QUANTUM PERIPHERALS REALTY CORPORATION
(Mortgagor)
to
CS FIRST BOSTON MORTGAGE CAPITAL CORP.
(Mortgagee)
--------------------------
MORTGAGE AND SECURITY AGREEMENT
--------------------------
Dated: As of September 10, 1996
RECORD AND RETURN TO:
Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
THIS MORTGAGE AND SECURITY AGREEMENT (hereinafter referred to as
"Mortgage") made as of the 10 th day of September, 1996, by QUANTUM PERIPHERALS
REALTY CORPORATION, a Delaware corporation having an address at 000 XxXxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "Mortgagor"),
to CS FIRST BOSTON MORTGAGE CAPITAL CORPORATION, a Delaware corporation, having
its principal place of business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter referred to as "Mortgagee").
W I T N E S E T H:
To secure the payment of an indebtedness in the principal sum of TWENTY
SIX MILLION THREE HUNDRED FIFTEEN THOUSAND SEVEN HUNDRED EIGHTY NINE AND FORTY
SEVEN/100 DOLLARS ($26,315,789.47) in lawful money of the United States of
America, to be paid with interest according to a certain note dated the date
hereof made by Mortgagor to Mortgagee (the note together with all extensions,
renewals or modifications thereof being hereinafter collectively called the
"Note") (said indebtedness, interest and all other sums which may or shall
become due hereunder and under the Note being hereinafter collectively referred
to as the "Debt") and the performance and observance of and compliance with each
and every obligation, covenant, warranty, agreement, term, provision and
condition conferred in this Mortgage, Mortgagor has mortgaged, given, granted,
bargained, sold, aliened, enfeoffed, conveyed, confirmed, pledged, hypothecated
and assigned, and by these presents does hereby mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, pledge, hypothecate and assign unto
Mortgagee with Mortgage Covenants all right, title and interest of Mortgagor now
owned, or hereafter acquired, in and to all of the following property rights,
interests and estates (collectively the "Mortgaged Property"):
(a) the plots, pieces or parcels of property described
in Exhibit A attached hereto and made a part hereof (the
"Premises");
(b) (i) all buildings, structures, fixtures, addi-
tions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located on
the Premises (the "Improvements");
(c) all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses,
water rights and powers, air rights and development rights, and all
estates, rights, titles, interests, privileges, liberties, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises or the Improvements
and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the Premises to the center line
thereof and all the estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy, property, possession,
claim and demand whatsoever, both at law and in equity, of Mortgagor
of, in and to the Premises and the Improvements and every part and
parcel thereof, with the appurtenances thereto;
(d) all machinery, equipment, fixtures (including but not
limited to all heating, air conditioning, plumbing, lighting,
communications and elevator fixtures), and articles of personal
property and accessions thereof and renewals, replacements thereof and
substitutions therefor and other property of every kind and nature,
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have
an interest, now or hereafter located upon the Premises or the
Improvements, or appurtenant thereto, and usable in connection with the
present or future operation and occupancy of the Premises or the
Improvements and all building equipment, materials and supplies of any
nature whatsoever owned by Mortgagor, or in which Mortgagor has or
shall have an interest, now or hereafter located upon the Premises or
the Improvements, or appurtenances thereto, or used in connection with
the present or future operation of the Premises or the Improvements but
excluding machinery, equipment and other personal property owned by and
used by the Prime Tenant (hereinafter defined) and any assignee or
sublessee thereof in the conduct of its business therein (the
"Equipment");
(e) all awards or payments, including interest thereon, which
may heretofore and hereafter be made with respect to the Premises, the
Improvements or the Equipment, to the extent actually received by
Mortgagor, on account of the exercise of the right of eminent domain or
condemnation (including but not limited to any transfer of the
Mortgaged Property or part thereof made in lieu of or in anticipation
of the exercise of said rights), or for a change of grade, or for any
other injury to or decrease in the value of the Premises, the
Improvements or the Equipment resulting therefrom;
(f) all leases including, without limitation, the Prime Lease
(hereinafter defined) and all guarantees thereof and other agreements
affecting the use, enjoyment or occupancy of the Premises, the
Improvements or the Equipment
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now or hereafter entered into (the "Leases") and all income, rents,
profits and revenues (including, without limitation, all oil and gas or
other mineral royalties and bonuses) from the Premises, the
Improvements or the Equipment (the "Rents") and all proceeds from the
sale or other disposition of the Leases and the right to receive and
apply the Rents to the payment of the Debt;
(g) all proceeds of and any unearned premiums on any insurance
policies covering the Premises, the Improvements or the Equipment,
including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu
thereof, for damage to the Premises, the Improvements or the Equipment;
(h) all right, title and interest of every nature of the
Mortgagor in all monies deposited or to be deposited in any funds or
account maintained or deposited with Mortgagee, or its assigns, in
connection herewith;
(i) all accounts receivable, contract rights,
franchises, interests, estate or other claims, both at law
and in equity, relating to the Premises, the Improvements or
the Equipment;
(j) all claims against any person or entity with respect to
any damage to the Premises, the Improvements, or Equipment including,
without limitation, damage arising from any defect in or with respect
to the design or construction of the Improvements, or the Equipment and
any damage resulting therefrom;
(k) all deposits or other security or advance payments,
including rental payments made by or on behalf of the Mortgagor to
others, with respect to (i) insurance policies, (ii) utility services,
(iii) cleaning, maintenance, repair or similar services, (iv) refuse
removal or sewer service, (v) parking or similar services or rights and
(vi) rental of Equipment, if any, relating to or otherwise used in the
operation of the Premises, Improvements, or Equipment;
(l) all advertising material, guaranties, warranties, building
permits, other permits, licenses, plans and specifications, shop and
working drawings, soil tests, appraisals and other documents, materials
and/or personal property of any kind now or hereafter existing in or
relating to the Premises, Improvements, and Equipment;
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(m) all drawings, designs, plans and specifications prepared
by the architects, engineers, interior designers, landscape designers
and any other consultants or professionals for the design, development,
construction, repair and/or improvement of the Premises or the
Improvements, as amended from time to time; and
(n) all proceeds of each of the foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property
unto and for the proper use and benefit of Mortgagee and Mortgagee's successors,
substitutes and assigns, forever.
PROVIDED, ALWAYS that these presents are upon this express condition,
if Mortgagor shall well and truly pay to Mortgagee the Debt at the time and in
the manner provided in the Note and this Mortgage and shall well and truly abide
by and comply with each and every covenant and condition set forth herein and in
the Note in a timely manner, then these presents and the estate hereby granted
shall cease, terminate and be void.
AND Mortgagor covenants with and warrants to Mortgagee that:
1. Payment of Debt and Incorporation of Covenants, Conditions and
Agreements. Mortgagor will pay, or will cause to be paid, the Debt at the time
and in the manner provided in the Note and in this Mortgage. All the covenants,
conditions and agreements contained in (a) the Note and (b) all and any of the
documents other than the Note or this Mortgage now or hereafter executed by
Mortgagor and/or others and by or in favor of Mortgagee, which wholly or
partially evidence, secure or guaranty payment of the Note or which are
otherwise executed and/or delivered in connection with the Note and this
Mortgage (the "Other Security Documents"), are hereby made a part of this
Mortgage to the same extent and with the same force as if fully set forth
herein.
2. Warranty of Title. Mortgagor warrants that Mortgagor has good and
indefeasible title to the Mortgaged Property and that Mortgagor (and the
undersigned representative of Mortgagor) has the right to mortgage, give, grant,
bargain, sell, alien, enfeoff, convey, confirm, pledge, assign and hypothecate
the same pursuant to the terms hereof and to keep and perform all of the terms
of this Mortgage on Mortgagor's part to be performed and that Mortgagor
possesses an unencumbered fee estate in the Premises and the Improvements and
that it owns the Mortgaged Property free and clear of all liens, encumbrances
and charges whatsoever except for the Prime Lease and those exceptions shown in
the title insurance policy insuring the lien of this Mortgage
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(the "Permitted Encumbrances"). Mortgagor shall forever warrant, defend and
preserve such title and the validity and priority of the lien of this Mortgage
and shall forever warrant and defend the same to Mortgagee against the claims of
all persons whomsoever.
3. Insurance. (a) Subject to the provisions of paragraph
3(g) hereof, Mortgagor will, or will cause Prime Tenant
(hereinafter defined) to, at its sole cost and expense, maintain
insurance of the following types:
(i) Insurance against loss or damage by fire, casualty and
other hazards included in an "all-risk" extended coverage endorsement,
including, but not limited to, riot and civil commotion, malicious
mischief, vandalism, windstorm or earthquake, with such additional
endorsements as the Mortgagee may from time to time reasonably require
and which are customarily required by institutional Mortgagees of
similar properties similarly situated, covering the Improvements and
Equipment ("Insured Property") in an amount not less than the greater
of (i) 100% of the insurable replacement value of the Insured Property
(exclusive of the Premises' footings and foundations) and (ii) such
other amount as is necessary to prevent any reduction in such policy by
reason of and to prevent Mortgagor, Mortgagee or any other insured
thereunder from being deemed to be a co-insurer;
(ii) Commercial comprehensive general liability insurance against
claims for personal and bodily injury and/or death to one or more
persons or property damage, occurring on, in or about the Mortgaged
Property (including the adjoining streets, sidewalks and passageways
therein) in an amount not less than $10,000,000;
(iii) Business interruption insurance with loss payable to Mortgagee
in an amount not less than 100% of the actual fixed or base rent plus
percentage rent and all expenses of the Mortgaged Property which the
Prime Tenant shall be obligated to pay or reimburse under the Prime
Lease for the succeeding twelve (12) month period with respect to the
Mortgaged Property;
(iv) Insurance against loss or damages from (i) leakage of
sprinkler systems and (ii) explosion of steam boilers, air conditioning
equipment, pressure vessels or similar apparatus now or thereafter
installed at the Premises, in such amounts as the Mortgagee may from
time to time reasonably require and which are then customarily required
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by institutional lenders of similar properties similarly
situated;
(v) Flood insurance in an amount equal to the full insurable
value of the Insured Property if it is located in an area designated by
the Secretary of Housing and Urban Development as being "an area of
special flood hazard" under the National Flood Insurance Program (i.e.,
having a one percent or greater chance of flooding), and if flood
insurance is available under the National Flood Insurance Act;
(vi) Worker's compensation insurance or other similar
insurance which may be required by law;
(vii) During the period when any addition, alteration, construction,
installation or demolition is being made to any part of the
Improvements, contingent liability, public liability, completed value
builder's risk (non-reporting form), worker's compensation and other
insurance as is customarily maintained in respect of property similar
to the Mortgaged Property under similar circumstances; and
(viii) Such other insurance as may from time to time be required by
Mortgagee and which is then customarily required by institutional
lenders of similar properties similarly situated.
Mortgagor shall pay the premiums or cause Prime Tenant to pay the premiums (the
"Insurance Premiums") for such insurance as same become due and payable except
for the insurance premiums related to the Prime Lease Casualty Insurance, which
Mortgagor shall pay on or before the date hereof. All policies of insurance (the
"Policies") shall be issued by an insurer authorized to do business in the state
where the Premises are located and acceptable to Mortgagee and having a "claims
paying ability" of "A" from at least two nationally recognized statistical
organizations (each, a "Rating Agency"). Mortgagor will assign and deliver the
Policies to Mortgagee. No policy shall have a deductible in excess of $150,000.
Not later than thirty (30) days prior to the expiration date of each of the
Policies, Mortgagor will deliver to Mortgagee satisfactory evidence of the
renewal of each of the Policies. If at any time Mortgagee is not in receipt of
written evidence that all insurance required hereunder is in full force and
effect, Mortgagee shall have the right without notice to Mortgagor to take such
action as Mortgagee deems necessary to protect its interest in the Mortgaged
Property, including without limitation the obtaining of such insurance coverage
as Mortgagee in its sole discretion deems appropriate, and all expenses incurred
by Mortgagee in connection with such action or in
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obtaining such insurance and keeping it in effect shall be paid by Mortgagor to
Mortgagee upon demand. If Mortgagee shall receive and retain such insurance
money, the lien of this Mortgage shall be reduced only by the amount thereof
received after expenses of collection and retained by Mortgagee and actually
applied by Mortgagee in reduction of the Debt.
(b) All of the Policies shall (i) contain a standard noncontributory
form of mortgagee clause (in favor of the Mortgagee and entitling the Mortgagee
to collect any and all proceeds payable under such insurance), as well as a
standard waiver of subrogation endorsement, and in the case of such liability
policy, name the Mortgagee as an additional insured, all to be in form and
substance satisfactory to the Mortgagee; (ii) provide that such policies may not
be cancelled or amended to diminish the coverage thereunder without at least
thirty (30) days prior written notice to the Mortgagee; and (iii) provide that
no act, omission or negligence of the Mortgagor, or its agents, servants or
employees, or of any tenant under any Lease, which might otherwise result in a
forfeiture of such insurance or any part thereof, shall in any way affect the
validity or enforceability of such insurance insofar as the Mortgagee is
concerned. Mortgagor shall not carry separate insurance, concurrent in kind or
form or contributing in the event of loss, with any insurance required under
this paragraph 3.
