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Resolution No. 2017-050RESOLUTION NO. 2017-50 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING THE GROUND LEASE RE -ASSIGNMENT AND SUBLEASE AT 2970 E. 50TH STREET AND AUTHORIZING THE EXECUTION OF RELATED GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT WHEREAS, the City of Vernon owns certain real property located at 2970 E. 50th Street in the City of Vernon, consisting of approximately 113,000 square feet of land and a building located thereon (the "Premises"); and WHEREAS, on January 5, 2005, the City Council of the City of Vernon adopted Resolution No. 8632 approving a Ground Lease Agreement (the "Lease") with Union Ice -Pacific, L.P., through its General Partner, Union Ice GP Inc. ("Union Ice"), dated as of December 27, 2004, for rental and renovation of the Premises for use as an ice production, food processing and cold storage facility; and WHEREAS, on October 12, 2005, the City Council of the City of Vernon adopted Resolution No. 8866 approving an Amendment to the Lease with Union Ice, which modified the commencement date of the Lease to June 30, 2005; and WHEREAS, on February 20, 2007, the City Council of the City of Vernon adopted Resolution No. 9251 approving the execution of a Landlord's Estoppel Certificate, Agreement and Consent which (i) permitted assignment of the Lease to Arctic Ice Properties, LLC ("Arctic Ice"); and (ii) permitted sublease (as amended, modified or restated, "Sublease") of the Premises to Arctic Glacier Vernon Inc. or an affiliate thereof ("Arctic Glacier Vernon"); and WHEREAS, on or about June 12, 2012, the City was notified by Arctic Glacier Vernon that (i) it along with several of its affiliates had commenced Court -supervised restructuring proceedings in Canada and thereunder had agreed to sell their business and all of their assets to H.I.G. Zamboni, LLC ("HIG"), which is the corporate parent of Arctic Glacier U.S.A., Inc. ("Arctic Glacier USA"), effective as of June 7, 2012 (the "Bankruptcy Sale"); and (ii) it desired to assign its interest in the Sublease' to HIG or an affiliate thereof, with the intention of continuing the operation of Arctic Glacier Vernon's business uninterrupted following closing of the Bankruptcy Sale; and WHEREAS, as of June 28, 2012, HIG changed its name to "Arctic Glacier LLC," but this fact was not made known to the City at the time; and WHEREAS, on July 17, 2012, the City Council of the City of Vernon adopted Resolution No. 2012-125 approving and authorizing the execution of a consent to the assignment of the Sublease from Arctic Glacier Vernon to HIG, which, unbeknownst to the City, had legally changed its name to "Arctic Glacier LLC," or an affiliate thereof;2 and WHEREAS, on July 27, 2012, the Bankruptcy Sale was completed (the "2012 Sublease Transaction"); and WHEREAS, following the 2012 Sublease Transaction, the current lessee under the Lease is Arctic Ice, and the current sublessee under the Sublease and occupant of the Premises is Arctic Glacier USA; and WHEREAS, by memorandum dated October 3, 2017, the City Administrator has recommended the approval of re -assignment of the Lease and Sublease and the authorization to execute the related ground 1 The June 12, 2012 letter misidentified the instrument for assignment as the Lease; this should have read "the Sublease." 2 In the fifth recital of Resolution No. 2012-125, the sender of the June 12, 2012 letter was misidentified as "Union Ice"; this should have read "Arctic Glacier o: lessor estoppel, consent and ground lease amendment to and for the benefit of NM GLCR, L.P. or another affiliate of New Mountain Net Lease Acquisition Corporation ("NM GLCR"); and WHEREAS, the City Administrator further recommends approval of a sublease of the Premises by NM GLCR to Arctic Glacier USA; and WHEREAS, NM GLCR intends to continue to perform the obligations under the Lease from and after the date of such re- assignment; and WHEREAS, the City Council of the City of Vernon desires to approve the Lease re -assignment, the authorization to execute related ground lessor estoppel, consent and ground lease amendment to and in favor of NM GLCR, and the sublease from NM GLCR to Arctic Glacier USA. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 2: The City Council of the City of Vernon finds that this action is exempt under the California Environmental Quality Act (CEQA), because it is an administrative action that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a "project" as defined by CEQA Guidelines section 15378. SECTION 3: The City Council of the City of Vernon hereby approves, ratifies and confirms the recitals set forth herein with respect to the 2012 Sublease Transaction. SECTION 4: The City Council of the City of Vernon hereby approves the re -assignment of the Lease at 2970 E. 50th Street to NM Vernon." In the sixth recital, the instrument to be assigned was misidentified as the - 3 - GLCR and approves and authorizes the execution of the related Ground Lessor Estoppel, Consent, and Ground Lease Amendment (the "Amendment") in substantially the same form as the copy which is attached hereto as Exhibit A, including the consent to NM GLCR granting a leasehold mortgage on its interest in the Premises as permitted in the Amendment. SECTION 5: The City Council of the City of Vernon hereby approves of a sublease of the Premises from NM GLCR to Arctic Glacier USA. SECTION 6: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Amendment for, and on behalf of, the City of Vernon and the City Clerk, or Deputy City Clerk, is hereby authorized to attest thereto. SECTION 7: The City Council of the City of Vernon hereby instructs the City Administrator, or his designee, to take whatever actions are deemed necessary or desirable for the purpose of implementing and carrying out the purposes of this Resolution and the transactions herein approved or authorized, including but not limited to, making any non -substantive changes to the Amendment attached hereto (including that NM GLCR may replace the initial "Lender" named therein with another lender upon reasonable prior notice to the City Administrator). SECTION 8: The City Council of the City of Vernon hereby directs the City Clerk, or the City Clerk's designee, to send a fully executed Amendment to NM GLCR. Lease; this should have read "the Sublease." - 4 - SECTION 9 : The City Clerk, or Depu4 - ri t jr C"? �k, of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk, or Deputy City Clerk, of the City of Vernon shall cause this resolution and the City Clerk's, or Deputy City Clerk's, certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 3rd day of October, 2017. "I -<� L�� T: M ria E. ala City C erk / --- Dep„�.1. r_}. r -1r APPROVED AS TO FORM: Bria B un, Seni Deputy City Attorney Title: Mayor / Mayor E - 5 - STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, Maria E. Ayala, City Clerk / nep„ty 91ty rler4 of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 2017-50, was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, October 3, 2017, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this 231"4ay of October, 2017, at Vernon, California. (SEAL) - 6 - -m_ (;-� 4V:Z2��� - aria E. yala City 4lerk / EXHIBIT A GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT THIS GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT (this "Estoppel and Amendment") made as of this day of September, 2017, by and between THE CITY OF VERNON (individually and collectively, together with their successors and/or assigns, "Lessor") and [NM GLCR, L.P., a Delaware limited partnership] ("Lessee"). WHEREAS, Lessor has heretofore leased certain lands described on Exhibit A attached hereto (the "Premises") to Arctic Ice Properties, LLC ("Arctic Ice"), pursuant to a Ground Lease dated December 27, 2004, as amended by that Amendment to Lease dated August 24, 2005, as further amended by that certain Ground Lease re- assignment and sublease dated February 20, 2007 (as same may have been amended, modified, substituted, assigned or extended, the "Lease"); WHEREAS, the current lessee under the Lease is Arctic Ice, which subleases the Premises to the current tenant, Arctic Glacier U.S.A., Inc. ("Sublessee"). The agreement between Arctic Ice and Sublesseee shall be referred to herein as the "Sublease." WHEREAS, Lessee is desirous of obtaining from UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (together with its successors and/or assigns, "Lender"), a loan in the approximate amount of $29,100,000.00 (the "Loan") secured by (among other things) a first leasehold mortgage upon Lessee's interest as lessee under the Lease in the Premises (the "First Leasehold Mortgage" ) and evidenced by, among other things, that certain Loan Agreement, by and between Lessee, as "Borrower," and Lender (the "Loan Aareement"; the First Leasehold Mortgage, the Loan Agreement, and all other documents executed and/or delivered in connection with the Loan are referred to herein, collectively, as the "Loan Documents"); WHEREAS, the First Leasehold Mortgage and any future leasehold mortgage and other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease shall be referred to herein as a "Leasehold Mortaaae," and the holder of any Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee"; and WHEREAS, Lender is unwilling to make the Loan unless (i) Lessor confirms and restates certain provisions of the Lease respecting leasehold mortgages for Lender's benefit, and (ii) Lessor and Lessee amend the Lease to provide for certain revisions respecting leasehold mortgages for Lender's benefit, NOW THEREFORE, in consideration of ten dollars ($10.00) and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Lessor hereby certifies to and agrees with Lender as follows: Lessor hereby acknowledges that Lender's notice address is as follows, for all purposes of the Lease: Address for Lender Notice: (or such other address as Lender may provide from time -to -time) UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York 1285 Avenue of the Americas New York, New York 10019 Attention: Transaction Management - Henry Chung with a copy to: Cassin & Cassin LLP 711 Third Avenue, 20'' Floor New York, New York l 0017 Attention: Dennis W. Mensi, Esq. Facsimile No.: (212) 557-2952 t01323048;1) 2. Lessor hereby certifies, as of the date hereof, to Lender and Lessee and as follows: (a) Lessor is the owner of the fee simple estate in the Premises and is the Lessor under the Lease. (b) Lessee is the owner of the leasehold estate in the Premises and is the Lessee under the Lease. (c) The Lease is in full force and effect in accordance with its terms and has not been further assigned, supplemented, modified or otherwise amended and each of the obligations on Lessor's part to be performed to date under the Lease have been performed. (d) To the best of Lessor's knowledge, each of the obligations on Lessee's part to be performed to date under the Lease have been performed. (e) To the best of Lessor's knowledge, Borrower has no offsets, counterclaims, defenses, deductions or credits whatsoever with respect to the Lease, or any amounts owing thereunder. (f) With respect to the Lease, no options to renew or extend exist, and no security deposits, escrows or prepaid rent or liens have been paid, except as set forth therein. The Base Rent, additional rent, and other additional charges related to the Premises, including all charges for real property taxes, operating expenses and other such expenses, and all other sums payable by Lessee to the Lessor under the Lease, including utility charges during the original and any renewal term of the Lease, are the responsibility of Lessee under the Lease. (g) Other than the Lease and the Sublease, there do not exist any other effective agreements (including Subordination, Non -Disturbance and Attornment Agreements) concerning the Premises, whether oral or written between Lessor and Lessee (or their respective predecessors) under the Lease. (h) As of the date hereof, no Base Rent or additional rent is delinquent from Lessee under the Lease. The Base Rent currently payable by Lessee under the Lease is $11,913.56 per month. Base Rent due under the Lease has been paid through September 30, 2017. The Base Rent will next reset effective as of January 2026. (i) Subject to the extension set forth in Section 4(e) below, the current term of the lease shall expire on January 9, 2061, whereupon Lessee will have remaining four (4) renewal options of ten (10) years each. (j) Aside from the Sublease, neither Lessor nor Lessee has assigned the Lease, nor has Lessor sublet the Premises. (k) Lessor has not assigned, conveyed, transferred, sold, encumbered or mortgaged its interest in the Lease or the Premises and there are currently no mortgages, deeds of trust or other security interests encumbering Lessor's fee interest in the Premises and Lessor has not granted to any third party an option or preferential right to purchase all or any part of the Premises. (1) Lessor has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against the Lessor's interest in the Premises. (m) Lessor has not received written notice that it is in violation of any governmental law or regulation applicable to its interest in the Premises and its operation thereon, including, without limitation, any environmental laws or the Americans with Disabilities Act, and has no reason to believe that there are grounds for any claim or such violation. (n) There are no actions, voluntary or otherwise, pending or, to the best knowledge of Lessor, threatened against Lessor under the bankruptcy, reorganization, moratorium or similar laws of the United States, any state thereof or any other jurisdiction. 3. Lessor hereby consents and agrees to the following: (a) assignment of the Lease from Arctic Ice to Lessee; {01323048;1} 2 (b) sublease of the Premises from Lessee to Sublessee; and (c) anything in the Lease to the contrary notwithstanding, Lessee entering into the First Leasehold Mortgage in favor of the Lender as part of the security for the Loan, the Loan will also be secured by up to six (6) additional properties owned in fee by the Lessee, and recording the same of record thereby creating a lien and security interest on Lessee's leasehold estate in the Premises and assigning its rights under the Ground Lease to the Lender; provided, however, that the First Leasehold Mortgage and all rights acquired under it shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder; and provided, however, Landlord's consent to any of the foregoing is not intended, and shall not be construed (a) to modify or otherwise affect any provision of the Lease (except as may be set forth herein), or (b) as a waiver of any of Landlord's rights under the Lease. 4. In lieu of a separate subordination, non -disturbance and attornment agreement with the Lender, Lessor and Lessee agree to the following amendments and modifications of the Lease: (a) Notwithstanding anything to the contrary contained in the Lease, any mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering the Premises or any interest therein, other than any Leasehold Mortgage whether entered into by Lessee (any such mortgage, etc., being referred to herein as a "Fee Mortgage"; the holder of any Fee Mortgage is referred to herein as a "Fee Mortgagee") shall automatically be subject and subordinate to the Lease and to any Pick -Up Lease (as defined in Exhibit B attached hereto), and Lessor shall cause any such Fee Mortgage to expressly state in the instrument recorded against the Premises that such Fee Mortgage is so subordinate, and the Lease and the rights of Lessee (and, to the extent of any Pickup Lease, the rights of the Leasehold Mortgagee or its designee) in and to the Premises shall have priority over the Fee Mortgage. Lessee agrees with Lessor, for the benefit of any Fee Mortgagee that has satisfied the requirements of this Lease, to attorn to any transferee of Lessor's interest through foreclosure of a Fee Mortgage or a conveyance in lieu of foreclosure. (b) Section 34 of the Lease is hereby deleted from the Lease and replaced with the provisions set forth on Exhibit B attached hereto. (c) Notwithstanding anything to the contrary in the Lease (including, without limitation, Section 10 thereof), at any time when a Leasehold Mortgage shall be outstanding, or a Leasehold Mortgagee (or its nominee or designee) shall hold title to the Lessee's Interest, (a) Lessor agrees that the Leasehold Mortgagee may be added to the "Loss Payable Endorsement" (and as a mortgagee) of any and all insurance policies carried by Lessee with respect to the Lessee's interest therein; (b) the Leasehold Mortgagee shall be entitled to participate in any settlement regarding insurance proceeds or condemnation awards; (c) the Leasehold Mortgagee shall be entitled to collect and hold any such insurance proceeds, and to make such insurance proceeds available to restore the Premises in accordance with the terms and provisions contained in the Loan Agreement required in connection with the restoration of the Premises (as are customarily imposed by a Leasehold Mortgagee in connection with commercial loans similar to the Loan) so long as the Lease is not terminated as a result of such casualty solely to the extent such termination is permitted in the Lease; and (d) all condemnation awards payable with respect to the Premises and/or other improvements payable to Lessee (or on account of the Premises and/or other improvements) shall be paid to Leasehold Mortgagee for use in restoration or application in accordance with the terms of the Leasehold Mortgage. (d) There shall be no merger of the Lease or any interest in the Lease or of Lessee's leasehold interest with the fee estate in the Premises, by reason of the fact that the Lease or such interest therein, or Lessee's leasehold interest in the Premises, may be directly or indirectly held by or for the account of any person who shall also hold the fee estate in the Premises, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of Lessee's leasehold interest may be conveyed or mortgaged in a Leasehold Mortgage to a mortgagee or beneficiary who shall also hold the fee estate in the Premises or any interest of Lessor under the Lease. {01323048;1} (e) Lessee hereby notifies Lessor of and exercises the initial three (3) Options to extend the term of the Lease (for a total extension of thirty (30) years) as permitted by Section 36 of the Lease and Lessor and Lessee hereby agree that such extension of the term is effective as of the date hereof. 5. This Estoppel and Amendment and the representations, warranties and covenants contained herein are given with the understanding that this Estoppel and Amendment constitutes a material inducement for Lender in making the Loan to Lessee and that Lender shall rely hereon in making the Loan to Borrower. Lender may at any time, without Lessor's consent, sell, assign, participate or securitize all or any portion of Lender's rights and obligations under the Loan Documents, and any such sale, assignment, participation or securitization may be to one or more financial institutions or other entities, to private investors, and/or into the public securities market, in Lender's sole discretion. This Estoppel and Amendment and the representations, warranties and covenants contained herein shall inure to the benefit of Lender, its successors and assigns (including, without limitation, each and every owner and holder of the Loan, each person who, pursuant to proceedings to enforce the Leasehold Mortgage or conveyance in lieu of such proceedings, may succeed to Lessee's interest under the Lease and each person who may thereafter acquire Lessee's interest under the Lease by purchase or otherwise) and shall be binding on Lessor, its heirs, legal representatives, successors and assigns and Lessor further agrees that this Agreement may be relied upon by Lender, its successors and assigns and any nationally recognized statistical rating agency rating any securities issued in connection with the Loan or any portion thereof. 6. This Estoppel and Amendment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Estoppel and Amendment may be detached from any counterpart of this Estoppel and Amendment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Estoppel and Amendment identical in form hereto but having attached to it one or more additional signature pages. IN WITNESS WHEREOF, the undersigned parties have executed this Estoppel, Consent and Amendment as of the date and year first written above. LESSOR: THE CITY OF VERNON By:_ Name: Title: ACCEPTED AND AGREED TO: LESSEE: [NM GLCR, L.P., a Delaware limited partnership] By:_ Name: Title: 101323048;1 } EXHIBIT A PARCEL 1 AS SHOWN ON RESOLUTION NO. 8363 FOR LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED FEBRUARY 10, 2004 AS INSTRUMENT NO. 2004-0296188 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCEL i THAT PORTION OF LOT 31, OF THE 500 ACRE TRACT OF THE LOS ANGELES FRUIT LAND ASSOCIATION, IN T11E CITY OF VERNON. COUNTY OF LOS A`IGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3. PAGES 156 AND 157 OF MISCEI.LANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 31; 1 HENCE SOUTH 321.50 FEET ALONG THE EAST LINE OF SAID LOT 31 TO THE NORTH LINE OF THAT 1 ".00 FOOT WIDE RIGHT OF WAY OF THE LOS ANGELES )UNCTION RAILWAY. AS DESCRIBED IN DEED TO CENTRAL MANUFACTURING DISFRIC"T INC., RECORDED 4-7-1927, IN BOOK 4752. PAGE 265 OF OFFICIAL RECORDS. IN SAID RECORDER'S OFFICE; THENCE WEST 387.70 FEET ALONG SAID NORTH UNF. OF SAID RIGHT OF WAY TO THE INTERSECTION OF A LINE THAT IS 397 70 FEET WEST MEASURED PERPENDICULAR TO AND IS PARALLEL WITH THE EAST LINE OF SAID LOT 31; THENCI- NORTH 321.50 FEET ALONG LAST SAID PARALLEL LINE TO THE NORTH LINE OF SAID LOT 31, '[HENCE EAST 38770 FEET ALONG SAID NORTH LINE OF SAID LOT 31. ALSO BEING THE CENTERLINE OF EAST 50TH STREET, 40.00 FEET WIDE, AS DESCRIBED IN DEED TO THE CITY OF VERNON. RECORDED 9-5-1929, AS DOCUMENT NO. 1410. IN BOOK 9335 PAGE 149 OF OFFICIAL RECORDS. IN SAID R1 CORDER'S OFFICE, TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE NORTH 2O.00 FEET OF SAID LOT 31. THE SOUTH LINE OF SAID NORTH 2O.00 FEET. ALSO BEING THE SOUTH UNE OF EAST SM STREET 4C.00 FEET WIDE, AS DESCRIBED IN DEED TO THE CITY OF VERNON. RECORDED 9.5-1929. AS DOCUM E\ F NO. 1410, IN BOOK 9335, PAGE 149 OF OFFICIAI RECORDS. IN SAID RECORDER'S OFFICE. {01323048;1 } EXHIBIT B 34. (a) Notwithstanding the provisions of Section 13.1 of the Lease to the contrary, Lessee may from time to time, without the consent of but upon written notice to Lessor, execute and deliver a mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease (any such mortgage, etc., being referred to herein as a "Leasehold Mortgage"; the holder of the Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee") that does not result in a change in use of the Premises; provided, however, Lessor shall have a reasonable right of approval of financing terms to the extent they relate to Lessor's interest in the Premises. The Leasehold Mortgagee may enforce its Leasehold Mortgage and acquire title to the interest encumbered thereby in any lawful way, including, without limitation, through foreclosure; provided, all such rights shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder. Subject to the terms of the Leasehold Mortgage, following a default thereunder (beyond any applicable notice and cure period), pending a foreclosure of a Leasehold Mortgage, the related Leasehold Mortgagee may take possession of and rent the Premises, and upon acquisition thereof, through foreclosure or otherwise, may, without further consent of Lessor, sell and assign Lessee's interest in the Premises by assignment in which the assignee shall expressly assume and agree to observe and perform all of the covenants of Lessee herein contained, and such assignee may make a purchase money leasehold mortgage of Lessee's leasehold interest in the Premises to the assignor. Lessor agrees that following the foreclosure of Leasehold Mortgage, Lessor will waive its right to enforce any noncurable default (i.e., any default hereunder that is personal to the previous lessee) against the transferee of Lessee's interest through foreclosure or a conveyance in lieu of foreclosure. A Leasehold Mortgagee shall be liable to perform the obligations herein imposed on Lessee only during the period that Leasehold Mortgagee has ownership of Lessee's interest in the Premises. Nothing contained in the Leasehold Mortgage shall release or be deemed to relieve the Lessee from the full and faithful observance and performance of Lessee's covenants herein contained, or from any liability for the nonobservance or nonperformance thereof, nor be deemed to constitute a waiver of any right of Lessor under this Lease. (b) Upon the execution and recording of a Leasehold Mortgage, the Leasehold Mortgagee shall send to Lessor a true copy of the Leasehold Mortgage with the recordation information noted, together with written notice specifying the name and address of Leasehold Mortgagee. So long as such Leasehold Mortgage shall remain unsatisfied of record or until written notice of satisfaction is given by Leasehold Mortgagee to Lessor, and subject to the provisions of the first sentence of this Section 34(b), the following provisions shall apply with respect to such Leasehold Mortgage. (i) There shall be no termination, cancellation, surrender, acceptance of surrender, amendment or modification of the Lease by joint action of Lessor and Lessee or by Lessee alone, without in each case the prior consent in writing of Leasehold Mortgagee. Any such termination, cancellation, surrender, acceptance of surrender, amendment or modification made without the consent of Leasehold Mortgagee shall not be binding on Leasehold Mortgagee. (ii) Lessor shall, upon serving Lessee with any notice of Default and/or Breach, simultaneously serve a copy of such notice upon Leasehold Mortgagee, and no such notice to Lessee shall be deemed given unless a copy is so served upon Leasehold Mortgagee in the manner specified in this Lease for the giving of notices. (iii) In the event of any Default and/or Breach by Lessee under this Lease, Leasehold Mortgagee shall have the same period, after service of notice upon such Default and/or Breach to remedy or cause to be remedied the Default and/or Breach, that Lessee has under this Lease to remedy or cure same, plus an additional fifteen (15) days if such Default and/or Breach can be cured solely with the payment of money, or an additional thirty (30) days for all other Defaults and/or Breaches (such period, the "Leasehold Mortgagee Cure Period"). Lessor shall accept such performance by or at the instigation of a Leasehold Mortgagee as if the performance had been done by Lessee. Each notice of Default and/or Breach given by Lessor shall (i) state the amounts of Base Rent and other payments that are then claimed to be in default, and/or (ii) provide a description of any non -monetary Default and/or Breach. {01323048;1 } (iv) Notwithstanding any provision in this Lease to the contrary, if any Default and/or Breach shall occur that, pursuant to any provision of this Lease entitles Lessor to terminate the Lease, and if before the expiration of the related Leasehold Mortgagee Cure Period with respect to all such defaults (measured from the date of service of the notice of termination upon such Leasehold Mortgagee), a Leasehold Mortgagee shall have notified Lessor of its desire to nullify such notice and Leasehold Mortgagee shall have agreed to pay or cause to be paid to Lessor within the Leasehold Mortgagee Cure Period all amounts of the Base Rent and other payments then in default, and shall have agreed to commence or cause to be commenced the work of complying with all of the other requirements of the Lease, if any are then in default, and shall prosecute or cause the prosecution of same to completion with reasonable diligence, then in such event, Lessor shall not be entitled to terminate this Lease, and any notice of termination theretofore given shall be void and of no effect. (v) If Lessor shall elect to terminate this Lease by reason of any Default and/or Breach, Leasehold Mortgagee shall not only have the right to nullify any notice of termination by agreeing to cure such Breach as described in Paragraph 34(b)(iv) above, but shall also have the separate right to postpone and extend the specified date for the termination of the Lease as stated by Lessor in its notice of termination, provided that Leasehold Mortgagee shall continue to cure or cause to be cured any then existing monetary Breach and any other Breach capable of being cured by Leasehold Mortgagee, and meanwhile pay or cause to be paid the Base Rent, and provided further that Leasehold Mortgagee shall forthwith take steps to acquire or sell Lessee's interest in the Premises by foreclosure of Leasehold Mortgage or otherwise and shall prosecute the same to completion with reasonable diligence. If Leasehold Mortgagee is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy, debtor rehabilitation or insolvency proceeding involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the period for Leasehold Mortgagee to acquire or sell Lessee's interest in the Premises shall be extended for the period of such prohibition, provided that Leasehold Mortgagee shall diligently attempt to remove any such prohibition. If Lessee's interest is acquired or sold as described above through foreclosure of Leasehold Mortgage or a conveyance in lieu of foreclosure, the intended termination of the Lease by Lessor under the notice described above shall be automatically nullified, and this Lease will continue as if such notice of termination had never been given. (vi) In the event of termination of this Lease for any reason whatsoever (including, without limitation, if the Lease shall be rejected (or deemed rejected) in a bankruptcy or similar proceeding involving Lessee or otherwise), Lessor shall promptly notify the Leasehold Mortgagee of such termination and the amount of the sums then due to Lessor under this Lease, and the Leasehold Mortgagee shall have the right to have Lessor enter into a new lease in the Premises with Leasehold Mortgagee or its nominee or designee (such new Lease, a "Pick -Up Lease"), in accordance with the following provisions: a. A Leasehold Mortgagee or its nominee or designee shall be entitled to such new lease if such Leasehold Mortgagee shall make written request upon Lessor for such new lease on or before the date that is thirty (30) days after the date on which such Leasehold Mortgagee shall have received the notice from Lessor of such termination and if such written request is accompanied by the agreement of the Leasehold Mortgagee to pay to Lessor upon the execution and delivery of the Pick - Up Lease the sums due to Lessor under this Lease as of the date of such Pick -Up Lease. b. The Pick -Up Lease shall be for what would have been the remainder of the Term if the Lease had not been terminated, effective as of the date of such termination, at the Base Rent and upon the terms, provisions, covenants and agreements as herein contained, including all rights of Lessee (including, without limitation, for renewal options) that are provided in this Lease. C. The Pick -Up Lease shall be of the same priority as this Lease and shall be senior in priority to any Fee Mortgage in effect as of the granting of the Pick -Up Lease. d. In the Pick -Up Lease, the Lessee named therein shall agree to perform and observe all covenants contained therein on lessee's part to be performed, except that, in accordance with Section 13.2(a) hereof, upon an assignment of the Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Pick -Up Lease. (01323048;1) e. The initial conveyance by any Leasehold Mortgagee or its nominee or designee lessee under the Pick -Up Lease shall not require the consent of Lessor or constitute a breach of any provision of or a default under the Pick -Up Lease. f. Except when a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, no liability for the payment of the Base Rent or the performance of any of Lessee's covenants and agreements under this Lease shall attach to or be imposed upon a Leasehold Mortgagee, all such liability being hereby expressly waived by Lessor. In accordance with Section 13.2(a) hereof, if a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, upon an assignment of the Lease or Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Lease or Pick -Up Lease. (vii) No payment made to Lessor by Leasehold Mortgagee shall constitute an agreement that such payment was, in fact, due under the terms of the Lease. A Leasehold Mortgagee having made any payment to Lessor pursuant to Lessor's wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof, provided that Leasehold Mortgagee shall have made demand therefor not later than one (1) year after the date of payment. (viii) Notwithstanding any provision in this Lease to the contrary, foreclosure of a Leasehold Mortgage or any sale of Lessee's interest in the Premises in connection with a foreclosure, whether by judicial proceedings or by virtue of any power of sale contained in such Leasehold Mortgage, or any conveyance of Lessee's interest in the Premises from Lessee to a Leasehold Mortgagee or its nominee or designee by virtue of, or in lieu of, foreclosure or other appropriate proceedings, or any conveyance of Lessee's interest in the Premises by a Leasehold Mortgagee or its nominee or designee, shall not require the consent or approval of Lessor or constitute a Default and/or Breach under the Lease. (c) In the event of any conflict between the provisions of this Section 34 and any other provision of this Lease, this Section 34 shall control. 