EXHIBIT 10.61
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Dechert Price & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
SPACE ABOVE THIS LINE FOR RECORDER'S USE
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MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
by
G&L HAMPDEN, LLC
a Delaware limited liability company
having an address of
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (as Mortgagor)
to
NOMURA ASSET CAPITAL CORPORATION
having an address at
Two World Financial Center, Building B
New York, New York 10281-1198
(as Mortgagee)
Property: _______________________________
____________, Massachusetts
MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING
(this "Mortgage") is made as of the ___ day of October, 1997 by and among G&L
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HAMPDEN, LLC, a Delaware limited liability company, having an address at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Telefax Number (▇▇▇) ▇▇▇-▇▇▇▇ (the "Mortgagor"), for the
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benefit of NOMURA ASSET CAPITAL CORPORATION, having an address at Two World
Financial Center, Building B, New York, New York 10281-1198, Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, Telefax Number (▇▇▇) ▇▇▇-▇▇▇▇ (together with its successors and
assigns, the "Mortgagee").
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W I T N E S S E T H:
WHEREAS, the Mortgagor and the Mortgagee are parties to a Loan Agreement
dated as of the date hereof (said Loan Agreement, as modified and supplemented
and in effect from time to time, the "Loan Agreement");
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WHEREAS, the Loan being made in connection with this Mortgage is to be
evidenced by, and repayable with interest thereon, Default Rate interest, and
Late Charges, together with the Yield Maintenance Premium, if any, in accordance
with a promissory note executed and delivered to the order of the Mortgagee
(such note, as modified and supplemented and in effect from time to time, the
"Note");
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WHEREAS, ▇▇▇▇▇▇▇▇▇ contemplates that Mortgagee's interest in and to, inter
alia, the Loan (or a portion thereof), the Note, this Mortgage and the Loan
Documents may be assigned by Mortgagee to another Person, including without
limitation to a trustee on behalf of security holders in connection with a
Securitization;
NOW, THEREFORE, in consideration of the making of the Loan by the Mortgagee
to the Mortgagor and the covenants, agreements, representations and warranties
set forth in the Loan Documents, and for the purpose of securing the following
(collectively, the "Loan Obligations"):
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(a) all principal (including, without limitation, any advance to the
Mortgagor now or hereafter made), interest, Default Rate interest, Late Charges,
the Yield Maintenance Premium, if any, owing from time to time under the Note,
and all obligations owing by the Mortgagor under the Loan Documents and all
amounts from time to time owing by the
Mortgagor under this Mortgage or any of the other Loan Documents; and
(b) all covenants, agreements and other obligations of Mortgagor under the
Loan Documents;
the Mortgagor hereby irrevocably grants, bargains, sells, releases, conveys,
warrants, assigns, transfers, mortgages, pledges, sets over and confirms unto
Mortgagee, its successors and assigns, WITH POWER OF SALE AND RIGHT OF ENTRY AND
POSSESSION, to have and to hold forever, subject to all of the terms,
conditions, covenants and agreements herein set forth, for the security and
benefit of Mortgagee and its respective successors and assigns, with MORTGAGE
COVENANTS, all Mortgagor's interest now owned or hereafter acquired in the
following described land, real estate, buildings, improvements, equipment,
fixtures, furniture, and other personal property (which together with the
Security Interest Property and any additional such property and interests
hereafter acquired by the Mortgagor and subjected to the lien of this Mortgage,
or intended to be so, as the same may be from time to time constituted, is
hereafter referred to as the "Mortgaged Estate") to-wit:
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(a) All the land located in the County and State identified in Exhibit A
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attached hereto, as more particularly described in such Exhibit A, subject,
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however, to the Permitted Encumbrances (the "Land");
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(b) All Improvements and Equipment (the Land, Improvements and Equipment
collectively, the "Facility");
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(c) All Appurtenant Rights;
(d) All Rents;
(e) All Collateral; and
(f) All products and Proceeds.
AND, as additional security, Mortgagor, as debtor, hereby grants to
Mortgagee, as secured party, a continuing security interest in the foregoing
property and in the Collateral, and any property as to which a security interest
can be created or perfected, now existing or hereafter coming into existence,
and all substitutions, replacements, renewals and additions to and all products
and Proceeds of the foregoing (collectively, the "Security Interest Property").
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This Mortgage is intended to be and shall be effective as a security agreement
pursuant to the UCC.
TO HAVE AND TO HOLD the Mortgaged Estate and all parts thereof unto the
Mortgagee, its successors and assigns, their successors and assigns forever,
subject however to the Permitted Encumbrances and the terms and conditions
herein;
PROVIDED, HOWEVER, that these presents are upon the express condition that,
if the Mortgagor shall (i) pay or cause to be paid to the Mortgagee the
principal, interest, Default Rate interest, Late Charges, and the Yield
Maintenance Premium, if any, payable in respect to the Note, at the times and in
the manner stipulated therein and herein, all without any deduction or credit
for taxes or other similar charges paid by the Mortgagor, and shall keep,
perform, and observe all and singular the covenants and promises in each of the
Loan Documents and in the Loan Agreement expressed to be kept, performed, and
observed by and on the part of the Mortgagor, all without fraud or delay or (ii)
comply with the provisions of Section 2.11 of the Loan Agreement, then this
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Mortgage, and all the properties, interests, and rights hereby granted,
bargained, and sold shall cease, terminate and be void; otherwise the same shall
remain in full force and effect.
TO PROTECT THE SECURITY OF THIS MORTGAGE, THE MORTGAGOR HEREBY COVENANTS
AND AGREES AS FOLLOWS:
ARTICLE I
Definitions
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Section 1.1. Certain Defined Terms. For all purposes of this Mortgage all
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capitalized terms shall have the meaning ascribed thereto in the Loan Agreement
unless defined herein, and:
"Accounts" means all of Mortgagor's "accounts," as such term is defined in
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the UCC, and, to the extent not included in such definition, all rights to
payment for goods sold or leased arising from the ownership of the Facility and
not evidenced by an Instrument, including, without limitation, all accounts and
accounts receivable arising from the ownership of the Facility, now existing or
hereafter coming into existence, and all proceeds thereof (whether cash or non
cash, movable or immovable, tangible or intangible) received from the sale,
exchange, transfer, collection or other disposition or substitution thereof.
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"Appurtenant Rights" means all easements, rights-of-way, strips and gores
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of land, vaults, streets, ways, alleys, passages, sewer rights, waters, water
courses, water rights, air rights, development rights and powers, and, to the
extent now or hereafter owned by the Mortgagor, all minerals, flowers, shrubs,
crops, trees, timber and other emblements now or hereafter appurtenant to, or
used in connection with, or located on, under or above the Land, or any part or
parcel thereof, and all ground leases, subleases, estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances,
reversions, and remainders whatsoever, in any way belonging, relating or
appertaining to the Land or any part thereof.
"Collateral" means, collectively, the Accounts, Account Collateral,
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Appurtenant Rights, Equipment, General Intangibles, goods, Improvements,
Instruments, Inventory, Leases, Land, Licenses, Money, Permitted Investments (to
the full extent assignable) Permits, Rents, investment properties, and letters
of credit, and all Proceeds and products of any of the foregoing, all whether
now owned or hereafter acquired, and all other property which is or hereafter
may become subject to a Lien in favor of ▇▇▇▇▇▇.
"Condemnation Proceeds" means any and all awards, compensation,
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reimbursement and proceeds paid or to be paid in connection with a Taking.
"Equipment" means all of Mortgagor's "equipment," as such term is defined
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in the UCC, and, to the extent not included in such definition, all fixtures,
appliances, machinery, furniture, furnishings, decorations, tools and supplies,
now owned or hereafter acquired by Mortgagor, including without limitation, all
beds, linens, radios, televisions, carpeting, telephones, cash registers,
computers, lamps, glassware, restaurant and kitchen equipment, all medical,
dental, rehabilitation, therapeutic and paramedic equipment and supplies, any
building equipment, including without limitation, all heating, lighting,
incinerating, waste removal and power equipment, engines, pipes, tanks, motors,
conduits, switchboards, security and alarm systems, plumbing, lifting, cleaning,
fire prevention, fire extinguishing, refrigeration, washing machines, dryers,
stoves, refrigerators, ventilating, and communications apparatus, air cooling
and air conditioning apparatus, escalators, elevators, ducts, and compressors,
materials and supplies, and all other machinery, apparatus, equipment, fixtures
and fittings now owned or hereafter acquired by Mortgagor wherever located, any
portion thereof or any appurtenances thereto, together with all additions,
replacements, parts, fittings, accessions, attachments, accessories,
modifications and alterations of any of the foregoing.
"Equity Interests" mean (a) if Mortgagor is a limited partnership, limited
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partnership interests in Mortgagor or (b) if Mortgagor is a limited liability
company, membership interests in Mortgagor; provided, however, that Equity
Interests shall not include any direct or indirect legal or beneficial ownership
interest, or any other interest of any nature or kind whatsoever, of the SPE
Equity Owner in any Mortgagor.
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"Event of Default" has the meaning provided in Section 5.1.
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"Facility" has the meaning provided in the Recitals of this Mortgage.
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"General Intangibles" means all of Mortgagor's "general intangibles," as
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such term is defined in the UCC, and, to the extent not included in such
definition, all intangible personal property of Mortgagor (other than Accounts,
Rents, Instruments, Inventory, Money and Permits), including, without
limitation, chooses in action, settlements, judgments, contract rights, rights
to performance (including, without limitation, rights under warranties) refunds
of real estate taxes and assessments and other rights to payment of Money,
copyrights, trademarks, trade names, service marks, trade secrets, and patents,
the goodwill associated with any of the foregoing, and all applications for any
of the foregoing, in each case whether now existing or hereafter in existence.
"Initial Operator" means Hampden Nursing Homes, Inc., a Massachusetts not-
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for-profit corporation.
"Impositions" means all ground rents and all taxes (including, without
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limitation, all real estate, ad valorem or value added, sales (including those
imposed on lease rentals), use, single business, gross receipts, value added,
intangible transaction privilege, privilege, license or similar taxes),
assessments (including, without limitation, to the extent not discharged prior
to the Closing Date, all assessments for public improvements or benefits,
whether or not commenced or completed within the term of this Mortgage), water,
sewer or other rents and charges, excises, levies, fees (including, without
limitation, license, permit, inspection, authorization and similar fees), and
all other governmental charges, in each case whether general or special,
ordinary or extraordinary, foreseen or unforeseen, of every character in respect
of the Facility, (including all interest and penalties thereon), which at any
time prior to, during or in respect of the term hereof may be assessed or
imposed on or in respect of or be a Lien upon (i) Mortgagor (including, without
limitation, all income, franchise, single business or other taxes imposed on
Mortgagor for the privilege of doing business in the jurisdiction in which the
Facility, or any other Security Interest Property is located), (ii) the
Facility, or any other Security Interest Property or any part thereof, or (iii)
any occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Facility or the leasing or use of the
Facility or any part thereof, or the acquisition or financing of the acquisition
of the Facility by Trustor.
"Improvements" means all buildings, structures and improvements of every
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nature whatsoever situated on the Land on the Closing Date for the Facility or
thereafter, including, without limitation, to the extent of Mortgagor's right,
title or interest therein or thereto, all gas and electric fixtures, radiators,
heaters, washing machines, dryers, refrigerators, ovens,
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engines and machinery, boilers, ranges, elevators and motors, plumbing and
heating fixtures, antennas, carpeting and other floor coverings, water heaters,
awnings and storm sashes, and cleaning apparatus which are or shall be attached
to the Land or said buildings, structures or improvements.
"Instruments" means all of Mortgagor's "instruments," as such term is
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defined in the UCC, and, to the extent not included in such definition, all
instruments, chattel paper, documents or other writings obtained by Mortgagor
from or in connection with the ownership of the Facility evidencing a right to
the payment of Money, including, without limitation, all notes, drafts,
acceptances, documents of title, and policies and certificates of insurance,
including but not limited to, liability, hazard, rental and credit insurance,
guarantees and securities, now or hereafter received by Mortgagor or in which
Mortgagor has or acquires an interest pertaining to the foregoing.
"Insurance Proceeds" means any and all Proceeds of any policy of insurance
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required by this Mortgage to be obtained and maintained by ▇▇▇▇▇▇▇▇▇.
"Insurance Requirements" means all material terms of any insurance policy
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required pursuant to this Mortgage and all material regulations and any use or
condition thereof, which may, at any time, be recommended by the Board of Fire
Underwriters, if any, having jurisdiction over the Mortgaged Estate, or such
other body exercising similar function.
"Inventory" means all of Mortgagor's "inventory," as such term is defined
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in the UCC, and, to the extent not included in such definition, all goods now
owned or hereafter acquired by Mortgagor intended for sale or lease, including
without limitation, all inventories held by Mortgagor for sale or use at or from
the Facility, and all other such goods, wares, merchandise, and materials and
supplies of every nature owned by Mortgagor and all such other goods returned to
or repossessed by ▇▇▇▇▇▇▇▇▇.
"Land" has the meaning provided in the Recitals to this Mortgage.
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"Leases" means all leases and other agreements or arrangements affecting
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the use or occupancy of all or any portion of the Facility now in effect or
hereafter entered into (including, without limitation, all lettings, subleases,
licenses, concessions, tenancies and other occupancy agreements covering or
encumbering all or any portion of the Facility), together with any guarantees,
supplements, amendments, modifications, extensions and renewals of the same, and
all additional remainders, reversions, and other rights and estates appurtenant
thereto.
"Loan" has the meaning provided in the Recitals to this Mortgage.
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"Loan Agreement" has the meaning provided in the Recitals to this Mortgage.
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"Loan Obligations" has the meaning provided in the Recitals to this
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Mortgage.
