Exhibit 10.4
▇▇▇▇▇▇▇▇ Paint
EXECUTION COPY
____________________________________________________________
KR TUCSON, INC.,
Mortgagor
to
SALOMON BROTHERS REALTY CORP.,
Mortgagee
____________________________________
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
____________________________________
Dated as of: February 26, 1997
RECORD AND RETURN TO:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
____________________________________________________________
TABLE OF CONTENTS
Page
1. Payment of Obligations and Incorporation of Covenants,
Conditions and Agreements. . . . . . . . . . . . . . 5
2. Warranty of Title. . . . . . . . . . . . . . . . . . 6
3. Insurance. . . . . . . . . . . . . . . . . . . . . . . 6
4. Payment of Taxes, etc. . . . . . . . . . . . . . . . 10
5. Condemnation. . . . . . . . . . . . . . . . . . . . . 10
6. ▇▇▇▇▇▇ and Rents.. . . . . . . . . . . . . . . . . . . 12
7. Maintenance of Mortgaged Property. . . . . . . . . . 14
8. Transfer or Encumbrance of the Mortgaged Property. . . 14
9. Changes in the Laws Regarding Taxation. . . . . . . . 16
10. No Credits on Account of the Obligations. . . . . . . 16
11. Documentary Stamps. . . . . . . . . . . . . . . . . . 16
12. Controlling Agreement. . . . . . . . . . . . . . . . 16
13. Books and Records. . . . . . . . . . . . . . . . . . 16
14. Performance of Other Agreements. . . . . . . . . . . 17
15. Further Acts, etc. . . . . . . . . . . . . . . . . . 17
16. Recording of Mortgage, etc. . . . . . . . . . . . . . 17
17. Reporting Requirements. . . . . . . . . . . . . . . . 17
18. Events of Default. . . . . . . . . . . . . . . . . . 18
19. Late Payment Charge. . . . . . . . . . . . . . . . . 18
20. Right to Cure Defaults. . . . . . . . . . . . . . . . 18
21. Remedies.. . . . . . . . . . . . . . . . . . . . . . . 18
22. Right of Access. . . . . . . . . . . . . . . . . . . . 21
23. Reasonable Use and Occupancy.. . . . . . . . . . . . . 21
24. Security Agreement. . . . . . . . . . . . . . . . . . 22
25. Actions and Proceedings. . . . . . . . . . . . . . . 23
26. Waiver of Setoff and Counterclaim. . . . . . . . . . 23
27. Contest of Certain Claims. . . . . . . . . . . . . . 23
28. Recovery of Sums Required to Be Paid. . . . . . . . . 24
29. Marshalling, Waiver of Redemption and Other Matters. . 24
30. Hazardous Substances. . . . . . . . . . . . . . . . . 24
31. Handicapped Access.. . . . . . . . . . . . . . . . . . 24
32. Notice. . . . . . . . . . . . . . . . . . . . . . . . 25
33. Waiver of Notice. . . . . . . . . . . . . . . . . . . 25
34. Remedies of Mortgagor. . . . . . . . . . . . . . . . 25
35. Sole Discretion of Mortgagee. . . . . . . . . . . . . 25
36. Non-Waiver. . . . . . . . . . . . . . . . . . . . . . 25
37. No Oral Change. . . . . . . . . . . . . . . . . . . . 26
38. Successors and Assigns. . . . . . . . . . . . . . . . 26
39. Severability. . . . . . . . . . . . . . . . . . . . . 26
40. Headings, etc. . . . . . . . . . . . . . . . . . . . 26
41. Duplicate Originals. . . . . . . . . . . . . . . . . 26
42. Definitions. . . . . . . . . . . . . . . . . . . . . 26
43. Homestead. . . . . . . . . . . . . . . . . . . . . . 27
44. Assignments. . . . . . . . . . . . . . . . . . . . . 27
45. Waiver of Jury Trial. . . . . . . . . . . . . . . . . 27
46. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . 27
47. SUBMISSION TO JURISDICTION.. . . . . . . . . . . . . . 28
48. Non-Recourse.. . . . . . . . . . . . . . . . . . . . . 28
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (as the same may from time to time
be extended, renewed or modified, the "Mortgage"), made as of the
26th day of February, 1997, by KR Tucson, Inc., an Arizona
corporation ("Mortgagor"), having its principal place of business
c/o Kranzco Realty Trust, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, to SALOMON BROTHERS REALTY CORP.
("Mortgagee"), having its principal place of business at Seven
World Trade Center, New York, New York 10048.
W I T N E S E T H:
To secure the payment of an indebtedness in the original
principal sum of up to FIFTY MILLION AND NO/100 DOLLARS
($50,000,000) as may be outstanding from time to time, lawful
money of the United States of America, to be paid with interest
according to a certain Loan Agreement, dated as of the date
hereof, among Mortgagor and each additional entity listed on
Schedule 1 thereto, as borrowers (collectively, the "Borrowers"),
Mortgagee, as initial lender and agent, Kranzco Realty Trust, as
guarantor, and Bank Leumi, as collateral agent (as the same may
be extended, renewed, supplemented or modified, the "Loan
Agreement"; capitalized terms used herein and not defined having
the meanings ascribed thereto in the Loan Agreement), as
evidenced by that certain Global Promissory Note executed and
delivered by the Borrowers pursuant to the Loan Agreement (as the
same may be extended, renewed, supplemented, exchanged,
substituted, replaced or modified, collectively, the "Note"; the
Loan Agreement, the Note, this Mortgage, the other Collateral
Security Instruments and any other documents executed and
delivered in connection with the Loan, collectively, the "Loan
Documents"), as security for the payment and performance of all
of the Borrowers' obligations hereunder and under the Loan
Documents (collectively, the "Obligations"), 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, alienate, enfeoff, convey, confirm,
warrant, pledge, assign and hypothecate unto Mortgagee WITH
MORTGAGE COVENANTS, all of Mortgagor's right, title and interest
in and to the real property described in Exhibit A attached
hereto (the "Land") and the buildings, structures and
improvements of every nature whatsoever now or hereafter located
thereon (including, but not limited to, all gas and electric
fixtures, radiators, heaters, docks and docking facilities,
engines and machinery, boilers, ranges, elevators and motors,
plumbing, heating and air conditioning fixtures, carpeting and
other floor coverings, water heaters, awnings and storm sashes,
and cleaning apparatus which are or shall be attached to the Land
or said buildings, structures or improvements) (the
"Improvements");
TOGETHER WITH: all right, title, interest and estate of ▇▇▇▇▇▇▇▇▇
now owned, or hereafter acquired, in and to the following
property, rights, interest and estates (▇▇▇▇▇▇▇▇▇'s interest in
the Land and the Improvements, together with the following
property, rights, interests and estates being hereinafter
described are collectively referred to herein as the "Mortgaged
Property"):
(a) 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, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances of any
nature whatsoever, in any way belonging, relating to or
pertaining to the Land and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front
of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower,
curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Mortgagor of, in
and to the Land and the Improvements and every part and parcel
thereof, with the appurtenances thereto;
(b) all "equipment" 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"), now or hereafter owned by Mortgagor or in which Mortgagor
has or shall acquire an interest, now or hereafter located on,
attached to or contained in or used or usable in connection with
the Mortgaged Property, and shall also mean and include all
building materials, construction materials, personal property
constituting furniture, fittings, appliances, apparatus,
leasehold improvements, machinery, devices, interior
improvements, appurtenances, equipment, plant, furnishings,
fixtures, computers, electronic data processing equipment,
telecommunications equipment and other fixed assets now owned or
hereafter acquired by Mortgagor which are used in the operation
of the business conducted at the Mortgaged Property; and all
proceeds thereof, as well as all additions to, substitutions for,
replacements of or accessions to any of the items recited as
aforesaid and all attachments, components, parts (including spare
parts) and accessories, whether installed thereon or affixed
thereto, and wherever located, now or hereafter owned by
Mortgagor and used or intended to be used in connection with, or
with the operation of, the Land or the Improvements, or in
connection with any construction being conducted or which may be
conducted thereon, all regardless of whether the same are located
on the Mortgaged Property or are located elsewhere (including
without limitation, in warehouses or other storage facilities or
in the possession of or on the premises of a bailee, vendor or
manufacturer) for purposes of manufacture, storage, fabrication
or transportation and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to, and
proceeds of, any of the foregoing (collectively, the
"Equipment"); provided, however, that with respect to any items
