EXHIBIT 10.3
[___________________________________]
(Mortgagor)
for the benefit of
NOMURA ASSET CAPITAL CORPORATION
(Mortgagee)
_______________________________________________
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
_______________________________________________
Dated: As of June 15, 1998
Property Location:
______________________________
______________________________
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (the "MORTGAGE"), made as of June __, 1998, by
[________________________________] a _______________________________________,
having an address c/o Horizon Group Properties, Inc., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MORTGAGOR"), for the benefit of Nomura Asset Capital
Corporation, a Delaware corporation (together with its successors and assigns,
shall hereafter be referred to as "MORTGAGEE"), having its principal place of
business at Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS:
A. Mortgagor is the owner of a fee simple title to that
certain parcel of real property (the "PREMISES") described in EXHIBIT A
attached hereto, and the buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and other
improvements now or hereafter located thereon (the "IMPROVEMENTS");
B. Mortgagee, Mortgagor and certain other entities affiliated
with Mortgagor (such affiliated entities and Mortgagor each being referred to
individually as a "BORROWER" and collectively as the "BORROWERS") have entered
into a certain Loan Agreement dated as of the date hereof (as amended, modified,
restated, consolidated or supplemented from time to time, the "LOAN AGREEMENT")
pursuant to which Mortgagee has agreed to make a secured mortgage loan to the
Borrowers. Capitalized terms used herein and not herein defined shall have the
meanings assigned to such terms in the Loan Agreement.
C. Pursuant to the Loan Agreement, Mortgagee is making a loan
to Borrowers in the aggregate original principal amount of
_____________________________________ (_______________) (the "LOAN") and
Borrowers have executed the Note in the principal amount of __________________
(as the same may be amended, modified, restated, severed, consolidated, renewed,
replaced, or supplemented from time to time, the "NOTE"). The Note is secured
by, INTER ALIA, this Mortgage and the other Loan Documents (as hereinafter
defined).
D. To induce Mortgagee to make the Loan and to secure payment
of the Note, together with interest thereon, Mortgagor has agreed to the
execution and delivery of this Mortgage.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and legal
sufficiency whereof are hereby acknowledged, and as an inducement to Mortgagee
to enter into the Loan Agreement, and to secure the payment of all sums which
may or shall become due hereunder or under the Note or any of the other
documents executed and delivered by a Borrower or an Affiliate of a Borrower
evidencing or securing the Loan (such other documents, including, without
limitation, the Loan Agreement; that certain Assignment of Leases and Rents of
even date herewith given by Mortgagor to Mortgagee with respect to the Premises
(as such assignment may be amended from time to time, the "ASSIGNMENT OF
LEASES"); that certain Assignment of Agreements, Licenses, Permits and Contracts
of even date herewith given by Mortgagor to Mortgagee with respect to the
Premises (as such assignment may be amended from time to time, the "ASSIGNMENT
OF AGREEMENTS"); and this Mortgage (as any of the same may, from time to time,
be modified, amended or supplemented) being hereinafter collectively referred to
as the "LOAN DOCUMENTS"), and including (i) the payment of interest and other
amounts which would accrue and become due but for the filing of a petition in
bankruptcy (whether or not a claim is allowed against Mortgagor for such
interest or other amounts in any such bankruptcy proceeding) or the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a) and (ii) the costs and
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expenses of enforcing any provision of the Note, this Mortgage or any of the
other Loan Documents (all such sums being hereinafter collectively referred
to as the "DEBT"), and in order to charge with such performance and with such
payments the Premises and the Improvements and other property hereinafter
described and the rents, revenues, issues, income and profits thereof,
Mortgagor has given, granted, mortgaged, bargained, sold, alienated,
enfeoffed, conveyed, confirmed, warranted, pledged, assigned, and
hypothecated and by these presents does hereby irrevocably, give, mortgage,
alien, enfeoff, confirm, warrant, pledge, assign, hypothecate, GRANT,
MORTGAGE, BARGAIN, SELL, AND CONVEY UNTO MORTGAGEE, the Premises and
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, and the property,
rights, interests and estates hereinafter described are collectively referred to
herein as the "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, air rights and development rights, all rights to oil, gas,
minerals, coal and other substances of any kind or character, 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, highway, alley or avenue, opened, vacated 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, furniture, furnishings, equipment, computer
software and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures),
inventory and articles of personal property and accessions thereof and renewals,
replacements thereof and substitutions therefor, if any, and other property of
every kind and nature, whether tangible or intangible, 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 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 used in connection with the present or
future operation, enjoyment and occupancy of the Premises and the Improvements
(hereinafter collectively referred to as the "EQUIPMENT"), including any leases
of any of the foregoing, any deposits existing at any time in connection with
any of the foregoing, and the proceeds of any sale or transfer of the foregoing,
and the right, title and interest of Mortgagor in and to any of the Equipment
that may be subject to any "security interests" as defined in the Uniform
Commercial Code, as adopted and enacted by the State where the Property is
located (the "UNIFORM COMMERCIAL CODE"), superior in lien to the lien of this
Mortgage;
(c) all awards or payments, including interest thereon, that
may heretofore and hereafter be made with respect to the Premises and the
Improvements, whether from the exercise of the right of eminent domain or
condemnation (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of said rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and Improvements;
(d) all leases and other agreements or arrangements heretofore
or hereafter entered
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into pursuant to which any person is granted a possessory interest in, or
right to use or occupy all or any portion of any space in the Premises and
the Improvements, including any extensions, renewals, modifications or
amendments thereof (hereinafter collectively referred to as the "LEASES") and
all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including, without limitation, all oil and gas
or other mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security, utility and
other deposits), accounts, cash, issues, profits, charges for services
rendered, and other consideration of whatever form or nature received by or
paid to or for the account of or benefit of Mortgagor or its agents or
employees from any and all sources arising from or attributable to the
Premises and the Improvements, including, without limitation, all
receivables, customer obligations, installment payment obligations and other
obligations now existing or hereafter arising or created out of the sale,
lease, sublease, license, concession or other grant of the right of the use
and occupancy of property and proceeds, if any, from business interruption or
other loss of income insurance (hereinafter collectively referred to as the
"RENTS"), together with 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 (other than those payable to Mortgagor under
any liability insurance policy of Mortgagor) of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(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
Property and to commence any action or proceeding to protect the interest of
Mortgagee in the Property;
(g) all accounts (including, without limitation, reserve
accounts, escrows, documents, instruments, chattel paper, claims, deposits and
general intangibles, as the foregoing terms are defined in the Uniform
Commercial Code, and all franchises, trade names, trademarks, symbols, service
marks, books, records, plans, specifications, designs, drawings, surveys, title
insurance policies, permits, consents, licenses, management agreements, contract
rights (including, without limitation, any contract with any architect or
engineer or with any other provider of goods or services for or in connection
with any construction, repair, or other work upon the Property), approvals,
actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to the Property), and causes of action that now
or hereafter relate to, are derived from or are used in connection with the
Property, or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (hereinafter collectively
referred to as the "INTANGIBLES"); and
(h) all proceeds, products, offspring, rents and profits from
any of the foregoing, including, without limitation, those from sale, exchange,
transfer, collection, loss, damage, disposition, substitution or replacement of
any of the foregoing.
