EXHIBIT 10.46
INDENTURE OF MORTGAGE, DEED OF TRUST,
SECURITY AGREEMENT, FINANCING STATEMENT,
FIXTURE FILING AND ASSIGNMENT OF
LEASES AND RENTS
from
▇▇▇▇▇▇ REALTY, L.P.,
as Debtor, Grantor
and Mortgagor
to
__________________________,
as Trustee
for the benefit of
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Lead Agent/Beneficiary/Mortgagee
Dated as of January ___, 1997
-------------------------------------------------------
Prepared and drafted by and after recording, return to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------------------
GRANTING CLAUSES............................................................. 3
1. Definitions.............................................................. 9
2. Warranty................................................................. 17
3. Payment and Performance of Obligations Secured........................... 19
4. Negative Covenants....................................................... 19
5. Insurance................................................................ 19
6. Condemnation and Insurance Proceeds...................................... 24
7. Impositions, Liens and Other Items....................................... 29
8. Funds for Taxes and Insurance............................................ 31
9. The Beneficiary and Trustees............................................. 34
10. Transfers, Additional Indebtedness and Subordinate Liens................ 43
11. Maintenance of Trust Estate; Alterations; Inspection; Utilities......... 44
12. Legal Compliance........................................................ 46
13. Books and Records, Financial Statements, Reports and Other Information.. 46
14. Compliance with Leases and Agreements................................... 47
15. The Beneficiary's Right to Perform...................................... 50
16. The Mortgagor's Existence; Organization and Authority; Litigation....... 50
17. Protection of Security; Costs and Expenses.............................. 51
18. Management of the Properties............................................ 52
19. Environmental Matters................................................... 52
20. Assignment of Rents..................................................... 53
21. Remedies................................................................ 54
22. Application of Proceeds................................................. 61
ii
23. Notice of Certain Occurrences........................................... 61
24. WAIVER OF TRIAL BY JURY................................................. 62
25. Taxes................................................................... 62
26. Notices................................................................. 63
27. No Oral Modification.................................................... 64
28. Partial Invalidity...................................................... 64
29. Successors and Assigns.................................................. 64
30. Governing Law........................................................... 65
31. Recording Fees, Taxes, Etc.............................................. 65
32. No Waiver............................................................... 65
33. Further Assurances...................................................... 66
34. Additional Security..................................................... 66
35. Indemnification by the Mortgagor........................................ 66
36. Release................................................................. 68
37. Security Agreement...................................................... 70
38. As to Property in California............................................ 71
EXHIBIT A Land Parcels
EXHIBIT B Permitted Exception
SCHEDULE 1 Agreements
iii
INDENTURE OF MORTGAGE, DEED OF TRUST,
SECURITY AGREEMENT, FINANCING STATEMENT,
FIXTURE FILING AND ASSIGNMENT OF
LEASES AND RENTS
THIS INDENTURE OF MORTGAGE, DEED OF TRUST, SECURITY AGREEMENT,
FINANCING STATEMENT, FIXTURE FILING AND ASSIGNMENT OF LEASES AND RENTS (herein,
together with all amendments and supplements thereto, called this "Mortgage"),
--------
dated as of the ___ day of January, 1997, made by ▇▇▇▇▇▇ REALTY, L.P., a
Delaware limited partnership (the "Mortgagor"), having an address at 2250 East
---------
Imperial Highway, Suite 1200, El ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as debtor, grantor,
trustor and mortgagor, in favor of [TRUSTEE], ("Trustee") having an address at
-------
____________________, as Trustee for the benefit of ▇▇▇▇▇▇ Guaranty Trust
Company of New York, (the "Beneficiary"), as Lead Agent for the Banks pursuant
-----------
to the Credit Agreement described herein, having an address at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
W I T N E S S E T H :
-------------------
WHEREAS, Mortgagor is the owner of the ground leasehold interests (the
"Ground Leasehold Estate") in the Property (as hereinafter defined), located on
-----------------------
the land described in Exhibits A-1 and A-2 attached hereto (each, a "Land
------------ --- ----
Parcel" and collectively, the "Land Parcels"); and
------------
WHEREAS, Beneficiary and the Banks named in the Credit Agreement have
made a revolving line of credit loan (the "Loan") available to Mortgagor,
----
pursuant to the Revolving Credit Agreement, dated of even date herewith, among
Mortgagor, the Banks and Beneficiary (as amended, modified, restated or
supplemented from time to time, the "Credit Agreement"). The Loan is evidenced
----------------
by a Promissory Note or Notes, dated as of the date hereof or to be dated
subsequent to the date hereof pursuant to the terms of the Credit Agreement
(such note or notes together with all amendments, modifications or replacements
thereof which may hereafter be executed, collectively, the "Note"), made by the
----
Mortgagor, as maker, in favor of Beneficiary and the Banks named therein, as
payee, in the
1
aggregate principal amount of One Hundred Million Dollars ($100,000,000) (the
"Loan Amount"); and
-----------
WHEREAS, the Mortgagor and the Beneficiary intend these recitals to be
a material part of this Mortgage.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Mortgagor hereby agrees as follows:
TO SECURE:
(1) payment and performance of all covenants, liabilities and
obligations contained in, and payment of the indebtedness guaranteed by,
the Note plus all interest, additional interest and additional amounts
payable thereunder; and
(2) payment and performance of all covenants, conditions,
liabilities and obligations of the Mortgagor to the Beneficiary contained
in this Mortgage and any extensions, renewals or modifications hereof; and
(3) payment and performance of all covenants, liabilities and
obligations of Mortgagor or any other Consolidated Subsidiary contained in
each of the other Loan Documents (as hereinafter defined); and
(4) without limiting the generality of the foregoing, payment of
all other indebtedness and liabilities, direct or indirect, of the
Mortgagor to the Beneficiary or the Banks, due or to become due hereunder,
or under any other Loan Document (including, without limitation, any
protective advances, disbursements, payments and reimbursements made, and
charges, expenses and costs (including, without limitation, any enforcement
and collection costs) incurred pursuant to the Note, this Mortgage, or such
other Loan Documents) to protect the security intended to be provided
hereby even if the aggregate amount of indebtedness outstanding at any one
time exceeds the amount of the Note (all of the foregoing indebtedness,
monetary liabilities and
obligations set forth in clauses (1)-(4) above, collectively, the
"Indebtedness"; and payment of the Indebtedness together with the
------------
performance of all covenants and obligations set forth in clauses (1)-(4)
above, collectively, the "Obligations").
-----------
GRANTING CLAUSES
----------------
NOW, THEREFORE, THIS MORTGAGE WITNESSETH: that the Mortgagor, in
consideration of the premises, the acceptance by the Beneficiary of the trusts
created hereby, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged (a) has mortgaged, warranted,
granted, transferred, bargained, sold, conveyed, pledged, and assigned and (b)
by these presents does hereby mortgage, warrant, grant a security interest in,
grant, transfer, bargain, sell, convey, pledge, and assign unto the Beneficiary
and its successors and assigns forever, or, if Section 38 provides that this
instrument is a deed of trust, to the Trustee for the benefit of the Beneficiary
in the trusts created hereby, WITH POWER OF SALE, all its estate, right, title
and interest now owned or hereafter acquired in, to and under any and all of the
property (herein called the "Trust Estate") described in the following Granting
------------
Clauses:
I. The Ground Leasehold Estate and all right, title and interest of
Mortgagor in, to and under the Ground Lease, with all rights of use, occupancy
and enjoyment and in and to all rents, income and profits arising from or
pursuant to the Ground Lease together with all amendments, extensions, renewals
and modifications of the Ground Lease and all credits, deposits, options and
privileges of Mortgagor as lessee under the Ground Lease including, without
limitation, the right to renew or extend the Ground Lease for a succeeding term
or terms and all rights of Mortgagor under the Ground Lease in connection with
any bankruptcy or insolvency proceeding of the lessor under the Ground Lease,
if any;
II. All right, title and interest of the Mortgagor in and to all
buildings, structures and other improvements now standing, or at any time
hereafter constructed or placed, upon the Land Parcels, including all of the
Mortgagor's right, title and interest in and to all equipment and fixtures of
every kind and nature on
3
the Land Parcels or in any such buildings, structures or other improvements
(such buildings, structures, other improvements, equipment and fixtures being
herein collectively called the "Improvements"), (b) all right, title and
------------
interest of the Mortgagor in and to all and singular tenements, hereditaments,
easements, rights of way, rights, privileges and appurtenances in and to the
Land Parcel belonging or in any way appertaining thereto, including without
limitation all right, title and interest of the Mortgagor in, to and under any
streets, ways, alleys, vaults, gores or strips of land adjoining any Land Parcel
and (c) all claims or demands of the Mortgagor, in law or in equity, in
possession or expectancy of, in and to any Land Parcel together with rents,
income, revenues, issues and profits from and in respect of any Land Parcel and
the Improvements and the present and continuing right to make claim for,
collect, receive and receipt for the same as hereinafter provided. It is the
intention of the parties hereto that, so far as may be permitted by law, all of
the foregoing, whether now owned or hereafter acquired by the Mortgagor,
affixed, attached or annexed to any Land Parcel shall be and remain or become
and constitute a part of the Trust Estate and the security covered by and
subject to the lien of this Mortgage. All such right, title and interest of the
Mortgagor in and to a Land Parcel, the interest of the Mortgagor in and to the
Improvements located thereon and such other property with respect thereto
described in Granting Clauses I and II is herein called a "Property" and each
--------
such Property, collectively, the "Properties."
----------
III. All right, title and interest of the Mortgagor in and to (i) all
extensions, improvements, betterments, renewals, substitutes and replacements of
and on the Properties described in the foregoing Granting Clauses I and II and
(ii) all additions and appurtenances thereto not presently leased to or owned by
the Mortgagor and hereafter leased to, acquired by or released to the Mortgagor
or constructed, assembled or placed upon the Properties (including, but not
limited to, the fee estate in any Land Parcel) immediately upon such leasing,
acquisition, release, construction, assembling or placement, and without any
further grant or other act by the ▇▇▇▇ ▇▇▇▇▇.
IV. All the estate, right, title and interest of the Mortgagor in and
to (i) all judgments, insurance
4
proceeds, awards of damages and settlements resulting from condemnation
proceedings or the taking of the Properties (or any of them), or any part
thereof, under the power of eminent domain or for any damage (whether caused by
such taking or otherwise) to the Properties (or any of them) or any part
thereof, or to any rights appurtenant thereto, and all proceeds of any sales or
other dispositions of the Properties (or any of them) or any part thereof; and
the Beneficiary is hereby authorized to collect and receive said awards and
proceeds and to give proper receipts and acquittances thereto, subject to the
conditions and limitations hereinafter set forth; and (ii) all contract rights,
general intangibles, actions and rights in action, relating to the Properties
(or any of them) including, without limitation, all rights to insurance proceeds
and unearned premiums arising from or relating to damage to the Properties (or
any of them); and (iii) all proceeds, products, replacements, additions,
substitutions, renewals and accessions of and to the Properties (or any of
them).
V. The Mortgagor does hereby pledge and presently and absolutely
assign to the Beneficiary from and after the date hereof (including any period
of redemption), primarily and on a parity with said real estate, and not
secondarily, all the rents, issues and profits of the Properties and all rents,
issues, profits, revenues, royalties, bonuses, rights, and benefits due, payable
or accruing (including all deposits of money as advance rent, for security or as
▇▇▇▇▇▇▇ money or as down payment for the purchase of all or any part of the
Properties) (the "Rents") under any and all present and future leases,
-----
subleases, underlettings, concession agreements, licenses, contracts or other
agreements relative to the ownership or occupancy of all or any portion of the
Properties and does hereby transfer and assign to the Beneficiary all such
leases and agreements (the "Leases"). The Beneficiary hereby grants to the
------
Mortgagor the right to collect and use the Rents as they become due and payable
under the Leases, until an Event of Default has occurred and is continuing,
provided that the existence of such right shall not operate to subordinate this
--------
assignment to any subsequent assignment, in whole or in part by the Mortgagor,
and any such subsequent assignment shall be subject to the rights of the
Beneficiary under this Mortgage. The Mortgagor further agrees to execute and
deliver such assignments of leases or assignments of
5
land sale contracts as the Beneficiary may from time to time request. Upon the
occurrence and during the continuance of an Event of Default (1) the Mortgagor
agrees, upon demand, to deliver to the Beneficiary such additional assignments
thereof as the Beneficiary may request and agrees that the Beneficiary may
assume the management of the Properties (or any of them), and collect the Rents,
applying the same upon the Obligations and (2) the Mortgagor hereby authorizes
and directs all tenants, purchasers or other persons occupying or otherwise
acquiring any interest in any part of the Properties to pay the Rents due under
the Leases to the Beneficiary upon request of the Beneficiary. The Mortgagor
hereby appoints the Beneficiary as its true and lawful attorney in fact to
manage said property and collect the Rents, with full power to bring suit for
collection of the Rents and possession of the Properties (or any of them),
giving and granting unto said Beneficiary full power and authority to do and
perform all and every act and thing whatsoever requisite and necessary to be
done in the protection of the security hereby conveyed; provided, however, that
-------- -------
(i) this power of attorney coupled with an interest and assignment of rents
shall not be construed as an obligation upon the Beneficiary to manage said
property or to make or cause to be made any repairs or to take any other action
that may be needful or necessary and (ii) the Beneficiary agrees that until such
Event of Default has occurred and is continuing as aforesaid, the Beneficiary
shall not exercise its rights pursuant to said power of attorney coupled with an
interest and shall permit the Mortgagor to perform the aforementioned management
responsibilities and collect the Rents. Upon the Beneficiary's receipt of the
Rents, at the Beneficiary's option, it may pay: (1) reasonable charges for
collection hereunder, costs of necessary repairs and other costs requisite and
necessary in connection with the management of the premises, during the
continuance of this power of attorney coupled with an interest and assignment of
rents including general and special taxes and assessments and insurance premiums
and (2) the Indebtedness secured hereby. This power of attorney coupled with
an interest and assignment of leases and rents shall be irrevocable until this
Mortgage shall have been satisfied and the releasing of this Mortgage shall act
as a revocation of this power of attorney coupled with an interest and
assignment of leases and rents with respect to such portion of the Trust Estate
so released. The
6
Beneficiary shall have and hereby expressly reserves the right and privilege
(but assumes no obligation) to demand, collect, ▇▇▇ for, receive and recover
the Rents, or any part thereof, now existing or hereafter made, and apply the
same in accordance with law, all in accordance herewith.
VI. All of the Mortgagor's right, title and interest in and to all
personal and intangible property and equipment of every nature whatsoever now or
hereafter located in, arising from or on and utilized or to be used in
connection with the Properties (or any of them), including but not limited to
(a) all screens, window shades, blinds, wainscoting, storm doors and windows,
floor coverings, and awnings; (b) all apparatus, machinery, accessions,
equipment and appliances not included as fixtures; (c) all items of furniture,
furnishings, and personal property; (d) all extensions, additions,
improvements, betterments, renewals, substitutions, and replacements to or of
any of the foregoing (a)-(c) (all of said property in (a)-(d) being
collectively,the "Equipment"); (e) all accounts receivable arising from the
---------
sale or other disposition of all or any of the Mortgagor's real property,
buildings, structures and other improvements, fixtures, furniture, furnishings,
apparatus, machinery, appliances or other equipment, and all extensions,
renewals, improvements, substitutions and replacements thereto whether owned or
leased, now or hereafter acquired in connection with the Properties; (f) all
accounts, including the Escrow Account, general intangibles, chattel paper, cash
or monies of the Mortgagor, wherever located, whether in the form of cash or
checks, and all cash equivalents including, without limitation, all deposits and
certificates of deposit, instruments, whether negotiable or non-negotiable, debt
notes both certificated and uncertificated, repurchase obligations for
underlying notes of the types described herein, and commercial paper (i)
received in connection with the sale or other disposition of all or any of the
Mortgagor's real property, buildings, structures and other improvements,
fixtures, furniture, furnishings, apparatus, machinery, appliances or other
equipment, and all extensions, renewals, improvements, substitutions and
replacements thereto whether owned or leased, now or hereafter acquired, all in
connection with the Properties, (ii) maintained by the Mortgagor in a
segregated account in trust for the benefit of the Beneficiary or
7
(iii) held by the Beneficiary; and (g) all proceeds (as defined in the Uniform
Commercial Code) of all of the foregoing; it being mutually agreed, intended and
declared, that the Trust Estate and all of the property rights and fixtures
owned by the Mortgagor shall, so far as permitted by law, be deemed to form a
part and parcel of the Land Parcels and for the purpose of this Mortgage to be
real estate and covered by this Mortgage, it being also agreed that if any of
the property herein mortgaged is of a nature so that a security interest therein
can be perfected under the Uniform Commercial Code, this instrument shall
constitute a security agreement, fixture filing and financing statement, and the
Mortgagor agrees to execute, deliver and file or refile any financing statement,
continuation statement, or other instruments the Beneficiary may reasonably
require from time to time to perfect or renew such security interest under the
Uniform Commercial Code. To the extent permitted by law, (i) all of the
fixtures are or are to become fixtures on the Land Parcels; and (ii) this
instrument, upon recording or registration in the real estate records of the
proper office, shall constitute a "fixture-filing" within the meaning of
Sections 9-313 and 9-402 of the Uniform Commercial Code. The remedies for any
violation of the covenants, terms and conditions of the agreements herein
contained shall be as prescribed herein or by general law, or, as to that part
of the security in which a security interest may be perfected under the Uniform
Commercial Code, by the specific statutory consequences now or hereafter enacted
and specified in the Uniform Commercial Code, all at the Beneficiary's sole
election.