which are leased and not owned by Mortgagor, the Equipment shall
include the leasehold interest only of Mortgagor, together with
any options to purchase any of said items and any additional or
greater rights with respect to such items which Mortgagor may
hereafter acquire;
(c) all awards or payments, including interest thereon, which
may heretofore and hereafter be made with respect to the Land and
the Improvements, whether from the exercise of the right of
eminent domain (including, but not limited to, 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 Land and the Improvements;
(d) all leases, subleases, lettings, occupancy agreements,
tenancies and licenses by Mortgagor as landlord of the Mortgaged
Property or any part thereof now or hereafter entered into, and
all amendments, extensions, renewals and guarantees thereof, and
all security therefor (collectively, the "Leases") and all
income, rents, rent equivalents, issues, profits, revenues
(including all oil and gas or other mineral royalties and
bonuses), deposits and other benefits from the Land and the
Improvements (including, without limitation, all receivables, and
other obligations now existing or hereafter arising or created
out of the sale, lease, sublease, license, concession or other
grant of the right of the use and occupancy of property or
rendering of services by Mortgagor or any operator or manager of
the Mortgaged Property or the commercial space located in the
Improvements or acquired from others (including, without
limitation, from the rental of any office space, retail space or
other space, halls, stores, and offices, and deposits securing
reservations of such space, exhibit or sales space of every kind,
license, lease, sublease and concession fees and rentals, health
club membership fees, food and beverage wholesale and retail
sales, service charges, vending machine sales and proceeds, if
any, from business interruption or other loss of income
insurance)) (collectively, the "Rents") and all proceeds from the
sale or other disposition of the Leases and the right to receive
and apply the Rents to the payment of the Obligations;
(e) 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);
(f) the right, in the name and on behalf of ▇▇▇▇▇▇▇▇▇, 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;
(g) all accounts (as defined in the Uniform Commercial Code)
now owned or hereafter acquired by Mortgagor, and arising out of
or in connection with, the operation of the Mortgaged Property
(including, without limitation, the Collection Account and the
Repair Reserve Account), and all other accounts described in the
Management Agreement and all present and future accounts
receivable, inventory accounts, contract rights, chattel paper,
notes, acceptances, insurance policies, Instruments (hereafter
defined), Documents (hereafter defined), or other rights to
payment and all forms of obligations owing at any time to
Mortgagor thereunder, whether now existing or hereafter created
or otherwise acquired by Mortgagor, and all proceeds thereof and
all liens, security interests, guaranties, remedies, privileges
and other rights pertaining thereto, and all rights and remedies
of any kind forming the subject matter of any of the foregoing
(including, without limitation, (i) all income, Rents, issues,
profits, revenues, deposits and other benefits from the Mortgaged
Property, (ii) all receivables and other obligations now existing
or hereafter arising or created out of the sale, lease, sublease,
license, concession or other grant of the right of the use and
occupancy of property or rendering of services by Mortgagor or
any operator or manager of the Mortgaged Property or other
commercial space located at the Mortgaged Property or acquired
from others (including, without limiting the generality of the
foregoing, from rental of space, halls, stores, and offices, and
deposits securing reservations of such space, exhibit or sales
space of every kind, license, lease, sublease and concession fees
and rentals, health club membership fees, food and beverage
wholesale and retail sales of merchandise, service charges,
vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance), (iii) all sums
of money, and all instruments, documents and securities held in
any accounts in connection therewith, or any demand, time,
savings or other account maintained with any bank or certificate
of deposit issued by any bank with the proceeds of such account
and (iv) all of the records and books of account now or hereafter
maintained by or on behalf of Mortgagor in connection with the
operation of the Mortgaged Property) (collectively, the
"Accounts");
(h) all proceeds (as defined in the Uniform Commercial Code)
thereof and, in any event, shall include, without limitation, all
proceeds, products, offspring, rents, profits or receipts, in
whatever form, arising from the Mortgaged Property (including,
without limitation, (i) cash, instruments and other property
received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Mortgaged Property, (ii) the
collection, sale, lease, sublease, concession, exchange,
assignment, licensing or other disposition of, or realization
upon, any item or portion of the Mortgaged Property (including,
without limitation, all claims of Mortgagor against third parties
for loss of, damage to, destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of
insurance in respect of, any the Mortgaged Property now existing
or hereafter arising), (iii) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to Mortgagor
from time to time with respect to any of the Mortgaged Property,
(iv) any and all payments (in any form whatsoever) made or due
and payable to Mortgagor from time to time in connection with the
requisition, confiscation, condemnation, seizure or forfeiture of
all or any part of the Mortgaged Property by any Governmental
Authority (or any person acting under color of Governmental
Authority) and (v) any and all other amounts from time to time
paid or payable under or in connection with any of the Mortgaged
Property) (collectively, the "Proceeds");
(i) all agreements to which Mortgagor is a party or which are
assigned to Mortgagor in the Management Agreement and which are
executed in connection with the construction, operation and
management of the Improvements located on the Mortgaged Property
(including, without limitation, the Management Agreement and the
agreements for the sale, lease or exchange of goods or other
property and/or the performance of services by it, in each case
whether now in existence or hereafter arising or acquired) as
any such agreements have been or may be from time to time
amended, supplemented or otherwise modified (collectively,
"Contracts");
(j) all "documents" as defined in the Uniform Commercial Code
or other receipts covering, evidencing or representing goods now
owned or hereafter acquired by Mortgagor (collectively,
"Documents");
(k) all trademark licenses, trademarks, rights in
intellectual property, trade names, service marks and copyrights
relating to the Mortgaged Property or the license to use
intellectual property such as computer software owned or licensed
by Mortgagor or other proprietary business information relating
to ▇▇▇▇▇▇▇▇▇'s policies, procedures, manuals and trade secrets
(collectively, "Trademarks");
(l) all "general intangibles" as defined in the Uniform
Commercial Code, now owned or hereafter acquired by Mortgagor
(including, without limitation, (i) all obligations or
indebtedness owing to Mortgagor from whatever source arising
(other than Accounts, Rents, Instruments, Inventory, Contracts,
Documents, Trademarks and Permits), (ii) all unearned premiums
accrued or to accrue under all insurance policies for the
Mortgaged Property obtained by Mortgagor, all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing
into cash or liquidated claims (including, without limitation,
proceeds of insurance, condemnation awards, and all rights of
Mortgagor to refunds of real estate taxes and assessments),
(iii) all royalties and license fees, (iv) all trademark
licenses, trademarks, rights in intellectual property, goodwill,
trade names, service marks, trade secrets, copyrights, permits
and licenses, together with the registrations therefor and the
goodwill appurtenant thereto, (v) all rights or claims in respect
of refunds for taxes paid and (vi) all rights in respect of any
pension plan or similar arrangement maintained for employees of
Mortgagor) (collectively, "General Intangibles");
(m) all (i) "instruments" as defined in the Uniform
Commercial Code, "chattel paper" as defined in the Uniform
Commercial Code, or letters of credit, evidencing, representing,
arising from or existing in respect of, relating to, securing or
otherwise supporting the payment of, any of the Collateral
(including, without limitation, promissory notes, drafts, bills
