______________________________________,
a ________ limited partnership
(Mortgagor)
to
▇▇▇▇▇▇ FINANCIAL CORPORATION,
a ____________ corporation
(Mortgagee)
______________________
FIRST MORTGAGE AND
SECURITY AGREEMENT
______________________
Dated: As of December __, 1995
Location:
County:
PREPARED BY AND UPON
RECORDATION RETURN TO:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
THIS FIRST MORTGAGE AND SECURITY AGREEMENT (the
"Mortgage"), is made as of the ____ day of December, 1995,
by ______________________________________________________, a
_______ limited partnership having its principal place of
business at ________________________________________________
_________________________________________________, as
mortgagor ("Mortgagor"), and ▇▇▇▇▇▇ FINANCIAL CORPORATION, a
________ corporation, having its principal place of business
at ____ __________________________________________________,
as mortgagee ("Mortgagee").
W I T N E S S E T H:
To secure the payment of an indebtedness in the
principal sum of _________________________________ AND 00/100
DOLLARS ($_____________), lawful money of the United States
of America, to be paid with interest according to a certain
note dated the date hereof made by Mortgagor to Mortgagee
(the note, together with all extensions, renewals or
modifications thereof being hereinafter collectively called
the "Note") (said indebtedness, interest and all other
amounts evidenced and/or secured by the Note, this Mortgage
and the Other Security Documents being collectively called
the "Debt"), Mortgagor has mortgaged, given, granted,
bargained, sold, aliened, enfeoffed, conveyed, confirmed,
pledged, assigned, set over and hypothecated and by these
presents does mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, pledge, assign, set over and
hypothecate unto Mortgagee, its successors and assigns, the
real property described in Exhibit A attached hereto (the
"Premises") and the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located
thereon (the "Improvements");
TOGETHER WITH: all right, title, interest and
estate of Mortgagor now owned, or hereafter acquired, in and
to the following property, rights, interests and estates (the
Premises, the Improvements together with the following
property, rights, interests and estates being hereinafter
collectively referred to as the "Mortgaged Property"):
(a) all easements, rights-of-way, strips and gores
of land, streets, ways, alleys, passages, sewer rights,
water, water courses, water rights and powers, and
rights and development rights, and all estates, rights,
titles, interests, privileges, liberties, tenements,
hereditaments and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining
to the Premises and the Improvements and the reversion
and reversions, remainder and remainders, and all land
lying in the bed of any street, road or avenue, opened
or proposed, in front of or adjoining the Premises, to
the center line thereof and all the estates, rights,
titles, interests, dower and rights of dower, curtesy
and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of
Mortgagor of, in and to the Premises and the
Improvements and every part and parcel thereof, with the
appurtenances thereto;
(b) all machinery, equipment, fixtures (including
but not limited to all heating, air conditioning,
plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature
whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest, now or hereafter located upon
the Premises and the Improvements, or appurtenant
thereto, and usable in connection with the present or
future management, maintenance, operation and occupancy
of the Premises and the Improvements and all building
equipment, materials and supplies of any nature
whatsoever owned by Mortgagor, or in which Mortgagor has
or shall have an interest, now or hereafter located upon
the Premises and the Improvements, or appurtenant
thereto, or usable in connection with the present or
future management, maintenance, operation and occupancy
of the Premises and the Improvements (hereinafter
collectively called the "Equipment"), and the right,
title and interest of Mortgagor in and to any of the
Equipment 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 Mortgaged Property is located (the "Uniform
Commercial Code"), superior in lien to the lien of this
Mortgage;
(c) all awards or payments, including interest
thereon, which may heretofore and hereafter be made with
respect to the Mortgaged 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 said right), or for a
change of grade, or for any other injury to or decrease
in the value of the Mortgaged Property;
(d) all written leases and other rental agreements
(collectively, the "Written Leases"), affecting the use,
enjoyment or occupancy of the Premises and the
Improvements heretofore or hereafter entered into (the
Written Leases and all other similar agreements
hereinafter collectively referred to as the "Leases")
and all rents, revenues, issues and profits (including
all oil and gas or other mineral royalties and bonuses)
from the Premises and the Improvements (the "Rents") and
all proceeds from the sale or other disposition of the
Leases and the right to receive and apply the Rents to
the payment of the Debt;
(e) all proceeds of and any unearned premiums on
any insurance policies covering the Mortgaged 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
Mortgaged Property;
(f) the right, in the name and on behalf of
Mortgagor, to appear in and defend any action or
proceeding brought with respect to the Mortgaged
Property and to commence any action or proceeding to
protect the interest of Mortgagee in the Mortgaged
Property;
(g) all right, title and interest of Mortgagor
arising from the operation of the Property in and to all
payments for goods or property sold or leased or for
services rendered, whether or not yet earned by
performance, and not evidenced by an instrument or
chattel paper (hereinafter referred to as "Accounts
Receivable"), including, without limiting the generality
of the foregoing, all rights to payment from any
consumer credit/charge card organization or entity (such
as, or similar to, the organizations or entities which
sponsor and administer the American Express Card, the
Visa Card, the Mastercard, the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Card, or
the Discover Card). Accounts Receivable shall include
those now existing or hereafter created, substitutions
therefor, proceeds (whether cash or noncash, movable or
immovable, tangible or intangible) received upon the
sale, exchange, transfer, collection or other
disposition or substitution thereof and any and all of
the foregoing and proceeds therefrom;
(h) all contract rights, with respect to, or which
may in any way pertain to, the Premises or the business
of the Mortgagor, including, without limitation, all
refunds, rebates, security deposits, or other expectancy
under or from any such account or contract right;
(i) all general intangibles with respect to, or
which may in any way pertain to, the Premises or the
business of the Mortgagor, including, without
limitation, any trade names, or other names under or by
which the Premises may at any time be operated or known,
the good will of the Mortgagor in connection therewith
and the right of the Mortgagor to carry on business
under any or all such name or names and any variant or
variants thereof, insofar as the same may be
transferable by the Mortgagor without breach of any
agreement pursuant to which the Mortgagor may have
obtained its right to use such name or names, and any
and all trademarks, prints, labels, advertising concepts
and literature;
TO HAVE AND TO HOLD the above granted and described
Mortgaged Property unto and to the use and benefit of
Mortgagee, and the successors and assigns of Mortgagee,
forever;
PROVIDED, HOWEVER, these presents are upon the
express condition that, if Mortgagor shall well and truly pay
to Mortgagee the Debt at the time and in the manner provided
in the Note and this Mortgage and shall well and truly abide
by and comply with each and every covenant and condition set
forth herein and in the Note, these presents and the estate
hereby granted shall cease, terminate and be void;
AND Mortgagor represents and warrants to and
covenants and agrees with Mortgagee as follows:
PART I
PROVISIONS OF GENERAL APPLICATION
1. Payment of Debt and Incorporation of
Covenants, Conditions and Agreements. Mortgagor will pay
the Debt at the time and in the manner provided in the Note
and in this Mortgage. All the covenants, conditions and
agreements contained in (a) the Note and (b) all and any of
the documents other than the Note or this Mortgage now or
hereafter executed by Mortgagor and/or others and by or in
favor of Mortgagee, which wholly or partially secure or
guaranty payment of the Note including but not limited to the
First Assignment of Leases and Rents (the "Assignment of
Rents") between Mortgagor, as assignor and Mortgagee, as
assignee (collectively, the "Other Security Documents"), are
hereby made a part of this Mortgage to the same extent and
with the same force as if fully set forth herein.
2. Warranty of Title. Mortgagor warrants that
Mortgagor has good title to the Mortgaged Property and has
the right to mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, pledge, assign and hypothecate and
grant a security interest in the same and that Mortgagor
possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Mortgaged Property free and
clear of all liens, encumbrances and charges whatsoever
except for those exceptions shown in the title insurance
policy insuring the lien of this Mortgage. Mortgagor shall
forever warrant, defend and preserve such title and the
validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against the
claims of all persons whomsoever.
3. Insurance. (a) Mortgagor will keep the
Mortgaged Property insured against loss or damage by fire,
flood and such other hazards, risks and matters, as Mortgagee
may from time to time require, including, without limitation,
rental value insurance against the abatement in rent or
business interruption insurance for at least twelve (12)
months, general public liability in an amount not less than
$1,000,000.00, including excess liability coverage and
umbrella liability insurance, boiler and machinery insurance,
and earthquake and/or hurricane insurance. Mortgagor shall
pay the premiums for such insurance (the "Insurance
Premiums") as the same become due and payable. All policies
of insurance (the "Policies") shall (i) be issued under forms
acceptable to Mortgagee (containing the standard New York
mortgagee non-contribution clause naming the Mortgagee as the
insured mortgagee and the person to which all payments made
by the Qualified Insurer (hereinafter defined) shall be
paid); (ii) provide for at least thirty (30) days prior
written notice to the Mortgagee of any cancellation,
reduction in an amount or change in insurance coverage; (iii)
contain a replacement cost endorsement for 100% of all
replacement costs relating to the Improvements (without
deduction for depreciation); (iv) contain an "enforcement" or
"Law and Ordinance" endorsement in form and substance
satisfactory to Mortgagee; and (v) be issued by insurers
qualified under the laws of the State in which the Mortgaged
Property is located, duly authorized and licensed to transact
insurance business in such State and reflecting a claims-
paying ability of A or better as determined by Standard &
Poors' Corporation ("S&P"), Duff and ▇▇▇▇▇▇ Credit Rating Co.
("Duff"), if rated by Duff, Fitch Investors Service, Inc.
("Fitch"), if rated by Fitch, and a claims paying ability of
A2 as determined by ▇▇▇▇▇'▇ Investors Service, Inc.
("Moody's"), if rated by Moody's (each such insurer
hereinafter referred to as a "Qualified Insurer",
collectively "Qualified Insurers"). Such insurance shall not
be invalidated due to the use or occupancy of the Property
for purposes more hazardous than are permitted by the policy.
The maximum amount deductible permitted under each insurance
policy shall be such as is customarily carried by owners or
managing agents operating first class multi-family residences
of similar type and size of the Mortgaged Property.
Mortgagor shall deliver the Policies, or duplicate originals
of the same, to Mortgagee. Not later than sixty (60) days
prior to the expiration date of each of the Policies,
Mortgagor will deliver evidence satisfactory to Mortgagee of
the renewal of each of the Policies. The Mortgagor shall not
insure the Mortgaged Property under any insurance policy
other than as expressly set forth herein.
(a) If the Mortgaged Property shall be damaged or
destroyed, in whole or in part, by fire or other casualty,
Mortgagor shall give prompt notice thereof to Mortgagee. The
net amount of all insurance proceeds received by Mortgagee
with respect to such damage or destruction, shall be held in
a segregated account (the "Net Proceeds Account") and
invested in an Eligible Investment (hereinafter defined).