Without limiting the generality of any of the foregoing, in the
event that a proceeding under Title 11 of the United States Code (the
"BANKRUPTCY CODE") is commenced by or against Mortgagor, pursuant to Section
552(b)(2) of the Bankruptcy Code, the security interest granted by this Mortgage
shall automatically extend to all Rents acquired by the Mortgagor after the
commencement of the case and shall constitute cash collateral under Section
363(a) of the Bankruptcy Code.
TO HAVE AND TO HOLD the above granted and described Property unto
and to the use and benefit of Mortgagee and its successors and assigns, forever
to secure Mortgagee (i) the repayment of the Debt; and (ii) any and all
extensions, modifications and renewals of the Note, or any part thereof, however
changed in form, manner or amount.
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PROVIDED, HOWEVER, these presents are upon the express condition
that, if the Borrowers shall well and truly pay to Mortgagee or defease the Debt
at the time and in the manner provided in the Note, the Loan Agreement and the
other Loan Documents and shall well and truly abide by and comply with each and
every covenant and condition set forth herein, in the Note, the Loan Agreement
and in the other Loan Documents in all material respects in a timely manner,
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:
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS
AND AGREEMENTS. Mortgagor shall pay the Debt at the time and in the manner
provided in the Note, the Loan Agreement and this Mortgage. All the covenants,
conditions and agreements contained in the Note, the Loan Agreement, or the
other Loan 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. INTENTIONALLY OMITTED.
3. INSURANCE. (a) Mortgagor, at its sole cost and expense,
for the mutual benefit of Mortgagor and Mortgagee, shall keep the Property
insured and obtain and maintain during the entire term of this Mortgage policies
of insurance against loss or damage by fire and lightning and against loss or
damage by all other risks and hazards as required and in accordance with the
terms and provisions of Section 7.1 of the Loan Agreement.
(b) If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (a "CASUALTY"), Mortgagor shall give
prompt notice thereof to Mortgagee. All amounts to be paid in connection with a
Casualty under such policies shall be governed by the terms and provisions of
the Loan Agreement.
4. PAYMENT OF TAXES, ETC. Mortgagor shall pay all real estate
and personal property taxes, assessments, fees or payments in lieu of real
estate taxes, water rates and sewer rents, now or hereafter levied or assessed
or imposed against the Property or any part thereof (the "TAXES") and all ground
rents, maintenance charges, impositions other than taxes, 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 Property or any part thereof (the "OTHER
CHARGES") as the same become due and payable, in each case subject to
Mortgagor's right to contest the amount or validity or application in whole or
in part any taxes or other charges in accordance with Section 5.1(b) of the Loan
Agreement.
5. CONDEMNATION. Mortgagor shall promptly give Mortgagee
written notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding with respect to the Property (a "CONDEMNATION") and
shall deliver to Mortgagee copies of any and all papers served in connection
with such Condemnation. All amounts to be paid in connection with a
Condemnation shall be governed by the terms and provisions of the Loan
Agreement.
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6. ASSIGNMENT OF LEASES AND RENTS. Mortgagor does hereby
absolutely and unconditionally assign to Mortgagee, all of Mortgagor's right,
title and interest in all current and future Leases and Rents, it being intended
by Mortgagor that this assignment constitutes a present, absolute assignment and
not an assignment for additional security only. Such assignment to Mortgagee
shall not be construed to bind Mortgagee to the performance of any of the
covenants, conditions or provisions contained in any such Lease or otherwise
impose any obligation upon Mortgagee. Mortgagor agrees to execute and deliver
to Mortgagee such additional instruments, in form and substance satisfactory to
Mortgagee, as may hereafter be requested by Mortgagee to further evidence and
confirm such assignment. Nevertheless, subject to the terms of this paragraph,
Mortgagee grants to Mortgagor a revocable license to operate and manage the
Property and to collect the Rents. Mortgagor shall cause all Rents to be
deposited into the Collection Account in accordance with the terms of the Loan
Agreement. Upon the occurrence and continuance of an Event of Default (as
hereinafter defined), without the need for notice or demand, the license granted
to Mortgagor herein shall automatically be revoked, and Mortgagee shall
immediately be entitled to possession of all Rents, whether or not Mortgagee
enters upon or takes control of the Property. Mortgagee is hereby granted and
assigned by Mortgagor the right, at its option, upon revocation of the license
granted herein, to enter upon the Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license shall be applied in accordance with Section 2.6 of the
Loan Agreement.
7. MAINTENANCE OF PROPERTY. (a) Mortgagor shall not (i)
desert or abandon the Property, (ii) change the use of the Property or cause or
permit the use or occupancy of any part of the Property to be discontinued if
such discontinuance or use change would violate any zoning or other law,
ordinance or regulation; (iii) consent to or seek any lowering of the zoning
classification, or greater zoning restriction affecting the Property; or (iv)
take any steps whatsoever to convert the Property, or any portion thereof, to a
condominium or cooperative form of ownership.
(b) Mortgagor shall, at its expense, (i) take good care
of the Property including grounds generally, and utility systems and sidewalks,
roads, alleys, and curbs therein, and shall keep the same in good, safe and
insurable condition and in compliance with all applicable Legal Requirements,
(ii) promptly make all repairs to the Property, above grade and below grade,
interior and exterior, structural and nonstructural, ordinary and extraordinary,
unforeseen and foreseen, and maintain the Property in a manner appropriate for
the facility and (iii) not commit or suffer to be committed any waste of the
Property or do or suffer to be done anything which will materially increase the
risk of fire or other hazard to the Property or materially impair the value
thereof. Mortgagor shall keep the sidewalks, vaults, gutters and curbs
comprising, or adjacent to, the Property, clean and free from dirt, snow, ice,
rubbish and obstructions. All repairs made by Mortgagor shall be made with
first-class materials, in a good and workmanlike manner, shall be equal or
better in quality and class to the original work and shall comply with all
applicable Legal Requirements and insurance requirements. To the extent any of
the above obligations are obligations of tenants under Leases or other Persons
under Property Agreements, Mortgagor may fulfill its obligations hereunder by
causing such tenants or other Persons, as the case may be, to perform their
obligations thereunder. As used herein, the terms "repair" and "repairs" shall
be deemed to include all necessary replacements.