of exchange and trade acceptances) and chattel paper obtained by
Mortgagor in connection with the Mortgaged Property (including,
without limitation, all ledger sheets, computer records and
printouts, databases, programs, books of account and files of
Mortgagor relating thereto) and (ii) notes or other obligations
of indebtedness owing to Mortgagor from whatever source arising,
in each case now owned or hereafter acquired by Mortgagor
(collectively, "Instruments");
(n) all "inventory" as defined in the Uniform Commercial
Code, whether now or hereafter existing or acquired, and which
arises out of or is used in connection with, directly or
indirectly, the ownership and operation of the Mortgaged
Property, all Documents representing the same and all Proceeds
and products of the same (including, without limitation, all
goods, merchandise, raw materials, work in process and other
personal property, wherever located, now or hereafter owned or
held by Mortgagor for manufacture, processing, the providing of
services or sale, use or consumption in the operation of the
Mortgaged Property (including, without limitation, fuel, supplies
and similar items and all substances commingled therewith or
added thereto) and rights and claims of Mortgagor against anyone
who may store or acquire the same for the account of Mortgagor,
or from whom Mortgagor may purchase the same) (collectively,
"Inventory"); and
(o) all licenses, permits, variances and certificates used in
connection with the ownership, operation, use or occupancy of the
Mortgaged Property (including, without limitation, business
licenses, state health department licenses, food service
licenses, liquor licenses, licenses to conduct business and all
such other permits, licenses and rights, obtained from any
Governmental Authority or private Person concerning ownership,
operation, use or occupancy of the Mortgaged Property)
(collectively, "Permits").
TO HAVE AND TO HOLD the above granted and described Mortgaged
Property unto and to the use and benefit of Mortgagee, and its
successors and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Mortgagor shall pay to Mortgagee the
Obligations at the time and in the manner provided in the Loan
Agreement and this Mortgage and shall abide by and comply with
each and every covenant and condition set forth herein and in the
other Loan Documents in a timely manner, these presents and the
estate hereby granted shall cease, terminate and be void;
AND ▇▇▇▇▇▇▇▇▇ represents and warrants to and covenants
and agrees with Mortgagee as follows:
1. Payment of Obligations and Incorporation of Covenants,
Conditions and Agreements. ▇▇▇▇▇▇▇▇▇ will pay the Obligations at
the time and in the manner provided in the Loan Documents and in
this Mortgage. All the covenants, conditions and agreements of
Mortgagee contained in 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 fee simple title to the Land and
Improvements 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, warrant, pledge, assign and hypothecate
the same and that Mortgagor possesses an unencumbered fee estate
in the Land 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 on Schedule B to the
Title Insurance Policy insuring the lien of this Mortgage 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 the Permitted Encumbrances. 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 (except with respect to holders [or
beneficiaries] of a Permitted Encumbrance).
3. Insurance.
(a) Mortgagor, at its sole cost and expense, will keep the
Improvements and Equipment insured during the entire term of this
Mortgage with the coverage and in the amounts required hereunder
or under the Loan Agreement for the mutual benefit of Mortgagor
and Mortgagee against loss or damage by fire and against loss or
damage by 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 on the "Special Form" (formerly an "All Risk" form). Such
insurance shall be in an amount (i) equal to at least the then
full replacement cost of the Improvements and Equipment
(exclusive of the cost of foundations and footings), without
deduction for physical depreciation, and (ii) such 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 the "Replacement Cost Endorsement" with a waiver of
depreciation.
(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and
maintain or cause to be obtained and maintained during the entire
term of this Mortgage 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 Act of 1968 (and any amendment
or successor act thereto) in an amount at least equal to the
maximum limit of coverage available with respect to the
Improvements and Equipment under said Act.
(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 Two Million Dollars
($2,000,000).
(iii) Business interruption insurance (including rental
value) in an annual aggregate amount equal to the estimated gross
revenues from the Leases of the Mortgaged Property, including,
without limitation, the loss of all rents and additional rents
payable by all of the lessees under the Leases (whether or not
such Leases are terminable in the event of a fire or casualty),
such insurance to cover losses for a period of at least one year
after the date of the fire or casualty in question. The amount
of such insurance shall be increased from time to time during the
term of this Mortgage as and when the gross revenues from the
Leases of the Mortgaged Property increase, including, without
limitation, increases from new Leases and renewal Leases entered
into in accordance with the terms of this Mortgage, to reflect
all increased rent and increased additional rent payable by all
of the lessees under such renewal Leases and all rent and
additional rent payable by all of the lessees under such new
Leases.
(iv) Insurance against loss or damage from (x) leakage
of sprinkler systems and (y) 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),
in an amount (i) equal to at least the then full replacement cost
of the Improvements and Equipment (exclusive of the cost of
foundations and footings), without deduction for physical
depreciation, and (ii) such that the insurer would not deem
Mortgagor a co-insurer under said policies or such other amount
reasonably required by Mortgagee.
(v) Worker's compensation insurance coverage in amounts
not less than the statutory minimums for all persons employed by
Mortgagor or its tenants on the Mortgaged Property. Such
worker's compensation insurance shall comply with all
requirements of applicable local, state and federal law.
Mortgagor shall also maintain or cause to be maintained
"Employers Liability" insurance in amounts not less than required
by statute, except as may be unrestricted by law; and
(vi) 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 Section 3 (i) shall be issued by an insurer
which has a claims paying ability rating of not less than "A" by
Standard & Poor's Corporation plus an equivalent rating as
established by one other nationally recognized statistical rating
organization satisfactory to Mortgagee or A:V or better as to
claims paying ability by AM Best, (ii) shall name Mortgagee as an
additional insured and contain a standard noncontributory
mortgagee clause naming Mortgagee (and/or such other party as may
be designated by Mortgagee) as the party to which all payments
made by such insurance company shall be paid, (iii) shall be
maintained throughout the term of this Mortgage without cost to
Mortgagee, (iv) 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), (v) shall contain a
waiver of subrogation against Mortgagee and (vi) shall be
reasonably satisfactory in form and substance to Mortgagee and
reasonably approved by Mortgagee as to amounts, form, risk
coverage, deductibles, loss payees and insureds. Mortgagor shall
pay the premiums for such Policies as the same become due and
payable. Copies of said Policies, certified as true and correct
by Mortgagor, or insurance certificates thereof, shall be
delivered to Mortgagee. Not later than fifteen (15) days prior
to the expiration date of each of the Policies, ▇▇▇▇▇▇▇▇▇ will
deliver to Mortgagee satisfactory evidence of the renewal of each
Policy. The insurance coverage required under Section 3(b) may
be effected under a blanket policy or policies covering the
Mortgaged Property and other property and assets not constituting
a part of the Mortgaged Property; provided that any such blanket
policy shall specify, except in the case of general liability
insurance, the portion of the total coverage of such policy that
is allocated exclusively to the Mortgaged Property, and any
sublimits in such blanket policy applicable to the Mortgaged
Property, which amounts shall not be less than the amounts
required pursuant to Section 3(b) and which shall in any case
comply in all other respects with the requirements of this
Section 3.