Mortgagee shall be entitled to deduct from such insurance
proceeds all of its administrative costs and expenses
reasonably incurred in connection with the investing and
collection of such insurance proceeds, and the balance if any
(the "Net Proceeds") shall be disbursed by Mortgagee in
accordance with the terms and conditions set forth herein to
pay for the costs and expenses of the Restoration
(hereinafter defined) provided (i) no Event of Default has
occurred and remains uncured under this Mortgage, the Note or
any of the Other Security Documents, (ii) Mortgagor proceeds
promptly after the insurance claims are settled with the
restoration, replacement, rebuilding or repair of the
Mortgaged Property as nearly as possible to the condition the
Mortgaged Property was in immediately prior to such fire or
other casualty (the "Restoration"), (iii) the Restoration
shall be done in compliance with all applicable laws, rules
and regulations, and, following the Restoration, the
Mortgaged Property shall be permitted under all applicable
zoning laws to be used for, and shall continue to be used
for, all purposes associated with multi-family residences,
(iv) a set of the plans and specifications in connection with
the Restoration shall be submitted to Mortgagee and shall be
acceptable to Mortgagee in all respects, (v) all costs and
expenses incurred by Mortgagee in connection with making the
Net Proceeds available for the Restoration of the Mortgaged
Property including, without limitation, counsel fees and
inspecting engineer fees incurred by Mortgagee, shall be paid
by Mortgagor, (vi) rental loss insurance is available to
offset fully any abatement of rent to which any tenant of the
Mortgaged Property may be entitled or any rent loss arising
out of the cancellation of any Lease as a result of the
casualty, throughout the Restoration and a reasonable-lease-
up period following the Restoration, and (vii) in Mortgagee's
judgment, the Restoration must be able to be completed within
one (1) year after the loss and at least one (1) year prior
to the Maturity Date of the Note. The term "Eligible
Investment" shall mean any investment approved by Mortgagee
in its sole discretion.
(b) The Net Proceeds shall be held in trust in the
Net Proceeds Account. The Net Proceeds shall be paid by
Mortgagee (or by a disbursing agent ("Depository") selected
by Mortgagee), to, or as directed by, Mortgagor from time to
time during the course of the Restoration, upon receipt of
evidence, and certification from Mortgagor, satisfactory to
Mortgagee, that (i) all materials installed and work and
labor performed (except to the extent they are to be paid for
out of the requested payment) in connection with the
Restoration have been paid for in full, (ii) no notices of
intention, mechanics' or other liens or encumbrances on the
Mortgaged Property arising out of the Restoration exist, and
(iii) the balance of the Net Proceeds plus the balance of any
deficiency deposits given by Mortgagor to Mortgagee or
Depository pursuant to the provisions of this paragraph
hereinafter set forth shall be sufficient to pay in full the
balance of the cost of the Restoration. Mortgagor shall pay
all fees and expenses of the Depository in connection with
the above.
(c) Notwithstanding anything to the contrary
contained herein, if the Net Proceeds shall be less than
$50,000.00, only one disbursement shall be required upon the
completion of the Restoration to the satisfaction of
Mortgagee. If the Net Proceeds shall be $50,000.00 or more,
Mortgagee shall disburse the Net Proceeds as provided above,
however, in no event shall Mortgagee be required to disburse
such Net Proceeds, or any portion thereof, more often than
once every thirty (30) days. If at any time the Net
Proceeds, or the undisbursed balance thereof, shall not be
sufficient to pay in full the balance of the cost of the
Restoration, Mortgagor shall deposit the deficiency with
Mortgagee or Depositary before any further disbursement of
the Net Proceeds shall be made.
(d) Any amount of the Net Proceeds received by
Mortgagee and not required to be disbursed for the
Restoration pursuant to the provisions of this paragraph
hereinabove set forth shall be retained and applied by
Mortgagee toward the payment of the Debt whether or not then
due and payable in such priority and proportions as Mortgagee
in its discretion shall deem proper. Upon the receipt and
retention by Mortgagee of such insurance proceeds, the lien
of this Mortgage shall be reduced only by the amount thereof
received and retained by Mortgagee and actually applied by
Mortgagee in reduction of the Debt.
(e) Notwithstanding anything to the contrary
contained herein, Mortgagee shall not be obligated to make
the Net Proceeds available for Restoration of the Mortgaged
Property unless the principal balance of the Note following
the completion of the Restoration (assuming the amount of Net
Proceeds received by Mortgagee in excess of the cost of the
Restoration (as estimated by Mortgagee) is applied to the
prepayment of the Note) will be in an amount sufficient to
cause (i) the Debt Service Coverage Ratio (hereinafter
defined) applicable to the Mortgaged Property immediately
following the Restoration to be not less than 1.3 to 1.0 and
(ii) in the event of any Restoration involving Net Proceeds
of more than $250,000.00, the ratio of (a) the appraised
value of the Mortgaged Property after completion of the
Restoration (as determined by an independent third-party
appraiser holding an MAI designation and having a national
practice and at least ten (10) years real estate experience
appraising properties of a similar nature and type as the
Mortgaged Property) to (b) the then outstanding principal
balance of the Note to be equal to or greater than the
Minimum Loan to Value Ratio (hereinafter defined). The term
"Minimum Loan to Value Ratio" means a ratio equal to the
lesser of (i) 1.33 to 1.0 or (ii) the ratio of (a) the
appraised value of the Mortgaged Property on the date hereof
to (b) the then outstanding principal balance of the Note.
The fee for such appraisal shall be paid for by the
Mortgagor.
4. Payment of Taxes, etc. Mortgagor shall pay
all taxes, assessments, water rates and sewer rents, now or
hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof (the "Taxes") and all ground
rents, maintenance charges, other governmental impositions,
and other charges, including, without limitation, vault
charges and license fees for the use of vaults, chutes and
similar areas adjoining the Premises, now or hereafter levied
or assessed or imposed against the Mortgaged Property or any
part thereof (the "Other Charges") as same become due and
payable. Upon written request from Mortgagee, Mortgagor will
deliver to Mortgagee evidence satisfactory to Mortgagee that
the Taxes and Other Charges have been so paid or are not then
delinquent. Mortgagor shall not suffer and shall promptly
cause to be paid and discharged any lien or charge whatsoever
which may be or become a lien or charge against the Mortgaged
Property, and shall promptly pay for all utility services
provided to the Mortgaged Property. Mortgagor shall furnish
to Mortgagee receipts for the payment of the Taxes, Other
Charges and said utility services prior to the date the same
shall become delinquent.
Notwithstanding the above, after prior written
notice to Mortgagee, Mortgagor, at its own expense, may
contest by appropriate legal proceeding, promptly initiated
and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any
of the Taxes, provided that (i) no Event of Default under the
Note or this Mortgage shall have occurred and be continuing,
(ii) such proceeding shall suspend the collection of the
Taxes from Mortgagor and from the Mortgaged Property, (iii)
such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to
which Mortgagor is subject and shall not constitute a default
thereunder, (iv) neither the Mortgaged Property nor any part
thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost, (v) Mortgagor shall
have set aside adequate reserves for the payment of the
Taxes, together with all interest and penalties thereon, and
(vi) Mortgagor shall have furnished such security as may be
reasonably required in the proceeding, or as may be requested
by Mortgagee to insure the payment of any such Taxes,
together with all interest and penalties thereon.
1. Escrow Fund. Mortgagor will comply with any
requirement imposed by any Rating Agency (as hereinafter
defined) as a condition of its initial rating, the Federal
National Mortgage Association ("FNMA") or the Federal Home
Loan Mortgage Corporation ("▇▇▇▇▇▇▇ Mac"), with respect to
the establishment of an escrow for Taxes and Insurance.
2. Condemnation. (a) Mortgagor shall give
Mortgagee prompt notice of the actual or threatened
commencement of any condemnation or eminent domain proceeding
and shall deliver to Mortgagee copies of any and all papers
served in connection with such proceedings. If less than 25%
of the land constituting the Mortgaged Property is taken,
then the net amount of all awards and payments received by
Mortgagee with respect to such taking shall be held in a
segregated account (the "Net Awards Account") and invested in
an Eligible Investment. Mortgagee shall be entitled to
deduct from the condemnation award all of its administrative
costs and expenses incurred in connection with investing and
collecting such condemnation award and the balance, if any
(hereinafter referred to as the "Net Award"), will be
disbursed by Mortgagee to pay for the costs and expenses of
the Condemnation Restoration (hereinafter defined), provided
(i) Mortgagor is not in default under this Mortgage, the Note
or any of the Other Security Documents, (ii) Mortgagor
proceeds promptly after the making of any award of payment
for such taking with the restoration, replacement, rebuilding
or repair of the Mortgaged Property as nearly as possible to
the condition the Mortgaged Property was in immediately prior
to such taking (the "Condemnation Restoration"), (iii) the
Condemnation Restoration shall be done in compliance with all
applicable laws, rules and regulations, and, following the
Condemnation Restoration, the Mortgaged Property shall be
permitted under all applicable zoning laws to be used for,
and shall continue to be used for, all purposes associated
with multi-family residences, (iv) a set of plans and
specifications in connection with the Condemnation
Restoration shall be submitted to Mortgagee and shall be
satisfactory to Mortgagee in all respects, (v) Mortgagor
shall have reimbursed Mortgagee for all costs and expenses
incurred by Mortgagee in connection with making the Net Award
available for the Condemnation Restoration of the Mortgaged
Property, including, without limitation, counsel fees,
inspecting engineer fees and appraisal fees incurred by
Mortgagee, (vi) rental loss proceeds are available to offset
in full any loss in rents throughout the Condemnation
Restoration and a reasonable lease-up period following the
completion of the Condemnation Restoration and (vii) in the
opinion of Mortgagee the Condemnation Restoration of the
Mortgaged Property can be completed within one (1) year after
the taking and at least one (1) year prior to the maturity
date of the Note.
(a) The Net Award shall be held in trust by
Mortgagee in the Net Awards Account and shall be paid by
Mortgagee or a Depository designated by Mortgagee to, or as
directed by, Mortgagor from time to time during the course
of the Condemnation Restoration, upon receipt of evidence
satisfactory to Mortgagee, that (i) all materials installed
and work and labor performed (except to the extent they are
to be paid for out of the requested payment) in connection
with the Condemnation Restoration have been paid for in full,
(ii) there exist no notices of intention, mechanics' or other
liens or encumbrances on the Mortgaged Property arising out
of the Condemnation Restoration, and (iii) the balance of the
Net Award plus the balance of any deficiency deposits given
by Mortgagor to Mortgagee or Depositary pursuant to the
provisions of this paragraph hereinafter set forth shall be
sufficient to pay in full the balance of the cost of the
Condemnation Restoration.
(b) Notwithstanding anything to the contrary
contained herein, Mortgagee shall not be obligated to make
the Net Award available for the Condemnation Restoration of
the Mortgaged Property unless the principal balance of the
Note after the completion of the Condemnation Restoration
(assuming the amount of the Net Award received by Mortgagee
in excess of the cost of the Condemnation Restoration as
estimated by Mortgagee is applied to the prepayment of the
Note) will be sufficient to cause (i) the Debt Service
Coverage Ratio applicable to the Mortgaged Property
immediately following the Condemnation Restoration to be not
less than 1.3 to 1.0 and (ii) in the event of any
Condemnation Restoration involving Net Award of more than
$250,000.00, the ratio of (a) the appraised value of the
Mortgaged Property after completion of the Condemnation
Restoration (as determined by an independent third-party
appraiser holding an MAI designation and having a national
practice and at least ten (10) years real estate experience
appraising properties of a similar nature and type as the
Mortgaged Property) to (b) the then outstanding principal
balance of the Note to be equal to or greater than the
Minimum Loan to Value Ratio.