101323048;11 FINAL FULLY EXECUTED AGREEMENT GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT THIS GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT (this "Estoppel and Amendment") made as of this 31e day of October, 2017, by and between THE CITY OF VERNON (individually and collectively, together with their successors and/or assigns, "Lessor") and NM GLCR, L.P., a Delaware limited partnership ("Lessee"). WHEREAS, Lessor has heretofore leased certain lands described on Exhibit A attached hereto (the "Premises") to Arctic Ice Properties, LLC ("Arctic Ice"), pursuant to a Ground Lease dated December 27, 2004, as amended by that Amendment to Lease dated August 24, 2005, as further amended by that certain Ground Lease re- assignment and sublease dated February 20, 2007 (as same may have been amended, modified, substituted, assigned or extended, the "Lease"); WHEREAS, the current lessee under the Lease is Arctic Ice, which subleases the Premises to the current tenant, Arctic Glacier U.S.A., Inc. ("Sublessee"). The agreement between Arctic Ice and Sublessee shall be referred to herein as the "Sublease." WHEREAS, Lessee is desirous of obtaining from UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (together with its successors and/or assigns, "Lender'), a loan in the approximate amount of $27,300,000.00 (the "Loan") secured by (among other things) a first leasehold mortgage upon Lessee's interest as lessee under the Lease in the Premises (the "First Leasehold Mortgage") and evidenced by, among other things, that certain Loan Agreement, by and between Lessee, as `Borrower," and Lender (the "Loan Agreement"; the First Leasehold Mortgage, the Loan Agreement, and all other documents executed and/or delivered in connection with the Loan are referred to herein, collectively, as the "Loan Documents"); WHEREAS, the First Leasehold Mortgage and any future leasehold mortgage and other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease shall be referred to herein as a "Leasehold Mortgage," and the holder of any Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee"; and WHEREAS, Lender is unwilling to make the Loan unless (i) Lessor confirms and restates certain provisions of the Lease respecting leasehold mortgages for Lender's benefit, and (ii) Lessor and Lessee amend the Lease to provide for certain revisions respecting leasehold mortgages for Lender's benefit, NOW THEREFORE, in consideration of ten dollars ($10.00) and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Lessor hereby certifies to and agrees with Lender as follows: Lessor hereby acknowledges that Lender's notice address is as follows, for all purposes of the Lease: Address for Lender Notice: (or such other address as Lender may provide from time -to -time) UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York 1285 Avenue of the Americas New York, New York 10019 Attention: Transaction Management - Henry Chung with a copy to: McGuireWoods LLP 1345 Avenue of the Americas, 7' Floor New York, New York 10105-0106 Attention: Dennis W. Mensi, Esq. Facsimile No.: (212) 715-6279 {01323048;1} 2. Lessor hereby certifies, as of the date hereof, to Lender and Lessee and as follows: (a) Lessor is the owner of the fee simple estate in the Premises and is the Lessor under the Lease. (b) Lessee is the owner of the leasehold estate in the Premises and is the Lessee under the Lease. (c) The Lease is in full force and effect in accordance with its terms and has not been further assigned, supplemented, modified or otherwise amended and each of the obligations on Lessor's part to be performed to date under the Lease have been performed. (d) To the best of Lessor's knowledge, each of the obligations on Lessee's part to be performed to date under the Lease have been performed. (e) To the best of Lessor's knowledge, Borrower has no offsets, counterclaims, defenses, deductions or credits whatsoever with respect to the Lease, or any amounts owing thereunder. (f) With respect to the Lease, no options to renew or extend exist, and no security deposits, escrows or prepaid rent or liens have been paid, except as set forth therein. The Base Rent, additional rent, and other additional charges related to the Premises, including all charges for real property taxes, operating expenses and other such expenses, and all other sums payable by Lessee to the Lessor under the Lease, including utility charges during the original and any renewal term of the Lease, are the responsibility of Lessee under the Lease. (g) Other than the Lease and the Sublease, there do not exist any other effective agreements (including Subordination, Non -Disturbance and Attornment Agreements) concerning the Premises, whether oral or written between Lessor and Lessee (or their respective predecessors) under the Lease. (h) As of the date hereof, no Base Rent or additional rent is delinquent from Lessee under the Lease. The Base Rent currently payable by Lessee under the Lease is $11,913.56 per month. Base Rent due under the Lease has been paid through September 30, 2017. The Base Rent will next reset effective as of January 2026. (i) Subject to the extension set forth in Section 4(e) below, the current term of the lease shall expire on January 9, 2061, whereupon Lessee will have remaining four (4) renewal options of ten (10) years each. (j) Aside from the Sublease, neither Lessor nor Lessee has assigned the Lease, nor has Lessor sublet the Premises. (k) Lessor has not assigned, conveyed, transferred, sold, encumbered or mortgaged its interest in the Lease or the Premises and there are currently no mortgages, deeds of trust or other security interests encumbering Lessor's fee interest in the Premises and Lessor has not granted to any third party an option or preferential right to purchase all or any part of the Premises. (1) Lessor has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against the Lessor's interest in the Premises. (m) Lessor has not received written notice that it is in violation of any governmental law or regulation applicable to its interest in the Premises and its operation thereon, including, without limitation, any environmental laws or the Americans with Disabilities Act, and has no reason to believe that there are grounds for any claim or such violation. (n) There are no actions, voluntary or otherwise, pending or, to the best knowledge of Lessor, threatened against Lessor under the bankruptcy, reorganization, moratorium or similar laws of the United States, any state thereof or any other jurisdiction. 3. Lessor hereby consents and agrees to the following: 101323048;11 2 (a) assignment of the Lease from Arctic Ice to Lessee; (b) sublease of the Premises from Lessee to Sublessee; and (c) anything in the Lease to the contrary notwithstanding, Lessee entering into the First Leasehold Mortgage in favor of the Lender as part of the security for the Loan, the Loan will also be secured by up to six (6) additional properties owned in fee by the Lessee, and recording the same of record thereby creating a lien and security interest on Lessee's leasehold estate in the Premises and assigning its rights under the Ground Lease to the Lender; provided, however, that the First Leasehold Mortgage and all rights acquired under it shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder; and provided, however, Landlord's consent to any of the foregoing is not intended, and shall not be construed (a) to modify or otherwise affect any provision of the Lease (except as may be set forth herein), or (b) as a waiver of any of Landlord's rights under the Lease. 4. In lieu of a separate subordination, non -disturbance and attornment agreement with the Lender, Lessor and Lessee agree to the following amendments and modifications of the Lease: (a) Notwithstanding anything to the contrary contained in the Lease, any mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering the Premises or any interest therein, other than any Leasehold Mortgage whether entered into by Lessee (any such mortgage, etc., being referred to herein as a "Fee Mortgage"; the holder of any Fee Mortgage is referred to herein as a "Fee Mortgagee") shall automatically be subject and subordinate to the Lease and to any Pick -Up Lease (as defined in Exhibit B attached hereto), and Lessor shall cause any such Fee Mortgage to expressly state in the instrument recorded against the Premises that such Fee Mortgage is so subordinate, and the Lease and the rights of Lessee (and, to the extent of any Pickup Lease, the rights of the Leasehold Mortgagee or its designee) in and to the Premises shall have priority over the Fee Mortgage. Lessee agrees with Lessor, for the benefit of any Fee Mortgagee that has satisfied the requirements of this Lease, to attorn to any transferee of Lessor's interest through foreclosure of a Fee Mortgage or a conveyance in lieu of foreclosure. (b) Section 34 of the Lease is hereby deleted from the Lease and replaced with the provisions set forth on Exhibit B attached hereto. (c) Notwithstanding anything to the contrary in the Lease (including, without limitation, Section 10 thereof), at any time when a Leasehold Mortgage shall be outstanding, or a Leasehold Mortgagee (or its nominee or designee) shall hold title to the Lessee's Interest, (a) Lessor agrees that the Leasehold Mortgagee may be added to the "Loss Payable Endorsement" (and as a mortgagee) of any and all insurance policies carried by Lessee with respect to the Lessee's interest therein; (b) the Leasehold Mortgagee shall be entitled to participate in any settlement regarding insurance proceeds or condemnation awards; (c) the Leasehold Mortgagee shall be entitled to collect and hold any such insurance proceeds, and to make such insurance proceeds available to restore the Premises in accordance with the terms and provisions contained in the Loan Agreement required in connection with the restoration of the Premises (as are customarily imposed by a Leasehold Mortgagee in connection with commercial loans similar to the Loan) so long as the Lease is not terminated as a result of such casualty solely to the extent such termination is permitted in the Lease; and (d) all condemnation awards payable with respect to the Premises and/or other improvements payable to Lessee (or on account of the Premises and/or other improvements) shall be paid to Leasehold Mortgagee for use in restoration or application in accordance with the terms of the Leasehold Mortgage. (d) There shall be no merger of the Lease or any interest in the Lease or of Lessee's leasehold interest with the fee estate in the Premises, by reason of the fact that the Lease or such interest therein, or Lessee's leasehold interest in the Premises, may be directly or indirectly held by or for the account of any person who shall also hold the fee estate in the Premises, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of Lessee's leasehold interest may be conveyed or (01323048;1) mortgaged in a Leasehold Mortgage to a mortgagee or beneficiary who shall also hold the fee estate in the Premises or any interest of Lessor under the Lease. (e) Lessee hereby notifies Lessor of and exercises the initial three (3) Options to extend the term of the Lease (for a total extension of thirty (30) years) as permitted by Section 36 of the Lease and Lessor and Lessee hereby agree that such extension of the term is effective as of the date hereof. 5. This Estoppel and Amendment and the representations, warranties and covenants contained herein are given with the understanding that this Estoppel and Amendment constitutes a material inducement for Lender in making the Loan to Lessee and that Lender shall rely hereon in making the Loan to Borrower. Lender may at any time, without Lessor's consent, sell, assign, participate or securitiee all or any portion of Lender's rights and obligations under the Loan Documents, and any such sale, assignment, participation or securitization may be to one or more financial institutions or other entities, to private investors, and/or into the public securities market, in Lender's sole discretion. This Estoppel and Amendment and the representations, warranties and covenants contained herein shall inure to the benefit of Lender, its successors and assigns (including, without limitation, each and every owner and holder of the Loan, each person who, pursuant to proceedings to enforce the Leasehold Mortgage or conveyance in lieu of such proceedings, may succeed to Lessee's interest under the Lease and each person who may thereafter acquire Lessee's interest under the Lease by purchase or otherwise) and shall be binding on Lessor, its heirs, legal representatives, successors and assigns and Lessor further agrees that this Agreement may be relied upon by Lender, its successors and assigns and any nationally recognized statistical rating agency rating any securities issued in connection with the Loan or any portion thereof. 6. This Estoppel and Amendment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Estoppel and Amendment may be detached from any counterpart of this Estoppel and Amendment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Estoppel and Amendment identical in form hereto but having attached to it one or more additional signature pages. IN WITNESS WHEREOF, the undersigned parties have executed this Estoppel, Consent and Amendment as of the date and year first written above. LESSOR: THE CITY OF VERNON BymN Ybarrae Title: Mayor ACCEPTED AND AGREED TO: LESSEE: NM GLCR, L.P., a Delaware limited partnership By: NM GLCR GP, L.L.C., a Delaware limited liability company, its general partner By: NI M Net Lease Manager, L.L.C., a Delaware limited liability company, its manager BY: —2-- Name: Pet4 E. Kaplan, Jr. Title: President (01323048,1) ATTEST: Mara E. Ayal City Clerk APPROVED AS TO FORM: n Brian Byun, �ity Senior Deputy Attorney EX111B1'1' A PARCEL 1 AS SHOWN ON RESOLUTION NO. 8363 FOR LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED FEBRUARY 10, 2004 AS INSTRUMENT NO. 2004-0296188 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCEL THAT PORTION OF LOT 31. OF THE 500 ACRE TRACT' OF T1IE LOS ANGELES FRUIT LAND ASSOCIAI ION. IN THE CITY OF VERNON. COUNTY OF LOS A'IGELES, STATE OF CALIFORNIA, AS PER MAI' RECORDED IN BOOK 3. PAGES 156 AND 157 OF hI1SCELLANFOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. DESCRIBED AS 1'JLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 31; 1 HENCE SOUTH 321.50 FEET ALONG THE EAST LINE OF SAID LbT31 TO THE NORTH LINE OF THAT 1-'.DO FOOT WIDE RIGHT OF WAY OF THE LOS ANGELES !UNCTION RAILWAY, AS DESCRIBED IN DEED TO CENTRAL MANUFACTURING DISTRICT INC., RECORDED 4.7.1927, IN BOOK 4752, PAGE 265 OF OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE; TIIFNCE WEST 397.70 FEET ALONG SAID NORTH LINE OF SAID RIGHT OF WAY 1'O THE INTERSECTION OF A LINE THAT IS 387.70 FEET WEST NE•ASURED PERPENDICULAR TO AND IS PARALLEL WITH THE. FAST LINE OF SAID LOT 31; T11FNCI- NORTH 321.50 FEET ALONG LAST SAID PARALLEL LINE TO THE NORTH LINE OF SAID LOT 31, 'THENCE EAST 387.70 FEET ALONG SAID NORTH LINE OF SAID LOT 31, ALSO BEING THE CENTERLINE OF EAST 50TH STREET, 40.00 FEET WIDE, AS DESCRIBED INDEED TO THE: CITY OF VERNON, RE•CORD?13 9.5-1929, AS DOCUMENT NO. 1410, IN BOOK 9335, PAGE 14P OF OFFICIAL RECORDS. IN SAID IWCORDER'S OFFICE. TO THE POINT OF BEGINNING, EXCEPT THEREFROM THE NORTH 20.DO FEET OF SAID LOT 31. THE SOUTH LINE OF SAID NORTH 2O.00 FEET. ALSO BEING THE SOUTH LINE OF EAST SOTH STREET 41..00 FEET WIDE, AS DESCRIBED IN DEED TO THE• CITY OF VERNON. RECORDED 9.5-1929, AS DOCUMF%- T NO. 1410, IN BOOK 9335, PAGE 149 OF OFFICIAL. RECORDS. IN SAID RECORDER'S OFFICE (01323048;1) EXHIBIT B 34. (a) Notwithstanding the provisions of Section 13.1 of the Lease to the contrary, Lessee may from time to time, without the consent of but upon written notice to Lessor, execute and deliver a mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease (any such mortgage, etc., being referred to herein as a "Leasehold Mortgage"; the holder of the Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee") that does not result in a change in use of the Premises; provided, however, Lessor shall have a reasonable right of approval of financing terms to the extent they relate to Lessor's interest in the Premises. The Leasehold Mortgagee may enforce its Leasehold Mortgage and acquire title to the interest encumbered thereby in any lawful way, including, without limitation, through foreclosure; provided, all such rights shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder. Subject to the terms of the Leasehold Mortgage, following a default thereunder (beyond any applicable notice and cure period), pending a foreclosure of a Leasehold Mortgage, the related Leasehold Mortgagee may take possession of and rent the Premises, and upon acquisition thereof, through foreclosure or otherwise, may, without further consent of Lessor, sell and assign Lessee's interest in the Premises by assignment in which the assignee shall expressly assume and agree to observe and perform all of the covenants of Lessee herein contained, and such assignee may make a purchase money leasehold mortgage of Lessee's leasehold interest in the Premises to the assignor. Lessor agrees that following the foreclosure of Leasehold Mortgage, Lessor will waive its right to enforce any noncurable default (i.e., any default hereunder that is personal to the previous lessee) against the transferee of Lessee's interest through foreclosure or a conveyance in lieu of foreclosure. A Leasehold Mortgagee shall be liable to perform the obligations herein imposed on Lessee only during the period that Leasehold Mortgagee has ownership of Lessee's interest in the Premises. Nothing contained in the Leasehold Mortgage shall release or be deemed to relieve the Lessee from the full and faithful observance and performance of Lessee's covenants herein contained, or from any liability for the nonobservance or nonperformance thereof, nor be deemed to constitute a waiver of any right of Lessor under this Lease. (b) Upon the execution and recording of a Leasehold Mortgage, the Leasehold Mortgagee shall send to Lessor a true copy of the Leasehold Mortgage with the recordation information noted, together with written notice specifying the name and address of Leasehold Mortgagee. So long as such Leasehold Mortgage shall remain unsatisfied of record or until written notice of satisfaction is given by Leasehold Mortgagee to Lessor, and subject to the provisions of the first sentence of this Section 34(b), the following provisions shall apply with respect to such Leasehold Mortgage. (i) There shall be no termination, cancellation, surrender, acceptance of surrender, amendment or modification of the Lease by joint action of Lessor and Lessee or by Lessee alone, without in each case the prior consent in writing of Leasehold Mortgagee. Any such termination, cancellation, surrender, acceptance of surrender, amendment or modification made without the consent of Leasehold Mortgagee shall not be binding on Leasehold Mortgagee. (ii) Lessor shall, upon serving Lessee with any notice of Default and/or Breach, simultaneously serve a copy of such notice upon Leasehold Mortgagee, and no such notice to Lessee shall be deemed given unless a copy is so served upon Leasehold Mortgagee in the manner specified in this Lease for the giving of notices. (iii) In the event of any Default and/or Breach by Lessee under this Lease, Leasehold Mortgagee shall have the same period, after service of notice upon such Default and/or Breach to remedy or cause to be remedied the Default and/or Breach, that Lessee has under this Lease to remedy or cure same, plus an additional fifteen (15) days if such Default and/or Breach can be cured solely with the payment of money, or an additional thirty (30) days for all other Defaults and/or Breaches (such period, the "Leasehold Mortgagee Cure Period"). Lessor shall accept such performance by or at the instigation of a Leasehold Mortgagee as if the performance had been done by Lessee. Each notice of Default and/or Breach given by Lessor shall (i) (01323048-,1) state the amounts of Base Rent and other payments that are then claimed to be in default, and/or (ii) provide a description of any non -monetary Default and/or Breach. (iv) Notwithstanding any provision in this Lease to the contrary, if any Default and/or Breach shall occur that, pursuant to any provision of this Lease entitles Lessor to terminate the Lease, and if before the expiration of the related Leasehold Mortgagee Cure Period with respect to all such defaults (measured from the date of service of the notice of termination upon such Leasehold Mortgagee), a Leasehold Mortgagee shall have notified Lessor of its desire to nullify such notice and Leasehold Mortgagee shall have agreed to pay or cause to be paid to Lessor within the Leasehold Mortgagee Cure Period all amounts of the Base Rent and other payments then in default, and shall have agreed to commence or cause to be commenced the work of complying with all of the other requirements of the Lease, if any are then in default, and shall prosecute or cause the prosecution of same to completion with reasonable diligence, then in such event, Lessor shall not be entitled to terminate this Lease, and any notice of termination theretofore given shall be void and of no effect. (v) If Lessor shall elect to terminate this Lease by reason of any Default and/or Breach, Leasehold Mortgagee shall not only have the right to nullify any notice of termination by agreeing to cure such Breach as described in Paragraph 34(b)(iv) above, but shall also have the separate right to postpone and extend the specified date for the termination of the Lease as stated by Lessor in its notice of termination, provided that Leasehold Mortgagee shall continue to cure or cause to be cured any then existing monetary Breach and any other Breach capable of being cured by Leasehold Mortgagee, and meanwhile pay or cause to be paid the Base Rent, and provided further that Leasehold Mortgagee shall forthwith take steps to acquire or sell Lessee's interest in the Premises by foreclosure of Leasehold Mortgage or otherwise and shall prosecute the same to completion with reasonable diligence. If Leasehold Mortgagee is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy, debtor rehabilitation or insolvency proceeding involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the period for Leasehold Mortgagee to acquire or sell Lessee's interest in the Premises shall be extended for the period of such prohibition, provided that Leasehold Mortgagee shall diligently attempt to remove any such prohibition. If Lessee's interest is acquired or sold as described above through foreclosure of Leasehold Mortgage or a conveyance in lieu of foreclosure, the intended termination of the Lease by Lessor under the notice described above shall be automatically nullified, and this Lease will continue as if such notice of termination had never been given. (vi) In the event of termination of this Lease for any reason whatsoever (including, without limitation, if the Lease shall be rejected (or deemed rejected) in a bankruptcy or similar proceeding involving Lessee or otherwise), Lessor shall promptly notify the Leasehold Mortgagee of such termination and the amount of the sums then due to Lessor under this Lease, and the Leasehold Mortgagee shall have the right to have Lessor enter into a new lease in the Premises with Leasehold Mortgagee or its nominee or designee (such new Lease, a "Pick -Up Lease"), in accordance with the following provisions: a. A Leasehold Mortgagee or its nominee or designee shall be entitled to such new lease if such Leasehold Mortgagee shall make written request upon Lessor for such new lease on or before the date that is thirty (30) days after the date on which such Leasehold Mortgagee shall have received the notice from Lessor of such termination and if such written request is accompanied by the agreement of the Leasehold Mortgagee to pay to Lessor upon the execution and delivery of the Pick - Up Lease the sums due to Lessor under this Lease as of the date of such Pick -Up Lease. b. The Pick -Up Lease shall be for what would have been the remainder of the Term if the Lease had not been terminated, effective as of the date of such termination, at the Base Rent and upon the terms, provisions, covenants and agreements as herein contained, including all rights of Lessee (including, without limitation, for renewal options) that are provided in this Lease. C. The Pick -Up Lease shall be of the same priority as this Lease and shall be senior in priority to any Fee Mortgage in effect as of the granting of the Pick -Up Lease. (01323048;1) d. In the Pick -Up Lease, the Lessee named therein shall agree to perform and observe all covenants contained therein on lessee's part to be performed, except that, in accordance with Section 13.2(a) hereof, upon an assignment of the Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Pick -Up Lease. e. The initial conveyance by any Leasehold Mortgagee or its nominee or designee lessee under the Pick -Up Lease shall not require the consent of Lessor or constitute a breach of any provision of or a default under the Pick -Up Lease. f. Except when a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, no liability for the payment of the Base Rent or the performance of any of Lessee's covenants and agreements under this Lease shall attach to or be imposed upon a Leasehold Mortgagee, all such liability being hereby expressly waived by Lessor. In accordance with Section 13.2(a) hereof, if a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, upon an assignment of the Lease or Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Lease or Pick -Up Lease. (vii) No payment made to Lessor by Leasehold Mortgagee shall constitute an agreement that such payment was, in fact, due under the terms of the Lease. A Leasehold Mortgagee having made any payment to Lessor pursuant to Lessor's wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof, provided that Leasehold Mortgagee shall have made demand therefor not later than one (1) year after the date of payment. (viii) Notwithstanding any provision in this Lease to the contrary, foreclosure of a Leasehold Mortgage or any sale of Lessee's interest in the Premises in connection with a foreclosure, whether by judicial proceedings or by virtue of any power of sale contained in such Leasehold Mortgage, or any conveyance of Lessee's interest in the Premises from Lessee to a Leasehold Mortgagee or its nominee or designee by virtue of, or in lieu of, foreclosure or other appropriate proceedings, or any conveyance of Lessee's interest in the Premises by a Leasehold Mortgagee or its nominee or designee, shall not require the consent or approval of Lessor or constitute a Default and/or Breach under the Lease. (c) In the event of any conflict between the provisions of this Section 34 and any other provision of this Lease, this Section 34 shall control. (01323048,1) STAFF REPORT CITY ADMINISTRATION IU I �U.