EXHIBIT 10.5
ALLSTATE LIFE INSURANCE COMPANY
LOAN NO. 121709
RECORDING REQUESTED
WHEN RECORDED MAIL TO:
Xxxxxxxx X. Xxxxx, Esquire
000 Xxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
000-000-0000
MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND
CONTRACTS, SECURITY AGREEMENT AND FIXTURE FILING
(Fee and Leasehold)
FROM
GUSTINE SIXTH AVENUE ASSOCIATES, LTD.
AS MORTGAGOR
TO ALLSTATE LIFE INSURANCE COMPANY
AS MORTGAGEE
Premises: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX
The address of the within-named Mortgagee is:
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Commercial Mortgage Loan Servicing Manager
/s/ X. X. Xxxxx
------------------------
On Behalf of Mortgagee
TABLE OF CONTENTS
ARTICLE HEADING PAGE
------- ------- ----
I COVENANTS OF MORTGAGOR
1.01 Performance of Obligations Secured 5
1.02 Insurance 5
1.03 Condemnation 7
1.04 Damage to Property 8
1.05 Escrow Fund for Condemnation and Insurance Proceeds 10
1.06 Taxes, Liens and other Items 11
1.07 Assignment of Leases, Contracts, Rents and Profits 12
1.08 Acceleration Upon Sale or Encumbrance 16
1.09 Preservation and Maintenance of Property 16
1.10 Offset Certificates 17
1.11 Intentionally Deleted 17
1.12 Protection of Security; Costs and Expenses 17
1.13 Mortgagor's Covenants Respecting Collateral 18
1.14 Covenants Regarding Financial Statements 19
1.15 Environmental Covenants 21
1.16 Covenants Relating to Subordinate Liens 22
1.17 Covenants Regarding Ground Lease 23
II EVENTS OF DEFAULT
2.01 Monetary and Performance Defaults 28
2.02 Bankruptcy, Insolvency, Dissolution 28
2.03 Misrepresentation 29
2.04 Default under Subordinate Loans 29
2.05 Default under Ground Lease 29
III REMEDIES
3.01 Acceleration 29
3.02 Entry 29
3.03 Judicial Action 32
3.04 Foreclosure 32
3.05 Right to Remedy Defaults 33
3.06 Mortgagee's Remedies Respecting Collateral 33
3.07 Proceeds of Sales 33
3.08 Condemnation and Insurance Proceeds 34
ARTICLE HEADING PAGE
------- ------- ----
3.09 Waiver of Marshalling, Rights of Redemption, Homestead and Valuation 34
3.10 Remedies Cumulative 34
3.11 Nonrecourse 35
3.12 Evasion of Prepayment Premium 35
IV MISCELLANEOUS
4.01 Severability 36
4.02 Certain Charges and Brokerage Fees 36
4.03 Notices 36
4.04 Mortgagor Not Released 37
4.05 Inspection 38
4.06 Release 38
4.07 Statute of Limitations 38
4.08 Interpretation 38
4.09 Captions 39
4.10 Consent 39
4.11 Delegation to Subagents 39
4.12 Successors and Assigns 39
4.13 Governing Law 39
4.14 Intentionally Deleted 39
4.15 Changes in Taxation 39
4.16 Maximum Interest Rate 40
4.17 Time of Essence 40
4.18 Reproduction of Documents 40
4.19 No Oral Modifications 40
EXHIBITS
Exhibit A - Legal Description of Fee Estate Land
Exhibit B - Legal Description of Leasehold Estate Land
MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND
CONTRACTS, SECURITY AGREEMENT AND FIXTURE FILING
(Fee and Leasehold)
THIS MORTGAGE, ASSIGNMENT OF LEASES, RENTS AND CONTRACTS, SECURITY
AGREEMENT AND FIXTURE FILING is made as of this 23rd day of March, 1999, from
GUSTINE SIXTH AVENUE ASSOCIATES, LTD., whose mailing address is c/o The Gustine
Company, 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000 (herein
"Mortgagor"), in favor of ALLSTATE LIFE INSURANCE COMPANY, a corporation, whose
mailing address is Allstate Plaza South, Suite G5C, 0000 Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx, 00000 (herein "Mortgagee").