(d) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty, Mortgagor shall
give prompt notice thereof to Mortgagee.
(i) In case of loss covered by Policies, Mortgagee may
either (A) jointly with Mortgagor settle and adjust any claim
(unless at the time of the settlement of such claim a monetary
Event of Default has occurred, in which event Mortgagee may
settle and adjust such claim without the consent of Mortgagor) or
(B) allow Mortgagor to agree with the insurance company or
companies on the amount to be paid upon the loss; provided, that
Mortgagor may adjust losses aggregating not in excess of ten
percent (10%) of the Allocated Loan Amount but not in excess of
$500,000 if such adjustment is carried out in a competent and
timely manner, and provided that in any case Mortgagee shall and
is hereby authorized to collect and receipt for any such
insurance proceeds. The reasonable expenses incurred by
Mortgagee in the adjustment and collection of insurance proceeds
shall become part of the Obligations and be secured hereby and
shall be reimbursed by ▇▇▇▇▇▇▇▇▇ to Mortgagee upon demand
therefor.
(ii) In the event of any insured damage to or
destruction of the Mortgaged Property or any part thereof (herein
called an "Insured Casualty") (i) where the aggregate amount of
the loss, as reasonably determined by an independent insurance
adjuster, is less than ten percent (10%) of the Allocated Loan
Amount but not in excess of $500,000 (the "Restoration
Threshold", and if, in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within six (6) months of
settlement of the claim to an economic unit not 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 Obligations, (ii) if the
loss exceeds the Restoration Threshold but, after giving effect
to the damage or destruction, Mortgagor shall be in compliance
with the Debt Service Coverage Test and the Property Release
Test, or (iii) if Mortgagee otherwise elects to allow Mortgagor
to restore the Mortgaged Property, then, in any of such events,
if no Event of Default (as hereinafter defined) shall have
occurred and be then continuing, the proceeds of insurance (after
reimbursement of any reasonable expenses incurred by Mortgagee in
connection with the collection of any applicable insurance
proceeds) shall be made available to reimburse Mortgagor or to
pay for the cost of restoring, repairing, replacing or rebuilding
the Mortgaged Property or part thereof subject to the Insured
Casualty, as provided for below; and Mortgagor hereby covenants
and agrees forthwith 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 (the "Deficient Amount").
(iii) Except as provided above, the proceeds of
insurance collected upon any Insured Casualty shall be held in an
Eligible Account by Mortgagee and shall, at the option of
Mortgagee in its sole discretion, be applied to the payment of
the Obligations as provided in Section 2.12(f) of the Loan
Agreement (provided that any such prepayment shall be without
Repayment Fee or prepayment penalty) 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.
(iv) In the event that proceeds of insurance (after
reimbursement of any reasonable expenses incurred by Mortgagee in
connection with the collection of any applicable insurance
proceeds), if any, shall be made available to Mortgagor for the
restoring, repairing, replacing or rebuilding of the Mortgaged
Property, Mortgagor hereby covenants 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 applicable law
and plans and specifications approved in advance by Mortgagee,
such approval not to be unreasonably withheld or delayed.
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.
(v) In the event Mortgagor is entitled to use of or
reimbursement out of insurance proceeds held by Mortgagee, such
proceeds shall be disbursed from time to time upon Mortgagee (or
at Mortgagee's election, the Collateral Agent) being furnished
with (A) evidence reasonably satisfactory to it of the estimated
cost of completion of the restoration, repair, replacement and
rebuilding, (B) funds, or, at Mortgagee's option, assurances
reasonably 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 (C) such architect's certificates, waivers of
lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of
cost, 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 approved by
Mortgagee prior to commencement of work such approval not to be
unreasonably withheld or delayed. All proceeds of rental or
business interruption insurance shall be deposited into the
Collection Account in accordance with Section 2.12(a) of the Loan
Agreement. Mortgagee may retain a construction consultant to
inspect such work and review ▇▇▇▇▇▇▇▇▇'s request for payments and
Mortgagor shall, on demand by Mortgagee, reimburse Mortgagee for
the reasonable fees and disbursements of such consultant. 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 repayment 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 Mortgagor so long as no Event of
Default has occurred and is continuing.
(e) Mortgagor shall not carry separate insurance, concurrent
in kind or form or contributing in the event of loss, with any
insurance required under this Mortgage; provided, however, that
notwithstanding the foregoing, Mortgagor may carry insurance not
required under this Mortgage if any such insurance affecting the
Mortgaged Property shall be for the mutual benefit of Mortgagor
and Mortgagee, as their respective interests may appear, and
shall be subject to all other provisions of this paragraph.
4. Payment of Taxes, etc. Subject to the provisions of
Section 27 hereof and the applicable provisions of the Loan
Agreement, Mortgagor shall pay all Impositions (including,
without limitation, all taxes, assessments, water rates and sewer
rents, now or hereafter levied or assessed or imposed against the
Mortgaged Property or any part thereof and all ground rents,
maintenance charges, other governmental impositions and other
charges (including, without limitation, vault charges and license
fees for the use of vaults, chutes and similar areas adjoining
the Land), 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. Subject to the
terms of the Loan Agreement, ▇▇▇▇▇▇▇▇▇ will deliver to Mortgagee
evidence satisfactory to Mortgagee that the Impositions and Other
Charges have been so paid or are not then delinquent no later
than thirty (30) days following the date on which the Impositions
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 (other than
Permitted Encumbrances) which may be or become a lien or charge
against the Mortgaged Property, and shall promptly pay for, or
cause to be paid, all utility services provided to the Mortgaged
Property.
5. Condemnation.
(a) Mortgagor shall promptly give Mortgagee written notice of
the actual or threatened commencement of any proceeding for a
Taking and shall deliver to Mortgagee copies of any and all
papers served in connection with such proceedings. Mortgagee is
hereby irrevocably appointed as ▇▇▇▇▇▇▇▇▇'s attorney-in-fact,
coupled with an interest, with exclusive power to collect,
receive and retain any Condemnation Proceeds for said Taking.
With respect to any compromise or settlement in connection with
such proceeding, Mortgagee will jointly with Mortgagor compromise
and reach settlement (unless at the time of such Taking a
monetary Event of Default has occurred, in which event Mortgagee
may compromise and reach settlement without the consent of
Mortgagor). Notwithstanding the foregoing provisions of this
Section 5(a), ▇▇▇▇▇▇▇▇▇ is authorized to negotiate, compromise
and settle, without participation by Mortgagee, Condemnation
Awards of up to 10% of the Allocated Loan Amount but not in
excess of $500,000 in connection with any Taking.
