MORTGAGE, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
from
LASALLE NATIONAL BANK,
not personally but as successor trustee under that certain
Trust Agreement, dated November 20, 1975, and known as Trust No.
49475,
and
OAK BROOK URBAN VENTURE, L.P.,
Beneficiary of the above-named land trust
MORTGAGOR
to
USC OAKBROOK, INC.,
MORTGAGEE
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MITSUI MARINE DERIVATIVE PRODUCTS, L.P.,
as a secured party
joined in by
TEACHERS' RETIREMENT SYSTEM OF THE STATE OF ILLINOIS,
FEE OWNER
Dated as of November 3, 1997
Prepared by and after recording, please return to:
Weil, Gotshal & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. (RH)
TABLE OF CONTENTS
PAGE
----
1. Definitions 8
2. Warranty of Title 31
3. Payment and Performance of Obligations Secured 32
4. No Default 33
5. Negative Covenants 33
6. Insurance 35
7. Condemnation and Insurance Proceeds 39
8. Impositions, Liens and Other Items; Contests Generally 45
9. Funds for Taxes and Insurance 47
10. Assignment of Leases and Rents 49
11. Security Agreement 50
12. Transfers, Indebtedness and Subordinate Liens 51
13. Maintenance of Mortgage Property; Alterations; Inspection;
Utilities 57
14. Legal Compliance 61
15. Books and Records, Financial Statements, Reports and Other
Information 61
16. Compliance with Leases and Agreements 63
17. Mortgagee's Right to Perform 66
18. Mortgagor's Existence; Organization and Authority 66
19. Protection of Security; Costs and Expenses 67
20. Management of the Mortgaged Property 68
21. No Endorsement 69
22. Remedies 69
23. Application of Proceeds 72
24. Notice of Certain Occurrences 73
25. Waiver of Trial by Jury 74
26. Trust Funds 74
27. Changes in Method of Taxation; No Credit for Payment of Taxes 74
28. Notices 74
29. Modification 76
30. Partial Invalidity 77
31. Mortgagor's Waiver of Rights 77
32. Remedies Not Exclusive 77
33. Successors and Assigns 78
34. Applicable Law 79
35. Additional Representations, Warranties and Covenants 79
36. No Waiver 85
37. Non-Recourse Obligations 85
38. Further Assurances 86
39. Estoppel Certificates 86
40. Additional Security 86
41. Indemnification by Mortgagor 86
42. Release 88
43. Usury 89
44. Creation of Additional Mortgage Notes 89
45. The Ground Lease 92
46. Exculpation of Land Trustee 92
47. Environmental Matters 92
48. Joinder by Ground Lessor 94
EXHIBITS
--------
EXHIBIT A Legal Description of Premises
EXHIBIT B Permitted Exceptions
EXHIBIT C Subordination, Nondisturbance and Attornment Agreement
EXHIBIT D Form of Class A Note
MORTGAGE, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS,
dated as of the 3rd day of November, 1997 (the "Mortgage"), made
by LASALLE NATIONAL BANK, not personally but as successor trustee
under that certain Trust Agreement, dated November 20, 1975, and
known as Trust No. 49475 ("Mortgagor"), having an address at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇
MITSUI MARINE DERIVATIVE PRODUCTS, L.P., a Delaware limited
partnership ("Rate Swap Counterparty"), having an address at ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and USC OAKBROOK, INC., a
Delaware corporation ("Mortgagee"; and sometimes hereinafter
referred to as "Depositor"), having an address at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
W I T N E S S E T H :
WHEREAS, Mortgagor is the lessee under a Ground Lease,
dated December 31, 1990, between Teachers' Retirement System of
the State of Illinois, as lessor (the "Ground Lessor"), and
Mortgagor, as lessee, as amended by amendments dated December 8,
1992, October 14, 1993 and October 21, 1993 (such Ground Lease,
as so amended, the "Ground Lease"), affecting certain land
located in the Village of Oak Brook, County of DuPage, State of
Illinois, and commonly known as "Oakbrook Center", as more
particularly described in Exhibit "A" attached hereto and made a
part hereof (the "Premises"), and all buildings and improvements
located thereon;
WHEREAS, simultaneously with the execution and delivery
of this Mortgage, Mortgagee desires to establish a trust that, on
the date hereof, will issue ONE HUNDRED FORTY MILLION AND 00/100
DOLLARS ($140,000,000) aggregate principal amount of Floating
Rate Certificates, which will be comprised of one class of
certificates designated as Class A (the "Class A Certificates")
under that certain Trust and Servicing Agreement (the "Trust
Agreement") dated of even date herewith by and between Mortgagee,
as Depositor, Bankers Trust Company, a New York banking
corporation, as Trustee (together with its co-trustees,
successors and assigns in accordance with the terms of the Trust
Agreement, the "Trustee"), and AMRESCO Services, L.P., as
Servicer (together with its successors and assigns in accordance
with the terms of the Trust Agreement, the "Servicer"), and to
lend the proceeds of issuance of the Class A Certificates to
Mortgagor, said loan (together with any loan evidenced by
Additional Notes, collectively, the "Loan"), in the amount, on
the date hereof, of $140,000,000, to be evidenced by that certain
Class A Mortgage Note made by Mortgagor to Mortgagee, the form of
which is attached hereto as Exhibit "D" and hereby made a part
hereof (the "Class A Note"), it being expressly understood that
all or any portion of the amounts due under the Class A Note may
from time to time be repaid, subject in each case to the terms of
the Class A Note and the terms and condition of this Mortgage and
the other Loan Documents executed by the Mortgagor as security
for the borrowing by Mortgagor evidenced by the Class A Note;
WHEREAS, simultaneously with the making and delivery of
the Class A Note and the execution and delivery of this Mortgage,
Mortgagee shall execute and deliver to the Trustee the Assignment
(as defined in the Trust Agreement), thereby assigning to the
Trustee the Class A Note, this Mortgage and all the other Loan
Documents securing the payment of the Class A Note; and
WHEREAS, simultaneously with the making and delivery of
the Class A Note and the execution and delivery of this Mortgage,
Mortgagor acquired that certain Rate Swap Agreement (hereinafter
defined) with the Rate Swap Counterparty.
NOW, THEREFORE, in consideration of the Loan to the
Mortgagor evidenced by the Class A Note and any Additional Notes
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby
agrees as follows:
TO SECURE:
(i) payment and performance of all
covenants, conditions, liabilities and obligations of
Mortgagor contained in, and payment of the indebtedness
evidenced by, the Class A Note and any Additional Notes
(hereinafter defined) (the Class A Note and any Additional
Notes hereinafter sometimes collectively referred to as the
"Mortgage Notes") plus all interest and other amounts
payable thereunder; and
(ii) payment and performance of all cove
nants, conditions, liabilities and obligations of Mortgagor
contained in this Mortgage and any extensions, renewals or
modifications hereof; and
(iii) payment and performance of all cove
nants, conditions, liabilities and obligations of Mortgagor
contained in the Assignment of Leases and Rents, dated as of
the date hereof (the "Assignment of Leases"), between
Mortgagor, as assignor, and Mortgagee, as assignee, and any
extensions, renewals or modifications thereof; and
(iv) payment and performance of all cove
nants, conditions, liabilities and obligations of Mortgagor
contained in the Rate Swap Agreement and each of the other
Loan Documents (as hereinafter defined); and
(v) without limiting the generality of the
foregoing, payment of all indebtedness, liabilities, and
amounts from time to time evidenced by the Mortgage Notes,
and all other indebtedness and liabilities, direct or
indirect, of Mortgagor to Mortgagee, due or to become due
hereunder, under the Assignment of Leases or under any other
Loan Document (including, without limitation, any future
advances, disbursements, payments and reimbursements made,
and charges, expenses and costs incurred by Mortgagee
pursuant to the Mortgage Notes, this Mortgage or such other
Loan Documents) payable in respect of the Mortgage Notes,
even if the aggregate amount of indebtedness outstanding at
any one time exceeds the respective face amounts of the
Mortgage Notes (all of the foregoing indebtedness, monetary
liabilities and obligations set forth in clauses (i)-(iv)
above and this clause (v), collectively, the "Indebtedness";
and payment of the Indebtedness together with the
performance of all covenants, conditions and obligations set
forth in clauses (i)-(iv) above and this clause (v),
collectively, the "Obligations").
GRANTING CLAUSES
Mortgagor hereby creates a Lien (as hereinafter defined) on and
security interest in and mortgages, grants, assigns, transfers
and sets over to Mortgagee and the Rate Swap Counterparty the
following (collectively, the "Mortgaged Property"):
(A) all of Mortgagor's right, title and
interest in and to the leasehold estate in the Premises
created pursuant to the Ground Lease, and all of Mortgagor's
rights, privileges and benefits as lessee thereunder; and all
of Mortgagor's right, title and interest in and to any right
pursuant to Section 365(h) of the Federal Bankruptcy Code, or
any successor to such section, (i) to possession or any
statutory term of years derived from or incident to the Ground
Lease, or (ii) to treat the Ground Lease as terminated;
(B) all of Mortgagor's right, title and
interest in and to all buildings, foundations, structures,
improvements and fixtures now or hereafter located or
erected on the Premises (the "Improvements");
(C) all of Mortgagor's right, title and
interest in and to (i) all streets, avenues, roads, alleys,
passages, places, sidewalks, strips and gores of land and
ways, existing or proposed, public or private, adjacent to
the Premises, and all reversionary rights with respect to
the vacation of said streets, avenues, roads, alleys,
passages, places, sidewalks and ways in the land lying
thereunder, (ii) all air, lateral support, drainage, oil,
gas and mineral rights, options to purchase or lease,
waters, water courses and riparian rights now or hereafter
pertaining to or used in connection with the Premises and/or
Improvements, (iii) all and singular, the tenements,
hereditaments, rights of way, easements, appendages and
appurtenances and property now or hereafter belonging or in
any way appertaining to the Premises, and (iv) all estate,
right, title, claim or demand whatsoever, either at law or
in equity, in possession or expectancy, of, in and to the
Premises (collectively, the "Appurtenances"; and together
with the Premises and the Improvements, collectively, the
"Real Estate");
(D) all of Mortgagor's right, title and
interest in and to all of the machinery, appliances,
apparatus, equipment, fittings, fixtures, materials,
articles of personal property and goods of every kind and
nature whatsoever, and all additions to and renewals and
replacements thereof, and all substitutions therefor, now or
hereafter affixed to, attached to, placed upon or located
upon or in the Real Estate, or any part thereof, and used in
connection with the complete and comfortable use, ownership,
management, maintenance, enjoyment or operation of the Real
Estate in any present or future occupancy or use thereof and
now owned or leased or hereafter owned or leased by
Mortgagor including, but without limiting the generality of
the foregoing, all heating, lighting, laundry, cooking,
incinerating, loading, unloading and power equipment,
boilers, dynamos, stokers, engines, pipes, pumps, tanks,
motors, conduits, switchboards, plumbing, lifting, cleaning,
fire prevention, fire extinguishing, refrigerating,
ventilating, and communications apparatus, air cooling and
air conditioning apparatus, building materials and
equipment, elevators, escalators, carpeting, shades,
draperies, awnings, screens, doors and windows, blinds,
stoves, ranges, refrigerators, dishwashers, cabinets, office
equipment, furniture and furnishings, partitions, ducts and
compressors (other than equipment and personal property of
tenants of the Premises or the Improvements, or any part
thereof) (hereinafter collectively called "Building
Equipment"),and Mortgagor agrees to execute and deliver,
from time to time, such further instruments (including,
without limitation, any financing statements under the
Uniform Commercial Code of the State of Illinois (the
"UCC")) as may be reasonably requested by Mortgagee to
confirm the lien of this Mortgage on any Building Equipment;
(E) all of Mortgagor's right, title and
interest as lessor, sublessor or licensor, or otherwise, as
the case may be, in, to and under all leases, subleases,
underlettings, concession agreements and licenses of the
Real Estate and Building Equipment, or any part thereof now
existing or hereafter entered into by Mortgagor including,
without limitation, any cash and securities deposited
thereunder (collectively, the "Leases"), and the right to
receive and collect the revenues, income, rents, issues,
profits, royalties and other benefits payable under any of
the Leases or otherwise arising from the use or enjoyment of
all or any portion of the Real Estate and Building Equipment
(collectively, the "Rents");
(F) all of Mortgagor's right, title and
interest in and to all proceeds, judgments, claims,
compensation, awards or payments heretofore and hereafter
made to Mortgagor for the taking, whether permanent or
temporary, by condemnation, eminent domain, or for any
conveyance made in lieu of such taking, of the whole or any
part of the Real Estate, including, without limitation, all
proceeds, judgments, claims, compensation awards or payments
for changes of grade of streets or any other injury to or
decrease in the value of the Real Estate, whether direct or
consequential, which said awards and payments are hereby
assigned to Mortgagee, who is hereby authorized to collect
and receive the proceeds thereof and to give proper receipts
and acquittances therefor, and to apply the same toward the
payment of the Indebtedness in such order as Mortgagee may
determine, without regard to the adequacy of Mortgagee's
security hereunder and notwithstanding the fact that the
amount thereof may not then be due and payable, and toward
the counsel fees, costs and disbursements authorized
hereunder to be incurred by Mortgagee in connection with the
collection of such awards or payments; and Mortgagor hereby
agrees, upon request, to make, execute and deliver any and
all further assignments and other instruments sufficient for
the purpose of confirming this assignment of said proceeds,
judgments, claims, compensation awards or payments to
Mortgagee, free, clear and discharged of any encumbrances of
any kind or nature whatsoever other than the interest of
Mortgagor therein or the claims of Mortgagor thereto;
(G) all of Mortgagor's right, title and
interest in and to all unearned premiums paid under
insurance policies now or hereafter obtained by Mortgagor
insuring the Real Estate and the Building Equipment and any
other insurance policies maintained by or on behalf of
Mortgagor pursuant to Section 6 hereof, including, without
limitation, liability insurance policies and Mortgagor's
interest in and to all proceeds of the conversion and the
interest payable thereon, voluntary or involuntary, of the
Mortgaged Property, or any part thereof, into cash or
liquidated claims, including, without limitation, proceeds
of casualty insurance, liability insurance, title insurance
or any other insurance maintained on or with respect to the
Real Estate and Building Equipment;
(H) all right, title and interest of
Mortgagor in and to all extensions, improvements,
betterments, renewals, substitutes and replacements of, and
all additions and appurtenances to, the Real Estate and the
Building Equipment, hereafter acquired by or released to
Mortgagor or constructed, assembled or placed by Mortgagor
on the Real Estate, and all conversions of the security
constituted thereby; immediately upon such acquisition,
release, construction, assembling, placement or conversion,
as the case may be, and in each such case, without any
further mortgage, conveyance, assignment or other act by
Mortgagor, any of such extensions, improvements,
betterments, renewals, substitutes and replacements shall
become subject to the lien of this Mortgage as fully and com
pletely, and with the same effect, as though now owned by
Mortgagor and specifically described herein;
(I) all of Mortgagor's right, title and
interest in, to and under, to the extent the same may be
encumbered or assigned by Mortgagor pursuant to the terms
thereof, (i) the Operating Agreements (as hereinafter
defined) and all contracts and agreements relating to the
Real Estate, and other documents, books and records related
to the ownership and operation of the Real Estate; (ii) all
consents, licenses, warranties, guaranties, building permits
and government approvals relating to or required for the
construction, completion, occupancy and operation of the
Real Estate; (iii) all plans and specifications for the
construction of the Improvements, including, without
limitation, installations of curbs, sidewalks, gutters,
landscaping, utility connections and all fixtures and
equipment necessary for the construction, operation and
occupancy of the Improvements; and (iv) all such other
contracts and agreements from time to time executed by
Mortgagor relating to the ownership, leasing, construction,
maintenance, operation, occupancy, sale or financing of the
Real Estate, together with all rights of Mortgagor to compel
performance of the terms of such contracts and agreements;
(J) to the extent the same may be encumbered
or assigned by Mortgagor pursuant to the terms thereof, all
of Mortgagor's right, title and interest in, to and under
escrows, documents, instruments and general intangibles, as
the foregoing terms are defined in the UCC, and all contract
rights, franchises, books, records, plans, specifications,
permits, licenses, approvals, actions and causes of action
which now or hereafter relate to, are derived from or used
in connection with the Real Estate or Building Equipment or
the use, operation, maintenance, occupancy or enjoyment
thereof or the conduct of any business or activities thereon
(collectively, the "Intangibles");
(K) all of Mortgagor's right, title and
interest in all proceeds, both cash and noncash, of the
foregoing which may be sold or otherwise be disposed of
pursuant to the terms hereof; and
(L) all right, title and interest of
Mortgagor in and to (i) any Rate Swap Agreement, and (ii)
all payments due or to become due in respect of or arising
out of any such Rate Swap Agreement, whether as contractual
obligations, damages or otherwise, and (iii) all claims,
rights, powers, privileges, authority, options, security
interests, liens and remedies, if any, under or arising out
of any such Rate Swap Agreement, in each case including all
accessions and additions to, substitutions for and
replacements, products and proceeds of any of the foregoing.
TO HAVE AND TO HOLD the Mortgaged Property unto the
Mortgagee and the Rate Swap Counterparty, its successors and
assigns forever, upon the terms and conditions set forth herein.
Concurrently with its execution and delivery to Mortgagee, this
Mortgage is being assigned, pursuant to the Assignment, to the
Trustee, as trustee for the benefit of the Holders of the
Certificates issued under the Trust Agreement. The address of
the Trustee is as shown on the first page of the Assignment.
Upon such assignment, the Trustee (and/or its designee) shall for
all purposes be the sole Mortgagee hereunder (and all references
herein to Mortgagee shall be deemed to refer to the Trustee while
such assignment is in effect) and shall (i) have the sole and
exclusive benefit of and the right and power to exercise, or to direct the
exercise of, all the rights and remedies of Mortgagee hereunder,
including the right to inspect the Premises, to receive notices
and financial information, to grant or withhold consents or
approvals, to benefit from indemnities, to receive, hold and
apply Proceeds and any Cash and Cash Collateral or Letter of
Credit or any other amount or property provided by Mortgagor
hereunder, and, upon the occurrence and during the continuance of
an Event of Default, to take any action required or permitted of
Mortgagee, all in the Trustee's own name, and to exercise all
other rights and remedies of Mortgagee hereunder, (ii) be bound
by all the terms hereof which apply to Mortgagee, and (iii)
except to the extent otherwise specified herein or in the Trust
Agreement, act in a commercially reasonable manner in making any
determination called for of it (without requiring thereby that
any Holder is obligated to act in a commercially reasonable
manner) under this Mortgage or in granting or withholding any
approval or consent called for under or requested pursuant to
this Mortgage. Mortgagor hereby acknowledges the foregoing and
agrees to be bound to the Trustee, upon such assignment,
recognizing the Trustee as Mortgagee hereunder as if the Trustee
were named in this Mortgage as Mortgagee. Upon such assignment,
Mortgagor's obligations to Mortgagee specified in this Mortgage
shall be satisfied by Mortgagor's tendering full and timely
payment or performance thereof to the Trustee. With respect to
delivery by Mortgagee of documents and other written materials,
Mortgagee shall have only the obligations expressly set forth
herein or in the other Loan Documents or in the Trust Agreement.
All rights and remedies of the Trustee as Mortgagee hereunder,
including all indemnities running to Mortgagee, shall also
operate for the benefit of the Holders (as defined in the Trust
Agreement) as provided in the Trust Agreement and for the benefit
of the Rate Swap Counterparty, and shall be exercised by the
Trustee in accordance with and subject to the terms and
conditions set forth in the Trust Agreement. It is expressly
understood that all or any portion of the amounts due under the
Mortgage Note may from time to time be repaid on the terms
provided therein, subject in each case to the terms of the Trust
Agreement.
1. DEFINITIONS. The words "herein," "hereof" and
"hereunder" and other words of like import refer to this Mortgage
as a whole and not to any particular Section, subsection or other
subdivision. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Trust Agreement.
In addition, wherever used in this Mortgage, the following terms,
and the singular and plural thereof, shall have the following
meanings:
ADDITIONAL AMOUNTS: Amounts distributable to Holders
(hereinafter defined) who are United States Aliens (hereinafter
defined) that are necessary in order that every net payment of
the principal of and interest on the Certificates, after
deduction or withholding for or on account of any present or
future tax, assessment or governmental charge imposed upon or as
a result of such payment by the United States or any political
subdivision or taxing authority thereof or therein, will not be
less than the amount otherwise distributable to such Holders,
provided that (i) Additional Amounts will cease to accrue upon
the foreclosure of this Mortgage, and (ii) the obligation to pay
Additional Amounts will not apply to any one or more of the
following:
(1) any tax, assessment or other governmental charge
which would not have been so imposed but for (i) the existence of
any present or former connection between a Holder (or between a
fiduciary, settlor, beneficiary or member of such Holder, if such
Holder is an estate, a trust or a partnership) and the United
States, including, without limitation, such Holder (or such
fiduciary, settlor, beneficiary or member) being or having been a
citizen or resident or treated as a resident thereof, or being or
having been engaged in trade or business or present therein, or
having or having had a permanent establishment therein, or (ii)
such Holder's present or former status as a personal holding
company, a foreign personal holding company, or a controlled
foreign corporation for United States tax purposes or a corporation
which accumulates earnings to avoid United States federal income tax;
(2) any tax, assessment or other governmental charge
imposed on interest received by reason of such Holder's past or
present status as the actual or constructive owner of 10% or more
of the capital or profits interest in the Mortgagor;
(3) any tax, assessment or other governmental charge
which would not have been imposed but for the failure to comply
with any certification, identification or other reporting
requirements concerning the nationality, residence, identity or
connection with the United States of the Holder or Beneficial
Owner (hereinafter defined) of such Certificate, if compliance is
required by statute or by regulation of the United States
Treasury Department as a precondition to exemption from such tax,
assessment or other governmental charge;
(4) any estate, inheritance, gift, sales, transfer,
personal property or any similar tax, assessment or other
governmental charge;
(5) any tax, assessment or other governmental charge
which is payable otherwise than by deduction or withholding from
payments of principal of or interest on such Certificate; or
(6) any tax, assessment or other governmental charge
which would not have been so imposed but for the presentation by
the Holder of such Certificate, for payment on a date more than
15 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided
for, whichever occurs later;
nor will Additional Amounts be paid with respect to any payment
of principal of or interest on any such Certificate to any United
States Alien who is a fiduciary or partnership or other than the
sole Beneficial Owner of any such payment to the extent that a
beneficiary or settlor with respect to such fiduciary, a member
of such a partnership or the Beneficial Owner would not have been
entitled to the Additional Amounts had such beneficiary, settlor,
member or Beneficial Owner been the Holder of such Certificate.
The term "UNITED STATES ALIEN" means any person who,
for United States federal income tax purposes, is a foreign
corporation, a nonresident alien individual, a nonresident alien
fiduciary of a foreign estate or trust, or a foreign partnership
one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a nonresident alien
individual or a nonresident alien fiduciary of a foreign estate
or trust.
ADDITIONAL CERTIFICATES: As defined in the Trust Agreement.
ADDITIONAL COUNTERPARTY: As defined in Section 44 hereof.
ADDITIONAL NOTES: As defined in Section 44 hereof.
ADDITIONAL RATE AGREEMENT: As defined in Section 44 hereof.
AFFILIATE: With respect to any specified Person means
any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities or other beneficial interest, by
contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
ALTERATION: As defined in Section 12(c) hereof.
APPROVED BANKS: Banks which have (i) (a) a minimum net
worth of $500,000,000, or (b) total assets of $5,000,000,000 and
(ii) a long-term unsecured debt rating of at least AA by S&P and
Aa2 by ▇▇▇▇▇'▇.
ASSIGNMENT: means the Assignment of Mortgage, Mortgage
Notes and Security Documents, dated as of the date hereof, from
Mortgagee, as assignor, to the Trustee, as assignee, together
with any amendment thereto pursuant to the provisions thereof.
APPURTENANCES: As defined in granting clause (C) hereof.
ASSIGNMENT OF LEASES: As defined in the recitals hereof.
BENEFICIAL OWNER: As defined in the Trust Agreement.
BENEFICIARY: Oak Brook Urban Venture, L.P., an
Illinois limited partnership, and its permitted successors and
assigns from time to time of its beneficial interest under that
certain trust agreement referred to in the caption of this
Mortgage.