In consideration of the indebtedness herein recited and as security for
payment and performance of obligations set forth below, Mortgagor has granted,
conveyed, bargained, sold, aliened, released, confirmed, transferred, pledged,
warranted, and mortgaged, and by these presents does hereby grant, convey,
bargain, sell, alien, release, confirm, transfer, pledge, warrant, and mortgage
unto Mortgagee, its successors and assigns, all that certain land described on
Exhibit A attached to and made a part hereof (the "Fee Estate Land"), together
with
(1) All of Mortgagor's right, title and interest in, to and
under a certain Indenture of Lease dated October 14, 1902 between the Trustees
of the First Presbyterian Church of Pittsburgh, as lessor, and Xxxxx X. Xxxxxx,
as lessee, which is recorded in the Office for the Recorder of Deeds in and for
Allegheny County, Pennsylvania (the "Recording Office"), in Deed Book Volume
1318 at page 357, as amended and supplemented by Agreement dated April 13, 1903
and recorded in the Recording Office in Deed Book Volume 1318 at page 361;
Agreement dated July 18, 1940 and recorded in the Recording Office in Deed Book
Volume 2669 at page 14; Agreement dated December 27, 1951 and recorded in the
Recording Office in Deed Book Volume 3165 at page 132; and Agreement dated
January 20, 1954 and recorded in the Recording Office in Deed Book Volume 3976
at page 22; and
(2) All of Mortgagor's right, title and interest in and to the
leasehold estate created by the aforesaid Indenture of Lease in and to the
parcel of land described in the aforesaid Indenture of Lease and as described on
Exhibit B attached hereto and hereby made a part hereof (the "Leasehold Estate
Land") (which interest in the aforesaid Indenture of Lease and the leasehold
estate and term created thereby are separately and collectively referred to in
this Mortgage as the "Ground Lease"); and the appurtenances and all the estate
and rights of Mortgagor of, in and to the Property under and by virtue of the
Ground Lease and the Fee Estate Land (the Leasehold Estate Land and the Fee
Estate Land being sometimes collectively referred to in this Mortgage as the
"Land").
TOGETHER with all of Mortgagor's right, title and interest now owned or
hereafter acquired in all renewals, extensions and amendments of the Ground
Lease; all credits and
deposits thereunder, if any; all purchase and other options, privileges and
rights of Mortgagor, as tenant under the Ground Lease; and in case Mortgagor
acquires, whether by exercise of any present or future option, or by any other
manner, the fee title or any other estate, title or interest in the Leasehold
Estate Land or any portion thereof or improvements thereon covered by the Ground
Lease, this Mortgage shall attach to and cover and be a lien upon the fee title
or other estate so acquired, and such fee title or other estate shall, without
further assignment, mortgage or conveyance, become and be subject to the lien of
and covered by this Mortgage.
ALSO TOGETHER with all of Mortgagor's now existing or hereafter
acquired estate, right, title and interest in, to and under all buildings,
structures, improvements and fixtures now existing or hereafter erected on the
Land and all right, title and interest, if any, of Mortgagor in and to the
streets and roads, opened or proposed, abutting the Land to the center lines
thereof, and strips within or adjoining the Land, the air space and right to use
said air space above the Land, all rights of ingress and egress on or within the
Land, all easements, rights and appurtenances thereto or used in connection with
the Land, including, without limitation, air lateral support, alley and drainage
rights, all revenues, income, rents, cash or security deposits, advance rental
deposits, profits, royalties, and other benefits thereof or arising from the use
or enjoyment of all or any portion thereof (subject however to the rights and
authorities given herein to Mortgagor to collect and apply such revenues, and
other benefits), all interests in and rights, royalties and profits in
connection with all minerals, oil and gas and other hydrocarbon substances
thereon or therein, and water stock, all options to purchase or lease, all
development or other rights relating to the Land or the operation thereof, or
used in connection therewith, including all Mortgagor's right, title and
interest in all fixtures, attachments, partitions, machinery, equipment,
building materials, appliances and goods of every nature whatever now or
hereafter located on, or attached to, the Land, all of which, including
replacements and additions thereto, shall, to the fullest extent permitted by
law and for the purposes of this Mortgage, be deemed to be real property and,
whether affixed or annexed thereto or not, be deemed conclusively to be real
property; and Mortgagor agrees to execute and deliver, from time to time, such
further instruments and documents as may be required by Mortgagee to confirm the
legal operation and effect of this Mortgage on any of the foregoing. All of the
foregoing property described in this paragraph (the "Improvements") together
with the Ground Lease, the Fee Estate Land and all appurtenances thereto, shall
be hereinafter referred to as the "Property".