"Material Lease" means the Operator Lease.
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"Money" means all moneys, cash, rights to deposit or savings accounts,
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credit card receipts, rents or other items of legal tender obtained from or for
the use in connection with the ownership or operation of the Facility.
"Mortgaged Estate" has the meaning provided in the recitals to this
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Mortgage.
"Mortgagee" has the meaning provided in the heading of this Mortgage.
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"Mortgagor" has the meaning provided in the heading of this Mortgage.
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"Note" has the meaning provided in the recitals to this Mortgage.
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"Operator" means each of the Initial Operator and the Subsequent Operator,
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or any successor or assign, as operator of the Facility, which successor or
assign shall be acceptable to Lender in ▇▇▇▇▇▇'s sole discretion and "Operators"
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means all such entities collectively.
"Operator Lease" means with respect to a Facility, that certain operator
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lease between the Borrower and the applicable Operator for the lease of all or a
part of a Facility, together with any guarantees, supplements, amendments,
modifications, extensions and renewals of the same, and all additional
remainders, reversions, and other rights and estates appurtenant thereto and
"Operator Leases" means all such agreements collectively.
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"Permits" means Mortgagor's interest in, with respect to the Facility, all
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licenses, registrations, permits, allocations, filings, authorizations,
approvals and certificates used in connection with the ownership, construction,
renovation, use or occupancy of the Facility, including, without limitation, to
the extent issued to Mortgagor as owner of the Mortgaged Property, building
permits, business licenses, state health department licenses, food service
licenses, liquor licenses, licenses to conduct business, certificates of need or
similar certificates, approvals issued by any state health department, and all
such other permits, licenses and rights, obtained from any Governmental
Authority or private Person concerning ownership, construction or renovation,
use or occupancy of the Facility.
"Permitted Encumbrances" means, with respect to a Facility (or, as
----------------------
applicable, with respect to all of the Facilities), collectively, (i) the Lien
created by the Related Mortgage or the
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other Loan Documents, (ii) all Liens and other matters disclosed in the
applicable Title Insurance Policy concerning such Facility, or any part thereof
which have been approved by Lender in Lender's discretion, (iii) Liens, if any,
for Impositions imposed by any Governmental Authority not yet due or delinquent
or being contested in good faith and by appropriate proceedings in accordance
with the Related Mortgage, (iv) without limiting the foregoing, any and all
governmental, public utility and private restrictions, covenants, reservations,
easements, licenses or other agreements of an immaterial nature which may be
granted by Borrower after the Closing Date and which do not materially and
adversely affect (a) the ability of Borrower to pay any of its obligations to
any Person as and when due, (b) the marketability of title to such Facility, (c)
the fair market value of such Facility, or (d) the use or operation of such
Facility as of the Closing Date and thereafter and (v) only until satisfaction
in full of the Receivables Financing, the Lien granted by the Operator in
connection with the Receivables Financing on the Pledged Accounts.
"Permitted Transfers" shall mean, provided that no Event of Default has
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occurred: (i) Permitted Encumbrances; (ii) all transfers of worn out or obsolete
furnishings, fixtures or equipment that are promptly replaced with property of
equivalent value and functionality; (iii) all Leases which are not Material
Leases; (iv) all Material Leases which have been approved by Mortgagee in
writing in Mortgagee's discretion; (v) transfers of Equity Interests in
Mortgagor which in the aggregate during the term of the Loan (a) do not exceed
49% of the total interests in Mortgagor and (b) do not result in any partner's,
member's or other Person's interest in Mortgagor exceeding 49% of the total
interests in Mortgagor and (vi) any other transfer of Equity Interests provided
that (a) prior to any Securitization, Mortgagee shall have consented to such
transfer or transfers, (b) after any Securitization, Mortgagee shall have
consented to such transfer or transfers and the Rating Agencies shall have
confirmed in writing that such transfer or transfers shall not result in a
downgrade, withdrawal or qualification of any securities issued in connection
with such Securitization, (c) acceptable opinions relating to such transfer or
transfers shall have been delivered by Mortgagor to Mortgagee and the Rating
Agencies (including without limitation tax and bankruptcy opinions) and (d)
Mortgagor pays all reasonable expenses incurred by Mortgagee in connection with
such transfer or transfers and (vii) a transfer of the Facility to a single
purchaser not more than one time during the term of the Loan, provided that
prior to such transfer (a) Mortgagor shall pay Mortgagee a fee of one percent
(1%) of the Loan Amount, (b) prior to a Securitization, Mortgagee shall have
consented to such transfer, (c) after a Securitization, (i) Mortgagee shall have
consented to such transfer and (ii) the Rating Agencies shall have confirmed in
writing that such transfer shall not result in a downgrade, withdrawal or
qualification of any securities issued in connection with such Securitization,
(d) acceptable opinions relating to such transfer shall have been delivered by
Mortgagor to Mortgagee and to the Rating Agencies (including without limitation
tax and bankruptcy opinions) then rating any securities issued in connection
with a Securitization, (e) the transferee assumes in writing all obligations of
the transferor under the
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Loan Documents and executes and delivers such other documentation as may be
required by Mortgagee or the Rating Agencies and (f) Mortgagor pays all
reasonable expenses incurred by Mortgagee in connection with such transfer.
"Proceeds" means all of ▇▇▇▇▇▇▇▇▇'s "proceeds," as such term is defined in
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the UCC, and, to the extent not included in such definition, all proceeds,
whether cash or non-cash, movable or immovable, tangible or intangible
(including Insurance Proceeds, Condemnation Proceeds, and proceeds of proceeds),
from the Security Interest Property, including, without limitation, those from
the sale, exchange, transfer, collection, loss, damage, disposition,
substitution or replacement of any of the Security Interest Property and all
income, gain, credit, distributions and similar items from or with respect to
the Security Interest Property, and including, without limitation, all
compensation (or rights thereto) paid to Mortgagor as manager of the Facility.
"Rating Agencies" means Fitch Investors Service, Inc., ▇▇▇▇▇'▇ Investors
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Service, Inc., Duff & ▇▇▇▇▇▇ Credit Rating Co. and S&P, or any successor
thereto, and any other nationally recognized statistical rating organization to
the extent that any of the foregoing have been or will be engaged by Mortgagee
or its designees in connection with a Securitization (each, individually, a
"Rating Agency").
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"Rents" means, with respect to the Facility, (x) all receipts, rents,
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(whether denoted as advance rent, minimum rent, percentage rent, additional rent
or otherwise), issues, income, royalties, profits, revenues, proceeds, bonuses,
deposits (whether denoted as security deposits or otherwise), lease termination
fees or payments, rejection damages, buy-out fees and any other fees made or to
be made in lieu of rent, any award made hereafter to Mortgagor in any court
proceeding involving any tenant, lessee, licensee or concessionaire under any of
the Leases in any bankruptcy, insolvency or reorganization proceedings in any
state or federal court, and all other payments, rights and benefits of whatever
nature from time to time due under any of the Leases, including, without
limitation, (i) rights to payment earned under any of the Leases for space in
the Improvements for the operation of ongoing businesses such as restaurants,
news stands, ▇▇▇▇▇▇ shops, beauty shops and pharmacies and (ii) all other
income, consideration, issues, accounts, profits or benefits of any nature
arising from the ownership or possession of the Facility
"S&P" means Standard and Poor's Ratings Services, a division of The McGraw-
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Hill Companies, Inc.
"SPE Equity Owner" means, as applicable, G&L Hampden, Inc., a Delaware
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corporation, as to Borrower, and the managing member or general partner of the
Subsequent Operator, as to the Subsequent Operator.
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"Subsequent Operator" means Hampden Holding Group, Inc., a Massachusetts
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corporation.
"Taking" means a temporary or permanent taking or voluntary conveyance of
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all or part of the Facility, or any interest therein or right accruing thereto
or use thereof, as the result of, or in settlement of, any condemnation or other
eminent domain proceeding by any Governmental Authority affecting the Facility
or any portion thereof whether or not the same shall have actually been
commenced.
"Transfer" means any conveyance, transfer (including, without limitation,
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any transfer of any direct or indirect legal or beneficial interest (including,
without limitation, any profit interest) in Mortgagor or any SPE Equity Owner),
sale, Lease (including, without limitation, any amendment, extension,
modification, waiver or renewal thereof), or Lien, whether by law or otherwise,
of, on or affecting the Security Interest Property, Mortgagor or any SPE Equity
Owner, other than a Permitted Transfer.
"UCC" means the Uniform Commercial Code in effect in the jurisdiction in
---
which the Facility or any of the Security Interest Property is located, as
applicable.
Section 1.2. Interpretation of Defined Terms.
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Singular terms shall include the plural forms and vice versa, as
applicable, of the terms defined.
All references to other documents or instruments shall be deemed to refer
to such documents or instruments as they may hereafter be extended, renewed,
modified or amended, and all replacements and substitutions therefor.
ARTICLE II
Particular Covenants and Agreements of the Mortgagor
----------------------------------------------------
Section 2.1. Payment of Secured Loan Obligations. The Mortgagor shall pay
-----------------------------------
when due the principal, the interest, Default Rate interest, Late Charges, and
the Yield Maintenance Premium, if any, owing from time to time under the Note
and all charges, fees and other Loan Obligations as provided in and strictly in
accordance with the Loan Agreement, this Mortgage and the other Loan Documents.
-10-
Section 2.2. Title, etc.
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(a) The Mortgagor represents and warrants that (i) Mortgagor owns and has
good, marketable and insurable fee simple title in and to the Facility, free and
clear of all covenants, liens, encumbrances, restrictions, easements and other
matters affecting title other than the Permitted Encumbrances, and (ii) there
are no outstanding options to purchase or rights of first refusal affecting the
Facility.
(b) The Mortgagor represents and warrants that it owns and has good and
absolute title to all existing personal property and fixtures hereby mortgaged,
subject only to the Permitted Encumbrances. The personal property and fixtures
hereby mortgaged, are free and clear of all liens, charges and encumbrances
whatsoever, including, without limitation, conditional sales contracts, chattel
mortgages, security agreements, financing statements and everything of a similar
nature other than the Permitted Encumbrances.
(c) The Mortgagor represents and warrants that it has the full power and
lawful authority to grant, bargain, sell, release, convey, warrant, assign,
transfer, mortgage, pledge, set over and confirm unto the Mortgagee the
Mortgaged Estate as hereinabove provided and warrants that it will forever
defend the title to the Mortgaged Estate and the validity and priority of the
lien or estate hereof against the claims and demands of all Persons whomsoever.
Section 2.3. Further Assurances; Filing; Re-Filing; etc.
-------------------------------------------
(a) The Mortgagor shall execute, acknowledge and deliver, from time to
time, such further instruments as Mortgagee may reasonably require to accomplish
the purposes of this Mortgage.
(b) The Mortgagor, immediately upon the execution and delivery of this
Mortgage, and thereafter from time to time, shall cause this Mortgage, any
security agreement, mortgage, modification or amendment supplemental hereto and
each document, instrument and agreement of further assurance to be filed,
registered or recorded and refiled, re-registered or re-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 perfect the lien or estate of this Mortgage upon the
Mortgaged Estate.
(c) The Mortgagor shall pay all intangible taxes, recording taxes, filing,
registration and recording fees, all refiling, re-registration and re-recording
fees, and all expenses incident to the execution, filing, recording and
acknowledgment of this Mortgage, any security agreement or mortgage,
modification or amendment supplemental hereto and any document, instrument and
agreement of further assurance, and all federal, state, county and municipal
stamp taxes and other taxes, duties, imposts, assessments and charges arising
out of the
-11-
execution, delivery, filing, registration and recording of the Note, this
Mortgage or any of the other Loan Documents, any security agreement or mortgage
supplemental hereto or any document, instrument or agreement of further
assurance.
(d) In the event of the passage of any state, federal, municipal or other
governmental law, order, rule or regulation, subsequent to the date hereof, in
any manner changing or modifying the laws now in force governing the taxation of
mortgages or security agreements or debts secured thereby or the manner of
collecting such taxes so as to adversely affect the Mortgagee, the Mortgagor,
this Mortgage or the lien hereof, the Mortgagor will pay any such tax on or
before the due date thereof. If the Mortgagor fails to make such prompt payment
or if, in the reasonable opinion of the Mortgagee, any such state, federal,
municipal, or other governmental law, order, rule or regulation prohibits the
Mortgagor from making such payment or would penalize the Mortgagee if the
Mortgagor makes such payment or if, in the opinion of the Mortgagee, the making
of such payment might result in the imposition of interest beyond the Maximum
Amount, then the entire balance of the Loan Obligations shall, at the option of
the Mortgagee, become due and payable on the date that is one hundred and twenty
(120) days after the passage of such law, order, rule or regulation.
(e) The Mortgagor hereby indemnifies and holds the Mortgagee harmless from
any sales or use tax that may be imposed on the Mortgagee by virtue of the Loan
from the Mortgagee to the Mortgagor other than taxes imposed on the income,
stock or assets of the Mortgagee.
Section 2.4. Liens. Without limiting the obligations of the Mortgagor
-----
under Section 2.6, the Mortgagor shall not create or suffer to be created any
-----------
mortgage, deed of trust, lien, security interest, charge or encumbrance upon the
Mortgaged Estate or any portion thereof, prior to, on a parity with, or
subordinate to the lien of this Mortgage other than a Permitted Encumbrance.
The Mortgagor shall pay and promptly discharge at the Mortgagor's cost and
expense, any such mortgages, deeds of trust, liens, security interests, charges
or encumbrances upon the Mortgaged Estate or any portion thereof or interest
therein.
Section 2.5. Insurance and Casualty Events.