Notwithstanding any Taking, ▇▇▇▇▇▇▇▇▇ shall continue to pay the
Obligations at the time and in the manner provided for in the
Note, in this Mortgage and the other Loan Documents and the
Obligations shall not be reduced until any Condemnation Proceeds
therefor shall have been actually received after expenses of
collection and applied by Mortgagee to the discharge of the
Obligations. Mortgagee shall not be limited to the interest paid
on the Condemnation Proceeds by the condemning authority, but
shall be entitled to receive out of the Condemnation Proceeds
interest at the rate or rates provided in the Loan Documents.
(b) With respect to a total Taking, i.e., other than a Taking
in part for which the provisions of subparagraph (c) below shall
control, Mortgagor shall cause the Condemnation Proceeds to be
paid directly to Mortgagee as provided in Section 2.12(f) of the
Loan Agreement. If Mortgagor shall not be in compliance with the
Debt Service Coverage Test and the Property Release Test,
Mortgagee shall apply any such Condemnation Proceeds to the
reduction or discharge of the Obligations (whether or not then
due and payable) provided that any such prepayment shall be
without Repayment Fee or prepayment penalty. If Condemnation
Proceeds in respect of such Taking are applied to the payment of
the Obligations, Mortgagor shall be relieved of any duty to
restore, repair, replace or rebuild the Mortgaged Property. If
Mortgagor shall be in compliance with the Debt Service Coverage
Test and the Property Release Test, Mortgagee shall cause the
Condemnation Proceeds to be paid to Mortgagor.
(c) With respect to a Taking in part, which shall mean any
Taking which does not render the Mortgaged Property physically or
economically unsuitable in the commercially reasonable judgment
of Mortgagor for the use to which it was devoted prior to the
Taking, (i) if, after giving effect to the partial Taking,
Mortgagor shall be in compliance with the Debt Service Coverage
Test and the Property Release Test, Mortgagor shall cause the
Condemnation Proceeds to be paid to Mortgagee to be applied to
pay for or to reimburse Mortgagor for the cost of repairing,
replacing, restoring or rebuilding the Mortgaged Property as
follows or (ii) if Mortgagor shall not be in such compliance with
the Debt Service Coverage Test and the Property Release Test, the
Condemnation Proceeds shall be held by Mortgagee in an Eligible
Account and shall, at the option of Mortgagee, in its sole
discretion, be applied to the payment of the Obligations as
provided in Section 2.12(f) of the Loan Agreement (provided that
any such prepayment shall be without Repayment Fee or prepayment
penalty) or applied to reimburse Mortgagor for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged
Property as follows:
(x) Provided that Condemnation Proceeds shall be made
available to Mortgagor for the restoring, repairing, replacing or
rebuilding of the Mortgaged Property, Mortgagor hereby covenants
to restore, repair, replace or rebuild the same to be of at least
equal value and of substantially the same character as prior to
the Taking, to the extent commercially practicable (i.e., what
other developers of other property similar to the Borrower and
the Mortgaged Property, respectively, and similarly situated
would construct under similar circumstances, all to be effected
in accordance with applicable law and plans and specifications
approved in advance by Mortgagee, such approval not to be
unreasonably withheld. 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 Condemnation Proceeds
made available pursuant to the terms hereof.
(y) The Condemnation Proceeds held by Mortgagee shall be
held in an Eligible Account by Mortgagee and shall be disbursed
from time to time upon Mortgagee (or at Mortgagee's election, the
Collateral Agent) being furnished with (A) evidence satisfactory
to it of the estimated cost of completion of the restoration,
repair, replacement and rebuilding, (B) funds, or, at Mortgagee's
option, assurances satisfactory to Mortgagee that such funds are
available, sufficient in addition to the Condemnation Proceeds to
complete the proposed restoration, repair, replacement and
rebuilding, and (C) such architect's certificates, waivers of
lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of
cost, 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 approved by
Mortgagee, which approval shall not be unreasonably withheld or
delayed, prior to commencement of work. Mortgagee may retain a
construction consultant to inspect such work and review
▇▇▇▇▇▇▇▇▇'s request for payments and Mortgagor shall, on demand
by Mortgagee, reimburse Mortgagee for the reasonable fees and
disbursements of such consultant. 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
construction work performed from time to time; funds other than
Condemnation Proceeds 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
repayment 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 Condemnation Proceeds held by Mortgagee after payment of such
costs of restoration, repair, replacement or rebuilding shall be
paid to Mortgagor so long as no Event of Default has occurred and
is continuing.
(z) If the Mortgaged Property is sold, through
foreclosure or otherwise, prior to the receipt by Mortgagee of
any such Condemnation Proceeds, Mortgagee shall have the right,
whether or not a deficiency judgment on the Note shall have been
sought, recovered or denied, to have reserved in any Foreclosure
decree a right to receive said award or payment, or a portion
thereof sufficient to pay the Obligations. In no case shall any
such application reduce or postpone any payments otherwise
required pursuant to the Loan Agreement, other than the final
payment on the Note.
6. Leases and Rents.
(a) ▇▇▇▇▇▇▇▇▇ does hereby absolutely and unconditionally
assign to Mortgagee, ▇▇▇▇▇▇▇▇▇'s right, title and interest in all
current and future Leases and Rents, it being intended by
▇▇▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇▇▇ 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. Any portion of the Rents held by ▇▇▇▇▇▇▇▇▇ shall be held
in trust for the benefit of Mortgagee for use in the payment of
the Obligations. Upon an Event of Default, 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 ▇▇▇▇▇▇▇▇▇
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 Obligations in such priority and
proportions as Mortgagee in its discretion shall deem proper.
(b) Mortgagor shall not enter into any Leases or modify
existing Leases without the prior written consent of Mortgagee
which consent shall not be unreasonably withheld or delayed,
provided, that Mortgagee's consent shall be deemed to have been
given if Mortgagee fails to reject or consent to a proposed lease
within fifteen (15) business days' receipt thereof; and, further,
provided, that no such consent shall be required with respect to
Leases for space which constitute less than ten percent (10%) of
the net rentable square footage of the Mortgaged Property.
Mortgagor shall furnish Mortgagee with executed copies of all
Leases. All renewals or amendments of Leases shall provide for
rental rates comparable to then-existing local market rates and
terms and conditions commercially reasonable and consistent with
then-prevailing market terms and conditions. All renewals
(except pursuant to the terms of Leases then in effect) or
amendments of Leases which do not satisfy the requirements of the
preceding sentence shall be subject to the prior approval of
Mortgagee, not to be unreasonably withheld or delayed, provided,
that any such renewal or amendment shall be deemed approved if
Mortgagee fails to approve or disapprove any such renewal or
amendment within fifteen (15) business days' receipt thereof by
Mortgagee. All Leases executed after the date hereof shall
provide that they are subordinate to this Mortgage and that the
lessee agrees to attorn to Mortgagee. Mortgagee agrees, upon the
request of any anchor tenant under a Lease for space at the
Mortgaged Property and for all other tenants under a Lease for
space in excess of ten percent (10%) of the rentable square feet
of the Mortgaged Property, to execute and deliver a non-
disturbance agreement in form reasonably satisfactory to the
tenant. 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 Obligations; (ii) shall promptly send
copies to Mortgagee of all notices of default which Mortgagor
shall send or receive thereunder; (iii) shall enforce all of the
material terms, covenants and conditions contained in the Lease
upon the part of the lessee thereunder to be observed or
performed, short of termination thereof, except as set forth in
clause (vi) below; (iv) shall not collect any of the Rents more
than one (1) month in advance; (v) shall not execute any other
assignment of lessor's interest in the Leases or Rents; (vi)
shall not alter, modify or change the terms of the Leases without
the prior written consent of Mortgagee except as set forth in the
first sentence of this subsection (b), or, except if Tenant is in
default in its monetary obligations thereunder, cancel or
terminate the Leases or accept a surrender thereof; (vii) shall
not convey or transfer or suffer or permit a conveyance or
transfer of the Mortgaged Property or of any interest therein so
as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees
thereunder; (viii) shall not alter, modify or change the terms of
any guaranty of the Leases or cancel or terminate such guaranty
without the prior written consent of Mortgagee; and (ix) shall
not consent to any assignment of or subletting under the Leases
not in accordance with their terms, without the prior written
consent of Mortgagee, which shall not be unreasonably withheld.