MORTGAGOR FURTHER GRANTS to Mortgagee a security interest in all of
Mortgagor's now existing or hereafter acquired right, title and interest in the
following:
(A) All equipment, fixtures, inventory, goods,
instruments, appliances, furnishings, machinery, tools, raw materials, component
parts, work in progress and materials, and all other tangible personal property
of whatsoever kind, used or consumed in the improvement, use or enjoyment of the
Property now or any time hereafter owned or acquired by Mortgagor, wherever
located and all products thereof whether in possession of Mortgagor or whether
located on the Property or elsewhere;
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(B) To the extent such general intangibles are
assignable, all general intangibles relating to design, development, operation,
management and use of the Property, including, but not limited to, (1) all names
under which or by which the Property may at any time be owned and operated or
any variant thereof, and all goodwill in any way relating to the Property and
all service marks and logotypes used in connection therewith, (2) all permits,
licenses, authorizations, variances, land use entitlements, approvals, consents,
clearances, and rights obtained from governmental agencies issued or obtained in
connection with the Property, (3) all permits, licenses, approvals, consents,
authorizations, franchises and agreements issued or obtained in connection with
the construction, use, occupation or operation of the Property, (4) all
materials prepared for filing or filed with any governmental agency, and (5) the
books and records of Mortgagor relating to construction, or operation of the
Property;
(C) All shares of stock or partnership interest or other
evidence of ownership of any part of the Property that is owned by Mortgagor in
common with others, and all documents or rights of membership in any owners' or
members' association or similar group having responsibility for managing or
operating any part of the Property provided, however, that the foregoing shall
not include any ownership interests in the Mortgagor;
(D) All accounts, deposit accounts, tax and insurance
escrows held pursuant to this Mortgage, accounts receivable, instruments,
documents, documents of title, general intangibles, rights to payment of every
kind, all of Mortgagor's rights, direct or indirect, under or pursuant to any
and all construction, development, financing, guaranty, indemnity, maintenance,
management, service, supply and warranty agreements, commitments, contracts,
subcontracts, insurance policies, licenses and bonds now or anytime hereafter
arising from construction on the Land or the use or enjoyment of the Property to
the extent such are assignable;
(E) All condemnation proceeds (including payments in lieu
thereof) and insurance proceeds related to the Property;
Together with all additions to, substitutions for and the products of
all of the above, and all proceeds therefrom, whether cash proceeds or noncash
proceeds, and including insurance and condemnation proceeds, received when any
such properly (or the proceeds thereof) is sold, exchanged, leased, licensed, or
otherwise disposed of, whether voluntarily or involuntarily. Such proceeds shall
include any of the foregoing specifically described property of Mortgagor
acquired with cash proceeds. Together with, and without limiting the above
items, all Goods, Accounts, Documents, Instruments, Money, Chattel Paper and
General Intangibles arising from or used in connection with the Property, as
those terms are defined in the Uniform Commercial Code from time to time in
effect in the state in which the Property is located. (All of the foregoing
including such products and proceeds thereof, are collectively referred to as
"Collateral".)
The personal property in which Mortgagee has a security interest
includes goods which are or shall become fixtures on the Property. This Mortgage
is intended to serve as a fixture filing pursuant to the terms of the applicable
provisions of the Uniform Commercial Code of the
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state in which the Property is located. This filing is to be recorded in the
real estate records of the appropriate city, town or county in which the
Property is located. In that regard, the following information is provided:
Names of Debtor: Gustine Sixth Avenue Associates, Ltd., a
Pennsylvania limited partnership
Address of Debtor: See section 4.03 hereof
Name of Secured Party: Allstate Life Insurance Company, an Illinois
insurance corporation
Address of Secured Party: See section 4.03 hereof.
Mortgagor warrants and agrees that there is no financing statement
covering the foregoing Collateral, the Property, or any part thereof, on file in
any public office.
TO HAVE AND TO HOLD the Property and the Collateral hereby conveyed or
mentioned and intended so to be, unto Mortgagee, its successors and assigns,
forever subject to and for the purposes and uses herein set forth. This Mortgage
secures:
(A) The repayment of the indebtedness evidenced by that
certain Mortgage Note ("Note") of even date herewith with a maturity date of
April 1, 2014 executed by Mortgagor and payable to the order of Mortgagee, in
the principal sum of Seventeen Million Nine Hundred Thousand Dollars ($
17,900,000) with interest thereon, as provided therein and all late charges,
loan fees, commitment fees, Prepayment Premiums (as described in the Note), and
all extensions, renewals, modifications, amendments and replacements thereof;
(B) The payment of all other sums which may be advanced
by or otherwise be due to Mortgagee under any provision of this Mortgage or
under any other instrument or document referred to in clause (C) below, with
interest thereon at the rate provided herein or therein;
(C) The performance of each and every covenant and
agreement of Mortgagor contained (1) herein, in the Note, or in any note
evidencing a Future Advance (as hereinafter defined), and (2) in the obligations
of Mortgagor upon any and all pledge or other security agreements, loan
agreements, disbursement agreements, supplemental agreements (the foregoing
shall not include the Commitment Letter between Mortgagor and Mortgagee),
assignments (both present and collateral) and all instruments of indebtedness or
security now or hereafter executed by Mortgagor in connection with any
indebtedness referred to in clauses (A), (B) or (D) of this section [including
but not limited to the Assignment of Leases and Rents] or for the purpose of
supplementing or amending this Mortgage or any instrument secured hereby (all of
the foregoing in this clause (C), as the same may be amended, modified or
supplemented from
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time to time, being referred to hereinafter as "Related Agreements") and all
costs and expenses, including reasonable attorneys' fees with respect to all
such documents, including, without limitation, the negotiation and drafting of
any loan settlement or workout agreement; and
(D) The repayment of any other loans or advances, with
interest thereon, hereafter made to Mortgagor (or any successor in interest to
Mortgagor as the owner of the Property or any part thereof) by Mortgagee when
the promissory note evidencing the loan or advance specifically states that said
note is secured by this Mortgage, together with all extensions, renewals,
modifications, amendments and replacements thereof (herein and in the Related
Agreements "Future Advance").