VII. All of the Mortgagor's right, title, and interest in, to and
under (i) any reciprocal easement agreements, operating agreements and similar
agreements affecting the ownership, use and operation of the Properties (or any
of them) included in the Permitted Exceptions, as such agreements have been or
may hereafter be amended, modified or supplemented; (ii) all contracts,
including the management agreements, if any, and agreements relating to the
Properties (or any of them), and other documents, books and records related to
the operation of the Properties (or any of them); (iii) all consents, licenses
(including, to the extent permitted by law, any licenses permitting the sale of
liquor at the Properties (or any of them)), warranties, guaranties and building
and other permits required or useful for the
8
construction, completion, occupancy and operation of the Properties (or any of
them); (iv) any contracts for the sale of any portion of the Properties or the
Equipment; and (v) all plans and specifications, engineering reports, land
planning, maps, surveys, and any other reports, exhibits or plans and
specifications used or to be used in connection with the construction, operation
or maintenance of the Properties (or any of them), together with all amendments
and modifications thereof.
TO HAVE AND TO HOLD THE TRUST ESTATE, whether now owned or held or
hereafter acquired, unto the Trustee, in trust, for the benefit and use of the
Beneficiary and its successors and assigns, forever.
IN TRUST FOREVER, with power of sale (to the extent permitted by
applicable law), upon the terms and trusts herein set forth and to secure the
performance of, and compliance with, the obligations, covenants and conditions
of this Mortgage and the other Loan Documents all as herein set forth.
1. Definitions. All capitalized terms used but not otherwise
-----------
defined herein shall have the meanings assigned to them in the Credit Agreement.
The words "herein," "hereof" and "hereunder" and other words of like import
refer to this Mortgage as a whole and not to any particular Section, subsection
or other subdivision. In addition, wherever used in this Mortgage, the
following terms, and the singular and plural thereof, shall have the following
meanings:
Affiliate: With respect to any specified Person means any other
---------
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interest, by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
Agreements: Any reciprocal easement agreements, operating agreements
----------
and similar agreements affecting the ownership, use and operation of the
Proper-
9
ties (or any of them) included in the Permitted Exceptions, as such agreements
have been or may hereafter be amended, modified or supplemented.
Alteration: As defined in Section 11(c) hereof.
----------
Assignment of Leases and Rents: Shall mean the Assignment of Leases,
------------------------------
Rents and Security Deposits, dated the date hereof, by the Mortgagor in favor of
the Beneficiary.
Banks: All Banks now or hereafter parties to the Credit Agreement.
-----
Beneficiary: As defined in the recitals hereof.
-----------
Casualty Amount: As defined in Section 6(b) hereof.
---------------
Credit Agreement: As defined in the recitals hereof.
----------------
Default: The occurrence or existence of any event or condition which
-------
with or without the giving of notice or the passage of time, or both, would
constitute an Event of Default hereunder.
Default Rate: The rate of interest at the annual rate equal to the
------------
sum of (i) the Prime Rate (as defined in the Credit Agreement) and (ii) four
percent (4%).
Environmental Certificate: As defined in Section 19(b) hereof.
-------------------------
Environmental Event: As defined in Section 19(b) hereof.
-------------------
Environmental Reports: As defined in Section 19(a) hereof.
---------------------
Equipment: As defined in Granting Clause VI hereof.
---------
10
Escrow Account: As defined in Section 8(a) hereof.
--------------
Events of Default: The occurrence of any of the following shall
-----------------
constitute an Event of Default under this Mortgage:
a. If the Mortgagor fails to pay any amount payable pursuant to
this Mortgage within fifteen (15) days after notice by Beneficiary that
such amount is due and payable in accordance with the provisions hereof; or
b. Cancellation of the insurance required by Section 5 of this
Mortgage; or
c. Any violation of the terms of Section 7(a), Section 7(b)
(subject to the terms of Section 7(c)), which violation continues for a
period of five (5) days after notice thereof;
d. Any violation of the terms of Section 10 of this Mortgage;
or
e. An Event of Default (as defined therein) under the Credit
Agreement; or
f. Any other default in the performance, or breach, of any
material covenant, representation or warranty of the Mortgagor, in this
Mortgage or in any other Loan Document (other than a covenant,
representation, agreement or warranty, a default in whose performance or
whose breach is specifically dealt with elsewhere in this Section) and
continuance of such default or breach for a period of 30 days after notice
thereof; provided, that in the case of any such failure that is
--------
susceptible of cure but that cannot with reasonable diligence be cured
within such 30 day period, if the Mortgagor shall promptly have commenced
to cure the same and shall thereafter prosecute the curing thereof with
reasonable diligence, the period within which such failure may be cured
shall be extended for such further period as shall be reasonably necessary
for the curing thereof (and in the event such cure has not been completed
within 30 days
11
after the end of the initial 30 day period, the Mortgagor shall inform the
Beneficiary at least once each month thereafter as to the status of such
cure); or
g. Any "Event of Default" as defined in any other Loan Document
including any other Mortgage securing the Notes.
Notwithstanding anything to the contrary contained in this Mortgage
or the Loan Documents, no grace period or right to notice granted to the
Mortgagor herein with respect to any Event of Default is intended to duplicate
any other grace period or right to notice granted to the Mortgagor herein, in
the Credit Agreement or in the other Loan Documents with respect to such Event
of Default and in the event of any inconsistency, the grace period or right to
notice granted in the Credit Agreement shall apply.
Exculpated Parties: As defined in Section 39 hereof.
------------------
Governmental Authority: Any Federal, state or local government or any
----------------------
other political subdivision thereof exercising executive, legislative, judicial,
regulatory or administrative functions.
Grant: Shall mean ▇▇▇▇▇, ▇▇▇▇▇ a security interest in, bargain, sell,
-----
lien, mortgage, convey, pledge, hypothecate, assign, transfer, warrant and set
over.
Ground Leasehold Estate: As defined in the recitals hereof.
-----------------------
Ground Lease(s): Shall mean, as appropriate, the ground lease or
---------------
ground leases which are the subject of the Ground Leasehold Estate.
Ground Rent: Shall mean all rent, additional rent and all other
-----------
amounts which the Grantor is obligated to pay as tenant under the Ground Lease.
Impositions: All taxes (including, without limitation, all ad
-----------
valorem, sales (including those imposed on lease rentals), use, single
business, gross
12
receipts, value added, intangible transactions, privilege or license or similar
taxes), assessments (including, without limitation, all assessments for public
improvements or benefits, whether or not commenced or completed prior to the
date hereof and whether or not commenced or completed within the term of this
Mortgage), water, sewer or other rents and charges, excises, levies, fees
(including, without limitation, license, permit, inspection, authorization and
similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every
character in respect of the Trust Estate and/or any Rents (including all
interest and penalties thereon), which at any time prior to, during or in
respect of the term hereof may be assessed or imposed on or in respect of or be
a Lien upon (a) the Mortgagor (including, without limitation, all income,
franchise, single business or other taxes imposed on the Mortgagor for the
privilege of doing business in the jurisdiction in which the Trust Estate is
located) or the Beneficiary arising as a result of or with respect to its
capacity as the Beneficiary hereunder, (b) the Trust Estate or any other
collateral delivered or pledged by Mortgagor to the Beneficiary in connection
with the Loan, or any part thereof, or any Rents therefrom or any estate, right,
title or interest therein, or (c) any occupancy, operation, use or possession
of, or sales from, or activity conducted on, or in connection with the Trust
Estate or the leasing or use of all or any part thereof. Nothing contained in
this Mortgage shall be construed to require the Mortgagor to pay any tax,
assessment, levy or charge imposed on the Beneficiary or any Bank in the nature
of a franchise, capital levy, estate, inheritance, succession, income or net
revenue tax.
Improvements: As defined in Granting Clause II hereof.
------------
Indebtedness: As defined in the recitals hereof.
------------
Indemnified Environmental Parties: As defined in Section 19(c)
---------------------------------
hereof.
Indemnified Parties: As defined in Section 35 hereof.
-------------------
13
Independent Architect: An independent architect selected by the
---------------------
Mortgagor, and acceptable to the Beneficiary, such acceptance not to be
unreasonably withheld or delayed, licensed to practice in the State in which the
applicable Property is located, having at least ten (10) years of experience,
and not affiliated with the Mortgagor.
Individual Trustee: Shall mean such person as is required by
------------------
applicable state law to perform the functions of Individual Trustee pursuant to
Section 9 hereof.
Insurance Requirements: Shall mean all terms of any insurance policy
----------------------
required hereunder or under the Credit Agreement covering or applicable to any
Property or Equipment or any part thereof, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) applicable to or affecting any Property or Equipment or any part
thereof or any use of any Property or Equipment or any part thereof.
Jurisdictional Trustee: As defined in Section 9 hereof.
----------------------
Land Parcel(s): As defined in the recitals hereof.
--------------
Leases: As defined in Granting Clause V hereof.
------
Legal Requirements: As defined in Section 12.
------------------
Lien: Any mortgage, deed of trust, lien, pledge, hypothecation,
----
assignment, security interest, or any other encumbrance of, on or affecting the
Trust Estate or any portion thereof or any interest therein, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic's, materialmen's
and other similar liens and encumbrances.
Loan: As defined in the recitals hereof.
----
14
Loan Amount: As defined in the recitals hereof.
-----------
Loan Documents: This Mortgage, the Note, the Credit Agreement, the
--------------
Assignment of Leases and Rents, the Environmental Indemnity and any and all
other agreements, instruments or documents evidencing, securing or delivered by
the Mortgagor in connection with the Loan and the transactions contemplated by
the Credit Agreement and this Mortgage.
Mortgage: As defined in the recitals hereof.
--------
Mortgage Escrow Amounts: As defined in Section 8(a).
-----------------------
Mortgage Escrow Security: As defined in Section 8(b).
------------------------
Mortgagor: As defined in the recitals hereof.
---------
Note: As defined in the recitals hereof.
----
Obligations: As defined in the recitals hereof.
-----------
Officers' Certificate: A certificate delivered to the Beneficiary and
---------------------
signed by the President or a Vice President of the Mortgagor.
Permitted Exceptions: (a) Liens for taxes, assessments or other
--------------------
governmental charges not yet due and payable or which are being contested in
good faith by appropriate proceedings promptly instituted and diligently
conducted in accordance with Section 7(c);
(b) Statutory Liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred in the
ordinary course of business for sums not more than forty-five (45) days
delinquent or which are being contested in good faith in accordance with Section
7(c);
(c) Deposits made in the ordinary course of business to secure
liability to insurance carriers;
15
(d) Easements, rights-of-way, restrictions and other similar
charges or encumbrances against real property not interfering in any material
respect with the use of any Property or the ordinary conduct of the business of
Mortgagor and not diminishing in any material respect the value of any Property
to which it is attached;
(e) Liens and judgments which have been or will be bonded or
released of record within thirty (30) days after the Mortgagor has received
notice of the filing of such Lien or judgment;
(f) Those matters set forth on EXHIBIT B hereof; and
---------
(g) Liens in favor of the Beneficiary or any Bank under the
other Loan Documents.
Person: Shall mean any individual, corporation, limited liability
------
company, partnership, joint venture, estate, trust, unincorporated association,
any Federal, state, county or municipal government or any political subdivision
thereof.
Proceeds: As defined in Section 6(b) hereof.
--------
Property: As defined in Granting Clause II hereof.
--------
Properties: As defined in Granting Clause II hereof.
----------
Rents: As defined in Granting Clause V hereof.
-----
State: The State in which the applicable Property is located.
-----
Taking: Shall mean a temporary or permanent taking by any
------
Governmental Authority as the result or in lieu or in anticipation of the
exercise of the right of condemnation or eminent domain, of all or any part of a
Property, or any interest therein or right accruing thereto, including any right
of access thereto or any change of grade affecting a Land Parcel or any part
thereof.
16
Tenant: Shall mean any Person leasing any portion of a Property and
------
obligated to pay rent pursuant to a Lease.
Transfer: As defined in Section 10(a) hereof.
--------
Trustees: Shall mean the Individual Trustee together with the
--------
Jurisdictional Trustee, all separate trustees and co-trustees appointed as
provided in Section 9.
Trust Estate: As defined in the granting clause to this Mortgage.
------------
Uniform Commercial Code or UCC: Shall mean the Uniform Commercial
------------------------------
Code as adopted in the State.
Work: As defined in Section 6(b) hereof.
----
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
The Mortgagor represents and warrants to and covenants and agrees with
the Beneficiary as follows:
2. Warranty.
--------
(a) This Mortgage upon its due execution and proper
recordation is and will remain a valid, enforceable and perfected first
Lien on and a security interest in the Trust Estate subject to the
Permitted Exceptions, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other laws affecting
creditor's rights generally in effect from time to time.
(b) This Mortgage and each of the Loan Documents executed
by the Mortgagor, is the legal, valid and binding obligation of the
Mortgagor, enforceable against the Mortgagor in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditor's rights
generally in effect from time to time.
17
(c) The Mortgagor owns good, marketable and insurable
leasehold title to the Groundleasehold Estate, subject only to the
Permitted Exceptions. The Mortgagor will preserve such title to its Ground
Leasehold Estate and will forever warrant and defend same and the validity
and priority of the Lien hereof from and against any and all claims
whatsoever;
(d) On the date hereof, to Mortgagor's knowledge, no
portion of the Improvements at any Property has been materially damaged,
destroyed or injured by fire or other casualty which is not now fully
restored or in the process of being restored;
(e) The Mortgagor has and will maintain, in effect at all
times until the Indebtedness and Obligations are satisfied in full, all
necessary material licenses, permits, authorizations, registrations and
approvals to operate its business and own each Property as a commercial or
industrial property, and Mortgagor has full power and authority to carry on
its business at each Property as currently conducted and has not received
any written notice of any current violation of any such licenses, permits,
authorizations, registrations or approvals that materially impair the value
of any Property for which such notice was given or which would adversely
affect the use or operation of any Property in any material respect, except
for those matters which have been disclosed to Beneficiary in writing and
are in the process of being cured and/or remediated;
(f) As of the date hereof, the Mortgagor has not received
any written notice of any Taking or threatened Taking of any Property or
any material portion thereof;
(g) The Property and the Equipment located thereon
constitute all of the real property, equipment and fixtures currently owned
by the Mortgagor and used in the operation of the Property;
(h) Each Property has adequate access to public streets,
roads or highways;
18
(i) Each Property constitutes one or more separate tax
lots, with a separate tax assessment, independent of any other land or
improvements;
(j) All utility services necessary for the operation of
each Property have been connected and, to the Mortgagor's knowledge, are
available in adequate capacities for current operations at each Property
directly from utility lines and without the need for private easements not
presently existing; and
(k) To the actual knowledge of the Mortgagor, the Mortgagor
is not in material default under the terms, conditions or provisions of any
of the Leases or Agreements described in Section 14 hereof.
3. Payment and Performance of Obligations Secured. The Mortgagor
-----------------------------------------------
shall perform fully and in a timely manner all Obligations of the Mortgagor
hereunder or under any other Loan Document to which Mortgagor is a party. All
sums payable by the Mortgagor hereunder shall be paid without demand,
counterclaim, offset, deduction or defense all without relief from valuation and
appraisement laws. The Mortgagor waives all rights now or hereafter conferred
by statute or otherwise to any such demand, counterclaim, setoff, deduction
(except as required by law) or defense.
4. Negative Covenants. The Mortgagor covenants and agrees that it
------------------
shall not:
(a) partition any Property;
(b) transfer all or any portion of the Trust Estate or any
interest of the Mortgagor, except in accordance with the Credit Agreement;
(c) file a petition for voluntary bankruptcy under the
Bankruptcy Code or similar state law; or
(d) dissolve, terminate, liquidate, merge with or
consolidate into another Person, except as expressly permitted pursuant to
this Mortgage or the Credit Agreement.
19
5. Insurance.
---------
(a) Insurance Coverage Requirements. The Mortgagor shall
-------------------------------
keep in full force and effect insurance, of the types and minimum limits as
follows during the term of this Mortgage:
(i) Property Insurance. Insurance with respect to
------------------
each Property and the Equipment against any peril included within the
classification "All Risks of Physical Loss" with extended coverage in an
amount equal to the full insurable value (subject to deductibles as
permitted below) of such Property and the Equipment located thereon, the
term "full insurable value" to mean the actual replacement cost of the
Improvements and the Equipment at such Property (without taking into
account any depreciation, and exclusive of excavations, footings and
foundations, landscaping and paving);
(ii) Liability Insurance. Commercial general
-------------------
liability insurance, including bodily injury, death and property damage
liability, and umbrella liability insurance against any and all claims,
including all legal liability to the extent insurable imposed upon the
Beneficiary and all court costs and attorneys' fees and expenses, arising
out of or connected with the possession, use, leasing, operation,
maintenance or condition of each Property in such amounts as are generally
required by institutional lenders for properties comparable to the
applicable Property but in no event for limits of less than [$1,000,000]
per occurrence with combined single limit coverage for bodily injury or
property damage and excess (umbrella) liability coverage of no less than
[$10,000,000] per occurrence;
(iii) Workers' Compensation Insurance. Statutory
-------------------------------
workers' compensation insurance (to the extent the risks to be covered
thereby are not already covered by other policies of insurance maintained
by the Mortgagor), with respect to any work on or about each of the
Properties;
(iv) Business Interruption. Business interruption
---------------------
and/or loss of "rental value"
20
insurance for each of the Properties in an amount equal to one (1) year's
"rental value" attributable to each such Property and based on the "rental
value" for the immediately preceding year and otherwise sufficient to
avoid any co-insurance penalty, the term "rental value" to mean the sum of
(A) the total Rents payable under the Leases at the applicable Property
and (B) the total amount of all other amounts to be received by the
Mortgagor or third parties which are the legal obligation of the Tenants,
reduced to the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy of that
portion of such applicable Property then not being occupied;
(v) Flood Insurance. If all or any portion of any
---------------
Property is located within a Federally designated flood hazard zone, flood
insurance in such amount as generally required by institutional lenders for
properties comparable to the applicable Property (provided, however, that
if the Mortgagor believes that it is no longer obligated to maintain flood
insurance with respect to any Property pursuant to this provision, the
Mortgagor shall notify the Beneficiary of such circumstances and the
Beneficiary shall have the opportunity to contest by appropriate legal or
mutually agreeable arbitration proceedings whether or not the Mortgagor's
obligation remains in effect in light of the criteria set forth in this
provision); and
(vi) Other Insurance. Such other insurance with
---------------
respect to any Property and the Equipment located therein against loss or
damage as are reasonably requested by the Beneficiary, provided such
insurance is of the kind from time to time customarily insured against and
in such amounts as are generally required by institutional lenders for
properties comparable to the applicable Property.
