APN NO. 162-18-801-003
DEED OF TRUST AND SECURITY AGREEMENT
SUNWOOD VILLAGE JOINT VENTURE, LIMITED
PARTNERSHIP,
GRANTOR,
TO
UNITED TITLE OF NEVADA,
AS TRUSTEE,
FOR THE BENEFIT OF
FIRST UNION NATIONAL BANK,
BENEFICIARY
DATED: AS OF AUGUST 1, 2001
County: Clark
State: Nevada
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MAIL TAX STATEMENTS TO:
SUNWOOD VILLAGE JOINT VENTURE C/O SPECS,
INC.
4200 BLUE RIDGE BLVD
SUITE LH-06
KANSAS CITY, MO 64133
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Record and
Return to:
Winston &
Strawn
200 Park Avenue
New York, New York 10166
Attention: Colette Bonnard
FUNB Loan No.: 502694601
Sunwood Apartments
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DEED OF TRUST AND SECURITY
AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (this
“Deed of Trust”) is entered into
by SUNWOOD VILLAGE JOINT VENTURE, LIMITED PARTNERSHIP, a Nevada
limited partnership, as Grantor (“Grantor”), whose
address is SPECS, Inc., Suite LH-06,
4200 Blue Ridge Boulevard, Kansas City, Missouri
64133 to UNITED TITLE OF NEVADA, as Trustee
(“Trustee”), whose address is 3980 Howard Hughes
Parkway #100, Las Vegas, Nevada 89109, for the benefit of FIRST
UNION NATIONAL BANK, a national banking association, as Beneficiary
(“Beneficiary”), whose address is at the office of
Beneficiary at 201 South Tryon Street, Suite 130, PMB Box #4,
Charlotte, North Carolina 28202.
WITNESSETH :
Grantor has GRANTED, BARGAINED, SOLD and CONVEYED,
and by these presents does GRANT, BARGAIN, SELL and CONVEY, unto
Trustee, in trust, with power of sale, all of the following
described property, whether now owned or hereafter acquired
(collectively, the “Property”):
(A) All that certain
real property situated at 4020 S. Arville in the County of Clark,
State of Nevada, more particularly described on Exhibit A attached
hereto and incorporated herein by this reference (the “Land),
together with all of the easements, rights, privileges, franchises,
tenements, hereditaments and appurtenances now or hereafter
thereunto belonging or in any way appertaining thereto, and all of
the estate, right, title, interest, claim and demand whatsoever of
Grantor therein or thereto, either at law or in equity, in
possession or in expectancy, now or hereafter acquired;
(B) All
structures, buildings and improvements of every kind and
description now or at any time hereafter located or placed on the
Land (the “Improvements”):
(C) All
furniture, furnishings, fixtures, goods, equipment, inventory or
personal property owned by Grantor and now or hereafter located on,
attached to or used in and about the Improvements, including, but
not limited to, all machines, engines, boilers, dynamos, elevators,
stokers, tanks, cabinets, awnings, screens, shades, blinds,
carpets, draperies, lawn mowers, and all appliances, plumbing,
heating, air conditioning, lighting, ventilating, refrigerating,
disposal and incinerating equipment, and all fixtures and
appurtenances thereto, and such other goods and chattels and
personal property owned by Grantor as are now or hereafter used or
furnished in operating the Improvements, or the activities
conducted therein, and all building materials and equipment
hereafter situated on or about the Land or Improvements, and all
warranties and guaranties relating thereto, and all additions
thereto and substitutions and replacements therefor (exclusive of
any of the foregoing owned or leased by tenants of space in the
Improvements);
(D) All easements,
rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, passages, sewer rights, air rights and other development
rights now or hereafter located on the Land or under or above the
same or any part or parcel thereof, and all estates, rights,
titles, interests, tenements, hereditaments
and appurtenances, reversions and remainders whatsoever, in any way
belonging, relating or appertaining to the Land and/or Improvements
or any part thereof, or which hereafter shall in any way belong,
relate or be appurtenant thereto, whether now owned or hereafter
acquired by Grantor;
(E)
All water, ditches, wells, reservoirs and drains and
all water, ditch, well, reservoir and drainage rights which are
appurtenant to, located on, under or above or used in connection
with the Land or the Improvements, or any part thereof, whether now
existing or hereafter created or acquired;
(F) All
minerals, crops, timber, trees, shrubs, flowers and landscaping
features now or hereafter located on, under or above the
Land;
(G) All cash
funds, deposit accounts and other rights and evidence of rights to
cash, now or hereafter created or held by Beneficiary pursuant to
this Deed of Trust or any other of the Loan Documents (as
hereinafter defined), including, without limitation, all funds now
or hereafter on deposit in the Impound Account, _the Repair and
Remediation Reserve, the Replacement Reserve and the Payment
Reserve (each as hereafter defined);
(H) All leases
(including, without limitation, oil, gas and mineral leases),
licenses, concessions and occupancy agreements of all or any part
the Land or the Improvements (each, a “Lease” and
collectively, “Leases”), whether written or oral, now
or hereafter entered into and all rents, royalties, issues,
profits, bonus money, revenue, income, rights and other benefits
(collectively, the “Rents and Profits”) of the Land or
the Improvements, now or hereafter arising from the use or
enjoyment of all or any portion thereof or from any present or
future Lease or other agreement pertaining thereto or arising from
any of the Contracts (as hereinafter defined) or any of the General
Intangibles (as hereinafter defined) and all cash or securities
deposited to secure performance by the tenants, lessees or
licensees (each, a “Tenant” and collectively,
“Tenants”), as applicable, of their obligations under
any such Leases, whether said cash or securities are to be held
until the expiration of the terms of said Leases or applied to one
or more of the installments of rent coming due prior to the
expiration of said terms, subject, however, to the provisions
contained in Section 1.1 1 hereinbelow;
(I) All
contracts and agreements now or hereafter entered into covering any
part of the Land or the Improvements (collectively, the
“Contracts”) and all revenue, income and other benefits
thereof, including, without limitation, management agreements,
service contracts, maintenance contracts, equipment leases,
personal property leases and any contracts or documents
relating to construction on
any part of the Land or the Improvements (including plans, drawings,
surveys, tests, reports, bonds and governmental approvals) or to
the management or operation of any part of the Land or the
Improvements;
(J)
All present and future monetary deposits given to
any public or private utility with respect to utility services
furnished to any part of the Land or the Improvements;
(K)
All present and future funds, accounts, instruments,
accounts receivable, documents, causes of action, claims, general
intangibles (including, without limitation, trademarks, trade
names, service marks and symbols now or hereafter used in
connection with any part of the Land or the
Improvements, all names by which the Land or the Improvements may
be operated or known, all rights to carry on business under such
names, and all rights, interest and privileges which Grantor has or
may have as developer or declarant under any covenants,
restrictions or declarations now or hereafter relating to the Land
or the Improvements) and all notes or chattel paper now or
hereafter arising from or by virtue of any transactions related to
the Land or the Improvements (collectively, the “General
Intangibles”);
(L) All
water taps, sewer taps, certificates of occupancy, permits,
licenses, franchises, certificates, consents, approvals and other
rights and privileges now or hereafter obtained in connection with
the Land or the Improvements and all present and future warranties
and guaranties relating to the Improvements or to any equipment,
fixtures, furniture, furnishings, personal property or components
of any of the foregoing now or hereafter located or installed on
the Land or the Improvements;
(M) All building materials,
supplies and equipment now or hereafter placed on the Land or in
the Improvements and all architectural renderings, models,
drawings, plans, specifications, studies and data now or hereafter
relating to the Land or the Improvements;
(N) All right, title
and interest of Grantor in any insurance policies or binders now or
hereafter relating to the Property, including any unearned premiums
thereon;
(O) All proceeds,
products, substitutions and accessions (including claims and
demands therefor) of the conversion, voluntary or involuntary, of
any of the foregoing into cash or liquidated claims, including,
without limitation, proceeds of insurance and condemnation awards;
and
(P) All other or
greater rights and interests of every nature in the Land or the
Improvements and in the possession or use thereof and income
therefrom, whether now owned or hereafter acquired by
Grantor.
FOR THE PURPOSE OF SECURING:
(1) The debt
evidenced by that
certain promissory note (such promissory note, together with any
and all renewals, modifications, consolidations and extensions
thereof, is hereinafter referred to as the “Note”) of even date with
this Deed of Trust, made by Grantor to the order of Beneficiary in
the principal face amount of TEN MILLION EIGHTY THOUSAND AND 001100
DOLLARS ($10,080,000.00), together with interest as therein
provided;
(2) The
full and prompt payment and performance of all of the provisions,
agreements, covenants and obligations herein contained and
contained in any other agreements, documents or instruments now or
hereafter evidencing, securing, guarantying or otherwise relating
to the indebtedness evidenced by the Note, including, but not
limited to, the Hazardous Indemnity Agreement (as hereinafter
defined) (the Note, this Deed of Trust, and such other agreements,
documents and instruments, together with any and all renewals,
amendments, extensions and modifications thereof, are hereinafter
collectively referred to as the “Loan Documents”) and
the payment of all other sums therein covenanted to be
paid;
(3)
Any and all additional advances made by Beneficiary
to protect or preserve the Property or the lien or security
interest created hereby on the Property, or for taxes, assessments
or insurance premiums as hereinafter provided or for performance of
any of Grantor’s obligations hereunder or under the other
Loan Documents or for any other purpose provided herein or in the
other Loan Documents (whether or not the original Grantor remains
the owner of the Property at the time of such advances); and
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(4)
Any and all other indebtedness now owing or which
may hereafter be owing by Grantor to Beneficiary, including,
without limitation, all prepayment fees, however and whenever
incurred or evidenced, whether express or implied, direct or
indirect, absolute or contingent, or due or to become due, and all
renewals, modifications, consolidations, replacements and
extensions thereof, it being contemplated by Grantor and
Beneficiary that Grantor may hereafter become so indebted to
Beneficiary.