(c) Mortgagor shall not demolish, remove, construct, or,
except as otherwise expressly provided herein, restore, or alter the Property or
any portion thereof nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration (each a "RENOVATION") which
would, for a period in excess of one year and in Mortgagor's best judgment at
the time of such demolition, removal, construction, restoration or alteration,
diminish the value of the Property or materially diminish the Total GLA without
Mortgagee's prior written consent in each instance, which consent shall not be
unreasonably withheld or delayed, provided, however, that for any Renovation
which would temporarily diminish the value of the Property or temporarily would
materially
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diminish the Total GLA, Mortgagor shall be permitted to perform same provided
(a) no Event of Default has occurred and is continuing at the time of the
proposed Renovation, (b) Mortgagor shall have entered into one or more Leases
with respect to the leasing of all or a portion of the space demised under
the Leases which were terminated in connection with the Renovation (the
"AFFECTED LEASES") which are in form and substance substantially similar to
the Affected Leases and which provide for rental and other payments
thereunder, net of any rebates, credits and other concessions granted by
Mortgagor thereunder, equal to not less than eighty-five percent (85%) of the
Rent due under the Affected Leases and Mortgagor shall have delivered a copy
of such lease or leases to Mortgagee, (c) Mortgagor shall have delivered to
Mortgagee cash collateral or an unconditional, irrevocable, clean sight draft
letter of credit in form and substance, and issued by a bank, acceptable to
Mortgagee, in an amount equal to the Rent that would have been payable
pursuant to the Affected Leases during (I) the anticipated term of the
Renovation, as reasonably determined by Mortgagee, plus (II) an additional
six (6) month period (which cash collateral or letter of credit are
hereinafter referred to as the "RENOVATION FUNDS") and (d) all Renovations
shall be performed in compliance with Legal Requirements. Mortgagor hereby
grants to Mortgagee a security interest in all of Mortgagor's right, title
and interest in the Renovation Funds and irrevocably authorizes Mortgagee,
following an Event of Default, to apply any or all of the Renovation Funds to
cure any Event of Default or, following the acceleration of the Debt in
accordance with Article VIII hereof, toward the payment of the Debt, as
Mortgagee shall, in its sole discretion, determine, but without obligation to
do so. Following (X) delivery to Mortgagee of copies of any and all final
certificates of occupancy or other certificates, licenses and permits
required for the ownership, occupancy and operation of the Property as so
renovated and (Z) commencement of the payment of Rent payable under the lease
or leases which replaced the Affected Leases without rebate, credit or other
concession granted by Mortgagor thereunder, Mortgagee shall return the
balance of the Renovation Funds not applied in accordance with the
immediately preceding sentence, if any, to Mortgagor.
(d) Mortgagor represents and warrants to Mortgagee that
(i) there are no fixtures, machinery, apparatus, tools, equipment or articles of
personal property attached or appurtenant to, or located on, or used in
connection with the management, operation or maintenance of the Property, except
for the Equipment and equipment leased by Mortgagor for the management,
operation or maintenance of the Property in accordance with the Loan Documents;
(ii) the Equipment and the leased equipment constitutes all of the fixtures,
machinery, apparatus, tools, equipment and articles of personal property
necessary to the proper operation and maintenance of the Property; and (iii) all
of the Equipment is free and clear of all liens, except for the lien of this
Mortgage and the Permitted Encumbrances. All rights, title and interest of
Mortgagor in and to all extensions, improvements, betterment, renewals,
appurtenances to, the Property hereafter acquired by, or released to, Mortgagor
or constructed, assembled or placed by Mortgagor in the Property, and all
changes and substitutions of the security constituted thereby, shall be and, in
each such case, without any further mortgage, conveyance, assignment or other
act by Mortgagee or Mortgagor, shall become subject to the lien and security
interest of this Mortgage as fully and completely, and with the same effect, as
though now owned by Mortgagor and specifically described in this Mortgage, but
at any and all times Mortgagor shall execute and deliver to Mortgagee any
documents Mortgagee may reasonably deem necessary or appropriate for the purpose
of specifically subjecting the same to the lien and security interest of this
Mortgage.
(e) Notwithstanding the provisions of this Mortgage to
the contrary, Mortgagor shall have the right, at any time and from time to time,
to remove and dispose of Equipment which may have become obsolete or unfit for
use or which is no longer useful in the management, operation or maintenance of
the Property. Mortgagor shall promptly replace any such Equipment so disposed of
or removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Property, Mortgagor shall not be required to replace the
same. All such replacements or additional equipment shall ne deemed to
constitute "Equipment" and shall
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be covered by the security interest herein granted.
8. TRANSFER OR ENCUMBRANCE OF THE PROPERTY. (a) Except as
permitted under the terms and provisions of the Loan Agreement, Mortgagor shall
not, without the prior written consent of Mortgagee, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Property or any part
thereof, or permit the Property or any part thereof to be sold, conveyed,
alienated, mortgaged, encumbered, pledged or otherwise transferred other than in
connection with a release of the Property pursuant to Section 2.4 of the Loan
Agreement.
(b) 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
Property without Mortgagee's consent in instances where Mortgagee's consent is
required. This provision shall apply to every such sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the 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 Property.
(c) Mortgagee's consent to one sale, conveyance,
alienation, mortgage, encumbrance, pledge or transfer of the Property shall not
be deemed to be a waiver of Mortgagee's right to require such consent to any
future occurrence of same. Any sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Property made in contravention of this
paragraph shall be null and void and of no force and effect.
(d) Mortgagor agrees to bear and shall pay or reimburse
Mortgagee promptly following demand for all reasonable expenses (including,
without limitation, reasonable attorneys' fees and disbursements, title search
costs and title insurance endorsement premiums) incurred by Mortgagee in
connection with the review, approval and documentation of any such sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer which requires
Mortgagee's consent under the Loan Documents.
9. CHANGES IN 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 Property for the purpose of taxation or which imposes a
tax, either directly or indirectly, on the Debt or Mortgagee's interest in the
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.
10. NO CREDITS ON ACCOUNT OF THE DEBT. Mortgagor will not
claim or demand or be entitled to any credit or credits against the outstanding
balance of the Debt on account of Taxes or Other Charges assessed against the
Property, or any part thereof, and no deduction shall otherwise be made or
claimed from the assessed value of the Property, or any part thereof, by
Mortgagor 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.
11. 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,
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with interest and penalties thereon, if any.
12. CONTROLLING AGREEMENT. It is expressly stipulated and
agreed to be the intent of Mortgagor and Mortgagee at all times to comply with
applicable state law or applicable United States federal law (to the extent that
it permits Mortgagee to contract for, charge, take, reserve, or receive a
greater amount of interest than under state law) and that this PARAGRAPH 12
shall control every other covenant and agreement in this Mortgage and the other
Loan Documents. If the applicable law (state or federal) is ever judicially
interpreted so as to render usurious any amount called for under the Note or
under any of the other Loan Documents, or contracted for, charged, taken,
reserved, or received with respect to the Debt, or if Mortgagee's exercise of
the option to accelerate the maturity of the Note, or if any prepayment by
Mortgagor results in Mortgagor having paid any interest in excess of that
permitted by applicable law, then it is Mortgagor's and Mortgagee's express
intent that all excess amounts theretofore collected by Mortgagee shall be
credited on the principal balance of the Note and all other Debt (or, if the
Note and all other Debt have been or would thereby be paid in full, refunded to
Mortgagor), and the provisions of the Note, this Mortgage and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder.
All sums paid or agreed to be paid to Mortgagee for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Debt until payment in full so that the rate or amount of interest on account
of the Debt does not exceed the maximum lawful rate from time to time in effect
and applicable to the Debt for so long as the Debt is outstanding.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Mortgagee to accelerate the maturity
of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
13. INTENTIONALLY OMITTED.
14. FURTHER ACTS, ETC. Upon foreclosure, the appointment of a
receiver or any other relevant action, Mortgagor will, at the cost of Mortgagor
and without expense to Mortgagee, cooperate fully and completely to effect the
assignment or transfer of any license, permit, agreement or any other right
necessary or useful to the operation of the Property. Mortgagor grants to
Mortgagee an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Mortgagee at law and in equity, including, without limitation, such rights
and remedies available to Mortgagee pursuant to this paragraph.
15. 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 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 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 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 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.
