EXHIBIT 4.2
MORTGAGE AND SECURITY AGREEMENT
DATED: DECEMBER 13, 2002
IN THE AMOUNT OF $40,500,000.00
FROM
NEW VALLEY CORPORATION
(DOING BUSINESS IN NEW JERSEY AS NEW VALLEY REALTY COMPANY)
▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
TO
HSBC REALTY CREDIT CORPORATION (USA),
AS ADMINISTRATIVE AGENT
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Street Address ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ of: Plainsboro
County of: Middlesex
State of: New Jersey
Block: 3
Lots: 1.61 and 1.62
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RECORD & RETURN TO:
Trans-County Title Agency, LLC
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▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title No.: TC-32594
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MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT ("Mortgage"), made the
13th day of December 2002, from NEW VALLEY CORPORATION, a Delaware corporation
(doing business in New Jersey as New Valley Realty Company) with offices located
at ▇▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Mortgagor") in favor of HSBC
REALTY CREDIT CORPORATION (USA), a corporation organized under the laws of the
State of Delaware, with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
as Administrative Agent (in such capacity, "Mortgagee") for certain lenders in
connection with a loan agreement dated the date hereof among the Mortgagor, as
borrower, each of the "Lenders" (as hereinafter defined), and the Mortgagee, as
Administrative Agent ("Loan Agreement")
DEFINITIONS
The Mortgagor and the Mortgagee agree that, unless the context
otherwise specifies or requires, the following terms shall have the meanings
herein specified, such definitions to be applicable equally to the singular and
to the plural forms of such terms.
"Chattels" means all fixtures, fittings, appliances,
apparatus, equipment, machinery and articles of personal property, all additions
thereto and replacements thereof and articles in substitution therefore, now or
hereafter owned by the Mortgagor or in which the Mortgagor has or shall have an
interest, now or at any time hereafter affixed to, attached to, placed upon, or
used in any way in connection with the complete and comfortable use, enjoyment,
occupancy or operation of, the Improvements (as hereinafter defined) or the
Premises (as hereinafter defined).
"Code" means the Uniform Commercial Code adopted in New York
State, as the same may be from time to time in effect.
"Event of Default" means an event of default described as such
in Section 2.1 hereof.
"Improvements" means all structures and buildings, and
replacements thereof, now or hereafter located or erected upon the Premises,
including all Chattels of every kind and nature whatsoever forming part of said
structures and/or buildings.
"Intangibles" means all "general intangibles" (as such term is
defined in the Code) in any way relating to the Premises and/or the Improvements
and in which the Mortgagor has any interest, including, without limitation, all
licenses, trade names, and books and records relating to the Premises, the
construction of any Improvements, and/or to the business operated or to be
operated on the Premises or any part thereof, and all unearned premiums,
accrued, accruing or to accrue under all insurance policies now or hereafter
obtained by the Mortgagor insuring the Mortgaged Property (as hereinafter
defined), and all rights and interests of Mortgagor thereunder.
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"Involuntary Rate" means the Default Rate as set forth in the
Loan Agreement, but in no event to exceed the maximum rate allowed by law.
"Lenders" mean each of the lenders that is a signatory to the
Loan Agreement under the caption "Lenders" on the signature page(s) thereof,
including each assignee that becomes a "Lender" after the date hereof pursuant
to Section 12.06 of the Loan Agreement.
"Notes" shall have the meaning ascribed to such term in the
Loan Agreement.
"Premises" means all that certain plot, piece or parcel of
land owned by the Mortgagor as more particularly described in Schedule A hereto,
together with all of the improvements thereon, air space, easements, rights,
privileges, royalties and appurtenances belonging or in anyway appertaining
thereunto, and all of the estate, right, title, interest, claim or demand
whatsoever of the Mortgagor therein and in the streets, alleys and ways adjacent
thereto, either at law or in equity, in possession or expectancy, now or
hereafter acquired.
GRANTING CLAUSE
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the Mortgagor, in
consideration of the premises and in order to secure payment of the principal of
FORTY MILLION FIVE HUNDRED THOUSAND and 00/100 ($40,500,000.00) DOLLARS, and the
interest, and any other sums payable, under the Notes, the Loan Agreement,
and/or under this Mortgage, and the payment of any sums advanced by the
Mortgagee pursuant to this Mortgage (collectively, all of such obligations are
hereinafter referred to as the "Indebtedness"), hereby gives, grants, bargains,
sells, warrants, aliens, premises, releases, conveys, assigns, transfers,
mortgages, hypothecates, deposits, pledges, sets over and confirms unto the
Mortgagee, for the pro rata benefit of the Lenders, all the Mortgagor's estate,
right, title and interest in, to and under any and all of the following
described property (the "Mortgaged Property"), whether now owned or held or
hereafter acquired:
(a) the Premises;
(b) the Improvements;
(c) the Chattels;
(d) the Intangibles;
(e) all leases, subleases, lettings, licenses and other uses
and occupancies of the Premises now or hereafter entered into and all right,
title and interest of the Mortgagor thereunder, together with the rents, issues,
income and profits thereof including, without limitation, cash or securities
deposited thereunder to secure performance by the lessees of their obligations
thereunder, whether such cash or securities are to be held until the expiration
of the terms of such leases (except that the Mortgagor shall as licensee of the
Mortgagee have the right to collect such rents and other amounts, subject to
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provisions of this Mortgage, so long as no Event of Default shall have occurred
and be continuing) and all guaranties of the obligations of the tenants,
subtenants, lessees, licensees, users or occupants thereunder;
(f) all agreements and/or contracts now or hereafter entered
into by the Mortgagor relating to the sale, leasing, brokerage, development,
construction (including architectural and engineering contracts), equipping,
management, maintenance, marketing, and/or operation of the Premises or the
Improvements, including all moneys due and to become due thereunder;
(g) all books and records relating to the operation of the
Premises and/or the construction of any Improvements, including the plans and
specifications and working drawings relating to the construction of any
Improvements;
(h) all options and agreements with respect to any additional
real property for the use or development in connection with operation of the
Premises and/or construction of any Improvements;
(i) all Chattel Paper, Accounts, Deposits, Accounts,
Letter-of-Credit Rights, Documents, Inventory and Instruments, as such terms are
defined in the Code, relating to the Premises and/or Improvements only,
including, without limitation, all of the Mortgagor's operating accounts with
respect to the Premises and the Improvements;
(j) all consents, certificates, authorizations, variances,
waivers, licenses, permits and approvals from any governmental authority
relating to the Premises and/or the construction of any Improvements; and
(k) all proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including, without
limitation, proceeds of hazard and title insurance and condemnation awards.
TO HAVE AND TO HOLD unto the Mortgagee, its successors and
assigns forever.
ARTICLE I.
PARTICULAR COVENANTS OF THE MORTGAGOR
The Mortgagor covenants and agrees as follows:
Section 1.1. (a) Mortgagor represents and warrants that it has
and will continue to hold good and marketable title to an indefeasible fee
estate in the Premises subject to no lien, charge or encumbrance, except such as
are listed as exceptions in Schedule B attached hereto ("Permitted Exceptions").
(b) Mortgagor represents and warrants: (i) that it is the
owner of, and shall own, the Mortgaged Property free and clear of any liens and
claims, other than the Permitted Exceptions, (ii) that this Mortgage is and
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shall remain a valid and enforceable first lien on the Mortgaged Property
subject only to the Permitted Exceptions, (iii) that the execution and delivery
of this Mortgage, the Loan Agreement and the Notes have been duly authorized by
the Mortgagor and that there is no provision in any document evidencing or
establishing the existence of the Mortgagor that requires the further consent
for such action by any other entity or person, (iv) that it is duly organized,
validly existing and is in good standing under the laws of the State of
Delaware, and is authorized to do business in the State of New Jersey, (v) that
it has all necessary licenses, authorizations, registrations, permits and/or
approvals, and full power and authority, to own its properties and carry on its
business as currently conducted, (vi) that the execution and delivery by it of,
and performance of its obligations under this Mortgage, the Loan Agreement and
the Notes shall not result in the Mortgagor being in default under any provision
of any document evidencing or establishing the existence of the Mortgagor or of
any mortgage, credit or other agreement to which the Mortgagor is a party or
that affects the Mortgagor or the Premises, or any part thereof, (vii) that it
shall preserve its fee simple title in and to the Premises and shall forever
warrant and defend the same to the Mortgagee, (viii) that it shall forever
warrant and defend the validity and priority of the lien hereof against the
claims of all persons and parties whomsoever, and (ix) that the execution of
this Mortgage has been duly authorized by the executive committee of the board
of directors of the Mortgagor.
Section 1.2. The Mortgagor shall, at its sole cost and
expense, and without expense to the Mortgagee, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as the Mortgagee
shall from time to time reasonably require, for the better assuring, conveying,
assigning, transferring and confirming unto the Mortgagee the Mortgaged Property
and the rights hereby conveyed or assigned or intended now or hereafter so to
be, or which the Mortgagor may be or may hereafter become bound to convey or
assign to the Mortgagee, or for carrying out the intention or facilitating the
performance of the terms of this Mortgage, or for filing, registering or
recording this Mortgage and, on demand, shall execute and deliver, and hereby
authorizes the Mortgagee to execute and file in the name of the Mortgagor to the
extent it may lawfully do so, one or more financing statements to evidence more
effectively the lien hereof upon the Mortgaged Property or any part thereof.
Section 1.3. (a) The Mortgagor forthwith upon the execution
and delivery of this Mortgage, and thereafter from time to time, shall, at the
sole cost of the Mortgagor, cause this Mortgage and any security instrument
creating a lien or evidencing the lien hereof upon the Mortgaged Property and
each instrument of further assurance, to be filed, registered and/or recorded in
such manner and in such places as may be required by any present or future law
in order to publish notice of and to fully protect the lien hereof upon, and the
interest of the Mortgagee in, the Mortgaged Property.
(b) The Mortgagor shall pay all filing, registration or
recording fees, and all expenses incident to the execution and acknowledgment of
this Mortgage, any mortgage supplemental hereto, any security instrument with
respect to the Mortgaged Property, and any instrument of further assurance, and
all federal, state, county and municipal stamp taxes and other taxes, duties,
imposts, assessments and charges (other than the Mortgagee's franchise or income
taxes) arising out of or in connection with the execution and delivery of the
Loan Agreement, the Notes, this Mortgage or any mortgage supplemental hereto,
any security instrument with respect to the Mortgaged Property or any instrument
of further assurance.
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Section 1.4. The Mortgagor shall punctually pay the principal
and interest and all other sums to become due in respect of the Notes at the
time and place and in the manner specified in the Loan Agreement, and all
amounts due under the Loan Agreement, according to the true intent and meaning
thereof, all in any coin or currency of the United States of America that at the
time of such payment shall be legal tender for the payment of public and private
debts and all such principal and interest due in respect of the Loan Agreement
and the Notes is hereby deemed an obligation due under and secured by this
Mortgage.
Section 1.5. Mortgagor represents and warrants that Mortgagor
shall, so long as it is owner of the Mortgaged Property or any part thereof, do
all things necessary to preserve and keep in full force and effect its
existence, franchises, rights and privileges as a corporation under the laws of
the State of Delaware and shall comply with all regulations, rules, ordinances,
statutes, orders and decrees of any governmental authority or court applicable
to the Mortgagor or to the Mortgaged Property or any part thereof.
Section 1.6. All right, title and interest of the Mortgagor in
and to all extensions, improvements, betterments, renewals, substitutes and
replacements of, and all additions and appurtenances to, the Mortgaged Property
hereafter acquired by, or released to, the Mortgagor, or constructed, assembled
or placed by the Mortgagor on the Premises or any part thereof, 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 the Mortgagor or Mortgagee, shall become subject to
the lien of this Mortgage as fully and completely, and with the same effect, as
though now owned by the Mortgagor and specifically described in the granting
clause hereof, but at any and all times the Mortgagor shall execute and deliver
to the Mortgagee any and all such further assurances, mortgages, conveyances or
assignments thereof as the Mortgagee may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien of this Mortgage.
