Exhibit 10.135
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ VENTURE, L.P., as borrower
a Delaware limited partnership
and
GLIMCHER LOYAL PLAZA TENANT, L.P.,
a Delaware limited partnership, as tenant
(collectively, Mortgagor)
To
▇▇▇▇▇▇ BROTHERS BANK, FSB, as mortgagee
(Lender)
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OPEN-END MORTGAGE AND
SECURITY AGREEMENT
THIS INSTRUMENT SECURES FUTURE ADVANCES UP TO A MAXIMUM PRINCIPAL
AMOUNT OF $14,000,000 PLUS ACCRUED INTEREST AND OTHER INDEBTEDNESS
AS DESCRIBED IN PENNSYLVANIA ACT NO. 42 PENNSYLVANIA CONSOLIDATED
STATUTES ANNOTATED SECTIONS 8143 AND 8144
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Dated: the 31st day of May, 2001, to be effective
as of May 31, 2001
Location: ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇
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RECORDING REQUESTED BY AND WHEN RECORDED PLEASE RETURN TO:
Stroock & Stroock & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
TABLE OF CONTENTS
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Article 1 - GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED........................................................2
Section 1.2 ASSIGNMENT OF RENTS.......................................................6
Section 1.3 SECURITY AGREEMENT........................................................6
Section 1.4 FIXTURE FILING............................................................7
Section 1.5 PLEDGES OF MONIES HELD....................................................7
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT......................................................................8
Section 2.2 OTHER OBLIGATIONS.........................................................8
Section 2.3 DEBT AND OTHER OBLIGATIONS................................................8
Article 3 - BORROWER COVENANTS
Section 3.1 PAYMENT OF DEBT...........................................................8
Section 3.2 INCORPORATION BY REFERENCE................................................8
Section 3.3 INSURANCE.................................................................8
Section 3.4 MAINTENANCE OF PROPERTY...................................................9
Section 3.5 WASTE.....................................................................9
Section 3.6 PAYMENT FOR LABOR AND MATERIALS...........................................9
Section 3.7 PERFORMANCE OF OTHER AGREEMENTS..........................................10
Section 3.8 CHANGE OF NAME, IDENTITY OR STRUCTURE....................................14
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 RELATIONSHIP OF BORROWER AND LENDER......................................14
Section 4.2 NO RELIANCE ON LENDER....................................................14
Section 4.3 NO LENDER OBLIGATIONS....................................................14
Section 4.4 RELIANCE.................................................................15
Article 5 - FURTHER ASSURANCES
Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC....................................15
Section 5.2 FURTHER ACTS, ETC........................................................15
Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS..................16
Section 5.4 SPLITTING OF MORTGAGE....................................................16
Section 5.5 REPLACEMENT DOCUMENTS....................................................17
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 LENDER RELIANCE..........................................................17
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Section 6.2 NO SALE/ENCUMBRANCE......................................................17
Section 6.3 SALE/ENCUMBRANCE DEFINED.................................................17
Section 6.4 LENDER'S RIGHTS..........................................................18
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES.................................................................20
Section 7.2 APPLICATION OF PROCEEDS..................................................24
Section 7.3 RIGHT TO CURE DEFAULTS...................................................24
Section 7.4 ACTIONS AND PROCEEDINGS..................................................24
Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID.....................................25
Section 7.6 EXAMINATION OF BOOKS AND RECORDS.........................................25
Section 7.7 OTHER RIGHTS, ETC........................................................25
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.............................26
Section 7.9 VIOLATION OF LAWS........................................................26
Section 7.10 RECOURSE AND CHOICE OF REMEDIES..........................................26
Section 7.11 RIGHT OF ENTRY...........................................................27
Article 8 - ENVIRONMENTAL HAZARDS
Section 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.............................27
Section 8.2 ENVIRONMENTAL COVENANTS..................................................28
Section 8.3 LENDER'S RIGHTS..........................................................29
Article 9 - INDEMNIFICATION
Section 9.1 GENERAL INDEMNIFICATION..................................................30
Section 9.2 MORTGAGE AND/OR INTANGIBLE TAX...........................................31
Section 9.3 ERISA INDEMNIFICATION....................................................31
Section 9.4 ENVIRONMENTAL INDEMNIFICATION............................................31
Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND EXPENSES..............32
Article 10 - WAIVERS
Section 10.1 WAIVER OF COUNTERCLAIM...................................................33
Section 10.2 MARSHALLING AND OTHER MATTERS............................................33
Section 10.3 WAIVER OF NOTICE.........................................................33
Section 10.4 WAIVER OF STATUTE OF LIMITATIONS.........................................33
Section 10.5 SURVIVAL.................................................................33
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Article 11 - EXCULPATION
Article 12 - NOTICES
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW............................................................34
Section 13.2 USURY LAWS...............................................................34
Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW.....................................34
Article 14 - DEFINITIONS
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 NO ORAL CHANGE...........................................................35
Section 15.2 SUCCESSORS AND ASSIGNS...................................................35
Section 15.3 INAPPLICABLE PROVISIONS..................................................35
Section 15.4 HEADINGS, ETC............................................................35
Section 15.5 NUMBER AND GENDER........................................................35
Section 15.6 SUBROGATION..............................................................36
Section 15.7 ENTIRE AGREEMENT.........................................................36
Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY....................................36
Article 16 - INTENTIONALLY DELETED
Article 17 - STATE-SPECIFIC PROVISIONS
Section 17.1 OPEN-END MORTGAGE........................................................36
Section 17.2 ACTION IN EJECTMENT......................................................37
Section 17.3 CONFLICTING PROVISIONS...................................................38
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OPEN-END MORTGAGE AND SECURITY AGREEMENT
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT IN THE MAXIMUM AMOUNT OF
$14,000,000 (this "SECURITY INSTRUMENT") is made on the 31 day of May, 2001, to
be effective as of the 31 day of May, 2001, by LOYAL PLAZA VENTURE, L.P., a
Delaware limited partnership, having its principal place of business at ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as borrower ("BORROWER"), and GLIMCHER LOYAL
PLAZA TENANT, L.P., a Delaware limited partnership, having its principal place
of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as tenant ("TENANT")
(Borrower and Tenant collectively hereinafter referred to as "MORTGAGOR") to
▇▇▇▇▇▇ BROTHERS BANK, FSB, a federal stock savings bank, having an address at
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as beneficiary
("LENDER").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Security Instrument is given to secure a loan (the
"LOAN") in the principal sum of FOURTEEN MILLION AND 00/100 Dollars
($14,000,000) or so much thereof as may be advanced pursuant to that certain
Loan Agreement dated as of the date hereof between Borrower and Lender (as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time, the "LOAN AGREEMENT") and evidenced by that certain Promissory
Note dated the date hereof made by Borrower to Lender (such Note, together with
all extensions, renewals, replacements, restatements or modifications thereof
being hereinafter referred to as the "NOTE"); and
WHEREAS, Mortgagor desires to secure the payment of the Debt (as
defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents; and
WHEREAS, Borrower is the fee owner of Parcels I and II described in
Exhibit A hereto ("Parcel I" and "Parcel II," respectively); and
WHEREAS, Borrower is the holder of the tenant's interest under the
Ground Lease (hereinafter defined), which affects Parcel III described in
EXHIBIT A hereto ("Parcel III"); and
WHEREAS, Borrower has leased its interest in Parcel I and Parcel II to
Tenant pursuant to the Operating Lease (hereinafter defined) and subleased its
interest in Parcel III to Tenant pursuant to the Ground Sublease (hereinafter
defined); and
WHEREAS, this Security Instrument is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by Borrower and Tenant,
where applicable, of their respective obligations thereunder and under the other
Loan Documents are secured hereby, and each and every term and provision of the
Loan Agreement and the Note, including the rights, remedies, obligations,
covenants, conditions, agreements, indemnities, representations and warranties
of the parties therein, are hereby incorporated by reference herein as though
set forth in full and shall be considered a part of this Security Instrument
(the Loan Agreement, the Note, this Security Instrument, that certain Assignment
of Leases and Rents of even date herewith made by Borrower and Tenant in favor
of Lender (the "ASSIGNMENT OF LEASES") and all other
documents evidencing or securing the Debt are hereinafter referred to
collectively as the "LOAN DOCUMENTS").
NOW THEREFORE, in consideration of the making of the Loan by Lender and
the covenants, agreements, representations and warranties set forth in this
Security Instrument:
Article 1 -
GRANTS OF SECURITY
Section 1.1 PROPERTY MORTGAGED. Mortgagor does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey to Lender, the following property, rights, interests and estates now
owned, or hereafter acquired by Mortgagor (collectively, the "PROPERTY"):
(a) LAND. The real property described in EXHIBIT A
attached hereto and made a part hereof (the "LAND");
(b) GROUND LEASE. All right, title and interest of
Borrower as lessee under that certain Agreement of Lease made
between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇, as lessor (together
with their successors and assigns "LESSOR"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, as lessee, dated January 15, 1963, a memorandum of
which was recorded February 27, 1963 in Deed Book 492, Page
1142, as amended by Amendatory Agreement dated March 26, 1964
and recorded April 13, 1964 in Deed Book 500, Page 920, as
assigned by Assignment, Assumption Indemnity Agreement made by
and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as assignor, and Williamsport
Plaza Associates, as assignee, dated July 1, 1989 and recorded
July 19, 1989 in Deed Book 1433, Page 291 and as further
assigned by Warranty Assignment of Tenant's Interest in Ground
Lease and Assumption Agreement by and between Williamsport
Plaza Associates, L.P. a/k/a Williamsport Plaza Associates, a
Pennsylvania limited partnership, as assignor and Glimcher
Centers Limited Partnership, a Delaware limited partnership,
as assignee, dated January 17, 1994 and recorded February,
1994 in Record Book 2216, Page 210, and as further assigned by
Assignment of Ground Lease, dated on or about the date hereof
by Glimcher Centers Limited Partnership, as assignor, to
Borrower, as assignee, and intended to be recorded
contemporaneously herewith in the Deed Records of Lycoming
County, Pennsylvania (the "GROUND LEASE"), of the real
property described in EXHIBIT A as Parcel III (the "GROUND
LEASE LAND "), an amended memorandum of which is intended to
be recorded contemporaneously herewith in the Deed Records of
Lycoming County, Pennsylvania;
(c) OPERATING LEASE. All right, title and interest of
Tenant as lessee of Parcel I and Parcel II, and as sublessee
(under the Ground Lease) of Parcel III, pursuant to that
certain Lease Agreement of even date herewith between
Borrower, as landlord as to Parcel I and Parcel II and
sublandlord as to Parcel III, and Glimcher Properties Limited
Partnership ("GPLP"), as tenant as to Parcel I and Parcel II
and subtenant as to Parcel III (the "Operating Lease"), a
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memorandum of which has been recorded contemporaneously
herewith in the Deed Records of Lycoming County, Pennsylvania,
as assigned by that certain Assignment and Assumption of Lease
agreement of even date herewith between GPLP, as assignor and
Tenant, as assignee.