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16. REPORTING REQUIREMENTS. Mortgagor agrees to give prompt
notice to Mortgagee of the insolvency or bankruptcy filing of Mortgagor.
17. EVENTS OF DEFAULT. Each of the following events shall
constitute an event of default hereunder (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt is not paid when due;
(b) if any of the Taxes or Other Charges are not paid
prior to delinquency, subject to Mortgagor's right to contest same in accordance
with Section 5.1(b) of the Loan Agreement;
(c) if the Policies are not kept in full force and
effect;
(d) if, without Mortgagee's prior written consent,
except as permitted under the terms and provisions of the Loan Agreement,
(A) Mortgagor transfers or encumbers any portion of the Property or (B) any
direct or indirect interest in Mortgagor is transferred or assigned except as
expressly permitted under Section 6.1(j) of the Loan Agreement;
(e) if any representation or warranty of Mortgagor made
herein or in any other Loan Document or in any certificate, report, financial
statement or other instrument, agreement or document furnished by Mortgagor to
Mortgagee in connection with this Mortgage or any other Loan Document shall have
been false or misleading in any material respect as of the date the
representation or warranty was 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; provided,
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 sixty (60) days;
(h) if Mortgagor shall be in default beyond any notice
or grace period, if any, under any other mortgage or security agreement covering
any part of the Property whether it be superior or junior in lien to this
Mortgage;
(i) if the Property becomes subject to any mechanic's,
materialman's or other lien and such lien is not discharged (by payment,
bonding, or otherwise) for ten (10) days, except a lien for real estate taxes
and assessments not then due and payable and liens contested in accordance with
the Loan Agreement;
(j) except as permitted in this Mortgage, if Mortgagor
performs or permits the performance of any material demolition or removal of any
of the Improvements without the prior consent of Mortgagee;
(k) if any Borrower shall default under any term,
covenant, or provision of the Note, the Loan Agreement, or any of the other Loan
Documents, and such default shall continue
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beyond any applicable cure periods contained in such documents;
(l) if Mortgagor fails to cure a default under any other
term, covenant or provision of this Mortgage within ten (10) days after notice
to Mortgagor, 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 in the case of any other
default; PROVIDED, HOWEVER, that if such non-monetary default is susceptible of
cure but cannot reasonably be cured within such 30-day period and provided
further that Mortgagor shall have commenced to cure such Default within such
30-day period and thereafter diligently and expeditiously proceed to cure the
same, such 30-day period shall be extended for an additional period of time as
is reasonably necessary for Mortgagor in the exercise of due diligence to cure
such default, such additional period not to exceed ninety (90) days;
(m) if an Event of Default as defined or described in
any of the other Loan Documents occurs, whether as to a Borrower or a Property.
18. INTENTIONALLY OMITTED.
19. RIGHT TO CURE DEFAULTS. Upon the occurrence and during the
continuance of any Event of Default, 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 Property for such purposes or appear
in, defend, or bring any action or proceeding to protect its interest in the
Property or to foreclose this Mortgage or collect the Debt, and the cost and
expense thereof (including reasonable attorneys' fees and disbursements to the
extent permitted by law), with interest thereon 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, shall constitute a portion of the Debt, shall be
secured by this Mortgage and the other Loan Documents and shall be due and
payable to Mortgagee upon demand.
20. REMEDIES. (a) Upon the occurrence of any Event of
Default, Mortgagee may take such action, without notice or demand, as Mortgagee
deems advisable to protect and enforce Mortgagee's rights against Mortgagor and
in and to the Property by Mortgagee, including, without limitation, the
following actions, each of which may be pursued concurrently or otherwise, at
such time and in such order as Mortgagee may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Mortgagee:
(i) declare the entire Debt to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the
complete foreclosure of this Mortgage in which case
the Property or any interest therein may be sold for
cash or upon credit in one or more parcels or in
several interests or portions and in any order or
manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable
law, institute proceedings for the partial
foreclosure of this Mortgage for the portion of the
Debt then due and payable, subject to the continuing
lien of this Mortgage for the balance of the Debt
not then due;
(iv) sell or cause to be sold for cash or upon credit the
Property or any
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part thereof and all estate, claim,
demand, right, title and interest of Mortgagor
therein and rights of redemption thereof, pursuant
to the power of sale or otherwise, at one or more
sales, as an entirety or in parcels, at such time
and place, upon such terms and after such notice
thereof as may be required or permitted by law.
Subject to requirements and limits imposed by law,
Mortgagee may, from time to time postpone sale of
all or any portion of the Property by public
announcement at such time and place of sale, and
from time to time may postpone the sale by public
announcement at the time and place fixed by the
preceding postponement. The power of sale under
this Mortgage shall not be exhausted by any one or
more sales (or attempts to sell) as to all or any
portion of the Property remaining unsold, but shall
continue unimpaired until all of the Property has
been sold by exercise of the power of sale in this
Mortgage and all of the Debt has been paid and
discharged in full. Any person, including Mortgagor
or Mortgagee may purchase at the sale;
(v) institute an action, suit or proceeding in equity
for the specific performance of any covenant,
condition or agreement contained herein, or in any
of the other Loan Documents;
(vi) to the extent permitted by applicable law, recover
judgment on the Note either before, during or after
any proceedings for the enforcement of this
Mortgage;
(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Property, without
notice and without regard for the adequacy of the
security for the Debt and without regard for the
solvency of the Mortgagor or of any person, firm or
other entity liable for the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents
and enter into or upon the Property, either
personally or by its agents, nominees or attorneys
and dispossess Mortgagor and its agents and servants
therefrom, and thereupon Mortgagee may (A) use,
operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part
of the Property and conduct the business thereat;
(B) complete any construction on the Property in
such manner and form as Mortgagee deems advisable;
(C) make alterations, additions, renewals,
replacements and improvements to or on the Property;
(D) exercise all rights and powers of Mortgagor with
respect to the Property, whether in the name of
Mortgagor or otherwise, including, without
limitation, the right to make, cancel, enforce or
modify Leases, obtain and evict tenants, and demand,
▇▇▇ for, collect and receive all Rents; and (E)
apply the receipts from the Property to the payment
of the Debt, after deducting therefrom all expenses
(including reasonable attorneys' fees and
disbursements) incurred in connection with the
aforesaid operations and all amounts necessary to
pay the Taxes, insurance and other charges in
connection with the Property, as well as just and
reasonable compensation for the services of
Mortgagee, its counsel, agents and employees;
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(ix) require Mortgagor to vacate and surrender possession
to Mortgagee of the Property or to such receiver
and, in default thereof, evict Mortgagor by summary
proceedings or otherwise or 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 any portion of the Property occupied by
Mortgagor; or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform
Commercial Code, including, without limitation, the
right to receive and/or establish a lock box for all
Rents and proceeds from the Intangibles and any
other receivables or rights to payments of Mortgagor
relating to the Property.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Property, this Mortgage shall continue as a lien on the remaining portion of the
Property.
(b) The proceeds of any sale made under or by virtue of
this paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its sole discretion shall deem proper,
except as otherwise required by law.