-----------------------------
(a) At all times while the Mortgagor is indebted to the Mortgagee, the
Mortgagor shall maintain the following insurance:
(i) During any period of repair or restoration including, without
limitation, during any period of repair or restoration necessitated by a
casualty loss or a Taking, builder's "all risk" insurance in an amount equal to
not less than the full insurable value of the Facility against such risks
(including, without limitation, fire and extended
-12-
coverage and collapse of the Improvements to agreed limits) as Mortgagee may
request, in form and substance acceptable to Mortgagee.
(ii) Insurance with respect to the Improvements, Equipment and Inventory
against any peril included within the classification "All Risks of Physical
Loss" with extended coverage in amounts at all times sufficient to prevent the
Mortgagor from becoming a co-insurer within the terms of the applicable
policies, but in any event such insurance shall be maintained in an amount equal
to the full insurable value of the Improvements, Equipment and Inventory located
on the Facility. As used herein, "full insurable value" means the actual
replacement cost of the Improvements, Equipment and Inventory (without taking
into account any depreciation), determined annually by an insurer or by the
Mortgagor or, at the request of the Mortgagee, by an Independent insurance
broker (subject to the Mortgagee's reasonable approval) including an endorsement
covering acts of municipal authorities including increased cost of construction
and demolition;
(iii) Commercial general liability insurance, including contractual injury,
bodily injury, broad form death and property damage liability, and umbrella
liability insurance against any and all claims, including all legal liability to
the extent insurable imposed upon the Mortgagor and all court costs and
attorneys' fees and expenses, arising out of or connected with the possession,
use, leasing, operation, maintenance or condition of the Facility in such
amounts as are generally required by institutional lenders for properties
comparable to the Facility but in no event with limits for the Facility of less
than $1,000,000 per occurrence with combined single limit coverage for bodily
injury or property damage and excess (umbrella) liability coverage for the
Facility of no less than $10,000,000 per occurrence and $10,000,000 aggregate;
(iv) Statutory workers' compensation insurance (to the extent the risks to
be covered thereby are not already covered by other policies of insurance
maintained by the Mortgagor), with respect to any work on or about the Facility;
(v) Business interruption and/or loss of "rental value" insurance for the
Facility in an amount equal to eighteen(18) months estimated Gross Revenue
attributable to the Facility and based on the Gross Revenue for the immediately
preceding year and otherwise sufficient to avoid any co-insurance penalty;
(vi) If all or any portion of the Improvements, or any portion of the Land
is located within a federally designated flood hazard zone, flood insurance in
an amount equal to the lesser of the full insurable value of the Facility or the
maximum amount of flood insurance available;
-13-
(vii) 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 at the
Facility, in such amounts as the Mortgagee may from time to time require
and which are customarily required by institutional mortgagees with respect
to similar properties similarly situated; and
(viii) Earthquake insurance (if necessary) satisfactory to and from
an insurer satisfactory to Mortgagee.
(ix) Such other insurance with respect to the Improvements, Equipment
and Inventory located on the Facility against loss or damage as is
requested by the Mortgagee (including, without limitation liquor/dramshop,
hurricane and earthquake (if necessary) insurance) provided such insurance
is of the kind for risks from time to time customarily insured against and
in such amounts as are generally required by institutional lenders for
properties comparable to the Facility or which Mortgagee may deem necessary
in its reasonable discretion.
(b) The Mortgagor will maintain the insurance coverage described in Section
-------
2.5 with companies acceptable to Mortgagee and with a claims paying ability of
---
not less than "AA" by S&P and AA or its equivalent by any one of the other
Rating Agencies (except for earthquake insurance, which may be issued by
companies having a claims paying ability of not less than "BBB" by S&P and BBB
or its equivalent by any one of the other Rating Agencies). All insurers
providing insurance required by this Mortgage shall be authorized to issue
insurance in the state where the Facility is located.
The insurance coverage required under Section 2.5(a) may be effected under
--------------
a blanket policy or policies covering the Mortgaged Estate and other property
and assets not constituting a part of the Mortgaged Estate; provided that any
such blanket policy shall specify, except in the case of public liability
insurance, the portion of the total coverage of such policy that is allocated to
the Facility and Equipment and Inventory located thereon, and any sublimits in
such blanket policy applicable to the Mortgaged Estate, which amounts shall not
be less than the amounts required pursuant to Section 2.5(a) and which shall in
--------------
any case comply in all other respects with the requirements of this Section 2.5.
-----------
(c) All insurance policies shall be in such form and with such endorsements
and in such amounts as shall be satisfactory to Mortgagee (and Mortgagee shall
be entitled to approve amounts, form, risk coverage, deductibles, loss payees
and insureds). The policy referred to in Section 2.5(a)(ii) shall contain a
----------
replacement cost endorsement and a waiver of depreciation. Certified copies of
all of the above-mentioned insurance policies have been delivered to and shall
be held by the Mortgagee. All such policies shall name the Mortgagee as an
additional
-14-
insured/loss payee, shall provide that all Insurance Proceeds be payable to the
Mortgagee as set forth in Section 2.5(d), and shall contain: (i) "Non
--------------
Contributory Standard Lender Clause" and a Lender's Loss Payable Endorsement
(Form 438 BFUNS) or their equivalents naming Mortgagee as the person to whom all
payments shall be paid and a provision that payment of Insurance Proceeds in
excess of One Hundred Thousand Dollars ($100,000.00) shall be made by a check
payable only to Mortgagee; (ii) a waiver of subrogation endorsement as to the
Mortgagee and its assigns providing that no policy shall be impaired or
invalidated by virtue of any act, failure to act, negligence of, or violation of
declarations, warranties or conditions contained in such policy by the
Mortgagor, the Mortgagee or any other named insured, additional insured or loss
payee, except for the willful misconduct of the Mortgagee knowingly in violation
of the conditions of such policy; (iii) an endorsement indicating that neither
the Mortgagee nor the Mortgagor shall be or be deemed to be a co-insurer with
respect to any risk insured by such policies and shall provide for an aggregate
deductible per loss for all policies of an amount not more than that which is
customarily maintained by prudent owners of property of the same type and
quality as the Facility, but in no event in excess of five percent (5%) of the
full insurable value of the Improvements, Equipment and Inventory (ten percent
(10%) in the case of earthquake insurance), if required, with respect to all
casualty insurance policies and Five Thousand Dollars ($5,000.00) in the case of
all other policies of insurance maintained hereunder; (iv) a provision that such
policies shall not be canceled or amended, including, without limitation, any
amendment reducing the scope or limits of coverage, without at least thirty (30)
days prior written notice to the Mortgagee in each instance; and (v) include
effective waivers by the insurer of all claims for insurance premiums against
any loss payees, additional insureds and named insureds (other than the
Mortgagor). Certificates of insurance with respect to all renewal and
replacement policies shall be delivered to the Mortgagee not less than ten (10)
days prior to the expiration date of any of the insurance policies required to
be maintained hereunder which certificates shall bear notations evidencing
payment of applicable premiums and certified copies of such insurance policies
shall be delivered to the Mortgagee promptly after the Mortgagor's receipt
thereof. If the Mortgagor fails to maintain and deliver to the Mortgagee the
certified copies of the original policies or certificates of insurance required
by this Mortgage, the Mortgagee may, at its option, not earlier than two (2)
days after written notice to Mortgagor, procure such insurance, and the
Mortgagor shall reimburse the Mortgagee for the amount of all premiums paid by
the Mortgagee thereon promptly, after demand by the Mortgagee, with interest
thereon at the Default Rate from the date paid by the Mortgagee to the date of
repayment, and such sum shall be a part of the Loan Obligations secured by this
Mortgage.
The Mortgagee shall not by the fact of approving, disapproving, accepting,
preventing, obtaining or failing to obtain any insurance, incur any liability
for or with respect to the amount of insurance carried, the form or legal
sufficiency of insurance contracts, solvency of insurance companies, or the
carriers' or the Mortgagor's payment or defense of lawsuits, and
-15-
the Mortgagor hereby expressly assumes full responsibility therefor and all
liability, if any, with respect thereto.
(d) The Mortgagee shall be entitled to receive and collect all Insurance
Proceeds and all of the Insurance Proceeds are hereby assigned to the Mortgagee.
The Mortgagor shall instruct and cause the issuer of each policy of insurance
described herein to deliver to Mortgagee all Insurance Proceeds. The Mortgagor
shall execute such further assignments of the Insurance Proceeds as the
Mortgagee may from time to time reasonably require. Without limiting the
generality of the foregoing, following the occurrence of any casualty or damage
involving the Estate or any part thereof, the Mortgagor shall give prompt notice
thereof to the Mortgagee and shall cause all Insurance Proceeds payable as a
result of such casualty or damage to be paid to the Mortgagee, as additional
collateral security hereunder subject to the lien of this Mortgage, to be
applied by the Mortgagee to the Loan Obligations.
(e) In the event of damage, destruction or a casualty with respect to the
Facility, except as provided in Section 2.5(f) below, Mortgagor shall cause all
------- ------
Insurance Proceeds to be paid to the Mortgagee, which shall apply such Insurance
Proceeds to reduce the Indebtedness in accordance with Section 2.7 and Section
------- --- -------
2.8 of the Loan Agreement. All Insurance Proceeds received by Mortgagor or
---
Mortgagee in respect of business interruption coverage shall be deposited and
maintained in the Cash Collateral Account to be applied by Mortgagee in the same
manner as Rents (other than security deposits); provided, however, that if the
-------- -------
Insurance Proceeds of any such business interruption insurance policy are paid
in a lump sum in advance, Mortgagee shall hold such Insurance Proceeds or
Condemnation Proceeds in a segregated interest-bearing escrow account at the
Cash Collateral Account Bank, and Mortgagee shall estimate the number of months
required for Mortgagor to restore the damage caused by the casualty to the
Facility, shall divide the aggregate business interruption Insurance Proceeds in
connection with such casualty by such number of months, and shall disburse from
such escrow account into the Cash Collateral Account each month during the
performance of such restoration such monthly installment of said Insurance
Proceeds. Any Insurance Proceeds made available to Mortgagor for restoration or
repair in accordance herewith, to the extent not used by Mortgagor in connection
with, or to the extent they exceed the cost of, such restoration, shall be paid
to Mortgagor. Interest accruing on the Insurance Proceeds deposited into the
segregated interest account and may be paid to Mortgagor at such time that all
repairs have been completed and all Insurance Proceeds dispersed.
(f) Notwithstanding anything to the contrary set forth in Section 2.5(e)
--------------
above, the Mortgagee agrees that the Mortgagee shall make the Insurance Proceeds
(other than business interruption insurance proceeds, which shall be held and
disbursed as provided in Section 2.5(e)), available to Mortgagor for Mortgagor's
repair, restoration and replacement of the
-16-
Improvements, Equipment and Inventory damaged or taken on the following terms
and subject to the Mortgagor's satisfaction of the following conditions:
(i) At the time of such loss or damage and at all times thereafter, there
shall exist no Default or Event of Default which is continuing;
(ii) The Improvements, Equipment and Inventory for which loss or damage has
resulted shall be capable of being restored (including replacements) to their
pre-existing condition and utility as existed immediately prior to the
occurrence of the loss or damage then in question in all material respects with
a value equal to or greater than prior to such loss or damage, and shall be
capable of being completed six months prior to the Maturity Date, and prior to
the expiration of business interruption insurance;
(iii) The Mortgagor shall demonstrate to the Mortgagee's reasonable
satisfaction the Mortgagor's ability to pay the Loan Obligations coming due
during such restoration period;
(iv) Within thirty (30) days from the date of such loss or damage the
Mortgagor shall have given the Mortgagee a written notice electing to have the
Insurance Proceeds applied for repair, restoration or replacement of the
Improvements, Equipment or Inventory, as applicable;
(v) Within sixty (60) days following the date of notice under the preceding
subparagraph (iv) and prior to any Insurance Proceeds being disbursed to the
-----------------
Mortgagor, the Mortgagor shall have provided to the Mortgagee all of the
following:
(1) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), complete plans and specifications for restoration, repair and
replacement of the Improvements, Equipment and Inventory lost or damaged to the
condition, utility and value required by the preceding subparagraph (ii),
-----------------
(2) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), fixed-price or guaranteed maximum cost construction contracts for
completion of the repair, restoration and replacement work in accordance with
the aforementioned plans and specifications,
(3) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), builder's risk insurance for the full cost of construction with
the Mortgagee named under a standard mortgagee loss payable clause,
-17-
(4) such additional funds (if any) as in the Mortgagee's
reasonable opinion are necessary to complete the repair, restoration
and replacement, and
(5) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), copies of all permits and licenses necessary to
complete the work in accordance with the plans and specifications and
applicable law;
(vi) If loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), Mortgagee may, at ▇▇▇▇▇▇▇▇▇'s expense, retain an independent
inspector to review and approve plans and specifications and completed
construction and to approve all requests for disbursement, which approvals
shall be conditions precedent to release of the Insurance Proceeds as work
progresses;
(vii) The Mortgagor shall commence such work within one hundred
twenty (120) days after such loss or damage and shall diligently pursue
such work to completion;
(viii) If loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), each disbursement by the Mortgagee of such Insurance
Proceeds shall be funded subject to conditions and in accordance with
disbursement procedures which a commercial construction lender would
typically establish in the exercise of sound banking practices and shall be
made only upon receipt of disbursement requests on an AIA G702/703 form (or
similar form approved by the Mortgagee) signed and certified by the
Mortgagor and its architect and general contractor with appropriate
invoices, ▇▇▇▇ ▇▇▇▇▇▇▇ and any other documents, instruments or items which
may be required by the Mortgagee in the Mortgagee's sole discretion; and
(ix) The Mortgagee shall have a first lien and security interest in
all building materials and completed repair and restoration work and in all
fixtures and equipment acquired with such Insurance Proceeds, and the
Mortgagor shall execute and deliver such mortgages, deeds of trust,
security agreements, financing statements and other instruments as the
Mortgagee shall reasonably request to create, evidence, or perfect such
lien and security interest.
