COMMONWEALTH OF MASSACHUSETTS
COUNTY OF MIDDLESEX
Recording requested by:
And when recorded mail to:
Xxxxx, Xxxxxxx, Xxxxxxxx,
Xxxx & Xxxxxxxxx, P.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING,
FINANCING STATEMENT
AND ASSIGNMENT OF LEASES AND RENTS
THIS MORTGAGE, SECURITY AGREEMENT, FIXTURE FILING, FINANCING STATEMENT AND
ASSIGNMENT OF LEASES AND RENTS (this "Mortgage") is executed as of December 18,
1996, by XXXXX X. XXXXXXXXX, XXXXX X. XXXXXXXXX, and XXX X.X. XXX XXXX, trustees
of the Charterhouse of Cambridge Trust, and not individually, under a
Declaration of Trust dated December 27, 1963 and recorded at Middlesex South
Deeds Book 11160, Page 340, as amended by Amendment of Declaration of Trust
dated July 8, 1966 and recorded at Middlesex South Deeds Book 11160, Page 359
("Charterhouse"), and SONESTA OF MASSACHUSETTS, INC., a Massachusetts
corporation ("Sonesta," and, together with Charterhouse, collectively,
"Mortgagor"), in favor of, and for the use and benefit of, SUNAMERICA LIFE
INSURANCE COMPANY, an Arizona corporation ("Mortgagee").
I
PARTIES, PROPERTY, AND DEFINITIONS
The following terms and references shall have the meanings indicated:
I.1 Bankruptcy Rights: All rights and remedies at any time arising
under or pursuant to Section 365(h) of Title 11 of the United States Code
(the "Bankruptcy Code"), or under or pursuant to any other provision of the
Bankruptcy Code, including,
without limitation, all of Xxxxxxxxx's rights to remain in possession of
any property that is subject to a Primary Lease.
I.2 Chattels: All goods, fixtures, inventory, equipment, building and
other materials, supplies, and other tangible personal property of every
nature now owned or hereafter acquired by Mortgagor and used, intended for
use, or reasonably required in the construction, development, or operation
of the Property, together with all accessions thereto, replacements and
substitutions therefor, and proceeds thereof.
I.3 Default: Any manner which, with the giving of notice, passage of
time, or both, would constitute an Event of Default.
I.4 Environmental Indemnity Agreement: The Environmental Indemnity
Agreement of even date herewith executed by Xxxxxxxxx and Guarantor for the
benefit of Mortgagee.
I.5 ERISA: The Employee Retirement Income Security Act of 1974, as
amended, together with all rules and regulations issued thereunder.
I.6 Escrow Agreement: The Escrow Agreement of even date herewith
executed by Xxxxxxxxx, Mortgagee and Xxxxxx, Xxxxxxxx, Xxxxx & X'Xxxxxx,
Inc.
I.7 Event of Default: As defined in Article VI.
I.8 Financial Certificate: The certificate of even date herewith
executed by Xxxxxxxxx to Mortgagee concerning financial statements
previously delivered by Mortgagor to Mortgagee.
I.9 Guarantor: Sonesta International Hotels Corporation, a New York
corporation.
I.10 Guaranty Agreement: The Limited Guaranty Agreement of even date
herewith made by Guarantor for the benefit of Mortgagee.
I.11 Intangible Personalty: All accounts, accounts receivable arising
from guest occupancy of the Property, monies in the possession of Mortgagee
(including without limitation proceeds
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from insurance, retainages and deposits for taxes and insurance), permits,
contract rights (including, without limitation, rights to receive insurance
proceeds) and general intangibles (whether now owned or hereafter acquired,
and including proceeds thereof) relating to or arising from Mortgagor's
ownership, use, operation, leasing, or sale of all or any part of the
Property, specifically including but in no way limited to any right which
Mortgagor may have or acquire to transfer any development rights from the
Property to other real property, and any development rights which may be so
transferred.
I.12 Lease Certificate: The certificate of even date herewith executed
by Xxxxxxxxx to Mortgagee concerning Secondary Leases.
I.13 Leasehold Estate: As defined in Section 2.1.
I.14 Liquor License Assignment: The Collateral Assignment of Liquor
Licenses of even date herewith executed by Sonesta for the benefit of
Mortgagee.
I.15 Loan Documents: The Note, all of the deeds of trusts, mortgages
and other instruments and documents securing the Note, including this
Mortgage, the Environmental Indemnity Agreement, the Guaranty Agreement,
the Lease Certificate, the Financial Certificate, the Liquor License
Assignment, the Escrow Agreement, the Replacement Reserve and Security
Agreement, and each other document executed or delivered in connection with
the transaction pursuant to which the Note has been executed and delivered.
The term "Loan Documents" also includes all modifications, extensions,
renewals, and replacements of each document referred to above.
I.16 Mortgagee: The Mortgagee named in the introductory paragraph of
this Mortgage (Taxpayer Identification No. 00-0000000), whose legal address
is 0 XxxXxxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000-6022,
together with any future holder of the Note.
I.17 Mortgagor: The Mortgagor named in the introductory paragraph of
this Mortgage (Taxpayer Identification No. (Charterhouse: 00-0000000;
Sonesta: 00-0000000), whose legal address is c/o Sonesta International
Hotels Corp., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention:
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Office of the Treasurer, together with any future owner of the Property or
any part thereof or interest therein.
I.18 Note: Xxxxxxxxx's promissory note of even date herewith, payable
to the order of Mortgagee in the principal face amount of $22,880,000.00,
the last payment under which is due on December 1, 2003, or, if extended by
Mortgagee by its terms, December 1, 2008, unless such due date is
accelerated, together with all renewals, extensions and modifications of
such promissory note. All terms and provisions of the Note are incorporated
by this reference in this Mortgage.
I.19 Permits: All permits, licenses, certificates and authorizations
necessary for the beneficial development, ownership, use, occupancy,
operation and maintenance of the Property, including, without limitation,
all liquor, innholder's and similar such licenses.
I.20 Permitted Exceptions: The matters set forth in Exhibit B attached
hereto.
I.21 Primary Lease: As defined in Section 2.1.
I.22 Property: The tract or tracts of land described in Exhibit A
attached, together with the following:
(a) All buildings, structures, and improvements now or hereafter
located on such tract or tracts, as well as all rights-of-way,
easements, and other appurtenances thereto;
(b) All of Mortgagor's right, title and interest in any land
lying between the boundaries of such tract or tracts and the center
line of any adjacent street, road, avenue, or alley, whether opened or
proposed;
(c) All of the rents, income, receipts, revenues, issues and
profits of and from such tract or tracts and improvements;
(d) All (i) water and water rights (whether decreed or undecreed,
tributary, nontributary or not nontributary, surface or underground,
or appropriated or unappropriated); (ii) ditches and ditch rights;
(iii) spring and spring rights; (iv) reservoir and reservoir rights;
and (v) shares of stock in
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water, ditch and canal companies and all other evidence of such
rights, which are now owned or hereafter acquired by Mortgagor and
which are appurtenant to or which have been used in connection with
such tract or tracts or improvements;
(e) All minerals, crops, timber, trees, shrubs, flowers, and
landscaping features now or hereafter located on, under or above such
tract or tracts;
(f) All machinery, apparatus, equipment, fittings, fixtures owned
by Mortgagor (whether actually or constructively attached, and
including all trade, domestic, and ornamental fixtures) now or
hereafter located in, upon, or under such tract or tracts or
improvements and used or usable in connection with any present or
future operation thereof, including but not limited to all heating,
air-conditioning, freezing, lighting, laundry, incinerating and power
equipment; engines; pipes; pumps; tanks; motors; conduits;
switchboards; plumbing, lifting, cleaning, fire prevention, fire
extinguishing, refrigerating, ventilating, cooking, and communications
apparatus; boilers, water heaters, ranges, furnaces, and burners;
appliances; vacuum cleaning systems; elevators; escalators; shades;
awnings; screens; storm doors and windows; stoves; refrigerators;
attached cabinets; partitions; ducts and compressors; rugs and
carpets; draperies; and all additions thereto and replacements
therefor;
(g) All development rights associated with such tract or tracts,
whether previously or subsequently transferred to such tract or tracts
from other real property or now or hereafter susceptible of transfer
from such tract or tracts to other real property;
(h) All awards and payments, including interest thereon,
resulting from the exercise of any right of eminent domain or any
other public or private taking of, injury to, or decrease in the value
of, any of such property;
(i) All Bankruptcy Rights; and
(j) All other and greater rights and interests of every nature in
such tract or tracts and in the possession or use thereof and income
therefrom, whether now owned or subsequently acquired by Mortgagor.
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I.23 Replacement Reserve and Security Agreement: The Replacement
Reserve and Security Agreement of even date herewith executed by Xxxxxxxxx
for the benefit of Mortgagee.
I.24 Secondary Leases: Any and all leases, subleases and other
agreements under the terms of which any person other than Mortgagor has or
acquires any right to occupy or use the Property, or any part thereof.
I.25 Secured Obligations: All present and future obligations of
Mortgagor to Mortgagee evidenced by or contained in the Note, the
Environmental Indemnity Agreement, this Mortgage and all other Loan
Documents, whether stated in the form of promises, covenants,
representations, warranties, conditions, or prohibitions or in any other
form. If the maturity of the Note secured by this Mortgage is accelerated,
the Secured Obligations shall include an amount equal to any prepayment
premium which would be payable under the terms of the Note as if the Note
were prepaid in full on the date of the acceleration. Except as provided in
Section 5.4 hereof in connection with a Guarantor Transfer (as defined in
Section 5.4), if under the terms of the Note no voluntary prepayment would
be permissible on the date of the such acceleration, then the prepayment
fee or premium to be included in the Secured Obligations shall be equal to
one hundred fifty percent (150%) of the highest prepayment fee or premium
set forth in the Note, calculated as of the date of such acceleration.
II
GRANTING CLAUSE
II.1 Grant to Mortgagee.
(a) As security for the Secured Obligations, Mortgagor hereby
grants, bargains, sells, conveys, mortgages and warrants with MORTGAGE
COVENANTS unto Mortgagee the entire right, title, interest and estate
of Mortgagor in and to the Property, whether now owned or hereafter
acquired; TO HAVE AND TO HOLD the same, together with all and singular
the rights, hereditaments, and appurtenances in anywise appertaining
or belonging thereto, unto Mortgagee and Mortgagee's successors,
substitutes and assigns forever.
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(b) If Exhibit A attached to this Mortgage shall indicate that
Mortgagor's interest in any portion or portions of the Property is in
the nature of one or more leasehold estates (a "Leasehold Estate"),
then the granting language set forth in this Section shall extend to
and include the entire right, title and interest of Mortgagor in, to
and under each lease creating a Leasehold Estate (hereinafter a
"Primary Lease," or, collectively, the "Primary Leases"), together
with any other or greater interest in the Property hereafter acquired
by Xxxxxxxxx, including, but not limited to, any fee estate hereafter
acquired by Mortgagor in the land or improvements demised under the
provisions of any Primary Lease. This Mortgage shall be deemed to
encumber, and to grant, bargain, sell, convey and mortgage unto
Mortgagee, the fee simple title to the entire Property and the Primary
Leases.