BUILDING EQUIPMENT: As defined in granting clause (D) hereof.
BUSINESS DAY: Except in cases where the context
indicates otherwise, any day (except Saturday and Sunday) on
which commercial banking institutions and foreign exchange markets
are open for business in London, England and New York, New York.
CASH: Coin or currency of the government of the United
States of America.
CASH AND CASH EQUIVALENTS: Any or a combination of the
following: (i) Cash, (ii) U.S. Government Obligations and (iii)
Debt Securities.
CERTIFICATES: means, collectively, the Class A
Certificates and any Additional Certificates.
CLASS A CERTIFICATES: As defined in the recitals hereof.
CLASS A NOTE: As defined in the recitals hereof.
CLOSING DATE: The date of this Mortgage.
DEBT SECURITIES: Debt obligations, other than U.S.
Government Securities, of any Person, whether evidenced by bonds,
notes, debentures, certificates, book entry deposits,
certificates of deposit, commercial paper, bankers acceptances,
reinvestment letters, investment contracts, funding agreements or
other instruments, which (x) shall not be subject to prepayment
or redemption prior to maturity and (y) shall be rated not less
than the then current rating of the Certificates by each of the
Rating Agencies, or, if maturing within one year or less, having
a short-term rating by the Rating Agencies not less than A-1+/P-1
(or the then equivalent ratings); and bonds or other obligations
rated not less than the then current rating of the Notes by each of
the Rating Agencies, issued by or by authority of any state of the
United States, any territory or possession of the United States,
including the Commonwealth of Puerto Rico and agencies thereof, or
any political subdivision of any of the foregoing; or any combination
of the foregoing.
DEFAULT: The occurrence or existence of any event or
condition which with or without the giving of notice or the passage
of time, or both, would constitute an Event of Default hereunder.
DIRECT BENEFICIAL OWNER: Such Persons who presently or
may in the future own any direct ownership interest in Mortgagor
or any successor of Mortgagor, in accordance with and pursuant to
the terms hereof.
ENVIRONMENTAL LAWS: All present or future federal,
state and local laws, statutes, rules, ordinances and regulations
adopted by any governmental agency or instrumentality having the
power to adopt same relating to pollution or protection of human
health or the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface
strata) from Hazardous Substances, including, without limitation
laws, statutes, rules, ordinances and regulations relating to
emissions, discharges, releases of Hazardous Substances, or
otherwise relating to the manufacture, processing, discharge,
distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances 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 Toxic Substance Control Act, 15 U.S.C. 2601 et seq.; the
Water Pollution Control Act (also known as the Clean Water Act),
33 U.S.C. 1251 et seq.; the Clean Air Act, 42 U.S.C. 7401 et
seq.; and the Hazardous Materials Transportation Act, 49 U.S.C.
1801 et seq., as the same may be hereafter amended or modified.
ERISA: The Employee Retirement Income Security Act of
1974, as amended from time to time.
EVENTS OF DEFAULT: Any of the following:
(a) (i) Failure to make any payment of interest on any
Mortgage Note when due; (ii) failure to pay the principal amount
of any Mortgage Note on the maturity date thereof; (iii) failure
to pay when due any Additional Amounts; or (iv) failure to pay
when due any amounts owed to the Rate Swap Counterparty under the
Rate Swap Agreement; or
(b) Any insurance required to be maintained with
respect to the Mortgaged Property pursuant to Section 6 shall not
be in effect or shall otherwise be cancelled or terminated or
shall expire (and replacement insurance or a binder for such
replacement insurance complying with the provisions of Section 6
has not been effected prior to such event); or
(c) Any violation of the terms of Section 8(a)
requiring the payment of all Impositions (subject to the terms of
Section 8(c)), and any violation of the terms of Section 8(b)
requiring the discharge of all Liens within forty five (45)
Business Days after receipt of written notice of the filing
thereof (subject to the terms of Section 8(c)) or the incurrence
of any indebtedness in violation of Section 12(c) of this
Mortgage or the occurrence of any Transfer in violation of
Sections 12(a)-(b) of this Mortgage; or
(d) Any other default in the performance or payment,
or breach, of any material covenant, representation or agreement of
Mortgagor contained herein or in any other Loan Document (other than
a covenant, representation or agreement, a default in the performance or
payment of or the breach of which is specifically dealt with
elsewhere in this definition), which default is not cured within
thirty (30) Business Days after written notice to Mortgagor from
Mortgagee or, in the case of performance of an Obligation other
than payment of Indebtedness of Mortgagor, if such default is not
susceptible of being cured with diligence within said thirty (30)
Business Day period, such additional period of time as may be
reasonably necessary to cure same, provided that Mortgagor
commences such cure within said thirty (30) Business Day period
and diligently prosecutes same, subject to Excusable Delays,
until its completion, but in no event shall such extended period
exceed one hundred eighty (180) days, subject to Excusable
Delays, unless, only in the case of cures that require
construction or remedial work, such cure cannot with diligence be
completed within such 180-day period, in which case such period
shall be extended for an additional sixty (60) days, subject to
Excusable Delays; or
(e) The entry by a court of (A) a decree or order for
relief in respect of Mortgagor in an involuntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) a decree
or order adjudging Mortgagor a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of
Mortgagor under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of Mortgagor or of any substantial part
of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect
for a period of ninety (90) consecutive days; or
(f) The commencement by Mortgagor of a voluntary case
or proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of it in an involuntary case or proceeding under any
applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the
filing by Mortgagor of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law, or
the consent by Mortgagor to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official
of Mortgagor or of any substantial part of any of its property,
or the making by Mortgagor of an assignment for the benefit of
creditors, or the admission by Mortgagor in writing of its
inability to pay its debts generally as they become due, or the
taking of official trust action of Mortgagor (or if, at any time,
Mortgagor shall no longer be a trust, corporate or partnership
action, as the case may be) in furtherance of any such action.
Notwithstanding the foregoing, any default under (e) or (f) of
the foregoing definition which relates to a trustee of an
Illinois land trust (or other form of grantor trust) which is the
Mortgagor may be cured by the beneficiary of such trust
substituting another trustee for the trustee creating the
default, within ninety (90) days after such default arises.
EXCUSABLE DELAY: A delay due to acts of God,
governmental restrictions, enemy actions, civil commotion, fire,
casualty, strikes, shortages of supplies or labor, work stoppages
or other causes beyond the reasonable control of Mortgagor, but
lack of funds shall not be deemed a cause beyond the reasonable
control of Mortgagor.
EXPANSION: As defined in Section 13(f).
GAAP: As defined in Section 15(a) hereof.
GOVERNMENTAL AUTHORITY: Any federal, state or local
government or any other political subdivision thereof exercising
executive, legislative, judicial, regulatory or administrative
functions.
GROUND LEASE: As defined in the recitals hereof.
GROUND LESSOR: As defined in the recitals hereof.
HAZARDOUS SUBSTANCE: Any material waste or substance which is:
(i) included within the definition of
"hazardous substances," "hazardous materials," "toxic
substances," or "solid waste" in or pursuant to any
Environmental Law, or subject to regulation under any
Environmental Law;
(ii) listed in the United States Depart
ment of Transportation Optional Hazardous Materials Table,
49 C.F.R. 172.101 enacted as of the date hereof or hereafter
amended, or in the United States Environmental Protection
Agency List of Hazardous Substances and Reportable
Quantities, 40 C.F.R. Part 302, as enacted as of the date
hereof or as hereafter amended; or
(iii) explosive, radioactive, asbestos,
a polychlorinated biphenyl, oil or a petroleum product.
The term "Hazardous Substance" will not be deemed to
include materials which are stored, used, sold or held in
inventory in the ordinary course of the operation of the
businesses on the Mortgaged Property, in compliance with all
Environmental Laws, provided, however, such materials shall be
deemed to be included for purposes of Section 41 hereof.
HOLDER: As defined in the Trust Agreement.
IMPOSITIONS: All taxes (including, without limitation
all ad valorem, sales (including those imposed on lease rentals),
use, single business, gross receipts, value added, intangible
transaction, privilege or license or similar taxes), assessments
(including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed
prior to the date hereof and whether or not commenced or
completed within the term of this Mortgage), water, sewer or
other rents and charges, excises, levies, fees (including,
without limitation, license, permit, inspection, authorization
and similar fees), and all other governmental charges, in each
case whether general or special, ordinary or extraordinary, or
foreseen or unforeseen, of every character in respect of the
Mortgaged Property and/or any Rents (including all interest and
penalties thereon), which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in
respect of or be a Lien upon (a) Mortgagor (including, without
limitation, all income, franchise, single business or other taxes
imposed on Mortgagor for the privilege of doing business in the
Jurisdiction in which the Mortgaged Property is located), (b) the
Mortgaged Property, or any other collateral delivered or pledged
to Mortgagee in connection with the Loan, or any part thereof, or
any Rents therefrom or any estate, right, title or interest
therein, or (c) any occupancy, operation, use or possession of,
or sales from, or activity conducted on, or in connection with
the Mortgaged Property or the leasing or use of all or any part
thereof. Nothing contained in this Mortgage shall be construed to
create any obligation on the part of Mortgagor in favor of any
tenant occupying any portion of the Premises to pay any tax,
assessment, levy or charge imposed on any such tenant.
IMPROVEMENTS: As defined in granting clause (B)
hereof, except that it is understood that the term "Improvements"
shall not include buildings, structures and other improvements
situated on portions of the Real Estate leased to Tenants but
owned by such Tenants under ground leases or other customary
arrangements, except at such time, if any, and only for such
time, as Mortgagor's shall become entitled to possession of such
improvements by reason of the termination of such ground lease or
other arrangement.
INDEBTEDNESS: As defined in the recitals hereof.
INDEMNIFIED PARTIES: As defined in Section 41 hereof.
INDEPENDENT ACCOUNTANT: KPMG Peat Marwick, or another
national firm of independent certified public accountants
selected by Mortgagor.
INDEPENDENT ARCHITECT: With respect to a particular
project, an independent architect or engineer, as appropriate for
such project, selected by Mortgagor, licensed or registered to
practice in the state where the Premises is located and having at
least five (5) years' experience in respect of the subject matter
of such project.
INSURANCE REQUIREMENTS: All terms of any insurance
policy required hereunder covering or applicable to the Real
Estate or Building Equipment or any part thereof, all
requirements of the issuer of any such policy, and all orders,
rules, regulations and other requirements of the national board
of fire underwriters (or any other body exercising similar
functions) applicable to or affecting the Real Estate or Building
Equipment or any part thereof or any use of the Real Estate or
Building Equipment or any part thereof.
INTANGIBLES: As defined in granting clause (J) hereof.
INTEREST PAYMENT DATE: As defined in the Class A Note.
INTEREST PERIOD: As defined in the Class A Note.
INVESTMENT GRADE: A long term unsecured debt rating
not lower than BBB by S&P and Baa2 by Moody's (or when used with
respect to providers of insurance under Section 6 hereof, a
claims-paying-ability rating not lower than BBB by S&P and Baa3
by Moody's).
LEASED PERSONALTY: Any Building Equipment acquired by
Mortgagor pursuant to any conditional sale contract or other
title retention agreement or any financing lease; provided that
the aggregated value of all leased or financed Building Equipment
does not exceed $500,000.
LEASES: As defined in granting clause (E) hereof.
LEASING COSTS: As defined in Section 21(a) hereof.
LEGAL REQUIREMENTS: As defined in Section 14.
LETTER OF CREDIT: A clean, irrevocable, unconditional
transferable letter of credit in favor of the Mortgagee (which
will be the Trustee upon execution and delivery of the
Assignment) and entitling the Mortgagee to draw thereon in New
York, New York or in such other city as the Corporate Trust
Office of the Mortgagee may from time to time be located, issued
by a domestic bank or the U.S. agency or branch of a foreign
bank, the investment rating of which at the time such letter of
credit is delivered is not less than the Required Rating
applicable thereto, or if there are no domestic banks or U.S.
agencies or branches of a foreign bank having such investment
rating then issuing letters of credit, then such letter of credit
may be issued by a domestic bank, the long term unsecured debt
rating of which is the highest such rating then given to a
domestic commercial bank.
LIEN: Any mortgage, deed of trust, lien, pledge,
hypothecation, assignment, security interest, or any other
encumbrance of, on or affecting the Mortgaged Property or any
portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same
economic effect as any of the foregoing, the filing of any
financing statement, and mechanic's, materialmen's and other
similar liens and encumbrances.
LOAN: As defined in the recitals hereof.
LOAN DOCUMENTS: This Mortgage, the Assignment of
Leases, the Rate Swap Agreement, the Mortgage Notes, the Trust
Agreement, the Assignment and any and all other agreements,
instruments or documents evidencing, securing or delivered in
connection with the Loan and the transactions contemplated
hereby.
LTV RATIO: means an amount, expressed as a percentage,
derived from dividing (a) the aggregate principal amount of the
Loan outstanding as of the date of such computation by (b) the
Appraised Value (as defined in the Trust Agreement) of the
Mortgaged Property.
MAJORITY AFFILIATE: A Person or Persons directly or
indirectly, through one or more intermediaries, controlling,
controlled by or under common control with the Person or Persons
in question. The term "control", as used in the immediately
preceding sentence, shall mean, with respect to a Person that is
a corporation or a trust, the right to exercise, directly or
indirectly, more than 50% of the voting rights attributable to
the shares of the controlled corporation or trust and, with
respect to a Person that is not a corporation or a trust, the
possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of the
controlled Person.
MANAGEMENT AGREEMENT: Each management agreement which
is from time to time effective respecting the management or
leasing of the Mortgaged Property between Mortgagor and Manager.
MANAGER: Urban Retail Properties Co., any Affiliate
thereof, or another Qualifying Manager.
MATERIAL ALTERATION: As defined in Section 13(d).
MATERIAL LEASE: As defined in Section 16(a).
MATURITY DATE: October 29, 2004.
MAXIMUM FORESEEABLE CASUALTY LOSS: As defined in Section 6(c).
MINIMUM DEPOSIT AMOUNT: As defined in Section 7(b) hereof.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc. or any successor thereto.
MORTGAGE: This Mortgage, Security Agreement and Assign
ment of Rents, as it may be amended, modified, extended or
supplemented from time to time.
MORTGAGEE: The Person identified as Mortgagee in the
caption to this Mortgage, subject to the terms of the paragraph
immediately preceding Section 1 hereof.
MORTGAGE ESCROW AMOUNTS: As defined in Section 9(a).
MORTGAGE ESCROW SECURITY: As defined in Section 9(b).
MORTGAGE NOTES: As defined in the recitals hereof.
MORTGAGED PROPERTY: As defined in the granting clauses hereof.
MORTGAGOR: The Person identified as Mortgagor in the
caption to this Mortgage for the period during which the same
shall own the Mortgaged Property, and following any conveyance of
any of the Mortgaged Property permitted by this Mortgage, shall
mean the transferee for the period during which each transferee
shall own the Mortgaged Property, subject in all cases to Section
37 of this Mortgage; provided, however, unless the context shall
otherwise require, the term "Mortgagor" shall also include
Beneficiary.
MULTIEMPLOYER PLAN: A "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which Mortgagor is making or
has an obligation to make contributions.
NET OPERATING INCOME: With respect to any period, the
excess of Operating Income over Operating Expenses for such period.
NON-CONSOLIDATION OPINION: means an opinion of
counsel, which counsel and opinion shall be acceptable to the
Rating Agencies, to the effect that, after giving effect to a
Transfer, a court in the United States would likely not order the
substantive consolidation of Mortgagor, Depositor (as defined
under the Trust Agreement) and the appropriate persons in the
event of bankruptcy or insolvency of such appropriate persons.
NONDISTURBANCE AGREEMENT: As defined in Section 16(d).
OBLIGATIONS: As defined in the recitals hereof.
OFFICER'S CERTIFICATE: A certificate delivered to
Mortgagee and signed by the President or a Vice President of
Mortgagor (or if, at any time, Mortgagor shall be a partnership,
by an officer of a general partner of Mortgagor), or signed by
the president or a vice president of the investment advisor to
Mortgagor and/or its shareholders (or if, at any time, the
investment advisor shall be a partnership, by an officer of a
general partner of the investment advisor).
OPERATING AGREEMENTS: The Ground Lease, the Management
Agreement, and any other reciprocal easement agreements,
operating agreements and similar agreements affecting the
ownership, use and operation of the Real Estate included in the
Permitted Exceptions, as such agreements have been or may
hereafter be amended, modified or supplemented.
OPERATING EXPENSES: With respect to a specified
period, without duplication, all expenses paid or to be paid (as
applicable) by Mortgagor (or by the Manager for the account of
Mortgagor) during such period in connection with the ownership,
maintenance and operation of the Mortgaged Property (determined
as described in the final paragraph of this definition),
including, without limitation:
(i) costs and expenses related to tenant
improvements and leasing commissions, any other expenditures
on behalf of Tenants, any Building Equipment and any capital
expenditures; but in each such case only to the extent not
recovered from Tenants, from insurance proceeds or
condemnation proceeds, from the proceeds of sales of
Equipment pursuant to Section 12 or from any other Persons
(unless, in each case corresponding amounts recovered have
been included in Operating Income) and in each such case
only to the extent that the same are a generally recurring
type of expense; provided, however, that if the Mortgagor
finances all or part of the cost of any such items, the
amount paid or payable by the Mortgagor to any creditor on
account of any period in respect of such financing
(including principal, interest and any other payments) shall
be included as an Operating Expense for such period, and the
portion of the aggregate cost of such item which is so
financed shall not be deemed to be an Operating Expense
during the period in which it is incurred except to the
extent that payments are actually made during such period,
(ii) all payments required to be made
pursuant to the Operating Agreements, excluding for these
purposes any amounts payable to Ground Lessor under the
Ground Lease, other than the "Minimum Annual Rental" (as
defined in the Ground Lease);
(iii) legal, accounting, appraisal and other
professional fees and disbursements, including, without
limitation, fees and expenses required to be paid to the
Trustee and the Servicer and other amounts payable to the
Trustee and the Servicer in accordance with the Trust
Agreement (other than the Servicing Fee and the Trustee Fee,
as defined under the Trust Agreement), and to S&P and
Moody's in connection with the Mortgage Notes and/or the
Certificates;
(iv) fees and expenses of the Mortgagee paid
by the Mortgagor hereunder;
(v) expenses in connection with cleaning,
repair, maintenance, management, leasing, decoration or
painting thereof, or the provision of services to any
Tenant, net of any insurance proceeds or condemnation
proceeds in respect of any of the foregoing;
(vi) wages, benefits, payroll taxes,
uniforms, insurance costs and all other related expenses for
on-site building personnel, up to and including the level of
the on-site property manager, engaged in cleaning, repair,
maintenance, management, leasing, decoration or painting
thereof or the provision of services to any Tenant;
(vii) reasonable allocations of wages,
benefits, payroll taxes, insurance costs and all other
related expenses for bookkeeping, accounting and other
building management functions and home office expenses and
computer usage, but only if the amount of such allocations
in the aggregate exceeds the reasonable and customary
compensation described in clause (viii) for the same or
similar services;
(viii) the compensation being paid for
bookkeeping, accounting and building management services for
the Mortgaged Property, and all other items of compensation
and reimbursement payable by the Mortgagor to the Manager;
(ix) the cost of all electricity, oil, gas,
water, steam, heat, ventilation, air conditioning and any
other energy, telecommunications, utility or similar items,
including overtime usage, and the cost of building and
cleaning supplies;
(x) Impositions;
(xi) premiums for liability, casualty,
fidelity, business interruption, loss of "rental value" and
other insurance (which, in the case of any policy covering
multiple properties, shall be equitably allocated to the
Mortgaged Property pro rata in proportion to the replacement
value of each of the properties covered by such policy for
casualty insurance, the respective size and experience
rating of each of the properties covered by such policy for
liability insurance, and the insured value of each of the
properties covered by such policy for the other coverages);
(xii) amounts paid in consideration of any
modification, amendment, supplement, waiver, renewal, or
termination of any Lease; and
(xiii) all amounts paid or expenses incurred
under any Lease of an anchor department store or a
peripheral site at the Premises.
Notwithstanding the foregoing, Operating Expenses shall not
include (1) depreciation or amortization, (2) the principal of
and interest and premium, if any, on the Mortgage Notes or any
additional indebtedness of the Mortgagor (except as otherwise
provided in clause (i) above), (3) income taxes or other
Impositions in the nature of income taxes, (4) any expenses
(including legal, accounting and other professional fees,
expenses and disbursements) incurred in connection with the
issuance of the Mortgage Notes or the sale, exchange, transfer,
financing or refinancing of all or any portion of the Mortgaged
Property (other than Leased Personalty) or in connection with the
recovery of insurance or condemnation proceeds which are applied
to prepay the Mortgage Notes, (5) any expenses which in
accordance with GAAP should be capitalized (other than any such
expenses included in the preceding sentence), (6) any item of
expense which would otherwise be considered within Operating
Expenses pursuant to the provisions above but is paid directly by
any Tenant, and (7) any amounts deposited into a reserve or
escrow account (until expended or paid).
OPERATING INCOME: With respect to a specified period,
without duplication, all income paid or to be paid (as
applicable) to the Mortgagor (or to the Manager for the account
of the Mortgagor) by any Person during such period in connection
with the operation of the Mortgaged Property (determined as
described in the final paragraph of this definition), including,
without limitation, the following:
(i) all amounts payable as rent (including
percentage rent), charges for electricity, oil, gas, water,
steam, heat, ventilation, air conditioning and any other
energy, telecommunications, telephone, utility or similar
items, including overtime usage, HVAC equipment charges,
sprinkler charges, escalation charges, license fees,
maintenance fees, charges for improvements, Impositions and
other amounts payable to the Mortgagor (or to the Manager
for the account of the Mortgagor) under any Lease or other
agreement relating to the Mortgaged Property pursuant to
which space (including storage space rentals and rentals for
community hall usage), utilities, facilities, equipment,
parking facilities or other services are furnished by the
Mortgagor, and including late charges, default interest and
temporary investment income but excluding any security
deposits received;
(ii) condemnation proceeds under a temporary
Taking to the extent that such proceeds are compensation for
lost rent;
(iii) business interruption and loss of
"rental value" insurance proceeds;
(iv) proceeds of any sale of Building
Equipment pursuant to Section 12 hereof but only to the
extent that the same are of a generally recurring type; and
(v) all amounts payable under any Lease of
an anchor department store or a peripheral site at the
Premises reasonably expected by the Mortgagor to recur in
the ordinary course of business;
provided, however, that the items of income described in
subparagraph (i) shall be reduced (x) by the average bad
debts expense for the first two calendar years preceding the
year in which the calculation of Net Operating Income is
made, as established annually by the Mortgagor in accordance
with its bad debts policy and generally acceptable
accounting procedures, and (y) to the extent such average
exceeds the amount described in (x), the amount of any
receivables for Tenants at the Premises which are more than
ninety days old and which have been created during the last
calendar year in which such calculation of Net Operating
Income is made.
Notwithstanding the foregoing clauses (i)-(v), Operating Income
shall not include (A) any condemnation or insurance proceeds
(other than of the types described in clauses (ii) and (iii)
above), (B) any proceeds resulting from the sale, exchange,
transfer, financing or refinancing of all or any part of the
Mortgaged Property (other than of the types described in clauses
(ii) and (iv) above), (C) any rent accrued by the Mortgagor but
not received because of any free rent provisions or other rental
concessions in any Lease, (D) any repayments received from
Tenants of principal loaned or advanced to Tenants by the
Mortgagor pursuant to the terms hereof, or (E) any type of income
which would otherwise be considered Operating Income pursuant to
the provisions above but is paid directly by any Tenant to a
Person other than the Mortgagor (or the Manager on account of the
Mortgagor).
OPINION OF COUNSEL: means a written opinion of counsel
reasonably approved by Mortgagee at the expense of Mortgagor.
PERMITTED EXCEPTIONS: Those matters set forth on
Exhibit B annexed hereto and made a part hereof.
PERMITTED INVESTMENTS:
(a) (i) U.S. Government Securities and (ii) mutual
funds that invest in U.S. Government Securities, U.S.
