WASHINGTON CENTRE SHOPS, L.P.
(Mortgagor)
and
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
(Mortgagee)
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
Dated: As of November 7, 1997
PROPERTY LOCATION:
▇▇▇▇▇▇, New Jersey
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
TABLE OF CONTENTS
Granting Clause One............................................................1
Granting Clause Two............................................................2
Granting Clause Three..........................................................2
Granting Clause Four...........................................................2
Granting Clause Five...........................................................3
Granting Clause Six............................................................3
Granting Clause Seven..........................................................3
Granting Clause Eight..........................................................3
PART I
GENERAL PROVISIONS
1. Payment of Debt and Incorporation of Covenants, Conditions and Agreements..4
2. Warranty of Title..........................................................4
3. Insurance .................................................................4
4. Casualty .................................................................6
5. Payment of Taxes, Etc. ....................................................8
6. Tax and Insurance Impound Fund; Replacement Escrow Fund ...................9
7. Condemnation .............................................................11
8. Leases and Rents .........................................................13
9. Maintenance and Use of Mortgaged Property ................................15
10. Transfer or Encumbrance of the Mortgaged Property ........................16
11. Representations and Covenants Concerning the Borrower and Property .......20
12. Single Purpose Entity/Separateness .......................................27
13. Estoppel Certificates and No Default Affidavits ..........................29
14. Controlling Agreement ....................................................29
15. Changes in Laws Regarding Taxation .......................................30
16. No Credits on Account of the Debt ........................................30
17. Documentary Stamps .......................................................30
18. Books and Records ........................................................30
19. Performance of Other Agreements ..........................................32
20. Further Acts, Etc. .......................................................33
21. Recording of Mortgage, Etc. ..............................................33
22. Reporting Requirements ...................................................33
23. Events of Default ........................................................34
24. Late Payment Charge ......................................................35
25. Right To Cure Defaults ...................................................35
26. Additional Remedies ......................................................36
27. Right of Entry ...........................................................39
28. Security Agreement .......................................................39
29. Actions and Proceedings ..................................................40
30. Waiver of Setoff and Counterclaim ........................................41
31. Contest of Certain Claims ................................................41
32. Recovery of Sums Required to be Paid .. ..................................41
33. Marshalling and Other Matters ............................................42
34. Hazardous Substances .....................................................42
35. Asbestos .................................................................43
36. Environmental Monitoring..................................................43
37. Handicapped Access .......................................................44
38. Indemnification ..........................................................45
39. Notices...................................................................46
40. Authority ................................................................46
41. Waiver of Notice .........................................................46
42. Remedies of Mortgagor.....................................................47
43. Sole Discretion of Mortgagee .............................................47
44. Non-Waiver................................................................47
45. No Oral Change ...........................................................47
46. Liability.................................................................47
47. Inapplicable Provisions...................................................48
48. Headings, Etc ............................................................48
49. Duplicate Originals ......................................................48
50. Definitions ..............................................................48
51. Homestead ................................................................48
52. Assignments ..............................................................48
53. Waiver of Jury Trial .....................................................48
54. Recourse Provisions ......................................................49
55. Defeasance ...............................................................51
56. Cash Management Agreement ................................................53
57. Miscellaneous.............................................................54
58. Management of the Mortgaged Property .....................................56
59. Sale of Notes and Securitization .........................................56
60. Servicer .................................................................57
61. Letter of Credit .........................................................57
PART II
STATE SPECIFIC PROVISIONS
62. Conflicts.................................................................59
63. Future Remedies ..........................................................59
64. Fixture Filing ............ ..............................................59
65. Hazardous Substances .....................................................59
66. Continuing Enforcement of Mortgage........................................62
67. Mortgagor Acknowledgment .................................................62
68. Mortgage Modification ....................................................62
EXHIBIT A
LEGAL DESCRIPTION
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (the "Mortgage"), made as of November 7, 1997, by Washington Centre
Shops, L.P., a Delaware limited partnership, having its principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Mortgagor"), and
to Credit Suisse First Boston Mortgage Capital LLC, a Delaware limited liability
company ("Mortgagee"), having its principal office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
To secure the payment of an indebtedness in the original principal
sum of SIX MILLION TWO HUNDRED THOUSAND and no/100 Dollars ($6,200,000.00),
lawful money of the United States of America, to be paid with interest
according to a certain mortgage note of even date herewith made by Mortgagor to
Mortgagee (the mortgage note together with all extensions, renewals or
modifications thereof being hereinafter collectively called the "Note", and the
loan evidenced by the Note hereinafter being referred to as the "Loan") and all
other sums due hereunder, under the other Loan Documents (hereinafter defined)
and under the Note (said indebtedness and interest due under the Note and all
other sums due hereunder under the Note and the other Loan Documents being
hereinafter collectively referred to as the "Debt"), Mortgagor has mortgaged,
given, granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed,
warranted, pledged, assigned, and hypothecated and by these presents does hereby
mortgage, give, grant, bargain, sell, alien, enfeoff, convey, confirm, warrant,
pledge, assign and hypothecate unto Mortgagee, the real property described in
Exhibit A attached hereto (the "Premises") and the buildings, structures,
fixtures, additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located thereon (the
"Improvements");
TOGETHER WITH: all right, title, interest and estate of Mortgagor
now owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements, and such property,
rights, interests and estates hereinafter described are collectively referred to
herein as the "Mortgaged Property"):
GRANTING CLAUSE ONE
All easements, rights-of-way, strips and gores of land, streets,
ways, alleys, passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, all rights to oil, gas, minerals,
coal and other substances of any kind or character, and all estates, rights,
titles, interests, privileges, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the bed of any
street, road, highway, alley or avenue, opened, vacated or proposed, in front of
or adjoining the Premises, to the center line thereof and all the estates,
rights, titles, interests, dower and rights of dower, curtsey and rights of
curtsey, property, possession, claim and demand whatsoever, both at law and in
equity, of
Mortgagor of, in and to the Premises and the Improvements and every part and
parcel thereof, with the appurtenances thereto;
GRANTING CLAUSE TWO
All machinery, furniture, furnishings, equipment, computer
software and hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Premises and the Improvements 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 the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation, enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively referred to as the
"Equipment"), including any leases of any of the foregoing, any deposits
existing at any time in connection with any of the foregoing, and the proceeds
of any sale or transfer of the foregoing, and the right, title and interest of
Mortgagor in and to any of the Equipment that may be subject to any "security
interests" as defined in the Uniform Commercial Code, as adopted and enacted by
the State or States where any of the Mortgaged Property is located (the "Uniform
Commercial Code"), superior in lien to the lien of this Mortgage;
GRANTING CLAUSE THREE
Awards or payments, including interest thereon, that may
heretofore and hereafter be made with respect to the Premises and the
Improvements, whether from the exercise of the right of eminent domain or
condemnation (including, without limitation, any transfer made in lieu of or in
anticipation of the exercise of said rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and Improvements;
GRANTING CLAUSE FOUR
All leases and other agreements or arrangements heretofore or
hereafter entered into affecting the use, enjoyment or occupancy of, or the
conduct of any activity upon or in, the Premises and the Improvements, including
any extensions, renewals, modifications or amendments thereof (the "Leases") and
all rents, rent equivalents, moneys payable as damages or in lieu of rent or
rent equivalents, royalties (including, without limitation, all oil and gas or
other mineral royalties and bonuses), income, receivables, receipts, revenues,
deposits (including, without limitation, security, utility and other deposits),
accounts, cash, issues, profits, charges for services rendered, and other
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Mortgagor or its agents or employees from any and all
sources arising from or attributable to the Premises and the Improvements (the
"Rents"), together with 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;
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GRANTING CLAUSE FIVE
All proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Mortgaged Property;
GRANTING CLAUSE SIX
The right, in the name and on behalf of Mortgagor, to appear in
and defend any action or proceeding brought with respect to the Mortgaged
Property and to commence any action or proceeding to protect the interest of
Mortgagee in the Mortgaged Property;
GRANTING CLAUSE SEVEN
All accounts, escrows, documents, instruments, chattel paper,
claims, deposits and general intangibles, as the foregoing terms are defined in
the Uniform Commercial Code, and all franchises, trade names, trademarks,
symbols, service marks, books, records, plans, specifications, designs,
drawings, permits, consents, licenses, management agreements, contract rights
(including, without limitation, any contract with any architect or engineer or
with any other provider of goods or services for or in connection with any
construction, repair, or other work upon the Mortgaged Property), approvals,
actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to the Mortgaged Property), and causes of
action that now or hereafter relate to, are derived from or are used in
connection with the Mortgaged Property, or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any business or activities
thereon (hereinafter collectively referred to as the "Intangibles"); and
GRANTING CLAUSE EIGHT
All proceeds, products, offspring, rents and profits from any of
the foregoing, including, without limitation, those from sale, exchange,
transfer, collection, loss, damage, disposition, substitution or replacement of
any of the foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged
Property unto and to the use and benefit of Mortgagee, forever;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Mortgagor shall well and truly pay to Mortgagee the Debt at the time
and in the manner provided in the Note and this Mortgage and shall well and
truly abide by and comply with each and every covenant and condition set forth
herein, in the Note and in the other Loan Documents (hereinafter defined) in a
timely manner, these presents and the estate hereby granted shall cease,
terminate and be void;
AND Mortgagor represents and warrants to and covenants and agrees
with Mortgagee as follows:
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PART I
GENERAL PROVISIONS
1. Payment of Debt and Incorporation of Covenants, Conditions and
Agreements. Mortgagor shall pay the Debt at the time and in the manner provided
in the Note and in this Mortgage. All the covenants, conditions and agreements
contained in (a) the Note and (b) all and any of the documents including the
Note and this Mortgage now or hereafter executed by Mortgagor and/or others and
by or in favor of Mortgagee, which evidences, secures or guarantees all or any
portion of the payments due under the Note or otherwise is executed and/or
delivered in connection with the Note and this Mortgage (the "Loan Documents")
are hereby made a part of this Mortgage to the same extent and with the same
force as if fully set forth herein.
2. Warranty of Title. Mortgagor warrants that Mortgagor has good,
marketable and insurable title to the Mortgaged Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Mortgage and to encumber, mortgage, give, grant, bargain, sell, alienate,
enfeoff, convey, confirm, pledge, assign and hypothecate the same and that
Mortgagor possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Mortgaged Property free and clear of all
liens, encumbrances and charges whatsoever except for those exceptions shown in
the title insurance policy insuring the lien of this Mortgage (the "Permitted
Exceptions") and that this Mortgage is and will remain a valid and enforceable
first lien on and security interest in the Mortgaged Property, subject only to
said exceptions. Mortgagor shall forever warrant, defend and preserve such title
and the validity and priority of the lien of this Mortgage and shall forever
warrant and defend the same to Mortgagee against the claims of all persons
whomsoever.
3. Insurance
(a) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall obtain and maintain during the entire
term of this Mortgage (the "Term") policies of insurance against loss or damage
by fire, lightning and such other perils as are included in a standard
"all-risk" endorsement, and against loss or damage by all other risks and
hazards covered by a standard extended coverage insurance policy including,
without limitation, riot and civil commotion, vandalism, malicious mischief,
burglary and theft. Such insurance shall be in an amount equal to the greatest
of (i) the then full replacement cost of the Improvements and Equipment, without
deduction for physical depreciation, (ii) the outstanding principal balance of
the Loan, and (iii) such amount that the insurer would not deem Mortgagor a
co-insurer under said policies. The policies of insurance carried in accordance
with this paragraph shall be paid annually in advance and shall contain a
"Replacement Cost Endorsement" with a waiver of depreciation, and shall have a
deductible no greater than $25,000.00 unless so agreed by Mortgagee.
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(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain during the
Term the following policies of insurance:
(i) Flood insurance if any part of the Mortgaged Property is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Program in an amount at least
equal to the outstanding principal amount of the Loan or the maximum limit of
coverage available with respect to the Improvements and Equipment under said
Program, whichever is less.
(ii) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal injuries (including
death resulting therefrom) coverages and containing minimum limits per
occurrence of $1,000,000 and $2,000,000 in the aggregate for any policy year.
In addition, at least $5,000,000 excess and/or umbrella liability insurance
shall be obtained and maintained for any and all claims, including all legal
liability imposed upon Mortgagor and all court costs and attorneys' fee
incurred in connection with the ownership, operation and maintenance of the
Mortgaged Property.
(iii) Rental loss and/or business interruption insurance in
an amount equal to the greater of (A) estimated gross revenues for eighteen
(18) months from the operations of the Mortgaged Property or (B) the projected
operating expenses (including debt service) for twelve (12) months for the
maintenance and operation of the Mortgaged Property. The amount of such
insurance shall be increased from time to time during the Term as and when new
Leases and renewal Leases are entered into and the Rents increase or the
estimate of (or the actual) gross revenue, as may be applicable, increases.
(iv) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure vessels or
similar apparatus now or hereafter installed in the Improvements (without
exclusion for explosions), to the extent that such items now or hereafter exist
upon the Mortgaged Property, in an amount at least equal to the outstanding
principal amount of the Note or $2,000,000, whichever is less.
(v) If the Mortgaged Property includes commercial property,
worker's compensation insurance with respect to any employees of Mortgagor, as
required by any governmental authority or legal requirement.
(vi) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full insurable
value of the Mortgaged Property insuring against such risks (including, without
limitation, fire and extended coverage and collapse of the Improvements to
agreed limits) as Mortgagee may request, in form and substance acceptable to
Mortgagee.
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(vii) Ordinance or law coverage to compensate for the cost of
demolition and the increased cost of construction.
(viii) Such other insurance as may from time to time be
reasonably required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "Policies") required pursuant
to this paragraph: (i) shall be issued by companies approved by Mortgagee and
licensed to do business in the state where the Mortgaged Property is located,
with a claims paying ability rating of "A" or better by Standard & Poor's
Rating Services, a division of the McGraw Hill Companies, Inc.; (ii) shall name
Mortgagee and its successors and/or assigns as their interest may appear as the
beneficiary/mortgagee; (iii) shall contain a non-contributory standard
mortgagee clause and a Mortgagee's loss payable endorsement or their
equivalents, naming Mortgagee as the person to which all payments made by such
insurance company shall be paid; (iv) shall contain a waiver of subrogation
against Mortgagee; (v) shall be maintained throughout the Term without cost to
Mortgagee; (vi) shall be assigned and the originals delivered to Mortgagee;
(vii) shall contain such provisions as Mortgagee deems reasonably necessary or
desirable to protect its interest including, without limitation, endorsements
providing that neither Mortgagor, Mortgagee nor any other party shall be a
co-insurer under said Policies and that Mortgagee shall receive at least thirty
(30) days prior written notice of any modification, reduction or cancellation;
and (viii) shall be satisfactory in form and substance to Mortgagee and shall
be approved by Mortgagee as to amounts, form, risk coverage, deductibles, loss
payees and insureds. Mortgagor shall pay the premiums for such Policies (the
"Insurance Premiums") as the same become due and payable and shall furnish to
Mortgagee evidence of the renewal of each of the Policies with receipts for the
payment of the Insurance Premiums or other evidence of such payment reasonably
satisfactory to Mortgagee (provided, however, that Mortgagor is not required to
furnish such evidence of payment to Mortgagee in the event that such Insurance
Premiums have been paid by Mortgagee pursuant to Paragraph 6 hereof). If
Mortgagor does not furnish such evidence and receipts at least thirty (30) days
prior to the expiration of any expiring Policy, then Mortgagee may procure, but
shall not be obligated to procure, such insurance and pay the Insurance
Premiums therefor, and Mortgagor agrees to reimburse Mortgagee for the cost of
such Insurance Premiums promptly on demand. Within thirty (30) days after
request by Mortgagee, Mortgagor shall obtain such increases in the amounts of
coverage required hereunder as may be reasonably requested by Mortgagee, taking
into consideration changes in the value of money over time, changes in
liability laws, changes in prudent customs and practices.
4. Casualty
(a) If the Mortgaged Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty (an "Insured Casualty"), Mortgagor
shall give prompt notice thereof to Mortgagee. Following the occurrence of an
Insured Casualty, Mortgagor, regardless of whether insurance proceeds are
available, shall promptly proceed to restore, repair, replace or rebuild the
same to be of at least equal value and of substantially the same character as
prior to such damage or destruction, all to be effected in accordance with
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applicable law. The expenses incurred by Mortgagee in the adjustment and
collection of insurance proceeds shall become part of the Debt and be secured
hereby and shall be reimbursed by Mortgagor to Mortgagee upon-demand.
(b) In case of loss or damages covered by any of the Policies,
the following provisions shall apply:
(i) In the event of an Insured Casualty that does not exceed
the lesser of (a) $500,000.00 or (b) ten percent (10%) of the then outstanding
principal balance of the Note, Mortgagor may settle and adjust any claim
without the consent of Mortgagee and agree with the insurance company or
companies on the amount to be paid upon the loss; provided that such adjustment
is carried out in a competent and timely manner. In such case, Mortgagor is
hereby authorized to collect and receipt for any such insurance proceeds.
(ii) In the event an Insured Casualty shall exceed the lesser
of (a) $500,000.00 or (b) ten percent (10%) of the then outstanding principal
balance of the Note, then and in that event, Mortgagee may settle and adjust
any claim without the consent of Mortgagor and agree with the insurance company
or companies on the amount to be paid on the loss and the proceeds of any such
policy shall be due and payable solely to Mortgagee and held in escrow by
Mortgagee in accordance with the terms of this Mortgage.