(g) If and to the extent such Insurance Proceeds are not required to be
made available to Mortgagor to be used for the repair, restoration and
replacement of the Improvements, Equipment and Inventory for which a loss or
damage has occurred, or in the event the Mortgagor fails to timely make such
election or having made such election fails to timely comply with or is
otherwise unable to satisfy the terms and conditions set forth herein, upon five
Business Days prior notice to the Mortgagor, the Mortgagee shall be entitled
without
-18-
consent from the Mortgagor to apply such Insurance Proceeds, or the balance
thereof, at the Mortgagee's option either (x) to the full or partial payment or
prepayment of the Loan Obligations in accordance with Section 2.7 and Section
2.8 of the Loan Agreement, or (y) to the repair, restoration and/or replacement
of all or any part of such Improvements, Equipment and Inventory for which a
loss or damage has occurred.
(h) Subject to the Mortgagee's rights under Section 2.5(f) and (g),
------- ------ ---
provided no Default or Event of Default has occurred and the replacement,
restoration or repair has been completed in accordance with this Mortgage, any
Insurance Proceeds available to Mortgagor for replacement, restoration or
repair, to the extent not used by Mortgagor in connection with, or to the extent
they exceed the cost of such replacement, restoration or repair shall be paid to
Mortgagor.
(i) The Mortgagor appoints the Mortgagee to act after the occurrence of an
Event of Default as the Mortgagor's attorney-in-fact, coupled with an interest,
to cause the issuance of or an endorsement of any policy to bring the Mortgagor
into compliance herewith and, as limited above, at the Mortgagee's sole option,
to make any claim for, receive payment for, and execute and endorse any
documents, checks or other instruments in payment for loss, theft, or damage
covered under any such insurance policy; however, in no event will the Mortgagee
be liable for failure to collect any amounts payable under any insurance policy.
(j) The Mortgagee shall be entitled at its option to participate in any
compromise, adjustment or settlement in connection with any claims for loss,
damage or destruction under any policy or policies of insurance, in excess of
One Hundred Thousand Dollars ($100,000.00), and the Mortgagor shall within ten
(10) Business Days after request therefor reimburse the Mortgagee for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
disbursements) incurred by the Mortgagee in connection with such participation.
The Mortgagor shall not make any compromise, adjustment or settlement in
connection with any such claim in excess of One Hundred Thousand Dollars
($100,000.00), without the prior written approval of the Mortgagee.
(k) In the event of foreclosure of the lien of this Mortgage or other
transfer of title or assignment of the Mortgaged Estate in extinguishment, in
whole or in part, of the Loan Obligations, all right, title and interest of the
Mortgagor in and to all policies of casualty insurance covering all or any part
of the Mortgaged Estate shall inure to the benefit of and pass to the successors
in interest to the Mortgagee or the purchaser or grantee of the Mortgaged Estate
or any part thereof.
-19-
(i) Mortgagor shall not obtain or maintain any policy of insurance with
respect to Mortgagor, the Mortgaged Estate or any part thereof which does not
satisfy each of the requirements of this Section.
Section 2.6 Impositions.
-----------
(a) The Mortgagor shall pay or cause to be paid, before any fine, penalty,
interest or cost attaches thereto, all of the Impositions, including, without
limitation, any ground rents due under any ground lease agreements, if
applicable, as well as all claims for labor, materials or supplies that, if
unpaid, might by law become a lien on the Mortgaged Estate, and shall submit to
Mortgagee such evidence of the due and punctual payment of all such Impositions
and claims as may be required by law; provided, however, that if by law any such
Imposition may be paid in installments (whether or not interest shall accrue on
the unpaid balance thereof), the Mortgagor may pay the same in installments
(together with accrued interest on the unpaid balance thereof) as the same
respectively become due, before any fine, penalty, interest or cost attaches
thereto.
(b) The Mortgagor at its expense may, after prior notice to the Mortgagee,
contest by appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or lien therefor or any claims of mechanics,
materialmen, suppliers or vendors or liens thereof, and may withhold payment of
the same pending such proceedings if permitted by law, as long as (i) in the
case of any Impositions or lien therefor or any claims of mechanics,
materialmen, suppliers or vendors or liens thereof, such proceedings shall
suspend the collection thereof from the Mortgaged Estate, (ii) neither the
Mortgaged Estate nor any part thereof or interest therein will be sold,
forfeited or lost if the Mortgagor pays the amount or satisfies the condition
being contested, and the Mortgagor would have the opportunity to do so, in the
event of the Mortgagor's failure to prevail in the contest, (iii) the Mortgagee
would not, by virtue of such permitted contest, be exposed to any risk of any
civil liability for which the Mortgagor has not furnished additional security as
provided in clause (iv) below, or to any risk of criminal liability, and neither
-----------
the Mortgaged Estate nor any interest therein would be subject to the imposition
of any lien for which the Mortgagor has not furnished additional security as
provided in clause (iv) below, as a result of the failure to comply with such
-----------
law or of such proceeding and (iv) the Mortgagor shall have furnished to the
Mortgagee additional security in respect of the claim being contested or the
loss or damage that may result from the Mortgagor's failure to prevail in such
contest in such amount as may be reasonably requested by the Mortgagee, but in
no event less than one hundred and twenty five percent (125%) of the amount of
such claim.
-20-
(c) Without in any way limiting ▇▇▇▇▇▇▇▇▇'s obligations hereunder,
▇▇▇▇▇▇▇▇▇ shall fund the Basic Carrying Costs Sub-Account to the extent required
pursuant to the Loan Agreement and the real property taxes and assessments
applicable to the Facility shall be paid from the Basic Carrying Costs Sub-
Account, all in accordance with the Loan Agreement.
Section 2.7 Maintenance of the Improvements and Equipment. The Mortgagor
---------------------------------------------
shall not permit the Improvements or Equipment to be removed or demolished or
otherwise altered (provided, however, that the Mortgagor may remove, demolish or
alter such Improvements and Equipment that become obsolete in the usual conduct
of the Mortgagor's business and the removal or alteration of which do not
materially detract from the operation of the Mortgagor's business and Mortgagor
promptly replaces the same with Improvements or Equipment, as applicable, of
equivalent value and functionality); shall maintain the Mortgaged Estate in good
repair, working order and condition, except for reasonable wear and use; shall
not commit or suffer any waste; shall not do or suffer to be done anything which
would or could increase the risk of fire or other hazard to the Mortgaged Estate
or which would or could result in the cancellation of any insurance policy
carried with respect to the Mortgaged Estate, restore and repair the
Improvements and Equipment or any part thereof now or hereafter damaged or
destroyed by any fire or other casualty or affected by any Taking; provided,
however, that if the fire or other casualty is not insured against or insurable,
the Mortgagor shall so restore and repair even though no Insurance Proceeds are
received.
Section 2.8. Compliance With Laws.
--------------------
(a) The Mortgagor represents and warrants that the Facility and the
Mortgagor's operations at and use of the Facility currently comply in all
material respects with all Legal Requirements, including without limitation, the
Americans with Disabilities Act, and the orders, rules and regulations of the
American Insurance Association or any other body now or hereafter constituted
exercising similar functions. The Mortgagor shall maintain the Facility in
compliance with all future Legal Requirements.
(b) The Mortgagor hereby confirms the representations, warranties and
covenants set forth in Section 4.1(v) and Sections 5.1(d) through (i),
inclusive, of the Loan Agreement (relating to liabilities of the Mortgagor under
applicable Environmental Laws) insofar as such representations, warranties and
covenants apply to the Mortgaged Estate.
(c) The Mortgagor shall notify the Mortgagee promptly of any written notice
or order that the Mortgagor receives from any Governmental Authority with
respect to the Mortgagor's compliance with any Legal Requirements, including,
without limitation, the Americans with Disabilities Act and the Environmental
Laws, relating to the Facility and promptly take any and all actions necessary
to bring its operations at the Facility into compliance with such Legal
-21-
Requirements, including, without limitation, the Americans with Disabilities Act
and the Environmental Laws (and shall fully comply with the requirements of such
Legal Requirements, including, without limitation, the Americans with
Disabilities Act and the Environmental Laws, that at any time are applicable to
its operations at the Facility) all to the extent required under the applicable
provisions of the Loan Agreement; provided, that, subject to Section 5.1(d) of
------- ------
the Loan Agreement, the Mortgagor at its expense may, after prior notice to the
Mortgagee, contest by appropriate legal, administrative or other proceedings
conducted in good faith and with due diligence, the validity or application, in
whole or in part, of any such Legal Requirements, including, without limitation,
Environmental Laws, as long as (i) neither the Mortgaged Estate nor any part
thereof or any interest therein, will be sold, forfeited or lost if the
Mortgagor pays the amount or satisfies the condition being contested, and the
Mortgagor would have the opportunity to do so, in the event of the Mortgagor's
failure to prevail in the contest, (ii) the Mortgagee would not, by virtue of
such permitted contest, be exposed to any risk of any civil liability for which
the Mortgagor has not furnished additional security as provided in clause (iii)
------------
below, or to any risk of criminal liability, and neither the Mortgaged Estate
nor any interest therein would be subject to the imposition of any lien for
which the Mortgagor has not furnished additional security as provided in clause
------
(iii) below as a result of the failure to comply with such Legal Requirement or
-----
Environmental Law or the Americans with Disabilities Act or of such proceeding
and (iii) the Mortgagor shall have furnished to the Mortgagee additional
security in respect of the claim being contested or the loss or damage that may
result from the Mortgagor's failure to prevail in such contest in such amount as
may be reasonably requested by the Mortgagee in light of the risk attendant to
such contest, but in no event less than one hundred and twenty five percent
(125%) of the amount of such claim.
(d) After thirty (30) days prior written notice (except in the case of a
bona fide emergency in which no such prior written notice shall be required, but
in which event notice shall be given as soon as practicable) and the Mortgagor's
failure to so comply, but subject to subparagraph (c) above, the Mortgagee, at
----------------
its election and in its sole discretion may (but shall not be obligated to) cure
any failure on the part of the Mortgagor to comply with any Legal Requirements,
including Environmental Laws, and without limitation, may take any of the
following actions:
(i) arrange for the prevention of any Release or threat of Release of
Hazardous Substances at the Facility in violation of, or potentially
requiring clean up, removal or remediation under, Environmental Laws, and
pay any costs associated with such prevention;
(ii) arrange for the removal or remediation of Hazardous Substances
that may be Released or result from a Release at the Facility in violation
of, or potentially
-22-
requiring clean up, removal or remediation under, Environmental Laws, and
pay any costs associated with such removal and/or remediation;
(iii) pay, on behalf of the Mortgagor, any costs, fines or penalties
imposed on the Mortgagor by any Governmental Authority in connection with
such Release or threat of Release of Hazardous Substances in violation of,
or potentially requiring clean up, removal or remediation under,
Environmental Laws; or
(iv) make any other payment or perform any other act intended to
prevent a lien in favor of any Governmental Authority from attaching to the
Mortgaged Estate.
Any partial exercise by the Mortgagee of the remedies hereinafter set forth, or
any partial undertaking on the part of the Mortgagee to cure the Mortgagor's
failure to comply with such Legal Requirements, including Environmental Laws,
shall not obligate the Mortgagee to complete the actions taken or require the
Mortgagee to expend further sums to cure the Mortgagor's noncompliance; nor
shall the exercise of any such remedies operate to place upon the Mortgagee any
responsibility for the operation, control, care, management or repair of the
Facility or make the Mortgagee the "operator" of the Facility within the meaning
of any Environmental Laws. Any amount paid or costs incurred by the Mortgagee
as a result of the exercise by the Mortgagee of any of the rights hereinabove
set forth, together with interest thereon at the Default Rate from the date paid
by the Mortgagee, shall be due and payable by the Mortgagor to the Mortgagee
within ten (10) days after demand therefor, and until paid shall be added to and
become a part of the Loan Obligations secured hereby; and the Mortgagee, by
making any such payment or incurring any such costs, shall be subrogated to any
rights of the Mortgagor to seek reimbursement from any third parties, including,
without limitation, a predecessor-in-interest to the Mortgagor's title who may
be a "responsible party" or otherwise liable under any Environmental Law in
connection with any such Release or threat of Release of Hazardous Substances.
(e) If the Mortgagee suspects that Remedial Work may be required, the
Mortgagee may request that an environmental survey and risk assessment with
respect to the Mortgaged Estate be prepared and the Mortgagor agrees to supply,
at its cost, such a survey and risk assessment by an Independent Engineer
selected by the Mortgagor and satisfactory to the Mortgagee, in form and detail
satisfactory to the Mortgagee (including, if the Mortgagee reasonably suspects
that Remedial Work may be required, test borings of the ground and chemical
analyses of air, water and waste discharges), estimating current liabilities and
assessing potential sources of future liabilities of the Mortgagor or any other
owner or operator of the Facility under applicable Environmental Laws.
