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Substance, any actions to
prevent, cure or mitigate any Release of any Hazardous Substance,
any action to comply with any Environmental Laws or with any
permits issued pursuant thereto, any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any
Hazardous Substances or to anything referred to in this Article
11.
Section 11.2 Environmental Covenants. Mortgagor
covenants and agrees that so long as the Mortgagor 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 Mortgagor 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; (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) Mortgagor shall keep the Property free and clear of
all liens and other encumbrances imposed pursuant to any
Environmental Law, whether due to any act or omission of
Mortgagor or any other person or entity (the "Environmental
Liens"); (e) Mortgagor shall, at its sole cost and expense, fully
and expeditiously cooperate in all activities pursuant to Section
11.3 below, including, but not limited to providing all relevant
information and making knowledgeable persons available for
interviews; (f) Mortgagor 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 believe this Section 11.2 has been violated
(including, but not limited to sampling, testing and analysis of
soil, water, air, building materials and other materials
and substances whether solid, liquid or gas), and share with
Lender the reports and other results thereof, and Lender and
other Indemnified Parties (defined in Section 12.1) shall be
entitled to rely on such reports and other results thereof; (g)
Mortgagor shall, at its sole cost and expense, comply with all
reasonable written requests of Lender to (i) reasonably
effectuate Remediation of any condition (including, but not
limited to a Release of a Hazardous Substance) in, on, under or
from the Property, (ii) comply with any Environmental Law, (iii)
comply with any directive from any governmental authority, and
(iv) take any other reasonable action necessary or appropriate
for protection of human health or the environment; (h) Mortgagor
shall not do or allow any tenant or other user of the Property to
do any act that materially increases the dangers to human health
or the environment, poses an unreasonable risk of harm to any
person or entity (whether on or off the Property), impairs or may
impair the value of the Property, is contrary to any
requirement of any insurer, constitutes a public or private
nuisance, constitutes waste, or violates any covenant, condition,
agreement or easement applicable to the Property; and (i)
Mortgagor shall immediately 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 or oral notice or other
communication of which Mortgagor becomes aware from any source
whatsoever (including, but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation
thereof, possible liability of any person or entity pursuant to
any Environmental Law, other environmental conditions in
connection with the Property, or any actual or threatened
administrative or judicial proceedings in connection with
anything referred to in this Article 11.
Section 11.3 Lender's Rights. Lender, its
environmental consultant, and any other person or entity
designated by Lender, including, but not limited to 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
a Hazardous Substance or other environmental condition violates
or threatens to violate any Environmental Law, after notice to
Mortgagor, to enter upon the Property at all reasonable
times to assess any and all aspects of the environmental
condition of the Property and its use, including, but not limited
to conducting any environmental assessment or audit of the
Property or portions thereof to confirm Mortgagor's compliance
with the provisions of this Article 11, and Mortgagor 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, Mortgagor shall pay all 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 12 - INDEMNIFICATION
Section 12.1 General Indemnification. Mortgagor
shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from
and against any and all claims, suits, liabilities (including,
without limitation, strict liabilities),actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions
invalue, fines, penalties, charges, fees, expenses, judgments,
awards, amounts paid insettlement, or punitive damages, of
whatever kind or nature (including, but not limited to
reasonable attorneys' fees and other costs of defense) (the
"Losses") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following
(but excluding Losses arisingout of Lender's gross negligence or
willful misconduct): (a) ownership of this Security
Instrument, the Property or any interest therein or receipt of
any Rents; (b) any amendment to, or restructuring of, the Debt,
and the Note, the Loan Agreement, this Security Instrument, or
any Other Security Documents; (c) any and all lawful action that
may be taken by Lender in connection with the enforcement of the
provisions of this Security Instrument, the Loan Agreement, the
Note or any of the Other Security Documents, whether or not suit
is filed in connection with same, or in connection with
Mortgagor, Montgomery, any Guarantor or Indemnitor and/or any
member, partner, joint venturer or shareholder thereof becoming a
party to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to or
death of persons or loss of or damage to property occurring in,
on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (e) any use, nonuse or condition in, on or about
the Property or any part thereof or on the adjoining sidewalks,
curbs, adjacent property or adjacent parking areas, streets or
ways; (f) any failure on the part of Mortgagor to perform or be
