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EXHIBIT 10.3
MORTGAGE AND SECURITY AGREEMENT
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This Mortgage and Security Agreement (this "Mortgage") is made as of
the 29th day of May, 1997, by XXXXXXX X. XXXXXXXX and XXXXXXX X. XXXXXXXX, XX.,
TRUSTEES OF ANDOVER PARK REALTY TRUST u/d/t dated June 25, 1986 and recorded in
the Essex County (North District) Registry of Deeds, Book 2226, Page 284, (the
"Mortgagor") having a mailing address of X.X. Xxx 000, Xxxxxxx, XX 00000 to
VICOR CORPORATION, ("the Mortgagee"), a Delaware corporation having a place of
business at 00 Xxxxxxxx Xxxx, Xxxxxxx, XX 00000.
1. GRANT OF MORTGAGE. For consideration paid, the Mortgagor hereby grants
to the Mortgagee with Mortgage Covenants, the land and buildings thereon, if
any, located off Federal Street, Andover, Essex County, Massachusetts, shown as
Lot 3 on that certain Definitive Subdivision Plan of Land recorded with the
Essex County (North District) Registry of Deeds as Plan No. 10726, as more
particularly described in Exhibit A attached hereto, together with any and all
improvements now or hereafter situated thereon and all rents, issues and profits
and other appurtenant rights associated with the ownership of such land
(collectively, the "Real Property") to secure:
(i) the payment of Seven Million Five Hundred Thousand Dollars
($7,500,000) with interest thereon as provided in the promissory note (the "Lot
3 Note") of the Mortgagor of even date payable to the order of the Mortgagee;
(ii) damages (including consequential damages) which arise as a result
of the Mortgagor or any successor entity to the Mortgagor filing a petition for
reorganization or liquidation or for protection from creditors under the United
States Bankruptcy Code or any similar state law; and
(iii) the performance of all covenants and agreements contained in (a)
this Mortgage, (b) the Lot 3 Note, (c) a certain Letter of Intent dated April
17, 1997 by and between the Mortgagor and the Mortgagee, (d) the Loan Agreement
of even dated, (e) Conditional Assignment of Leases and Rents of even date, (f)
Collateral Assignment of Contracts, Licenses, Permits, Agreements, Warranties
and Approvals, (g) Hazardous Material Indemnity Agreement, and (h) any other
instrument now existing or hereafter entered into to provide additional security
for the Lot 3 Note, as they may be amended (collectively, the "Loan Documents").
As further security for the Mortgagor's obligations, the Mortgagor
hereby grants to the Mortgagee a security interest in all equipment (as defined
in the Uniform Commercial Code), now or hereafter located on or intended to be
used in connection with the Real Property (including fixtures); all insurance
proceeds including interest payable in connection with any damage or loss to the
Mortgaged Property, as hereinafter defined, all eminent domain awards made with
respect to the Mortgaged Property, all licenses and permits for the use or
occupancy of the Real Property, all trade names associated with the use or
occupancy of the Real Property, all books and records relating to the
Mortgagor's operation of the Real Property, all contracts, agreements and
warranties, including rights to return of deposits, prepaid premiums or other
payments, relating to the construction, use or occupancy of the Real Property,
and all other personal property of the Mortgagor arising from, or now or
hereafter relating to, located at or used in connection with the Real Property,
including without limitation, all inventory, equipment, and other goods,
documents, instruments, general intangibles, chattel paper, accounts and
contract rights (each as defined in the Uniform Commercial Code), and the
proceeds therefrom (collectively, the "Personal Property").
The Real Property and the Personal Property are referred to
collectively as the "Mortgaged Property".
2. REPRESENTATIONS. The Mortgagor warrants and represents that (i) this
Mortgage has been duly authorized, executed and delivered by and on behalf of
the Mortgagor, (ii) the Mortgagor is duly existing and in good standing with all
power, authority and legal right to engage in the transaction contemplated by
this Mortgage and the Loan Documents, (iii) the execution and delivery of this
Mortgage and the Loan Documents and the carrying out of the transaction
contemplated thereby will not conflict with or result in a breach of the terms
of any agreement or law or
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order of any court or governmental body, (iv) there are no actions, suits or
proceedings, pending or to the knowledge of the Mortgagor threatened before any
court or other governmental body or agency, which would adversely affect the
Mortgaged Property or the Mortgagor or the Mortgagor's ability to perform its
obligations under this Mortgage or under the other Loan Documents, (v) the
Mortgagor has no knowledge of any claim of violation of any applicable zoning,
building, environmental and all other laws, ordinances and regulations relating
to the use and occupancy of the Real Property, (vi) all necessary licenses and
permits (other than licenses and permits which may be required for tenant
improvements and alterations) for the use and occupancy of the Real Property
have been issued and are in full force and effect, (vii) the improvements on the
Real Property and the tangible Personal Property are in good working order and
free from structural defects and (viii) the Mortgagor has no knowledge of any
claim challenging the Mortgagor's title to the Mortgaged Property.
3. HAZARDOUS SUBSTANCES.
(a) The Mortgagor represents and warrants that except as customarily
and lawfully used in connection with the construction and operation of the
Mortgaged Property, it has never generated, stored or disposed of any hazardous
substances, as defined herein, on the Mortgaged Property; that the Mortgagor is
not aware of the generation, storage, disposal or release of such substances on
the Mortgaged Property by anyone else; and that the Mortgagor is not aware of
the generation, storage, disposal or release of such substances upon or into the
real property adjoining or in the vicinity of the Mortgaged Property which
through soil or groundwater migration could have come to be located at the
Mortgaged Property. For the purposes of this Mortgage and the other Loan
Documents, "hazardous substances" shall mean "oil" and "hazardous materials" as
defined in M.G.L., Ch. 21E and "hazardous substances" as defined in the
Comprehensive Environmental Response Compensation and Liability Act of l980, 42
U.S.C., Section 9601, ET SEQ., as amended by the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613, and as
otherwise amended ("CERCLA"), and regulations adopted pursuant to such Acts or
in any Hazardous Materials Laws, as hereinafter defined. The Mortgagor agrees
not to release or dispose of any hazardous substances at the Mortgaged Property,
nor to permit the same, at any time.