-23-
(f) The Mortgagor agrees to indemnify, reimburse, defend (with counsel
satisfactory to Mortgagee at Mortgagee's election), and hold harmless the
Mortgagee for, from, and against all demands, claims, actions or causes of
action, assessments, losses, damages, liabilities, costs and expenses,
including, without limitation, interest, penalties, consequential damages,
attorneys' fees, disbursements and expenses, and consultants' fees,
disbursements and expenses, including costs of Remedial Work, asserted against,
resulting to, imposed on, or incurred by the Mortgagee, directly or indirectly,
in connection with any of the following:
(i) events, circumstances, or conditions which are alleged to, or do,
form the basis for an Environmental Claim;
(ii) the presence, Use or Release of Hazardous Substances at, on, in,
under or from any Facility which presence, Use or Release requires or could
require Remedial Work;
(iii) any Environmental Claim against ▇▇▇▇▇▇▇▇▇, Mortgagee, or any
Person whose liability for such Environmental Claim the Mortgagor has or
may have assumed or retained either contractually or by operation of law;
or
(iv) the breach of any representation, warranty or covenant set forth
in Section 4.1(v) and Sections 5.1(d) through 5.1(i), inclusive, of the
------ ------ -------- ------ ------
Loan Agreement.
(v) any failure by ▇▇▇▇▇▇▇▇▇ to fulfill each and every obligation
undertaken pursuant to this Section 2.8(f).
------- ------
The indemnity provided in this Section 2.8(f) shall not be included in any
------- ------
exculpation of the Mortgagor or its partners, members, shareholders or any other
Person from personal liability provided in this Mortgage or in any of the other
Loan Documents. Further, ▇▇▇▇▇▇▇▇▇'s obligations under this Section 2.8(f)
------- ------
shall survive (in perpetuity) the closing and disbursement of the funds
evidenced by the Note, payment of the Note, payment and performance of the Loan
Obligations, any release, reconveyance, discharge or foreclosure of this
Mortgage, conveyance by deed in lieu of foreclosure, transfer by Mortgagee's
sale, and any subsequent conveyance of the Mortgaged Estate. Nothing in this
Section 2.8(f) shall be deemed to deprive the Mortgagee of any rights or
------- ------
remedies provided to it elsewhere in this Mortgage or the other Loan Documents
or otherwise available to it under law. Mortgagor waives and releases Mortgagee
from any rights or defenses Mortgagor may have under common law or Environmental
Laws for liability arising or resulting from the presence, Use or Release of
Hazardous Substances except to the extent directly and solely caused by the
gross negligence, fraud or willful misconduct of Mortgagee or Mortgagee's
agents.
-24-
Section 2.9. Limitations of Use. The Facility is and shall be used
------------------
exclusively as set forth in Section 3.1(o) of the Loan Agreement and uses
------- ------
reasonably ancillary thereto. The Mortgagor shall not, without the prior
written consent of the Mortgagee (a) materially change the use of the Facility
or (b) initiate, join in or consent to any change in any private restrictive
covenant, zoning ordinance or other public or private restrictions limiting or
defining the uses that may be made of the Facility or any part thereof, except
as may be necessary in connection with the uses permitted pursuant to the first
sentence of this Section 2.9. The Mortgagor shall comply with the provisions of
-----------
all Leases, licenses, agreements and private covenants, conditions and
restrictions that at any time are applicable to the Facility.
Section 2.10. Inspection of the Property. The Mortgagor shall keep
--------------------------
adequate records, accounts and books in accordance with GAAP and shall permit
the Mortgagee and its authorized representatives to enter the Facility and
inspect the Mortgaged Estate and examine the records, accounts and books of the
Mortgagor with respect thereto and make copies or extracts thereof, at
Mortgagee's cost and expense, all upon reasonable advance notice and at such
reasonable times as may be requested by the Mortgagee, subject, however, to the
rights of the tenants or occupants of the Facility. Notwithstanding the
foregoing, after the occurrence and continuation of an Event of Default,
Mortgagor shall pay any costs and expenses incurred by Mortgagee to examine
▇▇▇▇▇▇▇▇▇'s records, and accounts relating to the Mortgaged Estate as Mortgagee
shall determine to be necessary or appropriate in the protection of Mortgagee's
interest.
Section 2.11. Actions to Protect Mortgaged Estate. If the Mortgagor shall
-----------------------------------
fail to (a) effect the insurance required by Section 2.5, or (b) make the
-----------
payments required by Section 2.6, the Mortgagee may, without obligation to do
-----------
so, and upon notice to the Mortgagor (except in an emergency) effect or pay the
same. If the Mortgagor shall fail to perform or observe any of its other
covenants or agreements hereunder, the Mortgagee may, without obligation to do
so, and upon 30 days' prior written notice to the Mortgagor (except in an
emergency) effect the same. To the maximum extent permitted by law, all sums,
including reasonable attorneys' fees and disbursements, so expended or expended
to sustain the lien or estate of this Mortgage or its priority, or to protect or
enforce any of the rights hereunder, or to recover any of the Loan Obligations,
shall be a lien on the Mortgaged Estate, shall be deemed to be added to the Loan
Obligations secured hereby, and shall be paid by the Mortgagor within ten (10)
days after demand therefor, together with interest thereon at the Default Rate.
Section 2.12. Condemnation.
------------
(a) Should the Mortgaged Estate or any part thereof be taken or damaged by
reason of a Taking, or should the Mortgagor receive any written notice regarding
any such proceeding, the Mortgagor shall give prompt notice thereof to the
Mortgagee.
-25-
(b) The Mortgagee shall be entitled to receive and collect all Condemnation
Proceeds, and all such compensation, awards, damages and other payments or
relief, together with all rights and causes of action relating thereto or
arising out of any Taking, are hereby assigned to the Mortgagee subject to the
terms of Section 2.12(c) hereof. The Mortgagor shall execute such further
assignments of the Condemnation Proceeds as the Mortgagee may from time to time
require. Without limiting the generality of the foregoing, following the
occurrence of any Taking involving the Mortgaged Estate or any part thereof, the
Mortgagor shall give prompt notice thereof to the Mortgagee and shall cause all
Condemnation Proceeds payable as a result of such Taking to be paid to the
Mortgagee as additional collateral security hereunder subject to the lien of
this Mortgage and applied in accordance with Section 2.12(b).
---------------
(c) Notwithstanding anything to the contrary in Section 2.12(b) above, the
---------------
Mortgagee agrees that the Mortgagee shall make the Condemnation Proceeds (other
than Condemnation Proceeds in respect of a temporary Taking, which shall be held
and disbursed in accordance with Section 2.12(b) above) available to the
------- -------
Mortgagor for the Mortgagor's repair, restoration or replacement of the
Improvements, Equipment or Inventory affected by the Taking on the following
terms and subject to the Mortgagor's satisfaction of the following conditions:
(i) At the time of such Taking and at all times thereafter, there
shall exist no Default or Event of Default which is continuing;
(ii) The Improvements, Equipment and Inventory affected by the Taking
shall be capable of being restored to their pre-existing condition and
utility as existed immediately prior to the Taking, in all material
respects with a value equal to or greater than prior to such Taking and
shall be capable of being completed six (6) months prior to the Maturity
Date and prior to the expiration of business interruption insurance;
(iii) The Mortgagor shall demonstrate to the Mortgagee's reasonable
satisfaction the Mortgagor's ability to pay the Loan Obligations relating
to the Facility coming due during such restoration period;
(iv) Within thirty (30) days from the date of such Taking the
Mortgagor shall have given the Mortgagee a written notice electing to have
the Condemnation Proceeds applied for such repair, restoration or
replacement of the Improvements, Equipment or Inventory, as applicable;
(v) Within sixty (60) days following the date of notice under the
preceding subparagraph (iv) and prior to any Condemnation Proceeds being
-----------------
-26-
disbursed to the Mortgagor, the Mortgagor shall have provided to the
Mortgagee all of the following:
(1) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), complete plans and specifications for restoration, repair
and replacement of the Improvements, Equipment and Inventory lost or
damaged to the condition, utility and value required by the preceding
subparagraph (ii),
-----------------
(2) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), fixed-price or guaranteed maximum cost construction
contracts for completion of the repair, restoration and replacement work in
accordance with such plans and specifications,
(3) if loss or damage exceeds $100,000, builder's risk insurance for
the full cost of construction with the Mortgagee named under a standard
mortgagee loss payable clause,
(4) such additional funds (if any) as in the Mortgagee's reasonable
opinion are necessary to complete the repair, restoration and replacement,
and
(5) if loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), copies of all permits and licenses (if any) necessary to
complete the work in accordance with the plans and specifications and
applicable law;
(vi) If loss or damage exceeds One Hundred Thousand Dollars ($100,000.00),
Mortgagee may, at ▇▇▇▇▇▇▇▇▇'s expense, retain an independent inspector to review
and approve plans and specifications and completed construction and to approve
all requests for disbursement, which approvals shall be conditions precedent to
release of the Condemnation Proceeds as work progresses;
(vii) The Mortgagor shall commence such work within one hundred twenty
(120) days after such Taking and shall diligently pursue such work to
completion;
(viii) If loss or damage exceeds One Hundred Thousand Dollars
($100,000.00), each disbursement by the Mortgagee of such Condemnation
-27-
Proceeds shall be funded subject to conditions and in accordance with
disbursement procedures which a commercial construction lender would
typically establish in the exercise of sound banking practices and
shall be made only upon receipt of disbursement requests on an AIA
G702/703 form (or similar form reasonably approved by the Mortgagee)
signed and certified by the Mortgagor and its architect and general
contractor with appropriate invoices, lien waivers and any other
documents, instruments and items as may be required by the Mortgagee
in Mortgagee's sole discretion; and
(ix) The Mortgagee shall have a first lien and security interest in
all building materials and completed repair and restoration work and in all
fixtures and equipment acquired with such Condemnation Proceeds, and the
Mortgagor shall execute and deliver such mortgages, deeds of trust,
security agreements, financing statements and other instruments as the
Mortgagee shall reasonably request to create, evidence, or perfect such
lien and security interest.
(d) If and to the extent such Condemnation Proceeds are not required to be
made available to Mortgagor to be used for the repair, restoration and
replacement of the Improvements, Equipment and Inventory affected by the Taking
or if Mortgagor fails to timely make such election or having made such election
fails to timely comply with or is otherwise unable to satisfy the terms and
conditions set forth herein, upon five Business Days prior notice to the
Mortgagor, the Mortgagee shall be entitled without consent from the Mortgagor to
apply such Condemnation Proceeds, or the balance thereof, at the Mortgagee's
option either (x) to the full or partial payment or prepayment of the Loan
Obligations in accordance with Section 2.7 of the Loan Agreement, or (y) to the
repair, restoration and/or replacement of all or any part of such Improvements,
Equipment and Inventory affected by the Taking.
(e) Subject to Mortgagee's rights under Section 2.12(d), provided no Event
------- -------
of Default has occurred and the replacement, restoration or repair has been
completed in accordance with this Mortgage, any Condemnation Proceeds, available
to Mortgagor for replacement, restoration or repair, to the extent not used by
Mortgagor in connection with, or to the extent they exceed the cost of, such
replacement, restoration or repair, shall be paid to the Mortgagor.
(f) The Mortgagee shall be entitled at its option to participate in any
compromise, adjustment or settlement in connection with any Taking involving an
amount in controversy in excess of One Hundred Thousand Dollars ($100,000.00),
and the Mortgagor shall within ten (10) Business Days after request therefor
reimburse the Mortgagee for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by the Mortgagee in
connection with such participation. The Mortgagor shall not make any
-28-
compromise, adjustment or settlement in connection with any such claim in excess
of One Hundred Thousand Dollars ($100,000.00) without the prior written approval
of the Mortgagee.
Section 2.13. Leases; Management Agreements.
-----------------------------
(a) Mortgagor shall timely perform all of its obligations under the terms
and conditions of any Leases (including ground leases) and shall not accept rent
therefor in advance for a period of more than one (1) month. Mortgagor
represents that there are no Leases or agreements to lease all or any part of
the Mortgaged Estate now in effect, except those specifically assigned to
Mortgagee by the Assignment of Leases. There is no assignment or pledge of any
Rents now in effect, except pursuant to the Assignment of Leases. Mortgagor
shall not make any assignment or pledge thereof to anyone other than Mortgagee
until the Loan Obligations are paid in full.
(b) Mortgagor shall not enter into any Lease after the date hereof that
does not contain terms to the effect as follows:
(i) such Lease and the rights of the tenant thereunder
(including, without limitation, any options to purchase or rights of
first offer or refusal) shall be subject and subordinate to the
rights of Mortgagee under and the Lien of this Mortgage and
Mortgagee's rights under all Loan Documents, and any renewals,
modifications and amendments thereto and thereof;
(ii) such Lease has been assigned as collateral security by
▇▇▇▇▇▇▇▇▇ as landlord thereunder to Mortgagee under this Mortgage;
(iii) in the case of any foreclosure hereunder or the giving or
granting ofh a deed in lieu thereof, the rights and remedies of the
tenant in respect of any obligations of any successor landlord
thereunder shall be limited to the equity interest of such successor
landlord in the Mortgaged Estate and any successor landlord shall in
no event and to no extent (1) be liable for any act, omission or
default of any prior landlord under the Lease or (2) be required to
make or complete any tenant improvements or capital improvements or
repair, restore, rebuild or replace the demised premises or any part
thereof in the event of damage, casualty or condemnation or (3) be
required to pay any amounts to tenant arising under the Lease prior
to such successor landlord taking possession;
(iv) the tenant's obligation to pay rent and any additional rent
shall not be subject to any abatement, deduction, counterclaim or
setoff as against any
-29-
mortgagee, deed of trust trustee, beneficiary under any deed of trust
or purchaser upon the foreclosure of any of the Mortgaged Estate or
the giving or granting of a deed in lieu thereof by reason of a
landlord default occurring prior to such foreclosure and such
mortgagee, deed of trust trustee, beneficiary under any deed of trust
or purchaser will not be bound by any advance payments of rent in
excess of one month or any security deposit unless such security
deposit was actually received (or in the case of a letter of credit,
was properly transferred in negotiable form);
(v) the tenant agrees to attorn to Mortgagee or any purchaser of
the Mortgaged Estate upon a foreclosure of the Mortgaged Estate or
the giving or granting of a deed in lieu thereof, at the option of
Mortgagee or such purchaser;
(vi) the tenant agrees to give notice to Mortgagee of any
default by landlord under the Lease and Mortgagee shall have a
reasonable time to cure, should Mortgagee so elect, any default of
landlord prior to tenant exercising any rights of tenant to terminate
or cancel such Lease; and
(vii) all lease payments shall be due on or before the fifth
(5th) day of each calendar month.