II.2 Security Interest to Mortgagee. As additional security for the
Secured Obligations, Mortgagor hereby grants to Mortgagee a security
interest in the Chattels and in the Intangible Personalty. To the extent
any of the Chattels or the Intangible Personalty may be or have been
acquired with funds advanced by Mortgagee under the Loan Documents, this
security interest is a purchase money security interest. This Mortgage
constitutes a Security Agreement under the Uniform Commercial Code of the
state in which the Property is located (the "Code") with respect to any
part of the Property, Chattels and Intangible Personalty that may or might
now or hereafter be or be deemed to be personal property, fixtures or
property other than real estate (all collectively hereinafter called
"Collateral"); all of the terms, provisions, conditions and agreements
contained in this Mortgage pertain and apply to the Collateral as fully and
to the same extent as to any other property comprising the Property, and
the following provisions of this Section shall not limit the generality or
applicability of any other provisions of this Mortgage but shall be in
addition thereto:
(a) The Collateral shall be used by Mortgagor solely for business
purposes, and all Collateral (other than the Intangible Personalty)
shall be installed upon the real estate comprising part of the
Property for Mortgagor's own use or as the equipment and furnishings
furnished by Xxxxxxxxx, as landlord, to tenants of the Property;
(b) Subject to the provisions of Section 5.7, the Collateral
(other than the Intangible Personalty) shall be
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kept at the real estate comprising a part of the Property, and shall
not be removed therefrom without the consent of Mortgagee (being the
Secured Party as that term is used in the Code); and the Collateral
(other than the Intangible Personalty) may be affixed to such real
estate but shall not be affixed to any other real estate;
(c) No financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office; and Mortgagor will,
at its cost and expense, upon demand, furnish to Mortgagee such
further information and will execute and deliver to Mortgagee such
financing statements and other documents in form satisfactory to
Mortgagee and will do all such acts and things as Mortgagee may at any
time or from time to time reasonably request or as may be necessary or
appropriate to establish and maintain a perfected first-priority
security interest in the Collateral as security for the Secured
Obligations, subject to no adverse liens or encumbrances; and
Xxxxxxxxx will pay the cost of filing the same or filing or recording
such financing statements or other documents and this instrument in
all public offices wherever filing or recording is deemed by Mortgagee
to be necessary or desirable;
(d) The terms and provisions contained in this Section and in
Section 7.6 of this Mortgage shall, unless the context otherwise
requires, have the meanings and be construed as provided in the Code;
and
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(e) This Mortgage constitutes a financing statement under the
Code with respect to the Collateral. As such, this Mortgage covers all
items of the Collateral that are or are to become fixtures. The filing
of this Mortgage in the real estate records of the county where the
Property is located shall constitute a fixture filing in accordance
with the Code. Information concerning the security interests created
hereby may be obtained at the addresses set forth in Article I of this
Mortgage. Mortgagor is the "Debtor" and Mortgagee is the "Secured
Party" (as those terms are defined and used in the Code) insofar as
this Mortgage constitutes a financing statement.
III
XXXXXXXXX'S REPRESENTATIONS AND WARRANTIES
III.1 Warranty of Title. Mortgagor represents and warrants to
Mortgagee that:
(a) As to each portion (if any) of the Property in which
Xxxxxxxxx's interest is in the nature of a Leasehold Estate (as
indicated in Exhibit A attached hereto), Mortgagor is the sole owner
and holder of such Leasehold Estate and the entire right, title and
interest of the lessee or tenant under the Primary Lease creating such
Leasehold Estate, such Leasehold Estate and Primary Lease are in full
force and effect in accordance with their terms, there are no defaults
under such Primary Lease by any of the parties thereto and there are
no events or circumstances existing which, after notice or the passage
of time, or both, would constitute a Default or an Event of Default
under such Primary Lease, and the Leasehold Estate and Mortgagor's
interest under such Primary Lease are free and clear of all liens,
encumbrances, security interests and other claims whatsoever;
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(b) Except as specifically described in Section 3.1(a) above,
Xxxxxxxxx has a good and marketable fee simple title to the Property,
and such fee simple title is free and clear of all liens,
encumbrances, security interests and other claims whatsoever, subject
only to the Permitted Exceptions;
(c) Xxxxxxxxx is the sole and absolute owner of the Chattels and
the Intangible Personalty, free and clear of all liens, encumbrances,
security interests and other claims whatsoever, subject only to the
Permitted Exceptions;
(d) This Mortgage is a valid and enforceable first lien and
security interest on the Property, Chattels and Intangible Personalty,
subject only to the Permitted Exceptions; and
(e) Xxxxxxxxx, for itself and its successors and assigns, xxxxxx
agrees to warrant and forever defend, all and singular of the property
and property interests granted and conveyed pursuant to this Mortgage,
against every person whomsoever lawfully claiming, or to claim, the
same or any part thereof.
The warranties contained in this Section shall survive foreclosure of this
Mortgage, and shall inure to the benefit of and be enforceable by any person who
may acquire title to the Property, the Chattels, or the Intangible Personalty
pursuant to any such foreclosure.
III.2 Due Authorization. If Xxxxxxxxx is other than a natural person,
then each individual who executes this document on behalf of Xxxxxxxxx
represents and warrants to Mortgagee that such execution has been duly
authorized by all necessary corporate, partnership, or other action on the
part of Mortgagor. Xxxxxxxxx represents that, with respect to any portion
of the Property in which Xxxxxxxxx's interest is in the nature of a
Leasehold Estate, Xxxxxxxxx has obtained all consents and approvals
required in connection with the execution, delivery and performance of this
Mortgage. Without limitation, Mortgagor represents that it has obtained all
such consents and approvals which are required from the landlord or lessor
under any Primary Lease creating such Leasehold Estate, and that Mortgagee
is, and at all times will be, free to exercise its rights and powers
pursuant to this Mortgage, including each of the rights set forth in
Article VII hereof,
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without any further consent or approval of the landlord or lessor under any
such Primary Lease.
III.3 Other Representations and Warranties. Mortgagor represents and
warrants to Mortgagee as follows:
(a) Charterhouse is a business trust, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. Sonesta is a corporation, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. Guarantor is a corporation, duly organized, validly
existing and in good standing under the laws of the State of New York.
(b) This Mortgage is, and each other Loan Document to which
Xxxxxxxxx is a party will, when delivered hereunder, be valid and
binding obligations of Mortgagor enforceable against Mortgagor in
accordance with their respective terms, except as limited by equitable
principles and bankruptcy, insolvency and similar laws affecting
creditors' rights;
(c) The execution, delivery and performance by Xxxxxxxxx of the
Loan Documents will not contravene any contractual or other
restriction binding on or affecting Mortgagor or any Guarantor, and
will not result in or require the creation of any lien, security
interest, other charge or encumbrance (other than pursuant hereto)
upon or with respect to any of its properties;
(d) The execution, delivery and performance by Xxxxxxxxx of the
Loan Documents does not contravene any applicable law;
(e) No authorization, approval, consent or other action by, and
no notice to or filing with, any court, governmental authority or
regulatory body is required for the due execution, delivery and
performance by Xxxxxxxxx of any of the Loan Documents or the
effectiveness of any assignment of any of Xxxxxxxxx's rights and
interests of any kind to Mortgagee;
(f) No part of the Property, Chattels, or Intangible Personalty
is in the hands of a receiver, no application for a receiver is
pending with respect to any portion of the Property, Chattels, or
Intangible Personalty and no part of
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the Property, Chattels, or Intangible Personalty is subject to any
foreclosure or similar proceeding;
(g) Neither Mortgagor nor any Guarantor has made an assignment
for the benefit of creditors, nor has Mortgagor or any Guarantor
filed, or had filed against it, any petition in bankruptcy;
(h) There is no pending or, to the best of Xxxxxxxxx's knowledge,
threatened, litigation, action, proceeding or investigation,
including, without limitation, any condemnation proceeding, against
Mortgagor, any Guarantor or the Property before any court,
governmental or quasi-governmental, arbitrator or other authority;
(i) Mortgagor is a "non-foreign person" within the meaning of
Sections 1445 and 7701 of the United States Internal Revenue Code of
1986, as amended, and the regulations issued thereunder;
(j) Access to and egress from the Property are available and
provided by public streets, and Mortgagor has no knowledge of any
federal, state, county, municipal or other governmental plans to
change the highway or road system in the vicinity of the Property or
to restrict or change access from any such highway or road to the
Property;
(k) All public utility services necessary for the operation of
all improvements constituting part of the Property for their intended
purposes are available at the boundaries of the land constituting part
of the Property, including water supply, storm and sanitary sewer
facilities, and natural gas, electric, telephone and cable television
facilities;
(l) The Property is located in a zoning district designated
C-3A, with a PUD-2 overlay by Cambridge, Massachusetts. Such
designation permits the development use and operation of the
Property as it is currently operated as a permitted, and not as a
non-conforming use. To the best of Xxxxxxxxx's knowledge, the
Property complies in all material respects with all requirements,
conditions and restrictions, including but not limited to deed
restrictions and restrictive covenants applicable to the
Property;
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(m) There are no special or other assessments for public
improvements or otherwise now affecting the Property, nor does
Mortgagor know of any pending or threatened special assessments
affecting the Property or any contemplated improvements affecting the
Property that may result in special assessments. There are no tax
abatements or exceptions affecting the Property;
(n) Mortgagor and each Guarantor have filed all tax returns which
are required to be filed by them, and have paid all taxes as shown on
such returns or on any assessment received pertaining to the Property;
(o) Mortgagor has not received any notice from any governmental
body having jurisdiction over the Property as to any violation of any
applicable law, or any notice from any insurance company or inspection
or rating bureau setting forth any requirements as a condition to the
continuation of any insurance coverage on or with respect to the
Property or the continuation thereof at premium rates existing at
present which have not been remedied or satisfied;
(p) To the best of Mortgagor's knowledge, neither Mortgagor nor
any Guarantor is in default, in any manner which would adversely
affect its properties, assets, operations or condition (financial or
otherwise), in the performance, observance or fulfillment of any of
the obligations, covenants or conditions set forth in any agreement or
instrument to which it is a party or by which it or any of its
properties, assets or revenues are bound;
(q) Except as set forth in the Lease Certificate, there are no
occupancy rights (written or oral), leases or tenancies presently
affecting any part of the Property. The Lease Certificate contains a
true and correct description of all Secondary Leases presently
affecting the Property. No written or oral agreements or
understandings exist between Mortgagor and the tenants under the
Secondary Leases described in the Lease Certificate that grant such
tenants any rights greater than those described in the Lease
Certificate or that are in any way inconsistent with the rights
described in the Lease Certificate;
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(r) There are no options, purchase contracts or other similar
agreements of any type (written or oral) presently affecting any part
of the Property;
(s) There exists no brokerage agreement with respect to any part
of the Property;
(t) Except as otherwise disclosed to Mortgagee in writing prior
to the date hereof, (i) there are no contracts presently affecting the
Property ("Contracts") having a term in excess of one hundred eighty
(180) days or not terminable by Xxxxxxxxx (without penalty) on thirty
(30) days' notice; (ii) Mortgagor has heretofore delivered to
Mortgagee true and correct copies of each of the Contracts together
with all amendments thereto; (iii) to the best of Xxxxxxxxx's
knowledge, Mortgagor is not in default of any obligations under any of
the Contracts; and (iv) the Contracts represent the complete agreement
between Mortgagor and such other parties as to the services to be
performed or materials to be provided thereunder and the compensation
to be paid for such services or materials, as applicable, and except
as otherwise disclosed herein, such other parties possess no
unsatisfied claims against Mortgagor. To the best of Xxxxxxxxx's
knowledge, Mortgagor is not in default under any of the Contracts and
no event has occurred which, with the passing of time or the giving of
notice, or both, would constitute a Default under any of the
Contracts;
(u) Mortgagor has obtained all Permits necessary or desirable for
the operation, use, ownership, development, occupancy and maintenance
of the Property as a hotel. None of the Permits has been suspended or
revoked, and all of the Permits are in full force and effect, are
fully paid for, and Mortgagor has made or will make application for
renewals of any of the Permits prior to the expiration thereof;
(v) All insurance policies held by Mortgagor relating to or
affecting the Property are in full force and effect and shall remain
in full force and effect until all Secured Obligations are paid in
full. Mortgagor has not received any notice of default or notice
terminating or threatening to terminate any such insurance policies.
Mortgagor has made or will make application for renewals of such
insurance policies prior to the expiration thereof; and
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(w) Xxxxxxxxx currently complies with ERISA. To the best of
Xxxxxxxxx's knowledge, neither the making of the loan evidenced by the
Note and secured by this Mortgage nor the exercise by Mortgagee of any
of its rights under the Loan Documents constitutes or will constitute
a non-exempt prohibited transaction under ERISA.