(b) The Mortgagor represents and warrants that to the best of
Mortgagor's knowledge the Mortgaged Property currently complies and that the
Mortgaged Property and the Mortgagor shall comply with all federal, state and
local laws and regulations, including but not limited to M.G.L., Ch. 21E, CERCLA
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.,
ss.ss.6901-6987, as each may be amended from time to time, and regulations
promulgated pursuant to such Acts (such Acts and other similar laws and
regulations are collectively referred to as the "Hazardous Materials Laws")
relating to the storage, use, disposal, generation, transportation, or treatment
of hazardous, toxic or radioactive matter, including but not limited to
hazardous substances. The Mortgagor covenants to strictly comply with the
requirements of all Hazardous Materials Laws and to immediately notify the
Mortgagee of the presence, "release" or "threat of release" (as those terms are
defined in M.G.L., Ch. 21E) of any hazardous substances at or from the Mortgaged
Property or of any notice or claim received by it of any violation of any
Hazardous Materials Laws.
(c) To the fullest extent permissible according to law, and without
limiting any other rights or remedies of the Mortgagee, the Mortgagor
unconditionally, absolutely and irrevocably agrees to defend, hold harmless and
indemnify the Mortgagee and its officers, employees, agents and contractors
against all damages (including consequential damages), claims, costs, losses,
liabilities and expenses, including attorneys' fees and expenses, suffered or
incurred by the Mortgagee due to the existence at any time of any hazardous
substances at the Mortgaged Property or at any other property owned, occupied or
operated by the Mortgagor or by any other person for whose conduct the Mortgagor
is responsible, other than such claims, costs, liabilities and expenses arising
out of the intentional acts or negligence of the Mortgagee, its agents,
employees and independent contractors, including without limitation, any such
claims, costs, losses, liabilities and expenses arising from the violation of
any Hazardous Materials Laws or the imposition by any local, state or federal
government or governmental agency, department or authority, of a lien,
attachment or other encumbrance on any part of the Mortgaged Property or any
other property then owned by the Mortgagor. The foregoing indemnification shall
survive the satisfaction of the Mortgagor's obligations under the Loan Documents
and the release, foreclosure or assignment of this Mortgage. In addition, the
Mortgagee may (but shall not be obligated to), from time to time at the
Mortgagee's expense, conduct such investigations as the Mortgagee deems
reasonable to determine whether hazardous substances exist on any
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part of the Mortgaged Property and to determine the source, quantity and type of
such hazardous substances, if any, and the Mortgagor shall cooperate with the
Mortgagee in conducting such investigations. Such investigations may include
without limitation a detailed visual inspection of the Mortgaged Property,
including all storage areas, storage tanks, drains and dry xxxxx, as well as the
taking of soil samples, surface water samples, and ground water samples and such
other investigations or analyses as are necessary or appropriate in the
Mortgagee's sole discretion for a complete assessment of the compliance of the
Mortgaged Property and the use and operation thereof with all of the Mortgaged
Property and the use and operation thereof with all Hazardous Materials Laws.
The Mortgagee and its officers, employees, agents and contractors shall have and
are hereby granted the right to enter upon the Mortgaged Property for the
foregoing purposes.
(d) If the presence or release of hazardous substances at or from the
Mortgaged Property has resulted in contamination or determination of any portion
of the Mortgaged Property or any other affected property resulting in a level of
contamination greater than the levels permitted or established by any
governmental agency having jurisdiction, then the Mortgagor shall promptly take
any and all action necessary to clean up such contamination to the extent
required by any governmental authority having jurisdiction or as a condition to
the issuance or continuing effectiveness of any governmental approval or any
insurance policy that relates to the Mortgaged Property or the use thereof. The
Mortgagor shall further be solely responsible for, and shall defend, indemnify
and hold the Mortgagee and its officers, employees, agents and contractors
harmless from and against all damages (including consequential damages), claims,
costs, losses, liabilities and expenses, including attorneys' fees and expenses,
of whatever nature, on account of, arising out of or in connection with any
removal, cleanup and restoration work required to return the Mortgaged Property
and any other affected property of whatever nature to their conditions existing
prior to the presence or release of the hazardous substances; provided, however,
that the foregoing indemnity shall not apply if the presence or release of
hazardous substances is caused by the Mortgagee, its agents, employees and
independent contractors.
(e) Without limiting the generality of the foregoing, the Mortgagor,
and the Mortgaged Property and all alterations thereof, shall comply with all
local, state and federal laws and regulations now or hereafter in effect and
applicable relating to the presence, abatement, removal, disposal,
transportation or treatment of materials containing asbestos. To the fullest
extent permissible according to law, and without limiting any other rights or
remedies of the Mortgagee, the Mortgagor unconditionally, absolutely and
irrevocably agrees to defend, hold harmless and indemnify the Mortgagee and each
of its officers, employees, agents and contractors against all damages
(including consequential damages), claims, costs, losses, liabilities and
expenses, including attorneys' fees and expenses, suffered or incurred by the
Mortgagee on account of the existence at the Mortgaged Property of any materials
containing asbestos at any time, including without limitation, any such claims,
costs, losses, liabilities and expenses arising from the violation of any laws
relating thereto. The foregoing indemnification shall survive satisfaction of
the Mortgagor's obligations under the Loan Documents and the release,
foreclosure or assignment of this Mortgage. In addition, the Mortgagee may (but
shall not be obligated to), from time to time at the Mortgagor's expense,
conduct such investigations as the Mortgagee deems reasonable to determine
whether asbestos or materials containing asbestos are being released in to the
environment at the Mortgaged Property, and the Mortgagor shall cooperate with
the Mortgagee in conducting such investigations. The Mortgagee and its officers,
employees, agents and contractors shall have and are hereby granted the right to
enter upon the Mortgaged Property for the foregoing purposes.