The provisions of the foregoing clauses (vi), (viii) and (ix)
shall not be applicable to leases for space which constitutes ten
percent (10%) or less of the net rentable square footage of the
Mortgaged Property.
(c) Mortgagor shall deposit security deposits of lessees into
a segregated account in accordance with applicable Legal
Requirements. 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 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.
7. Maintenance 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 or pursuant to Leases in
effect from time to time) without the consent of Mortgagee which
shall not unreasonably be withheld or delayed. Subject to the
provisions of Section 27, ▇▇▇▇▇▇▇▇▇ shall promptly comply with
all Legal Requirements. Mortgagor shall or shall cause its
tenants to promptly repair, replace or rebuild any part of the
Mortgaged Property that becomes damaged, worn or dilapidated and
Mortgagor shall or shall cause its tenants to complete and pay
for any structure at any time in the process of construction or
repair on the Land. Mortgagor shall not initiate, join 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 without consent of Mortgagee which shall not be
unreasonable withheld or delayed. 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 Land in any
material respect, (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
management.
8. 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 secured hereby, and that Mortgagee will
continue to rely on ▇▇▇▇▇▇▇▇▇'s ownership of the Mortgaged
Property as a means of maintaining the value of the Mortgaged
Property as security for repayment of the Obligations. 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 Obligations, Mortgagee
can recover the Obligations by a sale of the Mortgaged Property.
Mortgagor shall not, without the prior written consent of
Mortgagee, which consent may be granted or withheld in
Mortgagee's sole discretion, 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 Section 8 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, ▇▇▇▇▇▇▇▇▇'s right, title and
interest in and to any Leases or any Rents; and (iii) a transfer
of a direct or indirect ownership interest or voting right in the
Borrower that would cause a Change of Control to occur.
(c) Subject to the provisions of the Loan Agreement,
Mortgagee may predicate its decision to grant or withhold consent
hereunder on Mortgagee's satisfaction, in its sole and absolute
discretion, with all relevant factors (including, without
limitation, the creditworthiness of the proposed transferee and
such proposed transferee's management experience), and, in the
case of any transfer of title to the Mortgaged Property, upon the
execution of an assumption agreement in form and substance
acceptable to Mortgagee and the payment of all costs and expenses
incurred by Mortgagee in connection with the assumption
(including, without limitation, reasonable attorneys' fees).
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 Obligations immediately due and
payable upon ▇▇▇▇▇▇▇▇▇'s sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property without
Mortgagee's consent. Except as provided in the Loan Agreement,
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. Except
as provided in the Loan Agreement, 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) ▇▇▇▇▇▇▇▇▇ agrees to bear and shall pay or reimburse
Mortgagee on demand for all reasonable expenses (including,
without limitation, reasonable attorney's 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.
9. Changes in the Laws Regarding Taxation. If any law is
enacted or adopted or amended after the date of this Mortgage
which deducts the Obligations from the value of the Mortgaged
Property for the purpose of taxation or which imposes a tax,
either directly or indirectly, on the Obligations 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 ▇▇▇▇▇▇▇▇▇ 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 ninety (90) days,
to declare the Obligations immediately due and payable.
10. No Credits on Account of the Obligations. Mortgagor will
not claim or demand or be entitled to any credit or credits on
account of the Obligations for any part of the Impositions or
Other Charges assessed against the Mortgaged Property, or any
part thereof.
11. 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.
12. 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 section 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 Obligations, 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 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 Obligations (or,
if the Note and all other Obligations 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
Obligations shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full
stated term of the Obligations until payment in full so that the
rate or amount of interest on account of the Obligations does not
exceed the maximum rate of interest permitted by law from time to
time in effect and applicable to the Obligations for so long as
the Obligations are outstanding.
13. Books and Records. ▇▇▇▇▇▇▇▇▇ will maintain full and
accurate books of accounts and other records reflecting the
results of the operations of the Mortgaged Property and will fur-
nish, or cause to be furnished, to Mortgagee such information
with respect to the operation of the Mortgaged Property as
Mortgagee from time to time reasonably may request, all in
accordance with the provisions of the Loan Agreement.
14. Performance of Other Agreements. Mortgagor shall observe
and perform in all material respects the terms to be observed or
performed by Mortgagor under any agreement or recorded instrument
affecting or pertaining to the Mortgaged Property the failure to
perform which would have a Material Adverse Effect.
15. Further Acts, etc. Mortgagor will, at the cost of
▇▇▇▇▇▇▇▇▇, 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, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Mortgagee
the property and rights hereby mortgaged, given, granted,
bargained, sold, alienated, enfeoffed, conveyed, confirmed,
warranted, 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. ▇▇▇▇▇▇▇▇▇, 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. Mortgagor grants to Mortgagee an irrevocable power of
attorney coupled with an interest for the purpose of exercising
the rights provided for in this Section 15.
16. 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 (other than income or franchise taxes imposed on
Mortgagee), 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.
17. Reporting Requirements. ▇▇▇▇▇▇▇▇▇ agrees to give prompt
notice to Mortgagee of the insolvency or bankruptcy filing of
Mortgagor.
18. Events of Default. The term "Event of Default" as used
herein shall mean the occurrence or happening, at any time and
from time to time, of an Event of Default under the Loan
Agreement as a result of which Mortgagee may, pursuant to the
Loan Agreement, exercise its rights and remedies against
Mortgagor, the Borrowers and/or the Mortgaged Property.
▇▇▇▇▇▇▇▇▇ acknowledges and agrees that this Mortgage shall be
cross-collateralized and cross-defaulted with any and all other
mortgages, assignments of leases and rents, security agreements
and fixture filings executed by any of the Borrowers to secure
the Loan pursuant to the terms of the Loan Agreement.
19. Late Payment Charge. If any portion of the Obligations
is not paid within ten (10) days after the date on which it is
due, Mortgagor shall pay to Mortgagee upon demand an amount equal
to the amount applicable thereto as provided in the Loan
Agreement.
20. Right to Cure Defaults. Upon the occurrence of any Event
of Default, 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
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 Obligations, and the cost and
expense thereof (including reasonable attorneys' fees to the
extent permitted by law), with interest at the Default Rate 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 Obligations, shall be secured by this
Mortgage and shall be due and payable to Mortgagee upon demand
therefor.