(c) If the Insured Property shall be damaged or destroyed, in whole or
in part, by fire or other casualty, Mortgagor shall give prompt written notice
thereof to Mortgagee. If Mortgagee determines that less than seventy-five
percent (75%) of the reasonably estimated aggregate insurable value of the
Insured Property is damaged or destroyed, the net amount of all insurance
proceeds received by Mortgagee with respect to such damage or destruction after
deduction of the reasonable costs and expenses incurred by Mortgagee in
collecting the same (the "Net Proceeds") shall be disbursed by Mortgagee in
accordance with the terms and conditions set forth herein to pay for the costs
and expenses of the Restoration (hereinafter defined) provided (i) no Event of
Default has occurred and remains uncured under this Mortgage, the Note or any of
the Other Security Documents, (ii) Mortgagor proceeds promptly with the
restoration, replacement, rebuilding or repair of the Insured Property as nearly
as possible to the condition and size the Insured Property was in immediately
prior to such fire or other casualty (the "Restoration"), (iii) the Restoration
shall be done in compliance with all applicable laws, rules and regulations,
(iv) a set of the plans and specifications in connection with the Restoration
shall be submitted to Mortgagee and shall be satisfactory to Mortgagee in all
material respects, (v) all costs and expenses incurred by Mortgagee in
connection with making the Net Proceeds available for the
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Restoration of the Insured Property including, without limitation, counsel fees
and inspecting engineer fees incurred by Mortgagee, shall be paid by Mortgagor,
and (vi) no Leases are terminated as a result of such fire or other casualty and
the Prime Tenant continues to pay rent, additional rent and all other amounts
under the Prime Lease unabated and uninterrupted. Notwithstanding the foregoing,
if, upon the occurrence of a casualty, the cost of Restoration is $200,000 or
less, Lessee shall be entitled to receive the Net Proceeds from the insurer and
apply the same to Restoration subject to the conditions of clauses (i), (ii),
(iii) and (vi) of the preceding sentence. If Mortgagee determines that more than
seventy-five percent (75%) of the reasonably estimated aggregate insurable value
of the Insured Property is damaged or destroyed, or if such damage or
destruction is the result of a Prime Lease Casualty, Mortgagee shall have the
option, in its sole discretion, to apply the Net Proceeds to the payment of the
Debt or to allow such Net Proceeds to be applied towards the Restoration in
accordance with the terms hereof.
(d) Except as otherwise provided in (c) above, the Net Proceeds shall
be held in trust by Mortgagee without interest thereon and, if the Net Proceeds
are to be applied towards the Restoration, shall be paid by Mortgagee to, or as
directed by, Mortgagor from time to time during the course of the Restoration,
upon receipt of evidence, satisfactory to Mortgagee, that (i) all materials
installed and work and labor performed (except to the extent they are to be paid
for out of the requested payment) in connection with the Restoration have been
paid in full (ii) no notices of intention, mechanics' or other liens or
encumbrances on the Mortgaged Property arising out of the Restoration exist, and
(iii) the balance of the Net Proceeds plus the balance of any deficiency
deposits given by Mortgagor to Mortgagee pursuant to the provisions of this
paragraph shall be sufficient to pay in full the balance of the cost of the
Restoration. If at any time the Net Proceeds, or the undisbursed balance
thereof, shall not, in the reasonable opinion of Mortgagee, be sufficient to pay
in full the balance of the cost of the Restoration, Mortgagor shall deposit the
deficiency with Mortgagee before any further disbursement of the Net Proceeds
shall be made.
(e) The excess, if any, of the Net Proceeds after payment to Mortgagor
as provided herein shall be applied by Mortgagee in reduction of the Debt in
such priority and proportions as Mortgagee in its sole discretion shall deem
proper. Notwithstanding anything to the contrary contained herein, if the Net
Proceeds shall be less than $50,000.00, then only one disbursement shall be
made, which disbursement shall be made upon the completion of the Restoration to
the satisfaction of Mortgagee.
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(f) Any amount of the Net Proceeds received by Mortgagee and not
required or permitted by Mortgagee, in its sole discretion, to be disbursed for
the Restoration pursuant to the provisions of this paragraph may, in Mortgagee's
discretion, be either (i) retained and applied by Mortgagee toward the payment
of the Debt whether or not then due and payable in such priority and proportions
as Mortgagee in its discretion shall deem proper, or (ii) paid in whole or in
part to Mortgagor for such purposes as Mortgagee shall designate. If Mortgagee
shall receive and retain such insurance proceeds, the lien of this Mortgage
shall be reduced only by the amount thereof received and retained by Mortgagee
and actually applied by Mortgagee in reduction of the Debt.
(g) Notwithstanding anything contained in this paragraph 3 to the
contrary, so long as (i) the party set forth as tenant ("Prime Tenant") under
that certain lease of the Premises more particularly described in Exhibit B
hereto (the "Prime Lease") is the sole tenant of the entire Premises pursuant to
the Prime Lease, (ii) the Prime Lease is in full force and effect, and (iii) no
default or event which with the passing of time or the giving of notice would
become a default has occurred under the Prime Lease, then upon the occurrence of
a fire or other casualty to the Insured Property, the provisions of Article XV
of the Prime Lease shall control.
4. Payment of Impositions, etc. Mortgagor shall pay, or shall cause
Prime Tenant to pay, all taxes, assessments, water rates and sewer rents, now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof and all ground rents, maintenance charges and, other governmental
impositions, other charges, including without limitation vault charges and
license fees for the use of vaults, chutes and similar areas adjoining the
Premises, now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof (collectively, the "Impositions") as same become
due and payable. Mortgagor will deliver to Mortgagee, upon request, evidence
reasonably satisfactory to Mortgagee that the Impositions and all other charges,
fees and impositions are not delinquent. Mortgagor shall not suffer and shall
promptly cause to be paid and discharged, any lien or charge whatsoever which
may be or become a lien or charge against the Mortgaged Property, and shall
promptly pay for, or cause to be paid, all utility services provided to the
Mortgaged Property. Upon the request of Mortgagee, Mortgagor shall furnish to
Mortgagee reasonable evidence of the payment of the Impositions prior to the
date that such Impositions would become delinquent and receipts for the payment
of the Impositions prior to the date the same shall become delinquent or as soon
thereafter as available. After prior written notice to Mortgagee, Mortgagor, at
its own expense,
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may contest by appropriate legal proceeding, promptly initiated and conducted in
good faith and with due diligence, the amount or validity or application in
whole or in part of any of the Impositions, provided that (i) Mortgagor is not
in default under the Note or this Mortgage, (ii) such proceedings shall suspend
the collection of the Impositions from Mortgagor and from the Mortgaged
Property, (iii) such proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Mortgagor is
subject and shall not constitute a default thereunder, (iv) neither the
Mortgaged Property nor any part thereof or interest therein will be in danger of
being sold, forfeited, terminated, cancelled or lost, (v) Mortgagor shall have
set aside adequate reserves for the payment of the Impositions, together with
all interest and penalties thereon, and (vi) Mortgagor shall have furnished such
security as may be required in the proceeding, or as may be requested by
Mortgagee to insure the payment of any such Impositions, together with all
interest and penalties thereon; provided, however, so long as (a) the Prime
Tenant is the sole tenant of the entire Premises pursuant to the Prime Lease,
(b) the Prime Lease is in full force and effect and (c) no default beyond
applicable notice and grace period, has occurred under the Prime Lease, the
Prime Tenant may contest any Imposition in accordance with the terms of the
Prime Lease and the provisions of clauses (i) through (vi) of this paragraph 4.
5. Escrow Fund. Mortgagor shall, or shall cause Prime Tenant to, pay to
Mortgagee on the first day of each calendar month (a) one-twelfth of an amount
which would be sufficient to pay the Impositions payable, or estimated by
Mortgagee to be payable, during the next ensuing twelve (12) months and (b)
one-twelfth of an amount which would be sufficient to pay the Insurance Premiums
due for the renewal of the coverage afforded by the Policies upon the expiration
thereof (said amounts in (a) and (b) above hereinafter called the "Escrow
Fund"). The Escrow Fund and the payments of interest or principal or both,
payable pursuant to the Note shall be added together and shall be paid as an
aggregate sum by Mortgagor to Mortgagee. Mortgagor hereby pledges to Mortgagee
any and all monies now or hereafter deposited in the Escrow Fund as additional
security for the payment of the Debt. Upon receipt of evidence, satisfactory to
Mortgagee, that proves that the Impositions and Insurance Premiums and any other
items for which sums have been deposited by Mortgagor into the Escrow Fund have
been paid in full,and provided that no Event of Default (hereinafter defined)
has occurred hereunder, Mortgagee shall, on each January 1 after the date hereof
credit any excess funds in the Escrow Fund against future payments to be made to
the Escrow Fund. In allocating such excess, Mortgagee may deal with the person
shown on the records of Mortgagee to be the owner of the Mortgaged Property.
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If the Escrow Fund is not sufficient to pay the items set forth in (a) and (b)
above, Mortgagor shall promptly pay to Mortgagee, upon demand, an amount which
Mortgagee shall estimate as sufficient to make up the deficiency. Upon the
occurrence of an Event of Default, Mortgagee may apply any sums then present in
the Escrow Fund to the payment of the following items in any order in its
uncontrolled discretion:
(i) Impositions and other charges;
(ii) Insurance Premiums;
(iii) interest on the unpaid principal balance of the
Note;
(iv) amortization of the unpaid principal balance of
the Note;
(v) maintenance of the Mortgaged Property; and
(vi) all other sums payable pursuant to the Note,
this Mortgage and the Other Security Documents,
including without limitation advances made by
Mortgagee pursuant to the terms of this Mortgage.
Until expended or applied as above provided, any amounts in the Escrow Fund
shall constitute additional security for the Debt. In accepting the Escrow Fund,
Mortgagee is not consenting to act as Mortgagor's agent for the payment of
Impositions or Insurance Premiums and the Escrow Fund shall not constitute a
trust fund and may be commingled with other monies held by Mortgagee. No
earnings or interest on the Escrow Fund shall be payable to Mortgagor.
Notwithstanding anything contained in this paragraph 5 to the contrary, so long
as (a) the Prime Tenant is the sole tenant of the entire Premises pursuant to
the Prime Lease, (b) the Prime Lease is in full force and effect, (c) no default
or event which with the passing of time or the giving of notice would become a
default has occurred under the Prime Lease, and (d) the Prime Tenant is
responsible for paying the Impositions under the Prime Lease and actually pays
the Impositions before they become delinquent, then the obligations of Mortgagor
under this paragraph 5 shall be deemed to have been met; provided, however, in
the event that Mortgagor is obligated pursuant to the Prime Lease to pay for or
maintain insurance of any type, Mortgagor shall be required to escrow sums with
Mortgagee for such required insurance pursuant to the terms of this paragraph 5.
6. Condemnation. Mortgagor shall promptly give Mortgagee
notice of the actual or threatened commencement of any
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condemnation or eminent domain proceeding and shall deliver to Mortgagee copies
of any and all papers served in connection with such proceedings.
Notwithstanding any taking by any public or quasi-public authority through
eminent domain or otherwise (including but not limited to any transfer made in
lieu of or in anticipation of the exercise of such taking), Mortgagor shall
continue to pay the Debt at the time and in the manner provided for its payment
in the Note and in this Mortgage and the Debt shall not be reduced until any
award or payment therefor shall have been actually received and applied by
Mortgagee, after the deduction of expenses of collection, to the reduction or
discharge of the Debt. Mortgagee shall not be limited to the interest paid on
the award by the condemning authority but shall be entitled to receive out of
the award interest at the rate or rates provided herein and in the Note.
Mortgagee may apply any such award or payment to the reduction or discharge of
the Debt whether or not then due and payable. Any reduction of the Debt pursuant
to the terms of this paragraph 6 shall not be deemed a prepayment of the Debt
and no prepayment consideration, if any, shall be due. If the Mortgaged Property
is sold, through foreclosure or otherwise, prior to the receipt by Mortgagee of
such award or payment, Mortgagee shall have the right, whether or not a
deficiency judgment on the Note shall have been sought, recovered or denied, to
receive said award or payment, or a portion thereof sufficient to pay the Debt.
7. Leases and Rents. (a) Mortgagee has the right to
enter the Mortgaged Property for the purpose of enforcing, on the
terms hereof, its interest in the Leases and the Rents, this
Mortgage constituting a present absolute assignment, grant and
transfer thereof.
(b) Upon or at any time after the occurrence of an Event of Default
(hereinafter defined), Mortgagee may enter upon the Mortgaged Property, and
collect, retain and apply the Rents toward payment of the Debt in such priority
and proportions as Mortgagee in its discretion shall deem proper. All Leases
(except as set forth below in clause (viii) below in connection with an
assignment or sublet to a Related Corporation (as defined in the Prime Lease)
and other than the Prime Lease) shall be subject to the prior approval of
Mortgagee and which approval shall not be unreasonably withheld or delayed. Upon
request, Mortgagor shall furnish Mortgagee with executed copies of all Leases.
