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GURNEE ▇▇▇▇▇ (MLP) LIMITED PARTNERSHIP,
as Mortgagor
to
CS FIRST BOSTON MORTGAGE CAPITAL CORP,
as Mortgagee
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND FIXTURE FILING
--------------------------
Dated: as of December 17, 1996
PREPARED BY AND UPON RECORDATION RETURN TO:
▇▇▇▇▇ & Wood LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
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INDEX
ARTICLE I: DEFINITIONS
Section 1.01. Certain Definitions......................................... 6
ARTICLE II: COVENANTS, WARRANTIES
AND REPRESENTATIONS OF MORTGAGOR
Section 2.01. Payment of Debt............................................. 33
Section 2.02. Representations and Warranties of Mortgagor................. 33
Section 2.03. Further Acts, etc........................................... 43
Section 2.04. Recording of Mortgage, etc.................................. 43
Section 2.05. Representations and Warranties as to the Mortgaged Property. 44
Section 2.06. Removal of Lien............................................. 51
Section 2.07. Cost of Defending and Upholding this Mortgage Lien.......... 52
Section 2.08. Use of the Mortgaged Property............................... 52
Section 2.09. Financial Reports........................................... 52
Section 2.10. Litigation.................................................. 55
ARTICLE III: INSURANCE AND CASUALTY RESTORATION
Section 3.01. Insurance Coverage.......................................... 55
Section 3.02. Policy Terms................................................ 58
Section 3.03. Assignment of Policies...................................... 59
Section 3.04. Casualty Restoration........................................ 61
Section 3.05. Compliance with Insurance Requirements...................... 65
Section 3.06. Event of Default During Restoration......................... 66
Section 3.07. Application of Proceeds to Debt Reduction................... 67
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ARTICLE IV: IMPOSITIONS
Section 4.01. Payment of Impositions, Utilities and Taxes, etc............ 67
Section 4.02. Deduction from Value........................................ 68
Section 4.03. No Joint Assessment......................................... 69
Section 4.04. Right to Contest............................................ 69
Section 4.05. No Credits on Account of the Debt........................... 70
Section 4.06. Documentary Stamps.......................................... 70
ARTICLE V: CENTRAL CASH MANAGEMENT
Section 5.01. Cash Flow................................................... 70
Section 5.02. Establishment of Sub-Accounts. ........................... 71
Section 5.03. Permitted Investments....................................... 72
Section 5.04. Interest on Accounts........................................ 73
Section 5.05. Monthly Funding of Sub-Accounts............................. 73
Section 5.06. Payment of Basic Carrying Costs............................. 75
Section 5.07. Debt Service Payment Sub-Account............................ 76
Section 5.08. Recurring Replacement Reserve Sub-Account................... 76
Section 5.09. Operation and Maintenance Expense Sub-Account............... 77
Section 5.10. Intentionally Omitted....................................... 78
Section 5.11. Curtailment Reserve Sub-Account............................. 78
Section 5.12. Intentionally Omitted....................................... 78
Section 5.13. Loss Proceeds............................................... 78
ARTICLE VI: CONDEMNATION
Section 6.01. Condemnation................................................ 79
ARTICLE VII: LEASES AND RENTS
Section 7.01. Assignment.................................................. 82
Section 7.02. Management of Mortgaged Property............................ 83
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ARTICLE VIII: MAINTENANCE AND REPAIR
Section 8.01. Maintenance and Repair of the Mortgaged Property;
Alterations; Replacement of Equipment........................ 85
ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY
Section 9.01. Other Encumbrances. Except for Permitted Liens............ 88
Section 9.02. No Transfer................................................. 88
Section 9.03. Due on Sale................................................. 88
ARTICLE X: CERTIFICATES
Section 10.01. Estoppel Certificates....................................... 89
ARTICLE XI: NOTICES
Section 11.01. Notices..................................................... 90
ARTICLE XII: INDEMNIFICATION
Section 12.01. Indemnification Covering Mortgaged Property................. 90
ARTICLE XIII: DEFAULTS
Section 13.01. Events of Default........................................... 92
Section 13.02. Remedies.................................................... 94
Section 13.03. Payment of Debt After Default............................... 98
Section 13.04. Possession of the Mortgaged Property........................ 99
Section 13.05. Interest After Default...................................... 99
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Section 13.06. Mortgagor's Actions After Default........................... 100
Section 13.07. Control by Mortgagee After Default.......................... 100
Section 13.08. Right to Cure Defaults...................................... 100
Section 13.09. Late Payment Charge......................................... 101
Section 13.10. Recovery of Sums Required to Be Paid........................ 101
Section 13.11. Marshalling and Other Matters............................... 101
Section 13.12. Tax Reduction Proceedings................................... 102
Section 13.13. General Provisions Regarding Remedies....................... 102
ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS
Section 14.01. Compliance with Legal Requirements.......................... 103
Section 14.02. Compliance with Recorded Documents; No Future Grants........ 104
ARTICLE XV: PREPAYMENT; RELEASE
Section 15.01. Prepayment.................................................. 104
Section 15.02. Out-Parcel Severance........................................ 105
Section 15.03. Release of Mortgaged Property............................... 108
ARTICLE XVI: ENVIRONMENTAL COMPLIANCE
Section 16.01. Covenants, Representations and Warranties................... 109
Section 16.02. Environmental Indemnification............................... 113
ARTICLE XVII: ASSIGNMENTS
Section 17.01. Participations and Assignments.............................. 114
ARTICLE XVIII: MISCELLANEOUS
Section 18.01. Right of Entry.............................................. 114
Section 18.02. Cumulative Rights........................................... 114
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Section 18.03. Liability................................................... 115
Section 18.04. Exhibits Incorporated....................................... 115
Section 18.05. Severable Provisions........................................ 115
Section 18.06. Duplicate Originals......................................... 115
Section 18.07. No Oral Change.............................................. 115
Section 18.08. Waiver of Counterclaim, etc................................. 115
Section 18.09. Headings; Construction of Documents; etc.................... 115
Section 18.10. Sole Discretion of Mortgagee................................ 116
Section 18.11. Waiver of Notice............................................ 116
Section 18.12. Covenants Run with the Land................................. 116
Section 18.13. Applicable Law.............................................. 116
Section 18.14. Security Agreement.......................................... 117
Section 18.15. Actions and Proceedings..................................... 118
Section 18.16 Usury Laws................................................... 118
Section 18.17. Remedies of Mortgagor....................................... 119
Section 18.18. Offsets, Counterclaims and Defenses......................... 119
Section 18.19. No Merger................................................... 119
Section 18.20. Restoration of Rights....................................... 119
Section 18.21. Waiver of Statute of Limitations............................ 119
Section 18.22. Advances.................................................... 120
Section 18.23. Application of Default Rate Not a Waiver.................... 120
Section 18.24. Intervening Lien............................................ 120
Section 18.25. No Joint Venture or Partnership............................. 120
Section 18.26. Time of the Essence......................................... 120
Section 18.27. Mortgagor's Obligations Absolute............................ 120
Section 18.28. Publicity................................................... 121
Section 18.29. Surveillance and Site Inspection Fees....................... 121
Section 18.30. Intentionally Omitted....................................... 121
Section 18.31. Intentionally Omitted....................................... 121
Section 18.32. Exculpation................................................. 121
Section 18.33. Certain Matters Relating to Mortgaged Property located
in the State of Illinois ................................... 124
Exhibit A - Legal Description of Premises
Exhibit B - Initial Sub-Account Deposits
Exhibit C - Form of Cash Flow Statement
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Exhibit D - Required Engineering Work
Exhibit E - Form of Sufficiency Notice
Exhibit F - Cross-collateralized Properties
Exhibit G - Form of Direction Notice
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THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE
FILING is made as of the 17th day of December, 1996, by the party set forth
on the signature page hereto as Mortgagor, having the address set forth on the
signature page hereto (hereinafter referred to as "Mortgagor"), to CS FIRST
BOSTON MORTGAGE CAPITAL CORP. having an address at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Mortgagee").
W I T N E S S E T H:
WHEREAS, Mortgagee has authorized a loan (hereinafter referred to as the
"Loan") to the Cross-collateralized Borrowers in the maximum principal sum of
TWO HUNDRED EIGHTY-FOUR MILLION and No/100 Dollars ($284,000,000.00)
(hereinafter referred to as the "Loan Amount"), which Loan is evidenced by that
certain note, dated the date hereof (hereinafter referred to as the "Note")
given by the Cross-collateralized Borrowers, as maker, to Mortgagee, as payee;
WHEREAS, in consideration of the Loan, the Cross-collateralized Borrowers
have agreed to make payments in amounts sufficient to pay and redeem, and
provide for the payment and redemption of the principal of, premium, if any, and
interest on the Note when due;
WHEREAS, Mortgagor desires by this Mortgage to provide for, among
other things, the issuance of the Note and for the deposit, deed and pledge
by Mortgagor with, and the creation of a security interest in favor of,
Mortgagee, as security for the Cross-collateralized Borrowers' obligations
to Mortgagee from time to time pursuant to the Note and the other Loan
Documents;
WHEREAS, Mortgagor and Mortgagee intend these recitals to be a material
part of this Mortgage; and
WHEREAS, all things necessary to make this Mortgage the valid and
legally binding obligation of Mortgagor in accordance with its terms, for the
uses and purposes herein set forth, have been done and performed.
NOW THEREFORE, to secure the payment of the principal of, prepayment
premium (if any) and interest on the Note and all other obligations,
liabilities or sums due or to become due under this Mortgage, the Note
or any other Loan Document, including, without limitation, interest on said
obligations, liabilities or sums (said principal, premium, interest and other
sums being hereinafter referred to as the "Debt"), and the performance of all
other covenants, obligations and liabilities of the Cross-collateralized
Borrowers pursuant to the Loan Documents, Mortgagor has executed and delivered
this Mortgage; and Mortgagor has irrevocably granted, and by these
presents and by the execution and delivery hereof does hereby irrevocably
grant, bargain, sell, alien, demise, release, convey, assign, transfer, deed,
hypothecate, pledge, set over, warrant, mortgage and confirm to Mortgagee,
forever with power of sale, all right, title and interest of Mortgagor in and
to all of the following property, rights, interests and estates:
(a) the plot(s), piece(s) or parcel(s) of real property described
in Exhibit A attached hereto and made a part hereof (individually and
collectively, hereinafter referred to as the "Premises");
(b) (i) all buildings, foundations, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and
improvements of every kind or nature now or hereafter located on the
Premises (hereinafter collectively referred to as the "Improvements"); and
(ii) to the extent permitted by law, the name or names, if any, as may now
or hereafter be used for each Improvement, and the goodwill associated
therewith;
(c) all easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights
and powers, ditches, ditch rights, reservoirs and reservoir rights, air
rights and development rights, lateral support, drainage, gas, oil and
mineral rights, tenements, hereditaments and appurtenances of any nature
whatsoever, in any way belonging, relating or pertaining to the Premises
or the Improvements and the reversion and reversions, remainder and
remainders, whether existing or hereafter acquired, and all land lying in
the
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bed of any street, road or avenue, opened or proposed, in front of or
adjoining the Premises to the center line thereof and any and all
sidewalks, drives, curbs, passageways, streets, spaces and alleys adjacent
to or used in connection with the Premises and/or Improvements and all the
estates, rights, titles, interests, property, possession, claim and demand
whatsoever, both in law and in equity, of Mortgagor of, in and to the
Premises and Improvements every part and parcel thereof, with the
appurtenances thereto;
(d) all machinery, equipment, fittings, apparatus, appliances,
furniture, furnishings, tools, fixtures (including, but not limited to,
all heating, air conditioning, ventilating, waste disposal, sprinkler and
fire and theft protection equipment, plumbing, lighting, communications
and elevator fixtures) and other property of every kind and nature
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon, or in, and used in connection
with the Premises or the Improvements, or appurtenant thereto, and all
building equipment, materials and supplies of any nature whatsoever owned
by Mortgagor, or in which Mortgagor has or shall have an interest, now or
hereafter located upon, or in, and used in connection with the Premises or
the Improvements or appurtenant thereto, (hereinafter, all of the
foregoing items described in this paragraph (d) are collectively called
the "Equipment"), all of which, and any replacements, modifications,
alterations and additions thereto, to the extent permitted by applicable
law, shall be deemed to constitute fixtures (the "Fixtures"), and are part
of the real estate and security for the payment of the Debt and the
performance of Mortgagor's obligations. To the extent any portion of the
Equipment is not real property or Fixtures under applicable law, it shall
be deemed to be personal property, and this Mortgage shall
constitute a security agreement creating a security interest therein in
favor of Mortgagee under the UCC;
(e) all awards or payments, including interest thereon, which may
hereafter be made with respect to the Premises, the Improvements, the
Fixtures, or the Equipment, whether from the exercise of the right of
eminent domain
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(including but not limited to any transfer made in lieu of or in
anticipation of the exercise of said right), or for a change of grade, or
for any other injury to or decrease in the value of the Premises, the
Improvements or the Equipment or refunds with respect to the payment of
property taxes and assessments, and all other proceeds of the conversion,
voluntary or involuntary, of the Premises, Improvements, Equipment,
Fixtures or any other Mortgaged Property or part thereof into cash or
liquidated claims;
(f) all leases, tenancies, licenses and other agreements affecting
the use, enjoyment or occupancy of the Premises, the Improvements, the
Fixtures, or the Equipment or any portion thereof now or hereafter entered
into, whether before or after the filing by or against Mortgagor of any
petition for relief under the Bankruptcy Code and all reciprocal easement
agreements, license agreements and other agreements with Pad Owners
(hereinafter collectively referred to as the "Leases"), together with all
cash or security deposits, lease termination payments, advance rentals and
payments of similar nature and guarantees or other security held by
Mortgagor in connection therewith to the extent of Mortgagor's right or
interest therein and all remainders, reversions and other rights and
estates appurtenant thereto, and all base, fixed, percentage or additional
rents, and other rents, oil and gas or other mineral royalties, and
bonuses, issues, profits and rebates and refunds or other payments made by
any Governmental Authority from or relating to the Premises, the
Improvements, the Fixtures or the Equipment plus all rents, common area
charges and other payments, whether paid or accruing before or after the
filing by or against Mortgagor of any petition for relief under the
Bankruptcy Code (the "Rents") and all proceeds from the sale or other
disposition of the Leases and the right to receive and apply the Rents to
the payment of the Debt;
(g) all proceeds of and any unearned premiums on any insurance
policies covering the Premises, the Improvements, the Fixtures, the Rent
or the Equipment, including, without limitation, the right to receive and
apply the proceeds of any insurance, judgments, or settlements made in
lieu
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thereof, for damage to the Premises, the Improvements, the Fixtures or the
Equipment and all refunds or rebates of Impositions, and interest paid or
payable with respect thereto;
(h) all monies deposited or to be deposited in any funds or accounts
maintained or deposited with Mortgagee, or its assigns, in connection
herewith, including, without limitation, the Security Deposit Account (to
the extent permitted by law), the Rent Account, the Central Account, the
Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account,
the Recurring Replacement Reserve Sub-Account, the Operation and
Maintenance Expense Sub-Account and the Curtailment Reserve Sub-Account;
(i) all accounts receivable, contract rights, franchises, interests,
estate or other claims, both at law and in equity, relating to the
Premises, the Improvements, the Fixtures or the Equipment, not included in
Rents;
(j) all claims against any Person with respect to any damage to the
Premises, the Improvements, the Fixtures or Equipment, including, without
limitation, damage arising from any defect in or with respect to the
design or construction of the Improvements, the Fixtures or the Equipment
and any damage resulting therefrom;
(k) all deposits or other security or advance payments, including
rental payments made by or on behalf of Mortgagor to others, with respect
to (i) insurance policies, (ii) utility services, (iii) cleaning,
maintenance, repair or similar services, (iv) refuse removal or sewer
service, (v) parking or similar services or rights and (vi) rental of
Equipment, if any, relating to or otherwise used in the operation of the
Premises, Improvements, the Fixtures or Equipment;
(l) all intangible property relating to the Premises, the
Improvements, the Fixtures or the Equipment or its operation, including,
without limitation, trade names, trademarks, logos, building names and
goodwill;
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(m) all advertising material, guaranties, warranties, building
permits, other permits, licenses, plans and specifications, shop and
working drawings, soil tests, appraisals and other documents, materials
and/or personal property of any kind now or hereafter existing in or
relating to the Premises, the Improvements, the Fixtures, and the
Equipment;
(n) all drawings, designs, plans and specifications prepared by the
architects, engineers, interior designers, landscape designers and any
other consultants or professionals for the design, development,
construction, repair and/or improvement of the Mortgaged Property, as
amended from time to time;
(o) the right, in the name of and on behalf of Mortgagor, to appear
in and defend any action or proceeding brought with respect to the
Premises, the Improvements, the Fixtures or the Equipment and to commence
any action or proceeding to protect the interest of Mortgagee in the
Premises, the Improvements, the Fixtures or the Equipment; and
(p) all proceeds of each of the foregoing.
All of the foregoing items (a) through (p), together with all of the
right, title and interest of Mortgagor therein, are collectively referred to as
the "Mortgaged Property".
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and to the proper use and benefit of Mortgagee, and the successors and
assigns of Mortgagee in fee simple, forever.
PROVIDED, ALWAYS, and these presents are upon this express condition, if
Mortgagor shall well and truly pay and discharge the Debt and perform and
observe the terms, covenants and conditions set forth in the Loan Documents,
then these presents and the estate hereby granted shall cease and be void.
AND Mortgagor covenants with and warrants to Mortgagee that:
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ARTICLE I: DEFINITIONS
Section 1.01. Certain Definitions.
For all purposes of this Mortgage, except as otherwise expressly
provided or unless the context clearly indicates a contrary intent:
(1) the capitalized terms defined in this Section have the meanings
assigned to them in this Section, and include the plural as well as the
singular;
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(3) the words "herein", "hereof", and "hereunder" and other words of
similar import refer to this Mortgage as a whole and not to any
particular Section or other subdivision.
"Affiliate" of any specified Person shall mean any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have the meanings correlative to
the foregoing.
"Aggregate Debt Service Coverage" shall mean the quotient obtained by
dividing the aggregate Net Operating Income for all of the Cross-collateralized
Properties for the specified period by the aggregate payments of interest and
principal (not including the amount of principal payable upon Maturity) due for
such specified period under the Note (determined as of the date the calculation
of Aggregate Debt Service Coverage is required or requested hereunder).
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"Affected Leases" shall have the meaning set forth in Section 8.01(c)
hereof.
"Allocated Loan Amount" shall mean the Initial Allocated Loan Amount of
each Cross-collateralized Property as such amount may be adjusted from time
to time as hereinafter set forth. Upon each adjustment in the principal
portion of the Debt (each a "Total Adjustment"), whether as a result of
amortization, or prepayment or as otherwise expressly provided herein or in
any other Loan Document, each Allocated Loan Amount shall be increased or
decreased, as the case may be, by an amount equal to the product of (i) the
Total Adjustment, and (ii) a fraction, the numerator of which is the
applicable Allocated Loan Amount (prior to the adjustment in question) and
the denominator of which is the Debt prior to the adjustment to the principal
portion of the Debt which results in the recalculation of the Allocated Loan
Amount. However, when the principal portion of the Debt is reduced as a
result of Mortgagee's receipt of (i) Net Proceeds, the Allocated Loan
Amounts for the Cross-collateralized Property with respect to which the Net
Proceeds were received shall be reduced to zero (the amount by which such
Allocated Loan Amount is reduced being referred to as the "Foreclosed
Allocated Amount") and each other Allocated Loan Amount shall (x) if the Net
Proceeds exceed the Foreclosed Allocated Amount (such excess being referred
to as the "Surplus Net Proceeds"), be decreased by an amount equal to the
product of (1) the Surplus Net Proceeds and (2) a fraction, the numerator of
which is the applicable Allocated Loan Amount (prior to the adjustment in
question) and the denominator of which is the aggregate of all of the
Allocated Loan Amounts (prior to the adjustment in question) other than the
Allocated Loan Amount applicable to the Cross-collateralized Property with
respect to which the Net Proceeds were received (such fraction being referred
to as the "Net Proceeds Adjustment Fraction"), (y) if the Foreclosed
Allocated Amount exceeds the Net Proceeds (such excess being referred to as
the "Net Proceeds Deficiency"), be increased by an amount equal to the
product of (1) the Net Proceeds Deficiency and (2) the Net Proceeds
Adjustment Fraction, or (z) if the Net Proceeds equal the Foreclosed
Allocated Amount, remain unadjusted, or (ii) Loss Proceeds or partial
prepayments, made in accordance with Section 15.01 hereof, the Allocated Loan
Amount for the Cross-collateralized Property with respect to which the Loss
Proceeds
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or voluntary prepayments were received shall be decreased by an amount equal
to the sum of (A) with respect to Loss Proceeds, Loss Proceeds which are
applied towards the reduction of the Debt as set forth in Article III hereof,
if any, and (B) with respect to voluntary prepayments, the amount of any such
voluntary prepayment which is applied towards the reduction of the Debt in
accordance with the provisions of the Note, if any, but in no event shall the
Allocated Loan Amount for the Cross-collateralized Property with respect to
which the Loss Proceeds or voluntary prepayments were received be reduced to
an amount less than zero (the amount by which such Allocated Loan Amount is
reduced being referred to as the "Loss Proceeds or Prepayment Allocated
Amount") and each other Allocated Loan Amount shall be decreased by an amount
equal to the product of (1) the excess of (a) the Loss Proceeds or such
partial prepayments over (b) the Loss Proceeds or Prepayment Allocated
Amount, and (2) a fraction, the numerator of which is the applicable
Allocated Loan Amount (prior to the adjustment in question) and the
denominator of which is the aggregate of all of the Allocated Loan Amounts
(prior to the adjustment in question) other than the Allocated Loan Amount
applicable to the Cross-collateralized Property to which such Loss Proceeds
or partial prepayments were applied.
"Allocation Date" shall mean each Tuesday and Thursday in a Current Month,
unless such day is not a Business Day, in which event the Allocation Date shall
be the next Business Day thereafter.
"Appraisal" shall mean the appraisal of the Mortgaged Property and all
supplemental reports or updates thereto previously delivered to Mortgagee in
connection with the Loan.
"Appraiser" shall mean the Person who prepared the Appraisal.
"Approved Manager Standard" shall mean the standard of business
operations, practices and procedures customarily employed by entities having
a senior executive with at least seven (7) years' experience in the
management of value oriented super-regional malls which manage not less than
5,000,000 feet of gross leasable area, including, without limitation, certain
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super-regional malls which contain more than 1,500,000 square feet of gross
leasable area.
"Approved TI Costs" shall mean costs up to an amount not to exceed
$500,000 in the aggregate per Loan Year which are actually and reasonably
incurred by Mortgagor for improvements required to be made by Mortgagor under
the terms of any Space Lease which are approved by Mortgagee, which approval
may be granted or denied in Mortgagee's sole and absolute discretion.
"Architect" shall have the meaning set forth in Section 3.04(b)(i) hereof.
"Assignment" shall mean the Assignment of Leases and Rents and Security
Deposits of even date herewith relating to the Mortgaged Property given by
Mortgagor to Mortgagee.
"Bank" shall mean Nationsbank N.A., or any successor bank hereafter
selected by Mortgagee, subject to the approval of Mortgagor, which shall not be
unreasonably withheld, delayed or conditioned.
"Bankruptcy Code" shall mean 11 U.S.C. ss.101 et seq.
"Basic Carrying Costs" shall mean the sum of the following costs
associated with the Mortgaged Property: (a) Impositions (excluding those
Impositions which may be assessed or imposed on or constitute a lien upon
Mortgagor only, as opposed to the Mortgaged Property or any part thereof or
interest therein) and (b) insurance premiums.
"Basic Carrying Costs Monthly Installment" shall mean Mortgagee's
estimate of one-twelfth (1/12th) of the annual amount for Basic Carrying
Costs. "Basic Carrying Costs Monthly Installment" shall also include, if
required by Mortgagee, a sum of money which, together with such monthly
installments, will be sufficient to make the payment of each such Basic
Carrying Cost at least thirty (30) days prior to the date initially due.
Should such Basic Carrying Costs not be ascertainable at the time any monthly
deposit is required to be made, the Basic Carrying Costs Monthly Installment
shall be determined by Mortgagee in its reasonable discretion on the basis
of the aggregate Basic
10
Carrying Costs for the prior Fiscal Year or month or the prior payment period
for such cost. As soon as the Basic Carrying Costs are fixed for the then
current Fiscal Year, month or period, the next ensuing Basic Carrying Costs
Monthly Installment shall be adjusted to reflect any deficiency or surplus in
prior monthly payments. If at any time during the term of the Loan Mortgagee
determines that there will be insufficient funds in the Basic Carrying Costs
Sub-Account to make payments when they become due and payable, Mortgagee shall
have the right to adjust the Basic Carrying Costs Monthly Installment such that
there will be sufficient funds to make such payments.
"Basic Carrying Costs Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.06 hereof.
"Business Day" shall mean any day other than (a) a Saturday or Sunday, or
(b) a day on which banking and savings and loan institutions in the State of New
York are authorized or obligated by law or executive order to be closed, or at
any time during which the Loan is an asset of a securitization, the cities,
states and/or commonwealths used in the comparable definition of "Business Day"
in the securitization documents which shall initially include Illinois and
Georgia.
"Central Account" shall mean an Eligible Account, maintained at the Bank,
in the name of Mortgagee or its successors or assigns (as secured party) as
be designated by Mortgagee.
"Closing Date" shall mean the date of the Note.
"Closing DSC" shall mean 1.5:1.
"Code" shall mean the Internal Revenue Code of 1986, as amended and as it
may be further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto.
"Collection Account" shall mean one or more demand deposit account(s)
designated by Mortgagee, which shall be an Eligible Account, to which payments
of Debt are transferred.
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"Condemnation Proceeds" shall mean all of the proceeds in respect of any
Taking or purchase in lieu thereof.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"CPI" shall mean "The Consumer Price Index (New Series) (Base Period
1982-84=100) (all items for all urban consumers)" issued by the Bureau of
Labor Statistics of the United States Department of Labor (the "Bureau"). If
the CPI ceases to use the 1982-84 average equaling 100 as the basis of
calculation, or if a change is made in the term, components or number of
items contained in said index, or if the index is altered, modified,
converted or revised in any other way, then the index shall be adjusted to
the figure that would have been arrived at had the change in the manner of
computing the index in effect at the date of this Mortgage not been
altered. If at any time during the term of this Mortgage the CPI shall
no longer be published by the Bureau, then any comparable index issued by the
Bureau or similar agency of the United States issuing similar indices shall
be used in lieu of the CPI.
"Cross-collateralized Borrowers" shall mean each Person which has executed
the Note secured by this Mortgage.
"Cross-collateralized Mortgage" shall mean each mortgage, deed of
trust, deed to secure debt, security agreement, assignment of rents and
fixture filings as originally executed or as same may hereafter from time to
time be supplemented, amended, modified or extended by one or more indentures
supplemental thereto granted by a Cross-collateralized Borrower to Mortgagee
as security for the Note.
"Cross-collateralized Property" shall mean each parcel or parcels of real
property encumbered by a Cross-collateralized Mortgage as identified on
Exhibit F attached hereto and made a part hereof.
"Current Month" shall mean each Interest Accrual Period.
12
"Curtailment Reserve Sub-Account" shall mean the Sub-Account established
pursuant to Section 5.02 hereof and maintained pursuant to Section 5.11 hereof
for the purpose of holding certain Excess Rent.
"Debt" shall have the meaning set forth in the recitals hereto.
"Debt Service" shall mean the amount of interest and principal payments
due and payable in accordance with the Note during an applicable period.
"Debt Service Coverage" shall mean the quotient obtained by dividing Net
Operating Income for the specified period by the sum of the aggregate payments
of interest and principal for such specified period under the Note (determined
as of the date the calculation of Debt Service Coverage is required or
requested hereunder).
"Debt Service Payment Sub-Account" shall mean the Sub-Account of the
Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.07 hereof for the purposes of making Debt Service
payments.
"Default" shall mean any Event of Default or event which would constitute
an Event of Default if all requirements in connection therewith for the giving
of notice, the lapse of time, and the happening of any further condition, event
or act, had been satisfied.
"Default Rate" shall have the meaning set forth in the Note.
"Default Rate Interest" shall mean, to the extent the Default Rate becomes
applicable, interest accrued on the Note in excess of the interest which would
have accrued at the Class A Rate, the Class B Rate, the Class C Rate, or the
Class D Rate, each as defined in the Note, on (a) the principal amount of the
Loan which is outstanding from time to time and (b) any accrued but unpaid
interest (other than Default Rate Interest), if the Default Rate was not
applicable.
13
"Development Laws" shall mean all applicable subdivision, zoning,
environmental protection, wetlands protection, or land use laws or ordinances,
and any and all applicable rules and regulations of any Governmental Authority
promulgated thereunder or related thereto.
"Distribution Date" shall mean the twentieth (20th) day of each calendar
month or, if such twentieth (20th) day is not a Business Day, on the Business
Day immediately after the twentieth (20th) day of such calendar month.
"Eligible Account" shall mean a segregated account which is either (i) an
account or accounts maintained with a depository institution or trust company
the long term unsecured debt obligations of which are rated by the Rating Agency
(or the Rating Agency has confirmed in writing that such account would not, in
and of itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any certificates issued in connection with a
Securitization) in one of its two highest rating categories at all times (or, in
the case of the Rent Account and the Basic Carrying Costs Sub-Account, the long
term unsecured debt obligations of which are rated at least "AA" or the
equivalent by the Rating Agency (or,
14
the Rating Agency has confirmed in writing that such account would not, in
and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to any certificates issued in connection with a
Securitization) or, if the funds in such account are to be held in such
account for less than 30 days, the short term obligations of which are rated
by the Rating Agency (or, if not rated by the Rating Agency, the Rating
Agency has confirmed in writing that such account would not, in and of
itself, result in a downgrade, qualification or withdrawal of the then
current ratings assigned to any certificates issued in connection with a
Securitization) in its highest rating category at all times) or (ii) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution is
subject to regulations substantially similar to 12 C.F.R. ss. 9.10(b), having
in either case a combined capital and surplus of at least $100,000,000 and
subject to supervision or examination by federal and state authority, or the
Rating Agency has confirmed in writing that such account would not, in and of
itself, cause a downgrade, qualification or withdrawal of the then current
ratings assigned to any certificates issued in connection with a
Securitization, which may be an account maintained by Mortgagee or its
agents or (iii) an account in any other insured depository institution
reasonably acceptable to Mortgagee and the Rating Agency as confirmed in
writing that such account would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings of any certificates
issued in connection with a Securitization. Eligible Accounts may bear
interest. The title of each Eligible Account shall indicate that the funds
held therein are held in trust for the uses and purposes set forth herein.
"Engineer" shall have the meaning set forth in Section 3.04(b)(i) hereof.
"Environmental Problem" shall mean any of the following:
(a) the presence of any Hazardous Material on, in, under, or above
all or any portion of the Mortgaged Property, which Mortgagor would be
required to report to a Governmental Authority;
15
(b) the release or threatened release of any Hazardous Material
from or onto the Mortgaged Property which Mortgagor would be required to
report to a Governmental Authority;
(c) the violation or threatened violation of any Environmental
Statute with respect to the Mortgaged Property; or
(d) the failure to obtain or to abide by the terms or conditions of
any permit or approval required under any Environmental Statute with
respect to the Mortgaged Property.
A condition described above shall be an Environmental Problem regardless of
whether or not any Governmental Authority has taken any action in connection
with the condition and regardless of whether that condition was in existence on
or before the date hereof.
"Environmental Report" shall mean the environmental audit report for the
Mortgaged Property and any supplements or updates thereto, previously delivered
to Mortgagee in connection with the Loan.
"Environmental Statute" shall mean any effective, applicable or relevant
federal, state or local statute, ordinance, rule or regulation, any judicial or
administrative order (whether or not on consent) or judgment applicable to
Mortgagor or the Mortgaged Property including, without limitation, any judgment
or settlement based on common law theories, and any provisions or condition of
any permit, license or other authorization binding on Mortgagor relating to (a)
the protection of the environment, the safety and health of persons (including
employees) or the public welfare from actual or potential exposure (or effects
of exposure) to any actual or potential release, discharge, disposal or emission
(whether past or present) of any Hazardous Materials or (b) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any Hazardous Materials, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), as amended by the Superfund Amendments and
16
Reauthorization Act of 1986, 42 U.S.C. ss.9601 et seq., the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976, as
amended by the Solid and Hazardous Waste Amendments of 1984, 42 U.S.C. ss.6901
et seq., the Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 U.S.C. ss.1251 et seq., the Toxic Substances Control Act of
1976, 15 U.S.C. ss.2601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. ss.1101 et seq., the Clean Air Act of 1966,
as amended, 42 U.S.C. ss.7401 et seq., the National Environmental Policy Act of
1975, 42 U.S.C. ss.4321, the Rivers and Harbours Act of 1899, 33 U.S.C. ss.401
et seq., the Endangered Species Act of 1973, as amended, 16 U.S.C. ss.1531 et
seq., the Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
ss.651 et seq., and the Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
ss.300(f) et seq., and all rules, regulations and guidance documents promulgated
or published thereunder.
"Equipment" shall have the meaning set forth in granting clause (d) of
this Mortgage.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder. Section
references to ERISA are to ERISA, as in effect at the date of this Mortgage and,
as of the relevant date, any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean any corporation or trade or business that is
a member of any group of organizations (a) described in Section 414(b) or (c) of
the Code of which Mortgagor is a member and (b) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which Mortgagor is a
member.
"Event of Default" shall have the meaning set forth in Section 13.01
hereof.
"Excess Rent" shall have the meaning set forth in Section 5.05 hereof.
17
"First Interest Accrual Period" shall mean the period commencing on the
Closing Date and ending on January 19, 1997.
"First Payment Date" shall mean the Payment Date in the month following
the month in which the Loan is initially funded.
"Fiscal Year" shall mean the twelve-month period commencing on January 1
and ending on December 31 during each year of the term of this Mortgage,
or such other fiscal year of Mortgagor as Mortgagor may select from time
to time with the prior written consent of Mortgagee.
"Fixtures" shall have the meaning set forth in granting clause (d) of this
Mortgage.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as of the date of the applicable financial report,
consistently applied (except for changes in application as to which Mortgagor's
independent certified accountants and Mortgagee concur).
"General Partner" shall mean, if Mortgagor is a partnership, each general
partner of Mortgagor and, if applicable, each general partner of such general
partner.
"Governmental Authority" shall mean, with respect to any Person, any
federal or State government or other political subdivision thereof and any
entity, including any regulatory or administrative authority or court,
exercising executive, legislative, judicial, regulatory or administrative or
quasi-administrative functions of or pertaining to government, and any
arbitration board or tribunal in each case, having jurisdiction over such
applicable Person or such Person's property and any stock exchange on which
shares of capital stock of such Person are listed or admitted for trading.
"Hazardous Material" shall mean any flammable, explosive or radioactive
materials, hazardous materials or wastes, hazardous or toxic substances,
pollutants, asbestos or any material containing asbestos, or any other similar
substance or material, in each case as defined in or regulated by any
Environmental Statutes.
18
"Impositions" shall mean all taxes (including, without limitation, all
real estate, ad valorem, sales (including those imposed on lease rentals),
use, single business, gross receipts, value added, intangible, transaction,
privilege or license or similar taxes), assessments (including, without
limitation, all assessments for public improvements or benefits, whether or
not commenced or completed prior to the date hereof and whether or not
commenced or completed within the term of this Mortgage), ground rents,
water, sewer or other rents and charges, excises, levies, fees (including,
without limitation, license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Mortgaged Property and/or any Rent (including all
interest and penalties thereon), which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in respect of or
be a lien upon (a) Mortgagor (including, without limitation, all franchise,
single business or other taxes imposed on Mortgagor for the privilege of
doing business in the jurisdiction in which the Mortgaged Property or any
other collateral delivered or pledged to Mortgagee in connection with the
Loan is located) or Mortgagee, (b) the Mortgaged Property or any part thereof
or any Rent therefrom or any estate, right, title or interest therein, or (c)
any occupancy, operation, use or possession of, or sales from, or activity
conducted on, or in connection with the Mortgaged Property, or any part
thereof, or the leasing or use of the Mortgaged Property, or any part
thereof, or the acquisition or financing of the acquisition of the Mortgaged
Property, or any part thereof, by Mortgagor.
"Improvements" shall have the meaning set forth in the granting clause (b)
of this Mortgage.