in compliance with any of the terms of this Security Instrument
or the Other Security Documents; (g) performance of any labor or
services or the furnishing of any materials or other property in
respect of the Property or any part thereof; (h) the failure of
any person to file timely with the Internal Revenue Service an
accurate Form 1099-B, Statement for Recipients of Proceeds from
Real Estate, Broker and Barter Exchange Transactions, which may
be required in connection with 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 12; (k) any and all claims and demands whatsoever which
may be asserted against Lender by reason of any alleged
obligations or undertakings on its part to perform or discharge
any of the terms, covenants, or agreements contained in any
Lease; (l) the payment of any commission, charge or brokerage fee
to anyone which may be payable in connection with the funding of
the loan evidenced by the Note and secured by this Security
Instrument; or (m) any misrepresentation made by Mortgagor in
this Security Instrument,the Other Security Documents, or any
documents or information provided pursuant to Section 17.1
hereof. Any amounts payable to Lender by reason of the
application of this Section 12.1 shall become immediately due and
payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Lender until paid. For
purposes of this Article 12, 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,
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, but not limited to
Investors or prospective Investors in the Securities, as well as
custodians, trustees and other fiduciaries who hold or have held
a full or partial interest in this loan for the benefit of third
parties) as well as the respective directors, officers,
shareholders, members, partners, employees, agents, servants,
representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all
of the foregoing (including, but not limited to any other person
or entity who holds or acquires or will have held a participation
or other full or partial interest in 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, but not limited to any
successors by merger, consolidation or acquisition of all or a
substantial portion of Lender's assets and business).
Section 12.2 Mortgage and/or Intangible Tax.
Mortgagor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way relating to
any tax on the making and/or recording of this Security
Instrument, the Note or any of the Other Security Documents or in
connection with a transfer of all or a portion of the
Property pursuant to a foreclosure, deed in lieu of foreclosure
or otherwise.
Section 12.3 ERISA Indemnification. Mortgagor shall,
at its sole cost and expense, protect, defend, indemnify, release
and hold harmless the Indemnified Parties from and against any
and all Losses (including, without limitation, reasonable
attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining
any individual prohibited transaction exemption under ERISA that
may be required, in Lender's sole discretion) that Lender may
incur, directly or indirectly, as a result of a default under
Section 5.9.
Section 12.4 Duty to Defend; Attorneys' Fees and Other
Fees and Expenses. Upon written request by any Indemnified
Party, Mortgagor shall defend such Indemnified Party (if
requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved
by the Indemnified Parties. Notwithstanding the foregoing, any
Indemnified Parties may, in their sole and absolute discretion,
engage their own attorneys and other professionals to defend or
assist them, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of claim or proceeding.
Upon demand, Mortgagor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and
other professionals in connection therewith.
Article 13 - WAIVERS
Section 13.1 Waiver of Counterclaim. Mortgagor hereby
waives the right to assert a counterclaim, other than a mandatory
or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected with
this Security Instrument, the Note, any of the Other Security
Documents, or the Obligations.
Section 13.2 Marshalling and Other Matters. Mortgagor
hereby waives, to the extent permitted by law, the benefit of all
appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Property or
any part thereof or any interest therein. Further, Mortgagor
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 Mortgagor, and on behalf of each and
every person acquiring any interest in or title to the
Property subsequent to the date of this Security Instrument and
on behalf of all persons to the extent permitted by Applicable
Law.
Section 13.3 Waiver of Notice. To the extent
permitted by Applicable Law, Mortgagor shall not be entitled to
any notices of any nature whatsoever from Lender except
with respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by
Lender to Mortgagor and except with respect to matters for which
Lender is required by Applicable Law to give notice, and
Mortgagor hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this
Security Instrument does not specifically and expressly provide
for the giving of notice by Lender to Mortgagor.
Section 13.4 Sole Discretion of Lender. Wherever
pursuant to this Security Instrument (a) Lender exercises any
right given to it to approve or disapprove, (b) any
arrangement or term is to be satisfactory to Lender, or (c) any
other decision or determination is to be made by Lender, the
decision of Lender to approve or disapprove all decisions that
arrangements or terms are satisfactory or not satisfactory, and
all other decisions and determinations made by Lender, shall be
in the sole and absolute discretion of Lender and shall be final
and conclusive, except as may be otherwise expressly and
specifically provided herein.