Governmental Agency Securities, or commercial paper having a
rating of not less than A-1 by S&P or P-1 by ▇▇▇▇▇'▇;
(b) certificates of deposit or other interest-bearing
obligations of the Trustee or another bank or trust company that
is a member in good standing of the Federal Reserve System having
a combined capital, surplus and undivided profits of not less
than $100,000,000, provided that the Trustee or such other bank
or trust company has (i) short-term unsecured debt rating of not
less than A-1+ by S&P or a long-term unsecured debt rating of not
less than AA by S&P, and (ii) a short-term unsecured debt rating
of not less than P-1 by ▇▇▇▇▇'▇ or a long-term unsecured debt
rating of not less than Aa2 by ▇▇▇▇▇'▇ (or in each case, if no
bank or trust company is so rated, the highest comparable rating
then given to any bank or trust company, but in such case only
for funds invested overnight or over a weekend) and the
investments shall mature or be redeemable upon the option of the
holders thereof on or prior to the earlier of (x) one month from
the date of their purchase or (y) the Business Day preceding the
date such amounts are required to be applied under this Mortgage;
(c) bonds or other debt obligations having (i) a short-
term unsecured debt rating of not less than A-1+ by S&P or a long-
term unsecured debt rating of not less than AA- by S&P, and (ii)
a short-term unsecured debt rating of not less than P-1 by
▇▇▇▇▇'▇ or a long-term unsecured debt rating of not less than Aa2
by ▇▇▇▇▇'▇ issued by or by authority of any state of the United
States, any territory or possession of the United States,
including the Commonwealth of Puerto Rico and agencies thereof,
or any political subdivision of any of the foregoing;
(d) repurchase agreements issued by a bank having a
short term debt rating of not less than A-1+ by S&P, and not less
than P-1 by ▇▇▇▇▇'▇ which are secured by U.S. Government
Securities maturing on or prior to the earlier of (x) one month
after the date the repurchase agreement is entered into or (y)
the Business Day preceding the such amounts are required to be
applied under this Mortgage;
(e) commercial paper rated not less than A-1+ by S&P
and not less than P-1 by ▇▇▇▇▇'▇ maturing or to be redeemable
upon the option of the holders thereof on or prior to the earlier
of (x) one month from the date of their purchase or (y) the
Business Day preceding the date such amounts are required to be
applied under this Mortgage; which investment, so long as no
Event of Default has occurred and is continuing hereunder, shall
be upon the written direction of the Mortgagor; and
(f) any other investment, as confirmed by the Rating
Agencies, that would not result in a downgrading or withdrawal of
the ratings then assigned to the Certificates by the Rating Agencies.
With respect to items (b) through (e) above, each such
instrument shall have a maturity of not more than 365 days, shall
not have an "r" highlighter affixed to its rating, and by its
terms should have a predetermined fixed dollar amount of
principal due at maturity that cannot vary or change, and
interest shall be tied to a fixed rate or a single interest rate
index plus a single fixed spread (if any), and move
proportionately with that index.
Unless otherwise directed by Mortgagor, Mortgagee shall
invest any amounts held pending their application to the purposes
herein provided in obligations of a mutual fund that invests
exclusively in U.S. Government Securities. Mortgagee shall not
be responsible for its inability to invest funds received after
11:00 a.m. New York City time.
After application to the purposes for which any amounts
invested are held and so long as no Event of Default has occurred
and is continuing hereunder, any investment income earned from
such investments shall be paid to Mortgagor.
PERMITTED OWNER: means (i) one or more Principals and
(ii) a partnership or a limited liability company in which any
one or a combination of Principals is a general partner or
managing member, as the case may be, that owns and controls, or
otherwise directly or indirectly owns and controls, at least a
25% interest.
"Control" means, for purposes of this definition, primary
responsibility to make or veto all material decisions with
respect to the operation, management, financing and disposition
of the specified interest, rather than a beneficial ownership
requirement, and without being compromised by the fact that
responsibility for such day-to-day operating and management
functions as are ordinarily handled by a property manager has
been delegated by such controlling Person pursuant to an
agreement in writing.
PERSON: Any individual, corporation, partnership,
joint venture, limited liability company, estate, trust, unincor
porated association, any federal, state, county or municipal
government or any political subdivision thereof.
PREFERRED EQUITY: As defined in Section 12(c).
PREMISES: As defined in the recitals hereto.
PRINCIPAL: Urban REIT, REIT Operating Partnership, or
any Urban Affiliate; any corporation that is directly or
indirectly majority-owned by or controlled by or under common
control with Urban REIT, the REIT Operating Partnership, or an
Urban Affiliate; any general partnership having Urban REIT, the
REIT Operating Partnership, or an Urban Affiliate as the general
partner(s) with at least equal power with all other general
partners to direct and control the general partnership; any
limited partnership having Urban REIT, the REIT Operating
Partnership, or an Urban Affiliate as the general partner(s) with
at least equal power with all other general partners to direct
and control the limited partnership; any limited liability
company having Urban REIT, the REIT Operating Partnership or an
Urban Affiliate as the managing member(s) with at least equal
power with all other managing members to direct and control the
limited liability company; or any real estate investment trust,
multi-investor trust, foundation, common fund or investor account
for which Urban REIT, the REIT Operating Partnership, or an Urban
Affiliate acts as the investment manager or advisor.
PROCEEDS: As defined in Section 7(b).
QUALIFIED FIRE PROTECTION ENGINEER: One of the
following: (a) an engineer duly licensed in the state where the
Real Estate is located who shall either (x) have five (5) years'
experience evaluating fire and life safety systems and estimating
casualty insurance claims or (y) be certified as a qualified fire
protection engineer (or equivalent) by a professional, trade or
other, similar association of recognized standing, (b) a
reputable insurance broker having an in-house engineering and
loss control group capable of estimating casualty insurance
claims, or (c) an insurer meeting the criteria set forth in
Section 6(b) hereof or a qualified employee thereof, in each case
selected by the Mortgagor and to which Mortgagee shall not object
within five (5) Business Days after notice by Mortgagor of the
identity of the proposed Qualified Fire Protection Engineer.
QUALIFIED TRANSFEREE: means (i) a pension fund,
pension trust or pension account, (ii) an insurance company which
is subject to supervision by the insurance commissioner, or a
similar official or agency, of a state of territory of the United
States (including the District of Columbia), (iii) a corporation
organized under the banking laws of the United States or any
state or territory of the United States (including the District
of Columbia) with a combined capital and surplus of at least
$100,000,000, (iv) any Person with a long-term, unsecured debt
rating from the Rating Agencies of at least investment grade, or
(v) a Person who owns or operates at least twelve (12) regional
or super-regional malls totalling at least 6,000,000 square feet;
provided, that such entity is,
(a) a Person (x) (1) with a net worth, as of date no more
that 6 months prior to the date of such transfer, of at least
$500 million, and (2) who, immediately prior to such transfer,
controls real estate equity assets of at least $1 billion, or (y)
if such Person is a pension fund advisor, only the condition set
forth in (x) (2) above must be satisfied, or
(b) a pension fund, pension trust or pension account that
has total assets of at least $500 million, managed by a Person
who controls at least $1 billion of real estate equity assets.
QUALIFYING MANAGER: As defined in Section 20.
RATE SWAP AGREEMENT: Any interest rate swap
transactions pursuant to the Master Agreement, dated as of the
date hereof, between Rate Swap Counterparty and Mortgagor, as it
may be amended, modified, extended or supplemented from time to
time, and any similar interest rate swap or collar agreement
subsequently entered into by Mortgagor with respect to the Loan
or any portion thereof.
RATE SWAP COUNTERPARTY: As defined in the recitals hereof.
RATE SWAP BREAKAGE COSTS: means the payment owed, if
any, under Section 6(e) of the Rate Swap Agreement by the Mortgagor.
RATE SWAP NET AMOUNT: means the net payment, if any,
owed under the Rate Swap Agreement by the Mortgagor, as the fixed
rate payer, to the Rate Swap Counterparty, as the floating rate
payer (excluding any Rate Swap Breakage Costs).
RATING AGENCIES: S&P and ▇▇▇▇▇'▇.
REAL ESTATE: As defined in granting clause (C) hereof.
REIT OPERATING PARTNERSHIP: Urban Shopping Centers,
L.P., an Illinois limited partnership.
RENEWAL LEASE: As defined in Section 16(b) hereof.
RENTS: As defined in granting clause (E) hereof.
REQUIRED RATING: A long-term unsecured debt rating not
lower than Investment Grade in all cases except in the case of a
Letter of Credit delivered in accordance with Section 7.2(d) or
Section 13(d) hereof, and in such excepted cases shall mean a
short-term debt rating not lower than A-1+ by S&P and P-1 by
▇▇▇▇▇'▇, if the expiration date of the Letter of Credit does not
exceed three months, or a long-term debt rating not lower than AA
by S&P and Aa2 by ▇▇▇▇▇'▇, if the expiration date of the Letter
of Credit exceeds three months.
SINGLE PURPOSE ENTITY: A Person, other than an
individual, which is formed or organized solely for the purpose
of holding, directly, an ownership interest in one (1) property,
does not engage in any business unrelated to such property and
the financing thereof, does not have any assets other than those
related to its interest in the property or the financing thereof
or any indebtedness other than as permitted by this Mortgage or
the other Loan Documents, has its own separate books and records
and its own accounts, in each case which are separate and apart
from the books and records and accounts of any other Person, and
holds itself out as being a Person, separate and apart from any
other Person.
S&P: Standard & Poor's Ratings Services, a division of
the ▇▇▇▇▇▇-▇▇▇▇ Companies, or any successor thereto.
TAKING: A temporary or permanent taking by any
Governmental Authority as the result or in lieu or in
anticipation of the exercise of the right of condemnation or
eminent domain, of all or any part of the Mortgaged Property, or
any interest therein or right accruing thereto, including any
right of access thereto or any change of grade affecting the
Premises or any part thereof.
TEACHERS: Teachers' Retirement System of the State of Illinois.
TEACHERS' AFFILIATE: Any corporation, partnership,
limited liability company, trust or other entity that (i) is a
primary, secondary or tertiary majority-owned subsidiary of
Teachers or (ii) any corporation that is directly or indirectly
majority-owned or controlled by Teachers.
TENANT: Any Person leasing any portion of the Premises
and obligated to pay rent pursuant to a Lease.
THRESHOLD AMOUNT: Seven Million Dollars ($7,000,000).
TRANSFER: As defined in Section 12(a) hereof.
TRUSTEE: As defined in the recitals hereof.
TRUST AGREEMENT: As defined in the recitals hereof.
UCC: As defined in granting clause (D) hereof.
URBAN AFFILIATE: Any corporation, partnership, limited
liability company, trust or other entity that (i) is a primary,
secondary or tertiary majority-owned subsidiary of Urban REIT or
the REIT Operating Partnership, or (ii) is controlled by Persons
who are senior level officers or majority shareholders or
majority owners of Urban REIT or the REIT Operating Partnership.
URBAN REIT: Urban Shopping Centers, Inc., a Maryland corporation.
UNITED STATES OR U.S.: each mean the United States of
America; and any territory or possession of the United States or
any action to be taken within the United States, unless otherwise
explicitly provided shall include the District of Columbia,
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island and the Northern Mariana Islands.
U.S. GOVERNMENT SECURITIES AND U.S. GOVERNMENTAL AGENCY
SECURITIES: means securities that are (x) direct obligations of
the United States for the full and timely payment of which its
full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or
instrumentality and guaranteed as a full faith and credit
obligation which shall be fully and timely paid by the United
States, which in either case are not callable or redeemable at
the option of the issuer thereof (including a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the United
States Securities Act of 1933, as amended) as custodian with
respect to any such U.S. Government Securities or a specific
payment of principal of or interest on any such U.S. Government
Securities held by such custodian for the account of the holder
of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the securities
or the specific payment of principal of or interest on the
securities evidenced by such depository receipt).
WORK: As defined in Section 7(b) hereof.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Mortgagor represents and warrants to and covenants and agrees
with Mortgagee as follows:
2. WARRANTY OF TITLE. This Mortgage is and will
remain a valid, enforceable and perfected first Lien on and secu
rity interest in the Mortgaged Property subject only to the
Permitted Exceptions. Mortgagor represents and warrants that it
owns good, marketable and insurable leasehold title to the
Premises under the Ground Lease and good, marketable and
insurable title to the Improvements, subject only in each case to
the Permitted Exceptions. Mortgagor will preserve such title and
will forever warrant and defend same and the validity and
priority of the lien hereof from and against any and all claims
whatsoever other than with respect to the Permitted Exceptions.
Mortgagor warrants that the Permitted Exceptions affecting title
to the Mortgaged Property as of the date hereof shall not
materially and adversely affect the use, operation or value of
the Mortgaged Property or the ability of Mortgagor to timely pay
principal and interest due under the Mortgage Notes.
3. PAYMENT AND PERFORMANCE OF OBLIGATIONS SECURED.
a) Mortgagor shall promptly pay when due the principal of and
interest on the Indebtedness, any prepayments, late charges and
fees provided for in the Mortgage Notes, and all other payment
Obligations secured by this Mortgage, all in lawful money of the
United States of America, and shall further perform fully and in
a timely manner all Obligations of Mortgagor. All sums payable
by Mortgagor hereunder shall be paid without demand,
counterclaim, offset, deduction (except as required by law) or
defense. As of the date hereof, Mortgagor waives all rights now
or hereafter conferred by statute or otherwise to any such
demand, counterclaim, setoff, deduction or defense.
b) At or prior to the maturity of the Class A Note or
any Additional Notes (whether at the stated maturity date or due
to prepayment thereof, but not due to acceleration), payments
made by Mortgagor under the Mortgage Notes, the Rate Swap
Agreement and this Mortgage shall be applied in the following
order of priority:
(i) First, to the payment of accrued and unpaid
interest (excluding Additional Amounts and Default Interest,
if any) due and payable on the Class A Note until all such
accrued and unpaid interest then due and payable on the
Class A Note has been paid in full;
(ii) Second, to the payment of any Rate Swap Net Amount
due and owing the Rate Swap Counterparty;
(iii) Third, to the payment of accrued and unpaid
interest (excluding Additional Amounts and Default Interest,
if any) due and payable on each class of Additional Notes
until all such accrued and unpaid interest then due and
payable has been paid in full;
(iv) Fourth, to any net payments (other than breakage
costs) due any Additional Counterparty in connection with
any Additional Rate Agreement;
(v) Fifth, to the payment of all principal then due
and payable on the Class A Note until all unpaid principal
then due and payable on the Class A Note has been paid in
full;
(vi) Sixth, to the payment of all principal then due
and payable on each class of Additional Notes until all
unpaid principal on each such class of Additional Notes has
been paid in full;
(vii) Seventh, to the payment of Default Interest then
due and payable on the Class A Note until all accrued and
unpaid Default Interest then due and payable on the Class A
Note has been paid in full;
(viii) Eighth, to the payment of Default Interest then
due and payable on each class of Additional Notes until all
accrued and unpaid Default Interest then due and payable on
each class of Additional Notes has been paid in full;
(ix) Ninth, to the payment of any Additional Amounts
due and payable on the Class A Note until all such
Additional Amounts on the Class A Note have been paid in
full;
(x) Tenth, to the payment of any Additional Amounts
due and payable on each class of Additional Notes until all
such Additional Amounts on each class of Additional Notes
have been paid in full;
(xi) Eleventh, to the payment of Rate Swap Breakage
Costs due and owing the Rate Swap Counterparty; and
(xii) Twelfth, to the payment of any breakage costs
due and owing any Additional Counterparty.
4. NO DEFAULT. To the actual knowledge of Mortgagor,
Mortgagor is not in material default under the terms, conditions
or provisions of any Material Lease or Operating Agreement.
5. NEGATIVE COVENANTS. Mortgagor covenants and
agrees that it shall not:
(a) incur, create or assume any indebtedness or
Transfer or lease the Mortgaged Property or any interest therein,
except as permitted under Sections 12 and 16 hereof;
(b) engage, directly or indirectly, in any business
other than that arising out of or entering into this Mortgage and
the other Loan Documents to which Mortgagor is a party and the
ownership, management, leasing, construction, development,
operation, maintenance and expansion of the Mortgaged Property;
(c) commingle its assets with the assets of any other Person;
(d) guarantee any obligations of any Person or make
advances or loans to any Persons or entities or Affiliates of
Mortgagor (other than of the proceeds of the Certificates
offering under the Trust Agreement and other than loans to
Tenants for tenant improvements or similar purposes) except as
expressly permitted under this Mortgage;
(e) partition the Real Estate or the ground leasehold
therein under the Ground Lease or portion thereof; or
(f) voluntarily file or consent to the filing of a
petition for bankruptcy, reorganization, assignment for the
benefit of creditors or similar proceeding under any Federal or
state bankruptcy, insolvency, reorganization or other similar
law, without the unanimous consent of its trustees or partners,
as the case may be (or if Mortgagor shall hereafter be a limited
liability company or corporation, its members or shareholders, as
the case may be).
Mortgagor represents and warrants that on the Closing
Date it does not have any indebtedness or obligations which would
cause it to be in violation of the foregoing covenants.
Further, Mortgagor covenants that it will do or cause
to be done all things necessary to preserve and keep in full
force and effect its existence and will maintain adequate
capitalization (taking into account, among other things, the
market value of its assets) for its business purposes; will not
modify its partnership agreement (or other organizational
document) in any manner that would have a material adverse effect
on the interests of the Mortgagee hereunder; will pay all
expenses of the Mortgaged Property from property of the
Mortgagor; will maintain books and records and bank accounts
separate from those of its Affiliates and will maintain a
separate business office (which may be a management office at the
Premises); will at all times hold itself out to the public as a
legal entity separate and distinct from any of its Affiliates
(including in its leasing activities, in entering into any
contract, in preparing its financial statements, and in its stationery),
and will cause its Affiliates to conduct business with it on an arm's-
length basis (or, as to management and leasing, on a basis
comparable to the management and leasing arrangements at
properties similar to the Premises owned by any Affiliate of the
Mortgagor and managed by the Manager); will file its own tax
returns or, if part of a consolidated group, will join in the
consolidated tax return of such group as a separate member
thereof; and will cause its management to meet regularly to carry
on its business.
6. INSURANCE.
(a) Insurance Coverage Requirements. Mortgagor shall,
at its sole cost and expense, keep in full force and effect
insurance coverage of the types and minimum limits as follows
during the term of this Mortgage:
(i) Property Insurance. Insurance with respect to
the Improvements and the Building Equipment against any peril
included within the classification "All Risks of Physical Loss"
in amounts at all times sufficient to prevent the Mortgagor from
becoming co-insurer within the terms of the applicable policies,
but in any event such insurance shall be maintained in an amount
equal to the full insurable value of the Improvements and the
Building Equipment, the term "full insurable value" to mean the
actual replacement cost of the Improvements and the Building
Equipment (without taking into account any depreciation, and
exclusive of excavations, footings and foundations, landscaping
and paving, but inclusive of demolition and debris removal)
determined annually by an insurer, a recognized independent
insurance broker or an appraiser selected and paid by the
Mortgagor and in no event less than the coverage required
pursuant to the terms of any Lease; provided, however, if the
terms of the applicable insurance policies expressly provide for
insurance to be provided in the amount of the actual replacement
cost of the Improvements and the Building Equipment or such
policies contain a replacement cost endorsement, no such annual
determination will be necessary;
(ii) Liability Insurance. Commercial general
liability insurance, including bodily injury, death and property
damage liability, and excess liability insurance against any and
all claims, including all legal liability to the extent insurable
imposed upon the Mortgagee and all court costs and attorneys'
fees and expenses, arising out of or connected with the
possession, use, leasing, operation, maintenance or condition of
the Real Estate for a combined single limit of not less than
$15,000,000;
(iii) Workers' Compensation Insurance. Statutory
workers' compensation insurance (to the extent the risks to be
covered thereby are not already covered by other policies of
insurance maintained by the Mortgagor), with respect to any work
on or about the Real Estate;
(iv) Business Interruption. Business interruption
and/or loss of "rental value" insurance in an amount sufficient
to avoid any co-insurance penalty and to provide Proceeds which
will cover rental value for a period of not less than twenty-four
(24) months following the date of casualty or loss, the term
"rental value" to mean the sum of (A) the total Rents payable
under the Leases and (B) the total amount of all other amounts to
be received by the Mortgagor from third parties which are the
legal obligation of the Tenants, reduced to the extent such
amounts would not be received because of Operating Expenses not
incurred during a period of non-occupancy of that portion of the
Real Estate then not being occupied;
(v) Boiler and Machinery Insurance. Broad form boiler
and machinery insurance (without exclusion for explosion)
covering all boilers or other pressure vessels, machinery and
equipment located in, on or about the Real Estate and insurance
against loss of occupancy or use arising from any such breakdown
in such amounts as are generally available at commercially
reasonable premiums and are generally required by institutional
lenders for properties comparable to the Real Estate;
(vi) Flood Insurance. If all or any portion of the
Real Estate is located within a federally designated flood hazard
zone, flood insurance if available, in such amount as generally
required by institutional lenders for similar properties
provided, however, if flood insurance shall be unavailable from
private carriers, such flood insurance may be provided by the
federal government, if available; and
(vii) Other Insurance. Such other insurance requested
by Mortgagee with respect to the Mortgaged Property against loss
or damage of the kinds from time to time customarily insured
against and in such amounts as are generally available at
commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Real
Estate.
(b) Ratings of Insurers.
(i) Property and Business Interruption Insurance.
The Mortgagor will maintain the insurance coverage described
in Section 6(a)(i) above, and the insurance coverage
described in Section 6(a)(iv) above, with either (x) the
insurers who insure the Improvements and Building Equipment
on the date of this Mortgage or (y) one or more other
primary insurers having (or a syndicate of insurers through
which at least 75% of the coverage (if there are 4 or fewer
members of the syndicate) or at least 60% of the coverage
(if there are 5 or more members of the syndicate) is with
carriers having), a claims-paying-ability rating by S&P not
lower than one category below the then highest rating of the
Certificates by S&P, but in either case of (x) or (y) above,
such insurers' rating shall in no event be less than
Investment Grade by S&P and ▇▇▇▇▇'▇.
(ii) Liability and Boiler and Machinery
Insurance. The Mortgagor will maintain a portion of the
insurance coverage described in Sections 6(a)(ii) and
6(a)(v) with either (x) the insurers who insure the
Mortgaged Property on the date of this Mortgage or (y) one
or more other domestic primary insurers having (or a
syndicate of insurers through which at least 75% of the
coverage (if there are 4 or fewer members of the syndicate)
or at least 60% of the coverage (if there are 5 or more
members of the syndicate) is with carriers having), a claims-
paying-ability rating by S&P not lower than one category
below the then highest rating of the Certificates by S&P,
but in either case of (x) or (y) above, such insurers'
rating shall in no event be less than Investment Grade by
S&P and ▇▇▇▇▇'▇.
(iii) Other Insurance. The Mortgagor will
maintain a portion of the insurance coverage described in
Section 6(a)(iii) above with either an insurer having a
claims-paying-ability rating of not less than Investment
Grade or the applicable state workers' compensation fund.
In each case as to a syndicate or an individual insurer, however,
if no domestic providers of such insurance are so rated, the
requirement for such rating shall be the highest rating then
given to primary insurers by S&P; provided that in the case of an
individual insurer or a syndicate failing to satisfy the
foregoing test, supplementary qualifying coverage shall be
required within ninety (90) days after the date the Mortgagor
learns of such failure (in the case of a syndicate, only to the
extent the syndicate fails to satisfy the test); and provided
further that in the event of any loss, claims in respect of such
portion of such insurance maintained in accordance with Section
6(a)(i) above shall be payable prior to claims in respect of the
remaining portion(s) of the insurance required by such
provisions.
Notwithstanding anything to the contrary set forth herein, all
insurance required coverage shall be provided by one or more
primary insurers having an ▇▇▇▇▇▇ ▇. Best Company, Inc. rating of
"A" or better and financial size category of not less than VIII,
except to the extent that insurance in force on the date of this
Mortgage does not satisfy such criteria or if otherwise approved
by the Mortgagee. Any insurance in force on the date of this
Mortgage which is accepted or approved by Mortgagee and which is
provided by a group or syndicate of insurers shall be
satisfactory so long as a sufficient number of members of the
syndicate providing the coverage satisfy the foregoing criteria
for claims-paying ability even if one or more of the insurers
comprising the group or syndicate no longer participates in the
group or syndicate. All insurers providing insurance required by
this Mortgage shall be authorized to issue insurance in the state
where the Mortgaged Property is located.