(c) The Mortgagor shall not without the prior consent of the Mortgagee
enter into, amend or terminate any management agreements, franchise agreements
or Operator Lease, except as otherwise specifically permitted pursuant to the
Loan Agreement. The Mortgagor shall diligently perform all terms and covenants
of any and all Management Agreements.
(d) Mortgagor shall not create, or permit the Mortgaged Estate or any part
thereof to become subject to, any easement, license or restrictive covenant,
other than a Permitted Encumbrance. Without limiting the generality of the
immediately preceding sentence, Mortgagor shall not enter into, consent to,
grant, amend, modify, restate or supplement any document, instrument or
agreement affecting, related to or impacting upon the Mortgaged Estate, the
title thereto or any portion or aspect thereof, including, without limitation,
any easement, reciprocal easement agreement, or any declaration of easements or
covenants.
Section 2.14. Mortgagee Reliance. Mortgagor acknowledges that Mortgagee has
------------------
examined and relied on the experience of Mortgagor and its partners,
shareholders and members (including, without limitation, the direct and indirect
legal and beneficial owners of Mortgagor), in owning and operating properties
such as the Facility in agreeing to make the Loan, and will continue to rely on
Mortgagor and such experience of such persons as a means of maintaining the
value of the Facility as security for repayment of the Loan and performance
-30-
of all of Mortgagor's obligations under the Loan Documents. Mortgagor
acknowledges that Mortgagee has a valid interest in maintaining the value of the
Facility so as to insure that, should Mortgagor allow a Transfer to occur
without Mortgagee's prior written consent, Mortgagee may exercise all of its
rights hereunder.
Section 2.15. No Transfer. Except for Permitted Transfers, Mortgagor shall
-----------
not and shall not cause, allow, or permit, and shall prevent from occurring, a
Transfer, without the prior written consent of Mortgagee, which consent may be
withheld or conditioned in Mortgagee's sole and absolute discretion. Consent to
any such Transfer by Mortgagee shall not be deemed a waiver of Mortgagee's right
to require such consent to any further or future Transfers. In the event of any
violation of this Section 2.15, Mortgagee may, at its option, accelerate and
------------
declare the outstanding principal amount, unpaid interest, Default Rate
interest, Late Charges, Yield Maintenance Premium and any other amounts owing by
Mortgagor to be immediately due and payable, without notice or demand, and
whether or not Mortgagee shall have commenced any foreclosure proceeding or
other action for the enforcement of its rights and remedies under any of the
Loan Documents with respect to any Facility or all or any portion of the
Security Interest Property.
ARTICLE III
Assignment of Rents, Issues and Profits
---------------------------------------
Section 3.1. Assignment of Rents, Issues and Profits. The Mortgagor does
----------------------------------------
hereby absolutely and unconditionally assign to the Mortgagee the Mortgagor's
right, title and interest in all current and future Leases and Rents, it being
intended by the Mortgagor that this assignment constitutes a present, absolute
assignment and not an assignment for additional security only. This Section 3.1
-----------
presently gives Mortgagee the right to collect the Rents and to apply the Rents
in partial payment of the Note and Loan Obligations and otherwise in accordance
with the terms of the Loan Agreement. Mortgagor intends that the Rents and
Leases be absolutely assigned as provided in this Section 3.1 and that they no
-----------
longer be, during the term of this Section, property of the Mortgagor or
property of the estate of Mortgagor, as defined by 11 U.S.C. (S)541. If any law
exists requiring Mortgagee to take actual possession of the Mortgaged Estate (or
some action equivalent to taking possession of the Mortgaged Estate, such as
securing the appointment of a receiver) in order for Mortgagee to "perfect" or
"activate" the rights and remedies of Mortgagee as provided in this Section,
Mortgagor waives the benefit of such law. Such assignment to the Mortgagee
shall not be construed to bind the Mortgagee to the performance of any of the
covenants, conditions or provisions contained in any such Leases or otherwise
impose any obligation upon the Mortgagee and notwithstanding the assignment,
Mortgagor shall remain liable for any obligations undertaken by ▇▇▇▇▇▇▇▇▇
-31-
pursuant to any Lease. ▇▇▇▇▇▇▇▇▇ agrees that, further to evidence and reflect
the assignment granted herein, ▇▇▇▇▇▇▇▇▇ shall execute, acknowledge and deliver
to Mortgagee such additional instruments in form and substance reasonably
satisfactory to Mortgagee as may hereafter be requested by Mortgagee (but which
are not inconsistent with the terms of this Section 3.1 and the other Loan
-----------
Documents) and shall record such leases or memoranda thereof, and all
assignments thereof, all at ▇▇▇▇▇▇▇▇▇'s expense. Subject to the terms of this
Section 3.1 and the Loan Agreement, the Mortgagee grants to the Mortgagor a
-----------
license, revocable as hereinafter provided, to collect and use the Rents subject
to the requirements of the Loan Agreement. Upon the occurrence of an Event of
Default (except an Event of Default set forth in Sections 7.1(x), (xi) and (xii)
-------- ------ ---- -----
of the Loan Agreement, in which event the revocation hereinafter described shall
be automatic and simultaneous with the occurrence of such Event of Default), the
license granted to Mortgagor herein shall, at Mortgagee's election, be revoked
by the Mortgagee, and the Mortgagee shall immediately be entitled to possession
of all Rents then or thereafter in the Collection Account and in the Cash
Collateral Account or wherever they may be and all Rents collected thereafter
(including Rents past due and unpaid), whether or not the Mortgagee enters upon
or takes control of the Mortgaged Estate. Upon such a revocation of the license
granted herein, Mortgagee shall provide Mortgagor with written notice of same.
Any Rents collected by the Mortgagor from and after the date on which an Event
of Default occurred shall be held by Mortgagor in trust for Mortgagee. The
Mortgagee is hereby granted and assigned by the Mortgagor the right, at its
option, upon revocation of the license granted herein, to enter upon the
Mortgaged Estate in person, by agent or by court appointed receiver to collect
Rents with or without taking the actual possession of the Mortgaged Estate or
any equivalent action. Any Rents collected after the revocation of the license
may be applied by Mortgagee in its sole and absolute discretion toward payment
of the Loan Obligations in accordance with Section 2.8 of the Loan Agreement.
-----------
ARTICLE IV
Security Agreement
------------------
Section 4.1. Security Agreement. This Mortgage creates a lien on and a
-------------------
security interest in the Security Interest Property, and shall constitute a
security agreement and "fixture filing" under the UCC or other law applicable to
the creation of liens on and security interests in personal property and
fixtures. As further security for the payment and performance of the Loan
Obligations this Mortgage shall constitute a financing statement under the UCC
with the Mortgagor as the "debtor" and the Mortgagee as the "secured party". To
the extent permitted by law, ▇▇▇▇▇▇▇▇▇ hereby authorizes Mortgagee to file
financing and continuation statements necessary to continue the lien of and
security interest evidenced by this Mortgage with respect
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to the Security Interest Property without the signature of ▇▇▇▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇▇ hereby irrevocably appoints Mortgagee as attorney-in-fact (which
appointment shall be deemed coupled with an interest) for the purposes of
executing and filing such financing and continuation statements.
Section 4.2. Rights Upon Default. If an Event of Default occurs, the
-------------------
Mortgagee, in addition to the rights and remedies granted to the Mortgagee by
applicable law and this Mortgage, shall have all rights and remedies of a
secured party under the UCC, and in addition, Mortgagee shall have all of the
rights and remedies of a secured party and Mortgagee under a Mortgage granted,
conferred or permitted by applicable law. Any notice of sale, disposition or
other intended action by the Mortgagee with respect to the Mortgagee's rights
under the UCC sent to the Mortgagor in accordance with the notice provision
hereof at least ten (10) days prior to such action shall constitute commercially
reasonable notice to the Mortgagor. The proceeds of any such sale or
disposition, or any part thereof, may be applied by the Mortgagee to the payment
of the Loan Obligations in accordance with Section 2.7 of the Loan Agreement.
-----------
Section 4.3. Warranties, Representations and Covenants. The Mortgagor
------------------------------------------
hereby warrants, represents and covenants that: (a) the Equipment and Inventory
will be kept on or at the Facility and the Mortgagor will not remove any
Equipment or Inventory from the Facility, except such portions or items of the
Equipment or Inventory that are consumed or worn out in ordinary usage, all of
which shall be promptly replaced by the Mortgagor with Equipment or Inventory,
as applicable, of equivalent value and functionality, except as otherwise
expressly provided in Section 2.7 with respect to Equipment, and (b) all
-----------
covenants and obligations of the Mortgagor contained herein relating to the
Mortgaged Estate shall be deemed to apply to the Equipment and Inventory whether
or not expressly referred to herein. Information relative to the security
interest created hereby may be obtained by application to the Mortgagee (secured
party). The mailing addresses of the Mortgagor and the Mortgagee are set forth
on Page 1.
------
ARTICLE V
Events of Default; Remedies
---------------------------
Section 5.1. Events of Default. The term "Event of Default" wherever used
------------------ -----------------
in this Mortgage, shall mean any one of the following events: (a) if Mortgagor
fails to pay any amount payable hereunder when due and payable; (b) if any
representation or warranty made herein shall be false in any material respect as
of the date such representation or warranty was made or remade; (c) the
occurrence of a default on the part of Mortgagor under any Lease (subject,
however, to any applicable notice and cure periods required under the applicable
-33-
Lease) provided that such default adversely affects the value of the Mortgaged
Estate or in any way impairs Mortgagor's ability to perform its obligations
under the Loan Documents; (d) the failure of Mortgagor to maintain the insurance
required in this Mortgage; (e) if a Transfer shall occur without Mortgagee's
prior written consent, which consent may be withheld in Mortgagee's sole and
absolute discretion; (f) the occurrence of any "Event of Default" under any of
the Loan Documents, including, without limitation, the Loan Agreement; or (g) if
Mortgagor shall be in default under any of the other obligations, agreements,
undertakings, terms, covenants, provisions or conditions of this Mortgage, not
otherwise referred to in this Section 5.1, for ten (10) days after written
notice to Mortgagor from Mortgagee, in the case of any default which can be
cured by the payment of a sum of money or for thirty (30) days after written
notice from Mortgagee, in the case of any other default (unless otherwise
provided herein); provided, however, that if such non-monetary default is
susceptible of cure but cannot reasonably be cured within such thirty (30) day
period and provided further that Mortgagor shall have commenced to cure such
default within such thirty (30) day period and thereafter diligently and
expeditiously proceeds to cure the same, such thirty (30) day period shall be
extended for such time as is reasonably necessary for Mortgagor in the exercise
of due diligence to cure such default but in no event shall such period exceed
ninety (90) days after the original notice from Mortgagee.
Section 5.2. Acceleration of Maturity. If an Event of Default shall have
------------------------
occurred, then the entire principal amount of the indebtedness secured hereby
with interest accrued thereon and all other Loan Obligations shall, at the
option of the Mortgagee, become immediately due and payable without notice or
demand, time being of the essence; and any omission on the part of the Mortgagee
to exercise such option when entitled to do so shall not be considered as a
waiver of such right. Mortgagor hereby expressly waives presentment, demand for
payment, notice of protest, notice of dishonor, notice of intent to accelerate
the maturity of the indebtedness secured hereby and notice of acceleration of
the maturity of the indebtedness secured hereby. Notwithstanding anything
contained to the contrary herein, the outstanding principal amount, unpaid
interest, Default Rate interest, Late Charges, Yield Maintenance Premium and any
other amounts owing by Mortgagor shall be accelerated and immediately due and
payable, without any election by Mortgagee upon the occurrence of an Event of
Default described in Sections 7.1(x), (xi) or (xii) of the Loan Agreement.
-------- ------ ---- -----
Section 5.3. Default Remedies.