(c) Notwithstanding anything to the contrary
contained herein, if the Net Award shall be less than
$50,000.00, only one such disbursement shall be required upon
the completion of the Condemnation Restoration to the
satisfaction of Mortgagee. If the Net Award shall be
$50,000.00 or more, Mortgagee shall disburse the Net Award
as provided above, however, in no event shall Mortgagee be
required to disburse such Net Award, or any portion thereof,
more often than once every thirty (30) days. If at any time
the Net Award, or the undisbursed balance thereof, shall not
in the opinion of Mortgagee be sufficient to pay in full the
balance of the cost of Condemnation Restoration, Mortgagor
shall deposit such deficiency with Mortgagee or Depository
before any further disbursement of the Net Award shall be
made.
(d) Notwithstanding anything to the contrary
contained herein, and notwithstanding any taking by any
public or quasi-public authority through eminent domain or
otherwise (including but not limited to any transfer made in
lieu of or in anticipation of the exercise of such taking),
Mortgagor shall continue to pay the Debt at the time and in
the manner provided for in the Note and in this Mortgage and
the Debt shall not be reduced until any award or payment
therefor shall have been actually received and applied in
accordance with this paragraph 6. Mortgagee shall not be
limited to the interest paid on the award by the condemning
authority but shall be entitled to receive out of the award
interest at the rate or rates provided herein and in the
Note.
(e) Any amount of the Net Award received by
Mortgagee and not required to be disbursed for the
Condemnation Restoration pursuant to the provisions of this
paragraph hereinabove set forth may be retained and applied
by Mortgagee to the discharge of the Debt, whether or not
then due and payable, in such priority and proportions as
Mortgagee in its discretion shall deem proper. If the
Mortgaged Property is sold through foreclosure or otherwise
prior to the receipt by Mortgagee of such award or payment,
Mortgagee shall have the right, whether or not a deficiency
judgment on the Note shall have been sought, recovered or
denied, to receive such award or payment or a portion thereof
sufficient to pay the Debt, whichever is less. Mortgagor
shall file and prosecute its claim or claims for any such
award or payment in good faith and with due diligence and
cause the same to be collected and paid over to Mortgagee,
and Mortgagor hereby irrevocably authorizes and empowers
Mortgagee, in the name of Mortgagor or otherwise, to collect
and receipt for any such award or payment and to file and
prosecute such claim or claims, and although it is hereby
expressly agreed that the same shall not be necessary in any
event, Mortgagor shall upon demand of Mortgagee make, execute
and deliver any and all assignments and other instruments
sufficient for the purpose of assigning any such award or
payment to Mortgagee, free and clear of any encumbrances of
any kind or nature whatsoever.
3. Leases and Rents. (a) Mortgagee is hereby
granted and assigned by Mortgagor the right to enter the
Mortgaged Property for the purpose of enforcing its interest
in the Leases and the Rents, this Mortgage constituting a
present, absolute assignment of the Leases and the Rents.
Nevertheless, subject to the terms of this paragraph 7,
Mortgagee grants to Mortgagor a revocable license to operate
and manage the Mortgaged Property and to collect the Rents.
Mortgagor shall hold the Rents, or a portion thereof
sufficient to discharge all current sums due on the Debt, for
use in the payment of such sums. Upon or at any time after
an Event of Default, the license granted to Mortgagor herein
may be revoked by Mortgagee, and Mortgagee may enter upon the
Mortgaged Property, and collect, retain and apply the Rents
toward payment of the Debt in such priority and proportions
as Mortgagee in its discretion shall deem proper.
(a) All Written Leases shall be written on the
standard form of lease which has been approved by Mortgagee.
Upon written request from Mortgagee, Mortgagor shall furnish
Mortgagee with executed copies of all Leases and all
modifications thereto as soon as may be practicable. No
material changes may be made to the Mortgagee-approved
standard forms except as may be required by applicable law.
In addition, all renewals of Leases and all proposed leases
shall provide for rental rates comparable to existing local
market rates and shall be arms-length transactions.
Mortgagor shall not enter into any lease having a term of
more than three (3) years. All Leases must be Written Leases
unless such Leases create periodic tenancies on a month to
month basis or for a shorter period and are terminable upon
not more than thirty (30) days' notice. [All Leases shall
provide that they are subordinate to this Mortgage and that
the lessee agrees to attorn to Mortgagee.] Mortgagor (i)
shall observe and perform all the obligations imposed upon
the lessor under the Leases and shall not do or permit to be
done anything to impair the value of the Leases as security
for the Debt; (ii) shall enforce all of the terms, covenants
and conditions contained in the Leases upon the part of the
lessee thereunder to be observed or performed; (iii) shall
not collect any of the Rents more than one (1) month in
advance; (iv) shall not execute any other assignment of
lessor's interest in the Leases or the Rents; (v) shall not
materially alter, modify or change the terms of the Leases,
or cancel or terminate the Leases or accept a surrender
thereof or convey or transfer or suffer or permit a
conveyance or transfer of the Premises or of any interest
therein so as to effect a merger of the estates and rights
of, or a termination or diminution of the obligations of,
lessees thereunder, except that Mortgagor may terminate any
Lease in exercising its rights as landlord thereunder upon a
default by the tenant under said Lease; (vi) shall not alter,
modify or change the terms of any guaranty of the Leases or
cancel or terminate such guaranty; (vii) shall not consent to
any assignment of or subletting under the Leases not in
accordance with their terms; and (viii) shall execute and
deliver all such further assurances, confirmations and
assignments in connection with the Mortgaged Property as
Mortgagee shall from time to time require.
4. Maintenance of Mortgaged Property. (a)
Mortgagor shall cause the Mortgaged Property to be maintained
in a good and safe condition and repair. The Improvements
and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the
Equipment). Mortgagor shall promptly comply with all laws,
orders and ordinances affecting the Mortgaged Property, or
the use thereof. Mortgagor shall promptly repair, replace or
rebuild any part of the Mortgaged Property which may be
destroyed by any casualty, or become damaged, worn or
dilapidated or which may be affected by any proceeding of the
character referred to in paragraph 6 hereof and shall
complete and pay for any structure at any time in the process
of construction or repair on the Premises. Mortgagor shall
not initiate, join in, acquiesce in, or consent to any change
in any private restrictive covenant, zoning law or other
public or private restriction, limiting or otherwise changing
the uses which may be made of the Mortgaged Property or any
part thereof. If under applicable zoning provisions the use
of all or any portion of the Mortgaged Property is or shall
become a nonconforming use, Mortgagor will not cause or
permit such nonconforming use to be discontinued or abandoned
without the express written consent of Mortgagee.
(a) Mortgagor hereby represents that all
inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the
Mortgaged Property and with respect to the use and occupancy
of the same, including but not limited to, certificates of
occupancy and fire underwriter certificates, have been made
by or obtained from the appropriate governmental authorities.
Mortgagor hereby represents, warrants and covenants that it
has obtained and will maintain all permits and licenses
required to operate the Mortgaged Property as a multi-family
residential development. Mortgagor has and shall continue to
comply in all material respects with and make all payments
required under all laws, ordinances, regulations, covenants,
conditions and restrictions now or hereafter affecting the
Mortgaged Property or any part thereof or the business or the
activity conducted thereon. Mortgagor will not commit,
suffer, permit or allow any act to be done in or upon the
Mortgaged Property in violation of any law, ordinance or
regulation. Mortgagor is in material compliance and shall
continue to comply in all material respects with all existing
and future requirements of all governmental authorities
having jurisdiction over the Mortgaged Property.
5. Transfer or Encumbrance of the Mortgaged
Property. (a) Mortgagor acknowledges that Mortgagee has
examined and relied on the creditworthiness of Mortgagor and
the experience of Mortgagor in owning properties such as the
Mortgaged Property in agreeing to make the loan secured
hereby, and that Mortgagee will continue to rely on
Mortgagor's ownership of the Mortgaged Property as a means
of maintaining the value of the Mortgaged Property as
security for repayment of the Debt. Mortgagor acknowledges
that Mortgagee has a valid interest in maintaining the value
of the Mortgaged Property so as to ensure that, should
Mortgagor default in the repayment of the Debt, Mortgagee can
recover the Debt by a sale of the Mortgaged Property. Except
as otherwise provided in subparagraph 9(c) hereof, Mortgagor
shall not sell, convey, alien, mortgage, encumber, pledge or
otherwise transfer the Mortgaged Property or any part
thereof, or permit the Mortgaged Property or any part thereof
to be sold, conveyed, aliened, mortgaged, encumbered, pledged
or otherwise transferred.
(a) A sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer within the meaning of this
paragraph 9 shall be deemed to include (i) an installment
sales agreement wherein Mortgagor agrees to sell the
Mortgaged Property or any part thereof for a price to be paid
in installments; (ii) an agreement by Mortgagor leasing all
or a substantial part of the Mortgaged Property for other
than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security
interest in, Mortgagor's right, title and interest in and to
any Leases or any Rents; (iii) if Mortgagor or any general
partner of Mortgagor is a corporation, the voluntary or
involuntary sale, conveyance or transfer of such
corporation's stock or the creation or issuance of new stock
by which an aggregate of more than 49% of such corporation's
stock shall be vested in a party or parties who are not now
stockholders, except for any sale, conveyance or transfer of
such corporation's stock to an Affiliate provided Mortgagee
shall have received prior written notice of such transfer;
(iv) if Mortgagor or any general partner of Mortgagor is a
limited or general partnership or joint venture, the change,
removal or resignation of a general partner or managing
partner or the transfer of the partnership interest of any
general partner or managing partner, except for any transfer
of such partnership interest to an Affiliate, and excluding
the removal or resignation of any non-Affiliate or non-
managing general partner where the managing general partner
shall remain following such removal or resignation, provided,
in either case, Mortgagee shall have received prior written
notice of such transfer resignation or removal; (v) any
transfer of any interest by the Manager (hereinafter defined)
other than as permitted under paragraph 54; and (vi) any
transfer of the beneficial interest of any Mortgagor in any
trust holding legal title to the Mortgaged Property.