(c) Blanket Coverage. The insurance coverage required
under Section 6(a) may be effected under a blanket policy or
policies covering the Mortgaged Property and other property and
assets not constituting a part of the Mortgaged Property; provided
that the certificate of insurance evidencing the coverage
under any such blanket policy shall specify, except in the case
of general liability insurance, the portion of the total coverage
of such policy that is allocated exclusively to the Mortgaged
Property, and any sublimits in such blanket policy applicable to
the Mortgaged Property, which amounts shall not be less than the
amounts required pursuant to Section 6(a) and which shall in any
case comply in all other respects with the requirements of this
Section 6.
(d) Form of Insurance Policies; Endorsements. All
insurance policies shall be in such form and with such
endorsements as are comparable to the forms of and endorsements
to Mortgagor's insurance policies in effect on the date hereof or
otherwise in accordance with commercially reasonable standards
applied by prudent owners of first class regional shopping
centers (taking into account the office uses also being made of
the Mortgaged Property) in the general vicinity of the Mortgaged
Property. Certificates of insurance with respect to all of the
insurance policies required hereunder have been delivered to
Mortgagee (or will be so delivered promptly after the date
hereof), and originals or certified copies of all such policies
shall be delivered to Mortgagee when the same are available and
shall be held by Mortgagee. All such policies shall name
Mortgagee as an additional insured, shall provide that all
Proceeds be payable to Mortgagee as set forth in Section 7
hereof, and shall contain: (i) a standard "non-contributory
mortgagee" endorsement or its equivalent relating, inter alia, to
recovery by Mortgagee notwithstanding the negligent or willful
acts or omissions of Mortgagor; (ii) to the extent available at
commercially reasonable rates a waiver of subrogation endorsement
in favor of Mortgagee; (iii) an endorsement providing that no
policy shall be impaired or invalidated by virtue of any act,
failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by Mortgagor,
Mortgagee or any other named insured, additional insured or loss
payee, except for the willful misconduct of Mortgagee knowingly in
violation of the conditions of such policy; (iv) an endorsement
providing for a deductible per loss of an amount not more than that
which is customarily maintained by prudent owners of first class regional
shopping centers (taking into account the office uses also being
made of the Mortgaged Property) in the general vicinity of the
Mortgaged Property, but in no event in excess of $50,000; (v) a
provision that such policies shall not be cancelled or
terminated, except in the case of nonpayment, without at least
thirty (30) days prior written notice to Mortgagee in each
instance; and (vi) a provision that such policies shall not be
terminated or cancelled for nonpayment of premium without at
least ten (10) days prior written notice to Mortgagee.
Certificates of insurance with respect to all renewal and
replacement policies shall be delivered to Mortgagee not less
than ten (10) days prior to the expiration date of any of the
insurance policies required to be maintained hereunder which
certificates shall bear notations evidencing payment of
applicable premiums. Originals or certified copies of such
replacement insurance policies shall be delivered to Mortgagee
promptly after Mortgagor's receipt thereof but in any case within
sixty (60) days after the effective date thereof. If Mortgagor
fails to maintain insurance required by this Mortgage, Mortgagee
may, in accordance with the provisions of Section 9 hereof,
procure such insurance.
(e) Compliance with Insurance Requirements. Mortgagor
shall comply with all Insurance Requirements and shall not bring
or keep or permit to be brought or kept any article upon any of
the Real Estate or cause or permit any condition to exist thereon
which would be prohibited by any Insurance Requirement, or would
invalidate insurance coverage required hereunder to be maintained
by Mortgagor on or with respect to any part of the Real Estate
pursuant to this Section 6.
(f) Separate Insurance. The Mortgagor will not take
out separate insurance contributing in the event of loss with
that required to be maintained pursuant to this Section 6 unless
such insurance complies with Section 6(d).
7. CONDEMNATION AND INSURANCE PROCEEDS.
(a) Mortgagor will promptly notify Mortgagee in
writing upon obtaining knowledge of (i) the institution of any
proceedings relating to any Taking or (ii) the occurrence of any
casualty, damage or injury to the Real Estate or Building
Equipment or any portion thereof, the restoration of which is
estimated by Mortgagor in good faith to cost more than Two
Million Dollars ($2,000,000). In addition, notice of any
casualty damage or loss, the restoration of which is estimated by
Mortgagor in good faith to cost more than Two Million Dollars
($2,000,000), shall set forth such good faith estimate of the
cost of repairing or restoring such damage or destruction in
reasonable detail if the same is then available and, if not, as
soon thereafter as it can reasonably be provided.
(b) In the event of any Taking of or casualty or other
damage or injury to the Mortgaged Property, Mortgagor's right,
title and interest in and to all compensation, awards, proceeds,
damages, claims, insurance recoveries, causes and rights of
action (whether accrued prior to or after the date hereof) and
payments which Mortgagor may receive or to which Mortgagor may
become entitled with respect to the Mortgaged Property or any
part thereof (collectively, "Proceeds"), in connection with any
such Taking (subject to the terms of the Operating Agreements and
the Leases), casualty or other damage or injury to the Mortgaged
Property, or any part thereof, are hereby assigned to and shall
be paid to Mortgagee. Notwithstanding anything to the contrary
set forth in this Mortgage, to the extent the Proceeds are not in
excess of Seven Million Dollars ($7,000,000) (the "Minimum
Deposit Amount") (excluding, solely for purposes of such
calculation, Proceeds paid in respect of the insurance described
in Section 6(a)(iv)) then, provided that no Event of Default
shall have occurred and be continuing, Mortgagee hereby consents
to and agrees that such Proceeds shall be paid directly to
Mortgagor to be applied to restoration of the Mortgaged Property
in accordance with the terms hereof (provided, however, unless an
Event of Default shall have occurred and be continuing, Proceeds
paid in respect of the insurance described in Section 6(a)(iv)
shall be paid directly to Mortgagor). Subject to the provisions
of this Section 7(b) and Section 7(c) hereof, promptly after the
occurrence of any damage or destruction to all or any portion of
the Mortgaged Property or a Taking of a portion of the Mortgaged
Property, Mortgagor shall commence and diligently prosecute to
completion, subject to Excusable Delays, the repair, restoration
and rebuilding of the Mortgaged Property (in the case of a
Taking, to the extent it is capable of being restored) (such
repair, restoration and rebuilding are sometimes hereinafter
collectively referred to as the "Work") so damaged, destroyed or
remaining after such Taking, in full compliance with all Legal
Requirements and free and clear of any and all Liens except the
Permitted Exceptions. Mortgagor will, in good faith and in a
commercially reasonable manner, file and prosecute the
adjustment, compromise or settlement of any claim for Proceeds
and, subject to Mortgagor's right to receive the direct payment
of any Proceeds up to the Minimum Deposit Amount and, with
respect to Proceeds from a Taking, subject to the applicable
terms of the Operating Agreements and the Leases and the
provisions below, will cause the same to be collected and paid
over to Mortgagee, to be held and applied in accordance with the
provisions of this Mortgage. Mortgagor hereby irrevocably
authorizes Mortgagee to file and prosecute such claim and to
collect and to make receipt for any such payment in the event
Mortgagor fails so to act or if an Event of Default shall have
occurred and be continuing, and in such case Mortgagee shall be
authorized to file such claim and prosecute it with counsel
satisfactory to it at the expense of Mortgagor. Mortgagee shall
have the right to approve, such approval not to be unreasonably
withheld, any settlement which might result in any Proceeds in
excess of the Minimum Deposit Amount, and Mortgagor will deliver
or cause to be delivered to Mortgagee all instruments reasonably
requested by Mortgagee to permit such approval. Mortgagor will
pay all costs, fees and expenses reasonably incurred by Mortgagee
(including all reasonable attorneys' fees and expenses, the fees
of insurance experts and adjusters and reasonable costs incurred
in any litigation or arbitration) in connection with the
settlement of any claim for insurance in excess of the Minimum
Deposit Amount or Proceeds in excess of the Minimum Deposit
Amount and seeking and obtaining of any payment on account
thereof in accordance with the foregoing provisions and for any
of the foregoing expenses, regardless of whether or not the
Proceeds exceed the Minimum Deposit Amount, if an Event of
Default shall have occurred and be continuing. If any Proceeds
are received by Mortgagor, such Proceeds shall, until the
completion of the related Work, be held in trust and segregated
from other funds of the Mortgagor to be used to pay for the cost
of the Work in accordance with the terms hereof, and in the event
such Proceeds are in excess of the Minimum Deposit Amount such
Proceeds shall, subject to the provisions of the Operating
Agreements and the Leases, be forthwith paid to the Trustee to be
held by the Trustee in a segregated account in trust for
Mortgagor, in each case to be applied or disbursed in accordance
with the provisions thereof.
(c) In the event that any Proceeds (other than
Proceeds paid with respect to the insurance described in Section
6(a)(iv)) are in excess of the Minimum Deposit Amount, then all
Proceeds (other than Proceeds paid with respect to the insurance
described in Section 6(a)(iv) and except that Proceeds in respect
of a Taking shall be subject to the terms and conditions of the
Operating Agreements and the Leases) shall be paid over to Mortgagee
and shall be applied as follows: first, toward reimbursement of Mortgagee's
reasonable costs and expenses in connection with recovery of the
Proceeds and disbursement of the Proceeds (as further described below),
including, without limitation, reasonable administrative costs and
inspection fees, and then, to the prepayment of the Indebtedness
secured hereby (which prepayment shall be made on the next Interest
Payment Date occurring at least ten (10) Business Days following notice to
Mortgagee of an elected or required prepayment hereunder, which
notice Mortgagor shall promptly give), without prepayment premium
or penalty, only if:
(i) Mortgagor is not required to restore the
Mortgaged Property pursuant to any Operating Agreement or Lease, and
(A) the Taking or casualty
adversely affects leased areas of the Mortgaged
Property, and the restoration of the Mortgaged
Property cannot reasonably be completed before the
date of expiration of any insurance maintained
pursuant to Section 6(a)(iv) hereof, or
(B) the Taking or casualty occurs
during the last six (6) months of the term of the
Loan, or
(C) the Taking or casualty effects
all of the Mortgaged Property; or
(ii) If such Proceeds were the result of a Taking,
then after restoration is completed, the Proceeds that are
not required to effect such restoration shall be applied,
without premium or penalty, to the prepayment of principal
and accrued interest of the Mortgage Notes.
(d) If Proceeds are not required to be applied towards
payment of the Indebtedness pursuant to Section 7(c) above, then
after payment of the expenses described in clause first of
Section 7(c), Mortgagee shall make the Proceeds (except Proceeds
paid with respect to the insurance described in Section 6(a)(iv))
which it is holding pursuant to the terms hereof available to
Mortgagor for payment of or reimbursement of Mortgagor's expenses
incurred with respect to the Work, upon the terms and subject to
the conditions set forth below and in Section 7(e):
(i) there shall be no continuing Event of
Default hereunder;
(ii) to the extent, if any, that the
estimated cost of the Work (as estimated by an Independent
Architect) shall exceed the Proceeds available, Mortgagor
shall (within a reasonable period of time after receipt of
such estimate, and in any event prior to any further
disbursement by Mortgagee) deposit with or deliver to
Mortgagee Cash and Cash Equivalents and/or a Letter of
Credit in the amount of such excess; and
(iii) Mortgagee shall, within a reasonable
period of time prior to Mortgagor's request for initial
disbursement, be furnished with an estimate of the cost of
the Work accompanied by an Independent Architect's
certification as to such costs and appropriate plans and
specifications for the Work to the extent that the same are
required by law or are prepared by the Mortgagor. The plans
and specifications shall require that the Work be done in a
first-class workmanlike manner substantially equivalent to
the quality and character of the original work in the
Improvements, so that upon completion thereof (taking into
account a commercially reasonable time to relet the affected
portion of the Mortgaged Property), the Mortgaged Property shall
be at least substantially equal in value and general utility to
the Mortgaged Property prior to the damage or destruction
(or, in the case of a partial Taking, to the state to which
it is capable of being restored). Mortgagor shall restore
all Improvements such that when they are fully restored
and/or repaired that such Improvements and their contem
plated use fully comply with all applicable Legal Requirements,
including, without limitation, zoning, environmental and
building laws, codes, ordinances and regulations.
(e) Disbursement of Proceeds shall be made from time
to time (but not more frequently than once in any month) by
Mortgagee as the Work progresses upon receipt by Mortgagee of (i)
an Officer's Certificate dated not more than thirty (30) days
prior to the application for such payment, requesting such
payment or reimbursement and setting forth the Work performed
which is the subject of such request, the parties which performed
such Work and the actual cost thereof, and also certifying that
such Work and materials are free and clear of Liens other than
Permitted Exceptions and (ii) an Independent Architect's
certificate certifying performance of the Work together with an
estimate of the cost to complete the Work. No payment made prior
to the final completion of the Work shall exceed ninety-five
percent (95%) of the value of the Work performed or materials
furnished and incorporated into the Improvements from time to
time (except in the case of contractors' or subcontractors' work
as to which final completion has been attained), and at all times
the undisbursed balance of said Proceeds, together with all
amounts for which Cash or Cash Equivalents or a Letter of Credit
deposited or delivered pursuant to clause (ii) above, shall be at
least sufficient to pay for the cost of completion of the Work,
free and clear of Liens other than Permitted Exceptions; final
payment of all Proceeds remaining with Mortgagee shall be made
upon receipt by Mortgagee of a certification by an Independent
Architect as to the completion of the Work substantially in
accordance with the submitted plans and specifications, and the
filing of a notice of completion (if such filing is required by
applicable law). If the Proceeds shall be more than the
Threshold Amount, Mortgagee shall require (i) evidence of
mechanic's lien waivers, and (ii) an endorsement to its title
insurance policy insuring the continued priority of the Lien of
this Mortgage (subject to Permitted Exceptions and any Liens
associated with the Leased Personalty) as to all sums advanced
hereunder, such endorsement to be paid for by Mortgagor. From
time to time as the Work progresses, the amount of any Cash or
Cash Equivalents so furnished may be withdrawn by Mortgagor and
paid or otherwise applied by or returned to Mortgagor in an
amount equal to the amount Mortgagor would be entitled to so
withdraw if the same were Proceeds, and any Letter of Credit so
furnished may be reduced by Mortgagor in an amount equal to the
amount Mortgagor would be entitled to reduce if the same were
Proceeds. At any time after substantial completion of any Work
in respect whereof Cash and Cash Equivalents and/or a Letter of
Credit was deposited pursuant hereto, the whole balance of any
Cash so deposited with Mortgagee and then remaining on deposit
may be withdrawn by Mortgagor and shall be paid by Mortgagee to
Mortgagor and any Cash and Cash Equivalents and/or Letter of
Credit so deposited or delivered shall, to the extent it has not
been called upon, reduced or theretofore released, be released by
Mortgagee to Mortgagor, within ten (10) days after receipt by
Mortgagee of an application for such withdrawal and/or release
together with an Officer's Certificate, and signed also (as to
the following clause (1)) by the Independent Architect, setting
forth in substance as follows:
(1) that the Work in respect of which such Cash and
Cash Equivalents and/or a Letter of Credit was deposited has been
substantially completed in all material respects in accordance
with any plans and specifications therefor previously filed with
Mortgagee under Section 7(d) hereof; and
(2) that to the knowledge of the certifying Person all
amounts which Mortgagor is or may become liable to pay in respect
of such Work through the date of the certification have been paid
in full or adequately provided for or are being contested in
accordance with Section 8(c) hereof and, to the extent that such
are customary and reasonably obtainable by prudent managers in
the metropolitan area where the Premises are located and
Mortgagor is not contesting payment in accordance with Section
8(c) hereof, that lien waivers have been obtained from the
general contractor and major subcontractors performing such Work.
8. IMPOSITIONS, LIENS AND OTHER ITEMS; CONTESTS GENERALLY.
(a) Mortgagor has filed and will file all federal,
state and local tax returns required to be filed prior to their
respective due dates (taking into account extensions thereto) and
has paid or will pay or provide for the payment of all taxes
shown or required to be shown thereon, including all required
contributions to Mortgagor's employee benefit plans (as defined
in Section 3(3) of ERISA). Subject to its right of contest set
forth in Section 8(c), Mortgagor shall pay all Impositions prior
to the date such Impositions shall become delinquent or late
charges may be imposed thereon, directly to the applicable
Governmental Authority with respect thereto, unless and to the
extent such Impositions shall be paid from any Mortgage Escrow
Amounts or any Mortgage Escrow Security pursuant to Section 9 hereof.
(b) Subject to its right of contest set forth in
Section 8(c) and its rights set forth in Sections 12(c) and (d),
Mortgagor shall at all times keep the Mortgaged Property free
from all Liens (other than the Lien hereof, the Permitted
Exceptions and the Lien upon any Leased Personalty) and shall pay
when due and payable all claims and demands of mechanics,
materialmen, laborers and others which, if unpaid, might result
in or permit the creation of a Lien on the Mortgaged Property or
any portion thereof, whether ranked senior, pari passu or junior
to the priority of the Lien created hereby, and shall in any
event cause the prompt, full and unconditional discharge of, or
otherwise secure against collection out of the Mortgaged
Property, all Liens imposed on or against the Mortgaged Property
or any portion thereof within forty-five (45) Business Days after
receiving written notice of the filing (whether from Mortgagee,
the lienholder or any other Person) thereof. Mortgagor shall do
or cause to be done, at the sole cost of Mortgagor, everything
reasonably necessary to fully preserve the first priority of the
Lien of this Mortgage against the Mortgaged Property subject to
the Permitted Exceptions. Upon the occurrence of an Event of
Default with respect to its Obligations as set forth in this
Section 8, Mortgagee may (but shall not be obligated to) make
such payment or discharge such Lien, and Mortgagor shall
reimburse Mortgagee on demand for all such advances pursuant to
Section 17 hereof.
(c) Nothing contained herein shall be deemed to
require Mortgagor to pay, or cause to be paid, any Imposition, to
satisfy any Lien, or to comply with any Legal Requirement or
Insurance Requirement, so long as Mortgagor is in good faith, and
by proper legal proceedings, diligently contesting the validity,
amount or application thereof, provided that in each case, at the
time of the commencement of any such action or proceeding, and during
the pendency of such action or proceeding (i) no Event of Default shall
exist and be continuing hereunder, (ii) adequate reserves with
respect thereto are maintained on Mortgagor's books in accordance
with GAAP (as determined by the Independent Accountant), (iii)
such contest operates to suspend collection or enforcement as the
case may be, of the contested Imposition or Lien and such contest
is maintained and prosecuted continuously and with diligence,
(iv) in the case of any Insurance Requirement, the failure of the
Mortgagor to comply therewith shall not impair the validity of
any insurance required to be maintained by Mortgagor under
Section 6 or the right to full payment of any claims thereunder,
(v) in the case of Impositions and Liens in amounts greater than
$100,000, during such contest, Mortgagor shall be required to
deliver to the Mortgagee Cash or Cash Equivalents or a Letter of
Credit in an amount equal to 125% of Mortgagor's obligations
being contested and any additional interest, charge, or penalty
arising from such contest, (vi) neither the Mortgaged Property
nor any part thereof or interest therein would be in any danger
of being sold, forfeited or lost if Mortgagor pays the amount or
satisfies the condition being contested, and Mortgagor would have
the opportunity to so pay such amount or satisfy such condition
if Mortgagor ultimately fails to prevail in the contest, and
(vii) in the case of any utility services required for the normal
operation of the Mortgaged Property, any contest or failure to
pay will not result in a discontinuance of any such service.
Notwithstanding the foregoing, including the delivery of any such
Cash or Cash Equivalents or Letter of Credit, Mortgagor promptly
shall comply with any contested Legal Requirement or Insurance
Requirement or shall pay any contested Imposition or Lien, and
compliance therewith or payment thereof shall not be deferred, if
Mortgagee may be subject to civil or criminal damages as a result
thereof. If such action or proceeding is terminated or
discontinued adversely to Mortgagor, Mortgagor, upon written
demand, shall deliver to Mortgagee reasonable evidence of
Mortgagor's compliance with such contested Imposition, Lien,
Legal Requirements or Insurance Requirements, as the case may be.
Mortgagor shall notify Mortgagee of the commencement of any
contest or similar proceeding hereunder.
(d) Mortgagor has no knowledge of any material
liability incurred by Mortgagor which remains unsatisfied for any
taxes or penalties with respect to any employee benefit plan (as
defined in Section 8(a)) or any Multiemployer Plan, or of any
lien which has been imposed on the assets of the Mortgagor
pursuant to Section 412 of the Internal Revenue Code of 1986, as
amended, or Sections 302 or 4068 of ERISA.
9. FUNDS FOR TAXES AND INSURANCE.
(a) From and after the occurrence of any Event of
Default by Mortgagor hereunder, Mortgagee may at its sole elec
tion upon one (1) Business Day's written notice to Mortgagor,
establish a segregated, interest-bearing escrow account, in which
Mortgagee shall hold additional amounts sufficient to discharge
the obligations of Mortgagor under Sections 6 and 8(a) hereof as
and when they become due (such amounts, the "Mortgage Escrow
Amounts"). Upon Mortgagee's election to retain Mortgage Escrow
Amounts in accordance with the foregoing, Mortgagee may initially
retain in such account a sum which bears the same relation to the
annual insurance premiums for all insurance required by the terms
hereof and Impositions assessed against the Real Estate for the
insurance period or tax year then in effect, as the case may be,
as (i) the number of months elapsed as of the date of such
election since the last preceding installment of said premiums or
Impositions shall have become due and payable bears to (ii)
twelve (12). For the purpose of this computation, the month in
which such last preceding installment of premiums or Impositions
became due and payable and the month in which Mortgagee makes
such election shall be included and deemed to have elapsed.
During each month thereafter, until the Mortgagee shall elect
that the provisions of this Section 9 shall no longer be applicable,
the Mortgagee may retain with respect to the Mortgage Escrow Amounts
a sum equal to one-twelfth of such insurance premiums and such
Impositions for the then-current insurance period and tax year, so
that as each installment of such premiums and Impositions shall
become due and payable, Mortgagee shall have retained a sum sufficient
to pay the same. If the amount of such premiums and Impositions has
not been definitely ascertained at the time when any such monthly
deposits are to be retained, the Mortgagee may retain Mortgage Escrow
Amounts based upon the amount of such premiums and Impositions
for the preceding year, subject to adjustment as and when the
amount of such premiums and Impositions are ascertained.
(b) At any time after Mortgagee's election to retain
Mortgage Escrow Amounts pursuant to Section 9(a) above, subject
to the conditions of the next succeeding sentence, Mortgagor may
elect to replace any Mortgage Escrow Amounts then being retained
by Mortgagee and satisfy its obligations under this Section 9 by
the delivery or posting of Cash or Cash Equivalents or a Letter
of Credit (any such security, "Mortgage Escrow Security") in an
amount which, when added to any Mortgage Escrow Amounts on
deposit, equals six (6) months of insurance premiums and six (6)
months of Impositions, to be determined on the basis of the
premiums and Impositions next coming due (and for so long as
Mortgagor elects to post such security, the same shall be in lieu
of Mortgagee's retention of such Mortgage Escrow Amounts).
(c) The Mortgage Escrow Amounts (or any Mortgage
Escrow Security posted in lieu thereof pursuant to Section 9(b))
shall be held by the Mortgagee and shall be applied to the
payment of the obligations in respect of which such Mortgage
Escrow Amounts were retained. In the absence of an acceleration
of the Mortgage Note, any Mortgage Escrow Amounts retained by (or
Mortgage Escrow Security posted with) the Mortgagee in excess of
the actual obligations for which they were retained, shall be
held and applied to the obligations for the ensuing year.
Nothing herein contained shall be deemed to affect any right or
remedy of the Mortgagee under this Mortgage or otherwise at law
or in equity, to pay any such amount and to add the amount so
paid to the Indebtedness hereby secured.
(d) If Mortgagee elects to retain Mortgage Escrow
Amounts from funds deposited with it by Mortgagor pursuant to
this Section 9, Mortgagor shall deliver to Mortgagee all tax
bills, bond and assessment statements, statements of insurance
premiums, and statements for any other obligations referred to
above as soon as the same are received by Mortgagor, and
Mortgagee shall cause the same to be paid when due to the extent
of Mortgage Escrow Amounts available therefor; provided, however,
that if Mortgagor has theretofore provided Mortgage Escrow
Security, Mortgagor shall be entitled to continue paying such
bills and statements. If Mortgagor fails to pay such bills and
statements on or before their respective due dates, Mortgagee
shall be entitled to pay same provided that Mortgagee has first
given Mortgagor three (3) Business Days' notice before applying
any Mortgage Escrow Security. It is expressly acknowledged and
agreed that Mortgagee shall have no obligation whatsoever to
advance any amounts in payment of all or any portion of such
obligations to the extent that Mortgage Escrow Amounts retained
(or Mortgage Escrow Security delivered) are insufficient to pay
any such obligations as and when the same become due.