(c) Mortgagee may adjourn from time to time any sale by
it to be made under or by virtue of this Mortgage by announcement at the time
and place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant
hereto, Mortgagee or an officer of any court empowered to do so, shall execute
and deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Property and rights so sold and for
that purpose Mortgagee may execute all necessary instruments of conveyance,
assignment and transfer, and may substitute one or more persons with like power,
Mortgagor hereby ratifying and confirming all that its said attorney or such
substitute or substitutes shall lawfully do by virtue hereof. Any sale or sales
made under or by virtue of this paragraph, whether made under the power of sale
herein granted or under or by virtue of judicial proceedings or of a judgment or
decree of foreclosure and sale, shall operate to divest all the estate, right,
title, interest, claim and demand whatsoever, whether at law or in equity, of
Mortgagor in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against Mortgagor and against any and all persons
claiming or who may claim the same, or any part thereof from, through or under
Mortgagor.
(e) Upon any sale made under or by virtue of this
paragraph, whether made under a power of sale or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Mortgagee may
bid for and acquire the Property or any part thereof and in lieu of paying cash
therefor may make settlement for the purchase price by crediting upon the Debt
the net sales price after deducting therefrom the expenses of the sale and costs
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage.
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(f) No recovery of any judgment by Mortgagee and no levy
of an execution under any judgment upon the Property or upon any other property
of any Borrower shall affect in any manner or to any extent the lien of this
Mortgage upon the Property or any part thereof, or any liens, rights, powers or
remedies of Mortgagee hereunder, but such liens, rights, powers and remedies of
Mortgagee shall continue unimpaired as before.
(g) Mortgagee may terminate or rescind any proceeding or
other action brought in connection with its exercise of the remedies provided in
this PARAGRAPH 20 at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(h) Mortgagee may resort to any remedies and the
security given by the Note, this Mortgage or in any of the other Loan Documents
in whole or in part, and in such portions and in such order as determined by
Mortgagee's sole discretion. No such action shall in any way be considered a
waiver of any rights, benefits or remedies evidenced or provided by the Note,
this Mortgage or in any of the other Loan Documents. The failure of Mortgagee
to exercise any right, remedy or option provided in the Note, this Mortgage or
any of the other Loan Documents shall not be deemed a waiver of such right,
remedy or option or of any covenant or obligation secured by the Note, this
Mortgage or any of the other Loan Documents. No acceptance by Mortgagee of any
payment after the occurrence of any Event of Default and no payment by Mortgagee
of any obligation for which Mortgagor is liable hereunder shall be deemed to
waive or cure any Event of Default with respect to Mortgagor, or Mortgagor's
liability to pay such obligation. No sale of all or any portion of the
Property, no forbearance on the part of Mortgagee, and no extension of time for
the payment of the whole or any portion of the Debt or any other indulgence
given by Mortgagee to Mortgagor, shall operate to release or in any manner
affect the interest of Mortgagee in the remaining Property or the liability of
Mortgagor to pay the Debt. No waiver by Mortgagee shall be effective unless it
is in writing and then only to the extent specifically stated. All costs and
expenses of Mortgagee in exercising its rights and remedies under this PARAGRAPH
20 (including reasonable attorneys' fees and disbursements to the extent
permitted by law), shall be paid by Mortgagor immediately upon notice from
Mortgagee, with interest at the Default Rate for the period after notice from
Mortgagee and such costs and expenses shall constitute a portion of the Debt and
shall be secured by this Mortgage.
(i) The interests and rights of Mortgagee under the
Note, this Mortgage or any of the other Loan Documents shall not be impaired by
any indulgence, including (i) any renewal, extension or modification which
Mortgagee may grant with respect to any of the Debt, (ii) any surrender,
compromise, release, renewal, extension, exchange or substitution which
Mortgagee may grant with respect to the Property or any portion thereof; or
(iii) any release or indulgence granted to any maker, endorser, guarantor or
surety of any of the Debt.
21. RIGHT OF ENTRY. In addition to any other rights or
remedies granted under this Mortgage, Mortgagee and its agents shall have the
right after reasonable prior notice to Mortgagor to enter and inspect the
Property at any reasonable time during the term of this Mortgage. The
reasonable cost of such inspections or audits shall be borne by Mortgagor should
Mortgagee reasonably determine that an Event of Default exists, including the
cost of all follow up or additional investigations or inquiries deemed
reasonably necessary by Mortgagee. The reasonable cost of such inspections, if
not paid for by Mortgagor following demand, may be added to the principal
balance of the sums due under the Note and this Mortgage and shall bear interest
thereafter until paid at the Default Rate.
22. SECURITY AGREEMENT. This Mortgage is both a real property
deed of trust and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Mortgagor in the Property. Mortgagor by executing and delivering this Mortgage
has granted and
xiii
hereby grants to Mortgagee, as security for the Debt, a security interest in
the Property to the full extent that the Property may be subject to the
Uniform Commercial Code (said portion of the Property so subject to the
Uniform Commercial Code being called in this paragraph the "COLLATERAL").
Mortgagor hereby agrees with Mortgagee to execute and deliver to Mortgagee,
in form and substance satisfactory to Mortgagee, such financing statements
and such further assurances as Mortgagee may from time to time, reasonably
consider necessary to create, perfect, and preserve Mortgagee's security
interest herein granted. This Mortgage shall also constitute a "fixture
filing" for the purposes of the Uniform Commercial Code. As such, this
Mortgage covers all items of the Collateral that are or are to become
fixtures. Information concerning the security interest herein granted may be
obtained from the parties at the addresses of the parties set forth in the
first paragraph of this Mortgage. 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 expenses, including
attorneys' fees and disbursements, incurred or paid by Mortgagee in
protecting the interest in the Collateral and in enforcing the 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 ten (10) days
prior to such action, shall constitute commercially reasonable notice to
Mortgagor. 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 sole discretion shall deem
proper. In the event of any change in name, identity or structure of any
Mortgagor, such Mortgagor shall notify Mortgagee thereof and promptly after
request shall execute, file and record such Uniform Commercial Code forms as
are necessary to maintain the priority of Mortgagee's lien upon and security
interest in the Collateral, and shall pay all expenses and fees in connection
with the filing and recording thereof. If Mortgagee shall require the filing
or recording of additional Uniform Commercial Code forms or continuation
statements, Mortgagor shall, promptly after request, execute, file and record
such Uniform Commercial Code forms or continuation statements as Mortgagee
shall deem necessary, and shall pay all expenses and fees in connection with
the filing and recording thereof, it being understood and agreed, however,
that no such additional documents shall increase Mortgagor's obligations
under the Note, this Mortgage and the other Loan Documents. Mortgagor hereby
irrevocably appoints Mortgagee as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Mortgagee, as secured party, in
connection with the Collateral covered by this Mortgage.
23. ACTIONS AND PROCEEDINGS. If Mortgagor fails to act within
a reasonable time, Mortgagee has the right to appear in and defend any action or
proceeding brought with respect to the Property and to bring any action or
proceeding, in Mortgagee's name or, if required by law, in the name and on
behalf of Mortgagor, which Mortgagee, in its reasonable discretion, decides
should be brought to protect their interest in the 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.
24. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under
this Mortgage, the Note and the other Loan Documents shall be payable without
setoff, counterclaim or any deduction whatsoever. Mortgagor hereby waives the
right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Mortgagee is a
participant, or arising out of or in any way connected with this Mortgage, the
Note, any of the other Loan Documents, or the Debt.
xiv
25. 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 any other action,
for a default or defaults by Mortgagor existing at the time such earlier action
was commenced.