(d) ADDITIONAL LAND. All ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
and development rights hereafter acquired by Mortgagor for use
in connection with the Land and the development of the Land
and all additional lands and estates therein which may, from
time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security
Instrument;
(e) IMPROVEMENTS. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter
erected or located on the Land (collectively, the
"IMPROVEMENTS");
(f) EASEMENTS. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion
and reversions, remainder and remainders, and all land lying
in the bed of any street, road or avenue, opened or proposed,
in front of or adjoining the Land, to the center line thereof
and all the estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy, property,
possession, claim and demand whatsoever, both at law and in
equity, of Mortgagor of, in and to the Land and the
Improvements and every part and parcel thereof, with the
appurtenances thereto;
(g) EQUIPMENT. All "equipment," as such term is
defined in Article 9 of the Uniform Commercial Code, now owned
or hereafter acquired by Mortgagor, which is used at or in
connection with the Improvements or the Land or is located
thereon or therein (including, but not limited to, all
machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or
hereafter acquired by Mortgagor and any and all additions,
substitutions and replacements of any of the foregoing),
together with all attachments, components, parts, equipment
and accessories installed thereon or affixed thereto
(collectively, the "EQUIPMENT"). Notwithstanding the
foregoing, Equipment shall not include any property belonging
to tenants under leases except to the extent that Mortgagor
shall have any right or interest therein;
(h) Fixtures. All Equipment now owned, or the
ownership of which is hereafter acquired, by Mortgagor which
is so related to the Land and Improvements forming part of the
Property that it is deemed fixtures or real property under the
law of the particular state in which the Equipment is located,
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including, without limitation, all building or construction
materials intended for construction, reconstruction,
alteration or repair of or installation on the Property,
construction equipment, appliances, machinery, plant
equipment, fittings, apparatuses, fixtures and other items now
or hereafter attached to, installed in or used in connection
with (temporarily or permanently) any of the Improvements or
the Land , including, but not limited to, engines, devices for
the operation of pumps, pipes, plumbing, cleaning, call and
sprinkler systems, fire extinguishing apparatuses and
equipment, heating, ventilating, plumbing, laundry,
incinerating, electrical, air conditioning and air cooling
equipment and systems, gas and electric machinery,
appurtenances and equipment, pollution control equipment,
security systems, disposals, dishwashers, refrigerators and
ranges, recreational equipment and facilities of all kinds,
and water, gas, electrical, storm and sanitary sewer
facilities, utility lines and equipment (whether owned
individually or jointly with others, and, if owned jointly, to
the extent of Mortgagor's interest therein) and all other
utilities whether or not situated in easements, all water
tanks, water supply, water power sites, fuel stations, fuel
tanks, fuel supply, and all other structures, together with
all accessions, appurtenances, additions, replacements,
betterments and substitutions for any of the foregoing and the
proceeds thereof (collectively, the "FIXTURES").
Notwithstanding the foregoing, "Fixtures" shall not include
any property which tenants are entitled to remove pursuant to
leases except to the extent that Mortgagor shall have any
right or interest therein;
(i) PERSONAL PROPERTY. All furniture, furnishings,
objects of art, machinery, goods, tools, supplies, appliances,
general intangibles, contract rights, accounts, accounts
receivable, franchises, licenses, certificates and permits,
and all other personal property of any kind or character
whatsoever (as defined in and subject to the provisions of the
Uniform Commercial Code as hereinafter defined), other than
Fixtures, which are now or hereafter owned by Mortgagor and
which are located within or about the Land and the
Improvements, together with all accessories, replacements and
substitutions thereto or therefor and the proceeds thereof
(collectively, the "PERSONAL PROPERTY"), and the right, title
and interest of Mortgagor in and to any of the Personal
Property which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted
by the state or states where any of the Property is located
(the "UNIFORM COMMERCIAL CODE"), superior in lien to the lien
of this Security Instrument and all proceeds and products of
the above;
(j) LEASES AND RENTS. All leases and other agreements
affecting the use, enjoyment or occupancy of the Land and the
Improvements heretofore or hereafter entered into, whether
before or after the filing by or against Mortgagor of any
petition for relief under 11 U.S.C.ss.101 et seq., as the same
may be amended from time to time (the "BANKRUPTCY CODE")
(collectively, the "LEASES") and all right, title and interest
of Mortgagor, its successors and assigns therein and
thereunder, including, without limitation, cash or securities
deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional
rents, revenues, issues and profits (including
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all oil and gas or other mineral royalties and bonuses) from
the Land and the Improvements whether paid or accruing before
or after the filing by or against Mortgagor of any petition
for relief under the Bankruptcy Code (collectively, 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;
(k) CONDEMNATION AWARDS. Except to the extent
required to be applied under the Ground Lease with respect to
the Ground Lease Land, all awards or payments, including
interest thereon, which may heretofore and hereafter be made
with respect to the Property, whether from the exercise of the
right of eminent domain (including but not limited to any
transfer made in lieu of or in anticipation of the exercise of
the right), or for a change of grade, or for any other injury
to or decrease in the value of the Property;
(l) INSURANCE PROCEEDS. Except to the extent required
to be applied under the Ground Lease, all proceeds in respect
of the Property under 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;
(m) TAX CERTIORARI. All refunds, rebates or credits
in connection with reduction in real estate taxes and
assessments charged against the Property as a result of tax
certiorari or any applications or proceedings for reduction;
(n) CONVERSION. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims;
(o) RIGHTS. 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 Lender in the
Property;
(p) AGREEMENTS. All agreements, contracts,
certificates, instruments, franchises, permits, licenses,
plans, specifications and other documents, now or hereafter
entered into, and all rights therein and thereto, respecting
or pertaining to the use, occupation, construction, management
or operation of the Land and any part thereof and any
Improvements or respecting any business or activity conducted
on the Land and any part thereof and all right, title and
interest of Mortgagor therein and thereunder, including,
without limitation, the right, upon the happening of any
default hereunder, to receive and collect any sums payable to
Mortgagor thereunder;
(q) TRADEMARKS. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records
and all other general intangibles relating to or used in
connection with the operation of the Property;
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(r) GROUND LEASE RIGHTS. Any contract right, option
or right of first refusal, now owned or hereafter acquired by
Mortgagor, to purchase or otherwise acquire the interest of
the lessor (the "LESSOR") under the Ground Lease or any other
estate, title or interest in or to the property subject to the
Ground Lease; any right of Mortgagor to reject or terminate,
or to agree to or acquiesce in any rejection or termination of
the Ground Lease, whether made with respect to any election
under Section 365(b) of the Bankruptcy Code (or any successor
provision) or under any similar law or right of any nature, or
otherwise; and all other rights and privileges (including but
not limited to any credit, security, deposit and offset) of
Mortgagor as lessee under the Ground Lease and all rights,
privileges and prerogatives to terminate, cancel, modify,
change, supplement, alter, amend or renew the Ground Lease;
and
(s) OTHER RIGHTS. Any and all other rights of
Mortgagor in and to the items set forth in Subsections (a)
through (q) above.
AND without limiting any of the other provisions of this Security
Instrument, to the extent permitted by applicable law, Mortgagor expressly
grants to Lender, as secured party, a security interest in the portion of the
Property which is or may be subject to the provisions of the Uniform Commercial
Code which are applicable to secured transactions; it being understood and
agreed that the Improvements and Fixtures are part and parcel of the Land (the
Land, the Ground Lease Land, the Improvements and the Fixtures collectively
referred to as the "REAL PROPERTY") appropriated to the use thereof and, whether
affixed or annexed to the Real Property or not, shall for the purposes of this
Security Instrument be deemed conclusively to be real estate and conveyed
hereby.
Section 1.2 ASSIGNMENT OF RENTS. Mortgagor hereby absolutely
and unconditionally assigns to Lender all of Mortgagor's right, title and
interest in and to all current and future Leases and Rents; it being intended by
Mortgagor that this assignment constitutes a present, absolute assignment and
not an assignment for additional security only. Nevertheless, subject to the
terms of the Assignment of Leases and Section 7.1(h) of this Security
Instrument, Lender grants to Mortgagor a revocable license to collect, receive,
use and enjoy the Rents. Mortgagor shall hold the Rents, or a portion thereof
sufficient to discharge all current sums due on the Debt, for use in the payment
of such sums.
Section 1.3 SECURITY AGREEMENT. This Security Instrument is
both a real property 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. By executing and delivering this Security
Instrument, Mortgagor hereby grants to Lender, as security for the Obligations
(hereinafter defined), a security interest in the Fixtures, the Equipment and
the Personal Property to the full extent that the Fixtures, the Equipment and
the Personal Property may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial Code being called
the "COLLATERAL"). If an Event of Default shall occur and be continuing, Lender,
in addition to any other rights and remedies which it may have, shall have and
may exercise immediately and without demand, any and all rights
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and remedies granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of the foregoing,
the right to take possession of the Collateral or any part thereof, and to take
such other measures as Lender may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Lender after the
occurrence and during the continuance of an Event of Default, Mortgagor shall,
at its expense, assemble the Collateral and make it available to Lender at a
convenient place (at the Land if tangible property) reasonably acceptable to
Lender. Mortgagor shall pay to Lender on demand any and all expenses, including
reasonable legal expenses and attorneys' fees, incurred or paid by Lender in
protecting its interest in the Collateral and in enforcing its rights hereunder
with respect to the Collateral after the occurrence and during the continuance
of an Event of Default. Any notice of sale, disposition or other intended action
by Lender with respect to the Collateral sent to Mortgagor in accordance with
the provisions hereof at least ten (10) business days prior to such action,
shall, except as otherwise provided by applicable law, constitute reasonable
notice to Mortgagor. The proceeds of any disposition of the Collateral, or any
part thereof, may, except as otherwise required by applicable law, be applied by
Lender to the payment of the Debt in such priority and proportions as Lender in
its discretion shall deem proper. Mortgagor's (Debtor's) principal place of
business is as set forth on page one hereof and the address of Lender (Secured
Party) is as set forth on page one hereof.
Section 1.4 FIXTURE FILING. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, described or referred to in this Security Instrument, and this
Security Instrument, upon being filed for record in the real estate records of
the city or county wherein such fixtures are situated, shall operate also as a
financing statement naming Borrower as the Debtor and Lender as the Secured
Party filed as a fixture filing in accordance with the applicable provisions of
said Uniform Commercial Code upon such of the Property that is or may become
fixtures.
Section 1.5 PLEDGES OF MONIES HELD. Borrower hereby pledges to
Lender any and all monies now or hereafter held by Lender or on behalf of
Lender, including, without limitation, any sums deposited in the Clearing
Account, the Reserve Funds and Net Proceeds, as additional security for the
Obligations until expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto and
to the use and benefit of Lender and its successors and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that,
if Borrower shall well and truly pay to Lender the Debt at the time and in the
manner provided in the Note, the Loan Agreement and this Security Instrument and
Borrower and Tenant, where applicable, shall well and truly perform the Other
Obligations as set forth in this Security Instrument and shall well and truly
abide by and comply with each and every covenant and condition set forth herein
and in the Note, the Loan Agreement and the other Loan Documents, these presents
and the estate hereby granted shall cease, terminate and be void; provided,
7
however, that Mortgagor's obligation to indemnify and hold harmless Lender
pursuant to the provisions hereof shall survive any such payment or release.
Article 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 DEBT. This Security Instrument and the grants,
assignments and transfers made in Article 1 are given for the purpose of
securing the Debt which by its definition (as set forth in Loan Agreement)
includes, but is not limited to, the obligations of Borrower to pay to Lender
the principal and interest owing pursuant to the terms and conditions of the
Note.
Section 2.2 OTHER OBLIGATIONS. This Security Instrument and
the grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "OTHER OBLIGATIONS"):
(a) the performance of all other obligations of
Mortgagor contained herein;
(b) the performance of each obligation of Mortgagor
contained in the Loan Agreement and any other Loan Document;
and
(c) the performance of each obligation of Borrower
and Tenant, where applicable, contained in any renewal,
extension, amendment, modification, consolidation, change of,
or substitution or replacement for, all or any part of the
Note, the Loan Agreement or any other Loan Document.
A copy of each of the Loan Documents is available for review during regular
business hours at the office of Lender at the address first set forth above.
Section 2.3 DEBT AND OTHER OBLIGATIONS. Borrower's obligations
for the payment of the Debt and the performance of the Other Obligations by
Borrower and Tenant, where applicable, may sometimes be referred to collectively
herein as the "OBLIGATIONS."
Article 3 - BORROWER AND TENANT COVENANTS
Borrower covenants and agrees that:
Section 3.1 PAYMENT OF DEBT. Borrower will pay the Debt at the
time and in the manner provided in the Loan Agreement, the Note and this
Security Instrument.