(All of the sums referred to in Paragraphs (1)
through (4) above are herein sometimes referred to as the
“secured indebtedness” or the “indebtedness
secured hereby”).
TO HAVE AND TO HOLD the Property unto Trustee, its
successors and assigns forever, and Grantor does hereby bind
itself, its successors and assigns, to WARRANT AND FOREVER DEFEND
the title to the Property unto Trustee against every person
whomsoever lawfully claiming or to claim the same or any part
thereof;
PROVIDED, HOWEVER, that if the principal and
interest and all other sums due or to become due under the Note or
under the other Loan Documents, including, without limitation, any
prepayment fees required pursuant to the terms of the
Note,
shall have been paid at the time and in the manner
stipulated therein and all other sums payable hereunder and all
other indebtedness secured hereby shall have been paid and all
other covenants contained in the Loan Documents shall have been
performed, then, in such case, the liens, security interests,
estates and rights granted by this Deed of Trust shall be satisfied
and the estate, right, title and interest of Beneficiary in the
Property shall cease, and upon payment to Beneficiary of all costs and expenses incurred
for the preparation of the release hereinafter referenced and all
recording costs if allowed by law, Beneficiary shall satisfy and
release this Deed of Trust and the lien hereof by proper
instrument.
ARTICLE I
COVENANTS OF GRANTOR
For the purpose of further securing the indebtedness
secured hereby and for the protection of the security of this Deed
of Trust, for so long as the indebtedness secured hereby or any
part thereof remains unpaid, Grantor covenants and agrees as
follows:
1.1
Warranties of Grantor .
Grantor, for itself and its successors and assigns, does hereby
represent, warrant and covenant to and with Beneficiary, its
successors and assigns, that:
(a) Grantor
has good and indefeasible fee simple title to the Property, subject
only to those matters expressly set forth as exceptions to or
subordinate matters in the title insurance policy insuring the lien
of this Deed of Trust which Beneficiary has agreed to accept,
excepting therefrom all preprinted and/or standard exceptions
(the “Permitted
Exceptions”), and has full power
and lawful authority to grant, bargain, sell, convey, assign,
transfer and encumber its interest in the property in the manner
and form hereby done or intended. Grantor will preserve its
interest in and title to the Property and will forever warrant and
defend the same to Beneficiary against any and all claims
whatsoever and will forever warrant and defend the validity and
priority of the lien and security interest created herein against
the claims of all persons and parties whomsoever, subject to the
Permitted Exceptions. The foregoing warranty of title shall survive
the foreclosure of this Deed of Trust and shall inure to the
benefit of and be enforceable by Beneficiary in the event
Beneficiary acquires title to the Property pursuant to any
foreclosure;
(b) No
bankruptcy or insolvency proceedings are pending or contemplated by
Grantor or, to the best knowledge of Grantor, against Grantor or by
or against any endorser or cosigner of the Note, or any guarantor
or indemnitor under any guaranty or indemnity agreement executed in
connection with the Note of the loan evidenced thereby and secured
hereby;
(c) All reports, certificates, affidavits,
statements and other data furnished by or on behalf of Grantor to
Beneficiary in connection with the loan evidenced by the Note are
true and correct in all material respects and do not omit to state
any fact or circumstance necessary to make the statements contained
therein not misleading;
(d) The
execution, delivery and performance of this Deed of Trust, the Note
and all of the other Loan Documents have been duly authorized by
all necessary action to be, and are, binding and enforceable
against Grantor in accordance with the respective terms thereof and
do not contravene, result in a breach of or constitute (upon the
giving of notice or the passage of time or both) a default under
the partnership agreement, articles of incorporation or other
organizational documents of Grantor or any contract or agreement of
any nature to which Grantor is a party or by which Grantor or any
of its property may be bound and do not violate or contravene any
law, order, decree, rule or regulation to which Grantor is
subject;
(e) To the best
of Grantor’s knowledge, information and belief, the Land and
the Improvements and the intended use thereof by Grantor comply in
all material respects with all applicable restrictive covenants,
zoning ordinances, subdivision and building codes, flood disaster
laws, applicable health and environmental laws and regulations and
all other ordinances, orders or requirements issued by any state,
federal or municipal authorities having or claiming jurisdiction
over the Property. The Land and Improvements constitute one or more
separate tax parcels for purposes of ad valorem taxation. The Land
and Improvements do not require any rights over, or restrictions
against, other property in order to comply with any of the
aforesaid governmental ordinances, orders or
requirements;
(f) All utility
services necessary and sufficient for the full use, occupancy,
operation and disposition of the Land and the Improvements for
their intended purposes are available to the Property, including
water, storm sewer, sanitary sewer, gas, electric, cable and
telephone facilities, through public rights-of-way or perpetual
private easements approved by Beneficiary;
(g) To the
best of Grantor’s knowledge, information and belief, all
streets, roads, highways, bridges and waterways necessary for
access to and full use, occupancy, operation and disposition of the
Land and the Improvements have been completed, have been dedicated
to and accepted by the appropriate municipal authority and are open
and available to the Land and the Improvements without further
condition or cost to Grantor;
(h) All
curb cuts, driveways and traffic signals shown on the survey
delivered to Beneficiary prior to the execution and delivery of
this Deed of Trust are existing and have been fully approved by the
appropriate governmental authority;
(i) There
are no judicial, administrative, mediation or arbitration actions,
suits or proceedings pending or threatened against or affecting
Grantor, (and, if Grantor is a partnership, any of its general
partners) or the Property which, if adversely determined, would
materially impair either the Property or Grantor’s ability to
perform the covenants or obligations required to be performed under
the Loan Documents;
(j)
The Property is free from delinquent water charges, sewer
rents, taxes and assessments;
(k) Except as
otherwise disclosed in that certain environmental report prepared
by Dominion Environmental Group and dated May 7, 2001, as of the date of this Deed of
Trust, the Property is free from unrepaired damage caused by fire,
flood, accident or other casualty;
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(l)
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As of the date of this Deed of Trust, no part of the
Land or the
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Improvements has been taken in condemnation, eminent
domain or like proceeding or is any such proceeding pending or to
Grantor’s knowledge and belief, threatened or
contemplated;
( m
) Grantor possesses all
franchises, patents, copyrights, trademarks, trade names, licenses
and permits adequate for the conduct of its business substantially
as now conducted;
(n) The
Improvements are structurally sound, in good repair and free of
defects in materials and workmanship and have been constructed and
installed in substantial compliance with the plans and
specifications relating thereto. All major building systems located
within the Improvements, including, without limitation, the heating
and air conditioning systems and the electrical and plumbing
systems, are in good working order and condition;
(o) Grantor has
delivered to Beneficiary true, correct and complete copies of all
Contracts and all amendments thereto or modifications
thereof;
( p
) Each Contract constitutes the legal, valid and binding
obligation of Grantor and, to the best of Grantor’s knowledge
and belief, is enforceable against any other party thereto. No
default exists, or with the passing of time or the giving of notice
or both would exist, under any Contract which would, in the
aggregate, have a material adverse effect on Grantor or the
Property;
(q) No Contract
provides any party with the right to obtain a lien or
encumbrance upon the Property superior to the lien
of this Deed of Trust;
(r) Grantor and
the Property are free from any past due obligations for sales and
payroll taxes;
(s) There are no
security agreements or financing statements affecting any of the
Property other than (i) as disclosed in writing by Grantor to
Beneficiary prior to the date hereof and (ii) the security
agreements and financing statements created in favor of
Beneficiary;
(t) The
Property forms no part of any property owned, used or claimed by
Grantor as a
residence or business homestead and is not exempt from forced sale
under the laws of the State of Nevada. Grantor hereby disclaims and
renounces each and every claim to all or any portion of the
Property as a homestead; and
(u) The
Permitted Exceptions do not and will not materially and adversely
affect (1) the ability of Grantor to pay in full the principal and
interest on the Note in a timely manner or (2) the use of the Property for the use
currently being made thereof, the operation of the Property as
currently being operated or the value of the Property.
1.2
Defense of Title . If,
while this Deed of Trust is in force, the title to the Property or
the interest of Beneficiary therein shall be the subject, directly
or indirectly, of any action at law or in equity, or be attached
directly or indirectly, or endangered, clouded or adversely
affected in any manner, Grantor, at Grantor’s expense, shall
take all necessary and proper steps for the defense of said title
or interest, including the employment of counsel approved by
Beneficiary, the prosecution or defense of litigation, and the
compromise or discharge of claims made against said title or
interest. Notwithstanding the foregoing, in the event that
Beneficiary determines that Grantor is not adequately performing
its obligations under this Section, Beneficiary may, without limiting or waiving any other
rights or remedies of Beneficiary hereunder, take such steps with
respect thereto as Beneficiary shall deem necessary or proper and
any and all costs and expenses incurred by Beneficiary in
connection therewith, together with interest thereon at the Default
Interest Rate (as defined in the Note) from the date incurred by
Beneficiary until actually paid by Grantor, shall be immediately
paid by Grantor on demand and shall be secured by this Deed of
Trust and by all of the other Loan Documents securing all or any
part of the indebtedness evidenced by the Note.