��f7:�►`I Illy TO: Debbie Juarez, Records Management Assistant FROM: Diana Figueroa, Administrative Analyst Ir DATE: January 17 2018 SUBJECT: Resolution No. 2017-50 — A Resolution of the City Council of the City of Vernon Approving the Ground Lease Re -Assignment and Sublease at 2970 E. 50" Street and Authorizing the Execution of Related Ground Lessor Estoppel, Consent and Ground Lease Amendment Changes have been made to the final Ground Lessor, Estoppel, Consent and Ground Lease Amendment (Agreement 17-119) related to Resolution No. 2017-50. As per the counterparty's request, the amendment was revised to modify the following: 1. Removal of the brackets around NM GLCR 2. Change in loan dollar amount from $29,100,000 to $27,300,000 3. Updated notice information for lender's attorney from Cassin & Cassin to McGuireWoods LLP As per our City Attorney's Office, each of the changes noted above are considered non -substantive and will not require re -approval from City Council. Attached for the City Clerk's Office records, please find enclosed the updated amendment which incorporates the edits noted above (each of which is on page 1). Please update the appropriate file accordingly. If you have any questions, or need any additional information, please advise. Thank you. Attachments 1. Revised Agreement 17-119 — Ground Lessor Estoppel, Consent and Ground Lease Amendment 2. City Attorney Email Correspondence/Approval c: Carlos R. Fandino, Jr., City Administrator COPY OF RECORDED DOCUMENT - This page is part of your document - DO NOT DISCARD 20180149121 Recorded/Filed in Official Records Recorder's Office, Los Angeles County, California 02/13/18 AT 08:OOAM FEES: TAXES: OTHER: 175.00 0.00 0.00 PAID: 175.00 IAIII�hIIIIIIIIIIIIIIIIIIINIIIIIIINIIIIIIIIIIhIIAIIINIIIIIIIIRIII LEADSHEET Ilhll IIIII IIIII INII IIIII IIIIIIIIII IINI IIIIINI IINIIIIINII�II�II�MI 201802130140017 00014887332 III II IIII I I I II I IIII IIII I III 008902622 S EQ: 01 SECURE - 8:00AM IIIIIIIIIII I II IIII I IIIII II IIIII I II I I II III IIIIIIIIIII III IIIII IIIIIIIIIII III III I II IIIII IIIIII II I I IIIII III III - THIS FORM IS NOT TO BE DUPLICATED 862618*7 2 6 A E 175892 N 00 d z F 3 O z 6303-029-900 DOC# 18-0149121-02-3 (IIIII IIIII IIIII IIIII IINI IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII IIII be 99 W y L O } 0 c Z }� C H C O N V O y E 0 0.� W — O ix COL 0 O W Q LU 'a Q O F s V L j V 2 a) W PLEASE READ YELLOW SHEET FIRST NM GLCR LP 4305 S SANTA FE AVE VERNON, CA 90058-1714 9 o.. ll nRITp .!•:a q-3 a., rid+ d'k:-FS;r+.v _ 1 • 877398 • 00000016 • Page 1 of 23 • LAW 2 ----- -- - ---- (fold line) .�- r O oc T c c m L N -O 0 0 W 0 Q N 00 0 O � c _N S J V 0 J y LU O J n Q D N r c 0? O C y 0 = Q_O O ���'F5 O a� N o O a OV CC ° ° a Q 0 r DC > o Vf 0 -O •p Z o EO L 0 O Z e as a� ����ao\�s �O�o�� Z Q O —'01 s O Q s 0 0W S N ii Q_ O 0 Q N C = O 2 ~ OC91 N 0 0 '- O ~ -0 } V O H Q C3 °' 'a3• •N s N N� 3 °' s-0 v , 3N Q 0 W 00 a 0. 0 PREPARED BY AND WHEN RECORDED RETURN TO, McGuireWoods LLP 1345 Avenue of the Americas, 7`h floor New York, New York 10tO5 Attention: heal Estate Recording Department NM GLCR, L.P., as grantor (Borrower) to FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee (Trustee) for the benefit of UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York, as beneficiary (Lender) LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT s- Dated: As of February 2018 Location: 2970 Fast 50'1" Street Vernon, California 90058 APN: 6303-029-900 (Fee Interest) and 3940-317-009 (Possessory interest) County: Los Angeles RECORDING REQUESTED BY: McGuire Woods LLP 0 ANT) WHEN RECORDED MAIL. TO: McGuire Woods LLP 1345 Avenue of the Americas 7th Floor New York, NY 10105 LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT (Please fill in documenttitle(s) on this line) ❑ Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is subject to the imposition of documentary transfer tax, or, IM Exempt from fee per GC27388.1 due to being recorded in connection with a transfer that was subject to documentary transfer tax which was paid on document recorded previously on February 9, 2018 (date) as document number 20180140432 of Official Records, or, ❑ Exempt from fee per GC27388.1 due to the maximum fees being paid on documents in this transaction, or, ❑ Exempt from fee per GC27388.1 due to the maximum fees having been paid on documents in the transaction(s) recorded previously on (date) as document number(s) of Official Records, or ❑ Exempt from fee per GC27388.1 due to being recorded in connection with concurrent transfer that is a residential dwelling to an owner -occupier, or, ❑ Exempt from fee per GC27388.1 due to it being recorded in connection with a transfer of real property that is a residential dwelling to an owner -occupier. The recorded document transferring the dwelling to the owner -occupier was recorded on (date) as document number(s) , or, ❑ Exempt from the fee per GC 27388.1 (a) (1); Not related to real property, or, ❑ Exempt from fee under GC27388.1 for the following reasons: THIS PAGEADDEDTOPROVIDE SENATEBILL20 MPII0NiNFORIVIA71ON (Additional recordingfeeapplies) NCS 862618-7 LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT 111IS LEASEHOLD DEED OF 'TRUST AND SECURITY AGREEMENT (this "Security instrument") is made as of this] tj'__ day of February, 2018, by NM GLCR, L.P., a Delaware limited partnership, having its principal place of business at c/o New Mountain Net Lease Acquisition Corporation, 787 Seventh Avenue, 49th Floor, New York, NY 10019, Attn: Peter E. Kaplan, Jr., as grantor ("Borrower"), FIRST AMERICAN TITLE INSURANCE COMPANY, a Nebraska corporation, having an address at 1 First American Way, Santa Ana, California 92707, as trustee ("Trustee") for the benefit of UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (together with its successors and assigns, collectively, ("Lender'), having an address at 1285 Avenue of the Americas, New York, New York 10019, as beneficiary. WITNESSETH: WHEREAS, this Security Instrument, together with those certain Deeds of Trust and Security Agreements as enumerated on Schedule I attached hereto, is given to secure a loan (the "Loan") in the principal sum of TWENTY-SEVEN MILLION THREE HUNDRED THOUSAND AND N0/100 DOLLARS ($27,300,000.00) pursuant to that certain Loan Agreement dated as of the date hereof between Borrower and Tender (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the "Loan Agreement") and evidenced by the Note (as defined in the Loan Agreement) dated the date hereof made by Borrower to Lender (such Note, together with all extensions, renewals, replacements, restatements or modifications thereof being hereinafter referred to as the "Note"). The maturity date of the Note is February 6, 2028. WHEREAS, Borrower desires to secure the payment of the Debt and the performance of all of its obligations under the Note, the Loan Agreement and the other Loan Documents; and WHEREAS, this Security Instrument is given pursuant to the Loan Agreement, and payment, fulfillment, and performance by Borrower of its obligations thereunder and under the other Loan Documents are secured hereby, and each and every term and provision of the Loan Agreement and the Note, including the rights, remedies, obligations, covenants, conditions, agreements, indemnities, representations and warranties of the parties therein, are hereby incorporated by reference herein as though set forth in full and shall be considered a part of this Security Instrument. NOW THFREFORE, in consideration of the making of the Loan by Lender and the covenants, agreements, representations and warranties set forth in this Security Instrument: Article 1 - GRANTS OF SECURITY Section 1.1 PROPERTY CONVEYEl7. Borrower does hereby irrevocably grant, bargain, sell, pledge, assign, warrant, transfer and convey and grant a security interest to Trustee and its successors and assigns, in trust, with Power of Sale for the benefit of Lender as beneficiary in trust, the following property, rights, interests and estates now owned, or hereafter acquired by Borrower (collectively, the "Property'): (a) Land. The real property described in Exhibit A attached hereto and made a part hereof (the "Land"), including all oil, gas, and other mineral rights in or under the Land; (b) Additional Land. All additional lands, estates and development rights hereafter acquired by Borrower for use in connection with the Land and the development of the Land or for any other use and all additional lands and estates therein which may, from time to time, by supplemental mortgage or otherwise be expressly made subject to the lien of this Security Instrument regardless of ownership thereof (the "Additional Land"); (c) Ground Lease. That certain (i) Ground Lease, dated December 27, 2004, by and between The City of Vernon ("Ground Lessor"), as landlord and Borrower, as tenant (as successor -in -interest to iJnion Ice -Pacific, L.P., a California limited partnership), with respect to which that certain Memorandum of Lease was recorded on July 5, 2005 in Official Records of the Recorder's Office of Los Angeles County, California as instrument 051570601, as corrected pursuant to a Modification and Correction of Real Property Description dated November 3, 2005 by and between Union Ice -Pacific, L.P. and International Bank of Commerce recorded in Recorder's Office of Los Angeles County, California on November 14, 2005 as Instrument No. 2005-2736645, as assigned pursuant to an Assignment and Assumption of Ground Lease dated March 1, 2007 by and between Union Ice -Pacific, L.P. and Arctic Ice Properties, 11C recorded in the Recorder's Office of Los Angeles County, California on March 5, 2007 as Instrument No. 20070475563, as further amended by that certain unrecorded Ground Lessor Estoppel, Consent and Ground Lease Amendment dated as of October 3, 2017, by and between The City of Vernon and Borrower (as the same may be further amended, supplemented, replaced, restated and/or otherwise modified from time to time, collectively, the "Ground Lease") and the leasehold estate created thereby (the "Leasehold Estate"); (d) Improvements. The buildings, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements now or hereafter erected or located on the Land or the Additional Land (collectively, the "Improvements"); (e) Easement-, and Other Beneficial Interests. All easements, rights -of -way or use, rights, strips and gores of land, streets, ways, alleys, passages, sewer rights, water, water courses, water rights and powers, air rights and development rights, and all estates, rights, titles, interests, privileges, liberties, servitudes, tenements, hcreditaments and appurtenances of any nature whatsoever, in any way now or hereafter belonging, relating or pertaining to the Land, the Additional Land and the Improvements, including, but not limited to those arising under and by virtue of the Ground Lease, and the reversion and reversions, remainder and remainders, and all land lying in the bed of any street, road or avenue, opened or proposed, in front of or adjoining the Land, to the center line thereof and all the estates, rights, titles, interests, dower and rights of dower, curtesy and rights of curtesy, property, possession, claim and demand whatsoever, both at law and in equity, of Borrower of, in and to the Land or the Additional Land and the Improvements, including, but not limited to, those arising under and by virtue of the Ground Lease and every part and parcel thereof, with the appurtenances thereto; (f) Equipment. All "equipment," as such term is defined in Article 9 of the IJniform Commercial Code (as hereinafter defined), now owned or hereafter acquired by Borrower, which is used at or in connection with the Improvements or the Land or the Additional Land or is 96HIS409 2 located thereon or therein (including, but not limited to, all machinery, equipment, furnishings, and electronic data-processing and other office equipment now owned or hereafter acquired by Borrower and any and all additions, substitutions and replacements of any of the foregoing), together with al I attachments, components, parts, equipment and accessories installed thereon or affixed thereto (collectively, the "Equipment'). Notwithstanding the foregoing, Equipment shall not include any property belonging to tenants under leases except to the extent that Borrower shall have any right or interest therein; (g) Fixtures. All Equipment now owned, or the ownership of which is hereafter acquired, by Borrower which is so related to the Land or the Additional Land and Improvements forming part of the Property that it is deemed fixtures or real property under the law of the particular state in which the Equipment is located, including, without limitation, all building or construction materials intended for construction, reconstruction, alteration or repair of or installation on the Property, construction equipment, appliances, machinery, plant equipment, fittings, apparatuses, fixtures and other items now or hereafter attached to, installed in or used in connection with (temporarily or permanently) any of the Improvements or the Land or the Additional Land, including, but not limited to, engines, devices for the operation of pumps, pipes, plumbing, cleaning, call and sprinkler systems, fire extinguishing apparatuses and equipment, beating, ventilating, plumbing, laundry, incinerating, electrical, air conditioning and air cooling equipment and systems, gas and electric machinery, appurtenances and equipment, pollution control equipment, security systems, disposals, dishwashers, refrigerators and ranges, recreational equipment and facilities of all kinds, and water, gas, electrical, storm and sanitary sewer facilities, utility lines and equipment (whether owned individually or jointly with others, and, if owned jointly, to the extent of Borrower's interest therein) and all other utilities whether or not situated in easements, all water tanks, water supply, water power sites, fuel stations, fuel tanks, fuel supply, and all other structures, together with all accessions, appurtenances, additions, replacements, betterments and substitutions for any of the foregoing and the proceeds thereof (collectively, the "Fixtures"). Notwithstanding the foregoing, "Fixtures" shall not include any property which tenants are entitled to remove pursuant to leases except to the extent that Borrower shall have any right or interest therein; (h) Personal Property. All furniture, furnishings, objects of art, machinery, goods, tools, supplies, appliances, general intangibles, contract rights, accounts, accounts receivable, franchises, licenses, certificates and permits, and all other personal property of any kind or character whatsoever (as defined in and subject to the provisions of the Uniform Commercial Code as hereinafter defined), other than Fixtures, which are now or hereafter owned by Borrower and which are located within or about the Land and the Tmprovements, together with all accessories, replacements and substitutions thereto or therefor and the proceeds thereof (collectively, the "Personal Property"), and the right, title and interest of Borrower in and to any of the Personal Property which may be subject to any security interests, as defined in the Uniform Commercial Code, as adopted and enacted by the state or states where any of the Property is located (the "Uniform Commercial Code"), superior in lien to the lien of this Security Instrument and all proceeds and products of the above; (i) Leases and Rents. All leases and other agreements affecting the use, enjoyment or occupancy of the Land and the Improvements heretofore or hereafter entered into, whether before or after the filing by or against Borrower of any petition for relief under 11 U.S.C. § 101 et 968184092 seq., as the same may be amended from time to time (the `Bankruptcy Code") (collectively, the "Leases") and all right, title and interest of Borrower, its successors and assigns therein and thereunder, including, without limitation, any lease guaranties, letters of credit, cash or securities deposited thereunder to secure the performance by the lessees of their obligations thereunder and all rents, additional rents, revenues, issues and profits (including all oil and gas or other mineral royalties and bonuses) from the Land and the Improvements whether paid or accruing before or after the filing by or against Borrower of any petition for relief under the Bankruptcy Code (collectively, the "Rents") and all proceeds from the sale or other disposition of the Teases and the right to receive and apply the Rents to the payment of the Debt; 0) Condemnation Awards. All awards or payments, including interest thereon, which may heretofore and hereafter be made with respect to the Property, whether from the exercise of the right of eminent domain (including but not limited to any transfer made in lieu of or in anticipation of the exercise of the right), or for a change of grade, or for any other injury to or decrease in the value of the Property; (k) insurance Proceeds. All proceeds of and any unearned premiums on any insurance policies covering the Property, including, without limitation, the right to receive and apply the proceeds of any insurance, judgments, or settlements made in lieu thereof, for damage to the Property; (1) Tax Certiorari. All refunds, rebates or credits in connection with reduction in real estate taxes and assessments charged against the Property as a result of tax certiorari or any applications or proceedings for reduction; (m) Rights. The right, in the name and on behalf of Borrower, to appear in and defend any action or proceeding brought with respect to the Property and to commence any action or proceeding to protect the interest of Lender in the Property; (n) Agreements. All agreements, contracts, certificates, instruments, letters of credit, franchises, permits, licenses, plans, specifications and other documents, now or hereafter entered into, and all rights therein and thereto, respecting or pertaining to the use, occupation, construction, management or operation of the Land and any part thereof and any Improvements or respecting any business or activity conducted on the land and any part thereof and all right, title and interest of Borrower therein and thereunder, including, without limitation, the right, upon the happening of any default hereunder, to receive and collect any sums payable to Borrower thereunder; (o) Trademarks. All tradenames, trademarks, servicemarks, logos, copyrights, goodwill, books and records and all other general intangibles relating to or used in connection with the operation of the Property; (p) Proceeds. All proceeds of any of the foregoing, including, without limitation, proceeds of insurance and condemnation awards, whether cash, liquidation or other claims or otherwise; and (q) Other Rights. Any and all other rights of Borrower in and to the iterns set forth in Subsections (a) through (p) above. 4 96818409_2 AND without limiting any of the other provisions of this Security Instrument, to the extent permitted by applicable law, Borrower expressly grants to Trustee, as secured party, a security interest in the portion of the Property which is or may be subject to the provisions of the Uniform Commercial Code which are applicable to secured transactions; it being understood and agreed that the Improvements and Fixtures are part and parcel of the Land (the Land, the Improvements and the Fixtures collectively referred to as the "Real Property") appropriated to the use thereof and, whether affixed or annexed to the Real Property or not, shall for the purposes of this Security Instrument be deemed conclusively to be real estate and conveyed hereby. Notwithstanding the foregoing, with respect to the security interest granted herein pursuant to Section LI(i), 0) and (k), Lender and Borrower acknowledge that, provided no Event of Default has occurred and is continuing, any such awards, proceeds, funds or other credits received related to such matters shall be held, maintained and disbursed in accordance with the express terms and conditions set forth in the Loan Agreement and the other Loan Documents. Section 1.2 AssioNMENT OF RENTS. Borrower hereby absolutely and unconditionally assigns to Lender all of Borrower's right, title and interest in and to all current and future Leases and Rents; it being intended by Borrower that this assignment constitutes a present, absolute assignment and not an assignment for additional security only. Nevertheless, subject to the terms of the Assignment of Leases, the Cash Management Agreement, and Section 7.1(h) of this Security Instrument, Lender grants to Borrower a revocable license to collect, receive, use and enjoy the Rents. Borrower shall hold the Rents, or a portion thereof sufficient to discharge all current sums due on the Debt, for use in the payment of such sums. Section 1.3 Swupi7y AGRLL: , vft_.N'r. This Security Instrument is both a real property mortgage and a "security agreement" within the meaning of the Uniform Commercial Code. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Borrower in the Property. By executing and delivering this Security Instrument, Borrower hereby grants to Lender, as security for the Obligations (hereinafter defined), a security interest in the Fixtures, the Equipment, the Personal Property and other property constituting the Property to the full extent that the Fixtures, the Equipment, the Personal Property and such other property may be subject to the Uniform Commercial Code (said portion of the Property so subject to the Uniform Commercial Code being called the "Collateral"). if an Event of Default shall occur and be continuing, Lender, in addition to any other rights and remedies which it may have, shall have and may exercise immediately and without demand, any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including, without limiting the generality of the foregoing, the right to take possession of the Collateral or any part thereof, and to take such other measures as Lender may deem necessary for the care, protection and preservation of the Collateral. Upon request or demand of Lender after the occurrence and during the continuance of an Fvent of Default, Borrower shall, at its expense, assemble the Collateral and make it available to Lender at Land. Borrower shall pay to Lender on demand any and all reasonable, out-of-pocket expenses, including reasonable out-of-pocket legal expenses and attorneys' fees, incurred or paid by Lender in protecting its interest in the Collateral and in enforcing its rights hereunder with respect to the Collateral after the occurrence and during the continuance of an Event of Default. Any notice of sale, disposition or other intended action by Lender with respect to the Collateral 968184092 sent to Borrower in accordance with the provisions hereof at least ten (10) business days prior to such action, shall, except as otherwise provided by applicable law, constitute reasonable notice to Borrower. The proceeds of any disposition of the Collateral, or any part thereof, may, except as otherwise required by applicable law, be applied by Lender to the payment of the Debt in such priority and proportions as Lender in its discretion shall deem proper. The principal place of business of Borrower (Debtor) is as set forth on page one hereof and the address of Lender (Secured Party) is as set forth on page one hereof. Section 1.4 FIXTURE FILING. Certain of the Property is or will become "fixtures" (as that term is defined in the Uniform Commercial Code) on the Land, described or referred to in this Security Instrument, and this Security instrument, upon being filed for record in the real estate records of the city or county wherein such fixtures are situated, shall operate also as a financing statement filed as a fixture filing in accordance with the applicable provisions of said Uniform Commercial Code upon such of the Property that is or may become fixtures. Borrower hereby authorizes Lender to execute in the name of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements (including, without limitation, initial financing statements and amendments thereto and continuation statements) with or without the signature of Borrower as authorized by applicable law, to evidence more; effectively the security interest of Lender in the Property. Section 1.5 PLEDGES OF MONIES Hi;r.a. Borrower hereby pledges to Lender any and all monies now or hereafter held by Lender or on behalf of Lender in connection with the Loan, including, without limitation, any Reserve Funds, any sums deposited in the Clearing Account or the Cash Management Account and Net Proceeds, as additional security for the Obligations until expended or applied as provided in this Security Instrument, the Cash Management Agreement or the Loan Agreement. CONDITIONS TO GRANT TO HAVE AND TO HOLD the above granted and described Property unto and to the use and benefit of Lender and its successors and assigns, forever; IN TRUST, WITH POWER OF SALE, to secure payment to Lender of the Obligations at the time and in the manner provided for its payment in the Note and in this Security Instrument. PROVIDED, HOWEVER, these presents are upon the express condition that, if Borrower shall well and truly pay to Lender the Debt at the time and in the manner provided in the Note, the Loan Agreement and this Security Instrument, shall well and truly perform the Other Obligations as set forth in this Security Instrument and shall well and truly abide by and comply with each and every covenant and condition set forth herein and in the Note, the Loan Agreement and the other Loan Documents, these presents and the estate hereby granted shall cease, terminate and be void; provided, however, that Borrower's obligation to indemnify and hold harmless Lender pursuant to the provisions hereof shall survive any such payment or release. Article 2 - DEBT AND OBLIGATIONS SECURED 96818409_2 dt�r� Section 2.1 DEBT. This Security Cnstrument and the grants, assignments and transfers made in Article 1 are given for the purpose of securing the Debt. Section 2.2 OTHER OBLIGATIONS. 'Phis Security Instrument and the grants, assignment-, and transfers made in Article I are also given for the purpose of securing the following (the "Other Obligations"): (a) the performance of all other obligations oCBorrower contained herein; (b) the performance of each obligation of Borrower contained in the Loan Agreement and any other Loan Document; (c) the performance of each obligation of Borrower contained in any renewal, extension, amendment, modification, consolidation, change of, or substitution or replacement for, all or any part of the Note, the Loan Agreement or any other Loan Document; and (d) THE PAYMENT OF ALL FUTURE AND ADDITIONAL INDEBTEDNESS, DIRECTOR INDIRECT, CRFATED AFTER THE DATE OF THIS SECURITY INSTRUMENT, WHICH MAY BE OWING BY BORROWER TO LENDER AT ANY TIME PRIOR TO PAYMENT IN FULL WITH INTEREST OF THE NOTE (SUCK ADDITIONAL INDEBTEDNESS TO BE SECURED HEREBY REGARDLESS OF WHETHER IT SHALL BE PREDICATED UPON FUTURE LOANS OR ADVANCES HEREAFTER MADE BY LFNDFR, OR OBLIGATIONS HEREAFTER ACQUIRED BY LENDER THROUGH ASSIGNMENT, SUBROGATION OR OTHERWISE), AND IT IS AGREED THIS SECURITY INSTRUMENT SHALL STAND AS SECURITY FOR ALL SUCH FUTURE AND ADDITIONAL INDEBTEDNESS WHETHER IT BE INCURRED FOR ANY BUSINESS OR OTHER PURPOSE THAT WAS RELATED OR WHOLLY UNRFI,ATF,D TO 'rHF PURPOSES OF THE NOTE, OR WHETHER IT WAS INCURRED FOR SOME PERSONAL OR NON -BUSINESS PURPOSE, OR FOR ANY OTHER PURPOSE RELATED OR UNRELATED, OR SD4 LAR OR DISSIMILAR TO THE PURPOSE OF THE NOTE; and (e) All ,judgments, orders, awards and decrees arising from or related to any indebtedness secured hereby. Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations for the payment of the Debt and the performance of the Other Obligations shall be referred to collectively herein as the "Obligations." Article 3 - BORROWER COVENANTS Borrower covenants and agrees that: Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the time and in the manner provided in the Loan Agreement, the Note and this Security Instrument Section 3.2 INCORPORATION BY REFERENCE. All the covenants, conditions and agreements contained in (a) the Loan Agreement , (b) the Note and (c) all and any of the other 968184092 Loan Documents, are hereby made a part of this Security Instrument to the same extent and with the same force as if fully set forth herein. Section 3.3 INSURANCE. Borrower shall obtain and maintain, or cause to be maintained, in full force and effect at all times insurance with respect to Borrower and the Property as required pursuant to the Loan Agreement. Section 3.4 MAIN ITNANC? Or PROPERIN. Borrower shall cause the Property to be maintained in a good and safe condition and repair. Except as expressly permitted herein and in the other Loan Documents, the Improvements, the Fixtures, the Equipment and the Personal Property shall not be removed, demolished or materially altered (except for normal replacement of the Fixtures, the Equipment or the Personal Property, tenant finish and refurbishment of the Improvements) without the consent of Lender. Borrower shall, or shall cause tenants under the Leases to, promptly repair, replace or rebuild any part of the Property which may be destroyed by any Casualty or become damaged, worn or dilapidated or which may be affected by any Condemnation, and shall complete and pay for (or cause the completion and payment for) any structure at any time in the process of construction or repair on the Land in accordance with the terms of the Loan Agreement and the other Loan Documents. Section 3.5 WASTE. Borrower shall not commit or suffer any waste of the Property or make any change in the use of the Property which will in any way materially increase the risk of fire or other hazard arising out of the operation of the Property, or take any action that might invalidate or allow the cancellation of any Policy, or do or permit to be done thereon anything that may in any way materially impair the value of the Property or the security of this Security Instrument. Borrower will not, without the prior written consent of Lender, drill or explore for or extract, remove, or produce any minerals from the surface or the subsurface of the Land, regardless of the depth thereof or the method of mining or extraction thereof. Section 3.6 PAYM1Nt' FOR LABOR AND MATERIALS. (a) Borrower will promptly pay (or cause the payment of) when due all bills and costs for labor, materials, and specifically fabricated materials incurred in connection with the Property ("Labor and Material Costs") and never permit to exist beyond the due date thereof in respect of the Property or any part thereof any lien or security interest, even though inferior to the liens and the security interests hereof, and in any event never permit to be created or exist in respect of. the Property or any part thereof any other or additional lien or security interest other than the liens or security interests hereof except for the Permitted Encumbrances. (b) After prior written notice to Lender, Borrower, at its own expense, may contest by appropriate legal proceeding, promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part of any of the Labor and Material Costs, provided that (i) no Event of Default has occurred and is continuing under the Loan Agreement, the Note, this Security instrument or any of the other Loan Documents, (ii) Borrower is permitted to do so under the provisions of any other mortgage, deed of trust or deed to secure debt affecting the Property, (iii) such proceeding shall suspend the collection of the Labor and Material Costs from Borrower and from the Property or Borrower shall have paid all of the Labor and Material Costs under protest, (iv) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower is 96818409_2 CAk subject and shall not constitute a default (beyond any applicable notice and cure period) thereunder, (v) neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost, and (vi) Borrower shall have furnished the security as may be required in the proceeding, or as may be reasonably requested by Lender to insure the payment of any contested Labor and Material Costs, together with all interest and penalties thereon. Section 3.7 PHRFORMANCE OF QnIER AGREEMENTS. Borrower shall observe and perform each and every term, covenant and provision to be observed or performed by Borrower pursuant to the Loan Agreement, any other Loan Document and any other agreement or recorded instrument affecting or pertaining to the Property and any amendments, modifications or changes thereto subject to applicable notice and grace periods. Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower shall not change Borrower's name, identity (including its trade name or names) or, if not an individual, Borrower's corporate, partnership or other structure without fast (a) notifying Lender of such change in writing at least thirty (30) days prior to the effective date of such change, (b) taking all action required by Lender for the purpose of perfecting or protecting the lien and security interest of Lender and (c) in the case of a change in Borrower's structure, without first obtaining the prior written consent of Lender. Borrower shall promptly notify Lender in writing of any change in its organizational identification number. If Borrower does not now have an organizational identification number and later obtains one, Borrower shall promptly notify Lender in writing of such organizational identification number. Upon Lender's request, Borrower shall execute, if necessary, and deliver to Lender, prior to or contemporaneously with the effective date of any such change, any financing statement or financing statement change required by Lender to establish or maintain the validity, perfection and priority of the security interest granted herein. At the reasonable request of Lender, Borrower shall execute a certificate in form satisfactory to Lender listing the trade names under which Borrower intends to operate the Property, and representing and warranting that Borrower does business under no other trade name with respect to the Property. Article 4 - OBLIGATIONS AND RELIANCES Section 4.1 RELATIONSHIP OF BORROWF:12 AND LENDER. The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower, and no term or condition of any of the Loan Agreement, the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor. Section 4.2 No RELIANCE ON UNDER. The general partners, officers, shareholders, members, principals and/or other beneficial owners of Borrower are experienced in the ownership and operation of properties similar to the Property, and Borrower and Lender are relying solely upon such expertise and business plan in connection with the ownership and operation of the Property. Borrower is not relying on Lender's expertise, business acumen or advice in connection with the Property. 9 9681 "09_2 Section 4.3 No LENDER OBLIGATIONS. (a) Notwithstanding the provisions of Subsections 1.1(h) and (m) or Section 1.2, Lender is not undertaking the performance of (i) any obligations under the Leases; or (ii) any obligations with respect to such agreements, contracts, certificates, instruments, franchises, permits, trademarks, licenses and other documents. (b) By accepting or approving anything required to be observed, performed or fulfilled or to be given to Lender pursuant to this Security Instrument, the Loan Agreement, the Note or the other Loan Documents, including, without limitation, any officer's certificate, balance sheet, statement of profit and loss or other financial statement, survey, appraisal, or insurance policy, Lender shall not be deemed to have warranted, consented to, or affirmed the sufficiency, the legality or effectiveness of same, and such acceptance or approval thereof shall not constitute any warranty or affirmation with respect thereto by Tender. Section 4.4 RUMNCE. Borrower recognizes and acknowledges that in accepting the Loan Agreement, the Note, this Security Instrument and the other Loan Documents, Lender is expressly and primarily relying on the truth and accuracy of the warranties and representations set forth in Article III of the Loan Agreement without any obligation to investigate the Property and notwithstanding any investigation of the Property by Lender; that such reliance existed on the part of bender prior to the date hereof, that the warranties and representations are a material inducement to Lender in making the Loan; and that Lender would not be willing to make the Loan and accept this Security Instrument in the absence of the warranties and representations as set forth in Article HI of the Loan Agreement. Article 5 - FURTHER ASSURANCES Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Borrower forthwith upon the execution and delivery of this Security Instrument and thereafter, from time to time, upon Lender's prior written request, will cause this Security Instrument and any of the other Loan Documents creating a security title interest in the Property and each instrument of further assurance to be filed, registered or recorded in such manner and in such places as may be required by any present or fixture law in order to publish notice of and fully to protect and perfect the lien or security interest hereof upon, and the interest of Lender in, the Property. Borrower will pay all taxes, filing, registration or recording fees, and all expenses incident to the preparation, execution, acknowledgment and/or recording of the Note, this Security Instrument, the other Loan Documents, any note, deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property and any instrument of further assurance, and any modification or amendment of the foregoing documents, and all federal, state, county and municipal taxes, duties, imposts, assessments and charges arising out of or in connection with the execution and delivery of this Security Instrument, any deed of trust or mortgage supplemental hereto, any security instrument with respect to the Property or any instrument of further assurance, and any modification or amendment of the foregoing documents, except where prohibited by law so to do. Notwithstanding the foregoing provisions of this Section 5.1, Borrower shall not be required to furnish any additional documentation or materials to Lender, consent to or execute, acknowledge or deliver any instrument, agreement, document, or further assurance or to take any action pursuant to this Section 5.1 if such furnishing of documentation or materials, consent or execution, acknowledgement or delivery or taking of any action would forfeit, waive, materially diminish, materially alter, or abandon any rights of Borrower or 10 968184092 materially increase any obligations or liabilities of Borrower in excess of what is necessary to assure, convey, assign, transfer and confum unto Lender the collateral granted under the Loan Documents and the rights granted to Lender under the Loan Documents, to carry out the intention of the Loan Documents, to facilitate the performance of the terms of the Loan Documents or to comply with Legal Requirements. Section 5.2 FUR L111- t Ac'rs, FTC. Upon Lender's prior written request, Borrower will, at the cost of Borrower, and without expense to Lender, do, execute, acknowledge and deliver all and every such further acts, deeds, conveyances, deeds of trust, mortgages, assignments, notices of assignments, transfers and assurances as Lender shall, from time to time, reasonably require, for the better assuring, conveying, assigning, transferring, and confirming unto Lender the property and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed, confirmed, pledged, assigned, warranted and transferred or intended now or hereafter so to be, or which Borrower may be or may hereafter become bound to convey or assign to Lender, or for carrying out the intention or facilitating the performance of the terms of this Security Instrument or for filing, registering or recording this Security Instrument or for complying with all Legal Requirements. Borrower hereby authorizes Lender to execute in the name of Borrower or without the signature of Borrower to the extent Lender may lawfully do so, one or more financing statements (including, without limitation, initial financing statements and amendments thereto and continuation statements) with or without the signature of Borrower as authorized by applicable law, to evidence more effectively the security interest of Lender in the Property. Borrower also ratifies its authorization for Lender to have filed any like initial financing statements, amendments thereto and continuation statements, if filed prior to the date of this Security Instrument. Borrower grants to bender an irrevocable power of attorney coupled with an interest for the purpose of exercising and perfecting any and all rights and remedies available to Lender at law and in equity, including without limitation such rights and remedies available to Lender pursuant to this Section 5.2; providedhowever, that so long as no Event of Default shall have occurred and be continuing, Lender shall not exercise such power of attorney unless Borrower shall fail to take any such action within ten (10) business days of Lender's request. To the extent not prohibited by applicable law, Borrower hereby ratifies all acts Lender has lawfully done in the past or shall lawfully do or cause to be done in the future by virtue of such power of attorney. Notwithstanding the foregoing provisions of this Section 5.21 Borrower shall not be required to furnish any additional documentation or materials to Lender, consent to or execute, acknowledge or deliver any instrument, agreement, document, or further assurance or to take any action pursuant to this Section 5.2 if such furnishing of documentation or materials, consent or execution, acknowledgement or delivery or taking of any action would forfeit, waive, materially diminish, materially alter, or abandon any rights of Borrower or materially increase any obligations or liabilities of Borrower in excess of what is necessary to assure, convey, assign, transfer and confirm unto Lender the collateral granted under the Loan Documents and the rights granted to Lender under the Loan Documents, to carry out the intention of the Loan Documents, to facilitate the performance of the terms of the Loan Documents or to comply with Legal Requirements. Section 5.3 CHANGmS TN TAX DEBT CREDIT AND DOCUMENTARY STAMP LAWS. (a) If any law is enacted or adopted or amended after the date of this Security Instrument which deducts the Debt from the value of the Property for the purpose of taxation or which imposes a tax, either directly or indirectly, on the Debt or Lender's interest in the Property, Borrower will 968I M09_2 pay the tax, with interest and penalties thereon, if any. If Lender is advised by counsel chosen by it that the payment of tax by Borrower would be unlawful or taxable to Lender or unenforceable or provide the basis for a defense of usury then Lender shall have the option by written notice of not less than one hundred twenty (120) days to declare the Debt immediately due and payable without payment of any prepayment penalty or premium unless Borrower fails to repay the Debt in accordance with this Section. (b) Borrower will not claim or demand or be entitled to any credit or credits on account of the Debt for any part of the Taxes or Other Charges assessed against the Property, or any part thereof, and no deduction shall otherwise be made or claimed from the assessed value of the Property, or any part thereof, for real estate tax purposes by reason of this Security Instrument or the Debt. If such claim, credit or deduction shall be required by law, Lender shall have the option, by written notice of not less than one hundred twenty (120) days, to declare the Debt immediately due and payable. (c) If at any time the United States of America, any State in which the Property is located or any subdivision of any such State shall require revenue or other stamps to be affixed to the Note, this Security Instrument, or any of the other Loan Documents or impose any other tax or charge on the same, Borrower will pay for the same, with interest and penalties thereon, if any. Section 5.4 SPLITTING OF MORTGAGE. Subject to the Loan Agreement, this Security Instrument and the Note shall, at any time until the same shall be fully paid and satisfied, at the sole election of Lender, be split or divided into two or more notes and two or more security instruments, each of which shall cover all or a portion of the Property to be more particularly described therein. To that end, Borrower, upon written request of Lender, shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered by the then owner of the Property, to Lender and/or its designee or designees substitute notes and security instruments in such principal amounts, aggregating not more than the then unpaid principal amount of the Note, and containing terms, provisions and clauses similar to those contained herein and in the Note, and such other documents and instruments as may be required by Lender. Notwithstanding the foregoing provisions of this Section 5.4, Borrower shall not be required to furnish any additional documentation or materials to Lender, consent to or execute, acknowledge or deliver any instrument, agreement, document, or further assurance or to take any required action pursuant to this Section 5.4 if such furnishing of documentation or materials, consent or execution, acknowledgment or delivery or taking of any action would forfeit, waive, materially diminish, materially alter, or abandon any rights of Borrower or materially increase any obligations or liabilities of Borrower in excess of what is necessary to assure, convey, assign, transfer and confirm unto Lender the collateral granted under the Loan Documents and the rights granted to Lender under the Loan Documents, to facilitate the performance of the terms of the Loan Documents or to comply with legal Requirements. Section 5.5 REPLACEMENT DOCUIMNTs. Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or mutilation of the Note or any other Loan Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation of such Note or other Loan Document, Borrower will, at no cost or expense to Borrower, issue, in lieu thereof, a replacement Note or other Loan Document, dated the date of 12 968iW9 2 such lost, stolen, destroyed or mutilated Note or other Loan Document in the same principal amount thereof and otherwise of like tenor. Article 6 - DUH ON SAUV NCUMBRANCE Section 6.1 LENDER RELIANCE. Borrower acknowledges that Lender has examined and relied on the experience of Borrower and its general partners, members, principals and (if Borrower is a trust) beneficial owners in owning or operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower's ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover the Debt by a sale of the Property. Section 6.2 No TRANSFER. Borrower shall not permit or suffer any Transfer to occur, unless specifically permitted by Article 8 of the Loan Agreement or unless Lender shall consent thereto in writing. Section 6.3 TRANSFER DEFINED. As used in this Article 6 "Transfer" shall mean any voluntary or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of. (a) all or any part of the Property or any estate or interest therein including, but not be limited to, (i) an installment sales agreement wherein Borrower agrees to sell the Property or any part thereof for a price to be paid in installments, (ii) an agreement by Borrower leasing all or a substantial part of the Property for other than actual occupancy by a space tenant thereunder and its affiliates or (iii) a sale, assignment or other transfer of, or the grant of a security interest in, Borrower's right, title and interest in and to any Leases or any Rents; or (b) any ownership interest in (i) Borrower or (ii) any indemnitor or guarantor of any Obligations or (iii) any corporation, partnership, limited liability company, trust or other entity owning, directly or indirectly, any interest in Borrower or any indemnitor or guarantor of any Obligations. Section 6.4 LENDER's RIGHTS. Without obligating Lender to grant any consent under Section 6.2 hereof which Lender may grant or withhold in its sole discretion, Lender reserves the right to condition the consent required hereunder upon (a) a modification of the terms hereof and of the Loan Agreement, the Note or the other Loan Documents; (b) an assumption of the Loan Agreement, the Note, this Security instrument and the other Loan Documents as so modified by the proposed transferee, subject to the provisions of Section 11.22 of the Loan Agreement; (c) payment of all of Lender's reasonable, out-of-pocket expenses incurred in connection with such transfer; (d) the confirmation in writing by the applicable Rating Agencies that the proposed transfer will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned in connection with any Securitization; (e) the delivery of a nonconsolidation opinion reflecting the proposed transfer satisfactory in form and substance to Lender; (f) the proposed transferee's continued compliance with the representations and covenants set forth in Section 3.1.24 and 4.2.11 of the Loan Agreement; (g) the delivery of evidence satisfactory to Lender that the single purpose nature and bankruptcy remoteness of Borrower, its shareholders, partners or members, as the case may be, following such transfers are 13 96818409_2 in accordance with the standards of the Rating Agencies; (h) the proposed transferee's ability to satisfy Lender's then -current underwriting standards; or (i) such other conditions as Lender shall determine in its reasonable discretion to be in the interest of Lender, including, without limitation, the creditworthiness, reputation and qualifications of the transferee with respect to the Loan and the Property. Lender shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order to declare the Debt immediately due and payable upon a Transfer without Lender's consent. This provision shall apply to every Transfer, other than any Transfer permitted pursuant to the Loan Agreement (including, without limitation, any Permitted Transfer), regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer. Article 7 - RIGHTS AND REMEDIES UPON DEFAULT Section 7.1 RFN EDIES. Upon the occurrence and during the continuance of any Event of Default, Borrower agrees that Lender may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Borrower and in and to the Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such order as Lender may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Lender: (a) declare the entire unpaid Debt to be immediately due and payable; (b) institute proceedings, judicial or otherwise, for the complete foreclosure of this Security Instrument under any applicable provision of law, in which case the Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner; (c) with or without entry, to the extent permitted and pursuant to the procedures provided by applicable law, institute proceedings for the partial foreclosure of this Security Instrument for the portion of the Debt then due and payable, subject to the continuing lien and security interest of this Security Instrument for the balance of the Debt not then due, unimpaired and without loss of priority; (d) sell for cash or upon credit the Property or any part thereof and all estate, claim, demand, right, title and interest of Borrower therein and rights of redemption thereof, pursuant to power of sale or otherwise, at one or more sales, as an entirety or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by law; (e) institute an action, suit or proceeding in equity for the specific performance of any covenant, condition or agreement contained herein, in the Note, the Loan Agreement or in the other Loan Documents; (f) recover judgment on the Note either before, during or after any proceedings for the enforcement of this Security Instrument or the other Loan Documents; (g) apply for the appointment of a receiver, trustee, liquidator or conservator of the Property, without notice and without regard for the adequacy of the security for the Debt and 14 96818409_2 0l without regard for the solvency of Borrower, any guarantor, indelnnitor with respect to the Loan or of any Person Iiable for the payment of the Debt; (h) the license granted to Borrower under Section 1.2 hereof shall automatically be revoked and Lender may enter into or upon the Property, either personally or by its agents, nominees or attorneys and dispossess Borrower and its agents and servants therefrom, without liability for trespass, damages or otherwise and exclude Borrower and its agents or servants wholly therefrom, and take possession of all books, records and accounts relating thereto and Borrower agrees to surrender possession of the Property and of such hooks, records and accounts to Lender upon demand, and thereupon Lender may (i) use, operate, manage, control, insure, maintain, repair, restore and otherwise deal with all and every part of the Property and conduct the business thereat; (ii) complete any construction on the Property required to be completed by Borrower in such manner and form as Lender reasonably deems advisable; (iii) make alterations, additions, renewals, replacements and improvements to or on the Property; (iv) exercise all rights and powers of Borrower with respect to the Property, whether in the name of Borrower or otherwise, including, without limitation, the right to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for, collect and receive all Rents of the Property and every part thereof; (v) require Borrower to pay monthly in advance to Lender, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of such part of the Property as may be occupied by Borrower; (vi) require Borrower to vacate and surrender possession of the Property to Lender or to such receiver and, in default thereof, Borrower may be evicted by summary proceedings or otherwise; and (vii) apply the receipts from the Property to the payment of the Debt, in such order, priority and proportions as Lender shall deem appropriate in its sole discretion after deducting therefrom all expenses (including reasonable attorneys' fees) incurred in connection with the aforesaid operations and all amounts necessary to pay the Taxes, Other Charges, insurance and other expenses in connection with the Property, as well as just and reasonable compensation for the services of Lender, its counsel, agents and employees; (i) exercise any and all rights and remedies granted to a secured party upon default under the Uniform Commercial Code, including, without limiting the generality of the foregoing: (i) the right to take possession of the Fixtures, the Equipment and the Personal Property, or any part thereof, and to take such other measures as Lender may deem necessary for the care, protection and preservation of the Fixtures, the Equipment and the Personal Property, and (ii) request Borrower at its expense to assemble the Fixtures, the Equipment and the Personal Property and make it available to Lender at the Land. Any notice of sale, disposition or other intended action by Lender with respect to the mixtures, the Equipment and/or the Personal Property sent to Borrower in accordance with the provisions hereof at least five (5) days prior to such action, shall constitute commercially reasonable notice to Borrower; 0) apply any sums then deposited or held in escrow or otherwise by or on behalf of Lender in accordance with the terms of the Loan Agreement, this Security Instrument or any other Loan Document to the payment of the following items in any order in its uncontrolled discretion: (i) Taxes and Other Charges; 15 96918409_2 (ii) Insurance Premiums; (iii) Interest on the unpaid principal balance of the Note; (iv) Amortization of the unpaid principal balance of the Note; (v) All other sums payable pursuant to the Note, the Loan Agreement, this Security Instrument and the other Loan Documents, including without limitation advances made by Lender pursuant to the terms of this Security Instrument; (k) pursue such other remedies as Lender may have under applicable law; or (1) apply the undisbursed balance of any Net Proceeds Deficiency deposit, together with interest thereon, to the payment of the Debt in such order, priority and proportions as Tender shall deem to be appropriate in its discretion. In the event of a sale, by foreclosure, power of sale or otherwise, of less than all of the Property, this Security Instrument shall continue as a lien and security interest on the remaining portion of the Property unimpaired and without loss of priority. Section 7.2 APPLICATION OF Pgoumm The purchase money, proceeds and avails of any disposition of the Property, and or any part thereof, or any other sums collected by Lender pursuant to the exercise of its remedies following the occurrence and during the continuance of an Event of Default under the Note, this Security Instrument or the other Loan Documents, may be applied by Lender to the payment of the Debt in such priority and proportions as Tender in its discretion shall deem proper. Section 7.3 RIGHT To CURE DEFAULTS. (i) Upon the occurrence and during the continuance of any Event of Default or (ii) within three (3) days following written notice from Lender, if Borrower fails to make any payment or to do any act as herein provided, Lender may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, make or do the same in such manner and to such extent as Lender may deem necessary to protect the security hereof. Subject to the rights of existing tenants under Leases at the Property, Lender is authorized to enter upon the Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in the Property or to foreclose this Security Instrument or collect the Debt, and the reasonable, out-of- pocket cost and expense thereof (including reasonable out-of-pocket attorneys' fees to the extent permitted by law), with interest as provided in this Section 7.3, shall constitute a portion of the Debt and shall be due and payable to Lender within five (5) days following written request by Lender or if an Event of Default shall have occurred and be continuing, on demand. All such costs and expenses incurred by Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any such action or proceeding shall bear interest at the Default Rate, for the period after notice from Lender that such cost or expense was incurred to the date of payment to Lender. All such costs and expenses incurred by Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Debt and be secured by this Security Instrument and the other Loan Documents and shall be immediately due and payable upon demand by Lender therefor. 16 968194092 M Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to appear in and defend any action or proceeding brought with respect to the Property and to bring any action or proceeding, in the name and on behalf of Borrower, which Lender, in its discretion, decides should be brought to protect its interest in the Property. Section 7.5 RECOVERY OF SLIMS REQUIRED TO BE PAID. Lender shall have the right from time to time to take action to recover any sum or sums which constitute a part of the Debt as the same become due, without regard to whether or not the balance of the Debt shall be due, and without prejudice to the right of Lender thereafter to bring an action of foreclosure, or any other action, for a default or defaults by Borrower existing at the time such earlier action was commenced. Section 7.6 EXAMINATION of BOOKS AND RRcnitns. At reasonable times and upon reasonable notice, Lender, its agents, accountants and attorneys shall have the right to examine the records, books, management and other papers of Borrower which reflect upon the financial condition of Borrower or the Property or at any office regularly maintained by Borrower where the books and records are located. Lender and its agents shall have the right to make copies and extracts from the foregoing records and other papers. In addition, at reasonable times and upon reasonable notice, Lender, its agents, accountants and attorneys shall have the right to examine and audit the books and records of Borrower pertaining to the income, expenses and operation of the Property during reasonable business hours at any office of Borrower where the books and records are located. This Section 7.6 shall apply throughout the term of the Note and without regard to whether an Event of Default has occurred or is continuing. Section 7.7 OTHER RIGHTS. ETC. (a) The failure of Lender to insist upon strict performance of any term hereof shall not be deemed to be a waiver of any term of this Security Instrument. Borrower shall not be relieved of Borrower's obligations hereunder by reason of (i) the failure of Lender to comply with any request of Borrower or any guarantor or indemnitor with respect to the Loan to take any action to foreclose this Security Instrument or otherwise enforce any of the provisions hereof or of the Note or the other Loan Documents, (ii) the release, regardless of consideration, of the whole or any part of the Property, or of any person liable for the Debt or any portion thereof, or (iii) any agreement or stipulation by Lender extending the time of payment or otherwise modifying or supplementing the terms of the Note, this Security Instrument or the other Loan Documents. (b) It is agreed that the risk of loss or damage to the Property is on Borrower, and Lender shall have no liability whatsoever for decline in value of the Property, for failure to maintain the Policies, or for failure to determine whether insurance in force is adequate as to the amount of risks insured. Possession by Lender shall not be deemed an election of judicial relief, if any such possession is requested or obtained, with respect to any Property or collateral not in Lender's possession. (c) Lender may resort for the payment of the Debt to any other security held by Lender in such order and manner as Lender, in its discretion, may elect. Lender may take action to recover the Debt, or any portion thereof, or to enforce any covenant hereof without prejudice to the right of Lender thereafter to foreclose this Security Instrument. The rights of Lender under this Security Instrument shall be separate, distinct and cumulative and none shall be given effect 17 968194092 to the exclusion of the others. No act of Lender shall be construed as an election to proceed under any one provision herein to the exclusion of any other provision. Lender shall not be limited exclusively to the rights and remedies herein stated but shall be entitled to every right and remedy now or hereafter afforded at law or in equity. Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lender may release any portion of the Property for such consideration as Lender may require without, as to the remainder of the Property, in any way impairing or aflccting the lien or priority of this Security Tnstrument, or improving the position of any subordinate lienholder with respect thereto, except to the extent that the obligations hereunder shall have been reduced by the actual monetary consideration, if any, received by Lender for such release, and may accept by assignment, pledge or otherwise any other property in place thereof as Lender may require without being accountable for so doing to any other lienholder. This Security Instrument shall continue as a lien and security interest in the remaining portion of the Property. Section 7.9 INTENTIONALLY OMITTED. Section 7.10 RRCoURSF; AND CHQTCR oP RFmM w s. Notwithstanding any other provision of this Security Instrument or the Loan Agreement, including, without limitation, Section 11.22 of the Loan Agreement, Lender and other indemnified Parties (as hereinafter defined) are entitled to enforce the obligations of Borrower, any guarantor and indemnitor contained in Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement without first resorting to or exhausting any security or collateral and without first having recourse to the Note or any of the Property, through foreclosure or acceptance of a deed in lieu of foreclosure or otherwise, and in the event Lender commences a foreclosure action against the Property, Lender is entitled to pursue a deficiency judgment with respect to such obligations against Borrower and any guarantor or indemnitor with respect to the Loan. The provisions of Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement are exceptions to any non -recourse or exculpation provisions in the Loan Agreement, the Note, this Security Instrument or the other Loan Documents, and Borrower and any guarantor or indemnitor with respect to the Loan are fully and personally liable for the obligations pursuant to Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement. The liability of Borrower and any guarantor or indemnitor with respect to the Loan pursuant to Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement is not limited to the original principal amount of the Note. Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender from foreclosing or exercising a power of sale pursuant to this Security Instrument or any other rights and remedies pursuant to the Loan Agreement, the Note, this Security Instrument and the other Loan Documents, whether simultaneously with foreclosure proceedings or in any other sequence. A separate action or actions may be brought and prosecuted against Borrower pursuant to Sections 9.2 and 9.3 herein and Section 9.2 of the Loan Agreement, whether or not action is brought against any other Person or whether or not any other Person is joined in the action or actions. In addition, Lender shall have the right but not the obligation to join and participate in, as a party if it so elects, any administrative or judicial proceedings or actions initiated in connection with any matter addressed in the Environmental Indemnity. Section 7.11 RF.COU1m AND CHoTCR OF RFNwmws. The liability of Borrower hereunder is limited pursuant to Section 11.22 of the Loan Agreement. 18 968184092 Section 7.12 RIGHT of ENTRY. Upon reasonable notice to Borrower and subject to the rights of tenants under Leases at the Property, Lender and its agents shall have the right to enter and inspect the Property at all reasonable times. Article 8 - INTENTIONALLY OMITTED Article 9 - INDEMNIFICATION Section 9.1 GENFRAL INDEMNIFICA noN. F,xcept for any Losses caused by the gross negligence or willful misconduct of Lender or its agents, representatives, employees, successors or assigns or by any of the Indemnified Parties, Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, out-of-pocket losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive damages, foreseeable and unforeseeable consequential damages, of whatever kind or nature (including but not limited to reasonable out-of-pocket attorneys' fees and other costs of defense) (collectively, the "Losses") imposed upon or incurred by or asserted against any Indemnified Parties and that are directly or indirectly arising out of or in any way relating to any one or more of the following; (a) ownership of this Security Instrument, the Property or any interest therein or receipt of any Rents; (b) any amendment to, or restructuring of, the Debt, and the Note, the Loan Agreement, this Security Instrument, or any other Loan Documents; (c) any and all lawful action that may be taken by Lender in connection with the enforcement of the provisions of this Security Instrument or the Loan Agreement or the Note or any of the other Loan Documents, whether or not suit is filed in connection with same, or in connection with Borrower, any guarantor or indemnitor and/or any partner, joint venturer or shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (e) any use, nonuse or condition in, on or about the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (1) any failure on the part of Borrower to perform or be in compliance with any of the terms of this Security instrument; (g) performance of any labor or services or the furnishing of any materials or other property in respect of the Property or any part thereof; (h) the failure of any person to file timely with the Internal Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with this Security Instrument, or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the transaction in connection with which this Security Instrument is made; (i) any failure of the Property to be in compliance with any Legal Requirements; 0) the enforcement by any Indemnified Party of the provisions of this Article 9; (k) any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; (1) the payment of any commission, charge or brokerage fee to anyone claiming through Borrower which may be payable in connection with the funding of the Loan; or (m) any misrepresentation made by Borrower in this Security Instrument or any other Loan Document. Any amounts payable to Lender by reason of the application of this Section 9.1 shall 19 969194092 be due within five (5) Business nays following Lender's written demand, or if an Event of Default shall have occurred and be continuing, become immediately due and payable and shall bear interest at the Default Rate from the date due until paid. For purposes of this Article 9, the term "Indemnified Parties" means Lender, the servicer of the Loan, any Person in whose name the encumbrance created by this Security Instrument is or will have been recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the Loan secured hereby (including, but not limited to, investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, affiliates, subsidiaries, successors and assigns of any and all of the foregoing (including but not limited to any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan during the term of the Loan and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender's assets and business). Section 9.2 MOR rGAGL AND/OR INTANGIBLE TAX. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of this Security Instrument, the Note or any of the other Loan Documents, but excluding any income, franchise or other similar taxes. Section 9.3 ERISA INDEMNIFICATION. Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses (including, without limitation, reasonable out-of-pocket attorneys' fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may he required, in Lender's sole discretion) that Lender may incur, directly or indirectly, as a result of a default under Sections 3.1.8 or 4.2.10 of the Loan Agreement. Section 9.4 DUTYTO DHIFEND: A'rrORNLYS' FEL'S AND OTHER PEES AND EXPENSES. Upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if reasonably requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals reasonably approved by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in any such claim or proceeding include both Borrower and any indemnified Party and Borrower and such Indemnified Party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified Parties that are different from or additional to those available to Borrower, such lndwmnified Party shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Inderrmified Parry, provided that no compromise or settlement shall be entered without Borrower's consent, which consent shall not be unreasonably withheld. Upon demand, Borrower shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable out-of-pocket fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith. 20 96918409_2 r Article 10 -WAIVERS Section 10,1 WAIVER OF COITNjTRC1.AIM. To the extent permitted by applicable law, Borrower hereby waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Lender arising out of or in any way connected with this Security Instrument, the Loan Agreement, the Note, any of the other Loan Documents, or the Obligations. Section 10.2 MARSlIAI,I.INC ANl) O'1111,'R MA'r'i 1;RS. To the extent permitted by applicable law, Borrower hereby waives the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws now or hereafter in force and all rights of marshalling in the event of any sale hereunder of the Property or any part thereof or any interest therein. Further, Borrower hereby expressly waives any and all rights of redemption from sale under any order or decree of foreclosure of this Security Instrument on behalf of Borrower, and on behalf of each and every person acquiring any interest in or title to the Property subsequent to the date of this Security Instrument and on behalf of all persons to the extent permitted by applicable law. Section 10.3 WAIVER Or NOTTCF. To the extent permitted by applicable law and as set forth in this Security Instrument, Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Security Instrument or the Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Lender is required by applicable law to give notice, and Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Security Instrument does not specifically and expressly provide for the giving of notice by Lender to Borrower. Section 10.4 WAIVER OF STATUTE of LIMITATIONS. To the extent permitted by applicable law, Borrower hereby expressly waives and releases to the fullest extent permitted by law, the pleading of any statute of limitations as a defense to payment of the Debt or performance of its Other Obligations. Section 10.5 SURVIVAL. The indemnifications made pursuant to Section 9.3 herein and the representations and warranties, covenants, and other obligations arising under the Environmental Indemnity, shall continue indefinitely in full force and effect and shall survive and shall in no way be impaired by: any satisfaction or other termination of this Security Instrument, any assignment or other transfer of all or any portion of this Security Instrument or Lender's interest in the Property (but, in such case, shall benefit both indemnified Parties and any assignee or transferee), any exercise of Lender's rights and remedies pursuant hereto including but not limited to foreclosure or acceptance of a deed in lieu of foreclosure, any exercise of any rights and remedies pursuant to the Loan Agreement, the Note or any of the other Loan Documents, any transfer of all or any portion of the Property (whether by Borrower or by Lender following foreclosure or acceptance of a deed in lieu of foreclosure or at any other time), any amendment to this Security Instrument, the Loan Agreement, the Note or the other Loan Documents, and any act or omission that might otherwise be construed as a release or discharge of Borrower from the obligations pursuant hereto, except to the extent set forth in the Environmental Indemnity. 21 9681 M9_2 Article 11 - EXCULPATION The provisions of Section 11.22 of the Loan Agreement are hereby incorporated by reference into this Security Instrument to the same extent and with the same force as if fully set forth herein. Article 12 - NOTICES All notices or other written communications hereunder shall be delivered 41 accordance with Scction 11.6 of the Loam Agreement. Article 13 - APPLICABLE LAW Section 13.1 GOVERNING LAW. (A) THIS SECURITY INSTRUMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER AND LENDER AND ACCEPTED BY LENDER AND BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY INSTRUMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE. WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THw: UNITED STATES OF AMERICA, EXCEPT THAT AT ALI, TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS WITH RESPECT TO THE PROPERTY AND WITH RESPECT TO REMEDIES IN THE EVENT OF DEFAULT SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL. GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER AND LENDER EACH HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS, AND THIS SECURITY INSTRUMENT AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 22 96919409_2 (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING. OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY AT LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER AND LENDER EACH WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HERFAFTF,R HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER AND LENDER EACH HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT NM GLCR, L.P. C/O NEW MOUNTAIN NET LEASE ACQUISITION CORPORATION 787 SEVENTH AVENUE, 49TH FLOOR NEW YORK, NY 10019 ATTN: PETER E. KAPLAN, JR. AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCFEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (1) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (11) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (HI) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR. Section 13.2 USURY LAWS. Notwithstanding anything to the contrary, (a) all agreements and communications between Borrower and Lender are hereby and shall automatically be limited so that, after taking into account all amounts deemed interest, the interest contracted for, charged or received by Lender shall never exceed the maximum lawful rate or amount, (b) in calculating whether any interest exceeds the lawful maximum, all such interest shall be amortized, prorated, allocated and spread over the full amount and term of all principal indebtedness of Borrower to Lender, and (c) if through any contingency or event, Lender receives or is deemed to receive interest in excess of the lawful maximum, any such excess shall be deemed to have been applied toward payment of the principal of any and all then outstanding indebtedness of Borrower to Lender, or if there is no such indebtedness, shall immediately be returned to Borrower. 23 968184092 Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and remedies provided in this Security Instrument may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will not render this Security Instrument invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. If any term of this Security instrument or any application thereof shall be invalid or unenforceable, the remainder of this Security Instrument and any other application of the term shall not be affected thereby. Article 14 - DEFINITIONS All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Security Instrument may be used interchangeably in singular or plural form and the word `Borrower" shall mean "each Borrower and any subsequent owner or owners of the Property or any part thereof or any interest therein," the word "Lender" shall mean "Lender and any subsequent holder of the Note," the word "Note" shall mean "the Note and any other evidence of indebtedness secured by this Security Instrument," the word "Property" shall include any portion of the Property and any interest therein, and the phrases "attorneys' fees", "leeal fees" and "counsel fees" shall include any and all attorneys', paralegal and law clerk fees and disbursements, including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Lender in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder. Article 15 - MISCELLANEOUS PROVISIONS Section 15.1 No ORAL CIIAN i— Tbis Security Instrument, and any provisions hereof, may not be modified, amended, waived, extended, changed, discharged or terminated orally or by any act or failure to act on the part of Borrower or Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, change, discharge or termination is sought. Section 15.2 SI&CESSORS AND AssIGNs. This Security Instrument shall be binding upon and inure to the benefit of Borrower and Lender and their respective successors and assigns forever. Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or condition of the Loan Agreement, the Note or this Security Instrument is held to be invalid, illegal or unenforceable in any respect, the Loan Agreement, the Note and this Security Instrument shall be construed without such provision. Section 15.4 TITADINGS, c.m. The headings and captions of various Sections of this Security Instrument are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. Section 15.5 NUMBER AND GENDER. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa. 24 968194092 9 Section 15.6 SUBROGATION. if any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of the funds so used, Tender shall be subrogated to all of the rights, claims, liens, titles, and interests existing against the Property heretofore held by, or in favor of, the holder of such indebtedness and such former rights, claims, liens, titles, and interests, if any, are not waived but rather are continued in full force and effect in favor of Lender and are merged with the lien and security interest created herein as cumulative security for the repayment of the Debt, the performance and discharge of Borrower's obligations hereunder, under the Loan Agreement, the Note and the other Loan Documents and the performance and discharge of the Other Obligations. Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement, this Security instrument and the other Loan Documents constitute the entire understanding and agreement between Borrower and Lender with respect to the transactions arising in connection with the Debt and supersede all prior written or oral understandings and agreements between Borrower and Lender with respect thereto. Borrower hereby acknowledges that, except as incorporated in writing in the Note, the Loan Agreement, this Security Instrument and the other Loan Documents, there are not, and were not, and no persons are or were authorized by Lender to make, any representations, understandings, stipulations, agreements or promises, oral or written, with respect to the transaction which is the subject of the Note, the Loan Agreement, this Security Instrument and the other Loan Documents. Section 15.8 LIMTTA m ON LENDF,R's RESPONSIBTT.ITY. No provision of this Security Instrument shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Lender, nor shall it operate to make Lender responsible or liable for any waste committed on the Property by the tenants or any other Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any tenant, licensee, employee or stranger. Nothing herein contained shall be construed as constituting Lender a "mortgagee in possession." Article 16 - DEED OF TRUST PROVISIONS Section 16.1 CONCERNING Tim TRUSTEE. Trustee shall be under no duty to take any action hereunder except as expressly required hereunder or by law, or to perform any act which would involve Trustee in any expense or liability or to institute or defend any suit in respect hereof, unless properly indemnified to Trustee's reasonable satisfaction. Trustee, by acceptance of this Security Instrument, covenants to perform and fulfill the trusts herein created, being liable, however, only for willful negligence or misconduct, and hereby waives any statutory fee or other compensation, except as set forth in Section 16.2 hereof, for any services rendered by Trustee in accordance with the terms hereof. Trustee may resign at any time upon giving thirty (30) days' notice to Borrower and to Lender. Lender may remove Trustee at any time or from time to time and select a successor trustee. In the event of the death, removal, resignation, refusal to act, or inability to act of Trustee, or in its sole discretion for any reason whatsoever Lender may, without notice and without specifying any reason therefor and without applying to any court, select and appoint a successor trustee, by an instrument recorded wherever this Security instrument is recorded and all powers. rights, duties and authority of Trustee, as 25 968IR409_2 aforesaid, shall thereupon become vested in such successor. Such substitute trustee shall not be required to give bond for the faithful performance of the duties of Trustee hereunder unless required by Lender. The procedure provided for in this paragraph for substitution of Trustee shall be in addition to and not in exclusion of any other provisions for substitution, by law or otherwise. Section 16.2 TRUSTEU,'S l'LLs. Unless required pursuant to applicable Legal Requirements, no fees, costs or expenses shall be or become payable to Trustee or Trustee's agents and counsel in connection with the perfonnance by Trustee of "Trustee's duties hereunder; provided that, in connection with services rendered by Trustee in connection with any foreclosure or sale in accordance with the terms hereof or with respect to the release and discharge of the lien and security interest of this Security Instrument upon the full and final payment of the Debt, Trustee shall be entitled to reasonable and customary fees and reimbursement of reasonable out-of-pocket costs and expenses incurred by Trustee. The foregoing permitted fees, costs and expenses shall be paid by Borrower to Trustee and Trustee's agents and counsel promptly upon request and such fees, costs and expenses shall be secured by this Security Instrument. Section 16.3 CERTAIN Rlows. With the approval of Lender, Trustee shall have the right to take any and all of the following actions: (i) to select, employ, and advise with counsel (who may be, but need not be, counsel for Lender) upon any matters arising hereunder, including the preparation, execution, and interpretation of the Loan Agreement, the Note, this Security Instrument or the other Loan Documents, and shall be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through his agents or attorneys, (iii) to select and employ, in and about the execution of his duties hereunder, suitable accountants, engineers and other experts, agents and attorneys -in -fact, either corporate or individual, not regularly in the employ of Trustee, and Trustee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney -in -fact, if selected with reasonable care, or for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Trustee's gross negligence or bad faith, and (iv) any and all other lawful action as Lender may instruct Trustee to take to protect or enforce Lender's rights hereunder. Trustee shall not be personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon the Property for debts contracted for or liability or damages incurred in the management or operation of the Property. Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting an action taken or proposed to be taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for actual expenses incurred by Trustee in the performance of Trustee's duties hereunder and to reasonable compensation for such of Trustee's services hereunder as shall be rendered. Section 16.4 RLMNTION Or MONLY. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not he segregated in any manner from any other moneys (except to the extent required by applicable law) and Trustee shall be under no liability for interest on any moneys received by Trustee hereunder. 26 968184092 Section 16.5 PI:RI-I?C'I'ION oP APPOINTivll?N1. Should any deed, conveyance, or instrument of any nature be required from Borrower by any Trustee or substitute trustee to more fully and certainly vest in and confirm to the Trustee or substitute trustee such estates rights, powers, and duties, then, upon request by the Trustee or substitute trustee, any and all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Borrower. Section 16.6 SUCCESSION INSTRUMENTS. Any substitute trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed, or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as 'trustee herein; but nevertheless, upon the written request of Lender or of the substitute trustee, the Trustee ceasing to act shall execute and deliver any instrument transferring to such substitute trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such 'trustee to the substitute trustee so appointed in the 'trustee's place. Article 17 - GROUND LEASE PROVISIONS Section 17.1 No MbAGRR ol� Frr. Am) Lr.ASE1101.1) ESTATES. RLLEASES. So long as any portion of the Debt shall remain unpaid, unless Lender shall otherwise consent, the fee title to the Land and the Leasehold Estate shall not merge but shall always be kept separate and distinct, notwithstanding the union of such estates in Borrower, Ground Lessor or in any other Person by purchase, operation of law or otherwise. Lender reserves the right, at any time, to release portions of the Property, including, but not limited to, the Leasehold Instate, with or without consideration, at Lender's election, without waiving or sheeting any of its rights hereunder or under the Note or the other Loan Documents and any such release shall not affect Lender's rights in connection with the portion of the Property not so released. Section 17.2 BORROWER'S ACQuISMON of Fph ESTATI". In the event that Borrower, so long as any portion of the Debt remains unpaid, shall become the owner and holder of Ground Lessor's fee interest in the portion of the Property demised pursuant to the Ground Lease, the lien of this Security instrument shall be spread to cover such interest and such interest shall be deemed to be included in the Property. Borrower agrees, at its sole cost and expense, including without limitation, Lender's reasonable out-of-pocket attorney's fees, to (i) execute any and all documents or instruments necessary to subject the foregoing interest to the lien of this Security Instrument; and (ii) provide a title insurance policy which shall insure that the lien of this Security Instrument is a first lien on such interest. The foregoing shall not be construed to permit Borrower to acquire the aforesaid fee interest and Borrower rights to acquire additional property shall remain subject to the restrictions relating thereto contained in the Loan Agreement and the other Loan Documents. Section 17.3 RE]ECTION OF THE GROUND LEASE. (a) If the Ground Lease is terminated by Ground Lessor for any reason in the event of the rejection or disaffirmance of the Ground Lease by Ground Lessor pursuant to the Bankruptcy Code or any other law affecting creditor's rights, (i) Borrower, immediately after obtaining 27 96918409_2 notice thereof, shall give notice thereof to Lender, (ii) Borrower, without the prior written consent of Lender, shall not elect to treat the Ground Lease as terminated pursuant to Section 365(h) of the Bankruptcy Code or any comparable federal or state statute or law, and any election by Borrower made without such consent shall be void and (iii) this Security Instrument and all the liens, terms, covenants and conditions of this Security Instrument shall extend to and cover Borrower's possessory rights under Section 365(h) of the Bankruptcy Code and to any claim for damages due to the rejection of the Ground Lease or other termination of the Ground Lease. In addition, Borrower hereby assigns irrevocably to Lender Borrower's rights to treat the Ground Lease as terminated pursuant to Section 365(h) of the Bankruptcy Code and to offset rents under the Ground Lease in the event any case, proceeding or other action is commenced by or against Ground Lessor under the Bankruptcy Code or any comparable federal or state statute or law, provided that Lender shall not exercise such rights and Borrower shall be permitted to exercise such rights only with the prior written consent of Lender, not to be unreasonably withheld or delayed, unless an Event of Default shall have occurred and be continuing. (b) Borrower hereby assigns to Lender Borrower's right to reject the Ground Lease under Section 365 of the Bankruptcy Code or any comparable federal or state statute or law with respect to any case, proceeding or other action commenced by or against Borrower under the Bankruptcy Code or comparable federal or state statute or law, provided Lender shall not exercise such right, and Borrower shall be permitted to exercise such right only with the prior written consent of Lender, not to be unreasonably withheld or delayed, unless an Event of Default shall have occurred and he continuing. further, if Borrower shall notify Lender of its intent to reject the Ground Lease, at Lender's request, to