Section 3.2 INCORPORATION BY REFERENCE. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Security Instrument.
Section 3.3 INSURANCE. Borrower shall obtain and maintain, or
cause to be maintained, in full force and effect at all times insurance with
respect to Borrower and the Property as required pursuant to the Loan Agreement.
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Section 3.4 MAINTENANCE OF PROPERTY. (a) Mortgagor shall cause
the Property to be maintained in a good and safe condition and repair. The
Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the
Fixtures, the Equipment or the Personal Property, tenant finish and
refurbishment of the Improvements) without the consent of Lender. Mortgagor
shall promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated and shall
complete and pay for any structure at any time in the process of construction or
repair on the Land .
Section 3.5 WASTE. Mortgagor shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy, or do or permit to be done thereon anything that
may in any way materially impair the value of the Property or the security of
this Security Instrument. Mortgagor will not, without the prior written consent
of Lender, permit any drilling or exploration for or extraction, removal, or
production of any minerals from the surface or the subsurface of the Land ,
regardless of the depth thereof or the method of mining or extraction thereof.
Section 3.6 PAYMENT FOR LABOR AND MATERIALS. (a) Mortgagor
will promptly pay when due all bills and costs for labor, materials, and
specifically fabricated materials ("LABOR AND MATERIAL COSTS") incurred in
connection with the Property and never permit to exist beyond the due date
thereof in respect of the Property or any part thereof any lien or security
interest, even though inferior to the liens and the security interests hereof,
and in any event never permit to be created or exist in respect of the Property
or any part thereof any other or additional lien or security interest other than
the liens or security interests hereof except for the Permitted Encumbrances.
(b) After prior written notice to Lender, Mortgagor,
at its own expense, may contest by appropriate legal
proceeding, promptly initiated and conducted in good faith and
with due diligence, the amount or validity or application in
whole or in part of any of the Labor and Material Costs,
provided that (i) no Event of Default has occurred and is
continuing under the Loan Agreement, the Note, this Security
Instrument or any of the other Loan Documents, (ii) Mortgagor
is permitted to do so under the provisions of any other
mortgage, deed of trust or deed to secure debt affecting the
Property, (iii) such proceeding shall suspend the collection
of the Labor and Material Costs from Mortgagor and from the
Property or Mortgagor shall have paid all of the Labor and
Material Costs under protest, (iv) such proceeding shall be
permitted under and be conducted in accordance with the
provisions of any other instrument to which Borrower or Tenant
is subject and shall not constitute a default thereunder, (v)
neither the Property nor any part thereof or interest therein
will be in danger of being sold, forfeited, terminated,
canceled or lost, and (vi) Mortgagor shall have furnished the
security as may be required in the proceeding, or as may be
reasonably requested by Lender to insure the payment of any
contested Labor and Material Costs, together with all interest
and penalties thereon.
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Section 3.7 ADDITIONAL PROVISIONS REGARDING GROUND LEASE.
(a) Mortgagor shall promptly pay all rent, additional
rent, contingent rent, taxes and all other sums and charges
when due and payable under the terms of the Ground Lease,
shall fully and promptly perform and observe all of the
agreements, terms, covenants and conditions required to be
performed and observed by Mortgagor under the Ground Lease
within the grace periods provided therein for Mortgagor's
performance (in contrast to any additional grace periods
provided for therein or by any separate agreement for curative
action by the Lender), and shall do all things necessary to
preserve and keep unimpaired Mortgagor's rights under the
Ground Lease. Upon demand, Mortgagor shall furnish to Lender
proof of payment of all sums which the Ground Lease requires
Mortgagor to pay.
(b) Mortgagor shall immediately notify Lender in
writing of: (i) any default (or alleged default) by Mortgagor
or Lessor in the performance or observance of any of the
terms, covenants or conditions on the part of Mortgagor or
Lessor to be performed or observed under the Ground Lease;
(ii) the receipt by Mortgagor of any notice or other writing
or communication from Lessor noting or claiming any default by
Mortgagor in such performance or observance under the Ground
Lease; and (iii) the receipt by Mortgagor of any notice from
Lessor of any termination of the Ground Lease pursuant to the
terms thereof or otherwise. Mortgagor shall immediately cause
a copy of each such notice to be delivered to Lender.
(c) If Mortgagor fails to observe or perform any
covenant or agreement to be observed or performed under the
Ground Lease on the part of Mortgagor, or if Lender receives
from Lessor any notice of any default by Mortgagor thereunder,
Lender may rely on such notice and may take any action that
Lender in its sole discretion deems necessary or advisable to
cure such default, even if the existence of such default or
the nature thereof is questioned or denied by Mortgagor;
provided, however, that Lender shall not take any action to
cure such default if, and so long as (i) Mortgagor shall take
all steps necessary to challenge or take any action to cure
such default; and (ii) during such challenge or cure: (A) the
interests of Lender may in no way be adversely affected, (B)
no time limits or grace periods under the Ground Lease would
expire which would give Lessor any right or option to
terminate the Ground Lease, and (C) no additional right or
remedy would become available to Lessor by reason of the
deferral by Lender of any action to effect a cure of the
claimed default; and (iii) if the default is a default in the
payment of a sum of money, Mortgagor shall post with Lender
security acceptable to Lender to pay the amount in dispute.
Mortgagor hereby expressly grants to Lender the absolute and
immediate right to enter in and upon the Land to such extent
and as often as Lender in its sole discretion deems necessary
or desirable to prevent or cure any default by Mortgagor under
the Ground Lease or this Security Instrument. Lender may pay
and expend such sums of money as Lender in its sole discretion
deems necessary for any such
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purpose, and upon so doing shall be subrogated to any and all
rights of Mortgagor, as lessee, and all such sums shall be
secured by the lien of this Security Instrument, shall be
added to the principal amount of the Debt and shall accrue
interest at the Default Rate (as defined in the Loan
Agreement).
(d) Without the prior written consent of the Lender,
which Lender may grant or withhold in its sole discretion,
Mortgagor shall not: (i) surrender the Ground Lease or
terminate, cancel or release, or assign the Ground Lease (nor
permit any of the foregoing to occur), whether under Section
365 of the Bankruptcy Code (or any successor provision) or
under any similar law or right of any nature, or otherwise;
nor (ii) modify, abridge, change, supplement, alter or amend
the Ground Lease, either orally or in writing and hereby
irrevocably grants and assigns to Lender the power and right
to modify, abridge, change, supplement, alter or amend the
Ground Lease, and no agreement seeking to modify, abridge,
change, supplement, alter or amend the Ground Lease shall be
valid or binding without the prior written consent of Lender;
nor (iii) waive any of its rights against Lessor under the
Ground Lease; nor (iv) subordinate the Ground Lease to any
mortgage encumbering any portion of the Land ; nor (v) agree
to or acquiesce in any rejection or termination of the Ground
Lease by Lessor or Lessor's trustee in bankruptcy, whether
under Section 365 of the Bankruptcy Code (or any successor
provision) or under any similar law or provision, and any such
surrender, abandonment, termination, cancellation, release,
modification, change, supplement, alteration, amendment,
waiver, subordination, agreement or acquiescence without
Lender's prior written consent shall be ineffective as against
Lender, and shall constitute a default under this Security
Instrument for which no grace or curative period shall apply.
In addition to the provisions of this Section 3.7(d):
(i) If any action, proceeding, motion or
notice shall be commenced or filed in respect of the
Ground Lease by any party thereto, in connection with
any case under the Bankruptcy Code, Lender shall have
the option, to the exclusion of Mortgagor, to conduct
and control any such litigation with counsel of
Lender's choice. Lender may proceed in its own name
or in the name of Mortgagor in connection with any
such litigation, and Mortgagor agrees to execute any
and all powers, authorizations, consents and other
documents required by the Lender in connection
therewith. Mortgagor shall, upon demand, pay to
Lender all costs and expenses (including attorneys'
fees and costs) paid or incurred by Lender in
connection with the prosecution or conduct of any
such proceedings. Any such costs and expenses not
paid by Mortgagor as aforesaid shall be secured by
the lien of this Security Instrument, shall be added
to the principal amount of the Debt and shall accrue
interest at the Default Rate. Mortgagor shall not
commence any action, suit, proceeding or case, or
file any application or make any motion, in respect
of the Ground Lease, in any case under the Bankruptcy
Code as amended from time to time without the prior
written consent of Lender.
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(ii) Mortgagor shall promptly after
obtaining knowledge thereof, notify Lender orally of
any filing by or against Mortgagor of a petition
under the Bankruptcy Code. Mortgagor shall thereafter
forthwith deliver written notice of such filing to
Lender, setting forth any information available to
Mortgagor as of the date of such filing, the court in
which such petition was filed, and the relief sought
therein. Upon its receipt thereof, Mortgagor shall
promptly deliver to Lender any and all notices,
summonses, pleadings, applications and other
documents received by Mortgagor in connection with
any such petition and any proceedings relating
thereto.
(iii) The lien of this Security Instrument
attaches to all of Mortgagor's and Lessor's rights
and remedies at any time arising under or pursuant to
Section 365 of the Bankruptcy Code (whether as Land
lord or tenant under any lease), including, without
limitation, all of Mortgagor's rights to remain in
possession of the Land and Improvements in the event
of Lessor's rejection of the Ground Lease. Mortgagor
shall not, without Lender's prior written consent,
elect to treat the Ground Lease as terminated under
Section 365 of the Bankruptcy Code. Any such election
made without Lender's prior written consent shall be
void.
(iv) Mortgagor hereby unconditionally
assigns, transfers and sets over to Lender all of
Mortgagor's claims and rights to the payment of
damages (including but not limited to the right to
any offsets or credits) arising from any rejection of
the Ground Lease by Lessor under the Bankruptcy Code.
Lender shall have the right to proceed in its own
name or in the name of Mortgagor in respect of any
claim, suit, action or proceeding relating to the
rejection of the Ground Lease, including, without
limitation, the right to file and prosecute, to the
exclusion of Mortgagor, any proofs of claim,
complaints, motions, applications, notices and other
documents, in any case under the Bankruptcy Code.
This assignment constitutes a present, irrevocable
and unconditional assignment of the foregoing claims,
rights and remedies, and shall continue in effect
until all of the Debt shall have been satisfied and
discharged in full. Any amounts received by Lender as
damages arising out of the rejection of the Ground
Lease as aforesaid shall be applied first to all
costs and expenses of Lender (including, without
limitation, attorneys' fees and costs) incurred in
connection with the exercise of any of its rights or
remedies under this Security Instrument. For the
purposes of construing Section 365(h) of the
Bankruptcy Code, the intention of the parties hereto
is that the term "possession" shall mean the right to
possession of all of the leased premises granted to
Mortgagor under the Ground Lease, whether or not all
or part of the leased premises is covered by any of
the Leases.
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(v) If there shall be filed by or against
Mortgagor a petition under the Bankruptcy Code, and
Mortgagor, as lessee under the Ground Lease or lessor
under the Leases, shall determine to reject the
Ground Lease or any of the Leases pursuant to Section
365 of the Bankruptcy Code, Mortgagor shall give the
Lender not less than ten days' prior written notice
of the date on which Mortgagor shall apply to the
bankruptcy court for authority to reject the Ground
Lease or any of the Leases. Lender shall have the
right, but not the obligation, to serve upon
Mortgagor within such ten day period a notice stating
that (A) the Lender demands that Mortgagor assume and
assign the Lease in question to the Lender pursuant
to Section 365 of the Bankruptcy Code and (B) the
Lender covenants to cure (or provide adequate
assurance of prompt cure of) all defaults and provide
adequate assurance of future performance under such
Lease. If the Lender serves upon Mortgagor the notice
described in the preceding sentence, Mortgagor shall
not seek to reject such Lease and shall comply with
the demand provided for in clause (A) of the
preceding sentence within thirty (30) days after the
notice shall have been given, subject to the
performance by the Lender of the covenant provided
for in clause (B) of the preceding sentence.