Section 13.5 Survival. Except as hereinafter
specifically set forth below, the representations and warranties,
covenants, and other obligations arising under Article 11
shall in no way be impaired by: any satisfaction or other
termination of this Security Instrument, any assignment or other
transfer of all or any portion of this Security Instrument
or Lender's interest in the Property (but, in such case, shall
benefit both Indemnified Parties and any assignee or transferee),
any exercise of Lender's rights and remedies pursuant hereto
including, but not limited to foreclosure or acceptance of a deed
in lieu of foreclosure, any exercise of any rights and remedies
pursuant to the Note, the Loan Agreement, or any of the Other
Security Documents, any transfer of all or any portion of
the Property (whether by Mortgagor or by Lender, following
foreclosure or acceptance of a deed in lieu of foreclosure or at
any other time), any amendment to this Security Instrument, the
Note, the Loan Agreement or the Other Security Documents, and any
act or omission that might otherwise be construed as a release or
discharge of Mortgagor from the obligations pursuant hereto. All
obligations and liabilities of Mortgagor under Article 11 shall
cease and terminate on the first (1st) anniversary of the date of
payment to Lender in cash of the entire Debt, provided that
contemporaneously with or subsequent to such payment, Mortgagor
or Montgomery, at its sole cost and expense, delivers to Lender
an environmental audit of the Property in form and substance, and
prepared by a qualified environmental consultant, reasonably
satisfactory in all respects to Lender and indicating the
Property is in full compliance with all applicable Environmental
Laws.
Section 13.6 Waiver of Trial By Jury. Mortgagor HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER
IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY
TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN
EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY INSTRUMENT OR THE
OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS
OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION
THEREWITH.
Article 14 - Intentionally Omitted
Article 15 - NOTICES
Section 15.1 Notices. All notices or other written
communications hereunder shall be deemed to have been given (a)
upon receipt, if personally delivered (unless subject
to clause (b)) or is mailed by registered or certified mail, (b)
at noon on the date after dispatch is sent by overnight courier
or (c) upon the completion of transmission (which is
confirmed telephonically by the receiving party) if transmitted
by telecopy or other means of facsimile which provides immediate
or near immediate transmission to compatible equipment in the
possession of the recipient, and in any case to the parties at
the following addresses or telecopy numbers (or at such other
address or telecopy number for a party as will be specified by
like notice):
If to Mortgagor:
Century Plaza Associates, L.P.
c/o Montgomery CV Realty L.P.
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, Pennsylvania 19426
Attention: Paul Zambrotta
Telecopy No.: 610/834-8110
With a copy to:
Montgomery CV Realty LP
c/o Montgomery CV Realty L.P.
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, Pennsylvania 19426
Attention: Paul Zambrotta
Telecopy No.: 610/834-8110
With a copy to:
Stanley S. Cohen, Esquire
Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, 10th Floor
Philadelphia, Pennsylvania 19103-3291
Telecopy No.: 215/299-2150
With a copy to:
David J. Wiener, Esquire
Levy, Kneen, Mariani, Curtin, Wiener, Kornfeld
& Del Russo, P.A.
1400 Centrepark Boulevard, Suite 1000
West Palm Beach, Florida 33401
Telecopy No.: 561/478-5811
If to Lender: GMAC Commercial Mortgage Corporation
650 Dresher Road
Horsham, Pennsylvania 19044-8015
ATTN: Loan Servicing Department
Telecopy No.: (215) 328-1378
Article 16 - APPLICABLE LAW
Section 16.1 Choice of Law. THIS SECURITY INSTRUMENT
SHALL BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 16.2 Usury Laws. This Security Instrument and
the Note are subject to the express condition that at no time
shall Montgomery 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 Montgomery is permitted by
applicable law to contract or agree to pay. If by the terms of
this Security Instrument or the Note, Montgomery 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 16.3 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.