10. ASSIGNMENT OF LEASES AND RENTS.
(a) The Leases and all of the Rents, whether now due,
past due, or to become due, and including all prepaid rents and
security deposits, are hereby absolutely, presently and uncondi
tionally assigned, transferred, conveyed and set over by
Mortgagor to Mortgagee, such Rents (other than any
Tenant security deposits which Mortgagor has not applied against
amounts owing under the applicable Lease) to be applied by
Mortgagee following the occurrence of an Event of Default in
accordance with Section 23 hereof. Mortgagor shall not otherwise
assign, transfer or encumber in any manner the Leases or the
Rents relating to the Mortgaged Property or any portion thereof
except as may be otherwise provided herein or in the Assignment
of Leases. Mortgagor shall have a license to exercise any and
all rights under the Leases and to collect and receive all Rents,
which license shall be terminable at the sole option of
Mortgagee, without regard to the adequacy of its security
hereunder, upon the occurrence and continuance of any Event of
Default without further notice to, or demand upon, Mortgagor.
The assignment in this Section 10 shall constitute an absolute
and present assignment of the Leases and Rents, and not an
assignment for security, and the existence or exercise of
Mortgagor's conditional license as provided in the immediately
foregoing sentence shall not operate to subordinate this
assignment to any subsequent assignment. It is understood and
agreed that neither the foregoing assignment of Leases and Rents
to Mortgagee nor the exercise by Mortgagee of any of its rights
or remedies hereunder including, without limitation, the
appointment of a receiver for the Mortgaged Property by any court
at the request of Mortgagee or by agreement with Mortgagor, or
the entering into possession of the Mortgaged Property or any
part thereof by such receiver shall be deemed to make Mortgagee a
"mortgagee-in-possession" or otherwise responsible or liable in
any manner with respect to the Mortgaged Property or the use,
occupancy, enjoyment or operation of all or any portion thereof,
unless and until Mortgagee, in person or by agent, assumes actual
possession thereof.
(b) If the license granted in Section 10(a) hereof
shall have been terminated by Mortgagee, Mortgagee or an agent
appointed by Mortgagee may, to the fullest extent permitted by
the Leases, do any or all of the following:
(i) exercise any of Mortgagor's rights
under the Leases, including notifying Tenants to pay
rent to an account or location selected by Mortgagee in
accordance with the terms of this Mortgage;
(ii) enforce the Leases;
(iii) demand, collect, ▇▇▇ for, attach,
levy, recover, receive, compromise and adjust, and
make, execute and deliver receipts and releases for all
rents or other payments that may then be or may
thereafter become due, owing or payable with respect to
the Leases;
(iv) demand that any sums held by
Mortgagor with respect to any Lease (including, but not
limited to, any security deposits, other deposits or
prepayments) be immediately remitted to Mortgagee; and
(v) generally, do, execute and perform
any other act, deed, matter or thing whatsoever that
ought to be done, executed and performed in and about
or with respect to the Leases, as fully as allowed or
authorized by this Section 10.
(c) Neither the execution and delivery of this
Mortgage nor any action or inaction on the part of the Mortgagee
shall release (i) any Tenant from its Lease, (ii) any guarantor
of any Lease or (iii) Mortgagor from any of its obligations under
the Leases or constitute an assumption of any such obligation
under the Leases or constitute an assumption of any such
obligation on the part of Mortgagee. No action or failure to act
on the part of Mortgagee shall adversely affect or limit the rights
of Mortgagee under this Mortgage or the Assignment of Leases or,
through this Mortgage or the Assignment of Leases, under any Lease.
11. SECURITY AGREEMENT. This Mortgage is intended to
be a security agreement and fixture filing pursuant to the UCC.
Mortgagor hereby grants a security interest in favor of Mortgagee
in and to (i) other than Leased Personalty, any and all personal
property owned by Mortgagor and described in the Granting Clauses
hereof which, under applicable law, may be subject to a security
interest pursuant to the UCC and which is not herein effectively
made part of the Real Estate, and (ii) any and all of the
Mortgaged Property which are fixtures under applicable law and
may be subject to a security interest under the UCC, to the
fullest extent that a security interest may be granted therein
under the UCC or applicable law, and in all additions to,
substitutions for and proceeds of any of the foregoing, other
than Leased Personalty, for the purpose of securing all
Indebtedness and the Obligations of Mortgagor now or hereafter
secured by this Mortgage. Mortgagor agrees to execute and
deliver financing and continuation statements covering the
property described in clauses (i) and (ii) above from time to
time and in such form as is required by applicable law to perfect
and continue the perfection of Mortgagee's lien or security
interest with respect to such property and, in the event that
Mortgagor shall fail to execute and deliver any such financing or
continuation statement promptly after demand therefor by
Mortgagee, Mortgagor hereby irrevocably authorizes Mortgagee to
file such financing and continuation statements on behalf of
Mortgagor. Mortgagor shall pay all reasonable and customary
costs of filing such statements and renewals and releases thereof
and shall pay all reasonable costs and expenses of any record
searches for financing statements Mortgagee may reasonably
require. Mortgagee shall have the rights and remedies of a
secured party under the UCC, as well as all other rights and
remedies available under this Mortgage, the other Loan Documents
or otherwise at law or in equity with respect to such property.
12. TRANSFERS, INDEBTEDNESS AND SUBORDINATE LIENS.
Unless such action is permitted by the provisions of this Section
12 or Section 16 hereof, Mortgagor will not (i) sell, assign,
convey, transfer or otherwise dispose of legal or beneficial
interests in all or any part of the Mortgaged Property, (ii)
permit any owner, directly or indirectly, of a beneficial
ownership interest in the Mortgaged Property, to transfer such
interest, whether by transfer of stock or other beneficial
interest in any entity, or otherwise, (iii) incur indebtedness,
(iv) mortgage, hypothecate or otherwise encumber or grant a
security interest in all or any part of the Mortgaged Property,
(v) sell, assign, convey, transfer, mortgage, encumber, grant a
security interest in, or otherwise dispose of any legal or
beneficial ownership interest in Mortgagor, or permit any owner
of a legal or beneficial interest in Mortgagor to do the same, or
(vi) file a declaration of condominium with respect to the Real
Estate (any of the foregoing transactions, a "Transfer").
(a) Sale of the Mortgaged Property.
(i) Mortgagor shall not sell, assign,
convey, transfer or otherwise dispose of legal or equitable
title to or any interest in all or any part of the Mortgaged
Property unless:
(A) the Rating Agencies shall
have confirmed in writing that such transfer shall
not result in a downgrading, withdrawal or
qualification of the then-ratings of the
Certificates, or
(B) after giving effect to the
proposed transaction:
(1) the Mortgaged Property shall be
beneficially owned by either (x) a Qualified
Transferee, PROVIDED, HOWEVER, that no such Transfer
shall be permitted without Mortgagee's receipt of a Non-
Consolidation Opinion, or (y) a Teachers' Affiliate,
PROVIDED that such Teachers' Affiliate qualifies as a
Single Purpose Entity, and
(2) no Event of Default shall have
occurred and be continuing;
provided further that any permitted transferee of the
Mortgaged Property shall execute an assumption, subject to
the provisions of Article 37 hereof, of the obligations of
the Mortgagor under this Mortgage.
(ii) Mortgagor also may transfer or dispose
of Building Equipment which is being replaced or which is no
longer necessary in connection with the operation of the
Premises free from the interest of Mortgagee under this
Mortgage provided that such transfer or disposal will not
materially adversely affect the value of the Mortgaged
Property taken as a whole, will not materially impair the
utility of the Premises, and will not result in a reduction
or abatement of, or right of offset against, the Rents
payable under any Lease, in either case as a result thereof,
and provided that any new Building Equipment acquired by
Mortgagor (and not so disposed of) shall be subject to the
interest of Mortgagee under this Mortgage unless the same
constitutes Leased Personalty. Mortgagee shall, from time
to time, upon receipt of an Officer's Certificate requesting
the same and confirming satisfaction of the conditions set
forth above, execute a written instrument in form reasonably
satisfactory to it to confirm that such Building Equipment
which is to be, or has been, sold or disposed of is free
from the interest of Mortgagee under this Mortgage.
(b) Transfer or Encumbrance of Interests of Mortgagor.
A sale, assignment, conveyance, transfer, or other disposition or
hypothecation or other encumbrance of a direct or indirect
beneficial ownership interest in Mortgagor shall be permitted if
(i) Mortgagee shall have consented thereto and the Rating
Agencies shall have confirmed that such transfer shall not result
in a downgrading, withdrawal or qualification of the then-ratings
of the Certificates, or (ii) after giving effect to the proposed
transaction, a Permitted Owner or a Qualified Transferee shall,
individually or acting in concert, be the managing or co-managing
general partner of, or control, Mortgagor ("control" meaning, for
purposes of this Section 12(b), primary responsibility to make or
veto all material decisions with respect to the operation,
management, financing and disposition of the Mortgaged Property,
rather than a beneficial ownership requirement, and without being
compromised by the fact that responsibility for such day to day
operating and management functions as are ordinarily handled by a
property manager or for leasing activities has been delegated by
such controlling Person pursuant to an agreement in writing).
Notwithstanding the foregoing, prior to any Transfer of (A) a
limited partnership interest of Mortgagor that results in a
Person owning more than a 49% limited partnership interest of
Mortgagor if such Person did not own more than a 49% limited
partnership interest in Mortgagor as of the date hereof, or (B)
the shares of any general partner of Mortgagor that results in a
Person owning more than 49% of the outstanding shares of such
general partner if such Person did not own more than 49% of the
outstanding shares of such general partner as of the date hereof,
Mortgagee shall be in receipt of (1) written confirmation from the
Rating Agencies that any such transfer will not result in the
downgrading, qualification or withdrawal of the then current
rating on the Class A Certificates (or, if the Class A
Certificates are not then outstanding, the rating of the highest
rated outstanding class of Certificates), or (2) a Non-
Consolidation Opinion.
(c) Indebtedness. Mortgagor shall not incur, create
or assume any indebtedness or incur any liabilities without the
consent of Mortgagee and written confirmation from the Rating
Agencies that the incurrence of any such indebtedness or
liability shall not in itself result in a downgrading, withdrawal
or qualification of the then current ratings of any of the
Certificates; provided, however, so long as no Event of Default
shall have occurred and be continuing, Mortgagor may, without the
consent of Mortgagee, incur, create or assume the following
indebtedness:
(i) the Mortgage Notes and the other
obligations, indebtedness and liabilities secured by this
Mortgage or set forth in any other Loan Document;
(ii) (x) accrued rental and similar accruing
obligations under the Ground Lease and (y) amounts, not
secured by the Mortgaged Property, payable by or on behalf
of Mortgagor for or in respect of the operation of the
Mortgaged Property in the ordinary course of operating
Mortgagor's business and is not more than sixty (60) days
past due, including amounts payable by or on behalf of
Mortgagor to suppliers, contractors, mechanics, vendors,
materialmen or other persons providing property or services
to Mortgagor or to the Mortgaged Property and capitalized
personal property leasing expense, or in connection with the
ownership, management, operation, leasing, cleaning,
maintenance, repair, replacement, financing, improvement,
alteration or restoration thereof incurred in the ordinary
course of operating Mortgagor's business (provided, however,
that notwithstanding the foregoing, in no event shall ▇▇▇▇
▇▇▇▇▇ be permitted under this provision to enter into a note
for borrowed money);
(iii) amounts, not secured by the Mortgaged
Property, payable or reimbursable to any Tenant on account
of work performed at the Mortgaged Property by such Tenant
or for costs incurred by such Tenant in connection with its
occupancy of space in the Mortgaged Property, including for
tenant improvements (provided, however, that notwithstanding
the foregoing, in no event shall Mortgagor be permitted
under this provision to enter into a note for borrowed money);
(iv) indebtedness of Mortgagor, on an
unsecured basis, that might be owed to the counterparty to a
Rate Swap Agreement, by reason of a default thereunder on
the part of Mortgagor.
Capital which may be required by Mortgagor from its
partners from time to time may be contributed to Mortgagor as a
capital contribution with such preferred returns thereon as
Mortgagor may determine, as long as such capital contributions
are clearly denominated as equity ("Preferred Equity"); PROVIDED,
HOWEVER, that
(i) the aggregate amount of Preferred Equity
together with the outstanding principal amount of
indebtedness of the Note may not exceed 85% of the Appraised
Value (as defined in the Trust Agreement) of the Mortgaged
Property at the applicable time, which Appraised Value shall
be acceptable to the Rating Agencies, as confirmed in
writing by the Rating Agencies;
(ii) if the holder of the Preferred Equity is
not a partner of Mortgagor on the date hereof, then the
Rating Agencies shall have confirmed in writing that such
party's holding such Preferred Equity will not result in a
downgrading, withdrawal or qualification of the then current
ratings of the Certificates;
(iii) the terms of which shall require
that the holder of the Preferred Equity will not receive any
distributions on account thereof until (A) all current
payments under this Mortgage and the Mortgage Notes have
been paid, (B) all Operating Expenses then due and payable
have been paid, (C) the cost of all leasehold or tenant
improvements or contributions on account thereof required
under Leases have been paid and (D) adequate reserves (as
determined by an Independent Architect to insure that
sufficient amounts are available for the performance of
capital expenditures and improvements at the time such
performance will be required) have been funded for capital
expenditures and improvements, whether or not presently
contemplated or expected and whether ordinary or
extraordinary;
(iv) the holder of the Preferred Equity may
not pledge, assign, transfer or convey its Preferred Equity
unless such holder has obtained written confirmation from
the Rating Agencies that such pledge, assignment, transfer
or conveyance will not result in the downgrade,
qualification or withdrawal of the then current ratings of
the Certificates; and
(v) the Rating Agencies confirm in writing
that any consent, approval or control rights which the
holder of the Preferred Equity has incident to such
Preferred Entity with respect to the actions of Mortgagor
will not result in a downgrading, withdrawal or
qualification of the then current ratings of the Certificates.
(d) Additional Permitted Transfers. Notwithstanding
the above provisions of this Section 12, and so long as no Event
of Default shall have occurred and be continuing, Mortgagor
without the consent of Mortgagee may (i) make transfers of
immaterial portions of the Real Estate to Governmental
Authorities in connection with Takings of such portions of the
Real Estate for dedication or public use (subject to the
provisions of Section 7 hereof) or non revenue-generating (as of
the date hereof) portions of the Real Estate to third parties,
including, without limitation, owners of outparcels, department
store pads or other properties for the purpose of erecting and
operating additional structures whose use is integrated with the
use of the Mortgaged Property, provided same shall not cause a
reduction in the Mortgaged Property cash-flow, and (ii) grant
easements, restrictions, covenants, reservations and rights of
way in the ordinary course of business for water and sewer lines,
telephone and telegraph lines, electric lines or other utilities
or for other similar purposes, provided that no transfer,
conveyance or encumbrance set forth in the foregoing clauses (i)
and (ii) shall (A) materially impair the utility and operation of
the Real Estate, or (B) materially adversely affect the value of
the Real Estate. If Mortgagor shall receive any consideration in
connection with any such transfer or other conveyance, Mortgagor
shall have the right to use any such proceeds in connection with
any Alterations performed in connection with, or required as a
result of, such conveyance. Any net proceeds received by
Mortgagor in excess of the cost of such Alterations shall be paid
to Mortgagee in repayment of the Mortgage Notes on the next
Interest Payment Date occurring at least ten (10) Business Days
following notice to Mortgagee of such repayment, which notice
Mortgagor shall promptly give, provided, however, that with
respect to such transfers or other conveyances of nonrevenue-
generating portions of the Real Estate, Mortgagor
may retain the first Five Hundred Thousand Dollars ($500,000) of
net proceeds on a cumulative basis (subject, however, to the same
being used to pay the costs of any such Alterations). In
connection with any transfer, conveyance or encumbrance permitted
pursuant to clauses (i) and (ii) above, the Mortgagee shall
execute and deliver any instrument reasonably necessary or
appropriate to evidence its consent to said action and/or, in the
case of the transfers referred to in clause (i) above, to release
the portion of the Real Estate affected by such Taking or such
transfer from the Lien of this Mortgage or, in the case of clause
(ii) above, to subordinate the Lien of this Mortgage to such
easements, restrictions, covenants, reservations and rights of
way or other similar grants upon receipt by the Mortgagee of:
(A) a copy of the instrument of transfer; and
(B) an Officer's Certificate stating
(x) with respect to any Taking, the consideration, if
any, being paid for the transfer and (y) with respect
to any transfer pursuant to clause (i) or (ii) above,
that such Transfer does not materially impair the
utility and operation of the Real Estate or materially
reduce its value.
All Taking Proceeds shall be applied in accordance with the
provisions of Section 7 hereof.
(e) Not less than five (5) Business Days prior to the
closing of any transaction subject to the provisions of this
Article 12 (other than subsection (d) hereof), Mortgagor shall
deliver to Mortgagee and the Rating Agencies an Officer's
Certificate describing the proposed transaction and stating that
such transaction is permitted by this Article 12, together with
any appraisal or other documents upon which such Officer's
Certificate is based. In addition, Mortgagor shall provide the
Mortgagee and the Rating Agencies with copies of executed deeds,
assignments of Direct Beneficial Owner interests in the
Mortgagor, mortgages or other similar closing documents within
ten (10) days after such closing.
(f) Notwithstanding any provision in this Section 12
to the contrary, this Mortgage shall not restrict the right of
(i) any shareholder in the Urban REIT from transferring its
shares in the Urban REIT or to cause or permit its interest in
the Urban REIT to be redeemed or (ii) any limited partner of REIT
Operating Partnership from transferring its limited partnership
interests in REIT Operating Partnership.
13. MAINTENANCE OF MORTGAGED PROPERTY; ALTERATIONS;
INSPECTION; UTILITIES.
(a) Mortgagor shall keep and maintain the Mortgaged
Property and every part thereof in good, clean order, condition
and repair, subject to ordinary wear and tear, and, subject to
Excusable Delays and the provisions of this Mortgage with respect
to damage or destruction caused by casualty events or Takings,
shall not permit or commit any waste, impairment, or
deterioration of the Mortgaged Property in any material respect.
Mortgagor further covenants to do all other acts which, in light
of the character or use of the Mortgaged Property, may be
reasonably necessary to protect the security hereof, the specific
enumerations herein not excluding the general. Mortgagor shall
not remove or demolish any Improvement on the Premises except as
the same may be necessary in connection with an Alteration or a
restoration in connection with a Taking or casualty in accordance
with the terms and conditions hereof.
(b) Except as may be necessary in connection with an
Alteration permitted by Sections 13(c) or 13(f), Mortgagor shall
not make any changes or allow any material changes to be made in
the nature of the use of the Real Estate or any part thereof, or
initiate or take any trust action or furtherance of any change in
any zoning or other land use classification affecting all or any
portion of the Real Estate now or hereafter in effect and
affecting all or any portion of the Real Estate.
(c) Provided that no Event of Default shall have
occurred and be continuing hereunder, Mortgagor shall have the
right, without Mortgagee's consent, to undertake any Expansion or
any alteration, improvement, demolition or removal of the
Mortgaged Property or any portion thereof (any Expansion and any
such alteration, improvement, demolition or removal performed by
Mortgagor, an "Alteration") so long as such Alteration is
undertaken in accordance with the applicable provisions of this
Mortgage and the other Loan Documents, is not prohibited by the
Operating Agreements and the Leases and shall not involve an
estimated cost of more than the Threshold Amount. Any Alteration
which involves an estimated cost of more than the Threshold
Amount shall be subject to (i) the approval of Mortgagee (such
approval not to be unreasonably withheld or delayed), and (ii)
receipt by Mortgagee of written confirmation from the Rating
Agencies that the Alteration shall not result in a downgrading,
withdrawal or qualification of the then-ratings of the
Certificates, and shall be conducted under the supervision of an
Independent Architect. No such Alteration shall be undertaken
until five (5) Business Days after there shall have been filed
with the Mortgagee, for information purposes only and not for
approval by the Mortgagee, detailed plans and specifications and
cost estimates therefor, prepared and approved in writing by such
Independent Architect. Such plans and specifications may be
revised at any time and from time to time provided that material
revisions of such plans and specifications are filed with the
Mortgagee, for information purposes only, together with the
written approval thereof by such Independent Architect. All work
done in connection with any Alteration shall be performed with
due diligence in a good and workmanlike manner, all materials
used in connection with any Alteration shall not be less than the
standard of quality of the materials currently used at the
Premises and all work performed and all materials used shall be
in accordance with all applicable Legal Requirements and
Insurance Requirements.
(d) Notwithstanding anything to the contrary contained
in Section 13(c) hereof, no Alteration contracted for by
Mortgagor shall be performed by or on behalf of Mortgagor if the
cost thereof, individually or in the aggregate with all other
related Alterations, as reasonably estimated by an Independent
Architect, that are due and payable and unpaid exceed the
Threshold Amount (adjusted as described below) (any such
Alteration, a "Material Alteration"), unless Mortgagor shall have
delivered to Mortgagee security in an amount not less than the
difference between such due and payable and unpaid costs and the
Threshold Amount. The Threshold Amount shall be reduced on any
given date by the Independent Architect's estimate of the cost,
if work on the Alterations were to be terminated on such date, to
restore the Premises to the extent necessary so that, as
restored, there would be no material adverse effect on the value
of the Premises as a whole. Costs which are subject to retainage
shall be treated as due and payable and unpaid from the date they
would be due and payable but for their characterization as
subject to retainage. In the event that any Alteration shall be
made in conjunction with any Restoration with respect to which
Mortgagor shall be entitled to withdraw Proceeds pursuant to
Section 7(d) and (e) hereof, the amount of the Cash and Cash
Equivalents and/or Letter of Credit to be furnished pursuant
hereto need not exceed the aggregate cost of such Restoration and
such Alteration (as estimated by the Independent Architect),
less the sum of the amount of any Proceeds which Mortgagor may be
entitled to withdraw pursuant to Section 7(d) and (e) hereof and
the Threshold Amount (adjusted as described above). The
Independent Architect shall deliver to Mortgagee a schedule
setting forth the projected stages of completion of the
Alteration and the corresponding amounts equal to such
completion. Any Cash which Mortgagor shall deliver pursuant
hereto (or the proceeds of any Cash and Cash Equivalents and/or
Letter of Credit) shall be invested by Mortgagee in a Permitted
Investment consistent with the projected completion of the
Alteration. From time to time as the Alteration progresses, the
amount of any Cash or Cash Equivalents so furnished may be
withdrawn by Mortgagor and paid or otherwise applied by or
returned to Mortgagor in an amount equal to the amount Mortgagor
would be entitled to so withdraw if Section 7(d) and (e) hereof
were applicable, and any Letter of Credit so furnished may be
reduced by Mortgagor in an amount equal to the amount Mortgagor
would be entitled to so reduce if Section 7(d) and (e) hereof
were applicable. At any time after substantial completion of any
Alteration in respect whereof Cash and Cash Equivalents and/or a
Letter of Credit was deposited pursuant hereto, the whole balance
of any Cash so deposited with Mortgagee and then remaining on
deposit may be withdrawn by Mortgagor and shall be paid by
Mortgagee to Mortgagor, and any Cash and Cash Equivalents and/or
a Letter of Credit so deposited or delivered shall, to the extent
it has not been called upon, reduced or theretofore released, be
released by Mortgagee to Mortgagor, within ten (10) days after
receipt by Mortgagee of an application for such withdrawal and/or
release together with an Officer's Certificate, and signed also
(as to the following clause (1)) by the Independent Architect,
setting forth in substance as follows:
(1) that the Alteration in respect of which
such Cash and Cash Equivalents and/or a Letter of
Credit was deposited has been substantially completed
in all material respects in accordance with any plans
and specifications therefor previously filed with
Mortgagee under Section 13(c) hereof; and
(2) that to the knowledge of the certifying
Person all amounts which Mortgagor is or may become
liable to pay in respect of such Alteration through the
date of the certification have been paid in full or
adequately provided for or are being contested in
accordance with Section 8(c) hereof and, to the extent
that such are customary and reasonably obtainable by
prudent managers in the metropolitan area where the
Premises are located and Mortgagor is not contesting
payment in accord ance with Section 8(c) hereof, that
lien waivers have been obtained from the general
contractor and major subcontractors performing such
Alterations.