(e) Mortgagor shall require strict and full
performance by Lessor of all the agreements, terms, covenants
and conditions required to be performed and observed by Lessor
under the Ground Lease.
(f) Mortgagor shall promptly notify Lender in writing
of any claim, action or proceeding (including, but not limited
to, any request for arbitration or institution of such
arbitration) made by any party to the Ground Lease, and the
progress thereof and any determination made by the court
and/or arbitrators thereunder. Lender shall have the right to
participate in any such claim, action or proceedings as an
interested party.
(g) Mortgagor shall use its best efforts to obtain
from Lessor under the Ground Lease, and deliver to Lender
within thirty (30) days after demand from the Lender, a
statement in writing certifying that the Ground Lease is in
full force and effect and the dates to which the ground rent
and other charges, if any, have been paid in advance, and
stating whether or not, to the best knowledge of Lessor,
Mortgagor is in default in the performance of any covenant,
agreement or condition contained in the Ground Lease and if
so, specifying each such default of which Lessor has
knowledge.
(h) Unless Lender shall otherwise consent in writing,
the fee simple title to the property subject to the Ground
Lease shall not merge with the leasehold estate under the
Ground Lease for so long as any obligations secured by this
Security Instrument remain outstanding, but such estates shall
always remain separate and distinct estates, notwithstanding
the union of any thereof in any person whatsoever, whether by
purchase or otherwise.
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(i) No release or forbearance of any of Mortgagor's
obligations under the Ground Lease, pursuant to the Ground
Lease or otherwise, shall release Borrower or Tenant, where
applicable, from any of their respecitive obligations under
this Security Instrument, the Loan Agreement, the Note or the
other Loan Documents.
(j) Mortgagor acknowledges and agrees that it shall
not have any right to terminate the Ground Lease without the
prior written consent of Lender, and any attempt to terminate,
or purported exercise of termination, shall be void.
Section 3.8 PERFORMANCE OF OTHER AGREEMENTS. Borrower and
Tenant, where applicable, shall observe and perform each and every term,
covenant and provision to be observed or performed by Borrower and Tenant, where
applicable, pursuant to the Loan Agreement, any other Loan Document and any
other agreement or recorded instrument affecting or pertaining to the Property
and any amendments, modifications or changes thereto.
Section 3.9 CHANGE OF NAME, IDENTITY OR STRUCTURE. Borrower
and Tenant shall not change their respective names, identities (including trade
name or names) or, if not an individual, their respective corporate, partnership
or other structure without notifying Lender of such change in writing at least
thirty (30) days prior to the effective date of such change and, in the case of
a change in Borrower's structure, without first obtaining the prior written
consent of Lender. Borrower and Tenant shall execute and deliver to Lender,
prior to or contemporaneously with the effective date of any such change, any
financing statement or financing statement change required by Lender to
establish or maintain the validity, perfection and priority of the security
interest granted herein. At the request of Lender, Mortgagor shall execute a
certificate in form satisfactory to Lender listing the trade names under which
Mortgagor intends to operate the Property, and representing and warranting that
Mortgagor does business under no other trade name with respect to the Property.
Article 4 - OBLIGATIONS AND RELIANCES
Section 4.1 RELATIONSHIP OF BORROWER AND LENDER. The
relationship between Borrower and Lender is solely that of debtor and creditor,
and Lender has no fiduciary or other special relationship with Borrower, and no
term or condition of any of the Loan Agreement, the Note, this Security
Instrument and the other Loan Documents shall be construed so as to deem the
relationship between Borrower and Lender to be other than that of debtor and
creditor.
Section 4.2 NO RELIANCE ON LENDER. The general partners,
members, principals and (if Borrower or Tenant is a trust) beneficial owners of
Borrower or Tenant are experienced in the ownership and operation of properties
similar to the Property, and Borrower and Tenant and Lender are relying solely
upon such expertise and business plan in connection with the ownership and
operation of the Property. Borrower and Tenant are not relying on Lender's
expertise, business acumen or advice in connection with the Property.
Section 4.3 NO LENDER OBLIGATIONS. (a) Notwithstanding the
provisions of SUBSECTIONS 1.1(h) AND (n) or Section 1.2, Lender is not
undertaking the performance of (i) any
14
obligations under the Leases; or (ii) any obligations with respect to such
agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents.
(b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Lender
pursuant to this Security Instrument, the Loan Agreement, the
Note or the other Loan Documents, including, without
limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement,
survey, appraisal, or insurance policy, Lender shall not be
deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or effectiveness of same, and such
acceptance or approval thereof shall not constitute any
warranty or affirmation with respect thereto by Lender.
Section 4.4 RELIANCE. Borrower and Tenant, where applicable,
recognize and acknowledge that in accepting the Loan Agreement, the Note, this
Security Instrument and the other Loan Documents, Lender is expressly and
primarily relying on the truth and accuracy of the warranties and
representations set forth in Section 4.1 of the Loan Agreement without any
obligation to investigate the Property and notwithstanding any investigation of
the Property by Lender; that such reliance existed on the part of Lender prior
to the date hereof, that the warranties and representations are a material
inducement to Lender in making the Loan; and that Lender would not be willing to
make the Loan and accept this Security Instrument in the absence of the
warranties and representations as set forth in Section 4.1 of the Loan
Agreement.
Article 5 - FURTHER ASSURANCES
Section 5.1 RECORDING OF SECURITY INSTRUMENT, ETC. Mortgagor
forthwith upon the execution and delivery of this Security Instrument and
thereafter, from time to time, will cause this Security Instrument and any of
the other Loan Documents creating a lien or security interest or evidencing the
lien hereof upon the Property and each instrument of further assurance to be
filed, registered or recorded in such manner and in such places as may be
required by any present or future law in order to publish notice of and fully to
protect and perfect the lien or security interest hereof upon, and the interest
of Lender in, the Property. Mortgagor will pay all taxes, filing, registration
or recording fees, and all expenses incident to the preparation, execution,
acknowledgment and/or recording of the Note, this Security Instrument, the other
Loan Documents, any note, deed of trust or mortgage supplemental hereto, any
security instrument with respect to the Property and any instrument of further
assurance, and any modification or amendment of the foregoing documents, and all
federal, state, county and municipal taxes, duties, imposts, assessments and
charges arising out of or in connection with the execution and delivery of this
Security Instrument, any deed of trust or mortgage supplemental hereto, any
security instrument with respect to the Property or any instrument of further
assurance, and any modification or amendment of the foregoing documents, except
where prohibited by law so to do.
Section 5.2 FURTHER ACTS, ETC. Mortgagor will, at the cost of
Mortgagor, and without expense to Lender, do, execute, acknowledge and deliver
all and every such further acts, deeds, conveyances, deeds of trust,
assignments, notices of assignments, transfers and
15
assurances as Lender shall, from time to time, reasonably require, for the
better assuring, conveying, assigning, transferring, and confirming unto Lender
the property and rights hereby deeded, granted, bargained, sold, conveyed,
confirmed, pledged, assigned, warranted and transferred or intended now or
hereafter so to be, or which Mortgagor may be or may hereafter become bound to
convey or assign to Lender, or for carrying out the intention or facilitating
the performance of the terms of this Security Instrument or for filing,
registering or recording this Security Instrument, or for complying with all
Legal Requirements. Mortgagor, on demand, will execute and deliver, and in the
event it shall fail to so execute and deliver, hereby authorizes Lender to
execute in the name of Mortgagor or without the signature of Mortgagor to the
extent Lender may lawfully do so, one or more financing statements to evidence
more effectively the security interest of Lender in the Property. Mortgagor
grants to Lender an irrevocable power of attorney coupled with an interest for
the purpose of exercising and perfecting any and all rights and remedies
available to Lender at law and in equity, including without limitation such
rights and remedies available to Lender pursuant to this Section 5.2. Nothing
contained in this Section 5.2 shall be deemed to create an obligation on the
part of Mortgagor to pay any costs and expenses incurred by Lender in connection
with the Securitization or other sale or transfer of the Loan.
Section 5.3 CHANGES IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP
LAWS. (a) If any law is enacted or adopted or amended after the date of this
Security Instrument which deducts the Debt from the value of the Property for
the purpose of taxation or which imposes a tax, either directly or indirectly,
on the Debt or Lender's interest in the Property, Mortgagor will pay the tax,
with interest and penalties thereon, if any. If Lender is advised by counsel
chosen by it that the payment of tax by Mortgagor would be unlawful or taxable
to Lender or unenforceable or provide the basis for a defense of usury then
Lender shall have the option by written notice of not less than one hundred
twenty (120) days to declare the Debt immediately due and payable.
(b) 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 Property,
or any part thereof, and no deduction shall otherwise be made
or claimed from the assessed value of the Property, or any
part thereof, for real estate tax purposes by reason of this
Security Instrument or the Debt. If such claim, credit or
deduction shall be required by law, Lender shall have the
option, by written notice of not less than one hundred twenty
(120) days, to declare the Debt immediately due and payable.
(c) If at any time the United States of America, any
State thereof or any subdivision of any such State shall
require revenue or other stamps to be affixed to the Note,
this Security Instrument, or any of the other Loan Documents
or impose any other tax or charge on the same, Borrower and
Tenant, where applicable, will pay for the same, with interest
and penalties thereon, if any.
Section 5.4 SPLITTING OF MORTGAGE. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Lender, be split or divided into two or more
notes and two or more security instruments, each of which shall
16
cover all or a portion of the Property to be more particularly described
therein. To that end, Mortgagor, upon written request of Lender, shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered by
the then owner of the Property, to Lender and/or its designee or designees
substitute notes and security instruments in such principal amounts, aggregating
not more than the then unpaid principal amount of this Security Instrument, and
containing terms, provisions and clauses similar to those contained herein and
in the Note, and such other documents and instruments as may be required by
Lender.
Section 5.5 REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of such
Note or other Loan Document, Borrower and Tenant, where applicable, will issue,
in lieu thereof, a replacement Note or other Loan Document, dated the date of
such lost, stolen, destroyed or mutilated Note or other Loan Document in the
same principal amount thereof and otherwise of like tenor.
Article 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 LENDER RELIANCE. Mortgagor acknowledges that
Lender has examined and relied on the experience of Mortgagor and its general
partners, members, principals and (if Mortgagor is a trust) beneficial owners in
owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Mortgagor's ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Mortgagor acknowledges that
Lender has a valid interest in maintaining the value of the Property so as to
ensure that, should Borrower default in the repayment of the Debt or the should
Borrower or Tenant, where applicable default in the performance of the Other
Obligations, Lender can recover the Debt by a sale of the Property.
Section 6.2 NO SALE/ENCUMBRANCE. Mortgagor agrees that
Mortgagor shall not, without the prior written consent of Lender, sell, convey,
mortgage, grant, bargain, encumber, pledge, assign, or otherwise transfer the
Property or any part thereof or permit the Property or any part thereof to be
sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned, or
otherwise transferred, unless Lender shall consent thereto in accordance with
Section 6.4 hereof.
Section 6.3 SALE/ENCUMBRANCE DEFINED. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Article 6 shall be deemed to include, but not be limited to,
(a) an installment sales agreement wherein Mortgagor agrees to sell the Property
or any part thereof for a price to be paid in installments; (b) an agreement by
Mortgagor leasing all or a substantial part of the Property for other than
actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of, or the grant of a security interest in, Mortgagor's right, title
and interest in and to any Leases or any Rents; (c) the voluntary or involuntary
sale, conveyance, transfer or pledge of the stock of the general partner of
Mortgagor (or the stock of any corporation directly or indirectly controlling
such general partner by operation of law or otherwise) or the creation or
issuance of new stock by
17
which an aggregate of more than ten percent (10%) of such general partner's
stock shall be vested in a party or parties who are not now stockholders; (d)
the voluntary or involuntary sale, conveyance, transfer or pledge of any general
or limited partnership interest in Mortgagor; (e) if Mortgagor, any general
partner of Mortgagor, any guarantor or any indemnitor is a limited liability
company, the change, removal or resignation of a member or managing member or
the transfer or pledge of the interest of any member or managing member or any
profits or proceeds relating to such interest; or (f) any other transfer
prohibited by the terms of the Loan Agreement.