Section 16.4 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 17 - SECONDARY MARKET
Section 17.1 Dissemination of Information. If Lender
determines at any time to sell, transfer or assign the Note, this
Security Instrument and the Other Security Documents, and any or
all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage
pass-through certificates or other securities (such sale and/or
issuance, the "Securitization") evidencing a beneficial interest
in a rated or unrated public offering or private placement (the
"Securities"), Lender may forward to each purchaser, transferee,
assignee, servicer, participant, investor, or their respective
successors in such Participations and/or Securities
(collectively, the "Investor") or any Rating Agency rating such
Securities and each prospective Investor, all documents and
information which Lender now has or may hereafter acquire
relating to the Debt and to Mortgagor, Montgomery, any Guarantor,
any Indemnitors and the Property (including, without
limitation, all financial statements), which shall have been
furnished by Mortgagor, Montgomery, any Guarantor or any
Indemnitors, as Lender determines necessary or desirable.
Mortgagor, Montgomery, any Guarantor and any Indemnitor agree to
cooperate with Lender in connection with any transfer made or any
Securities created pursuant to this Section, including, without
limitation, the delivery of an estoppel certificate required in
accordance with Subsection 6.4(c) hereof and such other documents
as may be reasonably requested by Lender and, upon Lender's
reasonable request, meeting with any Rating Agency for due
diligence purposes. Mortgagor shall also furnish and Mortgagor,
Montgomery, any Guarantor and any Indemnitor consent to Lender
furnishing to such Investors or such prospective Investors or any
Rating Agency any and all information concerning the Property,
the Leases, the financial condition of Mortgagor, Montgomery, any
Guarantor and any Indemnitor as may be requested by Lender, any
Investor or any prospective Investor or Rating Agency in
connection with any sale, transfer or Participation.
Any dissemination of information pursuant to this Section shall
comply with the requirements of the Securities and Exchange
Commission and shall not impose a material financial burden on
Borrower.
Article 18 - COSTS
Section 18.1 Performance at Mortgagor's Expense.
Mortgagor acknowledges and confirms that Lender shall impose
certain administrative processing and/or commitment fees in
connection with (a) the extension, renewal, modification,
amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining
certain consents, waivers and approvals with respect to the
Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance
agreement (the occurrence of any of the above shall be called an
"Event"). Mortgagor 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, subject to the Loan Agreement. Mortgagor hereby
acknowledges and agrees to pay, immediately, with or
without demand, all such fees (as the same may be increased or
decreased from time to time), and any additional fees of a
similar type or nature which may be imposed by Lender
from time to time, upon the occurrence of any Event or
otherwise. Wherever it is provided for herein that Mortgagor pay
any costs and expenses, such costs and expenses shall include,
but not be limited to, all legal fees and disbursements of Lender
(whether of retained firms, the reimbursement for the expenses of
in-house staff or otherwise).
Section 18.2 Attorneys' Fees for Enforcement. (a)
Mortgagor shall pay all reasonable legal fees incurred by Lender
in connection with (i) the preparation of the Note, the Loan
Agreement, this Security Instrument and the Other Security
Documents; and (ii) the items set forth in Section 18.1 above,
and (b) Mortgagor shall pay to Lender on demand any and all
expenses, including reasonable legal expenses and attorneys'
fees, incurred or paid by Lender in protecting its interest in
the Property or the Collateral or in collecting any
amount payable hereunder or in enforcing its rights hereunder
with respect to the Property or the Collateral, whether or not
any legal proceeding is commenced hereunder or thereunder and
whether or not any default or Event of Default shall have
occurred and is continuing, together with interest thereon at the
Default Rate from the date paid or incurred by Lender until such
expenses are paid by Mortgagor.
Article 19 - DEFINITIONS
Section 19.1 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 "Mortgagor" shall mean "each Mortgagor and any
subsequent owner or owners of the Property or any part thereof or
any interest therein," the word "Lender" shall mean "Lender
and any subsequent holder of the Note," the word "Note" shall
mean "the Note and any other evidence of indebtedness secured by
this Security Instrument," the word "person" shall include an
individual, corporation, 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, but not limited to fees and
disbursements at the pre-trial, trial and appellate levels
incurred or paid by Lender in protecting its interest in
the Property, the Leases and the Rents and enforcing its rights
under this Security Instrument.