(iii) In the event of an Insured Casualty where the loss is
in an aggregate amount less than sixty percent (60%) of the original principal
balance of the Note, and if, in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within twelve (12) months and prior to
Anticipated Repayment Date (as defined in the Note) to an economic unit not
materially less valuable (including an assessment of the impact of the
termination of any Leases due to such Insured Casualty) and not less useful
than the same was prior to the Insured Casualty, and after such restoration
will adequately secure the outstanding balance of the Debt, then, if no Event
of Default (as hereinafter defined) shall have occurred and be then continuing,
the proceeds of insurance (after reimbursement of any expenses incurred by
Mortgagee) shall be applied to reimburse Mortgagor for the cost of restoring,
repairing, replacing or rebuilding the Mortgaged Property or part thereof
subject to the Insured Casualty, in the manner set forth below. Mortgagor
hereby covenants and agrees to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding; provided always, that Mortgagor
shall pay all costs (and if required by Mortgagee, Mortgagor shall deposit the
total thereof with Mortgagee in advance) of such restoring, repairing,
replacing or rebuilding in excess of the net proceeds of insurance made
available pursuant to the terms hereof.
(iv) Except as provided above, the proceeds of insurance
collected upon any Insured Casualty shall, at the option of Mortgagee in its
sole discretion, be applied to the payment of the Debt or applied to reimburse
Mortgagor for the cost of restoring, repairing, replacing or rebuilding the
Mortgaged Property or part thereof subject to the Insured Casualty, in the
manner set forth below. Any such application to the Debt shall be without any
prepayment consideration except that if an Event of Default, or an event with
notice and/or the passage of time would constitute an Event of Default, has
occurred, then the Mortgagor
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shall pay to Mortgagee an additional amount equal to the Yield Maintenance
Premium (hereinafter defined), if any, that would be required under Paragraph 55
hereof if Defeasance Collateral (hereinafter defined) was to be purchased by
Mortgagor. Any such application to the Debt shall be applied to those payments
of principal and interest last due under the Note but shall not postpone or
reduce any payments otherwise required pursuant to the Note other than such last
due payments.
(v) In the event Mortgagor is entitled to reimbursement out of
insurance proceeds held by Mortgagee, such proceeds shall be disbursed from
time to time (with respect to requests in excess of $10,000, as work is
performed and payment is due) upon Mortgagee being furnished with (1) evidence
satisfactory to it of the estimated cost of completion of the restoration,
repair, replacement and rebuilding, (2) fiends or, at Mortgagee's option,
assurances satisfactory to Mortgagee that such funds are available, sufficient
in addition to the proceeds of insurance to complete the proposed restoration,
repair, replacement and rebuilding, and (3) such architect's certificates,
waivers of lien, contractor's sworn statements, title insurance endorsements,
bonds, plats of survey and such other reasonable evidences of cost, payment and
performance as Mortgagee may reasonably require and approve. Mortgagee may, in
any event, require that all plans and specifications for such restoration,
repair, replacement and rebuilding be submitted to and reasonably approved by
Mortgagee prior to commencement of work. In the event that Mortgagor is
required to deliver the plans and specifications to the Mortgagee for its
approval, Mortgagor shall submit to Mortgagee a request for consent stating in
bold 12 point (or larger) type that failure to respond to such request within
fourteen (14) Business Days shall be deemed approval of the proposed plans and
specifications. In the event that Mortgagee shall be unwilling to grant consent
to any proposed plans and specifications, Mortgagee will give written notice to
Mortgagor within fourteen (14) Business Days of Mortgagor's request setting
forth the reasons for its refusal to consent. Mortgagee's failure to respond to
a request for consent within fourteen (14) Business Days after Mortgagee's
receipt of the request and of materials and information set forth above, or
such further material and information that Mortgagee shall reasonably request,
shall be deemed approval. No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time; funds other than
proceeds of insurance shall be disbursed prior to disbursement of such
proceeds; and at all times, the undisbursed balance of such proceeds remaining
in the hands of Mortgagee, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Mortgagee by or on behalf of
Mortgagor for that purpose, shall be at least sufficient in the reasonable
judgment of Mortgagee to pay for the cost of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or claims for
lien. Any surplus which may remain out of insurance proceeds held by Mortgagee
after payment of such costs of restoration, repair, replacement or rebuilding
shall be paid to the Mortgagor.
5. Payment of Taxes. Etc, Mortgagor shall pay all taxes,
assessments, water rates and sewer rents, now or hereafter levied or assessed
or imposed against the Mortgaged Property or any part thereof (the "Taxes")
and all ground rents, maintenance charges, other impositions, and other
charges, including, without limitation, vault charges and
-8-
license fees for the use of vaults, chutes and similar areas adjoining the
Premises, now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof (the "Other Charges") as the same become due and
payable. Mortgagor will deliver to Mortgagee receipts for payment or other
evidence satisfactory to Mortgagee that the Taxes and Other Charges have been so
paid or are not then delinquent no later than thirty (30) days prior to the date
on which the Taxes and/or Other Charges would otherwise be delinquent if not
paid. Mortgagor shall not suffer and shall promptly cause to be paid and
discharged any lien or charge whatsoever which may be or become a lien or charge
against the Mortgaged Property, and shall promptly pay for all utility services
provided to the Mortgaged Property. Mortgagor shall furnish to Mortgagee
receipts for the payment of the Taxes and the Other Charges prior to the date
the same shall become delinquent (provided, however, that Mortgagor is not
required to furnish such receipts for payment of Taxes is the event that such
Taxes have been paid for by Mortgagee pursuant to Paragraph 6 hereof).
6. Tax and Insurance Impound Fund: Replacement Escrow Fund:
Leasing Escrow Fund.
(a) Mortgagor shall pay to Mortgagee on the eleventh day of each
calendar month (a) one-twelfth of the Taxes that Mortgagee estimates will be
payable during the next ensuing twelve (12) months in order to accumulate with
Mortgagee sufficient funds to pay all such Taxes at least thirty (30) days
prior to their respective due dates, and (b) one-twelfth of the Insurance
Premiums that Mortgagee estimates will be payable for the renewal of the
coverage afforded by the Policies upon the expiration thereof in order to
accumulate with Mortgagee sufficient funds to pay all such Insurance Premiums
at least thirty (30) days prior to the expiration of the Policies (said amounts
in (a) and (b) above hereinafter called the "Tax and Insurance Impound Fund").
The Tax and Insurance Impound Fund and the payments of interest or principal or
both, payable pursuant to the Note, shall be added together and shall be paid
as an aggregate sum by Mortgagor to Mortgagee. Mortgagee will apply the Tax and
Insurance Impound Fund to payments of Taxes and Insurance Premiums required to
be made by Mortgagor pursuant to Paragraphs 3 and 5 hereof. In making any
payment relating to the Tax and Insurance Impound Fund, Mortgagee may do so
according to any ▇▇▇▇, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such ▇▇▇▇, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax and Insurance Impound
Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Paragraphs 3 and 5 hereof, Mortgagee shall, in its sole discretion, return any
excess to Mortgagor or credit such excess against future payments to be made to
the Tax and Insurance Impound Fund. In allocating such excess, Mortgagee may
deal with the person shown on the records of Mortgagee to be the owner of the
Mortgaged Property. If at any time Mortgagee determines that the Tax and
Insurance Impound Fund is not or will not be sufficient to pay the items set
forth in (a) and (b) above, Mortgagee shall notify Mortgagor of such
determination and Mortgagor shall increase its monthly payments to Mortgagee by
the amount that Mortgagee estimates is sufficient to make up the deficiency at
least thirty (30) days prior to delinquency of the Taxes and/or expiration of
the Policies, as the case may be. The Tax and Insurance Impound Fund shall be
held in an interest
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bearing account in Mortgagee's name at a financial institution selected by
Mortgagee in its sole discretion. All earnings or interest on the Tax and
Insurance Impound Fund shall be and become part of such Tax and Insurance
Impound Fund and shall be disbursed as provided in this Paragraph 6(a). Until
expended or applied as above provided, any amounts in the Tax and Insurance
Impound Fund shall constitute additional security for the Debt. The Tax and
Insurance Impound Fund shall not constitute a trust fund and may be commingled
with other monies held by Mortgagee. No earnings or interest on the Tax and
Insurance Impound Fund shall be payable to Mortgagor. If Mortgagee so elects at
any time, Mortgagor shall provide, at Mortgagor's expense, a tax service
contract for the Term issued by a tax reporting agency acceptable to Mortgagee.
If Mortgagee does not so elect, Mortgagor shall reimburse Mortgagee for the cost
of making annual tax searches throughout the Term.
(b) Mortgagor shall pay to Mortgagee on the eleventh day of each
calendar month the sum of One Thousand One Hundred Sixty Six and 66/100 Dollars
($1,166.66) which shall be deposited with and held by Mortgagee for replacement
and repairs required to be made to the Mortgaged Property during the calendar
year and for any other work approved by Mortgagee ("Replacement Escrow Fund").
Mortgagee may in its reasonable discretion reassess its estimate of the amount
necessary for the Replacement Escrow Fund from time to time and in its
discretion, and may adjust the monthly amounts required to be deposited into
the Replacement Escrow Fund by thirty (30) days notice to Mortgagor. Mortgagee
shall make disbursements from the Replacement Escrow Fund as requested by
Mortgagor, and approved by Mortgagee in its sole discretion, no more frequently
than once in any thirty (30) day period of no less than $5,000.00 upon delivery
by Mortgagor of Mortgagee's standard form of draw request accompanied by copies
of paid invoices for the amounts requested and, if required by Mortgagee for
requests in excess of $10,000.00, lien waivers and releases from all parties
furnishing materials and/or services in connection with the requested payment.
Mortgagee may require an inspection of the Mortgaged Property at Mortgagor's
expense prior to making a monthly disbursement in order to verify completion of
replacements and repairs of items in excess of $10,000.00 for which
reimbursement is sought. The Replacement Escrow Fund shall be held in an
interest bearing account in Mortgagee's name at a financial institution
selected by Mortgagee in its sole discretion. All earnings or interest on the
Replacement Escrow Fund shall be and become part of such Replacement Escrow
Fund and shall be disbursed as provided in this Paragraph 6(b). Until expended
or applied as above provided, the Replacement Escrow Fund shall constitute
additional security for the Debt. The Replacement Escrow Fund shall not
constitute a trust fund and may be commingled with other monies held by
Mortgagee.
(c) Mortgagor shall pay to Mortgagee on the eleventh day of each
calendar month one-twelfth of $50,000, which shall be deposited with and held
by Mortgagee for tenant improvement and leasing commission obligations incurred
following the date hereof (the "Leasing Escrow Fund") until the amount on
deposit in the Leasing Escrow Fund equals $150,000 (the "Maximum Balance"). In
the event that the amount on deposit in the Leasing Escrow Fund, after
achieving the Maximum Balance, decrease below the Maximum Balance then the
Mortgagee shall resume making monthly deposits as otherwise required pursuant
to this Paragraph 6(c). In addition, Mortgagor shall pay to Mortgagee for
deposit in the Leasing
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Escrow Fund all funds received by Mortgagor from tenants in connection with the
cancellation of any Leases (excluding the return of unamortized leasehold
improvement advances), including, but not limited to, any cancellation fees,
penalties, leasing commissions or other charges. Mortgagor hereby pledges to
Mortgagee any and all monies now or hereafter deposited in the Leasing Escrow
Fund as additional' security for the payment of the Debt. Mortgagee may reassess
its estimate of the monthly amount necessary to be deposited into the Leasing
Escrow Fund and, upon notice to Mortgagor, Mortgagor shall be required to
deposit into the Leasing Escrow Fund each month such reassessed amount.
Mortgagee shall make disbursements from the Leasing Escrow Fund for expenses
reasonably incurred by Mortgagor for new Leases and renewals of Leases entered
into by Mortgagor in accordance with the provisions of Paragraph 8 below. All
such expenses shall be approved by Mortgagee in its reasonable discretion.
Mortgagee shall make disbursements as requested by Mortgagor on a quarterly
basis in increments of no less than $5,000.00 upon delivery by Mortgagor of
Mortgagee's standard form of draw request accompanied by copies of paid invoices
for the amounts requested for tenant improvements and leasing commissions, the
newly executed Lease (taking into account the existing market conditions),
extension, renewal, or modification, with terms commensurate with the expired
Lease, and, if required by Mortgagee, lien waivers and releases from all parties
furnishing materials and/or services in connection with the requested payment.
Mortgagee may require an inspection of the Mortgaged Property at Mortgagor's
reasonable expense prior to making a quarterly disbursement in order to verify
completion of improvements for which reimbursement is sought. The Leasing Escrow
Fund shall be held in an interest bearing account in Mortgagee's name at a
financial institution selected by Mortgagee in its sole discretion. All earnings
or interest on the Leasing Escrow Fund shall be and become part of such Leasing
Escrow Fund and shall be disbursed as provided in this Paragraph 6(b). Until
expended or applied as above provided, the Leasing Escrow Fund shall constitute
additional security for the Debt. The Leasing Escrow Fund shall not constitute a
trust fund and may be commingled with other monies held by Mortgagee.
(d) Mortgagor hereby pledges to Mortgagee and grants to
Mortgagee a security interest in any and all monies now or hereafter deposited
in the Tax and Insurance Impound Fund, the Replacement Escrow Fund and the
Leasing Escrow Fund as additional security for the payment of the Debt. Upon
the occurrence of an Event of Default, Mortgagee may apply any sums then
present in the Tax and Insurance Impound Fund, the Replacement Escrow Fund
and/or the Leasing Escrow Fund to thaw payment of the Debt in any order in its
sole discretion.
7. Condemnation. Mortgagor shall promptly give Mortgagee written
notice of the actual or threatened commencement of any condemnation or eminent
domain proceeding (a "Condemnation") and shall deliver to Mortgagee copies of
any and all papers served in connection with such Condemnation. The Mortgagee
hereby acknowledges that it has received notice of a present proposed
condemnation of an eight (8) foot wide strip of the Mortgaged Property as shown
on the survey delivered in connection with the origination of the Loan (such
proposed condemnation the "Proposed Street Widening"). Following the occurrence
of a Condemnation, Mortgagor, regardless of whether an Award (hereinafter
defined) is available, shall promptly proceed to restore, repair, replace or
rebuild the same to
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the extent practicable to be of at least equal value and of substantially the
same character as prior to such Condemnation, all to be effected in accordance
with applicable law.
(a) Mortgagee is hereby irrevocably appointed as Mortgagor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("Award") for any taking accomplished
through a Condemnation (a "Taking") and to make any compromise or settlement in
connection with such Condemnation, subject to the provisions of this Mortgage.
Notwithstanding any Taking by any public or quasi-public authority (including,
without limitation, any transfer made in lieu of or in anticipation of such a
Taking), Mortgagor shall continue to pay the Debt at the time and in the manner
provided for in the Note, in this Mortgage and the other Loan Documents and the
Debt shall not be reduced unless and until any Award shall have been actually
received and applied by Mortgagee to expenses of collecting the Award and to
discharge of the Debt. Mortgagee shall not be limited to the interest paid on
the Award by the condemning authority but shall continue to be entitled to
receive interest at the rate or rates provided in the Note for the Loan.
Mortgagor shall cause any Award that is payable to Mortgagor to be paid
directly to Mortgagee.
(b) In the event of any Condemnation where the Award is in an
aggregate amount less than sixty percent (60%) of the outstanding original
principal balance of the Note, and if, in the reasonable judgment of Mortgagee,
the Mortgaged Property can be restored within twelve (12) months and prior to
the Anticipated Repayment Date to an economic unit not less valuable (including
an assessment of the impact of the termination of any Leases due to such
Condemnation) and not less useful than the same was prior to the Condemnation,
and after such restoration will adequately secure the outstanding balance of
the Debt, then, if no Event of Default shall have occurred and be then
continuing, the proceeds of the Award (after reimbursement of any expenses
incurred by Mortgagee) shall be applied to reimburse Mortgagor for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to Condemnation, in the manner set forth below. Mortgagor
hereby covenants and agrees to commence and diligently to prosecute such
restoring, repairing, replacing or rebuilding; provided always, that Mortgagor
shall pay all costs (and if required by Mortgagee, Mortgagor shall deposit the
total thereof with Mortgagee in advance) of such restoring, repairing,
replacing or rebuilding in excess of the Award made available pursuant to the
terms hereof.
(c) Except as provided above, the Award collected upon any
Condemnation shall, at the option of Mortgagee in its sole discretion, be
applied to the payment of the Debt or applied to reimburse Mortgagor for the
cost of restoring, repairing, replacing or rebuilding the Mortgaged Property or
part thereof subject to the Condemnation, in the manner set forth below. Any
such application to the Debt shall be without any prepayment consideration
except that if an Event of Default, or an event with notice and/or the passage
of time would constitute an Event of Default, has occurred then the Mortgagor
shall pay to Mortgagee an additional amount equal to the Yield Maintenance
Premium, if any, that would be required under Paragraph 55 hereof if Defeasance
Collateral was to be purchased by Mortgagor. Any such application to the Debt
shall be applied to those payments of principal
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and interest last due under the Note but shall not postpone or reduce any
payments otherwise required pursuant to the Note other than such last due
payments. If the Mortgaged Property is sold, through foreclosure or otherwise,
prior to the receipt by Mortgagee of such Award, Mortgagee shall have the right,
whether or not a deficiency judgment on the Note shall be recoverable or shall
have been sought, recovered or denied, to receive all or a portion of said Award
sufficient to pay the Debt.
(d) In the event Mortgagor is entitled to reimbursement out of
the Award received by Mortgagee, such proceeds shall be disbursed from time to
time upon Mortgagee being furnished with (1) evidence satisfactory to it of the
estimated cost of completion of the restoration, repair, replacement and
rebuilding resulting from such condemnation, (2) funds or, at Mortgagee's
option, assurances satisfactory to Mortgagee that such fiends are available,
sufficient in addition to the proceeds of the Award to complete the proposed
restoration, repair, replacement and rebuilding, and (3) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of costs, payment
and performance as Mortgagee may reasonably require and approve; and Mortgagee
may, in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and reasonably
approved by Mortgagee prior to commencement of work. In the event that
Mortgagor is required to deliver the plans and specifications to the Mortgagee
for its approval, Mortgagor shall submit to Mortgagee a request for consent
stating in bold 12 point (or larger) type that failure to respond to such
request within fourteen (14) Business Days shall be deemed approval of the
proposed plans and specifications. In the event that Mortgagee shall be
unwilling to grant consent to any proposed plans and specifications, Mortgagee
will give written notice to Mortgagor within fourteen (14) Business Days of
Mortgagor's request setting forth the reasons for its refusal to consent.