Section 1.7. (a) The Mortgagor, from time to time when the
same shall become due and payable, shall pay and discharge all taxes of every
kind and nature, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents and charges, and all
other public charges whether of a like or different nature, imposed upon or
assessed against the Mortgaged Property, or any part thereof, or upon the
revenue, rents, issues, income and profits of the Mortgaged Property, or any
part thereof, or arising in respect of the occupancy, use or possession thereof.
In default thereof the Mortgagee may, but shall be under no obligation to, pay
the same, and the Mortgagor shall repay the same to the Mortgagee with interest
and the same shall be a lien of the Premises secured on this Mortgage. If
requested by the Mortgagee, the Mortgagor shall deliver to the Mortgagee
receipts evidencing the payment of all such taxes, assessments, levies, fees,
rents and other public charges imposed upon or assessed against the Mortgaged
Property, or any part thereof, or the revenues, rents, issues, income or profits
thereof, promptly upon the payment thereof. The Mortgagor shall deposit with the
Mortgagee, at the time of each payment of an installment of interest or
principal under the Note, an additional amount sufficient to discharge the
obligations under this subsection (a) when they become due. The determination of
the amount so payable and of the fractional part thereof to be deposited with
the Mortgagee, so that the aggregate of such deposit shall be sufficient for
this purpose, shall be made by the Mortgagee in its sole and reasonable
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discretion. Such amounts shall be held by the Mortgagee without interest and
applied to the payment of the obligations in respect to which such amounts were
deposited on or before the respective dates on which the same or any of them
would become delinquent or, at the option of the Mortgagee, but only if an Event
of Default shall have occurred and shall be continuing, to the payment of any
amount due under the Loan Agreement, the Notes or hereunder (including
principal, interest and any late charges) in such order or priority as the
Mortgagee shall determine. If one (1) month prior to the due date of any of the
aforementioned obligations, the amounts then on deposit therefor shall be
insufficient for the payment of such obligation in full, the Mortgagor, within
five (5) business days after demand by the Mortgagee, shall deposit the amount
of the deficiency with the Mortgagee. Nothing herein contained shall be deemed
to affect any right or remedy of the Mortgagee under any provision of this
Mortgage or of any statute or rule of law to pay any such amount and to add the
amount so paid to the Indebtedness. The Mortgagor hereby grants the Mortgagee a
security interest in any and all such funds to secure the repayment of the
Indebtedness.
(b) Nothing in this Section 1.7 shall require the payment or
discharge of any obligation imposed upon the Mortgagor by this Section 1.7 so
long as the Mortgagor shall in good faith and at its own expense contest the
same or the validity thereof by appropriate legal proceedings which shall
operate to prevent the collection thereof or other realization thereon and the
sale or forfeiture of the Mortgaged Property or any part thereof to satisfy the
same; provided that during such contest the Mortgagor shall, at the option of
the Mortgagee, provide reasonable security satisfactory to the Mortgagee
assuring the discharge of the Mortgagor's obligation under this Section 1.7 and
of any additional charge, penalty, or expense arising from or incurred as a
result of such contest; and provided further that if, at any time, payment of
any obligation imposed upon the Mortgagor by subsection (a) of this Section 1.7
shall become necessary to prevent the delivery of a tax deed, or its equivalent,
conveying the Mortgaged Property, or any part thereof, because of non-payment,
then the Mortgagor shall pay the same in sufficient time to prevent the delivery
of such tax deed or its equivalent.
Section 1.8. (a) The Mortgagor shall pay, or adequately bond,
from time to time when the same shall become due, all lawful claims and demands
of mechanics, materialmen, laborers and others, which claims and demands, if
unpaid, might result in, or permit the creation of, a lien on the Mortgaged
Property or any part thereof, or on the revenues, rents, issues, income and
profits arising therefrom and in general shall do or cause to be done everything
necessary so that the lien on this Mortgage shall be fully preserved, at the
cost of the Mortgagor, without expense to the Mortgagee.
(b) The Mortgagor shall pay any and all taxes, charges, fees
and/or levies by reason of Mortgagee's ownership of this Mortgage or any
Lender's ownership of its Note and/or resulting from the exercise by Mortgagee
of any of its rights and/or remedies provided for under this Mortgage, except
for franchise and income taxes of the Mortgagee. The obligations assumed by
Mortgagor pursuant to this Section 1.8 shall survive the exercise by the
Mortgagee of any of its rights and/or remedies under this Mortgage.
Section 1.9. (a) The Mortgagor, at its sole cost and expense,
shall maintain the following insurance:
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(i) intentionally omitted.
(ii) Insurance on the Improvements and the Chattels against
loss or damage by fire and against loss or damage by other risks now or
hereafter embraced by "All-Risks" insurance, so called, in an amount sufficient
to prevent the Mortgagor from becoming a co-insurer under the applicable
policies but, in any event, not less than 100% of the "full replacement cost"
thereof, without deduction for depreciation, and with a replacement cost
endorsement and agreed amount endorsement satisfactory to the Mortgagee. As used
herein, "full replacement cost" shall mean (A) with reference to the
Improvements, the cost of replacing the Improvements exclusive of the cost of
excavations, foundations and footings below the lowest basement floor, and (B)
with reference to the Chattels, the cost of replacing the Chattels, and in
either case, without deduction for the physical depreciation thereof. Such full
replacement cost shall be determined from time to time (but not more often than
once every twenty-four months) at the request of the Mortgagee by an insurer or
by an appraiser, architect or contractor designated by the Mortgagee and paid by
the Mortgagor. No omission on the part of the Mortgagee to request any such
determination shall relieve the Mortgagor of any of its obligations under this
Section 1.9.
(iii) Comprehensive general liability insurance (with
contractual liability on an occurrence basis and including blanket contractual
liability, completed operations and personal injury coverage) against claims for
bodily injury, death or property damage occurring on, in or about the Premises,
such insurance to afford protection, during the term of this Mortgage, in such
amounts as the Mortgagee may from time to time require.
(iv) Worker's compensation insurance, in accordance with all
applicable statutory requirements.
(v) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, pressure vessels or similar apparatus now or hereafter installed in
the Premises, in for and in such amounts as the Mortgagee shall from time to
time reasonably requires.
(vi) Rent and business interruption insurance for loss
occasioned by the perils commonly insured in the "All Risks" policy, so-called,
in an amount not less than one year's gross income from the Premises plus the
annual real estate taxes thereon.
(vii) Insurance in such amounts as may from time to time be
reasonably required by the Mortgagee, against such other insurable casualties,
hazards or risks as shall from time to time commonly be insured against in the
case of premises comparable to the Premises, including, without limitation,
insurance against loss and damage resulting from perils and acts of terrorism;
PROVIDED, HOWEVER with respect to insurance against loss and damage resulting
from perils and acts of terrorism, Mortgagor shall only be required to use
commercially reasonable efforts, consistent with those of prudent owners of real
estate comparable to the Premises and Improvements, to maintain commercial
property and business income insurance for loss and damage resulting from perils
and acts of terrorism on terms (including amounts) consistent with those
required under this Section 1.9.
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Each policy of insurance required by clauses (ii), (iv), (v),
(vi) and (vii) of this subdivision (a) of this Section 1.9 shall contain the
standard non-contributory mortgagee endorsement in favor of the Mortgagee, shall
name the Mortgagee as loss payee of any and all proceeds payable under such
insurance, and shall provide that the Mortgagee shall have the right to
participate in the adjustment of any insurance awards. All policies of insurance
required by clause (iii) of this subdivision (a) of this Section 1.9 shall be
written on an "on occurrence" basis and shall name the Mortgagee as an
additional insured.
All insurance policies and endorsements required pursuant to
this Section 1.9 shall be fully paid for, nonassessable and contain such
provisions and expiration dates and be in such form and amounts and issued by
such insurance companies as shall be reasonably satisfactory to the Mortgagee.
Without limiting the foregoing, each policy shall specifically provide that (A)
such policy may not be canceled or modified except upon thirty (30) days prior
written notice to the Mortgagee via certified mail and that no act or thing done
by the Mortgagor shall invalidate the policy as against the Mortgagee, and (B)
any and all insurance proceeds shall be paid to the Mortgagee, except for
insurance proceeds of less than $150,000.00 for any single occurrence, which may
be paid directly to the Mortgagor, so long as no Event of Default shall have
occurred and be continuing. In addition, from time to time, upon the occurrence
of any change in the use, operation or value of the Premises, or in the
availability of insurance in the area in which the Premises are located, the
Mortgagor shall, within ten (10) business days after demand by the Mortgagee,
take out such additional amounts and/or require other kinds of insurance as the
Mortgagee may reasonably require. The Mortgagor shall assign and deliver the
policies of all such insurance to the Mortgagee, in such manner and form that
the Mortgagee and its successors and assigns shall at all times have and hold
said policy or policies as collateral and further security for the payment of
the Indebtedness until the full payment of the Indebtedness.
(b) Mortgagor shall not take out separate insurance concurrent
in form or contribution in the event of loss with that required to be maintained
under this Section 1.9, unless the Mortgagee is included thereon as a named
insured with loss payable to the Mortgagee under a standard mortgagee
endorsement of the character above described. The Mortgagor shall immediately
notify the Mortgagee whenever any such separate insurance is taken out and shall
immediately notify the Mortgagee whenever such separate insurance is taken out
and shall promptly deliver to the Mortgagee the policy or policies of such
insurance.
(c) If the Premises, or any part thereof, are located in an
area which has been identified by the Secretary of Housing and Urban Development
as a flood hazard area, the Mortgagor shall keep, for as long as any
Indebtedness remains unpaid, the Premises covered by flood insurance in an
amount at least equal to the full amount of the Indebtedness or the maximum
limit of coverage available for the Premises under the National Flood Insurance
Act of 1968 and the Flood Disaster Protection Act of 1983, as the same may have
been or may hereafter be amended or modified (and any successor act thereto),
whichever is less, naming Mortgagee as an additional insured party.
(d) The Mortgagor shall give the Mortgagee prompt notice of
any loss covered by insurance and the Mortgagee shall have the right to join the
Mortgagor in adjusting any loss. Notwithstanding anything to the contrary
contained herein or under applicable law, the proceeds of insurance policies
coming into the possession of the Mortgagee shall not be deemed trust funds and,
unless the Mortgagor shall be entitled to receive disbursement of the insurance
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proceeds pursuant to and in accordance with the provisions of 1.9(h) below, the
Mortgagee shall have the option in its sole discretion to apply any insurance
proceeds it may receive pursuant hereto, or otherwise, to the payment of the
Indebtedness, or to allow all or a portion of such proceeds to be used for the
restoration of the Premises in accordance with Section 1.9(h) below without
affecting the lien of this Mortgage for the full amount of the Indebtedness
owing prior to receipt of such proceeds. In the event any such insurance
proceeds shall be used to reduce the Indebtedness, the same shall be applied by
the Mortgagee, after the deduction therefrom and repayment to the Mortgagee of
any and all costs and expenses incurred by the Mortgagee in the recovery
thereof, in any manner Mortgagee shall designate including but not limited to,
the application of such proceeds to the then unpaid installments of the
principal balance due under the Loan Agreement and the Notes in the inverse
order of their due dates, such that the regular payments, if any, under the Loan
Agreement and the Notes shall not be reduced or altered in any manner.
(e) All insurance provided for in this Section 1.9 shall be
effected under valid and enforceable policies issued by financially responsible
insurers having a general policyholder's and financial rating of not less than
"A", as rated in the most currently available Best's Insurance Reports (or an
equivalent rating with a publication of a similar nature if Bests Insurance
Reports is no longer being published), and incorporated under the Laws of the
United States or any state thereof and authorized to do business in the State of
New York and in the State of New Jersey and which are approved in writing by the
Mortgagee. It is further agreed that the aggregate amount of coverage
underwritten by any insurer in conformance with the provisions of this Mortgage
shall not exceed 10% of that insurer's surplus to policyholders. Upon the
execution of this Mortgage and thereafter, not less than thirty (30) days prior
to the expiration dates of the expiring policies theretofore furnished pursuant
to this section or any other section of this Mortgage, originals or certified
copies of the policies bearing notations (or certificates thereof) evidencing
the payment of not less than one year's premiums, or accompanied by other
evidence reasonably satisfactory to the Mortgagee of such payment, shall be
delivered by the Mortgagor to the Mortgagee.