21. 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, but not limited to, 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, subject to the provisions of Section 48, without
impairing or otherwise affecting the other rights and remedies of
Mortgagee:
(i) declare the entire principal amount of the
indebtedness secured hereby with interest accrued thereon 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 in accordance with the laws of the
jurisdiction in which such Mortgaged Property is located;
(iii) with or without entry, to the extent permitted,
and pursuant to the procedures provided by, applicable law,
institute proceedings for the foreclosure of this Mortgage for
the Obligations then due and payable subject to the continuing
lien of this Mortgage, in accordance with the laws of the
jurisdiction in which such Mortgaged Property is located, for the
balance of the Obligations 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 entity or in parcels, at
such time and place, upon such terms and after such notice
thereof as may be required or permitted by the laws of the
jurisdiction in which such Mortgaged Property is located;
(v) institute an action, suit or proceeding in equity
for the specific performance of any covenant, condition or
agreement contained herein or in the other Loan Documents;
(vi) subject to Section 48 hereof, recover judgment on
the Note either before, during or after any proceedings for the
enforcement of this Mortgage;
(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 Obligations and without regard for the solvency of Mortgagor
or of any person, firm or other entity liable for the payment of
the Obligations;
(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, sue for, collect and
receive all earnings, revenues, rents, issues profits and other
income of the Mortgaged Property and every part thereof); and (E)
apply the receipts from the Mortgaged Property to the payment of
the Obligations, after deducting therefrom all expenses
(including, without limitation, reasonable attorneys' fees)
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 the right to establish a lock box for all Rents
and other receivables 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
Section 21, together with any other sums which then may be held
by Mortgagee under this Mortgage, whether under the provisions of
this section or otherwise, shall be applied by Mortgagee in
accordance with the provisions of the Loan Agreement.
(c) Upon any sale made under or by virtue of this Section 21,
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 Obligations 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.
(d) To the extent allowed by law, recovery of any judgment by
▇▇▇▇▇▇▇▇▇ 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.
(e) Mortgagee may terminate or rescind any proceeding or
other action brought in connection with its exercise of the
remedies provided in this Section 21 at any time before the
conclusion thereof, as determined in Mortgagee's sole discretion
and without prejudice to Mortgagee.
(f) Mortgagee may resort to any remedies and the security
given by this Mortgage or the other 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 this Mortgage or the other Loan Documents. The
failure of Mortgagee to exercise any right, remedy or option
provided in this Mortgage or the other Loan Documents shall not
be deemed a waiver of such right, remedy or option or of any
covenant or obligation secured by this Mortgage or the other Loan
Documents. No right, power or remedy, including, without
limitation, remedies with respect to any security for the Note,
conferred upon or reserved to Mortgagee by this Mortgage or any
other Loan Document is exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be
cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Loan
Document, now or hereafter existing at law, in equity or by
statute, and Mortgagee shall be entitled to resort to such
rights, powers, remedies or security as Mortgagee shall in its
sole and absolute discretion deem advisable. 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 ▇▇▇▇▇▇▇▇▇'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 Obligations 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, subject to the provisions of Section 48,
the liability of Mortgagor to pay the Obligations. No waiver by
Mortgagee shall be effective, unless it is in writing and then
only to the extent specifically stated.
(g) The interests and rights of Mortgagee under this Mortgage
or 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 Obligations,
(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 Obligations.
(h) ▇▇▇▇▇▇▇▇▇ agrees to the full extent permitted by law that
if an Event of Default occurs, neither Mortgagor nor anyone
claiming through or under it shall or will set up, claim or seek
to take advantage of any appraisement, valuation, stay, extension
or redemption laws now or hereafter in force, in order to prevent
or hinder the enforcement or foreclosure of this Mortgage or the
absolute sale of the Mortgaged Property or any portion thereof or
the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and
Mortgagor for itself and all who may at any time claim through or
under it, hereby waives, to the full extent that it may lawfully
do so, (i) the benefit of all such laws, (ii) all notices of any
Event of Default or of Mortgagee's election to exercise or actual
exercise of any right, remedy or recourse provided for under the
Loan Documents, and (iii) any and all right to have the assets
comprising the Mortgaged Property marshaled upon any foreclosure
of the lien hereof, and ▇▇▇▇▇▇▇▇▇ agrees that Mortgagee or any
court having jurisdiction to foreclose such lien may sell the
Mortgaged Property in part or as an entirety.
22. Right of Access. Mortgagee and its agents shall have the
right to enter and inspect the Mortgaged Property as provided in
Section 5.1(K) of the Loan Agreement.
23. Reasonable Use and Occupancy. In addition to the rights
which Mortgagee may have herein, upon the occurrence of any Event
of Default which shall remain uncured, Mortgagee, at its option,
may require Mortgagor to pay monthly in advance to Mortgagee, or
any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of such part
of the Mortgaged Property as may be occupied by Mortgagor or may
require Mortgagor to vacate and surrender possession of the
Mortgaged Property to Mortgagee or to such receiver and, in
default thereof, Mortgagor may be evicted by summary proceedings
or otherwise.
24. Security Agreement. This Mortgage is both a real
property mortgage/deed of trust 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 Obligations, 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 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 and is to be
filed in the office where a mortgage on the Mortgaged Property
would be recorded. The respective addresses of the Mortgagor
(debtor) and the Mortgagee (secured party) are set forth in the
beginning of this Mortgage. All or part of the Mortgaged
Property is or is 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. If an Event of Default shall occur which shall
remain uncured, 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 limitation, 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 therefor any and all expenses (including,
without limitation, reasonable legal expenses and attorneys'
fees, 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 of the Loan
Agreement at least ten (10) Business Days prior to such action or
such notice as is otherwise required by law or the Loan
Agreement, 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 Obligations in such priority and proportions as required by
the Loan Agreement. In the event of any change in name, identity
or structure of 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 this
Mortgage or 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 financial or other statements signed only by
Mortgagee, as secured party, in connection with the Collateral
covered by this Mortgage.
25. 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 discretion, decides should be brought to
protect its interest under this Mortgage in the Mortgaged
Property. 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 Obligations, and any such subrogation
rights shall constitute additional security for the payment of
the Obligations.
26. Waiver of Setoff and Counterclaim. Except as may be
permitted under the Loan Agreement, all amounts due under this
Mortgage, the Note and the other Loan Documents shall be payable
without setoff, counterclaim or any deduction whatsoever. Except
as may be permitted under the Loan Agreement, Mortgagor hereby
waives the right to assert a counterclaim in any action or
proceeding brought against it by Mortgagee, or arising out of or
in any way connected with this Mortgage and the other Loan
Documents, or the Obligations.
27. Contest of Certain Claims. Notwithstanding the
provisions of Section 4 and Section 7, Mortgagor shall not be in
default for failure to pay or discharge Impositions, Other
Charges or mechanic's or materialman's liens asserted against the
Mortgaged Property or for failure to comply with any Legal
Requirement if, and so long as, (a) Mortgagor shall have notified
Mortgagee of same within ten (10) 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) unless funds are otherwise reserved, Mortgagor shall furnish
to Mortgagee a cash deposit, or an indemnity bond satisfactory to
Mortgagee with a surety reasonably satisfactory to Mortgagee, in
the amount of the Impositions, Other Charges, or mechanic's or
materialman's lien claim or penalties or fines relating to the
failure to comply with any Legal Requirement, 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 timely upon final determination thereof pay the
amount of any such Impositions, Other Charges, claim, fine or
penalty so determined, together with all costs, interest and
penalties which may be payable in connection therewith; (e) the
failure to pay the Impositions, Other Charges or mechanic's or
materialman's lien claim does not constitute a default under any
other deed of trust, mortgage or security interest covering or
affecting any part of the Mortgaged Property; and (f)
notwithstanding the foregoing, ▇▇▇▇▇▇▇▇▇ 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 Impositions, Other Charges
or claim notwithstanding such contest, if in the reasonable
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.