(b) Ratings of Insurers. All insurance coverage shall be
-------------------
provided by one or more domestic primary insurers having an ▇▇▇▇▇▇ ▇. Best
Company, Inc. rating of "A" or better and financial size category of not less
than IX, except to the extent that insurance in force on the date of this
Mortgage does not satisfy such criteria
21
or if otherwise approved by the Beneficiary. All insurers providing insurance
required by this Mortgage shall be authorized to issue insurance in the state
where the applicable Property is located.
The insurance coverage required under Section 5(a) may be effected
under a blanket policy or policies covering the Trust Estate and other property
and assets not constituting a part of the Trust Estate; provided that any such
--------
blanket policy shall specify, except in the case of public liability insurance,
the portion of the total coverage of such policy that is allocated to the
applicable Property and the Equipment located thereon, and any sublimits in such
blanket policy applicable to the Trust Estate, which amounts shall not be less
than the amounts required pursuant to Section 5(a) and which shall in any case
comply in all other respects with the requirements of this Section 5.
(c) Form of Insurance Policies; Endorsements. All insurance
----------------------------------------
policies shall be in such form and with such endorsements as are comparable to
the forms of and endorsements to the Mortgagor's insurance policies in effect on
the date hereof or otherwise in accordance with commercially reasonable
standards applied by prudent owners of commercial or industrial properties of
the same quality as each of the Properties. Certified copies of all of the
above-mentioned insurance policies and/or certificates of insurance have been
delivered to and shall be held by the Beneficiary. All insurance certificates
from time to time delivered (or required to be delivered) hereunder in order to
evidence the property insurance required by Section (a)(i) of this Article 5
shall be "Accord 27" certificates. The policy or policies required by Section
(a)(i) of this Article 5 shall name the Beneficiary as loss payee/mortgagee, and
all other policies required hereunder shall name the Beneficiary as additional
insured. All policies required to be maintained hereunder shall provide that
all Proceeds be payable to the Beneficiary as set forth in Section 6 hereof, and
shall contain: (i) a standard "non-contributory mortgagee" endorsement or its
equivalent relating, inter alia, to recovery by the Beneficiary notwithstanding
----- ----
the negligent or willful acts or omissions of the Mortgagor; (ii) to the extent
available, a waiver of subrogation endorsement as to the Beneficiary providing
that no policy shall be impaired or invalidated by virtue
22
of any act, failure to act, negligence of, or violation of declarations,
warranties or conditions contained in such policy by the Mortgagor, the
Beneficiary or any other named insured, additional insured or loss payee, except
for the willful misconduct of the Beneficiary knowingly in violation of the
conditions of such policy; provided, however, that if such waiver of subrogation
-------- -------
endorsement is not available, Mortgagor shall obtain a substantially similar
waiver with respect to each individual claim filed by Mortgagor under any such
insurance policy; (iii) an endorsement indicating that neither the Beneficiary
nor the Mortgagor shall be or be deemed to be a co-insurer with respect to any
risk insured by such policies and shall provide for a deductible per loss of an
amount not more than that which is customarily maintained by prudent owners of
commercial or industrial properties of the same quality as the applicable
Property, but in no event in excess of $100,000; (iv) a provision that such
policies shall not be cancelled or amended, including, without limitation, any
amendment reducing the scope or limits of coverage, without at least thirty (30)
days prior written notice to the Beneficiary in each instance; and (v) include
effective waivers by the insurer of all claims for insurance premiums against
any loss payees, additional insureds, mortgagees and named insureds (other than
the Mortgagor). Certificates of insurance (in the form of "Accord 27"
certificates with respect to property insurance) with respect to all renewal
and replacement policies shall be delivered to the Beneficiary not less than
thirty (30) days prior to the expiration date of any of the insurance policies
required to be maintained hereunder, which certificates shall bear notations
evidencing payment of applicable premiums and originals (or certified copies) of
such insurance policies shall be delivered to the Beneficiary promptly after
the Mortgagor's receipt thereof. If the Mortgagor fails to maintain and deliver
to the Beneficiary the original policies (or certified copies) or certificates
of insurance required by this Mortgage, the Beneficiary may, at its option,
after ten (10) days' prior written notice to the Mortgagor, procure such
insurance, and the Mortgagor shall reimburse the Beneficiary for the amount of
all premiums paid by the Beneficiary thereon promptly, upon demand by the
Beneficiary, with interest thereon at the Default Rate from the date paid by the
Beneficiary to the date of repayment, and such sum shall be a part of the
Indebtedness secured by this Mortgage.
23
The Beneficiary shall not by the fact of approving, disapproving,
accepting, preventing, obtaining or failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and the Mortgagor hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.
(d) Compliance with Insurance Requirements. The Mortgagor shall
--------------------------------------
comply with all Insurance Requirements and shall not bring or keep any article
upon any of the Properties or cause or permit any condition to exist thereon
which would be prohibited by or would invalidate insurance coverage maintained,
or required hereunder or under the Credit Agreement to be maintained, by the
Mortgagor on or with respect to any part of the Trust Estate pursuant to this
Section 5.
(e) Separate Insurance. The Mortgagor will not take out
------------------
separate insurance contributing in the event of loss with that required to be
maintained pursuant to this Section 5, unless such insurance complies with this
Section 5.
(f) Blanket Policies. Except in the case of public liability
----------------
insurance, upon Beneficiary's request, the Mortgagor shall deliver to
Beneficiary an officer's certificate setting forth (i) the number of properties
covered by such policy, (ii) the location by city (if available, otherwise,
county) and state of the properties, (iii) the average square footage of the
properties (or the aggregate square footage), (iv) a brief description of the
typical construction type included in the blanket policy and (v) such other
information as Beneficiary may reasonably request.
6. Condemnation and Insurance Proceeds.
-----------------------------------
(a) The Mortgagor will promptly notify the Beneficiary in
writing upon obtaining knowledge of (i) the institution of any proceedings
relating to any Taking of, or (ii) the occurrence of any casualty, damage or
injury to, the Properties (or any of them) or Equipment located thereon or any
portion thereof, the restora-
24
tion of which is estimated by the Mortgagor in good faith to cost more than
$500,000.
(b) In the event of any Taking of, or casualty or other damage
or injury to, any Property, or Equipment located thereon, the Mortgagor's right,
title and interest in and to all compensation, awards, proceeds, damages,
claims, insurance recoveries, causes and rights of action (whether accrued prior
to or after the date hereof) and payments which the Mortgagor may receive or to
which the Mortgagor may become entitled with respect to such Property or any
part thereof (collectively, "Proceeds"), in connection with any such Taking,
--------
casualty or other damage or injury to any Property, or any part thereof, or
Equipment located thereon are hereby assigned to and shall be paid to the
Beneficiary on behalf of the Banks. Notwithstanding anything to the contrary
set forth in this Mortgage, to the extent such Proceeds are not in excess of
$1,000,000 (the "Casualty Amount"), then the Beneficiary hereby consents to and
---------------
agrees that such Proceeds are to be paid directly to the Mortgagor to be applied
to restoration of such Property in accordance with the terms hereof and/or the
applicable terms of the Lease. Subject to the provisions of Sections 6(c) and
6(d) hereof, promptly after the occurrence of any damage or destruction to all
or any portion of such Property or a Taking of a portion of such Property, the
Mortgagor shall commence and diligently prosecute to completion the repair,
restoration and rebuilding of such Property (in the case of a Taking, to the
extent it is capable of being restored) (such repair, restoration and rebuilding
are sometimes hereinafter collectively referred to as the "Work") so damaged,
----
destroyed or remaining after such damage or destruction or such Taking in full
compliance with all Legal Requirements and free and clear of any and all Liens
(subject to Section 7(c) hereof), except the Permitted Exceptions; it being
understood, however, that the Mortgagor shall not be obligated to restore such
Property to the precise condition of such Property prior to any Taking, casualty
or other damage or injury to such Property (and in fact, so long as the
Mortgagor applies the Proceeds received upon such Taking or casualty to such
Property to restore the damage or injury to such Property and/or to provide
another type of improvement that is reasonably expected to benefit such
Property, no restoration or rebuilding of the damaged or taken structures must
be undertaken), if the Work actually per-
25
formed, if any, or failed to be performed, shall have no material adverse effect
on the value of such Property from the value that such Property would have had
if the same had been restored to its condition immediately prior to such Taking
or casualty. The Mortgagor will, in good faith and in a commercially reasonable
manner, file and prosecute the adjustment, compromise or settlement of any claim
for insurance or Taking Proceeds and, subject to the Mortgagor's right to
receive the direct payment of any Proceeds up to the Casualty Amount subject to
the provisions below, will cause the same to be collected and the net Proceeds
paid over to the Beneficiary, to be held and applied in accordance with the
provisions of this Mortgage. The Mortgagor hereby irrevocably authorizes and
empowers the Beneficiary, in the name of the Mortgagor as its true and lawful
attorney-in-fact, to file and prosecute such claim and to collect and to make
receipt for any such payment, and, in the event the Mortgagor fails so to act
for a period of ten (10) days following the Mortgagor's receipt of written
notice from the Beneficiary or if an Event of Default shall have occurred and
be continuing, then in such case the Beneficiary may file such claim and
prosecute it with counsel satisfactory to it at the expense of the Mortgagor.
The Beneficiary shall have the right to approve, such approval not to be
unreasonably withheld or delayed, any settlement which might result in any
Proceeds in excess of the Casualty Amount, and the Mortgagor will deliver to
the Beneficiary all instruments reasonably requested by the Beneficiary to
permit such approval. The Mortgagor will pay all costs, fees and expenses
reasonably and actually incurred by the Beneficiary (including all reasonable
attorneys' fees and expenses actually incurred, the reasonable fees of insurance
experts and adjusters and reasonable costs incurred in any litigation or
arbitration) in connection with the settlement of any claim for insurance or
Taking Proceeds and seeking and obtaining of any payment on account thereof in
accordance with the foregoing provisions. If any insurance or Taking Proceeds
are received by the Mortgagor, such Proceeds shall be received in trust for the
Beneficiary (on behalf of the Banks), shall be used to pay for the cost of the
Work in accordance with the terms hereof, and in the event such Proceeds are in
excess of the Casualty Amount, shall be forthwith paid to the Beneficiary to be
held by the Beneficiary in a segregated account in trust for the Mortgagor, in
each
26
case to be applied or disbursed in accordance with the provisions hereof.
(c) Upon the occurrence and during the continuance of an Event
of Default hereunder, all net Proceeds shall be paid over to the Beneficiary (on
behalf of the Banks) and shall be applied first toward reimbursement of the
Beneficiary's reasonable costs and expenses actually incurred in connection with
recovery of the Proceeds and disbursement of the Proceeds (as further described
below), including, without limitation, reasonable administrative costs and
inspection fees, and then to the payment or prepayment of the Indebtedness
secured hereby in such order as the Beneficiary shall determine.
(d) If Proceeds are not paid directly to Mortgagor pursuant to
this Section 6 or are not required to be applied towards payment of the
Indebtedness pursuant to Section 6(c) above, then the Beneficiary shall make the
Proceeds which it is holding pursuant to the terms hereof available to the
Mortgagor (after payment of any reasonable expenses actually incurred by the
Beneficiary in connection with the collection thereof), for payment of or
reimbursement of the Mortgagor's expenses incurred with respect to the Work,
upon the following terms and subject to the following conditions:
(i) there shall be no continuing Event of Default
hereunder;
(ii) if the estimated cost of the Work (as estimated by
the architect referred to in clause (iii) below) shall exceed the Proceeds
available, the Mortgagor shall at its option either deposit with or deliver
to the Beneficiary an amount equal to such excess in the form of (A) Cash
and Cash Equivalents or (B) an unconditional, irrevocable, clean sight
draft letter of credit in commercially reasonable form and issued by an
Approved Bank; and
(iii) the Beneficiary shall be furnished with an estimate
of the cost of the Work accompanied by an Independent Architect's
certification as to such costs and appropriate plans and specifications for
the Work. The plans and specifications or construction documents shall
require that
27
the Work be done in a first-class workmanlike manner at least equivalent to
the quality and character of the original Improvements (provided, however,
-------- -------
that in the case of a Taking the restoration of the applicable Property
shall be done to the extent reasonably practicable after taking into
account the consequences of such Taking), so that upon completion thereof,
the applicable Property shall be at least equal in value and general
utility to such Property immediately prior to the damage or destruction.
The Mortgagor shall restore all Improvements such that when they are fully
restored and/or repaired such Improvements and their contemplated use
fully comply with all applicable Legal Requirements, including, without
limitation, zoning, environmental and building laws, codes, ordinances and
regulations.
(e) Disbursement of the Proceeds to the Mortgagor shall be made
from time to time (but not more frequently than once in any month) by the
Beneficiary as the Work progresses upon receipt by the Beneficiary of (i) an
Officers' Certificate dated not more than thirty (30) days prior to the
application for such payment, requesting such payment or reimbursement and
setting forth the Work performed which is the subject of such request, the
parties which performed such Work and the actual cost thereof, and also
certifying that such Work and materials are free and clear of Liens (subject to
Section 7(c) hereof) other than Permitted Exceptions and (ii) an Independent
Architect's certificate certifying performance of the Work together with an
estimate of the cost to complete the Work. No payment made prior to the final
completion of the Work shall exceed ninety percent (90%) of the value of the
Work performed or materials furnished and incorporated into the Improvements
from time to time, and at all times the undisbursed balance of said Proceeds,
together with all amounts deposited, bonded, guaranteed or otherwise funded
pursuant to clause (ii) above, shall be at least sufficient to pay for the cost
of completion of the Work, free and clear of Liens (subject to Section 7(c)
hereof) other than Permitted Exceptions; final payment shall be made upon
receipt by the Beneficiary of a certification by an Independent Architect as to
the completion substantially in accordance with the submitted plans and
specifications, and the filing of a notice of completion and the receipt by
28
the Beneficiary of final lien waivers (subject to Section 7(c) hereof) from each
contractor or materialman. The Beneficiary may at its option require an
endorsement to its title insurance policy insuring the continued priority of
the Lien of this Mortgage (subject to Permitted Exceptions) as to all sums
advanced hereunder, such endorsement to be paid for by the Mortgagor.
(f) In the event that any condition to application of Proceeds
to the Work contained in Section 6(d) above is not satisfied within a reasonable
period of time, then, upon thirty (30) days prior written notice all Proceeds
with respect to the Taking of or damage or injury to the Trust Estate in
question shall be applied by the Beneficiary to the payment or prepayment of all
or any portion of the Indebtedness secured hereby.
(g) In the event that, after the completion of the Work and
payment of all costs of completion, there are excess Proceeds, then, upon thirty
(30) days prior written notice to Mortgagor such excess Proceeds with respect to
the Taking of or damage or injury to the Trust Estate shall be applied by the
Beneficiary to the payment or prepayment of all or any portion of the
Indebtedness secured hereby.
(h) In the event of a Taking of 100% of any Property, the
Mortgagor shall prepay the Note, without penalty or premium, in an amount equal
to the net Proceeds received by the Mortgagor for such Property.
(i) In the event of a casualty which damages 100% of any
Property, the Mortgagor shall prepay the Note, without penalty or premium, in an
amount equal to the net Proceeds received by the Mortgagor for such Property,
and such Property shall be released from the lien and security interests of the
Loan Documents.
7. Impositions, Liens and Other Items.
----------------------------------
(a) The Mortgagor shall deliver to the Beneficiary annually, no
later than fifteen (15) Business Days after the first day of each fiscal year of
the Mortgagor, and shall update as new information is received, a schedule
describing all Impositions payable or estimated to be payable during such fiscal
year attributable to or affecting the Trust Estate or the Mortgagor.
29
Subject to its right of contest set forth in Section 7(c), the Mortgagor shall
pay all Impositions which are attributable to or affect each of the Properties
or the Mortgagor with respect to each of the Properties, prior to the date such
Impositions shall become delinquent or late charges may be imposed thereon,
directly to the applicable taxing authority with respect thereto, unless and to
the extent the Beneficiary shall pay such Impositions from any Mortgage Escrow
Amounts pursuant to Section 8 hereof. The Mortgagor shall deliver to
Beneficiary, not later than forty five (45) days after each payment of
Impositions, paid receipts evidencing the payment of such Impositions.
(b) Subject to its right of contest set forth in Section 7(c), the
Mortgagor shall at all times keep the Properties and the Equipment located
thereon free from all Liens (other than the Lien hereof and Permitted
Encumbrances) and shall pay when due and payable all claims and demands of
mechanics, materialmen, laborers and others which, if unpaid, might result in or
permit the creation of a Lien on any Property or any portion thereof and the
Equipment located thereon, whether ranked senior, pari passu or junior to the
priority of the Lien created hereby, and shall in any event cause the prompt,
full and unconditional discharge of all Liens imposed on or against any
Property, or any portion thereof, and the Equipment located thereon within
forty-five (45) Domestic Business Days after receiving written notice of the
filing (whether from the Beneficiary, the lienor or any other Person) thereof.