4. TAXES AND ASSESSMENTS. The Mortgagor shall pay or cause to be paid, not
later than the last day upon which payment may be made without penalty or
interest, all taxes, charges for water, sewer and other municipal services and
assessments and any other charges or assessments that might become a lien prior
to the lien of this Mortgage, whether or not assessed against the Mortgagor or
the Mortgagee, and whether or not assessed pursuant to authority adopted before
or after the date of this Mortgage if applicable or related in any way to the
Mortgaged Property, any interest in the Mortgaged Property of the Mortgagor or
the Mortgagee or the debt, obligations or performance secured hereby, or the
disbursement or application of the proceeds therefrom (collectively, the
"Impositions"), excluding, however, any income or corporation excise tax of the
Mortgagee. If at any time the Mortgagee does not require the escrow of payments
for Impositions, the Mortgagor shall furnish to the Mortgagee receipted real
estate tax bills for the Mortgaged Property not later than ten (10) days after
the date from which any interest or penalty would accrue for nonpayment thereof.
The Mortgagor shall also furnish to the Mortgagee
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evidence of payment of all other Impositions within fifteen (15) days after
written request therefor by the Mortgagee. If the Mortgagor is not permitted by
applicable law to pay any Imposition or the payment of such Imposition would
violate any usury law applicable to the transaction contemplated by this
Mortgage, at the option of the Mortgagee, the principal sum secured by this
Mortgage shall become due and payable upon the date specified by written notice
given by the Mortgagee to the Mortgagor, which date shall be at least thirty
days after the date of such notice. The Mortgagor shall require all tenants of
the Mortgaged Property to pay, when due, all taxes assessed against personal
property and trade fixtures of each said tenant.
If requested by the Mortgagee, after an Event of Default (as herein
defined), the Mortgagor shall pay to the Mortgagee monthly, on the first day of
each month, a sum reasonably determined by the Mortgagee to be sufficient to
provide in the aggregate a fund adequate to pay each Imposition at least thirty
(30) days before it becomes delinquent, and, in addition, shall pay to the
Mortgagee on demand any balance necessary to pay in full each Imposition at
least thirty (30) days before the date on which it becomes due and payable. Such
sums shall not bear interest and may be commingled with the general assets of
the Mortgagee. The Mortgagee shall not be required to account for any profits
resulting from its use thereof. Such sums may be applied by the Mortgagee to the
payment of the Impositions or any other obligation of the Mortgagor hereunder.
The Mortgagor shall furnish to the Mortgagee all original bills relating to any
Imposition promptly upon issuance.
The Mortgagor shall have the right, after giving written notice to the
Mortgagee and subject to the conditions stated below, to contest by appropriate
legal proceedings the amount or validity of any Imposition. In no event shall
the Mortgagor be entitled to delay payment of any Imposition if the delay in
payment could subject any portion of the Mortgaged Property to possible
foreclosure or in any event unless the Mortgagor deposits with Mortgagee a sum
of money or such other security as the Mortgagee deems reasonable to cover the
amount of such Imposition plus any interest or penalty that may become due as a
result of such contest.
5. INSURANCE. The Mortgagor agrees, at the Mortgagor's sole cost and
expense, to keep the Mortgaged Property insured at all times throughout the term
of this Mortgage with policies of insurance of the types set forth below:
(a) PROPERTY INSURANCE. Physical hazard insurance on an "all risks"
basis, including without limitation the hazards of earthquake and collapse, with
a full replacement cost endorsement (including builder's risk during any period
or periods of time that construction or remodeling is being performed on the
Mortgaged Property), in an amount equal to 100% of the full replacement cost of
all improvements (excluding only the reasonable value of footings and
foundations) and the Mortgagor's contents therein, determined to the reasonable
satisfaction of the Mortgagee, and in any event, in an amount sufficient to
prevent the Mortgagor from incurring any co-insurance liability.
(b) SYSTEM INSURANCE. A policy or policies of insurance against loss or
damage arising from incidents relating to the air conditioning and/or heating
systems, electrical systems, other pressure vessels, high pressure piping and
machinery, if any, installed in the buildings and improvements, for an amount
reasonably satisfactory to the Mortgagee.
(c) BUSINESS INTERRUPTION AND/OR LOSS OF RENTAL VALUE INSURANCE.
Business interruption and/or loss of rental insurance for a period of twelve
months in such amounts as are reasonably satisfactory to the Mortgagee.
(d) FLOOD INSURANCE. If the Real Property is located in an area
designated by any governmental agency as an area of special flood hazard, such
insurance against damage caused by flooding as the Mortgagee shall reasonably
request.
(e) AUTOMOBILE INSURANCE. Policies of comprehensive automobile
liability insurance on an occurrence basis arising out of vehicles owned,
unowned or hired by Mortgagor for bodily injury and property damage with limits
of not less than $1,000,000 in the aggregate, including $1,000,000 of primary
coverage.
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(f) WORKER'S COMPENSATION. Policies of worker's compensation insurance
including employer's liability with policy limits of not less than $100,000.
(g) LIABILITY/UMBRELLA INSURANCE. Policies of comprehensive general
liability and umbrella insurance on an occurrence basis against claims for
bodily injury and property damage with limits of liability satisfactory to the
Mortgagee and in any event not less than $10,000,000 in the aggregate, including
$1,000,000 of primary coverage. The Mortgagor and the Mortgagee shall be named
insurers under such policies, as their interests may appear.
(h) ADDITIONAL INSURANCE. Insurance with respect to such other
insurable risks relating to the Mortgaged Property or the Mortgagor in such
amounts and containing such terms and conditions as the Mortgagee may reasonably
require from time to time.