Section 19.2 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.
Article 20 - MISCELLANEOUS PROVISIONS
Section 20.1 No Oral Change. This Security
Instrument, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor
or Lender but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Section 20.2 Liability. If Mortgagor consists of more
than one person, the obligations and liabilities of each such
person hereunder shall be joint and several. This
Security Instrument shall be binding upon and inure to the
benefit of Mortgagor and Lender and their respective successors
and assigns forever.
Section 20.3 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 counterparts shall be deemed an
original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party hereto
to execute this Security Instrument, or any counterpart hereof,
shall not relieve the other signatories from their obligations
hereunder.
Section 20.4 Number and Gender. Whenever the context
may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and
vice versa.
Section 20.5 Subrogation. If any or all of the
proceeds of the Note have been used to extinguish, extend or
renew any indebtedness heretofore existing against the
Property, then, to the extent of the funds so used, Lender shall
be subrogated to all of the rights, claims, liens, titles, and
interests existing against the Property heretofore held by, or
in favor of, the holder of such indebtedness and such former
rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor
of Lender and are merged with the lien and security interest
created herein as cumulative security for the repayment of the
Debt, the performance and discharge of Mortgagor's obligations
hereunder, under the Note, the Loan Agreement and the Other
Security Documents and the performance and discharge of the Other
Obligations.
Section 20.6 Entire Agreement. The Note, the Loan
Agreement, this Security Instrument and the Other Security
Documents constitute the entire understanding and agreement
between Mortgagor, Montgomery and Lender with respect to the
transactions arising in connection with the Debt and supersede
all prior written or oral understandings and agreements between
Mortgagor, Montgomery and Lender with respect thereto. Mortgagor
hereby acknowledges that, except as incorporated in writing in
the Note, the Loan Agreement, this Security Instrument and the
Other Security Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any
representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the transaction which
is the subject of the Note, the Loan Agreement, this Security
Instrument and the Other Security Documents.
Article 21 - PERFORMANCE BY MONTGOMERY
Lender acknowledges and agrees that Mortgagor's
covenants, agreements and obligations under or pursuant to
Sections 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.10, 3.11, 3.12, 4.4,
6.1, 6.3, 18.1 and 18.2 hereunder may be performed by Montgomery
on behalf of Mortgagor.
Article 22 - LOCAL LAW PROVISIONS
The provisions set forth on Exhibit B annexed hereto
are incorporated herein by reference as if fully set forth
herein.
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been
executed by Mortgagor the day and year first above written.
MORTGAGOR:
CENTURY PLAZA ASSOCIATES, L.P., a
Delaware limited partnership
By: CP General Partner LLC, a Delaware
limited liability company, its sole
general partner
By: Montgomery CV Realty L.P., a
Delaware limited partnership,
its sole member
By: Montgomery CV Realty Trust, a
Delaware limited partnership,
its sole general partner
By: /s/ Louis P. Meshon, Sr.
Name: Louis P. Meshon, Sr.