"Independent" shall mean, when used with respect to any Person, a Person
who (a) is in fact independent, (b) does not have any direct financial interest
or any material indirect financial interest in Mortgagor, or in any Affiliate of
Mortgagor or any constituent partner, shareholder, member or beneficiary of
Mortgagor and (c) is not connected with Mortgagor or any Affiliate of Mortgagor
or any constituent partner, shareholder,
19
member or beneficiary of Mortgagor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions;
provided, however, that a Person shall not be deemed to be connected with
Mortgagor or any Affiliate of Mortgagor solely by reason of such Person being a
director of a Single Purpose Entity. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be provided, such opinion or
certificate shall state that the Person executing the same has read this
definition and is Independent within the meaning hereof.
"Initial Allocated Loan Amount" shall mean the portion of the Loan Amount
allocated to each Cross-collateralized Property as set forth on Exhibit F
annexed hereto and made a part hereof.
"Initial Basic Carrying Costs Deposit" shall equal the amount set forth on
Exhibit B attached hereto and made a part hereof.
"Initial Central Account Deposit" shall equal the amount set forth on
Exhibit B attached hereto and made a part hereof.
"Institutional Lender" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company or pension
and/or annuity company, (d) any fraternal benefit society, (e) any pension,
retirement or profit sharing trust or fund within the meaning of Title I of
ERISA or for which any bank, trust company, national banking association or
investment adviser registered under the Investment Advisers Act of 1940, as
amended, is acting as trustee or agent, (f) any investment company or business
development company, as defined in the Investment Company Act of 1940, as
amended, (g) any small business investment company licensed under the Small
Business Investment Act of 1958, as amended, (h) any broker or dealer registered
under the Securities and Exchange Act of 1934, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended, (i) any
government, any public employees' pension or retirement system, or any other
government agency supervising the investment of public funds, or (j) any other
entity all of the
20
equity owners of which are Institutional Lenders; provided that each of said
Persons shall have net assets equal to or greater than $500,000,000, be in the
business of making commercial mortgage loans, secured by properties of like
type, size and value as the Mortgaged Property and have a long term credit
rating which is not less than BBB- (or its equivalent) from the Rating Agency.
"Insurance Proceeds" shall mean all of the proceeds received under the
insurance policies required to be maintained by Mortgagor pursuant to Article
III hereof.
"Insurance Requirements" shall mean all terms of any insurance policy
required by this Mortgage, all requirements of the issuer of any such policy,
and all regulations and then current standards applicable to or affecting the
Mortgaged Property or 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 Property, or such other Person exercising similar
functions.
"Interest Accrual Period" shall mean (x) the First Interest Accrual Period
and, (y) thereafter, each period commencing on and including the Distribution
Date in the immediately preceding calendar month and ending on and including the
day immediately preceding the Distribution Date in the calendar month in which
the applicable Payment Date occurs, each of which periods shall be treated as
one-month for purposes of computing the interest accruing during such period.
"Late Charge" shall have the meaning set forth in Section 13.09 hereof.
"Leases" shall have the meaning set forth in granting clause (f) of this
Mortgage.
"Legal Requirement" shall mean as to any Person, the certificate of
incorporation, by-laws, certificate of limited partnership, agreement of limited
partnership or other organization or governing documents of such Person, and any
law, statute, order, ordinance, judgement, decree, injunction, treaty, rule or
regulation (including, without limitation, Environmental
21
Statutes, Development Laws and Use Requirements) or determination of an
arbitrator or a court or other Governmental Authority and all covenants,
agreements, restrictions and encumbrances contained in any instruments, in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Loan" shall have the meaning set forth in the Recitals hereto.
"Loan Amount" shall have the meaning set forth in the Recitals hereto.
"Loan Documents" shall mean this Mortgage, the Note, the
Assignment, and any and all other agreements, instruments, certificates or
documents executed and delivered by Mortgagor or any of the
Cross-collateralized Borrowers or any Affiliate of Mortgagor in connection with
the Loan.
"Loan Year" shall mean each 365 day period (or 366 day period if the month
of February in a leap year is included) commencing on the first day each January
after the Closing Date (provided, however, that the first Loan Year shall also
include the period from the Closing Date to the end of the month in which the
Closing Date occurs).
"Loss Proceeds" shall mean, collectively, all Insurance Proceeds and all
Condemnation Proceeds.
"Major Space Lease" shall mean any Space Lease of a tenant or Affiliate of
such tenant where such tenant or such Affiliate leases, in the aggregate, 40,000
or more square feet of the Total GLA.
"Manager" shall mean the Person, other than Mortgagor, which manages the
Mortgaged Property on behalf of Mortgagor.
"Manager Certification" shall have the meaning set forth in Section 2.09
hereof.
"Material Adverse Effect" shall mean any event or condition that has a
material adverse effect on (a) the Mortgaged Property,
22
(b) the business, prospects, profits, operations or condition (financial or
otherwise) of Mortgagor, (c) the enforceability, validity, perfection or
priority of the lien of any Loan Document or (d) the ability of Mortgagor to
perform any obligations under any Loan Document.
"Maturity", when used with respect to the Note, shall mean the Maturity
Date set forth in the Note or such other date pursuant to the Note on which the
final payment of principal, and premium, if any, on which the Note becomes due
and payable as therein or herein provided, whether at Stated Maturity or by
declaration of acceleration, or otherwise.
"Maturity Date" shall mean the Maturity Date set forth in the Note.
"Merger" shall mean a merger of Potomac ▇▇▇▇▇-Phase III (MLP) Limited
Partnership and Washington Outlet Mall (MLP) Limited Partnership.
"Monthly Debt Service Payment" shall mean a monthly payment of principal
in an amount equal to that which is required to fully amortize the Loan based
upon a thirty (30) year level amortization schedule, together with a monthly
payment of interest on the Principal Amount.
"Mortgage" shall mean this Mortgage as originally executed or
as it may hereafter from time to time be supplemented, amended, modified or
extended by one or more indentures supplemental hereto.
"Mortgaged Property" shall have the meaning set forth in the granting
clauses of this Mortgage.
"Mortgagee" shall mean the Mortgagee named herein and its successors
or assigns.
"Mortgagor" shall mean Mortgagor named herein and any successor to the
obligations of Mortgagor.
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have
23
been, or were required to have been, made by Mortgagor or any ERISA Affiliate
and which is covered by Title IV of ERISA.
"Net Operating Income" shall mean in each Fiscal Year or portion thereof
during the term hereof, Operating Income less Operating Expenses.
"Net Proceeds" shall mean the excess of (i)(x) the purchase price (at
foreclosure or otherwise) actually received by Mortgagee with respect to the
Mortgaged Property as a result of the exercise by Mortgagee of its rights,
powers, privileges and other remedies after the occurrence of an Event of
Default, or (y) in the event that Mortgagee (or Mortgagee's nominee) is the
purchaser at foreclosure by credit bid, then the amount of such credit bid, in
either case, over (ii) all costs and expenses, including, without limitation,
all attorneys' fees and disbursements and any brokerage fees, if applicable,
incurred by Mortgagee in connection with the exercise of such remedies,
including the sale of such Mortgaged Property after a foreclosure against the
Mortgaged Property.
"Note" shall have the meaning set forth in the recitals hereof.
"Notice Date" shall have the meaning set forth in Section 5.05 hereof.
"O&M Operative Period" shall mean the period of time commencing upon the
earlier to occur of (a) an Event of Default and (b) the Optional Prepayment Date
and terminating upon the earlier to occur of (i) repayment of the Debt in full
and (ii)(A) if the O&M Operative Period has commenced as a result of an Event of
Default of the types set forth in clauses (a), (b), (c), (e), (g) (to the extent
(g) applies to a representation or warranty given after the Closing Date), (j),
(m) or (o) of Section 13.01 hereof, upon the curing of such Event of Default;
provided that the O&M Operative Period may only be terminated pursuant to this
clause (b) one (1) time during the Loan (i.e., if an Event of Default of the
types set forth in clause (ii)(A) occurs more than once during the term of the
Loan, the O&M Operative Period shall not terminate prior to the payment of the
Debt in full) or (B) if the O&M Operative Period has commenced as a result of an
Event of
24
Default of the type set forth in clause (k) of Section 13.01 hereof, upon the
curing of such Event of Default.
"Officer's Certificate" shall mean a certificate delivered to Mortgagee
by Mortgagor which is signed on behalf of Mortgagor by an authorized
representative of Mortgagor which states that the items set forth in such
certificate are true, accurate and complete in all respects.
"Operating Expenses" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all expenses paid by Mortgagor (or by the Manager on
behalf of Mortgagor) on account of such period in connection with the operation
of the Mortgaged Property, which shall include, without limitation, the
following expenses:
(a) expenses in connection with cleaning, repair, maintenance,
management, leasing, decoration or painting thereof, or the provision of
services to any tenant, net of any insurance proceeds or condemnation proceeds
in respect of any of the foregoing;
(b) wages, benefits, payroll taxes, uniforms, insurance costs and
all other related expenses for on-site building personnel, up to and including
the level of the on-site building manager, engaged in cleaning, repair,
maintenance, management, leasing, decoration or painting thereof or the
provision of services to any tenant;
(c) reasonable allocations of wages, benefits, payroll taxes,
insurance costs and all other related expenses for bookkeeping, accounting,
legal and other building management functions and home office expenses and
computer usage, but only if the amount of such allocations in the aggregate
exceeds the reasonable and customary compensation described in clause (iv) for
the same or similar services;
(d) the compensation being paid for bookkeeping, accounting, legal
and building management services for the Mortgaged Property, and all other items
of compensation and reimbursement payable by Mortgagor to the Manager, provided,
however, that if such compensation actually is less than 5.0% of
25
minimum and overage rentals from the Mortgaged Property the amount of such
compensation shall be deemed to be 5.0% of minimum and overage rentals from the
Mortgaged Property for purposes of determining Debt Service Coverage;
(e) the cost of all electricity, oil, gas, water, steam, heat,
ventilation, air conditioning and any other energy, telecommunications, utility
or similar items, including overtime usage, and the cost of building and
cleaning supplies;
(f) Impositions (except for real estate taxes paid directly to any
taxing authority by any tenant);
(g) premiums for liability, casualty, fidelity, business
interruption, loss of "rental value" and other insurance (which, in the case of
any policy covering multiple properties, shall be equitably allocated to the
Mortgaged Property pro rata in proportion to the replacement value of each of
the properties covered by such policy for casualty insurance, the respective
size and experience rating of each of the properties covered by such policy for
liability insurance, and the insured value of each of the properties covered by
such policy for the other coverages);
(h) legal, accounting, appraisal and other professional fees,
expenses and disbursements;
(i) amounts paid in consideration of any modification, amendment,
supplement, waiver, renewal, or termination of any lease;
(j) all amounts paid or expenses incurred under Property Agreements
or under any Lease, including, without limitation, marketing and promotion fees
to the extent not reimbursed or reimbursable by tenants under any Lease; and
(k) all other amounts paid during such period in respect of items
which in accordance with generally accepted accounting principles would be
included in Mortgagor's annual financial statements for such period or any other
period as operating expenses of the Mortgaged Property and are reasonably
expected by Mortgagor to be regularly recurring operating
26
expenses of the Mortgaged Property and not separately deducted in the definition
of Operating Income.
Notwithstanding the foregoing, Operating Expenses shall not include (1) any
non-cash charge such as depreciation or amortization, (2) the principal of and
interest and premium, if any, on the Note or any other indebtedness of
Mortgagor, (3) income taxes or other Impositions in the nature of income taxes,
(4) any expenses (including legal, accounting and other professional fees,
expenses and disbursements) incurred in connection with the issuance of the Note
or the sale, exchange, transfer, financing or refinancing of all or any portion
of the Mortgaged Property or in connection with the recovery of Loss Proceeds
which are applied to prepay the Debt, (5) any item of expense which would
otherwise be considered within Operating Expenses pursuant to the provisions
above but is paid directly by any tenant and (6) capital improvement costs
(including, without limitation, tenant allowances) capitalized in accordance
with GAAP and not recovered from tenants.
"Operating Income" shall mean, in each Fiscal Year or portion thereof
during the term hereof, all revenue derived by Mortgagor arising from the
Mortgaged Property including, without limitation, rental revenues (whether
denominated as basic rent, additional rent, escalation payments, electrical
payments or otherwise) and other fees and charges payable pursuant to Leases or
otherwise in connection with the Mortgaged Property, and business interruption,
rent or other similar insurance proceeds. Operating Income shall not include (a)
Insurance Proceeds (other than proceeds of rent, business interruption or other
similar insurance allocable to the applicable period) and Condemnation Proceeds
(other than Condemnation Proceeds arising from a temporary taking or the use and
occupancy of all or part of the applicable Mortgaged Property allocable to the
applicable period), or interest accrued on such Condemnation Proceeds, (b)
proceeds of any financing, (c) proceeds of any sale, exchange or transfer of the
Mortgaged Property or any part thereof or interest therein, (d) capital
contributions or loans to Mortgagor or an Affiliate of Mortgagor, (e) any item
of income otherwise includable in Operating Income but paid directly by any
tenant to a Person other than Mortgagor except for real estate taxes paid
directly to any taxing authority by any tenant, (f) any other
27
extraordinary, non-recurring revenues, (g) Rent paid by or on behalf of any
lessee under a Space Lease which is the subject of any proceeding or action
relating to its bankruptcy, reorganization or other arrangement pursuant to
federal bankruptcy law or any similar federal or state law or which has been
adjudicated a bankrupt or insolvent unless such Space Lease has been affirmed
by the trustee in such proceeding or action, (h) Rent paid by or on behalf of
any lessee under a Space Lease the demised premises of which are not occupied
either by such lessee or by a sublessee thereof, (i) Rent paid by or on
behalf of any lessee under a Space Lease in whole or in partial consideration
for the termination of any Space Lease in excess of $45,000 per Fiscal Year;
(j) interest income in excess of $75,000 per Fiscal Year, (k) sales tax
rebates from any Governmental Authority, or (l) Rent paid by any Space Tenant
for a period more than one month in advance of when due.
"Operation and Maintenance Expense Monthly Installment" shall mean with
respect to each Current Month in which funds are required to be allocated or
distributed pursuant to the terms of Section 5.05(d), or if an Event of
Default has occurred and is continuing, the lesser of (a) all amounts
remaining in the Central Account after the distributions made pursuant to
clauses (a) through (c) of Section 5.05 or (b), an amount equal to 1/12 of
the higher of (i) the product of (A) 1.05 and (B) the actual Operating
Expenses (exclusive of Impositions and insurance premiums) for the
immediately preceding calendar year and (ii) the annual Operating Expenses
(exclusive of Impositions and insurance premiums) for the immediately
preceding calendar year multiplied by a fraction, the number of which is the
CPI for the month of December of the calendar year immediately preceding the
year with respect to which the determination is being made and the
denominator of which is the CPI for the month of December, 1996.
"Operation and Maintenance Expense Sub-Account" shall mean the Sub-Account
of the Central Account established pursuant to Section 5.02 hereof and
maintained pursuant to Section 5.09 hereof relating to the payment of Operating
Expenses (exclusive of Impositions and insurance premiums) and Approved TI
Costs.
28
"Optional Prepayment Date" shall mean the Payment Date occurring in
December, 2003.
"Pad Owners" shall mean any owner of any fee interest in property
contiguous to or surrounded by the Mortgaged Property who has entered into or is
subject to a reciprocal easement agreement or other agreement or agreements with
Mortgagor either (a) in connection with an existing or potential improvement on
such property or (b) relating to or affecting the Mortgaged Property.
"Payment Date" shall mean, with respect to each Interest Accrual Period,
the second (2nd) Business Day prior to the Distribution Date occurring in the
month in which such Interest Accrual Period ends.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Permitted Debt" shall mean (i) unsecured trade and other indebtedness
incurred in the operation of the Mortgaged Property in the ordinary course of
Mortgagor's business which is consistent with the Approved Manager Standard
that is paid in full within ninety (90) days of the date upon which such
indebtedness was due, (ii) subordinated obligations to reimburse another
Cross-collateralized Borrower in connection with any amounts paid by such
other Cross-collateralized Borrower in excess of the Allocated Loan Amount of
such Cross-collateralized Borrower, interest thereon and its ratable share of
any other sums due under the Loan Documents, and (iii) if no Event of Default
has occurred and is continuing, indebtedness solely in respect of
reimbursement obligations incurred in connection with surety and appeal
bonds, performance bonds, and other obligations of like nature, all in the
ordinary course of business in accordance with customary industry practices
and the Approved Manager Standard; provided, however, that the aggregate of
unsecured Permitted Debt of the types set forth in clauses (i) and (iii)
shall in no event exceed $5,000,000. As used herein the term "indebtedness"
shall mean (a) any liabilities and obligations of such Person, contingent or
otherwise, (i) in respect of borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such Person or only to a
29
portion thereof), (ii) evidenced by bonds, notes, debentures, or similar
instruments, (iii) representing the balance deferred and unpaid of the purchase
price of any property or services, except those incurred in the ordinary course
of such Person's business that would constitute ordinarily a trade payable to
trade creditors, (iv) evidenced by bankers' acceptances, (v) for the payment of
money relating to a capitalized lease obligation or sale/leaseback obligation,
or (vi) evidenced by a letter of credit or a reimbursement obligation of such
Person with respect to any letter of credit or (b) any liabilities and
obligations of others of the kind described in the preceding clause (a) that
such Person has guaranteed or that is otherwise its legal liability or which is
secured by any assets or property of such Person including any obligations to
purchase, redeem, or acquire any capital stock or similar interests.
"Permitted Encumbrances" shall have the meaning set forth in Section
2.05(a) hereof.
"Permitted Investments" shall mean any one or more of the following
obligations or securities payable on demand or having a scheduled maturity on
or before the Business Day preceding the date upon which funds in the Central
Account are required to be drawn, and having at all times the required
ratings, if any, provided for in this definition, unless the Rating Agency
shall have confirmed in writing to Mortgagee that a lower rating would not,
in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to any certificates issued in connection with a
Securitization:
(a) obligations of, or obligations fully guaranteed as to payment
of principal and interest by, the United States of America or any agency
orinstrumentality thereof provided such obligations are backed by the
full faith and credit of the United States of America including, without
limitation, obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration (certificates of
beneficial ownership), the General Services Administration (participation
certificates), the U.S. Maritime Administration (guaranteed Title XI
financing), the Small Business Administration (guaranteed participation
certificates and guaranteed pool
30
certificates), the U.S. Department of Housing and Urban Development (local
authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if such
investments have a variable rate of interest, such interest rate must be
tied to a single interest rate index plus a fixed spread (if any) and must
move proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(b) intentionally omitted;
(c) obligations of the following United States of America government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations),the Farm Credit System (consolidated systemwide bonds and
notes), the Federal Home Loan Banks (consolidated debt obligations), the
Federal National Mortgage Association (debt obligations), the
Student Loan Marketing Association (debt obligations), the Financing
Corp. (debt obligations), and the Resolution Funding Corp. (debt
obligations); provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if such investments have a
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(d) federal funds, unsecured certificates of deposit, time deposits,
bankers' acceptances and repurchase agreements with maturities of not more
than 365 days of any bank, the short term obligations of which are rated
in the highest short term rating category by the Rating Agency; provided,
however, that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary
or change, (B) if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index
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plus a fixed spread (if any) and must move proportionately with that
index, and (C) such investments must not be subject to liquidation prior
to their maturity;
(e) fully Federal Deposit Insurance Corporation-insured demand and
time deposits in, or certificates of deposit of, or bankers' acceptances
issued by, any bank or trust company, savings and loan association or
savings bank, the short term obligations of which are rated in the highest
short term rating category by the Rating Agency; provided, however, that
the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B)
if such investments have a variable rate of interest, such interest rate
must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (C) such investments
must not be subject to liquidation prior to their maturity;
(f) debt obligations with maturities of not more than 365 days and
rated by the Rating Agency in its highest long-term unsecured rating
category; provided, however, that the investments described in this clause
must (A) have a predetermined fixed dollar of principal due at maturity
that cannot vary or change, (B) if such investments have a variable rate
of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that
index, and (C) such investments must not be subject to liquidation prior
to their maturity;
(g) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof)
with maturities of not more than 270 days and that is rated by the Rating
Agency in its highest short-term unsecured debt rating; provided, however,
that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that cannot vary
or change, (B) if such investments have a
32
variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move
proportionately with that index, and (C) such investments must not be
subject to liquidation prior to their maturity;
(h) the Federated Prime Obligation Money Market Fund (the "Fund") so
long as the Fund is rated "AAA" by the Rating Agency;
(i) any other demand, money market or time deposit, demand
obligation or any other obligation, security or investment, provided that
the Rating Agency has confirmed in writing to Mortgagee, that such
investment would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization); and
(j) such other obligations as are acceptable as Permitted
Investments to the Rating Agency, as confirmed in writing to Mortgagee,
that such obligations would not, in and of itself, result in a downgrade,
qualification or withdrawal of the then current ratings assigned to any
certificates issued in connection with a Securitization);
provided, however, that, in the judgment of Mortgagee, such instrument
continues to qualify as a "cash flow investment" pursuant to Code Section
860G(a)(6) earning a passive return in the nature of interest and that no
instrument or security shall be a Permitted Investment if (i) such instrument
or security evidences a right to receive only interest payments or (ii) the
right to receive principal and interest payments derived from the underlying
investment provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.
"Permitted Liens" shall mean (i) the liens of this Mortgage and
other Loan Documents; (ii) liens for taxes, assessments and other
governmental charges not yet due and payable or due and payable, but not yet
delinquent, or that are being contested in good faith by appropriate
proceedings in accordance with Section
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4.04 hereof; (iii) deposits or pledges to secure the payment of workmen's
compensation, unemployment insurance or other social security benefits or
obligations, or to secure the performance of trade contracts, leases, public
or statutory obligations, surety or appeal bonds or other obligations of a
like general nature incurred in the ordinary course of business and in
accordance with the Approved Manager Standard; (iv) judgment liens,
landlords, mechanics', materialmen's, warehousemen's, carriers', or other
like liens arising in the ordinary course of business securing obligations
which are not overdue for a period longer than 30 days, or which are being
contested in good faith by appropriate proceedings which are being diligently
pursued in accordance with Section 2.06 hereof; and (v) easements, rights of
way, zoning, similar restrictions, and other similar encumbrances or title
defects that, singly or in the aggregate, do not in any case detract from the
value of the Mortgaged Property, all of which (other than the liens of the
type set forth in clauses (i) and (ii) above and Permitted Encumbrances) are
subordinate to the lien of this Mortgage.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
"Plan" shall mean an employee benefit or other plan established or
maintained by Mortgagor or any ERISA Affiliate during the five-year period
ended prior to the date of this Mortgage or to which Mortgagor or any
ERISA Affiliate makes, is obligated to make or has, within the five year
period ended prior to the date of this Mortgage, been required to make
contributions (whether or not covered by Title IV of ERISA or Section 302 of
ERISA or Section 401(a) or 412 of the Code), other than a Multiemployer Plan.
"Premises" shall have the meaning set forth in granting clause (a) of this
Mortgage.
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"Principal Amount" shall mean the Loan Amount as such amount may be
reduced from time to time pursuant to the terms of this Mortgage, the
Note or the other Loan Documents.
"Principal Payments" shall mean all payments of principal made pursuant to
the terms of the Note.
"Property Agreements" shall mean all agreements, grants of easements
and/or rights-of-way, reciprocal easement agreements, permits, declarations of
covenants, conditions and restrictions, disposition and development agreements,
planned unit development agreements, management or parking agreements, party
wall agreements or other instruments affecting the Mortgaged Property,
including, without limitation any Pad Owners, but not including any brokerage
agreements, management agreements, service contracts, Space Leases or the Loan
Documents.
"Rating Agency" shall mean Fitch Investors Services, L.P., and any
successor thereto.
"Realty" shall have the meaning set forth in Section 2.05(b) hereof.
"Recurring Replacement Expenditures" shall mean expenditures related to
capital repairs, replacements and improvements performed at the Mortgaged
Property from time to time.
"Recurring Replacement Reserve Monthly Installment" shall mean an
amount equal to the product of 1/12 of the gross leasable area of the
Premises multiplied by the RR Multiplier set forth on Exhibit B attached
hereto and made a part hereof (the "Initial Recurring Installments") until
the end of the first (1st) Loan Year and an amount per month in each
subsequent Loan Year or portion thereof occurring prior to the Maturity Date
equal to 1/12 of the product of (a) the gross leasable area of the Premises
as of December 1 of each year and (b) the RR Multiplier and (c) a fraction,
the numerator of which is the CPI for the month of December of the calendar
year immediately preceding the year with respect to which the determination
is being made and the denominator of which is the CPI for the month of
December, 1996, but in no event shall the Recurring Replacement Reserve
Monthly Installment as calculated above be decreased in any year.
35
"Recurring Replacement Reserve Sub-Account" shall mean the Sub-Account of
the Central Account established pursuant to Section 5.02 hereof and maintained
pursuant to Section 5.08 hereof relating to the payment of Recurring Replacement
Expenditures.
"Rent" shall have the meaning set forth in granting clause (f) of this
Mortgage.
"Rent Account" shall mean an Eligible Account maintained by a bank
acceptable to Mortgagor and Mortgagee in the name of Mortgagee.
"Rent Roll" shall have the meaning set forth in Section 2.05 (o) hereof.
"Required Debt Service Coverage" shall mean a Debt Service Coverage of not
less than 1.4:1.
"Required Debt Service Payment" shall mean, as of any Payment Date, the
amount of interest, including, without limitation Default Rate Interest, and
principal then due and payable pursuant to the Note, together with any other
sums due and payable thereunder, including, without limitation, any prepayments
required to be made or for which notice has been given under this Mortgage and
premium, if any, to be paid in accordance therewith.
"Required Engineering Work" shall have the meaning set forth in Section
5.02 hereof.
"Retention Amount" shall have the meaning set forth in Section
3.04(b)(vii) hereof.
"Securities Act" shall mean the Securities Act of 1933, as the same shall
be amended from time to time.
"Securitization" shall mean a public or private offering of securities by
Potomac Gurnee Finance Corp., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated, Mortgagee or any of their respective Affiliates or their
36
respective successors and assigns which are collateralized, in whole or in part,
by this Mortgage.
"Security Deposit Account" shall have the meaning set forth in Section
5.01 hereof.
"Single Purpose Entity" shall mean a corporation, partnership, joint
venture, trust or unincorporated association, which is formed or organized
solely for the purpose of holding, directly, an ownership interest in the
Mortgaged Property and activities incidental thereto, does not engage in any
business unrelated to the Mortgaged Property, does not have any assets other
than those related to its interest in the Mortgaged Property or any
indebtedness other than as permitted by this Mortgage or the other Loan
Documents, has its own separate books and records and has its own accounts,
in each case which are separate and apart from the books and records and
accounts of any other Person, and holds itself out as being a Person,
separate and apart from any other Person and which otherwise satisfies the
criteria of the Rating Agency, as in effect on the Closing Date, for a single
purpose entity.
"Solvent" shall mean, as to any Person, that (a) the sum of the assets of
such Person, at a fair valuation, exceeds its liabilities, including contingent
liabilities, (b) such Person has sufficient capital with which to conduct its
business as presently conducted and as proposed to be conducted and (c) such
Person has not incurred indebtedness, and does not intend to incur debts, beyond
its ability to pay such indebtedness as they mature. For purposes of this
definition, "indebtedness" shall have the meaning set forth in the definition of
Permitted Debt.
"Space Leases" shall mean any Lease or sublease thereunder (including,
without limitation, any Major Space Lease) or any other agreement providing for
the use and occupancy of a portion of the Mortgaged Property as the same may be
amended, renewed or supplemented.
"State" shall mean any of the states which are members of the United
States of America.
37
"Stated Maturity", when used with respect to the Note or any installment
of interest and/or principal payment thereunder, shall mean the date specified
in the Note as the fixed date on which a payment of all or any portion of
principal and/or interest is due and payable.
"Sub-Accounts" shall have the meaning set forth in Section 5.02 hereof.
"Substantial Casualty" shall have the meaning set forth in Section 3.04
hereof.
"Substantial Taking" shall mean a Taking of such portion of the
Mortgaged Property that (a) would leave remaining a balance of the Mortgaged
Property which would not under then current economic conditions, applicable
zoning laws, building regulations and other applicable Legal Requirements,
permit the restoration of the Mortgaged Property so as to constitute a
complete, rentable facility of the same sort as existed prior to the Taking,
having adequate ingress and egress to the Mortgaged Property, (b) as a result
of which Mortgagee is not reasonably satisfied that the Debt Service Coverage
for the previous fiscal quarter, as of the last day of the first fiscal
quarter ending after substantial completion of the Work, will not be equal to
or greater than the greater of (i) the Debt Service Coverage for the fiscal
quarter immediately prior to the Taking and (ii) the Closing DSC, (c) as a
result of which more than 15% of the reasonably estimated aggregate value of
the Mortgaged Property is affected, or (d) as a result of which Mortgagee is
not reasonably satisfied the Work can be completed prior to Maturity and
within twelve months of the Taking; provided, however, such twelve month
period may be extended at the request of Mortgagor provided that Mortgagor
delivers a letter from the Rating Agency confirming that any rating issued in
connection with a Securitization will not, as a result of such extension be
downgraded from the then current ratings thereof, qualified, or withdrawn.
"Taking" shall mean a condemnation or taking pursuant to the lawful
exercise of the power of eminent domain.
"Total GLA" shall mean the total gross leasable area of the Mortgaged
Property, including all Space Leases.
38
"Transfer" shall mean the conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to, or other disposition of (directly or
indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration or of record) all or any portion of any legal
or beneficial interest (a) in all or any portion of the Mortgaged Property; (b)
in the stock or membership interest of any General Partner; (c) in Mortgagor (or
any trust of which Mortgagor is a trustee); or (d) in any Person having a direct
legal or beneficial ownership in Mortgagor and shall also include, without
limitation to the foregoing, the following: an installment sales agreement
wherein Mortgagor agrees to sell the Mortgaged Property or any part thereof or
any interest therein for a price to be paid in installments; an agreement by
Mortgagor leasing all or a substantial part of the Mortgaged Property to one or
more Persons pursuant to a single or related transactions, or a sale, assignment
or other transfer of, or the grant of a security interest in, Mortgagor's right,
title and interest in and to any Leases or any Rent; any instrument subjecting
the Mortgaged Property to a condominium regime or transferring ownership to a
cooperative corporation; and the dissolution or termination of Mortgagor or the
merger or consolidation of Mortgagor with any other Person. The Merger will not
be deemed a Transfer. Additionally (a) as long as The ▇▇▇▇▇ Corporation remains
the sole general partner of the ▇▇▇▇▇ Limited Partnership, a Delaware limited
partnership ("MLP") and The ▇▇▇▇▇ Corporation owns at least 35% of the limited
partnership interests of MLP, the term "Transfer" shall not apply to any
conveyance, assignment, sale, mortgaging, encumbrance, pledging, hypothecation,
granting of a security interest in, granting of options with respect to or other
disposition of any limited partnership interests in MLP and (b) the term
"Transfer" shall not apply to any conveyance, assignment, sale, mortgaging,
encumbrance, pledging, hypothecation, granting of a security interest in,
granting of options with respect to or other disposition of any interest in
Mortgagor or any general partner of Mortgagor to a Person which is owned one
hundred percent, directly or indirectly, by MLP or The ▇▇▇▇▇ Corporation.
Additionally, it shall be a Transfer if MLP and/or The ▇▇▇▇▇
39
Corporation ceases to own 100% of Mortgagor either directly or indirectly.
"Treasury Constant Maturity Yield Index" shall mean the average yield for
"This Week" as reported by the Federal Reserve Board in Federal Reserve
Statistical Release H.15 (519).
"UCC" shall mean the Uniform Commercial Code as in effect in the State in
which the Mortgaged Property is located.
"Unscheduled Payments" shall mean (a) all Loss Proceeds that Mortgagor
has elected or is required to apply to the repayment of the Debt pursuant to
this Mortgage, the Note or any other Loan Documents, (b) any funds
representing a voluntary or involuntary principal prepayment other than
scheduled Principal Payments, (c) any Net Proceeds and (d) any amounts paid
from the Curtailment Reserve Sub-Account pursuant to Section 5.11 hereof.
"Use Requirements" shall mean any and all building codes, permits,
certificates of occupancy or compliance, laws, regulations, or ordinances
(including, without limitation, health, pollution, fire protection, medical and
day-care facilities, waste product and sewage disposal regulations),
restrictions of record, easements, reciprocal easements, declarations or other
agreements affecting the use of the Mortgaged Property or any part thereof.
"Welfare Plan" shall mean an employee welfare benefit plan as defined in
Section 3(1) of ERISA established or maintained by Mortgagor or any ERISA
Affiliate or that covers any current or forms employee of Mortgagor or any ERISA
Affiliate.
"Work" shall have the meaning set forth in Section 3.04(a)(i) hereof.
"Yield Maintenance Premium" shall mean the premium which shall be the
product of (a) a fraction, the numerator of which is the positive excess
(expressed as a percentage of the outstanding principal amount of the applicable
Portion (as such term is defined in the Note) before repayment), if any, of (i)
the present value of all future payments of principal and interest on the
Principal Amount, including, without limitation, any outstanding
40
principal amount of the Loan as of the Payment Date in June, 2003 to be made on
the applicable Portion before the prepayment in question, discounted at an
interest rate per annum equal to the Treasury Constant Maturity Yield Index
published during the second full week preceding the date on which such premium
is payable for instruments having a maturity coterminous with the Payment Date
occurring in June, 2003, over (ii) the outstanding principal amount of the
applicable Portion immediately before such prepayment, and the denominator of
which is the Principal Amount immediately prior to the prepayment, and (b) the
principal amount of the applicable Portion being prepaid; provided, however,
that if there is no Treasury Constant Maturity Yield Index for instruments
having a maturity coterminous with the Payment Date occurring in June, 2003,
then the index referred to in (1) above shall be equal to the weighted average
yield to maturity of the Treasury Constant Maturity Yield Indices with
maturities next longer and shorter than such remaining average life to the
Payment Date occurring in June, 2003, calculated by averaging (and rounding
upward to the nearest whole multiple of 1/100 of 1% per annum, if the average is
not such a multiple) the yields of the relevant Treasury Constant Maturity Yield
Indices (rounded, if necessary, to the nearest 1/100 of 1% with any figure of
1/200 of 1% or above rounded upward).
ARTICLE II: COVENANTS, WARRANTIES
AND REPRESENTATIONS OF MORTGAGOR
Section 2.01. Payment of Debt. Mortgagor will pay the Debt at the time and in
the manner provided in the Note and the other Loan Documents, all in lawful
money of the United States of America in immediately available funds.
41
Section 2.02. Representations and Warranties of Mortgagor. Mortgagor
represents and warrants to Mortgagee:
(a) Organization and Authority. Mortgagor (i) is a general partnership,
limited partnership or corporation, as the case may be, duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, (ii) has all requisite power and authority and all necessary and
material licenses and permits to own and operate the Mortgaged Property and to
carry on its business as now conducted and as presently proposed to be conducted
and (iii) is duly qualified, authorized to do business and in good standing in
the jurisdiction where the Mortgaged Property is located and in each other
jurisdiction where the conduct of its business or the nature of its activities
makes such qualification necessary. If Mortgagor is a limited partnership or
general partnership, each general partner of Mortgagor which is a corporation is
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Power. Mortgagor and, if applicable, each General Partner has full
power and authority to execute, deliver and perform, as applicable, the Loan
Documents to which it is a party, to make the borrowings thereunder, to execute
and deliver the Note and to grant to Mortgagee a first, prior, perfected and
continuing lien on and security interest in the Mortgaged Property, subject only
to the Permitted Encumbrances.
(c) Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents to which Mortgagor is a party, the making of the borrowings
thereunder, the execution and delivery of the Note, the grant of the liens on
the Mortgaged Property pursuant to the Loan Documents to which Mortgagor is a
party and the consummation of the Loan are within the powers of Mortgagor and
have been duly authorized by Mortgagor and, if applicable, the General Partners,
by all requisite action (and Mortgagor hereby represents that no approval or
action of any limited partner or shareholder, as applicable, of Mortgagor is
required to authorize any of the Loan Documents to which Mortgagor is a party
other than as have been obtained) and will constitute the legal, valid and
binding obligation of Mortgagor, enforceable against Mortgagor in accordance
with their terms,
42
except as enforcement may be stayed or limited by bankruptcy, insolvency,
reorganization, receivership, moratorium, or similar laws relating to or
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether considered in proceedings at law or in equity) and
will not (i) violate any provision of its partnership agreement or partnership
certificate or certificate of incorporation or by-laws, as applicable, or, to
its knowledge, any law, judgment, order, rule or regulation of any court,
arbitration panel or other Governmental Authority, domestic or foreign, or other
Person affecting or binding upon Mortgagor or the Mortgaged Property, or (ii)
violate any provision of any indenture, agreement, mortgage, contract or other
instrument to which Mortgagor or, if applicable, any General Partner is a party
or by which any of their respective property, assets or revenues are bound, or
be in conflict with, result in an acceleration of any obligation or a breach of
or constitute (with notice or lapse of time or both) a default or require any
payment or prepayment under, any such indenture, agreement, mortgage, contract
or other instrument, or (iii) result in the creation or imposition of any lien,
except those in favor of Mortgagee as provided in the Loan Documents to which
it is a party.
