ONE PRICE CLOTHING STORES, INC. AND SUBSIDIARIES
EXHIBIT 10(d) - Mortgage and Security Agreement by and between
First Union National bank, as Mortgagee and One Price
Realty, Inc., as Mortgagor dated June 17, 1997
Loan Number 19-5113985
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ONE PRICE REALTY, INC.,
as Mortgagor
to
FIRST UNION NATIONAL BANK,
as Mortgagee
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MORTGAGE AND SECURITY AGREEMENT
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Date: June 17, 1997
PREPARED BY AND UPON RECORDATION RETURN TO:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
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MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT (this "Mortgage") is made
as of June 17, 1997 by ONE PRICE REALTY, INC., a South Carolina, corporation, as
Mortgagor ("Mortgagor"), whose address is HWY. 290 - Commerce Park, ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to FIRST UNION
NATIONAL BANK, a national banking association, as Mortgagee ("Mortgagee"), whose
address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
W I T N E S S E T H:
THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS ($10), AND
OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY
ACKNOWLEDGED, MORTGAGOR HEREBY IRREVOCABLY MORTGAGES, GRANTS, BARGAINS, SELLS,
CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND ASSIGNS, WITH POWER OF SALE, all of
Mortgagor's estate, right, title and interest in, to and under any and all of
the following described property, whether now owned or hereafter acquired by
Mortgagor (collectively, the "Mortgaged Property"):
A. All that certain real property situated in the County of
Spartanburg, State of South Carolina, more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (the "Premises"),
together with all of the easements, rights, privileges, franchises, tenements,
hereditaments and appurtenances now or hereafter thereunto belonging or in any
way appertaining thereto, and all of the estate, right, title, interest, claim
and demand whatsoever of Mortgagor therein or thereto, either at law or in
equity, in possession or in expectancy, now or hereafter acquired;
B. All structures, buildings and improvements of every
kind and description now or at any time hereafter located or placed on the
Premises (the "Improvements");
C. All fixtures (other than trade fixtures) owned by Mortgagor
now or hereafter located on, attached to or used in and about the Improvements,
and all of t he following equipment owned by Mortgagor: all boilers, dynamos,
elevators, stokers, tanks, cabinets, awnings, screens, shades, blinds, wall and
floor coverings, draperies, and all plumbing, heating, air conditioning,
lighting, ventilating, electrical, refrigerating, disposal and incinerating
equipment, and all fixtures and appurtenances thereto, as are now or hereafter
used or furnished in operating the Improvements, and all warranties and
guaranties relating thereto, and all additions thereto and substitutions and
replacements therefor (exclusive of any of the foregoing owned or leased by
tenants of space in the Improvements);
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D. All easements, rights-of-way, strips and gores of land,
vaults, streets, ways, alleys, passages, sewer rights, and other emblements now
or hereafter located on the Premises or under or above the same or any part or
parcel thereof, and all estates, rights, titles, interests, tenements,
hereditaments and appurtenances, reversions and remainders whatsoever, in any
way belonging, relating or appertaining to the Mortgaged Property or any part
thereof, or which hereafter shall in any way belong, relate or be appurtenant
thereto, whether now owned or hereafter acquired by Mortgagor;
E. All water, ditches, ▇▇▇▇▇, reservoirs and drains and all
water, ditch, well, reservoir and drainage rights which are appurtenant to,
located on, under or above or used in connection with the Premises or the
Improvements, or any part thereof, whether now existing or hereafter created or
acquired;
F. All minerals, crops, timber, trees, shrubs,
flowers and landscaping features now or hereafter located on, under or above
the Premises;
G. All cash funds, deposit accounts and other rights and
evidence of rights to cash, now or hereafter created or held by Mortgagee
pursuant to this Mortgage or any other of the Loan Documents (as hereinafter
defined), including, without limitation, all funds now or hereafter on deposit
in the Impound Account, the Payment Reserve, the Replacement Reserve and the
Repair and Remediation Reserve (each as hereinafter defined);
H. That certain lease between Mortgagor, as landlord, and One
Price Clothing Stores, Inc., a Delaware corporation, as tenant ("Tenant"), dated
as the even date herewith (as the same may be amended, modified or supplemented
from time to time, the "Lease") and all other leases (including, without
limitation, oil, gas and mineral leases), licenses, concessions and occupancy
agreements of all or any part of the Premises or the Improvements, whether
written or oral, now or hereafter entered into (the "Other Leases") and all
rents, royalties, issues, profits, bonus money, revenue, income, rights and
other benefits (collectively, the "Rents and Profits") of the Premises or the
Improvements, now or hereafter arising from the use or enjoyment of all or any
portion thereof or from any present or future Lease, Other Leases or other
agreement pertaining thereto or arising from the Lease or any of the Other
Leases or any of the General Intangibles (as hereinafter defined) and all cash
or securities deposited to secure performance by the tenants, lessees or
licensees, as applicable, of their obligations under any such Leases, whether
said cash or securities are to be held until the expiration of the terms of said
Other Leases or applied to one or more of the installments of rent coming due
prior to the expiration of said terms, subject, however, to the provisions
contained in Section 1.11 hereinbelow;
I. All contracts and agreements now or hereafter entered into
covering any part of the Premises or the Improvements (collectively, the
"Contracts") and all revenue, income and other benefits thereof, including,
without limitation, management agreements, service contracts, maintenance
contracts, equipment leases, personal property leases and any contracts or
documents relating to construction on any part of the Premises or the
Improvements (including plans, drawings, surveys, tests, reports, bonds and
governmental approvals) or to the management or operation of any part of the
Premises or the Improvements;
J. All present and future monetary deposits given to
any public or private utility with respect to utility services furnished to any
part of the Premises or the Improvements;
K. All of Mortgagor's estate, right, title and interest in
present and future funds, accounts, instruments, accounts receivable, documents,
causes of action, claims, general intangibles (including, without limitation,
trademarks, trade names, service marks and symbols now or hereafter used in
connection with any part of the Premises or the Improvements, all names by which
the Premises or the Improvements may be operated or known, all rights to carry
on business under such names, and all rights, interest and privileges which
Mortgagor has or may have as developer or declarant under any covenants,
restrictions or declarations now or hereafter relating to the Premises or the
Improvements) and all notes or chattel paper now or hereafter arising from or by
virtue of any transactions related to the Premises or the Improvements
(collectively, the "General Intangibles");
L. All water taps, sewer taps, certificates of occupancy,
permits, licenses, franchises, certificates, consents, approvals and other
rights and privileges now or hereafter obtained in connection with the Premises
or the Improvements and all present and future warranties and guaranties
relating to the Improvements or to any property of Mortgagor referred to in
clause (C) above now or hereafter located or installed on the Premises or the
Improvements;
M. All building materials, building supplies and building
equipment now or hereafter placed on the Premises or in the Improvements
and all architectural renderings, models, drawings, plans, specifications,
studies and data now or hereafter relating to the Premises or the Improvements;
N. All right, title and interest of Mortgagor in any insurance
policies or binders now or hereafter relating to the Mortgaged Property,
including any unearned premiums thereon;
O. All proceeds, products, substitutions and accessions
(including claims and demands therefor) of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims,
including, without limitation, proceeds of insurance and condemnation awards;
P. All of Mortgagor's claims and rights to damages and any
other remedies in connection with or arising from the rejection of the Lease by
Tenant or any trustee, custodian or receiver pursuant to the provisions of the
U.S. Bankruptcy Code in the event that there shall be filed by or against the
Tenant any petition, action or proceeding under the U.S. Bankruptcy Code or
under any other similar federal or state law now or hereafter in effect; and
Q. All other or greater rights and interests of every
nature in the Premises or the Improvements and in the possession or use thereof
and income therefrom, whether now owned or hereafter acquired
by Mortgagor.
FOR THE PURPOSE OF SECURING:
1. The debt evidenced by that certain Promissory Note (such
Promissory Note, together with any and all renewals, amendments, modifications,
consolidations and extensions thereof, is hereinafter referred to as the "Note")
of even date with this Mortgage, made by Mortgagor payable to the order of
Mortgagee in the principal face amount of EIGHT MILLION ONE HUNDRED TWENTY-FIVE
THOUSAND AND NO/100 DOLLARS ($8,125,000.00), together with interest as therein
provided;
2. The full and prompt payment and performance of all of the
provisions, agreements, covenants and obligations herein contained and contained
in any other agreements, documents or instruments now or hereafter evidencing,
securing or otherwise relating to the Debt (as hereinafter defined) including,
but not limited to, the Environmental Indemnity Agreement (as hereinafter
defined)(the Note, this Mortgage, and such other agreements, documents and
instruments, together with any and all renewals, amendments, extensions and
modifications thereof, are hereinafter collectively referred to as the "Loan
Documents") and the payment of all other sums herein or therein covenanted to be
paid;
3. Any and all additional advances made by Mortgagee to
protect or preserve the Mortgaged Property or the lien or security interest
created hereby on the Mortgaged Property, or for taxes, assessments or insurance
premiums as hereinafter provided or for performance of any of Mortgagor's
obligations hereunder or under the other Loan Documents or for any other purpose
provided herein or in the other Loan Documents (whether or not the original
Mortgagor remains the owner of the Mortgaged Property at the time of such
advances); and
4. Any and all other indebtedness now owing or which may
hereafter be owing by Mortgagor to Mortgagee, including, without limitation, all
prepayment fees, however and whenever incurred or evidenced, whether express or
implied, direct or indirect, absolute or contingent, or due or to become due,
and all renewals, modifications, consolidations, replacements and extensions
thereof, it being contemplated by Mortgagor and Mortgagee that Mortgagor may
hereafter become so indebted to Mortgagee.
(All of the sums referred to in Paragraphs (1) through (4) above are herein
referred to as the "Debt").
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its
successors and assigns forever, and Mortgagor does hereby bind itself, its
successors and assigns, to WARRANT AND FOREVER DEFEND the title to the Mortgaged
Property, subject to the Permitted Encumbrances (as hereinafter defined), to
Mortgagee against every person whomsoever lawfully claiming or to claim the same
or any part thereof;
PROVIDED, HOWEVER, that if the principal and interest and all
other sums due or to become due under the Note or under the other Loan
Documents, including, without limitation, any prepayment fees required pursuant
to the terms of the Note, shall have been paid at the time and in the manner
stipulated therein and the Debt shall have been paid and all other covenants
contained in the Loan Documents shall have been performed, then, in such case,
the liens, security interests, estates and rights granted by this Mortgage shall
be satisfied and the estate, right, title and interest of Mortgagee in the
Mortgaged Property shall cease, and upon payment to Mortgagee of all costs and
expenses incurred for the preparation of the release hereinafter referenced and
all recording costs if allowed by law, Mortgagee shall promptly satisfy and
release this Mortgage of record and the lien hereof by proper instrument.
ARTICLE I
REPRESENTATIONS, WARRANTIES AND COVENANTS OF Mortgagor
For the purpose of further securing the Debt and for the
protection of the security of this Mortgage, for so long as the Debt or any part
thereof remains unpaid, Mortgagor covenants and agrees as follows:
1.1 Representations, Warranties and Covenants of Mortgagor. Mortgagor, for
itself and its successors and assigns, does hereby represent, warrant and
covenant to and with Mortgagee, its successors and assigns, that:
(a) Mortgagor has good, marketable and
indefeasible fee simple title to the Mortgaged Property, subject only to those
matters expressly set forth as exceptions to or subordinate matters in the title
insurance policy insuring the lien of this Mortgage delivered as of the date
hereof which Mortgagee has agreed to accept, excepting therefrom all preprinted
and/or standard exceptions (such items being the "Permitted Encumbrances"), and
has full power and lawful authority to grant, bargain, sell, convey, assign,
transfer, encumber and mortgage its interest in the Mortgaged Property in the
manner and form hereby done or intended. Mortgagor will preserve its interest in
and title to the Mortgaged Property and will forever warrant and defend the same
to Mortgagee against any and all claims whatsoever and will forever warrant and
defend the validity and priority of the lien and security interest created
herein against the claims of all persons and parties whomsoever, subject to the
Permitted Encumbrances. The foregoing warranty of title shall survive the
foreclosure of this Mortgage and shall inure to the benefit of and be
enforceable by Mortgagee in the event Mortgagee acquires title to the Mortgaged
Property pursuant to any foreclosure;
(b) No bankruptcy or insolvency proceedings
are pending or contemplated by Mortgagor or, to the best knowledge of Mortgagor,
against Mortgagor or by or against any endorser or cosigner of the Note or of
any portion of the Debt, or any guarantor or indemnitor under any guaranty or
indemnity agreement executed in connection with the Note or the loan evidenced
thereby and secured hereby (an "Indemnitor");
(c) All reports, certificates, affidavits,
statements and other data furnished by or on behalf of Mortgagor to Mortgagee in
connection with the loan evidenced by the Note are true and correct in all
material respects and do not omit to state any fact or circumstance necessary to
make the statements contained therein not misleading;
(d) The execution, delivery and performance of
this Mortgage, the Note and all of the other Loan Documents have been duly
authorized by all necessary action to be, and are, binding and enforceable
against Mortgagor in accordance with the respective terms thereof and do not
contravene, result in a breach of or constitute a default (nor upon the giving
of notice or the passage of time or both will same constitute a default) under
the partnership agreement, articles of incorporation, operating agreement or
other organizational documents of Mortgagor or any contract or agreement of any
nature to which Mortgagor is a party or by which Mortgagor or any of its
property may be bound and do not violate or contravene any law, order, decree,
rule or regulation to which Mortgagor is subject;
(e) The Premises and the Improvements and
the current intended use thereof by Mortgagor comply in all material respects
with all applicable restrictive covenants, zoning ordinances, subdivision and
building codes, flood disaster laws, health and environmental laws and
regulations and all other ordinances, orders or requirements issued by any
state, federal or municipal authorities having or claiming jurisdiction over the
Mortgaged Property. The Premises and Improvements constitute one or more
separate tax parcels for purposes of ad valorem taxation. The Premises and
Improvements do not require any rights over, or restrictions against, other
property in order to comply with any of the aforesaid governmental ordinances,
orders or requirements;
(f) All utility services necessary and
sufficient for the full use, occupancy, operation and disposition of the
Premises and the Improvements for their intended purposes are available to the
Mortgaged Property, including water, storm sewer, sanitary sewer, gas, electric,
cable and telephone facilities, through public rights-of-way or perpetual
private easements approved by Mortgagee;
(g) All streets, roads, highways, bridges and
waterways necessary for access to and full use, occupancy, operation and
disposition of the Premises and the Improvements have been completed, have been
dedicated to and accepted by the appropriate municipal authority and are open
and available to the Premises and the Improvements without further condition or
cost to Mortgagor;
(h) All curb cuts, driveways and traffic signals
shown on the survey delivered to Mortgagee prior to the execution and delivery
of this Mortgage are existing and have been fully approved by the appropriate
governmental authority;
(i) There are no judicial, administrative,
mediation or arbitration actions, suits or proceedings pending or threatened
against or affecting Mortgagor or the Mortgaged Property which, if adversely
determined, would materially impair either the Mortgaged Property or Mortgagor's
ability to perform the covenants or obligations required to be performed under
the Loan Documents;
(j) The Mortgaged Property is free from
delinquent water charges, sewer rents, taxes and assessments;
(k) As of the date of this Mortgage, the
Mortgaged Property is free from unrepaired damage caused by fire, flood,
accident or other casualty;
(l) As of the date of this Mortgage, no part
of the Premises or the Improvements has been taken in condemnation, eminent
domain or like proceeding nor is any such proceeding pending or, to Mortgagor's
knowledge and belief, threatened or contemplated;
(m) Mortgagor possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits necessary for the
conduct of its business substantially as now conducted;
(n) Except as may otherwise be disclosed in the
Engineering Report (as hereinafter defined), the Improvements are
structurally sound, in good repair and free of defects in materials and
workmanship and have been constructed and installed in substantial compliance
with the plans and specifications relating thereto. All major building systems
located within the Improvements, including, without limitation, the heating and
air conditioning systems and the electrical and plumbing systems, are in good
working order and condition;
(o) Mortgagor has delivered to Mortgagee true,
correct and complete copies of all Contracts and all amendments thereto
or modifications thereof;
(p) Each Contract constitutes the legal, valid
and binding obligation of Mortgagor and, to the best of Mortgagor's
knowledge and belief, is enforceable against any other party thereto. No default
exists, or with the passing of time or the giving of notice or both would exist,
under any Contract which would, in the aggregate, have a material adverse effect
on Mortgagor or the Mortgaged Property;
(q) No Contract provides any party with the
right to obtain a lien or encumbrance upon the Mortgaged Property superior to
the lien of this Mortgage;
(r) Mortgagor and the Mortgaged Property are
free from any past due obligations for sales and payroll taxes;
(s) There are no security agreements or
financing statements affecting all or any portion of the Mortgaged Property
other than (i) as disclosed in writing by Mortgagor to Mortgagee prior to the
date hereof and (ii) the security agreements and financing statements created in
favor of Mortgagee;
(t) Intentionally Omitted;
(u) The Lease and each Other Lease constitutes
the legal, valid and binding obligation of Mortgagor and, to the best of
Mortgagor's knowledge and belief, is enforceable against the tenant (including,
without limitation, Tenant) thereof. No default exists, or with the passing of
time or the giving of notice or both would exist, under the Lease or any Other
Lease which would, in the aggregate, have a material adverse effect on Mortgagor
or the Mortgaged Property;
(v) Neither the Tenant under the Lease nor the
tenant under any Other Lease has, as of the date hereof, paid rent more than
thirty (30) days in advance, and the rents under the Lease and such Other Leases
have not been waived, released, or otherwise discharged or compromised;
(w) All work to be performed by Mortgagor under
the Lease and any and all Other Leases has been substantially performed,
all contributions to be made by Mortgagor to the tenants (including, without
limitation, Tenant) thereunder have been made and all other conditions precedent
to each such tenant's (including, without limitation, Tenant) obligations
thereunder have been satisfied;
(x) Tenant and each tenant under any Other Lease
has entered into occupancy of the demised premises;
(y) Mortgagor has delivered to Mortgagee true, a
correct and complete copy of the Lease;
(z) To the best of Mortgagor's knowledge and
belief, Tenant and each tenant under any Other Lease, if any, is free from
bankruptcy, reorganization or arrangement proceedings or a general assignment
for the benefit of creditors;
(aa) Neither the Lease nor any Other Lease
provides any party with the right to obtain a lien or encumbrance upon the
Mortgaged Property superior to the lien of this Mortgage; and
(ab) Mortgagor is not a "foreign person" within
the meaning of '1445(f)(3) of the Internal Revenue Code of 1986, as amended, and
the related Treasury Department regulations, including temporary regulations.
1.2 Defense of Title. If, while this Mortgage is in force, the
title to the Mortgaged Property or the interest of Mortgagee therein shall be
the subject, directly or indirectly, of any action at law or in equity, or be
attached directly or indirectly, or endangered, clouded or adversely affected in
any manner, Mortgagor, at Mortgagor's expense, shall take all necessary and
proper steps for the defense of said title or interest, including the employment
of counsel approved by Mortgagee, the prosecution or defense of litigation, and
the compromise or discharge of claims made against said title or interest.
Notwithstanding the foregoing, in the event that Mortgagee determines that
Mortgagor is not adequately performing its obligations under this Section,
Mortgagee may, without limiting or waiving any other rights or remedies of
Mortgagee hereunder, take such steps with respect thereto as Mortgagee shall
deem necessary or proper and any and all costs and expenses incurred by
Mortgagee in connection therewith, together with interest thereon at the Default
Interest Rate (as defined in the Note) from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the indebtedness evidenced by the Note.