No material changes may be made to the Mortgagee- approved lease without the
prior written consent of Mortgagee, which consent may not be unreasonably
withheld. In addition, except as otherwise set forth below in clause (viii)
below in connection with an assignment or sublet to a Related Corporation (as
defined in the Prime Lease), all renewals of Leases and all proposed Leases
shall be arms-length transactions with terms
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which are commercially reasonable and consistent with that of the prevailing
rental market. All Leases shall provide that they are subordinate to this
Mortgage and that the lessee attorns to Mortgagee. Mortgagor (i) shall observe
and perform all the obligations imposed upon the lessor under the Leases and
shall not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (ii) shall promptly send copies to Mortgagee of all
notices of default which Mortgagor shall send or receive thereunder; (iii) shall
enforce all of the material terms, covenants and conditions contained in the
Leases upon the part of the lessees thereunder to be observed or performed,
short of termination thereof; (iv) shall not collect any of the Rents more than
one (1) month in advance; (v) shall not execute any other assignment of lessor's
interest in the Leases or the Rents; (vi) shall not, except as otherwise
provided in clause (viii) of this Section 7(b), materially alter, modify or
change the terms of the Leases without the prior written consent of Mortgagee,
or cancel or terminate the Leases or accept a surrender thereof except as
required by the terms of the Leases or with Mortgagee's consent, or convey
transfer or suffer or permit a conveyance or transfer of the Premises or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, lessees thereunder; (vii) shall
not alter, modify or change the terms of any guaranty of the Leases or cancel or
terminate such guaranty without the prior written consent of Mortgagee; (viii)
shall not consent to any assignment of or subletting under the Leases not in
accordance with their terms, without the prior written consent of Mortgagee,
other than an assignment or sublet of the Prime Lease to a Related Corporation
(as defined in the Prime Lease) as provided in Article XXIV of the Prime Lease;
and (ix) shall execute and deliver at the request of Mortgagee all such further
assurances, confirmations and assignments in connection with the Mortgaged
Property as Mortgagee shall from time to time reasonably require. In addition to
the rights which Mortgagee may have herein, upon the occurrence of any Event of
Default, Mortgagee, at its option, may require Mortgagor to vacate and surrender
possession of the Mortgaged Property to Mortgagee or to such receiver and, in
default thereof, Mortgagor may be evicted by summary proceedings or otherwise.
Nothing contained in this paragraph shall be construed as imposing on Mortgagee
any of the obligations of lessor under the Leases.
8. Maintenance of Mortgaged Property. Mortgagor shall
cause the Mortgaged Property to be maintained in a good and safe
condition and repair. Except as may otherwise be provided in the
Prime Lease, the Improvements and the Equipment shall not be
removed, demolished or materially altered except (a) for normal
replacement of the Equipment which has become obsolete or unfit
for use or which is no longer useful in the management, operation
13
or maintenance of the Mortgaged Property or (b) provided the Prime Lease is in
effect, as provided in the Prime Lease. Mortgagor shall, or shall cause Prime
Tenant to, promptly replace any such Equipment so disposed of or removed with
other Equipment of equal quality, value, serviceability and use, free of
superior title, liens and claims. Mortgagor shall, or shall cause Prime Tenant
to, promptly comply with all existing and future governmental laws, orders,
ordinances, rules and regulations affecting the Mortgaged Property, or the use
thereof, and shall, subject to the provisions of paragraph 3, promptly repair,
replace or rebuild any part of the Mortgaged Property which may be destroyed by
any casualty (including any casualty for which insurance was not obtained or
obtainable), or become damaged, worn or dilapidated or which may be affected by
any proceeding of the character referred to in paragraph 6 hereof or as provided
in Section 59(a) hereof and shall complete and pay for, within a reasonable
time, any structure at any time in the process of construction or repair on the
Premises. Mortgagor shall not initiate, join in, or consent to any change in any
private restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Mortgaged Property or any
part thereof. Mortgagor shall not consent to or initiate the joint assessment of
the Premises and the Improvements (a) with any other real property constituting
a separate tax lot and Mortgagor represents and covenants that the Premises and
the Improvements are and shall remain a separate tax lot or one or more separate
tax lots or (b) with any portion of the Mortgaged Property which may be deemed
to constitute personal property or which shall be assessed or levied or charged
to the Mortgaged Property as a single lien.
9. Transfer or Encumbrance of the Mortgaged Property. (a)
_________________________________________________
Mortgagor acknowledges that Mortgagee has examined and relied on
the creditworthiness of Mortgagor and experience of Mortgagor in
owning and operating properties such as the Mortgaged Property in
agreeing to make the loan secured hereby, and that Mortgagee will
continue to rely on Mortgagor's ownership of the Mortgaged
Property as a means of maintaining the value of the Mortgaged
Property as security for repayment of the Debt. Mortgagor
acknowledges that Mortgagee has a valid interest in maintaining
the value of the Mortgaged Property so as to ensure that, should
Mortgagor default in the repayment of the Debt, Mortgagee can
recover the Debt by a sale of the Mortgaged Property.
(b) (i) Except as set forth in Section 9(b)(ii) below, Mortgagor shall
not, without the prior written consent of Mortgagee, further encumber the
Mortgaged Property or any part thereof or permit the further encumbrance of the
Mortgaged Property or any part thereof, or pledge the Mortgaged Property or any
part thereof. Mortgagor shall not, without the prior written
14
consent of Mortgagee, sell, transfer or convey the Mortgaged Property or any
part thereof or the right to manage or control the operation of the Mortgaged
Property or any part thereof or permit the Mortgaged Property or any part
thereof to be sold, transferred or conveyed. A sale, transfer or conveyance
within the meaning of this paragraph 9 shall be deemed to include (a) an
installments sales agreement wherein Mortgagor agrees to sell the Mortgaged
Property or any part thereof for a price to be paid in installments; (b) an
agreement by Mortgagor (other than the Prime Lease) leasing all or a substantial
part of the Mortgaged Property or a sale, assignment or other transfer of, or
the grant of a security interest in, Mortgagor's right, title and interest in
and to any Leases or any Rents; (c) if Mortgagor, any Guarantor (hereinafter
defined), any managing member, or any general partner of Mortgagor or Guarantor
is a corporation, the voluntary or involuntary sale, conveyance or transfer of
such corporation's stock or the creation or issuance of new stock in a single
transaction or cumulatively over any series of transactions, by which, in the
aggregate, more than 49% of such corporation's stock shall at any time be vested
in a party or parties who are not now stockholders; (d) if Mortgagor, any
Guarantor, any managing member, or any general partner of Mortgagor or Guarantor
is a limited or general partnership or joint venture, the change, removal or
resignation of a general partner or managing partner or the transfer of the
partnership interest of any general partner or managing partner; and (e) if
Mortgagor, any Guarantor, any managing member, or any general partner of
Mortgagor is a limited liability company, the voluntary or involuntary sale,
conveyance or transfer of such limited liability company's membership interests
by which an aggregate of more than 10% of such limited liability company's
membership interests shall be vested in a party of parties who are not now
members; or (f) the removal or resignation of the managing agent, if any, for
the Mortgaged Property or the transfer of ownership, management or control of
such managing agent to a person or entity other than the general partner or
managing partner, if Mortgagor is a partnership, or the managing member, if
Mortgagor is a limited liability company of Mortgagor without the consent of
Mortgagee.
(ii) Notwithstanding anything to the contrary contained
herein, Mortgagor shall have the one-time right to transfer the Mortgaged
Property to a single-purpose, bankruptcy remote entity (including an Affiliate
(as hereinafter defined) of Mortgagor or Prime Tenant) without the consent of
Mortgagee provided that (A) no Event of Default shall have occurred hereunder;
(B) the Prime Lease is in effect; (C) the transferee shall assume the
obligations of the Mortgagor hereunder and Mortgagee shall receive such evidence
as it, in its sole discretion, finds satisfactory that all approvals and
authorizations, if any, for
15
such transfer and assumption of this Mortgage have been obtained; (D) Mortgagor
at its sole cost and expense, shall deliver such reasonable opinions of counsel
as Mortgagee may, in its sole discretion, request; (E) Mortgagor shall pay for
all costs and expense incurred by Mortgagee in connection with such transfer,
including all reasonable attorneys' fees; and (F) if the transferee is not an
Affiliate of Mortgagor or Prime Tenant, Mortgagor shall pay to Mortgagee, in
addition to those amounts payable under subsection (G) hereof, an amount equal
to 1% of the outstanding principal amount of the Debt. "Affiliate" shall mean a
corporation or other business entity which controls, is controlled by or is
under common control with Mortgagor or Prime Tenant, which, for the purposes of
this definition, shall mean, with respect to any person or entity the
possession, directly or indirectly, of the power to direct or cause the
direction of the management of such person or entity, whether through the
ownership of voting security or other ownership interests.
(c) Mortgagee reserves the right to condition the consent required
hereunder upon a modification of the terms hereof and on assumption of this
Mortgage as so modified by the proposed transferee, payment of a transfer fee,
or such other conditions as Mortgagee shall determine in its sole discretion to
be in the interest of Mortgagee. Mortgagee shall not be required to demonstrate
any actual impairment of its security or any increased risk of default hereunder
in order to declare the Debt immediately due and payable upon Mortgagor's sale,
transfer, conveyance or further encumbrance of the Mortgaged Property without
Mortgagee's consent. This provision shall apply to every sale, transfer,
conveyance, or further encumbrance of the Mortgaged Property or any part thereof
regardless of whether voluntary or not, or whether or not Mortgagee has
consented to any previous sale, transfer, conveyance, or further encumbrance of
the Mortgaged Property. Mortgagor was ably represented by an attorney-at-law in
the delivery of this Mortgage, the terms and conditions of which were bargained
for at arm's length and without duress of any kind.
(d) After prior written notice to Mortgagee, Mortgagor, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount or validity or
application in whole or in part of any lien which is subordinate to the lien of
this Mortgage, provided that (i) Mortgagor is not in default under the Note or
this Mortgage, (ii) such proceedings shall suspend the collection of the lien
from Mortgagor and from the Mortgaged Property, (iii) such proceeding shall be
permitted under and be conducted in accordance with the provisions of any other
instrument to which Mortgagor is subject and shall not constitute a default
thereunder, (iv) neither the Mortgaged Property nor any
16
part thereof or interest therein will be in danger of being sold, forfeited,
terminated, cancelled or lost, (v) Mortgagor or the Prime Tenant shall have set
aside adequate reserves for the payment of the lien, together with all interest
and penalties thereon, and (vi) Mortgagor shall have furnished such security as
may be required in the proceeding, or as may be requested by Mortgagee to insure
the payment of any such lien, together with all interest and penalties thereon;
provided, however, so long as (a) the Prime Tenant is the sole tenant of the
entire Premises pursuant to the Prime Lease, (b) the Prime Lease is in full
force and effect and (c) no default or event which with the passing of time or
the giving of notice would become a default has occurred under the Prime Lease,
the Prime Tenant may contest any such lien in accordance with the terms of the
Prime Lease and the provisions of clauses (i) through (vi) of this paragraph
9(d).
10. Estoppel Certificates.
(a) After request by Mortgagee, Mortgagor, within fifteen (15) days and
at its expense, will furnish Mortgagee with a statement, duly acknowledged and
certified, setting forth the amount of the original principal amount of the
Note, the unpaid principal amount of the Note, the date payments of interest
and/or principal were last paid, any offsets or defenses to the payment of the
Debt and that the Note and this Mortgage are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification.
(b) After request by Mortgagee, Mortgagor will use its best efforts
(which shall not include the expenditure of any sums of money) to furnish
Mortgagee, within thirty (30) days, with estoppel certificates in form and
substance reasonably satisfactory to Mortgagee from any lessees under then
existing Leases.
11. Notices. Any notice, demand, statement, request or consent made
hereunder shall be in writing and delivered personally or mailed to the party to
whom the notice, demand or request is being made by certified or registered
mail, return receipt requested, as follows and shall be deemed given when
delivered personally or placed in the United States mail:
if to Mortgagee: at the address first written above
with a copy to:
Xxxxx & Xxxx LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
17
if to Mortgagor: at the address first written above
or such other address as either Mortgagor or Mortgagee shall hereafter specify
by written notice as provided herein.
12. Sale of Mortgaged Property. If this Mortgage is foreclosed, the
Mortgaged Property, or any interest therein, may at the discretion of Mortgagee,
be sold in one or more parcels or in several interests or portions and in any
order or manner. Mortgagor agrees that, in the event that holder of the
Mortgage, in the exercise of the power of sale herein given, elects to sell in
parcels, such sale may be held from time to time and the power of sale shall not
be exhausted until all of the Mortgaged Property not previously released shall
have been sold.
13. Changes in the Laws Regarding Taxation. If any law is enacted or
adopted or amended after the date of this Mortgage which deducts the Debt from
the value of the Mortgaged Property for the purpose of taxation and which
imposes a tax, either directly or indirectly, on the Note, the Debt or
Mortgagee's interest in the Mortgaged Property, Mortgagor will pay such tax,
with interest and penalties thereon. In the event Mortgagee is advised by
counsel chosen by it that the payment of such tax or interest and penalties by
Mortgagor would be unlawful, or taxable to Mortgagee or unenforceable or provide
the basis for a defense of usury, then in any such event, Mortgagee shall have
the option, by written notice of not less than thirty (30) days, to declare the
Debt immediately due and payable.
14. No Credits on Account of the Debt. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Impositions assessed against the Mortgaged Property or any part
thereof and no deduction shall otherwise be made or claimed from the taxable
value of the Mortgaged Property, or any part thereof, by reason of this Mortgage
or the Debt. In the event such claim, credit or deduction shall be required by
law, Mortgagee shall have the option, by written notice of not less than ninety
(90) days, to declare the Debt immediately due and payable.