1.3 Performance of
Obligations. Grantor shall pay when due the principal of and the
interest on the indebtedness evidenced by the Note. Grantor shall
also pay all charges, fees and other sums required to be paid by
Grantor as provided in the Loan Documents, and shall observe,
perform and discharge all obligations, covenants and agreements to
be observed, performed or discharged by Grantor set forth in the
Loan Documents in accordance with their terms. Further, Grantor
shall promptly and strictly perform and comply with all covenants,
conditions, obligations and prohibitions required of Grantor in
connection with any other document or instrument affecting title to
the Property, or any part thereof, regardless of whether
such
document or instrument is superior or subordinate to
this Deed of Trust.
1.4 Insurance. Grantor shall, at Grantor’s expense, maintain
in force and effect on the Property at all times while this Deed of
Trust continues in effect the following insurance:
(a) Insurance against
loss or damage to the Property by fire, windstorm, tornado and hail
and against loss and damage by such other, further and additional
risks as may be now or hereafter embraced by an
“all-risk” or “special form” type of
insurance policy. The amount of such insurance shall be not less
than one hundred percent (100%) of the full replacement cost
(insurable value) of the Improvements (as established by an MAI
appraisal), without reduction for depreciation. The determination
of the replacement cost amount shall be adjusted annually to comply
with the requirements of the insurer issuing such coverage or, at
Beneficiary’s election, by reference to such indices,
appraisals or information as Beneficiary determines in its
reasonable discretion in order to reflect increased value due to
inflation. 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. Full
replacement cost, as used herein, means, with respect to the
Improvements, the cost of replacing the Improvements without regard
to deduction for depreciation, exclusive of the cost of
excavations, foundations and footings below the lowest basement
floor. Grantor shall also maintain insurance against loss or damage
to furniture, furnishing, fixtures, equipment and other items
(whether personalty or fixtures) included in the Property and owned
by Grantor from time to time to the extent applicable. Each policy
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 Beneficiary’s approval. The maximum deductible shall be
$10,000.00.
(b) Commercial
General Liability Insurance against claims for personal injury,
bodily injury, death and property damage occurring on, in or about
the Real Estate or the Improvements in amounts not less than
$1,000,000.00 per occurrence and $2,000,000.00 in the aggregate
plus umbrella coverage in an amount not less than $2,000,000.
Beneficiary hereby retains the right to periodically review the
amount of said liability insurance being maintained by Grantor and
to require an increase in the amount of said liability insurance
should Beneficiary deem an increase to be reasonably prudent under
then existing circumstances.
(c) Boiler and
machinery insurance is required if steam boilers or other
pressure-fired vessels are in operation at the Property. Minimum
liability coverage per accident must equal the greater of the
replacement cost (insurable value) of the Improvements housing such
boiler or pressure-fired machinery or $2,000,000.00. If one or more
large (i.e., greater than twenty (20) tons) HVAC units is in
operation at the Property, “Systems Breakdowns”
coverage shall be required, as
determined by Beneficiary. Minimum liability
coverage per accident must equal the value of such
unit(s).
(d) If the
Improvements or any part thereof is situated in an area designated
by the Federal Emergency Management Agency (“FEMA”) as
a special flood hazard area (Zone A or Zone V), flood insurance in
an amount 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 $3,000.00
per building or a higher minimum amount as required by FEMA or
other applicable law.
(e) During
the period of any construction, renovation or alteration of the
existing Improvements which exceeds the lesser of 10% of the
principal amount of the Note or $500,000, at Beneficiary’s
request, a completed value, “All Risk” Builder’s
Risk form or “Course of Construction” insurance policy
in nonreporting form, in an amount approved by Beneficiary, 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 Beneficiary, shall be required.
(f) When
required by applicable law, ordinance or other regulation,
Worker’s Compensation and
Employer’s Liability Insurance covering all persons subject
to the worker’s compensation laws of the state in which the
Property is located.
(g) Business income
(loss of rents) insurance in amounts sufficient to compensate
Grantor for all Rents and Profits or income during a period of not
less than eighteen (18) months. The amount of coverage shall be
adjusted annually to reflect the Rents and Profits or income
payable during the succeeding eighteen (18) month
period.
(h) Such other
insurance on the Property or on any replacements or substitutions
thereof or additions thereto as may from time to time be required
by Beneficiary 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.
All such insurance shall (i) be with insurers fully
licensed and authorized to do business in the state within which
the Premises is located and who
have and maintain a rating of at least from
AA from Standard
& Poor’s, (ii)
contain the complete address of the Premises (or a complete legal
description), (iii) be for terms of at least one year, with premium
prepaid, and (vi) be subject to the approval of Beneficiary as to
insurance companies, amounts, content, forms of policies, method by
which premiums are paid and expiration dates, and (v) include a
standard, non-contributory, mortgagee clause naming
EXACTLY:
First Union National Bank,
its successors and assigns ATIMA
c/o First Union Mortgage Corporation
P.O. Box 20068
Charlotte, North Carolina 28202
(a) as an
additional insured under all liability insurance policies, (b) as
the first mortgagee on all property insurance policies and (c) as
the loss payee on all loss of rents or loss of business income
insurance policies.
Grantor shall, as of the date hereof, deliver to
Beneficiary evidence that said insurance policies have been prepaid
as required above and certified copies of such insurance policies
and original certificates of insurance signed by an authorized
agent of the applicable insurance companies evidencing such
insurance satisfactory to Beneficiary. Grantor shall renew all such
insurance and deliver to Beneficiary certificates and policies
evidencing such renewals at least thirty (30) days before any such
insurance shall expire. Grantor further agrees that each such
insurance policy: (i) shall provide for at least thirty (30)
days’ prior written notice to Beneficiary prior to any policy
reduction or cancellation for any reason other than non-payment of
premium and at least ten (10) days’ prior written notice to
Beneficiary prior to any cancellation due to non-payment of
premium; (ii) shall contain an endorsement or agreement by the
insurer that any loss shall be payable to Beneficiary in accordance
with the terms of such policy notwithstanding any act or negligence
of Grantor which might otherwise result in forfeiture of such
insurance; (iii) shall waive all rights of subrogation against
Beneficiary; (iv) in the event that the Real Estate or the
Improvements constitutes a legal non-conforming use under
applicable building, zoning or land use laws or ordinances, 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;
and (v) may be in the form of a
blanket policy provided that, in the event that any
such coverage is provided in the form of a blanket policy, Grantor
hereby acknowledges and agrees that failure to pay any portion of
the premium therefor which is not allocable to the Property or by
any other action not relating to the Property which would otherwise
permit the issuer thereof to cancel the coverage thereof, would
require the Property to be insured by a separate, single-property
policy. The blanket policy must properly identify and fully protect
the Property as if a separate policy were issued for 100% of
Replacement Cost at the time
of loss and otherwise meet all of
Beneficiary’s applicable insurance requirements set forth in
this Section 1.4. The delivery to Beneficiary of the insurance
policies or the certificates of insurance as provided above shall
constitute an assignment of all proceeds payable under such
insurance policies relating to the Property by Grantor to
Beneficiary as further security for the indebtedness secured
hereby. In the event of foreclosure of this Deed of Trust, or other
transfer of title to the Property in extinguishment in whole or in
part of the indebtedness secured hereby, all right, title and
interest of Grantor 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 Beneficiary or other
transferee in the event of such other transfer of title. Approval
of any insurance by Beneficiary shall not be a representation of
the solvency of any insurer or the sufficiency of any amount of
insurance. In the event Grantor fails to provide, maintain, keep in
force or deliver and furnish to Beneficiary the policies of
insurance required by this Deed of Trust or evidence of their
renewal as required herein, Beneficiary may, but shall not be
obligated to, procure such insurance and Grantor shall pay all
amounts advanced by Beneficiary therefor, together with interest
thereon at the Default Interest Rate from and after the date
advanced by Beneficiary until actually repaid by Grantor, promptly
upon demand by Beneficiary. Any amounts so advanced by Beneficiary,
together with interest thereon, shall be secured by this Deed of
Trust and by all of the other Loan Documents securing all or any
part of the indebtedness secured hereby. Beneficiary 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
Beneficiary has caused the insurance to be placed with the insurer
after failure of Grantor to furnish such insurance. Grantor shall
not obtain insurance for the Property in addition to that required
by Beneficiary without the prior written consent of Beneficiary,
which consent will not be unreasonably withheld provided that (i)
Beneficiary is a named insured on such insurance, (ii) Beneficiary
receives complete copies of all policies evidencing such insurance,
and (iii) such insurance complies with all of the applicable
requirements set forth herein.
1.5
Payment of Taxes .
Grantor shall pay or cause to be paid, except to the extent
provision is actually made therefor pursuant to Section 1.6 of this
Deed of Trust, all taxes and assessments which are or may become a
lien on the Property or which are assessed against or imposed upon
the Property. Grantor shall furnish Beneficiary with receipts (or
if receipts are not immediately available, with copies of canceled
checks evidencing payment with receipts to follow promptly after
they become available) showing payment of such taxes and
assessments at least fifteen (15) days prior to the applicable
delinquency date therefor. Notwithstanding the foregoing, Grantor
may in good faith, by appropriate proceedings and upon notice to
Beneficiary, contest the validity, applicability or amount of any
asserted tax or assessment so long as (a) such contest is
diligently pursued, (b) Beneficiary determines, in its subjective
opinion, that such contest suspends the obligation to pay the tax
and that nonpayment of such tax or assessment will not result in
the sale, loss, forfeiture or diminution of the Property or any
part thereof or any interest of Beneficiary therein, and (c) prior
to the earlier of the commencement of such contest
or the delinquency date of the asserted tax or
assessment, Grantor deposits in the Impound Account (as hereinafter
defined) an amount determined by Beneficiary to be adequate to
cover the payment of such tax or assessment and a reasonable
additional sum to cover possible interest, costs and penalties;
provided, however, that Grantor shall promptly cause to be paid any
amount adjudged by a court of competent jurisdiction to be due,
with all interest, costs and penalties thereon, promptly after such
judgment becomes final; and provided further that in any event each
such contest shall be concluded and the taxes, assessments,
interest, costs and penalties shall be paid prior to the date any
writ or order is issued under which the Property may be sold, lost
or forfeited.