1.3 Performance of Obligations. Mortgagor shall pay when due
the principal of and the interest on the Debt in accordance with the terms of
the Note. Mortgagor shall also pay all charges, fees and other sums required to
be paid by Mortgagor as provided in the Loan Documents, in accordance with the
terms of the Loan Documents, and shall observe, perform and discharge all
obligations, covenants and agreements to be observed, performed or discharged by
Mortgagor set forth in the Loan Documents in accordance with their terms.
Further, Mortgagor shall promptly and strictly perform and comply with all
covenants, conditions, obligations and prohibitions required of Mortgagor in
connection with any other document or instrument affecting title to the
Mortgaged Property, or any part thereof, regardless of whether such document or
instrument is superior or subordinate to this Mortgage.
1.4 Insurance. Mortgagor shall, at Mortgagor's expense,
maintain or cause to be maintained in force and effect on the Mortgaged Property
at all times while this Mortgage continues in effect the following
insurance:
(a) Insurance against loss or damage to the
Mortgaged Property by fire, windstorm, tornado and hail and against loss
and damage by such other, further and additional risks as may be now or
hereafter embraced by an "all-risk" or "special form" type of insurance policy.
The amount of such insurance shall be not less than one hundred percent (100%)
of the full replacement cost (insurable value) of the Improvements (as
established by an MAI appraisal), without reduction for depreciation. The
determination of the replacement cost amount shall be adjusted annually to
comply with the requirements of the insurer issuing such coverage or, at
Mortgagee's election, by reference to such indices, appraisals or information as
Mortgagee determines in its reasonable discretion in order to reflect increased
value due to inflation. Absent such annual adjustment, each policy shall contain
inflation guard coverage insuring that the policy limit will be increased over
time to reflect the effect of inflation. Full replacement cost, as used herein,
means, with respect to the Improvements, the cost of replacing the Improvements
without regard to deduction for depreciation, exclusive of the cost of
excavations, foundations and footings below the lowest basement floor. Mortgagor
shall also maintain insurance against loss or damage to furniture, furnishings,
fixtures, equipment and other items (whether personalty or fixtures) included in
the Mortgaged Property and owned by Mortgagor from time to time to the extent
applicable. Each policy shall contain a replacement cost endorsement and either
an agreed amount endorsement (to avoid the operation of any co-insurance
provisions) or a waiver of any co-insurance provisions, all subject to
Mortgagee's approval. The maximum deductible shall be $50,000.00.
(b) Commercial General Liability Insurance
against claims for personal injury, bodily injury, death and property damage
occurring on, in or about the Premises or the Improvements in amounts not less
than $1,000,000.00 per occurrence and $2,000,000.00 in the aggregate plus
umbrella coverage in an amount not less than $2,000,000. Mortgagee hereby
retains the right to periodically review the amount of said liability insurance
being maintained by Mortgagor and to require an increase in the amount of said
liability insurance should Mortgagee deem an increase to be reasonably prudent
under then existing circumstances.
(c) Boiler and machinery insurance is required
if steam boilers or other pressure-fired vessels are in operation at the
Premises. Minimum liability coverage per accident must equal the greater of the
replacement cost (insurable value) of the Improvements housing such boiler or
pressure-fired machinery or $2,000,000.00. If one or more large HVAC units is in
operation at the Premises, "Systems Breakdowns" coverage shall be required, as
determined by Mortgagee. Minimum liability coverage per accident must equal the
value of such unit(s).
(d) If the Improvements or any part thereof is
situated in an area designated by the Federal Emergency Management Agency
("FEMA") as a special flood hazard area (Zone A or Zone V), flood insurance in
an amount equal to the lesser of: (a) the minimum amount required, under the
terms of coverage, to compensate for any damage or loss on a replacement basis
(or the unpaid balance of the Debt if replacement cost coverage is not available
for the type of building insured), or (b) the maximum insurance available under
the appropriate National Flood Insurance Administration program. The maximum
deductible shall be $3,000.00 per building or a higher minimum amount as
required by FEMA or other applicable law.
(e) During the period of any construction,
renovation or alteration of the existing Improvements which exceeds the
lesser of 10% of the principal amount of the Note or $500,000, at Mortgagee's
request, a completed value, "All Risk" Builder's Risk form or "Course of
Construction" insurance policy in non-reporting form, in an amount approved by
Mortgagee, may be required. During the period of any construction of any
addition to the existing Improvements, a completed value, "All Risk" Builder's
Risk form or "Course of Construction" insurance policy in non-reporting form, in
an amount approved by Mortgagee, shall be required.
(f) When required by applicable law, ordinance
or other regulation, Worker's Compensation and Employer's Liability Insurance
covering all persons subject to the worker's compensation laws of the state in
which the Mortgaged Property is located.
(g) Business income (loss of rents) insurance
in amounts sufficient to compensate Mortgagor for all Rents or income during a
period of not less than twelve (12) months. The amount of coverage shall be
adjusted annually to reflect the Rents or income payable during the succeeding
twelve (12) month period.
(h) Such other insurance on the Mortgaged
Property or on any replacements or substitutions thereof or additions
thereto as may from time to time be required by Mortgagee against other
insurable hazards or casualties which at the time are commonly insured against
in the case of property similarly situated including, without limitation,
Sinkhole, Mine Subsidence, Earthquake and Environmental insurance, due regard
being given to the height and type of buildings, their construction, location,
use and occupancy.
All such insurance shall (i) be with insurers fully licensed
and authorized to do business in the state within which the Premises is located
and who have and maintain a rating of at least (A) A from Standard & Poors, or
equivalent or (B) A-V or higher from A.M. Best, (ii) contain the complete
address of the Premises (or a complete legal description), (iii) be for terms of
at least one year, and (iv) be subject to the approval of Mortgagee as to
insurance companies, amounts, content, forms of policies, method by which
premiums are paid and expiration dates, and (vi) include a standard,
non-contributory, mortgagee clause naming EXACTLY:
First Union National Bank,
its Successors and Assigns ATIMA
Attn.: Commercial Mortgage Servicing
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(a) as an additional insured under all liability insurance policies, (b) as the
first mortgagee on all property insurance policies and (c) as the loss payee on
all loss of rents or loss of business income insurance policies.
Mortgagor shall, as of the date hereof, deliver to Mortgagee evidence
that said insurance policies have been paid current as of the date hereof and
certified copies of such insurance policies and original certificates of
insurance signed by an authorized agent of the applicable insurance companies
evidencing such insurance satisfactory to Mortgagee. Mortgagor shall renew or
cause to be renewed all such insurance and deliver to Mortgagee certificates and
policies evidencing such renewals at least thirty (30) days before any such
insurance shall expire. Mortgagor further agrees that each such insurance
policy: (i) shall provide for at least thirty (30) days' prior written notice to
Mortgagee prior to any policy reduction or cancellation for any reason other
than non-payment of premium and at least ten (10) days' prior written notice to
Mortgagee prior to any cancellation due to non-payment of premium; (ii) shall
contain an endorsement or agreement by the insurer that any loss shall be
payable to Mortgagee in accordance with the terms of such policy notwithstanding
any act or negligence of Mortgagor which might otherwise result in forfeiture of
such insurance; (iii) shall waive all rights of subrogation against Mortgagee;
(iv) in the event that the Premises or the Improvements constitutes a legal
non-conforming use under applicable building, zoning or land use laws or
ordinances, shall include an ordinance or law coverage endorsement which will
contain Coverage A: "Loss Due to Operation of Law" (with a minimum liability
limit equal to Replacement Cost With Agreed Value Endorsement), Coverage B:
"Demolition Cost" and Coverage C: "Increased Cost of Construction" coverages;
and (v) may be in the form of a blanket policy provided that, in the event that
any such coverage is provided in the form of a blanket policy, Mortgagor hereby
acknowledges and agrees that failure to pay any portion of the premium therefor
which is not allocable to the Mortgaged Property or by any other action not
relating to the Mortgaged Property which would otherwise permit the issuer
thereof to cancel the coverage thereof, would require the Mortgaged Property to
be insured by a separate, single-property policy. The blanket policy must
properly identify and fully protect the Mortgaged Property as if a separate
policy were issued for 100% of Replacement Cost at the time of loss and
otherwise meet all of Mortgagee's applicable insurance requirements set forth in
this Section 1.4. The delivery to Mortgagee of the insurance policies or the
certificates of insurance as provided above shall constitute an assignment of
all proceeds payable under such insurance policies relating to the Mortgaged
Property by Mortgagor to Mortgagee as further security for the Debt. In the
event of foreclosure of this Mortgage, or other transfer of title to the
Mortgaged Property in extinguishment in whole or in part of the Debt, all right,
title and interest of Mortgagor in and to all proceeds payable under such
policies then in force concerning the Mortgaged Property shall thereupon vest in
the purchaser at such foreclosure, or in Mortgagee or other transferee in the
event of such other transfer of title. Approval of any insurance by Mortgagee
shall not be a representation of the solvency of any insurer or the sufficiency
of any amount of insurance. In the event Mortgagor fails to provide, maintain,
keep in force or deliver and furnish (or cause to be provided, maintained, kept
in force or delivered and furnished) to Mortgagee the policies of insurance
required by this Mortgage or evidence of their renewal as required herein,
Mortgagee may, but shall not be obligated to, procure such insurance and
Mortgagor shall pay all amounts advanced by Mortgagee therefor, together with
interest thereon at the Default Interest Rate from and after the date advanced
by Mortgagee until actually repaid by Mortgagor, promptly upon demand by
Mortgagee. Any amounts so advanced by Mortgagee, together with interest thereon,
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. Mortgagee shall not be responsible for nor
incur any liability for the insolvency of the insurer or other failure of the
insurer to perform, even though Mortgagee has caused the insurance to be placed
with the insurer after failure of Mortgagor to furnish such insurance. Mortgagor
shall not obtain insurance for the Mortgaged Property in addition to that
required by Mortgagee without the prior written consent of Mortgagee, which
consent will not be unreasonably withheld provided that (i) Mortgagee is a named
insured on such insurance, (ii) Mortgagee receives complete copies of all
policies evidencing such insurance, and (iii) such insurance complies with all
of the applicable requirements set forth herein.
1.5 Payment of Taxes and Insurance. Mortgagor shall pay or
cause to be paid, except to the extent provision is actually made therefor
pursuant to Section 1.6 of this Mortgage, all taxes, assessments and insurance
premiums which are or may become a lien on the Mortgaged Property or which are
assessed against or imposed upon the Mortgaged Property. As of the date hereof,
Mortgagor has paid to its insurer(s) an amount equal to one (1) monthly premium
payment for all insurance required pursuant to Section 1.4 hereof. Mortgagor
shall furnish Mortgagee with bills, invoices and/or statements for all taxes,
assessments and insurance premiums and receipts (or if receipts are not
immediately available, with copies of canceled checks evidencing payment with
receipts to follow promptly after they become available) showing payment of such
taxes, assessments and insurance premiums at least ten (10) days prior to the
applicable delinquency date (or due date with respect to insurance premiums)
therefor. Notwithstanding the foregoing, Mortgagor may, in good faith, by
appropriate proceedings and upon notice to Mortgagee, contest the validity,
applicability or amount of any asserted tax or assessment so long as (a) such
contest is diligently pursued, (b) Mortgagee determines, in its subjective
opinion, that such contest suspends the obligation to pay the tax and that
nonpayment of such tax or assessment will not result in the sale, loss,
forfeiture or diminution of the Mortgaged Property or any part thereof or any
interest of Mortgagee therein, and (c) prior to the earlier of the commencement
of such contest or the delinquency date of the asserted tax or assessment,
Mortgagor deposits in the Impound Account (as hereinafter defined) an amount
determined by Mortgagee to be adequate to cover the payment of such tax or
assessment and a reasonable additional sum to cover possible interest, costs and
penalties; provided, however, that Mortgagor shall promptly cause to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all
interest, costs and penalties thereon, promptly after such judgment becomes
final; and provided, further, that, in any event each such contest shall be
concluded and the taxes, assessments, interest, costs and penalties shall be
paid prior to the date any writ or order is issued under which the Mortgaged
Property may be sold, lost or forfeited.
1.6 Tax and Insurance Impound Account. If Mortgagor shall fail
to pay any tax, assessment or insurance premium pursuant to Section 1.4 or
Section 1.5 hereof, or to provide Mortgagee with any ▇▇▇▇, invoice, statement,
receipt or other documentation required by Section 1.4 or Section 1.5, within
five (5) days after notice from Mortgagee (the "Initial Impound Costs Date"),
then Mortgagor shall thereafter establish and maintain at all times while this
Mortgage continues in effect an impound account (the "Impound Account") with
Mortgagee for payment of real estate taxes and assessments and insurance
premiums on the Mortgaged Property and as additional security for the Debt. On
the Initial Impound Costs Date, Mortgagor shall deposit in the Impound Account
an amount determined by Mortgagee to be necessary to ensure that there will be
on deposit with Mortgagee an amount which, when added to the monthly payments
subsequently required to be deposited with Mortgagee hereunder on account of
real estate taxes, assessments and insurance premiums, will result in there
being on deposit with Mortgagee in the Impound Account an amount sufficient to
pay the next due installment of real estate taxes and assessments on the
Mortgaged Property at least one (1) month prior to the earlier of (a) the due
date thereof or (b) any such date by which Mortgagor or Mortgagee is required by
law to pay same and the next due annual insurance premiums with respect to the
Mortgaged Property at least one (1) month prior to the due date thereof.
Commencing on the first monthly payment date under the Note after the Initial
Impound Costs Date and continuing thereafter on each monthly payment date under
the Note, Mortgagor shall pay to Mortgagee, concurrently with and in addition to
the monthly payment due under the Note and until the Debt is fully paid and
performed, deposits in an amount equal to one-twelfth (1/12) of the amount of
the annual real estate taxes and assessments that will next become due and
payable on the Mortgaged Property, plus one-twelfth (1/12) of the amount of the
annual premiums that will next become due and payable on insurance policies
which Mortgagor is required to maintain hereunder, each as estimated and
determined by Mortgagee. So long as no Event of Default has occurred, and no
event has occurred or failed to occur which with the passage of time, the giving
of notice, or both would constitute an Event of Default (a "Default"), all sums
in the Impound Account shall be held by Mortgagee in the Impound Account to pay
said taxes, assessments and insurance premiums before the same become
delinquent. Mortgagor shall be responsible for ensuring the receipt by
Mortgagee, at least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound Account, and so
long as no Event of Default has occurred, Mortgagee shall pay the governmental
authority or other party entitled thereto directly to the extent funds are
available for such purpose in the Impound Account. In making any payment from
the Impound Account, Mortgagee shall be entitled to rely on any ▇▇▇▇, statement
or estimate procured from the appropriate public office or insurance company or
agent without any inquiry into the accuracy of such ▇▇▇▇, statement or estimate
and without any inquiry into the accuracy, validity, enforceability or
contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or
title or claim thereof. No interest on funds contained in the Impound Account,
if any, shall be paid by Mortgagee to Mortgagor.
1.7 Intentionally Omitted.
1.8 Replacement Reserve.
(a) As additional security for the Debt, Mortgagor
shall establish and maintain at all times while this Mortgage continues in
effect a repair reserve (the "Replacement Reserve") with Mortgagee for payment
of costs and expenses incurred by Mortgagor in connection with the performance
of work to the roofs, chimneys, gutters, downspouts, paving, curbs, ramps,
driveways, balconies, porches, patios, exterior walls, exterior doors and
doorways, windows, elevators and mechanical and HVAC equipment (collectively,
the "Repairs"). Commencing on the first monthly Payment Date under the Note and
continuing thereafter on each monthly Payment Date under the Note, Mortgagor
shall pay to Mortgagee, concurrently with and in addition to the monthly payment
due under the Note and until the Debt is fully paid and performed, a deposit to
the Replacement Reserve in an amount equal to $4,388.49 per month. So long as no
Event of Default has occurred, all sums in the Replacement Reserve shall be held
by Mortgagee in the Replacement Reserve to pay the costs and expenses of
Repairs. So long as no Default or Event of Default has occurred, Mortgagee
shall, to the extent funds are available for such purpose in the Replacement
Reserve, disburse to Mortgagor the amount paid or incurred by Mortgagor in
performing such Repairs within ten (10) days following: (a) the receipt by
Mortgagee of a written request from Mortgagor for disbursement from the
Replacement Reserve and a certification by Mortgagor in a form approved in
writing by Mortgagee that the applicable item of Repair has been completed; (b)
the delivery to Mortgagee of invoices, receipts or other evidence satisfactory
to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement
requests in excess of $10,000.00, the delivery to Mortgagee of affidavits, lien
waivers or other evidence reasonably satisfactory to Mortgagee showing that all
materialmen, laborers, subcontractors and any other parties who might or could
claim statutory or common law liens and are furnishing or have furnished
material or labor to the Mortgaged Property have been paid all amounts due for
labor and materials furnished to the Mortgaged Property; (d) for disbursement
requests in excess of $10,000.00, delivery to Mortgagee of a certification from
an inspecting architect or other third party acceptable to Mortgagee describing
the completed Repairs and verifying the completion of the Repairs and the value
of the completed Repairs; and (e) for disbursement requests in excess of
$10,000.00, delivery to Mortgagee of a new certificate of occupancy for the
portion of the Improvements covered by such Repairs, if said new certificate of
occupancy is required by law, or a certification by Mortgagor that no new
certificate of occupancy is required. Mortgagee shall not be required to make
advances from the Replacement Reserve more frequently than once in any thirty
(30) day period. In making any payment from the Replacement Reserve, Mortgagee
shall be entitled to rely on such request from Mortgagor without any inquiry
into the accuracy, validity or contestability of any such amount. Mortgagee may,
at Mortgagor's expense, make or cause to be made during the term of this
Mortgage an annual inspection of the Mortgaged Property to determine the need,
as determined by Mortgagee in its reasonable judgment, for further Repairs of
the Mortgaged Property. In the event that such inspection reveals that further
Repairs of the Mortgaged Property are required, Mortgagee shall provide
Mortgagor with a written description of the required Repairs and Mortgagor shall
complete such Repairs to the reasonable satisfaction of Mortgagee within ninety
(90) days after the receipt of such description from Mortgagee, or such later
date as may be approved by Mortgagee in its sole discretion. Interest on the
funds contained in the Replacement Reserve shall be credited to Mortgagor as
provided in Section 4.31 hereof.