III.4 Continuing Effect. Mortgagor shall be liable to Mortgagee for
any damage suffered by Mortgagee if any of the foregoing representations
are materially inaccurate as of the date hereof, regardless when such
inaccuracy may be discovered by, or result in harm to, Mortgagee. Xxxxxxxxx
further represents and warrants that the foregoing representations and
warranties, as well as all other representations and warranties of
Mortgagor to Mortgagee relative to the Loan Documents, shall remain
materially true and correct during the term of the Note and shall survive
termination of this Mortgage.
IV
XXXXXXXXX'S AFFIRMATIVE COVENANTS
IV.1 Payment of Note. Mortgagor will pay all principal, interest, and
other sums payable under the Note, on the date when such payments are due,
without notice or demand.
IV.2 Performance of Other Obligations. Xxxxxxxxx will promptly and
strictly perform and comply with all other covenants, conditions, and
prohibitions required of Mortgagor by the terms of the Loan Documents.
IV.3 Other Encumbrances. Mortgagor will promptly and strictly perform
and comply with all covenants, conditions, and prohibitions required of
Mortgagor in connection with any other encumbrance affecting the Property,
the Chattels, or the Intangible Personalty, or any part thereof, or any
interest therein, regardless of whether such other encumbrance is superior
or subordinate to the lien hereof.
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IV.4 Payment of Taxes.
(a) Property Taxes. Except to the extent that Mortgagor has made
escrow payments to Mortgagee pursuant to Section 4.4(b) below, (i)
Mortgagor will pay, before delinquency, all taxes and assessments,
general or special, which may be levied or imposed at any time against
Mortgagor's interest and estate in the Property, the Chattels, or the
Intangible Personalty, (ii) within ten (10) days after each payment of
any such tax or assessment, Mortgagor will deliver to Mortgagee,
without notice or demand, an official receipt for such payment, and
(iii) at Mortgagee's option, Mortgagee may retain the services of a
firm to monitor the payment of all taxes and assessments relating to
the Property, the cost of which shall be borne by Mortgagor.
(b) Deposit for Taxes. On or before the date hereof, Mortgagor
shall deposit with Mortgagee an amount equal to 1/12th of the amount
which Mortgagee estimates will be required to make the next annual
payment of taxes, assessments, and similar governmental charges
referred to in this Section, multiplied by the number of whole or
partial months that have elapsed since the date one month prior to the
most recent due date for such taxes, assessments and similar
governmental charges. Thereafter, with each monthly payment under the
Note, Mortgagor shall deposit with Mortgagee an amount equal to 1/12th
of the amount which Mortgagee estimates will be required to pay the
next annual payment of taxes, assessments, and similar governmental
charges referred to in this Section. The purpose of these provisions
is to provide Mortgagee with sufficient funds on hand to pay all such
taxes, assessments, and other governmental charges thirty (30) days
before the date on which they become past due. If the Mortgagee, in
its sole discretion, determines that the funds escrowed hereunder are,
or will be, insufficient, Mortgagor shall upon demand pay such
additional sums as Mortgagee shall determine necessary and shall pay
any increased monthly charges requested by Mortgagee. Provided no
Default or Event of Default exists hereunder, Mortgagee will apply the
amounts so deposited to the payment of such taxes, assessments, and
other charges when due. Any amount deposited pursuant to this Section
4.4(b) may be held and commingled with Mortgagee's own funds. All
amounts held in escrow pursuant to this Section 4.4(b) shall accrue
interest for the benefit of Mortgagor; provided, however, Mortgagor
shall pay to Mortgagee (or its loan servicer) the administrative costs
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associated with investing, administering or otherwise providing for
interest on the amounts so deposited.
(c) Intangible Taxes. If by reason of any statutory or
constitutional amendment or judicial decision adopted or rendered
after the date hereof, any tax, assessment, or similar charge is
imposed against the Note, Mortgagee, or any interest of Mortgagee in
any real or personal property encumbered hereby, Mortgagor will pay
such tax, assessment, or other charge before delinquency and will
indemnify Mortgagee against all loss, expense, or diminution of income
in connection therewith. In the event Mortgagor is unable to do so,
either for economic reasons or because the legal provisions or
decisions creating such tax, assessment or charge forbid Mortgagor
from doing so, then the Note will, at Mortgagee's option, become due
and payable in full upon ninety (90) days' notice to Mortgagor.
(d) Right to Contest. Notwithstanding any other provision of this
Section, Mortgagor will not be deemed to be in default solely by
reason of Xxxxxxxxx's failure to pay any tax, assessment or similar
governmental charge so long as, in Mortgagee's judgment, each of the
following conditions is satisfied:
(i) Xxxxxxxxx is engaged in and diligently pursuing in good
faith administrative or judicial proceedings appropriate to
contest the validity or amount of such tax, assessment, or
charge; and
(ii) Xxxxxxxxx's payment of such tax, assessment, or charge
would necessarily and materially prejudice Xxxxxxxxx's prospects
for success in such proceedings; and
(iii) Nonpayment of such tax, assessment, or charge will not
result in the loss or forfeiture of any property encumbered
hereby or any interest of Mortgagee therein; and
(iv) Mortgagor deposits with Mortgagee, as security for such
payment which may ultimately be required, a sum equal to the
amount of the disputed tax, assessment or charge plus the
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interest, penalties, advertising charges, and other costs which
Mortgagee estimates are likely to become payable if Xxxxxxxxx's
contest is unsuccessful.
If Mortgagee determines that any one or more of such conditions is not
satisfied or is no longer satisfied, Xxxxxxxxx will pay the tax, assessment, or
charge in question, together with any interest and penalties thereon, within ten
(10) days after Mortgagee gives notice of such determination.
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IV.5 Maintenance of Insurance.
(a) Coverages Required. Mortgagor shall maintain or cause to be
maintained, with financially sound and reputable insurance companies
or associations, insurance which insures the Property against (i) all
risk of loss, damage, destruction, theft, or any other casualty or
risk, covering the Property including all of Mortgagor's personal
property located therein, without deduction for depreciation, in an
amount reasonably approved by Mortgagee, but in no event less than the
full replacement cost thereof, and builder's risk insurance throughout
the period of any construction of any improvements on the Property,
(ii) use and occupancy insurance covering either rental income or
business interruption with coverage in an amount not less than twelve
months' anticipated gross rental income, (iii) comprehensive general
liability insurance covering the Property and Mortgagor, in an amount
not less than $2,000,000.00 for bodily injury and/or property damage
liability per occurrence and $5,000,000.00 in the aggregate or such
higher amounts as Mortgagee may reasonably require, and (iv) worker's
compensation insurance in accordance with the requirements of
applicable law, which policies of insurance maintained pursuant to
this Section shall provide standard mortgagee endorsements or clauses
naming Mortgagee as mortgagee and as loss payee (with respect to
property insurance) or additional insured (with respect to liability
insurance). Each policy of insurance required hereunder shall provide
that it shall not be modified or cancelled without at least thirty
(30) days prior written notice to Mortgagee. The original or a
certified copy of each insurance policy shall be delivered to
Mortgagee by the applicable insurance company, and such delivery will
constitute an assignment to Mortgagee, as further security for the
Secured Obligations, of all unearned premiums returnable upon
cancellation of any such policy. Mortgagor shall also maintain, at the
request of Mortgagee, such hazard insurance, in addition to the
insurance required above, as Mortgagee may reasonably request and as
shall be available, including but not limited to flood, including
surface waters, and earthquake, including subsidence, all of such
insurance to comply in all respects with the requirements of this
Section. Within five (5) days following written request therefor,
Mortgagor shall provide to Mortgagee proof of payment of all premiums
for all policies of insurance required hereunder.
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(b) Renewal Policies. Not less than thirty (30) days prior to the
expiration date of each insurance policy required pursuant to Section
4.5(a) above, Mortgagor will deliver to Mortgagee an appropriate
renewal policy (or a certified copy thereof) or evidence satisfactory
to Mortgagee that the existing policy has been extended, together with
evidence satisfactory to Mortgagee that the applicable premium has
been prepaid.
(c) Deposit for Premiums. Upon demand made by Mortgagee following
the occurrence of any Default or Event of Default, Mortgagor shall
deposit with Mortgagee an amount equal to 1/12th of the amount which
Mortgagee estimates will be required to make the next annual payments
of the premiums for the policies of insurance referred to in this
Section, multiplied by the number of whole and partial months which
have elapsed since the date one month prior to the most recent policy
anniversary date for each such policy. Thereafter, with each monthly
payment under the Note, Mortgagor will deposit an amount equal to
1/12th of the amount which Mortgagee estimates will be required to pay
the next required annual premium for each insurance policy referred to
in this Section. The purpose of these provisions is to provide
Mortgagee with sufficient funds on hand to pay all such premiums
thirty (30) days before the date on which they become past due. If the
Mortgagee, in its sole discretion, determines that the funds escrowed
hereunder are, or will be, insufficient, Mortgagor shall upon demand
pay such additional sums as Mortgagee shall determine necessary and
shall pay any increased monthly charges requested by Mortgagee.
Provided no Default or Event of Default exists hereunder, Mortgagee
will apply the amounts so deposited to the payment of such insurance
premiums when due. Any amount deposited pursuant to this Section
4.5(c) may be held and commingled with Mortgagee's own funds. All
amounts held in escrow pursuant to this Section 4.5(c) shall accrue
interest for the benefit of Mortgagor; provided, however, Mortgagor
shall pay to Mortgagee (or its loan servicer) the administrative costs
associated with investing, administering or otherwise providing for
interest on the amounts so deposited.
(d) Application of Hazard Insurance Proceeds. Mortgagor shall
promptly notify Mortgagee of any damage or casualty to all or any
portion of the Property or Chattels. Mortgagee may participate in all
negotiations and appear and participate in all judicial arbitration
proceedings concerning any insurance proceeds which may be payable as
a result of such
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casualty or damage. Any such insurance proceeds shall be paid to
Mortgagee and shall be applied first to reimburse Mortgagee for all
costs and expenses, including attorneys' fees, reasonably incurred by
Mortgagee in connection with the collection of such insurance
proceeds. The balance of any insurance proceeds received by Mortgagee
with respect to an insured casualty may, in Mortgagee's sole
discretion, either (i) be retained and applied by Mortgagee toward
payment of the Secured Obligations, or (ii) be paid over, in whole or
in part and subject to such conditions as Mortgagee may reasonably
impose and as are consistent with customary construction loan
disbursements, to Mortgagor to pay for repairs or replacements
necessitated by the casualty; provided, however, that if all of the
Secured Obligations have been performed or are discharged by the
application of less than all of such insurance proceeds, then any
remaining proceeds will be paid over to Mortgagor. Notwithstanding the
preceding sentence, if (A) no Default or Event of Default shall exist
hereunder, and (B) the proceeds received by Mortgagee (together with
any other funds delivered by Mortgagor to Mortgagee for such purpose)
shall be sufficient, in Mortgagee's reasonable judgment, to pay for
any restoration necessitated by the casualty, and (C) the cost of such
restoration shall not exceed $2,300,000.00, and (D) such restoration
can be completed, in Mortgagee's judgment, at least ninety (90) days
prior to the maturity date of the Note, then Mortgagee shall apply
such proceeds as provided in clause (ii) of the preceding sentence.
Mortgagee will have no obligation to see to the proper application of
any insurance proceeds paid over to Mortgagor, nor will any such
proceeds received by Mortgagee bear interest or be subject to any
other charge for the benefit of Mortgagor. Mortgagee may, prior to the
application of insurance proceeds, commingle them with Mortgagee's own
funds and otherwise act with regard to such proceeds as Mortgagee may
determine in Mortgagee's sole discretion.
(e) Successor's Rights. Any person who acquires title to the
Property or the Chattels upon foreclosure hereunder will succeed to
all of Xxxxxxxxx's rights under all policies of insurance maintained
pursuant to this Section.