1.6
Tax and Insurance Impound Account
. Grantor shall establish and maintain at all times
while this Deed of Trust continues in effect an impound account
(the “Impound Account”) with Beneficiary for payment of
real estate taxes and assessments and insurance on the Property and
as additional security for the indebtedness secured hereby.
Simultaneously with the execution hereof, Grantor shall deposit in
the Impound Account an amount determined by Beneficiary to be
necessary to ensure that there will be on deposit with Beneficiary
an amount which, when added to the monthly payments subsequently
required to be deposited with Beneficiary hereunder on account of
real estate taxes, assessments and insurance premiums, will result
in there being on deposit with Beneficiary in the Impound Account
an amount sufficient to pay the next due installment of real estate
taxes and assessment on the Property at least one (1) month prior
to the due date thereof and the next due annual insurance premiums
with respect to the Property at least one (1) month prior to the
due date thereof (if paid in one installment). Commencing on the
first monthly payment date under the Note and continuing thereafter
on each monthly payment date under the Note, Grantor shall pay to
Beneficiary, concurrently with and in addition to the monthly
payment due under the Note and until the Note and all other
indebtedness secured hereby is fully paid and performed, deposits
in an amount equal to one-twelfth (1/12) of the amount of the
annual real estate taxes and assessments that will next become due
and payable on the Property, plus one-twelfth (1/12) of the amount
of the annual premiums that will next become due and payable on
insurance policies which Grantor is required to maintain hereunder,
each as estimated and determined by Beneficiary. So long as no
Event of Default (as hereinafter defined), or event which with the
passage of time, the giving of notice, or both, would constitute an
Event of Default (a “Default”) hereunder or under the
other Loan Documents has occurred and is continuing, all sums in
the Impound Account shall be held by Beneficiary in the Impound
Account to pay said taxes, assessments and insurance premiums
before the same become delinquent. Grantor shall be responsible for
ensuring the receipt by Beneficiary, at least thirty (30) days
prior to the respective due date for payment thereof, of all bills,
invoices and statements for all taxes, assessments and insurance
premiums to be paid from the Impound Account, and so long as no
Default or Event of Default hereunder or under the other Loan
Documents has occurred and is continuing, Beneficiary shall pay the
governmental authority or other party entitled thereto directly to
the extent funds are available for
such purpose in the Impound Account. In making any
payment from the Impound Account, Beneficiary shall be entitled to
rely on any bill, statement or estimate procured from the
appropriate public office or insurance company or agent without any
inquiry into the accuracy of such bill, statement or estimate and
without any inquiry into the accuracy, validity, enforceability or
contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or title or
claim thereof. The Impound Account shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow
or trust funds, but, at Beneficiary’s option and in
Beneficiary’s discretion, may either be held in a separate
account or be commingled by Beneficiary with the general funds of
Beneficiary. No interest on the funds contained in the Impound
Account shall be paid by Beneficiary to Grantor. The Impound
Account is solely for the protection of Beneficiary and entails no
responsibility on Beneficiary’s part beyond the payment of
taxes, assessments and insurance premiums following receipt of
bills, invoices or statements therefor in accordance with the terms
hereof and beyond the allowing of due credit for the sums actually
received. Upon assignment of this Deed of Trust by Beneficiary, any
funds in the Impound Account shall be turned over to the assignee
and any responsibility of Beneficiary, as assignor, with respect
thereto shall terminate. If the total funds in the Impound Account
shall exceed the amount of payments actually applied by Beneficiary
for the purposes of the Impound Account, such excess may be
credited by Beneficiary on subsequent payments to be made hereunder
or, at the option of Beneficiary, refunded to Grantor. If, however,
the Impound Account shall not contain sufficient funds to pay the
sums required when the same shall become due and payable, Grantor
shall, within ten (10) days after receipt of written notice
thereof, deposit with Beneficiary the full amount of any such
deficiency. If Grantor shall fail to deposit with Beneficiary the
full amount of such deficiency as provided above, Beneficiary shall
have the option, but not the obligation, to make such deposit, and
all amounts so deposited by Beneficiary, together with interest
thereon at the Default Interest Rate from the date incurred by
Beneficiary until actually paid by Grantor, shall be immediately
paid by Grantor on demand and shall be secured by this Deed of
Trust and by all of the other Loan Documents securing all or any
part of the indebtedness evidenced by the Note. If there is an
Event of Default under this Deed of Trust, Beneficiary may, but
shall not be obligated to, apply at any time the balance then
remaining in the Impound Account against the indebtedness secured
hereby in whatever order Beneficiary shall subjectively determine.
No such application of the Impound Account shall be deemed to cure
any Default or Event of Default hereunder. Upon full payment of the
indebtedness secured hereby in accordance with its terms or at such
earlier time as Beneficiary may elect, the balance of the Impound
Account then in Beneficiary’s possession shall be paid over
to Grantor and no other party shall have any right or claim
thereto.
(a) Contemporaneously
with the execution hereof, Grantor has established with Beneficiary
a reserve in the amount equal to one (1) regular monthly
installments of principal, interest and all required
deposits or impounds as calculated by Beneficiary (the
“Payment Reserve”). Grantor understands and agrees
that, notwithstanding the establishment of the Payment Reserve as
herein required, all of the proceeds of the Note have been, and
shall be considered, fully disbursed and shall bear interest and be
payable on the terms provided therein. No interest on funds
contained in the Payment Reserve shall be paid by Beneficiary to
Grantor.
(b) For so long
as no Event of Default has occurred hereunder or under any of the
other Loan Documents, Beneficiary shall on the first one (1)
monthly Payment Dates (as defined in the Note) under the Note,
advance from the Payment Reserve to itself the amount of the
monthly installment due and payable by Grantor under the Note on
such monthly Payment Date and shall also advance from the Payment
Reserve into the Impound Account the amount of any deposit for
taxes and insurance premiums and into the Replacement Reserve (as
hereinafter defined) the amount of any deposit for Repairs (as
hereinafter defined) and into any other reserve account the amount
of any deposit in accordance with the terms of any other Loan
Document required to be paid by Grantor concurrently with each such
monthly installment pursuant to the terms hereof. Provided no
Default or Event of Default has occurred after the final
disbursement from the Payment Reserve, any amounts then remaining
in the Payment Reserve shall be paid to Grantor. Nothing contained
herein, including, without limitation, the existence of the Payment
Reserve, shall release Grantor of any obligation to make payments
under the Note, this Deed of Trust or the other Loan Documents
strictly in accordance with the terms hereof or thereof and, in
this regard, without limiting the generality of the foregoing,
should the amounts contained in the Payment Reserve not be
sufficient to pay in full the monthly installments and the Impound
Account, Replacement Reserve and any other applicable reserve
account deposits referenced above in this subparagraph, Grantor
shall be responsible for paying such deficiency on the Payment Date
of any such monthly installment.
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1.8
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Replacement Reserve: Security Interest
Reserves .
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(a) As
additional security for the indebtedness secured hereby, Grantor
shall establish and maintain at all times while this Deed of Trust
continues in effect a repair reserve (the “Replacement
Reserve”) with Beneficiary for payment of certain
non-recurring types of costs and expenses incurred by Grantor for
interior and exterior work to the Property, including without
limitation, performance of work to the roofs, chimneys, gutters,
downspouts, paving, curbs, ramps, driveways, balconies, porches,
patios, exterior walls, exterior doors and doorways, windows,
elevators and mechanical and HVAC equipment, (collectively,
the “Repairs”)
provided such costs and expenses are incurred for
repairs (i) not incurred for ordinary wear and tear at the Property
and (ii) categorized under generally accepted accounting principles
as a capital expense and not as an operating expense. Commencing on
the first monthly Payment Date under the Note and continuing
thereafter on each monthly Payment Date under the Note, Grantor
shall pay to Beneficiary, concurrently with and in
addition to the monthly payment due under the Note
and until the Note and all other indebtedness secured hereby is
fully paid and performed, a deposit to the Replacement Reserve in
an amount equal to $5,250.00 per month. So long as no Default or
Event of Default hereunder or under the other Loan Documents has
occurred and is continuing, all sums in the Replacement Reserve
shall be held by Beneficiary in the Replacement Reserve to pay the
costs and expenses of Repairs. So long as no Default or Event of
Default hereunder or under the other Loan Documents has occurred
and is continuing, Beneficiary shall, to the extent funds are
available for such purpose in the Replacement Reserve, disburse to
Grantor the amount incurred and paid by Grantor in performing such
Repairs within ten (10) days following: (a) the receipt by
Beneficiary of a written request from Grantor for disbursement from
the Replacement Reserve and a certification in the form attached
hereto as Exhibit B that the applicable item of Repair has been completed; (b) the
delivery to Beneficiary of paid invoices, receipts or other
evidence satisfactory to Beneficiary, verifying the cost and
payment of performing the Repairs; (c) for disbursement requests in
excess of $10,000.00, the delivery to Beneficiary of affidavits,
lien waivers or other evidence reasonably satisfactory to
Beneficiary showing that all materialmen, laborers, subcontractors
and any other parties who might or could claim statutory or common
law liens and are furnishing or have furnished material or labor to
the Property have been paid all amounts due for labor and materials
furnished to the Property; (d) for disbursement requests in excess
of $10,000.00, delivery to Beneficiary of a certification from an
inspecting architect or other third party acceptable to Beneficiary
describing the completed Repairs and verifying the completion of
the Repairs; (e) for disbursement requests in excess of $10,000.00,
delivery to Beneficiary of a new certificate of occupancy for the
portion of the Improvements covered by such Repairs, if said new
certificate of occupancy is required by law, or a certification by
Grantor that no new certificate of occupancy is required;
and (f) the receipt by
Beneficiary of an administrative fee in the amount of $150.00.