Section 6.4 LENDER'S RIGHTS. Lender reserves the right to
condition the consent required hereunder upon (a) a modification of the terms
hereof and of the Loan Agreement, the Note or the other Loan Documents; (b) an
assumption of the Loan Agreement, the Note, this Security Instrument and the
other Loan Documents as so modified by the proposed transferee, subject to the
provisions of Section 9.4 of the Loan Agreement; (c) payment of all of Lender's
reasonable expenses incurred in connection with such transfer; (d) the
confirmation in writing by the applicable Rating Agencies that the proposed
transfer will not, in and of itself, result in a downgrade, qualification or
withdrawal of the initial, or, if higher, then current ratings assigned in
connection with any Securitization; (e) the delivery of a nonconsolidation
opinion reflecting the proposed transfer satisfactory in form and substance to
Lender; (f) the proposed transferee's continued compliance with the
representations and covenants set forth in Section 4.1.30 and 5.2.14 of the Loan
Agreement; (g) the delivery of evidence satisfactory to Lender that the single
purpose nature and bankruptcy remoteness of Mortgagor, its shareholders,
partners or members, as the case may be, following such transfers are in
accordance with the standards of the Rating Agencies; (h) the proposed
transferee's ability to satisfy Lender's then-current underwriting standards;
(i) payment of a transfer fee to Lender equal to 1% of the outstanding principal
balance of the Loan at the time of such transfer; or (j) such other conditions
as Lender shall determine in its reasonable discretion to be in the interest of
Lender, including, without limitation, the creditworthiness, reputation and
qualifications of the transferee with respect to the Loan and the Property.
Lender shall not be required to demonstrate any actual impairment of its
security or any increased risk of default hereunder in order to declare the Debt
immediately due and payable upon Mortgagor's sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer of the Property without
Lender's consent. This provision shall apply to every sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer of the
Property regardless of whether voluntary or not, or whether or not Lender has
consented to any previous sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property.
Notwithstanding anything to the contrary contained in this Article 6,
and in addition to the transfers permitted hereunder, following the sale of the
Loan in a securitization, Lender's consent to a sale, assignment, or other
transfer of the Property shall not be withheld provided that Lender receives
sixty (60) days prior written notice of such transfer hereunder and no Event of
Default has occurred and is continuing, and further provided that, the following
additional requirements are satisfied:
(a) Mortgagor shall pay Lender a transfer fee equal
to 1% of the outstanding principal balance of the Loan at the
time of such transfer;
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(b) Mortgagor shall pay any and all out-of-pocket
costs incurred in connection with the transfer of the Property
(including, without limitation, Lender's counsel fees and
disbursements and all recording fees, title insurance premiums
and mortgage and intangible taxes and the fees and expenses of
the Rating Agencies pursuant to clause (x) below);
(c) The proposed transferee (the "Transferee") or
Transferee's Principals (hereinafter defined) must have
demonstrated expertise in owning and operating properties
similar in location, size and operation to the Property, which
expertise shall be reasonably determined by Lender. The term
"Transferee's Principals" shall include Transferee's (A)
managing members, general partners or principal shareholders
and (B) such other members, partners or shareholders which
directly or indirectly shall own a 15% or greater interest in
Transferee;
(d) Transferee and Transferee's Principals shall, as
of the date of such transfer, have an aggregate net worth and
liquidity reasonably acceptable to Lender;
(e) Transferee, Transferee's Principals and all other
entities which may be owned or controlled directly or
indirectly by Transferee's Principals ("Related Entities")
must not have been a party to any bankruptcy proceedings,
voluntary or involuntary, made an assignment for the benefit
of creditors or taken advantage of any insolvency act, or any
act for the benefit of debtors within seven (7) years prior to
the date of the proposed transfer of the Property;
(f) Transferee shall assume all of the obligations of
Borrower and Tenant, where applicable, under the Loan
Documents in a manner satisfactory to Lender in all respects,
including, without limitation, by entering into an assumption
agreement in form and substance satisfactory to Lender and one
or more Transferee's Principals having an aggregated net worth
and liquidity reasonably acceptable to Lender shall execute in
favor of Lender a Guaranty of Recourse Obligations and
Environmental Indemnity Agreement in form acceptable to
Lender;
(g) There shall be no material litigation or
regulatory action pending or threatened against Transferee,
Transferee's Principals or Related Entities which is not
reasonably acceptable to Lender;
(h) Transferee, Transferee's Principals and Related
Entities shall not have defaulted under its or their
obligations with respect to any other indebtedness in a manner
which is not reasonably acceptable to Lender;
(i) No Event of Default or event which, with the
giving of notice, passage of time or both, shall constitute an
Event of Default, shall otherwise occur as a result of such
transfer, and Transferee and Transferee's Principals shall
deliver (A) all organization documentation reasonably
requested by Lender,
19
which shall be reasonably satisfactory to Lender, and (B) all
certificates, agreements and covenants reasonably required by
Lender; and
(j) Mortgagor shall deliver, at its sole cost and
expense, an endorsement to the existing title policy insuring
this Security Instrument, as modified by the assumption
agreement, as a valid first lien on the Property and naming
the Transferee as owner of the Property, which endorsement
shall insure that, as of the date of the recording of the
assumption agreement, the Property shall not be subject to any
additional exceptions or liens other than those contained in
the title policy issued on the date hereof.
In addition to the foregoing, Lender shall have the right to condition
the consent required hereunder upon the confirmation in writing by the
applicable Rating Agencies that the proposed transfer to, and assumption of the
Loan by, the Transferee will not, in and of itself, result in a downgrade,
qualification or withdrawal of the initial, or, if higher, then current ratings
assigned in connection with any Securitization.
Immediately upon a transfer of the Property to such Transferee and the
satisfaction of all of the above requirements, the named Mortgagor herein shall
be released from all liability under this Security Instrument, the Note and the
other Loan Documents accruing after such transfer. The foregoing release shall
be effective upon the date of such transfer, but Lender agrees to provide
written evidence thereof reasonably requested by Mortgagor.
Article 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 REMEDIES. Upon the occurrence and during the
continuance of any Event of Default, Mortgagor agrees that Lender may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against Mortgagor and in and to the Property, including, but not
limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Lender may determine, in their sole
discretion, without impairing or otherwise affecting the other rights and
remedies of Lender:
(a) declare the entire unpaid Debt to be immediately
due and payable;
(b) institute proceedings, judicial or otherwise, for
the complete foreclosure of this Security Instrument under any
applicable provision of law, in which case the Property or any
interest therein may be sold for cash or upon credit in one or
more parcels or in several interests or portions and in any
order or manner;
(c) with or without entry, to the extent permitted
and pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of this
Security Instrument for the portion of the Debt then due and
payable, subject to the continuing lien and security interest
of this Security Instrument for the balance of the Debt not
then due, unimpaired and without loss of priority;
20
(d) sell for cash or upon credit the Property or any
part thereof and all estate, claim, demand, right, title and
interest of Mortgagor therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof, all as
may be required or permitted by law; and, without limiting the
foregoing:
(i) In connection with any sale or sales
hereunder, Lender shall be entitled to elect to treat
any of the Property which consists of a right in
action or which is property that can be severed from
the Real Property covered hereby or any improvements
without causing structural damage thereto as if the
same were personal property, and dispose of the same
in accordance with applicable law, separate and apart
from the sale of Real Property. Where the Property
consists of Real Property, Personal Property,
Equipment or Fixtures, whether or not such Personal
Property or Equipment is located on or within the
Real Property, Lender shall be entitled to elect to
exercise its rights and remedies against any or all
of the Real Property, Personal Property, Equipment
and Fixtures in such order and manner as is now or
hereafter permitted by applicable law;
(ii) Lender shall be entitled to elect to
proceed against any or all of the Real Property,
Personal Property, Equipment and Fixtures in any
manner permitted under applicable law; and if Lender
so elects pursuant to applicable law, the power of
sale herein granted shall be exercisable with respect
to all or any of the Real Property, Personal
Property, Equipment and Fixtures covered hereby, as
designated by Lender, and Lender is hereby authorized
and empowered to conduct any such sale of any Real
Property, Personal Property, Equipment and Fixtures
in accordance with the procedures applicable to Real
Property;
(iii) Should Lender elect to sell any
portion of the Property which is Real Property or
which is Personal Property, Equipment or Fixtures
that the Lender has elected under applicable law to
sell together with Real Property in accordance with
the laws governing a sale of Real Property, Lender
shall give such notice of Event of Default, if any,
and election to sell as may then be required by law.
Thereafter, upon the expiration of such time and the
giving of such notice of sale as may then be required
by law, and without the necessity of any demand on
Mortgagor, Lender at the time and place specified in
the notice of sale, shall sell such Real Property or
part thereof at public auction to the highest bidder
for cash in lawful money of the United States. Lender
may from time to time postpone any sale hereunder by
public announcement thereof at the time and place
noticed therefor;
(iv) If the Property consists of several
lots, parcels or items of property, Lender shall,
subject to applicable law, (A) designate the order
21
in which such lots, parcels or items shall be offered
for sale or sold, or (B) elect to sell such lots,
parcels or items through a single sale, or through
two or more successive sales, or in any other manner
Lender designates. Any Person, including Mortgagor or
Lender, may purchase at any sale hereunder. Should
Lender desire that more than one sale or other
disposition of the Property be conducted, Lender
shall, subject to applicable law, cause such sales or
dispositions to be conducted simultaneously, or
successively, on the same day, or at such different
days or times and in such order as Lender may
designate, and no such sale shall terminate or
otherwise affect the lien of this Security Instrument
on any part of the Property not sold until all the
Debt has been paid in full. In the event Lender
elects to dispose of the Property through more than
one sale, except as otherwise provided by applicable
law, Mortgagor agrees to pay the costs and expenses
of each such sale and of any judicial proceedings
wherein such sale may be made;
(e) institute an action, suit or proceeding in equity
for the specific performance of any covenant, condition or
agreement contained herein, in the Note, the Loan Agreement or
in the other Loan Documents;
(f) recover judgment on the Note either before,
during or after any proceedings for the enforcement of this
Security Instrument or the other Loan Documents;
(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and
Lender shall be entitled to the appointment of such a receiver
as a matter of right without regard for the adequacy of the
security for the Debt and without regard for the solvency of
Mortgagor, any guarantor, indemnitor with respect to the Loan
or of any Person, liable for the payment of the Debt;
(h) the license granted to Mortgagor under SECTION
1.2 hereof shall automatically be revoked and Lender may enter
into or upon the Property, either personally or by its agents,
nominees or attorneys and dispossess Mortgagor and its agents
and servants therefrom, without liability for trespass,
damages or otherwise and exclude Mortgagor and its agents or
servants wholly therefrom, and take possession of all books,
records and accounts relating thereto and Mortgagor agrees to
surrender possession of the Property and of such books,
records and accounts to Lender upon demand, and thereupon
Lender may (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and
every part of the Property and conduct the business thereat;
(ii) complete any construction on the Property in such manner
and form as Lender deems advisable; (iii) make alterations,
additions, renewals, replacements and improvements to or on
the Property; (iv) 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
22
tenants, and demand, ▇▇▇ for, collect and receive all Rents of
the Property and every part thereof; (v) require Mortgagor to
pay monthly in advance to Lender, or any receiver appointed to
collect the Rents, the fair and reasonable rental value for
the use and occupation of such part of the Property as may be
occupied by Mortgagor; (vi) require Mortgagor to vacate and
surrender possession of the Property to Lender or to such
receiver and, in default thereof, Mortgagor may be evicted by
summary proceedings or otherwise; and (vii) apply the receipts
from the Property to the payment of the Debt, in such order,
priority and proportions as Lender shall deem appropriate in
its sole discretion after deducting therefrom all expenses
(including reasonable attorneys' fees) incurred in connection
with the aforesaid operations and all amounts necessary to pay
the Taxes, Other Charges, insurance and other expenses in
connection with the Property, as well as just and reasonable
compensation for the services of Lender, its counsel, agents
and employees;
(i) exercise any and all rights and remedies granted
to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the
foregoing: (i) the right to take possession of the Fixtures,
the Equipment, the Personal Property or any part thereof, and
to take such other measures as Lender may deem necessary for
the care, protection and preservation of the Fixtures, the
Equipment, the Personal Property, and (ii) request Mortgagor
at its expense to assemble the Fixtures, the Equipment, the
Personal Property and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale,
disposition or other intended action by Lender with respect to
the Fixtures, the Equipment, the Personal Property 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;
(j) apply any sums then deposited or held in escrow
or otherwise by or on behalf of Lender in accordance with the
terms of the Loan Agreement, this Security Instrument or any
other Loan Document to the payment of the following items in
any order in its uncontrolled discretion:
(i) Taxes and Other Charges;
(ii) Insurance Premiums;
(iii) Interest on the unpaid principal
balance of the Note;
(iv) Amortization of the unpaid principal
balance of the Note;
(v) All other sums payable pursuant to the
Note, the Loan Agreement, this Security Instrument
and the other Loan Documents, including without
limitation advances made by Lender pursuant to the
terms of this Security Instrument;
23
(k) pursue such other remedies as Lender may have
under applicable law; or
(l) apply the undisbursed balance of any Net Proceeds
Deficiency deposit, together with interest thereon, to the
payment of the Debt in such order, priority and proportions as
Lender shall deem to be appropriate in its discretion.