No such insurance shall be blanketed with insurance on other properties without
the prior written consent of the Mortgagee, which consent shall not be
unreasonably withheld. The Mortgagor shall deposit all insurance policies (or
certificates thereof acceptable to the Mortgagee) providing coverage applicable
to the Mortgaged Property, whether or not required by this Mortgage, with the
Mortgagee forthwith after the binding of such insurance, and shall deliver to
the Mortgagee new policies (or certificates thereof acceptable to the Mortgagee)
for any insurance about to expire at least thirty (30) days before such
expiration. All such insurance policies shall be first payable in case of loss
to the Mortgagee by means of a standard non-contributory mortgagee clause, shall
be written by such companies, on such terms, in such form and for such periods
and amounts as the Mortgagee shall from time to time designate or approve, shall
be primary and without right of contribution from other insurance which may be
available, shall waive any right of setoff, counterclaim, subrogation, or any
deduction in respect of any liability of the Mortgagor and the Mortgagee, shall
provide that with respect to the Mortgagee, the insurance shall not be
invalidated by any action or inaction by the Mortgagor including without
limitation any representations made by the Mortgagor in the procurement of such
insurance, and shall provide that they shall not be canceled or amended without
at least thirty (30) days' prior written notice to the Mortgagee. The Mortgagor
hereby grants the Mortgagee full power and authority as attorney irrevocable of
the Mortgagor to cancel or transfer such insurance, to collect and endorse any
checks issued in the name of the Mortgagor and to retain any premium and to
apply the same to the obligations secured hereby provided, however, that
Mortgagee shall provide Mortgagor five (5) days prior written notice before
executing any instrument as attorney in fact.
6. MAINTENANCE AND ALTERATIONS. The Mortgagor shall maintain the Mortgaged
Property at all times in as good repair and condition as the same now is or may
hereafter be put, damage from casualty expressly not excepted. The Mortgagor
shall not take any action, or permit any condition or activity, which could
diminish the value of the Mortgaged Property or invalidate any insurance
required to be provided under this Mortgage. The Mortgagor shall not remove or
alter any of the improvements, equipment, appliances, furnishings and fixtures
constituting part of the Mortgaged Property without promptly replacing any such
item with an item of equivalent utility and value. The Mortgagor shall permit
the Mortgagee, its agents and employees reasonable opportunity to enter upon the
Mortgaged Property for the purpose of inspecting the condition of the Mortgaged
Property and determining the Mortgagor's compliance with the covenants contained
in this Mortgage.
7. USE AND COMPLIANCE WITH LAW. The Mortgagor shall maintain the Mortgaged
Property in a first class condition and shall not change nor suffer or permit
any change in the use or character thereof without the prior written consent of
the Mortgagee. The Mortgagor shall continuously occupy all of the Real Property,
or cause the same to be occupied by the Mortgagor's lessees, licensees, or
concessionaires. The Mortgagor shall not permit any violation of any law,
by-law, ordinance, public or private restriction, regulation, order or code
affecting the Mortgaged Property or the use thereof or take any action or permit
any condition or activity which could invalidate any license or permit needed
for the use and occupancy of the Mortgaged Property. The Mortgagor shall
indemnify, defend and hold harmless the Mortgagee and each of the Mortgagee's
agents, employees, successors and contractors from and against all loss,
liability, damage and expense, and all costs associated with any defense of any
claim with respect to any of the foregoing, including attorneys' fees and
expenses, occasioned by or associated with the actual or alleged existence at
the Real Property of any substance or material, the generation, handling,
storage or disposal of which is regulated by any governmental requirement;
provided, however, that the foregoing
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indemnity shall not apply if the loss, liability, damage or expense is a result
of the act or omission by the Mortgagee, its lessees, tenants, agents, employees
and independent contractors.
8. LEASES. The Mortgagor shall observe and perform all the obligations
imposed upon the Mortgagor under any lease of the Real Property or any portion
thereof, and shall not do or permit to be done anything which would impair the
security of any such lease to the Mortgagee, nor cancel or change any terms,
conditions or covenants of any lease of the Real Property or any portion thereof
without the prior written consent of the Mortgagee, nor execute any lease
providing for payment of rent for more than one month in advance, nor receive
rent from any tenant of all or any part of the Real Property for more than one
month in advance without the prior written consent of the Mortgagee. The
Mortgagee agrees not to unreasonably withhold its consent to any change,
cancellation of the covenants of any Lease, any change in the condition of the
Premises, or concerning the execution of a Lease providing for payment of rent
for more than one month in advance. The Mortgagor agrees to hold in trust for
the benefit of the Mortgagee any such advance rent in excess of one month
received by the Mortgagor. The Mortgagor agrees to send to the Mortgagee any
notice of default given by the Mortgagor to any lessee or occupant of the Real
Property and any notice of default received by the mortgagor from any tenant or
other occupant of the Real Property, and to give prompt written notice to the
Mortgagee of any material default on the part of any tenant or other occupant of
the Real Property, whether or not the Mortgagor has given notice of such
condition to the tenant or occupant in default. No tenant or occupant under any
lease of the Real Property which is subordinate to this Mortgage shall be
entitled to terminate such tenant's or occupant's lease without giving the
Mortgagee written notice of the Mortgagor's default under such lease and, if
Mortgagor fails to cure any default within the applicable grace period, if any,
contained in said lease, giving Mortgagee an additional reasonable period of
time to cure such default. In no event shall the Mortgagee have any liability to
any tenant or occupant for any default by Mortgagor or for the return of any
security deposit given to the Mortgagor and in no event shall the Mortgagee be
subject to any setoff, defense or claim which any tenant or occupant may have
against the Mortgagor. Any tenant or occupant of the Real Property shall,
promptly after receipt of a request from the Mortgagee made at any time prior to
foreclosure of this Mortgage, execute, acknowledge and deliver to the Mortgagee
such instrument as the Mortgagee may reasonably request agreeing to attorn to
the Mortgagee, at the election of the Mortgagee, after the foreclosure of this
Mortgage.