Beneficiary shall not be required to make advances from the
Replacement Reserve more frequently than once in any ninety (90)
day period. In making any payment from the Replacement Reserve,
Beneficiary shall be entitled to rely on such request from Grantor
without any inquiry into the accuracy, validity or contestability
of any such amount. Beneficiary may, at Grantor’s expense,
make or cause to be made during the term of this Deed of Trust an
annual inspection of the Property to determine the need, as
determined by Beneficiary in its reasonable judgment, for further
Repairs of the Property. In the event that such inspection reveals
that further Repairs of the Property are required, Beneficiary
shall provide Grantor with a written description of the required
Repairs and Grantor shall complete such Repairs to the reasonable
satisfaction of Beneficiary within ninety (90) days after the
receipt of such description from Beneficiary, or such later date as
may be approved by Beneficiary in its sole discretion. The
Replacement Reserve shall not, unless otherwise explicitly required
by applicable law, be or be deemed to be escrow or trust funds,
but, at Beneficiary’s option and in Beneficiary’s
discretion, may either be held in a separate account or be
commingled by Beneficiary with the general funds of Beneficiary.
Interest on the funds contained in the Replacement Reserve shall be
credited to Grantor as provided in Section 5.31 hereof. The Replacement Reserve
is
solely for the protection of Beneficiary and entails
no responsibility on Beneficiary’s part beyond the payment of
the costs and expenses described in this Section in accordance with
the terms hereof and beyond the allowing of due credit for the sums
actually received. In the event that the amounts on deposit or
available in the Replacement Reserve are inadequate to pay the cost
of the Repairs, Grantor shall pay the amount of such deficiency.
Upon assignment of this Deed of Trust by Beneficiary, any funds in
the Replacement Reserve shall be turned over to the assignee and
any responsibility of Beneficiary, as assignor, with respect
thereto shall terminate. If there is an Event of Default under this
Deed of Trust, Beneficiary may, but shall not be obligated to,
apply at any time the balance then remaining in the Replacement
Reserve against the indebtedness secured hereby in whatever order
Beneficiary shall subjectively determine. No such application of
the Replacement Reserve shall be deemed to cure any Default or
Event of Default hereunder. Upon full payment of the indebtedness
secured hereby in accordance with its terms or at such earlier time
as Beneficiary may elect, the balance of the Replacement Reserve
then in Beneficiary’s possession shall be paid over to
Grantor and no other party shall have any right or claim
thereto.
(b) As
additional security for the payment and performance by Grantor of
all duties, responsibilities and obligations under the Note and the
other Loan Documents, Grantor hereby unconditionally and
irrevocably assigns, conveys, pledges, mortgages, transfers,
delivers, deposits, sets over and confirms unto Beneficiary, and
hereby grants to Beneficiary a security interest in, (i) the
Impound Account, the Payment Reserve, the Repair and Remediation
Reserve, the Replacement Reserve and any other reserve or escrow
account established pursuant to the terms hereof or of any other
Loan Document (collectively, the “Reserves”), (ii) the
accounts into which the Reserves have been deposited, (iii) all
insurance on said accounts, (iv) all accounts, contract rights and
general intangibles or other rights and interests pertaining
thereto, (v) all sums now or hereafter therein or represented
thereby, (vi) all replacements, substitutions or proceeds thereof,
(vii) all instruments and documents now or hereafter evidencing the
Reserves or such accounts, (viii) all powers, options, rights,
privileges and immunities pertaining to the Reserves (including the
right to make withdrawals therefrom), and (ix) all proceeds of the
foregoing. Grantor hereby authorizes and consents to the account
into which the Reserves have been deposited being held in
Beneficiary’s name or the name of any entity servicing the
Note for Beneficiary and hereby acknowledges and agrees that
Beneficiary, or at Beneficiary’s election, such servicing
agent, shall have exclusive control over said account. Notice of
the assignment and security interest granted to Beneficiary herein
may be delivered by Beneficiary at any time to the financial
institution wherein the Reserves have been established, and
Beneficiary, or such servicing entity, shall have possession of all
passbooks or other evidences of such accounts. Grantor hereby
assumes all risk of loss with respect to amounts on deposit in the
Reserves. Grantor hereby knowingly, voluntarily and intentionally
stipulates, acknowledges and agrees that the advancement of the
funds from the Reserves as set forth herein is at Grantor’s
direction and is not the exercise by Beneficiary of any
right of set-off or other remedy upon a Default or
an Event of Default. Grantor hereby waives all right to withdraw
funds from the Reserves. If an Event of Default shall occur
hereunder or under any other of the Loan Documents which is not
cured within any applicable grace or cure period, then Beneficiary
may, without notice or demand on Grantor, at its option: (A)
withdraw any or all of the funds (including, without limitation,
interest) then remaining in the Reserves and apply the same, after
deducting all costs and expenses of safekeeping, collection and
delivery (including, but not limited to, attorneys’ fees,
costs and expenses) to the indebtedness evidenced by the Note or
any other obligations of Grantor under the other Loan Documents in
such manner or as Beneficiary shall deem appropriate in its sole
discretion, and the excess, if any, shall be paid to Grantor, (B)
exercise any and all rights and remedies of a secured party under
any applicable Uniform Commercial Code, and/or (C) exercise any
other remedies available at law or in equity. No such use or
application of the funds contained in the Reserves shall be deemed
to cure any Default or Event of Default hereunder or under the
other Loan Documents.
1.9
Casualty and Condemnation . Grantor shall give Beneficiary prompt written notice of the
occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the
Property or any portion thereof. All insurance proceeds on the
Property, and all causes of action, claims, compensation, awards
and recoveries for any damage, condemnation or taking of all or any
part of the Property or for any damage or injury to it for any loss
or diminution in value of the Property, are hereby assigned to and
shall be paid to Beneficiary. Beneficiary may participate in any
suits or proceedings relating to any such proceeds, causes of
action, claims, compensation, awards or recoveries, and Beneficiary
is hereby authorized, in its own name or in Grantor’s name,
to adjust any loss covered by insurance or any condemnation claim
or cause of action, and to settle or compromise any claim or cause
of action in connection therewith, and Grantor shall from time to
time deliver to Beneficiary any instruments required to permit such
participation; provided, however, that so long as no Default or
Event of Default shall have occurred and be continuing Beneficiary
shall not have the right to participate in the adjustment of any
loss which is not in excess of the lesser of (i) ten percent (10%)
of the then outstanding principal balance of the Note, and (ii)
$250,000.00. Beneficiary shall apply any sums received by it under
this Section first to the payment of all of its costs and expenses
(including, but not limited to, legal fees and disbursements)
incurred in obtaining those sums, and then, as follows:
(a) In the event
that less than forty percent (40%) of the Improvements located on
the Land have been taken or destroyed, then if:
(1)
no Default or Event of Default is then continuing
hereunder or under any of the other Loan Documents, and
(2) the Property
can, in Beneficiary’s judgment, with diligent restoration or
repair, be returned to a condition at least equal to the
condition thereof that existed prior to the casualty
or partial taking causing the loss or damage within the earlier to
occur of (i) six (6) months after the receipt of insurance proceeds
or condemnation awards by either Grantor or Beneficiary, and (ii)
six (6) months prior to the stated maturity date of the Note,
and
(3) all necessary
governmental approvals can be obtained to allow the rebuilding and
reoccupancy of the Property as described in Section 1.9(a)(2)
above, and
(4) there are sufficient sums available (through
insurance proceeds or condemnation awards and contributions by
Grantor, the full amount of which shall at Beneficiary’s
option have been deposited with Beneficiary) for such restoration
or repair (including, without limitation, for any costs and
expenses of Beneficiary to be incurred in administering said
restoration or repair) and for payment of principal and interest to
become due and payable under the Note during such restoration or
repair, and
(5) the economic
feasibility of the Improvements after such restoration or repair
will be such that income from their operation is reasonably
anticipated to be sufficient to pay operating expenses of the
Property and debt service on the indebtedness secured hereby in
full with the same coverage ratio considered by Beneficiary in its
determination to make the loan secured hereby including an
assessment of the impact of the termination of any Leases due to
such casualty or condemnation, and
(6) in
the event that the insurance proceeds or
condemnation awards received as a result of such casualty or
partial taking exceed the lesser of (i) five percent (5%) of the
then outstanding principal balance of the Note and (ii) $150,000,
Grantor shall have delivered to Beneficiary, at Grantor’s
sole cost and expense, an appraisal reporting form and substance
satisfactory to Beneficiary appraising the value of the Property as
proposed to be restored or repaired to be not less than the
appraised value of the Property considered by Beneficiary in its
determination to make the loan secured hereby, and
(7) Grantor so
elects by written notice delivered to Beneficiary within five (5)
days after settlement of the aforesaid insurance or condemnation
claim then, Beneficiary shall, solely for the purposes of such
restoration or repair, advance so much of the remainder of such
sums as may be required for such restoration or repair, and any
funds deposited by Grantor therefor, to Grantor in the manner and
upon such terms and conditions as would be required by a prudent
interim construction lender, including, but not limited to, the
prior approval by Beneficiary of plans and specifications,
contractors and form of construction contracts and the furnishing
to Beneficiary of permits, bonds, lien waivers, invoices, receipts
and affidavits
from contractors and subcontractors, in form and
substance satisfactory to Beneficiary in its discretion, with any
remainder being applied by Beneficiary for payment of the
indebtedness secured hereby in whatever order Beneficiary directs
in its absolute discretion.