the extent not prohibited by the terms of the Ground Lease and applicable law, Borrower shall assign its interest in the Ground Lease to Lender in lieu of rejecting the Ground Lease as described above, upon receipt by Borrower of written notice from Lender of such request together with Lender's agreement to cure any existing defaults of Borrower under the Ground Lease and to provide adequate assurance of future performance of Borrower's obligations thereunder. (c) Borrower hereby assigns to Lender Borrower's right to seek an extension of the 60-day period within which Borrower must accept or reject the Ground Lease under Section 365 of the Bankruptcy Code or any comparable federal or state statute or law with respect to any case, proceeding or other action commenced by or against Borrower under the Bankruptcy Code or comparable federal or state statute or law, provided Lender shall not exercise such right, and Borrower shall be permitted to exercise such right only with the prior written consent of Lender, not to be unreasonably withheld or delayed, unless an Event of Default shall have occurred and be continuing. Further, if Borrower shall notify Lender of its intent to reject the Ground Lease, at Lender's request, to the extent not prohibited by the terms of the Ground Lease and applicable law, Borrower shall assign its interest in the Ground Lease to Lender in lieu of rejecting such Ground Lease as described above, upon receipt by Borrower of written notice from Lender of such request together with Lender's agreement to cure any existing defaults of Borrower under the Ground Lease and to provide adequate assurance of future performance of the applicable Borrower's obligations thereunder. (d) Borrower hereby agrees that if the Ground Lease is terminated for any reason in the event of the rejection or disaffirmance of the Ground Lease pursuant to the Bankruptcy Code or any other law affecting creditor's rights, any Personal Property of Borrower not removed from 28 96818409_2 9z the Properly by Borrower as permitted or required by the Ground lease, shall at the option of Lender be deemed abandoned by Borrower, provided that Lender may remove any such Personal Property required to be removed by Borrower pursuant to the Ground Tease and all reasonable out-of-pocket costs and expenses associated with such removal shall be paid by Borrower within five (5) days of receipt by Borrower of an invoice for such removal costs and expenses. PART H Article 18 - STATE -SPECIFIC PROVISIONS Section 18.1 PRINCIPLES OF CONSTRUCTION. In the event of any inconsistencies between the terms and conditions of this Article 17 and the other terms and conditions of this Security Instrument, the terms and conditions of this Article 17 shall control and be binding. Section 18.2 GRANTnR. Any references to "borrower", "mortgagor" or "grantor" shall be deemed to refer to the party identified herein as "Borrower" in its capacity as "Grantor" hereunder. Section 18.3 ASSIGNMENT OF IXASES AM) REN I S. Section 1.2 of this Security Tnstrument entitled "Assignment of Rents" is hereby deleted in its entirety and the following is substituted therefore: This Security Instrument constitutes a present, absolute assignment of the Leases and Rents from Borrower to Lender. The Leases and Rents are hereby absolutely and irrevocably assigned by Borrower to Lender. Lender is hereby granted and assigned by Borrower the right, subject to the terms of the Loan Agreement, to enter the Property for the purpose of enforcing its right in the Leases and Rents. Nevertheless, subject to the terms of this Section 1.2, Lender grants to Borrower a revocable license to operate and manage the Property and to collect Rents and, provided the license provided for herein has not been revoked to apply such Rents to the obligations of Borrower with respect to the Property and to distribute any excess proceeds of the Rents to its owners free of any security interest. Upon or at any time after the occurrence of and during the continuance of an Event of Default, the license granted to Borrower herein may be revoked by Lender, and Lender may, subject to the terms of the Loan Agreement, enter upon the Property, and collect, retain and apply the Rents toward payment of the Debt in accordance with the Note. The foregoing assignment shall be fully operative without any further action on the part of either party and Lender shall be entitled to the Leases and Rents whether or not Lender takes possession of the Property or any part thereof. Section 18.4 SECURITY AGREEMENT. The first two sentences of Section 1.3 of this Security Instrument entitled "Security Agreement" are hereby deleted and the following is substituted therefor: This Security Instrument is both a real property deed of trust and a "security agreement" within the meaning of the Uniform Commercial Code and is being recorded as a fixture filing, With respect to said fixture filing, (i) the debtor is Borrower, and Borrower's name 29 96818409_2 and address appear in the first paragraph of this Security Instrument, and (ii) the secured party is Lender, and Lender's name and address appear in the first paragraph of the Security Instrument. The Property includes both real and personal property and all other rights and interests, whether tangible or intangible in nature, of Borrower in the Property, including, but not limited to, the Leases and Rents and all proceeds thereof and all fixtures. Section 18.5 CONDITIONS To GRANT'. The portion of the paragraph beginning "PROVIDED, HOWEVER" appearing at the end of Article I of this Security Instrument entitled "Conditions to Grant" is hereby deleted in its entirety and the following language is substituted therefor: PROVIDED, HOWEVER, upon written request of Lender stating that all sums secured hereby have been paid, that Borrower has well and truly abided by and complied with each and every covenant and condition set forth herein and in the Note, and upon the surrendering of this Security Instrument and the Note to 'Trustee for cancellation and retention and upon payment by Borrower of Trustee's fees, Trustee shall reconvey to Borrower, or to the person or persons legally entitled thereto, without warranty, any portion of the estate hereby granted and then held hereunder; provided, however, Borrower's obligation to indemnify and hold harmless Lender pursuant to the terms and provisions hereof shall survive any such payment or release. The recitals in such reconveyanee of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyanee may he described as "the person or persons legally entitled thereto". Section 18.6 DUE ON SALE/ENCUMBRANCE. Borrower expressly agrees that upon a violation of ARTICLE 6 of this Security Instrument by Borrower and acceleration of the principal balance of the Note because of such violation, Borrower will pay all sums required to be paid in connection with a prepayment, if any, as described in the Note, herein imposed on prepayment after an Event of Default and acceleration of the principal balance. Borrower expressly acknowledges that Borrower has received adequate consideration for the foregoing agreement. Section 18.7 POWER OF SALE. Upon an Event of Default and acceleration of the Debt, Lender, its successors and assigns, may elect to cause the Property or any part thereof to be sold as follows: (a) Lender may proceed as if all of the Property were real property, in accordance with subparagraph (d) below, or Lender may elect to treat any of the Property which consists of a right in action or which is property that can be severed from the Land without causing structural damage thereto as if the same were personal property, and dispose of the same in accordance with subparagraph (c) below, separate and apart from the sale of real properly, the remainder of the Property being treated as real property. (b) I .ender may cause any such sale or other disposition to be conducted immediately following the expiration of any grace period, if any, provided in the Loan Documents (or immediately upon the expiration of any redemption period required by Legal Requirements) or 30 96818409 2 OF Lender may delay any such sale or other disposition for such period of time as Lender deems to be in its best interest. Should Lender desire that more than one such sale or other disposition be conducted, Tender may at its option, in accordance with Legal Requirements cause the same to be conducted simultaneously, or successively on the same day, or at such different days or times and in such order as Lender may deem to be in its best interest. (c) Should Lender elect to cause any of the Property to be disposed of as personal property as permitted by subparagraph (a) above, it may dispose of any part hereof in any manner now or hereafter permitted by Article 9 of the Uniform Commercial Code or in accordance with any other remedy provided by law. Both Borrower and Lender shall be eligible to purchase any part or all of such property at any such disposition. Any such disposition may be either public or private as Lender may so elect, subject to the provisions of the Uniform Commercial Code. Lender shall give Borrower at least ten (10) days' prior written notice of the time and place of any public sale or other disposition of such property or of the time at or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Borrower as provided in subparagraph 6) hereof, it shall constitute reasonable notice to Borrower. (d) Should Lender elect to sell the Property which is real property or which Lender has elected to treat as real properly, Lender shall notify Trustee and shall, if required, deposit with Trustee a copy of the Loan Agreement, a copy of the Notes, the original or a certified copy of this Security Instrument, and such other documents, receipts and evidences of expenditures made and secured hereby as Trustee may require, and Trustee shall give such notice of default and election to sell as may then be required by Legal Acquirements. Thereafter, upon the expiration of such time and the giving of such notice of sale as may then be required by Legal Requirements, Trustee, at the time and place specified in the notice of sale, shall sell such Property, or any portion thereof specified by Lender, at public auction to the highest bidder for cash in lawful money of the United States, subject, however, to the provisions of subparagraph (h) hereof. Trustee for good cause may, and upon request of Lender shall, from time to time, postpone the sale by public announcement thereof at the time and place noticed therefor. If the Property consists of several lots or parcels, Lender may designate the order in which such lots or parcels shall be offered for sale or sold. Any person, including Borrower, Trustee or Lender, may purchase at the sale. Upon any sale Trustee shall execute and deliver to the purchaser or purchasers a deed or deeds conveying the property so sold, but without any covenant or warranty whatsoever, express or implied, whereupon such purchaser or purchasers shall be let into immediate possession. (c) In the event of a sale or other disposition of any such property, or any part thereof, and the execution of a deed or other conveyance, pursuant thereto, the recitals therein of facts, such as a default, the giving of notice of default and notice of sale, demand that such sale should be made, postponement of sale, terms of sale, sale, purchaser, payment of purchase money, and any other fact affecting the regularity or validity of such sale or disposition, shall be conclusive proof of the truth of such facts; and any such deed of conveyance shall be conclusive against all persons as to such facts recited therein. (f) Lender and/or Trustee shall apply the proceeds of any sale or disposition hereunder to payment of the following: (1) the expenses of such sale or disposition together 31 968184092 with Trustee's fees and reasonable attorneys' fees, and the actual cost of publishing, recording, mailing and posting notice; (2) the cost of any search and/or other evidence of title procured in connection therewith and transfer tax on any deed or conveyance; (3) all sums expended under the terms hereof, not then repaid, with accrued interest in the amount provided herein; (4) all other sums secured hereby; and (5) the remainder if any to the person or persons legally entitled thereto. (g) Borrower hereby expressly waives any right which it may have to direct the order in which any of the Property shall be sold in the event of any sale or sales pursuant hereto. (h) Upon any sale of the Property, whether made under a power of sale herein granted or pursuant to judicial proceedings, if the holder of the Note is a purchaser at such sale, it shall be entitled to use and apply all or any portion of the indebtedness then secured hereby for or in settlement or payment of all or any portion of the purchase price of the property purchased, and, in such case, this Security instrument, the Note and documents evidencing expenditures secured hereby shall be presented to the person conducting the sale in order that the amount of said indebtedness so used or applied may be credited thereon as having been paid. (i) No remedy herein conferred upon or reserved to Trustee or Lender is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by this instrument to Trustee or Tender, or to which either of them may be otherwise entitled, may be exercised from time to time and as often as may be deemed expedient by Trustee or Lender, and either of them may pursue inconsistent remedies. If there exists additional security for the performance of the obligations secured hereby, the holder of the Note, at its sole option and without limiting or affecting any rights or remedies hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder either concurrently with whatever other rights it may have in connection with such other security or in such order as it may determine. 0) Borrower hereby requests that every notice of default and every notice of sale be given in accordance with the provisions of Section 11.6 of the Loan Agreement except as otherwise required by Legal Requirements. Borrower may, from time to time, change the address to which notice of default and sale hereunder shall be sent by both filing a request therefor, in the manner provided by the California Civil Code, Section 2924b, and sending a copy of such request to Lender, its successors or assigns in accordance with the provisions of Section 11.6 of the Loan Agreement. Section 18.8 CONCERNING'I'11L TRUSTEE: (a) Trustee accepts the trust created by this Security instrument when this Security Instrument, duly executed and acknowledged, is made a public record as provided by law. (b) Trustee is not obligated to notify any party hereto of pending sale under any other deed of trust or of any action or proceeding in which Borrower, Lender or Trustee shall be a party (other than with respect to this Security Instrument), unless brought by Trustee. 32 96818409_2 Section 18.9 FIXTURE FILING. This Security Instrument constitutes a financing statement filed as a fixture filing pursuant to the provisions of Division 9 of the Uniform Commercial Code with respect to those portions of the Property consisting of goods which are or are to become fixtures relating to the Land or the Improvements. Section 18.10 RESERVE FUNDS. By exercising any of Lender's rights or remedies under the Loan Agreement or this Security Instrument (including, without limitation, taking possession of the Reserve Funds or other non -real property collateral), Borrower acknowledges and agrees that Lender shall not be deemed to have exercised any equitable right of setoff, foreclosed any statutory banker's lien, initiated or prosecuted any "action" to enforce the rights and obligations secured by this Security Instrument, or the Loan Documents, as the term "action" is used in California Code of Civil Procedure Section 726 ("Section 726"), or to have violated the "security first" principle of Section 726. Accordingly, the exercise of any or all of Lender's rights and remedies with respect to any Reserve Funds or other non -real property collateral shall not in any way prejudice or affect Lender's right to initiate and complete a judicial or non judicial foreclosure under this Security Instrument. This Security Instrument evidences the consensual granting of a personal property security interest in the Reserve Funds as permitted by the California Commercial Code; the parties do not intend that the exercise by Lender of any of its rights or remedies hereunder shall have any different consequences under Section 726 than the exercise of rights or remedies under any other security agreement under which a secured party has been granted a security interest in other types of personal property. [NO FURTHER TEXT ON THIS PACE] 33 96818409 2 IN WITNESS WHEREOF, this Security Instrument has been executed by Borrower as of the day and year first above written. BORROWER: NM GLCR,,1,.P., a Delaware limited partnership By: NM GLCR GP, L.L.C., a Delaware limited liability company, its general partner By: NM NET LEASE MANAGER, L.I.C., a Delaware limited liability company, its non-member manager --- --- - --- - By: _ Name: Peter B. Kaplan, Jr. Title: President ACKNOWLEDGMENT A Notary Public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certtricate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF NEW YORK COUNTY OF NEW YORK On t . •!. ,'_ 2018 before me,; Notar ublic, personally appeared,,", ",'°f? <- ��+•:;ii+- i .';�', io proved to me on the basis of satisfactory evidence to be the person whose name is subscn6ed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature., (Seal) of the State of California that the P� WG A RR,Q� y� 'SPRY"' p s �- NAP "w F%0") Y NGs G ev ° •, ar ._.. Nua\- y 9r �� y^. a EXHIBIT A LEGAL ]DESCRIPTION See Attached All that parcel of land located In the City of Vernon, County of Los Angeles, State of California, as described under that certain unrecorded Ground Lease dated December 27, 2004 by and between the Clty of Vernon and Union Ice -Pacific, L.P., as disclosed by a Memorandum of Lease recorded in the Recorders Office of Los Angeles County, California on July 5, 2005 as Instrument No. 2005-1570601, as corrected pursuant to a Modlftcatlon and Correction of Real Property Description dated November 3, 2005 by and between Union Ice -Pacific, L.P. and International Bank of Commerce recorded In the Recorder's Office of Los Angeles County, California on November 14, 2005 as Instrument No. 2005-2736645, as assigned pursuant to an Assignment and Assumption of Ground Lease dated March 1, 2007 by and between Union Ice-PadRc, L.P. and Arctic Ice Properties, LLC recorded in the Recorder's Office of Los Angeles County, California on March 5, 2007 as Instrument No. 20070475563, as further assigned by Assignment and Assumption of Ground Lease dated ;•-k%, <-:, •4_ 1 , 2018 by and between Arctic Ice Properties, LLC and NM GLCR, L.P. recorded In the Recorder's Office of Los Angeles County, Callfomla on +, t-i =� , 2018 as Instrument No:,�1,:u .; ",(*I'') z , as further amended by that unrecorded Ground Lessor Estoppel, Consent and Ground Lease Amendment dated 2011 by and between The City of Vernon and NM GLCR, L.P., as follows: PARCEL 1 AS SHOWN ON RESOLUTION NO. 8363 FOR LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED FEBRUARY 10, 2004 AS INSTRUMENT NO. 2004-0296188 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: THAT PORTION OF LOT 31, OF THE 500 ACRE TRACT OF THE LOS ANGELES FRUIT LAND ASSOCIATION, IN THE CITY OF VERNON, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3, PAGES 156 AND 157 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHEAST CORNER OF SAID LOT 31; THENCE SOUTH 321.50 FEET ALONG THE EAST LINE OF SAID LOT 31 TO THE NORTH LINE OF THAT 17.00 FOOT WIDE RIGHT OF WAY OF THE LOS ANGELES 3UNCTION RAILWAY, AS DESCRIBED IN DEED TO CENTRAL MANUFACTURING DISTRICT INC., RECORDED APRIL 7, 1927, IN BOOK 4752, PAGE 265 OF OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE; THENCE WEST 387.70 FEET ALONG SAID NORTH LINE OF SAID RIGHT OF WAY TO THE INTERSECTION OF A LINE THAT IS 387.70 FEET WEST MEASURED PERPENDICULAR TO AND IS PARALLEL WITH THE EAST LINE OF SAID LOT 31; THENCE NORTH 321.50 FEET ALONG LAST SAID PARALLEL LINE TO THE NORTH LINE OF SAID LOT 31; THENCE EAST 387.70 FEET ALONG SAID NORTH LINE OF SAID LOT 31, ALSO BEING THE CENTERLINE OF EAST 5011H STREET, 40.00 FEET WIDE, AS DESCRIBED IN DEED TOTHE CITY OF VERNON, RECORDED SEPTEMBER 5, 1929, AS DOCUMENT NO. 1410 IN BOOK 9335, PAGE 149 OF OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE, TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE NORTH 2O.00 FEET OF SAID LOT 31, THE SOUTH LINE OF SAID NORTH 2O.00 FEET, ALSO BEING THE SOUTH LINE OF EAST SOTH STREET, 40.00 FEET WIDE, AS DESCRIBED IN DEED TO THE CITY OF VERNON, RECORDED SEPTEMBER 5, 1929, AS DOCUMENT NO. 1410, IN BOOK 9335, PAGE 149 OF OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE. EXCEPT AN UNDIVIDED ONE -TWELFTH (1/12) INTEREST IN ALL OIL, GAS, OR OTHER HYDROCARBON SUBSTANCES IN OR UNDER SAID LAND, AS CONVEYED BY?. B. LENOINS, INC. TO FRANK E. BURGER BY DEED RECORDED NOVEMBER 16, 1931, IN BOOK 11244, PAGE 136, AND AS EXCEPTED IN THE DEED FROM J.B. LEONIS, INC., RECORDED DECEMBER 31, 1931, IN BOOK 11337, PAGE 160 OF OFFICIAL RECORDS. ALSO EXCEPT A ONE -TWELFTH (1/12) PART OF ALL MINERALS, OIL, GAS, AND/OR OTHER HYDROCARBON SUBSTANCES PRODUCED ON OR FROM SAID LAND, AS EXCEPTED AND 96818409_2 RESERVED IN THE DEED DATED DULY 24, 1941 EXECUTED BY J.B. LEONIS, INC., A CORPORATION, RECORDED JULY 31, 1941 AS INSTRUMENT NO. 215 IN BOOK 18648 PAGE 168 OF OFFICIAL N RECORDS. ALSO EXCEPT A ONE -TWELFTH (1/121 PART OF ALL MINERALS, OIL, GAS AND/OR OTHER HYDROCARBON SUBSTANCES PRODUCED ON OR FROM SAID LAND, AS EXCEPTED AND RESERVED IN DEED EXECUTED BY J.B. LEONIS, INC., TO OWENS-ILLINOIS PACIFIC COAST COMPANY, DATED DECEMBER 14, 1943, RECORDED DECEMBER 23, 1943 AS INSTRUMENT NO.745 IN BOOK 20599 PAGE 299 OF OFFICIAL RECORDS. 968184092 a SCHEDUIX I (Security instruments) 1. Deed of Trust and Security Agreement with respect to the Bakersfield Property (as defined in the Loan Agreement); 2. Deed of Trust and Security Agreement with respect to the Carson Property (as defined in the Loan Agreement); 3. Deed of Trust and Security Agreement with respect to the Fremont Property (as defined in the Loan Agreement); 4. Deed of Trust and Security Agreement with respect to the Oceanside Property (as defined in the Loan Agreement); and 5. Deed of Trust and Security Agreement with respect to the Van Nuys Property (as defined in the Loan Agreement). 96st8409 z TRANSMITTAL COMMUNICATION CITY CLERK'S OFFICE INTEROFFICE MEMORANDUM DATE: December 18, 2017 TO: Diana Figueroa, Administrative Analyst FROM: Deborah Juarez, Records Management Assistant RE: Resolution No. 2017-50 — A Resolution of the City Council of the City of Vernon Approving the Ground Lease Re -Assignment and Sublease at 2970 E. 50th Street and Authorizing the Execution of Related Ground Lessor Estoppel, Consent and Ground Lease Amendment Please find enclosed for your transmittal one fully executed original amendment as referenced above, which was approved by Resolution No. 2017-50 on October 3, 2017. Please ensure that a copy of your transmittal communication is sent to my attention for the file. Thank you. Enclosure c: Carlos Fandino Resolution No. 2017-50 Agreement 17-119 of CITY ADMINISTRATION 4305 Santa Fe Avenue, Vernon, California 90058 Telephone (323) 583-8811 January 18, 2018 Clare Ursano First American Title Insurance Company National Commercial Services Division 1850 K Street, NW Washington, DC 20006 RE: Resolution No. 20I7-50 — A Resolution of the City Council of the City of Vernon Approving the Ground Lease Re -Assignment and Sublease at 2970 E. 50" Street and Authorizing the Execution of Related Ground Lessor Estoppel, Consent and Ground Lease Amendment (as amended January 2018) Dear Clare Ursano: Please find enclosed a fully executed original amendment as referenced above, which was approved by City Council on October 3, 2017 via Resolution No. 2017-50. If you have any questions regarding this matter, please contact me at (323) 583-8811, Ext. 570. a Administrative Analyst Enclosure c: Carlos R. Fandino, Jr., City Administrator Deborah R. Juarez, Records Management Assistant Kristin Gallagher, Bass Berry & Sims PLC Resolution No. 2017-50 A;reement 17-119 &PHU APID RETAIN THIS COPY BEFOE AFFIXING TO THE FACNAGE, NO POMfj NEEDED, — -- a iL FU Lj 0 mo m a (X I 0 D-1 r. b: Fu L-n IF I Mj — o < 01 4- < Z eZ' LU z Lo M Ln cr Q. x LLJc d t2 m OI wz J" J .2" iLi 9 CD va Z;F Li M i fit rd -gm*, c3 i "spa Lf) SIGNATURE ROUTING FORM CONTRACTOR: NM GLCR L.P. CONTRACT PURPOSE: Ground Lease Amendment and Assignment for 2970 East 50" St Vernon CA CONTRACT IS: ❑ FEDERAL ❑ PREVAILING WAGE ❑ COMPETITIVE SELECTION & NOTICED RFP ❑ COMPETITIVE BID & NOTICED INVITATION TO BID ❑ EXEMPT FROM COMPETITIVE PROCESS (APPROVAL ATTACHED) ❑ SERVICES ❑ MATERIALS ❑ BUDGETED ❑ NOT BUDGETED 17 LEASE AMENDMENT TOTAL CONTRACT VALUE: $ N/A Charge Acct. No(s) N/A Amendment Value $ N/A ❑ Contract is an Amendment to Eden Contract No. N/A (if applicable) RESPONSIBLE DEPARTMENT PERSON: Diana Figueroa PHONE: ext. 570 AUTHORIZATION: (Check one and attach supporting documentation) © Approved by Council on 10/3/17 Resolution No. 2017-50 (if applicable) ❑ Approved by City Administrator on ❑ Approved by Finance Director on ROUTING SEQUENCE: (Please Follow In Order) Initials Date (1) Responsible Department Person C/c Z2 7 /7 Certifies compliance with Competitive Bidding and Purchasing Ordinance, obtains approval from City Council/City Administrator/Finance Director, and obtains approval as to form from the City Attorney's Office, assembles two (2) originals of contract, obtains proper signatures from contractor/consultant pursuant to the signature requirements, obtains insurance & bond documents, notifies IT to remove related RFP/bid notice from the City's website (if applicable), enters contract into Eden once routing process is complete. (2) Liability and Claims �C Approves insurance and sureties, if bonds required. �` s2l�v i2-1 �12 (3) Finance (Purchasing) Checks compliance with Competitive Bidding & Living Wage Ordinances and reflected in current budget. (4) City Attorney Approves contract as to form. L (5) City Signatory Signs document on behalf of City. (6) City Clerk l �/ Attests signatures, numbers and files contract, enters contract documents (executed contract, supporting documentation, insurance and bonds, etc.) into Laserfiche, transmits duplicate original to contractor/consultant, notifies Responsible Department Person, and notifies any "consultant" of duties to file Form 700, if applicable. Rev. 6/2017 FULLY EXECUTED AGREEMENT GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT THIS GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT (this "Estoppel and Amendment") made as of this day of October, 2017, by and between THE CITY OF VERNON (individually and collectively, together with their successors and/or assigns, "Lessor") and [NM GLCR, L.P., a Delaware limited partnership] ("Lessee"). WHEREAS, Lessor has heretofore leased certain lands described on Exhibit A attached hereto (the "Premises") to Arctic Ice Properties, LLC ("Arctic Ice"), pursuant to a Ground Lease dated December 27, 2004, as amended by that Amendment to Lease dated August 24, 2005, as further amended by that certain Ground Lease re- assignment and sublease dated February 20, 2007 (as same may have been amended, modified, substituted, assigned or extended, the "Lease"); WHEREAS, the current lessee under the Lease is Arctic Ice, which subleases the Premises to the current tenant, Arctic Glacier U.S.A., Inc. ("Sublessee"). The agreement between Arctic Ice and Sublesseee shall be referred to herein as the "Sublease." WHEREAS, Lessee is desirous of obtaining from UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (together with its successors and/or assigns, "Lender"), a loan in the approximate amount of $29,100,000.00 (the "Loan") secured by (among other things) a first leasehold mortgage upon Lessee's interest as lessee under the Lease in the Premises (the "First Leasehold Mortpap_e" ) and evidenced by, among other things, that certain Loan Agreement, by and between Lessee, as "Borrower," and Lender (the "Loan Agreement"; the First Leasehold Mortgage, the Loan Agreement, and all other documents executed and/or delivered in connection with the Loan are referred to herein, collectively, as the "Loan Documents"); WHEREAS, the First Leasehold Mortgage and any future leasehold mortgage and other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease shall be referred to herein as a "Leasehold Mortgage," and the holder of any Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee"; and WHEREAS, Lender is unwilling to make the Loan unless (i) Lessor confirms and restates certain provisions of the Lease respecting leasehold mortgages for Lender's benefit, and (ii) Lessor and Lessee amend the Lease to provide for certain revisions respecting leasehold mortgages for Lender's benefit, NOW THEREFORE, in consideration of ten dollars ($10.00) and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Lessor hereby certifies to and agrees with Lender as follows: 1. Lessor hereby acknowledges that Lender's notice address is as follows, for all purposes of the Lease: Address for Lender Notice: UBS AG, by and through its branch office at (or such other address as 1285 Avenue of the Americas, New York, New York Lender may provide from 1285 Avenue of the Americas time -to -time) New York, New York 10019 Attention: Transaction Management - Henry Chung with a copy to: Cassin & Cassin LLP 711 Third Avenue, 20°i Floor New York, New York 10017 Attention: Dennis W. Mensi, Esq. Facsimile No.: (212) 557-2952 {01323048;1) 2. Lessor hereby certifies, as of the date hereof, to Lender and Lessee and as follows: (a) Lessor is the owner of the fee simple estate in the Premises and is the Lessor under the Lease. (b) Lessee is the owner of the leasehold estate in the Premises and is the Lessee under the Lease. (c) The Lease is in full force and effect in accordance with its terms and has not been further assigned, supplemented, modified or otherwise amended and each of the obligations on Lessor's part to be performed to date under the Lease have been performed. (d) To the best of Lessor's knowledge, each of the obligations on Lessee's part to be performed to date under the Lease have been performed. (e) To the best of Lessor's knowledge, Borrower has no offsets, counterclaims, defenses, deductions or credits whatsoever with respect to the Lease, or any amounts owing thereunder. (f) With respect to the Lease, no options to renew or extend exist, and no security deposits, escrows or prepaid rent or liens have been paid, except as set forth therein. The Base Rent, additional rent, and other additional charges related to the Premises, including all charges for real property taxes, operating expenses and other such expenses, and all other sums payable by Lessee to the Lessor under the Lease, including utility charges during the original and any renewal term of the Lease, are the responsibility of Lessee under the Lease. (g) Other than the Lease and the Sublease, there do not exist any other effective agreements (including Subordination, Non -Disturbance and Attornment Agreements) concerning the Premises, whether oral or written between Lessor and Lessee (or their respective predecessors) under the Lease. (h) As of the date hereof, no Base Rent or additional rent is delinquent from Lessee under the Lease. The Base Rent currently payable by Lessee under the Lease is $11,913.56 per month. Base Rent due under the Lease has been paid through September 30, 2017. The Base Rent will next reset effective as of January 2026. (i) Subject to the extension set forth in Section 4(e) below, the current term of the lease shall expire on January 9, 2061, whereupon Lessee will have remaining four (4) renewal options of ten (10) years each. (j) Aside from the Sublease, neither Lessor nor Lessee has assigned the Lease, nor has Lessor sublet the Premises. (k) Lessor has not assigned, conveyed, transferred, sold, encumbered or mortgaged its interest in the Lease or the Premises and there are currently no mortgages, deeds of trust or other security interests encumbering Lessor's fee interest in the Premises and Lessor has not granted to any third party an option or preferential right to purchase all or any part of the Premises. (1) Lessor has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against the Lessor's interest in the Premises. (m) Lessor has not received written notice that it is in violation of any governmental law or regulation applicable to its interest in the Premises and its operation thereon, including, without limitation, any environmental laws or the Americans with Disabilities Act, and has no reason to believe that there are grounds for any claim or such violation. (n) There are no actions, voluntary or otherwise, pending or, to the best knowledge of Lessor, threatened against Lessor under the bankruptcy, reorganization, moratorium or similar laws of the United States, any state thereof or any other jurisdiction. 