(b) As additional security for the payment
and performance by Mortgagor of all duties, responsibilities and
obligations under the Note and the other Loan Documents, Mortgagor hereby
unconditionally and irrevocably assigns, conveys, pledges, mortgages, transfers,
delivers, deposits, sets over and confirms unto Mortgagee, and hereby grants to
Mortgagee a security interest in, (i) the Impound Account, the Replacement
Reserve, the Repair and Remediation Reserve (as hereinafter defined) and any
other reserve or escrow account established pursuant to the terms hereof or of
any other Loan Document (collectively, the "Reserves"), (ii) the accounts into
which the Reserves have been deposited, (iii) all insurance on said accounts,
(iv) all accounts, contract rights and general intangibles or other rights and
interests pertaining thereto, (v) all sums now or hereafter therein or
represented thereby, (vi) all replacements, substitutions or proceeds thereof,
(vii) all instruments and documents now or hereafter evidencing the Reserves or
such accounts, (viii) all powers, options, rights, privileges and immunities
pertaining to the Reserves (including the right to make withdrawals therefrom),
and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes and consents
to the account into which the Reserves have been deposited being held in
Mortgagee's name or the name of any entity servicing the Note for Mortgagee and
hereby acknowledges and agrees that Mortgagee, or at Mortgagee's election, such
servicing agent, shall have exclusive control over said account. Notice of the
assignment and security interest granted to Mortgagee herein may be delivered by
Mortgagee at any time to the financial institution wherein the Reserves have
been established, and Mortgagee, or such servicing entity, shall have possession
of all passbooks or other evidences of such accounts. Mortgagor hereby assumes
all risk of loss with respect to amounts on deposit in the Reserves. Mortgagor
hereby knowingly, voluntarily and intentionally stipulates, acknowledges and
agrees that the advancement of the funds from the Reserves as set forth herein
is at Mortgagor's direction and is not the exercise by Mortgagee of any right of
set-off or other remedy upon a Default or an Event of Default. Mortgagor hereby
waives all right to withdraw funds from the Reserves except as provided for in
this Mortgage. If an Event of Default shall occur hereunder or under any other
of the Loan Documents Mortgagee may, without notice or demand on Mortgagor, at
its option: (A) withdraw any or all of the funds (including, without limitation,
interest) then remaining in the Reserves and apply the same, after deducting all
costs and expenses of safekeeping, collection and delivery (including, but not
limited to, reasonable attorneys' fees, costs and expenses) to the Debt or any
other obligations of Mortgagor under the other Loan Documents in such manner as
Mortgagee shall deem appropriate in its sole discretion, and the excess, if any,
shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a
secured party under any applicable Uniform Commercial Code, or (C) exercise any
other remedies available at law or in equity. No such use or application of the
funds contained in the Reserves shall be deemed to cure any Default or Event of
Default.
(c) The Reserves shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow or
trust funds, but, at Mortgagee's option and in Mortgagee's discretion, may
either be held in a separate account or be commingled by Mortgagee with the
general funds of Mortgagee. The Reserves are solely for the protection of
Mortgagee and entail no responsibility on Mortgagee's part beyond the payment of
the respective items for which they are held following receipt of bills,
invoices or statements therefor in accordance with the terms hereof and beyond
the allowing of due credit for the sums actually received. Upon assignment of
this Mortgage by Mortgagee, any funds in the Reserves shall be turned over to
the assignee and any responsibility of Mortgagee, as assignor, with respect
thereto shall terminate. If the funds in the applicable Reserve shall exceed the
amount of payments actually applied by Mortgagee for the purposes and items for
which the applicable Reserve is held, such excess may be credited by Mortgagee
on subsequent payments to be made hereunder or, at the option of Mortgagee,
refunded to Mortgagor. If, however, the applicable Reserve shall not contain
sufficient funds to pay the sums required by the dates on which such sums are
required to be on deposit in such account, Mortgagor shall, within ten (10) days
after receipt of written notice thereof, deposit with Mortgagee the full amount
of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the
full amount of such deficiency as provided above, Mortgagee shall have the
option, but not the obligation, to make such deposit, and all amounts so
deposited by Mortgagee, together with interest thereon at the Default Interest
Rate from the date so deposited by Mortgagee until actually paid by Mortgagor,
shall be immediately paid by Mortgagor on demand and shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
Debt. If there is an Event of Default under this Mortgage, Mortgagee may, but
shall not be obligated to, apply at any time the balance then remaining in any
or all of the Reserves against the Debt in whatever order Mortgagee shall
subjectively determine. No such application of any or all of the Reserves shall
be deemed to cure any Event of Default. Upon full payment of the Debt in
accordance with its terms or at such earlier time as Mortgagee may elect, the
balance of any or all of the Reserves then in Mortgagee's possession shall be
paid over to Mortgagor and no other party shall have any right or claim thereto.
1.9 Casualty and Condemnation. Mortgagor shall give Mortgagee
prompt written notice of the occurrence of any casualty affecting, or the
institution of any proceedings for eminent domain or for the condemnation of,
the Mortgaged Property or any portion thereof. All insurance proceeds on the
Mortgaged Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
Mortgaged Property or for any damage or injury to it for any loss or diminution
in value of the Mortgaged Property, are hereby assigned to and shall be paid to
Mortgagee. Mortgagee may participate in any suits or proceedings relating to any
such proceeds, causes of action, claims, compensation, awards or recoveries, and
Mortgagee is hereby authorized, in its own name or in Mortgagor's name, to
adjust any loss covered by insurance or any condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in connection
therewith, and Mortgagor shall from time to time deliver to Mortgagee any
instruments required to permit such participation; provided, however, that, so
long as no Default or Event of Default shall have occurred, Mortgagee shall not
have the right to participate in the adjustment of any loss which is not in
excess of the lesser of (i) five percent (5%) of the then outstanding principal
balance of the Note and (ii) $100,000. Mortgagee shall apply any sums received
by it under this Section first to the payment of all of its costs and expenses
(including, but not limited to, reasonable legal fees and disbursements)
incurred in obtaining those sums, and then, as follows:
(a) In the event that less than seventy percent
(70%) of the Improvements located on the Premises have been taken or destroyed,
then if and so long as:
(i) no Default or Event of Default has
occurred hereunder or under any of the other Loan Documents, and
(ii) the Mortgaged Property can, in Mortgagee's
judgment, with diligent restoration or repair, be returned to a
condition at least equal to the condition thereof that existed prior to
the casualty or partial taking causing the loss or damage within the
earlier to occur of (i) six (6) months after the receipt of insurance
proceeds or condemnation awards by either Mortgagor or Mortgagee, and
(ii) sixty (60) days prior to the stated maturity date of the Note, and
(iii) all necessary governmental approvals can be
obtained to allow the rebuilding and reoccupancy of the Mortgaged
Property as described in Section (a)(2) above, and
(iv) there are sufficient sums available (through
insurance proceeds or condemnation awards and contributions by
Mortgagor, the full amount of which shall, at Mortgagee's option, have
been deposited with Mortgagee) for such restoration or repair
(including, without limitation, for any costs and expenses of Mortgagee
to be incurred in administering said restoration or repair) and for
payment of principal and interest to become due and payable under the
Note during such restoration or repair, and
(v) the economic feasibility of the Improvements
after such restoration or repair will be such that income from their
operation is reasonably anticipated to be sufficient to pay operating
expenses of the Mortgaged Property and debt service on the Debt in full
with the same coverage ratio considered by Mortgagee in its
determination to make the loan secured hereby, and
(vi) in the event that the insurance proceeds or
condemnation awards received as a result of such casualty or partial
taking exceed the lesser of (i) five percent (5%) of the then
outstanding principal balance of the Note and (ii) $150,000, Mortgagor
shall have delivered to Mortgagee, at Mortgagor's sole cost and
expense, an appraisal report in form and substance satisfactory to
Mortgagee appraising the value of the Mortgaged Property as proposed to
be restored or repaired to be not less than the appraised value of the
Mortgaged Property considered by Mortgagee in its determination to make
the loan secured hereby, and
(vii) Mortgagor so elects by written notice delivered
to Mortgagee within five (5) days after settlement of the aforesaid
insurance or condemnation claim,
then, Mortgagee shall, solely for the purposes of such restoration or repair,
advance so much of the remainder of such sums as may be required for such
restoration or repair, and any funds deposited by Mortgagor therefor, to
Mortgagor in the manner and upon such terms and conditions as would be required
by a prudent interim construction lender, including, but not limited to, the
prior approval by Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of permits, bonds, lien
waivers, invoices, receipts and affidavits from contractors and subcontractors,
in form and substance satisfactory to Mortgagee in its discretion, with any
remainder being applied by Mortgagee for payment of the Debt in whatever order
Mortgagee directs in its absolute discretion.
(b) In all other cases, namely, in the event that seventy
percent (70%) or more of the Improvements located on the Premises have been
taken or destroyed or Mortgagor does not elect to restore or repair the
Mortgaged Property pursuant to clause (a) above or otherwise fails to meet the
requirements of clause (a) above, then, in any of such events, Mortgagee shall
elect, in Mortgagee's absolute discretion and without regard to the adequacy of
Mortgagee's security, to do either of the following: (1) accelerate the maturity
date of the Note and declare any and all of the Debt to be immediately due and
payable and apply the remainder of such sums received pursuant to this Section
to the payment of the Debt in whatever order Mortgagee directs in its absolute
discretion, with any remainder being paid to Mortgagor, or (2) notwithstanding
that Mortgagor may have elected not to restore or repair the Mortgaged Property
pursuant to the provisions of Section 1.9(a)(vii) above, require Mortgagor to
restore or repair the Mortgaged Property in the manner and upon such terms and
conditions as would be required by a prudent interim construction lender,
including, but not limited to, the deposit by Mortgagor with Mortgagee, within
thirty (30) days after demand therefor, of any deficiency reasonably determined
by Mortgagee to be necessary in order to assure the availability of sufficient
funds to pay for such restoration or repair, including Mortgagee's costs and
expenses to be incurred in connection therewith, the prior approval by Mortgagee
of plans and specifications, contractors and form of construction contracts and
the furnishing to Mortgagee of permits, bonds, lien waivers, invoices, receipts
and affidavits from contractors and subcontractors, in form and substance
satisfactory to Mortgagee in its discretion, and apply the remainder of such
sums toward such restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the Debt in whatever order Mortgagee
directs in its absolute discretion.
Any reduction in the Debt resulting from Mortgagee's application of any sums
received by it hereunder shall take effect only when Mortgagee actually receives
such sums and elects to apply such sums to the Debt and, in any event, the
unpaid portion of the Debt shall remain in full force and effect and Mortgagor
shall not be excused in the payment thereof. Partial payments received by
Mortgagee, as described in the preceding sentence, shall be without any
prepayment penalty or premium and shall be applied first to the final payment
due under the Note and thereafter to installments due under the Note in the
inverse order of their due date. If Mortgagor elects or Mortgagee directs
Mortgagor to restore or repair the Mortgaged Property after the occurrence of a
casualty or partial taking of the Mortgaged Property as provided above,
Mortgagor shall promptly and diligently, at Mortgagor's sole cost and expense
and regardless of whether the insurance proceeds or condemnation award, as
appropriate, shall be sufficient for the purpose, restore, repair, replace and
rebuild the Mortgaged Property as nearly as possible to its value, condition and
character immediately prior to such casualty or partial taking in accordance
with the foregoing provisions and Mortgagor shall pay to Mortgagee all costs and
expenses of Mortgagee incurred in administering said rebuilding, restoration or
repair, provided that Mortgagee makes such proceeds or award available for such
purpose. Mortgagor agrees to execute and deliver from time to time such further
instruments as may be requested by Mortgagee to confirm the foregoing assignment
to Mortgagee of any award, damage, insurance proceeds, payment or other
compensation. Mortgagee is hereby irrevocably constituted and appointed the
attorney-in-fact of Mortgagor (which power of attorney shall be irrevocable so
long as any portion of the Debt is outstanding, shall be deemed coupled with an
interest, shall survive the voluntary or involuntary dissolution of Mortgagor
and shall not be affected by any disability or incapacity suffered by Mortgagor
subsequent to the date hereof), with full power of substitution, subject to the
terms of this Section, to settle for, collect and receive any such awards,
damages, insurance proceeds, payments or other compensation from the parties or
authorities making the same, to appear in and prosecute any proceedings therefor
and to give receipts and acquittances therefor.
1.10 Construction Liens. Mortgagor shall pay when due all
claims and demands of mechanics, materialmen, laborers and others for any work
performed or materials delivered for the Premises or the Improvements; provided,
however, that, Mortgagor shall have the right to contest in good faith any such
claim or demand, so long as it does so diligently, by appropriate proceedings
and without prejudice to Mortgagee and provided that neither the Mortgaged
Property nor any interest therein would be in any danger of sale, loss or
forfeiture as a result of such proceeding or contest. In the event Mortgagor
shall contest any such claim or demand, Mortgagor shall promptly notify
Mortgagee of such contest and thereafter shall, upon Mortgagee's request,
promptly provide a bond, cash deposit or other security satisfactory to
Mortgagee to protect Mortgagee's interest and security should the contest be
unsuccessful. If Mortgagor shall fail to immediately discharge or provide
security against any such claim or demand as aforesaid, Mortgagee may do so and
any and all expenses incurred by Mortgagee, together with interest thereon at
the Default Interest Rate from the date incurred by Mortgagee until actually
paid by Mortgagor, shall be immediately paid by Mortgagor on demand and shall be
secured by this Mortgage and by all of the other Loan Documents securing all or
any part of the Debt.
1.11 Rents and Profits. As additional and collateral security
for the payment of the Debt and cumulative of any and all rights and remedies
herein provided for, Mortgagor hereby absolutely and presently assigns to
Mortgagee all existing and future Rents and Profits. Mortgagor hereby grants to
Mortgagee the sole, exclusive and immediate right, without taking possession of
the Mortgaged Property, to demand, collect (by suit or otherwise), receive and
give valid and sufficient receipts for any and all of said Rents and Profits,
for which purpose Mortgagor does hereby irrevocably make, constitute and appoint
Mortgagee its attorney-in-fact with full power to appoint substitutes or a
trustee to accomplish such purpose (which power of attorney shall be irrevocable
so long as any portion of the Debt is outstanding, shall be deemed to be coupled
with an interest, shall survive the voluntary or involuntary dissolution of
Mortgagor and shall not be affected by any disability or incapacity suffered by
Mortgagor subsequent to the date hereof). Mortgagee shall be without liability
for any loss which may arise from a failure or inability to collect Rents,
proceeds or other payments. However, until the occurrence of an Event of Default
under this Mortgage or under any other of the Loan Documents, Mortgagor shall
have a license to receive (subject to the terms of that certain (1) Lock Box
Agreement between Mortgagor and Mortgagee and (2) Assignment (as hereinafter
defined), each dated of even date herewith), use and enjoy the Rents and Profits
when due and prepayments thereof for not more than one (1) month prior to due
date thereof. Upon the occurrence of an Event of Default, Mortgagor's license
shall automatically terminate without notice to Mortgagor and Mortgagee may
thereafter, without taking possession of the Mortgaged Property, collect the
Rents and Profits itself or by an agent or receiver. Upon the cure of such Event
of Default and provided that no other Event of Default then exists hereunder or
under any of the other Loan Documents, such license shall be automatically
reinstated. From and during the termination of such license, Mortgagor shall be
the agent of Mortgagee in collection of the Rents and Profits, and all of the
Rents and Profits so collected by Mortgagor shall be held in trust by Mortgagor
for the sole and exclusive benefit of Mortgagee, and Mortgagor shall, within one
(1) business day after receipt of any Rents and Profits, pay the same to
Mortgagee to be applied by Mortgagee as hereinafter set forth. Neither the
demand for or collection of Rents and Profits by Mortgagee shall constitute any
assumption by Mortgagee of any obligations under any agreement relating thereto.
Mortgagee is obligated to account only for such Rents and Profits as are
actually collected or received by Mortgagee. Mortgagor irrevocably agrees and
consents that the respective payors of the Rents and Profits shall, upon demand
and notice from Mortgagee of an Event of Default, pay said Rents and Profits to
Mortgagee without liability to determine the actual existence of any Event of
Default claimed by Mortgagee. Mortgagor hereby waives any right, claim or demand
which Mortgagor may now or hereafter have against any such payor by reason of
such payment of Rents and Profits to Mortgagee, and any such payment shall
discharge such payor's obligation to make such payment to Mortgagor. All Rents
collected or received by Mortgagee may be applied against all expenses of
collection, including, without limitation, reasonable attorneys' fees, against
costs of operation and management of the Mortgaged Property and against the
Debt, in whatever order or priority as to any of the items so mentioned as
Mortgagee directs in its sole subjective discretion and without regard to the
adequacy of its security. Neither the exercise by Mortgagee of any rights under
this Section nor the application of any Rents to the Debt shall cure or be
deemed a waiver of any Event of Default. The assignment of Rents and Profits
hereinabove granted shall continue in full force and effect during any period of
foreclosure or redemption with respect to the Mortgaged Property. Mortgagor has
executed an Assignment of Leases and Rents dated of even date herewith (the
"Assignment") in favor of Mortgagee covering all of the right, title and
interest of Mortgagor, as landlord, lessor or licensor, in and to the Lease and
any and all Other Leases. All rights and remedies granted to Mortgagee under the
Assignment shall be in addition to and cumulative of all rights and remedies
granted to Mortgagee hereunder.
1.12 Leases.
(a) Mortgagor, by this Mortgage and the
Assignment, has absolutely and unconditionally assigned to Mortgagee all of
Mortgagor's right, title and interest in the Lease, the Other Leases (if any)
and the Rents and Profits, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment.
(b) Mortgagor shall at all times promptly and
faithfully perform or cause to be performed all of the covenants,
conditions and agreements contained in the Lease on the part of the landlord
thereunder to be kept and performed. Mortgagor shall not do or suffer to be done
any act that might result in a default by the landlord under the Lease or allow
the Tenant to withhold payment or rent and, except as otherwise expressly
permitted by the terms of Section 1.13 hereof, shall not further assign the
Lease or the Rents and Profits. Mortgagor, at no cost or expense to Mortgagee,
shall enforce, short of termination, the performance and observance of each and
every condition and covenant of each of the parties under the Lease. Mortgagor
shall not, without the prior written consent of Mortgagee, modify the Lease,
terminate or accept the surrender of the Lease, or waive or release any other
party from the performance or observance of any obligation or condition under
the Lease. Mortgagor shall not permit the prepayment of any Rents and Profits
under the Lease for more than one month prior to the due date thereof.
(c) The Lease provides, among other things, that
the Tenant will recognize as its landlord and attorn to any person
succeeding to the interest of Mortgagor upon any foreclosure of this Mortgage or
deed in lieu of foreclosure. The Lease also provides that, upon request of said
successor in interest, the tenant thereunder shall execute and deliver an
instrument or instruments confirming its attornment as provided for in this
Section and Section 17 of the Lease; provided, however, that neither Mortgagee
nor any successor-in-interest shall be bound by any payment of rental for more
than one (1) month in advance, or any amendment or modification of the Lease or
rental agreement made without the express written consent of Mortgagee or said
successor-in-interest.