Mortgagee's failure to respond to a request for consent within fourteen (14)
Business Days after Mortgagee's receipt of the request and of materials and
information set forth above, or such further material and information that
Mortgagee shall reasonably request, shall be deemed approval. No payment made
prior to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than proceeds of the Award shall be
disbursed prior to disbursement of such proceeds; and at all times, the
undisbursed balance of such proceeds remaining in hands of Mortgagee, together
with funds deposited for that purpose or irrevocably committed to the
satisfaction of Mortgagee by or on behalf of Mortgagor for that purpose, shall
be at least sufficient in the reasonable judgment of Mortgagee to pay for the
costs of completion of the restoration, repair, replacement or rebuilding, free
and clear of all liens or claims for lien. Any surplus which may remain out of
the Award received by Mortgagee after payment of such costs of restoration,
repair, replacement or rebuilding shall, in the sole and absolute discretion of
Mortgagee, be retained by Mortgagee and applied to payment of the Debt.
8. Leases and Rents.
(a) Mortgagor does hereby absolutely and unconditionally assign
to Mortgagee, all Mortgagor's right, title and interest in all current and
future Leases and Rents,
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it being intended by Mortgagor that this assignment constitutes a present,
absolute assignment and not an assignment for additional security only. Such
assignment to Mortgagee shall not be construed to bind Mortgagee to the
performance of any of the covenants, conditions or provisions contained in any
such Lease or otherwise impose any obligation upon Mortgagee. Mortgagor agrees
to execute and deliver to Mortgagee such additional instruments, in form and
substance satisfactory to Mortgagee, as may hereafter be requested by Mortgagee
to further evidence and confirm such assignment. Nevertheless, subject to the
terms of this paragraph, Mortgagee grants to Mortgagor a revocable license to
operate and manage the Mortgaged Property and to collect the Rents. Mortgagor
shall hold the Rents, or a portion thereof, sufficient to discharge all current
sums due on the Debt, in trust for the benefit of Mortgagee for use in the
payment of such sums. Upon an Event of Default, without the need for notice or
demand, the license granted to Mortgagor herein shall automatically be revoked,
and Mortgagee shall immediately be entitled to possession of all Rents, whether
or not Mortgagee enters upon or takes control of the Mortgaged Property.
Mortgagee is hereby granted and assigned by Mortgagor the right, at its option,
upon revocation of the license granted herein, to enter upon the Mortgaged
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license may be applied
toward payment of the Debt in such priority and proportions as Mortgagee in its
sole discretion shall deem proper.
(b) All Leases shall provide that they are subordinate to this
Mortgage and that the tenant agrees to attorn to Mortgagee. Except as described
in the rent roll (the "Rent Roll") delivered to the Mortgagee in connection
with the closing of the Loan, none of the Leases shall contain any option to
purchase, any right of first refusal to lease or purchase or any right to
terminate the lease term on the part of the tenant thereunder (except in the
event of the destruction of all or substantially all of the Mortgaged
Property). Leases executed after the date hereof shall not contain any
provisions which adversely affect the Mortgaged Property or which might
adversely affect the rights of any holder of the Loan without the prior written
consent of Mortgagee. Each tenant shall conduct business only in that portion
of the Mortgaged Property covered by its lease. Upon request, Mortgagor shall
furnish Mortgagee with executed copies of all Leases.
(c) Mortgagor shall not, without the prior consent of Mortgagee
(i) enter into any Lease of all or any part of the Mortgaged Property in excess
of 5,000 rentable square feet (a "Major Lease"), (ii) cancel, terminate,
abridge or otherwise modify the terms of any Major Lease, or accept a surrender
thereof, (iii) consent to any assignment of or subletting under any Major Lease
not in accordance with its terms, (iv) cancel, terminate, abridge or otherwise
modify any guaranty of any Major Lease or the terms thereof, (v) accept
prepayments of installments of Rents for a period of more than one (1) month in
advance or (vi) further assign the whole or any part of the Leases or the
Rents. In addition to the foregoing, Mortgagor shall not (A) lease all or any
part of the Mortgaged Property, (B) cancel, terminate, abridge or otherwise
modify the terms of any Lease, or accept a surrender thereof, (C) consent to
any assignment of or subletting under any Lease not in accordance with its
terms or (D) cancel, terminate, abridge or otherwise modify any guaranty of
any Lease or the
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terms thereof unless such actions are exercised for a commercially reasonable
purpose in length transactions for market rate terms.
(d) Mortgagor (i) shall observe and perform all the obligations
imposed upon the lessor under the Leases and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Mortgagee of all notices of default which Mortgagor
shall send or receive thereunder; (iii) shall enforce all the terms, covenants
and conditions contained in the Leases upon the part the lessee thereunder to
be observed or performed, short of termination thereof; (iv) shall not collect
any of the Rents more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in the Leases or the Rents; (vi)
shall use its commercially reasonable efforts to deliver to Mortgagee, upon
request, tenant estoppel certificates from each commercial tenant at the
Mortgaged Property in form and substance reasonably satisfactory to Mortgagee,
provided that Mortgagor shall not be required to deliver such certificates more
frequently than one (1) time in any calendar year; and (vii) shall execute and
deliver at the request of Mortgagee all such further assurances, confirmations
and assignments in connection with the Mortgaged Property as Mortgagee shall
from time to time require.
(e) All security deposits of tenants, whether held in cash or
any other form, shall not be commingled with any other funds of Mortgagor and,
if cash, shall be deposited by Mortgagor at such commercial or savings bank or
banks, or otherwise held in compliance with applicable law, as may be
reasonably satisfactory to Mortgagee. It is hereby agreed by Mortgagee that The
Chase Manhattan Bank, N.A., First Union National Bank, ▇▇▇▇▇▇▇ ▇▇▇▇▇
International Bank Limited and the Bank of New York are satisfactory to
Mortgagee for purposes of the preceding sentence. Any bond or other instrument
which Mortgagor is permitted to hold in lieu of cash security deposits under
any applicable legal requirements shall be maintained in full force and effect
in the full amount of such deposits unless replaced by cash deposits as
hereinabove described, shall be issued by an institution reasonably
satisfactory to Mortgagee, shall, if permitted pursuant to any legal
requirements, name Mortgagee as payee or mortgagee thereunder (or at
Mortgagee's option, be fully assignable to Mortgagee) and shall, in all
respects, comply with any 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 any applicable legal requirements, turn over to Mortgagee the
security deposits (and any interest theretofore earned thereon) with respect to
all or any portion of the Mortgaged Property, to be held by Mortgagee subject
to the terms of the Leases.
9. Maintenance and Use of Mortgaged Property. Mortgagor shall
cause the Mortgaged Property to be maintained in a good and safe condition and
repair. The Improvements and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment) without the
consent of Mortgagee. Mortgagor shall promptly comply with all laws, orders and
ordinances affecting the Mortgaged Property, or the use thereof. Mortgagor
shall promptly repair, replace or rebuild any part of
-15-
the Mortgaged Property that is destroyed by any casualty, or becomes damaged,
worn or dilapidated or that is affected by any proceeding of the character
referred to in Paragraph 7 hereof and shall complete and pay for any structure
at any time in the process of construction or repair on the Premises. Mortgagor
shall not initiate, join in, acquiesce in, or consent to any change in any
private restrictive covenant, zoning law or other public or private
restriction, limiting or defining the uses which may be made of the Mortgaged
Property or any part thereof. If under applicable zoning provisions the use of
all or any portion of the Mortgaged Property is or shall become a nonconforming
use, Mortgagor will not cause or permit such nonconforming use to be
discontinued or abandoned without the express written consent of Mortgagee.
Mortgagor shall not (i) change the use of the Mortgaged Property, (ii) permit
or suffer to occur any waste on or to the Mortgaged Property or to any portion
thereof or (iii) take any steps whatsoever to convert the Mortgaged Property,
or any portion thereof, to a condominium or cooperative form of ownership.
Mortgagor will not install or permit to be installed on the Premises any
underground storage tank.
10. Transfer or Encumbrance of the Mortgaged Property.
(a) Mortgagor acknowledges that Mortgagee has examined and relied
on the creditworthiness and experience of Mortgagor in owning and operating
properties such as the Mortgaged Property in agreeing to make the Loan, and
that Mortgagee 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. Mortgagor acknowledges that Mortgagee has a
valid interest in maintaining the value of the Mortgaged Property so as to
ensure that, should Mortgagor default in the repayment of the Debt, Mortgagee
can recover the Debt by a sale of the Mortgaged Property. Mortgagor shall not,
without the prior written consent of Mortgagee, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or any
part thereof, or permit the Mortgaged Property or any part thereof to be sold,
conveyed, alienated, mortgaged, encumbered, pledged or otherwise transferred.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge
or transfer within the meaning of this Paragraph 10 shall be deemed to include
(i) an installment sales agreement wherein Mortgagor agrees to sell the
Mortgaged Property or any part thereof for a price to be paid in installments;
(ii) an agreement by Mortgagor leasing all or a substantial part of the
Mortgaged Property for other than actual occupancy by a space tenant thereunder
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 Rents;
(iii) if Mortgagor, Guarantor or any general partner or managing member of
Mortgagor or Guarantor is a corporation, the voluntary or involuntary sale,
conveyance or transfer of such corporation's stock (or the stock of any
corporation directly or indirectly controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock in one or a series
of transactions by which an aggregate of more than 10% of such corporation's
stock shall be vested in a party or parties who are not now stockholders or any
change in the control of such corporation; (iv) if Mortgagor, any Guarantor or
any general partner of Mortgagor or any Guarantor is a limited or general
partnership, joint venture or limited liability company, the
-16-
change, removal, resignation or addition of a general partner, managing partner,
joint venturer or the transfer, assignment or pledge of any ownership interest
of any general partner, managing partner or joint venturer in Mortgagor or the
transfer, assignment or pledge of any ownership interest in any general partner,
managing partner or joint venturer; or (v) if Mortgagor or any Guarantor is a
limited partnership or limited liability company, the voluntary or involuntary
sale, conveyance, transfer or pledge of any limited partnership interests or
membership interests or the creation or issuance of new limited partnership
interests or membership interests, by which an aggregate of more than 30% of
such limited partnership interests or membership interests are held by, or
pledged to, parties who are not currently limited partners or members.
(c) 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 Mortgagor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Mortgagee's consent. This provision shall apply to
every sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer
of the Mortgaged Property regardless of whether voluntary or not, or whether
or not Mortgagee has consented to any previous sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property.
(d) Mortgagee's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property shall not
be deemed to be a waiver of Mortgagee's right to require such consent to any
future occurrence of same. Any sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property made in contravention
of this paragraph shall be null and void and of no force and effect.
(e) Mortgagor agrees to bear and shall pay or reimburse Mortgagee
on demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by Mortgagee in connection with the
review, approval and documentation of any such sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer.
(f) Mortgagee's consent to the sale or transfer of the Mortgaged
Property will not be unreasonably withheld after consideration of all relevant
factors, provided that:
(i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default
shall have occurred and remain uncured;
(ii) the proposed transferee ("Transferee") shall be a reputable
entity or person of good character, creditworthy, with
sufficient financial worth considering the obligations
assumed and
-17-
undertaken, as evidenced by financial statements and other
information reasonably requested by Mortgagee;
(iii) the Transferee and its property manager shall have sufficient
experience in the ownership and management of properties
similar to the Mortgaged Property, and Mortgagee shall be
provided with reasonable evidence thereof (and Mortgagee
reserves the right to approve the Transferee without
approving the substitution of the property manager);
(iv) Mortgagee shall have recommendations in writing from the
Rating Agencies to the effect that such transfer will not
result in a requalification, reduction or withdrawal of any
current securities rating assigned in a Securitization. The
term "Rating Agencies" as used herein shall mean each of
Standard & Poor's Ratings Group, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc.,
Duff and ▇▇▇▇▇▇ Credit Rating Co. and Fitch Investors
Service, L.P., or any other nationally-recognized statistical
rating agency which has been approved by Mortgagee;
(v) the Transferee shall have executed and delivered to Mortgagee
an assumption agreement in form and substance acceptable to
Mortgagee, evidencing such Transferee's agreement to abide
and be bound by the terms of the Note, this Mortgage and the
other Loan Documents, together with such legal opinions and
title insurance endorsements as may be reasonably requested
by Mortgagee; and
(vi) Mortgagee shall have received an assumption fee equal to one
percent (1%) of the Debt on the date of such assumption and
the payment of, or reimbursement for, all costs and expenses
incurred by Mortgagee in connection with such assumption
(including reasonable attorneys' fees and costs).
(g) Notwithstanding anything to the contrary contained in this
paragraph 10, holders of interests in Mortgagor (or holders of interests in any
entity directly or indirectly holding an interest in Mortgagor) as of the date
of this Mortgage (the "Interest Holders") shall have the right to transfer
their interest in Mortgagor (or any entity directly or indirectly holding an
interest in Mortgagor) without Mortgagee's consent to members of their
immediate family and other Interest Holders; provided, however, that (1) after
taking into account any prior transfers pursuant to this paragraph 10, whether
to the proposed transferee or otherwise, no such transfer (or series of
transfers) shall result in (x) the proposed transferee owning in the aggregate
(directly, indirectly or beneficially) more than 49% of the interests in
Mortgagor (or any entity directly or indirectly holding an interest in
Mortgagor), or (y) a transfer in the aggregate of more than 49% of the
interests in Mortgagor as of the date hereof, (2) no such
-18-
transfer of interest shall result in a change of control of Mortgagor or the day
to day operations of the Mortgaged Property, (3) Mortgagor shall give Mortgagee
notice of such transfer together with copies of all instruments effecting such
transfer not less than ten (10) business days prior to the date of such
transfer; (4) no Event of Default has occurred and remains uncured; and (5) the
legal and financial structure of Mortgagor after such transfer and its
shareholders or members and the single purpose nature of Mortgagor and any
shareholders satisfy Mortgagee's then current applicable underwriting criteria
and requirements including, without limitation, the requirement at the request
of Mortgagee, to deliver evidence reasonably satisfactory to Mortgagee that the
single purpose nature of Mortgagor following such transfer is in accordance with
the standards of two of the Rating Agencies or, if a Secondary Market
Transaction (hereinafter defined) has occurred, the Rating Agencies rating the
Secondary Market Transaction such that the Mortgaged Property continues to be
owned by a single purpose entity. For purposes of the foregoing, an "immediate
family member" shall mean a parent, spouse or a child of any Interest Holder.
For the purposes of this paragraph 10, a change of control of Mortgagor shall be
deemed to have occurred if there is any change in the identity of the individual
or group of individuals who have the right, by virtue of the articles of
organization, the operating agreement or any other agreement, with or without
taking any formative action, to cause Mortgagor to take some action or to block
Mortgagor from taking some action which, in either case, Mortgagor could take or
could refrain from taking were it not for the rights of such individuals.
(h) Notwithstanding anything to the contrary contained in this
Paragraph 10, Interest Holders shall have the right to transfer their interest
in Mortgagor (or any entity directly or indirectly holding an interest in
Mortgage) to another person or entity who is not an Interest Holder, without
Mortgagee's consent and Mortgagor shall not be required to pay the assumption
fee otherwise required pursuant to this Paragraph 10; provided, however, that:
(i) after taking into account any prior transfers pursuant
to this sentence, whether to the proposed transferee or
otherwise, no such transfer (or series of transfers)
shall result in (x) the proposed transferee, together
with all members of his/her immediate family or any
affiliates thereof, owning in the aggregate (directly,
indirectly or beneficially) more than 30% of the
interests in Mortgagor (or any entity directly or
indirectly holding an interest in Mortgagor), or (y) a
transfer in the aggregate of more than 30% of the
interests in Mortgagor as of the date hereof;
(ii) no such transfer of interest shall result in a change
of control of Mortgagor or the day to day operations of
the Mortgaged Property;
(iii) Mortgagor shall give Mortgagee notice of such transfer
together with copies of all instruments effecting such
transfer not less than ten (10) days prior to the date
of such transfer;
-19-
(iv) no Event of Default has occurred and remains uncured;
and
(v) the legal and financial structure of Mortgagor after
such transfer and its shareholders, partners or members
and the single purpose nature and bankruptcy
remoteness of Mortgagor and its shareholders, partners
or members satisfies Mortgagee's then current
applicable underwriting criteria and requirements,
including without limitation the requirement at the
request of Mortgagee to deliver written confirmations
from the Rating Agencies that such transfer or series
of transfers will not result in a qualification,
downgrade or withdrawal of the then applicable ratings.
11. Representations and Covenants Concerning the Mortgagor and
Property. Mortgagor represents, warrants and covenants as follows:
(a) Organization and Existence. Mortgagor is duly organized and
validly existing as a limited partnership in good standing
under the laws of Delaware and in all other jurisdictions in
which Mortgagor is transacting business. Mortgagor has the
power and authority to execute, deliver and perform the
obligations imposed on it under the Loan Documents and to
consummate the transactions contemplated by the Loan
Documents.
(b) Authorization. Mortgagor has taken all necessary actions for
the authorization of the borrowing on account of the Loan and
for the execution and delivery of the Loan Documents,
including, without limitation, that those partners of
Mortgagor whose approval is required by the terms of
Mortgagor's organizational documents have duly approved the
transactions contemplated by the Loan Documents and have
authorized execution and delivery thereof by the respective
signatories. To the best of Mortgagor's knowledge, no other
consent by any local, state or federal agency is required in
connection with the execution and delivery of the Loan
Documents.
(c) Valid Execution and Delivery. All of the Loan Documents
requiring execution by Mortgagor have been duly and validly
executed and delivered by Mortgagor.