(b) Notwithstanding anything to the contrary
contained herein:
(i) Upon sixty (60) days prior written notice to
Mortgagee, Mortgagor shall have the limited right
to transfer legal title to the Mortgaged Property
to a Single Purpose Entity Transferee (hereinafter
defined) provided (a) such Single Purpose Entity
Transferee assumes all of the obligations of the
Mortgagor under this Mortgage, the Note and the
Other Security Documents in a manner satisfactory
to Mortgagee in all respects, including, without
limitation, by entering into an assumption
agreement with Mortgagor and Mortgagee in form and
substance reasonably satisfactory to Mortgagee (an
"Assumption Agreement"), (b) the Single Purpose
Entity Transferee shall have been newly formed
exclusively and solely for the purpose of owning
and operating the Mortgaged Property and shall
have been engaged in no other business activities
prior to the transfer of title to such Single
Purpose Entity Transferee and must be a "United
States person" as defined by Section 7701(a)(30)
of the United States Internal Revenue Code of
1986, as amended, (c) the Single Purpose Entity
Transferee or the management agent it employs to
manage the Mortgaged Property shall have Adequate
Real Estate Experience (hereinafter defined), (d)
the Single Purpose Entity Transferee shall deliver
to Mortgagee evidence of the fulfillment of the
requirements of subsection (b) above, (e) the
Single Purpose Entity Transferee shall deliver any
and all organizational documentation requested by
Mortgagee, which documentation shall be reasonably
satisfactory to Mortgagee in all respects, and
shall deliver an opinion of counsel of the Single
Purpose Entity Transferee covering the Assumption
Agreement in form and substance similar to the due
execution, delivery and enforcement opinions
delivered by counsel to Mortgagor in connection
with the execution of this Mortgage, (f) the
Single Purpose Entity Transferee shall deliver any
certificates and opinions of counsel, enter into
agreements and covenants, or cause each of its
general partners (or any other principal thereof)
to deliver certificates, enter into agreements and
covenants, which certificates, agreements,
opinions of counsel and covenants shall be similar
in nature to those delivered, executed and made by
Mortgagor or any general partner of Mortgagor in
connection with the execution of this Mortgage or
the Securitization (hereinafter defined) relating
to the single purpose nature of the Single Purpose
Entity Transferee or otherwise, and (g) Mortgagor
shall deliver, at its sole cost and expense, an
endorsement to the existing title policy insuring
the Mortgage as modified by the Assumption
Agreement as a valid first lien on the Mortgaged
Property, naming the Single Purpose Entity
Transferee as owner of the fee estate of the
Mortgaged Property, which endorsement shall insure
that, as of the date of the recording of the
Assumption Agreement, the Mortgaged Property shall
not be subject to any additional exceptions or
liens other than those contained in the original
title policy insuring the lien of this Mortgage
and delivered in connection with the execution of
this Mortgage. Any and all costs incurred in
connection with the above (including Mortgagee's
counsel's fees and disbursements and expenses and
all recording fees, mortgage or intangible taxes,
and title insurance premiums), shall be paid by
Mortgagor. Mortgagee shall respond to Mortgagor's
request to transfer legal title to the Mortgaged
Property within forty-five (45) days of delivery
of all of the information required by subsections
(a)-(g) above. The failure of Mortgagee to
respond to such request shall not be deemed
consent to the transfer.
For purposes of this Mortgage, the term "Adequate Real
Estate Experience" shall mean an entity which manages
first class multi-family residential complexes of a type
and size similar to the Mortgaged Property, and which
manages in the aggregate no less than 1,000 residential
units at the time of such transfer.
For purposes of this Mortgage, the term "Single Purpose
Entity Transferee" shall mean an entity that:
A. shall not own any asset other than the
Mortgaged Property;
B. shall not engage in any business other
than those necessary for the ownership,
management or operation of the Mortgaged
Property and any such business transactions
with any general partner, principal or
Affiliate of the Single Purpose Entity
Transferee or any affiliate of the general
partner of the Single Purpose Entity
Transferee shall be entered into upon terms
and conditions that are intrinsically fair
and substantially similar to those that would
be available on an arms-length basis with
third parties other than an Affiliate of the
Single Purpose Entity Transferee or the
general partner or an Affiliate of the
general partner of the Single Purpose Entity
Transferee;
C. shall not incur any debt, secured or
unsecured, direct or contingent
(including guaranteeing any obligation),
other than the Debt;
D. shall not make any loans or advances to
any third party (including any
Affiliates of such Single Purpose Entity
Transferee or the general partner or an
Affiliate of the general partner of such
Single Purpose Entity Transferee);
E. shall be solvent and pay its debts from
its assets as the same become due;
F. shall do or cause to be done all things
necessary to preserve its existence, and
shall not amend, modify or otherwise change
its partnership certificate, partnership
agreement, articles of incorporation or by-
laws in a manner which adversely affects such
Single Purpose Entity Transferee's existence
as a single purpose entity;
G. shall maintain books and records and
bank accounts separate from those of its
Affiliates, including its general partners;
H. shall be, and at all times shall hold
itself out to the public as, a legal entity
separate and distinct from any other entity
(including any affiliate thereof, including
the general partner or any affiliate of the
general partner of such Single Purpose Entity
Transferee);
I. shall file its own tax returns;
J. shall maintain adequate capital for the
normal obligations reasonably foreseeable in
a business of its size and character and in
light of its contemplated business
operations;
K. shall not seek the dissolution or
winding up, in whole or in part, of the
Single Purpose Entity Transferee or
voluntarily file, or consent to the filing
of, a petition for bankruptcy,
reorganization, assignment for the benefit of
creditors or similar proceeding;
L. shall not commingle its funds or other
assets with any other person or entity, and
M. shall have at least one member of its
board of directors (if a corporation) that is
not affiliated with or employed by National
Property Investors, Inc. or any of its
Affiliates.
For purposes of this Mortgage, the term
"Affiliate" shall mean a corporation or other
entity which shall (i) control, (ii) be
controlled by, or (iii) be under common
control with either Mortgagor, any general
partner of Mortgagor, or National Property
Investors, Inc.
(ii) The consummation of the transactions contemplated
pursuant to that certain Partnership Units Purchase
Agreement, dated August 17, 1995, among National
Property Investors, Inc. and related entities and
Insignia Financial Group, Inc. and related entities, and
certain other agreements relating thereto shall not be
deemed to be a transfer in violation of the provisions
of this paragraph 9
(iii) Mortgagor may sell, convey or transfer stock or
partnership interest as described in subsections
9(b)(iii) and (iv) hereof by Mortgagor or the general
partner of Mortgagor, provided that:
1. No Event of Default shall have occurred
and be continuing;
2. The transferee shall be a person, firm
or corporation whose character,
financial strength, stability and
experience shall be similar to the
existing Mortgagor and any general
partner of Mortgagor as of the date
hereof and otherwise reasonably
satisfactory to Mortgagee;
3. The transferee shall deliver such
organizational documentation and other
material necessary to establish the
transfer; and
4. The transferee shall pay the costs and
expenses of Mortgagee and Mortgagee's
counsel incurred in connection with the
review and approval of such stock or
partnership transfer.
(a) Mortgagee shall not be required to demonstrate
any actual impairment of its security or any increased risk
of default hereunder in order to declare the Debt immediately
due and payable upon Mortgagor's sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Mortgagee's consent. This
provision shall apply to every sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged
Property regardless of whether voluntary or not, or whether
or not Mortgagee has consented to any previous sale,
conveyance, alienation, mortgage, encumbrance, pledge or
transfer of the Mortgaged Property.
1. Estoppel Certificates. (a) After request by
Mortgagee, Mortgagor, within ten (10) days, shall furnish
Mortgagee with a statement, duly acknowledged and certified,
setting forth (i) the amount of the original principal amount
of the Note, (ii) the unpaid principal amount of the Note,
(iii) the rate of interest of the Note, (iv) the date
installments of interest and/or principal were last paid, (v)
any offsets or defenses to the payment of the Debt, if any,
and (vi) that the Note and this Mortgage are valid, legal and
binding obligations and have not been modified or if
modified, giving particulars of such modification.
2. Changes in the Laws Regarding Taxation. If
any law is enacted or adopted or amended after the date of
this Mortgage which deducts the Debt from the value of the
Mortgaged Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or
Mortgagee's interest in the Mortgaged Property, Mortgagor
will pay such tax, with interest and penalties thereon, if
any. In the event Mortgagee is advised by counsel chosen by
it that the payment of such tax or interest and penalties by
Mortgagor would be unlawful or taxable to Mortgagee or
unenforceable or provide the basis for a defense of usury,
then in any such event, Mortgagee shall have the option, by
written notice of not less than ninety (90) days, to declare
the Debt immediately due and payable.
3. No Credits on Account of the Debt. Mortgagor
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 Mortgaged Property, or any
part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Mortgaged Property, or
any part thereof, for real estate tax purposes by reason of
this Mortgage or the Debt. In the event such claim, credit
or deduction shall be required by law, Mortgagee shall have
the option, by written notice of not less than ninety (90)
days, to declare the Debt immediately due and payable.
4. Documentary Stamps. If at any time the United
States of America, any State thereof or any subdivision of
any such State shall require revenue or other stamps to be
affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Mortgagor will pay for the same, with
interest and penalties thereon, if any.
5. Usury Laws. This Mortgage and the Note are
subject to the express condition that at no time shall
Mortgagor be obligated or required to pay interest on the
Debt at a rate which could subject the holder of the Note to
either civil or criminal liability as a result of being in
excess of the maximum interest rate which Mortgagor is
permitted by applicable law to contract or agree to pay. If
by the terms of this Mortgage or the Note, Mortgagor is at
any time required or obligated to pay interest on the Debt
at a rate in excess of such maximum rate, the rate of
interest under the same shall be deemed to be immediately
reduced to such maximum rate and the interest payable shall
be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the
principal balance of the Note.
6. Books and Records. Mortgagor shall keep
adequate books and records of account which accurately
reflect the operations of, and income and expenses
attributable to, the Mortgaged Property and furnish to
Mortgagee the following statements, all of which shall be in
form and substance acceptable to Mortgagee:
(i) monthly and an annual occupancy
statement listing each and every
Lease, identifying the leased premises,
names of all tenants, monthly rental and
all other charges payable under the
Lease, date to which paid, date of
occupancy, date of expiration, any and
every special provision, concession or
inducement granted to tenants and such
other information as is reasonably
requested by Mortgagee, signed, dated
and certified as true and accurate by
the general partner of Mortgagor and
Mortgagor;
(ii) monthly and an annual operating
statement of the operation of the
Mortgaged Property in a form pre-
approved by Mortgagee and otherwise
satisfactory to Mortgagee, showing in
reasonable detail total revenues
received and total expenses, prepared
and certified by the general partner of
Mortgagor and Mortgagor;
(iii) an annual balance sheet and profit
and loss statement of Mortgagor,
prepared and certified by the general
partner of Mortgagor and Mortgagor
within ninety (90) days after the close
of each fiscal year; and
(iv) such annual and monthly balance
sheets and profit and loss
statements and other financial
statements as may, from time to time, be
required by Mortgagee.
7. Performance of Other Agreements. Mortgagor
shall observe and perform each and every term to be observed
or performed by Mortgagor pursuant to the terms of any
agreement or recorded instrument affecting or pertaining to
the Mortgaged Property.