15. Documentary Stamps. If at any time the United States of America,
any State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Mortgagor will pay for the same, with interest and
penalties thereon, if any.
16. Right of Entry. Mortgagee and its agents shall have
the right to enter and inspect the Mortgaged Property at all
18
reasonable times, and, except in the event of an emergency, upon reasonable
notice. Such entry is to be accomplished in a reasonable manner which avoids
interference with the conduct by the Prime Tenant of its operations. Mortgagor
shall pay Mortgagee an annual inspection fee of $750 to reimburse Mortgagee for
Mortgagee's costs of inspecting the Mortgaged Property. Mortgagor shall pay such
fee within ten (10) days of demand by Mortgagee, and if Mortgagor shall fail to
pay such fee within such period, Mortgagee may, at its option, deduct such
amount from the Escrow Fund or declare an Event of Default.
17. Books and Records. Mortgagor will keep and maintain or will cause
to be kept and maintained on a fiscal year basis in accordance with generally
accepted accounting practices consistently applied proper and accurate books,
records and accounts reflecting all of the financial affairs of Mortgagor and
all items of income and expense in connection with the operation of the
Mortgaged Property or in connection with any services, equipment or furnishings
provided in connection with the operation of the Mortgaged Property. Mortgagee
shall have the right from time to time at all times during normal business hours
to examine such books, records and accounts at the office of Mortgagor or other
person maintaining such books, records and accounts and to make copies or
extracts thereof as Mortgagee shall desire. Provided no Event of Default
hereunder shall have occurred and be continuing, Mortgagor will furnish
Mortgagee annually, within ninety (90) days next following the end of each
fiscal year of Mortgagor, with (a) a complete executed copy of a financial
statement of Mortgagor certified by the chief financial officer of the Mortgagor
acceptable to Mortgagee covering such fiscal year and containing: a fully
itemized statement of income and expenses, a balance sheet, and a statement of
changes in financial condition or position, and (b) copies of all tax returns
filed by Mortgagor. If an Event of Default shall have occurred and be
continuing, Mortgagor shall (i) provide annual audited financial statements
within ninety (90) days next following the end of each fiscal year of Mortgagor,
acceptable to Mortgagee covering such fiscal year and containing: a fully
itemized statement of income and expenses, a balance sheet, and a statement of
changes in financial condition or position, and (ii) furnish Mortgagee
quarterly, within thirty (30) days next following the end of each fiscal quarter
of Mortgagor, with a complete unaudited financial statement of Mortgagor for
such fiscal quarter prepared and certified by an officer of Mortgagor and in
form acceptable to Mortgagee and containing a fully itemized statement of income
and expenses of the Mortgaged Property and with rent rolls and schedules of the
Mortgaged Property. Within ninety (90) days after the end of each fiscal year of
Mortgagor, Mortgagor shall furnish to Mortgagee a certificate signed by a duly
authorized representative of
19
Mortgagor certifying on the date thereof either that there does or does not
exist an event which constitutes, or which upon notice or lapse of time or both
would constitute, a default under the Note or this Mortgage and if such event
exists, the nature thereof and the period of time it has existed. Mortgagor
shall furnish Mortgagee promptly upon transmission thereof with copies of all
financial statements, proxy statements, notices and reports of Prime Tenant as
said entity shall send to its public shareholders and copies of all registration
statements (other than Form S-8 registration statements) and each Form 8-K, Form
10-K and Form 10-Q which it files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission). Mortgagor shall also furnish, or shall
cause Prime Tenant to furnish to Mortgagee, within ten (10) days after request,
such further detailed information covering the leasing and operation of the
Mortgaged Property and the financial affairs of Mortgagor and Prime Tenant and
any Guarantor as may be reasonably requested by Mortgagee. Mortgagee agrees
that, except as provided in Section 37 hereof, any non-public information (i)
shall be kept strictly confidential; (ii) shall be used solely for the purposes
of analyzing and evaluating the loan secured hereby and any securitization of
such loan; and (iii) shall not be used for proprietary purposes except as set
forth herein.
18. Performance of Other Agreements. Mortgagor shall
observe and perform, or cause to be observed and performed, each
and every term to be observed or performed by Mortgagor pursuant
to the terms of any agreement or recorded instrument affecting or
pertaining to the Mortgaged Property.
19. Events of Default. The Debt shall become immediately
due at the option of Mortgagee upon any one or more of the
following events ("Event of Default"):
(a) if any portion of the Debt is not paid when the
same is due;
(b) if any of the Impositions are not paid prior to
delinquency thereof;
(c) if the terms and conditions of paragraph 3 are
violated;
(d) if Mortgagor violates or does not comply with any of the
provisions of paragraphs 7 or 9 or paragraph 48 if such violation is
reportable to any local, state or federal agency;
20
(e) if any representation or warranty of Mortgagor, or
performance by Mortgagor of any of the terms of this Mortgage, made
herein or in any such guaranty, or in any certificate, report,
financial statement or other instrument furnished to Mortgagee shall
prove false or misleading in any material respect;
(f) if Mortgagor shall make an assignment for the
benefit of creditors or if Mortgagor shall generally not be
paying its debts as they become due;
(g) if a receiver, liquidator or trustee of Mortgagor shall be
appointed or if Mortgagor shall be adjudicated a bankrupt or insolvent,
or if any petition for bankruptcy, reorganization or arrangement
pursuant to federal bankruptcy law, or any similar federal or state
law, shall be filed by or against, consented to, or acquiesced in by,
Mortgagor or if any proceeding for the dissolution or liquidation of
Mortgagor shall be instituted; however, if such appointment,
adjudication, petition or proceeding was involuntary and not consented
to by Mortgagor, upon the same not being discharged, stayed or
dismissed within sixty (60) days or if Mortgagor shall generally not be
paying its debts as they become due;
(h) if Mortgagor shall be in default under any other mortgage
or security agreement covering any part of the Mortgaged Property
whether it be superior or junior in lien to this Mortgage;
(i) if the Mortgaged Property becomes subject to any
mechanic's, materialmen's or other lien, other than a lien for local
real estate taxes and assessments not then delinquent, and such lien
shall remain undischarged of record (by payment, bonding, or otherwise)
for thirty (30) days unless such lien is being contested in accordance
with the terms of this Mortgage;
(j) if Mortgagor fails to cure, or to cause Prime Tenant to
cure, promptly any violations of laws or ordinances affecting or which
may be interpreted to affect the Mortgaged Property;
(k) [intentionally omitted];
(l) if the Prime Lease shall terminate, or if the Prime Tenant
shall be in default beyond any applicable notice and grace period, if
any, under any of the terms of the Prime Lease, or if Mortgagor shall
be in default under any of the terms of the Prime Lease;
21
(m) if (i) any representation or warranty made by Mortgagor
under paragraph 54 fails to be true and correct in all respects, (ii)
Mortgagor fails to provide Mortgagee with the written certifications
and evidence referred to in paragraph 54, or (iii) Mortgagor
consummates a transaction which would cause this Mortgage or any
exercise of Mortgagee's rights under this Mortgage, or the Other
Security Documents to constitute a non-exempt prohibited transaction
under ERISA or a violation of a state statute regulating governmental
plans, or otherwise subjecting Mortgagee to liability for violation of
ERISA or such state statute;
(n) if Mortgagor shall be in default beyond any applicable
notice or grace periods under any one or more of those certain
mortgages more particularly described in Exhibit C attached hereto and
made a part hereof or the notes secured thereby; or
(o) if Mortgagor shall be in default under any of the other
terms, covenants or conditions of the Note, this Mortgage or the Other
Security Documents other then as set forth in (a)-(n) above for ten
(10) days after notice from Mortgagee in the case of any default which
can be cured by the payment of a sum of money or for thirty (30) days
after notice from Mortgagee in the case of any other default, provided
that if such default is susceptible of cure but cannot reasonably be
cured within such thirty (30) day period and Mortgagor shall have
commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such
thirty (30) day period shall be extended for so long as it shall
require Mortgagor in the exercise of due diligence to cure such
default.
Upon the occurrence of any Event of Default, Mortgagee may take such
action, without notice or demand, as it deems advisable to protect and enforce
its rights against and in and to the Mortgaged Property, including, but not
limited to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such order as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies: (i) declare the entire Debt to be immediately due and payable; (ii)
institute proceedings for the complete foreclosure of this Mortgage in which
case the Mortgaged Property or any interest therein may be sold for cash or upon
credit in one or more parcels or in several interests or portions and in any
order or manner; (iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute proceedings for
the partial foreclosure
22
of this Mortgage for the portion of the Debt then due and payable, subject to
the continuing lien of this Mortgage for the balance of the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or any part thereof and
all estate, claim, demand, right, title and interest of Mortgagor therein and
rights of redemption thereof, pursuant to power of sale or otherwise, at one or
more sales, as an entity or in parcels, at such time and place, upon such terms
and after such notice thereof as may be required or permitted by law; (v)
institute an action, suit or proceeding in equity for the specific performance
of any covenant, condition or agreement contained herein, in the Note or in any
of the Other Security Documents; (vi) recover judgment on the Note either
before, during or after any proceedings for the enforcement of this Mortgage;
(vii) apply for the appointment of a trustee, receiver, liquidator or
conservator of the Mortgaged Property, without notice and without regard for the
adequacy of the security for the Debt and without regard for the solvency of the
Mortgagor, any Guarantor or of any person, firm or other entity liable for the
payment of the Debt; (viii) enforce Mortgagee's interest in the Leases and Rents
and enter into or upon the Mortgaged Property, either personally or by its
agents, nominees or attorneys, and dispossess Mortgagor and its agents and
servants therefrom, and thereupon Mortgagee may (A) use, operate, manage,
control, insure, maintain, repair, restore and otherwise deal with all and every
part of the Mortgaged Property and conduct the business thereat; (B) complete
any construction on the Mortgaged Property in such manner and form as Mortgagee
deems advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Mortgaged Property; (D) exercise all rights and powers
of Mortgagor with respect to the Mortgaged Property, whether in the name of
Mortgagor or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and demand, xxx for,
collect and receive all earnings, revenues, rents, issues profits and other
income of the Mortgaged Property and every part thereof; and (E) apply the
receipts from the Mortgaged Property to the payment of the Debt, after deducting
therefrom all expenses (including, without limitation, attorneys' fees) incurred
in connection with the aforesaid operations and all amounts necessary to pay the
Impositions, in connection with the Mortgaged Property, as well as reasonable
compensation for the services of Mortgagee, its counsel, agents and employees;
or (ix) pursue such other rights and remedies as may be available at law or in
equity.
20. Right to Cure Defaults. Upon the occurrence of any
Event of Default or if Mortgagor fails to make any payment or to
do any act as herein provided, Mortgagee may, but without any
obligation to do so and without notice to or demand on Mortgagor
and without releasing Mortgagor from any obligation hereunder,
23
make or do the same in such manner and to such extent as Mortgagee may deem
necessary to protect the security hereof. Mortgagee is authorized to enter upon
the Mortgaged Property for such purposes, or appear in, defend, or bring any
action or proceedings to protect its interest in the Mortgaged Property or to
foreclose this Mortgage or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by law), with
interest as provided in this paragraph, shall constitute a portion of the Debt
and shall be due and payable to Mortgagee. All such costs, payments and expenses
incurred by Mortgagee in remedying such Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear interest as set
forth in the Note, for the period after notice from Mortgagee that such cost or
expense was incurred to the date of payment to Mortgagee. All such costs,
payments and expenses incurred by Mortgagee together with interest thereon
calculated at the above rate shall be deemed to constitute a portion of the Debt
and be secured by this Mortgage and shall be immediately due and payable upon
demand by Mortgagee therefor.
21. [Intentionally omitted].
22. Prepayment After Event of Default. If following the occurrence of
any Event of Default, Mortgagor shall tender payment of an amount sufficient to
satisfy the Debt in whole or in part at any time prior to a foreclosure sale of
the Mortgaged Property, and if at the time of such tender prepayment of the
principal balance of the Note is not permitted by the Note, Mortgagor shall, in
addition to the entire Debt, also pay to Mortgagee a sum equal to interest which
would have accrued on the principal balance of the Note at the rate or rates
specified in the Note from the date of such tender to the earlier of (a) the
Maturity Date, as defined in the Note, or (b) the first day of the period during
which prepayment of the principal balance of the Note would have been permitted,
together with a prepayment premium equal to the prepayment premium which would
have been payable as of the first day of the period during which prepayment
would have been permitted. If at the time of such tender prepayment of the
principal balance of the Note is permitted, such tender by Mortgagor shall be
deemed to be a voluntary prepayment of the principal balance of the Note, and
Mortgagor shall, in addition to the entire Debt, also pay to Mortgagee the
applicable prepayment premium specified in the Note or this Mortgage.
23. Appointment of Receiver. The holder of this Mortgage,
upon the occurrence of an Event of Default or in any action to
foreclose this Mortgage or upon the actual or threatened waste to
any part of the Mortgaged Property, shall be entitled to the
24
appointment of a receiver without notice and without regard to the value of the
Mortgaged Property as security for the Debt, or the solvency or insolvency of
any person liable for the payment of the Debt.
24. Restoration of Rights. In case Mortgagee shall have proceeded to
enforce any right under this Mortgage by foreclosure sale, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely, then, in every such case, Mortgagor and
Mortgagee shall be restored to their former positions and rights hereunder with
respect to the Mortgaged Property subject to the lien hereof.