(b) In all other
cases, namely, in the event that forty percent (40%) or more of the
Improvements located on the Land have been taken or destroyed or
Grantor does not elect to restore or repair the Property pursuant
to clause (a) above, or otherwise fails to meet the requirements of
clause (a) above, then, in any of such events, Beneficiary shall
elect, in Beneficiary’s absolute discretion and without
regard to the adequacy of Beneficiary’s security, to do
either of the following: (1) accelerate the maturity date of the
Note and declare any and all indebtedness secured hereby to be
immediately due and payable and apply the remainder of such sums
received pursuant to this Section to the payment of the
indebtedness secured hereby in whatever order Beneficiary directs
in its absolute discretion, with any remainder being paid to
Grantor, or (2) notwithstanding that Grantor may have elected not
to restore or repair the Property pursuant to the provisions of
Section 1.9(a)(7) above, require Grantor to restore or repair the
Property in the manner and upon such terms and conditions as would
be required by a prudent interim construction lender, including,
but not limited to, the deposit by Grantor with Beneficiary, within
thirty (30) days after demand therefor, of any deficiency necessary
in order to assure the availability of sufficient funds to pay for
such restoration or repair, including Beneficiary’s costs and
expenses to be incurred in connection therewith, the prior approval
by Beneficiary of plans and specifications, contractors and form of
construction contracts and the furnishing to Beneficiary of
permits, bonds, lien waivers, invoices, receipts and affidavits
from contractors and subcontractors, in form and substance
satisfactory to Beneficiary in its discretion, and apply the
remainder of such sums toward such restoration and repair, with any
balance thereafter remaining being applied by Beneficiary for
payment of the indebtedness secured hereby in whatever order
Beneficiary directs in its absolute discretion.
Any reduction in the indebtedness secured hereby
resulting from Beneficiary’s application of any sums received
by it hereunder shall take effect only when Beneficiary actually
receives such sums and elects to apply such sums to the
indebtedness secured hereby and, in any event, yet unpaid portion
of the indebtedness secured hereby shall remain in full force and
effect and Grantor shall not be excused in the payment thereof.
Partial payments received by Beneficiary, as described in the
preceding sentence, shall be applied first to the final payment due
under the Note and thereafter to installments due under the Note in
the inverse order of their due date. If Grantor elects or
Beneficiary directs Grantor to restore or repair the Property after
the occurrence of a casualty or partial taking of the Property as
provided above, Grantor shall promptly and diligently, at
Grantor’s sole cost and expense and regardless of whether the
insurance proceeds or condemnation award, as appropriate, shall be
sufficient for the purpose, restore, repair, replace and rebuild
the Property as nearly as possible to its value, condition and
character immediately prior to such casualty or
partial taking in accordance with the foregoing
provisions and Grantor shall pay to Beneficiary all costs and
expenses of Beneficiary incurred in administering said rebuilding,
restoration or repair, provided that Beneficiary makes such
proceeds or award available for such purpose. Grantor agrees to
execute and deliver from time to time such further instruments as
may be requested by Beneficiary to confirm the foregoing assignment
to Beneficiary of any award, damage, insurance proceeds, payment or
other compensation. Beneficiary is hereby irrevocably constituted
and appointed the attorney-in-fact of Grantor (which power of
attorney shall be irrevocable so long as any indebtedness secured
hereby is outstanding, shall be deemed coupled with an interest,
shall survive the voluntary or involuntary dissolution of Grantor
and shall not be affected by any disability or incapacity suffered
by Grantor subsequent to the date hereof), with full power of
substitution, subject to the terms of this Section, to settle for,
collect and receive any such awards, damages, insurance proceeds,
payments or other compensation from the parties or authorities
making the same, to appear in and prosecute any proceedings
therefor and to give receipts and acquittances therefor.
1.10
Construction Liens .
Grantor shall pay when due all claims and demands of mechanics,
materialmen, laborers and others for any work performed or
materials delivered for the Land or the Improvements; provided,
however, that, Grantor shall have the right to contest in good
faith any such claim or demand, so long as it does so diligently,
by appropriate proceedings and without prejudice to Beneficiary and
provided that neither the Property nor any interest therein would
be in any danger of sale, loss or forfeiture as a result of such
proceeding or contest. In the event Grantor shall contest any such
claim or demand, Grantor shall promptly notify Beneficiary of such
contest and thereafter shall, upon Beneficiary’s request,
promptly provide a bond, cash deposit or other security
satisfactory to Beneficiary to protect Beneficiary’s interest
and security should the contest be unsuccessful. If Grantor shall
fail to immediately discharge or provide security against any such
claim or demand as aforesaid, Beneficiary may do so and any and all
expenses incurred by Beneficiary, together with interest thereon at
the Default Interest Rate from the date incurred by Beneficiary
until actually paid by Grantor, shall be immediately paid by
Grantor on demand and shall be secured by this Deed of Trust and by
all of the other Loan Documents securing all or any part of the
indebtedness evidenced by the Note.
1.1 1
Rents and
Profits . As additional and collateral
security for the payment of the Indebtedness secured hereby and
cumulative of any and all rights and remedies herein provided for,
Grantor hereby absolutely and presently assigns to Beneficiary all
existing and future Rents and Profits. Grantor hereby grants to
Beneficiary the sole, exclusive and immediate right, without taking
possession of the Property, to demand, collect (by suit or
otherwise), receive and give valid and sufficient receipts for any
and all of said Rents and Profits, for which purpose Grantor does
hereby irrevocably make, constitute and appoint Beneficiary its
attorney-in-fact with full power to appoint substitutes or a
trustee to accomplish such purpose (which power of attorney shall
be irrevocable so long as any indebtedness secured hereby
is
outstanding, shall be deemed to be coupled with an
interest, shall survive the voluntary or involuntary dissolution of
Grantor and shall not be affected by any disability or incapacity
suffered by Grantor subsequent to the date hereof). Beneficiary
shall be without liability for any loss which may arise from a
failure or inability to collect Rents and Profits, proceeds or
other payments. However, until the occurrence of an Event of
Default under this Deed of Trust, Grantor shall have a license to
collect and receive the Rents and Profits when due and prepayments
thereof for not more than one (1) month prior to due date thereof.
Upon the occurrence of an Event of Default hereunder,
Grantor’s license shall automatically terminate without
notice to Grantor and Beneficiary may thereafter, without taking
possession of the Property, collect the Rents and Profits itself or
by an agent or receiver. From and after the termination of such
license, Grantor shall be the agent of Beneficiary in collection of
the Rents and Profits, and all of the Rents and Profits so
collected by Grantor shall be held in trust by Grantor for the sole
and exclusive benefit of Beneficiary, and Grantor shall, within one
(1) business day after receipt of any Rents and Profits, pay the
same to Beneficiary to be applied by Beneficiary as hereinafter set
forth. Neither the demand for or collection of Rents and Profits by
Beneficiary shall constitute any assumption by Beneficiary of any
obligations under any agreement relating thereto. Beneficiary is
obligated to account only for such Rents and Profits as are
actually collected or received by Beneficiary. Grantor irrevocably
agrees and consents that the respective payors of the Rents and
Profits shall, upon demand and notice from Beneficiary of an Event
of Default hereunder, pay said Rents and Profits to Beneficiary
without liability to determine the actual existence of any Event of
Default claimed by Beneficiary. Grantor hereby waives any right,
claim or demand which Grantor may now or hereafter have against any
such payor by reason of such payment of Rents and Profits to
Beneficiary, and any such payment shall discharge such
payor’s obligation to make such payment to Grantor. All Rents
and Profits collected or received by Beneficiary may be applied
against all expenses of collection, including, without limitation,
attorneys’ fees, against costs of operation and management of
the Property and against the indebtedness secured hereby, in
whatever order or priority as to any of the items so mentioned as
Beneficiary directs in its sole subjective discretion and without
regard to the adequacy of its security. Neither the exercise by
Beneficiary of any rights under this Section nor the application of
any Rents and Profits to the secured indebtedness shall cure or be
deemed a waiver of any Event of Default hereunder. The assignment
of Rents and Profits hereinabove granted shall continue in full
force and effect during any period of foreclosure or redemption
with respect to the Property. Grantor has executed an Assignment of
Leases and Rents dated of even date herewith (the
“ Assignment”) in favor of
Beneficiary covering all of the right, title and interest of
Grantor, as landlord, lessor or licensor, in and to any Leases. All
rights and remedies granted to Beneficiary under the Assignment
shall be in addition to and cumulative of all rights and remedies
granted to Beneficiary hereunder.
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1.12
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Leases and Licenses .