(d) Upon the occurrence of an Event of Default
under this Mortgage, whether before or after the whole principal sum
secured hereby is declared to be immediately due or whether before or after the
institution of legal proceedings to foreclose this Mortgage, forthwith, upon
demand of Mortgagee, Mortgagor shall surrender to Mortgagee, and Mortgagee shall
be entitled to take actual possession of, the Mortgaged Property or any part
thereof personally, or by its agent or attorneys. In such event, Mortgagee shall
have, subject to the terms of the Lease, and Mortgagor hereby gives and grants
to Mortgagee, the right, power and authority to make and enter into Other Leases
with respect to the Mortgaged Property or portions thereof for such rents and
for such periods of occupancy and upon conditions and provisions as Mortgagee
may deem desirable in its sole discretion, and Mortgagor expressly acknowledges
and agrees that the term of any such Other Lease may extend beyond the date of
any foreclosure sale of the Mortgaged Property, it being the intention of
Mortgagor that in such event Mortgagee shall be deemed to be and shall be the
attorney-in-fact of Mortgagor for the purpose of making and entering into Other
Leases of parts or portions of the Mortgaged Property for the rents and upon the
terms, conditions and provisions deemed desirable to Mortgagee in its sole
discretion and with like effect as if such Other Leases had been made by
Mortgagor as the owner in fee simple of the Mortgaged Property free and clear of
any conditions or limitations established by this Mortgage. The power and
authority hereby given and granted by Mortgagor to Mortgagee shall be deemed to
be coupled with an interest, shall not be revocable by Mortgagor so long as any
portion of the Debt is outstanding, shall survive the voluntary or involuntary
dissolution of Mortgagor and shall not be affected by any disability or
incapacity suffered by Mortgagor subsequent to the date hereof. In connection
with any action taken by Mortgagee pursuant to this Section, Mortgagee shall not
be liable for any loss sustained by Mortgagor resulting from any failure to let
the Mortgaged Property, or any part thereof, or from any other act or omission
of Mortgagee in managing the Mortgaged Property, nor shall Mortgagee be
obligated to perform or discharge any obligation, duty or liability under the
Lease or any Other Lease covering the Mortgaged Property or any part thereof or
under or by reason of this instrument or the exercise of rights or remedies
hereunder. Mortgagor shall, and does hereby, indemnify Mortgagee for, and hold
Mortgagee harmless from, any and all claims, actions, demands, liabilities, loss
or damage which may or might be incurred by Mortgagee under the Lease and/or any
such Other Lease or under this Mortgage or by the exercise of rights or remedies
hereunder and from any and all claims and demands whatsoever which may be
asserted against Mortgagee by reason of any alleged obligations or undertakings
on its part to perform or discharge any of the terms, covenants or agreements
contained in the Lease and/or any such Other Lease other than those finally
determined by a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of Mortgagee. Should Mortgagee incur any
such liability, the amount thereof, including, without limitation, costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately due and payable to Mortgagee by Mortgagor on
demand and shall be secured hereby and by all of the other Loan Documents
securing all or any part of the Debt. Nothing in this Section shall impose on
Mortgagee any duty, obligation or responsibility for the control, care,
management or repair of the Mortgaged Property, or for the carrying out of any
of the terms and conditions of the Lease and/or any such Other Lease, nor shall
it operate to make Mortgagee responsible or liable for any waste committed on
the Mortgaged Property by the Tenants or by any other parties or for any
dangerous or defective condition of the Mortgaged Property, or for any
negligence in the management, upkeep, repair or control of the Mortgaged
Property. Mortgagor hereby assents to, ratifies and confirms any and all actions
of Mortgagee with respect to the Mortgaged Property taken under this Section.
1.13 Alienation and Further Encumbrances.
(a) Mortgagor acknowledges that Mortgagee has
relied upon the principals of Mortgagor and their experience in owning and
operating the Mortgaged Property and properties similar to the Mortgaged
Property in connection with the closing of the loan evidenced by the Note.
Accordingly, except as specifically allowed hereinbelow in this Section and
notwithstanding anything to the contrary contained in Section 4.6 hereof, in the
event that the Mortgaged Property or any part thereof or interest therein shall
be sold, conveyed, disposed of, alienated, hypothecated, leased (except pursuant
to the Lease), assigned, pledged, mortgaged, further encumbered or otherwise
transferred or Mortgagor shall be divested of its title to the Mortgaged
Property or any interest therein, in any manner or way, whether voluntarily or
involuntarily, without the prior written consent of Mortgagee being first
obtained, which consent may be withheld in Mortgagee's sole discretion, then the
same shall constitute an Event of Default and Mortgagee shall have the right, at
its option, to declare any or all of the Debt, irrespective of the maturity date
specified in the Note, immediately due and payable and to otherwise exercise any
of its other rights and remedies contained in Article III hereof. For the
purposes of this Section: (i) in the event either Mortgagor or any of its
general partners or members is a corporation or trust, the sale, conveyance,
transfer or disposition of more than 10% of the issued and outstanding capital
stock of Mortgagor or any of its general partners or members or of the
beneficial interest of such trust (or the issuance of new shares of capital
stock in Mortgagor or any of its general partners or managing members so that
immediately after such issuance (in one or a series of transactions) the total
capital stock then issued and outstanding is more than 110% of the total
immediately prior to such issuance) shall be deemed to be a transfer of an
interest in the Mortgaged Property; and (ii) in the event Mortgagor or any
general partner or managing member of Mortgagor is a limited or general
partnership, a joint venture or a limited liability company, a change in the
ownership interests in any general partner, any joint venturer or any managing
member, either voluntarily, involuntarily or otherwise, or the sale, conveyance,
transfer, disposition, alienation, hypothecation or encumbering of all or any
portion of the interest of any such general partner, joint venturer or managing
member in Mortgagor or such general partner or managing member (whether in the
form of a beneficial or partnership interest or in the form of a power of
direction, control or management, or otherwise), shall be deemed to be a
transfer of an interest in the Mortgaged Property. Notwithstanding the
foregoing, however, (i) limited partnership interests in Mortgagor or in any
general partner or member of Mortgagor shall be freely transferable without the
consent of Mortgagee, (ii) any involuntary transfer caused by the death of
Mortgagor or any general partner, shareholder, joint venturer, member or
beneficial owner of a trust shall not be an Event of Default under this Mortgage
so long as Mortgagor is reconstituted, if required, following such death and so
long as those persons responsible for the management of the Mortgaged Property
and Mortgagor remain unchanged as a result of such death or any replacement
management is approved by Mortgagee, and (iii) gifts for estate planning
purposes of any individual's interests in Mortgagor or in any of Mortgagor's
general partners, managing members or joint venturers to the spouse or any
lineal descendant of such individual, or to a trust for the benefit of any one
or more of such individual, spouse or lineal descendant, shall not be an Event
of Default under this Mortgage so long as Mortgagor is reconstituted, if
required, following such gift and so long as those persons responsible for the
management of the Mortgaged Property and Mortgagor remain unchanged following
such gift or any replacement management is approved by Mortgagee.
(b) Notwithstanding the foregoing provisions
of this Section, Mortgagee shall consent to a sale, conveyance or transfer of
the Mortgaged Property in its entirety (hereinafter, "Sale") to any person or
entity provided that each of the following terms and conditions are
satisfied:
1. No Default and no Event of Default
is then continuing hereunder or under any of the other Loan
Documents;
2. Mortgagor gives Mortgagee written
notice of the terms of such prospective Sale not less than sixty (60)
days before the date on which such Sale is scheduled to close and,
concurrently therewith, gives Mortgagee all such information
concerning the proposed transferee of the Mortgaged Property
(hereinafter, "Buyer") as Mortgagee would require in evaluating an
initial extension of credit to a borrower and pays to Mortgagee a
non-refundable application fee in the amount of $5,000. Mortgagee
shall have the right to approve or disapprove the proposed Buyer. In
determining whether to give or withhold its approval of the proposed
Buyer, Mortgagee shall consider the Buyer's experience and track
record in owning and operating facilities similar to the Mortgaged
Property, the Buyer's financial strength, the Buyer's general business
standing and the Buyer's relationships and experience with
contractors, vendors, tenants, lenders and other business entities;
provided, however, that, notwithstanding Mortgagee's agreement to
consider the foregoing factors in determining whether to give or
withhold such approval, such approval shall be given or withheld based
on what Mortgagee determines to be commercially reasonable in
Mortgagee's sole discretion and, if given, may be given subject to
such conditions as Mortgagee may deem appropriate;
3. Mortgagor pays Mortgagee,
concurrently with the closing of such Sale, a non-refundable
assumption fee in an amount equal to all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys' fees,
incurred by Mortgagee in connection with the Sale, plus an amount
equal to one percent (1.0%) of the then outstanding principal balance
of the Note;
4. The Buyer assumes and agrees to
pay the Debt subject to the
provisions of Section 4.27 hereof and, prior to or concurrently with
the closing of such Sale, the Buyer executes, without any cost or
expense to Mortgagee, such documents and agreements as Mortgagee shall
reasonably require to evidence and effectuate said assumption and
delivers such legal opinions as Mortgagee may require;
5. A party associated with the Buyer
approved by Mortgagee in its sole
discretion assumes the obligations of the current Indemnitor under its
guaranty or indemnity agreement and such party associated with the
Buyer executes, without any cost or expense to Mortgagee, a new
guaranty or indemnity agreement in form and substance satisfactory to
Mortgagee and delivers such legal opinions as Mortgagee may require;
6. Mortgagor and the Buyer execute,
without any cost or expense to Mortgagee, new financing statements or
financing statement amendments and any additional documents reasonably
requested by Mortgagee;
7. Mortgagor delivers to Mortgagee,
without any cost or expense to
Mortgagee, such endorsements to Mortgagee's title insurance policy,
hazard insurance policy endorsements or certificates and other similar
materials as Mortgagee may deem necessary at the time of the Sale, all
in form and substance satisfactory to Mortgagee, including, without
limitation, an endorsement or endorsements to Mortgagee's title
insurance policy insuring the lien of this Mortgage, extending the
effective date of such policy to the date of execution and delivery
(or, if later, of recording) of the assumption agreement referenced
above in subparagraph (4) of this Section, with no additional
exceptions added to such policy, and insuring that fee simple title to
the Mortgaged Property is vested in the Buyer;
8. Mortgagor executes and delivers
to Mortgagee, without any cost or
expense to Mortgagee, a release of Mortgagee, its officers, directors,
employees and agents, from all claims and liability relating to the
transactions evidenced by the Loan Documents, through and including the
date of the closing of the Sale, which agreement shall be in form and
substance satisfactory to Mortgagee and shall be binding upon the
Buyer;
9. Subject to the provisions of
Section 4.27 hereof, such Sale is not
construed so as to relieve Mortgagor of any personal liability under
the Note or any of the other Loan Documents for any acts or events
occurring or obligations arising prior to or simultaneously with the
closing of such Sale, whether or not same is discovered prior or
subsequent to the closing of such Sale, and Mortgagor executes, without
any cost or expense to Mortgagee, such documents and agreements as
Mortgagee shall reasonably require to evidence and effectuate the
ratification of said personal liability. Mortgagor shall be released
from and relieved of any personal liability under the Note or any of
the other Loan Documents for any acts or events occurring or
obligations arising after the closing of such Sale which are not caused
by or arising out of any acts or events occurring or obligations
arising prior to or simultaneously with the closing of such Sale; and
10. Such Sale is not construed so as to
relieve any current Indemnitor of
its obligations under any guaranty or indemnity agreement for any acts
or events occurring or obligations arising prior to or simultaneously
with the closing of such Sale, and each such current Indemnitor
executes, without any cost or expense to Mortgagee, such documents and
agreements as Mortgagee shall reasonably require to evidence and
effectuate the ratification of each such guaranty and indemnity
agreement. Each such current Indemnitor shall be released from and
relieved of any of its obligations under any guaranty or indemnity
agreement executed in connection with the loan secured hereby for any
acts or events occurring or obligations arising after the closing of
such Sale which are not caused by or arising out of any acts or events
occurring or obligations arising prior to or simultaneously with the
closing of such Sale.
1.14 Payment of Utilities, Assessments, Charges, Etc.
Mortgagor shall pay when due all utility charges which are incurred by Mortgagor
or which may become a charge or lien against any portion of the Mortgaged
Property for gas, electricity, water and sewer services furnished to the
Premises and/or the Improvements and all other assessments or charges of a
similar nature, or assessments payable pursuant to any restrictive covenants,
whether public or private, affecting the Premises and/or the Improvements or any
portion thereof, whether or not such assessments or charges are or may become
liens thereon.
1.15 Access Privileges and Inspections. Mortgagee and the
agents, representatives and employees of Mortgagee shall, subject to the rights
of Tenant and any other tenants, have full and free access to the Premises and
the Improvements and any other location where books and records concerning the
Mortgaged Property are kept at all reasonable times and, except in the event of
an emergency, upon not less than 24 hours prior notice (which notice may be
telephonic) for the purposes of inspecting the Mortgaged Property and of
examining, copying and making extracts from the books and records of Mortgagor
relating to the Mortgaged Property. Mortgagor shall lend assistance to all such
agents, representatives and employees of Mortgagee.
1.16 Waste; Alteration of Improvements. Mortgagor shall not
commit, suffer or permit any waste on the Mortgaged Property nor take any
actions that might invalidate any insurance carried on the Mortgaged Property.
Mortgagor shall maintain the Mortgaged Property in good condition and repair. No
part of the Improvements may be removed, demolished or materially altered,
without the prior written consent of Mortgagee. Without the prior written
consent of Mortgagee, Mortgagor shall not commence construction of any
improvements on the Premises other than improvements required for the
maintenance or repair of the Mortgaged Property.
1.17 Zoning. Without the prior written consent of Mortgagee,
Mortgagor shall not seek, make, suffer, consent to or acquiesce in any change in
the zoning or conditions of use of the Premises or the Improvements. Mortgagor
shall comply with and make all payments required under the provisions of any
covenants, conditions or restrictions affecting the Premises or the
Improvements. Mortgagor shall comply with all existing and future requirements
of all governmental authorities having jurisdiction over the Mortgaged Property.
Mortgagor shall keep all licenses, permits, franchises and other approvals
necessary for the operation of the Mortgaged Property in full force and effect.
Mortgagor shall operate the Mortgaged Property in compliance with all applicable
zoning regulations and provisions. If, under applicable zoning provisions, the
current use of all or any part of the Premises or the Improvements is or becomes
a nonconforming use, Mortgagor shall not cause or permit such use to be
discontinued or abandoned without the prior written consent of Mortgagee.
Further, without Mortgagee's prior written consent, Mortgagor shall not file or
subject any part of the Premises or the Improvements to any declaration of
condominium or co-operative or convert any part of the Premises or the
Improvements to a condominium, co-operative or other form of multiple ownership
and governance.
1.18 Financial Statements and Books and Records. Mortgagor
shall keep accurate books and records of account of the Mortgaged Property and
its own financial affairs sufficient to permit the preparation of financial
statements therefrom in accordance with generally accepted accounting
principles. Mortgagee and its duly authorized representatives shall have the
right to examine, copy and audit Mortgagor's records and books of account at all
reasonable times. So long as this Mortgage continues in effect, Mortgagor shall
provide to Mortgagee, in addition to any other financial statements required
hereunder or under any of the other Loan Documents, the following financial
statements and information, all of which must be certified to Mortgagee as being
true and correct by Mortgagor or the person or entity to which they pertain, as
applicable:
(a) copies of all tax returns filed by Mortgagor, within thirty (30) days after
the date of filing;
(b) monthly operating statements for the Mortgaged Property, within fifteen (15)
days after the end of each of the first (1st) twelve (12) accounting periods
(each of which ends on the Saturday closest to the end of the calendar month);
(c) Tenant's 10-Q reports within ten (10) days after each such report is required
to be filed with the Securities and Exchange Commission;
(d) Tenant's 10-K reports within ten (10) days after each such report is required
to be filed with the Securities and Exchange Commission; and
(e) such other information with respect to the Mortgaged Property, Mortgagor, the
principals or general partners in Mortgagor, and each Indemnitor, which may be
reasonably requested from time to time by Mortgagee, within a reasonable time
after the applicable request.
If any of the aforementioned materials are not furnished to Mortgagee
within the applicable time periods or Mortgagee is dissatisfied with the
contents of any of the foregoing and has notified Mortgagor of its
dissatisfaction, in addition to any other rights and remedies of Mortgagee
contained herein, Mortgagee shall have the right, but not the obligation, to
obtain the same by means of an audit by an independent certified public
accountant selected by Mortgagee, in which event Mortgagor agrees to pay, or to
reimburse Mortgagee for, any expense of such audit and further agrees to provide
all necessary information to said accountant and to otherwise cooperate in the
making of such audit.
1.19 Further Documentation. Mortgagor shall, on the request of
Mortgagee and at the expense of Mortgagor: (a) promptly correct any defect,
error or omission which may be discovered in the contents of this Mortgage or in
the contents of any of the other Loan Documents; (b) promptly execute,
acknowledge, deliver and record or file such further instruments (including,
without limitation, further mortgages, deeds of trust, security deeds, security
agreements, financing statements, continuation statements and assignments of
rents or leases) and promptly do such further acts as may be necessary,
desirable or proper to carry out more effectively the purposes of this Mortgage
and the other Loan Documents and to subject to the liens and security interests
hereof and thereof any property intended by the terms hereof and thereof to be
covered hereby and thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
Mortgaged Property; (c) promptly execute, acknowledge, deliver, procure and
record or file any document or instrument (including specifically, without
limitation, any financing statement) deemed advisable by Mortgagee to protect,
continue or perfect the liens or the security interests hereunder against the
rights or interests of third persons; and (d) promptly furnish to Mortgagee,
upon Mortgagee's request, a duly acknowledged written statement and estoppel
certificate addressed to such party or parties as directed by Mortgagee and in
form and substance supplied by Mortgagee, setting forth all amounts due under
the Note, stating whether any Default or Event of Default has occurred
hereunder, stating whether any offsets or defenses exist against the Debt and
containing such other matters as Mortgagee may reasonably require.
1.20 Payment of Costs; Reimbursement to Mortgagee. Mortgagor
shall pay all costs and expenses of every character reasonably incurred in
connection with the closing of the loan evidenced by the Note and secured hereby
or otherwise attributable or chargeable to Mortgagor as the owner of the
Mortgaged Property, including, without limitation, appraisal fees, recording
fees, documentary, stamp, mortgage or intangible taxes, brokerage fees and
commissions, title policy premiums and title search fees, uniform commercial
code/tax lien/litigation search fees, escrow fees and reasonable attorneys'
fees. If Mortgagor defaults in any such payment, which default is not cured
within any applicable grace or cure period, Mortgagee may pay the same and
Mortgagor shall reimburse Mortgagee on demand for all such costs and expenses
incurred or paid by Mortgagee, together with such interest thereon at the
Default Interest Rate from and after the date of Mortgagee's making such payment
until reimbursement thereof by Mortgagor. Any such sums disbursed by Mortgagee,
together with such interest thereon, shall be additional indebtedness of
Mortgagor secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. Further, Mortgagor shall promptly notify
Mortgagee in writing of any litigation or threatened litigation affecting the
Mortgaged Property, or any other demand or claim which, if enforced, could
impair or threaten to impair Mortgagee's security hereunder. Without limiting or
waiving any other rights and remedies of Mortgagee hereunder, if Mortgagor fails
to perform any of its covenants or agreements contained in this Mortgage or in
any of the other Loan Documents and such failure is not cured within any
applicable grace or cure period, or if any action or proceeding of any kind
(including, but not limited to, any bankruptcy, insolvency, arrangement,
reorganization or other debtor relief proceeding) is commenced which might
affect Mortgagee's interest in the Mortgaged Property or Mortgagee's right to
enforce its security, then Mortgagee may, at it option, with or without notice
to Mortgagor, make any appearances, disburse any sums and take any actions as
may be necessary or desirable to protect or enforce the security of this
Mortgage or to remedy the failure of Mortgagor to perform its covenants and
agreements (without, however, waiving any default of Mortgagor). Mortgagor
agrees to pay on demand all expenses of Mortgagee incurred with respect to the
foregoing (including, but not limited to, reasonable fees and disbursements of
counsel), together with interest thereon at the Default Interest Rate from and
after the date on which Mortgagee incurs such expenses until reimbursement
thereof by Mortgagor. Any such expenses so incurred by Mortgagee, together with
interest thereon as provided above, shall be additional indebtedness of
Mortgagor secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. The necessity for any such actions and of
the amounts to be paid shall be determined by Mortgagee in its discretion.