The Mortgagor shall do or cause to be done, at the sole cost of the Mortgagor,
everything necessary to fully preserve the first priority of the Lien of this
Mortgage against the Properties and the Equipment located thereon, subject to
the Permitted Encumbrances. Upon the occurrence of an Event of Default with
respect to Mortgagor's Obligations as set forth in this Section 7, the
Beneficiary may (but shall not be obligated to) make such payment or discharge
such Lien, and the Mortgagor shall reimburse the Beneficiary on demand for all
such advances pursuant to Section 15 hereof, together with interest thereon at
the Default Rate.
(c) Nothing contained herein shall be deemed to require the
Mortgagor to pay any Imposition, to satisfy any Lien or to comply with any Legal
Requirement
30
or Insurance Requirement so long as the Mortgagor is in good faith, and by
proper legal proceedings, diligently contesting the validity, amount or
application thereof, provided that in each case, at the time of the
commencement of any such action or proceeding, and during the pendency of such
action or proceeding, (i) no Event of Default shall exist and be continuing
hereunder, (ii) adequate reserves with respect thereto are maintained on the
Mortgagor's books in accordance with GAAP, (iii) such contest operates to
suspend collection or enforcement, as the case may be, of the contested
Imposition or Lien and such contest is maintained and prosecuted continuously
and with diligence, (iv) in the case of any Insurance Requirement, the failure
of the Mortgagor to comply therewith shall not impair the validity of any
insurance required to be maintained by the Mortgagor under Section 5 or the
right to full payment of any claims thereunder, and (v) in the case of
Impositions and Liens, during such contest, security in the form required by
Section 6(d)(ii), assuring the discharge of the Mortgagor's obligations being
contested and of any additional interest, charge, or penalty arising from such
contest. Notwithstanding the foregoing, any such reserves or the furnishing of
any bond or other security, the Mortgagor promptly shall comply with any
contested Legal Requirement or Insurance Requirement or shall pay any contested
Imposition or Lien, and compliance therewith or payment thereof shall not be
deferred, if, at any time a Property or any portion thereof, or any Equipment
located thereon shall be, in the Beneficiary's reasonable judgment, in danger of
being forfeited or lost or the Beneficiary may be subject to civil or criminal
damages as a result thereof. If such action or proceeding is terminated or
discontinued adversely to the Mortgagor without any right of appeal exercised by
the Mortgagor within the time period legally permitted therefore, the Mortgagor,
upon written demand, shall deliver to the Beneficiary reasonable evidence of the
Mortgagor's compliance with such contested Imposition, Lien, Legal Requirements
or Insurance Requirements, as the case may be.
8. Funds for Taxes and Insurance.
-----------------------------
(a) From and after the occurrence of any Event of Default by the
Mortgagor hereunder, the Beneficiary may at its sole election, upon three (3)
business day's written notice to the Mortgagor, require the Mort-
31
gagor to pay additional amounts sufficient to discharge the obligations of the
Mortgagor under Sections 5 and 7 hereof with respect to insurance premiums and
Impositions and all Ground Rent, as and when they become due (such amounts, the
"Mortgage Escrow Amounts"). Upon the Beneficiary's election to require Mortgage
-----------------------
Escrow Amounts in accordance with the foregoing, the Mortgagor shall pay to the
Beneficiary to be held in an account controlled by the Beneficiary (the "Escrow
------
Account") the monthly amount of Ground Rent together with a sum which bears the
-------
same relation to the annual insurance premiums for all insurance required by
the terms hereof and Impositions assessed against the Properties for the
insurance period or tax year then in effect, as the case may be, as (i) the
number of months elapsed as of the date of such election since the last
preceding installment of said premiums or Impositions shall have become due and
payable bears to (ii) twelve (12). For the purpose of this computation, the
month in which such last preceding installment of premiums or Impositions became
due and payable and the month in which the Beneficiary makes such election shall
be included and deemed to have elapsed. During each month thereafter, until the
Beneficiary shall elect that the provisions of this Section 8 shall no longer be
applicable, the Mortgagor shall pay with respect to the Mortgage Escrow Amounts
a sum equal to the monthly Ground Rent plus one-twelfth of such insurance
premiums and such Impositions for the then-current insurance period and tax
year, so that as each installment of Ground Rent and such premiums and
Impositions shall become due and payable, the Beneficiary shall have received a
sum sufficient to pay the same. If the amount of such premiums and Impositions
has not been definitely ascertained at the time when any such monthly deposits
are to be made, the Mortgagor shall pay Mortgage Escrow Amounts based upon the
amount of such premiums and Impositions for the preceding year, subject to
adjustment as and when the amount of such premiums and Impositions are
ascertained.
(b) At any time after the Beneficiary's election to require Mortgage
Escrow Amounts pursuant to Section 8(a) above, subject to the conditions of the
next succeeding sentence, the Mortgagor may elect to replace any Mortgage Escrow
Amounts then being retained by the Beneficiary and satisfy its obligations under
this Section 8 by delivery of an unconditional, irrevocable, clean sight draft
letter of credit in commercially rea-
32
sonable form and issued by an Approved Bank (which letter of credit shall not
expire until a date two months after the Maturity Date, as defined in the Note
or the Credit Agreement) or Cash and Cash Equivalents (any such security,
"Mortgage Escrow Security") in an amount sufficient (including the amount of the
-------------------------
Mortgage Escrow Amounts so replaced) to discharge the Impositions and insurance
premiums which shall become due during the six (6) month period immediately
after the date of delivery of such Mortgage Escrow Security (and for each six
(6) month period thereafter for so long as the Mortgagor elects to post such
security in lieu of the Beneficiary's retention of such amounts in the Escrow
Account) and with maturities corresponding to the respective due dates of such
obligations. Notwithstanding the foregoing, it shall be a condition to the
Mortgagor's delivery of any Mortgage Escrow Security (other than cash) in
satisfaction of its obligations under this Section 8, that the Mortgagor, at its
expense, execute, acknowledge and deliver to the Beneficiary such additional
security agreements, financing statements and other documents or instruments
including, without limitation, an Opinion of Counsel, and take all such actions
which in the reasonable opinion of the Beneficiary or its counsel may be
necessary to grant and convey to the Beneficiary a perfected security interest
in and to any and all of the Mortgage Escrow Security.
(c) The Mortgage Escrow Amounts (or any Mortgage Escrow Security
posted in lieu thereof pursuant to Section 8(b)) shall be held by the
Beneficiary and shall be applied by Beneficiary to the payment of the
obligations in respect of which such Mortgage Escrow Amounts were required
except upon the occurrence of an Event of Default and the acceleration of the
Note in which case all or any portion of such Mortgage Escrow Amounts (or any
Mortgage Escrow Security posted in lieu thereof) may be so transferred or
otherwise applied to the Indebtedness in such order or priority as the
Beneficiary may elect or the Beneficiary may exercise any of its rights or
remedies with respect to same under any of the Loan Documents, at law or in
equity. Any Mortgage Escrow Amounts paid by the Mortgagor (or Mortgage Escrow
Security posted with the Beneficiary) in excess of the actual obligations for
which they were required, shall be held and applied to the obligations for the
ensuing year or otherwise applied in accordance with the terms of the Loan
Documents. Nothing herein contained shall be deemed
33
to affect any right or remedy of the Beneficiary under this Mortgage or
otherwise at law or in equity to pay any such amount and to add the amount so
paid to the Indebtedness hereby secured. Any such application of said amounts
or any portion thereof to any Indebtedness secured hereby shall not be
construed to cure or waive any Default or notice of Default hereunder or
invalidate any act done pursuant to any such Default or notice.
(d) If the Beneficiary elects to require Mortgage Escrow Amounts
pursuant to this Section 8, the Mortgagor shall deliver to the Beneficiary all
tax bills, bond and assessment statements, statements of insurance premiums, and
statements for any other obligations referred to above as soon as the same are
received by the Mortgagor, and the Beneficiary shall cause the same to be paid
when due to the extent of Mortgage Escrow Amounts in the Escrow Account
available therefor. It is expressly acknowledged and agreed that the
Beneficiary shall have no obligation whatsoever to advance any amounts in
payment of all or any portion of such obligations to the extent that Mortgage
Escrow Amounts received are insufficient to pay any such obligations as and
when the same become due.
9. The Beneficiary and Trustees. If any section of this Mortgage
----------------------------
provides that this document shall constitute a deed of trust, the provisions of
this Section 9 shall be applicable.
(a) The Trustees accept the trusts hereby created and agree to
perform the duties herein required of them upon the terms and conditions hereof.
The duties and obligations of the Trustees in respect of this Mortgage
shall be as set forth in this Section 9.
(i) Except upon the occurrence and during the continuance
of an Event of Default actually known to the Beneficiary,
(A) the Trustees shall undertake to perform such duties and
obligations and only such duties and obligations as are specifically set
forth in this Mortgage and the Loan Documents or as otherwise directed by
a letter of direction from the
34
Beneficiary, and no implied covenants or obligations shall be read into
this Mortgage or the Loan Documents against the Trustees; and
(B) in the absence of bad faith, the Trustees may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustees
and conforming to the requirements of this Mortgage and the Loan Documents.
(ii) In case an Event of Default known to the Beneficiary has
occurred and is continuing, the Trustees shall exercise the rights and
powers vested in the Trustees by this Mortgage and the Loan Documents, with
reasonable care, as directed by Beneficiary.
(iii) No provision of this Mortgage shall be construed to
relieve the Trustees from liability for their own gross negligence or
willful misconduct, except that
------
(A) this Subsection shall not be construed to limit the effect
of subsection (b) of this Section 9;
(B) the Trustees shall not be liable for any error of judgment
made in good faith by an officer of the Trustees, unless it shall be proved
that such Trustees were negligent in ascertaining the pertinent facts; and
(C) the Trustees shall not be liable with respect to any action
taken or omitted to be taken in good faith in accordance with the direction
of the Beneficiary relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustees, or exercising any
trust or power conferred upon the Trustees under this Mortgage or the other
Loan Documents.
(iv) Whether or not therein expressly so provided, every
provision of this Mortgage relating to the conduct or affecting the
liability
35
of or affording protection to the Trustees shall be subject to the
provisions of this Section 9(a).
(v) No provision of this Mortgage shall require the Trustees to
expend or risk their own funds or otherwise incur any personal financial
liability in the performance of any of their duties hereunder, or in the
exercise of any of their rights or powers.
(b) At any time or times for the purpose of meeting the Legal
Requirements of any jurisdiction in which any part of a Trust Estate may at the
time be located, the Beneficiary shall have the power to appoint and, upon the
written request of the Beneficiary, the Mortgagor shall for such purpose join
with the Beneficiary in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint one or more Persons
reasonably approved by the Beneficiary to act as trustee pursuant to this
Mortgage in such jurisdiction for such portion of the Trust Estate located in
such jurisdiction (the "Jurisdictional Trustee") with such powers as are
----------------------
provided in the instrument of appointment which shall expressly designate the
Properties affected and the capacity of the appointee as a Jurisdictional
Trustee, and to vest in such Person or Persons in the capacity aforesaid, any
property, title, right or power deemed necessary or desirable, subject to the
other provisions of this Section 9. If the Mortgagor does not join in such
appointment within fifteen (15) days after the receipt by it of a request so to
do, or in case an Event of Default has occurred and is continuing, the
Beneficiary alone shall make such appointment. Should any written instrument
from the Mortgagor be required by any Jurisdictional Trustee so appointed for
more fully confirming to such Jurisdictional Trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Mortgagor.
(i) Every Jurisdictional Trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the terms set
forth in Section 9(b)(iii) hereof.
(ii) As of the date hereof the Trustee named on page 1 hereof is
hereby appointed
36
Jurisdictional Trustee for the State in which the Properties are located.
(iii) To the extent permitted by law, but to such extent only,
the Jurisdictional Trustee is appointed herein subject to the following
terms, namely:
(A) Subject to the terms hereof and to the extent permitted by
law, all rights, powers, duties and obligations under this Mortgage granted
to or imposed upon the Beneficiary and the Jurisdictional Trustee shall be
exercised solely by the Beneficiary.
(B) The rights, powers, duties and obligations hereby conferred
or imposed upon the Beneficiary and the Jurisdictional Trustee in respect
of any Property covered by such appointment shall be exercised or performed
by the Beneficiary separately, or at the election of the Beneficiary by the
Beneficiary and the Jurisdictional Trustee jointly, except to the extent
that (i) under any law of any jurisdiction in which any particular act is
to be performed by the Beneficiary and/or the Jurisdictional Trustee and
the Beneficiary shall be incompetent or unqualified to perform such act or
(ii) the Beneficiary shall deem it inconvenient or undesirable to perform
such act, then in any such event such rights, powers, duties and
obligations shall be exercised and performed by the Jurisdictional Trustee
at the written direction of the Beneficiary.
(C) The Beneficiary at any time, by an instrument in writing
executed by it, may accept the resignation of or remove any Jurisdictional
Trustee. Upon the written request of the Beneficiary, the Mortgagor shall
join with the Beneficiary in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to the Jurisdictional Trustee so
resigned or removed may be appointed in the manner provided in this Section
9.
37
(D) Upon the resignation or removal of any Jurisdictional
Trustee, the Beneficiary shall have power to appoint and, upon the written
request of the Beneficiary, the Mortgagor shall, for such purpose, join
with the Beneficiary in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint one or more
Persons reasonably approved by the Beneficiary to act as successor
Jurisdictional Trustee of all or any part of the Trust Estate so
designated, with such power as provided for in this Section 9, and to vest
in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable, subject to the other
provisions of this Section 9. If the Mortgagor does not join in such
appointment, within fifteen (15) days after the receipt by it of a request
so to do, or in case an Event of Default has occurred and is continuing,
the Beneficiary acting alone shall make such appointment. Should any
written instrument from the Mortgagor be required by any successor
Jurisdictional Trustee so appointed for more fully confirming to such
trustee such property, title, right or power, any and all such instruments
shall, on request, be executed, acknowledged and delivered by the
Mortgagor.
(E) No Jurisdictional Trustee hereunder shall be personally
liable by reason of any act or omission of the Beneficiary or any other
trustee hereunder and the Beneficiary shall not be personally liable by
reason of any act or omission of the Jurisdictional Trustee; neither shall
knowledge of the Beneficiary be imputed to the Jurisdictional Trustee nor
shall knowledge of the Jurisdictional Trustee be imputed to the
Beneficiary.
(F) Any notice delivered to the Beneficiary shall be deemed to
have been sufficiently delivered without any delivery to the Jurisdictional
Trustee.
(G) Any obligation of the Mortgagor to file or give notices,
reports or information to the Beneficiary hereunder shall be satisfied by
the delivery thereof to the Beneficiary.
38
(H) Any successor to the Jurisdictional Trustee (herein, called
the Successor Jurisdictional Trustee) shall execute, acknowledge and
deliver to his predecessor (herein called the Predecessor Jurisdictional
Trustee), the Beneficiary and the Mortgagor, an instrument accepting such
appointment. Thereupon, the Successor Jurisdictional Trustee shall,
without any further act, deed or conveyance, become vested with the
estates, properties, rights, powers, duties and trusts of the Predecessor
Jurisdictional Trustee in the trusts created by this Mortgage, with the
same effect as if originally named as Jurisdictional Trustee. At the
written request of the Mortgagor, the Beneficiary or the Successor
Jurisdictional Trustee, the Predecessor Jurisdictional Trustee shall
execute and deliver an instrument, in recordable form, transferring to the
Successor Jurisdictional Trustee, upon the trusts herein expressed, the
Trust Estate and shall duly assign transfer, deliver and pay over to the
Successor Jurisdictional Trustee, any property and money subject to the
lien hereof held by him. If any written instrument from the Mortgagor or
the Beneficiary be required by the Successor Jurisdictional Trustee for
more fully and certainly vesting in and confirming to the Successor
Jurisdictional Trustee such estates, properties, rights, powers and trusts,
then, at the request of the Successor Jurisdictional Trustee, all such
instruments shall be made, executed, acknowledged and delivered by the
Mortgagor or the Beneficiary to the Successor Jurisdictional Trustee.
(c) The Mortgagor covenants and agrees:
(i) to reimburse the Beneficiary and the Trustees from time
to time for all reasonable, out-of-pocket costs and expenses incurred by
them hereunder;
(ii) to reimburse each of the Beneficiary and the Trustees
upon request for all reasonable out-of-pocket expenses, disbursements and
advances incurred or made by it or him in accordance with any provision of
this Mortgage (including reasonable compensation, expenses and
disbursements of agents and counsel), except any such expense,
39
disbursement or advance as may be attributable to Beneficiary's or
Trustee's negligence or bad faith; and
(iii) to indemnify the Beneficiary and the Trustees for, and to
hold each harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its or his part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder or the enforcement of remedies hereunder including the
reasonable costs and expenses of defending against any claim or liability
in connection with the exercise or performance of any of the powers or
duties hereunder or thereunder (except any liability incurred by the
Trustees and the Jurisdictional Trustee with negligence, willful misconduct
or bad faith on its or their part).
The obligations of the Mortgagor under this Section 9(c) to compensate or
indemnify the Trustees and the Beneficiary and to pay or reimburse the Trustees
and the Beneficiary for reasonable, out-of-pocket expenses, disbursements and
advances shall constitute additional Indebtedness hereunder and shall survive
the satisfaction and discharge of this Mortgage. When the Trustees or the
Beneficiary incur expenses or render services after an occurrence of an Event of
Default hereunder, the expenses and compensation for services are intended to
constitute expenses of administration under any Bankruptcy Law.