(f) If the Mortgagor shall fail to procure, pay for or deliver
to the Mortgagee any policy or policies of insurance (or certificates, as the
case may be) and/or renewals thereof as in this Section 1.9 required, the
Mortgagee may, at its option, but shall be under no obligation to do so, effect
such insurance and pay the premium therefor, and the Mortgagor shall upon five
(5) business days prior written notice repay to the Mortgagee any premiums so
paid, with interest thereon at the Involuntary Rate. Any amount so expended by
the Mortgagee, with interest thereon at the Involuntary Rate, shall be secured
by the lien of this Mortgage. The Mortgagor hereby waives any claim against the
Mortgagee by reason of the failure of the Mortgagee to (i) notify the Mortgagor
of the cancellation or non-renewal of any insurance required by this Section
1.9, or (ii) effect any such insurance.
(g) After an Event of Default, the Mortgagee may, at its
option, to be exercised by thirty (30) days written notice to the Mortgagor,
require the deposit by the Mortgagor, at the time of each payment of an
installment of interest or principal under the Loan Agreement and the Notes, of
an additional amount sufficient to pay the insurance premiums due for the
insurance required under this Section 1.9 when such premiums become due. The
determination of the amount so payable and of the fractional part thereof to be
deposited with the Mortgagee, so that the aggregate of such deposit shall be
sufficient for this purpose, shall be made by the Mortgagee in its sole and
reasonable discretion. Such amounts shall be held by the Mortgagee without
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interest and applied to the payment of the premiums in respect to which such
amounts were deposited on or before the respective dates on which the same or
any of them would become delinquent or, at the option of the Mortgagee, but only
if an Event of Default shall have occurred and shall be continuing, to the
payment of any amount due under the Loan Agreement or the Notes or hereunder
(including principal, interest and late charges) in such order or priority as
the Mortgagee shall determine. If one (1) month prior to the due date of any of
the aforementioned premiums, the amounts then on deposit therefor shall be
insufficient for the payment of such premiums in full, the Mortgagor, within
five (5) business days after demand by the Mortgagee, shall deposit the amount
of the deficiency with the Mortgagee. Nothing herein contained shall be deemed
to affect any right or remedy of the Mortgagee under any provision of this
Mortgage or of any statute or rule of law to pay any such amount and to add the
amount so paid to the Indebtedness. The Mortgagor hereby grants the Mortgagee a
security interest in any and all such funds to secure the repayment of the
Indebtedness.
(h) If (A) the Debt Coverage Ratio (as defined in subsection
1.23(b)(ii) of this Mortgage) shall equal or exceed the Acceptable Ratio (as
defined in subsection 1.23(b)(v) of this Mortgage) for all Periods (as defined
in subsection 1.23(b)(iv) of this Mortgage) during which insurance proceeds are
being made available for the restoration of the Improvements, and (B) the
stabilized value of the Premises and Improvements as set forth In the then most
recent Appraisal Report (as defined in Section 1.25 of this Mortgage) equals or
exceeds the Principal Balance (as defined in Section 1.25 of this Mortgage),
then the Mortgagee shall permit the Mortgagor to use the insurance proceeds for
the restoration of the Mortgaged Property, provided that (i) the net insurance
proceeds are sufficient in the opinion of the Mortgagee, on advice from
Mortgagee's architect or engineer, to restore the Mortgaged Property, or if such
proceeds are insufficient to restore the Mortgaged Property, Mortgagor shall
have deposited with the Mortgagee cash or other security reasonably acceptable
to the Mortgagee in an amount equal to the difference between the cost of such
restoration and such proceeds, (ii) there shall exist no Event of Default, and
(iii) in the opinion of the Mortgagee, on advice from Mortgagee's architect or
engineer, the Mortgaged Property can be completely restored within two hundred
seventy (270) days after the occurrence of such casualty or the Maturity Date
(as such term is defined in the Loan Agreement), whichever comes first. In the
event insurance proceeds are used to repair or restore the Mortgaged Property
pursuant to this subsection, Mortgagor shall obtain, at its sole cost and
expense, an architect who shall submit plans to the Mortgagee for the repair or
restoration of the Mortgaged Property indicating that such repair or restoration
can be completed within the period provided for herein, together with an
estimated budget itemizing the projected costs of such repair or restoration,
which plans and budget shall be subject to the approval of the Mortgagee, which
approval shall not be unreasonably withheld, conditioned or delayed. Mortgagor
shall also obtain and post, at its sole cost and expense, all necessary Federal,
State and local permits and approvals prior to the commencement of such repair
or restoration. Mortgagor agrees that all insurance proceeds (and any shortfall
deposits) to be used to repair or restore the Mortgaged Property shall be held
by the Mortgagee and disbursed monthly: (i) on advice from the Mortgagor's
architect or engineer (subject to the review and approval of the Mortgagee's
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architect or engineer) that the work completed or materials installed conform to
said budget and plans, as reasonably approved by the Mortgagee; and (ii) upon
presentment of receipted bills and releases reasonably satisfactory to the
Mortgagee. The expenses incurred by the Mortgagee, including reasonable
architects' and reasonable attorneys' fees, and all soft and hard costs in
connection with such restoration, shall be paid by Mortgagor to the extent
insurance proceeds (and any shortfall deposits) are insufficient to pay same. At
no time shall the Mortgagee be obligated to disburse any funds if (i) the
undisbursed balance is, in the opinion of the Mortgagee based on advice from its
architect or engineer, insufficient to timely complete the restoration of the
Mortgaged Property free and clear of all liens or if the advance of funds will,
in the reasonable opinion of the Mortgagee, adversely affect the priority of the
lien of this Mortgage, or (ii) an Event of Default shall have occurred and be
continuing. The Mortgagor agrees to post such bonds, obtain such guaranteed
maximum price general contract agreement and/or enter into such agreements and
arrangements as the Mortgagee may require to insure lien-free completion of such
repairs or restoration by the end of the period provided herein for completion
of such repairs or restoration.
(i) For the purpose of subsection 1.9(h) and Section 1.13
only, in determining the Debt Coverage Ratio (a) the DCR Shortage (as such term
is defined in subsection 1.23 of this Mortgage), if any, shall not be included
in determining whether the Debt Coverage Ratio is equal to or exceeds the
Acceptable Ratio, (b) the proceeds of rent insurance, to the extent such
proceeds are actually available to be used to pay debt service under the Loan
Agreement and the Notes, shall be included in determining Net Property Cash Flow
(as defined in subsection 1.23(b)(i) of this Mortgage), and (c) notwithstanding
the provisions of Section 1.23 of this Mortgage, the Mortgagee shall be entitled
to order an Appraisal Report at any time after the casualty/proceeding giving
rise to the insurance/condemnation claim and the Mortgagor shall be responsible
to pay all fees and expenses of the Mortgagee incurred with respect thereto.
Section 1.10. If the Mortgagor shall fail to perform any of
the covenants contained in Sections 1.1, 1.3, 1.7, 1.8, 1.9 or 1.12 hereof, the
Mortgagee may make advances to perform the same on Mortgagor's behalf, and all
sums so advanced shall be a lien upon the Mortgaged Property and shall be
secured hereby. The Mortgagor shall repay upon five business days prior written
demand by Mortgagee all such sums so advanced by Mortgagee on Mortgagor's behalf
with interest at the Involuntary Rate. The provision of this Section 1.10 shall
not prevent any default in the observance by Mortgagor of any covenant contained
in Sections 1.1, 1.3, 1.7, 1.8, 1.9 or 1.12 hereof from constituting an Event of
Default.
Section 1.11. (a) The Mortgagor shall keep adequate records
and books of account with respect to the Mortgaged Property, and shall keep
adequate records and books of account with respect to its overall operations, in
accordance with the principles of the accrual basis method of accounting,
consistently applied. Mortgagor shall permit the Mortgagee, by its agents,
accountants and attorneys, to visit and inspect the Premises at reasonable times
during normal business hours upon reasonable prior written or telephonic notice
and to examine the Mortgagor's records and books of account with respect to the
Mortgaged Property and to discuss its affairs, finances and accounts with the
partners or officers, members, accountants, employees, attorneys and agents of
the Mortgagor, at such reasonable times as may be requested by the Mortgagee
upon reasonable prior written or telephonic notice.
(b) The Mortgagor shall deliver to the Mortgagee (i) with
reasonable promptness after the close of each fiscal year of the Mortgagor, but
in no event later than one hundred twenty (120) days thereafter, the Mortgagor's
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operating report with respect to the Mortgaged Property, statement of income,
balance sheet, and statement of cash flow, for such fiscal year, together with
all schedules appurtenant thereto, prepared on the accrual basis method of
accounting in accordance with Generally Accepted Accounting Principles ("GAAP"),
consistently applied, and certified by an independent certified public
accountant engaged by the Mortgagor, which certified public accountant shall be
reasonably satisfactory to the Mortgagee; provided that, with respect to the
operating report, the certified public accountant shall review, but shall not be
required to certify, such report, but such report shall be signed by a financial
officer of the Mortgagor to certify that said operating report is true, accurate
and complete and that no events have occurred subsequent to the date of said
report that have or would cause a material adverse change in the financial
conditions represented therein, (ii) with reasonable promptness after the close
of each fiscal year of the Mortgagor, but in no event later than ninety (90)
days thereafter, the rent roll for the Premises in the form described in Section
1.1 l(d) of this Mortgage, (iii) with reasonable promptness after the close of
each fiscal year of the Mortgagor, but in no event later than fifteen (15) days
thereafter, the Mortgagor's business plan and projections for the Mortgaged
Property for the then immediately upcoming fiscal year, in form reasonable
satisfactory to the Mortgagee, (iv) with reasonable promptness after its filing
with the Securities and Exchange Commission ("SEC"), but in no event later than
thirty (30) days thereafter, Mortgagor's annual report on Form 1OK, and (v) with
reasonable promptness after its filing with the SEC, but in no event later than
thirty (30) days after the end of the second fiscal quarter of each fiscal year
of the Mortgagor, its quarterly report on Form 10Q.
(c) intentionally omitted.
(d) The Mortgagor, within ten (10) days after written request,
shall deliver to the Mortgagee a current rent roll of the Premises showing the
names of tenants, space occupied by each tenant, rent paid by each tenant (gross
and per square foot), lease security if any, lease or occupancy expiration
dates, options for renewal, rental during renewal terms, cancellation provisions
and other relevant information.
(e) The Mortgagor shall, within five (5) business days after
written request from the Mortgagee, but not more often than once every, twelve
months, furnish to Mortgagee a written statement, duly acknowledged, and to the
best of the Mortgagor's knowledge, of the amount due whether for principal or
interest under the Notes and all amounts due under the Loan Agreement, whether
any offsets, counterclaim or defenses exist against payment of the Indebtedness
or any part thereof.
(f) The Mortgagor, with reasonable promptness, shall deliver
or cause to be delivered to the Mortgagee such other information (financial or
otherwise) with respect to Mortgagor and/or the Mortgaged Property as Mortgagee
may reasonably request from time to time.
Section 1.12. The Mortgagor shall not commit any physical
waste on the Mortgaged Property, or any part thereof, nor make any material
change in the use of the Mortgaged Property, nor any part thereof, which shall
in any way increase any ordinary fire or other hazard arising out of alteration,
construction or operation. The Mortgagor shall, at all times, maintain the
Improvements in good operating order and condition and shall promptly make, at
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its sole expense, from time to time, all repairs, renewals, replacements,
additions and improvements in connection therewith which are needful or
desirable to such end.