(e) Mortgagee and any Persons authorized by Mortgagee
may at all reasonable times and upon reasonable notice enter and
examine the Real Estate and may inspect all work done, labor
performed and materials furnished in and about the Real Estate
subject in all instances to the rights of Tenants under Leases.
Mortgagee shall not have any duty to make any such inspection and
shall not have any liability or obligation for making (except for
its gross negligence or willful misconduct) or not making any
such inspection.
(f) Provided that no Event of Default shall have
occurred and be continuing hereunder, Mortgagor shall have the
right, without Mortgagee's consent, to expand or reduce the size
of the Mortgaged Property through the addition of one or more
anchor stores and/or the addition of one or more mall or
peripheral stores from time to time (either retail or non-retail
facilities) including, without limitation, by the conversion of
an existing department store to additional mall stores, the
transfer, free and clear of the lien of this Mortgage, of a portion
of the Mortgaged Property to a department store for the construction
of its store, or the construction of a decked parking facility (an
"Expansion"), so long as:
(i) such Expansion (A) shall not materially
adversely affect the value of the Premises, including any
anchor parcel to be conveyed to a department store, taken as
a whole, or materially adversely effect the Operating
Income, (B) shall not result in any violation of the terms
of any Operating Agreement or Lease at the Mortgaged
Property, and (C) shall be conducted in accordance with
Sections 12(d) and 13(c) hereof.
(ii) Mortgagor delivers an Officer's Certificate
stating that (A) such transactions and the particular plans
developed for the Expansion (x) shall not violate any
existing Material Lease or Operating Agreement, and shall
not affect the utility or operation of the Premises in any
material adverse respect, (B) any connection to, or
contemplated shared use of, the common area in order to
provide utilities services and access to the Expansion shall
not affect the availability or provision of utility services
to the Premises in any material adverse respect, and (C) any
such transaction shall not materially reduce the rentable
square footage of the Improvements,
(iii) Mortgagee receives written confirmation from
the Rating Agencies that the Expansion would not result in a
downgrading, withdrawal or qualification of the then-ratings
of the Certificates,
(iv) Mortgagor obtains an agreement from any
third party developer conducting such Expansion which
provides that in the event such third party developer does
not complete construction of the improvements on the
expansion parcel, Mortgagor will have the right, at either
Mortgagor's or the developer's expense as Mortgagor shall
elect, to enter the Expansion parcel and either complete the
improvements or demolish the uncompleted improvements with
no liability to the third party developer, and
(v) Mortgagor shall have provided to Mortgagee
such title insurance endorsements as Mortgagee may
reasonably require.
Mortgagee shall execute and deliver to Mortgagor such instruments
and agreements as are reasonably requested of it by Mortgagor, at
Mortgagor's expense, in order to consummate any Expansion
permitted hereby.
14. LEGAL COMPLIANCE. To Mortgagor's actual
knowledge, Mortgagor and the Mortgaged Property and the use
thereof materially comply with all Legal Requirements. Subject
to Mortgagor's right of contest pursuant to Section 8(c),
Mortgagor shall comply in all material respects with all present
and future laws, statutes, codes, ordinances, orders, judgments,
decrees, injunctions, rules, regulations and requirements of
every Governmental Authority, including, without limitation,
Environmental Laws, and all covenants, restrictions and
conditions now or hereafter of record which may be applicable to
it or to any of the Mortgaged Property, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property,
including, without limitation, building and zoning codes and
ordinances (collectively, "Legal Requirements"); provided,
however, with respect to any matters of noncompliance that are
the responsibility of a Tenant under its Lease and that do not
materially adversely affect the value or utility of the Mortgaged
Property, Mortgagor's obligations under the preceding provisions
of this Section 14 shall be limited to Mortgagor's exercise of
diligent efforts to have such Tenant fulfill such obligations.
15. BOOKS AND RECORDS, FINANCIAL STATEMENTS, REPORTS
AND OTHER INFORMATION.
(a) Books and Records. Mortgagor will keep and
maintain on a fiscal year basis proper books and client records,
in which accurate and complete entries shall be made of all
dealings or transactions of or in relation to the Mortgage Notes
and the Mortgaged Property and the business and affairs of
Mortgagor relating to the Mortgaged Property, in accordance with
U.S. generally accepted accounting principles consistently
applied ("GAAP"). Mortgagee and its authorized representatives
shall have the right at reasonable times and upon reasonable
notice to examine the books and records of Mortgagor relating to
the operation of the Mortgaged Property and to make such copies
or extracts thereof as Mortgagee may reasonably require.
(b) Financial Statements.
(i) Not later than sixty (60) days following
the end of each fiscal quarter (other than the fourth
(4th) quarter of any fiscal year) of Mortgagor's
operations, Mortgagor will deliver to Mortgagee
unaudited financial statements prepared by an
Independent Accountant (or internally prepared), which
shall be prepared in accordance with GAAP, including a
balance sheet as of the end of such quarter and a
statement of revenues and expenses for such quarter.
Such statements for each quarter shall be accompanied
by an Officer's Certificate certifying that to the
signer's actual knowledge, (A) such statements fairly
represent the financial condition and results of opera
tions of Mortgagor in accordance with GAAP and (B) as
of the date of such Officer's Certificate, no Default
exists under this Mortgage, the Mortgage Notes or any
other Loan Document or, if so, specifying each such
Default and the nature and status thereof and the
action then being taken by Mortgagor or proposed to be
taken to remedy such Default.
(ii) Not later than ninety (90) days after
the end of each fiscal year of Mortgagor's operations,
Mortgagor will deliver to Mortgagee audited financial
statements certified by an Independent Accountant in
accordance with GAAP, including a balance sheet as of
the end of such year and a statement of revenues and
expenses for such year, and stating in comparative form
the figures for the previous fiscal year. Such annual
financial statements shall also be accompanied by an
Officer's Certificate in the form required pursuant to
Section 15(b)(i) hereof.
(c) Leasing Reports. Not later than ninety (90) days
after the end of each fiscal quarter of Mortgagor's operations,
Mortgagor will deliver to Mortgagee a true and complete rent roll
for the Mortgaged Property, dated as of the last date of such
fiscal quarter, (i) containing a list of all Tenants under
Leases, (ii) the net rentable square feet or gross leasable
square feet leased by each Tenant, (iii) the annual fixed rent
and additional rent currently payable by each Tenant and, to the
extent available, sales per gross leasable foot by each Tenant,
and (iv) the expiration date of each of the Leases, and such rent
roll shall be accompanied by an Officer's Certificate certifying
that such rent roll is true, correct and complete in all material
respects and stating whether Mortgagor, within the past three (3)
months, has issued a notice of default with respect to any Lease
which has not been cured, and the nature of such default. In
each quarterly period Mortgagor will deliver to Mortgagee, upon
request by Mortgagee, a certified copy of any Lease entered into
during the previous fiscal quarter, together with a certificate
which shall include a statement that each such Lease complies
with the provisions of Section 16 hereof.
(d) Other Information. Mortgagor will, within a
reasonable time after written request by Mortgagee or any of the
Rating Agencies, furnish or cause to be furnished to Mortgagee or
such Rating Agency, as applicable, in such manner and in such
detail as may be reasonably requested, such reasonable additional
information as may be requested by such Person with respect to
the Mortgaged Property.
16. COMPLIANCE WITH LEASES AND AGREEMENTS.
(a) Mortgagor represents that it has heretofore
delivered to Mortgagee true and complete copies of the Material
Leases and the Operating Agreements and any and all amendments or
modifications thereof. Except as previously disclosed to the
Mortgagee and the Rating Agencies, (i) the Leases and the
Operating Agreements are in full force and effect, and (ii)
Mortgagor has not given any notice of default to, and has not
received any notice of default from, any Tenant under any of the
Material Leases (or under any other Leases which individually or
in the aggregate if in default would materially adversely affect
the value of the Premises taken as a whole) or any party to any
of the Operating Agreements which remains uncured. Mortgagor has
complied with and performed all of its material construction,
improvement and alteration obligations with respect to the
Premises or the Real Estate required as of the date hereof under
the Material Leases and the Operating Agreements. Mortgagor will
promptly after receipt thereof deliver to Mortgagee a copy of any
notice received with respect to any of the Operating Agreements
or from any Tenant under any Lease covering five percent (5%) or
more of the gross leasable area of the Real Estate (any such
Lease, a "Material Lease"), claiming that Mortgagor is in default
in the performance or observance of any of the material terms,
covenants or conditions of any of the Operating Agreements or
such Material Lease.
(b) Mortgagor may, at all times, lease the portions of
the Mortgaged Property currently used as retail premises in its
discretion reasonably exercised in a first-class manner
consistent with other first-class regional shopping malls located
in the greater Chicago, Illinois, metropolitan area and then
current market conditions existing therein, and otherwise in
accordance with this Mortgage. Each Lease entered into after the
date hereof, including the renewal or extension on or after the
date hereof of any Lease entered into prior to the date hereof if
the rent payable during such renewal or extension, or a formula
or other method to compute such rent, is not provided for in such
Lease (such a renewal or extension a "Renewal Lease"), either (A)
shall provide for payment of rent and all other material amounts
payable on market terms and conditions (taking into account the
type and quality of the tenant, the length of tenancy and the
location and configuration of the space so rented), as of the
date such Lease is executed by Mortgagor, of the space covered by
such Lease or Renewal Lease for the term thereof, including any
renewal options, (B) shall not materially adversely affect the
value of the Real Estate taken as a whole, or (C) shall be
consented to by the Mortgagee. Mortgagor may, without the
consent of Mortgagee, amend, modify or waive the provisions of
any Lease or terminate, reduce rents under or shorten the term of
any Lease provided that such action (taking into account, in the
case of a termination, reduction in rent or shortening of term,
the planned alternative use of the affected space) does
not materially adversely affect the value of the Real Estate
taken as a whole, and provided further that such Lease, as
amended, modified or waived, is otherwise in compliance with the
requirements of this Mortgage. Mortgagor shall deliver to
Mortgagee a certified copy of any such amendment, modification or
waiver which relates to a Material Lease which has previously
been delivered to Mortgagee. Mortgagor shall manage the portion
of the Mortgaged Property currently used as office premises in
accordance with sound management practices for similar properties.
(c) Mortgagor shall (i) promptly perform and observe
all of the material terms, covenants and conditions required to
be performed and observed by Mortgagor under the Ground Lease,
and promptly perform and observe all of the material terms,
covenants and conditions required to be performed and observed by
Mortgagor under the Leases and Operating Agreements (other than
the Ground Lease) if the failure to perform or observe the same
would materially and adversely affect the value of the Premises
taken as a whole; (ii) exercise, within fifteen (15) Business
Days after a written request by Mortgagee, any right to request
from the Tenant under any Lease or the party to any Operating
Agreement a certificate with respect to the status thereof; and
(iii) not collect any of the Rents under the Leases more than one
(1) month in advance (except that Mortgagor may collect such
security deposits as are permitted by Legal Requirements and are
commercially reasonable in the prevailing market and collect
escalations, percentage rent and other charges in accordance with
the terms of each Lease).
(d) All Leases entered into by Mortgagor after the
date hereof shall be subject and subordinate to this Mortgage
(through either subordination provisions in the Leases or
separate Nondisturbance Agreements), and shall provide that the
Tenant thereunder shall attorn to Mortgagee, or any other Person
succeeding to the interest of Mortgagee, on the terms set forth
in Section 16(e); provided that Mortgagee, at the request of
Mortgagor, shall enter into a subordination, attornment and
nondisturbance agreement, in form and substance substantially
similar to the form attached hereto as Exhibit C (a
"Nondisturbance Agreement") with any existing Tenant or any
Tenant entering into a Lease after the date hereof (other than a
Lease to an Affiliate of the Mortgagor), provided further that,
with respect to any Lease entered into after the date hereof,
such request is accompanied by an Officer's Certificate stating
that such Lease complies in all respects with this Section 16.
All actual, out-of-pocket costs and expenses of Mortgagee in
connection with the negotiation, preparation, execution and
delivery of any Nondisturbance Agreement including, without
limitation, reasonable attorneys' fees and disbursements, shall
be paid by Mortgagor.
(e) Each Lease entered into from and after the date
hereof shall provide as follows: In the event of the enforcement
by Mortgagee of any remedy under this Mortgage, the Tenant under
such Lease shall, at the option of Mortgagee or of any other
Person succeeding to the interest of Mortgagee as a result of
such enforcement, subject to Mortgagee's and such Tenant's
delivery of a Nondisturbance Agreement if such Nondisturbance
Agreement is required pursuant to the provisions of Section 16(d)
above, attorn to Mortgagee or to such Person and shall recognize
Mortgagee or such successor in interest as lessor under the such
Lease without change in the provisions thereof; provided,
however, Mortgagee or such successor in interest shall not be
liable for or bound by (i) any payment of an installment of rent
or additional rent which may have been made more than thirty (30)
days before the due date of such installment, (ii) any amendment
or modification to or termination of any such Lease not in
conformity with Section 16(b), (iii) any act or omission of or
default by Mortgagor under any such Lease or (iv) any credits,
claims, setoffs or defenses which any Tenant may have against
Mortgagor. Each such Tenant, upon reasonable request by Mortgagee
or such successor in interest, shall execute and deliver an
instrument or instruments confirming such attornment subject to
Mortgagee's delivery of a Nondisturbance Agreement to such Tenant
if such Nondisturbance Agreement is required pursuant to the
provisions of Section 16(d) above.
17. MORTGAGEE'S RIGHT TO PERFORM. Upon the occurrence
of an Event of Default with respect to the performance of any of
the Obligations contained herein, Mortgagee, without waiving or
releasing Mortgagor from any Obligation or Default under this
Mortgage, may (but shall not be obligated to), at any time
perform the same, and the cost thereof, with interest at a rate
equal to the weighted average of the interest rates provided for
in the Mortgage Notes from the date of payment by Mortgagee to
the date such amount is paid by Mortgagor, shall immediately be
due from Mortgagor to Mortgagee, and the same shall be secured by
this Mortgage and shall be a Lien on the Mortgaged Property prior
to any right, title to, interest in or claim upon the Mortgaged
Property attaching subsequent to the Lien of this Mortgage
(subject to the provisions of Section 12(d)). No payment or
advance of money by Mortgagee under this Section 17 shall be
deemed or construed to cure Mortgagor's Default or waive any
right or remedy of Mortgagee hereunder.
18. MORTGAGOR'S EXISTENCE; ORGANIZATION AND AUTHORITY.
Mortgagor shall do all things necessary to preserve and keep in
full force and effect its existence, franchises, rights and
privileges under the laws of the State of Illinois and such other
jurisdictions as may be required so as to have and retain the
right to own property or transact business in the state and other
jurisdictions in which the Mortgaged Property is located and to
which the Mortgaged Property and the Mortgagor are subject.
Mortgagor hereby represents and warrants that Mortgagor (a) is a
duly organized and validly existing limited partnership in good
standing under the laws of the State of Illinois, (b) has the
power and authority to own its properties and to carry on its
business as now being conducted and as proposed to be conducted
in the State of Illinois and (c) has the power to execute and
deliver and perform its obligations under this Mortgage, the
Mortgage Notes and all of the other Loan Documents. The
execution and delivery by Mortgagor of this Mortgage, the
Mortgage Notes and each of the other Loan Documents, Mortgagor's
performance of its respective obligations hereunder and
thereunder and the creation of the security interest and Liens
provided for herein and therein have been duly authorized by all
requisite action on the part of Mortgagor, including the consent
of its Direct Beneficial Owners where required, and will not
violate any Legal Requirement, any order of any court or other
Governmental Authority, the trust agreement of Mortgagor or any
material indenture, agreement or other instrument to which
Mortgagor is a party, or by which Mortgagor is bound, or be in
conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any of the
foregoing, or result in the creation or imposition of any Lien,
of any nature whatsoever, upon any of the property or assets of
Mortgagor except the Liens created hereunder and under the other
Loan Documents. Mortgagor further represents that the Mortgage
Notes, this Mortgage and the other Loan Documents constitute the
legal, valid and binding obligations of Mortgagor, enforceable
against Mortgagor in accordance with their respective terms,
except as may be limited by (i) bankruptcy, insolvency or other
similar Legal Requirements affecting the rights of creditors
generally, and (ii) general principles of equity regardless of
whether considered in a proceeding in equity or at law. Except
for filings that may be required to be made with the Securities
and Exchange Commission and any state agencies having
jurisdiction over the offering and sale of securities, Mortgagor
is not required to obtain any consent, approval or authorization
from or to file any declaration or statement with, any Governmental
Authority in connection with or as a condition to the execution,
delivery or performance of this Mortgage, the Mortgage Notes or
the other Loan Documents by Mortgagor. Representations
comparable to the representations set forth above shall be deemed
to have been made by the transferee of any part of the Mortgaged
Property pursuant to Section 12(a). Mortgagor further represents
and warrants that it is and, so long as any portion of the
Indebtedness shall remain outstanding, shall do all things
necessary to continue to be a Single-Purpose Entity.
19. PROTECTION OF SECURITY; COSTS AND EXPENSES.
Mortgagor shall appear in and defend any action or proceeding
purporting to affect the security hereof or the rights or powers
of Mortgagee hereunder and shall pay all actual, out-of-pocket
costs and expenses, including, without limitation, cost of
evidence of title and reasonable attorneys' fees and
disbursements, in any such action or proceeding in which
Mortgagee may appear, and in any suit brought by Mortgagee to
foreclose this Mortgage or to enforce or establish any other
rights or remedies of Mortgagee hereunder. If an Event of
Default occurs under this Mortgage, or if any action or
proceeding is commenced in which it becomes necessary to defend
or uphold the Lien or priority of this Mortgage or which
adversely affects Mortgagee's interest in the Mortgaged Property
or any part thereof, including, but not limited to, eminent
domain, enforcement of, or proceedings of any nature whatsoever
under any Legal Requirement affecting the Mortgaged Property or
involving Mortgagor's bankruptcy, insolvency, arrangement,
reorganization or other form of debtor relief, or to a decedent,
then Mortgagee, upon reasonable notice to Mortgagor, may, but
without obligation to do so and without releasing Mortgagor from
any obligation hereunder, make such appearances, disburse such
sums and take such action as Mortgagee deems reasonably necessary
or appropriate to protect Mortgagee's interest in the Mortgaged
Property, including, but not limited to, disbursement of
reasonable attorneys' fees, entry upon the Mortgaged Property to
make repairs or take other action to protect the security hereof,
and payment, purchase, contest or compromise of any encumbrance,
charge or lien which in the judgment of Mortgagee appears to be
prior or superior hereto. All of the costs, expenses and amounts
set forth in this Section 19 shall be payable by Mortgagor, on
demand and, together with interest thereon at a rate equal to the
weighted average of the rates then in effect with respect to the
Mortgage Notes, from the date of any such payment by Mortgagee
until the date of repayment by Mortgagor, shall be deemed to be
Indebtedness hereunder and shall be a Lien on the Mortgaged
Property prior to any right, title, interest or claim upon the
Mortgaged Property (subject to the provisions of Section 12(d)).
Nothing contained in this Section 12 shall be construed to
require Mortgagee to incur any expense, make any appearance, or
take any other action.
20. MANAGEMENT OF THE MORTGAGED PROPERTY. Mortgagor
covenants and agrees with Mortgagee that the Mortgaged Property
will be operated at all times in a first-class manner by the
Manager pursuant to the Management Agreement. The Manager shall
be a Qualifying Manager. For purposes hereof a "Qualifying
Manager" shall mean (i) Urban Retail Properties Co., (ii) an
Urban Affiliate, (iii) the Urban REIT or the REIT Operating
Partnership, provided that such entity, together with its
Affiliates, manages, at the time of its engagement, at least
twelve (12) other regional or super-regional shopping centers,
comprising an aggregate of at least six million square feet of
gross leasable area in the United States (including anchor
tenants), (iv) a prominent professional management corporation or
business entity which manages, at the time of its engagement, at
least twelve (12) other regional or super-regional shopping
centers, comprising an aggregate of at least six million square
feet of gross leasable area in the United States (including
anchor tenants), or (v) another Person designated by Mortgagor
(provided that Mortgagor shall obtain written confirmation from
the Rating Agencies that retention of such other Person as
Manager shall not result in a downgrading, withdrawal or
qualification of the then-ratings of the Certificates). If the
Manager shall be an entity specified in clauses (i), (ii) or (iii)
above, the Management Agreement shall at the time of execution be
on market terms and otherwise on terms not more favorable to the
Manager than would be agreed with an unaffiliated third party
(including that the same shall be terminable for cause and upon a
foreclosure of the lien of this Mortgage). To the extent required
by the terms of the Ground Lease, the Management Agreement shall
have been approved by the Ground Lessor under the Ground Lease.
Mortgagor shall provide written notice to the Rating Agencies if
there is a new Manager.
21. NO ENDORSEMENT. Mortgagee shall not become or be
considered to be an endorser, co-maker or co-obligor on the
Mortgage Notes or on any obligation of Mortgagor secured by this Mortgage.
22. REMEDIES. Upon the occurrence of and during the
continuation of an Event of Default, Mortgagee may take such
actions against Mortgagor and/or against the Mortgaged Property
or any portion thereof as Mortgagee determines is necessary to
protect and enforce its rights hereunder, without notice or
demand except as set forth below. Any such actions taken by
Mortgagee shall be cumulative and concurrent and may be pursued
independently, singly, successively, together or otherwise, at
such time and in such order as Mortgagee may determine in its
sole discretion, to the fullest extent permitted by law, without
impairing or otherwise affecting the other rights and remedies of
Mortgagee permitted by law, equity or contract or as set forth
herein or in the other Loan Documents. Such actions may include,
without limitation, the following:
(a) Acceleration. Subject to any applicable
provisions of the Mortgage Notes and the other Loan Documents,
Mortgagee may declare all or any portion of the unpaid principal
balance under the Mortgage Notes, together with all accrued and
unpaid interest thereon, and all other unpaid Indebtedness, to be
immediately due and payable.
(b) Entry. Mortgagee may enter into or upon the
Mortgaged Property, personally or by its agents, nominees or
attorneys, and may dispossess Mortgagor and its agents and
servants therefrom, and thereupon Mortgagee in its sole
discretion may: (i) use, operate, manage, control, insure,
maintain, repair, restore and otherwise deal with all and every
portion of the Mortgaged Property and conduct business thereon,
in any case either in the name of Mortgagee or in such other name
as Mortgagee shall deem advisable; (ii) complete any construction
with respect to the Mortgaged Property in such manner and form as
Mortgagee deems advisable; (iii) make alterations, additions,
renewals, replacements and improvements to or on the Mortgaged
Property, (iv) exercise all rights and powers of Mortgagor with
respect to the Mortgaged Property whether in the name of
Mortgagor or otherwise, including the right to enter into,
cancel, enforce or modify Leases, obtain and evict tenants and
demand, ▇▇▇ for, collect and receive all Rents with respect to
the Mortgaged Property; and (v) apply the receipts of all such
Rents (other than Tenant security deposits) with respect to the
Mortgaged Property to the payment of the Indebtedness, after
deducting therefrom all costs and expenses (including reasonable
attorneys' fees and disbursements) incurred in connection with
the aforesaid operations.
(c) Foreclosure. Mortgagee, in its sole and absolute
discretion, may institute proceedings for the complete or partial
foreclosure of this Mortgage against all or any portion or the
Mortgaged Property, in which case the Mortgaged Property or any
portion thereof may be sold for cash or upon credit, as an
entirety or in parcels or portions.
(d) Specific Performance. Mortgagee, in its sole and
absolute discretion, may institute an action, suit or proceeding
at law or in equity for the specific performance of any covenant,
condition or agreement contained herein or in the Mortgage Notes
or any other Loan Document, or in aid of the execution of any
power granted hereunder or for the enforcement of any other
appropriate legal or equitably remedy.
(e) Enforcement of Mortgage Notes. Mortgagee may
recover judgment on the Mortgage Notes (or any portion of the
Indebtedness evidenced thereby), either before, during or after
any proceedings for the foreclosure (or partial foreclosure) or
enforcement of this Mortgage.