The Mortgagee shall have the right to subordinate this Mortgage and its
rights hereunder to any lease of the Real Property or any portion thereof which
is subordinate to this Mortgage, except that the Mortgagee shall be entitled to
expressly exclude from such subordination the Mortgagee's rights to insurance
proceeds and eminent domain awards in the event of a loss or casualty or eminent
domain taking of the Mortgaged Property or any portion thereof. If the Mortgagee
executes and records an instrument which purports to effect a partial or
complete subordination of this Mortgage to any lease which is subordinate to
this Mortgage, such lease shall not be terminated by a foreclosure of this
Mortgage, but any rights of the Mortgagee to insurance proceeds or eminent
domain awards which are expressly excluded from such subordination shall remain
superior to the rights of the tenant under such lease.
9. CONDITIONAL ASSIGNMENT OF LEASES AND RENTS. As additional security for
the obligations secured hereby, the Mortgagor hereby assigns to the Mortgagee
all of the Mortgagor's rights under any and all leases or other arrangements for
the use or occupancy of all or any part of the Mortgaged Property, including
without limitation, the right to receive rent or other payment, provided,
however, the Mortgagor shall retain the right to receive such rents and payments
and exercise its other rights under such leases and other arrangements until the
occurrence of an Event of Default, as defined herein, under this Mortgage. After
an Event of Default, the Mortgagee shall be entitled to modify and otherwise
deal with all such leases and other arrangements with the same power and
discretion which the Mortgagee would have if it were the lessor thereof, and the
Mortgagee shall be entitled to collect all of the rents and other payments, to
collect and endorse any checks issued in the name of the Mortgagor and to apply
the same to the debt secured hereby, and after foreclosure the Mortgagee shall
not be liable to account to the Mortgagor for rents or other payments thereafter
accruing.
10. REPORTING REQUIREMENTS. The Mortgagor shall furnish the Mortgagee, from
time to time, within a reasonable time after its demand, a true and complete
statement of the annual operating expenses and income of the Mortgaged Property
together with a rent roll, description of leasing prospects, forecasts for
income and
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expenditures, and such other information concerning the Mortgaged Property as
the Mortgagee may reasonably request, and financial statements of the principal
owners and any guarantors and endorsers and if requested, shall furnish such
information on a periodic basis without additional requests. Such financial
statements shall be prepared in accordance with generally accepted principles of
accounting consistently applied, shall be in a form satisfactory to the
Mortgagee, and if requested by the Mortgagee, shall be reviewed by an
independent public accountant satisfactory to the Mortgagee.
11. CASUALTIES AND TAKINGS. If the Mortgaged Property or any part thereof
shall be damaged or destroyed by fire or other hazard insured against, or if the
Mortgaged Property or any portion thereof or interest therein shall be taken by
eminent domain, the Mortgagor shall promptly give written notice thereof to the
Mortgagee and promptly take such action as is required to collect any applicable
insurance proceeds or any eminent domain award. No settlement on account of any
loss, damage or taking shall be made without the prior written consent of the
Mortgagee. If, in the Mortgagee's sole judgment, the Mortgagor is not proceeding
promptly to settle such claims in a manner satisfactory to the Mortgagee, or if
there has occurred an Event of Default, as defined herein, which has not been
waived in writing by the Mortgagee, the Mortgagee may settle any claims with the
insurers or taking authority and the Mortgagee is hereby irrevocably appointed
attorney-in-fact for the Mortgagor to settle such claims and to collect and
endorse any checks issued in the name of the Mortgagor. Any proceeds from
insurance or wards for such taking, as the case may be, shall be paid to the
Mortgagee.
The Mortgagee, in its discretion, may either apply any insurance proceeds or
eminent domain award against any of the obligations secured hereby, or release
all or a portion of the proceeds to the Mortgagor upon such terms and conditions
as the Mortgagee deems appropriate, and apply the balance thereof, if any, to
the obligation secured hereby.
12. OTHER SECURITY INTERESTS AND EQUIPMENT LEASING. The Mortgagor shall not
permit, without the prior written consent of the Mortgagee, (i) the creation or
continued existence, whether by voluntary action or operation of law, of any
security interest in or other encumbrance on the Mortgaged Property other than
the lien for unpaid real estate taxes and betterment assessments prior to the
commencement of interest and penalties thereon, or (ii) the leasing of any
equipment to be used by the Mortgagor at or in connection with the operation of
the Mortgaged Property; provided, however, that in the case of a security
interest or encumbrance created by operation of law, the Mortgagor shall be
required to discharge any such encumbrance or cause the encumbrance to be bonded
over within fourteen (14) days. The Mortgagor shall notify the Mortgagee
promptly of the existence of and the terms of any security interest affecting
any portion of the Mortgaged Property and any lease of personal property to be
used by the Mortgagor at or in connection with the operation of the Real
Property, whether now existing or hereafter arising, shall make all payments
that become due to any secured party having any such security interest or any
lessor of such equipment, and at the request of the Mortgagee shall assign to
the Mortgagee all of its right, title and interest in and to any and all
agreements evidencing such security interest or lease. The Mortgagor hereby
grants the Mortgagee full power and authority as attorney-in-fact of the
Mortgagor to make, execute, acknowledge and deliver such assignments. The
Mortgagor represents that, except as previously disclosed in writing to the
Mortgagee, no such security interest or lease presently exists.
If at any time the Mortgaged Property or any portion thereof is subject
to a security interest other than this Mortgage, or any equipment used by the
Mortgagor at or in connection with the operation of the mortgaged Property is
owned other than by the Mortgagor, the Mortgagor shall not modify, amend or fail
to comply with any term or condition of such security interest or the
obligations secured thereby, or any lease of such equipment, without the prior
written consent of the Mortgagee. Notice is given hereby to any holder of a
junior security interest in or other encumbrance on the Mortgaged Property that
the Loan Documents may be amended. The holder of any such security interest or
encumbrance, by accepting such security interest or encumbrance subject to this
Mortgage shall be deemed to have agreed to any amendment of the Loan Documents,
including without limitation any change in interest rate.