(d) Enforceability. All of the Loan Documents constitute valid,
legal and binding obligations of Mortgagor and are fully
enforceable against Mortgagor in accordance with their terms
by Mortgagee and its successors, transferees and assigns,
subject only to bankruptcy laws and general principles of
equity.
(e) No Defenses. The Note, this Mortgage and the other Loan
Documents are not subject to any right of rescission,
set-off, counterclaim or
-20-
defense, nor would the operation of any of the terms of the
Note, this Mortgage or any of the other Loan Documents, or
the exercise of any right thereunder, render this Mortgage
unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including
the defense of usury.
(f) Defense of Usurer. Mortgagor knows of no facts that would
support a claim of usury to defeat or avoid its obligation to
repay the principal of, interest on, and other sums or
amounts due and payable under, the Loan Documents.
(g) No Conflict/Violation of Law. The execution, delivery and
performance of the Loan Documents by the Mortgagor will not
cause or constitute a default under or conflict with the
organizational documents of Mortgagor, any Guarantor or any
general partner or managing member of Mortgagor or any
Guarantor. The execution, delivery and performance of the
obligations imposed on Mortgagor under the Loan Documents
will not cause Mortgagor to be in default, including after
due notice or lapse of time or both, under the provisions of
any agreement, judgment or order to which Mortgagor is a
party or by which Mortgagor is bound.
(h) Compliance with & Applicable Laws and Regulations. All of the
Improvements and the use of the Mortgaged Property comply
with, and shall remain in compliance with, all applicable
statutes, rules, regulations and private covenants now or
hereafter relating to the ownership, construction, use or
operation of the Mortgaged Property, including all applicable
statutes, rules and regulations pertaining to requirements
for equal opportunity, anti-discrimination, fair housing,
environmental protection, zoning and land use. The
Improvements comply with, and shall remain in compliance
with, applicable health, fire and building codes. There is no
evidence of any illegal activities relating to controlled
substances on the Mortgaged Property. All certifications,
permits, licenses and approvals, including, without
limitation, certificates of completion and occupancy permits
required for the legal use, occupancy and operation of the
Mortgaged Property as a shopping center have been obtained
and are in full force and effect. All of the Improvements
comply with all material requirements of any applicable
zoning and subdivision laws and ordinances.
(i) Consents Obtained. All consents, approvals, authorizations,
orders or filings with any court or governmental agency or
body, if any, required for the execution, delivery and
performance of the Loan Documents by Mortgagor have been
obtained or made.
-21-
(j) No Litigation. There are no pending actions, suits or
proceedings, arbitrations or governmental investigations
against the Mortgaged Property, an adverse outcome of which
would materially affect the Mortgagor's performance under the
Note, the Mortgage or the other Loan Documents.
(k) Tide. The Mortgagor has good and marketable fee simple title
to the Mortgaged Property, and good title to the Equipment,
subject to no liens, charges or encumbrances other than the
Permitted Exceptions. The possession of the Mortgaged
Property has been peaceful and undisturbed and title thereto
has not been disputed or questioned to the best of
Mortgagor's knowledge
(i) Permitted Exceptions. The Permitted Exceptions do not and
will not materially and adversely affect (1) the ability of
the Mortgagor to pay in full the principal and interest on
the Note in a timely manner or (2) the use of the Mortgaged
Property for the use currently being made thereof, the
operation of the Mortgaged Property as currently being
operated or the value of the Mortgaged Property.
(m) First Lien. Upon the execution by the Mortgagor and the
recording of this Mortgage, and upon the execution and filing
of UCC-1 financing statements or amendments thereto, the
Mortgagee will have a valid first lien on the Mortgaged
Property and a valid security interest in the Equipment
subject to no liens, charges or encumbrances other than the
Permitted Exceptions.
(n) ERISA. The Mortgagor has made and shall continue to make all
required contributions to all employee benefit plans, if any,
and the Mortgagor has no knowledge of any material liability
which has been incurred by the Mortgagor which remains
unsatisfied for any taxes or penalties with respect to any
employee benefit plan or any multi-employer plan, and each
such plan has been administered in compliance with its terms
and the applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and any
other federal or state law.
(o) Contingent Liabilities. The Mortgagor has no known material
contingent liabilities.
(p) No Other Obligations: The Mortgagor has no material financial
obligation under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the
Mortgagor is a party or by which the Mortgagor or the
Mortgaged Property is otherwise bound, other than obligations
incurred in the ordinary course of the operation of
-22-
the Mortgaged Property and other than obligations under this
mortgage and the other Loan Documents.
(q) No Other Debt. The Mortgagor has not borrowed or received
other debt financing that has not been heretofore repaid in
full.
(r) Fraudulent Conveyance. The Mortgagor (1) has not entered into
the Loan or any Loan Document with the actual intent to
hinder, delay, or defraud any creditor and (2) received
reasonably equivalent value in exchange for its obligations
under the Loan Documents. Giving effect to the Loans
contemplated by the Loan Documents, the fair saleable value
of the Mortgagor's assets exceed and will, immediately
following the execution and delivery of the Loan Documents,
exceed the Mortgagor's total liabilities, including, without
limitation, subordinated, unliquidated, disputed or
contingent liabilities. The fair saleable value of the
Mortgagor's assets is and will, immediately following the
execution and delivery of the Loan Documents, be greater than
the Mortgagor's probable liabilities, including the maximum
amount of its contingent liabilities or its debts as such
debts become absolute and matured. The Mortgagor's assets do
not and, immediately following the execution and delivery of
the Loan Documents will not, constitute unreasonably small
capital to carry out its business as conducted or as proposed
to be conducted. The Mortgagor does not intend to, and does
not believe that it will, incur debts and liabilities
(including, without limitation, contingent liabilities and
other commitments) beyond its ability to pay such debts as
they mature (taking into account the timing and amounts to be
payable on or in respect of obligations of the Mortgagor).
(s) Investment Company Act. The Mortgagor is not (1) an
"investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment
Company Act of 1940, as amended; (2) a "holding company" or a
"subsidiary company" of a "holding company" or an "affiliate"
of either a "holding company" or a "subsidiary company"
within the meaning of the Public Utility Holding Company Act
of 1935, as amended; or (3) subject to any other federal or
state law or regulation which purports to restrict or
regulate its ability to borrow money.
(t) Access/Utilities. The Mortgaged Property has adequate rights
of access to public ways and is served by adequate water,
sewer, sanitary sewer and storm drain facilities. All public
utilities necessary to the continued use and enjoyment of the
mortgaged property as presently used and enjoyed are located
in the public right-of-way abutting the mortgaged property,
and all such utilities ace connected so as to serve the
mortgaged property without passing over other property. All
roads necessary for
-23-
the full utilization of the mortgaged property for its
current purpose have been completed and dedicated to public
use and accepted by all governmental authorities or are the
subject of access easements for the benefit of the mortgaged
property:
(u) Taxes Paid. Mortgagor has filed all federal, state, county
and municipal tax returns required to have been filed by
Mortgagor, and has paid all taxes which have become due
pursuant to such returns or to any notice of assessment
received by Mortgagor, and Mortgagor has no knowledge of any
basis for additional assessment with respect to such taxes.
(v) Single Tax Lot. The Premises consists of a single lot or
multiple tax lots; no portion of said tax lot(s) covers
property other than the Premises or a portion of the Premises
and no portion of the Premises lies in any other tax lot.
(w) Special Assessments. Except as disclosed in the title
insurance policy, there are no pending or, to the knowledge
of the Mortgagor, proposed special or other assessments for
public improvements or otherwise affecting the Mortgaged
Property, nor, to the knowledge of the Mortgagor, are there
any contemplated improvements to the Mortgaged Property that
may result in such special or other assessments.
(x) Flood Zone. The Mortgaged Property is not located in a flood
hazard area as defined by the Federal Insurance
Administration.
(y) Seismic Exposure. The Premises are not located Zone 3 or Zone
4 of the "Seismic Zone Map of the U.S.".
(z) Misstatements of Fact. No statement of fact made in the Loan
Documents contains any untrue statement of a material fact or
omits to state any material fact necessary to make statements
contained herein or therein not misleading. There is no fact
presently known to the Mortgagor which has not been disclosed
which adversely affects, nor as far as the Mortgagor can
foresee, might adversely affect the business, operations or
condition (financial or otherwise) of the representing party.
(aa) Condition of Improvements. The Mortgaged Property has not
been damaged by fire, water, wind or other cause of loss or
any previous damage to the Mortgaged Property has been fully
restored.
(bb) No Insolvency or Judgment. Neither Mortgagor, nor any general
partner of Mortgagor is currently (a) the subject of or a
party to any completed or pending bankruptcy, reorganization
or insolvency proceeding; or (b) the subject of any judgment
unsatisfied of record or docketed in any court of the state
in which the Mortgaged Property is
-24-
located or in any other court located in the United States.
The purposed Loan will not render the Mortgagor nor any
general partner of Mortgagor insolvent. As used in this
Certificate, the term "insolvent" means that the sum total of
all of an entity's liabilities (whether secured or unsecured,
contingent or fixed, or liquidated or unliquidated) is in
excess of the value of all such entity's non-exempt assets,
i.e., all of the assets of the entity that are available to
satisfy claims of creditors.
(cc) No Condemnation. No part of any property subject to the
Mortgage has been taken in condemnation or other like
proceeding to an extent which would impair the value of the
Mortgaged Property, the Mortgage or the Loan or the
usefulness of such property for the purposes contemplated by
the loan application relating to the Loan (the "Loan
Application"), nor is any proceeding pending, threatened or
known to be contemplated for the partial or total
condemnation or taking of the Mortgaged Property other than
the Proposed Street Widening.
(dd) No Subordinate Financing. Except as otherwise expressly
approved by Mortgagee in writing, no part of any property
subject to the Mortgage is, or will become, subject to a
second mortgage, deed of trust or other type of subordinate
lien.
(ee) No Labor or Materialmen Claims. All parties furnishing labor
and materials have been paid in full and, except for such
liens or claims insured against by the policy of title
insurance to be issued in connection with the Loan, there are
no mechanics', laborers' or materialmens' liens or claims
outstanding for work, labor or materials affecting the
Mortgaged Property, whether prior to, equal with or
subordinate to the lien of the Mortgage.
(ff) No Purchase Options. No tenant, person, party, firm,
corporation or other entity has an option to purchase the
Mortgaged Property, any portion thereof or any interest
therein.
(gg) Leases. The Mortgaged Property is not subject to any Leases
other than the Leases described in the rent roll delivered to
Mortgagee in connection with this Mortgage. No person has any
possessory interest in the Mortgaged Property or right to
occupy the same except under and pursuant to the provisions
of the Leases. As of the date hereof, (i) the Mortgagor is
the owner and holder of the landlord's interest under each
Lease; (ii) there are no prior assignments of any Lease or
any portion of Rents which are presently outstanding and have
priority over the Assignment of Leases and Rents (the
"Assignment of Leases and Rents"), dated the date hereof,
given by Mortgagor to Mortgagee and intended to be duly
recorded; (iii) with respect to new Leases entered
-25-
into after the date hereof, such Leases shall be on the
standard form of lease approved by Mortgagee and have not
been modified or amended, except as disclosed to Mortgagee in
writing on the date hereof; (iv) each Lease is in full force
and effect; (v) neither Mortgagor nor any tenant (unless
otherwise noted on the Rent Roll) under any Lease is in
default under any of the terms, covenants or provisions of
the Lease, and Mortgagor knows of no event which, but for the
passage of time or the giving of notice or both, would
constitute an event of default under any Lease; (vi) there
are no offsets or defenses to the payment of any portion of
the Rents; and (vii) all Rents due and payable under each
Lease (unless otherwise noted on the Rent Roll) have been
paid in full and no said Rents have been paid more than one
(1) month in advance of the due dates thereof.
(hh) Appraisal. All requirements and conditions of the appraisal
of the Property submitted to Mortgagee as part of the Loan
Application, upon which the value of the Mortgaged Property
was conditioned, have been fully satisfied.
(ii) Boundary Lines. All of the Improvements which were included
in determining the appraised value of the Mortgaged Property
lie wholly within the boundaries and building restriction
lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property,
and no easements or other encumbrances upon the Premises
encroach upon any of the Improvements, so as to affect the
value or marketability of the Mortgaged Property except those
which are insured against by title insurance.
(jj) Survey. The survey of the Mortgaged Property delivered to
Mortgagee in connection with this Mortgage, has been
performed by a duly licensed surveyor or registered
professional engineer in the jurisdiction in which the
Mortgaged Property is situated, is certified to the
Mortgagee, its successors and assigns, and the title
insurance company, and is in accordance with the most current
minimum standards for title surveys as determined by the
American Land Title Association, with the signature and seal
of a licensed engineer or surveyor affixed thereto, and does
not fail to reflect any material matter affecting the
Mortgaged Property or the title thereto.
(kk) Forfeiture. There has not been and shall never be committed
by Mortgagor or any other person in occupancy of or involved
with the operation or use of the Mortgaged Property any act
or omission affording the federal government or any state or
local government the right of forfeiture as against the
Mortgaged Property or any part thereof
-26-
or any monies paid in performance of Mortgagor's obligations
under any of the Loan Documents.
(ll) Management Agreement. The Management Agreement dated August
1, 1996 (the "Management Agreement") between Mortgagor and
▇▇▇▇▇▇ Development Corporation, Inc. ("Manager") pursuant to
which Manager operates the Mortgaged Property is in full
force and effect and there is no default or violation by any
party thereunder. The fee due under the Management Agreement,
and the terms and provisions of the Management Agreement, are
subordinate to this Mortgage and Manager shall attorn to
Mortgagee. Mortgagor shall not terminate, cancel, modify,
renew or extend the Management Agreement, or enter into any
agreement relating to the management or operation of the
Mortgaged Property with Manager or any other party without
the express written consent of Mortgagee, which consent shall
not be unreasonably withheld. If at any time Mortgagee
consents to the appointment of a new Manager, such new
Manager and Mortgagor shall, as a condition of Mortgagee's
consent, execute a Consent and Agreement of Manager in the
form then used by Mortgagee.
(mm) No Broker. No financial advisors, brokers, underwriters,
placement agents, agents or finders have been dealt with by
the Mortgagor in connection with the Loan other than
▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Realtors, LLC.
12. Single Purpose Entity & Separateness. Mortgagor represents,
warrants and covenants as follows:
(a) Mortgagor does not own and will not own any asset or
property other than (i) the Mortgaged Property, and (ii) incidental personal
property necessary for the ownership or operation of the Mortgaged Property.
(b) Mortgagor will not engage in any business other than the
ownership, management and operation of the Mortgaged Property and Mortgagor
will conduct and operate its business as presently conducted and operated.
(c) Mortgagor will not enter into any contract or agreement
with any affiliate of the Mortgagor, any constituent party of Mortgagor, any
guarantor (a "Guarantor") of the Debt or any part thereof or any affiliate of
any constituent party or Guarantor, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available
on an arms-length basis with third parties other than any such party.
(d) Mortgagor has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) the Debt, (ii) trade
and operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are normal and reasonable under the circumstances,
and (iii) debt incurred in the financing of equipment and other personal
-27-
property used on the Premises. No indebtedness other than the Debt may be
secured (subordinate or pari passu) by the Mortgaged Property.
(e) Mortgagor has not made and will not make any loans or
advances to any third party (including any affiliate or constituent party, any
Guarantor or any affiliate of any constituent party or Guarantor), and shall
not acquire obligations or securities of its affiliates.
(f) Mortgagor is and will remain solvent and Mortgagor will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.
(g) Mortgagor has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence, and Mortgagor will not, nor will Mortgagor permit any constituent
party or Guarantor to amend, modify or otherwise change the partnership
certificate, partnership agreement, articles of incorporation and bylaws,
operating agreement, certificate of organization, trust or other organizational
documents of Mortgagor or such constituent party or Guarantor without the prior
written consent of Mortgagee which consent shall not be unreasonably withheld,
conditioned or delayed.
(h) Mortgagor will maintain all of its books, records,
financial statements and bank accounts separate from those of its affiliates
and any constituent party and Mortgagor will file its own tax returns unless
required otherwise by applicable law. Mortgagor shall maintain its books,
records, resolutions and agreements as official records.
(i) Mortgagor will be, and at all times will hold itself out
to the public as, a legal entity separate and distinct from any other entity
(including any affiliate of Mortgagor, any constituent party of Mortgagor, any
Guarantor or any affiliate of any constituent party or Guarantor), shall
correct any known misunderstanding regarding its status as a separate entity,
shall conduct business in its own name, shall not identify itself or any of its
affiliates as a division or part of the other and shall maintain and utilize
separate stationery, invoices and checks.
(j) Mortgagor is adequately capitalized and will maintain
adequate capital for the normal obligations reasonably foreseeable in a
business of its size and character and in light of its contemplated business
operations.
(k) Neither Mortgagor nor any constituent party will effectuate
the dissolution, winding up, liquidation, consolidation or merger in whole or
in part, of the Mortgagor.
(1) Mortgagor will tot commingle the funds and other assets of
Mortgagor with those of any affiliate or constituent party, any Guarantor, or
any affiliate of any constituent party of Guarantor, or any other person.
-28-
(m) Mortgagor has and will maintain its assets in such a manner
it will not be costly or difficult to segregate, ascertain or identify its
individual assets those of any affiliate or constituent party, any Guarantor,
or any affiliate of any constituent party or Guarantor, or any other person.
(n) Mortgagor does not and will not guarantee, become obligated
for or hold itself out to be responsible for the debts or obligations of any
other person or entity or the decisions or actions respecting the daily
business or affairs of any other person or entity.
(o) If Mortgagor is a limited partnership or a limited
liability company, the general partner or managing member (the "SPC Entity")
shall be a corporation whose sole asset is its interest in Mortgagor and the
SPC Entity will at all times comply, and will cause Mortgagor to comply, with
each of the representations, warranties, and covenants contained in this
Paragraph 12 as if such representation, warranty or covenant was made directly
by such general partner or managing member.