IV.6 Maintenance and Repair of Property and Chattels. Mortgagor will
at all times maintain the Property and the Chattels in good condition and
repair, will diligently prosecute the completion of any building or other
improvement which is at any time in the process of construction on the
Property, and will
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promptly repair, restore, replace, or rebuild any part of the Property or
the Chattels which may be affected by any casualty or any public or private
taking or injury to the Property or the Chattels, provided that applicable
insurance proceeds or condemnation awards are made available for such
purpose pursuant to Section 4.5 or 4.9 hereof. All costs and expenses
arising out of the foregoing shall be paid by Xxxxxxxxx whether or not the
proceeds of any insurance or eminent domain shall be sufficient therefor.
Mortgagor will comply with all statutes, ordinances, and other governmental
or quasi-governmental requirements and private covenants relating to the
ownership, construction, use, or operation of the Property, including but
not limited to any environmental or ecological requirements; provided, that
so long as Mortgagor is not otherwise in default hereunder, Mortgagor may,
upon providing Mortgagee with security reasonably satisfactory to
Mortgagee, proceed diligently and in good faith to contest the validity or
applicability of any such statute, ordinance, or requirement. Mortgagee and
any person authorized by Mortgagee may enter and inspect the Property at
all reasonable times, and may inspect the Chattels, wherever located, at
all reasonable times.
IV.7 Primary Leases. Mortgagor shall timely pay and perform each of
its obligations under or in connection with any Primary Lease, and shall
otherwise pay such sums and take such action as shall be necessary or
required in order to maintain any Primary Lease in full force and effect in
accordance with its terms. Mortgagor shall immediately furnish to Mortgagee
copies of any notices given to Mortgagor by the lessor under any Primary
Lease, alleging the Default by Mortgagor in the timely payment or
performance of its obligations under any such Primary Lease and any
subsequent communication related thereto. Mortgagor agrees that Mortgagee,
in its sole discretion, may advance any sum or take any action which
Mortgagee believes is necessary or required to maintain any Primary Lease
in full force and effect, and all such sums advanced by Mortgagee, together
with all costs and expenses incurred by Mortgagee in connection with action
taken by Mortgagee pursuant to this Section, shall be due and payable by
Mortgagor to Mortgagee upon demand, shall bear interest from the date ten
(10) days following demand therefor until paid at the "Default Rate" (as
that term is defined in the Note), and shall be secured by this Mortgage.
IV.8 Secondary Leases. Mortgagor shall timely pay and perform each of
its obligations under or in connection with
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the Secondary Leases, and shall otherwise pay such sums and take such
action as shall be necessary or required in order to maintain each of the
Secondary Leases in full force and effect in accordance with its terms.
Mortgagor shall immediately furnish to Mortgagee copies of any notices
given to Mortgagor by the lessee under any Secondary Lease, alleging the
Default by Mortgagor in the timely payment or performance of its
obligations under such Secondary Lease and any subsequent communication
related thereto. Mortgagor shall also promptly furnish to Mortgagee copies
of any notices given to Mortgagor by the lessee under any Secondary Lease,
extending the term of any Secondary Lease, requiring or demanding the
expenditure of any sum by Xxxxxxxxx (or demanding the taking of any action
by Xxxxxxxxx), or relating to any other material obligation of Mortgagor
under such Secondary Lease and any subsequent communication related
thereto. Mortgagor agrees that Mortgagee, in its sole discretion, may
advance any reasonable sum or take any action which Mortgagee believes is
necessary or required to maintain the Secondary Leases in full force and
effect, and all such sums advanced by Mortgagee, together with all
reasonable costs and expenses incurred by Mortgagee in connection with
action taken by Mortgagee pursuant to this Section, shall be due and
payable by Mortgagor to Mortgagee upon demand, shall bear interest until
paid at the Default Rate, and shall be secured by this Mortgage.
IV.9 Eminent Domain; Private Damage. If all or any part of the
Property is taken or damaged by eminent domain or any other public or
private action, Mortgagor will notify Mortgagee promptly of the time and
place of all meetings, hearings, trials, and other proceedings relating to
such action. Mortgagee may participate in all negotiations and appear and
participate in all judicial or arbitration proceedings concerning any award
or payment which may be due as a result of such taking or damage. Any such
award or payment is to be paid to Mortgagee and will be applied first to
reimburse Mortgagee for all costs and expenses, including attorneys' fees,
reasonably incurred by Mortgagee in connection with the ascertainment and
collection of such award or payment. The balance, if any, of such award or
payment may, in Mortgagee's sole discretion, either (a) be retained by
Mortgagee and applied toward the Secured Obligations, or (b) be paid over,
in whole or in part and subject to such conditions as Mortgagee may
reasonably impose and as are consistent with customary construction loan
disbursements, to Mortgagor for the purpose of restoring, repairing, or
rebuilding any part of the Property
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affected by the taking or damage. Notwithstanding the preceding sentence,
if (i) no Default or Event of Default shall have occurred and be continuing
hereunder, and (ii) the proceeds received by Mortgagee (together with any
other funds delivered by Mortgagor to Mortgagee for such purpose) shall be
sufficient, in Mortgagee's reasonable judgment, to pay for any restoration
necessitated by the taking or damage, and (iii) the cost of such
restoration shall not exceed $2,300,000.00, and (iv) such restoration can
be completed, in Mortgagee's judgment, at least ninety (90) days prior to
the maturity date of the Note, and (v) the remaining Property shall
constitute, in Mortgagee's sole judgment, adequate security for the Secured
Obligations, then Mortgagee shall apply such proceeds as provided in clause
(b) of the preceding sentence. Mortgagee will have no duty to see to the
application of any part of any award or payment released to Mortgagor.
Xxxxxxxxx's duty to pay the Note in accordance with its terms and to
perform the other Secured Obligations will not be suspended by the pendency
or discharged by the conclusion of any proceedings for the collection of
any such award or payment, and any reduction in the Secured Obligations
resulting from Mortgagee's application of any such award or payment will
take effect only when Mortgagee receives such award or payment. If this
Mortgage has been foreclosed prior to Mortgagee's receipt of such award or
payment, Mortgagee may nonetheless retain such award or payment to the
extent required to reimburse Mortgagee for all costs and expenses,
including attorneys' fees, incurred in connection therewith, and to
discharge any deficiency remaining with respect to the Secured Obligations.
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IV.10 Mechanics' Liens. Xxxxxxxxx will keep the Property free and
clear of all liens and claims of liens by contractors, subcontractors,
mechanics, laborers, materialmen, and other such persons, and will cause
any recorded statement of any such lien to be released of record within
thirty (30) days after the recording thereof. Notwithstanding the preceding
sentence, however, Mortgagor will not be deemed to be in default under this
Section if and so long as Mortgagor (a) contests in good faith the validity
or amount of any asserted lien and diligently prosecutes or defends an
action appropriate to obtain a binding determination of the disputed
matter, and (b) provides Mortgagee with such security as Mortgagee may
require to protect Mortgagee against all loss, damage, and expense,
including attorneys' fees, which Mortgagee might incur if the asserted lien
is determined to be valid.
IV.11 Defense of Actions. Xxxxxxxxx will defend, at Xxxxxxxxx's
expense, any action, proceeding or claim which affects any property
encumbered hereby or any interest of Mortgagee in such property or in the
Secured Obligations, and will indemnify and hold Mortgagee harmless from
all loss, damage, cost, or expense, including attorneys' fees, which
Mortgagee may incur in connection therewith. Mortgagor's obligations under
this Section are subject to the following: (a) the right to settle or
resolve such claim, subject to Mortgagee's approval, which approval shall
not be unreasonably withheld, (b) the right to select legal counsel of
Xxxxxxxxx's choice, subject to Mortgagee's approval, which approval shall
not be unreasonably withheld, and (c) Mortgagor shall not indemnify
Mortgagee for Mortgagee's gross negligence or willful misconduct.
IV.12 Expenses of Enforcement. Xxxxxxxxx will pay all costs and
expenses, including attorneys' fees, which Mortgagee may incur in
connection with any effort or action (whether or not litigation or
foreclosure is involved) to enforce or defend Mortgagee's rights and
remedies under any of the Loan Documents, including but not limited to all
attorneys' fees, appraisal fees, consultants' fees, and other expenses
incurred by Mortgagee in securing title to or possession of, and realizing
upon, any security for the Secured Obligations. All such costs and expenses
(together with interest thereon at the Default Rate from the date ten (10)
days following demand therefor until paid) shall constitute part of the
Secured Obligations, and may be included in
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the computation of the amount owed to Mortgagee for purposes of foreclosing
or otherwise enforcing this Mortgage.
IV.13 Financial Reports. Within ninety (90) days after the end of each
fiscal year of Mortgagor, Xxxxxxxxx will furnish to Mortgagee (a)
Mortgagor's operating statements for the Property as of the end of and for
the preceding fiscal year, prepared against the budget for such year; and
(b) an annual balance sheet and profit and loss statement of Xxxxxxxxx and
of each Guarantor. The financial statements and reports described in (a)
and (b) above shall be in such detail as Mortgagee may require, shall be
prepared in accordance with generally accepted accounting principles
consistently applied, and shall be certified as true and correct by
Mortgagor or the applicable Guarantor (or, if required by Mortgagee, such
operating statements, balance sheets and profit and loss statements shall
be certified by an independent certified public accountant acceptable to
Mortgagee). Mortgagor will also furnish or cause to be furnished to
Mortgagee within thirty (30) days of Mortgagee's request, any other
financial reports or statements of Mortgagor, including, without
limitation, balance sheets, profit and loss statements, other financial
statements and certified rent rolls, required under any of the Loan
Documents, requested by any regulatory or governmental authority exercising
jurisdiction over Mortgagee, or reasonably requested by Mortgagee from time
to time.
IV.14 Priority of Leases. To the extent Mortgagor has the right, under
the terms of any Secondary Lease, to make such lease subordinate to the
lien hereof, Mortgagor will, at Mortgagee's request and Xxxxxxxxx's
expense, take such action as may be required to effect such subordination.
Conversely, Mortgagor will, at Mortgagee's request and Xxxxxxxxx's expense,
take such action as may be necessary to subordinate the lien hereof to any
future Secondary Lease designated by Mortgagee.
IV.15 Inventories; Assembly of Chattels. Mortgagor will, from time to
time at the request of Mortgagee, supply Mortgagee with a current inventory
of the Chattels and the Intangible Personalty, in such detail as Mortgagee
may require. Upon the occurrence of any Event of Default hereunder,
Xxxxxxxxx will at Mortgagee's request assemble the Chattels and make them
available to Mortgagee at any place designated by Mortgagee which is
reasonably convenient to both parties.
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IV.16 Compliance with Laws, Etc. Mortgagor shall comply in all
material respects with all applicable laws, rules, regulations and orders,
such compliance to include, without limitation, maintaining all Permits and
paying before the same become delinquent all taxes, assessments and
governmental charges imposed upon Mortgagor or the Property.
IV.17 Records and Books of Account. Mortgagor shall keep accurate and
complete records and books of account, in which complete entries will be
made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions relating to the
Property.
IV.18 Inspection Rights. At any reasonable time, and from time to
time, Xxxxxxxxx shall permit Mortgagee, or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the Property and to discuss with Xxxxxxxxx
the affairs, finances and accounts of Xxxxxxxxx.
IV.19 Change of Executive Offices. Mortgagor shall promptly notify
Mortgagee if changes are made in the location of Mortgagor's primary
executive offices.
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IV.20 Further Assurances; Estoppel Certificates. Xxxxxxxxx will
execute and deliver to Mortgagee upon demand, and pay the costs of
preparation and recording thereof, any further documents which Mortgagee
may request to confirm or perfect the liens and security interests created
or intended to be created hereby, or to confirm or perfect any evidence of
the Secured Obligations. Mortgagor will also, within ten (10) days after
any request by Mortgagee, deliver to Mortgagee a signed and acknowledged
statement certifying to Mortgagee, or to any proposed transferee of the
Secured Obligations, (a) the balance of principal, interest, and other sums
then outstanding under the Note, and (b) whether Xxxxxxxxx claims to have
any offsets or defenses with respect to the Secured Obligations and, if so,
the nature of such offsets or defenses.