28. 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 Obligations as the
same become due and owing, without regard to whether or not the
balance of the Obligations 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.
29. Marshalling, Waiver of Redemption 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.
30. Hazardous Substances. Mortgagor and the Mortgaged
Property shall comply with all provisions of the Loan Documents
relating to Environmental Laws, Environmental Claims and
Hazardous Substances.
31. Handicapped Access.
(a) ▇▇▇▇▇▇▇▇▇ agrees that the Mortgaged Property shall at all
times comply to the extent applicable with the requirements of
the Americans with Disabilities Act of 1990, 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, the "Access Laws").
(b) Notwithstanding any provisions set forth herein
(including the provisions of Section 7) 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 materially increase Mortgagor's
responsibilities for compliance with the applicable Access Laws
without the prior written approval of Mortgagee which approval
shall not unreasonably be withheld provided that Mortgagor can
demonstrate the availability of funding sources adequate to
comply with such requirements. The foregoing shall apply to
tenant improvements constructed by Mortgagor or by any of its
tenants. Mortgagee may condition any such approval upon receipt
from Mortgagor of a certificate of Access Law compliance from an
architect, engineer, or other person acceptable to Mortgagee or
other reasonably satisfactory evidence of compliance. Provided
Mortgagor has delivered to Mortgagee the certificate described
in, or otherwise complied with the provisions of, the foregoing
sentence, approval by Mortgagee of tenant improvements as part of
the approval of a new Lease shall also constitute approval of
Mortgagor's compliance with Access Laws applicable to such
improvements.
(c) ▇▇▇▇▇▇▇▇▇ agrees to give prompt notice to Mortgagee of
the receipt by ▇▇▇▇▇▇▇▇▇ of any complaints related to violations
of any Access Laws received from governmental authorities or
involving a threat of litigation and of the commencement of any
proceedings or investigations which relate to compliance with
applicable Access Laws.
(d) ▇▇▇▇▇▇▇▇▇ 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 expenses), imposed upon or
incurred by or asserted against Mortgagee by reason of any
failure of the Mortgaged Property to comply with any Access Laws.
32. Notice. All notices, demands, statements, requests or
consents (collectively, "notices") made hereunder shall be in
writing and given in the manner specified in the Loan Agreement.
33. 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 or any other Loan
Document 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
notice, and Mortgagor hereby expressly waives the right to
receive any notice from Mortgagee with respect to any matter for
which this Mortgage or any other Loan Document does not
specifically and expressly provide for the giving of notice by
Mortgagee to Mortgagor.
34. Remedies of Mortgagor. In the event that a claim or
adjudication is made that Mortgagee or its agents have
unreasonably delayed acting in any case where by law or under
this Mortgage or the other Loan Documents, Mortgagee or such
agent, as the case may be, has an obligation to act promptly,
▇▇▇▇▇▇▇▇▇ agrees that neither Mortgagee nor its agents shall be
liable for any monetary damages, and ▇▇▇▇▇▇▇▇▇'s sole remedies
shall be limited to commencing an action seeking injunctive
relief or declaratory judgment.
35. Sole Discretion of Mortgagee. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to approve or
disapprove, or any arrangement or term is to be satisfactory to
Mortgagee, the decision of Mortgagee to approve or disapprove or
to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Mortgagee and
shall be final and conclusive, except as may be otherwise
expressly and specifically provided herein.
36. 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 ▇▇▇▇▇▇▇▇▇'s Obligations hereunder by reason of (a)
the failure of Mortgagee to comply with any request of Mortgagor
to take any action to foreclose this Mortgage or otherwise
enforce any of the provisions hereof or of 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 Obligations 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 this
Mortgage or the other Loan Documents. Mortgagee may resort for
the payment of the Obligations to any other security held by
Mortgagee in such order and manner as Mortgagee, in its
discretion, may elect. Mortgagee may take action to recover the
Obligations, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Mortgagee thereafter to
foreclose 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.
37. 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.
38. Successors and Assigns. Subject to 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.
39. Severability. If any term, covenant or condition of this
Mortgage or the Loan Documents is held to be invalid, illegal or
unenforceable in any respect, this Mortgage and any such other
Loan Document shall be construed without such provision.
40. 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.
41. 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.
42. 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 "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.
43. 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
Land as against the collection of the Obligations, or any part
hereof.
44. Assignments. Consistent with the applicable provisions
of the Loan Agreement, 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.
45. Waiver of Jury Trial. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 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 ▇▇▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇▇▇.
46. GOVERNING LAW. THE LOAN AGREEMENT AND THE NOTE PROVIDE
THAT THEY ARE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. THIS
MORTGAGE SHALL ALSO BE CONSTRUED UNDER AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. NOTWITHSTANDING THE PARTIES' CHOICE OF
NEW YORK LAW, HOWEVER, (i) THE TERMS AND PROVISIONS OF THIS
MORTGAGE PERTAINING TO THE PRIORITY, ENFORCEMENT OR REALIZATION
BY MORTGAGEE OF ITS RESPECTIVE RIGHTS AND REMEDIES UNDER THIS
MORTGAGE WITH RESPECT TO THE MORTGAGED PROPERTY SHALL BE GOVERNED
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF
THE STATE IN WHICH THE LAND IS LOCATED (THE "STATE") WITHOUT
GIVING EFFECT TO THE CONFLICTS-OF-LAW RULES AND PRINCIPLES OF THE
STATE; (ii) ▇▇▇▇▇▇▇▇▇ AGREES THAT TO THE EXTENT DEFICIENCY
JUDGMENTS ARE AVAILABLE UNDER THE LAWS OF THE STATE AFTER A
FORECLOSURE (JUDICIAL OR NONJUDICIAL) OF THE MORTGAGED PROPERTY,
OR ANY PORTION THEREOF, OR ANY OTHER REALIZATION THEREON BY
MORTGAGEE, MORTGAGEE SHALL HAVE THE RIGHT TO SEEK SUCH A
DEFICIENCY JUDGMENT AGAINST MORTGAGOR IN THE STATE; AND (iii)
MORTGAGOR AGREES THAT IF MORTGAGEE OBTAINS A DEFICIENCY JUDGMENT
IN ANOTHER STATE, THEN MORTGAGEE SHALL HAVE THE RIGHT TO ENFORCE
SUCH JUDGMENT IN THE STATE TO THE EXTENT PERMITTED UNDER THE LAWS
OF THE STATE, AS WELL AS IN OTHER STATES.
47. SUBMISSION TO JURISDICTION. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ SUBMITS TO
THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS MORTGAGE, ANY OF
THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
48. Non-Recourse. The provisions of this Mortgage are
subject to the provisions of Section 8.24 of the Loan Agreement
which are incorporated herein in reference as if herein set forth
in full.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇ has executed this instrument
the day and year first above written.
MORTGAGOR:
KR Tucson, Inc.,
an Arizona corporation
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[ACKNOWLEDGEMENTS]
EXHIBIT A
LEGAL DESCRIPTION
(See Annex attached hereto)