(d) Consent. Neither Mortgagor nor, if applicable, any General Partner, is
required to obtain any consent, approval or authorization from, or to file any
declaration or statement with, any Governmental Authority or other agency in
connection with or as a condition to the execution, delivery or performance of
this Mortgage, the Note or the other Loan Documents which has not been so
obtained or filed.
(e) Interest Rate. The rate of interest paid under the Note and the method
and manner of the calculation thereof do not violate any usury or other law or
applicable Legal Requirement.
(f) Other Agreements. Mortgagor is not a party to nor is otherwise bound
by any agreements or instruments which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect. Neither Mortgagor nor, if
applicable, any General Partner, is in violation of its partnership agreement or
corporate organizational documents, as applicable, or other restriction or any
agreement or instrument by which it is bound,
43
or any judgment, decree, writ, injunction, order or award of any arbitrator,
court or Governmental Authority, or any Legal Requirement, in each case,
applicable to Mortgagor or the Mortgaged Property, except for such violations
that would not, individually or in the aggregate, have a Material Adverse
Effect.
(g) Maintenance of Existence. (i) Mortgagor and, if applicable, each
General Partner at all times since their formation have been duly formed and
existing and shall preserve and keep in full force and effect their existence as
a Single Purpose Entity.
(i) Mortgagor and, if applicable, each General Partner, at all times
since their organization have complied, and will continue to comply, with
the provisions of its certificate and agreement of partnership or
certificate of incorporation and by-laws, as applicable, and will comply
in all material respects with the laws of its jurisdiction of organization
relating to partnerships or corporations, as applicable.
(ii) All customary formalities regarding the partnership, or
corporate existence, as applicable, of Mortgagor, and if, applicable, each
General Partner will be observed.
(iii) Mortgagor and, if applicable, each General Partner, will
maintain their respective financial statements, accounting records and
other partnership or corporate documents separate from those of any other
Person provided that nothing herein shall prohibit the inclusion of the
financial statements of Mortgagor in consolidated financial statements of
another Person. Except as contemplated herein and in the other Loan
Documents, Mortgagor and, if applicable, each General Partner will not
commingle, their respective assets with those of any other Person.
Mortgagor will maintain, its own bank accounts, payroll and separate books
of account.
(iv) Mortgagor and, if applicable, each General Partner, will pay
their own liabilities from their own separate assets.
44
(v) Mortgagor and, if applicable, each General Partner will identify
themselves, in all dealings with the public, under their own names and as
separate and distinct entities. Mortgagor and, if applicable, each General
Partner, will not identify themselves, as being a division of any other
Person.
(vi) Mortgagor and, if applicable, each General Partner, are and
will continue to be, adequately capitalized in light of the nature of
their respective businesses.
(vii) Mortgagor (A) except as previously disclosed in writing to
Mortgagor, does not own and will not own any encumbered asset other than
the Mortgaged Property, (B) is not engaged and will not engage in any
business other than the ownership, management, leasing, expanding and
operation of the Mortgaged Property and activities incidental thereto, (C)
will not enter into any contract or agreement with any Affiliate of
Mortgagor or, if applicable, any Affiliate of a General Partner except
upon terms and conditions that are intrinsically fair and substantially
similar to those that would be available on an arm's-length basis with
third parties other than an Affiliate, (D) will not incur any debt,
secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than the Loan and Permitted Debt (E) will not make any
loans or advances to any Person (including any Affiliate).
(viii) Mortgagor will not change its name or principal place of
business, except in connection with the Merger.
(ix) Mortgagor does not have, and will not have, any subsidiaries.
(x) Mortgagor will preserve and maintain its existence as a limited
partnership and all material rights, privileges, trade names and
franchises, except in connection with the Merger.
45
(xi) Neither Mortgagor, nor, if applicable, any General Partner,
will merge or consolidate with, or sell all or substantially all of its
respective assets to any Person, or liquidate, wind up or dissolve itself
(or suffer any liquidation, winding up or dissolution), except in
connection with the Merger. Mortgagor will not acquire any business or
assets from, or capital stock or other ownership interest of, or be a
party to any acquisition of, any Person, except in connection with the
Merger.
(xii) Mortgagor will not assume or guarantee the liabilities of its
partners or shareholders or any predecessor corporation or partnership,
each as applicable, any Affiliates, or any other Persons, except in
connection with the Merger. Mortgagor will not acquire obligations or
securities of its partners or shareholders or any predecessor corporation
or partnership, each as applicable, or any Affiliates, except in
connection with the Merger. Mortgagor will not make loans to its partners
or shareholders or any predecessor corporation or partnership, each as
applicable, or any Affiliates of any of such Persons.
(xiii) Mortgagor will not enter into or be a party to any
transaction with its partners or shareholders, as applicable, or any
Affiliates of its partners except in the ordinary course of business of
Mortgagor on terms which are no less favorable to Mortgagor than would be
obtained in a comparable arm's length transaction with an unrelated third
party.
(h) No Defaults. No Default or Event of Default has occurred and is
continuing or would occur as a result of the consummation of the transactions
contemplated by the Loan Documents. Mortgagor is not in default in the payment
or performance of any of its Contractual Obligations in any material respect.
(i) Governmental Consents and Approvals. Mortgagor and, if applicable,
each General Partner, have obtained or made all necessary (i) consents,
approvals and authorizations, and registrations and filings of or with all
Governmental Authorities
46
and (ii) consents, approvals, waivers and notifications of partners,
stockholders, creditors, lessors and other nongovernmental Persons, in each
case, which are required to be obtained or made by Mortgagor or, if applicable,
the General Partner, in connection with the execution and delivery of, and the
performance by Mortgagor of its obligations under, the Loan Documents except for
such consents, approvals and authorizations, registrations and filings, waivers
and notifications the failure of which to obtain or make would not have (i) a
Material Adverse Effect, (ii) interfere with Mortgagor's ability to pay its
obligations in timely manner or (iii) otherwise interfere with the benefits of
the security intended to be provided by this Mortgage.
(j) Investment Company Act Status. Mortgagor is not an "investment
company," or a company "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
(k) Compliance with Law. Mortgagor is in compliance in all material
respects with all Legal Requirements to which it or the Mortgaged Property is
subject, including, without limitation, all Environmental Statutes, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
and ERISA. No portion or the Mortgaged Property has been or will be purchased,
improved, fixtured, equipped or furnished with proceeds of any illegal activity.
(l) Financial Information. All financial data that has been delivered by
Mortgagor to Mortgagee (i) is true, complete and correct in all material
respects, (ii) accurately represents in all material respects the financial
condition and results of operations of the Persons covered thereby as of the
date on which the same shall have been furnished, and (iii) has been prepared in
accordance with GAAP (or such other accounting basis as is reasonably acceptable
to Mortgagee) throughout the periods covered. As of the date hereof, neither
Mortgagor nor, if applicable, any General Partner, has any contingent liability,
liability for taxes or other unusual or forward commitment of a material nature
not reflected in such financial statements delivered to Mortgagee; since the
date of the last financial statements delivered by Mortgagor to Mortgagee except
as
47
otherwise disclosed in such financial statements or notes thereto, there has
been no change in the assets, liabilities or financial position of Mortgagor
nor, if applicable, any General Partner, or in the results of operations of
Mortgagor which would have a Material Adverse Effect. Neither Mortgagor nor, if
applicable, any General Partner, has incurred any obligation or liability,
contingent or otherwise not reflected in such financial statements which would
have a Material Adverse Effect.
(m) Transaction Brokerage Fees. Mortgagor has not dealt with any
financial advisors, brokers, underwriters, placement agents, agents or
finders in connection with the transactions contemplated by this Mortgage
except for CS First Boston Mortgage Capital Corp. and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and their respective Affiliates.
All brokerage fees, commissions and other expenses payable in connection with
the transactions contemplated by the Loan Documents have been paid in full
contemporaneously with the execution of the Loan Documents and the funding of
the Loan. Mortgagor hereby agrees to indemnify and hold Mortgagee harmless
from and against any and all claims, liabilities, costs and expenses of any
kind in any way relating to or arising from (i) a claim by any Person that
such Person acted on behalf of Mortgagor in connection with the transactions
contemplated herein or (ii) any breach of the foregoing representation. The
provisions of this subsection (m) shall survive the repayment of the Debt.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan will
be used for the purpose of purchasing or acquiring any "margin stock" within the
meaning of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations G, T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by Legal Requirements or by the terms and conditions
of the Loan Documents.
(o) Pending Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Mortgagor, threatened against or affecting
Mortgagor or the Mortgaged Property in any court or before any Governmental
Authority which
48
if adversely determined either individually or collectively has or is reasonably
likely to have a Material Adverse Effect.
(p) Solvency; No Bankruptcy. Each of Mortgagor and, if applicable, the
General Partner, (i) is and has at all times been Solvent and will remain
Solvent immediately upon the consummation of the transactions contemplated by
the Loan Documents and (ii) is free from bankruptcy, reorganization or
arrangement proceedings or a general assignment for the benefit of creditors and
is not contemplating the filing of a petition under any state or federal
bankruptcy or insolvency laws or the liquidation of all or a major portion of
such Person's assets or property and Mortgagor has no knowledge of any Person
contemplating the filing of any such petition against it or, if applicable, the
General Partner. None of the transactions contemplated hereby will be or have
been made with an intent to hinder, delay or defraud any present or future
creditors of Mortgagor and Mortgagor has received reasonably equivalent value in
exchange for its obligations under the Loan Documents. Mortgagor's assets do
not, and immediately upon consummation of the transaction contemplated in the
Loan Documents will not, constitute unreasonably small capital to carry out its
business as presently conducted or as proposed to be conducted. Mortgagor does
not intend to, nor believe that it will, incur debts and liabilities beyond its
ability to pay such debts as they may mature.
(q) Use of Proceeds. The proceeds of the Loan shall be applied by
Mortgagor to, inter alia, (i) satisfy certain mortgage loans presently
encumbering all or a part of the Mortgaged Property, (ii) fund the Sub-Accounts
in accordance with Article V hereof and (iii) pay certain transaction costs
incurred by Mortgagor in connection with the Loan. No portion of the proceeds of
the Loan will be used for family, personal, agricultural or household use.
(r) Tax Filings. Mortgagor and, if applicable, each General Partner, have
filed all federal, state and local tax returns required to be filed and have
paid or made adequate provision for the payment of all federal, state and local
taxes, charges and assessments payable by Mortgagor and, if applicable, the
General Partners. Mortgagor and, if applicable, the General Partners, believe
that their respective tax returns properly re-
49
flect the income and taxes of Mortgagor and said General Partner, if any, for
the periods covered thereby, subject only to reasonable adjustments required by
the Internal Revenue Service or other applicable tax authority upon audit.
(s) Not Foreign Person. Mortgagor is not a "foreign person" within the
meaning ofss.1445(f)(3) of the Code.
(t) ERISA. (a) The assets of Mortgagor are not and will not become treated
as "plan assets", whether by operation of law or under regulations promulgated
under ERISA. Each Plan and Welfare Plan, and, to the knowledge of Mortgagor,
each Multiemployer Plan, is in compliance in all material respects with, and has
been administered in all material respects in compliance with, its terms and the
applicable provisions of ERISA, the Code and any other applicable Legal
Requirement, and no event or condition has occurred and is continuing as to
which Mortgagor would be under an obligation to furnish a report to Mortgagee
under clause (b)(i) of this Section. Other than an application for a favorable
determination letter with respect to a Plan, there are no pending issues or
claims before the Internal Revenue Service, the United States Department of
Labor or any court of competent jurisdiction related to any Plan or Welfare Plan
under which Mortgagor or any ERISA Affiliate, directly or indirectly (through an
indemnification agreement or otherwise), could be subject to any material risk
of liability under Section 409 or 502(i) of ERISA or Section 4975 of the Code.
No Welfare Plan provides or will provide benefits, including, without
limitation, death or medical benefits (whether or not insured) with respect to
any current or former employee of Mortgagor or any ERISA Affiliate beyond his or
her retirement or other termination of service other than (i) coverage mandated
by applicable law, (ii) death or disability benefits that have been fully
provided for by fully paid up insurance or (iii) severance benefits.
(b) Mortgagor will furnish to Mortgagee as soon as possible, and in
any event within ten (10) days after Mortgagor knows or has reason to believe
that any of the events or conditions specified below with respect to any Plan,
Welfare Plan or Multiemployer Plan has occurred or exists, a statement signed by
a senior financial officer of Mortgagor setting forth details
50
respecting such event or condition and the action, if any, that Mortgagor or its
ERISA Affiliate proposes to take with respect thereto (and a copy of any report
or notice required to be filed with or given to PBGC (or any other relevant
Governmental Authority) by Mortgagor or an ERISA Affiliate with respect to such
event or condition, if such report or notice is required to be filed with the
PBGC or any other relevant Governmental Authority:
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan,
as to which PBGC has not by regulation waived the requirement of
Section 4043(a) of ERISA that it be notified within thirty (30) days
of the occurrence of such event (provided that a failure to meet the
minimum funding standard of Section 412 of the Code of Section 302
of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of
the Code of Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section
412(d) of the Code), and any request for a waiver under Section
412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or any action taken by Mortgagor or
an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by Mortgagor or any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a Multiemployer
Plan by Mortgagor or any ERISA Affiliate that results in liability
under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary
51
liability as a result of a purchaser default) or the receipt by
Mortgagor or any ERISA Affiliate of notice from a Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against Mortgagor or any ERISA Affiliate to
enforce Section 515 of ERISA, which proceeding is not dismissed
within thirty (30) days;
(vi) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would
result in the loss of tax-exempt status of the trust of which such
Plan is a part if Mortgagor or an ERISA Affiliate fails to timely
provide security to the Plan in accordance with the provisions of
said Sections; or
(vii) the imposition of a lien or a security interest in
connection with a Plan.
(c) Mortgagor shall not knowingly engage in or permit any
transaction in connection with which Mortgagor or any ERISA Affiliate could be
subject to either a civil penalty or tax assessed pursuant to Section 502(i) or
502(l) of ERISA or Section 4975 of the Code, permit any Welfare Plan to provide
benefits, including without limitation, medical benefits (whether or not
insured), with respect to any current or former employee of Mortgagor or any
ERISA Affiliate beyond his or her retirement or other termination of service
other than (i) coverage mandated by applicable law, (ii) death or disability
benefits that have been fully provided for by paid up insurance or otherwise or
(iii) severance benefits, permit the assets of Mortgagor to become "plan
assets", whether by operation of law or under regulations promulgated under
ERISA or adopt, amend (except as may be required by applicable law) or increase
the amount of any benefit or amount payable under, or permit any ERISA Affiliate
to adopt, amend (except as may be required by applicable law) or increase the
amount of any benefit or amount payable under, any employee
52
benefit plan (including, without limitation, any employee welfare benefit plan)
or other plan, policy or arrangement, except in the ordinary course of business.
(u) Labor Matters. Mortgagor is not a party to any collective bargaining
agreements.
(v) Private Offering. Neither Mortgagor nor any Person authorized to act
on its behalf (other than the initial purchasers of the Securities (as defined
below), as to which no representation is made) in connection with any offer or
sale of any securities issued in connection with a Securitization (the
"Securities") has used any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act of 1933, as amended
from time to time (the "Securities Act"), including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. Neither Mortgagor nor any Person authorized
to act on its behalf (other than the initial purchasers of the Securities, as to
which no representation is made) (i) has offered or sold directly or indirectly,
the Securities or any interest in the Securities or any other security from any
Person in any manner, (ii) has solicited any offer to buy, or (iii) has taken
any other action, in each of the cases set forth in clauses (i) through (iii)
above, that would constitute a distribution of the Securities under the
Securities Act or would render the sale of the Securities a violation of Section
5 of the Securities Act or any state securities laws, or would require
registration pursuant to the Securities Act, or would require qualification of
any of the Loan Documents under the Trust Indenture Act of 1939.
Section 2.03. Further Acts, etc. Mortgagor will, at the cost of Mortgagor, and
without expense to Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices
of assignments, transfers and assurances as Mortgagee shall, from time to
time, reasonably require, for the better assuring, conveying, assigning,
transferring, and confirming unto Mortgagee the property and rights hereby
mortgaged, given, granted, bargained,
53
sold, alienated, enfeoffed, conveyed, confirmed, pledged, assigned and
hypothecated, or which Mortgagor may be or may hereafter become bound to convey
or assign to Mortgagee, or for carrying out or facilitating the performance
of the terms of this Mortgage or for filing, registering or recording
this Mortgage and, on demand, will execute and deliver and hereby
authorizes Mortgagee to execute in the name of Mortgagor or without the
signature of Mortgagor to the extent Mortgagee may lawfully do so, one or
more financing statements, chattel mortgages or comparable security
instruments, to evidence more effectively the lien hereof upon the Mortgaged
Property. Mortgagor grants to Mortgagee an irrevocable power of attorney
coupled with an interest for the purpose of protecting, perfecting,
preserving and realizing upon the interests granted pursuant to this Mortgage
(but not to increase the obligations of Mortgagor beyond those which are
intended to be granted in this Mortgage and the other Loan Documents)
and to effect the intent hereof, all as fully and effectually as Mortgagor
might or could do; and Mortgagor hereby ratifies all that Mortgagee shall
lawfully do or cause to be done by virtue hereof.
Section 2.04. Recording of Mortgage, etc. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to
time, will cause this Mortgage, and any security instrument creating a
lien or security interest or evidencing the lien hereof upon the Mortgaged
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present
or future law in order to publish notice of and fully protect the lien or
security interest hereof upon, and the interest of Mortgagee in, the Mortgaged
Property. Mortgagor will pay all filing, registration or recording fees, and
all expenses incident to the preparation, execution and acknowledgment of
this Mortgage, any mortgage supplemental hereto, any security instrument
with respect to the Mortgaged Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution
and delivery of this Mortgage, any mortgage supplemental hereto, any
security instrument with respect to the Mortgaged Property or any instrument of
further assurance, except where prohibited by law to do so, in which event
Mortgagee may declare the Debt to be immediately due and payable. Mortgagor
54
shall hold harmless and indemnify Mortgagee, and its successors and assigns,
against any liability incurred as a result of the imposition of any tax on
the making and recording of this Mortgage.
Section 2.05. Representations and Warranties as to the Mortgaged Property.
Mortgagor represents and warrants with respect to the Mortgaged Property as
follows:
(a) Lien Priority. This Mortgage is a valid and enforceable first lien
on the Mortgaged Property, free and clear of all encumbrances and liens
having priority over the lien of this Mortgage, except for the items set
forth as exceptions to or subordinate matters in the title insurance policy
insuring the lien of this Mortgage, none of which, individually or in the
aggregate, materially interfere with the benefits of the security intended to
be provided by this Mortgage, materially affect the value or marketability of
the Mortgaged Property, impair the use or operation of the Mortgaged Property
or impair Mortgagor's ability to pay its obligations in a timely manner (such
items being the "Permitted Encumbrances").
(b) Title. Mortgagor has, subject only to the Permitted Encumbrances,
good, insurable and marketable fee simple title to the Premises, Improvements
and Fixtures (collectively the "Realty") and to all easements and rights
benefitting the Realty and has the right, power and authority to mortgage,
give, grant, bargain, sell, alien, enfeoff, convey, confirm, pledge, assign,
and hypothecate the Mortgaged Property. Mortgagor will preserve its interest
in and title to the Mortgaged Property and will forever warrant and defend
the same to Mortgagee against any and all claims made by, through or under
Mortgagor and will forever warrant and defend the validity and priority of
the lien and security interest created herein against the claims of all
Persons whomsoever claiming by, through or under Mortgagor. The foregoing
warranty of title shall survive the foreclosure of this Mortgage and shall
inure to the benefit of and be enforceable by Mortgagee in the event
Mortgagee acquires title to the Mortgaged Property pursuant to any
foreclosure. In addition, there are no outstanding options or rights of first
refusal to purchase the Mortgaged Property or Mortgagor's ownership thereof.
55
(c) Taxes and Impositions. All taxes and other Impositions and
governmental assessments due and owing in respect of, and affecting, the
Mortgaged Property have been paid. Mortgagor has paid all Impositions which
constitute special governmental assessments in full, except for those
assessments which are permitted by applicable Legal Requirements to be paid in
installments, in which case all installments which are due and payable have been
paid in full. There are no pending, or to Mortgagor's best knowledge, proposed
special or other assessments for public improvements or otherwise affecting the
Mortgaged Property, nor are there any contemplated improvements to the Mortgaged
Property that may result in such special or other assessments.
(d) Casualty; Flood Zone. The Realty is in good repair and free and clear
of any damage, destruction or casualty (whether or not covered by insurance)
that would materially affect the value of the Realty or the use for which the
Realty was intended. No portion of the Premises is located in an "area of
special flood hazard," as that term is defined in the regulations of the Federal
Insurance Administration, Department of Housing and Urban Development, under the
National Flood Insurance Act of 1968, as amended (24 CFR ss.1909.1) or Mortgagor
has obtained the flood insurance required by Section 3.01(a)(vi) hereof. The
Premises either does not lie in a 100 year flood plain that has been identified
by the Secretary of Housing and Urban Development or any other Governmental
Authority or, if it does, Mortgagor has obtained the flood insurance required by
Section 3.01(a)(vi) hereof.
(e) Completion; Encroachment. All Improvements necessary for the efficient
use and operation of the Premises have been completed and none of said
Improvements lie outside the boundaries and building restriction lines of the
Premises. Except as set forth in the title insurance policy insuring the lien of
this Mortgage, no improvements on adjoining properties encroach upon the
Premises.
(f) Separate Lot. The Premises are taxed separately without regard to any
other real estate and constitute a legally subdivided lot under all applicable
Legal Requirements (or, if not subdivided, no subdivision or platting of the
Premises is
56
required under applicable Legal Requirements), and for all purposes may be
mortgaged, conveyed or otherwise dealt with as an independent parcel except as
previously disclosed in writing to Mortgagee. The Mortgaged Property does not
benefit from any tax abatement or exemption.
(g) Use. The existence of all Improvements, the present use and operation
thereof and the access of the Premises and the Improvements to all of the
utilities and other items referred to in paragraph (k) below are in compliance
in all material respects with all Leases affecting the Mortgaged Property and
all applicable Legal Requirements, including, without limitation, Environmental
Statutes, Development Laws and Use Requirements. Mortgagor has not received any
notice from any Governmental Authority alleging any uncured violation relating
to the Mortgaged Property of any applicable Legal Requirements the failure to
cure of which is reasonably likely to have a Material Adverse Effect.
(h) Licenses and Permits. Mortgagor currently holds and will continue to
hold all certificates of occupancy, licenses, registrations, permits, consents,
franchises and approvals of any Governmental Authority or any other Person which
are material for the lawful occupancy and operation of the Realty or which are
material to the ownership or operation of the Mortgaged Property or the conduct
of Mortgagor's business. All such certificates of occupancy, licenses,
registrations, permits, consents, franchises and approvals are current and in
full force and effect.
(i) Environmental Matters. Mortgagor has received and reviewed the
Environmental Report and has no reason to believe that the Environmental Report
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which such statements were made, not misleading.
57
(j) Property Proceedings. Except as previously disclosed to Mortgagee
in writing, there are no actions, suits or proceedings pending or threatened
in any court or before any Governmental Authority or arbitration board or
tribunal (i) relating to (A) the zoning of the Premises or any part thereof,
(B) any certificates of occupancy, licenses, registrations, permits, consents
or approvals issued with respect to the Mortgaged Property or any part thereof,
(C) the condemnation of the Mortgaged Property or any part thereof, or (D) the
condemnation or relocation of any roadways abutting the Premises required for
access or the denial or limitation of access to the Premises or any part
thereof from any point of access to the Premises, (ii) asserting that (A) any
such zoning, certificates of occupancy, licenses, registrations, permits,
consents and/or approvals do not permit the operation of any material portion
of the Realty as presently being conducted, (B) any material improvements
located on the Mortgaged Property or any part thereof cannot be located thereon
or operated with their intended use or (C) the operation of the Mortgaged
Property or any part thereof is in violation in any material respect of any
Environmental Statutes, Development Laws or other Legal Requirements or Space
Leases or Property Agreements or (iii) which (A) might affect the validity or
priority of any Loan Document or (B) have a Material Adverse Effect. Mortgagor
is not aware of any facts or circumstances which may give rise to any
actions, suits or proceedings described in the preceding sentence.
(k) Utilities. The Premises has all necessary legal access to water, gas
and electrical supply, storm and sanitary sewerage facilities, other required
public utilities (with respect to each of the aforementioned items, by means of
either a direct connection to the source of such utilities or through
connections available on publicly dedicated roadways directly abutting the
Premises or through permanent insurable easements benefiting the Premises), fire
and police protection, parking, and means of direct access between the Premises
and public highways over recognized curb cuts (or such access to public highways
is through private roadways which may be used for ingress and egress pursuant to
permanent insurable easements).
58
(l) Mechanics' Liens. The Mortgaged Property is free and clear of any
mechanics' liens or liens in the nature thereof, and no rights are
outstanding that under law could give rise to any such liens, any of which
liens are or may be prior to, or equal with, the lien of this Mortgage,
except those which are insured against by the title insurance policy insuring
the lien of this Mortgage.
(m) Title Insurance and Survey. Mortgagee has received a lenders' title
insurance policy insuring this Mortgage as a first lien on the Mortgaged
Property subject only to Permitted Encumbrances.
(n) Insurance. The Mortgaged Property is insured in accordance with the
requirements set forth in Article III hereof.
(o) Space Leases.
(i) Mortgagor has delivered a true, correct and complete schedule of
all Space Leases as of the date hereof, which accurately and completely
sets forth in all material respects, for each such Space Lease, except for
temporary license agreements for terms of less than one year, the
following (collectively, the "Rent Roll"): the name of the tenant; the
lease expiration date, extension and renewal provisions; the base rent;
and all additional rent and pass-through obligations.
(ii) Each Space Lease constitutes the legal, valid and binding
obligation of Mortgagor and, to the knowledge of Mortgagor, is enforceable
against the tenant thereof. No default exists, or with the passing of time
or the giving of notice would exist, (A) under any Major Space Lease or
(B) under any other Space Leases which would, in the aggregate, have a
Material Adverse Effect.
(iii) No tenant under any Space Lease has, as of the date hereof,
paid Rent more than thirty (30) days in advance, and the Rents under such
Space Leases have not been waived, released, or otherwise discharged or
compromised.
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(iv) Except as previously disclosed in writing to Mortgagee, all
work to be performed by Mortgagor under the Space Leases has been
substantially performed, all contributions which are due and payable to be
made by Mortgagor to the tenants thereunder have been made except for any
held-back amounts, and all other conditions precedent to each such
tenant's obligations thereunder have been satisfied.
(v) Intentionally omitted.
(vi) Each tenant under a Major Space Lease has entered into
occupancy of the demised premises to the extent required under the terms
of its Major Space Lease, and each such tenant is open and conducting
business with the public in the demised premises. To the best knowledge of
Mortgagor, after due inquiry, each tenant under a Lease other than a Major
Space Lease has entered into occupancy of its demised premises under its
Lease to the extent required under the terms of its Lease and each such
tenant is open and conducting business with the public in the demised
premises.
(vii) Mortgagor has delivered to Mortgagee true, correct and
complete copies of the Space Leases described in the Rent Roll that have
been requested by Mortgagee.
(viii) Each Space Lease is in full force and effect and the
information disclosed on the Rent Roll reflects any assignment,
modification, supplementation or amendment in any way related to a Space
Lease.
(ix) Except as previously disclosed in writing to Mortgagee, to
the best of Mortgagor's knowledge, each tenant under each Space Lease is
free from bankruptcy, reorganization or arrangement proceedings or a
general assignment for the benefit of creditors.
(x) No Space Lease provides any party with the right to obtain a
lien or encumbrance upon the Mortgaged Property superior to the lien of
this Mortgage.
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(p) Property Agreements.
(i) Mortgagor has delivered to Mortgagee true, correct and complete
copies of all Property Agreements.
(ii) No Property Agreement provides any party with the right to
obtain a lien or encumbrance upon the Mortgaged Property superior to the
lien of this Mortgage.
(iii) No default exists or with the passing of time or the giving of
notice or both would exist under any Property Agreement which would,
individually or in the aggregate, have a Material Adverse Effect.
(iv) Other than late payment notices sent in the ordinary course of
business, Mortgagor has not received or given any written communication
which alleges that a default exists or, with the giving of notice or the
lapse of time, or both, would exist under the provisions of any Property
Agreement.
(v) No condition exists whereby Mortgagor or any future owner of the
Mortgaged Property may be required to purchase any other parcel of land
which is subject to any Property Agreement or which gives any Person a
right to purchase, or right of first refusal with respect to, the
Mortgaged Property.
(vi) To the best knowledge of Mortgagor, no offset or any right of
offset exists respecting continued contributions to be made by any party
to any Property Agreement except as expressly set forth therein. Except as
previously disclosed to Mortgagee in writing, no material exclusions or
restrictions on the utilization, leasing or improvement of the Mortgaged
Property (including non-compete agreements) exists in any Property
Agreement.
(vii) All "pre-opening" requirements contained in all Property
Agreements (including, but not limited to, all off-site and on-site
construction requirements), if any, have been fulfilled, and, to the best
of Mortgagor's knowledge, no condition now exists whereby any party to any
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such Property Agreement could refuse to honor its obligations thereunder.
(viii) All work, if any, to be performed by Mortgagor under each of
the Property Agreements has been substantially performed, all
contributions to be made by Mortgagor to any party to such Property
Agreements have been made, and all other conditions to such party's
obligations thereunder have been satisfied.
(q) Personal Property. Mortgagor has delivered to Mortgagee a schedule
which is true, correct and complete in all material respects of all personal
property, if any, owned by Mortgagor and located upon the Mortgaged Property or
used in connection with the use or operation of the Mortgaged Property and
Mortgagor represents that it has good and marketable title to all such personal
property, free and clear of any liens, except for liens created under the Loan
Documents and liens which describe the equipment and other personal property
owned by tenants and certain chattel liens disclosed in writing to Mortgagee.
(r) Leasing Brokerage and Management Fees. Except as previously disclosed
to Mortgagee in writing, there are no brokerage fees or commissions payable by
Mortgagor with respect to the leasing of space at the Mortgaged Property and
there are no management fees payable by Mortgagor with respect to the management
of the Mortgaged Property.
(s) Security Deposits. All security deposits with respect to the Mortgaged
Property on the date hereof have been transferred to the Security Deposit
Account on the date hereof, and Mortgagor is in compliance with all Legal
Requirements relating to such security deposits as to which failure to comply
might, individually or in the aggregate, have a Material Adverse Effect.
(t) Loan to Value Ratio. To the best knowledge of Mortgagor, based on the
Appraisal (which Mortgagor believes to contain a reasonable assessment of the
fair market value of the Mortgaged Property), the Initial Allocated Loan Amount
does not exceed one hundred twenty-five percent (125%) of the fair market
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value of the Mortgaged Property. For the purposes of this clause (t), the term
"fair market value" shall not include (i) the amount of any indebtedness
secured by a lien affecting the Mortgaged Property that is prior to, or on a
parity with, the lien of this Mortgage, and (ii) the value of any
property that is not "real property" within the meaning of Treas. Reg.
ss.ss.1.860G-2 and 1.856-3(d).
(u) Representations Generally. The review and inquiry made on behalf of
Mortgagor in connection with the representations and warranties contained in
the Mortgage, have all been made by Persons having the requisite
expertise and knowledge to provide such representations and warranties. No
representation, warranty or statement of fact made by or on behalf of Mortgagor
in this Mortgage or in any certificate, document or schedule furnished
to Mortgagee pursuant hereto, contains any untrue statement of a material
fact or omits to state any material fact necessary to make statements
contained therein or herein not misleading (which may be to Mortgagor's best
knowledge where so provided herein). There are no facts presently known to
Mortgagor which have not been disclosed to Mortgagee which would,
individually or in the aggregate, have a Material Adverse Effect nor as far
as Mortgagor can foresee might, individually or in the aggregate, have a
Material Adverse Effect. All representations and warranties contained in this
Mortgage shall survive the closing of the Loan.
Section 2.06. Removal of Lien. (a) Mortgagor shall, at its expense, maintain
this Mortgage as a first lien on the Mortgaged Property and shall keep the
Mortgaged Property free and clear of all liens of any kind and nature other
than the Permitted Encumbrances. Mortgagor shall, within twenty (20) days
following the filing thereof, promptly discharge of record, by bond or
otherwise, any such liens and, promptly upon request by Mortgagee, shall
deliver to Mortgagee evidence reasonably satisfactory to Mortgagee of the
discharge thereof.
(b) Subject to the provisions of Section 2.06(a) hereof, Mortgagor shall
(i) pay, from time to time when the same shall become due, all claims and
demands of mechanics, materialmen, laborers, and others which, if unpaid, might
result in, or permit the creation of, a lien on the Mortgaged Property or any
part thereof, or on the revenues, rents, issues, income or profits
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arising therefrom, (ii) cause to be removed of record (by payment or posting
of bond or settlement or otherwise) any mechanics', materialmens', laborers'
or other lien on the Mortgaged Property, or any part thereof, or on the
revenues, rents, issues, income or profit arising therefrom, and (iii) in
general, do or cause to be done, without expense to Mortgagee, everything
reasonably necessary to preserve in full the lien of this Mortgage. If
Mortgagor fails to comply with the requirements of paragraph (b) of this
Section 2.06, then, upon five (5) Business Days' prior notice to Mortgagor,
Mortgagee may, but shall not be obligated to, pay any such lien, and
Mortgagor shall, within five (5) Business Days after Mortgagee's demand
therefor, reimburse Mortgagee for all sums so expended, together with
interest thereon at the Default Rate from the date advanced, all of which
shall be deemed part of the Debt. Nothing contained herein shall be deemed a
consent or request of Mortgagee, express or implied, by inference or
otherwise, to the performance of any alteration, repair or other work by any
contractor, subcontractor or laborer or the furnishing of any materials by
any materialmen in connection therewith.
(c) Notwithstanding the foregoing, Mortgagor may contest any lien
(other than a lien relating to non-payment of Impositions, the contest of
which shall be governed by Section 4.04 hereof) of the type set forth in
subparagraph (b)(ii) of this Section 2.06 provided that, following prior
notice to Mortgagee (i) Mortgagor is contesting the validity of such lien
with due diligence and in good faith and by appropriate proceedings, without
cost or expense to Mortgagee or any of its agents, employees, officers, or
directors, (ii) Mortgagor shall preclude the collection of, or other
realization upon, any contested amount from the Mortgaged Property or any
revenues from or interest in the Mortgaged Property, (iii) neither the
Mortgaged Property nor any part thereof nor interest therein, shall be in any
danger of being sold, forfeited or lost by reason of such contest by
Mortgagor, (iv) such contest by Mortgagor shall not affect the ownership, use
or occupancy of the Mortgaged Property, (v) such contest by Mortgagor shall
not subject Mortgagee or Mortgagor to the risk of civil or criminal liability
(other than the civil liability of Mortgagor for the amount of the lien in
question), (vi) such lien is subordinate to the lien of this Mortgage, (vii)
Mortgagor has not consented to such lien,
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(viii) Mortgagor has given Mortgagee prompt notice of the filing of such lien
and the bonding thereof by Mortgagor and, upon request by Mortgagee from time
to time, notice of the status of such contest by Mortgagor and/or
confirmation of the continuing satisfaction of the conditions set forth in
this Section 2.06(c), (ix) Mortgagor shall promptly pay the obligation
secured by such lien upon a final determination of Mortgagor's liability
therefor, and (xi) Mortgagor shall deliver to Mortgagee cash, a bond or other
security acceptable to Mortgagee equal to 125% of the contested amount
pursuant to collateral arrangements reasonably satisfactory to Mortgagee.