(d) If an individual Person is named as Trustee on page 1 hereof,
such individual is hereby appointed Individual Trustee for the State in which
the Properties are located. To the extent permitted by law, but to such extent
only, the Individual Trustee is appointed herein by the Beneficiary subject to
the following terms, namely:
(i) Subject to the terms hereof and to the extent permitted by
law, all the rights, powers, duties and obligations under this Mortgage
granted to or imposed upon the Individual Trustees shall be exercised
solely by the Beneficiary except as herein provided.
40
(ii) The rights, powers, duties and obligations hereby conferred
or imposed upon the Individual Trustee in respect of any property covered
by such appointment shall be exercised or performed by the Beneficiary
separately, or at the election of the Beneficiary by the Beneficiary and
the Individual Trustee jointly, except to the extent that (i) under any law
of any jurisdiction in which any particular act is to be performed by the
Individual Trustees the Beneficiary shall be incompetent or unqualified to
perform such act or (ii) the Beneficiary shall deem it inconvenient or
undesirable to perform such act, then in any such event such rights,
powers, duties and obligations shall be exercised and performed by the
Individual Trustee at the written direction of the Beneficiary.
(iii) The Beneficiary at any time, by an instrument in writing
executed by it, may accept the resignation of or remove any Individual
Trustee. Upon the written request of the Beneficiary, the Mortgagor shall
join with the Beneficiary in the execution, delivery and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to the Individual Trustee so resigned
or removed may be appointed in the manner provided in this Section.
(iv) Upon the death, resignation or removal of any Individual
Trustee, the Beneficiary shall have power to appoint and, upon the written
request of the Beneficiary, the Mortgagor shall, for such purpose, join
with the Beneficiary in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more
persons approved by the Beneficiary to act as Successor Individual Trustee
together with the Beneficiary of all or any part of the Trust Estate, with
such powers as provided for in this Section 9, and to vest in such person
or persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this
Section 9. If the Mortgagor does not join in such appointment, within
fifteen (15) days after the receipt by it of a request so to do, or in case
an Event of Default has
41
occurred and is continuing, the Beneficiary acting alone shall make such
appointment.
(v) Should any written instrument from the Mortgagor be
required by any successor Individual Trustee so appointed for more fully
confirming to such trustee such property, title, right or power, any and
all such instruments shall, on request, be executed, acknowledged and
delivered by the Mortgagor.
(vi) No Individual Trustee hereunder shall be personally liable
by reason of any act or omission of the Beneficiary or any other trustee
hereunder and the Beneficiary shall not be personally liable by reason of
any act or omission of the Individual Trustee; neither shall knowledge of
the Beneficiary be imputed to the Individual Trustee nor shall knowledge of
the Individual Trustee be imputed to the Beneficiary.
(vii) Any notice delivered to the Beneficiary shall be deemed to
have been sufficiently delivered without any delivery to the Individual
Trustee.
(viii) Any obligation of the Mortgagor to file or give notices,
reports or information to the Trustees hereunder shall be satisfied by the
delivery thereof to the Beneficiary.
Any successor to the Individual Trustee (herein, in this subsection
(h) called the "Successor Individual Trustee") shall execute, acknowledge and
-----------------------------
deliver to his predecessor (herein, in this subsection (h), called the
"Predecessor Individual Trustee"), the Beneficiary and the Mortgagor, an
-------------------------------
instrument accepting such appointment. Thereupon, the Successor Individual
Trustee shall, without any further act, deed or conveyance, become vested with
the estates, properties, rights, powers, duties and trusts of the Predecessor
Individual Trustee in the trusts created by this Mortgage, with the same effect
as if originally named as Individual Trustee. At the written request of the
Mortgagor, the Beneficiary or the Successor Individual Trustee, the Predecessor
Individual Trustee shall execute and deliver an instrument transferring to the
Successor Individual Trustee, upon
42
the trusts herein expressed, the Trust Estate and shall duly assign, transfer,
deliver and pay over to the Successor Individual Trustee, any property and
money subject to the lien hereof held by him. If any written instrument from
the Mortgagor or the Beneficiary be required by the Successor Individual Trustee
for more fully and certainly vesting in and confirming to the Successor
Individual Trustee such estates, properties, rights, powers and trusts, then, at
the request of the Successor Individual Trustee, all such instruments shall be
made, executed, acknowledged and delivered by the Mortgagor or the Beneficiary
to the Successor Individual Trustee.
(e) At any time or times, (i) for the purpose of meeting the Legal
Requirements of any jurisdiction in which any part of a Trust Estate may at the
time be located or (ii) if the Beneficiary deems it to be necessary or desirable
for the protection of its interests, the Beneficiary shall have the power to
appoint, and upon written request of the Beneficiary, the Mortgagor shall for
such purpose join with the Beneficiary in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Beneficiary either to act as co-trustee,
jointly with the Beneficiary, of all or any part of the Trust Estate, or to act
as separate trustee of any such property, in either case with such powers as may
be provided in the instrument of appointment which shall expressly designate
the property affected and the capacity of the appointee as either a co-trustee
or separate trustee, and to vest in such person or persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 9. If the Mortgagor does not
join in such appointment within 15 days after the receipt by it of a request so
to do, or in case an Event of Default has occurred and is continuing, the
Beneficiary alone shall make such appointment.
Should any written instrument from the Mortgagor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, by request, be executed, acknowledged and delivered by
the Mortgagor.
43
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the same terms as
hereinabove set forth for the Individual Trustee.
10. Transfers, Additional Indebtedness and Subordinate Liens.
--------------------------------------------------------
(a) Except as permitted under the Credit Agreement, the
Mortgagor will not without the Beneficiary's prior written consent, which
consent may be withheld in the Beneficiary's sole discretion, (i) sell, assign,
convey, transfer or otherwise dispose of legal or beneficial interests in all or
any part of the Properties, (ii) incur additional Debt (as such term is defined
in the Credit Agreement), (iii) sell, assign, convey, transfer, or otherwise
dispose of any legal or beneficial interest in the Mortgagor or any entity
constituting the Mortgagor, or permit any owner of a legal or beneficial
interest in the Mortgagor to do the same, or file a declaration of condominium
with respect to any Property, or (iv) mortgage, hypothecate or otherwise
encumber or grant a security interest in the Trust Estate or any interest in the
Mortgagor or entity constituting the Mortgagor (the matters referred to in
clauses (i) through (iv) are collectively referred to as a "Transfer").
---------
(b) Any Transfer made in violation of this Mortgage or the
Credit Agreement shall be an immediate Event of Default hereunder and shall be
void and of no force or effect as against the Beneficiary. Upon any such
Transfer made in violation of Section 10(a), the Beneficiary may, at its option
and without limiting any other right or remedy available to the Beneficiary
hereunder, under any of the other Loan Documents, or otherwise at law or in
equity, accelerate the maturity of the Note and require the payment of the then
existing outstanding principal balance, accrued interest and all other
Indebtedness due under the Note and this Mortgage and any and all other amounts
due to the Beneficiary. The Mortgagor shall reimburse the Beneficiary for all
reasonable costs and expenses, including, without limitation, reasonable
attorneys' fees, actually incurred by the Beneficiary in connection with the
review by the Beneficiary of the Mortgagor's request for the Beneficiary's
consent to a Transfer of all or any portion
44
of the Trust Estate or any interest therein or any interest in the Mortgagor.
11. Maintenance of Trust Estate; Alterations; Inspection; Utilities.
---------------------------------------------------------------
(a) The Mortgagor shall keep and maintain the Trust Estate and
every part thereof in good condition and repair, subject to ordinary wear and
tear, and shall not permit or commit any impairment, deterioration or
intentional waste of any Property and the Equipment located thereon in any
material respect. The Mortgagor further covenants to do all other acts which
from the character or use of any Property may be reasonably necessary to
protect the security hereof, the specific enumerations herein not excluding the
general. The Mortgagor shall not remove or demolish any Improvement on any
Property except as the same may be necessary in connection with an Alteration
or a restoration in connection with a Taking or casualty, required under the
Leases or in the ordinary course of business in accordance with the terms and
conditions hereof.
(b) Except as may be necessary in connection with an Alteration
permitted by Section 11(c) below, the Mortgagor shall not make any changes or
allow any changes to be made in the use of a Property as a commercial or
industrial property and related uses or initiate or acquiesce in any change in
any zoning or other land use classification affecting all or any portion of a
Property now or hereafter in effect and affecting all or any portion of a
Property in a manner which could result in a Material Adverse Effect.
(c) The Mortgagor shall have the right, without the
Beneficiary's consent, to undertake any alteration, improvement, demolition or
removal (any such alteration, improvement, demolition or removal, an
"Alteration") of a Property or any portion thereof so long as any such
----------
Alteration is (i) required or permitted pursuant to or in connection with any
Lease or (ii) provided that no Event of Default shall have occurred and be
continuing hereunder, does not in the aggregate cost more than $1,000,000. The
Beneficiary shall not unreasonably withhold its consent to any Alteration in
excess of $1,000,000 which is not otherwise permitted under the terms of the
applicable Lease. Any Alteration which in-
45
volves an estimated cost of more than $1,000,000 in the aggregate for any
Property shall be conducted under the supervision of an Independent Architect,
and no such Alteration shall be undertaken until five (5) Domestic Business Days
after there shall have been filed with the Beneficiary, for information purposes
only and not for approval by the Beneficiary, detailed plans and specifications
and cost estimates therefor, prepared and approved in writing by such
Independent Architect. Such plans and specifications may be revised at any time
and from time to time, provided that material revisions of such plans and
specifications are filed with the Beneficiary, for information purposes only,
together with the written approval thereof by such Independent Architect. All
work done in connection with any Alteration shall be performed with due
diligence in a good and workmanlike manner, all materials used in connection
with any Alteration shall not be less than the standard of quality of the
materials currently used at such Property and all work performed and all
materials used shall be in accordance with all applicable Legal Requirements
and the insurance requirements of the insurance policies required hereby.
(d) The Beneficiary and any Persons authorized by them may at
all reasonable times, upon reasonable notice and in compliance with the Leases
enter and examine any Property and may inspect all work done, labor performed
and materials furnished in and about any Property
12. Legal Compliance. The Mortgagor and the Properties and the
----------------
Equipment thereon and the use thereof comply in all material respects with all
Legal Requirements (hereinafter defined). Subject to the Mortgagor's right of
contest pursuant to Section 7(c), the Mortgagor shall comply with and conform in
all material respects to all present and future (when enacted) laws, statutes,
codes, ordinances, orders, judgments, decrees, injunctions, rules, regulations
and requirements, and irrespective of the nature of the work to be done, of
every Governmental Authority including, without limitation, Environmental Laws,
consumer protection laws and all covenants, restrictions and conditions now or
hereafter of record which may be applicable to Mortgagor or to any Property and
the Equipment thereon, or to the use, manner of use, occupancy, possession,
operation, maintenance,
46
alteration, repair or reconstruction of any Property and the Equipment thereon,
including, without limitation, building and zoning codes and ordinances
(collectively, the "Legal Requirements"), the failure to comply with would, in
------------------
the aggregate, have a material adverse effect on the value of any Property taken
as a whole.
13. Books and Records, Financial Statements, Reports and Other
----------------------------------------------------------
Information.
-----------
(a) Books and Records. The Mortgagor will keep and maintain on a
-----------------
fiscal year basis proper books and client records, in which accurate and
complete entries shall be made of all dealings or transactions of or in relation
to the Note and the Trust Estate and the business and affairs of the Mortgagor
relating to the Trust Estate, in accordance with GAAP and the Credit Agreement.
The Beneficiary and its authorized representatives shall have the right at
reasonable times and upon reasonable notice to examine the books and records of
the Mortgagor relating to the operation of the Trust Estate and to make such
copies or extracts thereof as the Beneficiary may reasonably require.
(b) Other Information. The Mortgagor will, within a reasonable
-----------------
time after written request by the Beneficiary, furnish to the Beneficiary, in
such manner and in such detail as may be reasonably requested by the
Beneficiary, such reasonable additional information which has been prepared by
the Mortgagor in the ordinary course of business, as may be reasonably requested
by the Beneficiary with respect to the Trust Estate.
14. Compliance with Leases and Agreements.
-------------------------------------
(a) The Mortgagor has heretofore delivered to the Beneficiary
true and complete copies of all Leases, and all Agreements and any and all
amendments or modifications thereof as required under the Credit Agreement.
Except as disclosed in writing to Beneficiary (and which such matters do not
have a Material Adverse Effect), the Leases and Agreements are in full force
and effect and the Mortgagor has neither given to, nor received any written
notice of default from, any Tenants under any Leases or any party to any of the
Agreements, and, to the Mortgagor's knowledge, no events or circum-
47
stances exist which with or without the giving of notice, the passage of time or
both, may constitute a default under any of the Leases or Agreements. The
Mortgagor will promptly notify the Beneficiary upon the occurrence of any of the
foregoing events.
(b) The Mortgagor may, at all times, lease to any Person space within
any Property in a manner consistent with other first-class office properties
comparable to the applicable Property and then current market conditions
existing in the applicable market area in which such Property is located, and
otherwise in accordance with this Mortgage. Each Lease entered into after the
date hereof (including the renewal or extension on or after the date hereof of
any Lease entered into prior to the date hereof if the rent payable during such
renewal or extension, or a formula or other method to compute such rent, is not
provided for in such Lease (such a renewal or extension a "Renewal Lease"))
-------------
shall either (i) (A) provide for payment of rent and all other material amounts
payable thereunder at rates at least equal to the fair market rental value
(taking into account the type and creditworthiness of the tenant, the length of
tenancy and the location and size of the unit so rented), as of the date such
Lease is executed by the Mortgagor, of the space covered by such Lease or
Renewal Lease for the term thereof, including any renewal options, (B) not
contain any provision whereby the rent payable thereunder would be based, in
whole or in part, upon the net income or profits derived by any Person from the
applicable Property (provided, however, that it may contain a provision in which
-------- -------
a portion of rent may be payable based on a percentage of gross income), (C) not
entitle any Tenant to receive and retain Proceeds of a Taking except those that
may be specifically awarded to it in condemnation proceedings because of the
Taking of its trade fixtures and its leasehold improvements which have not
become part of the realty and such business loss and relocation expenses as
tenant may specifically and separately establish and (D) not have a material
adverse effect on the value of the Property in which it is to be located or (ii)
be consented to by the Beneficiary. Each such Lease (other than Renewal Leases)
in excess of 15% of the rentable area of any Property (a "Material Lease") shall
--------------
be subject to the prior consent of Beneficiary, which consent shall not be
unreasonably withheld. Any such Renewal Lease shall also be subject to the
prior
48
consent of Beneficiary, which consent shall not be unreasonably withheld, in
the case of any Renewal Lease which either provides for (x) any change to any
financial provision of the Lease being renewed or extended, or (y) any other
material modification or amendment. Beneficiary shall grant or deny its
consent within five (5) Domestic Business Days after receipt of request
therefor (together with a copy of the proposed Renewal Lease). If the
Beneficiary shall fail to respond within such five (5) Domestic Business Day
period, the Beneficiary shall be deemed to have granted its consent to the
proposed Renewal Lease. In addition, the Mortgagor shall give the Beneficiary
not less than one (1) Domestic Business Day's prior written notice (together
with a copy of the proposed Renewal Lease) of any other proposed Renewal Lease
prior to the execution thereof. Without the prior consent of Beneficiary,
which consent shall not be unreasonably withheld, the Mortgagor may not amend,
modify or waive the provisions of any Material Lease or terminate, reduce rents
under or shorten the term of any such Lease.
(c) The Mortgagor shall (i) promptly perform and observe all of the
material terms, covenants and conditions required to be performed and observed
by the Mortgagor under the Leases and Agreements such that there will be no
material and adverse impairment of the value of the Property to which the Lease
or Agreement relates or the Beneficiary's interest under this Mortgage; and
(ii) collect the Rents under the Leases at such times as are customary in the
ordinary course of the Mortgagor's business and may collect such security
deposits as are permitted by Legal Requirements and are commercially reasonable
in the prevailing market and collect escalations, percentage rent and other
charges in accordance with the terms of each Lease.
(d) All Leases entered into by the Mortgagor after the date hereof
shall be subject and subordinate to this Mortgage (through either subordination
provisions in the Leases or separate nondisturbance agreements), and shall
provide that the Tenant thereunder shall attorn to the Beneficiary, or any
other Person succeeding to the interest of the Beneficiary, on the terms set
forth in Section 14(e); provided that the Tenant's rights under the Lease shall
not be impaired or otherwise affected by such subordination or the foreclosure
of this Mortgage, unless such Tenant has defaulted
49
under the Lease and all applicable grace or cure periods thereunder have
expired. The Beneficiary, at the request of the Mortgagor, shall enter into a
subordination, attornment and nondisturbance agreement, in form and substance
reasonably acceptable to the Beneficiary with any existing Tenant or any Tenant
entering into a Lease after the date hereof (other than a Lease to an Affiliate
of the Mortgagor) provided, in any event, that such Tenant leases at least 15%
--------
of the rentable square feet of the Improvements. All actual, out-of-pocket
costs and expenses of the Beneficiary in connection with the negotiation,
preparation, execution and delivery of any nondisturbance agreement, including,
without limitation, reasonable attorneys' fees and disbursements, shall be paid
by the Mortgagor.