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(a) Prior to
execution of any Leases of space in the Improvements after the date
hereof, Grantor shall submit to Beneficiary, for
Beneficiary’s prior approval, which approval shall not be
unreasonably withheld, a copy of the form Lease Grantor plans to
use in leasing space in the Improvements. All Leases of space in
the Improvements shall be on terms consistent with the terms for
similar leases in the market area of the Land, shall provide for
free rent only if the same is consistent with prevailing market
conditions and shall provide for market rents then prevailing in
the market area of the Land. Such Leases shall also provide for
security deposits in reasonable amounts. Grantor shall also submit
to Beneficiary for Beneficiary’s approval, which approval
shall not be unreasonably withheld, prior to the execution thereof,
any proposed Lease of the Improvements or any portion thereof that
differs materially and adversely from the aforementioned form
Lease. Grantor shall not execute any Lease for all or a substantial
portion of the Property, except for an actual occupancy by the
Tenant thereunder, and shall at all times promptly and faithfully
perform, or cause to be performed, all of the covenants, conditions
and agreements contained in all Leases with respect to the
Property, now or hereafter existing, on the part of the landlord,
lessor or licensor thereunder to be kept and performed. Grantor
shall furnish to Beneficiary, within ten (10) days after a request
by Beneficiary to do so, but in any event by January 1 of each
year, a current Rent Roll certified by Grantor as being true and
correct, containing the names of all Tenants with respect to the
Property, the terms of their respective Leases, the spaces
occupied and the
rentals or fees payable thereunder and the amount of each
tenant’s security deposit. Upon the request of Beneficiary,
Grantor shall deliver to Beneficiary a copy of each such Lease.
Grantor shall not do or suffer to be done any act that might result
in a default by the landlord, lessor or licensor under any such
Lease or allow the Tenant, lessee or licensee thereunder to
withhold payment or rent and, except as otherwise expressly
permitted by the terms of Section 1.12 hereof, shall not further
assign any such Lease or any such rents. Grantor, at no cost or
expense to Beneficiary, shall enforce, short of termination, the
performance and observance of each and every condition and covenant
of each of the parties under such Leases. Grantor shall not,
without the prior written consent of Beneficiary, modify any of the
Leases, terminate or accept the surrender of any Leases, waive or
release any other party from the performance or observance of any
obligation or condition under such Leases except in the normal
course of business in a manner which is consistent with sound and
customary leasing and management practices for similar properties
in the community in which the Property is located. Grantor shall
not permit the prepayment of any rents under any of the Leases for
more than one (1) month prior to the due date thereof (except with
respect to newly executed Leases, Rents and Profits for the first
and last months (i.e., two (2)
months) may be collected in advance).
(b) Each Lease
executed after the date hereof affecting any of the Land or the
Improvements must provide, in a manner approved by Beneficiary,
that
the Tenant will recognize as its landlord, lessor or
licensor, as applicable, and attom to any person succeeding to the
interest of Grantor upon any foreclosure of this Deed of Trust or
deed in lieu of foreclosure. Each such Lease shall also provide
that, upon request of said successor in interest, the Tenant shall
execute and deliver an instrument or instruments confirming its
attornment as provided for in this Section; provided. however, that
neither Beneficiary nor any successor-in-interest shall be bound by
any payment of rental for more than one (1) month in advance, or
any amendment or modification of said Lease made without the
express written consent of Beneficiary or said
successor-in-interest.
(c) Upon the
occurrence of an Event of Default under this Deed of Trust, whether
before or after the whole principal sum secured hereby is declared
to be immediately due or whether before or after the institution of
legal proceedings to foreclose this Deed of Trust, forthwith, upon
demand of Beneficiary, Grantor shall surrender to Beneficiary, and
Beneficiary shall be entitled to take actual possession of, the
Property or any part thereof personally, or by its agent or
attorneys. In such event, Beneficiary shall have, and Grantor
hereby gives and grants to Beneficiary, the right, power and
authority to make and enter into Leases with respect to the
Property or portions thereof for such rents and for such periods of
occupancy and upon conditions and provisions as Beneficiary may
deem desirable in its sole discretion, and Grantor expressly
acknowledges and agrees that the term of any such Lease may extend
beyond the date of any foreclosure sale of the Property; it being
the intention of Grantor that in such event Beneficiary shall be
deemed to be and shall be the attorney-in-fact of Grantor for the
purpose of making and entering into Leases of parts or portions of
the Property for the rents and upon the terms, conditions and
provisions deemed desirable to Beneficiary in its sole discretion
and with like effect as if such Leases had been made by Grantor as
the owner in fee simple of the Property free and clear of any
conditions or limitations established by this Deed of Trust. The
power and authority hereby given and granted by Grantor to
Beneficiary shall be deemed to be coupled with an interest, shall
not be revocable by Grantor so long as any indebtedness secured
hereby is outstanding, shall survive the voluntary or involuntary
dissolution of Grantor and shall not be affected by any disability
or incapacity suffered by Grantor subsequent to the date hereof. In
connection with any action taken by Beneficiary pursuant to this
Section, Beneficiary shall not be liable for any loss sustained by
Grantor resulting from any failure to let the Property, or any part
thereof, or from any other act or omission of Beneficiary in
managing the Property, nor shall Beneficiary be obligated to
perform or discharge any obligation, duty or liability under any
Lease covering the Property or any part thereof or under or by
reason of this instrument or the exercise of rights or remedies
hereunder. Grantor shall, and does hereby, indemnify Beneficiary
for, and hold Beneficiary harmless from, any and all claims,
actions, demands, liabilities, loss or damage which may or might be
incurred by Beneficiary under any such Lease or under this Deed of
Trust or by the exercise of rights or remedies hereunder and from
any and all claims and demands whatsoever which may be asserted
against Beneficiary 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 such
Lease other than those finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or
willful misconduct of Beneficiary. Should Beneficiary incur any
such liability, the amount thereof, including, without limitation,
costs, expenses and attorneys’ fees, together with interest
thereon at the Default Interest Rate from the date incurred by
Beneficiary until actually paid by Grantor, shall be immediately
due and payable to Beneficiary by Grantor on demand and shall be
secured hereby and by all of the other Loan Documents securing all
or any part of the indebtedness evidenced by the Note. Nothing in
this Section shall impose on Beneficiary any duty, obligation or
responsibility for the control, care, management or repair of the
Property, or for the carrying out of any of the terms and
conditions of any such Lease nor shall it operate to make
Beneficiary responsible or liable for any waste committed on the
Property by the Tenants or by any other parties or for any
dangerous or defective condition of the Property, or for any
negligence in the management, upkeep, repair or control of the
Property. Grantor hereby assents to, ratifies and confirms any and
all actions of Beneficiary with respect to the Property taken under
this Section.
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1.13
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Alienation and Further Encumbrances
.
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(a) Grantor
acknowledges that Beneficiary has relied upon the principals of
Grantor and their experience in owning and operating the Property
and properties similar to the Property in connection with the
closing of the loan evidenced by the Note. Accordingly, except as
specifically allowed hereinbelow in this Section and
notwithstanding anything to the contrary contained in Section
5.6 hereof, in the event that the Property or
any part thereof or interest therein shall be sold, conveyed,
disposed of, alienated, hypothecated, leased (except to Tenants of
space in the Improvements in accordance with the provisions of
Section 1.12 hereof), assigned, pledged, mortgaged, further
encumbered or otherwise transferred or Grantor shall be divested of
its title to the Property or any interest
therein, in any manner or way, whether voluntarily or
involuntarily, without the prior written consent of Beneficiary
being first obtained, which consent may be withheld in
Beneficiary’s sole discretion, then the same shall constitute
an Event of Default hereunder and Beneficiary shall have the right,
at its option, to declare any or all of the indebtedness secured
hereby, irrespective of the maturity date specified in the Note,
immediately due and payable and to otherwise exercise any of its
other rights and remedies contained in Article III hereof. If such
acceleration is during any period when a prepayment fee is payable
pursuant to the provisions set forth in the Note, then, in addition
to all of the foregoing, such prepayment fee shall also then be
immediately due and payable to the same end as though Grantor were
prepaying the entire indebtedness secured hereby on the date of
such acceleration. For the purposes of this Section: (i) in the
event either Grantor or any of its general partners or managing
members is a corporation or trust, the sale, conveyance, transfer or
disposition of more than 10%
of the issued and outstanding capital stock of
Grantor or any of its general partners or of the beneficial
interest of such trust (or the issuance of new shares of capital
stock in Grantor or any of its general partners or managing members
so that immediately after such issuance
the total capital stock then issued and outstanding
is more than 110% of the total immediately prior to such issuance) shall be
deemed to be a transfer
of an interest in the Property; and (ii) in the event Grantor or
any general partner or managing member of Grantor is a limited or
general partnership, a joint venture or a limited liability
company, a change in the ownership interests in any general
partner, any joint venturer or any managing member, either
voluntarily, involuntarily or otherwise, or the sale, conveyance,
transfer, disposition, alienation, hypothecation or encumbering of
all or any portion of the interest of any such general partner,
joint venturer or managing member in Grantor or such general
partner (whether in the form of a beneficial or partnership
interest or in the form of a power of direction, control or
management, or otherwise), shall be deemed to be a transfer of an
interest in the Property. Notwithstanding the foregoing, however,
(i) limited partnership or non-managing member interests in Grantor
or in any general partner or managing member of Grantor shall be
freely transferable without the consent of Beneficiary, (ii) any
involuntary transfer caused by the death of Grantor or any general
partner, shareholder, joint venturer, or beneficial owner of a
trust shall not be an Event of Default under this Deed of Trust so
long as Grantor is reconstituted, if required, following such death
and so long as those persons responsible for the management of the
Property remain unchanged as a result of such death or any
replacement management is approved by Beneficiary and (iii) gifts
for estate planning purposes of any individual’s interests in
Grantor or in any of Grantor’s general partners, managing
members or joint venturers to the spouse or any lineal descendant
of such individual, or to a trust for the benefit of any one or
more of such individual, spouse or lineal descendant, shall not be
an Event of Default under this Deed of Trust so long as Grantor is
reconstituted, if required, following such gift and so long as
those persons responsible for the management of the Property and
Grantor remain unchanged following such gift or any replacement
management is approved by Beneficiary. Notwithstanding any
provision of this Deed of Trust to the contrary, no person or
entity may, after the date hereof, become an owner of a direct or indirect interest
in Grantor, which interest exceeds forty-nine percent
( 49%
), without
Beneficiary’s written consent in each instance and receipt by
Beneficiary of confirmation that there will be no Adverse Rating
Impact (as hereafter defined).