Section 2.07. Cost of Defending and Upholding this Mortgage Lien. If any
action or proceeding is commenced to which Mortgagee is made a party relating
to the Loan Documents and/or the Mortgaged Property or Mortgagee's interest
therein or in which it becomes necessary to defend or uphold the lien of this
Mortgage or any other Loan Document, Mortgagor shall, on demand, reimburse
Mortgagee for all expenses (including, without limitation, reasonable
attorneys' fees and disbursements) incurred by Mortgagee in connection
therewith, and such sum, together with interest thereon at the Default Rate
from and after such demand until fully paid, shall constitute a part of the
Debt.
Section 2.08. Use of the Mortgaged Property. Mortgagor will use, or cause to
be used, the Mortgaged Property for such use as is permitted pursuant to
applicable Legal Requirements including, without limitation, under the
certificate of occupancy applicable to the Mortgaged Property, and which is
required by the Loan Documents. Mortgagor shall not suffer or permit the
Mortgaged Property or any portion thereof to be used by the public, any
tenant, or any Person not subject to a Lease, in a manner as is reasonably
likely to impair Mortgagor's title to the Mortgaged Property, or in such
manner as may give rise to a claim or claims of adverse usage or adverse
possession by the public, or of implied dedication of the Mortgaged Property
or any part thereof.
Section 2.09. Financial Reports. (a) Mortgagor will keep and maintain or will
cause to be kept and maintained on a fiscal year basis, in accordance with
GAAP or federal income tax basis prepared consistently with the statements of
books, records and accounts delivered to Mortgagee and the Rating Agency
prior to the Closing
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Date (or such other accounting basis reasonably acceptable to Mortgagee)
consistently applied, proper and adequate books, records and accounts
reflecting (i) all of the financial affairs of Mortgagor and (ii) all items
of income and expense in connection with the operation of the Mortgaged
Property or in connection with any services, equipment or furnishings
provided in connection with the operation thereof, whether such income or
expense may be realized by Mortgagor or by any other Person whatsoever,
excepting lessees unrelated to and unaffiliated with Mortgagor who have
leased from Mortgagor portions of the Premises for the purpose of occupying
the same. Mortgagee shall have the right from time to time at all times
during normal business hours upon reasonable notice to examine such books,
records and accounts at the office of Mortgagor or other person maintaining
such books, records and accounts and to make such copies or extracts thereof
as Mortgagee shall desire. After the occurrence of an Event of Default,
Mortgagor shall pay any costs and expenses incurred by Mortgagee to examine
Mortgagor's accounting records with respect to the Mortgaged Property, as
Mortgagee shall determine to be necessary or appropriate in the protection of
Mortgagee's interest.
(b) Mortgagor will furnish Mortgagee annually, within one hundred
twenty (120) days following the end of each Fiscal Year of Mortgagor, with a
complete copy of Mortgagor's financial statement audited by an Independent
certified public accountant that is reasonably acceptable to Mortgagee in
accordance with GAAP or federal income tax basis prepared consistently with
the statements of books, records and accounts
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delivered to Mortgagee and the Rating Agency prior to the Closing Date (or
such other accounting basis reasonably acceptable to Mortgagee)
consistently applied covering (i) the financial affairs of Mortgagor and (ii)
the operation of the Mortgaged Property for such Fiscal Year and containing a
statement of revenues and expenses, a statement of assets and liabilities and
a statement of Mortgagor's equity. Together with Mortgagor's annual financial
statements, Mortgagor shall furnish to Mortgagee an Officer's Certificate
certifying as of the date thereof (i) that the annual financial statements
accurately represent the results of operation and financial condition of
Mortgagor and the Mortgaged Property all in accordance with GAAP or federal
income tax basis prepared consistently with the statements of books, records
and accounts delivered to Mortgagee and the Rating Agency prior to the
Closing Date consistently applied, and (ii) whether there exists an event or
circumstance which constitutes, or which upon notice or lapse of time or both
would constitute, a Default under the Note or any other Loan Document
executed and delivered by Mortgagor, and if such event or circumstance exists,
the nature thereof, the period of time it has existed and the action then
being taken to remedy such event or circumstance.
(c) Mortgagor will furnish Mortgagee monthly, within thirty (30) days
following the end of each month, with a true, complete and correct cash flow
statement all in accordance with GAAP or federal income tax basis prepared
consistently with the statements of books, records and accounts delivered to
Mortgagee and the Rating Agency prior to the Closing Date consistently
applied with respect to the Mortgaged Property in the form attached hereto as
Exhibit C and made a part hereof, showing (i) all cash receipts of any kind
whatsoever and all cash payments and disbursements, and (ii) year-to-date
summaries of such cash receipts, payments and disbursements together with a
certification of the Manager stating that such cash flow statement is true,
complete and correct.
(d) Mortgagor will furnish Mortgagee monthly, within thirty (30) days
following the end of each month, with a certification of the Manager stating
that all Operating Expenses with respect to the Mortgaged Property which had
accrued as of the last day of the month preceding the delivery of the cash flow
statement referred to in clause (c) above have been fully paid or otherwise
reserved or provided for by the Manager (any such certification or any
certification furnished by a Manager pursuant to clause (c) above, a "Manager
Certification").
(e) Mortgagor will furnish Mortgagee quarterly, within sixty (60) days
following the end of the first three fiscal quarters of Mortgagor and within
one-hundred twenty (120) days after the end of each Fiscal Year, with a true,
complete and correct rent roll for the Mortgaged Property, including a list of
which tenants are in default under their respective leases, dated as of the
date of Mortgagee's request, identifying each tenant, the monthly rent and
additional rent, if any, payable by such tenant, the expiration date of such
tenant's Lease, the security
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deposit, if any, held by Mortgagor under the Lease, the space covered by the
Lease, and the arrearages for such tenant, if any, the sales per square foot of
each tenant, to the extent reported by tenants under the terms of the Leases
(which Mortgagor agrees to use best efforts to obtain if required under the
terms of the Leases) and such rent roll shall be accompanied by an Officer's
Certificate, dated as of the date of the delivery of such rent roll, certifying
that such rent roll is true, correct and complete in all material respects as of
its date.
(f) Mortgagor shall furnish to Mortgagee, within thirty (30) days after
Mortgagee's request therefor, with such further detailed information with
respect to the operation of the Mortgaged Property and the financial affairs of
Mortgagor as may be reasonably requested by Mortgagee.
(g) Mortgagor shall cause the Manager to furnish to Mortgagee, within
thirty (30) days after the end of each month, a schedule of tenant security
deposits showing any activity in the Security Deposit Account for such month,
together with a certification of the Manager as to the balance in such Security
Deposit Account and that such tenant security deposits are being held in
accordance with all Legal Requirements.
(h) Mortgagor will furnish Mortgagee quarterly, within sixty (60) days
following the end of the first three fiscal quarters of Mortgagor and within
one hundred twenty (120) days after the end of each Fiscal Year, with a
report setting forth (i) the Net Operating Income for such fiscal quarter and
Fiscal Year-to-date, each as compared to the preceding Fiscal Year, (ii) the
average and period end occupancy rate of the Mortgaged Property, (iii) the Debt
Service Coverage for the most recent fiscal quarter and Fiscal Year-to-date,
and each as compared to the preceding Fiscal Year, (iv) the capital repairs,
replacements and improvements performed at the Mortgaged Property during such
fiscal quarter and Fiscal Year-to-Date and the aggregate Recurring
Replacement Expenditures made in connection therewith, and (v) the balance
contained in each of the Sub-Accounts as of the end of such fiscal quarter
(which balance Mortgagee shall provide upon Mortgagor's written request
therefor).
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Section 2.10. Litigation. Mortgagor will give prompt written notice to
Mortgagee of any litigation or governmental proceedings pending or
threatened (in writing) against Mortgagor which might have a Material Adverse
Effect.
ARTICLE III: INSURANCE AND CASUALTY RESTORATION
Section 3.01. Insurance Coverage. Mortgagor shall, at its expense, maintain the
following insurance coverages with respect to the Mortgaged Property during the
term of this Mortgage:
(a) (i) Insurance against loss or damage by fire, casualty and other
hazards included in an "all-risk" extended coverage endorsement or its
equivalent, with such endorsements as Mortgagee may from time to time
reasonably require and which are customarily required by Institutional
Lenders of similar properties similarly situated, covering the Mortgaged
Property in an amount not less than the greater of (A) 100% of the
insurable replacement value of the Mortgaged Property (exclusive of the
Premises and footings and foundations) and (B) such other amount as is
necessary to prevent any reduction in such policy by reason of and to
prevent Mortgagor, Mortgagee or any other insured thereunder from being
deemed to be a co-insurer. Not less frequently than once every three
years, Mortgagor, at its option, shall either (A) have the Appraisal
updated or obtain a new appraisal of the Mortgaged Property reasonably
acceptable to Mortgagee, (B) have a valuation of the Mortgaged Property
made by or for its insurance carrier conducted by an appraiser experienced
in valuing properties of similar type to that of the Mortgaged Property
and reasonably acceptable to Mortgagee which are in the geographical
area in which the Mortgaged Property is located or (C) provide such other
evidence as will, in Mortgagee's sole judgment, enable Mortgagee to
determine whether there shall have been an increase in the insurable value
of the Mortgaged Property and Mortgagor shall deliver such updated
Appraisal, new appraisal, insurance valuation or other evidence acceptable
to Mortgagee, as the case may be, and, if such updated Appraisal, new
appraisal, insurance valuation, or other evidence acceptable to
Mortgagee
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reflects an increase in the insurable value of the Mortgaged Property, the
amount of insurance required hereunder shall be increased accordingly and
Mortgagor shall deliver evidence satisfactory to Mortgagee that such
policy has been so increased.
(ii) Commercial comprehensive general liability insurance
against claims for personal and bodily injury and/or death to one or more
persons or property damage, occurring on, in or about the Mortgaged
Property (including the adjoining streets, sidewalks and passageways
therein) in such amounts as Mortgagee may from time to time reasonably
require (but in no event shall Mortgagee's requirements be increased
more frequently than once during each twelve (12) month period) and which
are customarily required by Institutional Lenders for similar properties
similarly situated, but not less than $10,000,000.00.
(iii) Business interruption, rent loss or other similar
insurance (A) with loss payable to Mortgagee, (B) covering all risks
required to be covered by the insurance provided for in Section 3.01(a)(i)
and (C) in an amount not less than 100% of the projected fixed or base
rent plus percentage rent for the succeeding twenty-four (24) month period
unless the Rating Agency shall have delivered confirmation that any rating
issued in connection with the Securitization will not, as a result of
having business interruption, rent loss or other similar insurance for a
shorter period, be downgraded from the then current ratings thereof,
qualified or withdrawn, based on an occupancy rate of 100%. The amount of
such insurance shall be determined upon the execution of this Mortgage,
and not more frequently than once each calendar year thereafter
based on Mortgagor's reasonable estimate of projected fixed or base rent
plus percentage rent, from the Mortgaged Property for the next succeeding
twenty-four (24) months unless the Rating Agency shall have delivered
confirmation that any rating issued in connection with the Securitization
will not, as a result of having business interruption, rent loss or other
similar insurance for a shorter period, be downgraded from the then
current ratings thereof, qualified or withdrawn. In the event the
Mortgaged Property shall be damaged or destroyed,
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Mortgagor shall and hereby does assign to Mortgagee all payment of claims
under the policies of such insurance, and all amounts payable thereunder,
and all net amounts, shall be collected by Mortgagee under such policies
and shall be applied in accordance with this Mortgage; provided,
however, that nothing herein contained shall be deemed to relieve
Mortgagor of its obligations to timely pay all amounts due under the
Loan Documents.
(iv) War risk insurance when such insurance is obtainable
from the United States of America or any agency or instrumentality thereof
at reasonable rates (for the maximum amount of insurance obtainable) and
if requested by Mortgagee, and such insurance is then customarily
required by Institutional Lenders of similar properties similarly
situated.
(v) Insurance against loss or damages 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 Mortgaged Property, in such amounts as Mortgagee may from
time to time reasonably require and which are then customarily required by
Institutional Lenders of similar properties similarly situated.
(vi) Flood insurance in an amount equal to the full insurable
value of the Mortgaged Property or the maximum amount available, whichever
is less, if the Improvements are located in an area designated by the
Secretary of Housing and Urban Development as being "an area of special
flood hazard" under the National Flood Insurance Program (i.e., having a
one percent or greater chance of flooding), and if flood insurance is
available under the National Flood Insurance Act.
(vii) Worker's compensation insurance or other similar
insurance which may be required by Governmental Authorities or Legal
Requirements.
(viii) Such other insurance as may from time to time be
required by Mortgagee and which is then customarily
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required by Institutional Lenders for similar properties similarly
situated, against other insurable hazards, including, but not limited to,
malicious mischief, vandalism, windstorm or earthquake, which at the time
are commonly insured against and generally available in the case of
properties similarly situated, due regard to be given to the size and type
of the Premises, Improvements, Fixtures and Equipment and their location,
construction and use.
(b) If Mortgagor is a partnership, Mortgagor shall cause the General
Partner to maintain fidelity insurance in an amount equal to or greater
than the annual Operating Income of the Mortgaged Property for the six (6)
month period immediately preceding the date on which the premium for such
insurance is due and payable.
(c) Mortgagor shall cause any Manager of the Mortgaged Property to
maintain fidelity insurance in an amount equal to or greater than the
annual Operating Income of the Mortgaged Property for the six (6) month
period immediately preceding the date on which the premium for such
insurance is due and payable or such lesser amount as Mortgagee shall
approve.
Section 3.02. Policy Terms. (a) All insurance required by this Article III
shall be in the form (other than with respect to Sections 3.01(a)(vi) and
(vii) above when insurance in those two sub-sections is placed with a
governmental agency or instrumentality on such agency's forms) and amount and
with deductibles as, from time to time, shall be reasonably acceptable to
Mortgagee, under valid and enforceable policies issued by financially
responsible insurers authorized to do business in the State where the Mortgaged
Property is located, with a general policyholder's service rating of not less
than A and a financial rating of not less than XI as rated in the most
currently available Best's Insurance Reports (or the equivalent, if such
rating system shall hereafter be altered or replaced) and shall have a claims
paying ability rating of not less than "AA" from the Rating Agency or, if not
so rated by the Rating Agency, then the Rating Agency shall have delivered
confirmation that any rating issued in connection with the Securitization
will not, as a result of the failure of such proposed issuer to meet such
standard, be
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downgraded from the then current ratings thereof, qualified or withdrawn.
Originals or certified copies of all insurance policies shall be delivered to
and held by Mortgagee. All such policies (except policies for worker's
compensation) shall name Mortgagee as an additional named insured, shall
provide for loss payable to Mortgagee and shall contain (or have attached):
(i) standard "non-contributory mortgagee" endorsement or its equivalent
relating, inter alia, to recovery by Mortgagee notwithstanding the
negligent or willful acts or omissions of Mortgagor; (ii) a waiver of
subrogation endorsement as to Mortgagee; (iii) an endorsement indicating
that neither Mortgagee nor Mortgagor shall be or be deemed to be a co-insurer
with respect to any casualty risk insured by such policies and shall provide
for a deductible per loss of an amount not more than that which is
customarily maintained by owners of similar properties similarly situated,
and (iv) a provision that such policies shall not be canceled, terminated,
denied renewal or amended, including, without limitation, any amendment
reducing the scope or limits of coverage, without at least thirty (30) days'
prior written notice to Mortgagee in each instance. Not less than thirty
(30) days prior to the expiration dates of the insurance policies obtained
pursuant to this Mortgage, originals or certified copies of renewals of
such policies (or certificates evidencing such renewals) bearing notations
evidencing the payment of premiums or accompanied by other reasonable
evidence of such payment (which premiums shall not be paid by Mortgagor through
or by any financing arrangement which would entitle an insurer to terminate a
policy) shall be delivered by Mortgagor to Mortgagee. Mortgagor shall not carry
separate insurance, concurrent in kind or form or contributing in the event
of loss, with any insurance required under this Article III.
(b) If Mortgagor fails to maintain and deliver to Mortgagee the
original policies or certificates of insurance required by this Mortgage,
or if there are insufficient funds in the Basic Carrying Costs
Sub-Account to pay the premiums for same, Mortgagee may, at its option,
procure such insurance, and Mortgagor shall pay, or as the case may be,
reimburse Mortgagee for, all premiums thereon promptly, upon demand by
Mortgagee, with interest thereon at the Default Rate from the date paid by
Mortgagee to the date of repayment and such sum shall constitute a part of
the Debt.
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(c) Mortgagor shall notify Mortgagee of the renewal premium of each
insurance policy and Mortgagee shall be entitled to pay such amount on
behalf of Mortgagor from the Basic Carrying Costs Sub-Account. With respect to
insurance policies which require periodic payments (i.e., monthly or
quarterly) of premiums, Mortgagee shall be entitled to pay such amounts
fifteen (15) days (or such lesser number of days as Mortgagee shall
determine) prior to the respective due dates of such installments.
(d) The insurance required by this Mortgage may, at the option of
Mortgagor, be effected by blanket and/or umbrella policies issued to Mortgagor
covering the Mortgaged Property provided that, in each case, the policies
otherwise comply with the provisions of this Mortgage and allocate to
the Mortgaged Property, from time to time (but in no event less than once a
year), the coverage specified by this Mortgage, without possibility of
reduction or coinsurance by reason of, or damage to, any other property (real
or personal) named therein. If the insurance required by this Mortgage
shall be effected by any such blanket or umbrella policies, Mortgagor shall
furnish to Mortgagee original policies or certified copies thereof, or an
original certificate of insurance together with reasonable access to the
original of such policy to review such policy's coverage of the Mortgaged
Property, with schedules attached thereto showing the amount of the insurance
provided under such policies applicable to the Mortgaged Property.
Section 3.03. Assignment of Policies. (a) Mortgagor hereby assigns to
Mortgagee the proceeds of all insurance (other than liability insurance)
obtained pursuant to this Mortgage, all of which proceeds shall be
payable to Mortgagee as collateral and further security for the payment of
the Debt and the performance of the Cross-collateralized Borrower's
obligations hereunder and under the other Loan Documents, and Mortgagor hereby
authorizes and directs the issuer of any such insurance to make payment of
such proceeds directly to Mortgagee. Except as otherwise expressly provided
in Section 3.04 or elsewhere in this Article III, Mortgagee shall have the
option, in its discretion, and without regard to the adequacy of its
security, to apply all or any part of the proceeds it may receive pursuant to
this Article in such manner as Mortgagee may elect to any one or more of
the
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following: (i) the payment of the Debt, whether or not then due, in any
proportion or priority as Mortgagee, in its discretion, may elect, (ii) the
repair or restoration of the Mortgaged Property, (iii) the cure of any Default
or (iv) the reimbursement of the costs and expenses of Mortgagee incurred
pursuant to the terms hereof in connection with the recovery of the Insurance
Proceeds. Nothing herein contained shall be deemed to excuse Mortgagor from
repairing or maintaining the Mortgaged Property as provided in this Mortgage or
restoring all damage or destruction to the Mortgaged Property, regardless of the
sufficiency of the Insurance Proceeds, and the application or release by
Mortgagee of any Insurance Proceeds shall not cure or waive any Default or
notice of Default.
(b) In the event of the foreclosure of this Mortgage or any other
transfer of title or assignment of all or any part of the Mortgaged Property in
extinguishment, in whole or in part, of the Debt, all right, title and
interest of Mortgagor in and to all policies of insurance required by this
Mortgage shall inure to the benefit of the successor in interest to Mortgagor
or the purchaser of the Mortgaged Property. If, prior to the receipt by
Mortgagee of any proceeds, the Mortgaged Property or any portion thereof shall
have been sold on foreclosure of this Mortgage or by deed in lieu
thereof or otherwise, or any claim under such insurance policy arising during
the term of this Mortgage is not paid until after the extinguishment of
the Debt, and Mortgagee shall not have received the entire amount of the
Debt outstanding at the time of such extinguishment, whether or not a
deficiency judgment on this Mortgage shall have been sought or recovered
or denied, then, the proceeds of any such insurance to the extent of the
amount of the Debt not so received, shall be paid to and be the property of
Mortgagee, together with interest thereon at the Default Rate, and the
reasonable attorney's fees, costs and disbursements incurred by Mortgagee
in connection with the collection of the proceeds which shall be paid to
Mortgagee and Mortgagor hereby assigns, transfers and sets over to
Mortgagee all of Mortgagor's right, title and interest in and to such
proceeds. Notwithstanding any provisions of this Mortgage to the
contrary, Mortgagee shall not be deemed to be a trustee or other fiduciary
with respect to its receipt of any such proceeds, which may be commingled
with any other monies of Mortgagee; provided, however, that Mortgagee
shall use such proceeds for the purposes
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and in the manner permitted by this Mortgage. Any proceeds deposited
with Mortgagee shall be held by Mortgagee in an interest-bearing account,
but Mortgagee makes no representation or warranty as to the rate or amount
of interest, if any, which may accrue on such deposit and shall have no
liability in connection therewith. Interest accrued, if any, on the proceeds
shall be deemed to constitute a part of the proceeds for purposes of this
Mortgage. The provisions of this Section 3.03(b) shall survive the
termination of this Mortgage by foreclosure, deed in lieu thereof or
otherwise as consequence of the exercise of the rights and remedies of
Mortgagee hereunder after a Default.
Section 3.04. Casualty Restoration. (a) (i) In the event of any damage to or
destruction of the Mortgaged Property, Mortgagor shall give prompt written
notice to Mortgagee (which notice shall set forth Mortgagor's good faith
estimate of the cost of repairing or restoring such damage or destruction, or
if Mortgagor cannot reasonably estimate the anticipated cost of restoration,
Mortgagor shall nonetheless give Mortgagee prompt notice of the occurrence of
such damage or destruction, and will diligently proceed to obtain estimates
to enable Mortgagor to quantify the anticipated cost and time required for
such restoration, whereupon Mortgagor shall promptly notify Mortgagee of such
good faith estimate) and, provided that restoration does not violate any
Legal Requirements, Mortgagor shall promptly commence and diligently
prosecute to completion the repair, restoration or rebuilding of the
Mortgaged Property so damaged or destroyed to a condition such that the
Mortgaged Property shall be at least equal in value to that immediately prior
to the damage to the extent practicable, in full compliance with all Legal
Requirements and the provisions of all Leases, and in accordance with Section
3.04(b) below. Such repair, restoration or rebuilding of the Mortgaged
Property are sometimes hereinafter collectively referred to as the "Work".
(ii) Mortgagor shall not adjust, compromise or settle any claim for
Insurance Proceeds without the prior written consent of Mortgagee, which shall
not be unreasonably withheld or delayed; provided, however, that, except during
the continuance of an Event of Default, Mortgagee's consent shall not be
required with respect to the adjustment, compromising or settlement of any claim
for Insurance Proceeds in an amount less than $1,000,000.
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(iii) Subject to Section 3.04(a)(iv), Mortgagee shall apply any
Insurance Proceeds which it may receive towards the Work in accordance with
Section 3.04(b) and the other applicable sections of this Article III.
(iv) If (A) an Event of Default shall have occurred and is continuing,
(B) Mortgagee is not reasonably satisfied that the Debt Service Coverage,
after substantial completion of the Work, will be at least equal to the
Required Debt Service Coverage, (C) more than twenty-five percent (25%) of
the reasonably estimated aggregate insurable value of the Mortgaged Property is
damaged or destroyed, (D) any Leases constituting ten percent (10%) of the
Total GLA physically affected by such destruction shall not continue in full
force and effect, or (E) Mortgagee is not reasonably satisfied the Work can
be completed by the earlier of (1) the end of the twelve (12) month period
following the damage to or destruction of the Mortgaged Property (provided that
such twelve month period may be extended at the request of Mortgagor provided
that Mortgagor delivers a letter from the Rating Agency confirming that an
rating issued in connection with a Securitization will not, as a result of
such extension be downgraded from the then current ratings thereof,
qualified, or withdrawn, (2) the Maturity Date, and (3) the period through
which the insurance specified in Section 3.01(a)(iii) insures against
business interruption or rent loss (collectively, a "Substantial Casualty"),
Mortgagee shall have the option, in its sole discretion to apply any
Insurance Proceeds it may receive pursuant to this Mortgage (less any
cost to Mortgagee of recovering and paying out such proceeds incurred
pursuant to the terms hereof and not otherwise reimbursed to Mortgagee,
including, without limitation, reasonable attorneys' fees and expenses) to
the payment of the Debt, without any prepayment fee or charge of any kind,
including, without limitation, Yield Maintenance Premium, or to allow such
proceeds to be used for the Work pursuant to the terms and subject to the
conditions of Section 3.04(b) hereof and the other applicable sections of
this Article III.
(v) In the event that Mortgagee elects or is obligated hereunder to
allow Insurance Proceeds to be used for the Work, any excess proceeds remaining
after completion of such
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Work shall be applied to the payment of the Debt without any prepayment fee or
charge of any kind, including, without limitation, Yield Maintenance Premium.
(b) If any Condemnation Proceeds, in accordance with Section 6.01(a) or
any Insurance Proceeds in accordance with Section 3.04(a), are to be applied to
the repair, restoration or rebuilding of the Mortgaged Property, then such
proceeds shall be deposited into a segregated interest-bearing bank account at
the Bank, which shall be an Eligible Account, held by Mortgagee and shall be
paid out from time to time to Mortgagor as the Work progresses (less any cost to
Mortgagee of recovering and paying out such proceeds, including, without
limitation, reasonable attorneys' fees and costs allocable to inspecting the
Work and the plans and specifications therefor) subject to Section 5.13 hereof
and to all of the following conditions:
(i) An architect or engineer selected by Mortgagor and reasonably
acceptable to Mortgagee (an "Architect" or "Engineer") or a Person
otherwise reasonably acceptable to Mortgagee, shall have delivered to
Mortgagee a certificate estimating the cost of completing the Work, and,
if the amount set forth therein is more than the sum of the amount of
Insurance Proceeds then being held by Mortgagee in connection with a
casualty and amounts agreed to be paid as part of a final settlement under
the insurance policy upon or before completion of the Work, Mortgagor
shall have delivered to Mortgagee (A) cash collateral in an amount equal
to such excess, (B) an unconditional, irrevocable, clean sight draft
letter of credit, in form, substance and issued by a bank reasonably
acceptable to Mortgagee, in the amount of such excess and draws on such
letter of credit shall be made by Mortgagee to make payments pursuant to
this Article III following exhaustion of the Insurance Proceeds therefore
or (C) a completion bond in form, substance and issued by a surety company
reasonably acceptable to Mortgagee.
(ii) If the cost of the Work is reasonably estimated by an Architect
or Engineer in a certification reasonably acceptable to Mortgagee to be
equal to or exceed ten percent (10%) of the Allocated Loan Amount, such
Work shall be
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performed under the supervision of an Architect or Engineer, it being
understood that the plans and specifications with respect thereto shall
provide for Work so that, upon completion thereof, the Mortgaged Property
shall be at least equal in replacement value and general utility to the
Mortgaged Property prior to the damage or destruction.
(iii) Each request for payment shall be made on not less than ten
(10) days' prior notice to Mortgagee and shall be accompanied by a
certificate of an Architect or Engineer, or, if the Work is not required
to be supervised by an Architect or Engineer, by an Officer's Certificate
stating (A) that payment is for Work completed in compliance with the
plans and specifications, if required under clause (ii) above, (B) that
the sum requested is required to reimburse Mortgagor for payments by
Mortgagor to date, or is due to the contractor, subcontractors,
materialmen, laborers, engineers, architects or other Persons rendering
services or materials for the Work (giving a brief description of such
services and materials), and that when added to all sums previously paid
out by Mortgagee does not exceed the value of the Work done to the date
of such certificate, (C) if the sum requested is to cover payment relating
to repair and restoration of personal property required or relating to the
Mortgaged Property, that title to the personal property items covered by
the request for payment is vested in Mortgagor (unless Mortgagor is lessee
of such personal property), and (D) that the Insurance Proceeds and other
amounts deposited by Mortgagor held by Mortgagee after such payment is
more than the estimated remaining cost to complete such Work; provided,
however, that if such certificate is given by an Architect or Engineer,
such Architect or Engineer shall certify as to clause (A) above, and such
Officer's Certificate shall certify as to the remaining clauses above.
Additionally, each request for payment shall contain a statement signed by
Mortgagor stating that the requested payment is for Work satisfactorily
done to date.
(iv) Each request for payment shall be accompanied by waivers of
lien, in customary form and substance, covering that part of the Work for
which payment or reimbursement is
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being requested and, if required by Mortgagee, a search prepared by a
title company or licensed abstractor, or by other evidence satisfactory to
Mortgagee that there has not been filed with respect to the Mortgaged
Property any mechanic's or other lien or instrument for retention of title
relating to any part of the Work not discharged of record. Additionally,
as to any personal property covered by the request for payment, Mortgage
shall be furnished with evidence of having incurred a payment obligation
therefor and such further evidence reasonably satisfactory to assure
Mortgagee that UCC filings therefor provide a valid first lien on the
personal property.
(v) Mortgagee shall have the right to inspect the Work at all
reasonable times upon reasonable prior notice and may condition any
disbursement of Insurance Proceeds upon satisfactory compliance by
Mortgagor with the provisions hereof. Neither the approval by Mortgagee of
any required plans and specifications for the Work nor the inspection by
Mortgagee of the Work shall make Mortgagee responsible for the
preparation of such plans and specifications, or the compliance of such
plans and specifications of the Work, with any applicable law, regulation,
ordinance, covenant or agreement.
(vi) Insurance Proceeds shall not be disbursed more frequently than
once every thirty (30) days or at any time during which a Default exists.
(vii) Until such time as the Work has been substantially completed,
Mortgagee shall not be obligated to disburse up to ten percent (10%) of
the cost of the Work (the "Retention Amount") to Mortgagor. Upon
substantial completion of the Work, Mortgagor shall send notice thereof to
Mortgagee and, subject to the conditions of Section 3.04(b)(i)-(iv),
Mortgagee shall disburse one-half of the Retention Amount to Mortgagor;
provided, however, that the remaining one-half of the Retention Amount
shall be disbursed to Mortgagor when Mortgagee shall have received copies
of any and all final certificates of occupancy or other certificates,
licenses and permits required for the ownership, occupancy and operation
of the Mortgaged Property
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in accordance with all Legal Requirements. Mortgagor hereby covenants to
diligently seek to obtain any such certificates, licenses and permits.
(viii) Upon failure on the part of Mortgagor promptly to commence
the Work or to proceed diligently and continuously to completion of the
Work, which failure shall continue after notice for thirty (30) days,
Mortgagee may apply any Insurance Proceeds or Condemnation Proceeds it
then or thereafter holds to the payment of the Debt in accordance with the
provisions of the Note; provided, however, that Mortgagee shall be
entitled to apply at any time all or any portion of the Insurance Proceeds
or Condemnation Proceeds it then holds to the extent necessary to cure any
Event of Default under this Mortgage, the Note or any other Loan
Document.
(c) If Mortgagor (i) within one hundred twenty (120) days after the
occurrence of any damage to the Mortgaged Property or any portion thereof (or
such shorter period as may be required under any Space Lease) shall fail to
submit to Mortgagee for approval plans and specifications (if required
pursuant to Section 3.04(b)(ii) hereof) for the Work (approved by the
Architect and by all Governmental Authorities whose approval is required),
(ii) after any such plans and specifications are approved by all Governmental
Authorities, the Architect and Mortgagee, shall fail to promptly commence
such Work or (iii) shall fail to diligently prosecute such Work to
completion, then, in addition to all other rights available hereunder, at law
or in equity, Mortgagee, or any receiver of the Mortgaged Property or any
portion thereof, upon five (5) days' prior notice to Mortgagor (except in the
event of emergency in which case no notice shall be required), may (but shall
have no obligation to) perform or cause to be performed such Work, and may
take such other steps as it reasonably deems advisable. Mortgagor hereby
waives, for Mortgagor, any claim, other than for gross negligence or willful
misconduct, against Mortgagee and any receiver arising out of any act or
omission of Mortgagee or such receiver pursuant hereto, and Mortgagee may
apply all or any portion of the proceeds of insurance (without the need to
fulfill any other requirements of this Section 3.04) to reimburse Mortgagee
and such
81
receiver, for all costs not reimbursed to Mortgagee or such receiver upon
demand together with interest thereon at the Default Rate from the date such
amounts are advanced until the same are paid to Mortgagee or the receiver.
(d) Mortgagor hereby irrevocably appoints Mortgagee as its
attorney-in-fact, coupled with an interest, to collect and receive any
insurance proceeds paid with respect to any portion of the Mortgaged Property
or the insurance policies required to be maintained hereunder, and to endorse
any checks, drafts or other instruments representing any insurance proceeds
whether payable by reason of loss thereunder or otherwise.
Section 3.05. Compliance with Insurance Requirements. Mortgagor promptly
shall comply with, and shall cause the Mortgaged Property to comply with, all
Insurance Requirements, even if such compliance requires structural changes
or improvements or would result in interference with the use or enjoyment of
the Mortgaged Property or any portion thereof provided Mortgagor shall have a
right to contest in good faith and with diligence such Insurance Requirements
provided (a) no Event of Default shall exist during such contest and such
contest shall not subject the Mortgaged Property or any portion thereof to
any lien or affect the priority of the lien of this Mortgage, (b) failure to
comply with such Insurance Requirements will not subject Mortgagee or any of
its agents, employees, officers or directors to any civil or criminal
liability, (c) such contest will not cause any reduction in insurance
coverage, (d) such contest shall not affect the ownership, use or occupancy
of the Mortgaged Property, (e) the Mortgaged Property or any part thereof or
any interest therein shall not be in any danger of being sold, forfeited or
lost by reason of such contest by Mortgagor, (f) Mortgagor has given
Mortgagee prompt notice of such contest and, upon request by Mortgagee from
time to time, notice of the status of such contest by Mortgagor and/or
information of the continuing satisfaction of the conditions set forth in
clauses (a) through (e) of this Section 3.05, (g) upon a final determination
of such contest, Mortgagor shall promptly comply with the requirements
thereof, and (h) prior to and during such contest, Mortgagor shall furnish to
Mortgagee security satisfactory to Mortgagee, in its reasonable discretion,
against loss or injury by reason of such contest or the non-compliance with
such Insurance Requirement (and if such security is cash, Mortgagee shall
deposit the same
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in an interest-bearing account and interest accrued thereon, if any, shall be
deemed to constitute a part of such security for purposes of this Mortgage,
but Mortgagee (i) makes no representation or warranty as to the rate or
amount of interest, if any, which may accrue thereon and shall have no
liability in connection therewith and (ii) shall not be deemed to be a
trustee or fiduciary with respect to its receipt of any such security and any
such security may be commingled with other monies of Mortgagee). If Mortgagor
shall use the Mortgaged Property or any portion thereof in any manner which
could permit the insurer to cancel any insurance required to be provided
hereunder, Mortgagor immediately shall obtain a substitute policy which shall
satisfy the requirements of this Mortgage and which shall be effective on or
prior to the date on which any such other insurance policy shall be canceled.
Mortgagor shall not by any action or omission invalidate any insurance policy
required to be carried hereunder unless such policy is replaced as aforesaid,
or materially increase the premiums on any such policy above the normal
premium charged for such policy. Mortgagor shall cooperate with Mortgagee in
obtaining for Mortgagee the benefits of any insurance proceeds lawfully or
equitably payable to Mortgagee in connection with the transaction
contemplated hereby.
Section 3.06. Event of Default During Restoration. Notwithstanding anything
to the contrary contained in this Mortgage including, without limitation, the
provisions of this Article 3, if, at the time of any casualty affecting the
Mortgaged Property or any part thereof, or at any time during any Work, or at
any time that Mortgagee is holding or is entitled to receive any proceeds of
any insurance pursuant to this Mortgage, a Default exists and is continuing
(whether or not it constitutes an Event of Default), Mortgagee shall then
have no obligation to make such proceeds available for Work and upon an Event
of Default Mortgagee shall have the right and option, to be exercised in its
sole and absolute discretion and election, with respect to the proceeds of
any such insurance, either to retain and apply such proceeds in reimbursement
for the actual costs, fees and expenses incurred by Mortgagee in accordance
with the terms hereof in connection with the adjustment of the loss and any
balance toward payment of the Debt in such priority and proportions as
Mortgagee, in its sole discretion, shall deem proper, or towards the Work,
upon such terms and conditions as Mortgagee shall determine, or to cure
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such Event of Default, or to any one or more of the foregoing as Mortgagee,
in its sole and absolute discretion, may determine. If Mortgagee shall
receive and retain such Insurance Proceeds, the lien of this Mortgage shall
be reduced only by the amount thereof received, after reimbursement to
Mortgagee of expenses of collection, and actually applied by Mortgagee in
reduction of the principal sum payable under the Note in accordance with the
Note.