26. MARSHALLING AND OTHER MATTERS. (a) Mortgagor hereby
waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein. Further, Mortgagor hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of
each and every person acquiring any interest in or title to the Property
subsequent to the date of this Mortgage and on behalf of all persons to the
extent permitted by applicable law.
(b) Mortgagor acknowledges that this Mortgage secures the Debt.
Mortgagor agrees that the lien of this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of Mortgagee and, without limiting the generality of the
foregoing, the lien hereof shall not be impaired by any acceptance by Mortgagee
of any other security for any portion of the Debt, or by any failure, neglect or
omission on the part of Mortgagee to realize upon or protect any portion of the
Debt or any collateral security therefor. The lien of this Mortgage shall not
in any manner be impaired or affected by any release (except as to the property
released), sale, pledge, surrender, compromise, settlement, renewal, extension,
indulgence, alteration, changing, modification or disposition of any portion of
the Debt or of any of the collateral security therefor.
27. INTENTIONALLY OMITTED.
28. INTENTIONALLY OMITTED.
29. INTENTIONALLY OMITTED.
30. INTENTIONALLY OMITTED.
31. INDEMNIFICATION. (a) In addition, and without limitation,
to any other provision of this Mortgage or any other Loan Document, Mortgagor
shall protect, indemnify and save harmless Mortgagee and its successors and
assigns, and their agents, employees, officers and directors, from and against
any and all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expense (including, without limitation, reasonable attorneys'
fees and disbursements, whether incurred within or outside the judicial
process), imposed upon or incurred by or asserted against Mortgagee and its
assigns, or any of their agents, employees, officers or directors, by reason of
(a) ownership of this Mortgage, the Assignment of Lease, the Property or any
part thereof or any interest therein or receipt of any Rents; (b) any accident,
injury to or death of any person or loss of or damage to property occurring in,
on or about the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, streets or ways; (c) any use, nonuse or condition in, on
or about, or possession, alteration, repair, operation, maintenance or
management of, the Property or any part thereof or on the adjoining sidewalks,
curbs, parking areas, or ways; (d) any failure on the part of Mortgagor to
perform or comply with any of the terms of this Mortgage or the Assignment of
Lease; (e) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (f)
any claim by brokers, finders or similar Persons claiming to be entitled to a
commission in connection with any Lease or other transaction involving the
Property or any part thereof; (g) any Taxes or Other
xv
Charges including, without limitation, any Taxes or Other Charges
attributable to the execution, delivery, filing, or recording of any Loan
Document, Lease or memorandum thereof; (h) any lien or claim arising on or
against the Property or any part thereof under any Legal Requirement or any
liability asserted against Mortgagee with respect thereto; or (i) the claims
of any lessee or any Person acting through or under any lessee or otherwise
arising under or as a consequence of any Lease. Notwithstanding the foregoing
provisions of this Section 31 to the contrary, Mortgagor shall have no
obligation to indemnify Mortgagee pursuant to this Section 31 for
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (1) which result from Mortgagee's, and its successors' or
assigns' willful misconduct or gross negligence or, (2) which are
attributable to acts or events which occur after the payment in full of the
Debt or earlier termination of this Mortgage (except to the extent fairly
attributable to acts or events or liabilities or damages occurring or
accruing prior thereto and except as may be provided in any other Loan
Document), (3) resulting from a transfer by Mortgagee of all or any part of
its interest in this Mortgage, the Note, the other Loan Documents or the
Property, other than any such transfer either required by this Mortgage or
any other Loan Document or made while an Event of Default shall have occurred
and be continuing, (4) for Mortgagee's income franchise, net revenue, capital
levy, estate, inheritance or succession taxes and (5) which arise under or
are connected to the Securities Act or any other securities laws, rules or
regulations. Mortgagee shall credit against any payments due under this
Section 31 any insurance recoveries actually received by beneficiary in
respect of the related claim under or from insurance paid for by Mortgagor or
assigned to Mortgagee by Mortgagor.
(b) In the event that any action, suit or proceeding
shall be brought against Mortgagee for which Mortgagee is indemnified herein,
Mortgagee shall notify Mortgagor of the commencement thereof, and Mortgagor
shall be entitled, at its sole cost and expense, acting through counsel
reasonably acceptable to Mortgagee, to participate in, and, to the extent that
Mortgagor desires to, assume and control the defense thereof; provided, however,
that Mortgagor shall have acknowledged in writing its obligation to fully
indemnify Mortgagee hereunder in respect of such action, suit or proceeding,
and, provided further, that Mortgagor shall not be entitled to participate in
the defense of any such action, suit or proceeding if (i) in the reasonable
opinion of Mortgagee, (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or any risk of civil liability on Mortgagee or
will involve a risk of the sale, forfeiture or loss of, or the creation of any
lien (other than a Permitted Encumbrance) on the Property or any part thereof
unless Mortgagor shall have posted a bond or other security satisfactory to
Mortgagee in respect to such risk except with respect to any risk of imposition
of criminal liability on Mortgagee as to which Mortgagor shall not be entitled
to so participate, (y) the control of such action, suit or proceeding would
involve a bona fide conflict of interest or (z) such action, suit or proceeding
involves claims, obligations, costs or expenses which exceed an amount equal to
the product of (A) $40,000,000 and (B) a fraction, the numerator of which is (1)
the aggregate Initial Allocated Loan Amounts less (2) the aggregate Initial
Allocated Loan Amounts of all Properties which have been Released from the liens
of the Mortgages as of the date of such determination, and the denominator of
which is the aggregate Initial Allocated Loan Amounts (which amount is herein
referred to as the "LITIGATION THRESHOLD"), (ii) such proceeding involves
claims, obligations, costs or expenses not fully indemnified by Mortgagor which
Mortgagor and Mortgagee have been unable to sever from the indemnified claim(s),
(iii) an Event of Default has occurred and is continuing, (iv) such action, suit
or proceeding involves matters which are unrelated to the overall transaction
contemplated by this Mortgage and the other Loan Documents and if determined
adversely could be detrimental to the interests of Mortgagee notwithstanding
indemnification by Mortgagor. Mortgagee may participate in a reasonable manner
at its own expense and with its own counsel in any proceeding conducted by
Mortgagor in accordance with the foregoing. The party controlling any such
action, suit or proceeding shall keep the other party or parties hereto fully
informed of the status of any such proceeding.
(c) In the event that, pursuant to Subsection (b)(i)(z)
of this Section 31, Mortgagor is not entitled to assume and control the defense
of any such action, suit or proceeding, Mortgagor shall be permitted to assume
and control such defense if Mortgagor either (i) delivers to
xvi
Mortgagee an opinion letter from counsel reasonably acceptable to Mortgagee
or a certificate or opinion from such other Person as shall be acceptable to
Mortgagee that, in such counsel's or other Person's opinion, there is no
reasonable likelihood that (A) the claimant would prevail on such action,
suit or proceeding or (B) Mortgagee's potential, uninsured liability would
not exceed the Litigation Threshold, which opinion or certificate shall be in
form and substance satisfactory to Mortgagee or (ii) Mortgagor executes and
delivers an agreement with Mortgagee, in form and substance satisfactory to
Mortgagee, that Mortgagor's liability for fully indemnifying Mortgagee in
respect of such action, suit or proceeding shall be a recourse obligation of
Mortgagor not subject to the provisions of Section 50 hereof.