-----------------
(a) If an Event of Default shall have occurred and be continuing, this
Mortgage may, to the maximum extent permitted by law, be enforced, and the
Mortgagee may exercise any right, power or remedy permitted to it hereunder,
under the Loan Agreement or under any of the other Loan Documents or by law or
in equity, and, without limiting the generality of the
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foregoing, the Mortgagee may, personally or by their agents, to the maximum
extent permitted by law:
(i) enter into and take possession of the Mortgaged Estate or any
part thereof, exclude the Mortgagor and all Persons claiming under the
Mortgagor whose claims are junior to this Mortgage, wholly or partly
therefrom, and use, operate, manage and control the same or any part
thereof either in the name of the Mortgagor or otherwise as the Mortgagee
shall deem best, and upon such entry, from time to time at the expense of
the Mortgagor and the Mortgaged Estate, make all such repairs,
replacements, alterations, additions or improvements to the Facility or any
part thereof as the Mortgagee may deem proper and, whether or not the
Mortgagee has so entered and taken possession of the Mortgaged Estate or
any part thereof, collect and receive all Rents and apply the same to the
payment of all expenses that the Mortgagee may be authorized to make under
this Mortgage, the remainder to be applied to the payment of the Loan
Obligations until the same shall have been repaid in full; if the Mortgagee
demands or attempts to take possession of the Mortgaged Estate or any part
thereof in the exercise of any rights hereunder, the Mortgagor shall
promptly turn over and deliver complete possession thereof to the
Mortgagee; and
(ii) personally or by agents, with or without entry, if the Mortgagee
shall deem it advisable:
(x) invoke the power of sale and pursuant to the procedures
prescribed by law as a result thereof, sell the Mortgaged Estate or
cause the Mortgaged Estate or any part thereof, to be sold at a sale
or sales held at such place or places and time or times and upon such
notice and otherwise in such manner and in such order as may be
required by law, or, in the absence of any such requirements, as the
Mortgagee may deem appropriate and from time to time adjourn any such
sale by announcement at the time and place specified for such sale or
for such adjourned sale without further notice, except such as may be
required by law;
(y) proceed to protect and enforce their rights under this
Mortgage, by suit for specific performance of any covenant contained
herein or in the Loan Documents or in aid of the execution of any
power granted herein or in the Loan Documents, or for the foreclosure
of this Mortgage (as a mortgage or otherwise) and the sale of the
Mortgaged Estate or any part thereof under the judgment or decree of a
court of competent jurisdiction, or for the enforcement of any other
right as the Mortgagee shall elect, provided, that in the event of a
sale, by foreclosure or otherwise, of less than all of the Mortgaged
Estate, this
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Mortgage shall continue as a lien on, and security
interest in, the remaining portion of the Mortgaged Estate; or
(z) exercise any or all of the remedies available to a secured
party under the UCC, including, without limitation:
(1) either personally or by means of a court appointed
receiver, take possession of all or any of the Security
Interest Property and exclude therefrom the Mortgagor and all
Persons claiming under the Mortgagor, and thereafter hold,
store, use, operate, manage, maintain and control, make
repairs, replacements, alterations, additions and improvements
to and exercise all rights and powers of the Mortgagor in
respect of the Security Interest Property, or any part thereof;
if the Mortgagee demands or attempts to take possession of the
Security Interest Property in the exercise of any rights
hereunder, the Mortgagor shall promptly turn over and deliver
complete possession thereof to the Mortgagee, as the case may
be;
(2) without further notice to or demand upon the Mortgagor
(except those otherwise required hereby or by the Loan
Agreement), make such payments and do such acts as the
Mortgagee may deem necessary to protect its security interest
in the Security Interest Property, including, without
limitation, paying, purchasing, contesting or compromising any
encumbrance that is prior to or superior to the security
interest granted hereunder, and in exercising any such powers
or authority paying all expenses incurred in connection
therewith, which expenses shall thereafter become part of the
Loan Obligations secured by the lien of this Mortgage ;
(3) require the Mortgagor to assemble the Security Interest
Property or any portion thereof, at a place designated by the
Mortgagee and reasonably convenient to both parties, and
promptly to deliver the Security Interest Property to the
Mortgagee, or an agent or representative designated by the
Mortgagee, and its agents and representatives, shall have the
right to enter upon the premises and property of the Mortgagor
to exercise the Mortgagee's rights hereunder;
(4) sell, lease or otherwise dispose of the Security
Interest Property, with or without having the Security Interest
Property at the place of sale, and upon such terms and in such
manner as the Mortgagee may determine (and the Mortgagee may be
a purchaser at any such sale), provided, however, that
Mortgagee, may dispose of the Security Interest Property in
accordance with the Mortgagee's rights and remedies in respect
of the Mortgaged Estate pursuant to the provisions of this
Mortgage in lieu of proceeding under the UCC; and
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(5) unless the Security Interest Property is perishable or
threatens to decline speedily in value or is of a type
customarily sold on a recognized market, the Mortgagee, shall
give the Mortgagor at least ten (10) days prior notice of the
time and place of any sale of the Security Interest Property or
other intended disposition thereof, which notice ▇▇▇▇▇▇▇▇▇
agrees is commercially reasonable.
(b) If an Event of Default shall have occurred, the Mortgagee, to the
maximum extent permitted by law, shall be entitled, as a matter of right, to the
appointment of a receiver of the Mortgaged Estate, without notice or demand, and
without regard to the adequacy of the security for the Loan Obligations or the
solvency of the Mortgagor. The Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor. Any such receiver or
receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of the Mortgagee in case of entry
and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Estate, unless such receivership is sooner
terminated.
(c) In any sale under any provision of this Mortgage or pursuant to any
judgment or decree of court, the Mortgaged Estate, to the maximum extent
permitted by law, may be sold in one or more parcels or as an entirety and in
such order as the Mortgagee may elect, without regard to the right of the
Mortgagor or any Person claiming under the Mortgagor to the marshalling of
assets. The purchaser at any such sale shall take title to the Mortgaged Estate
or the part thereof so sold free and discharged of the estate of the Mortgagor
therein, the purchaser being hereby discharged from all liability to see to the
application of the purchase money. Upon the completion of any such sale by
virtue of this Section 5.3 the Mortgagee, as the case may be, shall execute and
-----------
deliver to the purchaser an appropriate instrument that shall effectively
transfer all of the Mortgagor's estate, right, title, interest, property, claim
and demand in and to the Mortgaged Estate or portion thereof so sold, but
without any covenant or warranty, express or implied. The Mortgagee is hereby
irrevocably appointed the attorney-in-fact of the Mortgagor, coupled with an
interest, in its name and stead to make all appropriate transfers and deliveries
of the Mortgaged Estate or any portions thereof so sold and, for that purpose,
the Mortgagee may execute all appropriate instruments of transfer, and may
substitute one or more Persons with like power, the Mortgagor hereby ratifying
and confirming all that said attorneys or such substitute or substitutes shall
lawfully do by virtue hereof. Nevertheless, the Mortgagor shall ratify and
confirm, or cause to be ratified and confirmed, any such sale or sales by
executing and delivering, or by causing to be executed and delivered to the
Mortgagee or to such purchaser or purchasers all such instruments as may
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be advisable, in the judgment of the Mortgagee, for such purpose, and as may be
designated in such request. Any sale or sales made under or by virtue of this
Mortgage, to the extent not prohibited by law, shall operate to divest all the
estate, right, title, interest, property, claim and demand whatsoever, whether
at law or in equity, of the Mortgagor in, to and under the Mortgaged Estate, or
any portions thereof 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, by, through or under the Mortgagor. The
powers and agency herein granted are coupled with an interest and are
irrevocable.
(d) All rights of action under the Loan Documents and this Mortgage may be
enforced by the Mortgagee without the possession of the original Loan Documents
and without the production thereof at any trial or other proceeding relative
thereto.
Section 5.4. Application of Proceeds.
------------------------
(a) Prior to the occurrence and continuance of an Event of Default, any
amounts received or collected by Mortgagee under this Mortgage shall be applied
in accordance with Section 2.7 of the Loan Agreement. After the occurrence of
an Event of Default, any amounts received or collected by the Mortgagee under
this Mortgage or any other Loan Document may be applied to any one or more of
the following in such order and in such amounts as the Mortgagee may elect in
its sole discretion:
(i) To the payment of all costs, expenses and advances incurred by
the Mortgagee, or made by the Mortgagee in the enforcement of this Mortgage
or any of the other Loan Documents, the protection of the Lien and security
afforded thereby, and the preservation of the Mortgaged Estate, including,
without limitation, all expenses of managing the Facility, including,
without limitation, the salaries, fees and wages of any managing agent and
such other employees as Mortgagee may deem necessary and all expenses of
operating and maintaining the Facility, including, without limitation, all
taxes, charges, claims, assessments, water rents, sewer rents and any other
liens, and premiums for all insurance which are due and payable and the
cost of all alterations, renovations, repairs or replacements, and all
costs and expenses incident to taking and retaining possession of the
Facility and the enforcement of any of Mortgagee's rights and remedies
hereunder; and
(ii) To the payment of the Loan Obligations in accordance with the
Loan Agreement, this Mortgage and the other Loan Documents.
(b) No sale or other disposition of all or any part of the Mortgaged Estate
pursuant to Section 5.3 shall be deemed to relieve the Mortgagor of its
-----------
obligations under the Loan
-38-
Agreement or any other Loan Document except to the extent the proceeds thereof
are applied to the payment of such obligations. If the proceeds of sale,
collection or other realization of or upon the Mortgaged Estate are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Loan Obligations, the Mortgagor shall remain liable for any deficiency
subject to Section 6.14 hereof.
(c) Upon any sale made under the powers of sale herein granted and
conferred, the receipt given by Mortgagee will be sufficient discharge to the
purchaser or purchasers at any sale for the purchase money, and such purchaser
or purchasers and their heirs, devisees, personal representatives, successors
and assigns thereof will not, after paying such purchase money and receiving
such receipt of Mortgagee be obligated to see to the application thereof or be
in any way answerable for any loss, misapplication or non-application thereof.
Section 5.5 Right to Sue. The Mortgagee shall have the right from time to
-------------
time to sue for any sums required to be paid by the Mortgagor under the terms of
this Mortgage as the same become due, without regard to whether or not the Loan
Obligations shall be, or have become, due and without prejudice to the right of
the Mortgagee thereafter to bring any action or proceeding of foreclosure or any
other action upon the occurrence and continuance of any Event of Default
existing at the time such earlier action was commenced.
Section 5.6. Powers of the Mortgagee. The Mortgagee may at any time or
------------------------
from time to time renew or extend this Mortgage or (with the agreement of the
Mortgagor) alter or modify the same in any way, or waive any of the terms,
covenants or conditions hereof or thereof, in whole or in part, and may release
or reconvey any portion of the Mortgaged Estate or any other security, and grant
such extensions and indulgences in relation to the Loan Obligations, or release
any Person liable therefor as the Mortgagee may determine without the consent of
any junior lienor or encumbrancer, without any obligation to give notice of any
kind thereto, without in any manner affecting the priority of the lien and
estate of this Mortgage on or in any part of the Mortgaged Estate, and without
affecting the liability of any other Person liable for any of the Loan
Obligations.
Section 5.7. Remedies Cumulative.
--------------------
(a) No right or remedy herein conferred upon or reserved to the Mortgagee
is intended to be exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any other right or
remedy under this Mortgage, or under applicable law, whether now or hereafter
existing; the failure of the Mortgagee to insist at any time upon the strict
observance or performance of any of the provisions of this Mortgage or to
exercise any right or remedy provided for herein or under applicable law, shall
not impair any such right or remedy nor be construed as a waiver or
relinquishment thereof.
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(b) To the fullest extent permitted by applicable law, the Mortgagee shall
be entitled to enforce payment and performance of any of the obligations of the
Mortgagor and to exercise all rights and powers under this Mortgage or under any
Loan Document or any laws now or hereafter in force, notwithstanding that some
or all of the Loan Obligations may now or hereafter be otherwise secured,
whether by mortgage, deed of trust, pledge, lien, assignment or otherwise;
neither the acceptance of this Mortgage nor its enforcement, whether by court
action or pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect the right of the Mortgagee to realize upon or
enforce any other security now or hereafter held by the Mortgagee, it being
stipulated that the Mortgagee shall be entitled to enforce this Mortgage and any
other security now or hereafter held by the Mortgagee in such order and manner
as the Mortgagee, in its sole discretion, may determine; every power or remedy
given by the Loan Agreement, this Mortgage or any of the other Loan Documents to
the Mortgagee, or to which or the Mortgagee is otherwise entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by the Mortgagee, and the Mortgagee may pursue inconsistent
remedies.
Section 5.8. Waiver of Stay, Extension, Moratorium Laws; Equity of
-----------------------------------------------------
Redemption. To the maximum extent permitted by law, the Mortgagor shall not at
----------
any time insist upon, or plead, or in any manner whatever claim or take any
benefit or advantage of any applicable present or future stay, extension or
moratorium law, that may affect observance or performance of the provisions of
this Mortgage; nor claim, take or insist upon any benefit or advantage of any
present or future law providing for the valuation or appraisal of the Mortgaged
Estate or any portion thereof prior to any sale or sales thereof that may be
made under or by virtue of Section 5.3; and the Mortgagor, to the extent that it
-----------
lawfully may, hereby waives all benefit or advantage of any such law or laws.
The Mortgagor, for itself and all who may claim under it, hereby waives, to the
maximum extent permitted by applicable law, any and all rights and equities of
redemption from sale under the power of sale created hereunder or from sale
under any foreclosure of this Mortgage and (if an Event of Default shall have
occurred) all notice or notices of seizure, and all right to have the Mortgaged
Estate marshalled upon any foreclosure hereof. The Mortgagee shall not be
obligated to pursue or exhaust its rights or remedies as against any other part
of the Mortgaged Estate and the Mortgagor hereby waives any right or claim of
right to have the Mortgagee proceed in any particular order.
Section 5.9. Waiver of Homestead. The Mortgagor hereby waives and
--------------------
renounces all homestead and exemption rights provided for by the Constitution
and the laws of the United States and of any state, in and to the Mortgaged
Estate as against the collection of the Loan Obligations, or any part thereof.
Section 5.10. Discontinuance of Proceedings. In case the Mortgagee shall
------------------------------
have proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, power
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of sale, entry or otherwise, and such proceedings shall have been discontinued
or abandoned for any reason, or shall have been determined adversely to the
Mortgagee, then in every such case, the Mortgagor, and the Mortgagee shall be
restored to their former positions and rights hereunder, and all rights, powers
and remedies of the Mortgagee shall continue as if no such proceedings had
occurred.
ARTICLE VI
Miscellaneous
-------------
Section 6.1. Reconveyance by Mortgagee. Upon payment in full of the Loan
--------------------------
Obligations or a complete defeasance with respect to the Mortgaged Estate which
complies with the Loan Agreement (if the Loan Agreement provides for
defeasance), the Mortgagee shall release the lien of this Mortgage, or upon the
request of the Mortgagor, and at the Mortgagor's expense, assign this Mortgage
without recourse to the Mortgagor's designee, or to the Person or Persons
legally entitled thereto, by an instrument duly acknowledged in form for
recording.