Section 1.13. The Mortgagor, immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Premises or any part thereof, shall notify the Mortgagee of the pendency of such
proceedings. The Mortgagee may participate in any such proceedings and the
Mortgagor from time to time shall promptly deliver to the Mortgagee all
instruments requested by the Mortgagee to permit such participation. The award
or compensation payable to the Mortgagor in any such condemnation proceedings is
hereby assigned to and shall be paid to the Mortgagee. The Mortgagee shall be
under no obligation to question the amount of any such award or compensation and
may accept the same in the amount in which the same shall be paid. In any such
condemnation proceedings, the Mortgagee may be represented by counsel selected
by the Mortgagee, at the sole cost and expense of Mortgagor. The proceeds of any
award or compensation so received shall be applied toward the payment of the
Indebtedness, notwithstanding the fact that the Indebtedness may not then be due
and payable; provided, however, if the Mortgagor meets the Debt Coverage Ratio
and loan to value requirements set forth in subsections (A) and (B) of Section
1.9(h) as pre-conditions for the receipt of insurance proceeds, then such
condemnation proceeds shall be applied to the restoration of the Improvements in
the same manner set Section 1.9(h) for the use of insurance proceeds. In the
event that any portion of the condemnation awards or compensation shall be used
to reduce the Indebtedness, same shall be applied by the Mortgagee in any manner
it shall designate including, but not limited to, the application of such award
or compensation of the then unpaid installments of the principal balance due
under the Loan Agreement and the Notes in the inverse order of their maturity
such that the regular payments under the Loan Agreement and the Notes shall not
be reduced or altered in any manner. The Mortgagor, upon request by the
Mortgagee, shall make, execute and deliver to the Mortgagee any and all
instruments requested for the purpose of confirming the assignment of the
aforesaid awards and compensation to the Mortgagee free and clear of any liens,
charges or encumbrances of any kind or nature whatsoever. The Mortgagee shall
not be limited to the interest paid on the proceeds of any award or
compensation, but shall be entitled to the payment by the Mortgagor of interest
at the applicable rate provided for in the Loan Agreement and the Notes.
Section 1.14. (a) The Mortgagor has no right or power, as
against the Mortgagee without the Mortgagee's prior written consent, which
consent shall not be unreasonably withheld, conditioned, or delayed, to cancel,
abridge or otherwise modify the leases or subleases of the Premises or any of
the terms, provisions or covenants thereof or to accept prepayments of
installment of rent to become due thereunder and the Mortgagor shall not do so
without such consent, which consent shall not be unreasonably withheld,
conditioned, or delayed; provided, however that the Mortgagee's written consent
to non-material modifications and amendments shall only be required with respect
to leases for space covering 20,000 square feet or more.
(b) The Mortgagor shall not enter into any lease of all or any
portion of the Premises and/or the Improvements without the prior written
consent of the Mortgagee, which consent shall not be unreasonably withheld,
conditioned, or delayed; provided, however that the Mortgagee's written consent
shall only be required with respect to leases for space covering 20,000 square
feet or more.
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(c) The Mortgagor shall at all times, and in all commercially
reasonable respects, promptly and faithfully perform, or cause to be performed
promptly, all of the covenants, conditions and agreements contained in all
leases of the Premises, or any part thereof, now or hereafter existing, on the
part of the lessor thereunder to be kept and performed and shall at all times do
all things necessary and commercially reasonable to compel performance by the
lessees under each lease of all obligations, covenants and agreements by such
lessee to be performed thereunder. If any of such leases provide for the giving
by the lessee of certificates with respect to the status of such leases, the
Mortgagor shall exercise its right to request such certificates within five (5)
business days of any demand therefor by the Mortgagee.
(d) The Mortgagor shall at all times promptly and faithfully
perform, or cause to be performed promptly, all of the covenants, conditions and
agreements contained in all deeds, instruments, deed restrictions, notices,
easements or other agreements affecting the Premises, or any part thereof, now
or hereafter existing, on the part of the Mortgagor to be kept and performed and
shall at all times do all things necessary and commercially reasonable to compel
performance by the lessees, operators or other occupants of the Premises of all
obligations, covenants and agreements by such lessee, operator or other occupant
to be performed thereunder, as the case may be. Without limiting the generality
of the aforementioned, Mortgagor shall at all times promptly and faithfully
perform, or cause to be performed promptly, all of the covenants, conditions and
agreements on the part of the Mortgagor to be kept and performed under those
certain Deed Notices by The Trustees of Princeton University dated as of October
15, ! 999 affecting the Premises, including, without limitation, all
institutional controls and associated monitoring and maintenance activities, if
any, and shall prepare and deliver, or cause to be prepared and delivered, all
biennial reports and documentation required to be submitted to the New Jersey
Department of Environmental Protection with respect to such Deed Notices, the
Premises or any part thereof.
Section 1.15. Each lease covering the Premises, or any part
thereof, shall by its terms be subject and subordinate to the lien of this
Mortgage.
Section 1.16. Mortgagor shall not grant any licenses covering
the Premises or a portion thereof without the prior written consent of the
Mortgagee, which consent sha11 not be unreasonably withheld, conditioned or
delayed.
Section 1.17. In the event any payment provided for herein,
the Loan Agreement, or in the Notes (whether principal, interest or otherwise)
shall become overdue for a period in excess often (10) days, a late payment
premium of four (4) cents for each dollar so overdue shall become immediately
due to the Mortgagee for the purpose of defraying the expenses incident to
handling such delinquent payment, and such premium shall be deemed to be part of
the Indebtedness and therefore secured by the lien of this Mortgage. Late
payment premiums shall be payable together with the payment of such overdue
payment.
Section 1.18. (a) The Mortgagor shall receive the advances
secured by this Mortgage and shall hold the right to receive such advances as a
trust fund to be applied first for the purpose of paying the cost of
constructing the Improvements and shall apply the same first to the payment of
the costs before using any part of the total of the same for any other purpose.
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(b) The Mortgagor agrees that it shall indemnify and hold the
Mortgagee harmless from and against any loss or liability, cost or expense,
including, without limitation, any judgments, reasonable attorneys' fees, costs
of appeal bonds and printing costs arising out of or relating to any proceeding
instituted by any claimant alleging priority over the lien of this Mortgage,
and/or by any claimant alleging a violation by the Mortgagor of any section of
any applicable law.
Section 1.19. The Mortgagor shall (i) execute and deliver to
the appropriate governmental authority any affidavit, instrument, document
and/or filing required pursuant to any applicable statute, ordinance, rule
and/or regulation, and (ii) deliver to the Mortgagee, within thirty (30) days
after written and detailed request by Mortgagee, all information Mortgagee deems
reasonably appropriate in order to comply with the provision of any applicable
law.
Section 1.20. The Mortgagor expressly covenants and agrees to
pay in full the reasonable costs and expenses of the Mortgagee (including,
without limitation, the reasonable fees and actual out-of-pocket expenses of
Mortgagee's counsel), promptly upon receipt of a statement therefor, which are
incurred prior to and after the date hereof and which costs and expenses arise
in connection with any matter incidental to the preparation, negotiation,
execution, delivery, filing and recording, amendment or modification, and
enforcement of the Loan Agreement and the Notes and/or this Mortgage including,
without limitation, the reasonable costs and expenses of every kind incurred by
Mortgagee (including, without limitation, the reasonable fees and actual
out-of-pocket expenses of Mortgagee's counsel) in connection with the
commencement of any action to foreclose this Mortgage or to collect the
Indebtedness, all which costs and expenses shall, to the extent not prohibited
by law, be a lien on the Mortgaged Property prior to any interest in, or claim
upon, the Mortgaged Property arising subsequent to the date hereof. "Costs and
expenses" as used in the preceding sentence shall include, without limitation
(and in addition to those costs and expenses specified above), the reasonable
attorneys' fees and actual out-of-pocket expenses incurred by Mortgagee in
retaining counsel for advice, suit, appeal or any insolvency or other
proceedings under the Federal Bankruptcy Code or otherwise. The Mortgagor also
expressly covenants and agrees to pay in full the reasonable costs and expenses
of the Mortgagee's and Lenders (including, without limitation, the reasonable
fees and expenses of the Mortgagee and Lenders (including, without limitation,
the reasonable fees and expenses of Mortgagee's and Lenders' counsel), promptly
upon receipt of a statement therefore, which are incurred after the date hereof
and which costs and expenses arise in connection with the Mortgagee's or any
Lender's sale of one or more ownership interest(s) or participation interest(s)
in the Indebtedness, the Loan Agreement, the Notes, this Mortgage and any and
all of the documents executed in connection therewith; provided, however, such
costs and expenses shall be subject to the "Syndication Expense Cap" (as such
term is defined in the Loan Agreement) and shall only be paid in connection with
the sale of such ownership or participation interests of a Lender that is a
Lender as of the date of this Mortgage. The Mortgagor also covenants and agrees
to provide to the Mortgagee all financial and other information with respect to
the Mortgagor and/or Mortgaged Property reasonably requested by the Mortgagee,
and the Mortgagor authorizes the Mortgagee to make available to such information
to the Lenders, the proposed Lenders and such Lenders' participants.
Section 1.21. The Mortgagor shall not make any structural
alterations to the Premises without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld, conditioned, or delayed.
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Mortgagor or any tenants shall be permitted to make non-structural alterations
that do not materially adversely affect the Improvements.
Section 1.22. The Mortgagor hereby assigns to the Mortgagee
the leases, rents, issues and profits of the Premises, if any, and the Mortgagor
grants to the Mortgagee the right to enter upon and to take possession of the
Premises for the purpose of collecting such rents, issues and profits and to let
the Premises or any part thereof, and to apply the rents, issues and profits,
after payment of all necessary charges and expenses, on account of the
Indebtedness. This assignment and grant shall continue in effect until the
Indebtedness shall have been paid in full. The Mortgagee hereby grants to
Mortgagor a license for the purpose of collecting said rents, issues and
profits, and the Mortgagor shall be entitled to collect and receive said rents,
issues and profits; provided, however, after an Event of Default shall have
occurred and be continuing under this Mortgage, such license shall automatically
terminate upon the Mortgagee's written notice to any tenant of the Premises, or
any part thereof, to pay rent directly to the Mortgagee.
Section 1.23. (a) The Mortgagor shall establish and maintain
with HSBC Bank USA an interest bearing cash collateral account in the name of
the Mortgagor and pledged to the Mortgagee ("Reserve Account") in which the
Mortgagor shall maintain on deposit an amount calculated at the times and on the
basis described below, that, if it were added to Net Property Cash Flow (as
hereinafter defined) for the relevant period, would cause the Debt Coverage
Ratio (as hereinafter defined) to be equal to the Acceptable Ratio (as
hereinafter defined), which amount shall then be rounded up to the next
increment of $10,000.00 (which amount, as rounded, is hereinafter referred to as
the "DCR Shortage"); provided however, if the Debt Coverage Ratio for any Period
(as hereinafter defined) shall be 1.00:1.00 or less, the Mortgagor shall, upon
the Mortgagee's demand, either (i) prepay a portion of the principal balance of
the Indebtedness in an amount sufficient to cause the Debt Coverage Ratio to be
equal to the Acceptable Ratio, or (ii) post additional collateral reasonably
acceptable to the Mortgagee of a value that, if it were offset against the
principal balance of the Indebtedness, would be sufficient to cause the Debt
Coverage Ratio to be equal to the Acceptable Ratio. The Mortgagor shall
establish the Reserve Account with HSBC Bank USA promptly after the first date
on which the Debt Coverage Ratio for any Period is determined to be below the
Acceptable Ratio.
(b) The following terms shall have the following meanings:
(i) "Net Property Cash Flow" for any period of time
shall mean the aggregate of all revenues of every nature and kind from all
sources relating to the Mortgaged Property actually paid to the Mortgagor for
such period of time including, without limitation, base rent, additional rent,
and any other amounts (including, without limitation, reimbursement for common
area maintenance, insurance premiums and real estate taxes) payable pursuant to
any and all leases affecting the Premises and Improvements or any portion
thereof less the aggregate of all reasonable and ordinary costs relating to the
operation of the Premises and Improvements that are actually paid by the
Mortgagor to independent third parties for such period of time including
repairs, maintenance, insurance premiums, tenant improvement work, leasing
commissions, real estate taxes, capital expenditures, and management fees (but
excluding all non-cash expenses (such as depreciation)).
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(ii) "Debt Coverage Ratio" shall mean the ratio of
Net Property Cash Flow to Debt Service.
(iii) "Debt Service" for any period of time shall
mean the greater of (A) the aggregate of all payments of principal and interest
due under the Loan Agreement for such period of time, or (B) the aggregate of
all payments of principal and interest that would be due under a $40,500,000.00
(less any principal prepayment(s) made in accordance with the terms of the Loan
Agreement i.e., prepayments of $1,000,000.00 or a multiple thereof) obligation
being amortized over a twenty-five year period beginning as of January 1, 2003
at an interest rate equal to 7.50% per annum.