8. Further Acts, etc. Mortgagor will, at the
cost of Mortgagor, and without expense to Mortgagee, do,
execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Mortgagee shall,
from time to time, require, for the better assuring,
conveying, assigning, transferring, and confirming unto
Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, enfeoffed, conveyed,
confirmed, pledged, assigned and hypothecated or intended now
or hereafter so to be, or which Mortgagor may be or may
hereafter become bound to convey or assign to Mortgagee, or
for carrying out the intention or facilitating the
performance of the terms of this Mortgage or for filing,
registering or recording this Mortgage. Mortgagor on demand,
will execute and deliver and hereby authorizes Mortgagee to
execute in the name of Mortgagor or without the signature of
Mortgagor to the extent Mortgagee may lawfully do so, one or
more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Mortgagor
grants to Mortgagee an irrevocable power of attorney coupled
with an interest for the purpose of perfecting any and all
rights and remedies available to Mortgagee at law and in
equity pursuant to the terms of the Note, this Mortgage or
the Other Security Documents, including without limitation
such rights and remedies available to Mortgagee pursuant to
this paragraph 17.
9. Recording of Mortgage, etc. Mortgagor
forthwith upon the execution and delivery of this Mortgage
and thereafter, from time to time, will cause this Mortgage,
and any security instrument creating a lien or security
interest or evidencing the lien hereof upon the Mortgaged
Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such
places as may be required by any present or future law in
order to publish notice of and fully to protect the lien or
security interest hereof upon, and the interest of Mortgagee
in, the Mortgaged Property. Mortgagor will pay all filing,
registration or recording fees, and all expenses incident to
the preparation, execution and acknowledgment of this
Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property and any
instrument of further assurance, 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 Mortgage, any mortgage supplemental
hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance, except where
prohibited by law so to do. Mortgagor shall hold harmless
and indemnify Mortgagee, its successors and assigns, against
any liability incurred by reason of the imposition of any tax
on the making and recording of this Mortgage.
10. Prepayment. If permitted by the Note, the
Debt may be prepaid in accordance with the terms thereof.
11. Events of Default. The Mortgagee may declare
the Debt immediately due and payable upon any one or more of
the following events ("Event of Default"):
(a) if any portion of the Debt is not paid within
ten (10) days after written notice is delivered by the
Mortgagee notifying Mortgagor that the same is overdue;
(b) except as otherwise provided in paragraph 4
hereof, if any of the Taxes or Other Charges is not paid
when the same is due and payable;
(c) if the Policies are not kept in full force and
effect, or if the Policies (or duplicate originals
thereof) are not delivered to Mortgagee upon request;
(d) if Mortgagor violates or does not comply with
any of the provisions of paragraphs 7, 9, 34, 35 or 56
hereof;
(e) if any representation or warranty of Mortgagor
made herein or in any certificate, report, financial
statement or other instrument or document furnished to
Mortgagee shall have been false or misleading in any
material respect when made;
(f) if Mortgagor shall make an assignment for the
benefit of creditors or if Mortgagor shall generally not
be paying its debts as they become due;
(g) if a receiver, liquidator or trustee of
Mortgagor shall be appointed or if Mortgagor shall be
adjudicated a bankrupt or insolvent, or if any petition
for bankruptcy, reorganization or arrangement pursuant
to federal bankruptcy law, or any similar federal or
state law, shall be filed by or against, consented to,
or acquiesced in by, Mortgagor or if any proceeding for
the dissolution or liquidation of Mortgagor shall be
instituted; however, if such appointment, adjudication,
petition or proceeding was involuntary and not consented
to by Mortgagor, upon the same not being discharged,
stayed or dismissed within ninety (90) days;
(h) if Mortgagor shall be in default under any
other mortgage or security agreement covering any part
of the Mortgaged Property whether it be superior or
junior in lien to this Mortgage;
(i) the Mortgaged Property becomes subject to any
mechanic's, materialman's or other lien other than a
lien for local real estate taxes and assessments not
then due and payable and such lien shall remain
undischarged of record (by payment, bonding or
otherwise) on the earlier of (i) thirty (30) days after
Mortgagor shall have notice (written or oral) of such
lien or (ii) following a judgment in favor of the holder
of such lien, one week prior to the date on which such
lien may be foreclosed;
(j) if Mortgagor fails to cure promptly any
violations of laws or ordinances affecting or which may
be interpreted to affect the Mortgaged Property;
provided, however, after prior written notice to
Mortgagee, Mortgagor, at its own expense, may contest
by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the
validity or application of any building, fire or zoning
law or ordinance affecting the Mortgaged Property
provided that (i) no other Event of Default exists under
the Note, this Mortgage, or the Other Security
Documents, (ii) such proceeding shall be permitted under
and be conducted in accordance with the provisions of
any other instrument to which Mortgagor is subject and
shall not constitute a default thereunder, (iii) neither
the Mortgaged Property nor any part thereof or interest
therein will be in danger of being sold, forfeited,
terminated, canceled or lost, and (iv) if by the terms
of such law or ordinance, compliance therewith pending
the prosecution of any such proceeding may legally be
delayed without incurring any lien, charge or liability
of any kind against the Mortgaged Property, or any part
thereof, and without subjecting the Mortgagor or the
Mortgagee to any liability, civil or criminal, for
failure to comply therewith; or
(k) if Mortgagor shall continue to be in default
under any of the other terms, covenants or conditions
of the Note, this Mortgage or the Other Security
Documents for five (5) days after notice from Mortgagee
in the case of any default which can be cured by the
payment of a sum of money or for thirty (30) days after
notice from Mortgagee in the case of any other default,
provided that if such default cannot reasonably be cured
within such thirty (30) day period and Mortgagor shall
have commenced to cure such default within such thirty
(30) day period and thereafter diligently and
expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for so long as it
shall require Mortgagor in the exercise of due diligence
to cure such default, it being agreed that no such
extension shall be for a period in excess of ninety (90)
days.
12. Remedies of Mortgagee. Upon the occurrence
of an Event of Default, (a) Mortgagor will pay, from the date
of that Event of Default, interest on the unpaid principal
balance of the Note at the rate of (i) four percent (4%) over
the Applicable Interest Rate (as defined in the Note) due
under the Note or (ii) the maximum interest rate which
Mortgagor may by law pay, whichever is lower (the "Default
Rate"), and (b) Mortgagee shall have the right to exercise
any and all rights and remedies available at law and in
equity.
13. Sale of Mortgaged Property. If this Mortgage
is foreclosed or if the Mortgaged Property is sold pursuant
to the exercise of a power of sale, the Mortgaged Property,
or any interest therein, may at the discretion of Mortgagee,
be sold in one or more parcels or in several interests or
portions and in any order or manner.
14. Right to Cure Defaults. Upon the occurrence
of any Event of Default, if Mortgagor fails to make any
payment or perform any act as herein provided Mortgagee may,
but without any obligation to do so and without notice to or
demand on Mortgagor and without releasing Mortgagor from any
obligation hereunder, make or do the same in such manner and
to such extent as Mortgagee may deem necessary to protect the
security hereof. Mortgagee is authorized to enter upon the
Mortgaged Property for such purposes, or appear in, defend,
or bring any action or proceeding to protect its interest in
the Mortgaged Property or to foreclose this Mortgage or
collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law),
with interest as provided in this paragraph 23, shall
constitute a portion of the Debt and shall be due and payable
to Mortgagee upon demand. All such costs and expenses
incurred by Mortgagee in remedying such Event of Default or
in appearing in, defending, or bringing any such action or
proceeding shall bear interest at the Default Rate, for the
period after notice from Mortgagee that such cost or expense
was incurred to the date of payment to Mortgagee. All such
costs and expenses incurred by Mortgagee together with
interest thereon calculated at the Default Rate shall be
deemed to constitute a portion of the Debt and be secured by
this Mortgage and the Other Security Documents and shall be
immediately due and payable upon demand by Mortgagee
therefor.
15. Late Payment Charge. If any portion of the
Debt is not paid on or before the date on which it is due
without taking into account any applicable notice or grace
period, Mortgagor shall pay to Mortgagee upon demand an
amount equal to the lesser of five percent (5%) of such
unpaid portion of the Debt or the maximum amount permitted
by applicable law, to defray the expense incurred by
Mortgagee in handling and processing such delinquent payment
and to compensate Mortgagee for the loss of the use of such
delinquent payment, and such amount shall be secured by this
Mortgage and the Other Security Documents.
16. Prepayment After Event of Default. If
following the occurrence of any Event of Default, Mortgagor
shall tender payment of an amount sufficient to satisfy the
Debt in whole or in part at any time prior to a foreclosure
sale of the Mortgaged Property, or a sale of the Mortgaged
Property pursuant to the exercise of a power of sale, such
tender shall be deemed to be a voluntary prepayment of the
principal balance of the Note and Mortgagor shall, in
addition to the entire Debt, also pay to Mortgagee a sum
equal to the interest which would have accrued on the
principal balance of the Note at the Applicable Interest Rate
as defined in the Note from the date of such tender to the
earlier of (i) the Maturity Date as defined in the Note or to
(ii) the first day of the period during which prepayment of
the principal balance of the Note would have been permitted
together with a Premium (as defined in the Note) equal to the
prepayment consideration which would have been payable as of
the first day of the period during which prepayment would
have been permitted. If at the time of such tender
prepayment of the principal balance of the Note is permitted,
such tender by Mortgagor shall be deemed to be a voluntary
prepayment of the principal balance of the Note, and
Mortgagor shall, in addition to the entire Debt, also pay to
Mortgagee the applicable Premium specified in the Note and
this Mortgage, if any.
17. Right of Entry. Mortgagee and its agents
shall have the right to enter and inspect the Mortgaged
Property at all reasonable times.
18. Appointment of Receiver. The holder of this
Mortgage, upon the occurrence of an Event of Default or in
any action to foreclose this Mortgage or upon the actual or
threatened waste to any part of the Mortgaged Property, shall
be entitled to the appointment of a receiver without notice
and without regard to the value of the Mortgaged Property as
security for the Debt, or the solvency or insolvency of any
person liable for the payment of the Debt.
19. Reasonable Use and Occupancy. In addition to
the rights which Mortgagee may have herein, upon the
occurrence of any Event of Default, Mortgagee, at its option,
may require Mortgagor to pay monthly in advance to Mortgagee,
or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such
part of the Mortgaged Property as may be occupied by
Mortgagor or may require Mortgagor to vacate and surrender
possession of the Mortgaged Property to Mortgagee or to such
receiver and, in default thereof, Mortgagor may be evicted by
summary proceedings or otherwise.
20. Security Agreement. This Mortgage is both a
real property mortgage and a "security agreement" within the
meaning of the Uniform Commercial Code. The Mortgaged
Property includes both real and personal property and all
other rights and interests, whether tangible or intangible
in nature, of Mortgagor in the Mortgaged Property. Mortgagor
by executing and delivering this Mortgage has granted and
hereby grants to Mortgagee, as security for the Debt, a
security interest in the Mortgaged Property to the full
extent that the Mortgaged Property may be subject to the
Uniform Commercial Code (said portion of the Mortgaged
Property so subject to the Uniform Commercial Code being
called in this paragraph 29 the "Collateral"). If an Event
of Default shall occur, Mortgagee, 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 Mortgagee may deem necessary for the care,
protection and preservation of the Collateral. Upon request
or demand of Mortgagee, Mortgagor shall at its expense
assemble the Collateral and make it available to Mortgagee
at a convenient place acceptable to Mortgagee. Mortgagor
shall pay to Mortgagee on demand any and all reasonable
expenses, including legal expenses and attorneys' fees,
incurred or paid by Mortgagee in protecting its interest in
the Collateral and in enforcing its rights hereunder with
respect to the Collateral. Any notice of sale, disposition
or other intended action by Mortgagee with respect to the
Collateral sent to Mortgagor in accordance with the
provisions hereof at least five (5) days prior to such
action, shall constitute commercially reasonable notice to
Mortgagor unless otherwise required by law. The proceeds of
any disposition of the Collateral, or any part thereof, may
be applied by Mortgagee to the payment of the Debt in such
priority and proportions as Mortgagee in its discretion shall
deem proper.