3. Lessor hereby consents and agrees to the following: (01323048;1) 2 (a) assignment of the Lease from Arctic Ice to Lessee; (b) sublease of the Premises from Lessee to Sublessee; and (c) anything in the Lease to the contrary notwithstanding, Lessee entering into the First Leasehold Mortgage in favor of the Lender as part of the security for the Loan, the Loan will also be secured by up to six (6) additional properties owned in fee by the Lessee, and recording the same of record thereby creating a lien and security interest on Lessee's leasehold estate in the Premises and assigning its rights under the Ground Lease to the Lender; provided, however, that the First Leasehold Mortgage and all rights acquired under it shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder; and provided, however, Landlord's consent to any of the foregoing is not intended, and shall not be construed (a) to modify or otherwise affect any provision of the Lease (except as may be set forth herein), or (b) as a waiver of any of Landlord's rights under the Lease. 4. In lieu of a separate subordination, non -disturbance and attornment agreement with the Lender, Lessor and Lessee agree to the following amendments and modifications of the Lease: (a) Notwithstanding anything to the contrary contained in the Lease, any mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering the Premises or any interest therein, other than any Leasehold Mortgage whether entered into by Lessee (any such mortgage, etc., being referred to herein as a "Fee Mortgage'; the holder of any Fee Mortgage is referred to herein as a "Fee Mortgagee") shall automatically be subject and subordinate to the Lease and to any Pick -Up Lease (as defined in Exhibit B attached hereto), and Lessor shall cause any such Fee Mortgage to expressly state in the instrument recorded against the Premises that such Fee Mortgage is so subordinate, and the Lease and the rights of Lessee (and, to the extent of any Pickup Lease, the rights of the Leasehold Mortgagee or its designee) in and to the Premises shall have priority over the Fee Mortgage. Lessee agrees with Lessor, for the benefit of any Fee Mortgagee that has satisfied the requirements of this Lease, to attorn to any transferee of Lessor's interest through foreclosure of a Fee Mortgage or a conveyance in lieu of foreclosure. (b) Section 34 of the Lease is hereby deleted from the Lease and replaced with the provisions set forth on Exhibit B attached hereto. (c) Notwithstanding anything to the contrary in the Lease (including, without limitation, Section 10 thereof), at any time when a Leasehold Mortgage shall be outstanding, or a Leasehold Mortgagee (or its nominee or designee) shall hold title to the Lessee's Interest, (a) Lessor agrees that the Leasehold Mortgagee may be added to the "Loss Payable Endorsement" (and as a mortgagee) of any and all insurance policies carried by Lessee with respect to the Lessee's interest therein; (b) the Leasehold Mortgagee shall be entitled to participate in any settlement regarding insurance proceeds or condemnation awards; (c) the Leasehold Mortgagee shall be entitled to collect and hold any such insurance proceeds, and to make such insurance proceeds available to restore the Premises in accordance with the terms and provisions contained in the Loan Agreement required in connection with the restoration of the Premises (as are customarily imposed by a Leasehold Mortgagee in connection with commercial loans similar to the Loan) so long as the Lease is not terminated as a result of such casualty solely to the extent such termination is permitted in the Lease; and (d) all condemnation awards payable with respect to the Premises and/or other improvements payable to Lessee (or on account of the Premises and/or other improvements) shall be paid to Leasehold Mortgagee for use in restoration or application in accordance with the terms of the Leasehold Mortgage. (d) There shall be no merger of the Lease or any interest in the Lease or of Lessee's leasehold interest with the fee estate in the Premises, by reason of the fact that the Lease or such interest therein, or Lessee's leasehold interest in the Premises, may be directly or indirectly held by or for the account of any person who shall also hold the fee estate in the Premises, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of Lessee's leasehold interest may be conveyed or {01323048;11 mortgaged in a Leasehold Mortgage to a mortgagee or beneficiary who shall also hold the fee estate in the Premises or any interest of Lessor under the Lease. (e) Lessee hereby notifies Lessor of and exercises the initial three (3) Options to extend the term of the Lease (for a total extension of thirty (30) years) as permitted by Section 36 of the Lease and Lessor and Lessee hereby agree that such extension of the term is effective as of the date hereof. 5. This Estoppel and Amendment and the representations, warranties and covenants contained herein are given with the understanding that this Estoppel and Amendment constitutes a material inducement for Lender in making the Loan to Lessee and that Lender shall rely hereon in making the Loan to Borrower. Lender may at any time, without Lessor's consent, sell, assign, participate or securitize all or any portion of Lender's rights and obligations under the Loan Documents, and any such sale, assignment, participation or securitization may be to one or more financial institutions or other entities, to private investors, and/or into the public securities market, in Lender's sole discretion. This Estoppel and Amendment and the representations, warranties and covenants contained herein shall inure to the benefit of Lender, its successors and assigns (including, without limitation, each and every owner and holder of the Loan, each person who, pursuant to proceedings to enforce the Leasehold Mortgage or conveyance in lieu of such proceedings, may succeed to Lessee's interest under the Lease and each person who may thereafter acquire Lessee's interest under the Lease by purchase or otherwise) and shall be binding on Lessor, its heirs, legal representatives, successors and assigns and Lessor further agrees that this Agreement may be relied upon by Lender, its successors and assigns and any nationally recognized statistical rating agency rating any securities issued in connection with the Loan or any portion thereof. 6. This Estoppel and Amendment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Estoppel and Amendment may be detached from any counterpart of this Estoppel and Amendment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Estoppel and Amendment identical in form hereto but having attached to it one or more additional signature pages. IN WITNESS WHEREOF, the undersigned parties have executed this Estoppel, Consent and Amendment as of the date and year first written above. LESSOR: THE CITY OF VERNON By: Name: a issa Ybarra Title: May r ACCEPTED AND AGREED TO: LESSEE: NCI GLCR, L.P., a Delaware limited partnership By: NM GLCR GP, L.L.C., a Delaware limited liability company, its general partner By: NM Net Lease Manager, L.L.C., a Delaware limited liability company, its manager Name: Peter E. Kaplan, Jr. Title: President TTEST: MariOE�Ayala,y tClerk APPRO D AS TO FORM: Brian yun, Senior DeputyJity Attorney (01323048;1) EXHIBIT A PARCEL 1 AS SHOWN ON RESOLUTION NO. 8363 FOR LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED FEBRUARY 10, 2004 AS INSTRUMENT NO. 2004-0296188 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: r4kCFL i HAt POR7lC 1 .4F l,OT '3I OF : THE 300 4CS(E- TRACT OKTHE THE LOS ANGELES FRUIT LAND ASSOCIA7'1OKAN TME'dry IJF VERNON. COUNTY OF LOS VIC3ELES, STATE OF CALIFORNIiti AS PER ::MAP* RECORDED: IN 8.0,- 9 f :3 PAGES 156 AND I STOF MISCELLANEOUS RECORDS, IN VE.&bCj rl T11P C[?tiNTY R;ECC)Rl)F,i;'C)F SAID COUNTY, DESCRIBED AS OLLO WS` . B_EGINNi'Vii A'F T. H N4RTHEJ�ST CORNER OFSAiA' LCYI' 3i: IIIEtVGE SQ[lTH 311 S.Q FCET X[ANG''I`HE EAST LIN)r 0) Si!14D LO I : I: t.0!'fHE NORTJi_ LINE OF IN. T'1 'tX? OOT WIDE R1G117 OF Wi41t Of THE i'OS ANGELES ]lJNCifflK' AILWAY, AS `DESCRIBED IN 0rjp. To CENTRXL, MANUFACTURING D151'RIC'T 111Ci.R C'CSR>�1 b ..•7-1927, !N '66OK 4752, PxQt 6� Uf OFFICIAL ac.ORI�S `W All) RECORDER'S OFFICE;-'T3JENCE WEST 387.70 FEET:ALON.O SAID NORTH IINP.OF SAid RiCiHT.OF- WAY TO {IIE INTERSEC710iJ .A LINE'THAT IS 387.70 FEET Wi;5T uEdStlREt? PEIIPLNDICULARTCI AND IS PARALLEI. VI III TtiE S"I' i.INE AF `S?. P: LOT 31;"T7lENCj VOILTH 3z1;S0 FEET Al ONG LAST"SAID :.PARALLEL US% TCI THE'NORTH LINE OF SAID L6T 3t; "tllE1+ICE: E.AhT.. 38770 FEET AL010 SAID S.uQRtit I:INE 6646L+~1T t! ALSO.:BEING:tHE CENTEiCUNf" DF EAST 3C 11'ST W, 40.00 FEET WIDE,. +?i:S DFSC"Rl.IiED Jh'..dEED TQ7H�.C!'TY OF VERNON; RECp�dcD 95�15129, AS 1KKIJMENT h10: 14Io..1iV DOIiK a 35w PAGlr 144 QF`QF�MCi11L RE ORDS. 1l'! .S1liD RL.CQRD9111 OFFICE, TSB Tw. Pow OF BECiINHING, - :, EXCEPT TH99EFRQM THE NORTH 20 601 f OE SkID LOT-1 '1`0E. sOUT#{ E:I.NE OF S+l►!D NOR'TIi2�.tIS} FEET,AL' 0 BEING THE SOUTH LINE OF EAST S61�IiSiR8 41 04 F ATWIDE; AS >2ESCRIBF,1}7N DEED. TO fHE. 'i fY OF"VERNON. RECOROI:D 9-5-1429x'AS .D(3(?UME� i' m. 1410,.1TI .BOOK 93351 PXOE 1440E OFFICIAL RECORDS, IN SAID RECORDER'S OFFICE, {01323048;1} 5 EXHIBIT B 34. (a) Notwithstanding the provisions of Section 13.1 of the Lease to the contrary, Lessee may from time to time, without the consent of but upon written notice to Lessor, execute and deliver a mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease (any such mortgage, etc., being referred to herein as a "Leasehold Mortgage"; the holder of the Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee") that does not result in a change in use of the Premises; provided, however, Lessor shall have a reasonable right of approval of financing terms to the extent they relate to Lessor's interest in the Premises. The Leasehold Mortgagee may enforce its Leasehold Mortgage and acquire title to the interest encumbered thereby in any lawful way, including, without limitation, through foreclosure; provided, all such rights shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder. Subject to the terms of the Leasehold Mortgage, following a default thereunder (beyond any applicable notice and cure period), pending a foreclosure of a Leasehold Mortgage, the related Leasehold Mortgagee may take possession of and rent the Premises, and upon acquisition thereof, through foreclosure or otherwise, may, without further consent of Lessor, sell and assign Lessee's interest in the Premises by assignment in which the assignee shall expressly assume and agree to observe and perform all of the covenants of Lessee herein contained, and such assignee may make a purchase money leasehold mortgage of Lessee's leasehold interest in the Premises to the assignor. Lessor agrees that following the foreclosure of Leasehold Mortgage, Lessor will waive its right to enforce any noncurable default (i.e., any default hereunder that is personal to the previous lessee) against the transferee of Lessee's interest through foreclosure or a conveyance in lieu of foreclosure. A Leasehold Mortgagee shall be liable to perform the obligations herein imposed on Lessee only during the period that Leasehold Mortgagee has ownership of Lessee's interest in the Premises. Nothing contained in the Leasehold Mortgage shall release or be deemed to relieve the Lessee from the full and faithful observance and performance of Lessee's covenants herein contained, or from any liability for the nonobservance or nonperformance thereof, nor be deemed to constitute a waiver of any right of Lessor under this Lease. (b) Upon the execution and recording of a Leasehold Mortgage, the Leasehold Mortgagee shall send to Lessor a true copy of the Leasehold Mortgage with the recordation information noted, together with written notice specifying the name and address of Leasehold Mortgagee. So long as such Leasehold Mortgage shall remain unsatisfied of record or until written notice of satisfaction is given by Leasehold Mortgagee to Lessor, and subject to the provisions of the first sentence of this Section 34(b), the following provisions shall apply with respect to such Leasehold Mortgage. (i) There shall be no termination, cancellation, surrender, acceptance of surrender, amendment or modification of the Lease by joint action of Lessor and Lessee or by Lessee alone, without in each case the prior consent in writing of Leasehold Mortgagee. Any such termination, cancellation, surrender, acceptance of surrender, amendment or modification made without the consent of Leasehold Mortgagee shall not be binding on Leasehold Mortgagee. (ii) Lessor shall, upon serving Lessee with any notice of Default and/or Breach, simultaneously serve a copy of such notice upon Leasehold Mortgagee, and no such notice to Lessee shall be deemed given unless a copy is so served upon Leasehold Mortgagee in the manner specified in this Lease for the giving of notices. (iii) In the event of any Default and/or Breach by Lessee under this Lease, Leasehold Mortgagee shall have the same period, after service of notice upon such Default and/or Breach to remedy or cause to be remedied the Default and/or Breach, that Lessee has under this Lease to remedy or cure same, plus an additional fifteen (15) days if such Default and/or Breach can be cured solely with the payment of money, or an additional thirty (30) days for all other Defaults and/or Breaches (such period, the "Leasehold Mortgagee Cure Period"). Lessor shall accept such performance by or at the instigation of a Leasehold Mortgagee as if the performance had been done by Lessee. Each notice of Default and/or Breach given by Lessor shall (i) (01323048,1) state the amounts of Base Rent and other payments that are then claimed to be in default, and/or (ii) provide a description of any non -monetary Default and/or Breach. (iv) Notwithstanding any provision in this Lease to the contrary, if any Default and/or Breach shall occur that, pursuant to any provision of this Lease entitles Lessor to terminate the Lease, and if before the expiration of the related Leasehold Mortgagee Cure Period with respect to all such defaults (measured from the date of service of the notice of termination upon such Leasehold Mortgagee), a Leasehold Mortgagee shall have notified Lessor of its desire to nullify such notice and Leasehold Mortgagee shall have agreed to pay or cause to be paid to Lessor within the Leasehold Mortgagee Cure Period all amounts of the Base Rent and other payments then in default, and shall have agreed to commence or cause to be commenced the work of complying with all of the other requirements of the Lease, if any are then in default, and shall prosecute or cause the prosecution of same to completion with reasonable diligence, then in such event, Lessor shall not be entitled to terminate this Lease, and any notice of termination theretofore given shall be void and of no effect. (v) If Lessor shall elect to terminate this Lease by reason of any Default and/or Breach, Leasehold Mortgagee shall not only have the right to nullify any notice of termination by agreeing to cure such Breach as described in Paragraph 34(b)(iv) above, but shall also have the separate right to postpone and extend the specified date for the termination of the Lease as stated by Lessor in its notice of termination, provided that Leasehold Mortgagee shall continue to cure or cause to be cured any then existing monetary Breach and any other Breach capable of being cured by Leasehold Mortgagee, and meanwhile pay or cause to be paid the Base Rent, and provided further that Leasehold Mortgagee shall forthwith take steps to acquire or sell Lessee's interest in the Premises by foreclosure of Leasehold Mortgage or otherwise and shall prosecute the same to completion with reasonable diligence. If Leasehold Mortgagee is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy, debtor rehabilitation or insolvency proceeding involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the period for Leasehold Mortgagee to acquire or sell Lessee's interest in the Premises shall be extended for the period of such prohibition, provided that Leasehold Mortgagee shall diligently attempt to remove any such prohibition. If Lessee's interest is acquired or sold as described above through foreclosure of Leasehold Mortgage or a conveyance in lieu of foreclosure, the intended termination of the Lease by Lessor under the notice described above shall be automatically nullified, and this Lease will continue as if such notice of termination had never been given. (vi) In the event of termination of this Lease for any reason whatsoever (including, without limitation, if the Lease shall be rejected (or deemed rejected) in a bankruptcy or similar proceeding involving Lessee or otherwise), Lessor shall promptly notify the Leasehold Mortgagee of such termination and the amount of the sums then due to Lessor under this Lease, and the Leasehold Mortgagee shall have the right to have Lessor enter into a new lease in the Premises with Leasehold Mortgagee or its nominee or designee (such new Lease, a "Pick -Up Lease"), in accordance with the following provisions: a. A Leasehold Mortgagee or its nominee or designee shall be entitled to such new lease if such Leasehold Mortgagee shall make written request upon Lessor for such new lease on or before the date that is thirty (30) days after the date on which such Leasehold Mortgagee shall have received the notice from Lessor of such termination and if such written request is accompanied by the agreement of the Leasehold Mortgagee to pay to Lessor upon the execution and delivery of the Pick - Up Lease the sums due to Lessor under this Lease as of the date of such Pick -Up Lease. b. The Pick -Up Lease shall be for what would have been the remainder of the Term if the Lease had not been terminated, effective as of the date of such termination, at the Base Rent and upon the terms, provisions, covenants and agreements as herein contained, including all rights of Lessee (including, without limitation, for renewal options) that are provided in this Lease. C. The Pick -Up Lease shall be of the same priority as this Lease and shall be senior in priority to any Fee Mortgage in effect as of the granting of the Pick -Up Lease. {01323048;1} d. In the Pick -Up Lease, the Lessee named therein shall agree to perform and observe all covenants contained therein on lessee's part to be performed, except that, in accordance with Section 13.2(a) hereof, upon an assignment of the Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Pick -Up Lease. e. The initial conveyance by any Leasehold Mortgagee or its nominee or designee lessee under the Pick -Up Lease shall not require the consent of Lessor or constitute a breach of any provision of or a default under the Pick -Up Lease. f. Except when a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, no liability for the payment of the Base Rent or the performance of any of Lessee's covenants and agreements under this Lease shall attach to or be imposed upon a Leasehold Mortgagee, all such liability being hereby expressly waived by Lessor. In accordance with Section 13.2(a) hereof, if a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, upon an assignment of the Lease or Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Lease or Pick -Up Lease. (vii) No payment made to Lessor by Leasehold Mortgagee shall constitute an agreement that such payment was, in fact, due under the terms of the Lease. A Leasehold Mortgagee having made any payment to Lessor pursuant to Lessor's wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof, provided that Leasehold Mortgagee shall have made demand therefor not later than one (1) year after the date of payment. (viii) Notwithstanding any provision in this Lease to the contrary, foreclosure of a Leasehold Mortgage or any sale of Lessee's interest in the Premises in connection with a foreclosure, whether by judicial proceedings or by virtue of any power of sale contained in such Leasehold Mortgage, or any conveyance of Lessee's interest in the Premises from Lessee to a Leasehold Mortgagee or its nominee or designee by virtue of, or in lieu of, foreclosure or other appropriate proceedings, or any conveyance of Lessee's interest in the Premises by a Leasehold Mortgagee or its nominee or designee, shall not require the consent or approval of Lessor or constitute a Default and/or Breach under the Lease. (c) In the event of any conflict between the provisions of this Section 34 and any other provision of this Lease, this Section 34 shall control. (0132304811) STAFF REPORT ��pE�V1,►�� C& 4 1 i • N``��LT 1NNJ STAFF REPORT CITY ADMINISTRATION DATE: October 3, 2017 TO: Honorable Mayor and City Council FROM: Carlos R. Fandino Jr., City Administrator r: Diana Figueroa, Administrative Anal st Originator: g Y RECEIVED SEP 2 8 2017 CITY CLERK'S OFFICE RE: A Resolution Approving the Ground Lease Re -Assignment and Sublease at 2970 E. 5011 Street and Authorizing the Execution of Related Ground Lessor Estoppel, Consent and Ground Lease Amendment Recommendation A. Find that approval of the resolution proposed in this staff report is exempt from the California Environmental Quality Act ("CEQA"), because it is an administrative action that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a "project" as defined by CEQA Guidelines section 15378; and B. Adopt a resolution approving the ground lease re -assignment and sublease at 2970 E. 50tn Street and authorizing the execution of related Ground Lessor Estoppel, Consent and Ground Lease Amendment. Background As the Landlord of the property located at 2970 E. 501" Street (the "Premises"), the City recommends approving the proposed resolution which will allow the re -assignment of the Ground Lease for said premises (the "Lease") to NM GLCR, LP or another affiliate of New Mountain Net Lease Acquisition ("NM GLCR").; and an NM GLCR sublease to Arctic Glacier U.S.A., Inc. ("Arctic Glacier USA"). The main provisions of the Ground Lessor Estoppel, Consent and Ground Lease Amendment (the "Amendment") can be summarized as follows: • The Lease will be re -assigned from Arctic Ice Properties, LLC to NM GLCR; • NM GLCR will sublease the Premises to Arctic Glacier USA (the current occupant). The term of the Lease commenced on June 30, 2005 and is scheduled to expire on January 9, 2031. Under the Lease, the tenant is entitled to seven (7) options to extend the term of the Lease, Page 1 of 2 with each option being for a term of ten (10) years. By the Amendment, NM GLCR proposes to exercise three (3) of the seven (7) options, thus extending the term of the Lease to January 9, 2061 and leaving four (4) 10-year options available under the Lease. At present, all rent and other charges due and payable under the Lease have been paid in full to the City. Fiscal Impact A one-time $1,200 processing fee will be assessed by the City for the ground lease re- assignment. Attachment(s) 1. Resolution Approving the Ground Lease Re -Assignment and Sublease at 2970 E. 506' Street and Authorizing the Execution of Related Ground Lessor Estoppel, Consent and Ground Lease Amendment Page 2 of 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING THE GROUND LEASE RE -ASSIGNMENT AND SUBLEASE AT 2970 E. 50TH STREET AND AUTHORIZING THE EXECUTION OF RELATED GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT WHEREAS, the City of Vernon owns certain real property located at 2970 E. 50th Street in the City of Vernon, consisting of approximately 113,000 square feet of land and a building located thereon (the "Premises"); and WHEREAS, on January 5, 2005, the City Council of the City of Vernon adopted Resolution No. 8632 approving a Ground Lease Agreement (the "Lease") with Union Ice -Pacific, L.P., through its General Partner, Union Ice GP Inc. ("Union Ice"), dated as of December 27, 2004, for rental and renovation of the Premises for use as an ice production, food processing and cold storage facility; and WHEREAS, on October 12, 2005, the City Council of the City of Vernon adopted Resolution No. 8866 approving an Amendment to the Lease with Union Ice, which modified the commencement date of the Lease to June 30, 2005; and WHEREAS, on February 20, 2007, the City Council of the City of Vernon adopted Resolution No. 9251 approving the execution of a Landlord's Estoppel Certificate, Agreement and Consent which (i) permitted assignment of the Lease to Arctic Ice Properties, LLC ("Arctic Ice"); and (ii) permitted sublease (as amended, modified or restated, "Sublease") of the Premises to Arctic Glacier Vernon Inc. or an affiliate thereof ("Arctic Glacier Vernon"); and WHEREAS, on or about June 12, 2012, the City was notified by Arctic Glacier Vernon that (i) it along with several of its affiliates had commenced Court -supervised restructuring proceedings in Canada and thereunder had agreed to sell their business and all of their assets to H.I.G. Zamboni, LLC ("HIG"), which is the corporate parent of Arctic Glacier U.S.A., Inc. ("Arctic Glacier USA"), effective as of June 7, 2012 (the "Bankruptcy Sale"); and (ii) it desired to assign its interest in the Sublease' to HIG or an affiliate thereof, with the intention of continuing the operation of Arctic Glacier Vernon's business uninterrupted following closing of the Bankruptcy Sale; and WHEREAS, as of June 28, 2012, HIG changed its name to "Arctic Glacier LLC," but this fact was not made known to the City at the time; and WHEREAS, on July 17, 2012, the City Council of the City of Vernon adopted Resolution No. 2012-125 approving and authorizing the execution of a consent to the assignment of the Sublease from Arctic Glacier Vernon to HIG, which, unbeknownst to the City, had legally changed its name to "Arctic Glacier LLC," or an affiliate thereof;2 and WHEREAS, on July 27, 2012, the Bankruptcy Sale was completed (the "2012 Sublease Transaction"); and WHEREAS, following the 2012 Sublease Transaction, the current lessee under the Lease is Arctic Ice, and the current sublessee under the Sublease and occupant of the Premises is Arctic Glacier USA; and WHEREAS, by memorandum dated October 3, 2017, the City Administrator has recommended the approval of re -assignment of the Lease and Sublease and the authorization to execute the related ground 1 The June 12, 2012 letter misidentified the instrument for assignment as the Lease; this should have read "the Sublease." 2 In the fifth recital of Resolution No. 2012-125, the sender of the June 12, 2012 letter was misidentified as "Union Ice"; this should have read "Arctic Glacier - 2 - lessor estoppel, consent and ground lease amendment to and for the benefit of NM GLCR, L.P. or another affiliate of New Mountain Net Lease Acquisition Corporation ("NM GLCR"); and WHEREAS, the City Administrator further recommends approval of a sublease of the Premises by NM GLCR to Arctic Glacier USA; and WHEREAS, NM GLCR intends to continue to perform the obligations under the Lease from and after the date of such re- assignment; and WHEREAS, the City Council of the City of Vernon desires to approve the Lease re -assignment, the authorization to execute related ground lessor estoppel, consent and ground lease amendment to and in favor of NM GLCR, and the sublease from NM GLCR to Arctic Glacier USA. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 2: The City Council of the City of Vernon finds that this action is exempt under the California Environmental Quality Act (CEQA), because it is an administrative action that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a "project" as defined by CEQA Guidelines section 15378. SECTION 3: The City Council of the City of Vernon hereby approves, ratifies and confirms the recitals set forth herein with respect to the 2012 Sublease Transaction. SECTION 4: The City Council of the City of Vernon hereby approves the re -assignment of the Lease at 2970 E. 50th Street to NM Vernon." In the sixth recital, the instrument to be assigned was misidentified as the - 3 - GLCR and approves and authorizes the execution of the related Ground Lessor Estoppel, Consent, and Ground Lease Amendment (the "Amendment") in substantially the same form as the copy which is attached hereto as Exhibit A, including the consent to NM GLCR granting a leasehold mortgage on its interest in the Premises as permitted in the Amendment. SECTION 5: The City Council of the City of Vernon hereby approves of a sublease of the Premises from NM GLCR to Arctic Glacier USA. SECTION 6: The City Council of the City of Vernon hereby authorizes the Mayor or Mayor Pro-Tem to execute said Amendment for, and on behalf of, the City of Vernon and the City Clerk, or Deputy City Clerk, is hereby authorized to attest thereto. SECTION 7: The City Council of the City of Vernon hereby instructs the City Administrator, or his designee, to take whatever actions are deemed necessary or desirable for the purpose of implementing and carrying out the purposes of this Resolution and the transactions herein approved or authorized, including but not limited to, making any non -substantive changes to the Amendment attached hereto (including that NM GLCR may replace the initial "Lender" named therein with another lender upon reasonable prior notice to the City Administrator). SECTION 8: The City Council of the City of Vernon hereby directs the City Clerk, or the City Clerk's designee, to send a fully executed Amendment to NM GLCR. Lease; this should have read "the Sublease." - 4 - SECTION 9: The City Clerk, or Deputy City Clerk, of the City of Vernon shall certify to the passage, approval and adoption of this resolution, and the City Clerk, or Deputy City Clerk, of the City of Vernon shall cause this resolution and the City Clerk's, or Deputy City Clerk's, certification to be entered in the File of Resolutions of the Council of this City. APPROVED AND ADOPTED this 3rd day of October, 2017. ATTEST: City Clerk / Deputy City Clerk APPROVED TO FORM: •-P°^ Bria B un, Seni Deputy City Attorney Name: Title: Mayor / Mayor Pro-Tem - 5 - STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, , City Clerk / Deputy City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. , was duly passed, approved and adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Tuesday, October 3, 2017, and thereafter was duly signed by the Mayor or Mayor Pro-Tem of the City of Vernon. Executed this day of October, 2017, at Vernon, California. (SEAL) City Clerk / Deputy City Clerk - 6 - EXHIBIT A GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT THIS GROUND LESSOR ESTOPPEL, CONSENT AND GROUND LEASE AMENDMENT (this "Estoppel and Amendment") made as of this day of September, 2017, by and between THE CITY OF VERNON (individually and collectively, together with their successors and/or assigns, "Lessor") and [NM GLCR, L.P., a Delaware limited partnership] ("Lessee'). WHEREAS, Lessor has heretofore leased certain lands described on Exhibit A attached hereto (the "Premises") to Arctic Ice Properties, LLC ("Arctic Ice"), pursuant to a Ground Lease dated December 27, 2004, as amended by that Amendment to Lease dated August 24, 2005, as further amended by that certain Ground Lease re- assignment and sublease dated February 20, 2007 (as same may have been amended, modified, substituted, assigned or extended, the "Lease"); WHEREAS, the current lessee under the Lease is Arctic Ice, which subleases the Premises to the current tenant, Arctic Glacier U.S.A., Inc. ("Sublessee"). The agreement between Arctic Ice and Sublesseee shall be referred to herein as the "Sublease." WHEREAS, Lessee is desirous of obtaining from UBS AG, by and through its branch office at 1285 Avenue of the Americas, New York, New York (together with its successors and/or assigns, "Lender"), a loan in the approximate amount of $29,100,000.00 (the "Loan") secured by (among other things) a first leasehold mortgage upon Lessee's interest as lessee under the Lease in the Premises (the "First Leasehold Mortgage") and evidenced by, among other things, that certain Loan Agreement, by and between Lessee, as "Borrower," and Lender (the "Loan Agreement"; the First Leasehold Mortgage, the Loan Agreement, and all other documents executed and/or delivered in connection with the Loan are referred to herein, collectively, as the "Loan Documents"); WHEREAS, the First Leasehold Mortgage and any future leasehold mortgage and other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease shall be referred to herein as a "Leasehold Mortgage," and the holder of any Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee'; and WHEREAS, Lender is unwilling to make the Loan unless (i) Lessor confirms and restates certain provisions of the Lease respecting leasehold mortgages for Lender's benefit, and (ii) Lessor and Lessee amend the Lease to provide for certain revisions respecting leasehold mortgages for Lender's benefit, NOW THEREFORE, in consideration of ten dollars ($10.00) and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Lessor hereby certifies to and agrees with Lender as follows: 1. Lessor hereby acknowledges that Lender's notice address is as follows, for all purposes of the Lease: Address for Lender Notice: UBS AG, by and through its branch office at (or such other address as 1285 Avenue of the Americas, New York, New York Lender may provide from 1285 Avenue of the Americas time -to -time) New York, New York 10019 Attention: Transaction Management - Henry Chung with a copy to: Cassin & Cassin LLP 711 Third Avenue, 20t' Floor New York, New York 10017 Attention: Dennis W. Mensi, Esq. Facsimile No.: (212) 557-2952 (01323048;1) 2. Lessor hereby certifies, as of the date hereof, to Lender and Lessee and as follows: (a) Lessor is the owner of the fee simple estate in the Premises and is the Lessor under the Lease. (b) Lessee is the owner of the leasehold estate in the Premises and is the Lessee under the Lease. (c) The Lease is in full force and effect in accordance with its terms and has not been further assigned, supplemented, modified or otherwise amended and each of the obligations on Lessor's part to be performed to date under the Lease have been performed. (d) To the best of Lessor's knowledge, each of the obligations on Lessee's part to be performed to date under the Lease have been performed. (e) To the best of Lessor's knowledge, Borrower has no offsets, counterclaims, defenses, deductions or credits whatsoever with respect to the Lease, or any amounts owing thereunder. (f) With respect to the Lease, no options to renew or extend exist, and no security deposits, escrows or prepaid rent or liens have been paid, except as set forth therein. The Base Rent, additional rent, and other additional charges related to the Premises, including all charges for real property taxes, operating expenses and other such expenses, and all other sums payable by Lessee to the Lessor under the Lease, including utility charges during the original and any renewal term of the Lease, are the responsibility of Lessee under the Lease. (g) Other than the Lease and the Sublease, there do not exist any other effective agreements (including Subordination, Non -Disturbance and Attornment Agreements) concerning the Premises, whether oral or written between Lessor and Lessee (or their respective predecessors) under the Lease. (h) As of the date hereof, no Base Rent or additional rent is delinquent from Lessee under the Lease. The Base Rent currently payable by Lessee under the Lease is $11,913.56 per month. Base Rent due under the Lease has been paid through September 30, 2017. The Base Rent will next reset effective as of January 2026. (i) Subject to the extension set forth in Section 4(e) below, the current term of the lease shall expire on January 9, 2061, whereupon Lessee will have remaining four (4) renewal options of ten (10) years each. (j) Aside from the Sublease, neither Lessor nor Lessee has assigned the Lease, nor has Lessor sublet the Premises. (k) Lessor has not assigned, conveyed, transferred, sold, encumbered or mortgaged its interest in the Lease or the Premises and there are currently no mortgages, deeds of trust or other security interests encumbering Lessor's fee interest in the Premises and Lessor has not granted to any third party an option or preferential right to purchase all or any part of the Premises. (1) Lessor has not received written notice of any pending eminent domain proceedings or other governmental actions or any judicial actions of any kind against the Lessor's interest in the Premises. (m) Lessor has not received written notice that it is in violation of any governmental law or regulation applicable to its interest in the Premises and its operation thereon, including, without limitation, any environmental laws or the Americans with Disabilities Act, and has no reason to believe that there are grounds for any claim or such violation. (n) There are no actions, voluntary or otherwise, pending or, to the best knowledge of Lessor, threatened against Lessor under the bankruptcy, reorganization, moratorium or similar laws of the United States, any state thereof or any other jurisdiction. 3. Lessor hereby consents and agrees to the following: (a) assignment of the Lease from Arctic Ice to Lessee; {01323048;1 } 2 (b) sublease of the Premises from Lessee to Sublessee; and (c) anything in the Lease to the contrary notwithstanding, Lessee entering into the First Leasehold Mortgage in favor of the Lender as part of the security for the Loan, the Loan will also be secured by up to six (6) additional properties owned in fee by the Lessee, and recording the same of record thereby creating a lien and security interest on Lessee's leasehold estate in the Premises and assigning its rights under the Ground Lease to the Lender; provided, however, that the First Leasehold Mortgage and all rights acquired under it shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder; and provided, however, Landlord's consent to any of the foregoing is not intended, and shall not be construed (a) to modify or otherwise affect any provision of the Lease (except as may be set forth herein), or (b) as a waiver of any of Landlord's rights under the Lease. 4. In lieu of a separate subordination, non -disturbance and attornment agreement with the Lender, Lessor and Lessee agree to the following amendments and modifications of the Lease: (a) Notwithstanding anything to the contrary contained in the Lease, any mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering the Premises or any interest therein, other than any Leasehold Mortgage whether entered into by Lessee (any such mortgage, etc., being referred to herein as a "Fee Mortgage"; the holder of any Fee Mortgage is referred to herein as a "Fee Mortgagee") shall automatically be subject and subordinate to the Lease and to any Pick -Up Lease (as defined in Exhibit B attached hereto), and Lessor shall cause any such Fee Mortgage to expressly state in the instrument recorded against the Premises that such Fee Mortgage is so subordinate, and the Lease and the rights of Lessee (and, to the extent of any Pickup Lease, the rights of the Leasehold Mortgagee or its designee) in and to the Premises shall have priority over the Fee Mortgage. Lessee agrees with Lessor, for the benefit of any Fee Mortgagee that has satisfied the requirements of this Lease, to attorn to any transferee of Lessor's interest through foreclosure of a Fee Mortgage or a conveyance in lieu of foreclosure. (b) Section 34 of the Lease is hereby deleted from the Lease and replaced with the provisions set forth on Exhibit B attached hereto. (c) Notwithstanding anything to the contrary in the Lease (including, without limitation, Section 10 thereof), at any time when a Leasehold Mortgage shall be outstanding, or a Leasehold Mortgagee (or its nominee or designee) shall hold title to the Lessee's Interest, (a) Lessor agrees that the Leasehold Mortgagee may be added to the "Loss Payable Endorsement" (and as a mortgagee) of any and all insurance policies carried by Lessee with respect to the Lessee's interest therein; (b) the Leasehold Mortgagee shall be entitled to participate in any settlement regarding insurance proceeds or condemnation awards; (c) the Leasehold Mortgagee shall be entitled to collect and hold any such insurance proceeds, and to make such insurance proceeds available to restore the Premises in accordance with the terms and provisions contained in the Loan Agreement required in connection with the restoration of the Premises (as are customarily imposed by a Leasehold Mortgagee in connection with commercial loans similar to the Loan) so long as the Lease is not terminated as a result of such casualty solely to the extent such termination is permitted in the Lease; and (d) all condemnation awards payable with respect to the Premises and/or other improvements payable to Lessee (or on account of the Premises and/or other improvements) shall be paid to Leasehold Mortgagee for use in restoration or application in accordance with the terms of the Leasehold Mortgage. (d) There shall be no merger of the Lease or any interest in the Lease or of Lessee's leasehold interest with the fee estate in the Premises, by reason of the fact that the Lease or such interest therein, or Lessee's leasehold interest in the Premises, may be directly or indirectly held by or for the account of any person who shall also hold the fee estate in the Premises, or any interest in such fee estate, nor shall there be such a merger by reason of the fact that all or any part of Lessee's leasehold interest may be conveyed or mortgaged in a Leasehold Mortgage to a mortgagee or beneficiary who shall also hold the fee estate in the Premises or any interest of Lessor under the Lease. {01323048;1} (e) Lessee hereby notifies Lessor of and exercises the initial three (3) Options to extend the term of the Lease (for a total extension of thirty (30) years) as permitted by Section 36 of the Lease and Lessor and Lessee hereby agree that such extension of the term is effective as of the date hereof. 5. This Estoppel and Amendment and the representations, warranties and covenants contained herein are given with the understanding that this Estoppel and Amendment constitutes a material inducement for Lender in making the Loan to Lessee and that Lender shall rely hereon in making the Loan to Borrower. Lender may at any time, without Lessor's consent, sell, assign, participate or securitize all or any portion of Lender's rights and obligations under the Loan Documents, and any such sale, assignment, participation or securitization may be to one or more financial institutions or other entities, to private investors, and/or into the public securities market, in Lender's sole discretion. This Estoppel and Amendment and the representations, warranties and covenants contained herein shall inure to the benefit of Lender, its successors and assigns (including, without limitation, each and every owner and holder of the Loan, each person who, pursuant to proceedings to enforce the Leasehold Mortgage or conveyance in lieu of such proceedings, may succeed to Lessee's interest under the Lease and each person who may thereafter acquire Lessee's interest under the Lease by purchase or otherwise) and shall be binding on Lessor, its heirs, legal representatives, successors and assigns and Lessor further agrees that this Agreement may be relied upon by Lender, its successors and assigns and any nationally recognized statistical rating agency rating any securities issued in connection with the Loan or any portion thereof. 6. This Estoppel and Amendment may be executed in any number of counterparts, each of which shall be effective only upon delivery and thereafter shall be deemed an original, and all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Any signature page of this Estoppel and Amendment may be detached from any counterpart of this Estoppel and Amendment without impairing the legal effect of any signatures thereon and may be attached to another counterpart of this Estoppel and Amendment identical in form hereto but having attached to it one or more additional signature pages. IN WITNESS WHEREOF, the undersigned parties have executed this Estoppel, Consent and Amendment as of the date and year first written above. LESSOR: THE CITY OF VERNON By:_ Name: Title: ACCEPTED AND AGREED TO: LESSEE: [NM GLCR, L.P., a Delaware limited partnership] By:_ Name: Title: {01323048;1} EXHIBIT A PARCEL 1 AS SHOWN ON RESOLUTION NO. 8363 FOR LOT LINE ADJUSTMENT, AS EVIDENCED BY DOCUMENT RECORDED FEBRUARY 10, 2004 AS INSTRUMENT NO. 2004-0296188 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: PARCELI THAT PORTION OF LOT 31, OF THE 500 ACRE TRACT OF THE LOS ANGELES FRUIT LAND ASSOCIAl ION. IN THE CITY OF VERNON. COUNTY OF LOS A'IGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 3. PAGES 156 AND 157 OF MISCEI.LANEOUS RECORDS, IN THE OFFICE OF TIIE. COUNTY RECORDER OF SAID COUNTY. DESCRIBED AS FOLLOWS: BEGINN14G AT THE NORTHEAST CORNER OF SAID LOT 31. 1 HENCE SOUTH 321.50 FEET ALONG THE EAST LINE OF SAID LOT 31 TO THE NORTH LINE OF THAT 1-.00 FOOT WIDE RIGHT OF WAY OF THE LOS ANGELES !UNCTION RAILWAY, AS DESCRIBED IN DEED TO CENTRAL MANUFACTURING DISTRICT INC., RECORDED 4-7-1927, IN BOOK 4752, PAGE. 265 OF OFFICIAL RECORDS, IN SAID RE(*ORDER'S OFFICE; THENCE WEST 347.70 FEET ALONG SAID NORTH LINE OF SAID RIGHT OF WAY TO'FHE INTERSECTION OF A LINE THAT IS 397.70 FELT WEST MEASURED PERPENDICULAR TO AND IS PARALLEL WITH THE EAST IJNE OF SAID LOT 31; THENCE NORTH 321,50 FEET ALONG LAST SAID PARALLEL LINE TO THE NORTH LINE OF SAID LOT 31. 'CHENCE EAST 387.70 FEET ALONG SAID NORTH LINE OF SAID LOT 31. ALSO BEING THE CENTERLINE :)F EAST 50TH STREET, 40.00 FEET WIDE, AS DESCRIBED IN DEED TO THE; CITY OF VERNON. RECORDcD 9-5-1929, AS DOCUMENT NO. 1410. IN ROOK 43?5 PAGE 149 OF OFFICIAL RECORDS. IN SAID RI CORDER'S OFFICE, TO THE POINT OF BEGINNING. EXCEPT THEREFROM THE NORTH 2O.00 FEET OF SAID LOT 31. THE SOUTH LINE OF SAID NORTH 2O.00 FEET. ALSO BEING THE SOUTH UNE OF EAST SM STREET 44-00 FEET WIDE, AS DESCRIBED IN DEED TO rHE CITY OF VERNON. RECORDED9-5-1929. AS DOC'UME\ F NO. 1410, IN BOOK 9315, PAGE 149 OF OFFIC'1Ai RECORDS. IN SAID RECORDER'S OFFICE. {01323048;1} EXHIBIT B 34. (a) Notwithstanding the provisions of Section 13.1 of the Lease to the contrary, Lessee may from time to time, without the consent of but upon written notice to Lessor, execute and deliver a mortgage, assignment, pledge, assignment of rents, deed of trust, security agreement, UCC financing statement and/or other security documents encumbering all or any portion of Lessee's interest in the Premises pursuant to the Lease (any such mortgage, etc., being referred to herein as a "Leasehold Mortgage"; the holder of the Leasehold Mortgage, or any successor or assignee as holder of such Leasehold Mortgage (as applicable), is referred to herein as a "Leasehold Mortgagee") that does not result in a change in use of the Premises; provided, however, Lessor shall have a reasonable right of approval of financing terms to the extent they relate to Lessor's interest in the Premises. The Leasehold Mortgagee may enforce its Leasehold Mortgage and acquire title to the interest encumbered thereby in any lawful way, including, without limitation, through foreclosure; provided, all such rights shall be subject and subordinate to each and all of the covenants, conditions, obligations and restrictions set forth in the Lease (as amended) and to the rights of Lessor thereunder. Subject to the terms of the Leasehold Mortgage, following a default thereunder (beyond any applicable notice and cure period), pending a foreclosure of a Leasehold Mortgage, the related Leasehold Mortgagee may take possession of and rent the Premises, and upon acquisition thereof, through foreclosure or otherwise, may, without further consent of Lessor, sell and assign Lessee's interest in the Premises by assignment in which the assignee shall expressly assume and agree to observe and perform all of the covenants of Lessee herein contained, and such assignee may make a purchase money leasehold mortgage of Lessee's leasehold interest in the Premises to the assignor. Lessor agrees that following the foreclosure of Leasehold Mortgage, Lessor will waive its right to enforce any noncurable default (i.e., any default hereunder that is personal to the previous lessee) against the transferee of Lessee's interest through foreclosure or a conveyance in lieu of foreclosure. A Leasehold Mortgagee shall be liable to perform the obligations herein imposed on Lessee only during the period that Leasehold Mortgagee has ownership of Lessee's interest in the Premises. Nothing contained in the Leasehold Mortgage shall release or be deemed to relieve the Lessee from the full and faithful observance and performance of Lessee's covenants herein contained, or from any liability for the nonobservance or nonperformance thereof, nor be deemed to constitute a waiver of any right of Lessor under this Lease. (b) Upon the execution and recording of a Leasehold Mortgage, the Leasehold Mortgagee shall send to Lessor a true copy of the Leasehold Mortgage with the recordation information noted, together with written notice specifying the name and address of Leasehold Mortgagee. So long as such Leasehold Mortgage shall remain unsatisfied of record or until written notice of satisfaction is given by Leasehold Mortgagee to Lessor, and subject to the provisions of the first sentence of this Section 34(b), the following provisions shall apply with respect to such Leasehold Mortgage. (i) There shall be no termination, cancellation, surrender, acceptance of surrender, amendment or modification of the Lease by joint action of Lessor and Lessee or by Lessee alone, without in each case the prior consent in writing of Leasehold Mortgagee. Any such termination, cancellation, surrender, acceptance of surrender, amendment or modification made without the consent of Leasehold Mortgagee shall not be binding on Leasehold Mortgagee. (ii) Lessor shall, upon serving Lessee with any notice of Default and/or Breach, simultaneously serve a copy of such notice upon Leasehold Mortgagee, and no such notice to Lessee shall be deemed given unless a copy is so served upon Leasehold Mortgagee in the manner specified in this Lease for the giving of notices. (iii) In the event of any Default and/or Breach by Lessee under this Lease, Leasehold Mortgagee shall have the same period, after service of notice upon such Default and/or Breach to remedy or cause to be remedied the Default and/or Breach, that Lessee has under this Lease to remedy or cure same, plus an additional fifteen (15) days if such Default and/or Breach can be cured solely with the payment of money, or an additional thirty (30) days for all other Defaults and/or Breaches (such period, the "Leasehold Mortgagee Cure Period"). Lessor shall accept such performance by or at the instigation of a Leasehold Mortgagee as if the performance had been done by Lessee. Each notice of Default and/or Breach given by Lessor shall (i) state the amounts of Base Rent and other payments that are then claimed to be in default, and/or (ii) provide a description of any non -monetary Default and/or Breach. 101323048;1 } (iv) Notwithstanding any provision in this Lease to the contrary, if any Default and/or Breach shall occur that, pursuant to any provision of this Lease entitles Lessor to terminate the Lease, and if before the expiration of the related Leasehold Mortgagee Cure Period with respect to all such defaults (measured from the date of service of the notice of termination upon such Leasehold Mortgagee), a Leasehold Mortgagee shall have notified Lessor of its desire to nullify such notice and Leasehold Mortgagee shall have agreed to pay or cause to be paid to Lessor within the Leasehold Mortgagee Cure Period all amounts of the Base Rent and other payments then in default, and shall have agreed to commence or cause to be commenced the work of complying with all of the other requirements of the Lease, if any are then in default, and shall prosecute or cause the prosecution of same to completion with reasonable diligence, then in such event, Lessor shall not be entitled to terminate this Lease, and any notice of termination theretofore given shall be void and of no effect. (v) If Lessor shall elect to terminate this Lease by reason of any Default and/or Breach, Leasehold Mortgagee shall not only have the right to nullify any notice of termination by agreeing to cure such Breach as described in Paragraph 34(b)(iv) above, but shall also have the separate right to postpone and extend the specified date for the termination of the Lease as stated by Lessor in its notice of termination, provided that Leasehold Mortgagee shall continue to cure or cause to be cured any then existing monetary Breach and any other Breach capable of being cured by Leasehold Mortgagee, and meanwhile pay or cause to be paid the Base Rent, and provided further that Leasehold Mortgagee shall forthwith take steps to acquire or sell Lessee's interest in the Premises by foreclosure of Leasehold Mortgage or otherwise and shall prosecute the same to completion with reasonable diligence. If Leasehold Mortgagee is prohibited by any process or injunction issued by any court or by reason of any action by any court having jurisdiction of any bankruptcy, debtor rehabilitation or insolvency proceeding involving Lessee from commencing or prosecuting foreclosure or other appropriate proceedings, the period for Leasehold Mortgagee to acquire or sell Lessee's interest in the Premises shall be extended for the period of such prohibition, provided that Leasehold Mortgagee shall diligently attempt to remove any such prohibition. If Lessee's interest is acquired or sold as described above through foreclosure of Leasehold Mortgage or a conveyance in lieu of foreclosure, the intended termination of the Lease by Lessor under the notice described above shall be automatically nullified, and this Lease will continue as if such notice of termination had never been given. (vi) In the event of termination of this Lease for any reason whatsoever (including, without limitation, if the Lease shall be rejected (or deemed rejected) in a bankruptcy or similar proceeding involving Lessee or otherwise), Lessor shall promptly notify the Leasehold Mortgagee of such termination and the amount of the sums then due to Lessor under this Lease, and the Leasehold Mortgagee shall have the right to have Lessor enter into a new lease in the Premises with Leasehold Mortgagee or its nominee or designee (such new Lease, a "Pick -Up Lease"), in accordance with the following provisions: a. A Leasehold Mortgagee or its nominee or designee shall be entitled to such new lease if such Leasehold Mortgagee shall make written request upon Lessor for such new lease on or before the date that is thirty (30) days after the date on which such Leasehold Mortgagee shall have received the notice from Lessor of such termination and if such written request is accompanied by the agreement of the Leasehold Mortgagee to pay to Lessor upon the execution and delivery of the Pick - Up Lease the sums due to Lessor under this Lease as of the date of such Pick -Up Lease. b. The Pick -Up Lease shall be for what would have been the remainder of the Term if the Lease had not been terminated, effective as of the date of such termination, at the Base Rent and upon the terms, provisions, covenants and agreements as herein contained, including all rights of Lessee (including, without limitation, for renewal options) that are provided in this Lease. C. The Pick -Up Lease shall be of the same priority as this Lease and shall be senior in priority to any Fee Mortgage in effect as of the granting of the Pick -Up Lease. d. In the Pick -Up Lease, the Lessee named therein shall agree to perform and observe all covenants contained therein on lessee's part to be performed, except that, in accordance with Section 13.2(a) hereof, upon an assignment of the Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Pick -Up Lease. {01323048J } e. The initial conveyance by any Leasehold Mortgagee or its nominee or designee lessee under the Pick -Up Lease shall not require the consent of Lessor or constitute a breach of any provision of or a default under the Pick -Up Lease. f. Except when a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, no liability for the payment of the Base Rent or the performance of any of Lessee's covenants and agreements under this Lease shall attach to or be imposed upon a Leasehold Mortgagee, all such liability being hereby expressly waived by Lessor. In accordance with Section 13.2(a) hereof, if a Leasehold Mortgagee or its nominee or designee becomes the Lessee under this Lease or a Pick -Up Lease, upon an assignment of the Lease or Pick -Up Lease, the Lessee named therein shall not have any further rights, obligations or liabilities under the Lease or Pick -Up Lease. (vii) No payment made to Lessor by Leasehold Mortgagee shall constitute an agreement that such payment was, in fact, due under the terms of the Lease. A Leasehold Mortgagee having made any payment to Lessor pursuant to Lessor's wrongful, improper or mistaken notice or demand shall be entitled to the return of any such payment or portion thereof, provided that Leasehold Mortgagee shall have made demand therefor not later than one (1) year after the date of payment. (viii) Notwithstanding any provision in this Lease to the contrary, foreclosure of a Leasehold Mortgage or any sale of Lessee's interest in the Premises in connection with a foreclosure, whether by judicial proceedings or by virtue of any power of sale contained in such Leasehold Mortgage, or any conveyance of Lessee's interest in the Premises from Lessee to a Leasehold Mortgagee or its nominee or designee by virtue of, or in lieu of, foreclosure or other appropriate proceedings, or any conveyance of Lessee's interest in the Premises by a Leasehold Mortgagee or its nominee or designee, shall not require the consent or approval of Lessor or constitute a Default and/or Breach under the Lease. (c) In the event of any conflict between the provisions of this Section 34 and any other provision of this Lease, this Section 34 shall control. {01323048;1}