(iv) "Periods" shall mean, during any calendar year,
the six month period of January 1 through June 30 and the six month period of
July 1 through December 31.
(v) "Acceptable Ratio" shall mean 1.25 to 1.00.
(c) The determination of the DCR Shortage shall be made as of
the end of each Period during the term of the Loan Agreement beginning with the
Period January 1, 2003 through June 30, 2003. The Mortgagor shall supply to the
Mortgagee such information as is reasonably requested by the Mortgagee for the
Mortgagee to determine the DCR Shortage on or prior to the date that is
twenty-five (25) days after the end of each Period. Such information, at a
minimum, shall include (without the necessity of explicitly requesting same) the
Mortgagor's determination of the Net Property Cash Flow and Debt Service for
such period. The determination of the DCR Shortage, if any, with respect to each
Period, shall be based on the Mortgagee's reasonable determination of the Debt
Coverage Ratio calculated as of the end of each Period by using the Net Property
Cash Flow (as determined by the Mortgagee) and the Debt Service (as determined
by the Mortgagee) for that Period, and shall be provided to the Mortgagor
promptly after such calculation.
(d) The Mortgagor, promptly following demand by the Mortgagee,
shall establish the Reserve Account at HSBC Bank USA and shall, from time to
time, promptly following the Mortgagee's demand, deposit into the Reserve
Account any amount that is necessary to maintain the balance of the Reserve
Account at an amount equal to the then most current determination of the DCR
Shortage.
(e) The amount of deposit in the Reserve Account shall not be
subject to downward adjustment during the term of the Loan Agreement; provided,
however, if the Debt Coverage Ratio (without the DCR Shortage) is greater than
or equal to the Acceptable Ratio for two Periods after the last deposit into the
Reserve Account, the amount in the Reserve Account shall be released to the
Mortgagor.
(f) The Mortgagor hereby grants to the Mortgagee a security
interest in the Reserve Account and shall confirm such grant pursuant to
documentation in form and substance reasonably satisfactory to the Mortgagee
and, in addition to all other remedies that the Mortgagee may have, the
Mortgagor hereby specifically authorizes the Mortgagee to apply the funds in the
Reserve Account to the reduction of the Indebtedness upon the occurrence, and
during the continuance, of an Event of Default.
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Section 1.24. The Mortgagor, beginning July 25, 2003, shall
deliver to the Mortgagee on July 25 and January 25 of each calendar year a
certificate signed by the Mortgagor certifying that the Mortgagor is in
compliance with all of its covenants under this Mortgage, including the
covenants contained in Section 1.23 and 1.25 of this Mortgage.
Section 1.25. The Mortgagor, promptly following the
Mortgagee's demand, shall pay all fees and charges actually incurred by the
Mortgagee with respect to any appraisal report of the Premises commissioned by
the Mortgagee after the date hereof ("Appraisal Report"); provided however that
the Mortgagor shall not be liable for fees and charges for any Appraisal Report
dated within two years of the date hereof or within twelve months of any other
Appraisal Report. On or after the date that is the second anniversary of the
date of this Mortgage, the Mortgagee shall, at the Mortgagee's option, determine
whether the then outstanding principal balance of the Indebtedness ("Principal
Balance") exceeds seventy-five (75%) percent of the value of the Premises and
Improvements as set forth in the latest Appraisal Report commissioned by the
Mortgagee after the second anniversary date of this Mortgage. If the Mortgagee
determines, in its reasonable discretion, that the Principal Balance exceeds
seventy-five (75%) percent of the value of the Premises and Improvements as set
forth in such Appraisal Report, then the Mortgagor, within ten (10) days after
written demand from the Mortgagee, shall either (i) pay to the Mortgagee a sum
sufficient to reduce the Principal Balance to an amount less than or equal to
seventy-five (75%) percent of the value of the Premises and Improvements as set
forth in such Appraisal Report, or (ii) deposit with the Mortgagee (or, at the
Mortgagee's direction, HSBC Bank USA) cash collateral (or a letter of credit in
favor of the Mortgagee issued by a financial institution reasonably satisfactory
to the Mortgagee, and otherwise in form and substance satisfactory to the
Mortgagee or other collateral reasonably acceptable to the Mortgagee) securing
the repayment of the Principal Balance (pursuant to documentation reasonably
satisfactory to the Mortgagee) so that the Principal Balance is less than or
equal to seventy-five (75%) percent of the aggregate value of the Premises and
Improvements and the cash collateral, or the amount available to be drawn by the
Mortgagee under the letter of credit (or other collateral reasonably acceptable
to the Mortgagee), as the case may be.
Section 1.26. The Mortgagor covenants and agrees to maintain
(and cause to be maintained) all cash security deposits for any and all leases
of the Premises and/or Improvements (or any part thereof) and all operating
account(s) with respect to the Premises and/or Improvements (whether maintained
by the Mortgagor or its agent) in one or more bank accounts at HSBC Bank USA.
Section 1.27. The Mortgagor covenants and agrees to deposit
(or cause to be deposited) all rent checks and all other forms of rental
payments from tenants at the Premises and/or Improvements, and all checks or
other forms of payments representing any other income whatsoever from the
Premises and/or Improvements, into the operating account(s) maintained by the
Mortgagor (or its agent) at HSBC Bank USA.
Section 1.28. Mortgagor will not commit any intentional
physical waste on the Premises or make any change in the use of the Premises
which will in any way increase any ordinary fire or other hazard arising out of
use or operation. Mortgagor will, at all times, maintain the Improvements and
Chattels in good operating order and condition and will promptly make, from time
to time, all repairs, renewals, replacements, additions and improvements in
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connection therewith which are needful to such end. The Improvements shall not
be demolished or substantially altered, nor shall any Chattels be removed
without Mortgagee's prior consent, except where obsolete or appropriate
replacements free of superior title, liens and claims are immediately made of
value at least equal to the value of the removed Chattels.
Section 1.29. The Mortgagor represents and warrants that there
is no management agreement with respect to the Premises or Improvements other
than the Property Management Agreement by and between Mortgagor, as owner, and
Crimson Corporate Services, LLC, a Texas limited liability company, as operator,
effective as of December 13, 2002.
(End of Article I)
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ARTICLE II.
EVENTS OF DEFAULT AND REMEDIES
Section 2.1. If one or more of the following Events of Default
shall happen, that is to say:
(a) if (i) default shall be made in the payment of the
principal and interest due under the Loan Agreement or the Notes at maturity,
whether by acceleration or otherwise, (ii) default shall be made in the payment
of any principal or interest due under the Loan Agreement or the Notes, when and
as the same shall become due and payable, other than at maturity, and such
default shall have continued for a period of ten (10) days, or (iii) default
shall be made in the payment of any other fee or amount due under the Loan
Agreement, the Notes or under this Mortgage and said default shall have
continued for a period of twenty (20) business days after written notice thereof
shall have been given to the Mortgagor by the Mortgagee; or
(b) if default shall be made in the due observance or
performance of any covenant or agreement on the part of the Mortgagor in this
Mortgage contained (other than those covered in clause (a) above) and such
default shall have continued for a period of thirty (30) days after written
notice thereof shall have been given to the Mortgagor by the Mortgagee, provided
however that if such default is of a nature that the same cannot reasonably be
cured within said thirty (30) days, it shall not be an Event of Default so long
as the Mortgagor diligently continues to pursue such cure, but in no event shall
such cure period extend beyond an additional reasonable period of time not to
exceed one hundred twenty (120) days; or
(c) if by the order of a court of competent jurisdiction, a
trustee, receiver or liquidator of the Mortgaged Property, or any part thereof,
or of the Mortgagor shall be appointed and such order shall not be discharged or
dismissed within ninety (90) days after such appointment; or
(d) if the Mortgagor shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case under any such law or to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Mortgagor or of any substantial part of its property,
or if the Mortgagor shall make any general assignment for the benefit of
creditors, or if the Mortgagor shall fail generally to pay its debts as such
debts become due, or if the Mortgagor shall take any action in furtherance of
any of the foregoing; or
(e) if any of the creditors of the Mortgagor shall commence
against the Mortgagor an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and if such case
shall not be discharged or dismissed within ninety (90) days after the date on
which such case was commenced; or
(f) if final judgment for the payment of money in excess of
$250,000.00 in the aggregate shall be rendered against the Mortgagor and the
Mortgagor shall not discharge the same or cause it to be bonded to the
Mortgagee's reasonable satisfaction, or paid within sixty (60) days from the
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entry thereof, or shall not appeal therefrom or from the order, decree or
process upon which or pursuant to which said judgment was granted, based or
entered, and secure a stay of execution pending such appeal within the
aforementioned sixty (60) day period, and shall not, after the expiration of
such stay, immediately discharge or bond such judgment to the Mortgagee's
reasonable satisfaction; or
(g) if the Mortgagor fails to discharge or bond to the
Mortgagee's reasonable satisfaction any judgment lien filed against the
Mortgaged Property, or any portion thereof, within twenty (20) days after notice
to do so from the Mortgagee; or
(h) intentionally omitted; or
(i) if the Mortgagor sells, transfers, assigns, leases (except
as expressly permitted herein), conveys, mortgages or encumbers the Mortgaged
Property or any part of the Mortgaged Property or any interest in the Mortgaged
Property without the prior written consent of the Mortgagee; or
(j) if a default beyond any applicable notice, grace and/or
cure period occurs under any mortgage encumbering the Mortgaged Property or any
part thereof (which mortgage would only be permitted with the prior written
consent of the Mortgagee), including any other mortgage held by the Mortgagee
encumbering the Mortgaged Property, or any part thereof; or
(k) intentionally omitted; or
(l) intentionally omitted; or
(m) intentionally omitted; or
(n) if the Mortgagor defaults under any covenant or agreement,
or materially breaches any representation or warranty, contained in the Loan
Agreement or defaults under any other agreement with the Mortgagee pertaining to
the Mortgaged Property or the Indebtedness and such default continues beyond the
expiration of any applicable notice, grace and/or cure period; or
(o) if the Mortgagor is dissolved, or is re-incorporated, or
if the Mortgagor's certificate of incorporation or by-laws are materially
modified or amended without the Mortgagee's prior written consent; provided
however if such modification or amendment does not adversely affect the rights
of the Mortgagee or the Lenders, any such amendment or modification shall not be
deemed to be an Event of Default; or
(p) if any certificate, written statement, representation,
warranty or financial statement furnished to the Mortgagee by or on behalf of
the Mortgagor (including, without limitation, representations and warranties
contained herein) shall prove to have been false in any material adverse respect
at the time as of which the facts therein set forth were certified, or to have
omitted any substantial contingent or unliquidated liability or claim against
the Mortgaged Property or if on the date of the execution of this Mortgage there
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shall have been any material adverse change in any of the facts disclosed by any
such statement or certificate, which change shall not have been disclosed in
writing by or on behalf of the Mortgagor to the Mortgagee at or prior to the
time of such execution; or
(q) if (i) the Improvements are substantially damaged,
demolished or destroyed in whole or in part, and (ii) the insurance proceeds
have been obtained from the insurance company, and (iii) the Mortgagee makes the
insurance proceeds available to the Mortgagor for restoration pursuant to the
terms of this Mortgage, and (iv) the Mortgagor shall have failed to promptly
commence and diligently prosecute the restoration of the Improvements and
Chattels in accordance with the provisions of the Section 1.09(h) of this
Mortgage, and (v) such default continues for thirty (30) days after notice from
Mortgagee;
then and in each and every such case:
(i) The Mortgagee, by written notice given to the
Mortgagor, may declare the Indebtedness then outstanding (if not then due and
payable), to be due and payable immediately, and upon any such declaration the
Indebtedness shall be immediately due and payable, anything in the Loan
Agreement, the Notes or in this Mortgage to the contrary notwithstanding. The
Indebtedness shall automatically be due and payable immediately, without demand
or notice of any kind, during the continuance of an Event of Default under
Sections 2.1 (c), (d) and (e) hereof.