13. Estoppel Certificates and No Default Affidavits.
(a) After request by Mortgagee, Mortgagor shall within ten (10)
days furnish Mortgagee with a statement, duly acknowledged and certified,
setting forth (i) the amount of the original principal amount of the Note,
(ii) the unpaid principal amount of the Note, (iii) the rate of interest of the
Note, (iv) the date installments of interest and/or principal were last paid,
(v) any offsets or defenses to the payment of the Debt, if any, (vi) that the
Note, this Mortgage and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification; and (vii) reaffirming all representations and warranties of
Mortgagor set forth herein and in the other Loan Documents as of the date
requested by Mortgagee or, to the extent of any changes to any such
representations and warranties, so stating such changes.
(b) Mortgagor shall deliver to Mortgagee upon request, tenant
estoppel certificates from each commercial tenant at the Mortgaged Property in
form and substance reasonably satisfactory to Mortgagee provided that Mortgagor
shall not be required to deliver such certificates more frequently than one (1)
time in any calendar year.
14. Controlling Agreement. It is expressly stipulated and agreed to
be the intent of Mortgagor, and Mortgagee at all times to comply with applicable
state law or applicable United States federal law (to the extent that it
permits Mortgagee to contract for, charge, take, reserve, or receive a greater
amount of interest than under state law) and that this Paragraph 14 (and the
similar paragraph contained in the Note) shall control every other covenant and
agreement in this Mortgage and the other Loan Documents. If the applicable law
(state or federal) is ever judicially interpreted so as to render usurious any
amount called for under the Note or under any of the other Loan Documents, or
contracted for, charged, taken, reserved, or received with respect to the Debt,
or if Mortgagee's exercise of the option to accelerate the maturity of the
Note, or if any prepayment by Mortgagor results in Mortgagor having paid any
interest in excess of that permitted by applicable law, then it is Mortgagor's
-29-
and Mortgagee's express intent that all excess amounts theretofore collected by
Mortgagee shall be credited on the principal balance of the Note and all other
Debt (or, if the Note and all other Debt have been or would thereby be paid in
full, refunded to Mortgagor), and the provisions of the Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid or agreed to be paid to Mortgagee for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Debt until payment in full so that the rate or amount of interest on account
of the Debt does not exceed the maximum lawful rate from time to time in effect
and applicable to the Debt for so long as the Debt is outstanding.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Mortgagee to accelerate the maturity
of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
15. Changes in Laws Regarding Taxation. If any law is enacted
or adopted or amended after the date of this Mortgage which deducts the Debt
from the value of the Mortgaged Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Mortgagee's
interest in the Mortgaged Property, Mortgagor will pay such tax, with interest
and penalties thereon, if any. In the event Mortgagee is advised by counsel
chosen by it that 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 one hundred twenty (120) days,
to declare the Debt immediately due and payable.
16. 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 Taxes or Other Charges assessed against the Mortgaged Property,
or any part thereof, and no deduction shall otherwise be made or claimed from
the assessed value of the Mortgaged Property, or any part thereof, for real
estate tax purposes by reason of this Mortgage or the Debt. In the event such
claim, credit or deduction shall be required by law, Mortgagee shall have the
option, by written notice of not less than one hundred twenty (120) days, to
declare the Debt immediately due and payable.
17. Documentary Stamps. If at any time the United States of
America, any State 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 charge on the same, Mortgagor will pay for the same, with
interest and penalties thereon, if any.
18. Books and Records.
(a) The financial statements heretofore furnished to Mortgagee
are, as of the dates specified therein, complete and correct and fairly present
the financial condition of the Mortgagor and any other persons or entities that
are the subject of such financial
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statements, and are prepared in accordance with generally accepted accounting
principles. Mortgagor does not have any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments that are known to Mortgagor and
reasonably likely to have a materially adverse effect on the Mortgaged Property
or the operation thereof as a shopping center, except as referred to or
reflected in said financial statements. Since the date of such financial
statements, there has been no materially adverse change in the financial
condition, operation or business of Mortgagor from that set forth in said
financial statements.
(b) Mortgagor will maintain full and accurate books of accounts
and other records reflecting the results of the operations of the Mortgaged
Property and will furnish to Mortgagee on or before forty-five (45) days after
the end of each calendar quarter the following items, each certified by
Mortgagor as being true and correct: (i) a written statement (rent roll) dated
as of the last day of each such calendar quarter identifying each of the Leases
by the term, space occupied, rental required to be paid, security deposit paid,
any rental concessions, and identifying any defaults or payment delinquencies
thereunder; (ii) monthly and year to date operating statements prepared for
each calendar month during each such calendar quarter, noting Net Operating
Income (as hereinafter defined), Gross Income from Operations (as hereinafter
defined), and Operating Expenses (as hereinafter defined), and including an
itemization of actual (not pro forma) capital and other information necessary
and sufficient under generally accepted accounting practices to fairly
represent the financial position and results of operation of the Mortgaged
Property during such calendar month, all in form satisfactory to Mortgagee;
(iii) a property balance sheet for each such calendar quarter; and (iv) a
comparison of the budgeted income and expenses and the actual income and
expenses for each calendar quarter and year to date together with a detailed
explanation of any variances of five percent (59%) or more between budgeted and
actual amounts for such quarterly periods and year to date. Until a
Securitization has occurred, the Mortgagor shall furnish monthly each of the
items listed in the immediately preceding sentence within twenty (20) days
after the end of such month. Within ninety (90) days following the end of each
calendar year, Mortgagor shall furnish statements of its financial affairs and
condition including a balance sheet and a statement of profit and loss for the
Mortgagor in such detail as Mortgagee may request, and setting forth the
financial condition and the income and expenses for the Mortgaged Property for
the immediately preceding calendar year, which statements shall be prepared by
Mortgagor. Mortgagor's amnnal financial statements shall include (i) a list of
the tenants, if any, occupying more than twenty (20%) percent of the total
floor area of the Improvements, and (ii) a breakdown showing the year in which
each Lease then in effect expires and the percentage of total floor area of the
Improvements and the percentage of base rent with respect to which Leases shall
expire in each such year, each such percentage to be expressed on both a per
year and a cumulative basis. Mortgagor's annual financial statements shall be
accompanied by a certificate executed by the chief financial officer of
Mortgagor or the general partner of Mortgagor, as applicable, stating that each
such annual financial statement presents fairly the financial condition of the
Mortgaged Property being reported upon. Each such annual financial statement
shall be prepared in accordance with generally accepted accounting principles
consistently applied. At any time and from time to time Mortgagor shall deliver
to Mortgagee or its agents such other financial data as Mortgagee
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or its agents shall reasonably request with respect to the ownership,
maintenance, use and operation of the Mortgaged Property.
(c) For the purposes of this Mortgage, the following terms
shall have the following meanings:
(i) The term "Net Operating Income" shall mean the amount
obtained by subtracting Operating Expenses from Gross Income from Operations.
(ii) The term "Operating Expenses" shall mean the total of
all expenditures, computed in accordance with generally accepted accounting
principles, of whatever kind relating to the operation, maintenance and
management of the Mortgaged Property that are incurred on a regular monthly
or other periodic basis, including without limitation, utilities, ordinary
repairs and maintenance, insurance, license fees, property taxes and
assessments, advertising expenses, management fees equal to the greater of
actual or 4% of Gross Income from Operations, payroll and related taxes,
computer processing charges, operational equipment or other lease payments as
approved by Mortgagee, and other similar costs, but excluding depreciation,
debt service, capital expenditures, and contributions to the Replacement Escrow
Fund, the Leasing Escrow Fund, the Tax and Insurance Impound Fund, and any
other reserves required under the Loan Documents.
(iii) The term "Gross Income from Operations" shall mean
all income, computed in accordance with generally accepted accounting
principles, derived from the ownership and operation of the Mortgaged Property
from whatever source, including, but not limited to, Rents, utility charges,
escalations, forfeited security deposits, interest on credit accounts, service
fees or charges, license fees, parking fees, rent concessions or credits, and
other pass-through or reimbursements paid by tenants under the Leases of any
nature but excluding sales, use and occupancy or other taxes on receipts
required to be accounted for by Mortgagor to any government or governmental
agency, refunds and uncollectible accounts, sales of furniture, fixtures and
equipment, proceeds of casualty insurance and condemnation awards (other than
business interruption or other loss of income insurance), and any disbursements
to the Mortgagor from the Tax and Insurance Impound Fund, the Replacement
Escrow Fund, the Leasing Escrow Fund, or any other escrow fund established by
the Loan Documents.
(iv) The term "Debt Service Coverage Ratio" shall mean a
ratio for the applicable period in which: (A) the numerator is the Net
Operating Income (excluding interest on credit accounts) for such period as
set forth in the statements required hereunder; and (B) the denominator is the
aggregate amount of principal and interest due and payable on the Note. For
purposes of such calculation, a constant equal to 9.23% shall be used.
19. Performance of Other Agreements. Mortgagor shall observe and
perform each and every term to be observed or performed by Mortgagor pursuant
to the terms of any agreement or recorded instrument affecting or pertaining to
the Mortgaged Property.
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20. 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
assignment, Uniform Commercial Code financing statements or continuation
statements, transfers and assurances as Mortgagee shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Mortgagee the property and rights hereby deeded, mortgaged,
given, granted, bargained, sold, alienated, enfeoffed, conveyed, confirmed,
pledged, assigned and hypothecated or intended now or hereafter so to be, or
which Mortgagor may be or may hereafter become bound to convey or assign to
Mortgagee, or for carrying out the intention or facilitating the performance of
the terms of this Mortgage or for filing, registering or recording this
Mortgage or for facilitating the sale of the Loan and the Loan Documents as
described in Paragraph 20(b) below. Mortgagor, 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 other instruments, to
evidence more effectively the security interest of Mortgagee in the Mortgaged
Property. Upon foreclosure, the appointment of a receiver or any other relevant
action, Mortgagor will, at the cost of Mortgagor and without expense to
Mortgagee, cooperate fully and completely to effect the assignment or transfer
of any license, permit, agreement or any other right necessary or useful to the
operation of or the Mortgaged Property. Mortgagor grants to Mortgagee an
irrevocable power of attorney coupled with an interest for the purpose of
exercising and perfecting any and all rights and remedies available to
Mortgagee at law and in equity, including, without limitation, such rights and
remedies available to Mortgagee pursuant to this paragraph.
21. 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 to 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 so to do. Mortgagor shall hold harmless and
indemnify Mortgagee, its successors and assigns, against any liability incurred
by reason of the imposition of any tax on the making and recording of this
Mortgage.
22. Reporting Requirements. Mortgagor agrees to give prompt notice
to Mortgagee of the insolvency or bankruptcy filing of Mortgagor or the death,
insolvency or bankruptcy filing of any Guarantor.
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23. Events of Default. The Debt shall become immediately due and
payable at the option of Mortgagee upon the happening of any one or more of the
following events of default (each an "Event of Default"):
(a) if any portion of the Debt is not paid on or before the
related Payment Date or, for any payment other than a Monthly Payment Amount,
the date on which such payment is due;
(b) subject to Mortgagor's right to contest as provided herein,
if any of the Taxes or Other Charges are not paid when the same are due and
payable (unless sums equaling the amount of Taxes and Other Charges then due
and payable have been delivered to Mortgagee in accordance with Paragraph 6
hereof);
(c) if the Policies are not kept in full force and effect, or
if the Policies are not delivered to Mortgagee upon request;
(d) if Mortgagor transfers or encumbers any portion of the
Mortgaged Property without Mortgagee's prior written consent;
(e) if any representation or warranty of Mortgagor, or of any
Guarantor, made herein or in any other Loan Document or in any certificate,
report, financial statement or other instrument or document furnished to
Mortgagee shall have been false or misleading in any material respect when
made;
(f) if Mortgagor or any Guarantor shall make an assignment for
the benefit of creditors or if Mortgagor shall generally not be paying its
debts as they become due;
(g) if a receiver, liquidator or trustee of Mortgagor or of any
Guarantor shall be appointed or if Mortgagor or any Guarantor 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 any Guarantor or if any proceeding for the
dissolution or liquidation of Mortgagor or of any Guarantor shall be
instituted; however, if such appointment, adjudication, petition or proceeding
was involuntary and not consented to by Mortgagor or such Guarantor, upon the
same not being discharged, stayed or dismissed within ninety (90) days;
(h) if Mortgagor shall be in default under any other mortgage
or security agreement covering any part of the Mortgaged Property whether it be
superior or junior in lien to this Mortgage;
(i) subject to Mortgagor's right to contest as provided herein,
if the Mortgaged Property becomes subject to any mechanic's, materialman's or
other lien and such lien is not removed or recorded within thirty (30) days of
the filing or recording of such lien (except a lien for local real estate taxes
and assessments not then due and payable);
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(j) if Mortgagor fails to cure properly any violations of laws
or ordinances affecting or which may be interpreted to affect the Mortgaged
Property within thirty (30) days after Mortgagor first receives notice of any
such violations; provided, however, if such violation is reasonably susceptible
of cure, but not within such thirty (30) day period, then Mortgagor may be
permitted up to an additional sixty (60) days to cure such default provided
that Mortgagor diligently and continuously pursues such cure.
(k) except as permitted in this Mortgage, the alteration,
improvement, demolition or removal of any of the Improvements without the prior
consent of Mortgagee;
(l) if Mortgagor shall continue to be in default under any
term, covenant, or provision of the Note or any of the other Loan Documents,
beyond applicable cure periods contained in those documents;
(m) if Mortgagor fails to cure a default under any other term,
covenant or provision of this Mortgage within thirty (30) days after Mortgagor
first receives notice of any such default; provided, however, if such default
is reasonably susceptible of cure, but not within such thirty (30) day period,
then Mortgagor may be permitted up to an additional one hundred twenty (120)
days to cure such default provided that Mortgagor diligently and continuously
pursues such cure;
(n) if without Mortgagee's prior written consent, (i) the
Management Agreement is terminated, (ii) the ownership, management or control
of Manager is transferred, (iii) there is a material change in the Management
Agreement, or (iv) if there shall be a material default by Mortgagor under the
Management Agreement; or
(o) if Mortgagor ceases to continuously operate the Mortgaged
Property or any material portion thereof as a shopping center for any reason
whatsoever (other than temporary cessation in connection with any repair or
renovation thereof undertaken with the consent of Mortgagee).
24. Late Payment Charge. If any portion of the Debt is not paid on
or before the date on which such payment is due, Mortgagor shall pay to
Mortgagee upon demand an amount equal to the lesser of three percent (3%) of
such unpaid portion of the Debt or the maximum amount permitted by applicable
law in order to defray a portion of the expenses incurred by Mortgagee in
handling and processing such delinquent payment and to compensate Mortgagee for
the loss of the use of such delinquent payment, and such amount shall be
secured by this Mortgage.
25. Right To Cure Defaults. Upon the occurrence of any Event of
Default or if Mortgagor fails to make any payment (including, without
limitation, any required payments for taxes, insurance or to discharge any
liens with respect to the Property) or to do any act as herein provided,
Mortgagee may, but without any 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
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necessary to protect the security hereof. Mortgagee is authorized to enter upon
the Mortgaged Property for such purposes or appear in, defend, or bring any
action or proceeding to protect its interest in the Mortgaged Property or to
foreclose this Mortgage or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees and disbursements to the extent permitted
by law), with interest at the Default Rate (as defined in the Note) for the
period after notice from Mortgagee that such cost or expense was incurred to
the date of payment to Mortgagee, shall constitute a portion of the Debt, shall
be secured by this Mortgage and the other Loan Documents and shall be due and
payable to Mortgagee upon demand.
26. Additional Remedies.
(a) Upon the occurrence of any Event of Default, Mortgagee may
take such action, without notice or demand, as it deems advisable to protect
and enforce its rights against Mortgagor and in and to the Mortgaged Property
by Mortgagee itself or otherwise, including, without limitation, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such order as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Mortgagee:
(i) declare the entire Debt to be immediately due and
payable;
(ii) institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure of
this Mortgage in which case the Mortgaged Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several interests
or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute proceedings
for the partial foreclosure of this Mortgage for the portion of the Debt then
due and payable, subject to the continuing lien of this Mortgage for the
balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or
any part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to the power of
sale contained herein or otherwise, at one or more sales, as an entirety or in
parcels, at such time and place, upon such terms and after such notice thereof
as may be required or permitted by law;
(v) institute an action, suit or proceeding in equity for
the specific performance of any covenant, condition or agreement contained
herein, or in any of the other Loan Documents;
(vi) recover judgment on the Note either before, during or
after any proceedings for the enforcement of this Mortgage;
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(vii) apply for the appointment of a trustee, receiver,
liquidator or conservator of the Mortgaged Property, without notice and without
regard for the adequacy of the security for the Debt and without regard for the
solvency of the Mortgagor, any Guarantor or of any person, firm or other entity
liable for the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents
and enter into or upon the Mortgaged Property, 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)
complete any construction on the Mortgaged Property in such manner and form as
Mortgagee deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Mortgaged Property; (D) exercise all
rights and powers of Mortgagor with respect to the Mortgaged Property, 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 Rents; and (E) apply the receipts from
the Mortgaged Property to the payment of Debt, after deducting therefrom all
expenses (including reasonable attorneys' fees and disbursements) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments insurance and other charges in connection with the Mortgaged
Property, as well as just and reasonable compensation for the services of
Mortgagee, its counsel, agents and employees;
(ix) 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 any portion of the
Mortgaged Property occupied by Mortgagor and require Mortgagor to vacate and
surrender possession to Mortgagee of the Mortgaged Property or to such receiver
and, in default thereof, evict Mortgagor by summary proceedings or otherwise;
or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform Commercial Code including
without limitation the right to receive and/or establish a lock box for all
Rents proceeds from the Intangibles and any other receivables or rights to
payments of Mortgagor relating to the Mortgaged Property.
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.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its sole discretion shall deem proper.