25. Non-Waiver. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) failure of Mortgagee to comply with any request of
Mortgagor or Guarantors to take any action to foreclose this Mortgage or
otherwise enforce any of the provisions hereof or of the Note or the Other
Security Documents, (b) the release, regardless of consideration, of the whole
or any part of the Mortgaged Property or any other security for the Debt, or of
any person liable for the Debt or portion thereof, or (c) any agreement or
stipulation by Mortgagee extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or the Other Security
Documents. Mortgagee may resort for the payment of the Debt to any other
security held by Mortgagee in such order and manner as Mortgagee, in its
discretion, may elect. Mortgagee may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Mortgagee thereafter to foreclose this Mortgage. The rights of
Mortgagee under this Mortgage shall be separate, distinct and cumulative and
none shall be given effect to the exclusion of the others. No act of Mortgagee
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision. Mortgagee shall not be limited exclusively
to the rights and remedies herein stated but shall be entitled to every right
and remedy now or hereafter afforded by law or in equity.
26. Liability. If Mortgagor consists of more than one
person, the obligations and liabilities of each such person
hereunder shall be joint and several.
27. Security Agreement. This Mortgage is both a real
property mortgage and a "security agreement" within the meaning
of the Uniform Commercial Code. The Mortgaged Property includes
both real and personal property and all other rights and
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interests, whether tangible or intangible in nature, of Mortgagor in the
Mortgaged Property. Mortgagor by executing and delivering this Mortgage has
granted to Mortgagee, as security for the Debt, a security interest in the
Mortgaged Property to the full extent that the Mortgaged Property may be subject
to the Uniform Commercial Code of the state or states where the Mortgaged
Property is situated (said portion of the Mortgaged Property so subject to the
Uniform Commercial Code being called in this paragraph the "Collateral"). If an
Event of Default shall occur, Mortgagee, in addition to any other rights and
remedies which it may have, shall have and may exercise immediately and without
demand, any and all rights and remedies granted to a secured party upon default
under the Uniform Commercial Code, including, without limiting the generality of
the foregoing, the right to take possession of the Collateral or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care, protection and preservation of the Collateral. Upon request or demand of
Mortgagee, Mortgagor shall at its expense assemble the Collateral and make it
available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor
shall pay to Mortgagee on demand any and all expenses, including legal expenses
and attorneys' fees, incurred or paid by Mortgagee in protecting its interest in
the Collateral and in enforcing its rights hereunder with respect to the
Collateral. Any notice of sale, disposition or other intended action by
Mortgagee with respect to the Collateral sent to Mortgagor in accordance with
the provisions hereof at least five (5) days prior to such action, shall
constitute reasonable notice to Mortgagor. The proceeds of any disposition of
the Collateral, or any part thereof, may be applied by Mortgagee to the payment
of the Debt in such priority and proportions as Mortgagee in its discretion
shall deem proper.
28. Not Foreign Person. Mortgagor represents and warrants
that Mortgagor is not a "foreign person" within the meaning of
ss.1445(f)(3) of the Internal Revenue Code of 1986 as amended and
the related Treasury Department regulations, including temporary
regulations.
29. Actions and Proceedings. Mortgagee has the right to appear in and
defend any action or proceeding brought with respect to the Mortgaged Property
and to bring any action or proceedings, in the name and on behalf of Mortgagor,
which Mortgagee, in its reasonable discretion, decides should be brought to
protect its interest in the Mortgaged Property. Mortgagee shall, at its option,
be subrogated to the lien of any mortgage or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.
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30. Inapplicable Provisions. If any term, covenant or
condition of the Note or this Mortgage is held to be invalid,
illegal or unenforceable in any respect, the Note and this
Mortgage shall be construed without such provision.
31. Duplicate Originals. This Mortgage may be executed in
any number of duplicate originals and each such duplicate
original shall be deemed to constitute but one and the same
instrument.
32. Prepayment. The Debt may be prepaid only in accordance
with the terms of the Note.
33. Certain Definitions. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "Mortgagor" shall mean "each Mortgagor and/or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein," the
word "Mortgagee" shall mean "Mortgagee or any subsequent holder of the Notes,"
the word "Note" shall mean "the Note or any other evidence of indebtedness
secured by this Mortgage," the word "person" shall include an individual,
corporation, partnership, trust, limited liability company, unincorporated
association, government, governmental authority, or other entity, the words
"Mortgaged Property" shall include any portion of the Mortgaged Property or
interest therein, and the word "Debt" shall mean "the principal outstanding
balance of the Note with interest thereon as provided in the Note and this
Mortgage and all other sums which may or shall become due pursuant to the Note
and this Mortgage and secured by this Mortgage"; whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa.
34. No Oral Change. This Mortgage, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated orally
or by any act on the part of Mortgagor or Mortgagee, but only by an agreement in
writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
35. Change of Ownership. For recording on its records a change of
ownership of the Mortgaged Property approved by Mortgagee, Mortgagee shall be
entitled, at its option, to receive an administrative fee; provided, however,
that in no event shall this fee be payable where the same would render the loan
evidenced by the Note usurious under applicable law.
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36. Waiver of Counterclaim. Mortgagor hereby waives the right to assert
a counterclaim, other than compulsory counterclaim, in any action or proceeding
brought against it by Mortgagee, and waives trial by jury in any action or
proceeding brought by either party hereto against the other or in any
counterclaim asserted by Mortgagee against Mortgagor, or in any matters
whatsoever arising out of or in any way connected with the Mortgagor or the
Debt.
37. Further Acts, Cooperation. (a) Mortgagor will, at the cost of
Mortgagor, and without expense to Mortgagee, do, execute, acknowledge and
deliver all and every such further acts, deeds, conveyances, mortgages, deeds of
trust, assignments, notices of assignments, transfers and assurances as
Mortgagee shall, from time to time, require, for the better assuring, conveying,
assigning, transferring, and confirming unto Mortgagee the property and rights
hereby mortgaged, given, granted, bargained, sold, aliened, enfeoffed, conveyed,
confirmed, pledged, assigned and hypothecated or intended now or hereafter so to
be, or which Mortgagor may be or may hereafter become bound to convey or assign
to Mortgagee, or for carrying out the intention or facilitating the performance
of the terms of this Mortgage or for filing, registering or recording this
Mortgage and, on demand, will execute and deliver and hereby authorizes
Mortgagee to execute in the name of Mortgagor or without the signature of
Mortgagor to the extent Mortgagee may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments, to evidence
more effectively the lien hereof upon the Mortgaged Property. Mortgagor grants
to Mortgagee an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies available
to Mortgagee at law and in equity, including without limitation such rights and
remedies available to Mortgagee pursuant to this paragraph 37.
(b) Mortgagor acknowledges that Mortgagee and its successors and
assigns may (a) sell this Mortgage, the Note and the Other Security Documents to
one or more investors as a whole loan, (b) participate the loan (the "Loan")
secured by this Mortgage to one or more investors, (c) deposit this Mortgage,
the Note and the Other Security Documents with a trust, which trust may sell
certificates to investors evidencing an ownership interest in the trust assets
or (d) otherwise sell the Loan or interest therein to investors (the
transactions referred to in clauses (a) through (d) are hereinafter referred to
as "Secondary Market Transactions"). Mortgagor shall cooperate in good faith
with Mortgagee in effecting any such Secondary Market Transaction and shall
cooperate in good faith to implement all requirements imposed by any Rating
Agency involved in any Secondary Market Transaction including, without
limitation, all structural or
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other changes to the Loan, modifications to any documents evidencing or securing
the Loan, delivery of opinions of counsel acceptable to such Rating Agency and
addressing such matters as the rating agency may require; provided, however,
that Mortgagor shall not be required to modify any documents evidencing or
securing the Loan which would modify any material economic term of the Loan to
the detriment of Mortgagor. Mortgagor shall provide such information and
documents relating to Mortgagor, Guarantor, if any, the Mortgaged Property,
Prime Tenant and any other tenant of the Improvements as Mortgagee may
reasonably request in connection with a Secondary Market Transaction. Mortgagee
shall have the right to provide to prospective investors (the "Investors") or
any Rating Agency any information in its possession, including, without
limitation, financial statements relating to Mortgagor, the Guarantor, if any,
the Mortgaged Property, Prime Tenant and any other tenant of the Improvements.
Mortgagor acknowledges that certain information regarding the Loan and the
parties thereto and the Mortgaged Property may be included in a private
placement memorandum, prospectus or other disclosure documents. Mortgagor may
notify Mortgagee in writing of any information it, in its reasonable discretion,
deems to be proprietary in nature (the "Confidential Information"). Mortgagee
shall only release such Confidential Information to Investors as it deems
necessary in connection with the Secondary Market Transaction. Mortgagee shall
use good faith efforts to cause the Investors and any Rating Agency to keep the
Confidential Information confidential, by, among other things, stating in
documents disclosing the Confidential Information that such Confidential
Information (i) shall be used solely for the purposes of analyzing and assessing
the Secondary Market Transaction; (ii) the information shall not be used for any
proprietary purposes other than in connection with the Secondary Market
Transaction; and (iii) such information shall be kept confidential by any party
receiving such information for purposes of analyzing such Secondary Market
Transaction. Nothing contained herein shall be deemed to prohibit (x) disclosure
of non-Confidential Information (y) disclosure of Confidential Information
which, in the opinion of Mortgagee or its counsel, is required by law, and (z)
any Rating Agency from including summary statements, conclusions or analyses
based on the Confidential Information in any reports they prepare and distribute
in connection with the loan secured hereby.
38. Headings, etc. The headings and captions of various paragraphs of
this Mortgage are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
39. Recording of Mortgage, etc. Mortgagor forthwith upon
the execution and delivery of this Mortgage and thereafter, from
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time to time, will cause this Mortgage, and any security instrument creating a
lien or security interest or evidencing the lien hereof upon the Mortgaged
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully protect the lien or security
interest hereof upon, and the interest of Mortgagee in, the Mortgaged Property.
Mortgagor will pay all filing, registration or recording fees, and all expenses
incident to the preparation, execution and acknowledgment of this Mortgage, any
mortgage supplemental hereto, any security instrument with respect to the
Mortgaged Property and any instrument of further assurance, and all federal,
state, county and municipal, taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property or any instrument of further assurance, except where
prohibited by law so to do. Mortgagor shall hold harmless and indemnify
Mortgagee, its successors and assigns, against any liability incurred by reason
of the imposition of any tax on the making and recording of this Mortgage.
40. Usury Laws. This Mortgage and the Note are subject to the express
condition that at no time shall Mortgagor be obligated or required to pay
interest on the principal balance due under the Note at a rate which could
subject the holder of the Note, or the Mortgagee to either civil or criminal
liability as a result of being in excess of the maximum interest rate which
Mortgagor is permitted by law to contract or agree to pay. If by the terms of
this Mortgage or the Note, Mortgagor is at any time required or obligated to pay
interest on the principal balance due under the Note at a rate in excess of such
maximum rate, the rate of interest under the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable shall be
computed at such maximum rate and all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Note.
41. Sole Discretion of Mortgagee. Wherever pursuant to this Mortgage,
Mortgagee exercises any right given to it to approve or disapprove, or any
arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise specifically
provided herein.
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42. Recovery of Sums Required to Be Paid. Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to whether
or not the balance of the Debt shall be due, and without prejudice to the right
of Mortgagee thereafter to bring an action of foreclosure, or any other action,
for a default or defaults by Mortgagor existing at the time such earlier action
was commenced.
43. Marshalling and Other Matters. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of
each and every person acquiring any interest in or title to the Mortgaged
Property subsequent to the date of this Mortgage and on behalf of all persons to
the extent permitted by applicable law.
44. Waiver of Notice. Mortgagor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
this Mortgage specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee is
required by applicable law to give notice, and Mortgagor hereby expressly waives
the right to receive any notice from Mortgagee with respect to any matter for
which this Mortgage does not specifically and expressly provide for the giving
of notice by Mortgagee to Mortgagor unless Mortgagee is required by applicable
law to give notice.
45. Remedies of Mortgagor. In the event that a claim or adjudication is
made that Mortgagee has acted unreasonably or unreasonably delayed acting in any
case where by law or under the Note, this Mortgage or the Other Security
Documents, it has an obligation to act reasonably or promptly, Mortgagee shall
not be liable for any monetary damages, and Mortgagor's remedies shall be
limited to injunctive relief or declaratory judgment.