21. Actions and Proceedings. Mortgagee has the
right to appear in and defend any action or proceeding
brought with respect to the Mortgaged Property and to bring
any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, decides should
be brought to protect its interest in the Mortgaged Property.
Mortgagee shall, at its option, be subrogated to the lien of
any mortgage or other security instrument discharged in whole
or in part by the Debt, and any such subrogation rights shall
constitute additional security for the payment of the Debt.
22. Waiver of Counterclaim. Mortgagor hereby
waives the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or
proceeding brought against it by Mortgagee, and waives trial
by jury in any action or proceeding brought by either party
hereto against the other or in any counterclaim asserted by
Mortgagee against Mortgagor, or in any matters whatsoever
arising out of or in any way connected with this Mortgage,
the Note, any of the Other Security Documents or the Debt.
23. Recovery of Sums Required To Be Paid.
Mortgagee 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 Mortgagee thereafter to bring an
action of foreclosure, or to sell the Mortgaged Property
pursuant to the exercise of a power of sale, or to bring any
other action, for a default or defaults by Mortgagor existing
at the time such earlier action was commenced.
24. Marshalling and Other Matters. Mortgagor
hereby waives, to the extent permitted by law, the benefit
of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force
and all rights of marshalling in the event of any sale
hereunder of the Mortgaged Property or any part thereof or
any interest therein. Further, Mortgagor hereby expressly
waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Mortgage on behalf of
Mortgagor, and on behalf of each and every person acquiring
any interest in or title to the Mortgaged Property subsequent
to the date of this Mortgage and on behalf of all persons to
the extent permitted by applicable law.
25. Hazardous Materials. Mortgagor represents and
warrants that, except as otherwise disclosed in that certain
environmental report delivered by Mortgagor to Mortgagee in
connection with the origination of this Mortgage, to the best
of Mortgagor's knowledge, after due inquiry and
investigation, (a) there are no Hazardous Materials
(hereinafter defined) on the Mortgaged Property, except those
in compliance with all applicable federal, state and local
laws, ordinances, rules and regulations, and (b) no owner or
occupant nor, to the best of Mortgagor's knowledge, any prior
owner or occupant of the Mortgaged Property has received any
notice or advice from any governmental agency or any source
whatsoever with respect to Hazardous Materials on, from or
affecting the Mortgaged Property. Mortgagor covenants that
the Mortgaged Property shall be kept free of Hazardous
Materials, and neither Mortgagor nor any occupant of the
Mortgaged Property shall use, transport, store, dispose of or
in any manner deal with Hazardous Materials on the Mortgaged
Property, except in compliance with all applicable federal,
state and local laws, ordinances, rules and regulations.
Mortgagor shall comply with, and ensure compliance by all
occupants of the Mortgaged Property with, all applicable
federal, state and local laws, ordinances, rules and
regulations, and shall keep the Mortgaged Property free and
clear of any liens imposed pursuant to such laws, ordinances,
rules or regulations. At any time after the occurrence of an
Event of Default and the continuance thereof, Mortgagee may
enter upon the Mortgaged Property and conduct such
environmental tests and studies as Mortgagee shall require.
The cost and expense of such tests and studies shall be borne
by Mortgagor and such amounts shall be secured by this
Mortgage. In the event that Mortgagor receives any notice
or advice from any governmental agency or any source
whatsoever with respect to Hazardous Materials on, from or
affecting the Mortgaged Property, Mortgagor shall immediately
notify Mortgagee. Mortgagor shall conduct and complete all
investigations, studies, sampling, and testing, and all
remedial actions necessary to clean up and remove all
Hazardous Materials from the Mortgaged Property in accordance
with all applicable federal, state, and local laws,
ordinances, rules and regulations. The term "Hazardous
Materials" as used in this Mortgage shall include, without
limitation, gasoline, petroleum products, explosives,
radioactive materials, polychlorinated biphenyls or related
or similar materials, or any other substance or material
defined as a hazardous or toxic substance or material by any
federal, state or local law, ordinance, rule, or regulation,
but excluding Asbestos, as defined in paragraph 35 hereof.
The obligations and liabilities of Mortgagor under this
paragraph 34 shall survive any entry of a judgment of
foreclosure, the sale of the Mortgaged Property pursuant to
the exercise of a power of sale, or the delivery of a deed in
lieu of foreclosure of this Mortgage.
26. Asbestos. Mortgagor represents and warrants
that, except as otherwise disclosed in that certain asbestos
survey (the "Asbestos Survey") delivered by Mortgagor to
Mortgagee in connection with the origination of this
Mortgage, to the best of Mortgagor's knowledge, after due
inquiry and investigation, there is no asbestos or material
containing asbestos ("Asbestos") on the Mortgaged Property,
and that no owner or occupant nor to the best of Mortgagor's
knowledge, any prior owner or occupant of the Mortgaged
Property has received any notice or advice from any
governmental agency or any source whatsoever with respect to
Asbestos on, affecting or installed on the Mortgaged
Property. Mortgagor covenants that, except as otherwise
disclosed in the Asbestos Survey, the Mortgaged Property
shall be kept free of Asbestos, and neither Mortgagor nor any
occupant of the Mortgaged Property shall install, or permit
to be installed, Asbestos on the Mortgaged Property.
Mortgagor shall comply with, and ensure compliance by all
occupants of the Mortgaged Property with, all applicable
federal, state and local laws, ordinances, rules and
regulations with respect to Asbestos, and shall keep the
Mortgaged Property free and clear of any liens imposed
pursuant to such laws, ordinances, rules or regulations. In
the event that Mortgagor receives any notice or advice from
any governmental agency or any source whatsoever with respect
to Asbestos on, affecting or installed on the Mortgaged
Property, Mortgagor shall immediately notify Mortgagee.
Mortgagor shall conduct and complete all investigations,
studies, sampling, and testing, and all remedial actions
necessary to manage and remove all Asbestos from the
Mortgaged Property in accordance with all applicable federal,
state and local laws, ordinances, rules and regulations. The
obligations and liabilities of Mortgagor under this paragraph
35 shall survive any entry of a judgment of foreclosure, the
sale of the Mortgaged Property pursuant to the exercise of a
power of sale, or delivery of a deed in lieu of foreclosure
of this Mortgage.
27. Indemnification. Mortgagor shall protect,
defend, indemnify and save harmless Mortgagee from and
against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including
without limitation reasonable attorneys' fees and expenses),
imposed upon or incurred by or asserted against Mortgagee
(except any liability, obligation, claim, damage, penalty,
cause of action, cost or expense imposed upon or incurred by
Mortgagee by reason of the gross negligence or willful
misconduct of Mortgagee) by reason of (a) ownership of this
Mortgage, the Mortgaged Property or any interest therein
arising pursuant to the terms of this Mortgage or receipt of
any Rents; (b) any accident, injury to or death of persons
or loss of or damage to property occurring in, on or about
the Mortgaged Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (c) any use, nonuse or
condition in, on or about the Mortgaged Property or any part
thereof or on the adjoining sidewalks,curbs, adjacent
property or adjacent parking areas, streets or ways; (d) any
failure on the part of Mortgagor to perform or comply with
any of the terms of this Mortgage; (e) performance of any
labor or services or the furnishing of any materials or other
property in respect of the Mortgaged Property or any part
thereof; (f) the failure of any person to file timely with
the Internal Revenue Service an accurate Form ▇▇▇▇-▇,
▇▇▇▇▇▇▇▇▇ for Recipients of Proceeds from Real Estate, Broker
and Barter Exchange Transactions, which may be required in
connection with this Mortgage, or to supply a copy thereof in
a timely fashion to the recipient of the proceeds of the
transaction in connection with which this Mortgage is made;
(g) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, or threatened release
of any Hazardous Materials on, from, or affecting the
Mortgaged Property or any other property or the presence of
Asbestos on the Mortgaged Property; (h) any personal injury
(including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous
Materials or Asbestos; (i) any lawsuit brought or threatened,
settlement reached, or government order relating to such
Hazardous Materials or Asbestos; or (j) any violation of
laws, orders, regulations, requirements, or demands of
government authorities, which are based upon or in any way
related to such Hazardous Materials or Asbestos including,
without limitation, the costs and expenses of any remedial
action required by such governmental authorities, attorney
and consultant fees, investigation and laboratory fees, court
costs, and litigation expenses. Any amounts payable to
Mortgagee by reason of the application of this paragraph 36
shall be secured by this Mortgage and shall become
immediately due and payable upon demand and shall bear
interest at the Default Rate commencing on the fifth (5th)
day following such demand until paid. The obligations and
liabilities of Mortgagor under this paragraph 36 shall
survive any termination, satisfaction, assignment, entry of
a judgment of foreclosure or delivery of a deed in lieu of
foreclosure of this Mortgage.
28. Notices. Any notice, demand, statement,
request or consent made hereunder shall be effective and
valid only if in writing and delivered personally or by a
reputable overnight courier service and shall be deemed given
when received at the address, as set forth above, of the
party to whom such notice is to be given, or to such other
address as Mortgagor or Mortgagee, as the case may be, shall
in like manner designate in writing. In the event delivery
is not accepted, notice shall be deemed given on the date
such delivery is refused.
29. Authority. (a) Mortgagor (and the
undersigned representative of Mortgagor, if any) has full
power, authority and legal right to execute this Mortgage,
and to mortgage, give, grant, bargain, sell, alien, enfeoff,
convey, confirm, pledge, hypothecate, assign and grant a
security interest in the Mortgaged Property pursuant to the
terms hereof and to keep and observe all of the terms of this
Mortgage on Mortgagor's part to be performed.
(a) Mortgagor represents and warrants that
Mortgagor is not a "foreign person" within the meaning of
1445(f)(3) of the Internal Revenue Code of 1986, as amended
and the related Treasury Department regulations, including
temporary regulations.
30. Waiver of Notice. Mortgagor shall not be
entitled to any notices of any nature whatsoever from
Mortgagee except with respect to matters for which this
Mortgage specifically and expressly provides for the giving
of notice by Mortgagee to Mortgagor and except with respect
to matters for which Mortgagee is required by applicable law
to give notice, and Mortgagor hereby expressly waives the
right to receive any notice from Mortgagee with respect to
any matter for which this Mortgage does not specifically and
expressly provide for the giving of notice by Mortgagee to
Mortgagor.