Title: Managing Trustee
EXHIBIT 5.4
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this
"Guaranty") dated as of the 9th day of April, 1998, made by CV
REIT, INC., a Delaware corporation ("Guarantor") to GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation
("Lender"),
W I T N E S S E T H :
WHEREAS, pursuant to a Loan and Credit Facility
Agreement dated as of March 31, 1998 between Montgomery CV Realty
L.P., a Delaware limited partnership ("Borrower"), Guarantor,
Century Plaza Associates, L.P. and Lender (as the same may be
amended, modified or supplemented from time to time, the "Loan
Agreement"), Lender has agreed to make a Loan of $7,650,000 to
Borrower (the "Loan");
WHEREAS, the Loan is evidenced by Borrower's $7,650,000
Note to Lender of even date herewith (as the same may be
extended, renewed, refinanced, refunded, amended, modified or
supplemented from time to time, the "Note");
WHEREAS, Guarantor acknowledges receipt of copies of
the Loan Agreement, the Note and the other Facility Loan
Documents (as defined in the Loan Agreement); and
WHEREAS, the execution and delivery by Guarantor of
this Guaranty is a condition to Lender's obligation to make the
Loan and other loans to Borrower pursuant to the Loan Agreement,
and Guarantor expects to derive financial benefit from the making
of the Loan and other loans by Lender to Borrower;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt of which is
hereby acknowledged by Guarantor, and intending to be legally
bound, Guarantor hereby agrees as follows:
ARTICLE I
GUARANTEE
1.01 Guaranteed Obligations. Guarantor hereby
unconditionally and irrevocably guarantees to Lender and becomes
surety to Lender for the due, punctual and full payment and
performance of, and covenants with Lender to duly, punctually and
fully pay and perform, the following (collectively, the
"Guaranteed
Obligations"):
(a) all indebtedness of Borrower to Lender
evidenced by the Note and/or incurred under the Loan Agreement,
including other loans from Lender to Borrower, both principal and
interest, future advances and any refinancing or refunding of any
thereof, and all other amounts due or to become due under the
Loan Agreement, the Note and the other Facility Loan Documents,
and any refinancing or refunding of any thereof, whether now
existing or hereafter arising, contracted or incurred; and
(b) all covenants, agreements, obligations
and liabilities of Borrower under the Loan Agreement, the Note
and the other Facility Loan Documents, whether now existing or
hereafter arising, contracted or incurred, as and when such
payment or performance shall become due (whether by acceleration
or otherwise) in accordance with the terms of the Facility Loan
Documents.
1.02. Guarantee Unconditional. The obligations of
Guarantor hereunder are continuing, absolute and unconditional,
irrespective of any circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a
guarantor or surety. Without limiting the generality of the
foregoing, the obligations of Guarantor hereunder shall remain in
full force and effect without regard to, and shall not be
released, discharged or in any way affected by:
(a) any amendment, modification or
supplement to the Loan Agreement, the Note or any other
Facility Loan Document;
(b) any exercise or nonexercise of or delay
in exercising any right, remedy, power or privilege under or
in respect of this Guaranty, the Loan Agreement, the Note or
any other Facility Loan Document (even if any such right,
remedy, power or privilege shall be lost thereby), or any
waiver, consent, indulgence or other action or inaction in
respect thereof;
(c) any bankruptcy, insolvency, arrangement,
composition, assignment for the benefit of creditors or
similar proceeding commenced by or against Borrower;
(d) any failure to perfect or continue
perfection of, or any release or waiver of, any rights given
to Lender in any property as security for the performance of
any of the Guaranteed Obligations;
(e) any extension of time for payment or
performance of any of the Guaranteed Obligations;
(f) the genuineness, validity or
enforceability of the Facility Loan Documents;
(g) any limitation of liability of Borrower
contained in any Facility Loan Document;
(h) any defense that may arise by reason of
the failure of Lender to file or enforce a claim against the
estate of Borrower in any bankruptcy or other proceeding;
(i) any voluntary or involuntary
liquidation, dissolution, sale of all or substantially all
of the property of Borrower, or any marshalling of assets
and liabilities, or other similar proceeding affecting,
Borrower or any of its assets;
(j) the release of Borrower from performance
or observance of any of the agreements, covenants, terms or
conditions contained in the Facility Loan Documents by
operation of law;
(k) the failure of Lender to keep Guarantor
advised of Borrower's financial condition, regardless of the
existence of any duty to do so; or
(l) any other circumstances which might
otherwise constitute a legal or equitable discharge of a
guarantor or surety.
No set-off, claim, reduction or diminution of any obligation, or
any defense of any kind or nature which Borrower or any Guarantor
now has or hereafter may have against Lender, shall be available
hereunder to Guarantor against Lender.
1.03. No Notice or Duty to Exhaust Remedies.
Guarantor hereby waives diligence, presentment, demand, protest
and all notices of any kind, and waives any requirement that
Lender exhaust any right or remedy, or proceed first or at any
time, against Borrower or any other guarantor of, or any security
for, any of the Guaranteed Obligations. This Guaranty
constitutes an agreement of suretyship as well as of guaranty,
and Lender may pursue its rights and remedies under this Guaranty
and under the other Facility Loan Documents in whatever order, or
collectively, and shall be entitled to payment and performance
hereunder notwithstanding such other Facility Loan Documents and
notwithstanding any action taken by Lender or inaction by Lender
to enforce any of its rights or remedies against any other
guarantor or any other person, entity, partnership, corporation,
limited liability company (a "Person") or property whatsoever.