46. Indemnification. (a) Mortgagor shall protect, indemnify and save
harmless Mortgagee from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expense (including without
limitation reasonable attorneys' fees and expenses whether incurred within or
outside the judicial process), imposed upon or incurred by or asserted against
Mortgagee by reason of (a) ownership of this Mortgage, the Mortgaged Property or
any interest therein or
31
receipt of any Rents; (b) any accident, injury to or death of persons or loss of
or damage to property occurring in, on or about (i) the Mortgaged Property or
any part thereof or (ii) on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways (collectively, the "Adjacent Property"),
unless the Adjacent Property is owned by, or secures a loan made by, Mortgagee
and Mortgagor otherwise has no liability for such accident, injury, death or
loss of or damage to property; (c) any use, nonuse or condition in, on or about
the Mortgaged Property or any part thereof or the Adjacent Property unless the
Adjacent Property is owned by, or secures a loan made by, Mortgagee and
Mortgagor otherwise has no liability for such use, non use or condition; (d) any
failure on the part of Mortgagor to perform or comply with any of the terms of
this Mortgage; (e) performance of any labor or services or the furnishing of any
materials or other property in respect of the Mortgaged Property or any part
thereof; (f) the failure of any person to file timely with the Internal Revenue
Service an accurate Form 0000-X, Xxxxxxxxx for Recipients of Proceeds from Real
Estate, Broker and Barter Exchange Transactions, which may be required in
connection with this Mortgage, or to supply a copy thereof in a timely fashion
to the recipient of the proceeds of the transaction in connection with which
this Mortgage is made; (g) the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release, or threatened release of any Hazardous
Materials (as hereinafter defined) on, from, or affecting the Mortgaged Property
or any other property, unless such other property is owned by, or secures a loan
made by, Mortgagee, and Mortgagor otherwise has no liability therefor; (h) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials; (i) any lawsuit brought
or threatened, settlement reached, or governmental order relating to such
Hazardous Materials; or (j) any violation of laws, orders, regulations,
requirements, or demands of government authorities, which are based upon or in
any way related to such Hazardous Materials including, without limitation, the
costs and expenses of any remedial action, attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses. Nothing
herein shall be construed as indemnifying Mortgagee from such liabilities,
claims, costs and expenses, damages, obligations, claims and causes of action
resulting solely from its own affirmatively negligent, grossly negligent or
willful acts. Any amounts payable to Mortgagee by reason of the application of
this paragraph 46 shall be secured by this Mortgage and shall become immediately
due and payable and shall bear interest at the Default Rate from the date loss
or damage is sustained by Mortgagee until paid. The obligations and liabilities
of Mortgagor under this paragraph 46 shall survive any termination,
32
satisfaction, assignment, entry of a judgment of foreclosure or delivery of a
deed in lieu of foreclosure of this Mortgage.
(b) In the event that any action, suit or proceeding shall be brought
against Mortgagee for which Mortgagee is indemnified herein, Mortgagee shall
notify Mortgagor of the commencement thereof, and Mortgagor shall be entitled,
at its sole cost and expense, acting through counsel reasonably acceptable to
Mortgagee, to participate in, and, to the extent that Mortgagor desires to,
assume and control the defense thereof; provided, however, that Mortgagor shall
have acknowledged in writing its obligation to fully indemnify Mortgagee
hereunder in respect of such proceeding, that no Event of Default shall have
occurred and be continuing and, provided further, that Mortgagor shall not be
entitled to assume control of and, unless named as a party therein, participate
in the defense of any such action, suit or proceeding if (i) based upon a
reasonable reading by Mortgagee or its counsel of the operative pleadings or
initiating papers (x) such action, suit or proceeding involves any risk of
imposition of criminal liability or civil enforcement liability against
Mortgagee, (y) such action, suit, or proceeding involves any risk of any other
civil liability against Mortgagee where the amount in controversy exceeds an
aggregate amount of $5,000,000.00 or will involve a risk of the sale, forfeiture
or loss of, or the creation of any lien (other than a Permitted Encumbrance) on
the Mortgaged Property or any part thereof unless Mortgagor shall have posted a
bond or other security satisfactory to Mortgagee in respect to such risk except
with respect to any risk of imposition of criminal liability on Mortgagee as to
which Mortgagor shall not be entitled to so participate, and (z) the control of
such action, suit or proceeding would involve a bona fide conflict of interest,
such action, suit or proceeding involves matters which are unrelated to the
overall transaction contemplated by this Mortgage and the Other Security
Documents and if determined adversely could be detrimental to the interests of
Mortgagee notwithstanding indemnification by Mortgagor. To the extent there are
separate or unseverable claims or proceedings which are not subject to the
indemnification provisions of this Section, such claims or proceedings may be
independently defended by Mortgagee. Mortgagee may participate in a reasonable
manner at its own expense and with its own counsel in any proceeding conducted
by Mortgagor in accordance with the foregoing. The party controlling any such
action, suit or proceeding shall keep the other party or parties hereto fully
informed of the status of any such proceeding.
(c) Each of Mortgagee and Mortgagor shall, at Mortgagor's sole cost and
expense, make available to the other party such information and documents
reasonably requested by the other party as are necessary or advisable for the
other party to participate
33
in any action, suit or proceeding to the extent permitted by this
Section 46.
47. Offsets, Counterclaims and Defenses. Any assignee of this Mortgage
and/or the Note shall take the same free and clear of all offsets, counterclaims
or defenses which Mortgagor may otherwise have against any assignor of this
Mortgage or the Note, and no such counterclaim or defense shall be interposed or
asserted by Mortgagor in any action or proceeding brought by any such assignee
upon this Mortgage and the Note and any such right to interpose or assert any
such offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Mortgagor.
48. Environmental Covenants.
(a) Mortgagor has not at any time, and, to Mortgagor's knowledge, after
due inquiry and investigation, no other party has at any time, handled, buried,
stored, retained, refined, transported, processed, manufactured, generated,
produced, spilled, allowed to seep, leak, escape or xxxxx, or pumped, poured,
emitted, emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with Hazardous Materials on, to or from the Premises or any
other real property owned and/or occupied by Mortgagor and Mortgagor does not
intend to use the Mortgaged Property or any such other real property for the
purpose of handling, burying, storing, retaining, refining, transporting,
processing, manufacturing, generating, producing, spilling, seeping, leaking,
escaping, leaching, pumping, pouring, emitting, emptying, discharging,
injecting, dumping, transferring or otherwise disposing of or dealing with
Hazardous Materials, except for ordinary cleaning fluids, heating fuel and other
items customarily used in the operation of Prime Tenant's current business,
provided such use shall not violate any Environmental Statute (hereinafter
defined) or be the basis for a lien against the Mortgaged Property.
(b) Except as previously disclosed in writing to Mortgagee, Mortgagor
knows of no seepage, leak, escape, xxxxx, discharge, injection, release,
emission, spill, pumping, pouring, emptying or dumping of Hazardous Materials
into waters on or adjacent to the Mortgaged Property or any other real property
owned and/or occupied by Mortgagor, or onto lands from which such hazardous or
toxic waste or substances might seep, flow or drain into such waters.
(c) Mortgagor shall not permit any Hazardous Materials to be handled,
buried, stored, retained, refined, transported, processed, manufactured,
generated, produced, spilled, allowed to seep, leak, escape or xxxxx, or to be
pumped, poured, emitted,
34
emptied, discharged, injected, dumped, transferred or otherwise disposed of or
dealt with on, to or from the Mortgaged Property or any portion thereof at any
time, except for ordinary cleaning fluids, heating fuel and other items
customarily used in the operation of Prime Tenant's current business, provided
such use is in conformance with all applicable federal, state and local laws,
rules and regulations and provided further that such use cannot give rise to
liability under any Environmental Statute or be the basis for a lien against the
Mortgaged Property.
(d) Except as previously disclosed in writing to Mortgagee, Mortgagor
has received no notice of, and has no knowledge of any occurrence or
circumstance which with notice or passage of time or both would give rise to a
claim under or pursuant to any Environmental Statute, pertaining to hazardous or
toxic waste or substances on or originating from the Mortgaged Property or any
other real property owned or occupied by Mortgagor or arising out of the conduct
of Mortgagor, including, without limitation, pursuant to any Environmental
Statute.
(e) In the event that there shall be filed a lien against the Mortgaged
Property pursuant to any Environmental Statute, Mortgagor shall, within thirty
(30) days or, in the event that the applicable Governmental Authority (as
hereinafter defined) has commenced steps to cause the Premises to be sold
pursuant to the lien, within ten (10) days, from the date that Mortgagor
receives notice of such lien, either (i) pay the claim and remove the lien from
the Mortgaged Property, or (ii) furnish (A) a bond reasonably satisfactory to
Mortgagee in the amount of the claim out of which the lien arises, (B) a cash
deposit in the amount of the claim out of which the lien arises, or (C) other
security reasonably satisfactory to Mortgagee in an amount sufficient to
discharge the claim out of which the lien arises.
(f) Except as previously disclosed in writing to Mortgagee, Mortgagor
represents and warrants that neither the Mortgaged Property nor any other land
owned by Mortgagor is included or, to the best of Mortgagor's knowledge,
proposed for inclusion on the National Priorities List issued pursuant to CERCLA
(as hereinafter defined) by the United States Environmental Protection Agency
(the "EPA") or on any database searched under the ASTM Standard Practice for
Environmental Site Assessments and has not otherwise been identified by the EPA
as a potential CERCLA site or included or, to the best of Mortgagor's knowledge,
proposed for inclusion on any list or inventory issued pursuant to any other
Environmental Statute, if any, or issued by any other Governmental Authority.
Mortgagor represents and warrants that Mortgagor will comply with all
Environmental Statutes.
35
(g) For purposes of this paragraph 48, "Hazardous Material" shall
include without limitation, any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material containing asbestos, or any other substance
or material as defined by any Federal, state or local environmental law,
ordinance, rule, or regulation including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Sections 9601, et seq.) ("CERCLA"), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901 et seq.) and
in the regulations adopted and publications promulgated pursuant to each of the
foregoing (individually, an "Environmental Statute") or by any Federal, state or
local governmental authority having or claiming jurisdiction over the Mortgaged
Property (a "Governmental Authority").
(h) Following the occurrence of an Event of Default, and without regard
to whether Mortgagee shall have taken possession of the Mortgaged Property or a
receiver has been requested or appointed or any other right or remedy of
Mortgagee has or may be exercised hereunder, Mortgagee shall have the right (but
not obligation) to conduct such reasonable investigations, studies, sampling
and/or testing of the Mortgaged Property or any part thereof as Mortgagee may,
in its discretion, determine to conduct, relative to Hazardous Materials. All
costs and expenses reasonably incurred in connection therewith including,
without limitation, consultants' fees and disbursements and laboratory fees,
shall be secured by this Mortgage, shall be immediately due and payable and
shall bear interest at the Default Rate from the date paid by Mortgagee until
reimbursed by Mortgagor.
49. No Merger. It is the intention of the parties hereto that if the
Mortgagee shall at any time hereafter acquire title to all or any portion of the
Mortgaged Property, then, and until the indebtedness secured hereby has been
paid in full, the interest of the Mortgagee hereunder and the lien of this
Mortgage shall not merge or become merged in or with the estate and interest of
the Mortgagee as the holder and owner of title to all or any portion of the
Mortgaged Property and that, until, such payment, the estate of the Mortgagee in
the Mortgaged Property and the lien of this Mortgage and the interest of the
Mortgagee hereunder shall continue in full force and effect to the same extent
as if the Mortgagee had not acquired title to all or any portion of the
Mortgaged Property.
50. Governing Law. In realizing upon the remedies set
forth herein and in the creation of the liens and security
36
interests granted hereunder, this Mortgage shall be governed by and construed in
accordance with the laws of the State in which the Premises is located.
51. Exculpation. Notwithstanding anything to the contrary
contained in this Mortgage or the Other Security Documents, the
obligations of Mortgagor hereunder shall be non-recourse subject
to the exceptions, limitations and recourse events provided in
Section 4.04 of the Note, the terms of which are incorporated
herein.
52. Negative Covenants with Respect to Indebtedness and
Fundamental Changes. Mortgagor hereby represents, warrants and
covenants, as of the date hereof and until such time as the Debt
is paid in full, that Mortgagor:
(a) will not dissolve or terminate or materially amend
the terms of its certificate of incorporation, partnership
agreement, articles of organization or operating agreement,
as applicable;
(b) will not enter into any transaction of merger or
consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution), or acquire by purchase or otherwise all or
substantially all the business or assets of, or any stock or other
evidence of beneficial ownership of, any entity;
(c) has not and will not guarantee or otherwise become
liable on or in connection with any obligation of any other
person or entity;
(d) does not own and will not own any encumbered asset
other than (i) the Mortgaged Property, and (ii) incidental
personal property necessary for the operation of the
Mortgaged Property;
(e) is not engaged and will not engage, directly or
indirectly, in any business other than the ownership,
management and operation of the Mortgaged Property;
(f) will not enter into any contract or agreement with any
member or general partner, as applicable, principal or affiliate of the
Mortgagor or any affiliate of any member or general partner, as
applicable, of the Mortgagor except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than an
affiliate;
37
(g) has not incurred and will not incur any debt, secured or
unsecured, direct or contingent (including guaranteeing any
obligation), other than (i) the indebtedness secured hereby, and (ii)
affiliate advances or trade payables or accrued expenses incurred in
the ordinary course of business of operating the Mortgaged Property; no
other debt may be secured (senior, subordinate or pari passu) by the
Mortgaged Property;
(h) has not made and will not make any loans or
advances to any third party (including any affiliate);
(i) is and will be solvent and pay its debt from its
assets as the same shall become due;
(j) has done or caused to be done and will do all things
necessary to preserve its existence; and will not do or cause to be
done anything which will adversely affect Mortgagor's existence as a
single purpose entity;
(k) will conduct and operate its business as presently
conducted and operated;
(l) will maintain books and records and bank accounts
separate from those of its affiliates, including its general
partners and any members, as applicable;
(m) will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any
other entity (including any affiliate thereof;
(n) will file its own tax returns;
(o) will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size
and character and in light of its contemplated business
operations;
(p) will not seek the dissolution or winding up, in
whole or in part, of the Mortgagor;
(q) will not commingle the funds and other assets of
the Mortgagor with those of any affiliate or any other
person;
(r) has and will maintain its assets in such a manner that it
is not costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or any other person; and
38
(s) does not and will not hold itself out to be
responsible for the debts or obligations of any other
person.