(ii) The Mortgagee personally, or by its agents or
attorneys, may enter into and upon all or any part of the Mortgaged Property (at
reasonable times during normal business hours and after reasonable prior notice)
and each and every part thereof, whereof it shall become possessed as aforesaid;
having and holding the same, may use, operate, manage and control the Mortgaged
Property and conduct the business thereof, either personally or by its
superintendents, managers, agents, servants, attorneys or receivers; upon every
such entry, the Mortgagee, at the expense of the Mortgaged Property, from time
to time, may maintain and restore the Mortgaged Property, may complete the
construction of any of the Improvements and in the course of such completion may
make such changes in the contemplated Improvements as it may deem desirable and
may insure the same; likewise, from time to time, at the expense of the
Mortgaged Property, the Mortgagee may make all necessary or proper repairs,
renewals and replacements and such useful alterations, additions, betterments
and improvements thereto and thereon as it may deem advisable; in every such
case the Mortgagee shall have the right to manage and operate the Mortgaged
Property and to carry on the business thereof and exercise all rights and powers
of the Mortgagor with respect thereto either in the name of the Mortgagor or
otherwise as it shall deem best; the Mortgagee shall be entitled to collect and
receive all earnings, revenues, rents, issues, profits and income of the
Mortgaged Property and every part thereof, all of which shall for all purposes
constitute property of the Mortgagee; and after deducting the expenses of
conducting the business thereof and of all maintenance, repairs, renewals,
replacements, alterations, additions, betterments and improvements and amounts
necessary to pay for taxes, assessments, insurance and prior or other proper
charges upon the Mortgaged Property, or any part thereof, as well as reasonable
compensation for the services of the Mortgagee and for all of the Mortgagee's
attorneys and agents, the Mortgagee shall apply the moneys arising as aforesaid
to the payment of the Indebtedness in the manner and in the amounts as the
Mortgagee shall elect in its sole discretion.
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(iii) Upon the occurrence of any such Event of
Default, the Mortgagee, with or without entry, personally or by its agents or
attorneys, may:
(1) after reasonable prior written notice to
Mortgagor, sell the Mortgaged Property, or any part thereof, to the extent
permitted and pursuant to the procedures provided by applicable law, and all
estate, right, title and interest, claim and demand therein, and right of
redemption thereof, at one or more sales as a single entity or in parcels, and
at such time and place upon such terms and after such notice thereof as may be
required or permitted by law; or
(2) institute and maintain proceedings for
the complete or partial foreclosure of this Mortgage; or
(3) take such steps to protect and enforce
its rights whether by action, suit or proceeding in equity or at law for the
specific performance of any covenant, condition or agreement in the Loan
Agreement, the Notes or in this Mortgage, or in aid of the execution of any
power herein granted, or for any foreclosure hereunder, or for the enforcement
of any other appropriate legal or equitable remedy or otherwise as the Mortgagee
shall elect.
Section 2.2. (a) The Mortgagee may adjourn from time to time
any sale to be made pursuant to or by virtue of this Mortgage by announcement at
the time and place appointed for such sale or for such adjourned sale or sales;
and, except as otherwise provided by any applicable law, the Mortgagee, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.
(b) Upon the completion of any sale or sales made pursuant to
or by virtue of this Mortgage, the Mortgagee, or an officer of any court
empowered to do so, shall execute and deliver to the purchaser or purchasers a
good and sufficient instrument or instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold and shall execute and deliver to the appropriate governmental
authority any affidavit, instrument, document and/or filing required pursuant to
any applicable statute, ordinance, rule and/or regulation. The Mortgagee is
hereby irrevocably appointed the true and lawful attorney of the Mortgagor, in
its name and stead, to make all necessary conveyances, assignments, transfers
and deliveries of the Mortgaged Property and rights so sold, and for that
purpose the Mortgagee may execute all necessary instruments of conveyance,
assignment and transfer, including, without limitation, any required affidavit,
instrument, document and/or filing and may substitute one or more persons with
like power. The Mortgagor hereby ratifies and confirms all that its said
attorney or such substitute or substitutes shall lawfully do by virtue hereof.
Nevertheless, the Mortgagor, if so requested by the Mortgagee, shall ratify and
confirm any such sale or sales by executing and delivering to the Mortgagee or
to such purchaser or purchasers all such instruments as may be advisable, in the
judgment of the Mortgagee, for that purpose. Any such sale or sales whether made
under or by virtue of this Article II, under the power of sale herein granted,
or under or by virtue of judicial proceedings of sale herein granted or of a
judgment or decree of foreclosure and sale, shall operate to divest all the
estate, right, title, interest, claim and demand whatsoever, whether at law or
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in equity, of the Mortgagor in and to the properties and rights so sold, and
shall be a perpetual bar both at law and in equity against the Mortgagor and
against any and all persons claiming or who may claim the same, or any part
thereof, from, through or under the Mortgagor.
(c) In the event of any sale or sales whether made under or by
virtue of this Article II, under the power of sale herein granted, or under or
by virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, the entire principal of, and interest on, the Loan Agreement and the
Notes, if not previously due and payable, and all other sums required to be paid
by the Mortgagor pursuant to this Mortgage, immediately thereupon, shall become
due and payable.
(d) The purchase money proceeds or avails of any sale made
under or by virtue of this Article II, together with any other sums which then
may be held by the Mortgagee under this Mortgage, whether under the provisions
of this Article II or otherwise, shall be applied as follows:
First: To the payment of the reasonable costs and
expenses of such sale, including, but not limited to, the
reasonable compensation to the Mortgagee, its agents and
attorneys, and any sums that may be due under and/or pursuant
to any statute, rule, regulation and/or law that imposes any
tax, charge, fee and/or levy in connection with and/or arising
from the exercise of any right and/or remedy under this
Mortgage or the recording or filing of any deed, instrument of
transfer or other such document in connection with any such
sale and of any judicial proceedings wherein the same may be
made, and of all expenses, liabilities and advances made or
incurred by the Mortgagee under this Mortgage, together with
interest at the Involuntary Rate, on all advances made by the
Mortgagee pursuant to this Mortgage.
Second: To the payment of the whole amount then due,
owing or unpaid under the Loan Agreement or the Notes for
principal and interest, in such order as the Mortgagee shall
determine in its sole and absolute discretion with interest on
the unpaid principal at the Involuntary Rate from and after
the due date (whether by acceleration or otherwise).
Third: To the payment of the surplus, if any, to
whomsoever may lawfully be entitled to receive the same.
(e) Upon any sale made under or by virtue of this Article II,
whether made under the power of sale herein granted or under by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, the
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the Indebtedness of the Mortgagor secured by this Mortgage the
net sales price after deducting therefrom the expenses of the sale and the costs
of the action and any other sums which the Mortgagee is authorized to deduct
under this Mortgage.
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Section 2.3. (a) If all of the principal shall be due and
payable under the Loan Agreement and the Notes, whether by acceleration or
otherwise, the Mortgagor shall pay to the Mortgagee (i) interest at the
Involuntary Rate on the then unpaid principal of the Loan Agreement and the
Notes, and on the sums required to be paid by the Mortgagor pursuant to any
provision of this Mortgage from the due date thereof until the payment in full
of the Indebtedness, and (ii) such further amount as shall be sufficient to
cover the reasonable costs and expenses of collection, including reasonable
compensation to the Mortgagee, its agents, and attorneys and any expenses
incurred by the Mortgagee pursuant to the exercise of any of the Mortgage rights
hereunder.
(b) Subject to the exculpatory provisions of Section 3.21 of
this Mortgage, in the event of a sale of the Mortgaged Property, or any part
thereof, and of the application of the proceeds of sale, as in this Mortgage
provided, to the payment of the debt hereby secured, the Mortgagee shall be
entitled to enforce payment of, and to receive all amounts then remaining due
and unpaid upon the Loan Agreement and the Notes, and to enforce payment of all
other reasonable charges, payments, costs and amounts due under this Mortgage,
and shall be entitled to recover judgment for any portion of the debt remaining
unpaid, with interest at the Involuntary Rate. Subject to the exculpatory
provisions of Section 3.21 of this Mortgage, in case of the commencement of any
case against the Mortgagor under any applicable bankruptcy, insolvency, or other
similar law now or hereafter in effect or any proceedings for its reorganization
or involving the liquidation of its assets, the-n- the Mortgagee shall be
entitled to prove the whole amount of principal and interest due upon the Loan
Agreement and the Notes to the full amount thereof, and all other payments,
charges, costs and amounts due under this Mortgage, without deducting therefrom
any proceeds obtained from the sale of the whole or in part of the Mortgaged
Property; provided, however, that in no case shall the Mortgagee receive a
greater amount than such principal and interest and such other payments,
charges, costs and amounts from the aggregate amount of the proceeds of the sale
of the Mortgaged Property and the distribution from the estate of the Mortgagor.
(c) No recovery of any judgment by the Mortgagee and no levy
of an execution under any judgment upon the Mortgaged Property shall affect in
any manner or to any extent, the lien of this Mortgage upon the Mortgaged
Property, or any part thereof, or of any liens, rights, powers or remedies of
the Mortgagee hereunder, but such liens, rights, powers and remedies of the
Mortgagee shall continue unimpaired as before.
(d) Any moneys collected by the Mortgagee under this Section
2.3 shall be applied by the Mortgagee in accordance with the provisions of
subsection (d) of Section 2.2.
Section 2.4. After the occurrence of any Event of Default and
immediately upon the commencement of any action, suit or other legal proceedings
by the Mortgagee to obtain judgment for the Indebtedness, or any part thereof,
the Mortgagor shall and hereby does, irrevocably consent to the appointment of a
receiver or receivers of the Mortgaged Property, or any part thereof, and of all
the earnings, revenues, rents, issues, profits and income thereof. After the
happening of any Event of Default and during its continuance, or upon the
commencement of any proceedings to foreclose this Mortgage or to enforce the
specific performance hereof or in aid thereof, or upon the commencement of any
other judicial proceeding to enforce any right of the Mortgagee, the Mortgagee
shall be entitled, as a matter of right, if it shall so elect, on an EX PARTE
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basis and without the giving of notice to any other party and without regard to
the adequacy of any security for the Indebtedness, either before or after
declaring the unpaid principal of the Loan Agreement and the Notes to be due and
payable, to the appointment of a receiver or receivers with respect to the
Mortgaged Property, or any part thereof, and of all the earnings, revenues,
rents, issues, profits and income thereof. Any such receiver shall have the
right to immediate possession of the Mortgaged Property (and of all the
earnings, revenues, rents, issues, profits and income thereof) from and after
his or her appointment.
Section 2.5. Notwithstanding the appointment of any receiver,
liquidator or trustee of the Mortgagor, or of any of its property, or of the
Mortgaged Property or any part thereof, the Mortgagee shall be entitled to
retain possession and control of all property now or hereafter held by the
Mortgagee under this Mortgage.
Section 2.6. No remedy herein conferred upon or reserved to
the Mortgagee is intended to be exclusive of any other remedy or remedies, and
each and every such remedy shall be cumulative, and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute. No delay or omission of the Mortgagee to exercise any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Event of Default or any
acquiescence therein; and every power and remedy given by this Mortgage to the
Mortgagee may be exercised from time to time as often as may be deemed expedient
by the Mortgagee. Nothing in this Mortgage, the Loan Agreement or in the Notes
shall affect the obligation of the Mortgagor to pay the principal of, and
interest under, the Loan Agreement, the Notes in the manner and at the time and
place therein respectively expressed.
Section 2.7. The Mortgagor shall not insist upon, or plead, or
in any manner whatever claim or take any benefit or advantage of any stay or
extension or moratorium law, any exemption from execution or sale of the
Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, that may affect the covenants and terms of performance of
this Mortgage, nor claim, take or insist upon any benefit or advantage of any
law now or hereafter in force providing for the valuation or appraisal of the
Mortgaged Property, or any part thereof, prior to any sale or sales thereof that
may be made pursuant to any provision herein, or pursuant to the decree,
judgment or order of any court of competent jurisdiction; nor, after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof and the
Mortgagor hereby expressly waives all benefit or advantage of any such law or
laws, and covenants not to hinder, delay or impede the execution of any power
herein granted or delegated to the Mortgagee, but to suffer and permit the
execution of every power as though no such law or laws had been made or enacted.