(f) Appointment of Receiver. Mortgagee as a matter of
right may appoint or secure the appointment of a receiver,
trustee, liquidator or similar official of the Mortgaged Property
or any portion thereof, and Mortgagor hereby irrevocably consents
and agrees to such appointment, without notice to Mortgagor and
without regard to the value of the Mortgaged Property or adequacy
of the security for the Indebtedness and without regard to the
solvency of Mortgagor or any other Person liable for the payment
of the Indebtedness, and such receiver or other official shall
have all rights and powers permitted by applicable law and such
other rights and powers as the court making such appointment may
confer (including the right to use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and
every portion of the Mortgaged Property and conduct business
thereon, demand, ▇▇▇ for, collect and receive all Rents with
respect to the Mortgaged Property and apply the receipts of all
such Rents (other than Tenant security deposits) with respect to
the Mortgaged Property to the payment of the Indebtedness after
deducting therefrom all costs and expenses (including reasonable
attorneys' fees and disbursements) incurred in connection with
the aforesaid operations), but the appointment of such receiver
or other official shall not impair or in any manner prejudice the
rights of Mortgagee to receive the Rents with respect to any of
the Mortgaged Property pursuant to this Mortgage or the
Assignment of Leases.
(g) UCC Remedies. Mortgagee may exercise any or all
of the remedies available to a secured party under the UCC.
(h) Other Rights. Mortgagee may pursue against
Mortgagor any other rights and remedies of Mortgagee permitted by
law, equity or contract or as set forth herein or in the other
Loan Documents.
(i) Acceleration upon Sale. Upon any sale of the
Mortgaged Property or any part thereof by Mortgagee under or by
virtue of this Mortgage, whether pursuant to foreclosure or power
of sale or otherwise in accordance with the provisions of this
Mortgage, the entire unpaid principal amount of the Mortgage
Notes at the time outstanding shall, if not previously declared
due and payable, immediately become due and payable, together
with the interest accrued thereon and any applicable premium
which would then be payable, and any other indebtedness which
this Mortgage by its terms secures.
Mortgagee, any Holder individually, or any nominee of
any of them may be a purchaser of the Mortgaged Property or a
portion thereof or of any interest therein at any sale thereof,
and may apply to the purchase price all or any part of the
indebtedness secured hereby in lieu of payment in cash of the
amount of such indebtedness applied. Any such purchaser shall,
upon any such purchase, acquire good title to the properties so
purchased, free of the lien of this Mortgage and free of all
rights of redemption in Mortgagor.
Upon any sale of the Mortgaged Property after the
Mortgage Notes becomes due and payable, whether at maturity, by
declaration of acceleration or by automatic acceleration after an
Event of Default or otherwise, the receipt of Mortgagee or the
receipt of the officer making the sale under judicial proceedings
shall, to the full extent legally permitted, be sufficient
discharge to the purchaser for the purchase money, and such
purchaser shall not be obligated to see to the application
thereof.
(j) Phase I Report. Prior to the commencement of any
proceeding to foreclose the lien of this Mortgage, Mortgagee
shall obtain, at Mortgagor's expense, a new Phase I environmental
report with respect to the Mortgaged Property, and such
additional environmental studies as may be recommended by such
Phase I report.
(k) Rate Swap Counterparty Rights. Notwithstanding
anything herein or in the Trust Agreement or any other Loan
Document to the contrary, upon the occurrence of an Event of
Default described herein, the Rate Swap Counterparty shall have
the right to issue and to direct Mortgagee to issue to Mortgagor
a notice calling for an Early Termination Date (as defined in the
Rate Swap Agreement), and in such event Mortgagee shall issue
such notice and provide a copy thereof to the Rate Swap
Counterparty. Notwithstanding anything herein to the contrary,
in the case of an Event of Default described herein, the Rate
Swap Counterparty shall have the right to direct Mortgagee to
take all reasonable steps necessary to foreclose the lien of this
Mortgage. Mortgagee shall be under no obligation to take any
action at the direction of the Rate Swap Counterparty unless the
Rate Swap Counterparty shall have offered to Mortgagee reasonable
security or indemnity against the cost, expenses and liabilities
which may be incurred by Mortgagee in connection with such action.
23. APPLICATION OF PROCEEDS. If the Class A Note or
any class of Additional Notes are not paid by the applicable
stated maturity date or are accelerated, available amounts shall
be applied in the following order of priority:
(i) First, to the payment of all sums advanced and
costs and expenses incurred by Mortgagee in connection with
the Loan or any part thereof, including any renewal,
extension, or change of or substitution for the Loan or any
part thereof, or the acquisition or perfection of the
security therefor, whether made or incurred at the request
of Mortgagor or Servicer, together with any interest thereon
at the Advance Rate, and all amounts owed to the Trust,
Trustee or Servicer in respect of Trustee's or Servicer's
costs and expenses, together with interest thereon at the
Advance Rate;
(ii) Second, to the payment of accrued and unpaid
interest (excluding Default Interest and Additional Amounts,
if any) due and payable on the Class A Note until all such
accrued and unpaid interest then due and payable on the
Class A Note has been paid in full;
(iii) Third, to the payment of all outstanding
principal of the Class A Note until all unpaid principal of
the Class A Note has been paid in full;
(iv) Fourth, to the payment of accrued and unpaid
interest (excluding Default Interest and Additional Amounts,
if any) due and payable on each class of Additional Notes
until all such accrued and unpaid interest then due and
payable on each class of Additional Notes has been paid in full;
(v) Fifth, to the payment of all outstanding principal
of each class of Additional Notes until all outstanding
principal of each class of Additional Notes has been paid in full;
(vi) Sixth, to the payment of Default Interest due and
payable on the Class A Note until all accrued and unpaid
Default Interest on the Class A Note has been paid in full;
(vii) Seventh, to the payment of Default Interest
due and payable on each class of Additional Notes until all
accrued and unpaid Default Interest on each class of
Additional Notes has been paid in full;
(viii) Eighth, to the payment of any Additional
Amounts due and payable on the Class A Note until all
accrued and unpaid Additional Amounts on the Class A Note
have been paid in full;
(ix) Ninth, to the payment of any Additional Amounts
due and payable on each class of Additional Notes until all
accrued and unpaid Additional Amounts on each class of
Additional Notes have been paid in full;
(x) Tenth, to the payment of Rate Swap Breakage Costs
due and owing the Rate Swap Counterparty; and
(xi) Eleventh, to the payment of any breakage costs due
and owing any Additional Counterparty.
Notwithstanding the foregoing, for amounts received
after an Event of Default that are not in respect of the
liquidation of the Mortgaged Property, the priorities set forth
in clauses third and fourth above shall be reversed and interest
on Additional Notes (excluding Additional Amounts and Default
Interest) shall be paid prior to principal of the Class A Note.
24. NOTICE OF CERTAIN OCCURRENCES. Mortgagor shall
give notice to Mortgagee and the Rating Agencies promptly upon
Mortgagor becoming aware of the occurrence of: (a) any Default;
(b) any litigation or proceeding affecting Mortgagor or the
Mortgaged Property or any part thereof in which the amount
involved is One Million Dollars ($1,000,000) or more and not
covered by insurance or in which injunctive or similar relief is
sought; and (c) a material adverse change in the business,
operations, property or financial condition of Mortgagor or the
Mortgaged Property.
25. WAIVER OF TRIAL BY JURY. Mortgagor hereby waives
and shall waive trial by jury in any action or proceeding brought
by, or counterclaim asserted by Mortgagee which action,
proceeding or counterclaim arises out of or is connected with
this Mortgage, the Mortgage Notes or any other Loan Documents.
26. TRUST FUNDS. Within ten (10) days after written
request by Mortgagee, Mortgagor shall furnish Mortgagee with a
statement of all security deposits by tenants under the Leases
which statement shall be certified by Mortgagor.
27. CHANGES IN METHOD OF TAXATION; NO CREDIT FOR
PAYMENT OF TAXES.
(a) In the event of the passage after the date hereof
of any law of the United States or of the state or municipality
where the Mortgaged Property is located (i) changing in any way
the laws for the taxation of mortgages or debts secured thereby
for federal, state or local purposes, or the manner of collection
of any such taxes, and (ii) imposing a tax, either directly or
indirectly, on mortgages or debts secured thereby (other than a
tax that may arise in connection with ownership or transfer of
the Mortgage Notes or that is imposed upon the income of the
Mortgagee), the Mortgagor shall either pay such taxes or prepay
the Mortgage Notes (without premium or penalty); provided, however,
the Mortgagor shall make any payment of any tax so imposed when due
until full prepayment of the Mortgage Notes.
(b) Mortgagor shall not be entitled to any credit
against the principal of or interest or premium, if any, payable
on the Mortgage Notes, and Mortgagor shall not be entitled to any
credit against any other amounts which may become payable under
the terms thereof or hereof, by reason of the payment of any tax
on the Mortgaged Property or any part thereof or by reason of the
payment of any other Imposition or other amount required to be
paid hereunder. No deduction shall be made or claimed from the
taxable value of the Mortgaged Property or any part thereof by
reason of this Mortgage.
28. NOTICES. Any notice, election, request or demand
which by any provision of this Mortgage is required or permitted
to be given or served hereunder shall be in writing and shall be
given or served by hand delivery against receipt, by any
nationally recognized overnight courier service providing
evidence of the date of delivery or by certified mail return
receipt requested, postage prepaid, by hand or by nationally
recognized overnight delivery service, addressed to Mortgagor at
the address provided on the first page of this Mortgage,
Attention: Chief Financial Officer.
with a copy to:
Urban Shopping Centers, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
and to Mortgagee at the following address:
Bankers Trust Company
▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: USC Oakbrook 1997-1
with a copy to:
AMRESCO Services, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, III
and to the Rate Swap Counterparty at the following address:
▇▇▇▇▇▇▇ Sachs Mitsui Marine Derivative Products, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
---------------------------
or at such other address as shall be designated from time to time
by Mortgagor or Mortgagee by notice given in accordance with the
provisions of this Section 28. Any such notice or demand given
hereunder shall be effective upon delivery or three (3) days after
mailing as aforesaid. All notices, elections, requests and demands
required or permitted under this Mortgage shall be in the English
language.
29. MODIFICATION. This Mortgage may not be altered,
amended, modified, changed or terminated orally but only by a
written agreement signed by the party against which enforcement
is sought. Except as otherwise provided herein, modifications of
and amendments to this Mortgage may be made by Mortgagee and
Mortgagor only with the consent of the Holders of more than fifty
percent (50%) in the aggregate principal amount of the
Certificates outstanding; provided, however, that no such
modification or amendment may, without the consent of the Holder
of each Certificate affected thereby, (a) change the stated
maturity of, or any installment of principal of, or interest on,
the related Mortgage Note, (b) reduce the stated principal amount
of, or the rate of interest on, the related Mortgage Note, (c)
change any obligation of Mortgagor to pay Additional Amounts in
respect of the related Mortgage Note except as contemplated by
this Mortgage and the Trust Agreement, (d) change the coin or
currency in which the related Mortgage Note or any interest
thereon is payable, (e) impair the right to institute suit for
the enforcement of any payment on or with respect to the related
Mortgage Note after its maturity or, in case of prepayment, on or
after the prepayment date, (f) reduce the percentage in principal
amount of outstanding Certificates, the consent of whose Holders
is required for any such modification or amendment of this
Mortgage or for the waiver of compliance with certain provisions
of this Mortgage or for the waiver of certain defaults, (g)
modify any of the provisions governing the rights of Mortgagee
and Mortgagor to amend this Mortgage or the Mortgage Notes, or
(h) deprive Mortgagee of the benefit of a first priority security
interest in the Mortgaged Property or permit the creation of any
lien ranking prior to or on a parity with the lien of this
Mortgage with respect to the Mortgaged Property or terminate the
lien of this Mortgage at any time.
Mortgagor and Mortgagee may agree, without the consent
of the Holders, to any modification of this Mortgage or the
Mortgage Notes, (a) to facilitate the issuance of Additional
Notes (without limiting the conditions set forth in Section 44
hereof), (b) to add to the covenants for the benefit of Mortgagee
or surrender any right or power of Mortgagor, provided that such
surrender shall not adversely affect the interests of the
Holders, (c) to add any Events of Default provided such action
shall not adversely affect the interests of any Holder, (d) to
evidence and provide for the appointment and acceptance of any
successor Trustee or Servicer, or (e) to cure any ambiguity or
cure or correct any defective or inconsistent provision in this
Mortgage or any Mortgage Note provided such action shall not
adversely affect the interests of the Holders. Notwithstanding
the foregoing, the Servicer shall have the right to consent to
any modification which adversely affects its rights under this Mortgage.
Mortgagee shall not consent to any amendment or
modification of this Mortgage which would adversely affect the
Trust's (as defined in the Trust Agreement) status as a grantor
trust for federal income tax purposes.
In determining whether any change adversely affects the
interests of Holders, Mortgagee may rely upon written
confirmation of the Rating Agencies that such change will not
result in the downgrading, withdrawal or qualification of the
then current rating on the Certificates then outstanding and
affected thereby.
30. PARTIAL INVALIDITY. In the event any one or more
of the provisions contained in this Mortgage shall for any reason
be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provision hereof, but each shall be construed as if
such invalid, illegal or unenforceable provision had never been
included hereunder.
31. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest
extent permitted by law, Mortgagor waives the benefit of all laws
now or hereafter in existence (i) providing for any appraisement
before sale of any portion of the Mortgaged Property, and (ii) in
any way extending the time for the enforcement of the collection
of the Mortgage Notes or the Indebtedness evidenced thereby and
by the other Loan Documents or creating or extending a period of
redemption from any sale made in collecting said Indebtedness.
To the fullest extent permitted by law, Mortgagor agrees that
Mortgagor will 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, extension or
redemption, and Mortgagor, for Mortgagor and its successors and
assigns, and for any and all persons ever claiming any interest
in the Mortgaged Property, to the fullest extent permitted by
law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to
mature or declare due the whole of the secured Indebtedness and
marshalling of assets in the event of foreclosure of the Liens
hereby created. Mortgagor hereby also waives any right to bring
or utilize any defense, counterclaim or setoff in or to any
foreclosure action by Mortgagee or with respect to the exercise
of any remedies hereunder by Mortgagee.
32. REMEDIES NOT EXCLUSIVE. Mortgagee shall be
entitled to enforce payment and performance of any Indebtedness
or obligations secured hereby and to exercise all rights and
remedies under this Mortgage, the Mortgage Notes or the other
Loan Documents or otherwise at law or in equity, notwithstanding
that some or all of the Indebtedness and obligations secured
hereby may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or
otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's
right to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being agreed that Mortgagee shall
be entitled to enforce this Mortgage and any other security now
or hereafter held by Mortgagee hereunder, under any of the other
Loan Documents or otherwise in such order and manner as Mortgagee
may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy available hereunder, under any of
the other Loan Documents or otherwise available at law or in
equity, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing
at law or in equity. Every right or remedy given by the Mortgage
Notes, the other Loan Documents or this Mortgage to Mortgagee or
to which either of them may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Mortgagee.
33. SUCCESSORS AND ASSIGNS. All covenants of
Mortgagor contained in this Mortgage are imposed solely and exclu
sively for the benefit of Mortgagee and its successors and
assigns, and no other Person shall have standing to require
compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all
of which may be freely waived in whole or in part by Mortgagee at
any time if in its sole discretion it deems it advisable to do
so. All such covenants of Mortgagor shall run with the land and
bind Mortgagor, the successors and assigns of Mortgagor (and each
of them) and all subsequent owners, encumbrances and
Tenants of the Mortgaged Property, and shall inure to the benefit
of Mortgagee, its successors and assigns. The word "Mortgagor"
shall be construed to mean the permitted successors and assigns
of the originally named Mortgagor and as if it read "Mortgagors"
whenever the sense of this Mortgage so requires. The word
"Mortgagee" shall be construed to mean Mortgagee named herein and
Trustee after the execution and delivery of the Assignment.
34. APPLICABLE LAW.
(a) All rights, powers and remedies provided herein may
be exercised only to the extent that the exercise thereof,
including those which do not require the giving of notice, does
not violate any applicable law, and are intended to be limited to
the extent necessary so that they will not render this Mortgage
invalid, unenforceable or not entitled to be recorded, registered
or filed under any applicable law. All waivers, consents,
confessions and releases provided for in this Mortgage are
effective only to the extent permitted by applicable law.
(b) This Mortgage shall be governed by and construed
according to the laws of the State of Illinois, without regard to
the conflicts of law principles of such State.
35. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Recording Fees, Taxes, Etc. Mortgagor hereby
agrees to take all such further reasonable actions, and to pay
all Impositions, recording fees, charges, costs and other
expenses including, without limitation, reasonable attorneys' and
professional fees and disbursements which are currently or in the
future shall be imposed, and which may be required or necessary
to establish, preserve, protect or enforce the Lien of this
Mortgage and any United States documentary stamp taxes which may
be imposed on this Mortgage or any instrument relating thereto.
(b) No Offsets. Mortgagor warrants and represents to
Mortgagee that as of the date hereof there exists no cause of
action at law or in equity that would constitute any offset,
counterclaim or deduction against the Indebtedness or its
Obligations under this Mortgage.
(c) Full and Accurate Disclosure. No statement of
fact made by or on behalf of Mortgagor in this Mortgage or in any
of the other Loan Documents contains any untrue statement of a
material fact or omits to state any material fact necessary to
make statements contained herein or therein not misleading.
(d) No Litigation. Except as has been disclosed in
writing to Mortgagee, Mortgagor has received no notice that
litigation is pending and, to Mortgagor's knowledge, no
litigation has been threatened in writing against Mortgagor
which, if determined adversely to Mortgagor, would have a
material adverse affect on the Mortgaged Property, and no Taking
has been commenced or, to Mortgagor's actual knowledge, is
contemplated with respect to all or any portion of the Mortgaged
Property or for the relocation of roadways providing access to
the Mortgaged Property.
(e) Solvency. The fair saleable value of the
Mortgagor's assets exceeds and will, immediately following the
issuance of the Mortgage Notes and the consummation of the other
transactions contemplated to take place simultaneously therewith,
exceed Mortgagor's liabilities, including, without limitation,
contingent liabilities. Mortgagor's assets do not and, immediately
following the issuance of the Mortgage Notes and the consummation
of the other transactions contemplated to take place simulta
neously therewith will not, constitute unreasonably small capital
to carry out its business as conducted or as proposed to be
conducted. Mortgagor does not intend to, and does not believe
that it will, incur debts and liabilities (including, without
limitation, contingent liabilities) beyond its ability to pay
such debts as they mature.
(f) Single Purpose Entity. Mortgagor covenants and
agrees with Mortgagee that it has not and shall not:
(i) engage in any business or activity other than the
ownership, operation and maintenance of the Mortgaged Property,
and activities incidental thereto;
(ii) acquire or own any material assets other than
(A) the Mortgaged Property, and (B) such incidental personal
property as may be necessary for the operation of the Mortgaged
Property;
(iii) merge into or consolidate with any person or
entity or dissolve, terminate or liquidate in whole or in part,
transfer or otherwise dispose of all or substantially all of its
assets or change its legal structure, without in each case
Mortgagee's consent, except in accordance with the terms of this Mortgage;
(iv) fail to preserve its existence as an entity duly
organized, validly existing and in good standing (if applicable)
under the laws of the jurisdiction of its organization or
formation, or, without confirmation by the Rating Agencies that
same shall not result in a downgrading, withdrawal or
qualification of the then-ratings of the Certificates, and except
as expressly provided herein, amend, modify, terminate or fail to
comply with the provisions of Mortgagor's partnership agreement,
articles or certificate of incorporation, operating agreement or
similar organizational documents, as the case may be, as same may
be further amended or supplemented, if such amendment,
modification, termination or failure to comply would adversely
affect the ability of Mortgagor to perform its obligations
hereunder, under the Mortgage Notes or under any Loan Documents;
(v) own any subsidiary or make any investment in, any
Person or entity without the consent of Mortgagee;
(vi) commingle its assets with the assets of any of its
general partners, members, shareholders, affiliates, principals
or of any other person or entity;
(vii) incur any debt, secured or unsecured, direct
or contingent (including guaranteeing any obligation), other than
the indebtedness secured hereby and other indebtedness permitted
hereunder;
(viii) fail to maintain its records, books of
account and bank accounts separate and apart from those of the
general partners, members, shareholders, principals and
affiliates of Mortgagor, the affiliates of a general partner or
member, or shareholder of Mortgagor and any other person or
entity;
(ix) enter into any contract or agreement with any
general partner, member, shareholder, principal or affiliate of
Mortgagor, any guarantor or indemnitor, or any general partner,
member, principal or affiliate thereof, 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 any general partner, member, shareholder,
principal or affiliate of Mortgagor, or any such guarantor or
indemnitor, or any general partner, member, principal or affiliate thereof;
(x) seek the dissolution or winding up in whole, or in
part, of Mortgagor;
(xi) hold itself out to be responsible for the
debts of another person;
(xii) make any loans or advances to any third
party, including any general partner, member, shareholder,
principal or affiliate of Mortgagor, or any general partner,
principal or affiliate thereof;
(xiii) fail to file its own tax returns;
(xiv) fail either to hold itself out to the public
as a legal entity separate and distinct from any other entity or
person or to conduct its business solely in its own name in order
not (A) to mislead others as to the identity with which such
other party is transacting business, or (B) to suggest that
Mortgagor is responsible for the debts of any third party
(including any general partner, principal or affiliate of
Mortgagor, or any general partner, principal or affiliate thereof);
(xv) fail to 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; or
(xvi) file or consent to the filing of any
petition, either voluntary or involuntary, to take advantage of
any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or make an assignment for the benefit of
creditors, without the consent of any general partner of
Mortgagor (including the vote of the Independent Director).
Mortgagor covenants and agrees with Mortgagee that it
has and shall:
(i) maintain separate financial statements;
(ii) pay the salaries of its own employees if any, and
maintain a sufficient number of employees in light of its
contemplated business operations;
(iii) allocate fairly and reasonably any overhead
for shared office space;
(iv) use separate stationery, invoices, and checks; and
(v) correct any known misunderstanding regarding its
separate entity.
(g) General Partner. If Mortgagor is a limited
partnership or a limited liability company, each general partner
or at least one member (the "SPE Member") of Mortgagor, as
applicable, is a corporation whose sole asset is its interest in
Mortgagor and each general partner or the SPE Member of
Mortgagor, as applicable, will at all times comply, and will
cause Mortgagor to comply, with each of the covenants, terms and
provisions contained in Section 35(f) as if such representation,
warranty or covenant was made directly by such general partner or
SPE Member. Only the SPE Member may be designated as a manager
under the law where Mortgagor is organized.
(h) Independent Director. Mortgagor shall at all
times cause there to be at least one duly appointed member of the
board of directors (an "Independent Director") of each general
partner of Mortgagor (or of the SPE Member of Mortgagor)
reasonably satisfactory to Mortgagee who shall not have been at
the time of such individual's initial appointment, and may not
have been at any time during the preceding five years, and shall
not be at any time while serving as a director of the general
partner (or SPE Member) either (i) a shareholder of, or an
officer, director, partner or employee of, Mortgagor or any of
its shareholders, partners, members, subsidiaries or affiliates,
(ii) a customer of, or supplier to, Mortgagor or any of its
shareholders, partners, members, subsidiaries or affiliates, who
draws more than ten percent (10%) of its revenue from Mortgagor,
(iii) a person or other entity controlling or under common
control with any such shareholder, officer, director, partner,
member, employee, supplier or customer, or (iv) a member of the
immediate family of any such shareholder, officer, director,
partner, member, employee, supplier or customer. As used in this
Section 35(h), the term "control": means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policy of a person or entity, whether through
ownership of voting securities, by contract or otherwise.
(i) ERISA. Mortgagor has made and shall continue to
make all required contributions to all employee benefit plans, if
any, and Mortgagor has no knowledge of any material liability
which has been incurred by Mortgagor which remains unsatisfied
for any taxes or penalties with respect to any employee benefit
plan or any multi-employer plan, and each such plan has been
administered in compliance with its terms and the applicable
provisions of ERISA and any other federal or state law.
(j) Contingent Liabilities. Mortgagor has no known
material contingent liabilities other than those disclosed in the
financial statements of Mortgagor delivered to Mortgagee.
(k) No Other Obligations. Mortgagor has no material
financial obligation under any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which
Mortgagor is a party or by which Mortgagor or the Mortgaged
Property is otherwise bound, other than obligations incurred in
the ordinary course of the operation of the Mortgaged Property
and other than obligations under this Mortgage and the other Loan
Documents.