Mortgagee is hereby empowered to enter and to authorize others to enter upon the
Mortgaged Property or any part thereof for the purpose of performing or
observing any such defaulted term, covenant or condition without thereby
becoming liable to Mortgagor or any person in possession holding under
Mortgagor. Mortgagor hereby acknowledges and agrees that the remedies set forth
in this Section 1.20 shall be exercisable by Mortgagee, and any and all payments
made or costs or expenses incurred by Mortgagee in connection therewith shall be
secured hereby and shall be, without demand, immediately repaid by Mortgagor
with interest thereon at the Default Interest Rate, notwithstanding the fact
that such remedies were exercised and such payments made and costs incurred by
Mortgagee after the filing by Mortgagor of a voluntary case or the filing
against Mortgagor of an involuntary case pursuant to or within the meaning of
the Bankruptcy Reform Act of 1978, as amended, Title 11 U.S.C., or after any
similar action pursuant to any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable to Mortgagor, Mortgagee,
any Indemnitor, the Debt or any of the Loan Documents. Mortgagor hereby
indemnifies and holds Mortgagee harmless from and against all loss, cost and
expenses with respect to any Event of Default hereof, any liens (i.e.,
judgments, mechanics' and materialmen's liens, or otherwise), charges and
encumbrances filed against the Mortgaged Property, and from any claims and
demands for damages or injury, including claims for property damage, personal
injury or wrongful death, arising out of or in connection with any accident or
fire or other casualty on the Premises or the Improvements or any nuisance made
or suffered thereon, except those that are due to Mortgagee's gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction, including, without limitation, in any case, reasonable attorneys'
fees, costs and expenses as aforesaid, whether at pretrial, trial or appellate
level, and such indemnity shall survive payment in full of the Debt. This
Section shall not be construed to require Mortgagee to incur any expenses, make
any appearances or take any actions.
1.21 Security Interest. This Mortgage is also intended to
encumber and create a security interest in, and Mortgagor hereby grants to
Mortgagee a security interest in, all sums on deposit with Mortgagee pursuant to
the provisions of Section 1.6, Section 1.7, Section 1.8 and Section 1.34 hereof
or any other Section hereof or of any other Loan Document and all fixtures,
chattels, accounts, equipment, inventory, contract rights, general intangibles
and other personal property of Mortgagor included within the Mortgaged Property,
all renewals, replacements of any of the aforementioned items, or articles in
substitution therefor or in addition thereto or the proceeds thereof (said
property is hereinafter referred to collectively as the "Collateral"), whether
or not the same shall be attached to the Premises or the Improvements in any
manner. It is hereby agreed that to the extent permitted by law, all of the
foregoing property is to be deemed and held to be a part of and affixed to the
Premises and the Improvements. The foregoing security interest shall also cover
Mortgagor's leasehold interest in any of the foregoing property which is leased
by Mortgagor. Notwithstanding the foregoing, all of the foregoing property shall
be owned by Mortgagor and no leasing or installment sales or other financing or
title retention agreement in connection therewith shall be permitted without the
prior written approval of Mortgagee. Mortgagor shall, from time to time upon the
request of Mortgagee, supply Mortgagee with a current inventory of all of the
property in which Mortgagee is granted a security interest hereunder, in such
detail as Mortgagee may reasonably require. Mortgagor shall promptly replace all
of the Collateral subject to the lien or security interest of this Mortgage when
worn or obsolete with Collateral comparable to the worn out or obsolete
Collateral when new and will not, without the prior written consent of
Mortgagee, remove from the Premises or the Improvements any of the Collateral
subject to the lien or security interest of this Mortgage except such as is
replaced by an article of equal suitability and value as above provided, owned
by Mortgagor free and clear of any lien or security interest except that created
by this Mortgage and the other Loan Documents. All of the Collateral shall be
kept at the location of the Premises except as otherwise required by the terms
of the Loan Documents. Mortgagor shall not use any of the Collateral in
violation of any applicable statute, ordinance or insurance policy.
Notwithstanding anything to the contrary herein provided, neither the Mortgaged
Property nor the Collateral shall include any inventory, equipment or trade
fixtures of Tenant (or any other tenant of the Mortgaged Property) or the
proceeds thereof.
1.22 Security Agreement. This Mortgage constitutes a security
agreement between Mortgagor and Mortgagee with respect to the Collateral in
which Mortgagee is granted a security interest hereunder, and, cumulative of all
other rights and remedies of Mortgagee hereunder, Mortgagee shall have all of
the rights and remedies of a secured party under any applicable Uniform
Commercial Code. Mortgagor hereby agrees to execute and deliver on demand and
hereby irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor to execute and deliver and, if appropriate, to file with the
appropriate filing officer or office, such security agreements, financing
statements, continuation statements or other instruments as Mortgagee may
request or require in order to impose, perfect or continue the perfection of the
lien or security interest created hereby. To the extent specifically provided
herein, Mortgagee shall have the right of possession of all cash, securities,
instruments, negotiable instruments, documents, certificates and any other
evidences of cash or other property or evidences of rights to cash rather than
property, which are now or hereafter a part of the Mortgaged Property, and
Mortgagor shall promptly deliver the same to Mortgagee, endorsed to Mortgagee,
without further notice from Mortgagee. Mortgagor agrees to furnish Mortgagee
with notice of any change in the name, identity, organizational structure,
residence, or principal place of business or mailing address of Mortgagor within
ten (10) days of the effective date of any such change. Upon the occurrence of
any Event of Default, Mortgagee shall have the rights and remedies as prescribed
in this Mortgage, or as prescribed by general law, or as prescribed by any
applicable Uniform Commercial Code, all at Mortgagee's election. Any disposition
of the Collateral may be conducted by an employee or agent of Mortgagee. Any
person, including both Mortgagor and Mortgagee, shall be eligible to purchase
any part or all of the Collateral at any such disposition. Expenses of retaking,
holding, preparing for sale, selling or the like (including, without limitation,
Mortgagee's reasonable attorneys' fees and legal expenses), together with
interest thereon at the Default Interest Rate from the date incurred by
Mortgagee until actually paid by Mortgagor, shall be paid by Mortgagor on demand
and shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. Mortgagee shall have the right to enter
upon the Premises and the Improvements or any real property where any of the
property which is the subject of the security interest granted herein is located
to take possession of, assemble and collect the same or to render it unusable,
or Mortgagor, upon demand of Mortgagee, shall assemble such property and make it
available to Mortgagee at the Premises, or at a place which is mutually agreed
upon or, if no such place is agreed upon, at a place reasonably designated by
Mortgagee to be reasonably convenient to Mortgagee and Mortgagor. If notice is
required by law, Mortgagee shall give Mortgagor at least ten (10) days' prior
written notice of the time and place of any public sale of such property, or
adjournments thereof, or of the time of or after which any private sale or any
other intended disposition thereof is to be made, and if such notice is sent to
Mortgagor, as the same is provided for the mailing of notices herein, it is
hereby deemed that such notice shall be and is reasonable notice to Mortgagor.
No such notice is necessary for any such property which is perishable, threatens
to decline speedily in value or is of a type customarily sold on a recognized
market. Any sale made pursuant to the provisions of this Section shall be deemed
to have been a public sale conducted in a commercially reasonable manner if held
contemporaneously with a foreclosure sale as provided in Section 3.1(e) hereof
upon giving the same notice with respect to the sale of the Mortgaged Property
hereunder as is required under said Section 3.1(e). Furthermore, to the extent
permitted by law, in conjunction with, in addition to or in substitution for the
rights and remedies available to Mortgagee pursuant to any applicable Uniform
Commercial Code:
(a) In the event of a foreclosure sale, the Mortgaged Property may, at the option
of Mortgagee, be sold as a whole; and
(b) It shall not be necessary that Mortgagee take possession of the aforementioned
Collateral, or any part thereof, prior to the time that any sale pursuant to the
provisions of this Section is conducted and it shall not be necessary that said
Collateral, or any part thereof, be present at the location of such sale; and
(c) Mortgagee may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale held by Mortgagee, including
the sending of notices and the conduct of the sale, but in the name and on
behalf of Mortgagee. The name and address of Mortgagor (as Debtor under any
applicable Uniform Commercial Code) are:
ONE PRICE REALTY, INC.
▇▇▇. ▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The name and address of Mortgagee (as Secured Party under any applicable Uniform
Commercial Code) are:
FIRST UNION NATIONAL BANK
One First Union Center DC6
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
1.23 Easements and Rights-of-Way.
Mortgagor shall not grant any easement or
right-of-way with respect to all or any portion of
the Premises or the Improvements without the prior
written consent of Mortgagee. The purchaser at any
foreclosure sale hereunder may, at its discretion,
disaffirm any easement or right-of-way granted in
violation of any of the provisions of this Mortgage
and may take immediate possession of the Mortgaged
Property free from, and despite the terms of, such
grant of easement or right-of-way. If Mortgagee
consents to the grant of an easement or right-of-way,
Mortgagee agrees to grant such consent without charge
to Mortgagor other than expenses, including, without
limitation, reasonable attorneys' fees, incurred by
Mortgagee in the review of Mortgagor's request and in
the preparation of documents effecting the
subordination.
1.24 Compliance with Laws. Mortgagor
shall at all times comply with all statutes,
ordinances, regulations and other governmental or
quasi-governmental requirements and private covenants
now or hereafter relating to the ownership,
construction, use or operation of the Mortgaged
Property, including, but not limited to, those
concerning employment and compensation of persons
engaged in operation and maintenance of the Mortgaged
Property and any environmental or ecological
requirements, even if such compliance shall require
structural changes to the Mortgaged Property;
provided, however, that, Mortgagor may, upon
providing Mortgagee with security satisfactory to
Mortgagee, proceed diligently and in good faith to
contest the validity or applicability of any such
statute, ordinance, regulation or requirement so long
as during such contest the Mortgaged Property shall
not be subject to any lien, charge, fine or other
liability and shall not be in danger of being
forfeited, lost or closed. Mortgagor shall not use or
occupy, or allow the use or occupancy of, the
Mortgaged Property in any manner which violates the
Lease or any Other Lease of or any other agreement
applicable to the Mortgaged Property or any
applicable law, rule, regulation or order or which
constitutes a public or private nuisance or which
makes void, voidable or cancelable, or increases the
premium of, any insurance then in force with respect
thereto.
1.25 Additional Taxes. In the event
of the enactment after the date hereof of any law of
the state in which the Mortgaged Property is located
or of any other governmental entity deducting from
the value of the Mortgaged Property for the purpose
of taxing any lien or security interest thereon, or
imposing upon Mortgagee the payment of the whole or
any part of the taxes or assessments or charges or
liens herein required to be paid by Mortgagor, or
changing in any way the laws relating to the taxation
of deeds of trust, mortgages or security agreements
or debts secured by deeds of trust, mortgages or
security agreements or the interest of the
beneficiary, mortgagee or secured party in the
property covered thereby, or the manner of collection
of such taxes, so as to adversely affect this
Mortgage or the Debt or Mortgagee, then, and in any
such event, Mortgagor, upon demand by Mortgagee,
shall pay such taxes, assessments, charges or liens,
or reimburse Mortgagee therefor; provided, however,
that if in the opinion of counsel for Mortgagee (a)
it might be unlawful to require Mortgagor to make
such payment, or (b) the making of such payment might
result in the imposition of interest beyond the
maximum amount permitted by law, then and in either
such event, Mortgagee may elect, by notice in writing
given to Mortgagor, to declare all of the Debt to be
and become due and payable in full thirty (30) days
from the giving of such notice, and, in connection
with the payment of such Debt, no prepayment premium
or fee shall be due unless, at the time of such
payment, an Event of Default or a Default shall have
occurred, which Default or Event of Default is
unrelated to the provisions of this Section 1.25, in
which event any applicable prepayment premium or fee
in accordance with the terms of the Note shall be due
and payable.
1.26 Secured Indebtedness. It is
understood and agreed that this Mortgage shall secure
payment of not only the indebtedness evidenced by the
Note but also any and all substitutions,
replacements, renewals and extensions of the Note,
any and all indebtedness and obligations arising
pursuant to the terms hereof and any and all
indebtedness and obligations arising pursuant to the
terms of any of the other Loan Documents, all of
which indebtedness is equally secured with and has
the same priority as any amounts advanced as of the
date hereof. It is agreed that any future advances
made by Mortgagee to or for the benefit of Mortgagor
from time to time under this Mortgage or the other
Loan Documents and whether or not such advances are
obligatory or are made at the option of Mortgagee, or
otherwise, made for any purpose, within twenty (20)
years from the date hereof, and all interest accruing
thereon, shall be equally secured by this Mortgage
and shall have the same priority as all amounts, if
any, advanced as of the date hereof and shall be
subject to all of the terms and provisions of this
Mortgage.
1.27 Mortgagor's Waivers. To the
full extent permitted by law, Mortgagor agrees that
Mortgagor shall not at any time insist upon, plead,
claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement,
valuation, stay, moratorium or extension, or any law
now or hereafter in force providing for the
reinstatement of the Debt prior to any sale of the
Mortgaged Property to be made pursuant to any
provisions contained herein or prior to the entering
of any decree, judgment or order of any court of
competent jurisdiction, or any right under any
statute to redeem all or any part of the Mortgaged
Property so sold. Mortgagor, for Mortgagor and
Mortgagor's successors and assigns, and for any and
all persons ever claiming any interest in the
Mortgaged Property, to the full extent permitted by
law, hereby knowingly, intentionally and voluntarily,
with and upon the advice of competent counsel: (a)
waives, releases, relinquishes and forever forgoes
all rights of valuation, appraisement, stay of
execution, reinstatement and notice of election or
intention to mature or declare due the Debt (except
such notices as are specifically provided for
herein); (b) waives, releases, relinquishes and
forever forgoes all right to a marshaling of the
assets of Mortgagor, including the Mortgaged
Property, to a sale in the inverse order of
alienation, or to direct the order in which any of
the Mortgaged Property shall be sold in the event of
foreclosure of the liens and security interests
hereby created and agrees that any court having
jurisdiction to foreclose such liens and security
interests may order the Mortgaged Property sold as an
entirety; and (c) waives, releases, relinquishes and
forever forgoes all rights and periods of redemption
provided under applicable law. To the full extent
permitted by law, Mortgagor shall not have or assert
any right under any statute or rule of law pertaining
to the exemption of homestead or other exemption
under any federal, state or local law now or
hereafter in effect, the administration of estates of
decedents or other matters whatever to defeat, reduce
or affect the right of Mortgagee under the terms of
this Mortgage to a sale of the Mortgaged Property,
for the collection of the Debt without any prior or
different resort for collection, or the right of
Mortgagee under the terms of this Mortgage to the
payment of the Debt out of the proceeds of sale of
the Mortgaged Property in preference to every other
claimant whatever. Furthermore, Mortgagor hereby
knowingly, intentionally and voluntarily, with and
upon the advice of competent counsel, waives,
releases, relinquishes and forever forgoes all
present and future statutes of limitations as a
defense to any action to enforce the provisions of
this Mortgage or to collect any of the Debt to the
fullest extent permitted by law. Mortgagor covenants
and agrees that upon the commencement of a voluntary
or involuntary bankruptcy proceeding by or against
Mortgagor, Mortgagor shall not seek a supplemental
stay or otherwise shall not seek pursuant to 11
U.S.C. '105 or any other provision of the Bankruptcy
Reform Act of 1978, as amended, or any other debtor
relief law (whether statutory, common law, case law,
or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become
applicable, to stay, interdict, condition, reduce or
inhibit the ability of Mortgagee to enforce any
rights of Mortgagee against any guarantor or
indemnitor of the secured obligations or any other
party liable with respect thereto by virtue of any
indemnity, guaranty or otherwise.
1.28 SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) MORTGAGOR, TO THE
FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVICE OF COMPETENT COUNSEL, (i) SUBMITS TO PERSONAL
JURISDICTION IN THE STATE IN WHICH THE PREMISES IS
LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY
PERSON ARISING FROM OR RELATING TO THE NOTE, THIS
MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii)
AGREES THAT ANY SUCH ACTION, SUIT OR PROCEEDING MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE COUNTY IN WHICH THE
PREMISES IS LOCATED, (iii) SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND (iv) TO THE FULLEST
EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER
FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF
MORTGAGEE TO BRING ANY ACTION, SUIT OR PROCEEDING IN
ANY OTHER FORUM).
(b) MORTGAGOR, TO THE
FULL EXTENT PERMITTED BY LAW, HEREBY KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE
ADVICE OF COMPETENT COUNSEL, WAIVES, RELINQUISHES AND
FOREVER FORGOES THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR
IN ANY WAY RELATING TO THE DEBT OR ANY CONDUCT, ACT
OR OMISSION OF MORTGAGEE OR MORTGAGOR, OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS,
MEMBERS, EMPLOYEES, AGENTS OR ATTORNEYS, OR ANY OTHER
PERSONS AFFILIATED WITH MORTGAGEE OR MORTGAGOR, IN
EACH OR THE FOREGOING CASES, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE.
1.29 Attorney-in-Fact Provisions.
With respect to any provision of this Mortgage or any
other Loan Document whereby Mortgagor grants to
Mortgagee a power-of-attorney, provided no Default or
Event of Default has occurred under this Mortgage,
Mortgagee shall first give Mortgagor written notice
at least three (3) days prior to acting under such
power, which notice shall demand that Mortgagor first
take the proposed action within such period and
advising Mortgagor that if it fails to do so,
Mortgagee will so act under the power; provided,
however, that, in the event that a Default or an
Event of Default has occurred, or if necessary to
prevent imminent death, serious injury, damage, loss,
forfeiture or diminution in value to the Mortgaged
Property or any surrounding property or to prevent
any adverse affect on Mortgagee's interest in the
Mortgaged Property, Mortgagee may act immediately and
without first giving such notice. In such event,
Mortgagee will give Mortgagor notice of such action
as soon thereafter as reasonably
practical.
1.30 Management of Property. All
Rents and Profits generated by or derived from the
Mortgaged Property shall first be utilized solely for
current expenses directly attributable to the
ownership and operation of the Mortgaged Property,
including, without limitation, current expenses
relating to Mortgagor's liabilities and obligations
with respect to this Mortgage and the other Loan
Documents, and none of the Rents and Profits
generated by or derived from the Mortgaged Property
shall be diverted by Mortgagor and utilized for any
other purposes unless all such current expenses
attributable to the ownership and operation of the
Mortgaged Property have been fully paid and
satisfied.
1.31 Hazardous Waste and Other
Substances.
(a) Mortgagor hereby
represents and warrants to
Mortgagee that, as of the date hereof: (i) to the
best of Mortgagor's knowledge, information and
belief, none of Mortgagor nor the Mortgaged Property
nor any Tenant at the Premises nor the operations
conducted thereon is in direct or indirect violation
of or otherwise exposed to any liability under any
local, state or federal law, rule or regulation or
common law duty pertaining to human health, natural
resources or the environment, including, without
limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C.
'9601 et seq.), the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. '6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. '1251
et seq.), the Clean Air Act (42 U.S.C. '7401 et
seq.), the Emergency Planning and
Community-Right-to-Know Act (42 U.S.C. '11001 et
seq.), the Endangered Species Act (16 U.S.C. '1531 et
seq.), the Toxic Substances Control Act (15 U.S.C.