PROVIDED ALWAYS, and this instrument is upon the express condition
that, if Mortgagor pays to Mortgagee the principal sum mentioned in the Note,
the interest thereon and all other sums payable by Mortgagor to Mortgagee as are
secured hereby, in accordance with the provisions of the Note and this Mortgage,
at the times and in the manner specified, without deduction, fraud or delay, and
Mortgagor performs and complies with all the agreements, conditions, covenants,
provisions and stipulations contained herein, in the Note and in the Related
Agreements, then this Mortgage and the estate hereby granted shall cease and
become void.
ARTICLE I
COVENANTS OF MORTGAGOR
To protect the security of this Mortgage, Mortgagor covenants and
agrees as follows:
1.01. Performance of Obligations Secured. Mortgagor shall promptly
pay when due the principal of and interest on the indebtedness evidenced by the
Note, the principal of and interest on any Future Advance, any Prepayment
Premium and late charges provided for in the Note or in any note evidencing a
Future Advance, and shall further perform fully and in a timely manner all other
obligations of Mortgagor contained herein or in the Note or in any note
evidencing a Future Advance or in any of the Related Agreements.
1.02. Insurance. For all times during the period there remains any
indebtedness under the Note, or any and all other indebtedness (including
without limitation Future Advances) secured by this Mortgage, Mortgagor shall
keep the Property insured against all risks or hazards as Mortgagee may require.
Such insurance shall be in policy form, amount and coverage satisfactory to
Mortgagee, including, but not limited to:
(A) Fire and extended coverage property damage insurance,
including, but not limited to all risk insurance, in an amount equal to the full
replacement value of the Improvements, without coinsurance deducting for
depreciation, containing a waiver of subrogation clause and a deductible amount
acceptable to Mortgagee;
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(B) Public liability insurance, in such form, amount and
deductible satisfactory to Mortgagee, and naming Mortgagee c/o Mortgagee's
servicing agent, if any, as additional insured covering Mortgagee's interest in
the Property;
(C) Business interruption or rent loss insurance
endorsement in an amount at least equal to one hundred percent (100%) of the sum
of: annual debt service on the Note, the annual debt service on any other
financing permitted by Mortgagee, ground rents, if any, and operating expenses,
including, without limitation, real estate taxes and assessments and insurance,
for the Property;
(D) Flood insurance required by and obtainable through
the National Flood Insurance Program sufficient to cover any damage which may be
anticipated in the event of flood unless Mortgagor has provided Mortgagee
evidence satisfactory to Mortgagee that no portion of the Property is located
within the boundaries of the one hundred (100) year flood plain;
(E) "Dram shop" insurance if alcoholic beverages are sold
on the Property;
(F) Boiler and machinery insurance when risks covered
thereby are present and Mortgagee requires such insurance; and
(G) Earthquake insurance if Mortgagee requires such
insurance.
The insurance coverages described in subsections (A), (C), (D), (F) and (G)
above shall name Mortgagee c/o Mortgagee's servicing agent, if any, under a
standard noncontributory mortgagee clause or otherwise directly insure
Mortgagee's interest in the Property. All losses under said insurance shall be
payable to Mortgagee in the manner provided in sections 1.04 and 1.05 hereof.
All policies of insurance required under this section 1.02 shall be with a
company or companies with a policy rating of A and financial rating of at least
Class X in the most current edition of Best's Insurance Reports and authorized
to do business in the state in which the Property is located. All policies of
insurance shall provide that they will not be cancelled or modified without
thirty (30) days' prior written notice to Mortgagee. True copies of the above
mentioned insurance policies or evidence of such insurance (in the form of
Accord Form 27) satisfactory to Mortgagee shall be delivered to and held by
Mortgagee. True copies of all renewal and replacement policies or evidences of
such insurance forms (Accord Form 27) thereof shall be delivered to Mortgagee at
least thirty (30) days before the expiration of the expiring policies. If any
renewal or replacement policy is not obtained as required herein, Mortgagee is
authorized to obtain the same in Mortgagor's name and at Mortgagor's expense.