IV.21 Costs of Closing. Mortgagor shall on demand pay directly or
reimburse Mortgagee for any costs or expenses pertaining to the closing of
the loan evidenced by the Note and secured by this Mortgage, including, but
not limited to, fees of counsel for Mortgagee, costs and expenses for which
invoices were not available at the closing of such loan, or costs and
expenses which are incurred by Mortgagee after such closing. All such costs
and expenses (together with interest thereon at the Default Rate from the
date ten (10) days following demand therefor until paid) shall constitute a
part of the Secured Obligations, and may be included in the computation of
the amount owed to Mortgagee for purposes of foreclosing or otherwise
enforcing this Mortgage.
IV.22 Fund for Electronic Transfer. All monthly payments of principal
and interest on the Note, and escrow deposits under this Mortgage, shall be
made by Mortgagor by electronic funds transfer from a bank account or
accounts established and maintained by Mortgagor.
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IV.23 Use. Mortgagor shall use the Property solely for the operation
of a hotel and ancillary purposes and for no other use or purpose.
V
MORTGAGOR'S NEGATIVE COVENANTS
V.1 Waste and Alterations. Mortgagor will not commit or permit any
waste with respect to the Property or the Chattels. Mortgagor shall not
cause or permit any part of the Property, including but not limited to any
building, structure, parking lot, driveway, landscape scheme, timber, or
other ground improvement, to be removed, demolished, or materially altered
without the prior written consent of Mortgagee.
V.2 Zoning and Private Covenants. Mortgagor will not initiate, join
in, or consent to any change in any zoning ordinance or classification, any
change in the "zone lot" or "zone lots" (or similar zoning unit or units)
presently comprising the Property, any transfer of development rights, any
private restrictive covenant, or any other public or private restriction
limiting or defining the uses which may be made of the Property or any part
thereof, without the express written consent of Mortgagee. If under
applicable zoning provisions the use of all or any part of the Property is
or becomes a nonconforming use, Mortgagor will not cause such use to be
discontinued or abandoned without the express written consent of Mortgagee,
and Mortgagor will use its best efforts to prevent the tenant under any
Secondary Lease from discontinuing or abandoning such use.
V.3 Interference with Leases. Mortgagor shall not collect rent from
all or any part of the Property for more than one month in advance, or
assign the rents from the Property or any part thereof. Without the prior
written consent of Mortgagee, which consent shall not be unreasonably
withheld, Mortgagor shall not (a) terminate or make or permit any
modification to any Primary Lease, or (b) enter into or terminate any
Secondary Lease, or modify or permit the modification to any economic term
of any Secondary Lease.
V.4 Transfer or Further Encumbrance of Property. Without the prior
written consent of Mortgagee, which may be
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withheld for any reason, Mortgagor will not sell, lease, convey,
assign, or otherwise transfer, dispose of, or be divested of its title
to, or mortgage, convey security title to, or otherwise encumber or
cause to be encumbered, the Property or any part thereof or interest
therein in any manner or way, whether voluntary or involuntary, or
cause or permit to occur any of the following: (a) any merger,
consolidation or dissolution involving, or the sale or transfer of all
or substantially all of the assets of, Mortgagor or any general
partner of Mortgagor; (b) the transfer (at one time or over any period
of time) of 10% or more of the voting stock of (i) a corporate
Mortgagor, (ii) any corporate general partner of Mortgagor, or (iii)
any corporation which is the direct or indirect owner of 10% or more
of the voting stock of any Mortgagor or any general partner of
Mortgagor; (c) the transfer of any general partnership interest in any
Mortgagor or in any partnership which is a direct or indirect general
partner of Mortgagor; (d) the conversion of any such general
partnership interest to a limited partnership interest; (e) the
transfer (at one time or over any period of time) of 10% or more of
the membership or beneficial interest in any Mortgagor (if any
Mortgagor is a limited liability company); or (f) the transfer (at one
time or over any period of time) of 10% or more of the certificates of
participation or shares of any Mortgagor (if any Mortgagor is a
Massachusetts business trust). Upon the occurrence of any such
transfer, encumbrance, or other event, the entire balance of the Note,
plus any applicable prepayment premium, shall become immediately due
and payable at the option of Mortgagee. Consent to one such transfer
or encumbrance by Mortgagee shall not be deemed a waiver to require
such consent to further or future transfers or encumbrances. This
provision shall not apply to transfers of title or interest under any
will or testament or applicable law of descent. Notwithstanding the
foregoing to the contrary, (1) Mortgagee shall permit transfers of the
shares of Guarantor (a "Guarantor Transfer") in connection with the
sale of all of the shares of Guarantor to an individual or entity
previously approved in writing by Mortgagee in its sole discretion,
or, in all other cases, provided that the Xxxxxxxxx family, or any of
them, shall at all times during which any Secured Obligation shall
remain outstanding, (x) collectively own not less than 51% of
Guarantor, and (y) control Guarantor, and (2) in connection with any
Guarantor Transfer not permitted by this Section 5.4, and
notwithstanding any lockout provisions set forth in Section 5(a) of
the Note, Mortgagor shall have the right to prepay the entire
principal balance of the Note, together with
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all accrued interest and other charges due thereon and subject to the
prepayment premium set forth in the Note. For purposes of the
foregoing, the Xxxxxxxxx family shall be presumed to control Guarantor
if the Xxxxxxxxx family, or any of them, possesses the power, directly
or indirectly, to direct, or cause the direction of, the management or
policies of Guarantor, whether through ownership of voting securities,
by contract, or otherwise.
V.5 Further Encumbrance of Chattels. Xxxxxxxxx will neither create nor
permit any lien, security interest or encumbrance against the Chattels or
Intangible Personalty or any part thereof or interest therein, other than
the liens and security interests created by the Loan Documents, without the
prior written consent of Mortgagee, which may be withheld for any reason.
V.6 Assessments Against Property. Mortgagor will not, without the
prior written approval of Mortgagee, which may be withheld for any reason,
consent to or allow the creation of any so-called special districts,
special improvement districts, benefit assessment districts or similar
districts, or any other body or entity of any type, or allow to occur any
other event, that would or might result in the imposition of any additional
taxes, assessments or other monetary obligations or burdens on the
Property, and this provision shall serve as RECORD NOTICE to any such
district or districts or any governmental entity under whose authority such
district or districts exist or are being formed that, should Mortgagor or
any other person or entity include all or any portion of the Property in
such district or districts, whether formed or in the process of formation,
without first obtaining Mortgagee's express written consent, the rights of
Mortgagee in the Property pursuant to this Mortgage or following any
foreclosure of this Mortgage, and the rights of any person or entity to
whom Mortgagee might transfer the Property following a foreclosure of this
Mortgage, shall be senior and superior to any taxes, charges, fees,
assessments or other impositions of any kind or nature whatsoever, or liens
(whether statutory, contractual or otherwise) levied or imposed, or to be
levied or imposed, upon the Property or any portion thereof as a result of
inclusion of the Property in such district or districts.
V.7 Transfer or Removal of Chattels. Mortgagor will not sell, transfer
or remove from the Property all or any part of the Chattels, unless the
items sold, transferred, or removed are
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simultaneously replaced with similar items of equal or greater value.
Mortgagor shall not replace any Chattel owned by any Mortgagor as of the
date hereof by leasing such Chattel or Chattels unless Mortgagee consents
to such lease, which consent shall not be unreasonably withheld provided
(a) Mortgagee may, under the terms of any such lease, succeed to
Xxxxxxxxx's rights as lessee, and (b) Mortgagee is given notice and an
opportunity to cure any default by Mortgagor under any such lease.
V.8 Change of Name. Mortgagor will not change the name under which
Xxxxxxxxx does business, or adopt or begin doing business under any other
name or assumed or trade name, without first notifying Mortgagee of
Mortgagor's intention to do so and delivering to Mortgagee such executed
modifications or supplements to this Mortgage (and to any financing
statement which may be filed in connection herewith) as Mortgagee may
require.
V.9 Improper Use of Property or Chattels. Mortgagor will not use the
Property or the Chattels for any purpose or in any manner which violates
any applicable law, ordinance, or other governmental requirement, the
requirements or conditions of any insurance policy, or any private
covenant.
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V.10 ERISA. Mortgagor shall not engage in any transaction which would
cause the Note (or the exercise by Mortgagee of any of its rights under the
Loan Documents) to be a non-exempt (under a class exemption), prohibited
transaction under ERISA, (including for this purpose the parallel
provisions of Section 4975 of the Internal Revenue Code of 1986, as
amended), or otherwise result in Mortgagee being deemed in violation of any
applicable provisions of ERISA. Mortgagor shall indemnify, protect, defend,
and hold Mortgagee harmless from and against any and all losses,
liabilities, damages, claims, judgments, costs, and expenses (including,
without limitation attorneys' fees and costs reasonably incurred in the
investigation, defense, and settlement of claims and in obtaining any
individual ERISA exemption or state administrative exception that may be
required, in Mortgagee's sole and absolute discretion) that Mortgagee may
incur, directly or indirectly, as the result of the breach by Mortgagor of
any warranty or representation set forth in Section 3.3(w) hereof or the
breach by Mortgagor of any covenant contained in this Section. This
indemnity shall survive any termination, satisfaction or foreclosure of
this Mortgage and shall not be subject to the limitation on personal
liability described in Section 9.4 hereof.