1.04. SUBORDINATION OF SUBROGATION, ETC.
NOTWITHSTANDING ANY PAYMENTS MADE OR OBLIGATIONS PERFORMED BY
GUARANTOR BY REASON OF THIS GUARANTY (INCLUDING BUT NOT LIMITED
TO APPLICATION OF FUNDS ON ACCOUNT OF SUCH PAYMENTS OR
OBLIGATIONS), GUARANTOR HEREBY IRREVOCABLY (A) SUBORDINATES TO
THE PRIOR PAYMENT IN FULL OF THE GUARANTEED OBLIGATIONS ANY AND
ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR
INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO ASSERT
ANY CLAIM AGAINST BORROWER OR ANY OTHER PERSON, OR AGAINST ANY
DIRECT OR INDIRECT SECURITY, ON ACCOUNT OF PAYMENTS MADE OR
OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY,
INCLUDING WITHOUT LIMITATION ANY AND ALL RIGHTS OF SUBROGATION,
REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY, AND (B)
WAIVES AND RELEASES ANY RIGHTS IT MAY HAVE AT ANY TIME TO REQUIRE
THE MARSHALING OF ANY ASSETS OF BORROWER, WHICH RIGHT OF
MARSHALING MIGHT OTHERWISE ARISE FROM PAYMENTS MADE OR
OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY, AND ANY
AND ALL RIGHTS THAT WOULD RESULT IN GUARANTOR BEING DEEMED A
"CREDITOR" UNDER THE UNITED STATES BANKRUPTCY CODE OF BORROWER OR
ANY OTHER PERSON.
ARTICLE II
COVENANTS
2.01. Covenants. Guarantor hereby covenants to Lender
that:
(i) Promptly upon becoming aware thereof,
Guarantor shall give Lender notice of (i) the commencement,
existence or threat of any proceeding by or before any
governmental authority against or affecting Guarantor which, if
adversely decided, would have a material adverse effect on the
business, operations, condition (financial or otherwise) or
prospects of Guarantor or on its ability to perform its
obligations hereunder or (ii) any material adverse change in the
business, operations, condition (financial or otherwise) or
prospects of Guarantor.
(ii) Guarantor shall permit such Persons as
Lender may designate to examine Guarantor's books and
records and take copies and extracts therefrom and to
discuss the affairs of Guarantor with its officers,
employees and independent accountants at such times and as
often as Lender may reasonably request. Guarantor hereby
authorizes such officers, employees and independent
accountants to discuss with Lender the affairs of Guarantor.
(iii) If Guarantor is a corporation or
partnership, Guarantor shall not dissolve, merge or
consolidate with any other Person or sell, transfer or
otherwise dispose of all or a substantial part of its assets,
and shall continue to engage in its business substantially as
currently conducted and operated and shall not engage in any
other business.
ARTICLE III
MISCELLANEOUS
3.01. Effect Of Bankruptcy Proceedings. This Guaranty
shall continue to be effective, or be automatically reinstated,
as the case may be, if at any time payment, in whole or in part,
of any of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by Lender as a preference,
fraudulent conveyance or otherwise under any bankruptcy,
insolvency or similar Law, all as though such payment had not
been made. If an Event of Default (as defined in the Loan
Agreement) at any time shall have occurred and be continuing or
exist and declaration of default or acceleration under or with
respect to any of the Facility Loan Documents shall at such time
be prevented by reason of the pendency against Borrower of a case
or proceeding under any bankruptcy or insolvency law, Guarantor
agrees that, for purposes of this Guaranty and its obligations
hereunder, such Facility Loan Documents shall be deemed to have
been declared in default or accelerated with the same effect as
if such Facility Loan Documents had been declared in default and
accelerated in accordance with the terms thereof, and Guarantor
shall forthwith pay the Guaranteed Obligations in full without
further notice or demand.