Mortgagee shall not by the fact of failing to obtain any insurance, incur any
liability for or with respect to the amount of insurance carried, the form or
legal sufficiency of insurance contracts, solvency of insurance companies, or
payment or defense of lawsuits, and Mortgagor hereby expressly assumes full
responsibility therefor and all liability, if any, with respect thereto.
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1.03. Condemnation.
(A) Immediately upon obtaining knowledge of the
commencement or threat of any action in connection with (1) any condemnation,
(2) any other taking of the Property or any part thereof by any public authority
or private entity having the power of eminent domain, or (3) any conveyance in
lieu of such condemnation or taking of the Property or any part thereof
("Condemnation"), Mortgagor shall notify Mortgagee in writing but in no event
later than ten (10) days after Mortgagor obtains knowledge of the commencement
of or threat of a Condemnation. Mortgagee shall have the right, but not the
obligation, to participate in any proceedings relating to any Condemnation and
may, in its sole discretion, consent or withhold its consent to any settlement,
adjustment, or compromise of any claims arising from the Condemnation and no
such settlement, adjustment or compromise shall be final or binding upon
Mortgagee without Mortgagee's prior consent.
(B) If all or part of the Property is taken by
Condemnation and Mortgagee in its reasonable judgment determines that the
remainder of the Property, if any, cannot be operated as an economically viable
entity at substantially the same level of operations as immediately prior to
such Condemnation, then all proceeds of the Condemnation ("Condemnation
Proceeds") shall be paid over to Mortgagee and shall be applied first toward
reimbursement of the costs and expenses (including reasonable attorneys' fees)
of Mortgagee, if any, in connection with the recovery of such Condemnation
Proceeds, and then, in the sole and absolute discretion of Mortgagee and without
regard to the adequacy of its security under this Mortgage, shall be applied
against all amounts due herein or under the Note and any remaining Condemnation
Proceeds shall be released to the Mortgagor. Partial prepayment of the Note
under this section 1.03(B) shall not be subject to the Prepayment Premium;
however, such partial prepayment shall not entitle Mortgagor to prepay the
portion of the Note remaining unpaid after application of the Condemnation
Proceeds. Prepayment of the balance shall continue to be subject to the terms
and conditions of the Note, including the No-Prepayment Period and the
Prepayment Premium described therein.
(C) If less than all of the Property is taken by
Condemnation and Mortgagee in its reasonable judgment determines that the
remainder of the Property can be operated as an economically viable entity at
substantially the same level of operations as immediately prior to such
Condemnation, then Mortgagor shall diligently restore the Property to a
condition and use as close as possible to its condition immediately prior to the
Condemnation and all Condemnation Proceeds shall be made available to Mortgagor
for such restoration. If the estimated cost of restoration, as reasonably
determined by Mortgagee, is equal to or less than Fifty Thousand and 00/100
Dollars ($50,000), all Condemnation Proceeds shall be released directly to
Mortgagor for restoration of the Property. If the estimated cost of restoration
exceeds Fifty Thousand and 00/100 Dollars ($50,000), all Condemnation Proceeds
shall be deposited into an escrow fund in accordance with section 1.05 below.
Mortgagee shall have the right to obtain an opinion of an independent contractor
or engineer satisfactory to Mortgagee, at Mortgagor's expense, to estimate the
cost to restore the remaining portion of the Property. If the amount of
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the Condemnation Proceeds is not sufficient to restore the Property based on the
opinion of an independent contractor or engineer, subject to revision as
restorations are made, Mortgagor shall be obligated to pay the difference toward
the restoration of the Property.
(D) If an Event of Default exists at any time from the
time of a Condemnation through the completion of restoration and payment of any
Condemnation Proceeds, the use of the Condemnation Proceeds shall be governed by
the remedies set forth in Article III below. If an event has occurred which with
notice, the passage of time, or both, could become an Event of Default, then,
the Condemnation Proceeds shall be held by Mortgagee or in the Escrow Fund (as
defined below), as applicable, pending cure of such event.