(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
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applicable provision of law, 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 pursuant hereto,
Mortgagee, or an 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, 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 of Mortgagor, in its name and stead, to make all necessary
conveyances, assignments, transfers and deliveries of the Mortgaged Property
and rights so sold and for that purpose Mortgagee may execute all necessary
instruments of conveyance, assignment and transfer, and may substitute one or
more persons with like power, Mortgagor hereby ratifying and confirming all
that its said attorney or such substitute or substitutes shall lawfully do by
virtue hereof. Any sale or sales made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, 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 properties
and rights so sold, and shall 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) Upon any sale made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
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 costs of the action and any other sums which Mortgagee
is authorized to deduct under this Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent 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 as before.
(g) Mortgagee may terminate or rescind any proceeding or other
action brought in connection with its exercise of the remedies provided in this
paragraph at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(h) Mortgagee may resort to any remedies and the security given
by the Note, this Mortgage or the Loan Documents in whole or in part, and in
such portions and in such order as determined by Mortgagee's sole discretion.
No such action shall in any way be considered a waiver of any rights, benefits
or remedies evidenced or provided by the Note,
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this Mortgage or any of the other Loan Documents. The failure of Mortgagee to
exercise any right, remedy or option provided in the Note, this Mortgage or any
of the other Loan Documents shall not be deemed a waiver of such right, remedy
or option or of any covenant or obligation secured by the Note, this Mortgage or
the other Loan Documents. No acceptance by Mortgagee of any payment after the
occurrence of any Event of Default and no payment by Mortgagee of any obligation
for which Mortgagor is liable hereunder shall be deemed to waive or cure any
Event of Default with respect to Mortgagor, or Mortgagor's liability to pay such
obligation. 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, shall operate to release or in any manner affect the
interest of Mortgagee in the remaining 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. All costs and
expenses of Mortgagee in exercising the rights and remedies under this Paragraph
26 (including reasonable attorneys' fees and disbursements to the extent
permitted by law), shall be paid by Mortgagor immediately upon notice from
Mortgagee, with interest at the Default Rate for the period after notice from
Mortgagee and such costs and expenses shall constitute a portion of the Debt and
shall be secured by this Mortgage.
(i) The interests and rights of Mortgagee under the Note, this
Mortgage or in any of the other 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.
27. Right of Entry. In addition to any other rights or remedies
granted under this Mortgage, Mortgagee, and its agents, during the Term, shall
have the right to enter and inspect the Mortgaged Property during normal
business hours. The cost of such inspections or audits shall be borne by
Mortgagor should Mortgagee determine that an Event of Default exists, including
the cost of all follow up or additional investigations or inquiries deemed
reasonably necessary by Mortgagee. The cost of such inspections, if not paid
for by Mortgagor following demand, may be added to the principal balance of the
sums due under the Note and this Mortgage and shall bear interest thereafter
until paid at the Default Rate.
28. Security Agreement.
(a) This Mortgage is both a real property mortgage and a
"security agreement" within the meaning of the Uniform Commercial Code. 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. Mortgagor by executing and delivering this Mortgage
has granted and hereby grants 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 Uniform Commercial Code (said portion
of the Mortgaged Property so
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subject to the Uniform Commercial Code being called in this paragraph the
"Collateral"). Mortgagor hereby agrees with Mortgagee to execute and deliver to
Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements and such further assurances as Mortgagee may from time to time,
reasonably consider necessary to create, perfect, and preserve Mortgagee's
security interest herein granted. This Mortgage shall also constitute a "fixture
filing" for the purposes of the Uniform Commercial Code. As such, this Mortgage
covers all items of the Collateral that are or are to become fixtures.
Information concerning the security interest herein granted may be obtained from
the parties at the addresses of the parties set forth in the first paragraph of
this Mortgage.
(b) 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 Uniform Commercial Code, 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, 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 attorneys' fees and disbursements, incurred or paid
by Mortgagee in protecting the interest in the Collateral and in enforcing the
rights hereunder with respect to the Collateral. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the
Collateral sent to Mortgagor in accordance with the provisions hereof at least
five (5) business days prior to such action, shall constitute commercially
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 sole discretion
shall deem proper. In the event of any change in name, identity or structure
of any Mortgagor, such Mortgagor shall notify Mortgagee thereof and promptly
after request shall execute, file and record such Uniform Commercial Code forms
as are necessary to maintain the priority of Mortgagee's lien upon and security
interest in the Collateral, and shall pay all expenses and fees in connection
with the filing and recording thereof. If Mortgagee shall require the filing or
recording of additional Uniform Commercial Code forms or continuation
statements, Mortgagor shall, promptly after request, execute, file and record
such Uniform Commercial Code forms or continuation statements as Mortgagee
shall deem necessary, and shall pay all expenses and fees in connection with
the filing and recording thereof, it being understood and agreed, however,
that no such additional documents shall increase Mortgagor's obligations under
the Note, this Mortgage and any of the other Loan Documents. 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.
29. Actions and Proceedings. Mortgagee has the right to appear
in and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its sole discretion, decides should be brought
to protect their interest in the Mortgaged Property.
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Mortgagee shall, at its option, be subrogated to the lien of any mortgage or
other security instrument discharged in whole or in part by the Debt, and any
such subrogation rights shall constitute additional security for the payment of
the Debt.
30. Waiver of Setoff and Counterclaim. All amounts due under
this Mortgage, the Note and the other Loan Documents shall be payable without
setoff, counterclaim or any deduction whatsoever. Mortgagor hereby waives the
right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Mortgagee is a
participant, or arising out of or in any way connected with this Mortgage, the
Note, any of the other Loan Documents, or the Debt.
31. Contest of Certain Claims. Notwithstanding the provisions of
Paragraphs 5 and 23 hereof, Mortgagor shall not be in default for failure to pay
or discharge Taxes, Other Charges or mechanic's or materialman's lien asserted
against the Mortgaged Property if, and so long as, (a) Mortgagor shall have
notified Mortgagee of same within five (5) business days of obtaining knowledge
thereof; (b) Mortgagor shall diligently and in good faith contest the same by
appropriate legal proceedings which shall operate to prevent the enforcement or
collection of the same and the sale of the Mortgaged Property or any part
thereof, to satisfy the same; (c) Mortgagor shall have furnished to Mortgagee a
cash deposit, or an indemnity bond satisfactory to Mortgagee with a surety
reasonably satisfactory to Mortgagee, in an amount equal to 125% of the amount
of the Taxes, Other Charges or mechanic's or materialman's lien claim, plus a
reasonable additional sum to pay all costs, interest and penalties that may be
imposed or incurred in connection therewith, to assure payment of the matters
under contest and to prevent any sale or forfeiture of the Mortgaged Property or
any part thereof; (d) Mortgagor shall promptly upon final determination thereof
pay the amount of any such Taxes, Other Charges or claim so determined, together
with all costs, interest and penalties which may be payable in connection
therewith; (e) the failure to pay the Taxes, Other Charges or mechanic's or
materialman's lien claim does not constitute a default under any other mortgage
or security interest covering or affecting any part of the Mortgaged Property;
and (f) notwithstanding the foregoing, Mortgagor shall immediately upon request
of Mortgagee pay (and if Mortgagor shall fail so to do, Mortgagee may, but shall
not be required to, pay or cause to be discharged or bonded against) any such
Taxes, Other Charges or claim notwithstanding such contest, if in the opinion of
Mortgagee, the Mortgaged Property or any part thereof or interest therein may be
in danger of being sold, forfeited, foreclosed, terminated, cancelled or lost.
Mortgagee may pay over any such cash deposit or part thereof to the claimant
entitled thereto at any time when, in the judgment of Mortgagee, the entitlement
of such claimant is established.
32. 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, 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.
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33. Marshalling and Other Matters. Mortgagor hereby waives, to
the extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption 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. Further, Mortgagor hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of
each and every person acquiring any interest in or title to the Mortgaged
Property subsequent to the date of this Mortgage and on behalf of all persons
to the extent permitted by applicable law.
34. Hazardous Substances. Mortgagor hereby represents and
warrants to Mortgagee that, to the best of Mortgagor's knowledge, after due
inquiry and investigation except as disclosed in the report dated December 20,
1996, prepared by Certified Environmental Inc. (the "Phase I Report") and
delivered to Mortgagee in connection with the Loan: (a) the Mortgaged Property
is not in direct or indirect violation of any local, state, federal or other
governmental authority, statute, ordinance, code, order, decree, law, rule or
regulation pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or clean-up including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended ("CERCLA"), the Resource Conservation and Recovery
Act, as amended ("RCRA"), the Emergency Planning and Community Right-to-Know
Act of 1986, as amended, the Hazardous Substances Transportation Act, as
amended, the Solid Waste Disposal Act, as amended, the Clean Water Act, as
amended, the Clean Air Act, as amended, the Toxic Substance Control Act, as
amended, the Safe Drinking Water Act, as amended, the Occupational Safety and
Health Act, as amended, any state super-lien and environmental clean-up
statutes and all rules and regulations adopted in respect to the foregoing laws
whether presently in force or coming into being and/or effectiveness hereafter
(collectively, "Environmental Laws"); (b) the Mortgaged Property is not subject
to any private or governmental lien or judicial or administrative notice or
action or inquiry, investigation or claim relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials, raw materials which
include hazardous constituents, pollutants or contaminants including without
limitation, petroleum, tremolite, anthlophylie, actinolite or polychlorinated
biphenyls and any other substances or materials which are included under or
regulated by Environmental Laws or which are considered by scientific opinion
to be otherwise dangerous in terms of the health, safety and welfare of humans
(collectively, "Hazardous Substances"); (c) no Hazardous Substances are or have
been (including the period prior to Mortgagor's acquisition of the Mortgaged
Property) discharged, generated, treated, disposed of or stored on, incorporated
in, or removed or transported from the Mortgaged Property other than in
compliance with all Environmental Laws; (d) no Hazardous Substances are present
in, on or under any nearby real property which could migrate to or otherwise
affect the Mortgaged Property; and (e) no underground storage tanks exist on any
of the Mortgaged Property. So long as Mortgagor owns or is in possession of the
Mortgaged Property, Mortgagor (i) shall keep or cause the Mortgaged Property to
be kept free from Hazardous Substances and in compliance with all Environmental
Laws, (ii) shall promptly notify Mortgagee if Mortgagor shall become aware of
any Hazardous Substances on or near the Mortgaged Property and/or if Mortgagor
shall become aware that the Mortgaged
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Property is in direct or indirect violation of any Environmental Laws and/or if
Mortgagor shall become aware of any condition on or near the Mortgaged Property
which shall pose a threat to the health, safety or welfare of humans, and (iii)
Mortgagor shall remove such Hazardous Substances and/or cure such violations
and/or remove such threats, as applicable, as required by law (or as shall be
required by Mortgagee in the case of removal which is not required by law, but
in response to the opinion of a licensed hydrogeologist, licensed environmental
engineer or other qualified consultant engaged by Mortgagee ("Mortgagee's
Consultant")), promptly after Mortgagor becomes aware of same, at Mortgagor's
sole expense. Notwithstanding anything to the contrary in this paragraph, the
Mortgagor and the tenants under the Leases may use and store immaterial amounts
of Hazardous Substances at the Mortgaged Property if such use or storage is in
connection with the ordinary cleaning and maintenance of the Mortgaged Property
so long as such use and storage (A) does not violate any applicable
Environmental Laws and (B) is not the subject of any specific recommendations in
the Phase I Report. Nothing herein shall prevent Mortgagor from recovering such
expenses from any other party that may be liable for such removal or cure. The
obligations and liabilities of Mortgagor under this Paragraph 34 shall survive
any termination, satisfaction, or assignment of this Mortgage and the exercise
by Mortgagee of any of its rights or remedies hereunder, including, without
limitation, the acquisition of the Mortgaged Property by foreclosure or a
conveyance in lieu of foreclosure.
35. Asbestos. Mortgagor represents and warrants that, to the
best of Mortgagor's knowledge, after due inquiry and investigation, no asbestos
or any substance or material containing asbestos ("Asbestos") is located on the
Mortgaged Property except as may have been disclosed in the Phase I Report
delivered to Mortgagee in connection with the Loan. Mortgagor shall not install
in the Mortgaged Property, nor permit to be installed in the Mortgaged
Property, Asbestos and shall remove any Asbestos promptly upon discovery to the
satisfaction of Mortgagee, at Mortgagor's sole expense. Mortgagor shall in all
instances comply with, and ensure compliance by all occupants of the Mortgaged
Property with, all applicable federal, state and local laws, ordinances, rules
and regulations with respect to Asbestos, and shall keep the Mortgaged Property
free and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Mortgagor receives any notice or advice from any
governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Mortgaged Property, Mortgagor shall immediately
notify Mortgagee. The obligations and liabilities of Mortgagor under this
Paragraph 35 shall survive any termination, satisfaction, or assignment of this
Mortgage and the exercise by Mortgagee of any of its rights or remedies
hereunder, including but not limited to, the acquisition of the Mortgaged
Property by foreclosure or a conveyance in lieu of foreclosure.
36. Environmental Monitoring. Mortgagor shall give prompt written
notices to Mortgagee of: (a) any proceeding or inquiry by any party with
respect to the presence of any Hazardous Substance or Asbestos on, under, from
or about the Mortgaged Property, (b) all claims made or threatened by any third
party against Mortgagor or the Mortgaged Property relating to any loss or
injury resulting from any Hazardous Substance or Asbestos, and (c) Mortgagor's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of the Mortgaged Property that could cause the Mortgaged Property
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to be subject to any investigation or cleanup pursuant to any Environmental Law.
Mortgagor shall permit Mortgagee to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated with respect to the Mortgaged
Property in connection with any Environmental Law or Hazardous Substance, and
Mortgagor shall pay all attorneys' fees and disbursements incurred by Mortgagee
in connection therewith. Upon Mortgagee's request, at any time and from time to
time while this Mortgage is in effect but not more frequently than once per
calendar year, unless Mortgagee has determined (in the exercise of its good
faith judgment) that reasonable cause exists for the performance of an
environmental inspection or audit of the Mortgaged Property, Mortgagor shall
provide at Mortgagor's sole expense, (i) an inspection or audit of the Mortgaged
Property prepared by a licensed hydrogeologist or licensed environmental
engineer approved by Mortgagee indicating the presence or absence of Hazardous
Substances on, in or near the Mortgaged Property, and (ii) an inspection or
audit of the Mortgaged Property prepared by a duly qualified engineering or
consulting firm approved by Mortgagee, indicating the presence or absence of
Asbestos on the Mortgaged Property; provided, however, any such inspection or
audit requested by Mortgagee, during the Term, in excess of one (1) inspection
during each five (5) year period commencing upon the date hereof, shall be
performed at Mortgagee's expense unless an Event of Default exists or Mortgagee
has determined (in the exercise of its good faith and judgment) that reasonable
cause exists for the performance of an environmental inspection or audit. If
Mortgagor fails to provide such inspection or audit within thirty (30) days
after such request Mortgagee may order same, and Mortgagor hereby grants to
Mortgagee and its employees and agents access to the Mortgaged Property and a
license to undertake such inspection or audit. The cost of such inspection or
audit may be added to the Debt and shall bear interest thereafter until paid at
the Default Rate. In the event that any environmental site assessment report
prepared in connection with such inspection or audit recommends that an
operations and maintenance plan be implemented for Asbestos or any Hazardous
Substance, Mortgagor shall cause such operations and maintenance plan to be
prepared and implemented at Mortgagor's expense upon request of Mortgagee. In
the event that any investigation, site monitoring, containment cleanup, removal,
restoration, or other work of any kind is reasonably necessary or desirable
under an applicable Environmental Law (the "Remedial Work"), Mortgagor shall
commence and thereafter diligently prosecute to completion all such Remedial
Work within thirty (30) days after written demand by Mortgagee for performance
thereof (or any such shorter period of time as may be required under applicable
law.) All Remedial Work shall be performed by contractors approved in advance by
Mortgagee, and under the supervision of a consulting engineer approved by
Mortgagee. All costs and expenses of such Remedial Work shall be paid by
Mortgagor including, without limitation, Mortgagee's reasonable attorneys' fees
and disbursements incurred in connection with monitoring or review of such
Remedial Work. In the event Mortgagor shall fail to timely commence, or cause to
be commenced, or fail to diligently prosecute to completion, such Remedial Work,
Mortgagee may, but shall not be required to, cause such Remedial Work to be
performed, and all costs and expenses thereof, or incurred in connection
therewith, may be added to the Debt and shall bear interest thereafter until
paid at the Default Rate.
37. Handicapped Access.
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(a) Mortgagor agrees that the Mortgaged Property shall at all
times strictly comply to the extent applicable with the requirements of the
Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of
1988 (if applicable), all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued pursuant
thereto including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Buildings and Facilities (collectively "Access
Laws").
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Mortgagee's approval of alterations of the Mortgaged
Property, Mortgagor shall not alter the Mortgaged Property in any manner which
would increase Mortgagor's responsibilities for compliance with the applicable
Access Laws without the prior written approval of Mortgagee. The foregoing
shall apply to tenant improvements constructed by Mortgagor or by any of its
tenants. Mortgagee may condition any such approval upon receipt of a
certificate of Access Law compliance from an architect, engineer, or other
person acceptable to Mortgagee.