In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Security Instrument shall continue as a lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
Lender reserves the right at any time to subordinate the lien of this
Security Instrument to any one or more of the leases now or in the future
pertaining to any part of the Property upon the unilateral execution and
recording by Lender of said subordination agreement prior to the filing of any
action by Lender to foreclose upon the Property, such subordination agreement to
be effective as of the date of execution of this Security Instrument as to those
leases identified by Lender in such subordination agreement.
Section 7.2 APPLICATION OF PROCEEDS. The purchase money,
proceeds and avails of any disposition of the Property, and or any part thereof,
or any other sums collected by Lender pursuant to the Note, this Security
Instrument or the other Loan Documents, may be applied by Lender to the payment
of the Debt in such priority and proportions as Lender in its discretion shall
deem proper, to the extent consistent with law.
Section 7.3 RIGHT TO CURE DEFAULTS. Upon the occurrence and
during the continuance of any Event of Default, Lender may remedy such Event of
Default in such manner and to such extent as Lender may deem necessary to
protect the security hereof, but without any obligation to do so and without
notice to or demand on Mortgagor, and without releasing Mortgagor from any
obligation hereunder. Lender is authorized to enter upon action or proceeding to
the Property for such purposes, or appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof (including
reasonable attorneys' fees to the extent permitted by law), with interest as
provided in this SECTION 7.3, shall constitute a portion of the Debt and shall
be due and payable to Lender upon demand. All such costs and expenses incurred
by Lender in remedying such Event of Default or such failed payment or act or in
appearing in, defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period after notice from Lender that such
cost or expense was incurred to the date of payment to Lender. All such costs
and expenses incurred by Lender together with interest thereon calculated at the
Default Rate shall be deemed to constitute a portion of the Debt and be secured
by this Security Instrument and the other Loan Documents and shall be
immediately due and payable upon demand by Lender therefor.
Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to
appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Lender, in its discretion, decides should be brought to protect
its interest in the Property.
24
Section 7.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lender shall
have the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Mortgagor existing at the time such earlier action was
commenced.
Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable
times and upon reasonable notice, Lender, its agents, accountants and attorneys
shall have the right to examine the records, books, management and other papers
of Mortgagor which reflect upon their financial condition, at the Property or at
any office regularly maintained by Mortgagor where the books and records are
located. Lender and its agents shall have the right to make copies and extracts
from the foregoing records and other papers. In addition, at reasonable times
and upon reasonable notice, Lender, its agents, accountants and attorneys shall
have the right to examine and audit the books and records of Mortgagor
pertaining to the income, expenses and operation of the Property during
reasonable business hours at any office of Mortgagor where the books and records
are located. This Section 7.6 shall apply throughout the term of the Note and
without regard to whether an Event of Default has occurred or is continuing.
Section 7.7 OTHER RIGHTS, ETC. (a) The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Security Instrument. Mortgagor shall not be relieved
of Mortgagor's obligations hereunder by reason of (i) the failure of Lender to
comply with any request of Mortgagor or any guarantor or indemnitor with respect
to the Loan to take any action to foreclose this Security Instrument or
otherwise enforce any of the provisions hereof or of the Note or the other Loan
Documents, (ii) the release, regardless of consideration, of the whole or any
part of the Property, or of any person liable for the Debt or any portion
thereof, or (iii) any agreement or stipulation by Lender extending the time of
payment or otherwise modifying or supplementing the terms of the Note, this
Security Instrument or the other Loan Documents.
(b) It is agreed that the risk of loss or damage to
the Property is on Mortgagor, and Lender shall have no
liability whatsoever for decline in value of the Property, for
failure to maintain the Policies, or for failure to determine
whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an
election of judicial relief, if any such possession is
requested or obtained, with respect to any Property or
collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to
any other security held by Lender in such order and manner as
Lender, in its discretion, may elect. Lender may take action
to recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights
of Lender under this Security Instrument shall be separate,
distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Lender shall be construed
as an election to proceed under any one provision herein to
the exclusion of any other
25
provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to
every right and remedy now or hereafter afforded at law or in
equity.
Section 7.8 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY.
Lender may release any portion of the Property for such consideration as Lender
may require without, as to the remainder of the Property, in any way impairing
or affecting the lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lender for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lender may require without being accountable for so doing to any other
lienholder. This Security Instrument shall continue as a lien and security
interest in the remaining portion of the Property.
Section 7.9 VIOLATION OF LAWS. If the Property is not in
material compliance with Legal Requirements, Lender may impose additional
requirements upon Mortgagor in connection herewith including, without
limitation, monetary reserves or financial equivalents.
Section 7.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other provision of this Security Instrument or the Loan Agreement,
including, without limitation, Section 9.4 of the Loan Agreement, Lender and
other Indemnified Parties (as hereinafter defined) are entitled to enforce the
obligations of Borrower and Tenant, where applicable, any guarantor and
indemnitor contained in Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the
Loan Agreement without first resorting to or exhausting any security or
collateral and without first having recourse to the Note or any of the Property,
through foreclosure, exercise of a power of sale or acceptance of a deed in lieu
of foreclosure or otherwise, and in the event Lender commences a foreclosure
action against the Property, or exercises the power of sale pursuant to this
Security Instrument, Lender is entitled to pursue a deficiency judgment with
respect to such obligations against Borrower and Tenant, where applicable, and
any guarantor or indemnitor with respect to the Loan. The provisions of Sections
9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan Agreement are exceptions to
any non-recourse or exculpation provisions in the Loan Agreement, the Note, this
Security Instrument or the other Loan Documents, and Borrower and Tenant, where
applicable, and any guarantor or indemnitor with respect to the Loan are fully
and personally liable for the obligations pursuant to Sections 9.2, 9.3 and 9.4
herein and Section 9.2 of the Loan Agreement. The liability of Borrower and
Tenant, where applicable, and any guarantor or indemnitor with respect to the
Loan pursuant to Sections 9.2, 9.3 and 9.4 herein and Section 9.2 of the Loan
Agreement is not limited to the original principal amount of the Note.
Notwithstanding the foregoing, nothing herein shall inhibit or prevent Lender
from foreclosing or exercising a power of sale pursuant to this Security
Instrument or exercising any other rights and remedies pursuant to the Loan
Agreement, the Note, this Security Instrument and the other Loan Documents,
whether simultaneously with foreclosure proceedings or in any other sequence. A
separate action or actions may be brought and prosecuted against Borrower and
Tenant, where applicable, pursuant to Sections 9.2, 9.3 and 9.4 herein and
Section 9.2 of the Loan Agreement, whether or not action is brought against any
other Person or whether or not any other Person is joined in the action or
actions. In addition, Lender shall have the right but not the obligation to join
and participate in, as a party if it so elects, any administrative or judicial
26
proceedings or actions initiated in connection with any matter addressed in
Article 8 or Section 9.4 herein.
Section 7.11 RIGHT OF ENTRY. Upon reasonable notice to
Mortgagor, Lender and its agents shall have the right to enter and inspect the
Property at all reasonable times.
Article 8 - ENVIRONMENTAL HAZARDS
Section 8.1 ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES.
Based upon an environmental assessment of the Property and information that
Mortgagor knows after due inquiry of the Manager, and except as otherwise
disclosed by that certain Environmental Site Assessment of the Property
delivered to Lender (such report is referred to below as the "ENVIRONMENTAL
REPORT"), (a) there are no Hazardous Substances (defined below) or underground
storage tanks in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with permits issued
pursuant thereto and (ii) fully disclosed to Lender in writing pursuant the
Environmental Report; (b) there are no past, present or threatened Releases
(defined below) of Hazardous Substances in, on, under or from the Property which
has not been fully remediated in accordance with Environmental Law; (c) there is
no threat of any Release of Hazardous Substances migrating to the Property; (d)
there is no past or present non-compliance with Environmental Laws, or with
permits issued pursuant thereto, in connection with the Property which has not
been fully remediated in accordance with Environmental Law; (e) Mortgagor does
not know of, and has not received, any written or oral notice or other
communication from any Person (including but not limited to a governmental
entity) relating to Hazardous Substances or Remediation (defined below) thereof,
of possible liability of any Person pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
potential administrative or judicial proceedings in connection with any of the
foregoing; and (f) Mortgagor has truthfully and fully provided to Lender, in
writing, any and all information relating to conditions in, on, under or from
the Property that is known to Mortgagor and that is contained in Mortgagor's
files and records, including but not limited to any reports relating to
Hazardous Substances in, on, under or from the Property and/or to the
environmental condition of the Property.
"ENVIRONMENTAL LAW" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to protection of human health or the environment, relating
to Hazardous Substances, relating to liability for or costs of Remediation or
prevention of Releases of Hazardous Substances or relating to liability for or
costs of other actual or threatened danger to human health or the environment.
Environmental Law includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
27
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. Environmental Law also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
governmental authority of the environmental condition of the Property; requiring
notification or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental authority or other
Person, whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements in connection with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action related to the Property; and relating to wrongful death,
personal injury, or property or other damage in connection with any physical
condition or use of the Property.
"HAZARDOUS SUBSTANCES" include but are not limited to any and all
substances (whether solid, liquid or gas) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or regulatory
effect under any present or future Environmental Laws or that may have a
negative impact on human health or the environment, including but not limited to
petroleum and petroleum products, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, radioactive materials, flammables and
explosives, but excluding substances of kinds and in amounts ordinarily and
customarily used or stored in similar properties for the purpose of cleaning or
other maintenance or operations and otherwise in compliance with all
Environmental Laws.
"RELEASE" of any Hazardous Substance includes but is not limited to any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing or other
movement of Hazardous Substances.
"REMEDIATION" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance, any actions to prevent,
cure or mitigate any Release of any Hazardous Substance, any action to comply
with any Environmental Laws or with any permits issued pursuant thereto, any
inspection, investigation, study, monitoring, assessment, audit, sampling and
testing, laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in Article 8.