1.04. Damage to Property.
(A) Promptly upon obtaining knowledge of any damage to
the Property or any part thereof with an estimated cost of restoration in excess
of Five Thousand and 00/100 Dollars ($5,000), but in no event later than five
(5) days after Mortgagor obtains such knowledge, Mortgagor shall notify
Mortgagee of such damage in writing. Mortgagor shall diligently restore the
Property to the same condition that existed immediately prior to the damage
whether or not insurance proceeds are sufficient for such restoration. All
proceeds of any insurance on the Property ("Insurance Proceeds") received by
Mortgagor shall be applied to such restoration. Mortgagee shall have the right
to obtain an opinion of an independent contractor or engineer satisfactory to
Mortgagee, at Mortgagor's expense, to estimate the cost to restore the Property
to its original condition, which opinion may be revised as restorations are
made. If the amount of the insurance proceeds is not sufficient to restore the
Property based on an independent contractor's or engineer's opinion, subject to
revision as restorations are made, Mortgagor shall be obligated to pay the
difference toward the restoration of the Property.
(B) If the estimated cost of restoration is equal to or
less than Fifty Thousand and 00/100 Dollars ($50,000), Mortgagor shall promptly
settle and adjust any claims under the insurance policies which insure against
such risks and, upon receipt of the Insurance Proceeds, Mortgagee shall deliver
such to Mortgagor for use in restoration of the Property.
(C) If the estimated cost of restoration is greater than
Fifty Thousand and 00/100 Dollars ($50,000), Mortgagee shall have the right, but
not the obligation, to participate in the settlement of the insurance claims and
may, in its sole discretion, consent or withhold its consent to any settlement,
adjustment, or compromise of such insurance claims and no such settlement,
adjustment, or compromise shall be final or binding upon Mortgagee without its
prior consent. Upon settlement of insurance claims, and if Mortgagor can
demonstrate to the reasonable satisfaction of Mortgagee that the projected ratio
of Net Operating Income, as defined below, to annual debt service due under the
Note and any other notes secured by the Property ("Debt Coverage Ratio") will be
at least one hundred five percent (105%) for the twelve (12) months immediately
following reconstruction of the Property, the insurance proceeds shall be
deposited into an escrow fund in accordance with section 1.05 below.
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As used in this Mortgage, "Net Operating Income" shall mean:
(i) all gross receipts received or anticipated (as may be
applicable) from tenants in the Property and paying rent under bona
fide leases in effect during the applicable twelve (12) month period,
calculated on a cash basis which reflects only the income actually
received during the previous twelve (12) month period as of the date of
such calculation, and any income anticipated to be received during the
following twelve (12) month period based on leases in effect as of the
date of calculation, for such time as those leases are contracted to
remain in effect without expiration by their terms or optional
termination by the tenant (unless the tenant has waived its termination
rights in writing or the term of the lease has been extended in
writing), including without limitation all amounts to be received from
tenants as payment of operating expenses but not including refundable
deposits, lease termination payments, excess tenant improvement and
leasing commission payments included as additional rent, principal or
interest payments received by Mortgagor on loans to tenants and fees
and reimbursements for work performed for tenants by Mortgagor, less:
(ii) all amounts, calculated on a cash basis, for the operation or
maintenance of the Property for the applicable twelve (12) month
period, including ground rents, the cost of property management (which
shall be no less than four percent (4%) of gross collections),
maintenance, cleaning, security, landscaping, parking maintenance and
utilities, and other costs and expenses approved in writing by
Mortgagee and amounts reasonably estimated by Mortgagee for the payment
of real estate taxes and assessments and other taxes related to the
operation of the Property, insurance premiums, necessary repairs and
future replacements of equipment; payments under the Note shall not be
included in Net Operating Income.
(D) If in the reasonable judgment of Mortgagee the
conditions of paragraph 1.04(C) cannot be satisfied, then at any time from and
after the occurrence of the damage, upon written notice to Mortgagor, Mortgagee
may declare the entire balance of the Note and/or any Future Advances then
outstanding and accrued and unpaid interest thereon, and all other sums or
payments required thereunder or under this Mortgage, without any Prepayment
Premium, to be immediately due and payable, and all insurance proceeds shall be
applied by Mortgagee first to the reimbursement of any costs or expenses
incurred by Mortgagee in connection with the damage or the determination to be
made hereunder, and then to the payment of the indebtedness secured by this
Mortgage in such order as Mortgagee may determine in its sole discretion.
(E) If an Event of Default exists at any time from the
time of damage through the completion of restoration and the final release of
any insurance proceeds to Mortgagor, the use of the insurance proceeds shall be
governed by the remedies set forth in Article III below. If an event has
occurred which with notice, the passage of time, or both, could become an Event
of Default, then the Insurance Proceeds shall be held by Mortgagee or in the
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Escrow Fund, as applicable, pending cure of such event prior to the expiration
of any applicable cure or grace period.