(e) Each Lease entered into from and after the date hereof shall
provide that: in the event of the enforcement by the Beneficiary of any remedy
under this Mortgage, the Tenant under such Lease shall, at the option of the
Beneficiary or of any other Person succeeding to the interest of the
Beneficiary as a result of such enforcement, subject to the Beneficiary's and
such Tenant's delivery of any nondisturbance agreement required hereunder
(except with respect to any Lease to an Affiliate of Tenant), attorn to the
Beneficiary or to such Person and shall recognize the Beneficiary or such
successor in interest as lessor under such Lease without change in the
provisions thereof; provided, however, the Beneficiary or such successor in
-------- -------
interest shall not be liable for or bound by (i) any payment of an installment
of rent or additional rent which may have been made more than thirty (30) days
before the due date of such installment, (ii) any amendment or modification to
or termination of any such Lease not in conformity with Section 14(b), (iii) any
act or omission of or default by the Mortgagor under any such Lease, or (iv) any
credits, claims, setoffs or defenses which any Tenant may have against the
Mortgagor. Each such Tenant, upon reasonable request by the Beneficiary or such
successor in interest, shall execute and deliver an instrument or instruments
confirming such attornment, subject to the Beneficiary's delivery of a
nondisturbance agreement to such Tenant (except with respect to any Lease to an
Affiliate of Tenant).
50
15. The Beneficiary's Right to Perform. Upon the occurrence and
----------------------------------
continuance of an Event of Default with respect to the performance of any of the
Obligations contained herein, the Beneficiary, without waiving or releasing the
Mortgagor from any Obligation or Default under this Mortgage, after delivery of
notice thereof to Mortgagor, may (but shall not be obligated to), at any time
perform the same, and the cost thereof, with interest at the Default Rate from
the date of payment by the Beneficiary to the date such amount is paid by the
Mortgagor, shall immediately be due from the Mortgagor to the Beneficiary, and
the same shall be secured by this Mortgage and shall be a Lien on the Trust
Estate prior to any right, title to, interest in or claim upon the Trust Estate
attaching subsequent to the Lien of this Mortgage. No payment or advance of
money by the Beneficiary under this Section 15 shall be deemed or construed to
cure the Mortgagor's Default or waive any right or remedy of the Beneficiary
hereunder.
16. The Mortgagor's Existence; Organization and Authority;
------------------------------------------------------
Litigation. The Mortgagor shall do all things necessary to preserve and keep in
----------
full force and effect its existence, franchises, rights and privileges as a
limited partnership and its right to own property or transact business in the
state in which each of the Properties is located.
17. Protection of Security; Costs and Expenses. The Mortgagor shall
------------------------------------------
appear in and defend any action or proceeding purporting to affect the security
hereof or the rights or powers of the Beneficiary or the Trustees hereunder and
shall pay all reasonable costs and expenses, including, without limitation,
cost of evidence of title and reasonable attorneys' fees and disbursements, in
any such action or proceeding in which the Beneficiary may appear, and in any
suit brought by the Beneficiary to foreclose this Mortgage or to enforce or
establish any other rights or remedies of the Beneficiary hereunder. If an
Event of Default occurs and is continuing under this Mortgage, or if any action
or proceeding is commenced in which it becomes necessary to defend or uphold
the Lien or priority of this Mortgage or which adversely affects the
Beneficiary's interest in the Trust Estate, or Property or any part thereof,
including, but not limited to, eminent domain, enforcement of, or proceedings
of any nature whatsoever under any Legal Requirement
51
affecting the Trust Estate or involving the Mortgagor's bankruptcy, insolvency,
arrangement, reorganization or other form of debtor relief, then the
Beneficiary, upon reasonable notice to the Mortgagor, may, but without
obligation to do so and without releasing the Mortgagor from any obligation
hereunder, may make such appearances, disburse such sums and take such action as
the Beneficiary deems necessary or appropriate to protect the Beneficiary's
interest in the Trust Estate, including, but not limited to, disbursement of
reasonable attorneys' fees, entry upon any Property to make repairs or take
other action to protect the security hereof, and payment, purchase, contest or
compromise of any encumbrance, charge or lien which in the judgment of the
Beneficiary appears to be prior or superior hereto. All of the costs, expenses
and amounts set forth in this Section 17 shall be payable by the Mortgagor on
demand, together with interest thereon at the rate then in effect with respect
to the Note (except during the continuance of an Event of Default in which case
interest shall accrue at the Default Rate), from the date of notice to Mortgagor
of any such payment by the Beneficiary (or the Trustees) until the date of
repayment by the Mortgagor, shall be deemed to be Indebtedness hereunder and
shall be secured hereby. Nothing contained in this Section 17 shall be
construed to require the Beneficiary to incur any expense, make any appearance,
or take any other action.
18. Management of the Properties.
----------------------------
(a) The Mortgagor covenants and agrees with the Beneficiary that
the Properties will be managed at all times in a manner consistent with past
practice by Mortgagor or by another manager acceptable to the Beneficiary. Upon
the appointment of any manager (other than the Mortgagor or an affiliate), the
Beneficiary shall have the right to approve (which approval shall not be
unreasonably withheld or delayed) any management agreement with such manager
and any such management agreement shall provide that it is subject and
subordinate to the terms and provisions of this Mortgage.
(b) It is acknowledged and agreed that any management agreement
may be terminated at the direction of the Beneficiary at any time following the
occurrence and continuance of an Event of Default hereunder
52
and, if any such management agreement is so terminated, a substitute manager
shall be appointed by the Beneficiary.
19. Environmental Matters.
---------------------
(a) The Mortgagor covenants and agrees with the Beneficiary that
it shall comply with all Environmental Laws, except for such instances of non-
compliance which, singly, or in the aggregate, are not reasonably likely to
have a Material Adverse Effect. If at any time during the continuance of the
Lien of this Mortgage, Material of Environmental Concern are discovered in,
around, on, or under any Property, in such concentrations as a Governmental
Authority having jurisdiction over the Trust Estate would require remedial
action to correct (an "Environmental Event"), the Mortgagor shall deliver
-------------------
notice of the occurrence of such Environmental Event to the Beneficiary promptly
after Mortgagor becomes aware of such Environmental Event. Within (30) thirty
days after Mortgagor becomes aware of the occurrence of an Environmental Event,
the Mortgagor shall deliver to the Beneficiary an Officers' Certificate (an
"Environmental Certificate") explaining the Environmental Event in reasonable
---------------------------
detail, setting forth to the Beneficiary the estimated cost (as determined at
such time) of remedying such Environmental Event and the proposed method of
remediation and time to complete such remedy. The Mortgagor shall complete, or
cause the appropriate third party to complete, such remedy as promptly as
possible in the ordinary course of business. If an Environmental Event occurs,
the Mortgagor shall diligently remedy or diligently cause the appropriate third
party to remedy all conditions giving rise to such Environmental Event in
accordance with all Environmental Laws.
(b) Notwithstanding anything to the contrary provided in this
Mortgage or in any other Loan Document, the indemnification provided in the
Environmental Indemnity Agreement shall be fully recourse to the Mortgagor and
shall be independent of, and shall survive, the discharge of the Indebtedness,
the release of the Lien created under this Mortgage, and/or the conveyance of
title to any Property to the Beneficiary or any purchaser or designee in
connection with a foreclosure of this Mortgage or conveyance in lieu of
foreclosure. Notwithstanding the foregoing, in no event shall the indemnity
contained in the Environmental Indemnity Agree-
53
ment be assignable by the Beneficiary to any such purchaser at or subsequent to
a foreclosure sale.
20. Assignment of Rents. Beneficiary and the Mortgagor hereby
-------------------
confirm that Beneficiary has granted to the Mortgagor a license to collect and
use the Rents as they become due and payable under the Leases in accordance
with the provisions of the Assignment of Leases and Rents, until an Event of
Default has occurred and is continuing; provided that the existence of such
--------
right shall not operate to subordinate the Assignment of Leases and Rents to any
subsequent assignment, in whole or in part by the Mortgagor, and any such
subsequent assignment shall be subject to Beneficiary's rights under this
Mortgage. The Mortgagor further agrees to execute and deliver such assignments
of leases as Beneficiary may from time to time reasonably request in order to
better assure, transfer and confirm to Beneficiary the rights intended to be
granted to Beneficiary with respect thereto. In accordance with the provisions
of the Assignment of Leases and Rents, upon the occurrence and during the
continuance of an Event of Default (1) the Mortgagor agrees that Beneficiary
may, but shall not be obligated to, assume the management of the Properties, and
collect the Rents, applying the same upon the Obligations and (2) the Mortgagor
hereby authorizes and directs all tenants, purchasers or other persons occupying
or otherwise acquiring any interest in any part of the real property to pay the
Rents due under the Leases to Beneficiary upon Beneficiary's request.
Beneficiary shall have and hereby expressly reserves the right and privilege
(but assumes no obligation) to demand, collect, ▇▇▇ for, receive and recover the
Rents, or any part thereof, now existing or hereafter made, and apply the same
in accordance with this Mortgage, the Assignment of Leases and Rents, and
applicable law.
21. Remedies. Upon the occurrence and continuance of an Event of
--------
Default, the Beneficiary may take such actions against the Mortgagor and/or
against the Trust Estate or any portion thereof as the Beneficiary determines is
necessary to protect and enforce its rights hereunder, without notice or demand
except as set forth below. Any such actions taken by the Beneficiary shall be
cumulative and concurrent and may be pursued independently, singly,
successively, together or otherwise, at such time and in such order as the
Beneficiary may deter-
54
mine in its sole discretion, to the fullest extent permitted by law, without
impairing or otherwise affecting the other rights and remedies of the
Beneficiary permitted by law, equity or contract or as set forth herein or in
the other Loan Documents. Such actions may include the following:
(a) Acceleration. Subject to any applicable provisions of the Note
------------
and the other Loan Documents, the Beneficiary may declare all or any portion of
the unpaid principal balance under the Note, together with all accrued and
unpaid interest thereon, and all other unpaid Indebtedness, to be immediately
due and payable.
(b) Entry. The Beneficiary, personally, or by its agents or
-----
attorneys, or the Jurisdictional Trustee, or by the appointment of a receiver,
at the Beneficiary's election, may enter into and upon all or any part of the
Trust Estate (including any Property and any part thereof), and may exclude the
Mortgagor, its agents and servants, including the manager therefrom; and, the
Beneficiary, having and holding the same, may use, operate, manage and control
the Trust Estate or any part thereof and conduct the business thereof, either
personally or by its superintendents, managers, agents, servants, attorneys or
receiver. Upon every such entry, the Beneficiary may, at the expense of the
Trust Estate or the Mortgagor, from time to time, either by purchase, repair or
construction, maintain and restore the Trust Estate or any part thereof, and may
insure and reinsure the same in such amount and in such manner as may seem to
them to be advisable. Similarly, from time to time, the Beneficiary may, at the
expense of the Trust Estate or the Mortgagor make all necessary or proper
repairs, renewals, replacements, alterations, additions, betterments and
improvements to and on the Trust Estate or any part thereof as it may seem
advisable. The Beneficiary shall also have the right to manage and operate the
Trust Estate or any part thereof and to carry on the business thereof and
exercise all rights and powers of the Mortgagor with respect thereto, either in
the name of the Mortgagor or otherwise, as may seem to them to be advisable. In
confirmation of GRANTING CLAUSE IV, in the case of the occurrence and
continuation of an Event of Default, the Beneficiary shall be entitled to
collect and receive all earnings, revenues, rents, issues, profits
55
and income of the Trust Estate or any part thereof (collectively, the "Rents")
-----
to be applied to the Obligations in the order of priorities and amounts as the
Beneficiary shall elect in its sole discretion. In the event the Beneficiary
elects, in its sole discretion, to apply the Rents to the Obligations in any
order of priority elected by Beneficiary, the Beneficiary shall not have cause
to claim that the Rents so applied to the Obligations by the Beneficiary were
misappropriated by the Mortgagor. All actions which may be taken by the
Beneficiary pursuant to this subparagraph (b) may be taken by the Jurisdictional
Trustee, upon the direction of the Beneficiary. The Beneficiary or the
Jurisdictional Trustee, as applicable, shall be liable to account only for
rents, issues and profits and other proceeds actually received by the
Beneficiary or the Jurisdictional Trustee.
(c) Foreclosure.
-----------
(i) The Beneficiary, with or without entry, personally or by its
agents or attorneys, insofar as applicable, may (i) sell or instruct the
Jurisdictional Trustee, if applicable, to sell, to the extent permitted by
law and pursuant to the power of sale granted herein, all and singular the
Trust Estate, and all estate, right, title and interest, claim and demand
therein, and right of redemption thereof, at one or more sales, as an
entirety or in parcels, and at such times and places as required or
permitted by law and as are customary in any county or parish in which a
Property is located and upon such terms as the Beneficiary may fix and
specify in the notice of sale to be given to the Mortgagor (and on such
other notice published or otherwise given as provided by law), or as may be
required by law; (ii) institute (or instruct the Jurisdictional Trustee to
institute) proceedings for the complete or partial foreclosure of this
Mortgage under the provisions of the laws of the jurisdiction or
jurisdictions in which the Trust Estate or any part thereof is located, or
under any other applicable provision of law; or (iii) take all steps to
protect and enforce the rights of the Beneficiary, whether by action, suit
or proceeding in equity or at law (for the specific performance of any
covenant, condition or agreement contained in this Mortgage, or in aid of
the execution of any power herein
56
granted, or for any foreclosure hereunder, or for the enforcement or any
other appropriate legal or equitable remedy), or otherwise, as the
Beneficiary, being advised by counsel and its financial advisor, shall deem
most advisable to protect and enforce any of their rights or duties
hereunder.
(ii) The Beneficiary (or the Jurisdictional Trustee, as
applicable), may conduct any number of sales from time to time. The power
of sale shall not be exhausted by any one or more such sales as to any part
of the Trust Estate remaining unsold, but shall continue unimpaired until
the entire Trust Estate shall have been sold.
(iii) With respect to any Property, this Mortgage is made upon
any statutory conditions of the state in which such Property is located,
and, for any breach thereof or any breach of the terms of this Mortgage,
the Beneficiary shall have the statutory power of sale, if any, provided
for by the laws of such State.
(d) Specific Performance. The Beneficiary, in its sole and absolute
--------------------
discretion, or the Jurisdictional Trustee, at the Beneficiary's election, may
institute an action, suit or proceeding at law or in equity for the specific
performance of any covenant, condition or agreement contained herein or in the
Note or any other Loan Document, or in aid of the execution of any power granted
hereunder or for the enforcement of any other appropriate legal or equitable
remedy.
(e) Enforcement of Note. The Beneficiary or the Jurisdictional
-------------------
Trustee, at the Beneficiary's election, may recover judgement on the Note (or
any portion of the Indebtedness evidenced thereby), either before, during or
after any proceedings for the foreclosure (or partial foreclosure) or
enforcement of this Mortgage, to the fullest extent permitted by law.
(f) Sale of Trust Estate; Application of Proceeds.
----------------------------------------------
(i) The Beneficiary (or the Jurisdictional Trustee, if
applicable), may postpone any sale of all or any part of the Trust Estate
to be
57
made under or by virtue of this Section 21 by public announcement at the
time and place of such sale, or by publication, if required by law, and,
from time to time, thereafter, may further postpone such sale by public
announcement made at the time of sale fixed by the preceding postponement.
(ii) Upon the completion of any sale made by the Beneficiary or
the Jurisdictional Trustee under or by virtue of this Section 21, the
Beneficiary shall execute and deliver to the accepted purchaser or
purchasers a good and sufficient deed or deeds or other appropriate
instruments, conveying, assigning and transferring all its estate, right,
title and interest in and to the property and rights so sold. The
Beneficiary or the Jurisdictional Trustee, as applicable, is hereby
appointed the true and lawful irrevocable attorney-in-fact of the Mortgagor
in its name and stead or in the name of the Beneficiary to make all
necessary conveyances, assignments, transfers and deliveries of the
property and rights so sold under this Section 21, and, for that purpose,
the Beneficiary or the Jurisdictional Trustee, as applicable, may execute
all necessary deeds and other instruments of assignment and transfer, and
may substitute one or more persons with like power, the Mortgagor hereby
ratifying and confirming all that such attorney or attorneys or such
substitute or substitutes shall lawfully do by virtue hereof. The Mortgagor
shall, nevertheless, if so requested in writing by the Beneficiary, ratify
and confirm any such sale or sales by executing and delivering to the
Beneficiary or to such purchaser or purchasers all such instruments as may
be advisable, in the reasonable judgment of the Beneficiary, for such
purposes and as may be designated in such request. Any such sale or sales
made under or by virtue of this Section 21 shall operate to divest all the
estate, right, title, interest, claim and demand, whether at law or in
equity, of the Mortgagor in and to the property and rights so sold, and
shall be a perpetual bar against the Mortgagor, its successors and assigns
and any Person claiming through or under the Mortgagor and their successors
and assigns.
58
(iii) The receipt of the Beneficiary or the Jurisdictional
Trustee, as applicable, for the purchase money paid as a result of any such
sale shall be a sufficient discharge therefor to any purchaser of the
property or rights, or any part thereof, so sold. No such purchaser, after
paying such purchase money and receiving such receipt, shall be bound to
see to the application of such purchase money upon or for any trust or
purpose of this Mortgage, or shall be answerable, in any manner, for any
loss, misapplication or non-application of any such purchase money or any
part thereof, nor shall any such purchaser be bound to inquire as to the
authorization, necessity, expediency or regularity of such sale.
(iv) Upon any sale made under or by virtue of this Section 21,
the Beneficiary may bid for and acquire the Trust Estate or any part
thereof and, in lieu of paying cash therefor, may make settlement for the
purchase price by crediting upon the Note secured by this Mortgage the net
proceeds of sale, after deducting therefrom the expense of the sale and the
costs of the action and any other sums which the Beneficiary is authorized
to deduct under this Mortgage. The person making such sale shall accept
such settlement without requiring the production of the Note or this
Mortgage, and without such production there shall be deemed credited to the
Indebtedness and Obligations under this Mortgage the net proceeds of such
sale. The Beneficiary, upon acquiring the Trust Estate or any part thereof
shall be entitled to own, hold, lease, rent, operate, manage or sell the
same in any manner permitted by applicable laws.