The Mortgagor, for itself and all who may claim under it, waives, to the extent
that it lawfully may, all right to have the Mortgaged Property marshalled upon
any foreclosure hereof.
Section 2.8. During the continuance of any Event of Default,
and pending the exercise by the Mortgagee of its right to exclude the Mortgagor
from all or any part of the Mortgaged Property, the Mortgagor agrees to pay the
fair and reasonable rental value for the use and occupancy of the Mortgaged
Property, or any part thereof that is in its possession for such period, and
upon default of any such payment, shall vacate and surrender actual possession
of the Mortgaged Property, or such part thereof, to the Mortgagee or to a
receiver, if any, and in default thereof may be evicted by any summary action or
proceeding for the recovery of possession of the Mortgaged Property, or the part
thereof so occupied by the Mortgagor, for non-payment of rent, however
designated. It is agreed that the fair and reasonable rental value for use and
occupancy of the Mortgaged Property, or the part thereof so occupied by the
Mortgagor, may be difficult or impossible to ascertain; therefore, Mortgagor and
Mortgagee hereby agree that the fair and reasonable rental value shall in no
event be less than an amount equal to the fair market rent for the part of the
Mortgaged Property so occupied.
(End of Article II)
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ARTICLE III.
MISCELLANEOUS
Section 3.1. In the event any one or more of the provisions
contained in this Mortgage or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such in validity, illegality
or unenforceability shall not affect any other provision of this Mortgage, but
this Mortgage shall be construed as if such provision had never been contained
herein or therein.
Section 3.2. All notices hereunder shall be in writing and
shall be deemed to have been sufficiently given or served for all purposes when
delivered in person or sent by first class certified mail, return receipt
requested, or by reliable overnight carrier, to any party hereto at its address
above stated (in the case of the Mortgagee, to the attention of ▇▇. ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, with a copy to Phillips, Lytle, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and in the
case of the Mortgagor to the attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., with copy to
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. or at such other address of which it shall
have notified the party giving such notice in writing as aforesaid. Each notice
shall be deemed to have been sufficiently given or served for all purposes when
delivered in person (or when delivery is first attempted, if delivery is
refused), three (3) business days after mailing when sent by certified or
registered mail, or on the following business day if sent by reliable overnight
courier.
Section 3.3. Whenever notice is required herein, the giving of
such notice may be waived in writing by the person or persons entitled to
receive such notice.
Section 3.4. All of the grants, terms, conditions, provisions
and covenants of this Mortgage shall run with the land, shall be binding upon
the Mortgagor and shall inure to the benefit of the Mortgagee, the Mortgagee's
assignees, the Mortgagee's participants, subsequent holders of this Mortgage,
and their respective assignees, participants, successors and assigns. For the
purpose of this Mortgage, the term "Mortgagor" shall include and refer to any
subsequent owner of the Mortgaged Property, or any part thereof, and their
respective heirs, executors, legal representatives, successors and assigns. If
there is more than one Mortgagor, all their undertakings hereunder shall be
joint and several, and each representation, warranty, covenant and agreement in
this Mortgage shall apply to each and all of such mortgagors named herein.
Section 3.5. Nothing in this Mortgage, the Loan Agreement, the
Notes or in any other agreement between the Mortgagor and the Mortgagee shall
require the Mortgagor to pay, or the Mortgagee to accept, interest in an amount
that would subject the Mortgagee to any penalty or forfeiture under applicable
law. If the payment of any charges, fees or other sums due hereunder or under
the Loan Agreement, the Notes or any such other agreement that are or could be
held to be in the nature of interest and that would subject the Mortgagee to any
penalty or forfeiture under applicable law, then, ipso facto, the obligations of
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the Mortgagor to make such payment shall be reduced so that interest under the
Loan Agreement and the Notes shall be the highest rate authorized under
applicable law. Should the Mortgagee receive any payment that is or would be in
excess of the highest rate authorized under applicable law, such payment shall
be deemed to have been made in error, and shall automatically be applied to
reduce the outstanding principal balance of the Indebtedness without any
penalty.
Section 3.6. The Loan Agreement and the Notes each provides
that it is governed by, and construed and enforced in accordance with, the laws
of the State of New York. This Mortgage shall also be construed under and
governed by the laws of the State of New York. Notwithstanding the parties'
choice of New York law, however, the terms and provisions of this Mortgage
pertaining to the priority, enforcement or realization by the Mortgagee of its
rights and remedies under this Mortgage with respect to the Mortgaged Property
shall be governed and construed and enforced in accordance with the internal law
of the State of New Jersey without giving effect to the conflicts-of-law rules
and principles of the State of New Jersey. Additionally, New Jersey law shall
also be included in the definition of Environmental Laws for the purposes of the
indemnities contained in 3.15 of this Mortgage.
Section 3.7. Except as expressly set forth herein to the
contrary, whenever the consent or approval of the Mortgagee is required, the
decision whether to consent or approve shall be in the sole and absolute
discretion of the Mortgagee.
Section 3.8. This Mortgage, the Loan Agreement and the Notes,
and all other documents executed and delivered in connection herewith shall be
given a fair and reasonable construction in accordance with the intention of the
parties as expressed herein and therein and without regard for any rule of law
requiring construction against the party that prepared such instruments.
Section 3.9. This Mortgage shall constitute a "security
agreement," as such term is defined in the Code. By executing and delivering
this Mortgage, the Mortgagor has granted, in the same manner and with the same
effect described in the Granting Clause hereof, to the Mortgagee, a security
interest in the Chattels, the Intangibles, and those items listed as (f) - (j)
in the Granting Clause of this Mortgage (collectively, "Collateral Documents").
The Mortgagor authorizes the Mortgagee to file any financing statements or other
documents or instruments, with or without the Mortgagor's signature, that the
Mortgagee may require to protect, perfect or establish any lien or security
interest granted to the Mortgagee and further authorizes the Mortgagee to
authenticate or sign the Mortgagor's name on same. If any Event of Default shall
occur, the Mortgagee shall have, in addition to any and all other rights and
remedies set forth in this Mortgage, and may exercise without demand, any and
all rights and remedies granted to a secured party under the Code, including,
but not limited to, the right to take possession of the Chattels, the Collateral
Documents, and the Intangibles, or any part thereof, and the right to advertise
and sell the Chattels, the Collateral Documents, and the Intangibles, or any
part thereof, pursuant to and in accordance with the power of sale provided for
in this Mortgage. The Mortgagor agrees that any notice of public or private sale
with respect to the Chattels, the Collateral Documents, and the Intangibles, or
any part thereof, shall constitute reasonable notice if it is sent to the
Mortgagor not less than ten (10) days prior to the date of any such sale. The
proceeds of any such sale of the Chattels, the Collateral Documents, and the
Intangibles, or any part thereof, shall be applied in the manner set forth in
Section 2.2(d) of this Mortgage.
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Section 3.10. All covenants hereof shall be construed as
affording to the Mortgagee rights additional to and not exclusive of the rights
conferred under the provisions of any applicable law.
Section 3.11. This Mortgage cannot be altered, amended,
waived, modified or discharged orally, and no executory agreement shall be
effective to modify, waive or discharge, in whole or in part, anything contained
in this Mortgage unless it is in writing and signed by the party against whom
enforcement of the modification, alteration, amendment, waiver or discharge is
sought.
Section 3.12. The Mortgagor acknowledges that it has received
a true copy of this Mortgage.
Section 3.13. This Mortgage may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to
be an original; and all such counterparts shall together constitute but one and
the same Mortgage.
Section 3.14. The information set forth on the cover hereof is
hereby incorporated herein.
Section 3.15. (a) As used in this Section 3.15, the following
capitalized terms shall have the meanings set forth below:
"ADA" means the requirements of the Americans with
Disabilities Act of 1990, Pub. Law 101-336, U.S.C. 12101 ET SEQ., together with
any federal, state or local law, rule, ordinance, regulation, order, or policy
thereunder as now or at any time hereafter in effect.
"Disposal" means the intentional or unintentional abandonment,
discharge, deposit, injection, dumping, spilling, leaking, storage, burning,
thermal destruction or placing of any substance so that it or any of its
constituents may enter the Environment.
"Environment" means any water including but not limited to
surface water and ground water or water vapor, any land including land surface
or subsurface, stream sediments, air, fish, wildlife, plants, and all other
natural resources or environmental media.
"Environmental Laws" means all federal, state (including the
State of New Jersey) and local environmental, land use, health, chemical use,
safety and sanitation laws, statutes, ordinances, regulations, codes and rules
relating to the protection of the Environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling, production or
disposal of Hazardous Substances and the policies, guidelines, procedures,
interpretations, decisions, orders and directives of federal, state and local
governmental agencies and authorities with respect thereto.
"Environmental Permits" means all licenses, permits,
approvals, authorizations, consents or registrations required by any applicable
Environmental Laws and all applicable judicial and administrative orders in
connection with ownership, lease, purchase, transfer, closure, use and/or
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operation of the Premises and/or as may be required for the storage, treatment,
generation, transportation, processing, handling, production or disposal of
Hazardous Substances.
"Environmental Report" means a written report prepared for the
Mortgagee by an environmental consulting or environmental engineering firm.
"Hazardous Substances" means, without limitation, any
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances
and any other material defined as a hazardous substance in Section 101(14) of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. Sections 9601(14).
"Release" has the same meaning as given to that term in
Section 101(22) of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 (22), and the regulations
promulgated thereunder.
(b) The Mortgagor represents and warrants to the Mortgagee
that to the Mortgagor's knowledge and except as may be set forth in the Phase 1
Environmental Site Assessment dated November 15, 2002 prepared by Environmental
Liability Management, Inc. and an Environmental Report with respect to the
Premises prepared by ENSR International in November, 2002:
(i) intentionally omitted,
(ii) no asbestos or urea formaldehyde foam insulation
is located in any of the buildings or structures improving the Premises,
(iii) no above-ground or underground storage tanks
containing Hazardous Substances are or have been located at the Premises,
(iv) radon gas is not present in buildings on any of
the Premises in concentrations exceeding 4 pCi/1,
(v) no electrical transformers, capacitors, lighting
ballasts or other electric equipment on any of the Premises contain
polychlorinated biphenyls (PCBs) in concentrations exceeding amounts allowed by
any applicable Environmental Law,
(vi) the Premises are not being used and have not
been used for the Disposal of any Hazardous Substance or for the treatment,
storage or Disposal of Hazardous Substances in violation of applicable
Environmental Laws,
(vii) no Release of a Hazardous Substance has
occurred or is threatened on, at, or from the Premises, in violation of
applicable Environmental Laws,
(viii) neither the Mortgagor nor the Premises is
subject to any existing, pending or threatened suit, claim, notice of violation
or request for information under any applicable Environmental Law, and
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(ix) the Mortgagor is in compliance with the
Environmental Laws applicable to its operations at the Premises.
(c) The Mortgagor covenants and agrees with the Mortgagee that
so long as this Mortgage remains a lien on the Premises that:
(i) the Mortgagor shall comply with applicable
Environmental Laws in connection with its ownership or use of the Premises or
any related property,
(ii) Mortgagor shall not suffer, cause or permit the
Disposal of Hazardous Substances at the Premises in violation of applicable
Environmental Laws,
(iii) the Mortgagor shall not suffer, cause or permit
the generation, handling, processing, use, or storage of Hazardous Substances on
the Premises, in violation of applicable Environmental Laws,
(iv) the Mortgagor shall promptly notify the
Mortgagee if Mortgagor receives notice, or becomes aware, of the Disposal of any
Hazardous Substance at the Premises, or any Release, or threatened Release, of a
Hazardous Substance, from the Premises, in violation of applicable Environmental
Laws;
(v) the Mortgagor shall allow the Mortgagee and its
agents access to the Premises at all reasonable times upon reasonable prior
written notice and permit such inspections, tests, drilling of monitoring ▇▇▇▇▇,
soil borings or other analysis of the Premises as the Mortgagee, subject to the
rights of tenants, may reasonably require,
(vi) the Mortgagor shall, at the Mortgagee's
reasonable request, provide to the Mortgagee, at the Mortgagor's expense,
Environmental Reports concerning the Premises,
(vii) the Mortgagor shall deliver promptly to the
Mortgagee (A) copies of any documents received from the United States
Environmental Protection Agency or any state, county or municipal environmental
or health agency concerning the Mortgagor's operations at the Premises, and (B)
copies of any documents submitted by the Mortgagor to the United States
Environmental Protection Agency or any state, county or municipal environmental
or health agency concerning its operations at the Premises, and
(viii) the Mortgagor shall: (1) comply with all
applicable requirements of the ADA; (2) notify Mortgagee promptly following
receipt of knowledge by the Mortgagor in the event of any non-compliance of the
Premises and/or Improvements with any provision of the ADA; (3) promptly forward
to Mortgagee copies of all orders, notices, permits, applications, and other
communications and reports in connection with any other matters relating to the
non-compliance of the Premises and/or Improvements with any provision of the
ADA.