(c) Mortgagor agrees to give prompt notice to Mortgagee of the
receipt by Mortgagor of any complaints related to violation of any Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
38. Indemnification. In addition to any other indemnifications
provided herein or in the other Loan Documents, Mortgagor shall protect,
defend, indemnify and save harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable attorneys'
fees and disbursements), imposed upon or incurred by or asserted against
Mortgagee by reason of (a) ownership of this Mortgage, the Mortgaged Property
or any interest therein or receipt of any Rents; (b) any accident, injury to or
death of persons 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,
adjacent property or adjacent parking areas, streets or ways; (c) any use,
nonuse or condition in, on or about the Mortgaged Property or any part thereof
or on adjoining sidewalks, curbs, adjacent property or adjacent 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; (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) the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release, or threatened release
of any Hazardous Substance or Asbestos on, from, or affecting the Mortgaged
Property; (g) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous Substance or
Asbestos; (h) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substance or Asbestos; (i) any
violation of the Environmental Laws, which are based upon or in any way related
to such Hazardous Substance or Asbestos including, without limitation, the
costs and expenses of any Remedial Work, attorney and consultant fees and
disbursements, investigation and laboratory fees, court costs, and litigation
expenses; (j) any failure of the Mortgaged Property to comply with any Access
Laws; (k) any representation or warranty made in the
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Note, this Mortgage or any of the other Loan Documents being false or misleading
in any material respect as of the date such representation or warranty was made;
(l) any claim by brokers, finders or similar persons claiming to be entitled to
a commission in connection with the Loan, any Lease or other transaction
involving the Mortgaged Property or any part thereof under any legal requirement
or any liability asserted against Mortgagee with respect thereto; and (m) the
claims of any lessee of any or any portion of the Mortgaged Property or any
person acting through or under any lessee or otherwise arising under or as a
consequence of any Lease. Any amounts payable to Mortgagee by reason of the
application of this paragraph shall be secured by this Mortgage and shall become
immediately due and payable and shall bear interest at the Default Rate from the
date loss or damage is sustained by Mortgagee until paid. The obligations and
liabilities of Mortgagor under this Paragraph 38 shall survive the termination,
satisfaction, or assignment of this Mortgage and the exercise by Mortgagee of
any of its rights or remedies hereunder, including, but not limited to, the
acquisition of the Mortgaged Property by foreclosure or a conveyance in lieu of
foreclosure.
39. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing, addressed to the address, as set forth
above, of the party to whom such notice is to be given, or to such other
address as Mortgagor or Mortgagee, as the case may be, shall designate in
writing, and shall be deemed to be received by the addressee on (i) the day
such notice is personally delivered to such addressee and receipted for, (ii)
the third (3rd) day following the day such notice is deposited with the United
States postal service first class certified mail, return receipt requested,
(iii) the day following the day on which such notice is delivered to a
nationally recognized overnight courier delivery service, or (iv) the day
facsimile transmission is confirmed after transmission of such notice by
telecopy to such telecopier number as Mortgagor or Mortgagee, as the case may
be, shall have previously designated in writing.
40. Authority.
(a) Mortgagor (and the undersigned representative of Mortgagor,
if any) represent and warrant that it (or they, as the case may be) has full
power, authority and right to execute, deliver and perform its obligations
pursuant to this Mortgage, and to mortgage, give, grant, bargain, sell, alien,
enfeoff, convey, confirm, warrant, pledge, hypothecate and assign the Mortgaged
Property pursuant to the terms hereof and to keep and observe all of the terms
of this Mortgage on Mortgagor's part to be performed.
(b) Mortgagor represents and warrants that Mortgagor is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended and the related Treasury Department
regulations, including temporary regulations.
41. 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
Mortgagee is required by applicable law to give
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notice, and Mortgagor hereby expressly waives the right to receive any notice
from Mortgagee with respect to any matter for which this Mortgage does not
specifically and expressly provide for the giving of notice by Mortgagee to
Mortgagor.
42. 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 any of the other 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.
43. Sole Discretion of Mortgagee. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to consent or not consent
or approve or disapprove, or any arrangement or term is to be satisfactory to
Mortgagee, the decision of Mortgagee to consent or not consent, 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 expressly and specifically provided
herein.
44. Non-Waiver. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term
of this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor or Guarantor to take any action to foreclose this Mortgage or
otherwise enforce any of the provisions hereof or of the Note, or the other
Loan Documents, (b) the release, regardless of consideration, of the whole or
any part of the Mortgaged Property, or of any person liable for the Debt or any
portion thereof, or (c) any agreement or stipulation by Mortgagee extending the
time of payment or otherwise modifying or supplementing the terms of the Note,
this Mortgage or any of the other Loan Documents. Mortgagee may resort for the
payment of the Debt to any other security held by Mortgagee in such order and
manner as Mortgagee, in its sole discretion, may elect. Mortgagee may take
action to recover the Debt, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Mortgagee thereafter to foreclosure
this Mortgage. The rights and remedies 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 to every right and remedy now or
hereafter afforded at law or in equity.
45. No Oral Change. This Mortgage, and any provisions hereof, may
not be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to 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.
46. Liability. If Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. Subject to
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the provisions hereof requiring Mortgagee's consent to any transfer of the
Mortgaged Property, this Mortgage shall be binding upon and inure to the benefit
of Mortgagor and Mortgagee and their respective successors and assigns forever.
47. Inapplicable Provisions. If any term, covenant or condition of
the Note or this Mortgage is held to be invalid, illegal or unenforceable in
any respect, the Note and this Mortgage shall be construed without such
provision.
48. Headings, Etc. The 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.
49. Duplicate Originals. This Mortgage may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
50. Definitions. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage may be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor and any subsequent owner or owners of
the Mortgaged Property or any part thereof or any interest therein," the word
"Mortgagee" shall mean "Mortgagee and any subsequent holder of the Note," the
word "Note" shall mean "the Note and any other evidence of indebtedness secured
by this Mortgage," the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, and the words "Mortgaged Property" shall
include any portion of the Mortgaged Property and any interest therein and the
words "attorneys' fees" shall include any and all attorneys' fees, paralegal
and law clerk fees, including, without limitation, fees at the pre-trial, trial
and appellate levels incurred or paid by Mortgagee in protecting its interest
in the Mortgaged Property and Collateral and enforcing its rights hereunder.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
51. Homestead. Mortgagor hereby waives and renounces all homestead
and exemption rights provided by the Constitution and the laws of the United
States and of any state, in and to the Mortgaged Property as against the
collection of the Debt, or any part hereof.
52. Assignments. Mortgagee shall have the right to assign or
transfer its rights under this Mortgage without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Mortgagee under this
Mortgage.
53. Waiver of Jury Trial. MORTGAGOR HEREBY AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO
TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST WITH REGARD TO THE
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NOTE, THIS MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY
JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MORTGAGOR, AND IS INTENDED TO
ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A
TRIAL BY JURY WOULD OTHERWISE ACCRUE. MORTGAGEE IS HEREBY AUTHORIZED TO FILE A
COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY MORTGAGOR.
54. Recourse Provisions. Subject to the qualifications below,
Mortgagee shall not enforce the liability and obligation of Mortgagor, to
perform and observe the obligations contained in this Mortgage, the Note or any
of the other Loan Documents by any action or proceeding wherein a money
judgment shall be sought against Mortgagor, except that Mortgagee may bring a
foreclosure action, an action for specific performance or any other appropriate
action or proceeding to enable Mortgagee to enforce and realize upon its
interests under the Note, this Mortgage or the other Loan Documents or in the
Mortgaged Property, the Rents or any other collateral given to Mortgagee
pursuant to this Mortgage and the other Loan Documents; provided, however, that,
except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against Mortgagor only to the extent of
Mortgagor's interest in the Mortgaged Property, the Rents and in any other
collateral given to Mortgagee, and Mortgagee, by accepting this Mortgage, the
Note and the other Loan Documents, agrees that it shall not ▇▇▇ for, seek or
demand any deficiency judgment against Mortgagor in any such action or
proceeding under or by reason of or in connection with this Mortgage, the Note
or any of the other Loan Documents. The provisions of this paragraph shall not,
however, (i) constitute a waiver, release or impairment of any obligation
evidenced or secured by this Mortgage, the Note or any of the other Loan
Documents; (ii) impair the right of Mortgagee to name Mortgagor, as a party
defendant in any action or suit for foreclosure and sale under this Mortgage;
(iii) affect the validity or enforceability of any guaranty made in connection
with the Loan or any rights and remedies of Mortgagee thereunder; (iv) impair
the right of Mortgagee to obtain the appointment of a receiver; (v) impair the
enforcement of the Assignment of Leases and Rents executed in connection
herewith; or (vi) constitute a waiver of the right of Mortgagee to enforce the
liability and obligation of Mortgagor, by money judgment or otherwise, to the
extent of any loss, damage, cost, expense, liability, claim or other obligation
incurred by Mortgagee (including attorneys' fees and costs reasonably incurred)
arising out of or in connection with the following:
(a) fraud or intentional misrepresentation by Mortgagor or any
Guarantor in connection with the Loan;
(b) the gross negligence or willful misconduct of Mortgagor;
(c) physical waste of the Mortgaged Property;
(d) the breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous Substance
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Indemnification Agreement of even date herewith given by Mortgagor to Mortgagee
or in this Mortgage concerning Environmental Laws, Hazardous Substances and
Asbestos;
(e) the removal or disposal of any portion of the Mortgaged
Property after an Event of Default;
(f) the misapplication or conversion by Mortgagor of (i) any
insurance proceeds paid by reason of any loss, damage or destruction to the
Mortgaged Property, (ii) any awards or other amounts received in connection
with the condemnation of all or a portion of the Mortgaged Property, (iii) any
Rents following an Event of Default or (iv) any Rents paid more than one month
in advance;
(g) subject to the right of Mortgagor to contest pursuant to
Paragraph 31 of this Mortgage, failure to pay charges for labor or materials or
taxes or other charges that can create liens on any portion of the Mortgaged
Property; and
(h) any security deposits collected with respect to the
Mortgaged Property which are not delivered to Mortgagee upon a foreclosure of
the Mortgaged Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan
Documents (i) Mortgagee shall not be deemed to have waived any right which
Mortgagee may have under Section 506(a), 506(b), 1111(b) or any other provisions
of the U.S. Bankruptcy Code to file a claim for the full amount of the Debt
secured by this Mortgage or to require that all collateral shall continue to
secure all of the Debt owing to Mortgagee in accordance with the Loan Documents,
and (ii) the Debt shall become fully recourse to Mortgagor in the event that:
(A) the first full monthly payment of principal and interest under the Note is
not paid when due; (B) Mortgagor fails to maintain its status as a single
purpose entity in accordance with the provisions of this Mortgage; (C) Mortgagor
fails to obtain Mortgagee's prior written consent to any subordinate financing
or other voluntary lien encumbering the Mortgaged Property; (D) Mortgagor fails
to obtain Mortgagee's prior written consent to any assignment, transfer, or
conveyance of the Mortgaged Property or any interest therein as required by this
Mortgage; or (E) a receiver, liquidator or trustee of Mortgagor or the Guarantor
shall be appointed or if Mortgagor or the Guarantor shall be adjudicated a
bankrupt or insolvent, or if any petition for bankruptcy, reorganization or
arrangement pursuant to federal 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 the
Guarantor or if any proceeding for the dissolution or liquidation of Mortgagor
or the Guarantor shall be instituted; however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented to by
Mortgagor or the Guarantor, upon the same not being discharged, stayed or
dismissed within sixty (60) days; or (F) Mortgagor, any Guarantor or any of
their respective affiliates or agents hinders, delays or interferes with the
exercise by Mortgagee of any of its
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limitation, such instruments as may be required by the
depository institution holding such securities to effectuate
book-entry transfers and pledges through the book-entry
facilities of such institution) in order to create a first
priority security interest therein in favor of the Mortgagee
in conformity with all applicable state and federal laws
governing granting of such security interests;
(B) a pledge and security agreement, in form and substance
satisfactory to Mortgagee in its sole discretion, creating a
first priority security interest in favor of Mortgagee in the
Defeasance Collateral (the "Defeasance Security Agreement"),
which shall provide, among other things, that any excess
received by Mortgagee from the Defeasance Collateral over the
amounts payable by Mortgagor hereunder shall be refunded to
Mortgagor promptly after each Payment Date;
(C) a certificate of Mortgagor certifying that all of the
requirements set forth in this Paragraph 55 have been
satisfied;
(D) an opinion of counsel for Mortgagor in form and substance and
delivered by counsel satisfactory to Mortgagee in its sole
discretion stating, among other things, that (1) Mortgagee
has a perfected first priority security interest in the
Defeasance Collateral and that the Defeasance Security
Agreement is enforceable against Mortgagor in accordance with
its terms; and (2) that any REMIC Trust formed pursuant to a
securitization will not fail to maintain its status as a
"real estate mortgage investment conduit" within the meaning
of Section 860D of the Code as a result of such defeasance;
(E) Mortgagor shall deliver evidence in writing from the
applicable Rating Agencies to the effect that the collateral
substitution will not result in a downgrading, withdrawal or
qualification of the respective ratings in effect immediately
prior to such defeasance event for any securities issued in
connection with the securitization which are then
outstanding;
(F) a certificate from a firm of independent public accountants
acceptable to Mortgagee certifying that the Defeasance
Collateral is sufficient to satisfy the provisions of
paragraph A above; and
(G) such other certificates, documents or instruments as
Mortgagee may reasonably require.
(b) Upon compliance with the requirements of this paragraph,
the Mortgaged Property shall be released from the lien of this Mortgage and the
other Loan
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Documents, and the Defeasance Collateral shall constitute the only collateral
which shall secure the Note and all other obligations under the Loan Documents.
Mortgagee will, at Mortgagor's expense, execute and deliver any agreements
reasonably requested by Mortgagor to release the lien of the Mortgage from the
Mortgaged Property. Mortgagor, pursuant to the Defeasance Security Agreement,
shall authorize and direct that the payments received from Defeasance Collateral
be made directly to Mortgagee and applied to satisfy the obligations of the
Mortgagor under the Note.
(c) Upon the release of the Mortgaged Property in accordance
with this paragraph, Mortgagor may, or at option of Mortgagee shall, assign all
its obligations under the Note, together with the pledged Defeasance
Collateral, to a successor entity designated by Mortgagor and approved by
Mortgagee in its sole discretion. Such successor entity shall execute an
assumption agreement in form and substance satisfactory to Mortgagee in its
sole discretion pursuant to which it shall assume Mortgagor's obligations under
the Note and the Defeasance Security Agreement. As conditions to such assignment
and assumption, Mortgagor shall (i) deliver to Mortgagee an opinion of counsel
in form and substance and delivered by counsel satisfactory to Mortgagee in its
sole discretion stating, among other things, that such assumption agreement is
enforceable against Mortgagor and such successor entity in accordance with its
terms and that the Note, the Defeasance Security Agreement and the other Loan
Documents, as so assumed, are enforceable against such successor entity in
accordance with their respective terms, and (ii) pay all costs and expenses
incurred by Mortgagee or its agents in connection with such assignment and
assumption (including, without limitation, the review of the proposed transferee
and the preparation of the assumption agreement and related documentation). Upon
such assumption, Mortgagor shall be relieved of its obligations hereunder, under
the other Loan Documents and under the Defeasance Security Agreement other than
those obligations which are specifically intended to survive the termination,
satisfaction or assignment of this Mortgage or the exercise of Mortgagee's
rights and remedies hereunder.
(d) Upon the release of the Mortgaged Property in accordance
with this paragraph, Mortgagor shall have no further right to prepay the Note
pursuant to the other provisions of this paragraph or otherwise. In connection
with the conditions set forth in subparagraph (a)(iii)(A) above, Mortgagor
hereby appoints Mortgagee as its agent and attorney-in-fact for the purpose of
purchasing the Defeasance Collateral with funds provided by the Mortgagor.
Mortgagor shall pay any and all expenses incurred in the purchase of the
Defeasance Collateral and any revenue, documentary stamp or intangible taxes or
any other tax or charge due in connection with the transfer of the Note or
otherwise required to accomplish the agreements of this paragraph.
(e) For purposes of this Mortgage, the Note and the other Loan
Documents, the term "Yield Maintenance Premium" shall mean the amount, if any,
which, when added to the remaining principal amount of the Note, will be
sufficient to purchase the Defeasance Collateral.
56. Cash Management Agreement. On or before the date hereof
Mortgagor covenants and agrees to enter into one or more servicing account
agreements and
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lockbox servicing agreements acceptable to Mortgagee between Mortgagor, Manager,
Mortgagee and one or more certain financial institutions (together with any
modification, amendment, substitution or replacement thereof, hereinafter
collectively referred to as the "Cash Management Agreement"). During any Sweep
Period (as defined in the Cash Management Agreement), all Rents shall be applied
as set forth in the Cash Management Agreement and the escrows and reserves
required hereunder shall be funded as provided therein. The Mortgagor shall pay
all costs and expenses required under the Cash Management Agreement. Upon the
occurrence of an Event of Default, Mortgagee may apply any sums then held
pursuant to the Cash Management Agreement to the payment of the Debt in any
order in its sole discretion. Until expended or applied, amounts held pursuant
to the Cash Management Agreement shall constitute additional security for the
Debt.
57. Miscellaneous.
(a) Any consent or approval by Mortgagee in any single instance
shall not be deemed or construed to be Mortgagee's consent or approval in any
like matter arising at a subsequent date, and the failure of Mortgagee to
promptly exercise any right, power, remedy, consent or approval provided herein
or at law or in equity shall not constitute or be construed as a waiver of the
same nor shall Mortgagee be estopped from exercising such right, power, remedy,
consent or approval at a later date. Any consent or approval requested of and
granted by Mortgagee pursuant hereto shall be narrowly construed to be
applicable only to Mortgagor and the matter identified in such consent or
approval and no third party shall claim any benefit by reason thereof, and any
such consent or approval shall not be deemed to constitute Mortgagee a venturer
or partner with Mortgagor nor shall privity of contract be presumed to have
been established with any such third party. If Mortgagee deems it to be in its
best interest to retain assistance of persons, firms or corporations
(including, without limitation, attorneys, title insurance companies,
appraisers, engineers and surveyors) with respect to a request for consent or
approval, Mortgagor shall reimburse Mortgagee for all costs reasonably incurred
in connection with the employment of such persons, firms or corporations.