(b)
Notwithstanding the foregoing
provisions of this Section, Beneficiary shall consent to one or
more sales, conveyances or transfers of the Property in its
entirety (hereinafter, “Sale”) to any person or entity
provided that each of the following terms and conditions are
satisfied for each such Sale:
(1) No Default
or Event of Default is then continuing hereunder or under any of
the other Loan Documents;
(2) Grantor
gives Beneficiary written notice of the terms of such prospective
Sale not less than sixty (60) days before the date on which such
Sale is scheduled to close and, concurrently therewith, gives
Beneficiary all such information concerning the proposed transferee
of the Property
(hereinafter, “Buyer”) as Beneficiary
would require in evaluating an initial extension of credit to a
borrower and pays to Beneficiary a non-refundable application fee
in the amount of $2,500.00. Beneficiary shall have the right to
approve or disapprove the proposed Buyer. In determining whether to
give or withhold its approval of the proposed Buyer, Beneficiary
shall consider the Buyer’s experience and track record in
owning and operating facilities similar to the Property, the
Buyer’s financial strength, the Buyer’s general
business standing and the Buyer’s relationships and
experience with contractors, vendors, tenants, lenders and other
business entities; provided, however, that, notwithstanding
Beneficiary’s agreement to consider the foregoing factors in
determining whether to give or withhold such approval, such
approval shall be given or withheld based on what Beneficiary
determines to be commercially reasonable in Beneficiary’s
sole discretion and, if given, may be given subject to such
conditions as Beneficiary may deem appropriate;
(3)
Grantor pays Beneficiary, concurrently with the
closing of such Sale, a non-refundable assumption fee in an amount
equal to all out-of-pocket costs and expenses, including, without
limitation, attorneys’ fees, incurred by Beneficiary in
connection with the Sale, plus an amount equal to one percent
(1.0%) of the then outstanding principal balance of the Note
(provided, however, that such one (1%) percent fee shall not be due
in connection with the first Sale hereunder);
(4) The Buyer assumes and agrees to pay the
indebtedness secured hereby subject to the provisions of Section
5.27 hereof and, prior to or concurrently with the closing of such
Sale, the Buyer executes, without any cost or expense to
Beneficiary, such documents and agreements as Beneficiary shall
reasonably require to evidence and effectuate said assumption and
delivers such legal opinions, including a non-consolidation
opinion, as Beneficiary may require;
(5)
A party associated with the
Buyer approved by Beneficiary in its sole discretion assumes the
obligations of the current indemnitor under its guaranty or
indemnity agreement and such party associated with the Buyer
executes, without any cost or expense to Beneficiary, a new
guaranty or indemnity agreement in form and substance satisfactory
to Beneficiary and delivers such legal opinions as Beneficiary may
require;
(6) Grantor and the Buyer
execute, without any cost or expense to Beneficiary, new financing
statements or financing statement amendments and any additional
documents reasonably requested by Beneficiary;
(7) Grantor
delivers to Beneficiary, without any cost or expense to
Beneficiary, such endorsements to Beneficiary’s title
insurance policy, hazard insurance endorsements or certificates and
other similar materials as Beneficiary may deem necessary at the
time of the Sale, all in form and substance satisfactory to
Beneficiary, including, without limitation, an endorsement or
endorsements to Beneficiary’s title insurance policy insuring
the lien of this Deed of Trust, extending the effective date of
such policy to the date of execution and delivery (or, if later, of
recording) of the assumption agreement referenced above in
subparagraph (4) of this Section, with no additional exceptions
added to such policy, and insuring that fee simple title to the
Property is vested in the Buyer;
(8)
Grantor executes and delivers to Beneficiary,
without any cost or expense to Beneficiary, a release of
Beneficiary, its officers, directors, employees and agents, from
all claims and liability relating to the transactions evidenced by
the Loan Documents, through and including the date of the closing
of the Sale, which agreement shall be in form and substance
satisfactory to Beneficiary and shall be binding upon the
Buyer;
(9) Subject to the provisions
of Section 5.27 hereof, such Sale is not construed so as to relieve
Grantor of any personal liability under the Note or any of the
other Loan Documents for any acts or events occurring or
obligations arising prior to or simultaneously with the closing of
such Sale, and Grantor executes, without any cost or expense to
Beneficiary, such documents and agreements as Beneficiary shall
reasonably require to evidence and effectuate the ratification of
said personal liability. Grantor shall be released from and
relieved of any personal liability under the Note or any of the
other Loan Documents for any acts or events occurring or
obligations arising after the closing of such Sale which are not
caused by or arising out of any acts or events occurring or
obligations arising prior to or simultaneously with the closing of
such Sale;
(10) Such Sale is not
construed so as to relieve any current indemnitor of its
obligations under any guaranty or indemnity agreement for any acts
or events occurring or obligations arising prior to or
simultaneously with the closing of such Sale, and each such current
indemnitor executes, without any cost or expense to Beneficiary,
such documents and agreements as Beneficiary shall reasonably
require to evidence and effectuate the ratification of each such
guaranty and indemnity agreement. Each such current indemnitor
shall be released from and relieved of any of its obligations under
any guaranty or indemnity agreement executed in connection with the
loan secured hereby for any acts or events occurring or obligations
arising after the closing of such Sale which are not caused by or
arising out of any acts or events occurring or obligations arising
prior to or simultaneously with the closing of such
Sale;
(1 1)
The Buyer shall furnish,
if the Buyer is a corporation, partnership or other entity, all
appropriate papers evidencing the Buyer’s capacity and good
standing, and the qualification of the signers to execute the
assumption of the indebtedness secured hereby, which papers shall
include certified copies of all documents relating to
the-organization and formation of the Buyer and of the entities, if
any, which are partners of the Buyer. The Buyer and such
constituent partners, members or shareholders of Buyer (as the case
may be), as Beneficiary shall require, shall be single purpose,
“bankruptcy remote” entities, whose formation documents
shall be approved by counsel to Beneficiary. The individual
recommended by the Grantor and approved by Beneficiary shall serve
as an independent director of the Buyer (if the Buyer is a
corporation) or the Buyer’s corporate general partner or as
an independent member or, in Beneficiary’s discretion, as a
manager, of Buyer if the Buyer a limited liability company. The
consent of such independent party shall be required for, among
other things, any merger, consolidation, dissolution, bankruptcy or
insolvency of such independent party or of the Buyer;
and
(12) Grantor delivers
to Beneficiary a written statement from the applicable rating
agency to the effect that the Sale will not result in a
downgrading, withdrawal or qualification of the respective ratings
(collectively, an “Adverse Rating Impact”) in effect
immediately prior to such Sale for any securities issues in
connection with a Secondary Market Transaction (as hereinafter
defined).
1.14 Payment of Utilities, Assessments, Charges, Et
c. Grantor shall pay when due all utility charges
which are incurred by Grantor w
which may become a charge or lien against any
portion of the Property for gas, electricity, water and sewer
services furnished to the Land and/or the Improvements and all
other assessments or charges of a similar nature, or assessments
payable pursuant to any restrictive covenants, whether public or
private, affecting the Land and/or the Improvements or any portion
thereof, whether or not such assessments or charges are or may
become liens thereon.
1.15 Access Privileges and Inspections .
Beneficiary and the agents, representatives and employees of
Beneficiary shall, subject to the rights of tenants, have full and
free access to the Land and the Improvements and any other location
where books and records concerning the Property are kept at all
reasonable times for the purposes of inspecting the Property and of
examining, copying and making extracts from the books and records
of Grantor relating to the Property. Grantor shall lend assistance
to all such agents, representatives and employees of
Beneficiary.
1.16 Waste: Alteration of Improvements .
Grantor shall not commit, suffer or permit any waste on the
Property nor take any actions that might invalidate any insurance
carried on the Property. Grantor shall maintain the Property in
good condition and repair. No part of the Improvements may be
removed, demolished or materially altered, without the prior
written consent of Beneficiary. Without the prior written consent
of Beneficiary, Grantor shall not commence construction of any
improvements on the Land other than improvements required for the
maintenance or repair of the Property.
1.17
Zoning . Without the
prior written consent of Beneficiary, Grantor shall not seek, make,
suffer, consent to or acquiesce in any change in the zoning or
conditions of use of the Land or the Improvements. Grantor shall
comply with and make all payments required under the provisions of
any covenants, conditions or restrictions affecting the Land or the
Improvements. Grantor shall comply with all existing and future
requirements of all governmental authorities having jurisdiction
over the Property. Grantor shall keep all licenses, permits,
franchises and other approvals necessary for the operation of the
Property in full force and effect. Grantor shall operate the
Property as an apartment complex for so long as the indebtedness
secured hereby is outstanding. If, under applicable zoning
provisions, the use of all or any part of the Land or the
Improvements is or becomes a nonconforming use, Grantor shall not
cause or permit such use to be discontinued or abandoned without
the prior written consent of Beneficiary. Further, without
Beneficiary’s prior written consent, Grantor shall not file
or subject any