VI
EVENTS OF DEFAULT
Each of the following events will constitute a default (an "Event of
Default") under this Mortgage and under each of the other Loan Documents:
VI.1 Failure to Pay Note. Xxxxxxxxx's failure to make any payment when
due under the terms of the Note or any other Loan Document;
VI.2 Due on Sale or Encumbrance. The occurrence of any violation of
any covenant contained in Section 5.4, 5.5 or 5.7 hereof;
VI.3 Other Obligations. The failure of Mortgagor to properly perform
any obligation contained herein or in any of the other Loan Documents
(other than the obligation to make payments under the Note or the other
Loan Documents) and the continuance of
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such failure for a period of thirty (30) days following written notice
thereof from Mortgagee to Mortgagor; provided, however, that if such
failure is not curable within such thirty (30) day period, then, so long as
Mortgagor commences to cure such failure within such thirty (30) day period
and is continually and diligently attempting to cure to completion, such
failure shall not be an Event of Default unless such failure remains
uncured for ninety (90) days after such written notice to Mortgagor;
VI.4 Levy Against Property. The levy against any of the Property,
Chattels, or Intangible Personalty of any execution, attachment,
sequestration or other writ, unless discharged within thirty (30) days;
VI.5 Liquidation. The liquidation, termination or dissolution of
Mortgagor any Guarantor, or any other party directly or indirectly liable
for the payment of the Note, whether as maker, endorser, guarantor, surety,
general partner or otherwise;
VI.6 Appointment of Receiver. The appointment of a trustee, liquidator
or receiver for Mortgagor or any Guarantor, or the assets, or any part
thereof, of Mortgagor, any Guarantor or any other party directly or
indirectly liable for the payment of the Note, whether as maker, endorser,
guarantor, surety, general partner or otherwise, or the appointment of a
trustee or receiver for any real or personal property, or the like, or any
part thereof, representing the security for the Note, unless discharged
within thirty (30) days;
VI.7 Assignments. The making by Mortgagor, or any other party directly
or indirectly liable for the payment of the Note, whether as maker,
endorser, guarantor, surety, general partner or otherwise, of a transfer in
fraud of creditors or an assignment for the benefit of creditors;
VI.8 Order for Relief. The entry in bankruptcy of an order for relief
for or against Mortgagor, any Guarantor or any other party directly or
indirectly liable for the payment of the Note, whether as maker, endorser,
guarantor, surety, general partner or otherwise;
VI.9 Bankruptcy. The filing of any petition (or answer admitting the
material allegations of any petition), or
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other pleading, seeking entry of an order for relief for or against
Mortgagor, any Guarantor or any other party directly or indirectly liable
for the payment of the Note, whether as maker, endorser, guarantor, surety,
general partner or otherwise as a debtor or bankrupt or seeking an
adjustment of any of such parties' debts, or any other relief under any
state or federal bankruptcy, reorganization, debtor's relief or insolvency
laws now or hereafter existing, including, without limitation, a petition
or answer seeking reorganization or admitting the material allegations of a
petition filed against any of such parties in any bankruptcy or
reorganization proceeding, or the act of any of such parties in instituting
or voluntarily being or becoming a party to any other judicial proceedings
intended to effect a discharge of the debts of any such parties, in whole
or in part, or a postponement of the maturity or the collection thereof, or
a suspension of any of the rights or powers of a trustee or of any of the
rights or powers granted to Mortgagee herein, or in any other document
executed in connection herewith; provided, however, that no Event of
Default shall occur under this Section if an involuntary bankruptcy or
insolvency petition is filed against Mortgagor, any General Partner, any
Guarantor or any other party directly or indirectly liable for the payment
of the Note unless such petition is not dismissed within sixty (60) days
following its filing;
VI.10 Misrepresentation. If any representation or warranty made by
Mortgagor, any Guarantor or any other party directly or indirectly liable
for the payment of the Note, whether as maker, endorser, guarantor, surety,
general partner or otherwise, herein, or in any of the other Loan Documents
or any other instrument or document modifying, renewing, extending,
evidencing, securing or pertaining to the Note is false, misleading or
erroneous in any material respect;
VI.11 Judgments. The failure of Mortgagor, any Guarantor or any party
directly or indirectly liable for the payment of the Note, whether as
maker, endorser, guarantor, surety, general partner or otherwise, to pay
any money judgment in excess of $50,000.00 against any such party before
the expiration of thirty (30) days after such judgment becomes final and no
longer appealable;
VI.12 Admissions Regarding Debts. The admission of Mortgagor, any
Guarantor or any other party directly or indirectly
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liable for the payment of the Note, whether as maker, endorser, guarantor,
surety, general partner or otherwise, in writing of any such party's
inability to pay such party's debts as they become due;
VI.13 Assertion of Priority. The assertion of any claim of priority
over this Mortgage, by title, lien, or otherwise, unless Mortgagor within
thirty (30) days after such assertion either causes the assertion to be
withdrawn or provides Mortgagee with such security as Mortgagee may require
to protect Mortgagee against all loss, damage, or expense, including
attorneys' fees, which Mortgagee may incur in the event such assertion is
upheld;
VI.14 Other Loan Documents. The occurrence of any Default by
Xxxxxxxxx, after the lapse of any applicable grace or cure period, or the
occurrence of any event or circumstance defined as a Default or an Event of
Default, under any of the Loan Documents other than this Mortgage;
VI.15 Other Liens. The occurrence of any Default by Xxxxxxxxx, after
the lapse of any applicable grace or cure period, or the occurrence of any
event or circumstance defined as an Event of Default, under any other
consensual lien encumbering the Property, or any part thereof or interest
therein, or any document or instrument evidencing obligations secured
thereby; or
VI.16 Default Under or Termination of Primary Lease. The occurrence of
any Default under any Primary Lease (subject to any applicable cure
period), or the termination of any Primary Lease before the expiration of
the term thereof for any reason, without the prior written consent of
Mortgagee.
VII
MORTGAGEE'S REMEDIES
Immediately upon or any time after the occurrence of any Event of Default
hereunder, Mortgagee may exercise any remedy available at law or in equity,
including but not limited to those listed below and those listed in the other
Loan Documents, in such sequence or combination as Mortgagee may determine in
Mortgagee's sole discretion:
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VII.1 Performance of Defaulted Obligations. Mortgagee may make any
payment or perform any other obligation under the Loan Documents which
Xxxxxxxxx has failed to make or perform, and Xxxxxxxxx hereby irrevocably
appoints Mortgagee as the true and lawful attorney-in-fact for Mortgagor to
make any such payment and perform any such obligation in the name of
Mortgagor. All payments made and expenses (including attorneys' fees)
incurred by Mortgagee in this connection, together with interest thereon at
the Default Rate from the date paid or incurred until repaid, will be part
of the Secured Obligations and will be immediately due and payable by
Xxxxxxxxx to Mortgagee. In lieu of advancing Mortgagee's own funds for such
purposes, Mortgagee may use any funds of Mortgagor which may be in
Mortgagee's possession, including but not limited to insurance or
condemnation proceeds and amounts deposited for taxes, insurance premiums,
or other purposes.
VII.2 Specific Performance and Injunctive Relief. Notwithstanding the
availability of legal remedies, Mortgagee will be entitled to obtain
specific performance, mandatory or prohibitory injunctive relief, or other
equitable relief requiring Mortgagor to cure or refrain from repeating any
Default.
VII.3 Acceleration of Secured Obligations. Mortgagee may, without
notice or demand, declare all of the Secured Obligations immediately due
and payable in full.
VII.4 Suit for Monetary Relief. Subject to the provisions of Section
9.4 of this Mortgage, with or without accelerating the maturity of the
Secured Obligations, Mortgagee may sue from time to time for any payment
due under any of the Loan Documents, or for money damages resulting from
Xxxxxxxxx's Default under any of the Loan Documents.
VII.5 Possession of Property. To the extent permitted by law,
Mortgagee may enter and take possession of the Property without seeking or
obtaining the appointment of a receiver, may employ a managing agent for
the Property, and may lease or rent all or any part of the Property, either
in Mortgagee's name or in the name of Xxxxxxxxx, and may collect the rents,
issues, and profits of the Property. Any revenues collected by Mortgagee
under this Section will be applied first toward payment of all expenses
(including attorneys' fees) incurred by Mortgagee,
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together with interest thereon at the Default Rate from the date incurred
until repaid, and the balance, if any, will be applied against the Secured
Obligations in such order and manner as Mortgagee may elect in its sole
discretion.
VII.6 Enforcement of Security Interests. Mortgagee may exercise all
rights of a secured party under the Code with respect to the Chattels and
the Intangible Personalty, including but not limited to taking possession
of, holding, and selling the Chattels and enforcing or otherwise realizing
upon any accounts and general intangibles. Any requirement for reasonable
notice of the time and place of any public sale, or of the time after which
any private sale or other disposition is to be made, will be satisfied by
Mortgagee's giving of such notice to Mortgagor at least five (5) days prior
to the time of any public sale or the time after which any private sale or
other intended disposition is to be made.
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VII.7 Foreclosure Against Property.
(a) Mortgagee may bring an action in any court of competent
jurisdiction to foreclose this Mortgage. Xxxxxxxxx agrees that, in
case Mortgagee in the exercise of the Power of Sale herein given
elects to sell in parcels, such sales may be held from time to time
and the Power of Sale shall not be exhausted until all of the Property
shall have been sold; and that Mortgagee shall have the additional
right and power to sell the whole of the Property notwithstanding that
the proceeds of such sales exceed or may exceed the sum of money then
secured hereby. In the event of any separate sale of the Collateral,
Mortgagor shall be entitled to reasonable notice of the time and place
of any public sale or of the time after which any private sale or
other intended disposition thereof is to be made, and such requirement
of reasonable notice shall be met if such notice is mailed postage
prepaid, to the address of Mortgagor as set forth in this Mortgage at
least five (5) days before the time of such sale or other disposition.
At any foreclosure sale, the Property or any combination or all of any
other security for the Secured Obligations or any part thereof may be
offered for sale for one total price, and the proceeds of such sale
may be accounted for in one account without distinction between the
items of security and without assigning to them any proportion of such
proceeds, Mortgagor hereby waiving the application of any doctrine of
marshalling of assets.
(b) All fees, costs and expenses of any kind incurred by
Mortgagee in connection with foreclosure of this Mortgage, including,
without limitation, the costs of any appraisals of the Property
obtained by Mortgagee, the cost of any title reports or abstracts, all
costs of any receivership for the Property advanced by Mortgagee, and
all attorneys' and consultants' fees and expenses incurred by
Mortgagee, shall constitute a part of the Secured Obligations and may
be included as part of the amount owing from Mortgagor to Mortgagee at
any foreclosure sale.
(c) The proceeds of any sale under this Section shall be applied
first to the fees and expenses of the officer conducting the sale, and
then to the reduction or discharge of the Secured Obligations in such
order and manner as Mortgagee may elect in its sole discretion; any
surplus remaining shall be paid
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over to Mortgagor or to such other person or persons as may be
lawfully entitled to such surplus.
(d) Nothing in this Section dealing with foreclosure procedures
or specifying particular actions to be taken by Mortgagee shall be
deemed to contradict or add to the requirements and procedures now or
hereafter specified by Massachusetts law, and any such inconsistency
shall be resolved in favor of Massachusetts law applicable at the time
of foreclosure.
VII.8 Appointment of Receiver. To the extent permitted by law,
Mortgagee shall be entitled, as a matter of absolute right and without
regard to the value of any security for the Secured Obligations or the
solvency of any person liable therefor, to the appointment of a receiver
for the Property upon ex-parte application to any court of competent
jurisdiction. Mortgagor waives any right to any hearing or notice of
hearing prior to the appointment of a receiver. Such receiver and its
agents shall be empowered to (a) take possession of the Property and any
businesses conducted by Mortgagor or any other person thereon and any
business assets used in connection therewith, (b) exclude Mortgagor and
Xxxxxxxxx's agents, servants, and employees from the Property, (c) collect
the rents, issues, profits, and income therefrom, (d) complete any
construction which may be in progress, (e) do such maintenance and make
such repairs and alterations as the receiver deems necessary, (f) use all
stores of materials, supplies, and maintenance equipment on the Property
and replace such items at the expense of the receivership estate, (g) pay
all taxes and assessments against the Property and the Chattels, all
premiums for insurance thereon, all utility and other operating expenses,
and all sums due under any prior or subsequent encumbrance, and (h)
generally do anything which Mortgagor could legally do if Mortgagor were in
possession of the Property. All expenses incurred by the receiver or its
agents shall constitute a part of the Secured Obligations. Any revenues
collected by the receiver shall be applied first to the expenses of the
receivership, including attorneys' fees incurred by the receiver and by
Mortgagee, together with interest thereon at the Default Rate from the date
ten (10) days following demand therefor until paid, and the balance shall
be applied toward the Secured Obligations in such order or manner as
Mortgagee may in its sole discretion elect or in such other manner as the
court may direct. Unless sooner terminated with the express consent of
Mortgagee, any such receivership will continue until the Secured
Obligations
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have been discharged in full, or until title to the Property has passed
after foreclosure sale and all applicable periods of redemption have
expired.
VII.9 Right to Make Repairs, Improvements. Should any part of the
Property come into the possession of Mortgagee after an Event of Default,
Mortgagee may use, operate, and/or make repairs, alterations, additions and
improvements to the Property for the purpose of preserving it or its value.
Mortgagor covenants to promptly reimburse and pay to Mortgagee, at the
place where the Note is payable, or at such other place as may be
designated by Mortgagee in writing, the amount of all reasonable expenses
(including the cost of any insurance, taxes, or other charges) incurred by
Mortgagee in connection with its custody, preservation, use or operation of
the Property, together with interest thereon from the date incurred by
Mortgagee at the Default Rate, and all such expenses, costs, taxes,
interest, and other charges shall be a part of the Secured Obligations. It
is agreed, however, that the risk of accidental loss or damage to the
Property is undertaken by Xxxxxxxxx and Mortgagee shall have no liability
whatsoever for decline in value of the Property, for failure to obtain or
maintain insurance, or for failure to determine whether any insurance ever
in force is adequate as to amount or as to the risks insured.
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VII.10 Prima Facie Evidence. Xxxxxxxxx agrees that, in any
assignments, deeds, bills of sale, notices of sale, or postings, given by
Mortgagee, any and all statements of fact or other recitals therein made as
to the identity of Mortgagee, or as to the occurrence or existence of any
Event of Default, or as to the acceleration of the maturity of the Secured
Obligations, or as to the request to sell, posting of notice of sale,
notice of sale, time, place, terms and manner of sale and receipt,
distribution and application of the money realized therefrom, and without
being limited by the foregoing, as to any other act or thing having been
duly done by Mortgagee, shall be taken by all courts of law and equity as
prima facie evidence that such statements or recitals state facts and are
without further question to be so accepted, and Xxxxxxxxx does hereby
ratify and confirm any and all acts that Mortgagee may lawfully do by
virtue hereof.