1.05. Escrow Fund for Condemnation and Insurance Proceeds.
(A) In the circumstances indicated above in subsections
1.03(C) and 1.04(C), all Condemnation Proceeds and Insurance Proceeds shall be
deposited in an interest bearing escrow fund ("Escrow Fund"). The escrow agent
and the form of the escrow agreement shall be reasonably satisfactory to
Mortgagee and Mortgagor. The costs and fees of such escrow agent shall be paid
by Mortgagor. If the amount of the Proceeds is not sufficient to restore the
Property based on an independent contractor's or engineer's opinion obtained by
Mortgagee at Mortgagor's expense, subject to revision as restorations are made,
Mortgagor shall be obligated to deposit in the Escrow Fund the difference
between the contractor's or engineer's estimate and the amount of the Proceeds
or deliver to the escrow agent an irrevocable, unconditional letter of credit
issued in the amount of such difference in a form and by a financial institution
acceptable to Mortgagee or other cash equivalent acceptable to Mortgagee. The
Mortgagor's funds, if necessary, and the Proceeds shall be deposited into the
Escrow Fund and shall not be released by the escrow agent unless used to restore
the Property to its original condition and unless a disbursement agent
satisfactory to Mortgagee and Mortgagor approves such disbursements from time to
time. The escrow agreement shall provide that the escrow agent shall only
disburse funds to Mortgagor so long as the restoration work is being diligently
performed by Mortgagor and only after (1) Mortgagee has approved the plans and
specifications for the restoration of the Property; (2) Mortgagor has executed a
contract acceptable to Mortgagee with a general contractor acceptable to
Mortgagee for the restoration of the Property; (3) the general contractor has
submitted lien waivers and/or releases, executed by the general contractor and
all subcontractors and suppliers which may be partial to the extent of partial
payments and which, in the case of releases, may be contingent upon payment if
the escrow agent makes payment directly to such contractor, subcontractor or
supplier; (4) Mortgagor has furnished Mortgagee with an endorsement to its title
policy showing no additional exceptions; and (5) Mortgagor has submitted such
other documents and information as may be requested by Mortgagee to determine
that the work to be paid for has been performed in accordance with the plans and
specifications approved by Mortgagee. If any requisition for payment of work
performed is for an amount which would result in the remaining balance of the
Escrow Fund to be insufficient to complete the remainder of the restoration,
Mortgagor shall advance the requisite amount in cash to the Escrow Fund
immediately upon written request from the disbursement agent or Mortgagee.
(B) Any Condemnation Proceeds and any interest thereon
remaining in the Escrow Fund after payment of the costs to complete the
restoration of the Property pursuant to the approved plans and specifications
and the costs of the escrow agent shall be paid first, to Mortgagor to the
extent of any funds of Mortgagor's contributed to the restoration pursuant to
paragraph 1.05, provided there is no Event of Default or an event which with
notice, the passage of time, or both, could become an Event of Default, and
thereafter at Mortgagee's option, any remaining Condemnation Proceeds may be
applied to the partial payment or prepayment of the
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Note without payment of any Prepayment Premium or may be returned to the
Mortgagor. If an Event of Default exists, the use of the Condemnation Proceeds
shall be governed by Article III below. If, however, an event exists which with
notice, the passage of time, or both, could become an Event of Default, the
remaining balance in the Escrow Fund shall be held by the escrow agent pending
cure of the event prior to the expiration of any applicable cure or grace
period.
(C) Any Insurance Proceeds and any interest thereon
remaining in the Escrow Fund after payment of the costs to complete the
restoration of the Property pursuant to the approved plans and specifications
and the costs of the escrow agent, provided there is no Event of Default or an
event which with notice, the passage of time, or both, could become an Event of
Default, shall be paid first, to Mortgagor to the extent of any funds of
Mortgagor's contributed to the restoration pursuant to paragraph 1.05, and
thereafter, any remaining Insurance Proceeds shall be held in the escrow as
additional collateral security for the Note, provided there is no Event of
Default or an event which with notice, the passage of time, or both, could
become an Event of Default. The entire amount remaining in such escrow shall be
paid to Mortgagee upon maturity of the Note for application to the indebtedness
secured by this Mortgage. If an Event of Default exists at any time from the
time of completion of restoration and the final application of any Insurance
Proceeds, the use of the Insurance Proceeds shall be governed by Article III
below.
1.06. Taxes, Liens and other Items.
(A) Mortgagor shall pay any and all taxes, bonds,
assessments, fees, liens, charges, fines, impositions and any accrued interest
or penalty thereon, and any and all other items which are attributable to or
affect the Property by making payment prior to delinquency directly to the payee
thereof and promptly furnish copies of paid receipts for these to Mortgagee.