'2601 et seq.), the Occupational Safety and Health
Act (29 U.S.C. '651 et seq.) and the Hazardous
Materials Transportation Act (49 U.S.C. '1801 et
seq.), regulations promulgated pursuant to said laws,
all as amended from time to time or otherwise exposed
to any liability under any Environmental Law relating
to or affecting the Mortgaged Property, whether or
not used by or within the control of Mortgagor; (ii)
no hazardous, toxic or harmful substances, wastes,
materials, pollutants or contaminants (including,
without limitation, asbestos or asbestos-containing
materials, lead based paint, polychlorinated
biphenyls, petroleum or petroleum products or
byproducts, flammable explosives, radioactive
materials, infectious substances or raw materials
which include hazardous constituents) or any other
substances or materials which are included under or
regulated by Environmental Laws (collectively,
"Hazardous Substances") are located on, in or under
or have been handled, generated, stored, processed or
disposed of on or released or discharged from the
Mortgaged Property (including underground
contamination), except for those substances used by
Mortgagor or any Tenant in the ordinary course of
their respective businesses and in compliance with
all Environmental Statutes and where such could not
reasonably be expected to give rise to liability
under Environmental Laws; (iii) the Mortgaged
Property is not subject to any private or
governmental lien or judicial or administrative
notice or action arising under Environmental Laws;
(iv) there is no pending, nor, to Mortgagor's
knowledge, information or belief, threatened
litigation arising under Environmental Laws affecting
Mortgagor or the Mortgaged Property; there are no and
have been no existing or closed underground storage
tanks or other underground storage receptacles for
Hazardous Substances or landfills or dumps on the
Mortgaged Property; (v) Mortgagor has received no
notice of, and to the best of Mortgagor's knowledge
and belief, there exists no investigation, action,
proceeding or claim by any agency, authority or unit
of government or by any third party which could
result in any liability, penalty, sanction or
judgment under any Environmental Laws with respect to
any condition, use or operation of the Mortgaged
Property, nor does Mortgagor know of any basis for
such an investigation, action, proceeding or claim;
vi) Mortgagor has received no notice of and, to the
best of Mortgagor's knowledge and belief, there has
been no claim by any party that any use, operation or
condition of the Mortgaged Property has caused any
nuisance or any other liability or adverse condition
on any other property, nor does Mortgagor know of any
basis for such an investigation, action, proceeding
or claim.
(b) Mortgagor has not
received nor to the best of
Mortgagor's knowledge, information and belief has
there been issued, any notice, notification, demand,
request for information, citation, summons, or order
in any way relating to any actual, alleged or
potential violation or liability arising under
Environmental Laws; and
(c) Neither the
Mortgaged Property, nor to the best of Mortgagor's
knowledge, information and belief, any property to
which Mortgagor has, in connection with the
maintenance or operation of the Mortgaged Property,
directly or indirectly transported or arranged for
the transportation of any Hazardous Substances is
listed or, to the best of Mortgagor's knowledge,
information and belief, proposed for listing on the
National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any
similar federal or state list of sites requiring
environmental investigation or clean-up.
(d) Mortgagor shall
comply with all applicable
Environmental Laws. Mortgagor shall keep or cause the
Mortgaged Property to be kept free from Hazardous
Substances (except those substances used by Mortgagor
or any Tenant in the ordinary course of their
respective businesses and except in compliance with
all Environmental Laws and where such could not
reasonably be expected to give rise to liability
under Environmental Laws) and in compliance with all
Environmental Laws, Mortgagor shall not install or
use any underground storage tanks, shall expressly
prohibit the use, generation, handling, storage,
production, processing and disposal of Hazardous
Substances by all Tenants in quantities or conditions
that would violate or give rise to any obligation to
take remedial or other action under any applicable
Environmental Laws. Without limiting the generality
of the foregoing, during the term of this Mortgage,
Mortgagor shall not install in the Improvements or
permit to be installed in the Improvements any
asbestos or asbestos-containing asbestos.
(e) Mortgagor shall
promptly notify Mortgagee if Mortgagor shall become
aware of (i) the actual or potential existence of any
Hazardous Substances on the Mortgaged Property other
than those occurring in the ordinary course of
Mortgagor's business and which do not violate, or
would not otherwise give rise to liability under
Environmental Laws, (ii) any direct or indirect
violation of, or other exposure to liability under,
any Environmental Laws, (iii) any lien, action or
notice affecting the Mortgaged Property or Mortgagor
resulting from any violation or alleged violation of
or liability or alleged liability under any
Environmental Laws, (iv) the institution of any
investigation, inquiry or proceeding concerning
Mortgagor or the Mortgaged Property pursuant to any
Environmental Laws or otherwise relating to Hazardous
Substances, or (v) the discovery of any occurrence,
condition or state of facts which would render any
representation or warranty contained in this Mortgage
incorrect in any respect if made at the time of such
discovery. Immediately upon receipt of same,
Mortgagor, shall deliver to Mortgagee copies of any
and all requests for information, complaints,
citations, summonses, orders, notices, reports or
other communications, documents or instruments in any
way relating to any actual, alleged or potential
violation or liability of any nature whatsoever
arising under Environmental Laws and relating to the
Mortgaged Property or to Mortgagor. Indemnitors shall
remedy or cause to be remedied in a timely manner
(and in any event within the time period permitted by
applicable Environmental Laws) any violation of
Environmental Laws or any condition that could give
rise liability under Environmental Laws. Without
limiting the foregoing, Mortgagor shall, promptly and
regardless of the source of the contamination or
threat to the environment or human health, at its own
expense, take all actions as shall be necessary or
prudent, for the clean-up of any and all portions of
the Mortgaged Property or other affected property,
including, without limitation, all investigative,
monitoring, removal, containment and remedial actions
in accordance with all applicable Environmental Laws
(and in all events in a manner satisfactory to
Mortgagee) and shall further pay or cause to be paid,
at no expense to Mortgagee, all clean-up,
administrative and enforcement costs of applicable
governmental agencies which may be asserted against
the Mortgaged Property. In the event Mortgagor fails
to do so, Mortgagee may, but shall not be obligated
to, cause the Mortgaged Property or other affected
property to be freed from any Hazardous Substances or
otherwise brought into conformance with Environmental
Laws and any and all costs and expenses incurred by
Mortgagee in connection therewith, together with
interest thereon at the Default Interest Rate from
the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately paid by Mortgagor on
demand and shall be secured by this Mortgage and by
all of the other Loan Documents securing all or any
part of the Debt. Mortgagor hereby grants to
Mortgagee and its agents and employees access to the
Mortgaged Property and a license to remove any items
deemed by Mortgagee to be Hazardous Substances and to
do all things Mortgagee shall deem necessary to bring
the Mortgaged Property into conformance with
Environmental Laws.
(f) Mortgagor covenants
and agrees, at Mortgagor's sole
cost and expense, to indemnify, defend (at trial and
appellate levels, and with attorneys, consultants and
experts acceptable to Mortgagee), and hold Mortgagee
harmless from and against any and all liens, damages
(including without limitation, punitive or exemplary
damages), losses, liabilities (including, without
limitation, strict liability), obligations,
settlement payments, penalties, fines, assessments,
citations, directives, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs,
disbursements or expenses of any kind or of any
nature whatsoever (including, without limitation,
reasonable attorneys', consultants' and experts' fees
and disbursements actually incurred in investigating,
defending, settling or prosecuting any claim,
litigation or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded
against Mortgagee or the Mortgaged Property, and
arising directly or indirectly from or out of: (i)
any violation or alleged violation of, or liability
or alleged liability under, any Environmental Law;
(ii) the presence, release or threat of release of or
exposure to any Hazardous Substances on, in, under or
affecting all or any portion of the Mortgaged
Property or any surrounding areas, regardless of
whether or not caused by or within the control of
Mortgagor; (iii) any transport, treatment, recycling,
storage, disposal or arrangement therefor of
Hazardous Substances whether on the Mortgaged
Property, originating from the Mortgaged Property, or
otherwise associated with Mortgagor or any operations
conducted on the Mortgaged Property at any time; (iv)
the failure by Mortgagor to comply fully with the
terms and conditions of this Section 1.31; (v) the
breach of any representation or warranty contained in
this Section 1.31; (vi) the enforcement of this
Section 1.31, including, without limitation, the cost
of assessment, investigation, containment, removal
and/or remediation of any and all Hazardous
Substances from all or any portion of the Mortgaged
Property or any surrounding areas, the cost of any
actions taken in response to the presence, release or
threat of release of any Hazardous Substances on, in,
under or affecting any portion of the Mortgaged
Property or any surrounding areas to prevent or
minimize such release or threat of release so that it
does not migrate or otherwise cause or threaten
danger to present or future public health, safety,
welfare or the environment, and costs incurred to
comply with Environmental Laws in connection with all
or any portion of the Mortgaged Property or any
surrounding areas. The indemnity set forth in this
Section 1.31 shall also include any diminution in the
value of the security afforded by the Mortgaged
Property or any future reduction in the sales price
of the Mortgaged Property by reason of any matter set
forth in this Section 1.31. The foregoing indemnity
shall specifically not include any such costs
relating to Hazardous Substances which are initially
placed on, in or under the Mortgaged Property after
foreclosure or other taking of title to the Mortgaged
Property by Mortgagee or its successor or assigns.
Mortgagee's rights under this Section shall survive
payment in full of the Debt and shall be in addition
to all other rights of Mortgagee under this Mortgage,
the Note and the other Loan Documents.
(g) Upon Mortgagee's
request, at any time after the occurrence of an Event
of Default or at such other time as Mortgagee has
reasonable grounds to believe that Hazardous
Substances are or have been released, stored or
disposed of on the Mortgaged Property, or on property
contiguous with the Mortgaged Property, or that the
Mortgaged Property may be in violation of the
Environmental Laws, Mortgagor shall perform or cause
to be performed, at Mortgagor's sole cost and expense
and in scope, form and substance satisfactory to
Mortgagee, an inspection or audit of the Mortgaged
Property prepared by a hydrogeologist or
environmental engineer or other appropriate
consultant approved by Mortgagee indicating the
presence or absence of Hazardous Substances on the
Mortgaged Property, the compliance or non-compliance
status of the Mortgaged Property and the operations
conducted thereon with applicable Environmental Laws,
or an inspection or audit of the Mortgaged Property
prepared by an engineering or consulting firm
approved by Mortgagee indicating the presence or
absence of friable asbestos or substances containing
asbestos or lead or substances containing lead or
lead based paint ("Lead Based Paint") on the
Mortgaged Property. If Mortgagor fails to provide
reports of such inspection or audit within thirty
(30) days after such request, Mortgagee may order the
same, and Mortgagor hereby grants to Mortgagee and
its employees and agents access to the Mortgaged
Property and an irrevocable license to undertake such
inspection or audit. The cost of such inspection or
audit, together with interest thereon at the Default
Interest Rate from the date incurred by Mortgagee
until actually paid by Mortgagor, shall be
immediately paid by Mortgagor on demand and shall be
secured by this Mortgage and by all of the other Loan
Documents securing all or any part of the
Debt.
(h) Reference is made
to that certain Environmental
Indemnity Agreement of even date herewith by and
among Mortgagor, Tenant and Mortgagee (the
"Environmental Indemnity Agreement"). The provisions
of this Mortgage and the Environmental Indemnity
Agreement shall be read together to maximize the
coverage with respect to the subject matter thereof,
as determined by Mortgagee.
(i) Mortgagor covenants
and agrees to institute, within
thirty (30) days after the discovery of any asbestos
containing materials ("ACM") in the Improvements and
written request from Mortgagee, an operations and
maintenance program (the "Maintenance Program")
designed by an environmental consultant, satisfactory
to Mortgagee, with respect to ACM's, consistent with
"Guidelines for Controlling Asbestos-Containing
Materials in Buildings" (USEPA, 1985) and other
relevant guidelines, and such Maintenance Program
will thereafter continuously remain in effect until
the Debt secured hereby is repaid in full. In
furtherance of the foregoing, Mortgagor shall
thereafter inspect and maintain all ACM's on a
regular basis and ensure that all ACM's shall be
maintained in a condition that prevents exposure of
residents to ACM's at all times. Without limiting the
generality of the preceding sentence, Mortgagee may
require (i) periodic notices or reports to Mortgagee
in form, substance and at such intervals as Mortgagee
may specify, (ii) an amendment to such operations and
maintenance program to address changing
circumstances, laws or other matters, (iii) at
Mortgagor's sole expense, supplemental examination of
the Mortgaged Property by consultants specified by
Mortgagee, and (iv) variation of the operations and
maintenance program in response to the reports
provided by any such consultants.
(j) Intentionally omitted.
(k) Intentionally omitted.
1.32 Indemnification; Subrogation.
(a) Mortgagor shall
indemnify, defend and hold Mortgagee harmless
against: (i) any and all claims for brokerage,
leasing, finders or similar fees which may be made
relating to the Mortgaged Property or the Debt, and
(ii) any and all liability, obligations, losses,
damages, penalties, claims, actions, suits, costs and
expenses (including Mortgagee's reasonable attorneys'
fees) of whatever kind or nature which may be
asserted against, imposed on or incurred by Mortgagee
in connection with the Debt, this Mortgage, the
Mortgaged Property, or any part thereof, or the
exercise by Mortgagee of any rights or remedies
granted to it under this Mortgage; provided, however,
that nothing herein shall be construed to obligate
Mortgagor to indemnify, defend and hold harmless
Mortgagee from and against any and all liabilities,
obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses enacted against,
imposed on or incurred by Mortgagee by reason of
Mortgagee's willful misconduct or gross
negligence.
(b) If Mortgagee is
made a party defendant to any litigation or any claim
is threatened or brought against Mortgagee concerning
the Debt, this Mortgage, the Mortgaged Property, or
any part thereof, or any interest therein, or the
construction, maintenance, operation or occupancy or
use thereof, then Mortgagor shall indemnify, defend
and hold Mortgagee harmless from and against all
liability by reason of said litigation or claims,
including reasonable attorneys' fees and expenses
incurred by Mortgagee in any such litigation or
claim, whether or not any such litigation or claim is
prosecuted to judgment. If Mortgagee commences an
action against Mortgagor to enforce any of the terms
hereof or to prosecute any breach by Mortgagor of any
of the terms hereof or to recover any sum secured
hereby, Mortgagor shall pay to Mortgagee its
reasonable attorneys' fees and expenses. The right to
such attorneys' fees and expenses shall be deemed to
have accrued on the commencement of such action, and
shall be enforceable whether or not such action is
prosecuted to judgment. If Mortgagor breaches any
term of this Mortgage, Mortgagee may engage the
services of an attorney or attorneys to protect its
rights hereunder, and in the event of such engagement
following any breach by Mortgagor, Mortgagor shall
pay Mortgagee reasonable attorneys' fees and expenses
incurred by Mortgagee, whether or not an action is
actually commenced against Mortgagor by reason of
such breach. All references to "attorneys" in this
Subsection and elsewhere in this Mortgage shall
include, without limitation, any attorney or law firm
engaged by Mortgagee and Mortgagee's in-house
counsel, and all references to "fees and expenses" in
this Subsection and elsewhere in this Mortgage shall
include, without limitation, any fees of such
attorney or law firm, any appellate counsel fees, if
applicable, and any allocation charges and allocation
costs of Mortgagee's in-house counsel.
(c) A waiver of
subrogation shall be obtained by Mortgagor from its
insurance carrier and, consequently, Mortgagor waives
any and all right to claim or recover against
Mortgagee, its officers, employees, agents and
representatives, for loss of or damage to Mortgagor,
the Mortgaged Property, Mortgagor's property or the
property of others under Mortgagor's control from any
cause insured against or required to be insured
against by the provisions of this Mortgage.
1.33 Covenants with Respect to
Indebtedness, Operations, Fundamental Changes of
Mortgagor. Mortgagor hereby represents, warrants and
covenants as of the date hereof and until such time
as the Debt is paid in full, that Mortgagor:
(a) will not amend,
modify or otherwise change its partnership
certificate, partnership agreement, articles of
incorporation, by-laws, operating agreement, articles
of organization, or other formation agreement or
document, as applicable, in any material term or
manner, or in a manner which adversely affects
Mortgagor's existence as a single purpose entity;
(b) will not liquidate
or dissolve (or suffer any
liquidation or dissolution), or enter into any
transaction of merger or consolidation, or acquire by
purchase or otherwise all or substantially all the
business or assets of, or any stock or other evidence
of beneficial ownership of any entity;
(c) has not and will
not guarantee, pledge its assets
for the benefit of, or otherwise become liable
on or in connection with, any
obligation of any other person or entity;
(d) does not own and
will not own any asset other than (i) the Mortgaged
Property, and (ii) incidental personal property
necessary for the operation of the Mortgaged
Property;
(e) is not engaged and
will not engage, either directly or indirectly, in
any business other than the ownership, management and
operation of the Mortgaged Property;
(f) will not enter
into any contract or agreement with any general
partner, principal, affiliate or member of Mortgagor,
as applicable, or any affiliate of any general
partner, principal or member of Mortgagor, except
upon terms and conditions that are intrinsically fair
and substantially similar to those that would be
available on an arms-length basis with third parties
other than an affiliate;
(g) has not incurred
and will not incur any debt, secured or unsecured,
direct or contingent (including guaranteeing any
obligation), other than (i) the Debt, and (ii)
affiliate advances or trade payables or accrued
expenses incurred in the ordinary course of business
of operating the Mortgaged Property, and no other
debt will be secured (senior, subordinate or pari
passu) by the Mortgaged Property;
(h) has not made
and will not make any loans or advances to
any third party (including any affiliate);
(i) is and will be
solvent and pay its debts from its
assets as the same shall become due;
(j) has done or
caused to be done and will do all
things necessary to preserve its existence,
and will observe all formalities
applicable to it;
(k) will conduct and
operate its business in its own
name and as presently conducted and operated;
(l) will maintain
financial statements, books and records and bank
accounts separate from those of its affiliates,
including, without limitation, its general partners
or members, as applicable;
(m) will be, and at
all times will hold itself out to the public as, a
legal entity separate and distinct from any other
entity (including, without limitation, any affiliate,
general partner, or member, as applicable, or any
affiliate of any general partner or member of
Mortgagor, as applicable);
(n) Intentionally omitted;
(o) will maintain
adequate capital for the normal
obligations reasonably foreseeable in a business
of its size and character and in
light of its contemplated business operations;
(p) will establish
and maintain an office through which its business
will be conducted separate and apart from those of
its affiliates and shall allocate fairly and
reasonably any overhead and expense for shared office
space;
(q) will not commingle
the funds and other assets of
Mortgagor with those of any general partner, member,
affiliate, principal or any other
person;
(r) has and will
maintain its assets in such a manner that it is not
costly or difficult to segregate, ascertain or
identify its individual assets from those of any
affiliate or any other person;
(s) does not and
will not hold itself out to be
responsible for the debts or obligations of any other
person;
(t) will pay any
liabilities out of its own funds,
including salaries of its employees, not funds of any
affiliate; and
(u) will use
stationery, invoices, and checks separate
from its affiliates.