Section 8.2 ENVIRONMENTAL COVENANTS. Mortgagor covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Mortgagor or any other Person, shall be in compliance with all Environmental
Laws and permits issued pursuant thereto; (b) there shall be no Releases of
Hazardous Substances in, on, under or from the Property; (c) there shall be no
Hazardous Substances in, on, or under the Property, except those that are both
(i) in compliance with all Environmental Laws and with permits issued pursuant
thereto and (ii) fully disclosed to Lender in writing; (d) Mortgagor shall keep
the Property free and clear of all liens and other encumbrances imposed pursuant
to any Environmental Law, whether due to any act or omission of Mortgagor or any
other Person (the "ENVIRONMENTAL LIENS"); (e) Mortgagor shall, at its sole cost
and expense, fully and expeditiously cooperate in all activities pursuant to
SECTION 8.3 below, including but not limited to providing all relevant
information and making
28
knowledgeable persons available for interviews; (f) Mortgagor shall, at its sole
cost and expense, perform any environmental site assessment or other
investigation of environmental conditions in connection with the Property,
pursuant to any reasonable written request of Lender made in the event that
Lender has reason to believe that an environmental hazard exists on the Property
(including but not limited to sampling, testing and analysis of soil, water,
air, building materials and other materials and substances whether solid, liquid
or gas), and share with Lender the reports and other results thereof, and Lender
and other Indemnified Parties shall be entitled to rely on such reports and
other results thereof; (g) Mortgagor shall, at its sole cost and expense, comply
with all reasonable written requests of Lender made in the event that Lender has
reason to believe that an environmental hazard exists on the Property (i)
reasonably effectuate Remediation of any condition (including but not limited to
a Release of a Hazardous Substance) in, on, under or from the Property; (ii)
comply with any Environmental Law; (iii) comply with any directive from any
governmental authority; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (h) Mortgagor
shall not do or allow any tenant or other user of the Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any Person (whether on or off the Property),
impairs or may impair the value of the Property, is contrary to any requirement
of any insurer, constitutes a public or private nuisance, constitutes waste, or
violates any covenant, condition, agreement or easement applicable to the
Property; and (i) Mortgagor shall immediately notify Lender in writing of (A)
any presence or Releases or threatened Releases of Hazardous Substances in, on,
under, from or migrating towards the Property; (B) any non-compliance with any
Environmental Laws related in any way to the Property; (C) any actual or
potential Environmental Lien; (D) any required or proposed Remediation of
environmental conditions relating to the Property; and (E) any written or oral
notice or other communication of which Mortgagor becomes aware from any source
whatsoever (including but not limited to a governmental entity) relating in any
way to Hazardous Substances or Remediation thereof, possible liability of any
Person pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Article 8.
Section 8.3 LENDER'S RIGHTS. In the event that Lender has
reason to believe that an environmental hazard exists on the Property, upon
reasonable notice from Lender, Mortgagor shall, at Mortgagor's expense, promptly
cause an engineer or consultant satisfactory to Lender to conduct any
environmental assessment or audit (the scope of which shall be determined in
Lender's sole and absolute discretion) and take any samples of soil, groundwater
or other water, air, or building materials or any other invasive testing
requested by Lender and promptly deliver the results of any such assessment,
audit, sampling or other testing; provided, however, if such results are not
delivered to Lender within a reasonable period, upon reasonable notice to
Mortgagor, Lender and any other Person designated by Lender, including but not
limited to any receiver, any representative of a governmental entity, and any
environmental consultant, shall have the right, but not the obligation, to enter
upon the Property at all reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in Lender's sole and absolute discretion) and taking samples of soil,
groundwater or other water, air, or building materials, and reasonably
conducting other
29
invasive testing. Mortgagor shall cooperate with and provide access to Lender
and any such Person designated by Lender.
Article 9 - INDEMNIFICATION
Section 9.1 GENERAL INDEMNIFICATION. Borrower and Tenant,
where applicable, shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified Parties from and against
any and all claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages, losses, costs,
expenses, diminutions in value, fines, penalties, charges, fees, expenses,
judgments, awards, amounts paid in settlement, punitive damages, foreseeable and
unforeseeable consequential damages, of whatever kind or nature (including but
not limited to reasonable attorneys' fees and other costs of defense)
(collectively, the "LOSSES") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any one or more of the following: (a) ownership of this Security
Instrument, the Property or any interest therein or receipt of any Rents; (b)
any amendment to, or restructuring of, the Debt, and the Note, the Loan
Agreement, this Security Instrument, or any other Loan Documents; (c) any and
all lawful action that may be taken by Lender in connection with the enforcement
of the provisions of this Security Instrument or the Loan Agreement or the Note
or any of the other Loan Documents, whether or not suit is filed in connection
with same, or in connection with Borrower or Tenant, any guarantor or indemnitor
and/or any partner, joint venturer or shareholder thereof becoming a party to a
voluntary or involuntary federal or state bankruptcy, insolvency or similar
proceeding; (d) any accident, injury to or death of persons or loss of or damage
to property occurring in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (e) any use, nonuse or condition in, on or about the Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (f) any failure on the part of Mortgagor to
perform or be in compliance with any of the terms of this Security Instrument;
(g) performance of any labor or services or the furnishing of any materials or
other property in respect of the Property or any part thereof; (h) the failure
of any person to file timely with the Internal Revenue Service an accurate Form
▇▇▇▇-▇, ▇▇▇▇▇▇▇▇▇ for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with this Security
Instrument, or to supply a copy thereof in a timely fashion to the recipient of
the proceeds of the transaction in connection with which this Security
Instrument is made; (i) any failure of the Property to be in compliance with any
Legal Requirements; (j) the enforcement by any Indemnified Party of the
provisions of this Article 9; (k) any and all claims and demands whatsoever
which may be asserted against Lender by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in any Lease; (1) the payment of any commission, charge or
brokerage fee to anyone claiming through Borrower or Tenant which may be payable
in connection with the funding of the Loan; or (m) any misrepresentation made by
Borrower or Tenant, where applicable, in this Security Instrument or any other
Loan Document. Notwithstanding the foregoing, Mortgagor shall not be liable to
the Indemnified Parties under this SECTION 9.1 for any Losses to which the
Indemnified Parties may become subject to the extent such Losses arise by reason
of the gross negligence, illegal acts, fraud or willful misconduct of the
Indemnified Parties. Any amounts payable to Lender by reason of the application
of this SECTION 9.1 shall
30
become immediately due and payable and shall bear interest at the Default Rate
from the date loss or damage is sustained by Lender until paid. For purposes of
this Article 9, the term "INDEMNIFIED PARTIES" means Lender and any Person who
is or will have been involved in the origination of the Loan, any Person who is
or will have been involved in the servicing of the Loan secured hereby, any
Person in whose name the encumbrance created by this Security Instrument is or
will have been recorded, persons and entities who may hold or acquire or will
have held a full or partial interest in the Loan secured hereby (including, but
not limited to, investors or prospective investors in the Securities, as well as
custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan secured hereby for the benefit of third parties) as
well as the respective directors, officers, shareholders, partners, employees,
agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the
foregoing (including but not limited to any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
whether during the term of the Loan or as a part of or following a foreclosure
of the Loan and including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of Lender's assets
and business).
Section 9.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower and
Tenant, where applicable, shall, at their sole cost and expense, protect,
defend, indemnify, release and hold harmless the Indemnified Parties from and
against any and all Losses imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of this Security Instrument,
the Note or any of the other Loan Documents, but excluding any income, franchise
or other similar taxes.
Section 9.3 ERISA INDEMNIFICATION. Borrower and Tenant, where
applicable, shall, at their sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and against any and all
Losses (including, without limitation, reasonable attorneys' fees and costs
incurred in the investigation, defense, and settlement of Losses incurred in
correcting any prohibited transaction or in the sale of a prohibited loan, and
in obtaining any individual prohibited transaction exemption under ERISA that
may be required, in Lender's sole discretion) that Lender may incur, directly or
indirectly, as a result of a default under Sections 4.1.9 or 5.2.12 of the Loan
Agreement.
Section 9.4 ENVIRONMENTAL INDEMNIFICATION. Mortgagor shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but not
limited to sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Mortgagor, any Person affiliated with Mortgagor or any tenant or other user of
the Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other
31
Release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any tine located in, under, on or
above the Property; (d) any activity by Mortgagor, any Person affiliated with
Mortgagor or any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (e) any past or present
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including but not limited to any failure by Mortgagor, any Affiliate of
Mortgagor or any tenant or other user of the Property to comply with any order
of any Governmental Authority in connection with any Environmental Laws; (f) the
imposition, recording or filing of any Environmental Lien encumbering the
Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
SECTION 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including but
not limited to costs to investigate and assess such injury, destruction or loss;
(i) any acts of Mortgagor or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Mortgagor or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Mortgagor or other users of the Property, in
accepting any Hazardous Substances for transport to disposal or treatment
facilities, incineration vessels or sites selected by Mortgagor or such other
users, from which there is a Release, or a threatened Release of any Hazardous
Substance which causes the incurrence of costs for Remediation; (k) any personal
injury, wrongful death, or property damage arising under any statutory or common
law or tort law theory, including but not limited to damages assessed for the
maintenance of a private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Property; and (1) any
misrepresentation or inaccuracy in any representation or warranty or material
breach or failure to perform any covenants or other obligations pursuant to
Article 8. Notwithstanding the foregoing, Mortgagor shall not be liable under
this SECTION 9.4 for any Losses or costs of Remediation to which the Indemnified
Parties may become subject to the extent such Losses or costs of Remediation
arise by reason of the gross negligence, illegal acts, fraud of willful
misconduct of the Indemnified Parties. This indemnity shall survive any
termination, satisfaction or foreclosure of this Security Instrument, subject to
the provisions of SECTION 10.5.
Section 9.5 DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
EXPENSES. Upon written request by any Indemnified Party, Mortgagor shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals approved by the
Indemnified Parties. Notwithstanding the foregoing, if the defendants in any
such claim or proceeding include both Mortgagor and any Indemnified Party and
Mortgagor and such Indemnified Party shall have reasonably concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those available to Mortgagor, such Indemnified
Party shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party, provided that no compromise or settlement
32
shall be entered without Mortgagor's consent, which consent shall not be
unreasonably withheld. Upon demand, Mortgagor shall pay or, in the sole and
absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
Article 10 - WAIVERS
Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted
by applicable law, Mortgagor hereby waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Lender arising out of or in any way connected with this
Security Instrument, the Loan Agreement, the Note, any of the other Loan
Documents, or the Obligations.
Section 10.2 MARSHALLING AND OTHER MATTERS. To the extent
permitted by applicable law, Mortgagor hereby waives, to the extent permitted by
law, the benefit of all appraisement, valuation, stay, extension, reinstatement
and redemption laws now or hereafter in force and all rights of marshalling in
the event of any sale hereunder of the Property or any part thereof or any
interest therein. Further, Mortgagor hereby expressly waives any and all rights
of redemption from sale under any order or decree of foreclosure of this
Security Instrument on behalf of Mortgagor, and on behalf of each and every
person acquiring any interest in or title to the Property subsequent to the date
of this Security Instrument and on behalf of all persons to the extent permitted
by applicable law.
Section 10.3 WAIVER OF NOTICE. To the extent permitted by
applicable law, Mortgagor shall not be entitled to any notices of any nature
whatsoever from Lender except with respect to matters for which this Security
Instrument or the Loan Documents specifically and expressly provide for the
giving of notice by Lender to Mortgagor and except with respect to matters for
which Lender is required by applicable law to give notice, and Mortgagor hereby
expressly waives the right to receive any notice from Lender with respect to any
matter for which this Security Instrument does not specifically and expressly
provide for the giving of notice by Lender to Mortgagor.
Section 10.4 WAIVER OF STATUTE OF LIMITATIONS. To the extent
permitted by applicable law, Mortgagor hereby expressly waives and releases to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its Other Obligations.