(l) Fraudulent Conveyance. Mortgagor (1) has not
entered into the Loan or any Loan Document with the actual intent
to hinder, delay, or defraud any creditor and (2) received
reasonably equivalent value in exchange for its obligations under
the Loan Documents. Giving effect to the transactions
contemplated by the Loan Documents, the fair saleable value of
Mortgagor's assets exceeds and will, immediately following the
execution and delivery of the Loan Documents, exceed Mortgagor's
total liabilities, including, without limitation, subordinated,
unliquidated, disputed or contingent liabilities. The fair
saleable value of Mortgagor's assets is and will, immediately
following the execution and delivery of the Loan Documents, be
greater than Mortgagor's probable liabilities, including the
maximum amount of its contingent liabilities or its debts as such
debts become absolute and matured. Mortgagor's assets do not
and, immediately following the execution and delivery of the Loan
Documents will not, constitute unreasonably small capital to
carry out its business as conducted or as proposed to be
conducted. Mortgagor does not intend to, and does not believe
that it will, incur debts and liabilities (including, without limitation,
contingent liabilities and other commitments) beyond its ability to pay
such debts as they mature (taking into account the timing and amounts
to be payable on or in respect of obligations of Mortgagor).
(m) Access/Utilities. The Mortgaged Property has
adequate rights of access to public ways and is served by
adequate water, sewer, sanitary sewer and storm drain facilities.
All public utilities necessary to the continued use and enjoyment
of the Mortgaged Property as presently used and enjoyed are
located in the public right-of-way abutting the Mortgaged
Property, and all such utilities are connected so as to serve the
Mortgaged Property without passing over other property. All
roads necessary for the full utilization of the Mortgaged
Property for its current purpose have been completed and
dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the
benefit of the Mortgaged Property.
(n) Special Assessments. Except as disclosed in that
certain commitment for title insurance issued by Ticor Title
Insurance Company, dated as of June 26, 1997, Commitment No.
D738525-N24-24660-14, there are no pending or, to the knowledge
of Mortgagor, proposed special or other assessments for public
improvements or otherwise affecting the Mortgaged Property, nor,
to the knowledge of Mortgagor, are there any contemplated
improvements to the Mortgaged Property that may result in such
special or other assessments.
(o) Flood Zone. The Mortgaged Property is not located
in a flood hazard area as defined by the Federal Insurance Administration.
36. NO WAIVER. No failure by Mortgagee to insist upon
the strict performance of any term hereof or to exercise any
right, power or remedy consequent upon a breach thereof shall
constitute a waiver of any such term or right, power or remedy or
of any such breach. No waiver of any breach shall affect or
alter this Mortgage, which shall continue in full force and
effect, or shall affect or alter the rights of Mortgagee with
respect to any other then existing or subsequent breach.
37. NON-RECOURSE OBLIGATIONS. Anything contained in
this Mortgage or the other Loan Documents to the contrary
notwithstanding (except as provided below), Mortgagee's recourse
for the satisfaction of the Indebtedness and for the payment and
performance of all of the Obligations of the Mortgagor under this
Mortgage, the Mortgage Notes or the other Loan Documents shall be
limited solely to the Mortgagor's interest in the Mortgaged
Property, and none of (i) Mortgagor or any Affiliate thereof,
(ii) any Direct Beneficial Owner or any Affiliate thereof, (iii)
any Person owning, directly or indirectly, any legal or
beneficial interest in Mortgagor or any Direct Beneficial Owner
or any Affiliate thereof, or (iv) any partner, principal,
officer, controlling person, beneficiary, trustee, advisor,
shareholder, employee, agent, Affiliate or director of any Person
described in clauses (i) through (iii) above shall be personally
liable for the performance of any Obligation or the payment of
any Indebtedness, provided, however, that the foregoing
limitation on the personal liability of the Persons described in
clauses (i) through (iv) above shall not impair the validity of
the Lien of this Mortgage, any other Loan Documents, or the right
of Mortgagee to foreclose and/or enforce any of its rights or
remedies in and to the Mortgaged Property upon the occurrence of
an Event of Default as provided in this Mortgage or the other
Loan Documents. Nothing herein shall be deemed to be a waiver of
any right which Mortgagee may have under Section 506(a), 506(b),
1111(b) or any other provision of the Bankruptcy Reform Act of
1978 or any successor thereto or similar provisions under applicable
state law to file a claim for the full amount of the Indebtedness
owing to Mortgagee by Mortgagor or to require that all the Mortgaged
Property shall continue to secure all of the Indebtedness owing to
Mortgagee in accordance with this Mortgage, the Mortgage Notes and the
other Loan Documents.
38. FURTHER ASSURANCES. Mortgagor, at its own
expense, will execute, acknowledge and deliver all such
reasonable further acts, documents or instruments including,
without limitation, security agreements on any personalty
included or to be included in the Mortgaged Property and a
separate assignment of each Lease and take all such actions as
Mortgagee from time to time may reasonably request to better
assure, transfer and confirm unto Mortgagee the rights now or
hereafter intended to be granted to Mortgagee under this Mortgage
or the other Loan Documents.
39. ESTOPPEL CERTIFICATES. Mortgagor and Mortgagee
each will, from time to time, upon twenty (20) days' prior
written request by the other party, execute, acknowledge and
deliver to the requesting party, in the case of a request to
Mortgagee, a certificate signed by an authorized officer or
officers and in the case of a request to Mortgagor, an Officer's
Certificate, stating that this Mortgage is unmodified and in full
force and effect (or, if there have been modifications, that this
Mortgage is in full force and effect as modified and setting
forth such modifications) and stating the amount of accrued and
unpaid interest and the outstanding principal amount of each of
the Mortgage Notes. The estoppel certificate from Mortgagee
shall also state either that, to the best knowledge of the signer
of such certificate and based on no independent investigation, no
Default exists hereunder or, if any Event of Default shall exist
hereunder, specify any Event of Default of which Mortgagee has
actual knowledge.
40. ADDITIONAL SECURITY. Without notice to or consent
of Mortgagor and without impairment of the Lien and rights
created by this Mortgage, Mortgagee may accept (but Mortgagor
shall not be obligated to furnish) from Mortgagor additional
security for the Mortgage Notes. Neither the giving of this
Mortgage nor the acceptance of any such additional security shall
prevent Mortgagee from resorting, first, to such additional
security, and, second, to the security created by this Mortgage
without affecting Mortgagee's Lien and rights under this Mortgage.
41. INDEMNIFICATION BY MORTGAGOR. Subject to the
provisions of Section 37 hereof, Mortgagor will protect,
indemnify and save harmless Mortgagee and its directors,
officers, shareholders, employees and agents (collectively, the
"Indemnified Parties") from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs
and expenses (including all reasonable attorneys' fees and
expenses) imposed upon or incurred by or asserted against the
Indemnified Parties or the Mortgaged Property or any part of its
interest therein, by reason of the occurrence or existence of any
of the following prior to the payment in full of the Mortgage
Notes or foreclosure of the lien of this Mortgage or delivery of
a deed in lieu thereof, unless caused solely by the actual
willful misconduct or gross negligence of the Indemnified Parties
(other than such willful misconduct or gross negligence imputed
to the Indemnified Parties because of their interest in the
Mortgaged Property): (a) ownership of Mortgagor's interest in
the Mortgaged Property, or any interest therein, or receipt of
any Rents or other sum therefrom, (b) any accident, injury to or
death of any persons or loss of or damage to property occurring
on or about the Mortgaged Property or any Appurtenances thereto,
(c) any design, construction, operation, repair, maintenance,
use, non-use or condition of the Mortgaged Property or
Appurtenances thereto, including claims or penalties arising from
violation of any Legal Requirement or Insurance Requirement, as
well as any claim based on any patent or latent defect, whether or
not discoverable by the Mortgagee, any claim the insurance as to
which is inadequate, and any claim in respect of any adverse
environmental impact or effect, (d) any Default under this Mortgage
or any of the other Loan Documents or any failure on the part of
Mortgagor to perform or comply with any of the material terms of
any Lease or Operating Agreement within the applicable notice or grace
periods, (e) any performance of any labor or services or the
furnishing of any materials or other property in respect of the
Mortgaged Property or any part thereof, (f) any negligence or
tortious act or omission on the part of Mortgagor or any of its
agents, contractors, servants, employees, sublessees, licenses or
invitees, (g) any contest referred to in Section 8(c) hereof, (h)
any obligation or undertaking relating to the performance or
discharge of any of the terms, covenants and conditions of the
landlord contained in the Leases or of lessee in the Ground Lease
or (i) the presence in, at or under the Premises or the
Improvements any Hazardous Substance in violation of any Legal
Requirement or alleged by a Governmental Authority or a third
party to be in violation of any Legal Requirement. Any amounts
payable to the Indemnified Parties under this Section 41 which
are not paid within ten (10) Business Days after written demand
therefor by Mortgagee, setting forth in reasonable detail the
amount of such demand and the basis therefor, shall bear interest
from the date of demand at a rate equal to the weighted average
of the rates set forth in the Mortgage Notes, and shall be part
of the Indebtedness and secured by this Mortgage. In case any
action, suit or proceeding is brought against the Indemnified
Parties by reason of any such occurrence, Mortgagor shall at
Mortgagor's expense resist and defend such action, suit or
proceeding or will cause the same to be resisted and defended by
counsel for the insurer of the liability or by counsel designated
by Mortgagor (unless reasonably disapproved by Mortgagee promptly
after Mortgagee has been notified of such counsel); provided,
however, that nothing herein shall compromise the right of
Mortgagee to appoint its own counsel for its defense with respect
to any action which in its reasonable opinion presents a conflict
or potential conflict between Mortgagee and Mortgagor that would
make such separate representation advisable. So long as
Mortgagor is resisting and defending such action, suit or proceed
ing as provided above in a prudent and commercially reasonable
manner, Mortgagee shall not be entitled to settle such action,
suit or proceeding and claim the benefit of this Section 41 with
respect to such action, suit or proceeding and Mortgagee agrees
that it will not settle any such action, suit or proceeding
without the consent of Mortgagor; provided, however, that if
Mortgagor is not diligently defending such action, suit or
proceeding in a prudent and commercially reasonable manner as
provided above, Mortgagee may settle such action, suit or
proceeding subject only to the consent of Mortgagor, which
consent shall not be unreasonably withheld or delayed, and claim
the benefit of this Section with respect to settlement of such
action, suit or proceeding. Any Indemnified Party will give
Mortgagor prompt notice after such Indemnified Party obtains
actual knowledge of any potential claim by such Indemnified Party
for indemnification hereunder.
42. RELEASE. If the Mortgagor shall pay or cause to
be paid, the principal of and interest on the Mortgage Notes in
full at maturity or as permitted in accordance with the terms
thereof and all other Indebtedness and Obligations payable to
Mortgagee hereunder by the Mortgagor or secured hereby or by the
other Loan Documents, then this Mortgage and all the other Loan
Documents shall be discharged and satisfied or assigned (to the
Mortgagor or to any other Person at the Mortgagor's direction and
without recourse to Mortgagee), at the Mortgagor's option,
without warranty, at the expense of the Mortgagor upon its
written request. Concurrently with such release and satisfaction
or assignment of this Mortgage and all the other Loan Documents,
the Mortgagee will return to the Mortgagor all insurance policies
relating to the Mortgaged Property which may be held by Mortgagee
and any part of the Mortgaged Property or other collateral that may
be in its possession and, on the written request and at the expense
of the Mortgagor, will execute and deliver such proper instruments of
conveyance, assignment and release (including appropriate UCC-3
termination statements) as may reasonably be requested by
Mortgagor to evidence such release and satisfaction, assignment
of this Mortgage and the other Loan Documents and the conveyance
or assignment to or at the direction of Mortgagor of any such
Mortgaged Property or other collateral, and any such instrument,
when duly executed by the Mortgagee and, if appropriate, duly
recorded in the places where this Mortgage is recorded, shall
conclusively evidence the release and satisfaction or assignment
of this Mortgage and the other Loan Documents and the conveyance
or assignment of such Mortgaged Property or other collateral.
43. USURY. Mortgagor and Mortgagee intend to conform
strictly to applicable laws regarding usury. Mortgagor and
Mortgagee hereby stipulate and agree that none of the terms and
provisions contained in the Mortgage Notes or this Mortgage shall
ever be construed to create a contract to pay for the use,
forbearance, or detention of money an amount in excess of the
maximum nonusurious amount allowed by applicable law. If the
Mortgage Notes or this Mortgage or the transactions contemplated
by any of them would be otherwise usurious under applicable law,
then notwithstanding anything to the contrary in any or all of
the Mortgage Notes or this Mortgage, Mortgagor and Mortgagee
hereby agree as follows: (i) for any applicable period of time
specified by any applicable law, interest under the Loan
Documents shall never exceed the maximum nonusurious amount
allowed by such law; and (ii) if the Mortgage Notes shall be
accelerated in whole or in part for any reason, or if any
required or permitted prepayment occurs hereunder, then for any
applicable period of time specified by any applicable law,
interest shall never include more than the maximum nonusurious
amount allowed by each such law, and in either such case any
excess interest (if any) otherwise provided for under any or all
of the Security Documents shall automatically be applied by the
Mortgagee in the following order: (1) to interest properly
charged under the Mortgage Notes and this Mortgage; (2) to
principal properly charged under the Mortgage Notes and this
Mortgage (without premium); (3) if all sums due under (1) and (2)
have been or would thereby be paid in full, all other interest on
the Mortgage Notes shall be cancelled automatically as of and
through the date of such acceleration or prepayment; and (4) if
any such excess interest has been received by the Mortgagee, it
shall be refunded by Mortgagee to Mortgagor. Mortgagor shall
never be required to pay unearned interest under the Mortgage
Notes and this Mortgage, or to pay interest under any or all of
the Loan Documents, in each case in an amount in excess of the
maximum nonusurious amount allowed by applicable law, and the
provisions of this Section 43 shall control over all other provisions
of any Loan Document which may be in apparent conflict herewith.
44. CREATION OF ADDITIONAL MORTGAGE NOTES.
(a) Additional Notes shall be created by a supplement
to this Mortgage authorized by Mortgagor, as evidenced by an
Officer's Certificate, establishing the terms and provisions of
such Additional Notes and the form thereof. Each class of
Additional Notes may differ from the Class A Note and as between
classes in any respect not in conflict with the provisions of
this Mortgage and the Trust Agreement or as may be prescribed in
the supplement creating such Additional Notes.
(b) Mortgagor may, so long as no Event of Default has
occurred and is continuing, incur one or more classes of
Additional Notes in an aggregate principal amount and having such
terms and provisions (including, without limitation, interest rate,
amortization schedule, maturity date and redemption provisions) as
Mortgagor shall deem appropriate, provided that each such class of
Additional Notes:
(i) shall be denominated and payable in United States Dollars;
(ii) shall not rank senior in any respect to the Class A Note;
(iii) shall have a maturity date that is the same
date as the Maturity Date of the Class A Note; and
(iv) may bear interest at fixed or floating rates as
shall be determined by Mortgagee at the time of incurrence of
each class of Additional Notes;
and provided further that:
(v) Mortgagee shall have received written evidence
from the Rating Agencies to the effect that the incurrence of
such Additional Notes will not result in a qualification,
downgrading or withdrawal of the then current ratings of the
Class A Certificates then outstanding;
(vi) in connection with the issuance of such Additional
Notes, Mortgagor and Mortgagee shall enter into a supplement to
this Mortgage, in form and substance reasonably satisfactory to
each of them, subjecting the Mortgaged Property to the Lien of
this Mortgage for the benefit of the holders of any Additional
Notes on a subordinate basis;
(vii) Mortgagee shall have received a favorable
Opinion of Counsel that the incurrence of such Additional Notes
will not result in any adverse tax consequences to the Holders of
the Class A Certificates then outstanding;
(viii) Mortgagee shall have received an Officer's
Certificate from Mortgagor that after the incurrence of any
Additional Notes, the LTV Ratio will be no greater than 55%;
(ix) Mortgagee shall have received a favorable Opinion
of Counsel as to the validity and perfection of the supplement to
this Mortgage and Mortgagee's security interest in the Mortgaged
Property;
(x) an Officer's Certificate from Mortgagor shall be
delivered stating that all conditions precedent herein provided
for relating to the incurrence of the Additional Notes have been
complied with and that the Mortgagee may lawfully execute and
deliver the Mortgage supplement pertaining thereto;
(xi) a new title insurance policy (or an endorsement to
Mortgagee's current title insurance policy) shall be issued and
delivered, insuring the priority of the lien of this Mortgage in
favor of the Mortgagee in respect of the indebtedness evidenced
by the Class A Note and the Additional Notes;
(xii) an Officer's Certificate shall be delivered
stating that all provisions of the Trust Agreement with respect
to the issuance of additional Certificates have been complied with;
(xiii) Mortgagee shall have received the written
consent of the Ground Lessor to the incurrence of such Additional
Notes; and
(xiv) any Additional Counterparty (hereinafter
defined) shall have agreed in writing to the priorities of
payment to the Holders, the Rate Swap Counterparty and any such
Additional Counterparty set forth herein.
Each class of Additional Notes may be issued
simultaneously with the execution and delivery by Mortgagor of an
interest rate swap, cap, floor or other agreement ("Additional
Rate Agreement") with a counterparty ("Additional Counterparty"),
which Additional Rate Agreement may be pledged to Mortgagee as
additional collateral for the Loan; PROVIDED, HOWEVER, that
Mortgagee receives written confirmation from the Rating Agencies
that no such Additional Rate Agreement shall result in a
downgrading, withdrawal or qualification of the then current
ratings of the Certificates.
Mortgagor shall not terminate any Rate Swap Agreement
unless (i) Mortgagor provides a replacement Rate Swap Agreement,
and (ii) Mortgagee receives written confirmation from the Rating
Agencies that the termination of the Rate Swap Agreement AND the
replacement Rate Swap Agreement shall not result in a
downgrading, withdrawal or qualification of the then current
ratings of the Certificates.
45. THE GROUND LEASE. Promptly after Mortgagor's
receipt of any notice of any motion, application or effort to
reject the Ground Lease by the Ground Lessor or any bankruptcy
trustee arising from or in connection with any case, proceeding
or other action commenced or pending by or against the Ground
Lessor under the Federal Bankruptcy Code or any successor
statutes, Mortgagor shall give notice thereof to Mortgagee.
Mortgagor hereby (i) assigns to Mortgagee any and all of the
Mortgagor's rights as lessee under Section 365(h) of the
Bankruptcy Code or any successor statute, (ii) covenants that it
shall not elect to treat the Ground Lease as terminated pursuant
to Section 365(h) of the Federal Bankruptcy Code or any such
successor statute without the prior written consent of Mortgagee,
and (iii) agrees that any such election by the Mortgagor without
such consent shall be null and void. Mortgagor hereby
irrevocably appoints Mortgagee as its true and lawful attorney-in-
fact, which power of attorney shall be coupled with an interest,
for the purpose of exercising its rights pursuant to Section
365(h) of the Federal Bankruptcy Code or any successor to such
Section (A) to obtain for the benefit of Mortgagor a right to
possession or statutory term of years derived from or incident to
the Ground Lease, or (B) to treat the Ground Lease as terminated
(it being understood, however, that prior to the foreclosure of
the Lien hereof in no event shall Mortgagee acting pursuant to
such power of attorney elect to treat the Ground Lease as
terminated without the prior written consent of Mortgagor).
46. EXCULPATION OF LAND TRUSTEE. This Mortgage, as
well as certain other Loan Documents, is executed by LaSalle
National Bank not individually or personally, but solely as
trustee as aforesaid in the exercise of the power and authority
conferred upon and vested it as such trustee, and it is expressly
understood and agreed that nothing herein or therein contained
shall be construed as creating any liability on such trustee
personally to perform any covenant, undertaking, representation
or agreement, either express or implied, contained herein, all
such personal liability of such trustee, if any, being expressly
waived by each and every person now or hereafter claiming any
right or security under this Mortgage. LaSalle National Bank
hereby represents that it possesses full power and authority to
execute and deliver this instrument.
47. ENVIRONMENTAL MATTERS. (a) Mortgagor hereby
represents and warrants that (i) except as set forth in the
"Phase I" environmental site assessment of the Premises, dated
August 15, 1997, prepared by Versar, Inc. ("Versar"), the
"Environmental Report"), to its actual knowledge, Mortgagor
(x) is in compliance in all material respects with all
applicable Environmental Laws, (y) has received no written
communication, from a Governmental Authority or any other Person,
alleging that Mortgagor is not in full compliance with all
Environmental Laws, and there are no events or circumstances that
may prevent or interfere with such full compliance in the future,
(ii) there is no claim pending or threatened against Mortgagor
with respect to Environmental Laws, and (iii) to Mortgagor's
knowledge, there are no past or present actions, activities,
circumstances, conditions, events or incidents including, without
limitation, the release, emission, discharge of disposal or any
Hazardous Substance, that could form the basis of any claim
against Mortgagor based on Environmental Laws.
(b) Mortgagor covenants and agrees with Mortgagee that
it shall comply with all Environmental Laws, except for such
instances of non-compliance which, singly, or in the aggregate,
are not reasonably likely to have a material adverse effect on
the financial condition of Mortgagor. Except as to items
disclosed in the Environmental Reports, if at any time during the
continuance of the Lien of this Mortgage, Hazardous Substances
are discovered in, around, on, or under the Premises, in such
concentrations as a Governmental Authority having jurisdiction
over the Mortgaged Property would require remedial action to
correct (an "Environmental Event"), Mortgagor shall deliver
prompt notice of the occurrence of such Environmental Event to
Mortgagee. Within thirty (30) days after the occurrence of an
Environmental Event, Mortgagor shall deliver to Mortgagee an
Officers' Certificate (an "Environmental Certificate") explaining
the Environmental Event in reasonable detail, setting forth the
estimated cost as determined at such time of remedying such
Environmental Event and the proposed method of remediation and
time to complete such remedy. Mortgagor shall complete such
remedy or cause such remediation with due diligence in the
ordinary course of business. If an Environmental Event occurs,
Mortgagor shall diligently remedy or (to the extent Mortgagor has
legal standing to do so) use diligent efforts to cause the
appropriate third party to remedy all conditions giving rise to
such Environmental Event in material accordance with all
Environmental Laws.
48. JOINDER BY GROUND LESSOR. Ground Lessor is
joining in the execution of this Mortgage to evidence the
subordination of its entire right, title and interest in and to
the Mortgaged Property to the lien of this Mortgage (and without
limitation of the foregoing, Ground Lessor agrees that to the
extent the rights of the parties to receive payment of insurance
proceeds or condemnation awards pursuant to the terms of the
Ground Lease conflict with the rights of the Mortgagee to receive
payments in insurance proceeds or condemnation awards under
Section 7 of this Mortgage, the latter shall control); provided
that, by accepting delivery of this Mortgage, Mortgagee, on
behalf of itself and its successors, and assigns and on behalf of
all other parties who, pursuant to the terms of this Mortgage,
shall be entitled to the benefit thereof, shall be deemed to have
agreed that (i) Ground Lessor's execution of the joinder of this
Mortgage shall not give rise to any personal liability under any
of the Loan Documents, on the part of the Ground Lessor, its
successors and assigns or any present or future officer,
director, employee, trustee, member, agent or advisor of any of
the foregoing and (ii) Ground Lessor and its successors and
assigns shall be entitled to the benefit of Article 25 of the
Ground Lease. Without limiting the generality of the foregoing,
all notices of Default hereunder and under the other Loan
Documents to the Mortgagor shall also be given to the Ground
Lessor, and the Ground Lessor shall have the right to cure any
such Default in accordance with Section 25 of the Ground Lease.
Mortgagee shall accept any such cure provided by the Ground
Lessor, and any acceleration previously declared in respect of
such Default shall be rescinded upon such cure.
IN WITNESS WHEREOF, this Mortgage has been duly
executed by Mortgagor, and joined in by Ground Lessor, on the
date first hereinabove written.
LASALLE NATIONAL BANK, not
personally but as successor trustee
under that certain Trust Agreement,
dated November 20, 1975, and known
as Trust No. 49475
By:______________________________________
Name:____________________________________
Its:________________________________
OAK BROOK URBAN VENTURE, L.P.,
Beneficiary of the above-named land trust
By: USC Oakbrook, Inc.,
its general partner
By:_________________________________
Name:_______________________________
Its:___________________________