1.34 Repair and Remediation Reserve.
Prior to the execution of this Mortgage, Mortgagee
has caused the Mortgaged Property to be inspected and
such inspection has revealed that the Mortgaged
Property is in need of certain maintenance, repairs
and/or remedial or corrective work. Contemporaneously
with the execution hereof, Mortgagor has established
with the Mortgagee a reserve in the amount of
$26,275.00 (the "Repair and Remediation Reserve") by
depositing such amount with Mortgagee. Mortgagor
shall cause each of the items described in that
certain Engineering Report (the "Engineering Report")
entitled Property Condition Report, dated June 5,
1997 and prepared by Inspection and Valuation
International (the "Deferred Maintenance") to be
completed, performed, remediated and corrected to the
satisfaction of Mortgagee and as necessary to bring
the Mortgaged Property into compliance with all
applicable laws, ordinances, rules and regulations on
or before the expiration of six (6) months after the
effective date hereof, as such time period may be
extended by Mortgagee in its sole discretion. So long
as no Event of Default has occurred, all sums in the
Repair and Remediation Reserve shall be held by
Mortgagee in the Repair and Remediation Reserve to
pay the costs and expenses of completing the Deferred
Maintenance. So long as no Event of Default has
occurred, Mortgagee shall, to the extent funds are
available for such purpose in the Repair and
Remediation Reserve, disburse to Mortgagor the amount
paid or incurred by Mortgagor in completing,
performing, remediating or correcting the Deferred
Maintenance upon (a) the receipt by Mortgagee of a
written request from Mortgagor for disbursement from
the Repair and Remediation Reserve and a
certification by Mortgagor in a form as may be
required by Mortgagee that the applicable item of
Deferred Maintenance has been completed in accordance
with the terms of this Mortgage, (b) delivery to
Mortgagee of invoices, receipts or other evidence
satisfactory to Mortgagee verifying the costs of the
Deferred Maintenance to be reimbursed, (c) delivery
to Mortgagee of a certification from an inspecting
architect, engineer or other consultant reasonably
acceptable to Mortgagee describing the completed
work, verifying the completion of the work and the
value of the completed work and, if applicable,
certifying that the Mortgaged Property is, as a
result of such work, in compliance with all
applicable laws, ordinances, rules and regulations
relating to the Deferred Maintenance so performed,
and (d) delivery to Mortgagee of affidavits, lien
waivers or other evidence reasonably satisfactory to
Mortgagee showing that all materialmen, laborers,
subcontractors and any other parties who might or
could claim statutory or common law liens and are
furnishing or have furnished materials or labor to
the Mortgaged Property have been paid all amounts due
for such labor and materials furnished to the
Mortgaged Property. Mortgagee shall not be required
to make advances from the Repair and Remediation
Reserve more frequently than once in any ninety (90)
day period. In making any payment from the Repair and
Remediation Reserve, Mortgagee shall be entitled to
rely on such request from Mortgagor without any
inquiry into the accuracy, validity or contestability
of any such amount. No interest on the funds
contained in the Repair and Remediation Reserve shall
be paid by Mortgagee to Mortgagor. Mortgagor hereby
grants to Mortgagee a power-of-attorney, coupled with
an interest, to cause the Deferred Maintenance to be
completed, performed, remediated and corrected to the
satisfaction of Mortgagee upon Mortgagor's failure to
do so in accordance with the terms and conditions of
this Section 1.34, and to apply the amounts on
deposit in the Repair and Remediation Reserve to the
costs associated therewith, all as Mortgagee may
determine in its sole and absolute discretion but
without obligation to do so.
ARTICLE II
EVENTS OF DEFAULT
2.1 Events of Default. The
occurrence of any of the following
events shall be an Event of Default hereunder:
(a) Mortgagor fails
to pay any money to Mortgagee required hereunder at
the time or within any applicable grace period set
forth herein, or if no grace period is set forth
herein, then within seven (7) days of the date such
payment is due (except those regarding payments to be
made under the Note, which failure is subject to any
grace periods set forth in the Note).
(b) Mortgagor fails
to provide insurance as required by Section 1.4
hereof or fails to perform any covenant, agreement,
obligation, term or condition set forth in Section
1.31 or Section 1.33 hereof.
(c) Mortgagor fails
to perform any other covenant, agreement, obligation,
term or condition set forth herein, other than those
otherwise described in this Section 2.1, and, to the
extent such failure or default is susceptible of
being cured, the continuance of such failure or
default for thirty (30) days after written notice
thereof from Mortgagee to Mortgagor; provided,
however, that if such default is susceptible of cure
but such cure cannot be accomplished with reasonable
diligence within said period of time, and if
Mortgagor commences to cure such default promptly
after receipt of notice thereof from Mortgagee, and
thereafter prosecutes the curing of such default with
reasonable diligence, such period of time shall be
extended for such period of time as may be necessary
to cure such default with reasonable diligence, but
not to exceed an additional sixty (60) days.
(d) Any representation
or warranty made herein, in or
in connection with any application or commitment
relating to the loan evidenced by the Note, or in any
of the other Loan Documents to Mortgagee by
Mortgagor, by any principal, general partner, manager
or member in Mortgagor, or by any Indemnitor is
determined by Mortgagee to have been false or
misleading in any material respect at the time made.
(e) There shall be
a sale, conveyance, disposition, alienation,
hypothecation, leasing, assignment, pledge, mortgage,
granting of a security interest in or other transfer
or further encumbrancing of the Mortgaged Property,
Mortgagor or its general partners or managing
members, or any portion thereof or any interest
therein, in violation of Section 1.13 hereof.
(f) A default occurs
under any of the other Loan
Documents which has not been cured within any
applicable grace or cure period therein provided.
(g) Mortgagor, any
principal, general partner or managing member in
Mortgagor or any Indemnitor becomes insolvent, or
makes a transfer in fraud of creditors, or makes an
assignment for the benefit of creditors, or files a
petition in bankruptcy, or is voluntarily adjudicated
insolvent or bankrupt or admits in writing the
inability to pay its debts as they mature, or
petitions or applies to any tribunal for or consents
to or fails to contest the appointment of a receiver,
trustee, custodian or similar officer for Mortgagor,
for any such principal, general partner or managing
member of Mortgagor or for any Indemnitor or for a
substantial part of the assets of Mortgagor, of any
such principal, general partner or managing member of
Mortgagor or of any Indemnitor, or commences any
case, proceeding or other action under any
bankruptcy, reorganization, arrangement, readjustment
or debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect.
(h) A petition is
filed or any case, proceeding or other action is
commenced against Mortgagor, against any principal,
general partner or managing member of Mortgagor or
against any Indemnitor seeking to have an order for
relief entered against it as debtor or seeking
reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts or
other relief under any law relating to bankruptcy,
insolvency, arrangement, reorganization, receivership
or other debtor relief under any law or statute of
any jurisdiction, whether now or hereafter in effect,
or a court of competent jurisdiction enters an order
for relief against Mortgagor, against any principal,
general partner or managing member of Mortgagor or
against any Indemnitor, as debtor, or an order,
judgment or decree is entered appointing, with or
without the consent of Mortgagor, of any such
principal, general partner or managing member of
Mortgagor or of any Indemnitor, a receiver, trustee,
custodian or similar officer for Mortgagor, for any
such principal, general partner or managing member of
Mortgagor or for any Indemnitor, or for any
substantial part of any of the properties of
Mortgagor, of any such principal, general partner or
managing member of Mortgagor or of any Indemnitor,
and if any such event shall occur, such petition,
case, proceeding, action, order, judgment or decree
is not dismissed within sixty (60) days after being
commenced.
(i) The Mortgaged
Property or any part thereof is taken on execution or
other process of law in any action against Mortgagor.
(j) Mortgagor abandons
all or a portion of the Mortgaged Property.
(k) The holder of any
lien or security interest on the Mortgaged Property
(without implying the consent of Mortgagee to the
existence or creation of any such lien or security
interest), whether superior or subordinate to this
Mortgage or any of the other Loan Documents, declares
a default and such default is not cured within any
applicable grace or cure period set forth in the
applicable document or such holder institutes
foreclosure or other proceedings for the enforcement
of its remedies thereunder.
(l) The Mortgaged
Property, or any part thereof, is subjected to waste
or to removal, demolition or material alteration so
that the value of the Mortgaged Property is
materially diminished thereby and Mortgagee
determines that it is not adequately protected from
any loss, damage or risk associated therewith.
(m) Any dissolution,
termination, partial or complete liquidation, merger
or consolidation of Mortgagor, any of its principals,
any general partner or any managing member, or any
Indemnitor.
ARTICLE III
REMEDIES
3.1 Remedies Available. If there
shall occur an Event of Default under this Mortgage,
then this Mortgage is subject to foreclosure as
provided by law and Mortgagee may, at its option and
by or through a trustee, nominee, assignee or
otherwise, to the fullest extent permitted by law,
exercise any or all of the following rights, remedies
and recourses, either successively or
concurrently:
(a) Acceleration.
Accelerate the maturity date of the Note and declare
any or all of the Debt to be immediately due and
payable without any presentment, demand, protest,
notice or action of any kind whatever (each of which
is hereby expressly waived by Mortgagor), whereupon
the same shall become immediately due and payable.
Upon any such acceleration, payment of such
accelerated amount shall constitute a prepayment of
the principal balance of the Note and any applicable
prepayment fee provided for in the Note shall then be
immediately due and payable.
(b) Entry on the
Mortgaged Property. Either in person or by agent,
with or without bringing any action or proceeding, or
by a receiver appointed by a court and without regard
to the adequacy of its security, enter upon and take
possession of the Mortgaged Property, or any part
thereof, without force or with such force as is
permitted by law and without notice or process or
with such notice or process as is required by law,
unless such notice and process is waivable, in which
case Mortgagor hereby waives such notice and process,
and do any and all acts and perform any and all work
which may be desirable or necessary in Mortgagee's
judgment to complete any unfinished construction on
the Premises, to preserve the value, marketability or
rentability of the Mortgaged Property, to increase
the income therefrom, to manage and operate the
Mortgaged Property or to protect the security hereof,
and all sums expended by Mortgagee therefor, together
with interest thereon at the Default Interest Rate,
shall be immediately due and payable to Mortgagee by
Mortgagor on demand and shall be secured hereby and
by all of the other Loan Documents securing all or
any part of the Debt.
(c) Collect Rents.
With or without taking possession of the Mortgaged
Property, ▇▇▇ or otherwise collect the Rents,
including those past due and unpaid.
(d) Appointment of
Receiver. Upon, or at any time prior or after,
initiating the exercise of any power of sale,
instituting any judicial foreclosure or instituting
any other foreclosure of the liens and security
interests provided for herein or any other legal
proceedings hereunder, make application to a court of
competent jurisdiction for appointment of a receiver
for all or any part of the Mortgaged Property, as a
matter of strict right and without notice to
Mortgagor and without regard to the adequacy of the
Mortgaged Property for the repayment of the Debt or
the solvency of Mortgagor or any person or persons
liable for the payment of the Debt, and Mortgagor
does hereby irrevocably consent to such appointment,
waive any and all notices of and defenses to such
appointment and agree not to oppose any application
therefor by Mortgagee, but nothing herein is to be
construed to deprive Mortgagee of any other right,
remedy or privilege Mortgagee may now have under the
law to have a receiver appointed, provided, however,
that the appointment of such receiver, trustee or
other appointee by virtue of any court order, statute
or regulation shall not impair or in any manner
prejudice the rights of Mortgagee to receive payment
of the Rents pursuant to other terms and provisions
hereof. Any such receiver shall have all of the usual
powers and duties of receivers in similar cases,
including, without limitation, the full power to
hold, develop, rent, lease, manage, maintain, operate
and otherwise use or permit the use of the Mortgaged
Property upon such terms and conditions as said
receiver may deem to be prudent and reasonable under
the circumstances as more fully set forth in Section
3.3 below. Such receivership shall, at the option of
Mortgagee, continue until full payment of all of the
Debt or until title to the Mortgaged Property shall
have passed by foreclosure sale under this Mortgage
or deed in lieu of foreclosure.
(e) Foreclosure.
Immediately commence an action to foreclose this
Mortgage or to specifically enforce its provisions
with respect to any of the Debt, pursuant to the
statutes in such case made and provided, and sell the
Mortgaged Property or cause the Mortgaged Property to
be sold in accordance with the requirements and
procedures provided by said statutes in a single
parcel or in several parcels at the option of
Mortgagee. In the event foreclosure proceedings are
instituted by Mortgagee, all expenses incident to
such proceedings, including, but not limited to,
reasonable attorneys' fees and costs, shall be paid
by Mortgagor and secured by this Mortgage and by all
of the other Loan Documents securing all or any part
of the Debt. The Debt and all other obligations
secured by this Mortgage, including, without
limitation, interest at the Default Interest Rate any
prepayment charge, fee or premium required to be paid
under the Note in order to prepay principal (to the
extent permitted by applicable law), reasonable
attorneys' fees and any other amounts due and unpaid
to Mortgagee under the Loan Documents, may be bid by
Mortgagee in the event of a foreclosure sale
hereunder. In the event of a judicial sale pursuant
to a foreclosure decree, it is understood and agreed
that Mortgagee or its assigns may become the
purchaser of the Mortgaged Property or any part
thereof.
(f) Judicial Remedies.
Proceed by suit or suits, at
law or in equity, instituted by or on behalf of
Mortgagee, upon written request of Mortgagee, to
enforce the payment of the Debt or the other
obligations of Mortgagor hereunder or pursuant to the
Loan Documents, to foreclose the liens and security
interests of this Mortgage as against all or any part
of the Mortgaged Property, and to have all or any
part of the Mortgaged Property sold under the
judgment or decree of a court of competent
jurisdiction. This remedy shall be cumulative of any
other non-judicial remedies available to Mortgagee
with respect to the Loan Documents. Proceeding with
the request or receiving a judgment for legal relief
shall not be or be deemed to be an election of
remedies or bar any available non-judicial remedy of
Mortgagee.
(g) Intentionally
omitted.
(h) Other.
Exercise any other right or remedy available
hereunder, under any of the other Loan Documents or
at law or in equity.
3.2 Application of Proceeds. To the
fullest extent permitted by law, the proceeds of any
sale under this Mortgage shall be applied, to the
extent funds are so available, to the following items
in such order as Mortgagee in its discretion may
determine:
(i) To payment of the
reasonable costs, expenses and fees of taking
possession of the Mortgaged Property, and of holding,
operating, maintaining, using, leasing, repairing,
improving, marketing and selling the same and of
otherwise enforcing Mortgagee's rights and remedies
hereunder and under the other Loan Documents,
including, but not limited to, receivers' fees, court
costs, attorneys', accountants', appraisers',
managers' and other professional fees, title charges
and transfer taxes.
(j) To payment of all
sums expended by Mortgagee under the terms of any of
the Loan Documents and not yet repaid, together with
interest on such sums at the Default Interest Rate.
(k) To payment of the
Debt and all other obligations
secured by this Mortgage, including, without
limitation, interest at the Default Interest Rate
and, to the extent permitted by applicable law, any
prepayment fee, charge or premium required to be paid
under the Note in order to prepay principal, in any
order that Mortgagee chooses in its sole discretion.
(l) The remainder,
if any, of such funds shall be
disbursed to Mortgagor or to the person or persons
legally entitled thereto.
3.3 Right and Authority of Receiver
or Mortgagee in the Event of Default; Power of
Attorney. Upon the occurrence of an Event of Default,
and entry upon the Mortgaged Property pursuant to
Section 3.1(b) hereof or appointment of a receiver
pursuant to Section 3.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable
under the circumstances in Mortgagee's or the
receiver's sole discretion, all at Mortgagor's
expense, Mortgagee or said receiver, or such other
persons or entities as they shall hire, direct or
engage, as the case may be, may do or permit one or
more of the following, successively or concurrently:
(a) enter upon and take possession and control of any
and all of the Mortgaged Property; (b) take and
maintain possession of all documents, books, records,
papers and accounts relating to the Mortgaged
Property; (c) exclude Mortgagor and its agents,
servants and employees wholly from the Mortgaged
Property; (d) manage and operate the Mortgaged
Property; (e) preserve and maintain the Mortgaged
Property; (f) make repairs and alterations to the
Mortgaged Property; (g) complete any construction or
repair of the Improvements, with such changes,
additions or modifications of the plans and
specifications or intended disposition and use of the
Improvements as Mortgagee may in its sole discretion
deem appropriate or desirable to place the Mortgaged
Property in such condition as will, in Mortgagee's
sole discretion, make it or any part thereof readily
marketable or rentable; (h) conduct a marketing or
leasing program with respect to the Mortgaged
Property, or employ a marketing or leasing agent or
agents to do so, directed to the leasing or sale of
the Mortgaged Property under such terms and
conditions as Mortgagee may in its sole discretion
deem appropriate or desirable; (i) employ such
contractors, subcontractors, materialmen, architects,
engineers, consultants, managers, brokers, marketing
agents, or other employees, agents, independent
contractors or professionals, as Mortgagee may in its
sole discretion deem appropriate or desirable to
implement and effectuate the rights and powers herein
granted; (j) execute and deliver, in the name of
Mortgagee as attorney-in-fact and agent of Mortgagor
or in its own name as Mortgagee, such documents and
instruments as are necessary or appropriate to
consummate authorized transactions; (k) enter such
leases, whether of real or personal property, or
tenancy agreements, under such terms and conditions
as Mortgagee may in its sole discretion deem
appropriate or desirable; (1) collect and receive the
Rents from the Mortgaged Property; (m) eject tenants
or repossess personal property, as provided by law,
for breaches of the conditions of their leases or
other agreements; (n) ▇▇▇ for unpaid Rents, payments,
income or proceeds in the name of Mortgagor or
Mortgagee; (o) maintain actions in forcible entry and
detainer, ejectment for possession and actions in
distress for rent; (p) compromise or give acquittance
for Rents, payments, income or proceeds that may
become due; (q) delegate or assign any and all rights
and powers given to Mortgagee by this Mortgage; and
(r) do any acts which Mortgagee in its sole
discretion deems appropriate or desirable to protect
the security hereof and use such measures, legal or
equitable, as Mortgagee may in its sole discretion
deem appropriate or desirable to implement and
effectuate the provisions of this Mortgage. This
Mortgage shall constitute a direction to and full
authority to any lessee, or other third party who has
heretofore dealt or contracted or may hereafter deal
or contract with Mortgagor or Mortgagee, at the
request of Mortgagee, to pay all amounts owing under
any lease, contract, concession, license or other
agreement to Mortgagee without proof of the Event of
Default relied upon. Any such lessee or third party
is hereby irrevocably authorized to rely upon and
comply with (and shall be fully protected by
Mortgagor in so doing) any request, notice or demand
by Mortgagee for the payment to Mortgagee of any
Rents or other sums which may be or thereafter become
due under its lease, contract, concession, license or
other agreement, or for the performance of any
undertakings under any such lease, contract,
concession, license or other agreement, and shall
have no right or duty to inquire whether any Event of
Default under this Mortgage or under any of the other
Loan Documents has actually occurred or is then
existing. Mortgagor hereby constitutes and appoints
Mortgagee, its assignees, successors, transferees and
nominees, as Mortgagor's true and lawful
attorney-in-fact and agent, with full power of
substitution in the Mortgaged Property, in
Mortgagor's name, place and stead, to do or permit
any one or more of the foregoing described rights,
remedies, powers and authorities, successively or
concurrently, and said power of attorney shall be
deemed a power coupled with an interest and
irrevocable so long as any portion of the Debt is
outstanding. Any money advanced by Mortgagee in
connection with any action taken under this Section
3.3, together with interest thereon at the Default
Interest Rate from the date of making such
advancement by Mortgagee until actually paid by
Mortgagor, shall be a demand obligation owing by
Mortgagor to Mortgagee and shall be secured by this
Mortgage and by every other instrument securing all
or any portion of the Debt.
a)
3.4 Occupancy After Foreclosure. In
the event there is a foreclosure sale hereunder and
at the time of such sale, Mortgagor or Mortgagor's
representatives, successors or assigns, or any other
persons claiming any interest in the Mortgaged
Property by, through or under Mortgagor (except
tenants of space in the Improvements subject to
leases entered into prior to the date hereof), are
occupying or using the Mortgaged Property, or any
part thereof, then, to the extent not prohibited by
applicable law, each and all shall, at the option of
Mortgagee or the purchaser at such sale, as the case
may be, immediately become the tenant of the
purchaser at such sale, which tenancy shall be a
tenancy from day-to-day, terminable at the will of
either landlord or tenant, at a reasonable rental per
day based upon the value of the Mortgaged Property
occupied or used, such rental to be due daily to the
purchaser. Further, to the extent permitted by
applicable law, in the event the tenant fails to
surrender possession of the Mortgaged Property upon
the termination of such tenancy, the purchaser shall
be entitled to institute and maintain an action for
unlawful detainer of the Mortgaged Property in the
appropriate court of the county in which the Premises
is located.