Section 6.2. Notices. All notices, demands, consents, requests or other
--------
communications that are permitted or required to be given by any party to the
other hereunder shall be in writing and given in the manner specified in Section
8.6 of the Loan Agreement.
Section 6.3. Amendments; Waivers; etc. This Mortgage cannot be modified,
-------------------------
changed or discharged except by an agreement in writing, duly acknowledged in
form for recording, signed by the Mortgagor and the Mortgagee.
Section 6.4. Successors and Assigns. This Mortgage applies to, inures to
-----------------------
the benefit of and binds the Mortgagor, the Mortgagee and each of their
respective successors and assigns and shall run with the Land.
Section 6.5. Captions. The captions or headings at the beginning of each
--------
Article and Section hereof are for the convenience of the parties hereto and are
not a part of this Mortgage.
Section 6.6. Severability. If any term or provision of this Mortgage or
------------
the application thereof to any Person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to Persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Mortgage shall be valid and enforceable to the maximum extent
permitted by law. If any portion of the Loan Obligations shall for any reason
not be secured by a valid and enforceable lien upon any part of the
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Mortgaged Estate, then any payments made in respect of the Loan Obligations
(whether voluntary or under foreclosure or other enforcement action or procedure
or otherwise) shall, for purposes of this Mortgage (except to the extent
otherwise required by applicable law) be deemed to be made (a) first, in respect
of the portion of the Loan Obligations not secured by the lien of this Mortgage,
(b) second, in respect of the portion of the Loan Obligations secured by the
lien of this Mortgage, but which lien is on less than all of the Mortgaged
Estate, and (c) last, to the portion of the Loan Obligations secured by the lien
of this Mortgage, and which lien is on all of the Mortgaged Estate.
Section 6.7. Indemnity; Expenses. Except for actions by Mortgagor against
--------------------
Mortgagee where Mortgagor is the prevailing party, Mortgagor will pay or
reimburse the Mortgagee for all reasonable attorneys' fees, costs and expenses
incurred by it in any suit, action, legal proceeding or dispute of any kind in
which it is made a party or appears as party plaintiff or defendant, affecting
the Loan Obligations, this Mortgage or the interest created herein, or the
Mortgaged Estate, or any appeal thereof, including, without limitation,
activities related to enforcement of the remedies of Mortgagee, activities
related to protection of Mortgagee's collateral, any foreclosure action or
exercise of the power of sale, any action commenced under Section 5.3, any
------- ---
condemnation action involving the Mortgaged Estate or any action to protect the
security hereof, any bankruptcy or other insolvency proceeding commenced by or
against the Mortgagor, or any lessee of the Mortgaged Estate (or any part
thereof), and any such amounts paid or incurred by the Mortgagee shall be added
to the Loan Obligations and shall be secured by this Mortgage. The Mortgagor
will indemnify, defend and hold the Mortgagee harmless from and against all
claims, damages, and expenses, including reasonable attorneys' fees and court
costs, resulting from any action by a third party against the Mortgagee relating
to this Mortgage or the interest created herein, or the Mortgaged Estate,
including, but not limited to, any action or proceeding claiming loss, damage or
injury to person or property, or any action or proceeding claiming a violation
of or liability under any Legal Requirements, including applicable Environmental
Laws, provided the Mortgagor shall not be required to indemnify the Mortgagee
for matters to the extent caused by the gross negligence, willful misconduct or
fraud by either of them, respectively. The Mortgagor acknowledges that it has
undertaken the obligation to pay all intangibles taxes and documentary taxes now
or hereafter due in connection with the Loan Obligations and the Loan Documents,
and the Mortgagor agrees to indemnify and hold the Mortgagee harmless from any
intangibles taxes and documentary stamp taxes, and any interest or penalties,
which the Mortgagee may hereafter be required to pay in connection with the Loan
Obligations or Loan Documents. The agreements of this Section 7.7 shall
expressly survive in perpetuity satisfaction of this Mortgage and repayment of
the Loan Obligations, any release, reconveyance, discharge or foreclosure of
this Mortgage, conveyance by deed in lieu of foreclosure, sale, and any
subsequent transfer by Mortgagee's conveyance of the Mortgaged Estate. The
indemnification by Mortgagor of Mortgagee does not and shall not be deemed to
limit or modify Mortgagor's
-42-
insurance or other obligations under the Loan Documents and, ▇▇▇▇▇▇▇▇▇'s
compliance with the insurance requirements under the Loan Documents shall not
limit or modify Mortgagor's indemnification obligations under the Loan
Documents. ▇▇▇▇▇▇▇▇▇'s duty to defend is independent of ▇▇▇▇▇▇▇▇▇'s duty to
indemnify, and shall be applicable regardless of mortgagor's independent
liability for such claims, claims based on Mortgagee's strict liability or
liability without fault, or Mortgagee's lack of detriment or payment of claims.
At any stage in the claim or suit against Mortgagee, Mortgagee is entitled to
obtain summary adjudication regarding ▇▇▇▇▇▇▇▇▇'s duty to defend.
Section 6.8. Estoppel Certificates. The Mortgagor and the Mortgagee each
----------------------
hereby agree at any time and from time to time upon not less than fifteen (15)
days prior written notice from the other party to execute, acknowledge and
deliver to the party specified in such notice, a statement, in writing,
certifying that this Mortgage is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and stating the modifications hereto), and stating whether or not, to the
best knowledge of such certifying party, any Default or Event of Default has
occurred, and, if so, specifying each such Default or Event of Default;
provided, however, that it shall be a condition precedent to the Mortgagee's
obligation to deliver the statement pursuant to this Section 6.8, that the
-----------
Mortgagee shall have received, together with the Mortgagor's request for such
statement, an Officer's Certificate stating that no Default or Event of Default
exists as of the date of such certificate (or specifying such Default or Event
of Default).
Section 6.9. Applicable Law. This Mortgage shall be governed by and
---------------
construed in accordance with the laws of the State in which the Facility is
located.
Section 6.10. Limitation of Interest. It is the intention of Mortgagor and
----------------------
Mortgagee to conform strictly to applicable usury laws. Accordingly, if the
transactions contemplated hereby would be usurious under applicable law, then,
in that event, notwithstanding anything to the contrary in any Loan Document, it
is agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable law that is taken, reserved, contracted for, charged
or received under any Loan Document or otherwise in connection with the Loan
shall under no circumstances exceed the maximum amount of interest allowed by
applicable law, and any excess shall be credited to principal by Mortgagee (or
if the Loan shall have been paid in full, refunded to Mortgagor); and (ii) in
the event that maturity of the Loan is accelerated by reason of an election by
Mortgagee resulting from any default hereunder or otherwise, or in the event of
any required or permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount of interest allowed by
applicable law, and any interest in excess of the maximum amount of interest
allowed by applicable law, if any, provided for in the Loan Documents or
otherwise shall be cancelled automatically as of the date of such acceleration
or prepayment and, if theretofore prepaid,
-43-
shall be credited to principal (or if the principal portion of the Loan and any
other amounts not constituting interest shall have been paid in full, refunded
to Mortgagor.)
In determining whether or not the interest paid or payable under any
specific contingency exceeds the maximum amount allowed by applicable law,
Mortgagee shall, to the maximum extent permitted under applicable law (a)
exclude voluntary prepayments and the effects thereof, and (b) amortize,
prorate, allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of the Loan so that the interest rate is
uniform throughout the entire term of the Loan; provided, that if the Loan is
paid and performed in full prior to the end of the full contemplated term
hereof, and if the interest received for the actual period of existence thereof
exceeds the maximum amount allowed by applicable law, Mortgagee shall refund to
Mortgagor the amount of such excess, and in such event, Mortgagee shall not be
subject to any penalties provided by any laws for contracting for, charging or
receiving interest in excess of the maximum amount allowed by applicable law.
Section 6.11. Assignment. The Mortgagee shall have the right to assign
----------
this Mortgage and the obligaitions hereunder to any Person in accordance with
the Loan Agreement. The parties hereto acknowledge that following the execution
and delivery of this Mortgage, the Mortgagee may sell, transfer or assign this
Mortgage and any or all of the other Loan Documents to the trustee or servicer
in connection with a Securitization. All references to "Mortgagee" hereunder
shall be deemed to include the assigns of the Mortgagee including the trustee or
servicer in any Securitization.
Section 6.12. Time of the Essence. Time is of the essence with respect to
-------------------
each and every covenant, agreement and obligation of the Mortgagor under this
Mortgage, the Note and all other Loan Documents.
Section 6.13. WAIVER OF JURY TRIAL. THE MORTGAGOR AND MORTGAGEE, HEREBY
--------------------
WAIVE ANY RIGHT THAT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN
ANY WAY RELATED TO THIS MORTGAGE OR THE LOAN, OR (B) IN ANY WAY CONNECTED WITH
OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF MORTGAGOR AND/OR
THE MORTGAGEE WITH RESPECT TO THE LOAN DOCUMENTS OR IN CONNECTION WITH THIS
MORTGAGE OR THE EXERCISE OF ANY PARTY'S RIGHTS AND REMEDIES UNDER THIS MORTGAGE
OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP OF THE PARTIES HERETO, IN ALL
OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. EACH OF THE
-44-
▇▇▇▇▇▇▇▇▇ AND THE MORTGAGEE AGREES THAT EITHER OF THEM MAY FILE A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND
BARGAINED AGREEMENT OF THE MORTGAGOR, AND MORTGAGEE IRREVOCABLY TO WAIVE ITS
RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT OF THE MORTGAGEE TO MAKE THE LOAN AND
THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY
WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN THE MORTGAGOR, AND THE
MORTGAGEE SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE
SITTING WITHOUT A JURY.
Section 6.14. Exculpation. This Mortgage and the obligations of Mortgagor
-----------
hereunder are and shall be subject to and limited by the exculpation provisions
of Section 8.14 of the Loan Agreement; provided, however, prior to the payment
of the Difference and any applicable hedging or interest rate management
breakage costs incurred by the Mortgagee on the Stabilization Date Payment Date
pursuant to Section 8.32(c) of the Loan Agreement, the Loan shall be fully
------- -------
recourse as described in Section 8.14 of the Loan Agreement.
------- ----
Section 6.15. Cross-Collateralization. Without limitation to any other
-----------------------
right or remedy provided to Mortgagee in this Mortgage or any of the other Loan
Documents, Mortgagor acknowledges and agrees that (i) upon the occurrence of an
Event of Default, to the fullest extent permitted by law, Mortgagee shall have
the right to pursue all of its rights and remedies in one proceeding, or
separately and independently in separate proceedings which Mortgagee, in its
sole and absolute discretion, shall determine from time to time, (ii) Mortgagee
is not required to either ▇▇▇▇▇▇▇▇ assets, sell Collateral in any inverse order
of alienation, or be subjected to any "one action" or "election of remedies" law
or rule, (iii) the exercise by Mortgagee of any remedies against any Collateral
will not impede Mortgagee from subsequently or simultaneously exercising
remedies against other Collateral; (iv) all Liens and other rights, remedies and
privileges provided to Mortgagee in the Loan Documents or otherwise shall remain
in full force and effect until Mortgagee has exhausted all of its remedies
against the Collateral and all Collateral has been foreclosed, sold and/or
otherwise realized upon in satisfaction of the Loan, and (v) all of the
Facilities (as defined in the Loan Agreement) shall remain security for the
performance of all of ▇▇▇▇▇▇▇▇▇'s obligations hereunder, under the Note and
under any of the other Loan Documents.
Section 6.16. Exhibits. The information set forth on the cover, heading
--------
and recitals hereof, and the Exhibits attached hereto, are hereby incorporated
herein as a part of this Mortgage with the same effect as if set forth in the
body hereof.
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Section 6.17. Future Advances. This Mortgage is intended to secure future
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advances. Mortgagee has no obligation whatsoever to make any future advance
hereunder.
Section 6.18. No Endorsement. The Mortgagee shall neither become or be
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considered to be an endorser, co-maker or co-obligor on the Note or any
obligation of the Mortgagor secured by this Mortgage.
Section 6.19. Collateral. In the event that Mortgagor granted any
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collateral under any other Loan Document that otherwise is not granted in this
Mortgage, then such collateral shall be deemed granted pursuant to this
Mortgage.
Section 6.20. Power of Sale. This Mortgage is upon the STATUTORY CONDITION
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and upon the further condition that all covenants and agreements on the part of
Mortgagor herein undertaken and in the Note and every other document executed in
connection therewith shall be kept and fully performed and that no breach of any
other of the conditions specified herein shall be permitted, for any breach of
which covenants, agreements, or conditions the Mortgagee shall have the
STATUTORY POWER OF SALE.
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IN WITNESS WHEREOF, this Mortgage has been duly executed by the Mortgagor
as of the day and year first above written and this document shall take effect
as an instrument under seal.
G&L HAMPDEN, LLC
a Delaware limited liability company
By: G&L Hampden, Inc., its
Managing Member
By: __________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
STATE OF ______________ )
SS:
COUNTY OF _____________ )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State aforesaid and in the County aforesaid to take
acknowledgments, the foregoing instrument was acknowledged before me by ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, as Senior Vice President of G&L HAMPDEN, INC., a Delaware
corporation, to me personally known, which corporation is the Managing Member of
G&L, HAMPDEN LLC, a Delaware limited liability company, freely and voluntarily
under authority duly vested in him by said corporation and is the free act and
deed of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as Senior Vice President, as aforesaid, on behalf of
said limited liability company, and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this _____ day of October, 1997.
_____________________________________
Notary Public
________________________________________
Typed, printed or stamped
name of Notary Public
My Commission Expires:
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Exhibit A
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DESCRIPTION OF PROPERTY
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