(g) Voluntary Appearance; Receivers. After the happening, and during
-------------------------------
the continuance of, any Event of Default, and immediately upon commencement of
(i) any action, suit or other legal proceeding by the Beneficiary to obtain
judgment for the principal and interest on the Note and any other sums required
to be paid pursuant to this Mortgage, or (ii) any action, suit or other legal
proceeding by the Beneficiary of any other nature in aid of the enforcement of
the Loan Documents or any of them, the Mortgagor will (a) enter its voluntary
appearance in such action, suit or proceeding, and (b) if
59
required by the Beneficiary, consent to the appointment of one or more receivers
of the Trust Estate and of the earnings, revenues, rents, issues, profits and
income thereof. After the happening, and during the continuance, of any Event
of Default, or upon the filing of a ▇▇▇▇ in equity to foreclose this Mortgage or
to enforce the specific performance hereof or in aid thereof, or upon the
commencement of any other judicial proceeding to enforce any right of the
Beneficiary, the Beneficiary shall be entitled, as a matter of right, if it
shall so elect, without notice to any other party and without regard to the
adequacy of the security of the Trust Estate, forthwith, either before or after
declaring the principal and interest on the Note to be due and payable, to the
appointment of such a receiver or receivers. Any receiver or receivers so
appointed shall have such powers as a court or courts shall confer, which may
include, without limitation, any or all of the powers which the Beneficiary is
authorized to exercise by the provisions of this Section 21, and shall have the
right to incur such obligations and to issue such certificates therefor as the
court shall authorize.
(h) Retention of Possession. Notwithstanding the appointment of any
-----------------------
receiver, liquidator or trustee of the Mortgagor, or any of its property, or of
the Trust Estate or any part thereof, the Beneficiary or the Jurisdictional
Trustee, as applicable, to the extent permitted by law, shall be entitled to
retain possession and control of all property now or hereafter granted to or
held by the Beneficiary or the Jurisdictional Trustee, as applicable, under this
Mortgage.
(i) Suits by the Beneficiary. All rights of action under this
------------------------
Mortgage may be enforced by the Beneficiary without the possession of the Note
and without the production thereof or this Mortgage at any trial or other
proceeding relative thereto. Any such suit or proceeding instituted by the
Beneficiary shall be brought in the name of the Beneficiary and any recovery of
judgment shall be subject to the rights of the Beneficiary.
(j) Remedies Cumulative. No remedy herein conferred upon or reserved
-------------------
to the Beneficiary is intended to be exclusive of any other remedy, and each
such remedy shall be cumulative and in addition to every other remedy given
hereunder or now or hereafter existing
60
at law or in equity. No delay or omission of the Beneficiary to exercise any
right or power accruing upon any Event of Default shall impair any such right or
power, or shall be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Mortgage to the
Jurisdictional Trustee and/or the Beneficiary may be exercised from time to time
and as often as may be deemed expedient by the Jurisdictional Trustee (at the
Beneficiary's discretion) and the Beneficiary and each of them. Nothing
contained in this Mortgage shall affect the obligations of the Mortgagor to pay
the principal of, and interest on, the Note in the manner and at the time and
place expressed in the Note.
(k) Waiver of Rights. The Mortgagor agrees that to the fullest
----------------
extent permitted by law it will not, at any time, (a) insist upon, plead or
claim or take any benefit or advantage of any stay, extension or moratorium law,
wherever enacted, now or at any time hereafter in force, which may affect the
covenants and terms of performance of this Mortgage, (b) claim, take or insist
upon any benefit or advantage of any law, now or at any time hereafter in force,
providing for valuation or appraisal of the Trust Estate, or any part thereof,
prior to any sale or sales thereof which may be made pursuant to any provision
herein contained, or pursuant to the decree, judgment or order of any court of
competent jurisdiction, or (c) after any such sale or sales, claim or exercise
any right, under any statute heretofore or hereafter enacted by the United
States of America, any State thereof or otherwise, to redeem the property and
rights sold pursuant to such sale or sales or any part hereof. The Mortgagor
hereby expressly waives all benefits and advantages of such laws, and
covenants, to the fullest extent permitted by law, not to hinder, delay or
impede the execution of any power herein granted or delegated to the Beneficiary
or Trustees, but will suffer and permit the execution of every power as though
no such laws had been made or enacted. The Mortgagor for itself, and all who
may claim through or under it, waive, to the extent that they lawfully may do
so, any and all homestead rights, any and all rights to reinstatement, and any
and all right to have the property comprising the Trust Estate marshaled upon
any foreclosure of the lien hereof.
61
22. Application of Proceeds. The proceeds of any sale or foreclosure
-----------------------
of the Trust Estate shall be applied to the following in such priority as the
Beneficiary shall elect in its sole discretion: (a) to the payment of the
costs and expenses of the foreclosure proceedings (including, without
limitation, reasonable counsel fees and disbursements actually incurred and
advertising costs and expenses), liabilities and advances made or incurred under
this Mortgage, and reasonable receivers' and trustees' fees and commissions,
together with interest at the Default Rate, (b) to the payment of any other sums
advanced by the Beneficiary in accordance with the terms hereof and not repaid
to it by the Mortgagor, together with interest at the Default Rate from and
after the occurrence of an Event of Default, (c) to the payment of all sums due
under the Note in such order as the Beneficiary may elect, (d) to the payment of
all sums due under any other Loan Document, in such order as the Beneficiary
shall elect, and (e) to the payment to the Mortgagor or other party legally
entitled thereto of any surplus.
23. Intentionally Omitted.
---------------------
24. WAIVER OF TRIAL BY JURY. THE MORTGAGOR HEREBY WAIVES AND SHALL
-----------------------
WAIVE, TO THE EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION OR PROCEEDING
BROUGHT BY, OR COUNTERCLAIM ASSERTED BY THE BENEFICIARY WHICH ACTION, PROCEEDING
OR COUNTERCLAIM ARISES OUT OF OR IS CONNECTED WITH THIS MORTGAGE, THE NOTE OR
ANY OTHER LOAN DOCUMENTS.
25. Taxes. (a) In the event of the passage after the date hereof of
-----
any law of the United States or of any state in which a Property is located
either (i) deducting from the value thereof, or changing in any way the laws for
the taxation of mortgages or debts secured thereby for federal, state or local
purposes, or the manner of collection of any such taxes, or (ii) imposing a tax,
either directly or indirectly, on mortgages or debts secured thereby, the
Mortgagor shall assume as an obligation hereunder the payment of any tax so
imposed, until full payment of the Note, provided such assumption shall be
permitted by law within thirty (30) days after written demand therefor from the
Beneficiary.
62
(b) All payments by Mortgagor of principal of, and interest on, the
Loan and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or franchise
taxes and other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority ("Taxes"), but excluding (i) United
-----
States Federal income taxes, (ii) New York State income taxes, and (iii) income
taxes imposed by any other state. In the event that any with holding or
deduction from any payment to be made by the Mortgagor hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Mortgagor will: (i) pay directly to the relevant authority the full amount
required to be so withheld or deducted; (ii) promptly forward to the Beneficiary
an official receipt or other documentation satisfactory to the Beneficiary
evidencing such payment to such authority; and (iii) pay to the Beneficiary
such additional amount or amounts as is necessary to ensure that the net amount
actually received by the Beneficiary will equal the full amount the Beneficiary
would have received had no such withholding or deduction been required.
Moreover, if any Taxes (except taxes discussed in subsections (i) through (iii)
of this paragraph 25 (b)) are directly asserted against the Beneficiary with
respect to any payment received by the Beneficiary under the Note, or hereunder,
the Beneficiary may pay such Taxes and the Mortgagor will within five (5)
Domestic Business Days pay such additional amounts (including any penalties,
interest or expenses) as are necessary in order that the net amount received by
such person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such person would have received had no
such Taxes been asserted.
(c) If the Mortgagor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Beneficiary the required
receipts or other required documentary evidence, the Mortgagor shall indemnify
the Beneficiary for any incremental Taxes, interest or penalties that may become
payable by the Beneficiary as a result of any such failure.
26. Notices. All notices, requests and other communications to any
-------
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or
63
similar writing) and shall be given to such party at the address, telex number
or facsimile number set forth below or at such other address, telex number or
facsimile number as such party may hereafter specify for the purpose by notice
to the other party. Each such notice, request or other communication shall be
effective (i) if given by telex or facsimile transmission, when such telex or
facsimile is transmitted to the telex number or facsimile number specified in
this Section and the appropriate answerback or facsimile confirmation is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, (iii) if
given by a nationally recognized overnight carrier, 24 hours after such
communication is deposited with such carrier with postage prepaid, or (iv) if
given by any other means, when delivered at the address specified in this
Section. Notices shall be addressed as follows:
To Mortgagor:
▇▇▇▇▇▇ Realty, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
To Beneficiary:
▇▇▇▇▇▇ Note Trust Company of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (212) 648-
64
With a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
27. No Oral Modification. This Mortgage may not be altered, amended,
--------------------
modified, changed or terminated orally, but only by a written agreement signed
by the party against whom enforcement is sought. This Mortgage is delivered
pursuant to, and upon and subject to, the terms of the Credit Agreement. If
there are any inconsistencies between this Mortgage and the Credit Agreement,
the terms of the Credit Agreement shall prevail.
28. Partial Invalidity. In the event any one or more of the
------------------
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included hereunder.
29. Successors and Assigns. All covenants of the Mortgagor contained
----------------------
in this Mortgage are imposed solely and exclusively for the benefit of the
Beneficiary and its successors and assigns, and no other Person shall have
standing to require compliance with such covenants or be deemed, under any
circumstances, to be the beneficiary of such covenants, any or all of which may
be freely waived in whole or in part by the Beneficiary at any time if in its
sole discretion it deems it advisable to do so. All such covenants of the
Mortgagor shall run with the land and bind the Mortgagor, the successors and
assigns of the Mortgagor (and each of them) and all subsequent owners,
encumbrancers and Tenants of the Trust Estate, and shall inure to the benefit of
the Beneficiary, its successors and assigns. The word "the Beneficiary" shall
be construed to mean the Beneficiary named herein.
30. Governing Law. This Mortgage and the obligations arising
-------------
hereunder shall be governed by and
65
construed in accordance with, the laws of the State where the Properties are
located. Whenever possible, each provision of this Mortgage shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Mortgage shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remaining provisions of this
Mortgage. Nothing contained in this Mortgage or in any Loan Document shall
require either the Mortgagor to pay or the Beneficiary to accept any sum in any
amount which would, under applicable law, subject the Beneficiary or any
Trustee to penalty or adversely affect the enforceability of this Mortgage. In
the event that the payment of any sum due hereunder or under any Loan Document
would have such result under applicable law, then, ipso facto, the obligation of
---- -----
the Mortgagor to make such payments shall be reduced to the highest sum then
permitted under applicable law and appropriate adjustment shall be made by the
Mortgagor and the Beneficiary.
31. Recording Fees, Taxes, Etc. The Mortgagor hereby agrees to take
---------------------------
all such further reasonable actions, and to pay all taxes, recording fees,
charges, costs and other reasonable expenses, including, without limitation,
reasonable attorneys' and reasonable professional fees and disbursements which
are currently or in the future shall be imposed, and which may be required or
necessary to establish, preserve, protect or enforce the Lien of this Mortgage.
32. No Waiver. No failure by the Beneficiary to insist upon the
---------
strict performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof shall constitute a waiver of any such term or
right, power or remedy or of any such breach. No waiver of any breach shall
affect or alter this Mortgage, which shall continue in full force and effect, or
shall affect or alter the rights of the Beneficiary with respect to any other
then existing or subsequent breach.
33. Further Assurances.
------------------
(a) The Mortgagor, at its own expense, will execute, acknowledge
and deliver all such reasonable further documents or instruments including,
without limitation, security agreements on any personalty includ-
66
ed or to be included in the Trust Estate and a separate assignment of each Lease
and take all such actions as the Beneficiary from time to time may reasonably
request to better assure, transfer and confirm unto the Beneficiary the rights
now or hereafter intended to be granted to the Beneficiary under this Mortgage
or the other Loan Documents.
(b) The Mortgagor covenants to give notice to the Beneficiary no less
than thirty (30) days prior to a change of Mortgagor's principal place of
business.
34. Additional Security. Without notice to or consent of the
-------------------
Mortgagor and without impairment of the Lien and rights created by this
Mortgage, the Beneficiary may accept (but the Mortgagor shall not be obligated
to furnish) from the Mortgagor additional security for the Note. Neither the
giving of this Mortgage nor the acceptance of any such additional security
shall prevent the Beneficiary from resorting, first, to such additional
security, and, second, to the security created by this Mortgage without
affecting the Beneficiary's Lien and rights under this Mortgage.
35. Indemnification by the Mortgagor. The Mortgagor will protect,
--------------------------------
indemnify and save harmless the Beneficiary, the Banks and every Trustee and all
officers, directors, stockholders, partners, employees, successors and assigns
of any of the foregoing (collectively, the "Indemnified Parties") from and
-------------------
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses (including all reasonable attorneys' fees and
expenses actually incurred) imposed upon or incurred by or asserted against the
Indemnified Parties or the Trust Estate or any part of its interest therein, by
reason of the occurrence or existence of any of the following (to the extent the
insurance Proceeds payable on account of the following shall be inadequate)
prior to (i) the payment in full of the Note, (ii) the acceptance by the
Beneficiary of a deed-in-lieu of foreclosure with respect to the applicable
Property, or (iii) the Beneficiary's taking possession or control of the
applicable Property, except to the extent caused by the actual willful
misconduct or gross negligence of the Beneficiary or any other Indemnified Party
(other than such willful misconduct or gross negli-
67
gence imputed to the Beneficiary solely because of its interest in the Trust
Estate): (a) ownership of the Mortgagor's interest in the Trust Estate, or any
interest therein, or receipt of any Rents or other sum therefrom, (b) any
accident, injury to or death of any persons or loss of or damage to property
occurring on or about the Trust Estate or any appurtenances thereto, (c) any
design, construction, operation, repair, maintenance, use, non-use or condition
of the Trust Estate or appurtenances thereto, including claims or penalties
arising from violation of any Legal Requirement or Insurance Requirement, as
well as any claim based on any patent or latent defect, whether or not
discoverable by the Beneficiary, any claim the insurance as to which is
inadequate, and any Environmental Claim, (d) any failure on the part of the
Mortgagor to perform or comply with any of the material terms of any Lease
within the applicable notice or grace periods, (e) any performance of any labor
or services or the furnishing of any materials or other property in respect of
the Trust Estate or any part thereof, (f) any negligence or tortious act or
omission on the part of the Mortgagor or any of its agents, contractors,
servants, employees, sublessees, licenses or invitees, (g) any contest referred
to in Section 7 hereof, or (h) any obligation or undertaking relating to the
performance or discharge of any of the terms, covenants and conditions of the
landlord contained in the Leases. Any amounts payable to the Indemnified Parties
under this Section 35 which are not paid within ten (10) Domestic Business Days
after written demand therefor by the Beneficiary; setting forth in reasonable
detail the amount of such demand and the basis therefor, shall bear interest
from the date of demand at the Default Rate, and shall be part of the
Indebtedness and secured by this Mortgage. In case any action, suit or
proceeding is brought against the Indemnified Parties by reason of any such
occurrence, the Mortgagor shall at the Mortgagor's expense resist and defend
such action, suit or proceeding or will cause the same to be resisted and
defended by counsel for the insurer of the liability or by counsel designated by
the Mortgagor (unless reasonably disapproved by the Beneficiary promptly after
the Beneficiary has been notified of such counsel); provided, however, that
-------- -------
nothing herein shall compromise the right of the Beneficiary to appoint its own
counsel for its defense with respect to any action which in its reasonable
opinion presents a conflict or potential conflict between the Beneficiary and
68
the Mortgagor that would make such separate representation advisable. So long
as the Mortgagor is resisting and defending such action, suit or proceeding as
provided above in a prudent and commercially reasonable manner, the Beneficiary
shall not be entitled to settle such action, suit or proceeding and claim the
benefit of this Section 35 with respect to such action, suit or proceeding and
the Beneficiary agrees that it will not settle any such action, suit or
proceeding without the consent of the Mortgagor; provided, however, that if the
-------- -------
Mortgagor is not diligently defending such action, suit or proceeding in a
prudent and commercially reasonable manner as provided above, the Beneficiary
may settle such action, suit or proceeding subject only to the consent of the
Mortgagor, which consent shall not be unreasonably withheld or delayed, and
claim the benefit of this Section 35 with respect to settlement of such action,
suit or proceeding. The Beneficiary will give the Mortgagor prompt notice after
it obtains actual knowledge of any potential claim by it for indemnification
hereunder; however, the failure of the Beneficiary to give such notice to
Mortgagor shall not affect Mortgagor's obligations hereunder.
36. Release. (a) If the Mortgagor shall pay or cause to be paid the
-------
principal of and interest on the Note in full at maturity or earlier as
permitted in accordance with the terms thereof or the terms of the Credit
Agreement and all other Indebtedness payable to the Beneficiary hereunder by the
Mortgagor or secured hereby or by the other Loan Documents and all of the
Obligations shall have been performed, then this Mortgage and all Loan Documents
pertaining hereto shall be discharged and satisfied or assigned to the
Mortgagor or to any other Person at the Mortgagor's direction and without
recourse to the Beneficiary or any Trustee, at the Mortgagor's option, without
warranty (except as otherwise provided herein with respect to indemnities) at
the expense of the Mortgagor upon its written request. Concurrently with such
release and satisfaction or assignment of this Mortgage and all the other Loan
Documents, the Beneficiary shall return to the Mortgagor or the Borrower all
insurance policies relating solely to the Trust Estate which may be held by the
Beneficiary, and, on the written request and at the expense of the Mortgagor,
Beneficiary shall execute and deliver such proper instruments of release
(including appropriate ▇▇▇-
▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇) as may reasonably be requested by the Mortgagor to
evidence such release and satisfaction or assignment, and any such instrument,
when duly executed by the Beneficiary and duly recorded in the places where this
Mortgage and each other Loan Document is recorded, shall conclusively evidence
the release and satisfaction or assignment of this Mortgage and the other Loan
Documents.