VIII
ASSIGNMENT OF LEASES AND RENTS
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VIII.1 Assignment of Leases and Rents. Mortgagor hereby
unconditionally and absolutely grants, transfers and assigns unto Mortgagee
all rents, royalties, issues, profits and income ("Rents") now or hereafter
due or payable for the occupancy or use of the Property, and all Secondary
Leases, whether written or oral, with all security therefor, including all
guaranties thereof, now or hereafter affecting the Property; reserving unto
Mortgagor, however, a license to collect and retain such Rents prior to the
occurrence of any Event of Default (and Mortgagee shall not revoke such
license prior to the occurrence of any Event of Default). Such license
shall be revocable by Mortgagee without notice to Mortgagor at any time
after the occurrence of an Event of Default. Xxxxxxxxx represents that the
Rents and the Secondary Leases have not been heretofore sold, assigned,
transferred or set over by any instrument now in force and will not at any
time during the life of this assignment be sold, assigned, transferred or
set over by Xxxxxxxxx or by any person or persons whomsoever; and Xxxxxxxxx
has good right to sell, assign, transfer and set over the same and to grant
to and confer upon Mortgagee the rights, interest, powers and authorities
herein granted and conferred. Failure of Mortgagee at any time or from time
to time to enforce the assignment of Rents and Leases under this Section
shall not in any manner prevent its subsequent enforcement, and Mortgagee
is not obligated to collect anything hereunder, but is accountable only for
sums actually collected.
VIII.2 Further Assignments. Mortgagor shall give Mortgagee at any time
upon demand any further or additional forms of assignment or transfer of
such Rents, Secondary Leases and security as may be reasonably requested by
Mortgagee, and shall deliver to Mortgagee executed copies of all such
Secondary Leases and security.
VIII.3 Application of Rents. Mortgagee shall be entitled to deduct and
retain a just and reasonable compensation from monies received hereunder
for its services or that of its agents in collecting such monies. Any
monies received by Mortgagee hereunder may be applied when received from
time to time in payment of any taxes, assessments or other liens affecting
the Property regardless of the delinquency, such application to be in such
order as Mortgagee may determine. The acceptance of this Mortgage by
Mortgagee or the exercise of any rights by it hereunder shall not be, or be
construed to be, an affirmation by
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it of any Secondary Lease nor an assumption of any liability under any
Secondary Lease.
VIII.4 Collection of Rents. Upon or at any time after an Event of
Default shall have occurred and be continuing, Mortgagee may declare all
sums secured hereby immediately due and payable, and may, at its option,
without notice, and whether or not the Secured Obligations shall have been
declared due and payable, either in person or by agent, with or without
bringing any action or proceeding, or by a receiver to be appointed by a
court, (a) enter upon, take possession of, manage and operate the Property,
or any part thereof (including without limitation making necessary repairs,
alterations and improvements to the Property); (b) make, cancel, enforce or
modify Secondary Leases; (c) obtain and evict tenants; (d) fix or modify
Rents; (e) do any acts which Mortgagee deems reasonably proper to protect
the security thereof; and (f) either with or without taking possession of
the Property, in its own name sue for or otherwise collect and receive such
Rents, including those past due and unpaid. In connection with the
foregoing, Mortgagee shall be entitled and empowered to employ attorneys,
and management, rental and other agents in and about the Property and to
effect the matters which Mortgagee is empowered to do, and in the event
Mortgagee shall itself effect such matters, Mortgagee shall be entitled to
charge and receive reasonable management, rental and other fees therefor as
may be customary in the area in which the Property is located; and the
reasonable fees, charges, costs and expenses of Mortgagee or such persons
shall be additional Secured Obligations. Mortgagee may apply all funds
collected as aforesaid, less costs and expenses of operation and
collection, including reasonable attorneys' and agents' fees, charges,
costs and expenses, as aforesaid, upon any Secured Obligations, and in such
order as Mortgagee may determine. The entering upon and taking possession
of the Property, the collection of such Rents and the application thereof
as aforesaid shall not cure or waive any Default or waive, modify or affect
notice of Default under the Note or this Mortgage or invalidate any act
done pursuant to such notice.
VIII.5 Authority of Mortgagee. Any tenants or occupants of any part of
the Property are hereby authorized to recognize the claims of Mortgagee
hereunder without investigating the reason for any action taken by
Mortgagee, or the validity or the amount of secured obligations owing to
Mortgagee, or the existence of any Default in the Note or this Mortgage, or
under or by reason of
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this assignment of Rents and Leases, or the application to be made by
Mortgagee of any amounts to be paid to Mortgagee. The sole signature of
Mortgagee shall be sufficient for the exercise of any rights under this
assignment and the sole receipt of Mortgagee for any sums received shall be
a full discharge and release therefor to any such tenant or occupant of the
Property. Checks for all or any part of the rentals collected under this
assignment of Rents and Leases shall be drawn to the exclusive order of
Mortgagee.
VIII.6 Indemnification of Mortgagee. Nothing herein contained shall be
deemed to obligate Mortgagee to perform or discharge any obligation, duty
or liability of any lessor under any Secondary Lease of the Property unless
and until Mortgagee forecloses this Mortgage or takes title to the
Property, and Mortgagor shall and does hereby indemnify and hold Mortgagee
harmless from any and all liability, loss or damage which Mortgagee may or
might incur under any Secondary Lease or by reason of the assignment; and
any and all such liability, loss or damage incurred by Mortgagee, together
with the costs and expenses, including reasonable attorneys' fees, incurred
by Mortgagee in defense of any claims or demands therefor (whether
successful or not), shall be additional Secured Obligations, and Xxxxxxxxx
shall reimburse Mortgagee therefor on demand. Mortgagor's obligations under
this Section are subject to the following: (a) the right to settle or
resolve such claim, subject to Mortgagee's approval, which approval shall
not be unreasonably withheld, (b) the right to select legal counsel of
Xxxxxxxxx's choice, subject to Mortgagee's approval, which approval shall
not be unreasonably withheld, and (c) Mortgagor shall not indemnify
Mortgagee for Mortgagee's gross negligence or willful misconduct.
IX
MISCELLANEOUS PROVISIONS
IX.1 Time of the Essence. Time is of the essence with respect to all
provisions of the Loan Documents.
IX.2 Joint and Several Obligations. If Mortgagor is more than one
person or entity, then (a) all persons or entities comprising Mortgagor are
jointly and severally liable for all of the Secured Obligations; (b) all
representations, warranties, and covenants made by Mortgagor shall be
deemed representations,
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warranties, and covenants of each of the persons or entities comprising
Mortgagor; (c) any breach, Default or Event of Default by any of the
persons or entities comprising Mortgagor hereunder shall be deemed to be a
breach, Default, or Event of Default of Mortgagor; (d) any reference herein
contained to the knowledge or awareness of Mortgagor shall mean the
knowledge or awareness of any of the persons or entities comprising
Mortgagor; and (e) any event creating personal liability of any of the
persons or entities comprising Mortgagor shall create personal liability
for all such persons or entities.
IX.3 Waiver of Homestead and Other Exemptions. To the extent permitted
by law, Mortgagor hereby waives all rights to any homestead or other
exemption to which Mortgagor would otherwise be entitled under any present
or future constitutional, statutory, or other provision of applicable state
or federal law. Mortgagor hereby waives any right it may have to require
Mortgagee to xxxxxxxx all or any portion of the security for the Secured
Obligations.
IX.4 Non Recourse. Except as expressly hereinafter set forth, the
recourse of Mortgagee with respect to the obligations evidenced by the Note
shall be solely to the Property, Chattels, Intangible Personalty and all
other collateral pledged by Xxxxxxxxx to secure the Note. Notwithstanding
anything to the contrary contained in the Note or in any Loan Document,
nothing shall be deemed in any way to impair, limit or prejudice the rights
of Mortgagee (a) in foreclosure proceedings or in any ancillary proceedings
brought to facilitate Mortgagee's foreclosure on the Property or any
portion thereof; (b) to recover from Mortgagor damages or costs (including
without limitation reasonable attorneys' fees) incurred by Mortgagee as a
result of waste by Xxxxxxxxx, (c) to recover from Mortgagor any
condemnation or insurance proceeds attributable to the Property which were
not paid to Mortgagee or used to restore the Property in accordance with
the terms of this Mortgage; (d) to recover from Mortgagor any rents,
profits, security deposits, advances, rebates, prepaid rents or other
similar sums attributable to the Property collected by or for Mortgagor
following an Event of Default under any Loan Document and not properly
applied to the reasonable fixed and operating expenses of the Property,
including payments of the Note and other sums due under the Loan Documents,
or held pursuant to Leases or applicable agreements; (e) to pursue the
personal liability of Mortgagor under the provisions of Section 5.10 of
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this Mortgage; (f) to exercise any specific rights or remedies afforded
Mortgagee under any other provisions of the Loan Documents or by law or in
equity (or to recover under any guarantee given in connection with the
Note); (g) to recover from Mortgagor and to properly apply and disburse the
amount of any accrued taxes, assessments, and/or utility charges affecting
the Property (whether or not the same have been billed to Mortgagor) that
are either unpaid by Mortgagor or paid by Mortgagee under this Mortgage and
to collect from Mortgagor any sums expended by Mortgagee in fulfilling the
obligations of Mortgagor, as lessor, under any Secondary Leases; (h) to
pursue any personal liability of Mortgagor or any Guarantor under the
Environmental Indemnity Agreement; and (i) to recover from Mortgagor the
amount of any loss suffered by Mortgagee (that would otherwise be covered
by insurance) as a result of Xxxxxxxxx's failure to maintain any insurance
required under the terms of any Loan Document. The agreement contained in
this Section to limit the personal liability of Mortgagor shall become null
and void and be of no further force and effect in the event (i) that the
Property or any part thereof or any interest therein, or any interest in
Mortgagor, shall be further encumbered by a voluntary lien securing any
obligation upon which Mortgagor or any general partner, principal or
affiliate of Mortgagor shall be personally liable for repayment, whether as
obligor or guarantor which has not been approved in advance by Mortgagee;
(ii) of any breach or violation of Sections 5.4, 5.5 or 5.7 of this
Mortgage; (iii) of any fraud or material misrepresentation by Mortgagor in
connection with the Property, the Loan Documents or the application for the
loan which is evidenced by the Note; or (iv) of any execution, amendment,
modification or termination of any Primary Lease or Secondary Lease without
the prior written consent of Mortgagee if such consent is required under
the terms of the Loan Documents. For purposes of the foregoing, "affiliate"
shall mean any individual, corporation, trust, partnership or any other
person or entity controlled by, controlling or under common control with
Mortgagor. A person or entity of any nature shall be presumed to have
control when it possesses the power, directly or indirectly to direct, or
cause the direction of, the management or policies of another person or
entity, whether through ownership of voting securities, by contract, or
otherwise.
IX.5 Rights and Remedies Cumulative. Mortgagee's rights and remedies
under each of the Loan Documents are cumulative of the rights and remedies
available to Mortgagee under
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each of the other Loan Documents and those otherwise available to Mortgagee
at law or in equity. No act of Mortgagee shall be construed as an election
to proceed under any particular provision of any Loan Document to the
exclusion of any other provision in the same or any other Loan Document, or
as an election of remedies to the exclusion of any other remedy which may
then or thereafter be available to Mortgagee.
IX.6 No Implied Waivers. Mortgagee shall not be deemed to have waived
any provision of any Loan Document unless such waiver is in writing and is
signed by Mortgagee. Without limiting the generality of the preceding
sentence, neither Xxxxxxxxx's acceptance of any payment with knowledge of a
Default by Xxxxxxxxx, nor any failure by Mortgagee to exercise any remedy
following a Default by Xxxxxxxxx shall be deemed a waiver of such Default,
and no waiver by Mortgagee of any particular Default on the part of
Mortgagor shall be deemed a waiver of any other Default or of any similar
Default in the future.