Section 10.5 SURVIVAL. The indemnifications made pursuant to
SECTIONS 9.3 AND 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article 8, shall continue indefinitely in
full force and effect and shall survive and shall in no way be impaired by: any
satisfaction, release or other termination of this Security Instrument, any
assignment or other transfer of all or any portion of this Security Instrument
or Lender's interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise of Lender's
rights and remedies pursuant hereto including but not limited to foreclosure or
acceptance of a deed in lieu of foreclosure, any exercise of any rights and
remedies pursuant to the Loan Agreement, the Note or any of the other Loan
Documents, any transfer of all or any portion of the Property (whether by
Mortgagor or by Lender following foreclosure or acceptance of a deed in lieu of
foreclosure or at any other time), any amendment to this Security Instrument,
the Loan Agreement, the Note or the other Loan Documents,
33
and any act or omission that might otherwise be construed as a release or
discharge of Mortgagor, from the obligations pursuant hereto. Notwithstanding
anything to the contrary contained in this Security Instrument or the other Loan
Documents, Mortgagor shall not have any obligations or liabilities under the
indemnification under SECTION 9.4 herein or other indemnifications with respect
to Hazardous Substances contained in the other Loan Documents with respect to
those obligations and liabilities that Mortgagor can prove arose solely from
Hazardous Substances that (i) were not present on or a threat to the Property
prior to the date that Lender or its nominee acquired title to the Property,
whether by foreclosure, exercise by power of sale, acceptance of a deed-in-lieu
of foreclosure or otherwise and (ii) were not the result of any act or
negligence of Mortgagor or any of Mortgagor's affiliates, agents or contractors.
Article 11 - EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
Article 12 - NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.
Article 13 - APPLICABLE LAW
Section 13.1 GOVERNING LAW. THIS SECURITY INSTRUMENT SHALL BE
GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
STATE IN WHICH THE PROPERTY IS LOCATED AND THE APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
Section 13.2 USURY LAWS. Notwithstanding anything to the contrary, (a) all
agreements and communications between Mortgagor and Lender are hereby and shall
automatically be limited so that, after taking into account all amounts deemed
interest, the interest contracted for, charged or received by Lender shall never
exceed the maximum lawful rate or amount, (b) in calculating whether any
interest exceeds the lawful maximum, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of Borrower to Lender, and (c) if through any contingency or event,
Lender receives or is deemed to receive interest in excess of the lawful
maximum, any such excess shall be deemed to have been applied toward payment of
the principal of any and all then outstanding indebtedness of Borrower to
Lender, or if there is no such indebtedness, shall immediately be returned to
Borrower.
Section 13.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and
remedies provided in this Security Instrument may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited
34
to the extent necessary so that they will not render this Security Instrument
invalid, unenforceable or not entitled to be recorded, registered or filed under
the provisions of any applicable law. If any term of this Security Instrument or
any application thereof shall be invalid or unenforceable, the remainder of this
Security Instrument and any other application of the term shall not be affected
thereby.
Article 14 - DEFINITIONS
All capitalized terms not defined herein shall have the respective
meanings set forth in the Loan Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Security Instrument may be used interchangeably in singular or plural form
and the word "BORROWER" shall mean "each Borrower and any subsequent owner or
owners of the Property or any part thereof or any interest therein," the word
"LENDER" shall mean "Lender and any subsequent holder of the Note," the word
"NOTE" shall mean "the Note and any other evidence of indebtedness secured by
this Security Instrument," the word "Property" shall include any portion of the
Property and any interest therein, and the phrases "ATTORNEYS' FEES", "LEGAL
FEES" and "COUNSEL FEES" shall include any and all attorneys', paralegal and law
clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre-trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder.
Article 15 - MISCELLANEOUS PROVISIONS
Section 15.1 NO ORAL CHANGE. This Security Instrument, and any
provisions hereof, may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Mortgagor or Lender, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.
Section 15.2 SUCCESSORS AND ASSIGNS. This Security Instrument
shall be binding upon and inure to the benefit of Mortgagor and Lender and their
respective successors and assigns forever.
Section 15.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is held to
be invalid, illegal or unenforceable in any respect, the Loan Agreement, the
Note and this Security Instrument shall be construed without such provision.
Section 15.4 HEADINGS, ETC. The headings and captions of
various Sections of this Security Instrument are for convenience of reference
only and are not to be construed as defining or limiting, in any way, the scope
or intent of the provisions hereof.
Section 15.5 NUMBER AND GENDER. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.
35
Section 15.6 SUBROGATION. If any or all of the proceeds of the
Note have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights, claims, liens, titles, and interests
existing against the Property heretofore held by, or in favor of, the holder of
such indebtedness and such former rights, claims, liens, titles, and interests,
if any, are not waived but rather are continued in full force and effect in
favor of Lender and are merged with the lien and security interest created
herein as cumulative security for the repayment of the Debt, the performance and
discharge of Borrower's and Tenant's, where applicable, obligations hereunder,
under the Loan Agreement, the Note and the other Loan Documents and the
performance and discharge of the Other Obligations.
Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement,
this Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Borrower, Lender and where applicable,
Tenant, with respect to the transactions arising in connection with the Debt and
supersede all prior written or oral understandings and agreements between
Mortgagor and Lender with respect thereto. Mortgagor hereby acknowledges that,
except as incorporated in writing in the Note, the Loan Agreement, this Security
Instrument and the other Loan Documents, there are not, and were not, and no
persons are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the transaction which is the subject of the Note, the Loan Agreement,
this Security Instrument and the other Loan Documents.
Section 15.8 LIMITATION ON LENDER'S RESPONSIBILITY. No
provision of this Security Instrument shall operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Lender, nor shall it operate to make Lender responsible or liable for any waste
committed on the Property by the tenants or any other Person, or for any
dangerous or defective condition of the Property, or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee or stranger. Nothing herein
contained shall be construed as constituting Lender a "mortgagee in possession."
Article 16 - INTENTIONALLY DELETED
Article 17 - STATE-SPECIFIC PROVISIONS
Section 17.1 PRINCIPALS OF CONTRUCTION: In the event of any inconsistencies
between the terms and provisions of this Security Instrument and Article 17 of
this Security Instrument, the terms and provisions of Article 17 shall govern
and control.
Section 17.2 OPEN-END MORTGAGE. (a) This Security Instrument is an open-end
mortgage pursuant to 42 PA. C.S.A. ss. 8143, and secures, INTER ALIA, present
and future advances made by Lender pursuant to the Loan Documents, including,
without limitation, advances for the payment of taxes, assessments, maintenance
charges, insurance premiums or costs incurred for the protection of the Property
or the lien of this Security Instrument, or expenses incurred by the Lender by
reason of default by the Mortgagor under this Security Instrument, and to enable
any completion of the improvements comprising the property as may
36
be contemplated by the Loan Documents. Nothing contained herein shall impose any
obligation on the part of Lender to make any such additional loan(s) to
Borrower.
(b) Without limiting any other provisions of this
Security Instrument, this Security Instrument secures present
and future loans, advances and extensions of credit made by
Lender to or for the benefit of Borrower, and the lien of such
future advances shall relate back to the date of this Security
Instrument. This Security Instrument shall also secure
additional loans hereafter made by Lender to Borrower. Nothing
contained herein shall impose any obligation on the part of
Lender to make any such additional loans, advances and
extensions of credit to or for the benefit of Borrower.
(c) If Mortgagor sends a written notice to Lender
which purports to limit the indebtedness secured by this
Security Instrument and to release the obligation of the
Lender to make any additional advances to Borrower, such
notice shall be ineffective as to any future advances made:
(i) to pay taxes, assessments, maintenance charges and
insurance premiums; (ii) costs incurred for the protection of
the Property or the lien of this Security Instrument, (iii)
expenses incurred by Lender by reason of the default of
Mortgagor and (iv) any other costs incurred by Mortgagor to
protect and preserve the Property. It is the intention of the
parties hereto that any such advance made by Lender after any
such notice by Mortgagor shall be secured by the lien of this
Security Instrument on the Property.
Section 17.3 ACTION IN EJECTMENT. For the purpose of obtaining
possession of the Land and the Improvements in the event of any Event of Default
hereunder or under the Note, Mortgagor hereby authorizes and empowers any
attorney of any court of record in the Commonwealth of Pennsylvania or
elsewhere, as attorney for Mortgagor and all persons claiming under or through
Mortgagor, to appear for and confess judgment against Mortgagor, and against all
persons claiming under or through Mortgagor, in an action in ejectment for
possession of the Property, in favor of Lender, for which this Security
Instrument, or a copy thereof verified by affidavit, shall be a sufficient
warrant; and thereupon a writ of possession may immediately issue for possession
of the Property, without any prior writ or proceeding whatsoever and without any
stay of execution. If for any reason after such action has been commenced it
shall be discontinued, or possession of the Property shall remain in or be
restored to Mortgagor, Lender shall have the right for the same default or any
subsequent default to bring one or more further actions as above provided to
recover possession of the Property. Lender may confess judgment in an action in
ejectment before or after the institution of proceedings to foreclose this
Security Instrument or to enforce the Note, or after entry of judgment therein
or on the Note, or after a sheriff's sale or judicial sale or other foreclosure
sale of the Property in which Lender is the successful bidder, it being the
understanding of the parties that the authorization to pursue such proceedings
for confession of judgment therein is an essential part of the remedies for
enforcement of this Security Instrument and the Note, and shall survive any
execution sale to Lender.
Mortgagor confirms to Lender that (i) Mortgagor is a business entity
and that its principals are knowledgeable in business matters; (ii) the terms of
this Security Instrument,
37
including the foregoing warrant of attorney to confess judgment, have been
negotiated and agreed upon in a commercial context; and (iii) Mortgagor has
fully reviewed the aforesaid warrant of attorney to confess judgment with its
own counsel and is knowingly and voluntarily waiving certain rights it would
otherwise possess, including but not limited to, the right to any notice of a
hearing prior to the entry of judgment by Lender pursuant to the foregoing
warrant.
Section 17.4 CONFLICTING PROVISIONS. The provisions of this
Article are intended to supplement, and not limit, the other provisions of this
Security Instrument; PROVIDED, HOWEVER, that in the event the provisions of this
Article contradict any other provision of this Security Instrument, the
provisions of this Article shall govern.
[NO FURTHER TEXT ON THIS PAGE]
38
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Mortgagor as of the day and year first above written.
MORTGAGOR:
BORROWER
LOYAL PLAZA VENTURE, L.P.,
a Delaware limited partnership
By: GLIMCHER LOYAL PLAZA, INC., a Delaware
corporation, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
Date of execution: May 31, 2001
------------
TENANT
GLIMCHER LOYAL PLAZA TENANT, L.P.,
a Delaware limited partnership
By:
GLIMCHER LOYAL PLAZA TENANT, INC., a Delaware corporation, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
Date of execution: May 31, 2001
------------
The address of the within named mortgagee is:
▇▇▇▇▇▇ BROTHERS BANK, FSB,
Three World Financial Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
39
----------------------------
On behalf of mortgagee
ACKNOWLEDGMENTS
STATE OF ________________ )
) ss.:
COUNTY OF ________________ )
On this, the ____ day of May 2001, before me, the undersigned officer,
personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who acknowledged himself to be the
executive vice president of Glimcher Loyal Plaza, Inc. and that he as such
executive vice president, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as executive vice president.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Notary Public
My Commission Expires: 7/02/05
STATE OF )
---------------------------
) ss.:
COUNTY OF )
--------------------------
On this, the 31 day of May 2001, before me, the undersigned officer,
personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, who acknowledged himself to be the
executive vice president of Glimcher Loyal Plaza Tenant, Inc. and that he as
such executive vice president, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as executive vice president.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Notary Public
My Commission Expires: 7/02/05
40
EXHIBIT A
LEGAL DESCRIPTION
[To Be Attached]
A-1