Section 3.07. Application of Proceeds to Debt Reduction. (a) No damage to the
Mortgaged Property, or any part thereof, by fire or other casualty
whatsoever, whether such damage be partial or total, shall relieve Mortgagor
from its liability to pay in full the Debt and to perform its obligations
under this Mortgage and the other Loan Documents except to the extent any
rent (business interruption) insurance is paid to Mortgagee and applied to
the Debt.
(b) If any Insurance Proceeds are applied to reduce the Debt, Mortgagee
shall apply the same in accordance with the provisions of the Note.
ARTICLE IV: IMPOSITIONS
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Section 4.01. Payment of Impositions, Utilities and Taxes, etc. (a) Mortgagor
shall pay or cause to be paid all Impositions at least five (5) days prior to
the date upon which any fine, penalty, interest or cost for nonpayment is
imposed, and furnish to Mortgagee, upon request, receipted bills of the
appropriate taxing authority or other documentation reasonably satisfactory
to Mortgagee evidencing the payment thereof. If Mortgagor shall fail to pay
any Imposition in accordance with this Section and is not contesting or
causing a contesting of such Imposition in accordance with Section 4.04
hereof, or if there are insufficient funds in the Basic Carrying Costs
Sub-Account to pay any Imposition, Mortgagee shall have the right, but shall
not be obligated, to pay that Imposition, and Mortgagor shall repay to
Mortgagee, on demand, any amount paid by Mortgagee, with interest thereon at
the Default Rate from the date of the advance thereof to the date of
repayment, and such amount shall constitute a portion of the Debt secured by
this Mortgage and the other Cross-collateralized Mortgages.
(b) Mortgagor shall, prior to the date upon which any fine, penalty,
interest or cost for the nonpayment is imposed, pay or cause to be paid all
charges for electricity, power, gas, water and other services and utilities
in connection with the Mortgaged Property, and shall, upon request, deliver
to Mortgagee receipts or other documentation reasonably satisfactory to
Mortgagee evidencing payment thereof. If Mortgagor shall fail to pay any
amount required to be paid by Mortgagor pursuant to this Section 4.01 and is
not contesting such charges in accordance with Section 4.04 hereof, Mortgagee
shall have the right, but shall not be obligated, to pay that amount, and
Mortgagor will repay to Mortgagee, on demand, any amount paid by Mortgagee
with interest thereon at the Default Rate from the date of the advance
thereof to the date of repayment, and such amount shall constitute a portion
of the Debt secured by this Mortgage and the other Cross-collateralized
Mortgages.
(c) Mortgagor shall pay all taxes, charges, filing, registration and
recording fees, excises and levies imposed upon Mortgagee by reason of or in
connection with its ownership of any Loan Document or any other instrument
related thereto, or resulting from the execution, delivery and recording of,
or the lien created by, or the obligation evidenced by, any of them,
85
other than income, franchise and other similar taxes imposed on Mortgagee and
shall pay all corporate stamp taxes, if any, and other taxes, required to be
paid on the Loan Documents. If Mortgagor shall fail to make any such payment
within ten (10) days after written notice thereof from Mortgagee, Mortgagee
shall have the right, but shall not be obligated, to pay the amount due, and
Mortgagor shall reimburse Mortgagee therefor, on demand, with interest
thereon at the Default Rate from the date of the advance thereof to the date
of repayment, and such amount shall constitute a portion of the Debt secured
by this Mortgage and the other Cross-collateralized Mortgages.
Section 4.02. Deduction from Value. In the event of the passage after the
date of this Mortgage of any Legal Requirement deducting from the value of
the Mortgaged Property for the purpose of taxation, any lien thereon or
changing in any way the Legal Requirements now in force for the taxation of
this Mortgage, the other Cross-collateralized Mortgages and/or the Debt for
federal, state or local purposes, or the manner of the operation of any such
taxes so as to adversely affect the interest of Mortgagee, or impose any tax
or other charge on any Loan Document, then Mortgagor will pay such tax, with
interest and penalties thereon, if any, within the statutory period. In the
event the payment of such tax or interest and penalties by Mortgagor would be
unlawful, or taxable to Mortgagee or unenforceable or provide the basis for a
defense of usury, then in any such event, Mortgagee shall have the option, by
written notice of not less than thirty (30) days, to declare the Debt
immediately due and payable, with no prepayment penalty, including without
limitation, Yield Maintenance Premium.
Section 4.03. No Joint Assessment. Mortgagor shall not consent to or initiate
the joint assessment of the Premises or the Improvements (a) with any other
real property constituting a separate tax lot and Mortgagor represents and
covenants that the Premises and the Improvements are and shall remain a
separate tax lot or (b) with any portion of the Mortgaged Property which may
be deemed to constitute personal property, or any other procedure whereby the
lien of any taxes which may be levied against such personal property shall be
assessed or levied or charged to the Mortgaged Property as a single lien.
86
Section 4.04. Right to Contest. Mortgagor shall have the right, after prior
notice to Mortgagee, at its sole expense, to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Mortgagee or any of its agents, employees, officers or directors, the
validity, amount or application of any Imposition or any charge described in
Section 4.01(b), provided that (a) no Default or Event of Default shall exist
during such proceedings and such contest shall not (unless Mortgagor shall
comply with clause (d) of this Section 4.04) subject the Mortgaged Property
or any portion thereof to any lien or affect the priority of the lien of this
Mortgage, (b) failure to pay such Imposition or charge will not subject
Mortgagee or any of its agents, employees, officers or directors to any civil
or criminal liability, (c) the contest suspends enforcement of the Imposition
or charge (unless Mortgagor first pays the Imposition or charge), (d) prior
to and during such contest, Mortgagor shall furnish to Mortgagee security
satisfactory to Mortgagee, in its reasonable discretion, against loss or
injury by reason of such contest or the non-payment of such Imposition or
charge (and if such security is cash, Mortgagee may deposit the same in an
interest-bearing account and interest accrued thereon, if any, shall be
deemed to constitute a part of such security for purposes of this Mortgage,
but Mortgagee (i) makes no representation or warranty as to the rate or
amount of interest, if any, which may accrue thereon and shall have no
liability in connection therewith and (ii) shall not be deemed to be a
trustee or fiduciary with respect to its receipt of any such security and any
such security may be commingled with other monies of Mortgagee), (e) such
contest shall not affect the ownership, use or occupancy of the Mortgaged
Property, (f) the Mortgaged Property or any part thereof or any interest
therein shall not be in any danger of being sold, forfeited or lost by reason
of such contest by Mortgagor, (g) Mortgagor has given Mortgagee notice of the
commencement of such contest and upon request by Mortgagee, from time to
time, notice of the status of such contest by Mortgagor and/or confirmation
of the continuing satisfaction of clauses (a) through (f) of this Section
4.04, and (h) upon a final determination of such contest, Mortgagor shall
promptly comply with the requirements thereof. Upon completion of any
contest, Mortgagor shall immediately pay the amount due, if any, and deliver
to Mortgagee proof of the completion of the contest and payment of the amount
due, if any, following which,
87
Mortgagee shall return the security, if any, deposited with Mortgagee
pursuant to clause (d) of this Section 4.04. Mortgagor shall not pay any
Imposition in installments unless permitted by applicable Legal Requirements,
and shall, upon the request of Mortgagee, deliver copies of all notices
relating to any Imposition or other charge covered by this Article IV to
Mortgagee.
Section 4.05. No Credits on Account of the Debt. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Mortgaged Property or any part
thereof and no deduction shall otherwise be made or claimed from the taxable
value of the Mortgaged Property, or any part thereof, by reason of this
Mortgage or the Debt. In the event such claim, credit or deduction shall be
required by Legal Requirements, Mortgagee shall have the option, by written
notice of not less than thirty (30) days, to declare the Debt immediately due
and payable, and Mortgagor hereby agrees to pay such amounts not later than
thirty (30) days after such notice.
Section 4.06. Documentary Stamps. If, at any time, the United States of
America, any State or Commonwealth thereof or any subdivision of any such
State shall require revenue or other stamps to be affixed to the Note or this
Mortgage, or impose any other tax or charges on the same, Mortgagor will pay
the same, with interest and penalties thereon, if any.
ARTICLE V: CENTRAL CASH MANAGEMENT
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Section 5.01. Cash Flow. Mortgagor hereby acknowledges and agrees that the
Rent (which for the purposes of this Section 5.01 shall not include security
deposits from tenants under valid Leases held by Mortgagor and not applied
towards Rent) derived from the Mortgaged Property and Loss Proceeds shall be
utilized (a) to fund the Basic Carrying Costs Sub-Account, (b) to pay all
amounts to become due and payable under the Note by funding the Debt Service
Payment Sub-Account, (c) to fund the Recurring Replacement Reserve
Sub-Account, (d) to fund the Operation and Maintenance Expense Sub-Account to
the extent required, and (e) to fund the Curtailment Reserve Sub-Account, to
the extent required. Mortgagor shall cause the Manager to collect all
security deposits from tenants under valid Leases, which shall be held by the
Manager, as agent for Mortgagor, in accordance with applicable law and in a
segregated demand deposit bank account at such commercial or savings bank or
banks as may be reasonably satisfactory to Mortgagee (the "Security Deposit
Account"). Mortgagor shall notify Mortgagee of any security deposits held as
letters of credit and, upon Mortgagee's request, such letters of credit shall
be promptly delivered to Mortgagee. Mortgagor shall have no right to withdraw
funds from the Security Deposit Account; provided that, prior to the
occurrence of an Event of Default, Mortgagor may withdraw funds from the
Security Deposit Account to refund or apply security deposits as required by
the Leases or by applicable Legal Requirements. After the occurrence and
during the continuance of an Event of Default, all withdrawals from the
Security Deposit Account must be approved by Mortgagee. All rental payments
made by tenants and other payments constituting Rent shall be paid by check,
cashiers check or money order made payable to Mortgagee or its successors and
assigns. Mortgagor shall give each tenant under a Lease an irrevocable
direction in the form of Exhibit G attached hereto and made a part hereof to
deliver all rental payments made by tenants and other payments constituting
Rent directly to the bank in which the Rent Account is located. In the event
that any tenant pays any Rent directly to Manager, the Manager shall deposit
such funds, within one (1) Business Day after receipt thereof in the Rent
Account. All Rent shall be deposited into the Rent Account. Mortgagor shall
cause the bank in which the Rent Account is located to automatically transfer
through automatic clearing house funds or by Federal wire to the Central
Account prior to 5:00 p.m. (New York City time) on each Business
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Day all sums deposited into the Rent Account. Mortgagee may elect to change
the financial institution in which the Rent Account and/or the Central
Account shall be maintained; however, Mortgagee shall give Mortgagor not
fewer than five (5) Business Days' prior notice of such change and, provided,
that no Default has occurred and is continuing, such institution shall be
subject to the approval of Mortgagor which may not be unreasonably withheld,
delayed or conditioned. All fees and charges of the banks in which the Rent
Account and the Central Account are located shall be paid by Mortgagor.
Section 5.02. Establishment of Sub-Accounts. Mortgagee has established the
Rent Account and the Central Account. The Central Account shall be under the
sole dominion and control of Mortgagee. Mortgagor shall have no right of
withdrawal in respect of the Rent Account or the Central Account except as
specifically provided herein. Each transfer of funds to be made hereunder
shall be made only to the extent that funds are on deposit in the Rent
Account, the Central Account or the affected Sub-Account, and Mortgagee shall
have no responsibility to make additional funds available in the event that
funds on deposit are insufficient. The Central Account shall contain the
Basic Carrying Costs Sub-Account, the Debt Service Payment Sub-Account, the
Recurring Replacement Reserve Sub-Account, the Operation and Maintenance
Expense Sub-Account (to the extent applicable), and the Curtailment Reserve
Sub-Account (to the extent applicable), each of which accounts shall be
Eligible Accounts (each a "Sub-Account" and collectively, the "Sub-Accounts")
to which certain funds shall be allocated and from which disbursements shall
be made pursuant to the terms of this Mortgage. On the date hereof, Mortgagor
has deposited from the proceeds of the Loan the Initial Central Account
Deposit in the Central Account. Notwithstanding the foregoing, any
Sub-Account which is a separate Eligible Account shall be deemed a
Sub-Account of the Central Account.
Section 5.03. Permitted Investments. Upon the written request of Mortgagor,
Mortgagee shall direct the Bank to invest and reinvest any balance in the
Central Account from time to time in Permitted Investments as instructed by
Mortgagor (which instruction may be made no more than one time per month),
provided that (a) if Mortgagor fails to so instruct Mortgagee, or upon the
occurrence and during the continuance of a Default, Mortgagee may direct the
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Bank to invest and reinvest such balance in Permitted Investments as
Mortgagee shall determine in its sole discretion, (b) the maturities of the
Permitted Investments on deposit in the Central Account shall, to the extent
such dates are ascertainable, be selected and coordinated to become due not
later than the day before any disbursements from the applicable Sub-Accounts
must be made, (c) all such Permitted Investments shall be held in the name
and be under the sole dominion and control of Mortgagee, and (d) no Permitted
Investment shall be made unless Mortgagee shall retain a perfected first
priority lien in such Permitted Investment securing the Debt and all filings
and other actions necessary to ensure the validity, perfection, and priority
of such lien have been taken. It is the intention of the parties hereto that
the entire amounts deposited in the Central Account (or as much thereof as
Mortgagee may reasonably arrange to invest) shall at all times be invested in
Permitted Investments, and that the Central Account shall be a so-called
"zero balance" account. All funds in the Central Account that are invested in
a Permitted Investment are deemed to be held in the Central Account for all
purposes of this Mortgage and the other Loan Documents. Mortgagee shall not
have any liability for any loss in investments of funds in the Central
Account that are invested in Permitted Investments whether Mortgagor or
Mortgagee selected such Permitted Investment in accordance herewith and no
such loss shall affect Mortgagor's obligation to fund, or liability for
funding, the Central Account and each Sub-Account, as the case may be.
Mortgagor agrees that Mortgagor shall include all such earnings on the
Central Account as income of Mortgagor (and, if Mortgagor is a partnership or
other pass-through entity, the partners, members or beneficiaries of
Mortgagor, as the case may be) for federal and applicable state and local tax
purposes. Mortgagor shall have no right whatsoever to direct the investment
of the proceeds in the Collection Account.
Section 5.04. Interest on Accounts. All interest paid or other earnings on
the Permitted Investments of funds deposited into the Central Account made
hereunder shall be deposited into the Central Account and, until such
Sub-Account is fully funded, shall be allocated to the Sub-Account which
contained the funds with respect to which such interest was paid or other
earnings earned. All such interest and earnings, once so allocated, shall be
treated as Rent allocated to such Sub-Account. All interest paid or
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other earnings on funds deposited into the Rent Account shall be deposited into
the Rent Account and shall be treated as Rent deposited into such account as of
the day such interest and earnings are deposited therein.
Section 5.05. Monthly Funding of Sub-Accounts. Prior to 2:00 p.m. (New York
City time) on each Allocation Date during the term of the Loan, Mortgagee
shall allocate all funds in the Central Account among the Sub-Accounts as
follows and in the following priority:
(a) first, to the Basic Carrying Costs Sub-Account, until an amount
equal to the Basic Carrying Costs Monthly Installment for such Current
Month has been allocated to the Basic Carrying Costs Sub-Account;
(b) second, to the Debt Service Payment Sub-Account, until an amount
equal to the Required Debt Service Payment for the Payment Date occurring
in such Current Month has been allocated to the Debt Service Payment
Sub-Account;
(c) third, to the Recurring Replacement Reserve Sub-Account, until
an amount equal to the sum of (x) the amount, if any, deducted therefrom
during any preceding month to pay any amounts due pursuant to clauses (a)
or (b) above, to the extent not previously reimbursed to such Sub-Account,
plus (y) an amount equal to the Recurring Replacement Reserve Monthly
Installment for such month has been allocated to the Recurring Replacement
Reserve Sub-Account;
(d) fourth, but only during the O&M Operative Period, to the
Operation and Maintenance Expense Sub-Account, until an amount equal to
the amount, if any, deducted therefrom during any preceding month to pay
any amounts due pursuant to clauses (a) or (b) above, to the extent not
previously reimbursed to such Sub-Account and then until an amount equal
to the Operation and Maintenance Expense Monthly Installment has been
allocated to such Sub-Account; and
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(e) fifth, but only during the O&M Operative Period, all Excess Rent
shall be allocated to the Curtailment Reserve Sub-Account.
Provided that (I) no Event of Default has occurred and is
continuing and (II) Mortgagee has received the Manager Certification
referred to in Section 2.09(d) hereof for the most recent period for which
the same is due, Mortgagee agrees that in each Current Month any amounts
deposited into or remaining in the Central Account after sufficient funds
have been transferred to the Central Account to fund the Sub-Accounts in
accordance with, and has allocated the amounts set forth in, clauses (a)
through (e) above with respect to the Current Month and any periods prior
thereto shall be disbursed by Mortgagee to Manager on each Allocation Date
in such Current Month unless such day is not a Business Day, in which event
distributions shall be made on the next following Business Day. The balance
of the funds distributed to Mortgagor after payment of all Operating Expenses
by or on behalf of Mortgagor may be retained by Mortgagor. As used herein,
"Excess Rent" means the amounts available in the Central Account (other than
any Loss Proceeds deposited in the Central Account) in any Current Month
after the allocations under clauses (a) through (d) above have been made and
after payments of all Operating Expenses for which Mortgagor has requested
payments in any Current Month provided Mortgagee has, in its sole and
absolute discretion, approved such requests. After the occurrence, and during
the continuance, of an Event of Default, no funds held in the Central Account
shall be distributed to Mortgagor, and Mortgagee shall have the right to
apply all or any portion of the funds held in such account to the Debt in
Mortgagee's sole discretion.
In the event that sufficient funds to fund all of the
Sub-Accounts pursuant to this Section 5.05 for the Payment Date in any
Current Month are not on deposit in the Central Account prior to 2:00 p.m.
(New York City time) on the Business Day immediately preceding the Payment
Date (the "Notice Date") for the then Current Month, Mortgagee shall
endeavor to deliver to Mortgagor, via telecopy, on or before 4:00 P.M. (New
York City time) on the Notice Date a certificate in the form set forth as
Exhibit E attached hereto and made a part hereof stating that sufficient
funds have not theretofore been deposited into the
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Central Account for allocation to the various Sub-Accounts pursuant to this
Section 5.05. Failure to give such notice shall not relieve Mortgagor of any
obligation to make any payment which is due on each Payment Date. If
sufficient funds are not on deposit in the Central Account to fund all of the
Sub-Accounts pursuant to Section 5.01 for the Payment Date in any Current
Month, Mortgagor shall be obligated to deposit immediately available United
States funds (in addition to Rent) into the Central Account, prior to such
Payment Date, in the amount of such deficiency, and failure to make such
deposit shall be an Event of Default hereunder. If, on any Payment Date, the
aggregate balance in the Central Account (excluding funds allocated to any
Sub-Account other than funds allocated to the Debt Service Payment
Sub-Account or the Basic Carrying Costs Sub-Account) is insufficient to make
the payment of the Basic Carrying Costs Monthly Installment and the Required
Debt Service Payment required to be made pursuant to clauses (a) and (b) of
this Section 5.05, then an Event of Default shall exist hereunder and
Mortgagee may withdraw funds and pay such deficiency from any Sub-Account.
In the event that Mortgagee elects to apply the proceeds of any
Sub-Account to pay any Required Debt Service Payment or to fund any Basic
Carrying Costs, Mortgagor shall, upon demand, repay to Mortgagee the amount
of the funds so applied to replenish such Sub-Account up to the amount
contained therein immediately prior to such application (i.e., including
interest earned on the balance prior to withdrawal), and if Mortgagor shall
fail to repay such amounts within five (5) days after such application, an
Event of Default shall exist hereunder, which Event of Default shall not be
cured unless and until Mortgagor repays such amount or all Sub-Accounts have
been fully funded from Rent for the then applicable Current Month and all
prior months. Mortgagee may, at its sole option, replenish such
Sub-Account(s) out of available Rent in subsequent months which Mortgagor would
have otherwise been entitled to receive.
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Section 5.06. Payment of Basic Carrying Costs. Mortgagor hereby agrees to pay
all Basic Carrying Costs with respect to Mortgagor, the Mortgaged Property
and any Rent derived therefrom or with respect thereto. At least ten (10)
Business Days prior to the due date of any Basic Carrying Costs, and not more
frequently than once each month, Mortgagor may notify Mortgagee in writing
and request that Mortgagee pay such Basic Carrying Costs on behalf of
Mortgagor on or prior to the due date thereof, and, provided that no Event of
Default has occurred and that there are sufficient funds available in the
Basic Carrying Costs Sub-Account, Mortgagee shall make such payments out of
the Basic Carrying Costs Sub-Account before same shall be delinquent.
Together with each such request, Mortgagor shall furnish Mortgagee with bills
and all other documents necessary, as reasonably determined by Mortgagee, for
the payment of the Basic Carrying Costs which are the subject of such
request. Mortgagor's obligation to pay (or cause Mortgagee to pay) Basic
Carrying Costs pursuant to this Mortgage shall include, to the extent
permitted by applicable law, Impositions resulting from future changes in law
which impose upon Mortgagee an obligation to pay any property taxes or other
Impositions or which otherwise adversely affect Mortgagee's interests.
Provided that no Event of Default shall have occurred and is
continuing, all funds deposited into the Basic Carrying Costs Sub-Account
shall be held by Mortgagee pursuant to the provisions of this Mortgage
and shall be applied in payment of Basic Carrying Costs in accordance with
the terms hereof. Should an Event of Default occur and is continuing, the
proceeds on deposit in the Basic Carrying Costs Sub-Account may be applied by
Mortgagee in payment of any Basic Carrying Costs or may be applied to the
payment of the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties as Mortgagee in its sole discretion may
determine; provided, however, that no such application shall be deemed to
have been made by operation of law or otherwise until actually made by
Mortgagee as herein provided.
Section 5.07. Debt Service Payment Sub-Account. On the Business Day after
each Payment Date during the term of the Loan, Mortgagee shall transfer to
the Collection Account, from the Debt Service Payment Sub-Account, an amount
equal to the sum of (a) the Re-
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quired Debt Service Payment for such Payment Date and (b) any amounts
deposited into the Central Account that are either (i) Loss Proceeds that
Mortgagee has elected to apply to reduce the Debt in accordance with the
terms of Article III hereof or (ii) excess Loss Proceeds remaining after the
completion of any restoration required hereunder.
Section 5.08. Recurring Replacement Reserve Sub-Account. Mortgagor hereby
agrees to pay all Recurring Replacement Expenditures with respect to Mortgagor
and the Mortgaged Property (without regard to the amount of money then
available in the Recurring Replacement Reserve Sub-Account). Provided that
Mortgagee has received written notice from Mortgagor at least five (5)
Business Days prior to the due date of any payment relating to Recurring
Replacement Expenditures and not more frequently than once each month, and
further provided that no Event of Default has occurred and is continuing,
that there are sufficient funds available in the Recurring Replacement
Reserve Sub-Account and Mortgagor shall have theretofore furnished Mortgagee
with lien waivers, copies of bills, invoices and other reasonable
documentation as may be required by Mortgagee to establish that the
Recurring Replacement Expenditures which are the subject of such request
represent amounts due for completed or partially completed capital work and
improvements performed at the Mortgaged Property, Mortgagee shall make such
payments out of the Recurring Replacement Reserve Sub-Account.
Provided that no Event of Default shall have occurred, all funds
deposited into the Central Account relating to Recurring Replacement
Expenditures shall be held by Mortgagee pursuant to the provisions of this
Mortgage and shall be applied in payment of Recurring Replacement
Expenditures. Should an Event of Default occur, the proceeds on deposit in
the Recurring Replacement Reserve Sub-Account may be applied by Mortgagee
in payment of any Recurring Replacement Expenditures or may be applied to the
payment of the Debt or any other charges affecting all or any portion of the
Cross-collateralized Properties, as Mortgagee in its sole discretion may
determine; provided, however, that no such application shall be deemed to
have been made by operation of law or otherwise until actually made by
Mortgagee as herein provided.
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Section 5.09. Operation and Maintenance Expense Sub-Account. Mortgagor hereby
agrees to pay all Operating Expenses with respect to the Mortgaged Property
(without regard to the amount of money then available in the Operation and
Maintenance Expense Sub-Account). All funds allocated to the Operation and
Maintenance Expense Sub-Account shall be held by Mortgagee pursuant to the
provisions of this Mortgage. Any sums held in the Operation and Maintenance
Expense Sub-Account shall be disbursed to Mortgagor within five (5) Business
Days of receipt by Mortgagee from Mortgagor of (a) a written request for such
disbursement which shall indicate the Operating Expenses or Approved TI Costs
(exclusive of Basic Carrying Costs) for which the required disbursement is to
pay and (b) an Officer's Certificate stating that no Operating Expenses or
Approved TI Costs with respect to the Property are more than sixty (60) days
past due; provided, however, in the event that Mortgagor legitimately
disputes any invoice for an Operating Expense or Approved TI Costs, and (i)
no Event of Default has occurred and is continuing hereunder, (ii) Mortgagor
shall have set aside adequate reserves for the payment of such disputed sums
together with all interest and late fees thereon, (iii) Mortgagor has
complied with all the requirements of this Mortgage relating thereto, and
(iv) the contesting of such sums shall not constitute a default under any
other instrument, agreement, or document to which Mortgagor is a party, then
Mortgagor may, after certifying to Mortgagee as to items (i) through (iv)
hereof, contest such invoice. Together with each such request, Mortgagor
shall furnish Mortgagee with bills and all other documents necessary for the
payment of the Operating Expenses and Approved TI Costs which are the subject
of such request. Mortgagor may request a disbursement from the Operation and
Maintenance Expense Sub-Account no more than one (1) time per calendar month.
Should an Event of Default occur and be continuing, the proceeds on deposit
in the Operation and Maintenance Expense Sub-Account may be applied by
Mortgagee in payment of any Operating Expenses or Approved TI Costs for the
Mortgaged Property or may be applied to the payment of the Debt or other
charges affecting all or any portion of the Mortgaged Property as Mortgagee,
in its sole discretion, may determine; provided, however, that no such
application shall be deemed to have been made by operation of law or
otherwise until actually made by Mortgagee as herein provided. All sums, if
any, remaining in the Operation and Maintenance Expense Sub-Account after the
payment of all Operating Expenses
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and Approved TI Costs for which Mortgagor requests payment in the then Current
Month in accordance with the terms hereof shall be deposited into the
Curtailment Reserve Sub-Account, as set forth in Section 5.05 hereof.
Section 5.10. Intentionally Omitted.
Section 5.11. Curtailment Reserve Sub-Account. During the O&M Operative
Period Mortgagee shall allocate all Excess Rent to the Curtailment Reserve
Sub-Account in accordance with Section 5.05(e) until such time as the Debt
has been paid in full. On the Business Day after each Payment Date during any
period for which funds have been allocated to the Curtailment Reserve
Sub-Account pursuant to Section 5.05(e) hereof, Mortgagee shall transfer to
the Collection Account an amount equal to the lesser of (a) the amount
available in the Curtailment Reserve Sub-Account, and (b) the total Debt then
outstanding under the Note and the other Loan Documents.
Section 5.12. Intentionally Omitted.
Section 5.13. Loss Proceeds. In the event of a casualty to the Mortgaged
Property, unless Mortgagee elects, or is required pursuant to Article III
hereof to make all of the Insurance Proceeds available to Mortgagor for
restoration, Mortgagee and Mortgagor shall cause all such Insurance Proceeds
to be paid by the insurer directly to the Central Account, whereupon
Mortgagee shall, after deducting Mortgagee's costs of recovering and
paying out such Insurance Proceeds, including without limitation, reasonable
attorneys' fees, apply same to reduce the Debt in accordance with the terms
of the Note; provided, however, that if Mortgagee elects, or is deemed to
have elected, or is required, to make the Insurance Proceeds available for
restoration, all Insurance Proceeds in respect of rent loss, business
interruption or similar coverage shall be maintained in the Central Account,
to be applied by Mortgagee in the same manner as Rent received with respect
to the operation of the Mortgaged Property; provided, further, however, that in
the event that the Insurance Proceeds of such rent loss, business
interruption or similar insurance policy are paid in a lump sum in advance,
Mortgagee shall hold such Insurance Proceeds in a segregated interest-
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bearing escrow account, which shall be an Eligible Account, shall estimate,
in Mortgagee's reasonable discretion, the number of months required for
Mortgagor to restore the damage caused by the casualty, shall divide the
aggregate rent loss, business interruption or similar Insurance Proceeds by
such number of months, and shall disburse from such escrow account into the
Central Account each month during the performance of such restoration such
monthly installment of said Insurance Proceeds. In the event that Insurance
Proceeds are to be applied toward restoration, Mortgagee shall hold such
funds in a segregated bank account at the Bank, which shall be an Eligible
Account, and shall disburse same in accordance with the provisions of Section
3.04 hereof. Unless Mortgagee elects, or is required pursuant to Section
6.01 hereof to make all of the Condemnation Proceeds available to Mortgagor for
restoration, Mortgagee and Mortgagor shall cause all such Condemnation
Proceeds to be paid to the Central Account, whereupon Mortgagee shall,
after deducting Mortgagee's costs of recovering and paying out such
Condemnation Proceeds, including without limitation, reasonable attorneys'
fees, apply same, by transferring such amounts to the Collection Account, to
reduce the Debt in accordance with the terms of the Note; provided, however,
that any Condemnation Proceeds received in connection with a temporary Taking
shall be maintained in the Central Account, to be applied by Mortgagee in
the same manner as Rent received with respect to the operation of the Mortgaged
Property; provided, further, however, that in the event that the Condemnation
Proceeds of any such temporary Taking are paid in a lump sum in advance,
Mortgagee shall hold such Condemnation Proceeds in a segregated
interest-bearing escrow account, which shall be an Eligible Account, shall
estimate, in Mortgagee's reasonable discretion, the number of months that
the Mortgaged Property shall be affected by such temporary Taking, shall divide
the aggregate Condemnation Proceeds in connection with such temporary Taking
by such number of months, and shall disburse from such escrow account into
the Central Account each month during the pendency of such temporary Taking
such monthly installment of said Condemnation Proceeds. In the event that
Condemnation Proceeds are to be applied toward restoration, Mortgagee shall
hold such funds in a segregated bank account at the Bank, which shall be an
Eligible Account, and shall disburse same in accordance with the provisions
of Section 3.04 hereof. If any Loss Proceeds are received by Mortgagor, such
Loss Proceeds shall be received
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in trust for Mortgagee, shall be segregated from other funds of Mortgagor,
and shall be forthwith paid into the Central Account, or paid to Mortgagee
to hold in a segregated bank account at the Bank, in each case to be applied
or disbursed in accordance with the foregoing. Any Loss Proceeds made
available to Mortgagor for restoration 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 deposited into the Central Account, whereupon
Mortgagee shall apply the same to reduce the Debt in accordance with the
terms of the Note.
ARTICLE VI: CONDEMNATION
Section 6.01. Condemnation. (a) Mortgagor shall notify Mortgagee promptly of
the commencement or threat of any Taking of the Mortgaged Property or any
portion thereof. Mortgagee is hereby irrevocably appointed as Mortgagor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain the proceeds of any such Taking and to make any compromise
or settlement in connection with such proceedings (subject to Mortgagor's
reasonable approval, except after the occurrence of an Event of Default, in
which event Mortgagor's approval shall not be required), subject to the
provisions of this Mortgage; provided, however, that Mortgagor may
participate in any such proceedings and shall be authorized and entitled to
compromise or settle any such proceeding with respect to Condemnation
Proceeds in an amount less than five percent (5%) of the Allocated Loan
Amount of the Mortgaged Property. Mortgagor shall execute and deliver to
Mortgagee any and all instruments reasonably required in connection with any
such proceeding promptly after request therefor by Mortgagee. Except as set
forth above, Mortgagor shall not adjust, compromise, settle or enter into any
agreement with respect to such proceedings without the prior consent of
Mortgagee. All Condemnation Proceeds are hereby assigned to and shall be paid
to Mortgagee. With respect to Condemnation Proceeds in an amount in excess of
five percent (5%) of the Allocated Loan Amount of the Mortgaged Property,
Mortgagor hereby authorizes Mortgagee to compromise, settle, collect and
receive such Condemnation Proceeds, and to give proper receipts and
acquittance therefor. Mortgagee may apply such Condemnation
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Proceeds (less any cost to Mortgagee of recovering and paying out such
proceeds, including, without limitation, reasonable attorneys' fees and
disbursements and costs allocable to inspecting any repair, restoration or
rebuilding work and the plans and specifications therefor) toward the payment
of the Debt or to allow such proceeds to be used for the Work.
(b) In the case of a Substantial Taking, the Condemnation Proceeds
shall be payable, after payment of all necessary and proper expenses incurred
in the collection of such award, to Mortgagee, to be applied towards the
payment of the Debt without any prepayment premium. If subsequent to payment
of such amount in full, Mortgagee shall receive payment of any subsequent
Condemnation Proceeds, then, such Condemnation Proceeds shall be paid to
Mortgagee. Each of the parties agrees to execute any and all documents that
may be reasonably required in order to facilitate collection by them of such
Condemnation Proceeds.
(c) In the event of a Taking which is less than a Substantial Taking,
Mortgagor at its sole cost and expense (whether or not the award shall have
been received or shall be sufficient for restoration), shall proceed
diligently to restore, or cause the restoration of, the remaining
Improvements not so taken, to maintain a complete, rentable, self-contained
fully operational facility of the same sort as existed prior to the Taking in
as good a condition as is reasonably possible. In the event of such a Taking,
Mortgagee shall receive the Condemnation Proceeds and shall pay over the
same:
(i) first, provided no Event of Default has occurred and is
continuing, to Mortgagor to the extent of any portion of the award as may
be necessary to pay the reasonable cost of restoration of the Improvements
remaining including costs of the collection, compromise or settlement
(including, without limitation, reasonable attorney fees), and
(ii) second, to Mortgagee, to be applied towards the payment
of the Debt without any prepayment premium.
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Restoration shall be done in accordance with and subject to the provisions
of Section 3.04. Payments to Mortgagor as aforesaid shall be disbursed in the
manner set forth in Section 3.04(b).
If one or more Takings in the aggregate create a Substantial Taking, then,
in such event, the sections of this Article VI above applicable to Substantial
Takings shall apply.
(d) In the event Mortgagee is obligated to or elects to make
Condemnation Proceeds available for the restoration or rebuilding of the
Mortgaged Property, such proceeds shall be disbursed in the manner and subject
to the conditions set forth in Section 3.04(b) hereof. If, in accordance with
this Article VI, any proceeds are used to reduce the Debt, they shall be
applied as Condemnation Proceeds. Mortgagor shall promptly execute and deliver
all instruments reasonably requested by Mortgagee for the purpose of
confirming the assignment of the Condemnation Proceeds to Mortgagee.
Application of all or any part of the Condemnation Proceeds to the Debt shall
be made in accordance with the provisions of Sections 3.06 and 3.07. No
application of the Condemnation Proceeds to the reduction of the Debt shall
have the effect of releasing the lien of this Mortgage until the
remainder of the Debt has been paid in full. In the case of any Taking,
Mortgagee, to the extent that Mortgagee has not been reimbursed by
Mortgagor, shall be entitled, as a first priority out of any Condemnation
Proceeds, to reimbursement for all costs, fees and expenses reasonably
incurred in the determination and collection of any Condemnation Proceeds.
All Condemnation Proceeds deposited with Mortgagee pursuant to this
Section, until expended or applied as provided herein, may be commingled with
the general funds of Mortgagee and shall constitute additional security for
the payment of the Debt and the payment and performance of Mortgagor's
obligations, but Mortgagee shall not be deemed a trustee or other fiduciary
with respect to its receipt of such Condemnation Proceeds or any part
thereof. All awards so deposited with Mortgagee shall be held by
Mortgagee in an Eligible Account and invested in Permitted Investments, but
Mortgagee makes no representation or warranty as to the rate or amount of
interest, if any, which may accrue on any such deposit and shall have no
liability in connection
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therewith. For purposes hereof, any reference to the award shall be deemed to
include interest, if any, which has accrued thereon.
ARTICLE VII: LEASES AND RENTS
Section 7.01. Assignment. (a) Mortgagor does hereby bargain, sell, assign and
set over unto Mortgagee, all of Mortgagor's interest in the Leases and Rents.