13. UCC REPRESENTATIONS. The Mortgagor warrants that the Mortgagor's
principal place of business in Massachusetts is at 00 Xxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxxxxx, and that Mortgagor has no other place of business in
Massachusetts. The Mortgagor agrees to maintain complete and accurate records
listing and describing the
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Personal Property and to deliver such records to the Mortgagee form time to time
upon request of the Mortgagee. Without limiting any of the provisions of this
Mortgage, the Mortgagor hereby grants to the Mortgagee a security interest in
the Personal Property. This Mortgage shall constitute a security agreement
within the meaning of the Uniform Commercial Code as enacted in Massachusetts
with respect to the Personal Property and a security interest shall attach
thereto and shall be vested directly in the Mortgagee to secure the obligations
secured by this Mortgage. Upon the occurrence of an Event of Default, as defined
herein, and at all other times, in addition to all of its other rights hereunder
and t law and in equity, the Mortgagee shall have all of the rights of a secured
party under the Uniform Commercial Code. The Mortgagee shall have no duty of
care with respect to any part of the Mortgaged Property.
14. TRANSFERS. The Mortgagor shall not suffer or permit a change, whether
effected by voluntary act or by operation of law, in the legal or direct or
indirect beneficial ownership of (i) the Mortgaged Property or any portion
thereof or (ii) any interest in the Mortgagor except in accordance with the
terms of the Letter of Intent and Loan Agreement. The Mortgagor shall not enter
into any lease or combination of leases or other arrangements which have the
effect of transferring to any other person or affiliated group the right to use
or occupy all or substantially all of the Real Property. The Mortgagee may,
without notice to the Mortgagor, deal with the Mortgagor's successor or
successors in interest with reference to this Mortgage and the debt secured
hereby in the same manner as with the Mortgagor without in any way releasing,
discharging or modifying the Mortgagor's liability or obligations with respect
to this Mortgage or the debt secured hereby. No transfer of any interest in any
part of the Mortgaged Property or interest therein shall operate to release,
discharge, modify, change or affect the original liability of the Mortgagor, nor
the priority of this Mortgage either in whole or in part.
15. MORTGAGEE'S RIGHT TO CURE AND EXPENSES. The Mortgagee shall be
entitled, but not obligated, to cure any failure of the Mortgagor to perform its
obligations under this Mortgage and to commence, intervene in or otherwise
participate in any legal or equitable proceeding which in the Mortgagee's sole
judgment affects the Mortgaged Property or any rights created or secured by this
Mortgage or any obligation secured hereby. If the Mortgagee shall become
involved in any action or course of conduct with respect to the Lot 3 Note, this
Mortgage, any of the other Loan Documents, the Mortgaged Property or other
security for the debt or obligations secured hereby in order to protect its
interest therein or cure any default of the Mortgagor hereunder, the Mortgagor
shall, on demand, reimburse the Mortgagee for all reasonable charges, costs and
expenses incurred by the Mortgagee in connection therewith, including without
limitation reasonable attorneys' fees and expenses, and an additional reasonable
fee to compensate the Mortgagee for overhead and personnel salaries and wages
attributable to undertaking such actions or conduct, together with interest
thereon, from the date incurred until paid at an interest rate equal to the
rate, if any, of interest specified in the Lot 3 Note to be in effect after
there has been a default and the principal sum has been declared due and
payable, but in no event higher than the highest rate permitted by law.
16. EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default:
(a) failure to pay interest or principal within the applicable grace
period, if any, on the Lot 3 Note in accordance with their respective terms;
(b) breach of the covenants, conditions or agreements in any Loan
Document or in any other mortgage, debt or obligation of or from the Mortgagor
to the Mortgagee or in any other mortgage or instrument which constitutes a lien
on all or any part of the Mortgaged Property, in each case, if it remains
uncured after the expiration of any applicable grace period;
(c) breach of any covenant contained in the Sections herein entitled
"Insurance", "Other Security Interests and Equipment Leasing" and "Transfers";
(d) breach of any other covenant, condition or agreement contained in
this Mortgage remaining uncured for a period in excess of fifteen (15) days;
provided that in the case of any breach which is susceptible to cure but cannot
be cured within thirty (30) days through the exercise of reasonable diligence,
so long as the Mortgagor commences such cure within thirty (30) days, such
breach remains susceptible to cure, and the Mortgagor diligently pursues such
cure, such breach shall not be deemed to create an Event of Default hereunder;
9
(e) failure of the Mortgagor to cause to be dismissed any proceeding
against the Mortgagor, and if applicable, any holder of a general partnership
interest in the Mortgagor, any guarantor of any of the Mortgagor's obligations
or any endorser of the Lot 3 Note (the Mortgagor and if applicable any such
general partner, guarantor or endorser shall each be an "Obligor") under any law
relating to bankruptcy, reorganization, insolvency or relief of debtors, within
thirty (30) days from the date on which it is filed or instituted, or the filing
or other institution of a proceeding by any Obligor under any such law; provided
that the Mortgagor commences dismissal efforts within said thirty (30) days and
the Mortgagor thereafter diligently pursues such dismissal, such breach shall
not be deemed to create an Event of Default until a total of ninety (90) days
from the date on which it is filed or instituted has passed.
(f) death of any Obligor who is an individual excepting only the death
of a Trustee of any obligor, the liquidation, termination, dissolution, merger
or consolidation of any Obligor which is not an individual, the insolvency of
any Obligor or the inability of any Obligor to pay such Obligor's debts when
due;
(g) material inaccuracy when made of any statement, representation or
warranty made by the Mortgagor to the Mortgagee in this Mortgage or in any Loan
Document; and
(h) breach of the Statutory Condition.