53. Representations and Warranties. Mortgagor represents
and warrants to Mortgagee:
(a) Mortgagor is not an "investment company," or a company
"controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended;
(b) Mortgagor is in compliance in all material respects
with all Federal, state and local laws, rules and regulations to
which Mortgagor or the Mortgaged Property is subject;
(c) all financial data that has been delivered by Mortgagor to
Mortgagee (i) is complete and correct in all material respects, (ii) accurately
represents the financial condition of the persons or entities covered thereby as
of the date on which the same shall have been furnished, and (iii) has been
prepared in accordance with generally accepted accounting principles
consistently applied (or such other accounting basis as is reasonably acceptable
to Mortgagee) throughout the periods covered; as of the date hereof, neither
Mortgagor nor, if Mortgagor is a partnership, any general partner of Mortgagor,
had any contingent liability, liability for taxes or other unusual or forward
commitment not reflected in the financial statements delivered to Mortgagee;
since the date of the last financial statements delivered by Mortgagor to
Mortgagee except as otherwise disclosed in such financial statements or notes
thereto, there has been no change in the assets, liabilities or financial
position of Mortgagor nor, if Mortgagor is a partnership, any general partner of
Mortgagor, or in the results of operations of Mortgagor which would have a
material adverse effect on Mortgagor or the Mortgaged Property; and neither
Mortgagor nor, if Mortgagor is a partnership, any general partner of Mortgagor
has incurred any obligation or liability, contingent or otherwise, not reflected
in such financial statements which would have a material adverse effect on
Mortgagor or the Mortgaged Property;
(d) no part of the proceeds of the loan evidenced by the Note will be
used for the purpose of purchasing or acquiring any "margin stock" within the
meaning of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System or for any other purpose which would be inconsistent with such
Regulations G, T, U or X or any other Regulations of such Board of Governors, or
for any purposes prohibited by law;
39
(e) There are no actions, suits or proceedings pending or, to the best
knowledge of the Mortgagor, threatened against or affecting Mortgagor or the
Mortgaged Property in any court or before any governmental authority which if
adversely determined may have a material adverse effect on Mortgagor or the
Mortgaged Property. Mortgagor is not in default with respect to any order of any
court or governmental authority and the execution and delivery of, and the
performance by Mortgagor of its obligations under the Note, this Mortgage or the
Other Security Documents will not cause or result in any such default;
(f) the original principal sum evidenced by the Note does not exceed
one hundred twenty-five percent (125%) of the fair market value of the Mortgaged
Property which, for purposes of this subparagraph (f), shall be reduced by the
amount of any indebtedness secured by a lien affecting the Mortgaged Property
that is prior to or on a parity with the lien of this Mortgage, and shall not
include the value of any personal property or other property that is not "real
property" within the meaning of Treas.
Reg. xx.xx. 1.860G-2 and 1.856-3(d);
(g) the Premises has adequate rights of access to public ways and is
served by adequate water, sewer, sanitary sewer and storm drain facilities, all
public utilities necessary or convenient to the full use and enjoyment of the
Mortgaged Property are located in the public right-of-way abutting the Premises,
and all such utilities are connected so as to serve the Mortgaged Property
without passing over other property, except to the extent such other property is
subject to a perpetual easement for such utility benefitting the Mortgaged
Property and all roads necessary for the full utilization of the Mortgaged
Property for its current purpose have been completed and dedicated to public use
and accepted by all applicable governmental or quasi-governmental authorities;
(h) to the best knowledge of Mortgagor, the Improvements
are not located in a federally designated flood hazard area;
(i) to the best of Mortgagor's knowledge, the Improvements are free of
structural defects and all building systems contained therein are in good
working order subject to ordinary wear and tear;
(j) there are no pending or, to Mortgagor's best knowledge, proposed
special or other assessments for public improvements or otherwise affecting the
Mortgaged Property, nor are there any contemplated improvements to the Mortgaged
Property that may result in such special or other assessments;
40
(k) Mortgagor has delivered a true, correct and complete
copy of the Prime Lease affecting the Mortgaged Property as of
the date hereof;
(l) the Prime Lease constitutes the legal, valid and binding obligation
of Mortgagor and, to the best of Mortgagor's knowledge and belief, is
enforceable against the Prime Tenant. No default exists, or with the passing of
time or the giving of notice would exist, under the Prime Lease and the Prime
Tenant has no defense, offset or counterclaim against Mortgagor or against Prime
Tenant's obligations under the Prime Lease;
(m) the Prime Tenant has not as of the date hereof paid rent more than
thirty (30) days in advance, and the rents under the Prime Lease have not been
waived, released, or otherwise discharged or compromised;
(n) all work to be performed by Mortgagor under the Prime Lease has
been performed, all contributions to be made by Mortgagor thereunder have been
made and all other conditions precedent to the Prime Tenant's obligations
thereunder have been satisfied;
(o) the Prime Tenant has entered into occupancy of the
Premises; and
(p) to the best of Mortgagor's knowledge and belief, the Prime Tenant
is free from bankruptcy, reorganization or arrangement proceedings or a general
assignment for the benefit of creditors.
54. ERISA. (a) Mortgagor represents and warrants that, as of the date
of this Mortgage and throughout the term of the Loan, (i) Mortgagor is not an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I
of ERISA, (ii) the assets of such Mortgagor do not constitute "plan assets" of
one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as of
the date of this Mortgage and throughout the term of this Mortgage, (iii)
Mortgagor is not a "governmental plan" within the meaning of Section 3(32) of
ERISA, and (iv) transactions by or with Mortgagor are not subject to state
statues regulating investments of and fiduciary obligations with respect to
governmental plans.
(b) Mortgagor covenants and agrees to deliver to Mortgagee such
certifications or other evidence from time to time throughout the term of the
Loan as requested by Mortgagee in its sole discretion, that (i) Mortgagor is not
an "employee benefit plan" or a "governmental plan", (ii) Mortgagor is not
subject to
41
state statutes regulating investments and fiduciary obligations with respect to
governmental plans, and (iii) one or more of the following circumstances is
true:
1. equity interests in Mortgagor are publicly
offered securities, within the meaning of 29
C.F.R. ss. 2510.3-101(b)(2);
2. less than 25% of all equity interests in such
Mortgagor are held by "benefit plan
investors" within the meaning of 29 C.F.R.
ss. 2510.3-101(f)(2); or
3. Mortgagor qualifies as an "operating company"
or a "real estate operating company" within
the meaning of 29 C.F.R. ss. 2510.3.-101(c) or
(e).
55. Repair and Remediation Reserve for Parking Lot.
(a) Prior to the execution of this Mortgage, Mortgagee has caused the
Mortgaged Property to be inspected and such inspection has revealed that the
parking lot in the Mortgaged Property is in need of certain maintenance, repairs
and/or remedial or corrective work. Contemporaneously with the execution hereof,
Mortgagor has established with Mortgagee a reserve in the amount of $100,000
(the "Repair and Remediation Reserve") by depositing such amount with Mortgagee.
Mortgagor shall cause that certain work with respect to the parking lot (the
"Deferred Maintenance") to be completed, performed, remediated and corrected to
the satisfaction of Mortgagee. So long as no Event of Default has occurred and
is continuing, all sums in the Repair and Remediation Reserve shall be held by
Mortgagee in the Repair and Remediation Reserve to pay the costs and expenses of
completing the Deferred Maintenance. So long as no Event of Default has occurred
and is continuing, Mortgagee shall, to the extent funds are available for such
purpose in the Repair and Remediation Reserve, disburse to Mortgagor the amount
paid or incurred by Mortgagor in completing, performing, remediating or
correcting the Deferred Maintenance within (30) days following: (a) receipt by
Mortgagee of a written request from Mortgagor for disbursement from the Repair
and Remediation Reserve and a certification by Mortgagor in a form satisfactory
to Mortgagee that the applicable item of Deferred Maintenance has been completed
in accordance with the terms of this Mortgage; (b) delivery to Mortgagee of
invoices, receipts or other evidence satisfactory to Mortgagee verifying the
costs of the Deferred Maintenance; (c) delivery to Mortgagee of a certification
from an inspecting architect, engineer or other consultant acceptable to
Mortgagee describing the completed Deferred Maintenance, verifying the
completion
42
thereof and the value of the completed Deferred Maintenance and, if applicable,
certifying that the Mortgaged Property is, as a result of such work, in
compliance with all applicable laws, ordinances, rules and regulations relating
to the Deferred Maintenance so performed; and (d) delivery to Mortgagee of
affidavits, lien waivers or other evidence reasonably satisfactory to Mortgagee
showing that all materialmen, laborers, subcontractors and any other parties who
might or could claim statutory or common law liens and are furnishing or have
furnished material or labor to the Mortgaged Property have been paid all amounts
due for such labor and materials furnished to the Mortgaged Property. Mortgagee
shall not be required to make advances from the Repair and Remediation Reserve
more frequently than once in any thirty (30) day period. In making any payment
from the Repair and Remediation Reserve, Mortgagee shall be entitled to rely on
such request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount.
(b) As additional security for the payment and performance by Mortgagor
of all duties, responsibilities and obligations under the Note, this Mortgage
and the Other Security Documents, Mortgagor hereby unconditionally and
irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits,
sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security
interest in, (i) the accounts into which the Repair and Remediation Reserve has
been deposited, (ii) all insurance of said accounts, (iii) all accounts,
contract rights and general intangibles or other rights and interests pertaining
thereto, (iv) all sums now or hereafter therein or represented thereby, (v) all
replacements, substitutions or proceeds thereof, (vi) all instruments and
documents now or hereafter evidencing the Repair and Remediation Reserve, (vii)
all powers, options, rights, privileges and immunities pertaining to the Repair
and Remediation Reserve (including the right to make withdrawals therefrom), and
(viii) all proceeds of the foregoing. Mortgagor hereby authorizes and consents
to the account into which the Repair and Remediation Reserve has been deposited
being held in Mortgagee's name or the name of any entity servicing the Note for
Mortgagee and hereby acknowledges and agrees that Mortgagee, shall have
exclusive control over said account. Notice of the assignment and security
interest granted to Mortgagee herein may be delivered by Mortgagee at any time
to the financial institution wherein the Repair and Remediation Reserve has been
established, and Mortgagee, or such servicing entity, shall have possession of
all passbooks or other evidences of such accounts. Mortgagor hereby assumes all
risk of loss with respect to amounts on deposit in the Repair and Remediation
Reserve. Mortgagor hereby knowingly, voluntarily and intentionally stipulates,
acknowledges and agrees that the advancement of the funds from
43
the Repair and Remediation Reserve as set forth herein is at Mortgagor's
direction and is not the exercise by Mortgagee of any right of set-off or other
remedy upon an Event of Default. Mortgagor hereby waives all right to withdraw
funds from the Repair and Remediation Reserve. The Repair and Remediation
Reserve shall not, unless otherwise explicitly required by applicable law, be or
be deemed to be escrow or trust funds, but at Mortgagee's option and in
Mortgagee's discretion, may either be held in a separate account or be
commingled by Mortgagee with the general funds of Mortgagee. No interest on the
funds contained in the Repair and Remediation Reserve shall be paid by Mortgagee
to Mortgagor. The Repair and Remediation Reserve is solely for the protection of
Mortgagee and Mortgagee has no responsibility beyond the payment of the costs
and expenses described in this paragraph 55 in accordance with the terms hereof
and beyond the allowing of due credit for the sums actually received. In the
event that the amounts on deposit or available in the Repair and Remediation
Reserve are inadequate to pay the costs of the Deferred Maintenance, Mortgagor
shall pay the amount of such deficiency. Upon assignment of this Mortgage by
Mortgagee, any funds in the Repair and Remediation Reserve shall be turned over
to the assignee and any responsibility of Mortgagee, as assignor, with respect
thereto shall terminate. If there is an Event of Default, Mortgagee may, but
shall not be obligated to, apply at any time the balance then remaining in the
Repair and Remediation Reserve against the Debt in whatever order Mortgagee
shall subjectively determine. No such application of the Repair and Remediation
Reserve shall be deemed to cure any Event of Default hereunder. Upon the earlier
to occur of full payment of the Debt in accordance with its terms, the
completion of the Deferred Maintenance to the satisfaction of the Mortgagee, or
at such earlier time as Mortgagee may elect, the balance of the Repair and
Remediation Reserve then in Mortgagee's possession shall be paid over to
Mortgagor and no other party shall have any right or claim thereto.
Section 56. Intentionally Omitted.
Section 57. Prepayment. (a) Except as set forth in
Section 57(b) hereof, no prepayment of the Debt may be made by
Mortgagor in whole or in part.
(b) At any time subsequent to the third (3rd) anniversary of the date
hereof, Mortgagor may prepay the Debt, in whole or, from time to time, in part,
in accordance with the following provisions:
(i) Mortgagee shall have received from Mortgagor, not less
than thirty (30) days', nor more than ninety (90) days', prior written
notice specifying the date proposed for
44
such prepayment (the "Prepayment Date"), which proposed date shall be a
Payment Date (as defined in the Note).