The assignment of Leases and Rents in this Section 7.01 is an absolute,
unconditional and present assignment from Mortgagor to Mortgagee and not an
assignment for security and the existence or exercise of Mortgagor's revocable
license to collect Rent shall not operate to subordinate this assignment to
any subsequent assignment. The exercise by Mortgagee of any of its rights
or remedies pursuant to this Section 7.01 shall not be deemed to make
Mortgagee a mortgagee-in-possession. In addition to the provisions of this
Article VII, Mortgagor shall comply with all terms, provisions and conditions
of the Assignment.
(b) So long as there shall exist and be continuing no Event of Default,
Mortgagor shall have a revocable license to take all actions with respect to all
Leases and Rents, present and future, including the right to collect and use the
Rents, subject to the terms of this Mortgage and the Assignment.
(c) In a separate instrument Mortgagor shall, as requested from time to
time by Mortgagee, assign to Mortgagee or its nominee by specific or general
assignment, any and all Leases, such assignments to be in form and content
reasonably acceptable to Mortgagee, but subject to the provisions of Section
7.01(b) hereof. Mortgagor agrees to deliver to Mortgagee, within thirty (30)
days after Mortgagee's request, a true and complete copy of every Lease and,
within ten (10) days after Mortgagee's request, a complete list of the Leases,
certified by Mortgagor to be true, accurate and complete and stating the demised
premises, the names of the lessees, the Rent payable under the Leases, the date
to which such Rents have been paid, the material terms of the Leases, including,
without limitation, the dates of occupancy, the dates of expiration, any Rent
concessions, work obligations or other inducements granted to the lessees
thereunder, and any renewal options.
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(d) The rights of Mortgagee contained in this Article VII, the
Assignment or any other assignment of any Lease shall not result in any
obligation or liability of Mortgagee to Mortgagor or any lessee under a Lease
or any party claiming through any such lessee.
(e) At any time after an Event of Default, the license granted
hereinabove may be revoked by Mortgagee, and Mortgagee or a receiver
appointed in accordance with this Mortgage may enter upon the Mortgaged
Property, and collect, retain and apply the Rents toward payment of the Debt
in such priority and proportions as Mortgagee in its sole discretion shall
deem proper.
(f) In addition to the rights which Mortgagee may have herein, upon
the occurrence of any Event of Default, Mortgagee, at its option, may
require Mortgagor to pay monthly in advance to Mortgagee, or any receiver
appointed to collect the Rents, the fair and reasonable rental value for the
use and occupation of such part of the Mortgaged Property as may be used and
occupied by Mortgagor and may require Mortgagor to vacate and surrender
possession of the Mortgaged Property to Mortgagee or to such receiver and, in
default thereof, Mortgagor may be evicted by summary proceedings or otherwise.
Section 7.02. Management of Mortgaged Property. (a) Mortgagor shall manage the
Mortgaged Property or cause the Mortgaged Property to be managed in a manner
which is consistent with the Approved Manager Standard. All Space Leases
shall provide for rental rates comparable to then existing market rates and
terms and conditions which constitute good and prudent business practice and
are consistent with prevailing market terms and conditions, and shall be
arm's-length transactions. Except as previously disclosed by Mortgagor to, and
consented to by Mortgagee, all Leases shall provide that they are
subordinate to this Mortgage and that the lessees thereunder attorn to
Mortgagee. Mortgagor shall deliver copies of all Leases, amendments,
modifications and renewals to Mortgagee.
(b) Mortgagor (i) shall observe and perform all of its material
obligations under the Leases pursuant to applicable Legal Requirements and
shall not do or permit to be done anything
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to impair the value of the Leases as security for the Debt; (ii) shall
promptly, upon Mortgagee's request, send copies to Mortgagee of all
notices of default which Mortgagor shall receive under the Leases; (iii) shall,
consistent with the Approved Manager Standard, enforce all of the terms,
covenants and conditions contained in the Leases to be observed or performed;
(iv) shall not collect any of the Rents under the Leases more than one (1)
month in advance (except that Mortgagor may collect in advance such security
deposits as are permitted pursuant to applicable Legal Requirements and are
commercially reasonable in the prevailing market); (v) shall not execute any
other assignment of lessor's interest in the Leases or the Rents except as
otherwise expressly permitted pursuant to this Mortgage; (vi) shall not
cancel or terminate any of the Leases or accept a surrender thereof in any
manner inconsistent with the Approved Manager Standard; (vii) shall not
convey, transfer or suffer or permit a conveyance or transfer of all or any
part of the Premises or the Improvements or of any interest therein so as to
effect a merger of the estates and rights of, or a termination or diminution
of the obligations of, lessees thereunder; (viii) shall notify Mortgagee of
any material alteration, modification or change in the terms of any guaranty
of any Major Space Lease or cancellation or termination of such guaranty
promptly upon effectuation of same unless altered, cancelled, modified or
changed in the ordinary course of business; (ix) shall, in accordance with
the Approved Manager Standard, make all reasonable efforts to seek lessees
for space as it becomes vacant and enter into Leases in accordance with the
terms hereof; (x) shall not materially modify, alter or amend any Major Space
Lease or Property Agreement with any Pad Owner without Mortgagee's consent,
which consent will not be unreasonably withheld or delayed; (xi) shall notify
Mortgagee promptly if any Pad Owner shall cease business operations or of
the occurrence of any event of which it becomes aware affecting a Pad Owner
or its property which might have any material effect on the Mortgaged Property;
and (xii) shall, without limitation to any other provision hereof, execute
and deliver at the request of Mortgagee all such further assurances,
confirmations and assignments in connection with the Mortgaged Property as are
required herein and as Mortgagee shall from time to time reasonably require.
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(c) All security deposits of lessees, whether held in cash or any other
form, shall be treated by Mortgagor as trust funds, but shall not be commingled
with any other funds of Mortgagor and, if cash, shall be deposited by Mortgagor
in the Security Deposit Account. Any bond or other instrument which Mortgagor
is permitted to hold in lieu of cash security deposits under applicable Legal
Requirements shall be maintained in full force and effect unless replaced by
cash deposits as hereinabove described, shall be issued by a Person
reasonably satisfactory to Mortgagee, shall, if permitted pursuant to Legal
Requirements, at Mortgagee's option, name Mortgagee as payee or mortgagee
thereunder or be fully assignable to Mortgagee and shall, in all respects,
comply with applicable Legal Requirements and otherwise be reasonably
satisfactory to Mortgagee. Mortgagor shall, upon request, provide Mortgagee
with evidence reasonably satisfactory to Mortgagee of Mortgagor's compliance
with the foregoing. Following the occurrence and during the continuance of
any Event of Default, Mortgagor shall, upon Mortgagee's request, if permitted
by applicable Legal Requirements, turn over the security deposits (and any
interest thereon) to Mortgagee to be held by Mortgagee in accordance with
the terms of the Leases and all Legal Requirements.
(d) If (i) the aggregate Net Operating Income of the
Cross-collateralized Properties in any Fiscal Year declines below $27,977,167
or (ii) an Event of Default has occurred, then, if Mortgagee determines in
its reasonable discretion prior to the removal of the existing manager that a
reputable independent property manager can manage the Mortgaged Property at
competitive rates more efficiently and with better results than Mortgagor or
Mortgagor's Manager, Mortgagee shall have the right to appoint such reputable
independent property manager selected by Mortgagee, in Mortgagee's sole
discretion, to manage the Mortgaged Property; provided, however, that no such
approval shall be granted unless the Rating Agency shall have delivered
confirmation that any rating issued in connection with the Securitization
will not, as a result of a change of Manager, be downgraded from the then
current ratings thereof, qualified or withdrawn.
(e) Mortgagor covenants and agrees with Mortgagee that (i) the Mortgaged
Property will be managed at all times by the
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Manager pursuant to the management agreement approved by Mortgagee (the
"Management Agreement"), (ii) after Mortgagor has knowledge of a fifty percent
(50%) or more change in control of the ultimate beneficial ownership of the
Manager, Mortgagor will promptly give Mortgagee notice thereof (a "Manager
Control Notice") and (iii) the Management Agreement may be terminated by
Mortgagee at any time for cause (including, but not limited to, Manager's
negligence, willful misconduct or fraud) or at any time following either (A)
the occurrence of an Event of Default, or (B) the receipt of a Manager
Control Notice, and a substitute managing agent shall be appointed by
Mortgagor, subject to Mortgagee's approval, which may be given or withheld in
Mortgagee's sole discretion but which will not be given unless, inter alia,
the Rating Agency shall have delivered confirmation that any rating issued in
connection with the Securitization will not, as a result of a change of
Manager, be downgraded from the then current ratings thereof, qualified or
withdrawn. Mortgagor may from time to time appoint a successor manager to
manage the Mortgaged Property with Mortgagee's prior written consent which
consent shall not be unreasonably withheld or delayed, provided that, any
such successor manager shall be a reputable management company having a
senior executive with at least seven (7) years' experience in the management
of super-regional malls, shall be the manager of at least five (5)
super-regional malls, including, without limitation, certain complexes which
contain more than 1,500,000 square feet of gross leasable area, and shall be
reasonably acceptable to Mortgagee. Mortgagor further covenants and agrees
that Mortgagor shall require the Manager (or any successor managers) to
maintain at all times during the term of the Loan worker's compensation
insurance as required by Governmental Authorities.
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ARTICLE VIII: MAINTENANCE AND REPAIR
Section 8.01. Maintenance and Repair of the Mortgaged Property; Alterations;
Replacement of Equipment. Mortgagor hereby covenants and agrees:
(a) Mortgagor shall not (i) desert or abandon the Mortgaged Property, (ii)
change the use of the Mortgaged Property or cause or permit the use or occupancy
of any part of the Mortgaged Property to be discontinued if such discontinuance
or use change would violate any zoning or other law, ordinance or regulation;
(iii) consent to or seek any lowering of the zoning classification, or greater
zoning restriction affecting the Mortgaged Property; or (iv) take any steps
whatsoever to convert the Mortgaged Property, or any portion thereof, to a
condominium or cooperative form of ownership.
(b) Mortgagor shall, at its expense, (i) take good care of the Mortgaged
Property including grounds generally, and utility systems and sidewalks, roads,
alleys, and curbs therein, and shall keep the same in good, safe and insurable
condition and in compliance with all applicable Legal Requirements, (ii)
promptly make all repairs to the Mortgaged Property, above grade and below
grade, interior and exterior, structural and nonstructural, ordinary and
extraordinary, unforeseen and foreseen, and maintain the Mortgaged Property in a
manner appropriate for the facility and (iii) not commit or suffer to be
committed any waste of the Mortgaged Property or do or suffer to be done
anything which will increase the risk of fire or other hazard to the Mortgaged
Property or impair the value thereof. Mortgagor shall keep the sidewalks,
vaults, gutters and curbs comprising, or adjacent to, the Mortgaged Property,
clean and free from dirt, snow, ice, rubbish and obstructions. All repairs made
by Mortgagor shall be made with first-class materials, in a good and workmanlike
manner, shall be equal or better in quality and class to the original work and
shall comply with all applicable Legal Requirements and Insurance Requirements.
To the extent any of the above obligations are obligations of tenants under
Space Leases or Pad Owners or other Persons under Property Agreements, Mortgagor
may fulfill its obligations hereunder by causing such tenants, Pad Owners or
other Persons, as the case may be, to perform their obligations thereunder. As
used herein, the terms
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"repair" and "repairs" shall be deemed to include all necessary replacements.
(c) Mortgagor shall not demolish, remove, construct, or, except as
otherwise expressly provided herein, restore, or alter the Mortgaged Property
or any portion thereof nor consent to or permit any such demolition, removal,
construction, restoration, addition or alteration (each a "Renovation") which
would diminish the value of the Mortgaged Property or materially diminish the
Total GLA without (i) Mortgagee's prior written consent in each instance,
which consent shall not be unreasonably withheld or delayed, and (ii) a
letter from the Rating Agency confirming that any rating issued in connection
with the Securitization will not, as a result of such Renovation be
downgraded from the then current ratings thereof, qualified or withdrawn;
provided, however, that, so long as the aggregate Net Operating Income of the
Cross-collateralized Properties is equal to or greater than $27,977,167, any
customary and reasonable tenant improvement work done in accordance with the
Approved Manager Standard and Mortgagor's past business practices which tenant
improvement work costs (in any one Loan Year) not more than two and one-half
percent (2.5%) of the Allocated Loan Amount shall be permitted without the
consent of Mortgagee or delivery of a letter of the type set forth in (ii)
above.
(d) Mortgagor represents and warrants to Mortgagee that (i) there are
no fixtures, machinery, apparatus, tools, equipment or articles of personal
property attached or appurtenant to, or located on, or used in connection
with the management, operation or maintenance of the Mortgaged Property, except
for the Equipment and equipment leased by Mortgagor for the management,
operation or maintenance of the Mortgaged Property in accordance with the Loan
Documents; (ii) the Equipment and the leased equipment constitutes all of the
fixtures, machinery, apparatus, tools, equipment and articles of personal
property necessary to the proper operation and maintenance of the Mortgaged
Property; and (iii) all of the Equipment is free and clear of all liens,
except for the lien of this Mortgage and the Permitted Encumbrances. All
rights, title and interest of Mortgagor in and to all extensions, improvements,
betterment, renewals, appurtenances to, the Mortgaged Property hereafter
acquired by, or released to, Mortgagor or constructed, assembled or placed by
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Mortgagor in the Mortgaged Property, and all changes and substitutions of the
security constituted thereby, shall be and, in each such case, without any
further mortgage, conveyance, assignment or other act by Mortgagee or
Mortgagor, shall become subject to the lien and security interest of this
Mortgage as fully and completely, and with the same effect, as though now
owned by Mortgagor and specifically described in this Mortgage, but at any
and all times Mortgagor shall execute and deliver to Mortgagee any documents
Mortgagee may reasonably deem necessary or appropriate for the purpose of
specifically subjecting the same to the lien and security interest of this
Mortgage.
(e) Notwithstanding the provisions of this Mortgage to the contrary,
Mortgagor shall have the right, at any time and from time to time, to remove and
dispose of Equipment which may have become obsolete or unfit for use or which is
no longer useful in the management, operation or maintenance of the Mortgaged
Property. Mortgagor shall promptly replace any such Equipment so disposed of or
removed with other Equipment of equal value and utility, free of any security
interest or superior title, liens or claims; except that, if by reason of
technological or other developments, replacement of the Equipment so removed or
disposed of is not necessary or desirable for the proper management, operation
or maintenance of the Mortgaged Property, Mortgagor shall not be required to
replace the same. All such replacements or additional equipment shall be deemed
to constitute "Equipment" and shall be covered by the security interest herein
granted.
ARTICLE IX: TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY
Section 9.01. Other Encumbrances. Except for Permitted Liens, Mortgagor shall
not further encumber or permit the further encumbrance in any manner (whether
by grant of a pledge, security interest or otherwise) of the Mortgaged Property
or any part thereof or interest therein, including, without limitation, of
the Rents therefrom except as expressly permitted pursuant to the terms of
this Mortgage.
Section 9.02. No Transfer. Mortgagor acknowledges that Mortgagee has examined
and relied on the expertise of Mortgagor and, if applicable, each General
Partner, in owning and operating
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properties such as the Mortgaged Property in agreeing to make the Loan and
will continue to rely on Mortgagor's ownership of the Mortgaged Property as a
means of maintaining the value of the Mortgaged Property as security for
repayment of the Debt and Mortgagor acknowledges that Mortgagee has a valid
interest in maintaining the value of the Mortgaged Property. Mortgagor shall
not make or permit any Transfer without the prior written consent of
Mortgagee, which consent Mortgagee may withhold in its sole and absolute
discretion and which shall in no event be granted unless, inter alia, the
Rating Agency shall have delivered confirmation that any rating issued in
connection with the Securitization will not, as a result of the proposed
Transfer, be downgraded from the then current ratings thereof, qualified or
withdrawn. Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon a Transfer without
Mortgagee's consent. This provision shall apply to every Transfer regardless
of whether voluntary or not, or whether or not Mortgagee has consented to any
previous Transfer.
Section 9.03. Due on Sale. Mortgagee may declare the Debt immediately due
and payable upon any Transfer or further encumbrance in violation of this
Article IX without regard to whether any impairment of its security or any
increased risk of default hereunder can be demonstrated. This provision shall
apply to every Transfer or further encumbrance of the Mortgaged Property in
violation of this Article IX or any part thereof or interest in the Mortgaged
Property or in Mortgagor regardless of whether voluntary or not, or whether or
not Mortgagee has consented to any previous Transfer or further
encumbrance of the Mortgaged Property or interest in Mortgagor.
Section 9.04. Permitted Transfer. Notwithstanding anything contained in this
Article IX, Mortgagee shall consent to a one time Transfer of an interest in
Mortgagor or any General Partner of Mortgagor that occurs by reason of MLP or
The ▇▇▇▇▇ Corporation merging into or consolidating with another Person
("Sale") provided that all of the following terms and conditions are
satisfied:
(a) No Event of Default is then continuing.
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(b) Mortgagor gives Mortgagee written notice of the terms of such
prospective Sale not less than sixty (60) days before the date on which such
Sale is scheduled to close and, concurrently therewith, gives Mortgagee all
such information concerning the Person with which The ▇▇▇▇▇ Corporation or
MLP, as applicable, shall be merging into or consolidating with ("Buyer") as
Mortgagee would require in evaluating an initial extension of credit to a
borrower and pays to Mortgagee a non-refundable application fee in the
amount of $25,000 to cover expenses of Mortgagee incurred in connection
therewith.
(c) Mortgagor and the Buyer execute, without any cost or expense to
Mortgagee, new financing statements or financing statement amendments and
any additional documents reasonably requested by Mortgagee.
(d) The Rating Agency shall have delivered written confirmation that any
rating issued by the Rating Agency in connection with the Securitization will
not, as a result of the proposed Transfer, be downgraded from the then current
ratings thereof, qualified or withdrawn.
ARTICLE X: CERTIFICATES
Section 10.01. Estoppel Certificates. (a) After request by Mortgagee,
Mortgagor, within fifteen (15) days and at its expense, will furnish
Mortgagee with a statement, duly acknowledged and certified, setting forth
(i) the amount of the original principal amount of the Note, and the unpaid
principal amount of the Note, (ii) the rate of interest of the Note, (iii)
the date payments of interest and/or principal were last paid, (iv) any
offsets or defenses to the payment of the Debt, and if any are alleged, the
nature thereof, (v) that the Note and this Mortgage have not been
modified or if modified, giving particulars of such modification and (vi)
that there has occurred and is then continuing no Default or if such Default
exists, the nature thereof, the period of time it has existed, and the action
being taken to remedy such Default.
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(b) Within fifteen (15) days after written request by Mortgagor,
Mortgagee shall furnish to Mortgagor a written statement confirming the
amount of the Debt, the maturity date of the Note, the date to which interest
has been paid, and whether any Event of Default or other Default has occurred
and is then continuing.
(c) Mortgagor shall use all reasonable efforts to obtain estoppels from
tenants that may be required hereunder or under the Loan Documents.
ARTICLE XI: NOTICES
Section 11.01. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and delivered personally or sent to the
party to whom the notice, demand or request is being made by Federal Express
or other nationally recognized overnight delivery service, as follows and
shall be deemed given when delivered personally or one (1) Business Day after
being deposited with Federal Express or such other nationally recognized
delivery service:
If to Mortgagee: To Mortgagee, at the address first
written above,
with a copy to:
▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
If to Mortgagor: To Mortgagor, at the address set forth
on the signature page hereto, to the
attention of the general counsel of
Mortgagor,
or such other address as either Mortgagor or Mortgagee shall hereafter specify
by written notice as provided herein; provided, however, that notwithstanding
any provision of this Article to
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the contrary, such notice of change of address shall be deemed given only upon
actual receipt thereof.
ARTICLE XII: INDEMNIFICATION
Section 12.01. Indemnification Covering Mortgaged Property. In addition, and
without limitation, to any other provision of this Mortgage or any other
Loan Document, Mortgagor shall protect, indemnify and save harmless Mortgagee
and its successors and assigns, and each of their agents, employees, officers
and directors, from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expense (including, without
limitation, reasonable attorneys' fees and expenses, whether incurred within
or outside the judicial process), imposed upon or incurred by or asserted
against Mortgagee and its assigns, or any of their agents, employees,
officers or directors, by reason of (a) ownership of this Mortgage, the
Assignment, the Mortgaged Property or any part thereof or any interest therein
or receipt of any Rents; (b) any accident, injury to or death of any person or
loss of or damage to property occurring in, on or about the Mortgaged Property
or any part thereof or on the adjoining sidewalks, curbs, parking areas,
streets or ways; (c) any use, nonuse or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, the
Mortgaged Property or any part thereof or on the adjoining sidewalks, curbs,
parking areas, streets or ways; (d) any failure on the part of Mortgagor to
perform or comply with any of the terms of this Mortgage or the Assignment;
(e) performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof; (f)
any claim by brokers, finders or similar Persons claiming to be entitled to a
commission in connection with any Lease or other transaction involving the
Mortgaged Property or any part thereof; (g) any Imposition including, without
limitation, any Imposition attributable to the execution, delivery, filing,
or recording of any Loan Document, Lease or memorandum thereof; (h) any lien
or claim arising on or against the Mortgaged Property or any part thereof
under any Legal Requirement or any liability asserted against Mortgagee
with respect thereto; or (i) the claims of any lessee or any Person acting
through or under any lessee or
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otherwise arising under or as a consequence of any Lease. Notwithstanding the
foregoing provisions of this Section 12.01 to the contrary, Mortgagor shall
have no obligation to indemnify Mortgagee pursuant to this Section 12.01
for liabilities, obligations, claims, damages, penalties, causes of action,
costs and expenses relative to the foregoing which result from Mortgagee's,
and its successors' or assigns', willful misconduct or gross negligence. Any
amounts payable to Mortgagee by reason of the application of this Section
12.01 shall constitute a part of the Debt secured by this Mortgage and
other Loan Documents and shall become immediately due and payable and shall
bear interest at the Default Rate applicable to the Class A Portion from the
date the liability, obligation, claim, cost or expense is sustained by
Mortgagee, as applicable, until paid. The provisions of this Section 12.01
shall survive the termination of this Mortgage whether by repayment of
the Debt, foreclosure or delivery of a deed in lieu thereof, assignment or
otherwise.
ARTICLE XIII: DEFAULTS
Section 13.01. Events of Default. The Debt shall become immediately due at
the option of Mortgagee upon any one or more of the following events
("Event of Default"):
(a) if the final payment or prepayment premium, if any, due under
the Note shall not be paid on Maturity;
(b) if any monthly payment of interest and/or principal due under
the Note (other than the sums described in (a) above) shall not be fully
paid on the date upon which the same is due and payable thereunder;
(c) if payment of any sum (other than the sums described in (a)
above or (b) above) required to be paid pursuant to the Note, this
Mortgage or any other Loan Document shall not be paid within five (5)
Business Days after Mortgagee delivers written notice to Mortgagor that
same is due and payable thereunder or hereunder;
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(d) except in connection with the Merger and as otherwise permitted
herein, if Mortgagor or, if Mortgagor is a partnership, any general
partner of Mortgagor shall institute or cause to be instituted any
proceeding for the termination or dissolution of Mortgagor or any such
general partner;
(e) if the insurance policies required hereunder are not kept in
full force and effect, or if the insurance policies are not assigned and
delivered to Mortgagee as herein provided;
(f) except in connection with the Merger, if Mortgagor attempts to
assign its rights under this Mortgage or any other Loan Document or
any interest herein or therein, or if any Transfer occurs other than in
accordance with the provisions hereof;
(g) if any representation or warranty of Mortgagor made herein or in
any other Loan Document or in any certificate, report, financial statement
or other instrument or agreement furnished to Mortgagee shall prove
false or misleading in any material respect as of the date made;
(h) if Mortgagor or any general partner of Mortgagor shall make an
assignment for the benefit of creditors or shall admit in writing its
inability to pay its debts generally as they become due;
(i) if a receiver, liquidator or trustee of Mortgagor or any general
partner of Mortgagor shall be appointed or if Mortgagor or any of its
general partners shall be adjudicated a bankrupt or insolvent, or if any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Mortgagor or its general
partners or if any proceeding for the dissolution or liquidation of
Mortgagor or any of its general partners shall be instituted; however, if
such appointment, adjudication, petition or proceeding was involuntary and
not consented to by Mortgagor or its general partners, as applicable, upon
the same not being discharged,
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stayed or dismissed within sixty (60) days or if Mortgagor or any of its
general partners shall generally not be paying its debts as they become
due;
(j) if Mortgagor shall be in default beyond any notice or grace
period, if any, under any other mortgage or deed of trust or security
agreement covering any part of the Mortgaged Property without regard to
its priority relative to this Mortgage; provided, however, this
provision shall not be deemed a waiver of the provisions of Article IX
prohibiting further encumbrances affecting the Mortgaged Property or any
other provision of this Mortgage;
(k) if the Mortgaged Property becomes subject (i) to any lien which
is superior to the lien of this Mortgage, other than a lien for real
estate taxes and assessments not due and payable, or (ii) to any
mechanic's, materialman's or other lien which is or is asserted to be
superior to the lien of this Mortgage, and such lien shall remain
undischarged (by payment, bonding, or otherwise) for twenty (20) days
unless contested in accordance with the terms hereof;
(l) if Mortgagor discontinues the operation of the Mortgaged
Property or any part thereof for ten (10) days or more for reasons other
than repair or restoration arising from a casualty or condemnation;
(m) except as permitted in this Mortgage, any material
alteration, demolition or removal of any of the Improvements without the
prior consent of Mortgagee;
(n) if Mortgagor consummates a transaction which would cause this
Mortgage or Mortgagee's rights under this Mortgage, the Note
or any other Loan Document to constitute a non-exempt prohibited
transaction under ERISA or result in a violation of a state statute
regulating government plans subjecting Mortgagee to liability for a
violation of ERISA or a state statute;
(o) if an Event of Default shall occur under any of the other
Cross-collateralized Mortgages; or
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(p) if Mortgagor shall be in default under any of the other terms,
covenants or conditions of the Note (other than as set forth in (a)
through (o) above), this Mortgage or any other Loan Document, other
than as set forth in (a) through (o) above, for ten (10) days after
notice 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 notice from
Mortgagee in the case of any other default or an additional ninety (90)
days if Mortgagor is diligently and continuously effectuating a cure of a
curable non-monetary default, other than as set forth in (a) through (o)
above.
Section 13.02. Remedies. (a) Upon the occurrence and during the continuance
of any Event of Default, Mortgagee may, in addition to any other rights or
remedies available to it hereunder or under any other Loan Document, at law
or in equity, take such action, without notice or demand, as it reasonably
deems advisable to protect and enforce its rights against Mortgagor or any one
or more of the Cross-collateralized Borrowers and in and to the Mortgaged
Property or any one or more of the Cross-collateralized Properties or any one
or more of them, including, but not limited to, the following actions, each
of which may be pursued singly, concurrently or otherwise, at such time and
in such order as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting any other rights and remedies of Mortgagee
hereunder, at law or in equity: (i) declare all or any portion of the unpaid
Debt to be immediately due and payable; provided, however, that upon the
occurrence of any of the events specified in Section 13.01(i), the entire
Debt will be immediately due and payable without notice or demand or any
other declaration of the amounts due and payable; or (ii) bring an action to
foreclose this Mortgage and without applying for a receiver for the
Rents, but subject to the rights of the tenants under the Leases, enter into
or upon the Mortgaged Property or any part thereof, either personally or by its
agents, nominees or attorneys, and dispossess Mortgagor and its agents and
servants therefrom, and thereupon Mortgagee may (A) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal with all and
every part of the Mortgaged Property and conduct the business thereat, (B) make
alterations, additions, renewals, replacements and improvements to or on the
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Mortgaged Property or any part thereof, (C) exercise all rights and powers of
Mortgagor with respect to the Mortgaged Property or any part thereof, whether
in the name of Mortgagor or otherwise, including, without limitation, the
right to make, cancel, enforce or modify leases, obtain and evict tenants,
and demand, ▇▇▇ for, collect and receive all earnings, revenues, rents,
issues, profits and other income of the Mortgaged Property and every part
thereof, and (D) apply the receipts from the Mortgaged Property or any part
thereof to the payment of the Debt, after deducting therefrom all expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
reasonably incurred in connection with the aforesaid operations and all
amounts necessary to pay the Impositions, insurance and other charges in
connection with the Mortgaged Property or any part thereof, as well as just
and reasonable compensation for the services of Mortgagee's third-party
agents; or (iii) have an appraisal or other valuation of the Mortgaged
Property or any part thereof performed by an Appraiser (and Mortgagor
covenants and agrees it shall cooperate in causing any such valuation or
appraisal to be performed) and any cost or expense incurred by Mortgagee in
connection therewith shall constitute a portion of the Debt and be secured by
this Mortgage and shall be immediately due and payable to Mortgagee with
interest, at the Default Rate, until the date of receipt by Mortgagee; or
(iv) sell the Mortgaged Property or institute proceedings for the complete
foreclosure of this Mortgage, or take such other action as may be allowed
pursuant to Legal Requirements, at law or in equity, for the enforcement of
this Mortgage in which case the Mortgaged Property or any part thereof may be
sold for cash or credit in one or more parcels; or (v) with or without entry,
and to the extent permitted and pursuant to the procedures provided by
applicable Legal Requirements, institute proceedings for the partial
foreclosure of this Mortgage, or take such other action as may be allowed
pursuant to Legal Requirements, at law or in equity, for the enforcement of
this Mortgage for the portion of the Debt then due and payable, subject to
the lien of this Mortgage continuing unimpaired and without loss of priority
so as to secure the balance of the Debt not then due; or (vi) sell the
Mortgaged Property or any part thereof and any or all estate, claim, demand,
right, title and interest of Mortgagor therein and rights of redemption
thereof, pursuant to power of sale or otherwise, at one or more sales, in
whole or in parcels, in any order or
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manner, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law, at the discretion of Mortgagee, and
in the event of a sale, by foreclosure or otherwise, of less than all of the
Mortgaged Property, this Mortgage shall continue as a lien on the
remaining portion of the Mortgaged Property; or (vii) institute an action, suit
or proceeding in equity for the specific performance of any covenant,
condition or agreement contained in the Loan Documents, or any of them; or
(viii) recover judgment on the Note or any guaranty either before, during or
after (or in lieu of) any proceedings for the enforcement of this Mortgage;
or (ix) apply, ex parte, for the appointment of a custodian, trustee,
receiver, liquidator or conservator of the Mortgaged Property or any part
thereof, irrespective of the adequacy of the security for the Debt and
without regard to the solvency of Mortgagor or of any Person liable for the
payment of the Debt, to which appointment Mortgagor does hereby consent and
such receiver or other official shall have all rights and powers permitted by
applicable law and such other rights and powers as the court making such
appointment may confer, but the appointment of such receiver or other
official shall not impair or in any manner prejudice the rights of
Mortgagee to receive the Rent with respect to any of the Mortgaged Property
pursuant to this Mortgage or the Assignment; or (x) require, at
Mortgagee's option, Mortgagor to pay monthly in advance to Mortgagee, or
any receiver appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of any portion of the Mortgaged Property
occupied by Mortgagor and may require Mortgagor to vacate and surrender
possession to Mortgagee of the Mortgaged Property or to such receiver and
Mortgagor may be evicted by summary proceedings or otherwise; or (xi) without
notice to Mortgagor (A) apply all or any portion of the cash collateral in the
Basic Carrying Costs Sub-Account, including any interest and/or earnings
therein, to carry out the obligations of Mortgagor under this Mortgage and
the other Loan Documents, to protect and preserve the Mortgaged Property and
for any other purpose permitted under this Mortgage and the other Loan
Documents and/or (B) have all or any portion of such cash collateral
immediately paid to Mortgagee to be applied against the Debt in the order
and priority set forth in the Note; or (xii) pursue any or all such other
rights or remedies as Mortgagee may have under applicable law or in equity;
provided, however, that the provisions of this Section 13.02(a)
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shall not be construed to extend or modify any of the notice requirements or
grace periods provided for hereunder or under any of the other Loan Documents.
Mortgagor hereby waives, to the fullest extent permitted by Legal Requirements,
any defense Mortgagor might otherwise raise or have by the failure to make any
tenants parties defendant to a foreclosure proceeding and to foreclose their
rights in any proceeding instituted by Mortgagee.
(b) Any time after an Event of Default Mortgagee shall have the power
to sell the Mortgaged Property or any part thereof at public auction, in such
manner, at such time and place, upon such terms and conditions, and upon such
public notice as Mortgagee may deem best for the interest of Mortgagee,
or as may be required or permitted by applicable law, consisting of
advertisement in a newspaper of general circulation in the jurisdiction and
for such period as applicable law may require and at such other times and by
such other methods, if any, as may be required by law to convey the Mortgaged
Property in fee simple by Mortgagee's deed with special warranty of title
to and at the cost of the purchaser, who shall not be liable to see to the
application of the purchase money. The proceeds or avails of any sale made
under or by virtue of this Section 13.02, together with any other sums which
then may be held by Mortgagee under this Mortgage, whether under the
provisions of this Section 13.02 or otherwise, shall be applied as follows:
First: To the payment of the third-party costs and expenses
reasonably incurred in connection with any such sale and to
advances, fees and expenses, including, without limitation,
reasonable fees and expenses of Mortgagee's legal counsel as
applicable, and of any judicial proceedings wherein the same may be
made, and of all expenses, liabilities and advances reasonably made
or incurred by Mortgagee under this Mortgage, together with
interest as provided herein on all such advances made by
Mortgagee, and all Impositions, except any Impositions or other
charges subject to which the Mortgaged Property shall have been
sold;
Second: To the payment of the whole amount then due, owing and
unpaid under the Note for principal and
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interest thereon, with interest on such unpaid principal at the
Default Rate from the date of the occurrence of the earliest Event
of Default that formed a basis for such sale until the same is paid
to be applied in the manner set forth in Section 2.02 of the Note;
Third: To the payment of any other portion of the Debt required to
be paid by Mortgagor pursuant to any provision of this Mortgage,
the Note, or any of the other Loan Documents to be applied
in the manner set forth in Section 2.02 of the Note; and
Fourth: The surplus, if any, to Mortgagor unless otherwise required
by Legal Requirements.
Mortgagee and any receiver or custodian of the Mortgaged Property or any part
thereof shall be liable to account for only those rents, issues, proceeds and
profits actually received by it.
(c) Mortgagee may adjourn from time to time any sale by it to be made
under or by virtue of this Mortgage by announcement at the time and
place appointed for such sale or for such adjourned sale or sales and, except
as otherwise provided by any applicable provision of Legal Requirements,
Mortgagee, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.
(d) Upon the completion of any sale or sales made by Mortgagee under
or by virtue of this Section 13.02, Mortgagee, or any officer of any court
empowered to do so, shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient instrument, or good and sufficient
instruments, granting, conveying, assigning and transferring all estate,
right, title and interest in and to the property and rights sold. Mortgagee
is hereby irrevocably appointed the true and lawful attorney-in-fact of
Mortgagor (coupled with an interest), in its name and stead, to make all
necessary conveyances, assignments, transfers and deliveries of the property
and rights so sold and for that purpose Mortgagee may execute all necessary
instruments of conveyance, assignment, transfer and delivery, and may
substitute one or more Persons with like power, Mortgagor hereby
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ratifying and confirming all that its said attorney-in-fact or such substitute
or substitutes shall lawfully do by virtue hereof. Nevertheless, Mortgagor, if
so requested by Mortgagee, shall ratify and confirm any such sale or sales by
executing and delivering to Mortgagee, or to such purchaser or purchasers all
such instruments as may be advisable, in the sole judgement of Mortgagee, for
such purpose, and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 13.02, whether made under the power of
sale herein granted or under or by virtue of judicial proceedings or a judgment
or decree of foreclosure and sale, shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Mortgagor in and to the property and rights so sold, and shall, to
the fullest extent permitted under Legal Requirements, be a perpetual bar, both
at law and in equity against Mortgagor and against any and all Persons claiming
or who may claim the same, or any part thereof, from, through or under
Mortgagor.
(e) In the event of any sale made under or by virtue of this Section 13.02
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or a judgment or decree of foreclosure and sale), the
entire Debt immediately thereupon shall, anything in the Loan Documents to the
contrary notwithstanding, become due and payable.
(f) Upon any sale made under or by virtue of this Section 13.02
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or a judgment or decree of foreclosure and sale),
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof
and in lieu of paying cash therefor may make settlement for the purchase
price by crediting upon the Debt the net sales price after deducting
therefrom the expenses of the sale and the costs of the action.