If an Event of Default shall occur, then, at the option of the
Mortgagee, without any further notice to the Mortgagor, the entire debt secured
hereby, shall be due and payable, and the Mortgagee shall have the STATUTORY
POWER OF SALE and shall be entitled to exercise any and all other rights and
remedies contained herein or in any of the Loan Documents or available at law,
including all rights and remedies available to a secured party under the Uniform
Commercial Code. The Mortgagor agrees that the requirement of the Uniform
Commercial Code with respect to personal property that a secured party give a
debtor reasonable notice of any proposed sale or disposition of the collateral
shall be met if such notice is given to the Mortgagor at least five (5) days
before the time of such sale or disposition.
17. APPLICATION OF DEPOSITS AFTER DEFAULT. If the Mortgagor shall default
in the performance or observance of any covenant or agreement herein or
contained in the Lot 3 Note, the Mortgagee may apply toward the debt secured
hereby any deposit, payment or any sum due from the Mortgagee to the Mortgagor
without first enforcing any other rights of the Mortgagee against the Mortgagor
or against the Mortgaged Property.
18. SEPARATE FORECLOSURE SALES AND WAIVER OF MARSHALING. The Mortgagee may,
in the exercise of the power of sale herein given, sell the Mortgaged Property
and other security in parts or parcels. Such sale may be held form time to time
by public or private sale and the power shall not be fully executed until all of
the Mortgaged Property and said other security not previously sold shall have
been sold. If surplus proceeds are realized from a foreclosure sale, the
Mortgagee shall not be liable for any interest thereon pending distribution of
such proceeds by the Mortgagee. Any separate items of property sold together for
a single price may be accounted for in one account without distinction between
the items of security or without assigning to them any proportion of such
proceeds. The Mortgagor hereby waives the application of any doctrine of
marshaling of assets.
19. COLLECTION OF ACCOUNTS. The Mortgagee may communicate with account
debtors in order to verify the existence, amount and terms of any accounts or
contract rights and to notify account debtors of the Mortgagee's security
interest in their accounts. When requested by the Mortgagee, the Mortgagor shall
notify account debtors and indicate on all xxxxxxxx that payments are, when
requested by the Mortgagee, to be made directly to the Mortgagee. After an Event
of Default, the Mortgagee may require that payments on accounts be made directly
to the Mortgagee and shall have full power to collect, compromise, endorse, sell
or otherwise deal with the accounts or proceeds thereof and to perform the terms
of any contract in order to create accounts in the Mortgagee's name or in the
name of the Mortgagor with respect to the business conducted at the Real
Property.
20. FURTHER ASSURANCES. The Mortgagor agrees to execute and cause to be
filed or recorded, and hereby appoints the Mortgagee its duly authorized
attorney-in-fact, with full power of substitution and with authority to
10
execute, file and record on behalf of the Mortgagor, all instruments from time
to time deemed by the Mortgagee to be necessary or appropriate to evidence
further the obligations of the Mortgagor pursuant to this Mortgage or secured by
this Mortgage, or to secure further to the Mortgagee the security intended to be
provided by this Mortgage, provided that the Mortgagee provides the Mortgagor
with not less than five (5) days' prior written notice before signing any
instrument as attorney-in-fact.
21. NOTICES. Any notice, demand or other communication under this Mortgage
shall be in writing and shall be deemed to be delivered on the earlier of (i)
the date received, or (ii) the date of delivery, refusal, or non-delivery
indicated on the return receipt, if deposited in a United States Postal Service
depository, postage prepaid, sent registered or certified mail, return receipt
requested, by hand delivery or by reputable overnight courier, in each case
addressed to the party to receive the same at the address of such party set
forth at the beginning of this Mortgage, or at such other address as may be
designated in a notice delivered or mailed as herein provided.
22. WAIVERS. No course of dealing by the Mortgagee and no forbearance on
the part of the Mortgagee or extension of the time for the payment of the debt
secured hereby or any other indulgence given by the Mortgagee shall operate to
release, discharge, modify, change or affect the original liability of the
Mortgagor nor affect the Mortgagee's rights later to take such action with
respect thereto, and no waiver as to any one default shall affect the
Mortgagee's rights as to any other default.
23. ESTOPPEL CERTIFICATE. Within ten (10) days after any request by the
Mortgagee, the Mortgagor will furnish a duly acknowledged, estoppel certificate
stating the amount of the debt secured by this Mortgage, either that no offsets
or defenses exist against the indebtedness secured by this Mortgage or if such
offsets or defenses are alleged to exist the nature and extent thereof, and such
other matters concerning any Obligor or the Mortgaged Property as the Mortgagee
may reasonably request.
24. INTERPRETATION AND BINDING EFFECT. This Mortgage shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts
and shall take effect as an instrument under seal. In case any provision of the
Lot 3 Note, this Mortgage, or any instrument executed by any person or
organization in connection therewith shall be found unenforceable or invalid for
any reason, such provision shall be deemed modified to the extent necessary to
be enforceable, or if such modification is not practicable, such provision shall
be deemed deleted from this Mortgage or such other instrument and the remainder
of this Mortgage or other such instrument shall remain binding on the Mortgagor
and otherwise of full force and effect. The word "Mortgagor" as used herein
means the Mortgagor named herein, whether one or several, and also means any
subsequent owner or owners of all or any part of the Mortgaged Property. All of
the covenants and agreements of the Mortgagor herein contained shall be binding
upon the Mortgagor, its heirs, executors, administrators, successors and assigns
and shall be joint and several if more than one person constitute the Mortgagor.
The word "Mortgagee" as used herein means the Mortgagee named herein and any
subsequent holder or holders of this Mortgage.