(b) Mortgagor covenants and agrees that during the Term, unless
Mortgagee shall have previously consented in writing, (a) Mortgagor will take
no action that would cause it to become an "employee benefit plan" as defined
in 29 C.F.R. Section 2510.3-101, or "assets of a governmental plan" subject to
regulation under the state statutes, and (b) Mortgagor will not sell, assign or
transfer the Mortgaged Property, or any portion thereof or interest therein, to
any transferee that does not execute and deliver to Mortgagee its written
assumption of the obligations of this covenant. Mortgagor further covenants and
agrees to protect, defend, indemnify and hold Mortgagee harmless from and
against all loss, cost, damage and expense (including without limitation, all
attorneys' fees and excise taxes, costs of correcting any prohibited
transaction or obtaining an appropriate exemption) that Mortgagee may incur as
a result of Mortgagor's breach of this covenant. This covenant and indemnity
shall survive the extinguishment of the lien of this Mortgage by foreclosure
or action in lieu thereof; furthermore, the foregoing indemnity shall supersede
any limitations on Mortgagor's liability under any of the Loan Documents.
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(c) If there is more than one party comprising Mortgagor then
the obligations and liabilities of each party under this Mortgage shall be
joint and several.
(d) The Loan Documents contain the entire agreement between
Mortgagor and Mortgagee relating to or connected with the Loan. Any other
agreements relating to or connected with the Loan not expressly set forth in
the Loan Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
(e) Mortgagor hereby covenants and agrees not to commit, permit
or suffer to exist any act, omission or circumstance affording such right of
forfeiture. In furtherance thereof, Mortgagor hereby indemnifies Mortgagee and
agrees to defend and hold Mortgagee harmless from and against any loss, damage
or injury by reason of the breach of the covenants and agreements or the
representations and warranties set forth in this paragraph. Without limiting
the generality of the foregoing, the filing of formal charges or the
commencement of proceedings against Mortgagor or all or any part of the
Mortgaged Property under any federal or state law for which forfeiture of the
Mortgaged Property or any part thereof or of any monies paid in performance of
Mortgagor's obligations under the Loan Documents is a potential result, shall,
at the election of Mortgagee, constitute an Event of Default hereunder without
notice or opportunity to cure.
(f) Mortgagor acknowledges that, with respect to the Loan,
Mortgagor is relying solely on its own judgment and advisors in entering into
the Loan without relying in any manner on any statements, representations or
recommendations of Mortgagee or any parent, subsidiary or affiliate of
Mortgagee. Mortgagor acknowledges that Mortgagee engages in the business of
real estate financings and other real estate transactions and investments which
may be viewed as adverse to or competitive with the business of the Mortgagor
or its affiliates. Mortgagor acknowledges that it is represented by competent
counsel and has consulted counsel before executing the Loan Documents.
(g) Mortgagor covenants and agrees to pay Mortgagee upon
receipt of written notice from Mortgagee, all reasonable costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Mortgagee
in connection with (i) the preparation, negotiation, execution and delivery of
this Mortgage and the other Loan Documents; (ii) Mortgagor's performance of and
compliance with Mortgagor's respective agreements and covenants contained in
this Mortgage and the other Loan Documents on its part to be performed or
complied with after the date hereof; (iii) Mortgagee's performance and
compliance with all agreements and conditions in this Mortgage and the other
Loan Documents on its part to be performed or complied with after the date
hereof; (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to
this Mortgage and the other Loan Documents; and (v) the filing and recording
fees and expenses, title insurance fees and expenses, and other similar
expenses incurred in creating and perfecting the lien in favor of Mortgagee
pursuant to this Mortgage and the other Loan Documents.
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(h) This Mortgage shall be governed by and construed in
accordance with the laws of the State in which the Premises are located and the
applicable laws of the United States of America.
58. Management of the Mortgaged Property.
Mortgagor shall maintain the Management Agreement for the
operation of the Mortgaged Property in full force and effect and timely perform
all of Mortgagor's obligations thereunder and enforce performance of all
obligations of the Manager thereunder, and not permit the termination or
amendment of such Management Agreement unless the prior written consent of
Mortgagee is first obtained. Mortgagor will enter into and cause the Manager to
enter into an assignment and subordination of such Management Agreement in form
satisfactory to Mortgagee, assigning and subordinating the Manager's interest
in the Mortgaged Property and all fees and other rights of the manager pursuant
to such Management Agreement to the rights of Mortgagee. Upon an Event of
Default or upon a material default under the Management Agreement, Mortgagor at
Mortgagee's request made at any time while such Event of Default continues,
shall terminate the Management Agreement and replace the Manager with a Manager
approved by Mortgagee.
59. Sale of Notes and Securitization.
Mortgagor acknowledges that Mortgagee and its successors and
assigns may (i) sell this Mortgage, the Note and other Loan Documents to one or
more investors as a whole loan, (ii) participate the Loan secured by this
Mortgage to one or more investors, (iii) deposit this Mortgage, the Note and
other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as
"Secondary Market Transaction"). Mortgagor shall cooperate with Mortgagee in
effecting any such Secondary Market Transaction and shall cooperate to
implement all requirements imposed by any Rating Agency involved in any
Secondary Market Transaction. Mortgagor, however, shall not be required to
modify any documents evidencing or securing the Loan which would modify (A) the
interest rate payable under the Note, (B) the stated maturity of the Note, (C)
the amortization of principal of the Note, (D) the non-recourse provisions of
the Loan or (E) any other material economic term of the Loan. Mortgagor shall
provide such information, legal opinions and documents relating to Mortgagor,
Guarantor, if any, the Mortgaged Property and any tenants of the Improvements
as Mortgagee may reasonably request in connection with such Secondary Market
Transaction. In addition, Mortgagor shall make available to Mortgagee all
information concerning its business and operations that Mortgagee may reasonably
request. Mortgagee shall be permitted to share all such information with the
investment banking firms, Rating Agencies, accounting firms, law firms and other
third-party advisory firms involved with the Loan and the Loan Documents or the
applicable Secondary Market Transaction. It is understood that the information
provided by Mortgagor to Mortgagee may ultimately be incorporated into the
offering documents for the Secondary Market Transaction and thus various
investors may also see some or all of the information. Mortgagee and all of the
aforesaid third-party advisors and
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professional firms shall be entitled to rely on the information supplied by, or
on behalf of, Mortgagor and Mortgagor indemnifies Mortgagee as to any losses,
claims, damages or liabilities that arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
information or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated in such information or
necessary in order to make the statements in such information, or in light of
the circumstances under which they were made, not misleading. Mortgagee may
publicize the existence of the Loan in connection with its marketing for a
Secondary Market Transaction or otherwise as part of its business development.
60. Servicer. At the option of Mortgagee, the Loan may be
serviced by a servicer/trustee (the "Servicer") selected by Mortgagee and
Mortgagee may delegate all or any portion of its responsibilities under this
Mortgage and the other Loan Documents to the Servicer pursuant to a servicing
agreement (the "Servicing Agreement") between Mortgagee and Servicer.
61. Letter of Credit.
(a) As additional security for the performance by Mortgagor of
its obligations under the Loan Documents, Mortgagor has delivered to Mortgagee
an irrevocable, unconditional, transferable, clean sight draft letter of credit
for an amount equal to $436,000 in favor of Mortgagee and entitling Mortgagee to
draw thereon in New York, New York, issued by a financial institution, the long
term unsecured debt rating of which is in the three highest ratings given by
each of the Rating Agencies (the "Letter of Credit"). At least thirty days prior
to the expiration date for the Letter of Credit then in effect, Mortgagor shall
deliver an extension or replacement of the Letter of Credit for a term of a
least one year from such expiration date. Any Letter of Credit delivered
pursuant hereto cannot be secured in whole or in part by the Mortgaged Property.
(b) Mortgagee shall have the right to draw upon the Letter of
Credit, in whole or in part, immediately and without notice to Borrower, upon
the occurrence of any one or more of the following events:
(i) an Event of Default occurs;
(ii) Mortgagor fails to deliver to Mortgagee, no less
than thirty (30) days prior to the expiration date of the
Letter of Credit (including any renewal, extension or
replacement thereof), a renewal, extension or replacement of
the Letter of Credit from a financial institution, the long
term unsecured debt rating of which is in the three highest
ratings given by each of the Rating Agencies;
(iii) Mortgagee has received notice from the issuing
financial institution that the Letter of Credit will be
terminated;
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(iv) any action by Mortgagor or the issuing financial
institution which, in Mortgagee's sole discretion, may
jeopardize its rights to properly draw on the Letter of
Credit in whole or in part in accordance with the terms
thereof; and
(v) Mortgagor fails to qualify for the release of the
Letter of Credit as provided in subparagraph (d) below within
two years after the date hereof.
(c) Proceeds of any draw upon the Letter of Credit may be
applied to the payment of the Debt in any order in the Mortgagee's sole
discretion. No delay by or omission of Mortgagee in exercising any right to
draw on the Letter of Credit shall impair any such right, or shall be construed
as a waiver of or acquiescence in, any default or event of default giving rise
to such rights.
(d) The Letter of Credit shall be released if the Debt Service
Coverage Ratio for the Mortgaged Property (based on a trailing three month
collections), as reasonably determined by Mortgagee, is equal to or greater
than 1.25.
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PART II
STATE SPECIFIC PROVISIONS
62. Conflicts. In the event of any inconsistencies between the
terms and conditions of Part I and Part II of this Mortgage, the terms of Part
II shall control and be binding.
63. Future Remedies. Paragraph 26(a)(ii) of this Mortgage is
amended by deleting the words, "judicial or nonjudicial," contained in the
first line thereof.
64. Fixture Filing. The following sentence shall be added to
the end of Paragraph 28(a) of this Mortgage:
"This Mortgage is a fixture filing to be filed on record in
the real estate records pursuant to N.J.S.A. 12A:9-402."
65. Hazardous Substances. Paragraph 34 of this Mortgage is
hereby deleted in its entirety and the following Paragraph 34 is substituted
therefor:
"34. Hazardous Substances. (a) Mortgagor hereby represents
and warrants to Mortgagee that, to the best of Mortgagor's
knowledge, after due inquiry and investigation except as
disclosed in the report dated December 20, 1996, prepared by
Certified Environmental Inc. (the "Phase I Report") delivered
to Mortgagee in connection with the Loan: (a) the Mortgaged
Property is not in direct or indirect violation of any local,
state, federal or other governmental authority, statute,
ordinance, code, order, decree, law, rule or regulation
pertaining to or imposing liability or standards of conduct
concerning environmental regulation, contamination or
clean-up including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as
amended ("CERCLA"), the Resource Conservation and Recovery
Act, as amended ("RCRA"), the Emergency Planning and
Community Right-to-Know Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, the Solid
Waste Disposal Act, as amended, the Clean Water Act, as
amended, the Clean Air Act, as amended, the Toxic Substance
Control Act, as amended, the Safe Drinking Water Act, as
amended, the Occupational Safety and Health Act, as amended,
the New Jersey Industrial Site Recovery Act, as amended
("ISRA"), the New Jersey Spill Compensation and Control Act,
as amended, the New Jersey Underground Storage of Hazardous
Substances Act, as amended, the New Jersey Water Pollution
Control Act, as amended, any
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state super-lien and environmental clean-up statutes and all
regulations adopted in respect to the foregoing laws
(collectively, "Environmental Laws"); (b) the Mortgaged
Property is not subject to any private or governmental lien
or judicial or administrative notice or action or inquiry,
investigation or claim relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials,
raw materials which include hazardous constituents,
pollutants or contaminants including without limitation,
petroleum, tremolite, anthlophylie, actinolite or
polychlorinated biphenyls, radon, formaldehyde insulation and
any other substances or materials which are included under
or regulated by Environmental Laws or which are considered by
scientific opinion to be otherwise dangerous in terms of
the health, safety and welfare of humans (collectively,
"Hazardous Substances"); (c) no Hazardous Substances are or
have been (including the period prior to Mortgagor's
acquisition of the Mortgaged Property), discharged,
generated, treated, disposed of or stored on, incorporated
in, or removed or transported from the Mortgaged Property
other than in compliance with all Environmental Laws; (d) no
Hazardous Substances are present in, on or under any nearby
real property which could migrate to or otherwise affect the
Mortgaged Property; (e) no underground storage tanks exist on
any of the Mortgaged Property; and (f) the Mortgaged Property
is not located within a "freshwater wetlands" or a
"transition area," each as defined by N.J.S.A. 13:9B-3, and
is not subject to the terms of the New Jersey Freshwater
Wetlands Protection Act, as amended, N.J.S.A. 13:9B-1 et.
seq., or the rules and regulations promulgated thereunder. So
long as Mortgagor owns or is in possession of the Mortgaged
Property, Mortgagor (i) shall keep or cause the Mortgaged
Property to be kept free from Hazardous Substances and in
compliance with all Environmental Laws, (ii) shall promptly
notify Mortgagee if Mortgagor shall become aware of any
Hazardous Substances on or near the Mortgaged Property and/or
if Mortgagor shall become aware that the Mortgaged Property
is in direct or indirect violation of any Environmental Laws
and/or if Mortgagor shall become aware of any condition on
or near the Mortgaged Property which shall pose a threat to
the health, safety or welfare of humans, and (iii) shall
remove such Hazardous Substances and/or cure such violations
and/or remove such threats, as applicable, as required by law
(or as shall be required by Mortgagee in the case of removal
which is not required by law, but in response to the opinion
of a licensed hydrogeologist or licensed environmental
engineer approved by Mortgagee
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("Mortgagee's Consultant"), promptly after Mortgagor becomes
aware of same, at Mortgagor's sole expense. Notwithstanding
anything to the contrary in this paragraph, the Mortgagor and
the tenants under Leases may use and store immaterial amounts
of Hazardous Substances at the Mortgaged Property if such use
or storage is in connection with the ordinary cleaning and
maintenance of the Mortgaged Property so long as such use and
storage (a) does not violate any applicable Environmental
Laws and (b) is not the subject of any specific
recommendations in the Phase I Report. Nothing herein shall
prevent Mortgagor from recovering such expenses from any
other party that may be liable for such removal or cure. The
obligations and liabilities of Mortgagor under this Paragraph
34 shall survive any termination, satisfaction, or assignment
of this Mortgage and the exercise by Mortgagee of any of its
rights or remedies hereunder, including, without limitation,
the acquisition of the Mortgaged Property by foreclosure or a
conveyance in lieu of foreclosure.
(b) Mortgagor shall not conduct or cause or permit to
be conducted on the Mortgaged Property any activity which
constitutes an Industrial Establishment (as such term is
defined in ISRA) without the prior written consent of
Mortgagee. In the event that the provisions of ISRA become
applicable to the Mortgaged Property subsequent to the date
hereof, Mortgagor shall give prompt written notice thereof to
Mortgagee and shall take immediate requisite action to insure
full compliance therewith. Mortgagor shall deliver to
Mortgagee copies of all correspondence, notices and
submissions that it sends to or receives from the New Jersey
Department of Environmental Protection in connection with
such ISRA compliance. Mortgagor's obligation to comply with
ISRA shall, notwithstanding its general applicability, also
specifically apply to sale, transfer, closure or termination
of operations associated with any foreclosure action,
including, without limitation, a foreclosure action brought
with respect to this Mortgage. In connection with the
purchase of the Mortgaged Property, Mortgagor required that
the seller of the Mortgaged Property comply with the
provisions of ISRA and the Seller did comply therewith.
(c) The Mortgaged Property has not been and is not now
being used as a Major Facility (as defined in the
Environmental Laws), and Mortgagor shall not use any such
property as a Major Facility in the future without the prior
written consent of Mortgagee. If Mortgagor ever becomes an
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owner or operator of a Major Facility, then Mortgagor shall
furnish the New Jersey Department of Environmental Protection
with all the information required by N.J.S.A. 58:10-23.11d,
and shall duly file with the Director of the Division of
Taxation in the New Jersey Department of the Treasury a tax
report or return, and shall pay all taxes due therewith, in
accordance with N.J.S.A. 58:10-23, 11b."
66. Continuing Enforcement of Mortgage. If, after receipt of
any payment of all or any part of the Debt, Mortgagee is compelled or agrees,
for settlement purposes, to surrender such payment to any person or entity for
any reason (including, without limitation, a determination that such payment is
void or voidable as a preference or fraudulent conveyance, an impermissible
setoff, or a diversion of trust funds), then this Mortgage and the other Loan
Documents shall continue in full force and effect, and Mortgagor shall be
liable for, and shall indemnify, defend and hold harmless Mortgagee with
respect to the full amount so surrendered. The provisions of this Paragraph 66
shall survive the cancellation or discharge of this Mortgage and shall remain
effective notwithstanding the payment of the Debt, the cancellation of the
Note, the release of any security interest, lien or encumbrance securing the
Debt or any other action which Mortgagee may have taken in reliance upon its
receipt of such payment. Any cancellation, release or other such action by
Mortgagee shall be deemed to have been conditioned upon any payment of the Debt
having become final and irrevocable.
67. Mortgagor Acknowledgment. Mortgagor acknowledges that
Mortgagor has received a true copy of this Mortgage without charge.
68. Mortgage Modification. The Mortgagor and the Mortgagee may
agree to change the interest rate, due date or other terms and conditions of
the Loan. If the parties agree to a change, which change is a "modification" as
defined in N.J.S.A. 46:9-8.1, then this Mortgage shall be subject to the
priority provisions of the law.
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IN WITNESS WHEREOF, Mortgagor has executed this instrument the
day and year first above written.
WASHINGTON CENTRE SHOPS, L.P.,
a Delaware limited partnership
By: Washington Centre Land, Inc.,
a Delaware corporation, it's
general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇. ▇. ▇▇▇▇▇▇
Title: President
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on this 6th day of November, 1997,
before me, the subscriber, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇ who, I am
satisfied, is the person who signed the within instrument as President of
Washington Centre Land, Inc.. a Delaware corporation, the general partner of
Washington Centre Shops, L.P., the Delaware limited partnership named therein,
and this person thereupon acknowledged that the said instrument made by said
limited partnership was signed, sealed and delivered by this person as such
officer and is the voluntary act and deed of the limited partnership.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public, State of New York
No. ▇▇-▇▇▇▇▇▇▇
Qualified in New York County
Commission Expires September 2, 1998