(g) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or any part thereof or
upon any other property of Mortgagor shall release the lien of this Mortgage
upon the Mortgaged Property or any part thereof, or any liens, rights,
powers or remedies of Mortgagee hereunder, but such liens, rights, powers
and remedies of Mortgagee shall continue unimpaired until all amounts due
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under the Note, this Mortgage and the other Loan Documents are paid in
full.
Section 13.03. Payment of Debt After Default. If following the occurrence of
any Event of Default, Mortgagor shall tender payment of an amount sufficient to
satisfy the Debt in whole or in part at any time prior to a foreclosure sale
of the Mortgaged Property, and if at the time of such tender prepayment of the
principal balance of the Note is not permitted by the Note, Mortgagor shall, in
addition to the entire Debt, also pay to Mortgagee a sum equal to interest
which would have accrued on the principal balance of the Note from the date
of such tender to the earlier of (a) the Maturity Date or (b) the first day
of the period during which prepayment of the principal balance of the Note
would have been permitted together with a prepayment consideration equal to
the prepayment consideration which would have been payable as of the first
day of the period during which prepayment would have been permitted. If at
the time of such tender, prepayment of the principal balance of the Note is
permitted, such tender by Mortgagor shall be deemed to be a voluntary
prepayment of the principal balance of the Note, and Mortgagor shall, in
addition to the entire Debt, also pay to Mortgagee the applicable
prepayment consideration specified in the Note and this Mortgage.
Section 13.04. Possession of the Mortgaged Property. Upon the occurrence of
any Event of Default hereunder and the acceleration of the Debt or any portion
thereof, Mortgagor, if an occupant of the Mortgaged Property or any part
thereof, upon demand of Mortgagee, shall immediately surrender possession of
the Mortgaged Property (or the portion thereof so occupied) to Mortgagee, and
if Mortgagor is permitted to remain in possession, the possession shall be as
a month-to-month tenant of Mortgagee and, on demand, Mortgagor shall pay to
Mortgagee monthly, in advance, a reasonable rental for the space so occupied
and in default thereof Mortgagor may be dispossessed. The covenants herein
contained may be enforced by a receiver of the Mortgaged Property or any part
thereof. Nothing in this Section 13.04 shall be deemed to be a waiver of the
provisions of this Mortgage making the Transfer of the Mortgaged Property or
any part thereof without Mortgagee's prior written consent an Event of Default.
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Section 13.05. Interest After Default. If any amount due under the Note, this
Mortgage or any of the other Loan Documents is not paid within any
applicable notice and grace period after same is due, whether such date is
the stated due date, any accelerated due date or any other date or at any
other time specified under any of the terms hereof or thereof, then, in such
event, interest on the amount not so paid shall accrue from and after the
date on which such amount first becomes due at the Default Rate; and such
interest shall accrue at such rate until the earlier of the cure of all
Events of Default or the payment of the entire amount due to Mortgagee,
whether or not any action shall have been taken or proceeding commenced to
recover the same or to foreclose this Mortgage. Accrued Default Rate
Interest shall be due and payable at such times specified in the Note. All
unpaid and accrued interest shall be secured by this Mortgage as part of
the Debt. Nothing in this Section 13.05 or in any other provision of this
Mortgage shall constitute an extension of the time for payment of the
Debt.
Section 13.06. Mortgagor's Actions After Default. After the happening of any
Event of Default and immediately upon the commencement of any action, suit or
other legal proceedings by Mortgagee to obtain judgment for the Debt, or of
any other nature in aid of the enforcement of the Loan Documents, Mortgagor
will (a) after receipt of notice of the institution of any such action, waive
the issuance and service of process and enter its voluntary appearance in
such action, suit or proceeding, and (b) if required by Mortgagee, consent
to the appointment of a receiver or receivers of the Mortgaged Property or any
part thereof and of all the earnings, revenues, rents, issues, profits and
income thereof.
Section 13.07. Control by Mortgagee After Default. Notwithstanding the
appointment of any custodian, receiver, liquidator or trustee of Mortgagor, or
of any of its property, or of the Mortgaged Property or any part thereof, to
the extent permitted by Legal Requirements, Mortgagee shall be entitled to
obtain possession and control of all property now and hereafter covered by
this Mortgage and the Assignment in accordance with the terms hereof.
Section 13.08. Right to Cure Defaults. (a) Upon the occurrence of any Event
of Default, Mortgagee or its agents may, but without any
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obligation to do so and without notice to or demand on Mortgagor and without
releasing Mortgagor from any obligation hereunder, make or do the same in such
manner and to such extent as Mortgagee may deem necessary to protect the
security hereof. Mortgagee and its agents are authorized to enter upon the
Mortgaged Property or any part thereof for such purposes, or appear in, defend,
or bring any action or proceedings to protect Mortgagee's interest in the
Mortgaged Property or any part thereof or to foreclose this Mortgage or collect
the Debt, and the cost and expense thereof (including reasonable attorneys' fees
to the extent permitted by law), with interest as provided in this Section
13.08, shall constitute a portion of the Debt and shall be immediately due and
payable to Mortgagee upon demand. All such costs and expenses incurred by
Mortgagee or its agents in remedying such Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear interest at the
Default Rate, for the period from the date so demanded to the date of payment to
Mortgagee. All such costs and expenses incurred by Mortgagee or its agents
together with interest thereon calculated at the above rate shall be deemed to
constitute a portion of the Debt and be secured by this Mortgage.
(b) If Mortgagee makes any payment or advance that Mortgagee is
authorized by this Mortgage to make in the place and stead of Mortgagor
(i) relating to the Impositions or tax liens asserted against the Mortgaged
Property, Mortgagee may do so according to any ▇▇▇▇, statement or estimate
procured from the appropriate public office without inquiry into the accuracy
of the ▇▇▇▇, statement or estimate or into the validity of any of the
Impositions or the tax liens or claims thereof; (ii) relating to any apparent
or threatened adverse title, lien, claim of lien, encumbrance, claim or
charge, Mortgagee will be the sole judge of the legality or validity of
same; or (iii) relating to any other purpose authorized by this Mortgage
but not enumerated in this Section 13.08, Mortgagee may do so whenever, in
its judgment and discretion, the payment or advance seems necessary or
desirable to protect the Mortgaged Property and the full security interest
intended to be created by this Mortgage. In connection with any payment
or advance made pursuant to this Section 13.08, Mortgagee has the option
and is authorized, but in no event shall be obligated, to obtain a
continuation report of title prepared by a title insurance company. The
payments and the advances made by
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Mortgagee pursuant to this Section 13.08 and the cost and expenses of said
title report will be due and payable by Mortgagor on demand, together with
interest at the Default Rate applicable to the Class A Portion (as defined in
the Note), and will be secured by this Mortgage.
Section 13.09. Late Payment Charge. If any portion of the Debt is not paid in
full within five (5) days after the date on which it is due and payable
hereunder, Mortgagor shall be obligated to pay to Mortgagee an amount equal
to five percent 5% of such unpaid portion of the Debt ("Late Charge") to
defray the expense incurred by Mortgagee in handling and processing such
delinquent payment, and such amount shall constitute a part of the Debt,
which Late Charge shall be due and payable at the times specified in the Note.
Section 13.10. Recovery of Sums Required to Be Paid. Mortgagee shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due and payable hereunder
(after the expiration of any grace period or the giving of any notice herein
provided, if any), without regard to whether or not the balance of the Debt
shall be due, and without prejudice to the right of Mortgagee thereafter to
bring an action of foreclosure, or any other action, for a default or
defaults by Mortgagor existing at the time such earlier action was commenced.
Section 13.11. Marshalling and Other Matters. Mortgagor hereby waives, to the
fullest extent permitted by law, the benefit of all appraisement, valuation,
stay, extension, reinstatement, redemption (both equitable and statutory) and
homestead laws now or hereafter in force and all rights of marshalling in the
event of any sale hereunder of the Mortgaged Property or any part thereof or
any interest therein. Nothing herein or in any other Loan Document shall be
construed as requiring Mortgagee to resort to any particular
Cross-collateralized Property for the satisfaction of the Debt in preference
or priority to any other Cross-collateralized Property but Mortgagee may seek
satisfaction out of all the Cross-collateralized Properties or any part
thereof in its absolute discretion. Further, Mortgagor hereby expressly waives
any and all rights of redemption from sale under
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any order or decree of foreclosure of this Mortgage on behalf of
Mortgagor, whether equitable or statutory and on behalf of each and every
Person acquiring any interest in or title to the Mortgaged Property or any part
thereof subsequent to the date of this Mortgage and on behalf of all
Persons to the fullest extent permitted by applicable law.
Section 13.12. Tax Reduction Proceedings. After an Event of Default, Mortgagor
shall be deemed to have appointed Mortgagee as its attorney-in-fact to seek a
reduction or reductions in the assessed valuation of the Mortgaged Property
for real property tax purposes or for any other purpose and to prosecute any
action or proceeding in connection therewith. This power, being coupled with
an interest, shall be irrevocable for so long as any part of the Debt remains
unpaid and any Event of Default shall be continuing.
Section 13.13. General Provisions Regarding Remedies.
(a) Right to Terminate Proceedings. Mortgagee may terminate or
rescind any proceeding or other action brought in connection with its
exercise of the remedies provided in Section 13.02 at any time before the
conclusion thereof, as determined in Mortgagee's sole discretion and
without prejudice to Mortgagee.
(b) No Waiver or Release. The failure of Mortgagee to exercise any
right, remedy or option provided in the Loan Documents shall not be deemed a
waiver of such right, remedy or option or of any covenant or obligation
contained in the Loan Documents. No acceptance by Mortgagee of any payment
after the occurrence of an Event of Default and no payment by Mortgagee of any
payment or obligation for which Mortgagor is liable hereunder shall be deemed
to waive or cure any Event of Default. No sale of all or any portion of the
Mortgaged Property, no forbearance on the part of Mortgagee, and no extension
of time for the payment of the whole or any portion of the Debt or any other
indulgence given by Mortgagee to Mortgagor or any other Person, shall operate
to release or in any manner affect the interest of Mortgagee in the Mortgaged
Property or the liability of Mortgagor to pay the Debt. No waiver by Mortgagee
shall be effective unless it is in writing and then only to the extent
specifically stated.
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(c) No Impairment; No Releases. The interests and rights of Mortgagee
under the Loan Documents shall not be impaired by any indulgence, including
(i) any renewal, extension or modification which Mortgagee may grant with
respect to any of the Debt; (ii) any surrender, compromise, release, renewal,
extension, exchange or substitution which Mortgagee may grant with respect
to the Mortgaged Property or any portion thereof; or (iii) any release or
indulgence granted to any maker, endorser, guarantor or surety of any of the
Debt.
(d) Effect on Judgment. No recovery of any judgment by Mortgagee and no
levy of an execution under any judgment upon any Mortgaged Property or any
portion thereof shall affect in any manner or to any extent the lien of the
other Cross-collateralized Mortgages upon the remaining Cross-collateralized
Properties or any portion thereof, or any rights, powers or remedies of
Mortgagee hereunder or thereunder. Such lien, rights, powers and remedies of
Mortgagee shall continue unimpaired as before.
ARTICLE XIV: COMPLIANCE WITH REQUIREMENTS
Section 14.01. Compliance with Legal Requirements. (a) Mortgagor shall promptly
comply in all material respects with all present and future Legal
Requirements, foreseen and unforeseen, ordinary and extraordinary, whether
requiring structural or nonstructural repairs or alterations including,
without limitation, all zoning, subdivision, building, safety and
environmental protection, land use and development Legal Requirements, all
Legal Requirements which may be applicable to the curbs adjoining the Mortgaged
Property or to the use or manner of use thereof, and all rent control, rent
stabilization and all other similar Legal Requirements relating to rents
charged and/or collected in connection with the Leases. Mortgagor represents
and warrants that the Mortgaged Property is in compliance in all material
respects with all Legal Requirements as of the date hereof, no notes or
notices of violations of any Legal Requirements have been entered or received
by Mortgagor and there is no basis for the entering of such note or notices.
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(b) Mortgagor shall have the right to contest by appropriate legal
proceedings diligently conducted in good faith, without cost or expense to
Mortgagee, the validity or application of any Legal Requirement and to suspend
compliance therewith if permitted under applicable Legal Requirements,
provided (i) failure to comply therewith may not subject Mortgagee to any
civil or criminal liability, (ii) prior to and during such contest, Mortgagor
shall furnish to Mortgagee security reasonably satisfactory to Mortgagee, in
its discretion, against loss or injury by reason of such contest or
non-compliance with such Legal Requirement, (iii) no Default or Event of
Default shall exist during such proceedings and such contest shall not
otherwise violate any of the provisions of any of the Loan Documents, (iv)
such contest shall not, (unless Mortgagor shall comply with the provisions of
clause (ii) of this Section 14.01(b)) subject the Mortgaged Property to any
lien or encumbrance the enforcement of which is not suspended or otherwise
affect the priority of the lien of this Mortgage; (v) such contest shall not
affect the ownership, use or occupancy of the Mortgaged Property; (vi) the
Mortgaged Property or any part thereof or any interest therein shall not be in
any danger of being sold, forfeited or lost by reason of such contest by
Mortgagor; (vii) Mortgagor shall give Mortgagee prompt notice of the
commencement of such proceedings and, upon request by Mortgagee, notice of the
status of such proceedings and/or confirmation of the continuing satisfaction
of the conditions set forth in clauses (i)-(vi) of this Section 14.01(b); and
(viii) upon a final determination of such proceeding, Mortgagor shall take all
steps necessary to comply with any requirements arising therefrom.
(c) Mortgagor shall at all times comply in all material respects with
all applicable Legal Requirements with respect to the construction, use and
maintenance of any vaults adjacent to the Mortgaged Property. If by reason of
the failure to pay taxes, assessments, charges, permit fees, franchise taxes
or levies of any kind or nature, the continued use of the vaults adjacent to
Mortgaged Property or any part thereof is discontinued, Mortgagor nevertheless
shall, with respect to any vaults which may be necessary for the continued use
of the
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Mortgaged Property, take such steps (including the making of any payment) to
insure the continued use of vaults or replacements.
Section 14.02. Compliance with Recorded Documents; No Future Grants. Mortgagor
shall promptly perform and observe or cause to be performed and observed, all
of the terms, covenants and conditions of all Property Agreements and all
things necessary to preserve intact and unimpaired any and all appurtenances
or other interests or rights affecting the Mortgaged Property.
ARTICLE XV: PREPAYMENT; RELEASE
Section 15.01. Prepayment. (a) Except as set forth in Section 15.01(b) hereof,
no prepayment of the Debt may be made in whole or in part.
(b) At any time subsequent to the third (3rd) anniversary of the date
hereof, Mortgagor may prepay the Loan, in whole or, from time to time, in part,
as of the last day of an Interest Accrual Period in accordance with the
following provisions:
(i) Mortgagee shall have received from Mortgagor, not less than
fifteen (15) days', nor more than ninety (90) days', prior written notice
specifying the date proposed for such prepayment and the amount which is
to be prepaid.
(ii) Mortgagor shall also pay to Mortgagee all interest due through
and including the last day of the Interest Accrual Period in which such
prepayment is being made, together with any and all other amounts due and
owing pursuant to the terms of the Note, this Mortgage or the other
Loan Documents.
(iii) In the event that, on or before the date which is six (6)
months prior to the Optional Prepayment Date, Mortgagor shall prepay all
or any portion of the Loan Amount, whether such prepayment is made
voluntarily or involuntarily, except where such prepayment is made as a
result of Mortgagee's determination to apply Loss Proceeds
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to the Debt, Mortgagor shall be required to pay to Mortgagee on the date
of such prepayment, in addition to the Principal Amount or portion thereof
which is to be prepaid, a non-refundable sum equal to the greater of (i)
one percent (1%) of the Principal Amount or portion thereof which is to be
prepaid and (ii) the Yield Maintenance Premium with respect to such
prepayment. Mortgagee shall deliver notice to Mortgagor of the amount of
any Yield Maintenance Premium due with respect to any prepayment by
Mortgagor at least three (3) Business Days prior to the date of such
prepayment which notice shall be conclusive and binding upon Mortgagor
absent manifest error.
(iv) Any partial prepayment shall be in a minimum amount not less
than $25,000 and shall be in whole multiples of $1,000 in excess thereof.
(v) No Event of Default shall have occurred and be continuing other
than an Event of Default which would be cured by such prepayment.
(vi) Any partial prepayment of the Principal Amount, including,
without limitation, Unscheduled Payments, shall not release or relieve
Mortgagor from the obligation to pay the regularly scheduled installments
of principal and interest becoming due under the Note or affect the amount
of any such regularly scheduled payments until the Debt is paid in full.
Section 15.02. Out-Parcel Severance. Notwithstanding any other
provision of this Mortgage to the contrary, Mortgagor shall be permitted
to transfer, and Mortgagee shall release from the lien of this Mortgage
and the other Loan Documents, any unimproved out-parcel and one
anchor-store parcel comprising a portion of the Mortgaged Property (either of
which is hereinafter referred to as the "Out-Parcel") secured by this Mortgage,
from the lien hereof, upon not less than thirty (30) nor more than
ninety (90) days' prior written notice to Mortgagee, upon satisfaction of
all of the following terms and conditions:
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(a) No Default shall have occurred and be continuing and all amounts which
are then required to be deposited in the Sub-Accounts shall have been so
deposited.
(b) The Out-Parcel shall be designated by a metes and bounds description
and a survey reasonably satisfactory to Mortgagee.
(c) The following conditions shall have been satisfied, and Mortgagee
shall in addition have received an Officer's Certificate, not less than fifteen
(15) Business Days prior to the proposed transfer or release of the Out-Parcel,
stating that:
(i) the use to which the Out-Parcel will be put, shall be consistent
with the use to which out-parcels or anchor-store parcels, as applicable,
are generally put in other first class enclosed regional shopping centers,
as reasonably determined by Mortgagor.
(ii) the portion of the Realty remaining subject to the lien of this
Mortgage after release of the Out-Parcel (the "Remaining Realty")
will continue to be in compliance with the Approved Manager Standard, and
remain in full compliance with all Legal Requirements and with the terms
of all Space Leases and Property Agreements on the Remaining Realty;
(iii) the proposed use of the Out-Parcel will not violate the
provisions of any Space Lease or Property Agreement affecting the
Remaining Realty. To the extent reasonably required, the permitted uses
of the Out-Parcel will be restricted of record, as reasonably agreed to
by Mortgagee, to insure that use of the Out-Parcel will not violate the
provisions of this Mortgage or any Space Leases or Property
Agreements;
(iv) Mortgagor shall have caused the Out-Parcel to be a separate
parcel of land for all subdivision, zoning, and taxing purposes;
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(v) title to the Out-Parcel shall have been or shall
simultaneously be conveyed to a Person other than a Cross-collateralized
Borrower;
(vi) the disposition of the Out-Parcel shall not have a Material
Adverse Affect on the Net Operating Income;
(vii) the occupancy rate of the specialty stores (i.e., the stores
occupied by tenants which are not tenants under Major Space Leases)
located in the Remaining Realty shall be equal to or greater than 85%
after giving effect to any proposed tenant relocations to the Out-Parcel;
(viii) the Debt Service Coverage allocable to the Remaining Realty
shall not be less than the Closing DSC;
(ix) no tenant under any Lease has executed, or is negotiating in
contemplation of executing, a lease or other occupancy agreement with
respect to a portion of such Out-Parcel; and
(x) an amount equal to the greater of (A) all sums received by
Mortgagor in connection with the sale of the Out-Parcel and (B) the fair
market value of the Out-Parcel as reasonably determined by Mortgagee is,
at Mortgagor's discretion either (1) paid to Mortgagee to be applied as a
prepayment of the Loan in accordance with Section 15.01 hereof or (2)
deposited in an Eligible Account established in the name of Mortgagee at
the bank in which the Central Account is located from which disbursements
may be made for the purpose of making improvements to the Premises which
are of a capital nature. Provided that Mortgagee has received from
Mortgagor at least five (5) Business Days prior written notice, and not
more frequently than once each month, and further provided that no Event
of Default has occurred, that there are sufficient funds available in such
account and that Mortgagor shall have theretofore furnished Mortgagee with
lien waivers, copies of bills, invoices and other reasonable documentation
as may be required by Mortgagee to
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establish that the capital costs which are the subject of such request
represent amounts due for completed or partially completed capital work
and improvements performed at the Mortgaged Property, Mortgagee shall
disburse to Mortgagor out of such account any sums necessary to reimburse
Mortgagor for such capital costs.
(xi) Mortgagor shall have delivered to Mortgagee an opinion letter
of counsel in form and substance acceptable to Mortgagee to the effect
that, with respect to the trust in which the Loan is included as an asset
in connection with the Securitization, such Release shall not (i)
adversely affect the qualification as a "real estate mortgage investment
conduit" (a "REMIC") within the meaning of Section 860D of the Code of the
portion of the Trust Fund which is intended to qualify as a REMIC (the
"Trust REMIC"), (ii) result in any tax being imposed on the Trust REMIC
under Sections 860F(a) or 860G(d) of the Code, or (iii) result in the
portion of the Trust Fund exclusive of the Trust REMIC being treated as
other than a grantor trust that is not a taxable mortgage pool for federal
income tax purposes.
(d) To the extent reasonably required, an appropriate Property Agreement
shall be executed (and a copy delivered to Mortgagee) to govern the integrated
use and operation, if applicable, of the Remaining Realty and the Out-Parcel.
(e) A title policy endorsement to the Mortgagee's lenders' title
insurance policy to the effect that the release of the Out-Parcel will not
have an adverse affect on the priority of the lien of this Mortgage with
respect to the Remaining Realty.
(f) Mortgagor shall, at its sole cost and expense, prepare any and all
documents and instruments necessary to effect the release of the Out-Parcel,
all of which shall be subject to the reasonable approval of Mortgagee, and
Mortgagor shall pay all costs reasonably incurred by Mortgagee (including,
but not limited to, reasonable attorneys' fees and disbursements, title
search costs and endorsement premiums) in connection with the review,
execution and delivery of such release.
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(g) All agreements and instruments to be delivered to Mortgagee
pursuant to this Section 15.02 shall be in form and substance reasonably
satisfactory to Mortgagee and its counsel and included with the Officer's
Certificate required to be delivered pursuant to clause (iii) of this Section
15.02 shall be evidence in form and substance satisfactory to Mortgagee
supporting the statements, calculations and information required pursuant to
clauses (c)(vi), (vii) and (viii) of this Section 15.02.
Section 15.03. Release of Mortgaged Property. If Mortgagor prepays all
or a portion of the Loan pursuant to Section 15.01(b) hereof or if Mortgagee
applies Loss Proceeds from the Mortgaged Property towards the repayment of the
Debt, Mortgagee shall, promptly upon satisfaction of all the following terms
and conditions execute, acknowledge and deliver to Mortgagor a release of this
Mortgage (a "Release") in recordable form with respect to the Mortgaged
Property:
(a) If such prepayment is a prepayment in part, but not in whole,
Mortgagee shall have received on the date proposed for such prepayment an
amount equal to one hundred fifty percent (150%) of the Initial Allocated
Loan Amount (the "Release Price") for the released Cross-collateralized
Property.
(b) Mortgagee shall have received from Mortgagor evidence in form and
substance satisfactory to Mortgagee that the pro forma Aggregate Debt Service
Coverage of all Cross-collateralized Properties immediately following the
Release (not including the Cross-collateralized Property which is to be
Released) is at least equal to the greater of 2.0:1 and the Aggregate Debt
Service Coverage immediately prior to effecting such Release, accompanied by an
Officer's Certificate stating that the statements, calculations and information
comprising such evidence are true, correct and complete in all respects.
(c) Mortgagor shall, at its sole expense, prepare any and all documents
and instruments necessary to effect the Release, all of which shall be subject
to the reasonable approval of Mortgagee, and Mortgagor shall pay all costs
reasonably incurred by Mortgagee (including, but not limited to, reasonable
attorneys' fees and disbursements, title search costs or
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endorsement premiums) in connection with the review, execution and
delivery of the Release.
(d) No Event of Default has occurred and is continuing.
(e) Mortgagor shall have delivered to Mortgagee an opinion letter of
counsel in form and substance acceptable to Mortgagee to the effect that, with
respect to the trust in which the Loan is included as an asset in connection
with the Securitization, such Release shall not (i) adversely affect the
qualification as a REMIC within the meaning of Section 860D of the Code of the
portion of the Trust Fund which is intended to qualify as a REMIC (the "Trust
REMIC"), (ii) result in any tax being imposed on the Trust REMIC under Sections
860F(a) or 860G(d) of the Code, or (iii) result in the portion of the Trust Fund
exclusive of the Trust REMIC being treated as other than a grantor trust that is
not a taxable mortgage pool for federal income tax purposes.
ARTICLE XVI: ENVIRONMENTAL COMPLIANCE
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Section 16.01. Covenants, Representations and Warranties. (a) Mortgagor has
not, at any time, and, to Mortgagor's best knowledge after due inquiry and
investigation, except as set forth in the Environmental Report, no other
Person has at any time, handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced, spilled, allowed to
seep, leak, escape or ▇▇▇▇▇, or pumped, poured, emitted, emptied, discharged,
injected, dumped, transferred or otherwise disposed of or dealt with Hazardous
Materials on, to or from the Premises or any other real property owned and/or
occupied by Mortgagor, and Mortgagor does not intend to and shall not use the
Mortgaged Property or any part thereof or any such other real property for the
purpose of handling, burying, storing, retaining, refining, transporting,
processing, manufacturing, generating, producing, spilling, seeping, leaking,
escaping, leaching, pumping, pouring, emitting, emptying, discharging,
injecting, dumping, transferring or otherwise disposing of or dealing with
Hazardous Materials, except for use and storage for use of heating oil,
cleaning fluids, pesticides and other substances customarily used in the
operation of properties that are being used for the same purposes as the
Mortgaged Property is presently being used, provided such use and/or storage
for use is in compliance with the Legal Requirements and does not give rise to
liability under applicable Legal Requirements or Environmental Statutes or be
the basis for a lien against the Mortgaged Property or any part thereof. In
addition, without limitation to the foregoing provisions, Mortgagor represents
and warrants that, to the best of its knowledge, after due inquiry and
investigation, except as previously disclosed in writing to Mortgagee, there
is no asbestos in, on, over, or under all or any portion of the fire-proofing
or any other portion of the Mortgaged Property.
(b) Mortgagor, after due inquiry and investigation, knows of no seepage,
leak, escape, ▇▇▇▇▇, discharge, injection, release, emission, spill, pumping,
pouring, emptying or dumping of Hazardous Materials into waters on, under or
adjacent to the Mortgaged Property or any part thereof or any other real
property owned and/or occupied by Mortgagor, or onto lands from which such
Hazardous Materials might seep, flow or drain into such waters, except as
disclosed in the Environmental Report.
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(c) Mortgagor shall not permit any Hazardous Materials to be handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or ▇▇▇▇▇, or to be
pumped, poured, emitted, emptied, discharged, injected, dumped, transferred or
otherwise disposed of or dealt with on, under, to or from the Mortgaged Property
or any portion thereof at any time, except for use and storage for use of
heating oil, ordinary cleaning fluids, pesticides and other substances
customarily used in the operation of properties that are being used for the same
purposes as the Mortgaged Property is presently being used, provided such use
and/or storage for use is in compliance with Legal Requirements and does not
give rise to liability under applicable Legal Requirements or be the basis for a
lien against the Mortgaged Property or any part thereof.
(d) Mortgagor represents and warrants that no actions, suits, or
proceedings have been commenced, or are pending, or to the best knowledge of
Mortgagor, are threatened with respect to any Legal Requirement governing the
use, manufacture, storage, treatment, transportation, or processing of Hazardous
Materials with respect to the Mortgaged Property or any part thereof. Mortgagor
has received no notice of, and, except as disclosed in the Environmental Report,
after due inquiry, has no knowledge of any fact, condition, occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute pertaining to Hazardous
Materials on, in, under or originating from the Mortgaged Property or any part
thereof or any other real property owned or occupied by Mortgagor or arising out
of the conduct of Mortgagor, including, without limitation, pursuant to any
Environmental Statute.
(e) Mortgagor has not waived any Person's liability with regard to the
Hazardous Materials in, on, under or around the Mortgaged Property, nor has
Mortgagor retained or assumed, contractually or by operation of law, any other
Person's liability relative to Hazardous Materials or any claim, action or
proceeding relating thereto.
(f) In the event that there shall be filed a lien against the Mortgaged
Property or any part thereof pursuant to any
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Environmental Statute pertaining to Hazardous Materials, Mortgagor shall,
within sixty (60) days or, in the event that the applicable Governmental
Authority has commenced steps to cause the Premises or any part thereof to be
sold pursuant to the lien, within twenty (20) days, from the date that
Mortgagor receives notice of such lien, either (i) pay the claim and/or remove
the lien from the Mortgaged Property, or (ii) furnish (A) a bond satisfactory
to Mortgagee in the amount of the claim out of which the lien arises, (B) a
cash deposit in the amount of the claim out of which the lien arises, or (C)
other security reasonably satisfactory to Mortgagee in an amount sufficient
to discharge the claim out of which the lien arises.
(g) Mortgagor represents and warrants that (i) except as disclosed in
the Environmental Report, Mortgagor has no knowledge of any violation of any
Environmental Statute or any Environmental Problem in connection with the
Mortgaged Property, nor has Mortgagor been requested or required by any
Governmental Authority to perform any remedial activity or other responsive
action in connection with any Environmental Problem and (ii) neither the
Mortgaged Property nor any other property owned by Mortgagor is included or,
to Mortgagor's best knowledge, after due inquiry and investigation, proposed
for inclusion on the National Priorities List issued pursuant to CERCLA by the
United States Environmental Protection Agency (the "EPA") or on the CERCLIS
list issued by the EPA and has not otherwise been identified by the EPA as a
potential CERCLA site or included or, to Mortgagor's knowledge, after due
inquiry and investigation, proposed for inclusion on any list or inventory
issued pursuant to any other Environmental Statute, if any, or issued by any
other Governmental Authority. Mortgagor covenants that Mortgagor will comply
with all Environmental Statutes affecting or imposed upon Mortgagor or the
Mortgaged Property.
(h) Mortgagor covenants that it shall notify Mortgagee within three (3)
Business Days of receipt of knowledge of the presence (if such presence does
or may violate Environmental Statutes) and/or release of such Hazardous
Material and of any request for information or any inspection of the Mortgaged
Property or any part thereof by any Governmental Authority with respect to
any Hazardous Materials and provide Mortgagee with copies of such request
and any response to any such request or
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inspection. Mortgagor covenants that it shall, in compliance with applicable
Legal Requirements, conduct and complete all investigations, studies,
sampling and testing (and shall provide Mortgagee with copies of any such
studies and the results of any such test within three(3) Business Days of the
receipt thereof) and all remedial, removal and other actions necessary to
clean up all Hazardous Materials in, on, over, under, from or affecting the
Mortgaged Property or any part thereof in accordance with all such Legal
Requirements applicable to the Mortgaged Property or any part thereof to the
reasonable satisfaction of Mortgagee.
(i) Following (A) the occurrence of an Event of Default hereunder or
(B) if Mortgagee reasonably determines that an Environmental Problem may
exist, and without regard to whether Mortgagee shall have taken possession
of the Mortgaged Property or a receiver has been requested or appointed or
any other right or remedy of Mortgagee has or may be exercised hereunder or
under any other Loan Document, Mortgagee shall have the right (but no
obligation) to conduct such investigations, studies, sampling and/or testing
of the Mortgaged Property or any part thereof as Mortgagee may, in its
discretion, determine to conduct, relative to Hazardous Materials. All costs
and expenses incurred in connection therewith including, without limitation,
consultants' fees and disbursements and laboratory fees, shall constitute a
part of the Debt and shall, upon demand by Mortgagee, be immediately due
and payable and shall bear interest at the Default Rate from the date so
demanded by Mortgagee until reimbursed.
(j) Mortgagor represents and warrants that, to the best of its knowledge,
except as disclosed in the Environmental Report, all paint and painted
surfaces existing within the interior or on the exterior of the Mortgaged
Property do not contain lead or are maintained in a condition that prevents
exposure of young children to lead-based paint. To Mortgagor's knowledge, there
have been no claims for adverse health effects from exposure on the Mortgaged
Property to lead-based paint or requests for the investigation, assessment or
removal of lead-based paint at the Mortgaged Property.
(k) Mortgagor represents and warrants that, except in accordance with all
applicable Environmental Statutes and as
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disclosed in the Environmental Report, to the best knowledge of Mortgagor, (i)
no underground treatment or storage tanks or pumps or water, gas, or oil
▇▇▇▇▇ are or have been located about the Mortgaged Property, (ii) no PCBs or
transformers, capacitors, ballasts or other equipment that contain dielectric
fluid containing PCBs are located about the Mortgaged Property, (iii) no
insulating material containing urea formaldehyde is located about the
Mortgaged Property and (iv) no asbestos-containing material is located about
the Mortgaged Property.
Section 16.02. Environmental Indemnification. Mortgagor shall defend, indemnify
and hold harmless Mortgagee, and its successors and assigns, and its
employees, agents, officers and directors from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or
otherwise, whether incurred or imposed within or outside the judicial
process, including, without limitation, reasonable attorneys' and
consultants' fees and disbursements and investigations and laboratory fees
arising out of, or in any way related to any Environmental Problem, including
without limitation:
(a) the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threat of release of any Hazardous
Materials in, on, over, under, from or affecting the Mortgaged Property or
any part thereof whether or not disclosed by the Environmental Report
relative to the Mortgaged Property;
(b) any personal injury (including wrongful death, disease or other
health condition related to or caused by, in whole or in part, any
Hazardous Materials) or property damage (real or personal) arising out of
or related to any Hazardous Materials in, on, over, under, from or
affecting the Mortgaged Property or any part thereof whether or not
disclosed by the Environmental Report relative to the Mortgaged Property;
(c) any action, suit or proceeding brought or threatened, settlement
reached, or order of any Governmental Authority relating to such Hazardous
Material whether or not
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disclosed by the Environmental Report relative to the Mortgaged Property; and/or
(d) any violation of the provisions, covenants, representations or
warranties of Section 16.01 hereof or of any Legal Requirement which is
based on or in any way related to any Hazardous Materials in, on, over,
under, from or affecting the Mortgaged Property or any part thereof
including, without limitation, the cost of any work performed and
materials furnished in order to comply therewith whether or not disclosed
by the Environmental Report relative to the Mortgaged Property.
Notwithstanding the foregoing provisions of this Section 16.02 to the
contrary, Mortgagor shall have no obligation to indemnify Mortgagee for
liabilities, claims, damages, penalties, causes of action, costs and expenses
relative to the foregoing which result directly from Mortgagee's willful
misconduct or gross negligence. Any amounts payable to Mortgagee by reason of
the application of this Section 16.02 shall be secured by this Mortgage and
shall, upon demand by Mortgagee, become immediately due and payable and shall
bear interest at the Default Rate applicable to the Class A Portion from the
date so demanded by Mortgagee until paid.
This indemnification shall survive the termination of this Mortgage
whether by repayment of the Debt, foreclosure or deed in lieu thereof,
assignment, or otherwise. The indemnity provided for in this Section 16.02
shall not be included in any exculpation of Mortgagor or its principals from
personal liability provided for in this Mortgage or in any of the other
Loan Documents. Nothing in this Section 16.02 shall be deemed to deprive
Mortgagee of any rights or remedies otherwise available to Mortgagee,
including, without limitation, those rights and remedies provided elsewhere
in this Mortgage or the other Loan Documents.
ARTICLE XVII: ASSIGNMENTS
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Section 17.01. Participations and Assignments. Mortgagee shall have the
right to assign this Mortgage and/or any of the Loan Documents, and to
transfer, assign or sell participations and subparticipations (including
blind or undisclosed participations and subparticipations) in the Loan
Documents and the obligations hereunder to any Person; provided, however,
that no such participation shall increase, decrease or otherwise affect
either Mortgagor's or Mortgagee's obligations under this Mortgage or the
other Loan Documents.
ARTICLE XVIII: MISCELLANEOUS
Section 18.01. Right of Entry. Mortgagee and its agents shall have the
right to enter and inspect the Mortgaged Property or any part thereof at all
reasonable times, and, except in the event of an emergency, upon reasonable
notice and to inspect Mortgagor's books and records and to make abstracts and
reproductions thereof.
Section 18.02. Cumulative Rights. The rights of Mortgagee under this Mortgage
shall be separate, distinct and cumulative and none shall be given
effect to the exclusion of the others. No act of Mortgagee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Mortgagee shall not be limited
exclusively to the rights and remedies herein stated but shall be entitled,
subject to the terms of this Mortgage, to every right and remedy now or
hereafter afforded by law.