(d) Each of Mortgagor and Mortgagee shall, at
Mortgagor's sole cost and expense, make available to the other party such
information and documents reasonably requested by the other party as are
necessary or advisable for the other party to participate in any action, suit or
proceeding to the extent permitted by this Section 31. Unless an Event of
Default shall have occurred and be continuing, Mortgagee shall not enter into
any settlement or other compromise with respect to any claim which is entitled
to be indemnified under this Section 31 without five (5) days' prior written
notice to Mortgagor unless Mortgagee waives its right to be indemnified under
this Section 31 with respect to such claim. Upon payment in full of any claim
by Mortgagor pursuant to this Section 31, to or on behalf of Mortgagee,
Mortgagor, without any further action, shall be subrogated to any and all claims
that Mortgagee may have relating thereto (other than claims in respect of
insurance policies maintained by Mortgagee at its own expense), and Mortgagee
shall execute such instruments of assignment and conveyance, evidence of claims
and payment and such other documents, instruments and agreements as may be
reasonably necessary to preserve any such claims and otherwise cooperate with
Mortgagor and give such further assurances as are reasonably necessary or
advisable to enable Mortgagor to pursue such claims vigorously. Any amount
payable to Mortgagee pursuant to this Section 31 shall be paid by Mortgagor to
the indemnified party promptly upon (i) the adverse determination of such
action, suit or proceeding against the indemnified party if, pursuant to this
Section 31, Mortgagor assumed and controlled the defense thereof, or (ii)
Mortgagor's receipt of a written demand therefor from Mortgagee, accompanied by
a written statement describing the basis for such indemnity and the computation
of the amount so payable.
Any amounts payable to Mortgagee by reason of the
application of this Section 31 shall constitute a part of the Debt secured by
the Mortgages and other Loan Documents and shall become immediately due and
payable and shall bear interest at the Default Rate from the date the liability,
obligation, claim, cost or expense is sustained by the indemnified party, until
paid. The provisions of this Section 31 shall survive the termination of this
Mortgage and the other Loan Documents whether by repayment of the Debt,
foreclosure or delivery of a deed in lieu thereof, assignment or otherwise.
32. NOTICES. All notices, consents, approvals and requests
required or permitted hereunder or under any other Loan Document shall be given
in writing and shall be effective for all purposes if hand delivered or sent by
(a) certified or registered United States mail, postage prepaid, or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, addressed as follows (or at such
other address and person as shall be designated from time to time by any party
hereto, as the case may be, in a written notice to the other parties hereto in
the manner provided for in this Section):
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If to Mortgagee:
Nomura Asset Capital Corporation
Two World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
with copies to:
Nomura Asset Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
and:
Nomura Asset Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
If to Mortgagor:
c/o Horizon Group Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
with copies to:
c/o Horizon Group Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive
and
xviii
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
A notice shall be deemed to have been given: in the case of hand delivery, at
the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a Business Day; or in the case of
expedited prepaid delivery, upon the first attempted delivery on a Business Day.
33. AUTHORITY. (a) Mortgagor (and the undersigned
representative of Mortgagor, if any) represent and warrant that it (or they, as
the case may be) has full power, authority and right to execute, deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and
assign the 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; and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
34. 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 or any other Loan Document 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. To the extent permitted by applicable law, Mortgagor hereby expressly
waives the right to receive any notice from Mortgagee with respect to any matter
for which this Mortgage or other Loan Document does not specifically and
expressly provide for the giving of notice by Mortgagee to Mortgagor.
35. INTENTIONALLY OMITTED.
36. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to consent or not consent or
approve or disapprove, or any arrangement or term is to be satisfactory to
Mortgagee, the decision of Mortgagee to consent or not consent, to approve or
disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Mortgagee and shall be final and
conclusive, except as may be otherwise expressly and specifically provided
herein.
37. 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 any of the other Loan Documents,
(b) except in connection with the release of this Mortgage or the full repayment
(or complete defeasance) of the Debt, the release, regardless of consideration,
any collateral securing the Debt or of any person other than Mortgagor 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 any of the other Loan 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 sole 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 and remedies 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
xix
rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity except as such rights may
be expressly limited herein or in the other Loan Documents.
38. 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.
39. LIABILITY. If Mortgagor consists of more than one person,
the obligations and liabilities of each such person hereunder shall be joint and
several. Subject to the provisions hereof requiring Mortgagee's consent to any
transfer of the Property, this Mortgage shall be binding upon and inure to the
benefit of Mortgagor and Mortgagee and their respective successors and assigns
forever.
40. 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.
41. 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.
42. 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.
43. 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 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, the words "PROPERTY" shall include any portion
of the Property and any interest therein which has not been released from the
lien of this Mortgage and the words "ATTORNEYS' FEES" shall include any and all
recorded attorneys' fees, paralegal and law clerk fees, including, without
limitation, fees at the pre-trial, trial and appellate levels incurred or paid
by Mortgagee in protecting its interest in the Property and Collateral and
enforcing its rights hereunder. 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.
44. HOMESTEAD. Mortgagor hereby waives and renounces all
homestead and exemption rights provided by the Constitution and the laws of the
United States and of any state, in and to the Property as against the collection
of the Debt, or any part hereof.
45. ASSIGNMENTS. Mortgagee shall have the right to assign or
transfer its rights under this Mortgage provided that no such assignment or
transfer shall increase, decrease or otherwise affect Mortgagor's obligations
under this Mortgage or the other Loan Documents. Any assignee or transferee
shall be entitled to all the benefits afforded Mortgagee under this Mortgage.
46. WAIVER OF JURY TRIAL. MORTGAGOR AND, BY ITS ACCEPTANCE
HEREOF, MORTGAGEE, EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
xx
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY
FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THIS MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MORTGAGOR AND
MORTGAGEE, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH
PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE OTHER PARTY.
47. MISCELLANEOUS. (a) Any consent or approval by Mortgagee
in any single instance shall not be deemed or construed to be Mortgagee's
consent or approval in any like matter arising at a subsequent date, and the
failure of Mortgagee to promptly exercise any right, power, remedy, consent or
approval provided herein or at law or in equity shall not constitute or be
construed as a waiver of the same nor shall Mortgagee be estopped from
exercising such right, power, remedy, consent or approval at a later date. Any
consent or approval requested of and granted by Mortgagee pursuant hereto shall
be narrowly construed to be applicable only to the Person and the matter
identified in such consent or approval and no third party shall claim any
benefit by reason thereof, and any such consent or approval shall not be deemed
to constitute Mortgagee a venturer or partner with Mortgagor nor shall privity
of contract be presumed to have been established with any such third party. If
Mortgagee deems reasonably necessary to retain assistance of persons, firms or
corporations (including, without limitation, attorneys, title insurance
companies, appraisers, engineers and surveyors) with respect to a request for
consent or approval, Mortgagor shall reimburse Mortgagee for all costs
reasonably incurred in connection with the employment of such persons, firms or
corporations.