(ii) Mortgagor shall also pay to Mortgagee all interest due through
and including the day immediately prior to the Prepayment Date,
together with any and all other amounts due and owing pursuant to the
terms of the Note, this Mortgage or the Other Security Documents.
(iii) No Event of Default shall have occurred and be
continuing.
(iv) Any partial prepayment of the Principal Amount (as defined in
the Note) shall be applied to the installments of principal last due
hereunder and shall not release or relieve Mortgagor from the
obligation to pay the regularly scheduled installments of principal and
interest becoming due under the Note.
(v) Mortgagor shall pay to Mortgagee on the Prepayment Date
the following premium on the principal amount to be prepaid for the
Loan Year in which the Prepayment Date occurs:
Loan Year Premium
4-5 Greater of three percent (3%)
and Yield Maintenance (as
defined in the Note)
6-7 Greater of two percent (2%)
and Yield Maintenance
7-10 Greater of one percent (1%)
and Yield Maintenance
Section 58. Release of Mortgaged Property. (a) If Mortgagor makes a
prepayment of the entire Debt or the Allocable Loan Amount as defined in and set
forth in Exhibit D annexed hereto pursuant to Section 57(b) hereof or if
Mortgagee applies Net Proceeds towards the repayment of the Debt or the
Allocable Loan Amount as defined in and set forth in Exhibit D annexed hereto,
Mortgagee shall, promptly, upon satisfaction of all the following terms and
conditions, execute, acknowledge and deliver to Mortgagor a release of this
Mortgage (a "Release") in recordable form:
(i) Mortgagee shall have received on the Prepayment
Date an amount equal to the sum of one hundred percent
45
(100%) of the amount listed as the "beginning balance" due as of the
Prepayment Date as set forth on Schedule A-1 [or A-2 as applicable] of
the Note, together with all other sums due and owing hereunder and, in
the event of a prepayment pursuant to Section 57(b) hereof, the premium
due pursuant to Section 57 hereof.
(ii) Mortgagor shall, at its sole expense, prepare any and all
documents and instruments necessary to effect the Release, all of which
shall be subject to the reasonable approval of Mortgagee, and Mortgagor
shall pay all costs reasonably incurred by Mortgagee (including, but
not limited to, reasonable attorneys' fees and disbursements, title
search costs or endorsement premiums) in connection with the review,
execution and delivery of the Release.
(b) Mortgagor may request a Release of a portion of the Premises
described in Exhibit E annexed hereto (the "Out Parcel") and Mortgagee shall
release the Out Parcel provided that the Out Parcel is a parcel and/or a
building which is legally and physically separate and, if a building,
freestanding from the Improvements presently located on the Premises and secured
by this Mortgage, and further provided that the following conditions are met:
(i) No Default shall have occurred and be
continuing.
(ii) The Out Parcel shall be designated by a metes and
bounds description and a survey reasonably satisfactory to
Mortgagee.
(iii) Mortgagor shall have caused the Out Parcel to be a
separate parcel of land for all subdivision, zoning, and
taxing purposes.
(iv) At Mortgagor's sole cost and expense, Mortgagor shall
cause to be provided a title policy endorsement to the
Mortgagee's lenders' title insurance policy to the effect that
the release of the Out Parcel will not have an adverse affect
on the priority of the lien of this Mortgage with respect to
the portion of the Mortgaged Property remaining after the
Release.
(v) Mortgagor shall, at its sole cost and expense, prepare
any and all documents and instruments necessary to effect the
release of the Out Parcel, all of which shall be subject to
the reasonable approval of Mortgagee, and Mortgagor shall pay
all costs reasonably incurred by Mortgagee (including, but not
limited to,
46
reasonable attorneys' fees and disbursements, title search
costs and endorsement premiums) in connection with the review,
execution and delivery of such release.
(vi) All agreements and instruments to be delivered to
Mortgagee pursuant to this Section 58(b) shall be in form and
substance reasonably satisfactory to Mortgagee and its
counsel.
No release price or other consideration shall be payable by Mortgagor
to Mortgagee in connection with a release of an Out Parcel made in accordance
with the provisions of this Section 58(b).
Section 59. Capital Repair, Maintenance and Replacement
Reserve.
(a) As additional security for the Debt, Mortgagor shall
establish and maintain at all times while this Mortgage continues in effect a
repair reserve (the "Replacement Reserve") with Mortgagee for payment of costs
and expenses incurred by Mortgagor in connection with the performance of work to
Improvements, including but not limited to the roofs, chimneys, gutters,
downspouts, paving, curbs, ramps, driveways, balconies, porches, patios,
exterior walls, exterior doors and doorways, windows, elevators and mechanical
and HVAC equipment, except the chillers (collectively, the "Repairs").
Commencing on the first monthly payment date under the Note and continuing
thereafter on each monthly payment date under the Note, Mortgagor shall pay to
Mortgagee, concurrently with and in addition to the monthly payment due under
the Note and until the Debt is fully paid and performed, a deposit to the
Replacement Reserve in an amount equal to $13,000.00 per month. So long as no
default hereunder or under the Other Security Documents has occurred and is
continuing, all sums in the Replacement Reserve shall be held by Mortgagee in
the Replacement Reserve to pay the costs and expenses of Repairs. So long as no
default hereunder or under the Other Security Documents has occurred and is
continuing, Mortgagee shall, to the extent funds are available for such purpose
in the Replacement Reserve, disburse to Mortgagor the amount paid or incurred by
Mortgagor in performing such Repairs within ten (10) days following: (a) the
receipt by Mortgagee of a written request from Mortgagor for disbursement from
the Replacement Reserve and a certification by Mortgagor in a form approved in
writing by Mortgagee that the applicable item of Repair has been completed; (b)
the delivery to Mortgagee of invoices, receipts or other evidence satisfactory
to Mortgagee, verifying the cost of performing the Repairs; (c) for disbursement
requests in excess of $50,000.00, the delivery to
47
Mortgagee of affidavits, lien waivers or other evidence reasonably satisfactory
to Mortgagee showing that all materialmen, laborers, subcontractors and any
other parties who might or could claim statutory or common law liens and are
furnishing or have furnished material or labor to the Mortgaged Property have
been paid all amounts due for labor and materials furnished to the Mortgaged
Property; (d) for disbursement requests in excess of $50,000.00, delivery to
Mortgagee of a certification from an inspecting architect or other third party
acceptable to Mortgagee describing the completed Repairs and verifying the
completion of the Repairs and the value of the completed Repairs; and (e) for
disbursement requests in excess of $50,000.00, delivery to Mortgagee of a new
certificate of occupancy for the portion of the Improvements covered by such
Repairs, if said new certificate of occupancy is required by law, or a
certification by Mortgagor that no new certificate of occupancy is required.
Mortgagee shall not be required to make advances from the Replacement Reserve
more frequently than once in any ninety (90) day period. In making any payment
from the Replacement Reserve, Mortgagee shall be entitled to rely on such
request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount. Mortgagee may, at Mortgagor's expense, make
or cause to be made during the term of this Mortgage an annual inspection of the
Mortgaged Property to determine the need, as determined by Mortgagee in its
reasonable judgment, for further Repairs of the Mortgaged Property. In the event
that such inspection reveals that further Repairs of the Mortgaged Property are
required, Mortgagee shall provide Mortgagor with a written description of the
required Repairs and Mortgagor shall complete such Repairs to the reasonable
satisfaction of Mortgagee within ninety (90) days after the receipt of such
description from Mortgagee, or such later date as may be approved by Mortgagee
in its sole discretion. The Replacement Reserve shall not, unless otherwise
explicitly required by applicable law, be or be deemed to be escrow or trust
funds, but, at Mortgagee's option and in Mortgagee's discretion, may either be
held in a separate account or be commingled by Mortgagee with the general funds
of Mortgagee. Interest on the funds contained in the Replacement Reserve shall
be credited to Mortgagor as provided in Subsection (c) hereof. The Replacement
Reserve is solely for the protection of Mortgagee and entails no responsibility
on Mortgagee's part beyond the payment of the costs and expenses described in
this Section in accordance with the terms hereof and beyond the allowing of due
credit for the sums actually received. In the event that the amounts on deposit
or available in the Replacement Reserve are inadequate to pay the cost of the
Repairs, Mortgagor shall pay the amount of such deficiency. Upon assignment of
this Mortgage by Mortgagee, any funds in the Replacement Reserve shall be turned
over to the assignee and any responsibility of Mortgagee, as assignor, with
48
respect thereto shall terminate. If there is a default under this Mortgage or
any of the Other Security Documents which is not cured within any applicable
grace or cure period, Mortgagee may, but shall not be obligated to, apply at any
time the balance then remaining in the Replacement Reserve against the Debt in
whatever order Mortgagee shall subjectively determine. No such application of
the Replacement Reserve shall be deemed to cure any default hereunder. Upon full
payment of the Debt in accordance with its terms or at such earlier time as
Mortgagee may elect, the balance of the Replacement Reserve then in Mortgagee's
possession shall be paid over to Mortgagor and no other party shall have any
right or claim thereto.
(b) As additional security for the payment and performance by
Mortgagor of all duties, responsibilities and obligations under the Note and the
Other Security Documents, Mortgagor hereby unconditionally and irrevocably
assigns, conveys, pledges, mortgages, transfers, delivers, deposits, sets over
and confirms unto Mortgagee, and hereby grants to Mortgagee a security interest
in, (i) the Replacement Reserve (collectively, the "Reserves"), (ii) the
accounts into which the Reserves have been deposited, (iii) all insurance on
said accounts, (iv) all accounts, contract rights and general intangibles or
other rights and interests pertaining thereto, (v) all sums now or hereafter
therein or represented thereby, (vi) all replacements, substitutions or proceeds
thereof, (vii) all instruments and documents now or hereafter evidencing the
Reserves or such accounts, (viii) all powers, options, rights, privileges and
immunities pertaining to the Reserves (including the right to make withdrawals
therefrom), and (ix) all proceeds of the foregoing. Mortgagor hereby authorizes
and consents to the account into which the Reserves have been deposited being
held in Mortgagee's name or the name of any entity servicing the Note for
Mortgagee and hereby acknowledges and agrees that Mortgagee, or at Mortgagee's
election, such servicing agent, shall have exclusive control over said account.
Notice of the assignment and security interest granted to Mortgagee herein may
be delivered by Mortgagee at any time to the financial institution wherein the
Reserves have been established, and Mortgagee, or such servicing entity, shall
have possession of all passbooks or other evidences of such accounts. Mortgagor
hereby assumes all risk of loss with respect to amounts on deposit in the
Reserves. Mortgagor hereby knowingly, voluntarily and intentionally stipulates,
acknowledges and agrees that the advancement of the funds from the Reserves as
set forth herein is at Mortgagor's direction and is not the exercise by
Mortgagee of any right of set-off or other remedy upon a default. Mortgagor
hereby waives all right to withdraw funds from the Reserves except as provided
for in this Mortgage. If a default shall occur hereunder or under any other of
the Other Security
49
Documents which is not cured within any applicable grace or cure period, then
Mortgagee may, without notice or demand on Mortgagor, at its option: (A)
withdraw any or all of the funds (including, without limitation, interest) then
remaining in the Reserves and apply the same, after deducting all costs and
expenses of safekeeping, collection and delivery (including, but not limited to,
reasonable attorneys' fees, costs and expenses) to the Debt or any other
obligations of Mortgagor under the Other Security Documents in such manner as
Mortgagee shall deem appropriate in its sole discretion, and the excess, if any,
shall be paid to Mortgagor, (B) exercise any and all rights and remedies of a
secured party under any applicable Uniform Commercial Code, or (C) exercise any
other remedies available at law or in equity. No such use or application of the
funds contained in the Reserves shall be deemed to cure any default hereunder or
under the Other Security Documents.
(c) Mortgagee shall cause funds in the Replacement Reserve to
be deposited into interest bearing accounts of the type customarily maintained
by Mortgagee or its servicing agent for the investment of similar reserves,
which accounts may not yield the highest interest rate then available. Interest
payable on such amounts shall be computed based on the daily outstanding balance
in the Replacement Reserve. Such interest shall be calculated on a simple,
non-compounded interest basis based solely on contributions made to the
Replacement Reserve by Mortgagor. All interest earned on amounts contributed to
the Replacement Reserve shall be retained by Mortgagee and accumulated for the
benefit of Mortgagor and added to the balance in the Replacement Reserve and
shall be disbursed for payment of the items for which other funds in the
Replacement Reserve are to be disbursed.
Section 60. Intentionally Omitted
Section 61. Certain Matters Relating to Mortgaged Property Located in
the Commonwealth of Massachusetts. With respect to the Mortgaged Property which
is located in the Commonwealth of Massachusetts, notwithstanding anything
contained herein:
This Mortgage is upon the STATUTORY CONDITION and upon the further condition
that all covenants and agreements contained herein and in the Note shall be kept
and fully performed, for any breach of which the Mortgagee shall have the
STATUTORY POWER OF SALE.
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IN WITNESS WHEREOF, Mortgagor has duly executed this Mortgage as of the
day and year first above written.
QUANTUM PERIPHERALS REALTY CORPORATION,
Mortgagor
By: \s\Xxxxxx Xxxxxx
---------------------
Name: Xxxxxx Xxxxxx
Title: President
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