(b) Beneficiary shall release, or cause the Trustee to release, the
Lien of the Mortgage from the applicable Property, upon payment by Mortgagor of
the amount required under Section 2.9(b) of the Credit Agreement and compliance
with all other applicable provisions of the Credit Agreement. Concurrently with
such release of this Mortgage and all other Loan Documents relating solely to
the Trust Estate, the Beneficiary shall return to the Mortgagor all insurance
policies relating solely to the Trust Estate which may be held by the
Beneficiary, and, on the written request and at the expense of the Mortgagor,
Beneficiary shall execute and deliver such proper instruments of release
(including appropriate UCC-3 termination statements) as may reasonably be
requested by the Mortgagor to evidence such release, and any such instrument,
when duly executed by the Beneficiary and duly recorded in the places where this
Mortgage and each other Loan Document is recorded, shall conclusively evidence
the release of this Mortgage and the other Loan Documents relating solely to the
Trust Estate.
37. Security Agreement.
------------------
(a) Security Intended. Notwithstanding any provision of this
-----------------
Mortgage to the contrary, the parties intend that this document constitutes
security for the payment and performance of the Obligations and shall be a
"mortgage" or "deed of trust" under applicable law as set forth in Section 38.
If Section 38 provides that this document is intended to be a deed of trust and,
despite that intention, a court of competent jurisdiction determines that this
document does not qualify as a "trust deed" or "deed of trust" under applicable
law, then ab initio, this instrument shall be deemed a realty mortgage under
applicable law and shall be enforceable as a realty mortgage, and, in such
event, or in the event that Section 38 provides that this document is intended
to be a mortgage, the Mortgagor shall be deemed a "mort-
70
gagor," Beneficiary shall be deemed a "mortgagee," and Trustee shall have no
capacity (but shall be disregarded and all references to "Trustee" shall be
deemed to refer to the "mortgagee" to the extent not inconsistent with
interpreting this instrument as though it were a realty mortgage). As a realty
mortgage, the Mortgagor, as mortgagor, shall be deemed to have conveyed the
Properties ab initio to Beneficiary as mortgagee, such conveyance as a security
to be void upon condition that the Mortgagor pay and perform all its
Obligations. The remedies for any violation of the covenants, terms and
conditions of the agreements herein contained shall be as prescribed herein or
by general law, or, as to that part of the security in which a security interest
may be perfected under the UCC, by the specific statutory consequences now or
hereafter enacted and specified in the UCC, all at Beneficiary's sole election.
(b) Fixture Filing; Personal Property. This Mortgage constitutes a
---------------------------------
financing statement and, to the extent required under UCC (S)9-402(f) because
portions of the Properties may constitute fixtures, this Mortgage is to be filed
in the office where a mortgage for the Land Parcels would be recorded.
Beneficiary also shall be entitled to proceed against all or portions of the
Trust Estate in accordance with the rights and remedies available under UCC
(S)9-501(d). The Mortgagor is, for the purposes of this Mortgage, deemed to be
the Debtor, and Beneficiary is deemed to be the Secured Party, as those terms
are defined and used in the UCC. The Mortgagor agrees that the Indebtedness and
Obligations secured by this Mortgage are further secured by security interests
in all of the Mortgagor's right, title and interest in and to fixtures,
Equipment, and other property covered by the UCC, if any, including all personal
property comprising part of the Trust Estate, which are used upon, in, or about
the Trust Estate (or any part) or which are used by the Mortgagor or any other
person in connection with the Trust Estate. The Mortgagor grants to Beneficiary
a valid and effective security interest in all of the Mortgagor's right, title
and interest in and to such personal property (but only to the extent permitted
in the case of leased personal property), together with all replacements,
additions, and proceeds. Except for Permitted Encumbrances, the Mortgagor
agrees that, without the written consent of Beneficiary, no other security
interest will be created under the provisions of the UCC
71
and no lease will be entered into with respect to any goods, fixtures,
equipment, appliances, or articles of personal property owned or leased by
Mortgagor now attached to or used or to be attached to or used in connection
with the Trust Estate, except as otherwise permitted hereunder. The Mortgagor
agrees that all property of every nature and description covered by the lien and
charge of this Mortgage together with all such property and interests covered by
this security interest are encumbered as a unit, and upon and during the
continuance of an Event of Default by Mortgagor, all of the Trust Estate, at
Beneficiary's option, may be foreclosed upon or sold in the same or different
proceedings or at the same or different time, subject to the provisions of
applicable law. The filing of any financing statement relating to any such
property or rights or interests shall not be construed to diminish or alter any
of Beneficiary's rights of priorities under this Mortgage.
(c) As of the Closing Date, the principal office, chief executive
office and principal place of business of the Mortgagor is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
38. As to Property in California. Notwithstanding anything to the
----------------------------
contrary elsewhere in this Mortgage, as to any property of the Trust Estate
located in the State of California (the "California Property"):
-------------------
(a) This Mortgage shall constitute a security agreement and
continuously perfected fixture filing and financing statement. The Mortgagor
is, for the purposes of this Mortgage, deemed to be the Debtor, and Beneficiary
is deemed to be the Secured Party, as those terms are defined and used in the
California Uniform Commercial Code. The addresses of the Secured Party and
Debtor from which information concerning the security agreement may be obtained
are set forth in the initial paragraph of this Mortgage. References to UCC (S)
9-402(f) and UCC (S) 9-501(d) in Section 10(b) of this Mortgage shall be deemed
to refer to UCC (S) 9-402(6) and UCC (S) 9-501, respectively.
(b) This Mortgage shall be deemed to be and shall be construed as a
Deed of Trust enforceable in accordance with the applicable laws of the State of
California regarding deeds of trust, as well as a Security Agreement, Financing
Statement and Assignment of Leases.
72
Reference throughout this instrument to this "Mortgage" shall mean, as
appropriate, this Deed of Trust, Security Agreement, Financing Statement and/or
Assignment of Leases. Reference throughout this Mortgage to "Mortgagor" shall
mean Trustor, as appropriate. References throughout this instrument to the
"Trustee" or "Trustees" shall mean: ____________________, a ________
corporation, subject to substitution as provided in California Civil Code
Section 2934(a). The California Property shall be deemed to be and hereby is
conveyed and transferred by Mortgagor, in trust and with power of sale, to
Trustee, and the reference to the "Beneficiary" in the Granting Clauses of this
Mortgage shall, with regard to the California Property, be deemed to be a
reference to Trustee so that Mortgagor mortgages, warrants, grants, bargains,
sells, conveys, pledges and assigns the California Property of the Trust Estate
to Trustee, in trust, for the benefit and use of Beneficiary. Other references
to "Beneficiary" in this Mortgage shall be interpreted to be references to
Beneficiary, Trustee or both as the context may require in light of the intent
of the parties that this Mortgage be construed as a Deed of Trust according to
the applicable laws of the State of California. Trustee shall have all the
obligations, rights, powers and duties of a trustee of a deed of trust as
explicitly set forth or necessarily implied in the California Civil Code, as
amended; and such rights, powers, duties and obligations shall be exercised and
performed by such Trustee at the written direction of Beneficiary or the legal
holder of the indebtedness secured hereby. Nothing contained herein, however is
intended to limit the rights or powers of Beneficiary as set forth in this
Mortgage, except to the extent necessary to accomplish the purpose stated above.
(c) Each of the remedies set forth herein, including without
limitation the remedies involving a power of sale of the California Property and
the right of Beneficiary to exercise self-help in connection with the
enforcement of the terms of this Mortgage, shall be exercisable if, and only to
the extent, permitted by the laws of the State of California in force at the
time of the exercise of such remedies without regard to the enforceability of
such remedies at the time of the execution and delivery of this Mortgage.
73
(d) (i) Beneficiary may elect to foreclose by exercise of the power
of sale contained herein, in which event Beneficiary shall notify Trustee
and shall, if required, deposit with Trustee the Note, the original or a
certified copy of this Mortgage, and such other documents, receipts and
evidences of expenditures made and secured hereby as Trustee may require.
(ii) Upon receipt of such notice from Beneficiary, Trustee shall
cause to be recorded and delivered to Mortgagor such notice as may then be
required by law and this Mortgage. Trustee shall, without demand on
Mortgagor, after lapse of such time as may then be required by law and
after recordation of such notice of default and after notice of sale has
been given as required by law, sell the California Property at the time and
place of sale fixed by it in said notice of sale, either as a whole or in
separate lots of parcel or items as Trustee shall deem expedient, and in
such order as it may determine, at public auction to the highest bidder for
cash in lawful money of the United States payable at the time of sale.
Trustee shall deliver to the purchaser or purchasers at such sale its good
and sufficient deed or deeds conveying the property so sold, but without
any covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness thereof.
Any person, including, without limitation, Mortgagor, Trustee or
Beneficiary, may purchase at such sale.
(iii) Trustee may postpone the sale of all or any portion of the
California Property from time to time in accordance with the laws of the
State of California.
(e) Beneficiary may from time to time rescind any notice of default
or notice of sale before any Trustee's sale as provided above in accordance with
the laws of the State of California.
(f) Mortgagor, as Trustor under this Mortgage, hereby requests that a
copy of any Notice of Default or Notice of Sale as may be required by law, which
affects the California Property, be mailed to Mortgagor at the
74
address set forth in Section 26 hereof. Otherwise, neither Trustee nor
----------
Beneficiary is under any obligation to notify any person or entity of any action
or proceeding of any kind in which Mortgagor, Beneficiary and/or Trustee shall
be a party, unless brought by Trustee, or of any pending sale under any other
deed of trust, except as may otherwise be required by law or required hereunder.
39. Ground Lease.
------------
(a) Mortgagor hereby represents and warrants as follows:
(i) each Ground Lease is in full force and effect, unmodified by any
writing or otherwise except as specifically set forth herein;
(ii) all rent, additional rent and/or other charges reserved in or
payable under each Ground Lease, have been paid to the extent that they are
payable to the date hereof;
(iii) Mortgagor enjoys the quiet and peaceful possession of the
Ground Leasehold Estate;
(iv) there are no defaults under any of the material terms of any
Ground Lease;
(v) Mortgagor has delivered to Beneficiary a true, accurate and
complete copy of each Ground Lease;
(vi) this Mortgage is secured by the Ground Leasehold Estate; upon
the occurrence of an Event of Default, Beneficiary has the right to
foreclose or otherwise exercise its rights with respect to the fee interest
in the Trust Estate within a commercially reasonable time;
(vii) each Ground Lease or a memorandum of same has been duly
recorded, each Ground Lease permits the interest of the lessee thereunder
to be encumbered by this Mortgage, and there has not been a material change
in the terms of either Ground Lease since its recordation;
75
(viii) Except for the Permitted Exceptions, Mortgagor's interest in
each Ground Lease is not subject to any liens or encumbrances superior to,
or of equal priority with, this Mortgage;
(ix) Mortgagor's interest in each Ground Lease is assignable to
Beneficiary upon notice to, but without the consent of, the lessor
thereunder, and in the event that such leasehold interest is so assigned,
it is further assignable by Beneficiary and its successors and assigns upon
notice to, but without a need to obtain the consent of, the lessor under
such Ground Lease;
(x) each Ground Lease requires the lessor thereunder to give notice
of any default by Mortgagor to Beneficiary; and each Ground Lease further
provides that notice of termination given under Ground Lease is not
effective against Beneficiary unless a copy of such notice has been
delivered to Beneficiary in the manner described in such Ground Lease;
(xi) Beneficiary is permitted a reasonable opportunity (including,
where necessary, sufficient time to gain possession of the interest of
Mortgagor under each Ground Lease) to cure any default under each Ground
Lease, which is curable after the receipt of notice of any such default
before the lessor thereunder may terminate such Ground Lease;
(xii) each Ground Lease has a term which extends not less than ten
(10) years beyond the Maturity Date;
(xiii) each Ground Lease requires the lessor thereunder to enter into
a new lease with Beneficiary upon termination of such Ground Lease for any
reason, including rejection of the Ground Lease in a bankruptcy proceeding;
(xiv) under the terms of each Ground Lease and this Mortgage, taken
together, any related insurance proceeds will be applied either to the
repair or restoration of all or part of the related Property, with
Beneficiary having the right to hold and disburse the proceeds as the
repair or restoration
76
progresses, or to the payment of the outstanding principal balance of the
Note together with any accrued interest thereon; and
(xv) neither Ground Lease imposes any restrictions on subletting.
Further, with respect to each Ground Lease, Mortgagor covenants and
agrees as follows: (i) to promptly and faithfully observe, perform and comply
with all the terms, covenants and provisions of such Ground Lease, on its part
to be observed, performed and complied with, within the applicable grace
periods, if any; (ii) to refrain from doing anything, as a result of which,
there could be a material default under or a breach of any of the terms of such
Ground Lease; (iii) not to do, permit or suffer any event or omission as a
result of which there is likely to occur a default or breach under such Ground
Lease after the passing of the applicable grace periods, if any; (iv) not to
cancel, terminate, surrender, modify, amend or in any way alter or permit the
alteration of any of the provisions of such Ground Lease or grant any consents
or waivers thereunder, and further agrees not to exercise any right it may have
under such Ground Lease to cancel or surrender the same; (v) to give Beneficiary
notice of any default by any party under such Ground Lease, within three (3)
Business Days subsequent to learning of such default, and promptly to deliver to
Beneficiary a copy of each notice of default and all responses to default
notices, similar instruments received or delivered by Beneficiary, in
connection with such Ground Lease; (vi) to furnish within a reasonable period of
time, except in connection with a notice of default which is governed by the
previous clause, to Beneficiary copies of such information and evidence as
Beneficiary may reasonably request concerning the due observance, performance
and compliance by Mortgagor with the terms, covenants and provisions of such
Ground Lease; and (vii) that any failure by Mortgagor, as tenant under such
Ground Lease, to perform within any applicable grace period its obligations
under such Ground Lease shall constitute an Event of Default by Mortgagor under
this Mortgage.
(b) In the event of the occurrence of any event which, with the
giving of notice, the passage of time or both, would constitute an Event of
Default (as
77
defined in the applicable Ground Lease) by Mortgagor in the performance of its
obligations under either Ground Lease, and which is not cured within any
applicable grace period, including, without limitation, any default in the
payment of any sums payable thereunder, then, in each and every case,
Beneficiary may, at its option cause the default or defaults to be remedied and
otherwise exercise any and all of the rights of Mortgagor thereunder in the name
of and on behalf of Mortgagor. Mortgagor shall, within five (5) Business Days
after written demand, reimburse Beneficiary for all advances made and expenses
reasonably incurred by Beneficiary in curing any such default (including,
without limitation, reasonable attorneys' fees), together with interest thereon
from the date that such advance is made, to and including the date the same is
paid to Beneficiary. The provisions of this subsection (b) are in addition to
any other remedy given to or allowed Beneficiary under the Ground Lease.
(c) If either Ground Lease is canceled or terminated by reason of an
Event of Default (as defined in the applicable Ground Lease) that Beneficiary
was unable to cure (following a good faith effort to so cure), then, if
Beneficiary or its nominee shall acquire an interest in any new lease of the
Ground Leasehold Estate with respect to such Ground Lease following such Event
of Default, Mortgagor shall have no right, title or interest in or to the new
lease or the leasehold estate created by such new lease.
(d) Mortgagor shall obtain and deliver to Beneficiary, within thirty
(30) days after written demand therefor by Beneficiary, an estoppel certificate
stating, with respect to either Ground Lease, (1) that the Ground Lease is in
full force and effect and has not been modified or, if it has been modified,
the date of each modification (together with copies of each such
modification), (2) the date to which the fixed rent has been paid under the
Ground Lease, (3) whether a notice of default has been sent to the tenant under
the Ground Lease which has not been cured, and if such notice has been sent, the
date it was sent and the nature of the default, (4) whether any parties under
the Ground Lease are in default in keeping, observing or performing any material
term covenant, agreement, provision, condition or limitation contained in the
Ground Lease, (5) if the tenant under the Ground Lease shall be in default, the
default, (6)
78
the name of the tenant entitled to possession of the Ground Leasehold Estate
under the Ground Lease, (7) whether to the best of Mortgagor's knowledge there
has occurred any event which, with the giving of notice or the passage of time
or both would constitute a default under the Ground Lease, and, if there has
occurred any such event, setting forth the nature thereof in reasonable detail.
(e) Notwithstanding anything to the contrary contained herein, this
Mortgage shall not constitute an assignment of either Ground Lease within the
meaning of any provision thereof prohibiting its assignment and Beneficiary
shall have no liability or obligation thereunder by reason of its acceptance of
this Mortgage. Beneficiary shall be liable for the obligations of the tenant
arising under either Ground Lease for only that period of time during which
Beneficiary is in possession of the Ground Leasehold Estate under such Ground
Lease or has acquired, by foreclosure or otherwise, and is holding, all of the
right, title and interest of Mortgagor therein.
79
IN WITNESS WHEREOF, this Mortgage has been duly executed by the
Mortgagor on the date first hereinabove written.
WITNESS: Mortgagor:
▇▇▇▇▇▇ REALTY, L.P.
By:_________________________
Name:
By:_____________________________
_______________________________ Name:
WITNESS: Title:
By:__________________________
EXHIBIT A
(LAND PARCELS)
A-1
EXHIBIT B
(PERMITTED EXCEPTIONS)
B-1
SCHEDULE 1
----------
AGREEMENTS
Schedule 1-i