31. Remedies of Mortgagor. In the event that a
claim or adjudication is made that Mortgagee has acted
unreasonably or unreasonably delayed acting in any case where
by law or under the Note, this Mortgage or the Other Security
Documents, it has an obligation to act reasonably or
promptly, Mortgagee shall not be liable for any monetary
damages, and Mortgagor's remedies shall be limited to
injunctive relief or declaratory judgment.
32. Sole Discretion of Mortgagee. Wherever
pursuant to this Mortgage, Mortgagee exercises any right
given to it to approve or disapprove, or any arrangement or
term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that
arrangements or terms are satisfactory or not satisfactory
shall be in the sole discretion of Mortgagee, except as may
be otherwise expressly and specifically provided herein.
33. Non-Waiver. The failure of Mortgagee to
insist upon strict performance of any term hereof shall not
be deemed to be a waiver of any term of this Mortgage.
Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply
with any request of Mortgagor to take any action to foreclose
this Mortgage or otherwise enforce any of the provisions
hereof or of the Note or the Other Security Documents, (b)
the release, regardless of consideration, of the whole or any
part of the Mortgaged Property, or of any person liable for
the Debt or any portion thereof, or (c) any agreement or
stipulation by Mortgagee extending the time of payment or
otherwise modifying or supplementing the terms of the Note,
this Mortgage or the Other Security Documents. Mortgagee may
resort for the payment of the Debt to any other security held
by Mortgagee in such order and manner as Mortgagee, in its
discretion, may elect. Mortgagee may take action to recover
the Debt, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Mortgagee thereafter
to foreclose this Mortgage. The rights of Mortgagee under
this Mortgage shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of the others.
No act of Mortgagee shall be construed as an election to
proceed under any one provision herein to the exclusion of
any other provision. Mortgagee 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.
34. No Oral Change. This Mortgage, and any
provisions hereof, may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any
act or failure to act on the part of Mortgagor or Mortgagee,
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.
35. Liability. If Mortgagor consists of more than
one person, the obligations and liabilities of each such
person hereunder shall be joint and several. The foregoing
sentence, however, is not intended to affect the limited
liability of any limited partner or stockholder of Mortgagor
afforded by applicable partnership or corporate law. This
Mortgage shall be binding upon and inure to the benefit of
Mortgagor and Mortgagee and their respective successors and
assigns forever.
36. Inapplicable Provisions. If any term,
covenant or condition of the Note or this Mortgage is held
to be invalid, illegal or unenforceable in any respect, the
Note and this Mortgage shall be construed without such
provision.
37. Headings. etc. The headings and captions of
various paragraphs of this Mortgage 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.
38. Duplicate Originals. This Mortgage may be
executed in any number of duplicate originals and each such
duplicate original shall be deemed to be an original.
39. Definitions. Unless the context clearly
indicates a contrary intent or unless otherwise specifically
provided herein, words used in this Mortgage may be used
interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor and any subsequent
owner or owners of the Mortgaged Property or any part thereof
or any interest therein," the word "Mortgagee" shall mean
"Mortgagee and any subsequent holder of the Note," the word
"Note" shall mean "the Note and any other evidence of
indebtedness secured by this Mortgage," the word "person"
shall include an individual, corporation, partnership, trust,
unincorporated association, government, governmental
authority, and any other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property
and any interest therein. 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.
40. CHOICE OF LAW. THIS MORTGAGE SHALL BE DEEMED
TO BE A CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE
STATE OF NEW YORK AND SHALL IN ALL RESPECTS BE GOVERNED,
CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, PROVIDED HOWEVER, THAT WITH RESPECT
TO THE CREATION, ATTACHMENT, PERFECTION, PRIORITY AND
ENFORCEMENT OF THE LIEN AND SECURITY INTEREST OF THIS
MORTGAGE, THE LAWS OF THE STATE WHERE THE MORTGAGED PROPERTY
IS LOCATED SHALL APPLY.
41. Exculpation. Mortgagee shall not enforce the
liability and obligation of Mortgagor to perform and observe
the obligations contained in the Note or this Mortgage by any
action or proceeding wherein a money judgment shall be sought
against Mortgagor or any general or limited partner of
Mortgagor (hereafter collectively referred to as the
"Exculpated Parties"), except that Mortgagee may bring a
foreclosure action, action for specific performance or other
appropriate action or proceeding to enable Mortgagee to
enforce and realize upon this Mortgage, the Other Security
Documents, and the interest in the Mortgaged Property, the
Rents and any other collateral given to Mortgagee created by
this Mortgage and the Other Security Documents; provided,
however, that any judgment in any such action or proceeding
shall be enforceable against the Exculpated Parties only to
the extent of Mortgagor's interest in the Mortgaged Property,
in the Rents and in any other collateral given to Mortgagee.
Mortgagee, by accepting the Note and this Mortgage, agrees
that it shall not ▇▇▇ for, seek or demand any deficiency
judgment against the Exculpated Parties in any such action
or proceeding, under or by reason of or in connection with
the Note, the Other Security Documents or this Mortgage. The
provisions of this paragraph shall not, however, (i)
constitute a waiver, release or impairment of any obligation
evidenced or secured by the Note, the Other Security
Documents or this Mortgage; (ii) impair the right of
Mortgagee to name Mortgagor as a party defendant in any
action or suit for judicial foreclosure and sale under this
Mortgage; (iii) affect the validity or enforceability of any
guaranty made in connection with the Note, this Mortgage, or
the Other Security Documents; (iv) impair the right of
Mortgagee to obtain the appointment of a receiver; (v) impair
the enforcement of the Assignment of Leases and Rents
executed in connection herewith; (vi) impair the right of
Mortgagee to bring suit with respect to fraud or intentional
misrepresentation by the Exculpated Parties or any other
person or entity in connection with the Note, this Mortgage
or the Other Security Documents; (vii) impair the right of
Mortgagee to obtain the Rents received by any of the
Exculpated Parties after the occurrence of an Event of
Default; (viii) impair the right of Mortgagee to bring suit
with respect to the Exculpated Parties' misappropriation of
tenant security deposits or Rents collected in advance; (ix)
impair the right of Mortgagee to obtain insurance proceeds
or condemnation awards due to Mortgagee under this Mortgage;
(x) impair the right of Mortgagee to enforce the provisions
of sub-paragraphs 36(g) through 36(j), inclusive and
paragraphs 34 and 35 of this Mortgage against the Mortgagor
(excluding any general or limited partner thereof); or (xi)
impair the right of Mortgagee to recover any part of the Debt
from the Mortgagor (excluding the general and limited
partners of Mortgagor), following the breach of any covenant
contained in paragraph 9 or 56 hereof.
42. [TO BE LIMITED TO CERTAIN PROPERTIES] Capital
Improvements Account. Mortgagor shall establish and maintain
for the benefit of Mortgagee a reserve account (the "Capital
Improvements Account") for the purpose of creating a reserve
for certain capital improvements in connection with the
Mortgaged Property which are described on a schedule (the
"Capital Improvements Schedule") in the engineering report
for the Mortgaged Property delivered to, and approved by,
Mortgagee (collectively, the "Capital Improvements").
Mortgagor shall deposit the amount set forth on the Capital
Improvements Schedule into the Capital Improvements Account
on the date hereof. Mortgagor, on a periodic basis (but not
more often than once every thirty (30) days), may request
disbursements ("Disbursements") from the Capital Improvements
Account provided: (i) Mortgagor shall have delivered a
written request for the Disbursement to Mortgagee, which
request shall (a) specify which "line item" set forth on the
Capital Improvements Schedule Mortgagor has incurred expenses
for, (b) set forth the amount of the requested Disbursement,
(c) contain a certification from the managing general partner
of Mortgagor and Mortgagor that the work for which the
Disbursement is requested has been completed and is then due
and payable and (d) if requested by Mortgagee, such other
evidence of completion of work, including but not limited to
any and all invoices or other work orders, (ii) the
Disbursement does not exceed the amount allocated to the line
item as such amount is set forth on the Capital Improvements
Schedule, and (iii) no Event of Default shall have occurred.
Disbursements shall be made by Mortgagee to Mortgagor by wire
transfer or as otherwise directed by Mortgagor within ten
(10) days after receipt by Mortgagee of Mortgagor's written
request in the form required above. The Capital Improvements
Account shall be held by Mortgagee as additional and
collateral security for the Debt and Mortgagor hereby grants
Mortgagee a security interest in, and pledges to Mortgagee
the Capital Improvements Account. The Capital Improvements
Account shall be held by Mortgagee as additional security for
the Debt and if Mortgagor breaches any term, covenant or
provision of the Note, this Mortgage or any Other Security
Document, Mortgagee may apply the proceeds of the Capital
Improvements Account to cure such default, and following the
acceleration of the maturity of the Note, in the reduction of
the Debt. The Capital Improvements Account shall be an
interest bearing account maintained at a bank satisfactory to
Mortgagee in its sole discretion, and Mortgagee shall have no
liability for its selection of the bank, type of account,
fluctuations in interest rate or for the amount of interest
earned on the account. Interest earned on the Capital
Improvements Account shall remain in the Capital Improvements
Account until such time as the account is released to the
Mortgagor or the proceeds are applied by Mortgagee to the
payment of the Debt as provided herein. Upon the completion
of all of the Capital Improvements, Mortgagee shall release
the sums remaining in the Capital Improvements Account, if
any, to Mortgagor.
43. Reserve Account. Mortgagor will comply with
any requirements of any Rating Agency as a condition of its
initial rating, or if required by either FNMA or ▇▇▇▇▇▇▇ Mac,
with respect to the establishment of a reserve account for
necessary repairs and replacements of existing improvements
on the Mortgaged Property.
44. Operations and Maintenance Plan. [LIMIT TO
LANDINGS] Mortgagor shall, within forty-five (45) days from
the date hereof deliver to Mortgagee an operation and
maintenance plan (the "O&M Plan") with respect to the
maintenance or removal of any asbestos, hazardous and toxic
wastes and substances, PCB's and storage tanks on the
Mortgaged Property, which O&M Plan appoints an "Asbestos
Program Manager" in charge of managing all asbestos-related
activities on the Mortgaged Property. Mortgagor shall (i)
diligently perform and observe all of the terms, covenants
and conditions of the O&M Plan on the part of Mortgagor to
be performed and observed to the end that all things shall
be done which are necessary to keep unimpaired the rights of
Mortgagor under the O&M Plan and (ii) promptly notify
Mortgagee of the giving of any notice to Mortgagor of any
default by the Asbestos Program Manager in the performance
or observance of any of the terms, covenants or conditions
of the O&M Plan on the part of the Asbestos Program Manager
to be performed and observed and deliver to Mortgagee a true
copy of each such notice. Mortgagee shall have the right to
approve any O&M Plan which may affect the Mortgaged Property.
45. Management Agreements. The Improvements have
been operated under the terms and conditions of that certain
management agreement entered into between Mortgagor and the
manager (the "Manager") set forth therein delivered to, and
approved by, Mortgagee (hereinafter, together with any
renewals or replacements thereof, being referred to as the
"Management Agreement"). Mortgagor acknowledges that
Mortgagee has examined and relied on the Manager's experience
in operating properties such as the Mortgaged Property in
agreeing to make the loan secured hereby, and that Mortgagee
will continue to rely on the Manager's management of the
Mortgaged Property as a means of maintaining the value of the
Mortgaged Property as security for repayment of the Debt.