3.5 Notice to Account Debtors.
Mortgagee may, at any time after an Event of Default,
notify the account debtors and obligors of any
accounts, chattel paper, negotiable instruments or
other evidences of indebtedness to Mortgagor included
in the Mortgaged Property to pay Mortgagee directly.
Mortgagor shall at any time or from time to time upon
the request of Mortgagee provide to Mortgagee a
current list of all such account debtors and obligors
and their addresses.
3.6 Cumulative Remedies. All
remedies contained in this Mortgage are cumulative
and Mortgagee shall also have all other remedies
provided at law and in equity or in any other Loan
Documents. Such remedies may be pursued separately,
successively or concurrently at the sole subjective
direction of Mortgagee and may be exercised in any
order and as often as occasion therefor shall arise.
No act of Mortgagee shall be construed as an election
to proceed under any particular provisions of this
Mortgage to the exclusion of any other provision of
this Mortgage or as an election of remedies to the
exclusion of any other remedy which may then or
thereafter be available to Mortgagee. No delay or
failure by Mortgagee to exercise any right or remedy
under this Mortgage shall be construed to be a waiver
of that right or remedy or of any Event of Default.
Mortgagee may exercise any one or more of its rights
and remedies at its option without regard to the
adequacy of its security.
3.7 Payment of Expenses. Mortgagor
shall pay on demand all of Mortgagee's expenses
incurred in any efforts to enforce any terms of this
Mortgage, whether or not any lawsuit is filed and
whether or not foreclosure is commenced but not
completed, including, but not limited to, reasonable
legal fees and disbursements, foreclosure costs and
title charges, together with interest thereon from
and after the date incurred by Mortgagee until
actually paid by Mortgagor at the Default Interest
Rate, and the same shall be secured by this Mortgage
and by all of the other Loan Documents securing all
or any part of the Debt.
ARTICLE IV
MISCELLANEOUS TERMS AND CONDITIONS
4.1 Time of Essence. Time is of the
essence with respect to all provisions of this
Mortgage.
4.2 Release of Mortgage. If all of
the Debt be paid, then and in that event only, all
rights under this Mortgage, except for those
provisions hereof which by their terms survive, shall
terminate and the Mortgaged Property shall become
wholly clear of the liens, security interests,
conveyances and assignments evidenced hereby, which
shall be promptly released of record by Mortgagee in
due form at Mortgagor's cost. No release of this
Mortgage or the lien hereof shall be valid unless
executed by Mortgagee.
4.3 Certain Rights of Mortgagee.
Without affecting Mortgagor's liability for the
payment of any of the Debt, Mortgagee may from time
to time and without notice to Mortgagor: (a) release
any person liable for the payment of the Debt; (b)
extend or modify the terms of payment of the Debt;
(c) accept additional real or personal property of
any kind as security or alter, substitute or release
any property securing the Debt; (d) recover any part
of the Mortgaged Property; (e) consent in writing to
the making of any subdivision map or plat thereof;
(f) join in granting any easement therein; or (g)
join in any extension agreement of this Mortgage or
any agreement subordinating the lien hereof.
4.4 Waiver of Certain Defenses. No
action for the enforcement of the lien hereof or of
any provision hereof shall be subject to any defense
which would not be good and available to the party
interposing the same in an action at law upon the
Note or any of the other Loan Documents.
4.5 Notices. All notices, demands,
requests or other communications to be sent by one
party to the other hereunder or required by law shall
be in writing and shall be deemed to have been
validly given or served by delivery of the same in
person to the intended addressee, or by depositing
the same with Federal Express or another reputable
private courier service for next business day
delivery, or by depositing the same in the United
States mail, postage prepaid, registered or certified
mail, return receipt requested, in any event
addressed to the intended addressee at its address
set forth on the first page of this Mortgage or at
such other address as may be designated by such party
as herein provided. All notices, demands and requests
shall be effective upon such personal delivery, or
one (1) business day after being deposited with the
private courier service, or two (2) business days
after being deposited in the United States mail as
required above. Rejection or other refusal to accept
or the inability to deliver because of changed
address of which no notice was given as herein
required shall be deemed to be receipt of the notice,
demand or request sent. By giving to the other party
hereto at least fifteen (15) days' prior written
notice thereof in accordance with the provisions
hereof, the parties hereto shall have the right from
time to time to change their respective addresses and
each shall have the right to specify as its address
any other address within the United States of
America.
4.6 Successors and Assigns; Joint
and Several Liability. The terms, provisions,
indemnities, covenants and conditions hereof shall be
binding upon Mortgagor and the successors and assigns
of Mortgagor, including all successors in interest of
Mortgagor in and to all or any part of the Mortgaged
Property, and shall inure to the benefit of
Mortgagee, its directors, officers, shareholders,
employees and agents and their respective successors
and assigns and shall constitute covenants running
with the land. All references in this Mortgage to
Mortgagor or Mortgagee shall be deemed to include all
such parties' successors and assigns, and the term
"Mortgagee" as used herein shall also mean and refer
to any lawful holder or owner, including pledgees and
participants, of any of the Debt. If Mortgagor
consists of more than one person or entity, each is
jointly and severally liable to perform the
obligations of Mortgagor hereunder and all
representations, warranties, covenants and agreements
made by Mortgagor hereunder are joint and
several.
4.7 Severability. A determination
that any provision of this Mortgage is unenforceable
or invalid shall not affect the enforceability or
validity of any other provision, and any
determination that the application of any provision
of this Mortgage to any person or circumstance is
illegal or unenforceable shall not affect the
enforceability or validity of such provision as it
may apply to any other persons or
circumstances.
4.8 Gender. Within this Mortgage,
words of any gender shall be held and construed to
include any other gender, and words in the singular
shall be held and construed to include the plural,
and vice versa, unless the context otherwise
requires.
4.9 Waiver; Discontinuance of
Proceedings. Mortgagee may waive any single Event of
Default by Mortgagor hereunder without waiving any
other prior or subsequent Event of Default. Mortgagee
may remedy any Event of Default by Mortgagor
hereunder without waiving the Event of Default
remedied. Neither the failure by Mortgagee to
exercise, nor the delay by Mortgagee in exercising,
any right, power or remedy upon any Event of Default
by Mortgagor hereunder shall be construed as a waiver
of such Event of Default or as a waiver of the right
to exercise any such right, power or remedy at a
later date. No single or partial exercise by
Mortgagee of any right, power or remedy hereunder
shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power
or remedy hereunder may be exercised at any time and
from time to time. No modification or waiver of any
provision hereof nor consent to any departure by
Mortgagor therefrom shall in any event be effective
unless the same shall be in writing and signed by
Mortgagee, and then such waiver or consent shall be
effective only in the specific instance and for the
specific purpose given. No notice to nor demand on
Mortgagor in any case shall of itself entitle
Mortgagor to any other or further notice or demand in
similar or other circumstances. Acceptance by
Mortgagee of any payment in an amount less than the
amount then due on any of the Debt shall be deemed an
acceptance on account only and shall not in any way
affect the existence of an Event of Default. In case
Mortgagee shall have proceeded to invoke any right,
remedy or recourse permitted hereunder or under the
other Loan Documents and shall thereafter elect to
discontinue or abandon the same for any reason,
Mortgagee shall have the unqualified right to do so
and, in such an event, Mortgagor and Mortgagee shall
be restored to their former positions with respect to
the Debt, the Loan Documents, the Mortgaged Property
and otherwise, and the rights, remedies, recourses
and powers of Mortgagee shall continue as if the same
had never been invoked.
4.10 Section Headings. The headings
of the sections and paragraphs of this Mortgage are
for convenience of reference only, are not to be
considered a part hereof and shall not limit or
otherwise affect any of the terms hereof.
4.11 GOVERNING LAW. THIS Mortgage
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE IN WHICH THE PREMISES IS
LOCATED, PROVIDED THAT TO THE EXTENT THAT ANY OF SUCH
LAWS MAY NOW OR HEREAFTER BE PREEMPTED BY FEDERAL
LAW, SUCH FEDERAL LAW SHALL SO GOVERN AND BE
CONTROLLING, AND PROVIDED FURTHER THAT THE LAWS OF
THE STATE IN WHICH THE PREMISES IS LOCATED SHALL
GOVERN AS TO THE CREATION, PRIORITY AND ENFORCEMENT
OF LIENS AND SECURITY INTERESTS IN THE MORTGAGED
PROPERTY LOCATED IN SUCH STATE.
4.12 Counting of Days. The term
"days" when used herein shall mean calendar days. If
any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the
Premises is located, the period shall be deemed to
end on the next succeeding business day. The term
"business day" when used herein shall mean a weekday,
Monday through Friday, except a legal holiday or a
day on which banking institutions in Greenville,
South Carolina are authorized by law to be closed.
4.13 Relationship of the Parties.
The relationship between Mortgagor and Mortgagee is
that of a borrower and a lender only and neither of
those parties is, nor shall it hold itself out to be,
the agent, employee, joint venturer or partner of the
other party.
4.14 Application of the Proceeds of
the Note. To the extent that proceeds of the Note are
used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance
against the Mortgaged Property, such proceeds have
been advanced by Mortgagee at Mortgagor's request and
Mortgagee shall be subrogated to any and all rights,
security interests and liens owned by any owner or
holder of such outstanding liens, security interests,
charges or encumbrances, irrespective of whether said
liens, security interests, charges or encumbrances
are released.
4.15 Unsecured Portion of
Indebtedness. If any part of the Debt cannot be
lawfully secured by this Mortgage or if any part of
the Mortgaged Property cannot be lawfully subject to
the lien and security interest hereof to the full
extent of such indebtedness, then all payments made
shall be applied on said indebtedness first in
discharge of that portion thereof which is unsecured
by this Mortgage.
4.16 Cross Default. An Event of
Default hereunder which has not been cured within any
applicable grace or cure period shall be a default
under each of the other Loan Documents.
4.17 Interest After Sale. In the
event the Mortgaged Property or any part thereof
shall be sold upon foreclosure as provided hereunder,
to the extent permitted by law, the sum for which the
same shall have been sold shall, for purposes of
redemption (pursuant to the laws of the State of in
which the Premises is located), bear interest at the
Default Interest Rate.
4.18 Inconsistency with Other Loan
Documents. In the event of any inconsistency between
the provisions hereof and the provisions in any of
the other Loan Documents, it is intended that the
provisions of the Note shall control over the
provisions of this Mortgage, and that the provisions
of this Mortgage shall control over the provisions of
the Assignment of Leases and Rents, the Guaranty and
Indemnity Agreement, the Environmental Indemnity
Agreement, and the other Loan Documents.
4.19 Construction of this Document.
This document may be construed as a mortgage,
security deed, deed of trust, chattel mortgage,
conveyance, assignment, security agreement, pledge,
financing statement, hypothecation or contract, or
any one or more of the foregoing, in order to fully
effectuate the liens and security interests created
hereby and the purposes and agreements herein set
forth.
4.20 No Merger. It is the desire and
intention of the parties hereto that this Mortgage
and the lien hereof do not merge in fee simple title
to the Mortgaged Property. It is hereby understood
and agreed that should Mortgagee acquire any
additional or other interests in or to the Mortgaged
Property or the ownership thereof, then, unless a
contrary intent is manifested by Mortgagee as
evidenced by an appropriate document duly recorded,
this Mortgage and the lien hereof shall not merge in
such other or additional interests in or to the
Mortgaged Property, toward the end that this Mortgage
may be foreclosed as if owned by a stranger to said
other or additional interests.
4.21 Rights With Respect to Junior
Encumbrances. Any person or entity purporting to have
or to take a junior mortgage or other lien upon the
Mortgaged Property or any interest therein shall be
subject to the rights of Mortgagee to amend, modify,
increase, vary, alter or supplement this Mortgage,
the Note or any of the other Loan Documents, and to
extend the maturity date of the Debt, and to increase
the amount of the Debt, and to waive or forebear the
exercise of any of its rights and remedies hereunder
or under any of the other Loan Documents and to
release any collateral or security for the Debt, in
each and every case without obtaining the consent of
the holder of such junior lien and without the lien
or security interest of this Mortgage losing its
priority over the rights of any such junior
lien.
4.22 Mortgagee May File Proofs of
Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor
or the principals, general partners or managing
members in Mortgagor, or their respective creditors
or property, Mortgagee, to the extent permitted by
law, shall be entitled to file such proofs of claim
and other documents as may be necessary or advisable
in order to have the claims of Mortgagee allowed in
such proceedings for the entire Debt at the date of
the institution of such proceedings and for any
additional amount which may become due and payable by
Mortgagor hereunder after such date.
4.23 Fixture Filing. This Mortgage
shall be effective from the date of its recording as
a financing statement filed as a fixture filing with
respect to all goods constituting part of the
Mortgaged Property which are or are to become
fixtures. This Mortgage shall also be effective as a
financing statement covering minerals or the like
(including oil and gas) and is to be filed for record
in the real estate records of the county where the
Premises is situated. The mailing address of
Mortgagor and the address of Mortgagee from which
information concerning the security interests may be
obtained are set forth in Section 1.22 above.
4.24 After-Acquired Mortgaged
Property. All property acquired by Mortgagor after
the date of this Mortgage which by the terms of this
Mortgage shall be subject to the lien and the
security interest created hereby, shall immediately
upon the acquisition thereof by Mortgagor and without
further mortgage, conveyance or assignment become
subject to the lien and security interest created by
this Mortgage. Nevertheless, Mortgagor shall execute,
acknowledge, deliver and record or file, as
appropriate, all and every such further mortgages,
security agreements, financing statements,
assignments and assurances as Mortgagee shall require
for accomplishing the purposes of this
Mortgage.
4.25 No Representation. By accepting
delivery of any item required to be observed,
performed or fulfilled or to be given to Mortgagee
pursuant to the Loan Documents, including, but not
limited to, any officer's certificate, balance sheet,
statement of profit and loss or other financial
statement, survey, appraisal or insurance policy,
Mortgagee shall not be deemed to have warranted,
consented to, or affirmed the sufficiency, legality,
effectiveness or legal effect of the same, or of any
term, provision or condition thereof, and such
acceptance of delivery thereof shall not be or
constitute any warranty, consent or affirmation with
respect thereto by Mortgagee.
4.26 Counterparts. This Mortgage may
be executed in any number of counterparts, each of
which shall be effective only upon delivery and
thereafter shall be deemed an original, and all of
which shall be taken to be one and the same
instrument, for the same effect as if all parties
hereto had signed the same signature page. Any
signature page of this Mortgage may be detached from
any counterpart of this Mortgage without impairing
the legal effect of any signatures thereon and may be
attached to another counterpart of this Mortgage
identical in form hereto but having attached to it
one or more additional signature pages.
4.27 Personal Liability.
Notwithstanding anything to the contrary contained in
this Mortgage, the liability of Mortgagor and its
officers, directors, general partners, managers,
members and principals for the Debt and for the
performance of the other agreements, covenants and
obligations contained herein and in the Loan
Documents shall be limited as set forth in Section
3.6 of the Note.
4.28 Recording and Filing. Mortgagor
will cause the Loan Documents and all amendments and
supplements thereto and substitutions therefor to be
recorded, filed, re-recorded and re-filed in such
manner and in such places as Mortgagee shall
reasonably request, and will pay on demand all such
recording, filing, re-recording and re-filing taxes,
fees and other charges. Mortgagor shall reimburse
Mortgagee, or its servicing agent, for the costs
incurred in obtaining a tax service company to verify
the status of payment of taxes and assessments on the
Mortgaged Property.
4.29 Entire Agreement and
Modifications. This Mortgage and the other Loan
Documents contain the entire agreements between the
parties relating to the subject matter hereof and
thereof and all prior agreements relative hereto and
thereto which are not contained herein or therein are
terminated. This Mortgage and the other Loan
Documents may not be amended, revised, waived,
discharged, released or terminated orally but only by
a written instrument or instruments executed by the
party against which enforcement of the amendment,
revision, waiver, discharge, release or termination
is asserted. Any alleged amendment, revision, waiver,
discharge, release or termination which is not so
documented shall not be effective as to any
party.
4.30 Maximum Interest. The provisions of this Mortgage and of
all agreements between Mortgagor and Mortgagee, whether now existing or
hereafter arising and whether written or oral, are hereby expressly limited so
that in no contingency or event whatsoever, whether by reason of demand or
acceleration of the maturity of the Note or otherwise, shall the amount paid, or
agreed to be paid ("Interest") to Mortgagee for the use, forbearance or
retention of the money loaned under the Note exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever,
performance or fulfillment of any provision hereof or of any agreement between
Mortgagor and Mortgagee shall, at the time performance or fulfillment of such
provision shall be due, exceed the limit for Interest prescribed by law or
otherwise transcend the limit of validity prescribed by applicable law, then,
ipso facto, the obligation to be performed or fulfilled shall be reduced to such
limit, and if, from any circumstance whatsoever, Mortgagee shall ever receive
anything of value deemed Interest by applicable law in excess of the maximum
lawful amount, an amount equal to any excessive Interest shall be applied to the
reduction of the principal balance owing under the Note in the inverse order of
its maturity (whether or not then due) or, at the option of Mortgagee, be paid
over to Mortgagor, and not to the payment of Interest. All Interest (including
any amounts or payments deemed to be Interest) paid or agreed to be paid to
Mortgagee shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal balance of the Note so that the Interest thereon for such full
period will not exceed the maximum amount permitted by applicable law. This
Section will control all agreements between Mortgagor and Mortgagee.
4.31 Interest Payable by Mortgagor. Mortgagee shall cause
funds in the Replacement Reserve to be deposited into interest bearing accounts
of the type customarily maintained by Mortgagee or its servicing agent for the
investment of similar reserves, which accounts may not yield the highest
interest rate then available. Interest payable on such amounts shall be computed
based on the daily outstanding balance in the Replacement Reserve. Such interest
shall be calculated on a simple, non-compounded interest basis based solely on
contributions made to the Replacement Reserve by Mortgagor. All interest earned
on amounts contributed to the Replacement Reserve shall be retained by Mortgagee
and accumulated for the benefit of Mortgagor and added to the balance in the
Replacement Reserve and shall be disbursed for payment of the items for which
other funds in the Replacement Reserve are to be disbursed.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
-3-
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage on the day and
year first written above.
MORTGAGOR:
WITNESS: ONE PRICE REALTY, INC.,
a South Carolina corporation
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇
Name: C. ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇ Title: Treasurer
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
I, ▇▇▇▇▇▇▇ Dell'Olio, a Notary Public for New York, do hereby certify that C.
▇▇▇▇ ▇▇▇▇▇ personally appeared before me this day and acknowledged the due
execution of the foregoing instrument.
Witness my hand and (where an official seal is required by law) official seal
this 17th day of June, 1997.
/s/ ▇▇▇▇▇▇▇ Dell'Olio (SEAL)
Signature of Notary Public
My commission expires:
▇▇▇▇▇▇▇ Dell'Olio
Notary Public, State of New York
Qualification New York County
Commission Expires June 23, 1998
EXHIBIT A
Legal Description