(b) Mortgagor covenants and agrees that during the term
of this Mortgage, unless Mortgagee shall have previously consented in writing,
(i) Mortgagor will take no action that would cause it to become an "EMPLOYEE
BENEFIT PLAN" as defined in 29 C.F.R. Section 2510.3-101, or "ASSETS OF A
GOVERNMENTAL PLAN" subject to regulation under the state statutes, and
(ii) Mortgagor will not sell, assign or transfer the Property, or any portion
thereof or interest therein, to any transferee that does not execute and deliver
to Mortgagee its written assumption of the obligations of this covenant.
(c) The Loan Documents contain the entire agreement
between Mortgagor and Mortgagee relating to or connected with the Loan. Any
other agreements relating to or connected with the Loan not expressly set forth
in the Loan Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
48. DEFEASANCE; RELEASE OF THIS MORTGAGE. This Mortgage will
be satisfied and discharged of record by Mortgagee in accordance with the terms
and provisions set forth in Sections 2.3 and 2.4 of the Loan Agreement.
49. NO ELECTION OF REMEDIES. (a) Without limiting any other
right or remedy provided to Mortgagee in this Mortgage or the other Loan
Documents, in the case of an Event of Default (i) Mortgagee shall have the right
to pursue all of its rights and remedies under this Mortgage and the Loan
Documents, at law and/or in equity, in one proceeding, or separately and
independently in separate proceedings from time to time, as Mortgagee, in its
sole and absolute discretion, shall determine from time to time, (ii) Mortgagee
shall not be required to either ▇▇▇▇▇▇▇▇ assets, sell the Property in any
particular order of alienation (and may sell the same simultaneously and
together or separately), or be subject to any "one action" or "election of
remedies" law or rule with respect to the Property, (iii) the exercise by
Mortgagee of any remedies against any one item of Property will not impede
Mortgagee from
xxi
subsequently or simultaneously exercising remedies against any other item of
Property, (iv) all liens and other rights, remedies or privileges provided to
Mortgagee herein shall remain in full force and effect until Mortgagee has
exhausted all of its remedies against the Property and all Property has been
foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt,
and (v) Mortgagee may resort for the payment of the Debt to any security held
by Mortgagee in such order and manner as Mortgagee, in its discretion, may
elect and 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.
(b) Without notice to or consent of Mortgagor and
without impairment of the lien and rights created by this Mortgage, Mortgagee
may, at any time (in its sole and absolute discretion, but Mortgagee shall have
no obligation to), execute and deliver to Mortgagor a written instrument
releasing and reconveying all or a portion of the lien of this Mortgage as
security for any or all of the obligations of Mortgagor now existing or
hereafter arising under or in respect of the Note, the Loan Agreement and each
of the other Loan Documents, whereupon following the execution and delivery by
Mortgagee to Mortgagor of any such written instrument of release, this Mortgage
shall no longer secure such obligations of Mortgagor so released.
50. EXCULPATION. [Notwithstanding anything herein to the
contrary, Mortgagee shall not enforce the liability and obligations contained in
the Note, the Loan Agreement, this Mortgage or the other Loan Documents except
as provided in Section 9.4 of the Loan Agreement.][THIS PARAGRAPH WILL BE
DELETED FOR BRIDGE LOAN MORTGAGES]
51. GOVERNING LAW. WITH RESPECT TO MATTERS RELATING TO THE
CREATION, PERFECTION AND PROCEDURES RELATING TO THE ENFORCEMENT (INCLUDING
NON-JUDICIAL FORECLOSURE OF LIENS) OF THIS MORTGAGE, THIS MORTGAGE SHALL BE
GOVERNED BY, AND BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN
WHICH THE PROPERTY IS LOCATED WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF. IT IS UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH ABOVE IN THIS
PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE
LAW OF THE STATE OF ILLINOIS SHALL GOVERN ALL MATTERS RELATING TO THIS
MORTGAGE AND THE OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR
OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. MORTGAGOR, AND, BY ITS
ACCEPTANCE HEREOF, MORTGAGEE, EACH HEREBY SUBMITS TO PERSONAL JURISDICTION IN
THE STATE OF ILLINOIS AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA
LOCATED IN THE STATE OF ILLINOIS (AND ANY APPELLATE COURTS TAKING APPEALS
THEREFROM) FOR THE ENFORCEMENT OF SUCH PARTY'S OBLIGATIONS HEREUNDER AND
WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAW OF ANY OTHER STATE TO OBJECT
TO JURISDICTION WITHIN SUCH STATE FOR THE PURPOSES OF SUCH ACTION, SUIT,
PROCEEDING OR LITIGATION TO ENFORCE SUCH OBLIGATIONS OF SUCH PARTY.
MORTGAGOR, AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE, EACH HEREBY WAIVES AND
AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS MORTGAGE (A) THAT IT IS NOT SUBJECT TO SUCH
JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN THOSE COURTS OR THAT THIS MORTGAGE MAY NOT BE ENFORCED IN
OR BY THOSE COURTS OR THAT IT IS EXEMPT OR IMMUNE FROM EXECUTION, (B) THAT
THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR (C)
THAT THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS IMPROPER. IN THE EVENT
ANY SUCH ACTION, SUIT, PROCEEDING OR LITIGATION IS COMMENCED, MORTGAGOR, AND,
BY ITS ACCEPTANCE HEREOF, MORTGAGEE, EACH
xxii
AGREES THAT SERVICE OF PROCESS MAY BE MADE, AND PERSONAL JURISDICTION OVER
SUCH PARTY OBTAINED, BY SERVICE OF A COPY OF THE SUMMONS, COMPLAINT AND OTHER
PLEADINGS REQUIRED TO COMMENCE SUCH LITIGATION BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED UPON SUCH PARTY AT THE APPLICABLE ADDRESS SET FORTH IN
SECTION 32 ABOVE. MORTGAGOR, AND, BY ITS ACCEPTANCE HEREOF, MORTGAGEE, EACH
HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING RELATED TO THE ENFORCEMENT OF THIS MORTGAGE.
52. DECLARATION OF SUBORDINATION. At the option of Mortgagee,
this Mortgage shall become subject and subordinate, in whole or in part (but not
with respect to priority of entitlement to insurance proceeds or any
condemnation proceeds), to any and all leases of all or any part of the Property
upon the execution by Mortgagee and recording thereof, at any time hereafter in
the appropriate official records of the County wherein the Property are
situated, of a unilateral declaration to that effect.
53. STATE SPECIFIC RIDER. The provisions of the State Specific
Rider attached hereto as EXHIBIT B are hereby incorporated herein by reference.
xxiii
IN WITNESS WHEREOF, Mortgagor has executed this instrument the day
and year first above written.
[_________________________], a Delaware
[____________]
By: Horizon Group Properties, L.P., a
Delaware limited partnership, its
[_________]
By: Horizon Group Properties, Inc.,
a Maryland corporation, its
general partner
By:________________________________
Name:
Title:
xxiv
STATE OF )
) ss.:
COUNTY OF )
This instrument has been acknowledged before me on this _____ day
of , 1998, by ____________, the __________ of Horizon Group
Properties, Inc., a Maryland corporation, in its capacity as the general partner
of Horizon Group Properties, L.P., a Delaware limited partnership, in its
capacity as _______________ of _____________________ on behalf of such entity.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal
of office this ____ day of , 1998.
_____________________________
Notary Public
[Notarial Seal]
xxv
EXHIBIT A
LEGAL DESCRIPTION
EXHIBIT B
RIDER