Mortgagor shall (i) diligently perform and observe all of the
terms, covenants and conditions of the Management Agreement
on the part of Mortgagor to be performed and observed to the
end that all things shall be done which are necessary to keep
unimpaired the rights of Mortgagor under the Management
Agreement and (ii) promptly notify Mortgagee of the giving of
any notice to Mortgagor of any default by Mortgagor in the
performance or observance of any of the terms, covenants or
conditions of the Management Agreement on the part of
Mortgagor to be performed and observed and deliver to
Mortgagee a true copy of each such notice. Mortgagor shall
not surrender the Management Agreement, consent to the
assignment by the Manager of its interest under the
Management Agreement, or terminate or cancel the Management
Agreement or modify, change, supplement, alter or amend the
Management Agreement, in any respect, either orally or in
writing, and Mortgagor hereby assigns to Mortgagee as further
security for the payment of the Debt and for the performance
and observance of the terms, covenants and conditions of this
Mortgage, all the rights, privileges and prerogatives of
Mortgagor to surrender the Management Agreement or to
terminate, cancel, modify, change, supplement, alter or amend
the Management Agreement in any respect, and any such
surrender of the Management Agreement or termination,
cancellation, modification, change, supplement, alteration or
amendment of the Management Agreement without the prior
consent of Mortgagee shall be void and of no force and
effect. If Mortgagor shall default in the performance or
observance of any material term, covenant or condition of the
Management Agreement on the part of Mortgagor to be performed
or observed, then, without limiting the generality of the
other provisions of this Mortgage, and without waiving or
releasing Mortgagor from any of its obligations hereunder,
Mortgagee shall have the right, but shall be under no
obligation, to pay any sums and to perform any act or take
any action as may be appropriate to cause all the terms,
covenants and conditions of the Management Agreement on the
part of Mortgagor to be performed or observed to be promptly
performed or observed on behalf of Mortgagor, to the end that
the rights of Mortgagor in, to and under the Management
Agreement shall be kept unimpaired and free from default.
Mortgagee and any person designated by Mortgagee shall have,
and are hereby granted, the right to enter upon the Mortgaged
Property at any time and from time to time for the purpose of
taking any such action. If the Manager under the Management
Agreement shall deliver to Mortgagee a copy of any notice
sent to Mortgagor of default under the Management Agreement,
such notice shall constitute full protection to Mortgagee for
any action taken or omitted to be taken by Mortgagee in good
faith, in reliance thereon. Mortgagor shall, from time to
time, use its best efforts to obtain from the Manager under
the Management Agreement such certificates of estoppel with
respect to compliance by Mortgagor with the terms of the
Management Agreement as may be requested by Mortgagee.
Mortgagor shall exercise each individual option, if any, to
extend or renew the term of the Management Agreement upon
demand by Mortgagee made at any time within one (1) year of
the last day upon which any such option may be exercised, and
Mortgagor hereby expressly authorizes and appoints Mortgagee
its attorney-in-fact to exercise any such option in the name
of and upon behalf of Mortgagor, which power of attorney
shall be irrevocable and shall be deemed to be coupled with
an interest.
Notwithstanding anything to the contrary contained
herein, Mortgagor may replace the Manager or accept the
resignation of the Manager or consent to a transfer by the
Manager, provided:
(1) No Event of Default shall have occurred and
be continuing;
(2) the new manager or holder of the stock or
partnership interest shall be a person, firm or
corporation whose character, financial strength,
stability and experience shall be similar to the
existing Manager and otherwise have Adequate Real Estate
Experience (it being understood that Insigna Financial
Group, Inc. or any Affiliate thereof shall be deemed an
acceptable replacement);
(3) the new manager shall deliver all
organizational documentation and other materials
evidencing its Adequate Real Estate Experience and
otherwise be acceptable to Mortgagee;
(4) the Mortgagor shall pay the reasonable costs
and expenses of Mortgagee and Mortgagee's counsel
incurred in connection with the review and approval of
such new manager; and
(5) the terms of any new management agreement
affecting the Mortgaged Property must be acceptable to
Mortgagee in all respects, provided, however, if the
terms and conditions of the new management agreement
shall be substantially similar to the Management
Agreement and the management fee due thereunder is no
greater than the fee provided in the Management
Agreement, such new management agreement shall be deemed
acceptable to Mortgagee.
1. Rating Agencies. The terms "Rating Agency"
or "Rating Agencies" shall mean any nationally recognized
rating agency(s) sought by Mortgagee to obtain ratings with
respect to this Mortgage or the Securitization (hereinafter
defined). Mortgagee intends to, but is not required to,
either (i) deposit this Mortgage, the Note and the Other
Security Documents in a trust in exchange for the issuance,
to or at the direction of the Mortgagee, of multiple classes
of mortgage pass-through certificates evidencing the entire
beneficial ownership interest in such trust or (ii) issue
multiple classes of bonds (also, "Securities") representing
non-recourse obligations secured by this Mortgage, the Note
and the Other Security Documents (the "Securities"). An
election will be made under the federal tax code to treat
this Mortgage, the Note and the Other Security Documents and
the related assets as one or more real estate mortgage
investment conduits. The Securities may be sold either in a
public offering or a private placement. The foregoing events
and all matters incidental thereto are herein referred to as
the "Securitization". Anything in paragraphs 5, 52 or 58 of
this Mortgage contained to the contrary notwithstanding: (i)
the provisions of paragraphs 5, 52 and 58 of this Mortgage
which require a Mortgagor to comply with certain requirements
("Requirements") which may be imposed by any Rating Agency,
FNMA or ▇▇▇▇▇▇▇ Mac shall be of no force or effect unless
Mortgagee notifies Mortgagor prior to the 270th day (the
"Deadline") following the Date hereof that it will be
required to comply with any such Requirements; and (ii) in
the event that Mortgagee so notifies Mortgagor prior to the
Deadline, (a) Mortgagee shall not prevent Mortgagor from
contacting the entity imposing such Requirements to discuss
the necessity of and/or details relating to such
Requirements, and (b) Mortgagor will not pursue such
discussion in a manner which materially delays the completion
of any related Securitization, and in any event Mortgagor
will either comply with the Requirements in question or cause
the Debt to be prepaid in full at par on or prior to the
Deadline.
2. Single Purpose Entity. Mortgagor hereby
represents and warrants to, and covenants with, Mortgagee
that, as of the date hereof and until such time as the Debt
shall be paid in full, Mortgagor:
(a) does not own and shall not own any encumbered
asset other than (i) the Mortgaged Property, (ii) and
(ii) such incidental personal property necessary for the
operation of the Mortgaged Property;
(b) is not engaged and shall not engage in any
business other than those necessary for the ownership,
management or operation of the Mortgaged Property and
any business transactions with any general partner,
principal or affiliate of Mortgagor or any affiliate of
the general partner of Mortgagor shall be entered into
upon terms and conditions that are intrinsically fair
and substantially similar to those that would be
available on an arms-length basis with third parties
other than an Affiliate;
(c) has not incurred and shall not incur any debt,
secured or unsecured, direct or contingent (including
guaranteeing any obligation), other than the Debt and
the type of indebtedness permitted pursuant to Paragraph
57 hereof;
(d) has not made and shall not make any loans or
advances to any third party (including any Affiliate);
(e) is and shall be solvent and pay its debt from
its assets as the same shall become due;
(f) has done or caused to be done and shall do all
things necessary to preserve its existence, and shall
not, nor shall any partner, limited or general, or
shareholder thereof, amend, modify or otherwise change
its partnership certificate, partnership agreement,
articles of incorporation or by-laws in a manner which
adversely affects Mortgagor's existence as a single
purpose entity;
(g) shall conduct and operate its business as
presently conducted and operated;
(h) shall maintain books and records and bank
accounts separate from those of its affiliates,
including its general partners;
(i) shall be, and at all times shall hold itself
out to the public as, a legal entity separate and
distinct from any other entity (including any affiliate
thereof, including the general partner or any affiliate
of the general partner of the Mortgagor);
(j) shall file its own tax returns;
(k) shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its
size and character and in light of its contemplated
business operations;
(l) shall not seek the dissolution or winding up,
in whole or in part, of the Mortgagor or voluntarily
file, or consent to the filing of, a petition for
bankruptcy, reorganization, assignment for the benefit
of creditors or similar proceeding;
(m) shall not commingle the funds and other assets
of the Mortgagor with those of any general partner, any
Affiliate or any other person; and
(n) shall have at least one member of its board
of directors that is not affiliated with or employed by
National Property Investors, Inc. or any of its
Affiliates.
3. No Other Indebtedness. During the term of the
Note and prior to the satisfaction or discharge of this
Mortgage, Mortgagor shall not create, incur, assume, or
suffer to exist any Indebtedness (hereinafter defined). For
purposes of the foregoing, the term "Indebtedness" shall mean
with respect to Mortgagor on a particular date (a) all
indebtedness of Mortgagor for borrowed money or for the
deferred purchase price of property or which is evidenced by
a note, bond, debenture, trust deed, bankers' acceptance or
similar instrument, (b) all obligations of Mortgagor under
any lease of real property (excluding Leases under which
Mortgagor is the landlord), (c) all obligations of Mortgagor
in respect of letters of credit, acceptances, or similar
obligations issued or created for the account of Mortgagor,
and (d) all liabilities secured by any lien or any property
owned by Mortgagor even though Mortgagor has not assumed or
otherwise become liable for the payment thereof.
Notwithstanding the foregoing, Indebtedness shall not include
(x) account payables to trade creditors of up to
[$__________] (which may include Affiliates of Mortgagor and
its partners and their employees) for goods and services
which are not aged more than sixty (60) days from the billing
date and current operating liabilities (other than for
borrowed monies) not more than sixty (60) days past due in
each case incurred in the ordinary course of business as
presently conducted and paid within the specified times,
unless contested in good faith and by appropriate proceeds
and (y) the indebtedness evidenced by the Note and secured
by this Mortgage.
4. Lockbox. Mortgagor will comply with any
requirement imposed by any Rating Agency as a condition of
its initial rating, FNMA or ▇▇▇▇▇▇▇ Mac with respect to the
establishment of lockbox arrangements with respect to the
operation of the Mortgaged Property.
PART II
[LOCAL LAW PROVISIONS]
1. In the event of any inconsistencies between
the terms and conditions of PART I of this Mortgage and PART
II, the terms and conditions of PART II shall control and be
binding.
[ADD LOCAL PROVISIONS, IF ANY]
IN WITNESS WHEREOF, this Mortgage has been executed
by Mortgagor the day and year first above written.
Witnesses: ___________________________________
________________, a _______ limited
partnership
_______________________ By: ____________________________,
Name: a ________ corporation, its
general partner
_______________________ By: ____________________________
Name: Name:
Title:
This instrument prepared by:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ACKNOWLEDGEMENT
[TO BE PROVIDED]
[Sketch of Subject Property
(This is not a survey)]