(d) The Mortgagor agrees to indemnify, defend, and hold
harmless the Mortgagee from and against any and all liabilities, claims,
damages, penalties, expenditures, losses or charges including, but not limited
to, all costs of investigation, monitoring, legal representation, remedial
response, removal, restoration or permit acquisition, which may now or in the
future be undertaken, suffered, paid, awarded, assessed or otherwise incurred by
the Mortgagee as a result of the presence of, Release of, or threatened Release
of, Hazardous Substance on, in, under or near the Premises or as a result of, or
with respect to, any past, present or future non-compliance with the ADA,
including any loss of value of the Mortgaged Property. The liability of the
Mortgagor to the Mortgagee under the covenants of this Section 3.15 is not
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limited by any exculpatory provisions of this Mortgage, the Loan Agreement or in
the Notes or in any of the other documents securing the loan and shall survive
any foreclosure of this Mortgage, transfer of the Premises by deed in lieu of
foreclosure or any other transfer or termination of this Mortgage regardless of
the means of such transfer or termination; but the indemnity hereunder shall not
apply to acts committed by the Mortgagee, or its designee, nominee, agents,
employees or any purchaser at a foreclosure sale that are committed after any of
such parties shall have taken title to the Premises or before such time if
resulting from the gross negligence or willful misconduct of the Mortgagee, its
designee, nominee, agents, employees or any such purchaser at a foreclosure
sale.
(e) If the Mortgagor defaults on any of its obligations
pursuant to this Mortgage, the Loan Agreement, the Notes or any other loan
document, the Mortgagee or its designee shall have the right, upon reasonable
prior written notice to the Mortgagor, to enter upon the Premises at reasonable
times and, subject to the rights of tenants, conduct such tests, investigations
and samplings, including but not limited to, installation of monitoring ▇▇▇▇▇,
as shall be reasonably necessary for the Mortgagee to determine whether any
Disposal of Hazardous Substances has occurred on, at or near the Premises. The
costs of all such tests, investigations and samplings shall be added to the
balance of the Indebtedness.
(f) The Mortgagor agrees that the Mortgagee shall not be
liable in any way for the completeness or accuracy of any Environmental Report
or the information contained therein. The Mortgagor further agrees that the
Mortgagee has no duty to warn the Mortgagor or any other person or entity about
any actual or potential environmental contamination or other problem that may
have become apparent or will become apparent to the Mortgagee.
Section 3.16. Notwithstanding anything contained herein to the
contrary, the maximum amount of indebtedness secured by this Mortgage at
execution or which under any contingency may become secured hereby at any time
hereafter is $40,500,000.00 plus interest thereon, plus all amounts expended by
the Mortgagee after default by the Mortgagor that constitute payment of (i)
taxes, charges or assessments that may be imposed by law upon the Premises; (ii)
premiums on insurance policies covering the Premises; (iii) reasonable expenses
incurred in protecting or upholding the lien of this Mortgage, including, but
not limited to the reasonable expenses of any litigation to prosecute or defend
the rights and lien created by this Mortgage; (iv) reasonable expenses incurred
in protecting the collateral encumbered by this Mortgage; or (v) any amount,
cost or charge to which the Mortgagee becomes subrogated upon payment, whether
under recognized principles of law or equity, or under express statutory
authority.
Section 3.17. No course of dealing between Mortgagor and
Mortgagee and no act, delay or omission by Mortgagee in exercising any right or
remedy hereunder, including, without limitation, acceptance of any partial
payment on the Indebtedness, shall operate as a waiver of any right, remedy or
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default hereunder, or of any other right or remedy, and no single or partial
exercise of any right or remedy shall preclude any other or further exercise
thereof or the exercise of any other right or remedy. All rights and remedies of
Mortgagee hereunder are cumulative.
Section 3.18. The Mortgagee may release any portion or
portions of or interest or interests in the Mortgaged Property from the lien of
this Mortgage, either with or without consideration, and may release or
discharge in whole or in part any other property which it may at any time hold
as security for payment of the Indebtedness or any part thereof and may take any
other bond, note or obligation as evidence of the Indebtedness, payable at such
time and on such terms as the Mortgagee may approve, and may change the rate of
interest in accordance with the provisions of the Loan Agreement, and until the
Indebtedness shall have been paid in full, every person who shall be or become
personally liable for the Indebtedness shall be bound and continue to be liable
for the Indebtedness as fully and effectively as if his consent had been
previously obtained.
Section 3.19. If the Mortgagee shall receive from or on behalf
of the Mortgagor any sum less than the full amount then due and payable, the
Mortgagee may, but shall not be obligated to, accept the same and if the
Mortgagee elects to accept any such payment, it may hold the same or any part
thereof, without liability for interest, in a special account and may from time
to time apply the same or any part thereof to the Indebtedness or to the payment
of any taxes, assessments, sewer or water charges or insurance premiums
desirable to maintain the lien of this Mortgage or to any reasonable expenses,
including reasonable costs and attorneys' fees and disbursements, incurred by
the Mortgagee in attempting to collect any amount owing on the Indebtedness and
in bringing any foreclosure proceedings with respect to this Mortgage.
Section 3.20. Without limiting any other right of Mortgagee,
whenever Mortgagee has the right to declare any Indebtedness to be immediately
due and payable (whether or not it has so declared), Mortgagee at its sole
election may set off against the Indebtedness any and all moneys then owed to
Mortgagor by Mortgagee in any capacity, whether or not the Indebtedness or the
obligation to pay such moneys owed by Mortgagee is then due, and Mortgagee shall
be deemed to have exercised such right of setoff immediately at the time of such
election even though any charge therefor is made or entered on Mortgagee's
records subsequent thereto.
Section 3.21. The extent of the Mortgagor's liability for any
sums due under this Mortgage, the Loan Agreement and the Notes or any document
or certificate executed in connection therewith or pursuant thereto
(collectively, "Relevant Documents") shall be limited to the Mortgagor's estate,
right, title and interest in, to and under the Mortgaged Property, the Mortgagee
agreeing not to look personally to the Mortgagor or to any director, officer,
shareholder or employee of Mortgagor (all of the foregoing, collectively,
"Members"), but to look solely to the Mortgaged Property and no other assets of
the Mortgagor for payment of any of such sums; PROVIDED, HOWEVER, the foregoing
shall not release the Mortgagor from personal liability to the Mortgagee and the
Lenders with respect to the environmental and ADA indemnities set forth in
Section 3.15 of this Mortgage; provided FURTHER, the foregoing shall not affect
the Mortgagor's personal liability to the Mortgagee and the Lenders for, and the
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Mortgagor hereby explicitly indemnifies and holds the Mortgagee and the Lenders
harmless from, and agrees to be personally liable to the Mortgagee and the
Lenders for, any actual loss, cost, expense, liability, damage or claim incurred
or suffered by Mortgagee and the Lenders relating to, in connection with, or
arising from (i) any fraud committed by the Mortgagor and/or any Member in
connection with the Indebtedness, (ii) intentional misapplication by the
Mortgagor or any Member of proceeds under any insurance policies disbursed by
reason of damage, loss or destruction to all or any portion of the Mortgaged
Property, (iii) intentional misapplication by the Mortgagor or any Member of
proceeds or awards resulting from the condemnation, or other taking in lieu of
condemnation, of all or any portion of the Mortgaged Property, (iv) intentional
misapplication by the Mortgagor or any Member of tenant security deposits or
other refundable deposits paid to or held by the Mortgagor or any agent of the
Mortgagor in connection with any leases of all or any portion of the Mortgaged
Property, (v) intentional waste or mismanagement of the Premises and/or
Improvements, or (vi) any intentional misrepresentation made to the Mortgagee by
the Mortgagor and/or any Member in connection with the Indebtedness. The
foregoing provisions shall not (a) constitute a waiver of any obligation
evidenced by the Loan Agreement, the Notes or this Mortgage or any of the other
documents executed in connection herewith, (b) limit the right of the holder of
this Mortgage to name the Mortgagor as a party defendant in any action or suit
for judicial foreclosure and sale under the Loan Agreement, the Notes and this
Mortgage or any action or proceeding hereunder so long as no judgment in the
nature of a deficiency judgment shall be asked for or taken against the
Mortgagor or any Member (nothing in this subsection 3.21(b), however, shall
prevent Mortgagee from naming the Mortgagor as a defendant in any such action or
proceeding in order to enforce the Mortgagee's rights and remedies with respect
to the Mortgagor's personal liability to the Mortgagee and the Lenders pursuant
to section 3.15 of this Mortgage or with respect to subsections (i)-(vi) of this
Section 3.21), (c) release or impair the Loan Agreement, the Notes or the lien
of this Mortgage, (d) prevent or in any way hinder the Mortgagee from
exercising, or constitute a defense, an affirmative defense, a counterclaim or
other basis for relief in respect of the exercise of any other remedy against
the Mortgaged Property, or under any other instrument securing the Loan
Agreement, the Notes, or under any of the other documents executed in connection
herewith, or as prescribed by law or in equity in case of default, or (e)
prevent or in any way hinder the Mortgagee from exercising, or constitute a
defense, an affirmative defense, a counterclaim or other basis for relief in
respect of the exercise of, its remedies in respect of any deposits, insurance
proceeds, condemnation awards or other monies or other collateral securing the
Loan Agreement or the Notes. Nothing herein shall be deemed to be a waiver of
any right which the 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 debt owing to the Mortgagee by the Mortgagor or to require
that all of the Mortgaged Property shall continue to secure all of the
Indebtedness owing to the Mortgagee in accordance with the Loan Agreement, the
Notes or this Mortgage.
Section 3.22. The Mortgagor acknowledges that this Mortgage,
the Loan Agreement, the Notes, and all instruments referred to in any of them
can be extended, modified or amended only in writing executed by the Mortgagee
and that none of the rights or benefits of the Mortgagee can be waived
permanently except in a written document executed by the Mortgagee. The
Mortgagor further acknowledges the Mortgagor's understanding that no officer or
administrator of the Mortgagee has the power or the authority from the Mortgagee
to make an oral extension or modification or amendment of any such instrument or
agreement on behalf of the Mortgagee.
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Section 3.23. (a) Mortgagor shall not claim or demand or be
entitled to any credit against the Indebtedness for any part of the taxes paid
with respect to the Mortgaged Property or any part thereof and no deduction
shall otherwise be made or claimed from the taxable value of the Mortgaged
Property, or any part thereof, by reason of this Mortgage.
(b) Mortgagor represents and warrants that the loans or other
financial accommodations included as the Indebtedness secured by this Mortgage
were obtained solely for the purpose of carrying on or acquiring a business or
commercial investment and not for residential, consumer or household purposes.
(c) This Mortgage is subject to "modification" as such term is
defined in P.L. 1985 c.353 (N.J.S.A. 46:9-8.1 ET SEQ.) and shall be subject to
the priority provisions thereof.
(d) This Mortgage is a purchase money mortgage as a portion of
the indebtedness is being used by the Mortgagor to finance the acquisition of
the Mortgaged Property.
IN WITNESS WHEREOF, this Mortgage and Security Agreement has
been duly executed by the Mortgagor as of the date first above written.
NEW VALLEY CORPORATION
(doing business in New Jersey as New
Valley Realty Company)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary
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