Section 18.03. Liability. If Mortgagor consists of more than one Person, the
obligations and liabilities of each such Person hereunder shall be joint and
several.
Section 18.04. Exhibits Incorporated. The information set forth on the cover
hereof, and the Exhibits annexed hereto, are hereby incorporated herein as a
part of this Mortgage with the same effect as if set forth in the body
hereof.
Section 18.05. Severable Provisions. If any term, covenant or condition of
the Loan Documents including, without limitation, the Note or
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this Mortgage, is held to be invalid, illegal or unenforceable in any
respect, such Loan Document shall be construed without such provision.
Section 18.06. Duplicate Originals. This Mortgage may be executed in any
number of duplicate originals and each such duplicate original shall be
deemed to constitute but one and the same instrument.
Section 18.07. No Oral Change. The terms of this Mortgage, together with
the terms of the Note and the other Loan Documents constitute the entire
understanding and agreement of the parties hereto and supersede all prior
agreements, understandings and negotiations between Mortgagor and Mortgagee
with respect to the Loan. This Mortgage, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act on the part of Mortgagor or Mortgagee, but only by an
agreement in writing signed by the 'party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination
is sought.
Section 18.08. Waiver of Counterclaim, etc. MORTGAGOR HEREBY WAIVES THE RIGHT
TO ASSERT A COUNTERCLAIM, OTHER THAN A COMPULSORY COUNTERCLAIM, IN ANY ACTION
OR PROCEEDING BROUGHT AGAINST IT BY MORTGAGEE OR ITS AGENTS, AND WAIVES TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER OR IN ANY COUNTERCLAIM MORTGAGOR MAY BE PERMITTED TO ASSERT
HEREUNDER OR WHICH MAY BE ASSERTED BY MORTGAGEE OR ITS AGENTS, AGAINST
MORTGAGOR, OR IN ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS MORTGAGE OR THE DEBT.
Section 18.09. Headings; Construction of Documents; etc. The table of
contents, headings and captions of various paragraphs of this Mortgage
are for convenience of reference only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.
Mortgagor acknowledges that it was represented by competent counsel in
connection with the negotiation and drafting of this Mortgage and the
other Loan Documents and that neither this Mortgage nor the other Loan
Documents shall be subject to the principle of construing the meaning against
the Person who drafted same.
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Section 18.10. Sole Discretion of Mortgagee. Whenever Mortgagee
exercises any right given to it to approve or disapprove, or any arrangement
or term is to be satisfactory to Mortgagee, the decision of Mortgagee to
approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of
Mortgagee and shall be final and conclusive, except as may be otherwise
specifically provided herein.
Section 18.11. Waiver of Notice. Mortgagor shall not be entitled to any notices
of any nature whatsoever from Mortgagee except with respect to matters for
which this Mortgage specifically and expressly provides for the giving
of notice by Mortgagee to Mortgagor and except with respect to matters for
which Mortgagor is not, pursuant to applicable Legal Requirements, permitted to
waive the giving of notice.
Section 18.12. Covenants Run with the Land. All of the grants, covenants,
terms, provisions and conditions herein shall run with the Premises, shall be
binding upon Mortgagor and shall inure to the benefit of Mortgagee,
subsequent holders of this Mortgage and their successors and assigns.
Without limitation to any provision hereof, the term "Mortgagor" shall include
and refer to the mortgagor named herein, any subsequent owner of the Mortgaged
Property, and its respective heirs, executors, legal representatives,
successors and assigns. The representations, warranties and agreements
contained in this Mortgage and the other Loan Documents are intended
solely for the benefit of the parties hereto, shall confer no rights
hereunder, whether legal or equitable, in any other Person and no other
Person shall be entitled to rely thereon.
Section 18.13. Applicable Law. THIS MORTGAGE WAS NEGOTIATED IN NEW YORK,
AND MADE BY MORTGAGOR AND ACCEPTED BY MORTGAGEE IN THE STATE OF NEW YORK, AND
THE PROCEEDS OF THE NOTE WERE DISBURSED FROM NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE. THIS MORTGAGE AND THE OBLIGATIONS
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ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT
THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY,
ENFORCEMENT AND FORECLOSURE OF THE LIENS AND SECURITY INTERESTS CREATED
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE
STATE IN WHICH THE MORTGAGED PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT,
TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE VALIDITY AND ENFORCEABILITY OF ALL LOAN
DOCUMENTS, AND THE DEBT OR OBLIGATIONS ARISING HEREUNDER.
Section 18.14. Security Agreement. (a) (i) This Mortgage is both a real
property mortgage and a "security agreement" within the meaning of the UCC.
The Mortgaged Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Mortgagor
in the Mortgaged Property. This Mortgage is filed as a fixture filing and
covers goods which are or are to become fixtures on the Mortgaged Property.
Mortgagor by executing and delivering this Mortgage has granted to Mortgagee,
as security for the Debt, a security interest in the Mortgaged Property to the
full extent that the Mortgaged Property may be subject to the UCC of the State
in which the Mortgaged Property is located (said portion of the Mortgaged
Property so subject to the UCC being called in this Section 18.14 the
"Collateral"). If an Event of Default shall occur, Mortgagee, in addition to
any other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the UCC, including, without limiting the
generality of the foregoing, the right to take possession of the Collateral or
any part thereof, and to take such other measures as Mortgagee may deem
necessary for the care, protection and preservation of the Collateral. Upon
request or demand of Mortgagee following an Event of Default, Mortgagor shall,
at its expense, assemble the Collateral and make it available to Mortgagee at
a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee
on demand any and all expenses, including reasonable legal expenses and
attorneys' fees, incurred or paid by Mortgagee in protecting its interest in
the Collateral and in enforcing its rights hereunder with respect to the
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Collateral. Any disposition pursuant to the UCC of so much of the Collateral as
may constitute personal property shall be considered commercially reasonable if
made pursuant to a public sale which is advertised at least twice in a newspaper
in which sheriff's sales are advertised in the county where the Premises is
located. Any notice of sale, disposition or other intended action by Mortgagee
with respect to the Collateral given to Mortgagor in accordance with the
provisions hereof at least ten (10) days prior to such action, shall constitute
reasonable notice to Mortgagor. The proceeds of any disposition of the
Collateral, or any part thereof, may be applied by Mortgagee to the payment of
the Debt in such priority and proportions as Mortgagee in its discretion shall
deem proper.
(ii) The mention in a financing statement filed in the records normally
pertaining to personal property of any portion of the Mortgaged Property shall
not derogate from or impair in any manner the intention of this Mortgage.
Mortgagee hereby declares that all items of Collateral are part of the real
property encumbered hereby to the fullest extent permitted by law, regardless of
whether any such item is physically attached to the Improvements or whether
serial numbers are used for the better identification of certain items.
Specifically, the mention in any such financing statement of any items included
in the Mortgaged Property shall not be construed to alter, impair or impugn any
rights of Mortgagee as determined by this Mortgage or the priority of
Mortgagee's lien upon and security interest in the Mortgaged Property in the
event that notice of Mortgagee's priority of interest as to any portion of the
Mortgaged Property is required to be filed in accordance with the UCC to be
effective against or take priority over the interest of any particular class of
persons, including the federal government or any subdivision or instrumentality
thereof.
(b) Mortgagor hereby irrevocably appoints Mortgagee as its
attorney-in-fact, coupled with an interest, to file with the appropriate
public office on its behalf any financing or other statements signed only by
Mortgagee, as secured party, in connection with the Collateral covered by
this Mortgage.
Section 18.15. Actions and Proceedings. Mortgagee has the right to appear
in and defend any action or proceeding brought with
148
respect to the Mortgaged Property in its own name or, if required by Legal
Requirements or, if in Mortgagee's reasonable judgment, it is necessary, in
the name and on behalf of Mortgagor, which Mortgagee believes will adversely
affect the Mortgaged Property or this Mortgage and to bring any action or
proceedings, in its name or in the name and on behalf of Mortgagor, which
Mortgagee, in its discretion, decides should be brought to protect its
interest in the Mortgaged Property.
Section 18.16. Usury Laws. This Mortgage and the Note are subject to the
express condition, and it is the expressed intent of the parties, that at no
time shall Mortgagor be obligated or required to pay interest on the principal
balance due under the Note at a rate which could subject the holder of the
Note to either civil or criminal liability as a result of being in excess of
the maximum interest rate which Mortgagor is permitted by law to contract or
agree to pay. If by the terms of this Mortgage or the Note, Mortgagor is
at any time required or obligated to pay interest on the principal balance
due under the Note at a rate in excess of such maximum rate, such rate of
interest shall be deemed to be immediately reduced to such maximum rate and
the interest payable shall be computed at such maximum rate and all prior
interest payments in excess of such maximum rate shall be applied and shall
be deemed to have been payments in reduction of the principal balance of the
Note. No application to the principal balance of the Note pursuant to this
Section 18.16 shall give rise to any requirement to pay any prepayment
premium due hereunder, if any, including, without limitation, Yield
Maintenance Premium.
Section 18.17. Remedies of Mortgagor. In the event that a claim or adjudication
is made that Mortgagee has acted unreasonably or unreasonably delayed
acting in any case where by law or under the Note, this Mortgage or the
Loan Documents, it has an obligation to act reasonably or promptly,
Mortgagee shall not be liable for any monetary damages, and Mortgagor's
remedies shall be limited to injunctive relief or declaratory judgment.
Section 18.18. Offsets, Counterclaims and Defenses. Any assignee of this
Mortgage, the Assignment and the Note shall take the same free and clear of
all offsets, counterclaims or defenses which are unrelated to the Note, the
Assignment or this Mortgage which
149
Mortgagor may otherwise have against any assignor of this Mortgage, the
Assignment and the Note and no such unrelated counterclaim or defense shall
be interposed or asserted by Mortgagor in any action or proceeding brought by
any such assignee upon this Mortgage, the Assignment or the Note and any
such right to interpose or assert any such unrelated offset, counterclaim or
defense in any such action or proceeding is hereby expressly waived by
Mortgagor.
Section 18.19. No Merger. If Mortgagor's and Mortgagee's estates become the
same including, without limitation, upon the delivery of a deed by Mortgagor in
lieu of a foreclosure sale, or upon a purchase of the Mortgaged Property by
Mortgagee in a foreclosure sale, this Mortgage and the lien created
hereby shall not be destroyed or terminated by the application of the
doctrine of merger and in such event Mortgagee shall continue to have and
enjoy all of the rights and privileges of Mortgagee as to the separate
estates; and, as a consequence thereof, upon the foreclosure of the lien
created by this Mortgage, any Leases or subleases then existing and
created by Mortgagor shall not be destroyed or terminated by application of the
law of merger or as a result of such foreclosure unless Mortgagee or any
purchaser at any such foreclosure sale shall so elect. No act by or on behalf
of Mortgagee or any such purchaser shall constitute a termination of any
Lease or sublease unless Mortgagee or such purchaser shall give written
notice thereof to such lessee or sublessee.
Section 18.20. Restoration of Rights. In case Mortgagee shall have proceeded
to enforce any right under this Mortgage by foreclosure sale, entry or
otherwise, and such proceedings shall have been discontinued or abandoned for
any reason or shall have been determined adversely, then, in every such case,
Mortgagor and Mortgagee shall be restored to their former positions and rights
hereunder with respect to the Mortgaged Property subject to the lien hereof.
Section 18.21. Waiver of Statute of Limitations. The pleadings of any statute
of limitations as a defense to any and all obligations secured by this
Mortgage are hereby waived to the full extent permitted by Legal Requirements.
150
Section 18.22. Advances. This Mortgage shall cover any and all advances
made pursuant to the Loan Documents, rearrangements and renewals of the Debt
and all extensions in the time of payment thereof, even though such advances,
extensions or renewals be evidenced by new promissory notes or other
instruments hereafter executed and irrespective of whether filed or recorded.
Likewise, the execution of this Mortgage shall not impair or affect any
other security which may be given to secure the payment of the Debt, and all
such additional security shall be considered as cumulative. The taking of
additional security, execution of partial releases of the security, or any
extension of time of payment of the Debt shall not diminish the force, effect
or lien of this Mortgage and shall not affect or impair the liability of
Mortgagor and shall not affect or impair the liability of any maker, surety, or
endorser for the payment of the Debt.
Section 18.23. Application of Default Rate Not a Waiver. Application of the
Default Rate shall not be deemed to constitute a waiver of any Default or
Event of Default or any rights or remedies of Mortgagee under this Mortgage,
any other Loan Document or applicable Legal Requirements, or a consent
to any extension of time for the payment or performance of any obligation
with respect to which the Default Rate may be invoked.
Section 18.24. Intervening Lien. To the fullest extent permitted by law, any
agreement hereafter made pursuant to this Mortgage shall be superior to
the rights of the holder of any intervening lien.
Section 18.25. No Joint Venture or Partnership. Mortgagor and Mortgagee
intend that the relationship created hereunder be solely that of mortgagor
and mortgagee or borrower and lender, as the case may be. Nothing herein is
intended to create a joint venture, partnership, tenancy-in-common, or joint
tenancy relationship between Mortgagor and Mortgagee nor to grant Mortgagee
any interest in the Mortgaged Property other than that of mortgagee or lender.
Section 18.26. Time of the Essence. Time shall be of the essence in the
performance of all obligations of Mortgagor hereunder.
Section 18.27. Mortgagor's Obligations Absolute. Mortgagor acknowledges that
Mortgagee and/or certain Affiliates of Mortgagee are engaged
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in the business of financing, owning, operating, leasing, managing, and
brokering real estate and in other business ventures which may be viewed as
adverse to or competitive with the business, prospect, profits, operations or
condition (financial or otherwise) of Mortgagor. Except as set forth to the
contrary in the Loan Documents, all sums payable by Mortgagor hereunder shall
be paid without notice or demand, counterclaim, setoff, deduction or defense
and without abatement, suspension, deferment, diminution or reduction, and
the obligations and liabilities of Mortgagor hereunder shall in no way be
released, discharged, or otherwise affected (except as expressly provided
herein) by reason of: (a) any damage to or destruction of or any Taking of
the Mortgaged Property or any portion thereof or any other
Cross-collateralized Property; (b) any restriction or prevention of or
interference with any use of the Mortgaged Property or any portion thereof or
any other Cross-collateralized Property; (c) any title defect or encumbrance
or any eviction from the Premises or any portion thereof by title paramount
or otherwise; (d) any bankruptcy proceeding relating to Mortgagor, any General
Partner, or any guarantor or indemnitor, or any action taken with respect to
this Mortgage or any other Loan Document by any trustee or receiver of
Mortgagor or any other Cross-collateralized Borrower or any such General
Partner, guarantor or indemnitor, or by any court, in any such proceeding;
(e) any claim which Mortgagor has or might have against Mortgagee; (f) any
default or failure on the part of Mortgagee to perform or comply with any
of the terms hereof or of any other agreement with Mortgagor or any other
Cross-collateralized Borrower; or (g) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Mortgagor shall
have notice or knowledge of any of the foregoing.
Section 18.28. Publicity. All promotional news releases, publicity or
advertising by Manager, Mortgagor or their respective Affiliates through any
media intended to reach the general public shall not refer to the Loan
Documents or the financing evidenced by the Loan Documents, or to Mortgagee
or to CS First Boston Corporation ("CSFB") without the prior written approval
of Mortgagee or CSFB, as applicable, in each instance, such approval not to
be unreasonably withheld or delayed. Mortgagee shall be authorized to
provide information relating to the Mortgaged Property, the Loan and matters
relating thereto to rating agencies,
152
underwriters, potential securities investors, auditors, regulatory authorities
and to any Persons which may be entitled to such information by operation of
law.
Section 18.29. Surveillance and Site Inspection Fees. Mortgagor shall reimburse
Mortgagee on demand an amount equal to (a) all "surveillance fees" charged
by the Rating Agency in connection with the ongoing surveillance of the
Securitization and (b) site inspection fees incurred pursuant to the Trust
and Servicing Agreement (as defined in the Note).
Section 18.30. Intentionally Omitted.
Section 18.31. Intentionally Omitted.
Section 18.32. Exculpation. Notwithstanding anything herein or in any other
Loan Document to the contrary, except as otherwise set forth in this Section
18.32 to the contrary, Mortgagee shall not enforce the liability and
obligation of Mortgagor or (a) if Mortgagor is a partnership, its constituent
partners or any of their respective partners, (b) if Mortgagor is a trust, its
beneficiaries or any of their respective Partners (as hereinafter defined),
(c) if Mortgagor is a corporation, any of its shareholders, directors,
principals, officers or employees, or (d) if Mortgagor is a limited liability
company, any of its members (the Persons described in the foregoing clauses
(a)-(d), as the case may be, are hereinafter referred to as the "Partners")
to perform and observe the obligations contained in this Mortgage or any
of the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Mortgagor or the Partners, except that
Mortgagee may bring a foreclosure action, action for specific performance,
or other appropriate action or proceeding (including, without limitation, an
action to obtain a deficiency judgment) solely for the purpose of enabling
Mortgagee to realize upon (i) Mortgagor's interest in the Mortgaged Property,
(ii) the Rent to the extent (x) received by Mortgagor (or actually received by
its Partners) after the occurrence of an Event of Default, or (y) distributed
to Mortgagor (or its Partners, but only to the extent received by its Partners)
during or with respect to any period for which Mortgagee did not receive a
Manager Certification accurate in all material respects confirming and
certifying that all Operating
153
Expenses with respect to the Mortgaged Property which had accrued as of the
applicable date of such Manager Certification had been paid (or if same had
not been paid, that Manager had taken adequate reserves therefor) (all Rent
covered by clauses (x) and (y) being hereinafter referred to as the "Recourse
Distributions") and (iii) any other collateral given to Mortgagee under the
Loan Documents (collectively, the "Default Collateral"); provided, however,
that any judgment in any such action or proceeding shall be enforceable
against Mortgagor and the Partners only to the extent of any such Default
Collateral. The provisions of this Section shall not, however, (a) impair the
validity of the Debt evidenced by the Note or in any way affect or impair the
lien of this Mortgage or any of the other Loan Documents or the right of
Mortgagee to foreclose this Mortgage following the occurrence of an
Event of Default; (b) impair the right of Mortgagee to name Mortgagor as a
party defendant in any action or suit for judicial foreclosure and sale under
this Mortgage; (c) affect the validity or enforceability of the Note,
this Mortgage, or any of the other Loan Documents; (d) impair the right
of Mortgagee to obtain the appointment of a receiver; (e) impair the
enforcement of the Assignment; (f) impair the right of Mortgagee to bring
suit for a monetary judgement with respect to fraud or intentional
misrepresentation by Mortgagor, or any other Person in connection with this
Mortgage, the Note or the other Loan Documents, and the foregoing
provisions shall not modify, diminish or discharge the liability of Mortgagor
or the Partners with respect to same; (g) impair the right of Mortgagee to
bring suit for a monetary judgment to obtain the Recourse Distributions
received by Mortgagor including, without limitation, the right to bring suit
for a monetary judgement to proceed against any Partner, to the extent of any
such Recourse Distributions theretofore distributed to and received by such
Partner, and the foregoing provisions shall not modify, diminish or discharge
the liability of Mortgagor or the Partners with respect to same; (h) impair the
right of Mortgagee to bring suit for a monetary judgment with respect to
Mortgagor's misappropriation of tenant security deposits or Rent collected in
advance, and the foregoing provisions shall not modify, diminish or discharge
the liability of Mortgagor or the Partners with respect to same; (i) impair the
right of Mortgagee to obtain Loss Proceeds due to Mortgagee pursuant to
this Mortgage; (j) impair the right of Mortgagee to enforce the
provisions of Sections 12.01, 16.01 or 16.02,
154
inclusive of this Mortgage, even after repayment in full by Mortgagor of the
Debt; (k) prevent or in any way hinder Mortgagee from exercising, or
constitute a defense, or counterclaim, or other basis for relief in respect of
the exercise of, any other remedy against any or all of the collateral
securing the Note as provided in the Loan Documents; (l) impair the right of
Mortgagee to bring suit for a monetary judgment with respect to any
misapplication of Loss Proceeds, and the foregoing provisions shall not
modify, diminish or discharge the liability of Mortgagor or the Partners with
respect to same; (m) impair the right of Mortgagee to ▇▇▇ for, seek or demand
a deficiency judgment against Mortgagor solely for the purpose of foreclosing
the Mortgaged Property or any part thereof, or realizing upon the Default
Collateral; provided, however, that any such deficiency judgment referred to
in this clause (m) shall be enforceable against Mortgagor and the Partners
(but only to the extent distributed to and actually received by such Partner)
only to the extent of any of the Default Collateral; or (n) impair the ability
of Mortgagee to bring a suit for a monetary judgment or otherwise against
Mortgagor or the Partners (but only to extent distributed to and actually
received by such Partner), nor modify, diminish or discharge the personal
liability of Mortgagor or the Partners, with respect to the indemnification
set forth in Section 16.02 hereof or (o) impair the right of Mortgagee to
bring a suit for a monetary judgment in the event of the exercise of any right
or remedy under any federal, state or local forfeiture laws resulting in the
loss of the lien of this Mortgage, or the priority thereof, against the
Mortgaged Property. The provisions of this Section 18.32 shall be inapplicable
to Mortgagor if any proceeding, action, petition or filing under the Federal
Bankruptcy Reform Act of 1978, as amended, or any similar state or federal law
now or hereafter in effect relating to bankruptcy, reorganization or
insolvency, or the arrangement or adjustment of debts, shall be filed by,
consented to or acquiesced in by or with respect to Mortgagor, or if Mortgagor
shall institute any proceeding for its dissolution or liquidation, or shall
make an assignment for the benefit of creditors, in which event Mortgagee
shall have recourse against all of the assets of Mortgagor including, without
limitation, any right, title and interest of Mortgagor in and to the Mortgaged
Property, any partnership interests in Mortgagor and any Recourse
Distributions received by the Partners of Mortgagor (but excluding the other
assets of such
155
Partners to the extent Mortgagee would not have had recourse thereto other
than in accordance with the provisions of this Section 18.32). In connection
with this Section 18.32, it is agreed that a Person (or Partner), other than
Mortgagor, shall only be personally liable to the extent of Recourse
Distributions actually made to or received by such Person (or Partner).
Section 18.33. Certain Matters Relating to Mortgaged Property located in the
State of Illinois. With respect to the Mortgaged Property which is located in
the State of Illinois, notwithstanding anything contained herein to the
contrary:
(a) COMPLIANCE WITH ILLINOIS MORTGAGE FORECLOSURE LAW.
(i) If any provision in this Mortgage is determined to be
inconsistent with any provision of the Illinois Mortgage
Foreclosure Law (735 ILCS 5/15-1101 et seq. (1992 State Bar
Edition)) (the "IMFL"), the provisions of the IMFL shall take
precedence over the provisions of this Mortgage, but shall not
invalidate or render unenforceable any other provisions of
this Mortgage that can be construed in a manner consistent
with the IMFL.
(ii) If any provision of this Mortgage shall grant to
Mortgagee any rights or remedies upon an Event of Default
which are more limited than the rights that would otherwise be
vested in Mortgagee under the IMFL in the absence of such
provision, Mortgagee shall be vested with the rights granted
in the IMFL to the full extent permitted by law.
(iii) Without limiting the generality of the foregoing, all
expenses incurred by Mortgagee to the extent reimbursable
under Sections 15-1510 and 15-1512 of the IMFL, whether
incurred before or after any decree or
156
judgment of foreclosure, and whether enumerated in this
Mortgage, shall be added to the indebtedness secured by this
Mortgage or by the judgment of foreclosure.
(iv) Without limiting the generality of the foregoing, this
Mortgage also secures all future advances made pursuant to the
terms of this Mortgage or the other Loan Documents made after
this Mortgage is recorded, including but not limited to all
monies so advanced by Mortgagee in accordance with the terms
of this Mortgage to (A) preserve or restore the Mortgaged
Property, (B) preserve the lien of this Mortgage or the
priority thereof or (C) enforce this Mortgage, and, to the
full extent permitted by Subsection (b)(5) of Section 15-1302
of the IMFL or other law, shall be a lien from the time this
Mortgage is recorded.
(b) WAIVER OF STATUTORY RIGHTS. Mortgagor acknowledges that the
transaction of which this Mortgage is a part is a transaction which
does not include either agricultural real estate (as defined in Section
15-1201 of the IMFL), or residential real estate (as defined in Section
15-1219 of the IMFL), and to the full extent permitted by law,
voluntarily and knowingly waives Mortgagor's rights to reinstatement and
redemption as allowed under Section 15-1601(b) of the IMFL, and to the
full extent permitted by law, the benefits of all present and future
valuation, appraisement, homestead, exemption, stay, redemption and
moratorium laws under any state or federal law.
(c) FIXTURE FILING. THIS INSTRUMENT IS EFFECTIVE AND SHALL BE EFFECTIVE AS
A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO ALL GOODS
WHICH ARE OR ARE TO BECOME FIXTURES INCLUDED WITHIN THE MORTGAGED PROPERTY
AND IS TO BE FILED FOR RECORD OR REGISTERED IN THE REAL ESTATE RECORDS OF
THE COUNTY IN WHICH THE
157
PREMISES IS LOCATED. THE ADDRESS OF MORTGAGEE [SECURED PARTY] AND THE
MAILING ADDRESS OF MORTGAGOR [DEBTOR] ARE SET FORTH WITHIN. A PHOTOGRAPHIC
OR OTHER REPRODUCTION OF THIS INSTRUMENT OR ANY FINANCING STATEMENT
RELATING TO THIS INSTRUMENT SHALL BE SUFFICIENT AS A FINANCING STATEMENT.
(d) FUTURE ADVANCES. Mortgagee has bound itself and by the acceptance
hereof does hereby bind itself to make advances pursuant to and subject to
the terms of Mortgagee's commitment letter dated December 1, 1994 (as
such terms are further embodied in the Loan Agreement of even date
herewith), and the parties hereby acknowledge and intend that all such
advances, including future advances whenever hereafter made, shall be a
lien from the time this Mortgage is recorded, as provided in Section
15-1302(b)(1) of the IMFL.
(e) MAXIMUM AMOUNT SECURED. Mortgagor and Mortgagee intend that this
Mortgage shall secure not only sums advanced as of the date hereof
but also all advances provided for in the Loan Documents; provided however
that the maximum amount secured by this Mortgage shall in no event
exceed Five Hundred Million Dollars ($500,000,000).
(f) BUSINESS LOAN. Mortgagor represents and agrees that the obligations
secured hereby constitute a business loan within the purview of such
paragraph 1(c) of Section 4 of the Illinois Interest Act, 815 ILCS 205/1
et seq. (1992 State Bar Edition) (or any substitute, amended or
replacement statutes) transacted solely for the purpose of carrying on or
acquiring the business of Mortgagor, and also constitutes a loan secured
by a mortgage which comes within the purview of subparagraph 1(l) of said
Section.
(g) ILLINOIS RESPONSIBLE PROPERTY TRANSFER ACT. Mortgagor represents that
the Premises do not constitute "Real Property" as defined in the Illinois
Responsible Property Transfer Act of 1988, 765 ILCS 90/1 et seq. (1992
State Bar Edition) ("IRPTA") and, therefore, the IRPTA disclosure
requirements do not apply to this Mortgage.
158
* * * * * *
159
IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage the day
and year first above written.
Mortgagor's Address; GURNEE ▇▇▇▇▇ (MLP)
LIMITED PARTNERSHIP,
an Illinois limited
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ partnership, Mortgagor
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: Gurnee ▇▇▇▇▇ II L.L.C.,
its general partner
By: The ▇▇▇▇▇ Limited
Partnership, its
managing member
By: The ▇▇▇▇▇ Corporation,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice
President
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)
COUNTY OF NEW YORK )
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇, a notary public in and for the state and county
aforesaid do certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, whose name as Senior Vice
President of The ▇▇▇▇▇ Corporation, general partner of The ▇▇▇▇▇ Limited
Partnership, managing member of Gurnee ▇▇▇▇▇ II L.L.C., general partner of
Gurnee ▇▇▇▇▇ (MLP) Limited Partnership, is signed to the writing above,
bearing date on the 17th day of December, 1996, have acknowledged the same
before me in the county aforesaid.
Given under my hand and official seal this 17th day of December, 1996.
My Term Expires:
▇▇▇▇▇▇ ▇. ▇▇▇▇
Notary Public State of New York /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
No 01T05016707 Notary Public
Qualified in Nassau County
Commission Expires August 23, 1997
161
EXHIBIT A
Legal Description
LEGAL DESCRIPTION
PARCEL 1A: Lot 2 in Block "A", ▇▇▇ ▇▇ ▇▇▇▇▇ "▇", ▇▇▇ ▇ in Block "E" in
Gurnee ▇▇▇▇▇, Being a subdivision of part of Sections 8, 9 and 16, Township
45 North, Range 11 East, of the Third Principle Meridian, according to the
Plat thereof recorded July 25, 1990 as Document 2928223 {See Tab 2, Vol I},
in Lake County, Illinois.
PARCEL 1B: Lot 1 (Except parcel 1 in First Resubdivision of Lot 1 in Block
"M" of Gurnee ▇▇▇▇▇, according to the Plat thereof recorded August 29, 1990
as Document 2938772 {See Tab 3, Vol I}), and (Except Lots 1 and 2 in Block
"M" in Second Resubdivision of Block "M" and First Resubdivision of Block "D"
and "E" in Gurnee ▇▇▇▇▇, according to the Plat thereof recorded March 27,
1992 as Document 3134293 {See Tab 4, Vol I}), and (Except Lot 1 in Third
Resubdivision of Lot 1 in Block "M" of Gurnee ▇▇▇▇▇, according to the Plat
thereof recorded July 7, 1993 as Document 3361150 {See Tab 5, Vol I}), and
also (Except Lot 1 in Fourth Resubdivision of Lot 1 in Block "M" of Gurnee
▇▇▇▇▇, according to the Plat thereof recorded July 7, 1993 as Document
3361759 {See Tab 6, Vol I}); and Lot 2 (Except that part described as
follows: Beginning at the Northwest corner of Lot 3 in Block "B" in Gurnee
▇▇▇▇▇; thence North 87deg. 26' 14" East along the North line of Lot 3, a
distance of 189.33 feet to the Northeast corner thereof; thence North 83deg.
30' 00" East along the North line of Lot 4 in Block "B" in said Gurnee ▇▇▇▇▇,
a distance of 32.16 feet to an angle point therein; thence Northeasterly
along a curved line having a radius of 491.40 feet, and arc length of 71.88
feet, and a chord length of 71.81 feet bearing North 79deg. 18' 35" East to a
point of reverse curvature; thence Southeasterly along a curved line concave
to the Southwest having a radius of 29.00 feet, an arc length of 45.89 feet,
and a chord length of 41.25 feet bearing South 59deg. 32' 42" East to a point
of tangency; thence Northwesterly along a curved line concave to the
Southwest having a radius of 776.20 feet, an arc length of 112.55 feet, and a
chord length of 112.45 feet bearing North 18deg. 21' 49" West to a point of
tangency; thence Southwesterly along a curved line concave to the Northwest
having a radius of 29.00 feet, an arc length of 49.88 feet, and a chord
length of 43.95 feet bearing South 26DEG. 45' 31" West to a point of compound
curvature; thence Southwesterly along a curved line concave to the Northwest
having a radius of 441.40 feet, an arc length of 57.52 feet, and a chord
length of 57.48 feet bearing South
continued...
LEGAL DESCRIPTION, CONTINUED...
PARCEL 1B, CONTINUED...
79DEG. 45' 58" West to a point of tangency; thence South 83DEG. 30' 00" West,
a distance of 221.04 feet to a point; thence South 06deg. 30' 00" East, a
distance of 37.00 feet to the Point of Beginning, in Block "M" in Gurnee
▇▇▇▇▇, being a Subdivision of Part of Sections 8,9 and 16, Township 45 North,
Range 11 East, of the Third Principal Meridian, according to the Plat thereof
recorded July 25, 1990 as Document 2928223 {See Tab 2, Vol I}, in Lake
County, Illinois.
PARCEL 1C: Lots 4 and 7, in block "D"; and lots 1 and 3 in block "E"; in the
Second Resubdivision of Block "M" and First Resubdivision of Blocks "D" and
"E" of Gurnee ▇▇▇▇▇ together with parts of the South 1/2 of Section 9 and the
North 1/2 of Section 16 in Township 45 North, Range 11 East, of the Third
Principal Meridian, according to the Plat thereof recorded March 27, 1992 as
Document 3134293 {See Tab 4, Vol I}, in Lake County, Illinois.
PARCEL 1D: ▇▇▇ ▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇ "M" in the Second Resubdivision of Block "M"
and First Resubdivision of Blocks "D" and "E" in Gurnee ▇▇▇▇▇ Subdivision,
together with parts of the South 1/2 of Section 9 and the North 1/2 of
Section 16 in Township 45 North Range 11 East, of the Third Principal
Meridian, according to the Plat thereof recorded March 27, 1992 as Document
3134293 {See Tab 4, Vol I}, in Lake County, Illinois.
PARCEL 2: Easement for vehicular and pedestrian access, ingress and
egress, and common utilities for the benefit of Parcels 1A through 1D, both
inclusive, as contained in the Gurnee ▇▇▇▇▇ Master Declaration of Easements,
Covenants, Conditions and Restrictions dated January 22, 1990 and recorded
January 26, 1990 as Document 2873087 {See Tab 7, Vol I}, as amended in
Documents 3078170 {See Tab 8, Vol I}, 3078171 {See Tab 9, Vol I}, and 3146113
{See Tab 10, Vol I}, and as further amended from time to time, in Lake
County, Illinois.
continued...
EXHIBIT B
Initial Sub-Account Deposits
Initial Basic Carrying Costs Deposit: $957,864
Initial Central Account Deposit: $957,864
Initial Recurring Installments: $0
RR Multiplier: $ .20 per square foot
EXHIBIT C
Property:____________________________
Location:____________________________
Cash Flow Statement for Month of:____________ Year:
Current Year to
Month Date
================================================================================
OPERATING INCOME
Minimum Rent
Percentage Rent
Common Area Maintenance Recovery
Real Estate Tax Recovery
Miscellaneous Income
(Less Bad Debt)
Total Operating Revenue ________ ________
OPERATING EXPENSES
Common Area Maintenance*
Real Estate Taxes
Management Fees
Contribution to Promotion Fund
General and Administrative
Other
Total Operating Expenses ________ ________
Net Operating Income ________ ________
================================================================================
Certified By:_____________________________
Name:_____________________________
Title:_____________________________
Management Company:_____________________________
*Includes Repairs and Maintenance of $____________, Utilities of $______________
and Insurance of $______________.
EXHIBIT D
[INTENTIONALLY OMITTED]
EXHIBIT E
Re: [Mortgage, Security Agreement,
Assignment of Rents and Fixture Filing]
dated as of ________, 199__ by
____________ as Mortgagor, to
________________________ as Mortgagee
(the "Mortgage")
Gentlemen:
This certificate is delivered in accordance with Article V of the
Mortgage. All capitalized terms not defined herein shall have the meanings
described to them in the Mortgage.
To date, the funds deposited into the Central Account are not sufficient
to fund or pay, to the extent required to be funded or paid, the Debt Service
Payment Sub-Account, the Basic Carrying Costs Sub-Account, the Operation and
Maintenance Expense Sub-Account, the Recurring Replacement Reserve Sub-Account,
and the Curtailment Reserve Sub-Account. The amount of the deficiency is
___________ Dollars ($______), and such amount must be deposited into the
Central Account prior to the next Payment Date or an Event of Default will exist
under the Mortgage.
_________________________, Mortgagee
By:_______________________________
Name:
Title:
EXHIBIT F
Initial Allocated
Cross-collateralized Properties Loan Amount
------------------------------- -----------------
Gurnee ▇▇▇▇▇,
Gurnee Illinois $122,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ $162,000,000
EXHIBIT G
FORM OF DIRECTION NOTICE
[Letterhead of Landlord]
[Name and Address of Tenant]
Re: _________________ Unit No.________
Dear Tenant:
You are hereby directed to make all future payments of rent and other sums
due to Landlord under the Lease payable as follows:
Payable To: [as currently being paid]
Address: ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
Please take particular care in making the check payable only to the
above-mentioned names because only checks made payable to the referenced names
will be credited against sums due by you to landlord. Until otherwise advised in
writing by Landlord and the above mentioned bank (or its successor), you should
continue to make your payments for rent and other sums as directed by the terms
of this letter.
Thank you in advance for your cooperation with this change in payment
procedures.
By:___________________________