3.02. Lender's Right of Set-Off. If an Event of
Default shall occur, Lender shall have the right, in addition to
all other rights and remedies available to it, to set-off against
and to appropriate and apply to the unpaid balance of the
Guaranteed Obligations any debt owing to, and any other funds
held in any manner for the account of Guarantor by Lender or such
holder, including without limitation all funds in all deposit
accounts (general or special) now or hereafter maintained by
Guarantor with Lender or such holder. Such right shall exist
whether or not Lender or any such holder shall have made any
demand under this Guaranty or any other Facility Loan Document
and whether or not the Guaranteed Obligations are matured or
unmatured. Guarantor hereby confirms the foregoing arrangements
and each such holder's and the Lender's right of banker's lien
and set-off and nothing in this Guaranty or any other Facility
Loan Document shall be deemed any waiver or prohibition of any
such holder's or of Lender's right of banker's lien or set-off.
3.03. Further Assurances. From time to time upon the
request of Lender, Guarantor shall promptly and duly execute,
acknowledge and deliver any and all such further instruments and
documents as Lender may deem necessary or desirable to confirm
this Guaranty, to carry out the purpose and intent hereof or to
enable Lender to enforce any of its rights hereunder.
3.04. Amendments, Waivers, Etc. This Guaranty cannot
be amended, modified, waived, changed, discharged or terminated
except by an instrument in writing signed by the party against
whom enforcement of such amendment, modification, waiver, change,
discharge or termination is sought.
3.05. No Implied Waiver; Cumulative Remedies. No
course of dealing and no delay or failure of Lender in exercising
any right, power or privilege under this Guaranty or any other
Facility Loan Document shall affect any other or future exercise
thereof or exercise of any other right, power or privilege; nor
shall any single or partial exercise of any such right, power or
privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further
exercise thereof or of any other right, power or privilege. The
rights and remedies of Lender under this Guaranty are cumulative
and not exclusive of any rights or remedies which Lender would
otherwise have under the other Facility Loan Documents, at law or
in equity.
3.06. Notices. All notices, requests, demands,
directions and other communications under the provisions of this
Guaranty shall be sent and deemed given in accordance with
Section 11.6 of the Loan Agreement.
3.07. Expenses. Guarantor agrees to pay or cause to
be paid and to save Lender harmless against liability for the
payment of all reasonable out-of-pocket expenses, including fees
and expenses of counsel for Lender, incurred by Lender from time
to time arising in connection with Lender's enforcement or
preservation of rights under this Guaranty, including but not
limited to such expenses as may be incurred by Lender in
connection with any default by Guarantor of any of its
obligations hereunder.
3.08. Survival. All obligations of Guarantor to make
payments under Sections 3.01 or 3.07 hereof or to indemnify
Lender (including indemnities by Borrower of Lender under the
Facility Loan Documents) shall survive the payment and
performance in full of the Guaranteed Obligations.
3.09. Jurisdiction; Etc. Guarantor irrevocably (a)
agrees that Lender may bring suit, action or other legal
proceedings arising out of this Guaranty in the courts of the
State of Florida or the courts of the United States for the
District of Florida; (b) consents to the jurisdiction of each
such court in any such suit, action or proceeding; (c) waives any
objection which such Guarantor may have to the laying of the
venue of any such suit, action or proceeding in any of such
courts; and (d) waives any right Guarantor may have to a jury
trial in connection with any such suit, action or proceeding.
3.10. Severability. If any term or provision of this
Guaranty or the application thereof to any Person or circumstance
shall to any extent be invalid or unenforceable, the remainder of
this Guaranty, or the application of such term or provision to
Persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Guaranty shall be valid and
enforceable to the fullest extent permitted by law.
3.11. Counterparts. This Guaranty may be executed in
any number of counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute
but one and the same instrument.
3.12. Governing Law. This Guaranty shall be governed
by, and construed in accordance with, the laws of the State of
Florida.
3.13. Successors and Assigns. This Guaranty shall
bind Guarantor and its successors and assigns, and shall inure
to the benefit of Lender and its successors and assigns.
IN WITNESS WHEREOF, Guarantor has duly executed and
delivered this Guaranty as of the date first above written.
CV REIT, INC., a Delaware corporation
By:/s/ Louis P. Meshon, Sr.
Name:Louis P. Meshon, Sr.
Title: President and Chief Executive Officer