IX.7 No Third Party Rights. No person shall be a third party
beneficiary of any provision of any of the Loan Documents. All provisions
of the Loan Documents favoring Mortgagee are intended solely for the
benefit of Mortgagee, and no third party shall be entitled to assume or
expect that Mortgagee will not waive or consent to modification of any such
provision in Mortgagee's sole discretion.
IX.8 Preservation of Liability and Priority. Without affecting the
liability of Mortgagor or of any other person (except a person expressly
released in writing) for payment and performance of all of the Secured
Obligations, and without affecting the rights of Mortgagee with respect to
any security not expressly released in writing, and without impairing in
any way the priority of this Mortgage over the interests of any person
acquired or first evidenced by recording subsequent to the recording
hereof, Mortgagee may, either before or after the maturity of the Note, and
without notice or consent: (a) release any person liable for payment or
performance of all or any part of the Secured Obligations; (b) make any
agreement altering the terms of payment or performance of all or any of the
Secured Obligations; (c) exercise or refrain from exercising, or waive, any
right or remedy which Mortgagee may have under any of the Loan Documents;
(d) accept additional security of any kind for any of the Secured
Obligations; or (e) release or otherwise deal with any
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real or personal property securing the Secured Obligations. Any person
acquiring or recording evidence of any interest of any nature in the
Property, the Chattels, or the Intangible Personalty shall be deemed, by
acquiring such interest or recording any evidence thereof, to have agreed
and consented to any or all such actions by Mortgagee.
IX.9 Subrogation of Mortgagee. Mortgagee shall be subrogated to the
lien of any previous encumbrance discharged with funds advanced by
Mortgagee under the Loan Documents, regardless of whether such previous
encumbrance has been released of record.
IX.10 Notices. Any notice required or permitted to be given by
Mortgagor or Mortgagee under this Mortgage shall be in writing and will be
deemed given (a) upon personal delivery, (b) on the first business day
after receipted delivery to a courier service which guarantees
next-business-day delivery, or (c) on the fifth business day after mailing,
by registered or certified United States mail, postage prepaid, in any case
to the appropriate party at its address set forth below:
If to Mortgagor:
c/o Sonesta International Hotels Corporation
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Office of the Treasurer
with a copy to:
Xxxxx & Xxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
If to Mortgagee:
SunAmerica Life Insurance Company
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-6022
Attn: Director-Mortgage Lending and Real Estate
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Either party may change such party's address for notices or copies of
notices by giving notice to the other party in accordance with this
Section.
IX.11 Defeasance. Upon payment and performance in full of all of the
Secured Obligations, Mortgagee will execute and deliver to Mortgagor such
documents as may be required to release this Mortgage of record.
IX.12 Illegality. If any provision of this Mortgage is held to be
illegal, invalid, or unenforceable under present or future laws effective
during the term of this Mortgage, the legality, validity, and
enforceability of the remaining provisions of this Mortgage shall not be
affected thereby, and in lieu of each such illegal, invalid or
unenforceable provision there shall be added automatically as a part of
this Mortgage a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable. If the rights and liens created by this Mortgage shall be
invalid or unenforceable as to any part of the Secured Obligations, then
the unsecured portion of the Secured Obligations shall be completely paid
prior to the payment of the remaining and secured portion of the Secured
Obligations, and all payments made on the Secured Obligations shall be
considered to have been paid on and applied first to the complete payment
of the unsecured portion of the Secured Obligations.
IX.13 Usury Savings Clause. It is expressly stipulated and agreed to
be the intent of Mortgagee and Mortgagor at all times to comply with the
applicable law governing the highest lawful interest rate. If the
applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Note or under any of the other Loan Documents,
or contracted for, charged, taken, reserved or received with respect to the
loan evidenced thereby, or if acceleration of the maturity of the Note, any
prepayment by Xxxxxxxxx, or any other circumstance whatsoever, results in
Mortgagor having paid any interest in excess of that permitted by
applicable law, then it is the express intent of Mortgagor and Mortgagee
that all excess amounts theretofore collected by Mortgagee be credited on
the principal balance of the Note (or, at Mortgagee's option, paid over to
Mortgagor), and the provisions of the Note and other Loan Documents
immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
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any new document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder
and thereunder. The right to accelerate maturity of the Note does not
include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Mortgagee does not intend to
collect any unearned interest in the event of acceleration. All sums paid
or agreed to be paid to Mortgagee for the use, forbearance or detention of
the Secured Obligations evidenced hereby or by the Note shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full term of such Secured Obligations until payment
in full so that the rate or amount of interest on account of such Secured
Obligations does not exceed the maximum rate or amount of interest
permitted under applicable law. The term "applicable law" as used herein
shall mean any federal or state law applicable to the loan made by
Mortgagee to Mortgagor evidenced by the Note.
IX.14 Obligations Binding Upon Xxxxxxxxx's Successors. This Mortgage
is binding upon Mortgagor and Xxxxxxxxx's successors and assigns, and shall
inure to the benefit of Mortgagee, and its successors and assigns, and the
provisions hereof shall likewise be covenants running with the land. The
duties, covenants, conditions, obligations, and warranties of Mortgagor in
this Mortgage shall be joint and several obligations of Mortgagor and
Xxxxxxxxx's successors and assigns.
IX.15 Construction. All pronouns and any variations of pronouns herein
shall be deemed to refer to the masculine, feminine, or neuter, singular or
plural, as the identity of the parties may require. Whenever the terms
herein are singular, the same shall be deemed to mean the plural, as the
identity of the parties or the context requires.
IX.16 Attorneys' Fees. Any reference in this Mortgage to attorneys' or
counsel fees paid or incurred by Mortgagee shall be deemed to mean
reasonable fees and shall be further deemed to include reasonable
paralegals' fees and reasonable legal assistants' fees. Moreover, wherever
provision is made herein for payment of attorneys' or counsels fees or
expenses incurred by Mortgagee, such provision shall include but not be
limited to, such fees or expenses incurred in any and all judicial,
bankruptcy, reorganization, administrative, or other proceedings, including
appellate proceedings, whether such fees or expenses
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arise before proceedings are commenced, during such proceedings or after
entry of a final judgment.
IX.17 Waiver and Agreement. XXXXXXXXX XXXXXX EXPRESSLY WAIVES ANY
RIGHT IT MAY HAVE UNDER APPLICABLE LAW TO PREPAY THE NOTE, IN WHOLE OR IN
PART, WITHOUT PREPAYMENT CHARGE (EXCEPT AS OTHERWISE PROVIDED IN THE NOTE),
UPON ACCELERATION OF THE MATURITY DATE OF THE NOTE, AND AGREES THAT, IF FOR
ANY REASON A PREPAYMENT OF ALL OR ANY PART OF THE NOTE IS MADE, WHETHER
VOLUNTARILY OR FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THE NOTE
BY MORTGAGEE ON ACCOUNT OF THE OCCURRENCE OF ANY EVENT OF DEFAULT ARISING
FOR ANY REASON, INCLUDING, WITHOUT LIMITATION, AS A RESULT OF ANY
PROHIBITED OR RESTRICTED TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION OF
THE PROPERTY OR ANY PART THEREOF SECURING THE NOTE, THEN MORTGAGOR SHALL BE
OBLIGATED TO PAY, CONCURRENTLY WITH SUCH PREPAYMENT, THE PREPAYMENT PREMIUM
PROVIDED FOR IN THE NOTE (OR, IN THE EVENT OF ACCELERATION WHEN THE NOTE IS
CLOSED TO PREPAYMENT, AS PROVIDED IN SECTION 1.25 HEREOF). XXXXXXXXX XXXXXX
DECLARES THAT MORTGAGEE'S AGREEMENT TO MAKE THE LOAN EVIDENCED BY THE NOTE
AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THE NOTE CONSTITUTES
ADEQUATE CONSIDERATION, GIVEN INDIVIDUAL WEIGHT BY MORTGAGOR, FOR THIS
WAIVER AND AGREEMENT.
IX.18 Waiver of Jury Trial. MORTGAGEE AND MORTGAGOR KNOWINGLY,
IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM
BASED ON THIS MORTGAGE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
MORTGAGE OR ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO
ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGEE
AND MORTGAGOR TO ENTER INTO THE LOAN TRANSACTION EVIDENCED BY THE NOTE.
IX.19 Governing Laws. The substantive laws of the Commonwealth of
Massachusetts shall govern the validity, construction, enforcement and
interpretation of this Mortgage.
IX.20 Inconsistency. In the event of any inconsistency between the
terms of the Loan Documents and the terms of that certain First Mortgage
Loan Application between Mortgagor and Mortgagee dated September 19, 1996,
as amended by Addendum to First Mortgage Loan Application, the terms of the
Loan Documents shall govern and control in all respects.
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IX.21 Statutory Condition. This Mortgage is upon the STATUTORY
CONDITION, and upon the further condition that each of the aforementioned
covenants, agreements, representations and warranties shall be kept and
duly performed. If there shall occur a breach of any of such conditions
which constitutes an Event of Default hereunder, or if the entire mortgage
debt becomes due at the option of Mortgagee, the holder hereof shall have
the STATUTORY POWER OF SALE, and, as to the Collateral, all rights and
remedies conferred by the Uniform Commercial Code.
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IN WITNESS WHEREOF, Xxxxxxxxx has executed and delivered this Mortgage as
of the date first mentioned above.
/s/
-------------------------------------
Xxxxx X. Xxxxxxxxx, Trustee of the Charterhouse of
Cambridge Trust, and not individually
/s/
-------------------------------------
Xxxxx X. Xxxxxxxxx, Trustee under a Grant of Trustee
Power, Authority and Discretion dated December 5, 1996
from Boy X.X. xxx Xxxx, Trustee of the Charterhouse of
Cambridge Trust, and not individually
SONESTA OF MASSACHUSETTS, INC., a Massachusetts
corporation
By:/s/
-------------------------------------
Xxxxx X. Xxxxxxxxx
Vice President
COMMONWEALTH OF MASSACHUSETTS
COMMONWEALTH OF MASSACHUSETTS )
) ss. December ___, 1996
COUNTY OF ___________________ )
Then personally appeared the above-named Xxxxx X. Xxxxxxxxx as Trustee of
the Charterhouse of Cambridge Trust, and not individually, and acknowledged the
foregoing instrument to be the free act and deed of Xxxxx X. Xxxxxxxxx and such
trust before me.
______________________________
Notary Public
My commission expires ____________.
COMMONWEALTH OF MASSACHUSETTS
COMMONWEALTH OF MASSACHUSETTS )
) ss. December ___, 1996
COUNTY OF ___________________ )
Then personally appeared the above-named Xxxxx X. Xxxxxxxxx, Trustee of
Charterhouse of Cambridge Trust, and not individually, under a Grant of Trustee
Power, Authority and Discretion dated December 5, 1996 from Boy X.X. xxx Xxxx,
Trustee, and acknowledged the foregoing instrument to be the free act and deed
of Xxxxx X. Xxxxxxxxx and such trust before me.
______________________________
Notary Public
My commission expires ____________.
COMMONWEALTH OF MASSACHUSETTS
COMMONWEALTH OF MASSACHUSETTS )
) ss. December ___, 1996
COUNTY OF ___________________ )
Then personally appeared the above-named Xxxxx X. Xxxxxxxxx as Vice
President of Sonesta of Massachusetts, Inc., a Massachusetts corporation, and
acknowledged the foregoing instrument to be the free act and deed of Xxxxx X.
Xxxxxxxxx and such corporation before me.
______________________________
Notary Public
My commission expires ____________.
EXHIBIT A
to
MORTGAGE
(Legal Description)
A-1
EXHIBIT B
to
MORTGAGE
(Permitted Exceptions)
1. Real estate taxes for the second half of fiscal year ending June 30, 1997,
and subsequent years, not yet due and payable
B-1