25. LIMITATION OF LIABILITY. The Mortgagee agrees that, except as otherwise
provided in any guarantee of the Lot 3 Note or the Loan Documents, it shall
proceed only against the Mortgaged Property and any other collateral given to
secure the Lot 3 Note and that neither the Mortgagor nor any trustee or
beneficiary of Mortgagor shall be personally liable for any amounts due under
the Lot 3 Note or under the other Loan Documents for the payment of any monetary
obligation of the Mortgagor to the Mortgagee or for any deficiency which may
arise upon a foreclosure of this Mortgage or the liquidation of other collateral
given to secure the Lot 3 Note, provided that this provision shall not diminish
in any way the powers of the Mortgagee to foreclose this Mortgage and to
exercise its rights under the Loan Documents and at law in the event of default;
provided further that Mortgagor and Mortgagor's trustees and beneficiaries shall
be personally liable to the Mortgagee, to the same extent as they would have
been liable absent the foregoing: (a) for fraud or willful misrepresentations;
or (b) for the retention of any rental or other sum, not applied to expenses of
the Mortgaged Property which are actually paid to bona fide third parties, with
respect to the Mortgaged Property received at any time after the earlier of (i)
the acceleration of the Lot 3 Note, (ii) a default by the Mortgagor under any of
the Loan Documents which is not cured within the applicable grace period, or
(iii) if notice of default is required under the Loan Documents, the date such
notice is deemed to be delivered to the Mortgagor; or (c) if the Mortgagor or
any successor entity files a petition for
11
reorganization or liquidation or for protection from creditors under the United
States Bankruptcy Code or any similar state law.
26. MISCELLANEOUS.
(a) Any person or entity taking a junior mortgage or other lien on the
Mortgaged Property or interest therein, shall take said lien subject to the
rights of the Mortgagee herein to amend, modify and supplement this Mortgage,
the Lot 3 Note, and the Loan Documents and to vary the rate of interest and the
method of computing the same, and to impose additional fees and other charges
and to extend the maturity of said indebtedness, and to grant partial releases
of the lien of this Mortgage in each and every case without obtaining the
consent of the holder of such junior lien and without the lien of this Mortgage
losing its priority over the rights of any such junior lien. Nothing contained
in this section, however, shall be construed as waiving any provision contained
herein which provides, among other things, that it shall constitute an Event of
Default if the Mortgaged Property is sold, conveyed or otherwise encumbered.
(b) Neither this Mortgage nor any other Loan Document may be modified,
amended, waived, extended, changed, discharged or terminated orally, or by any
act or failure to act on the part of the Mortgagor or the Mortgagee, but only an
agreement in writing and signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought and any oral modification, amendment, waiver, extension, change,
discharge or termination of any provision of this Mortgage by a representative
of any party shall be without authority and of no force and effect.
(c) Headings in this Mortgage are for convenience and reference only
and the words and phrases contained therein shall in no way be held to explain,
modify, amplify or aid in the interpretation, construction or meaning of any of
the provisions herein.
(d) To the extent permitted by applicable law, the Mortgagor hereby
consents to waiver of trial by jury and the Mortgagor authorizes and empowers
the Mortgagee in the name, place and stead of the Mortgagor to file this
Mortgage with the Clerk or Judge of any court of competent jurisdiction as a
statutory written consent to waiver of trial by jury.
(e) In the event of the passage of any law or the issuance of any
judicial decision or regulation deducting from the value of the Real Property
for the purpose of taxation, any lien or charge thereon or changing in any way
the taxation of deeds of trust, mortgages or other debts secured by the Real
Property, so as to impose a tax lien or charge thereon or changing in any way
the taxation of deeds of trust, mortgages or other debts secured by the Real
Property, so as to impose a tax, either directly or indirectly, on this Mortgage
or any other Loan Document, or if the Mortgagor shall not be permitted by
applicable law to pay any Imposition or the payment of any Imposition would
violate any applicable usury law, at the option of the Mortgagee, the
indebtedness secured by this Mortgage shall become due and payable upon the
date(s) specified in a written notice given by the Mortgagee to the Mortgagor,
which date(s) shall be at least thirty (30) days after the date of such notice,
unless the Mortgagor shall be permitted in accordance with law to, and shall
actually, pay such Imposition or any other amounts becoming due in connection
with this Mortgage or from the Mortgagee as a result of any of the foregoing in
accordance with all applicable laws.
(f) The Mortgagor shall promptly notify the Mortgagee: (i) if the
Mortgagor learns of the occurrence of a default under any of the Loan Documents;
or (ii) if the Mortgagor is aware of any other event of condition having a
material adverse effect on the Mortgagor or the Mortgaged Property. Any such
notice shall be given in writing in accordance with the provisions of Section 21
above and shall contain a detailed statement by the Mortgagor of the steps being
taken to cure such default or to remedy the event or condition having a material
adverse effect on the Mortgagor or the Mortgaged Property.
(g) For purposes of this Mortgage, the singular shall include the
plural and vice versa, and each of the neuter, female and male genders shall
include each of the others.
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Executed as an instrument under seal as of the date first above written.
Mortgagor:
/s/ Xxxxxxx X. Xxxxxxxx, Trustee
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Trustee
as aforesaid and not individually
/s/ Xxxxxxx X. Xxxxxxxx Xx., Trustee
----------------------------------------
Xxxxxxx X. Xxxxxxxx, Xx. Trustee
as aforesaid and not individually
COMMONWEALTH OF MASSACHUSETTS
Middlesex, ss May 29, 1997
Then personally appeared the above-named Xxxxxxx X. Xxxxxxxx and
Xxxxxxx X. Xxxxxxxx, Xx., Trustees of the Andover Park Realty Trust and
acknowledged the foregoing instrument to be their free act and deed as Trustees
of aforesaid, before me,
/s/ Xxxx X. Xxxxx
----------------------------------------
, Notary Public
My Commission Expires: 6/23/2000
13
EXHIBIT A
Lot 3, as shown on the plan entitled "`Woodland Park' a subdivision in
Andover, Mass," dated February 23, 1987, Owner: Andover Park Realty Trust, by
BSC - Bedford and Xxxx X. Xxxx Assoc., Inc., Xxxxx X. Xxxxxxx, recorded with the
Essex County (North District) Registry of Deeds on May 26, 1987 as Plan No.
10726; together with the right to use, in common with others, the entire length
of Federal Street for all purposes for which public streets may be used in the
Town of Andover.