Mortgagor shall promptly discharge or bond any lien or encumbrance on the
Property whether said lien or encumbrance has or may attain priority over this
Mortgage or not. This Mortgage shall be the sole encumbrance on the Property
and, if with the consent of Mortgagee it is not the sole encumbrance, then it
shall be prior to any and all other liens or encumbrances on the Property.
Provided that the priority of this Mortgage is not in any way affected,
Mortgagor may in good faith protest the payment of any tax or lien which it
believes is unwarranted or excessive and may defer payment of such tax pending
conclusion of such contest if legally permitted to do so and provided
Mortgagee's security is not jeopardized in Mortgagee's sole opinion.
(B) As further security for the payment of the Note and
the payment of real estate taxes, regular or special assessments and insurance
premiums, Mortgagor shall be required to deposit one-twelfth (1/12) of the
annual amounts of such items as estimated by Mortgagee, with each monthly
payment on the Note, so that Mortgagee will hold a sufficient amount to pay all
such charges not less than thirty (30) days prior to the date on which such
items become due and payable. Mortgagee shall be furnished evidence to allow it
to estimate such amounts, including paid receipts or annual insurance premium
statements, assessment notices and tax
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receipts. All funds so deposited shall, until applied to the payment of the
aforesaid items, as hereinafter provided, be held by Mortgagee without interest
(except to the extent required under applicable law) and may be commingled with
other funds of Mortgagee. All funds so deposited shall be applied to the payment
of the aforesaid items only upon the satisfaction of the following conditions:
(1) no Event of Default or event, which with notice or the passage of time or
both could become an Event of Default, shall have occurred; (2) Mortgagee shall
have sufficient funds to pay the full amounts of such items (which funds may
include amounts paid solely for such purpose by Mortgagor in addition to the
escrowed funds); and (3) Mortgagor shall have furnished Mortgagee with prior
written notification that such items are due and with the bills and invoices
therefor in sufficient time to pay the same before any penalty or interest
attaches and before policies of insurance lapse, as the case may be, and shall
have deposited any additional funds as Mortgagee may determine as necessary to
pay such items.
(C) Mortgagee expressly disclaims any obligation to pay
the aforesaid items unless and until Mortgagor complies with all of the
provisions set forth in subsections 1.06(A) and (B). Mortgagor hereby pledges
any and all monies now or hereafter deposited pursuant to subsection 1.06(B) as
additional security for the Note and Related Agreements. If any Event of Default
shall have occurred, or if the Note shall be accelerated as herein provided, all
funds so deposited may, at Mortgagee's option, be applied as determined solely
by Mortgagee or to cure said Event of Default or as provided in this section
1.06. In no event shall Mortgagor claim any credit against the principal and
interest due hereunder for any payment or deposit for any of the aforesaid
items.
1.07. Assignment of Leases, Contracts, Rents and Profits.
(A) Mortgagor hereby absolutely, presently and
unconditionally grants, assigns, transfers, conveys and sets over to Mortgagee
all of Mortgagor's right, title and interest in and to the following whether
arising under the Leases, by statute, at law, in equity, or in any other way:
(1) All of the leases of the Property which are
in effect on the date hereof, and entered into or in effect from time
to time after the date hereof, including, without limitation, all
amendments, extensions, replacements, modifications and renewals
thereof and all subleases, concession agreements, any ground leases or
ground subleases and all other agreements affecting the same (the
"Leases") and all guaranties thereunder;
(2) All of the rents, income, profits, revenue,
judgments, condemnation awards, Insurance Proceeds, unearned insurance
premiums and any other fees or sums payable to Mortgagor or any other
person as landlord and other benefits and rights of the Property
arising from the use, occupancy, operation or management of all or any
portion thereof or from all the Leases, and any proceeds, deposits or
security deposits relating thereto, including, without limitation, any
award to Mortgagor made hereafter in any court involving any of the
tenants under the Leases in any bankruptcy, insolvency, or
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reorganization proceeding in any state or federal court, and
Mortgagor's right to appear in any action and/or to collect any such
award or payment, and all payments by any tenant in lieu of rent
(collectively, "Rents and Profits"); and
(3) All contracts, agreements, management,
operating and maintenance agreements, warranties, licenses, permits,
guaranties and sales contracts relating to the Property and the
Collateral entered into by, or inuring to the benefit of, Mortgagor
(the "Contracts").
(B) Notwithstanding the provisions of subsection 1.07(A),
prior to the occurrence of any Event of Default hereunder, Mortgagee shall not
exercise any of the rights or powers conferred upon Mortgagee by this section
1.07, and, subject to subsection 1.07(F), Mortgagor shall have a license to
manage the Property; to collect, receive and use all Rents and Profits in
accordance with the terms of the Leases; to let the Property and to take all
actions which a reasonable and prudent landlord would take in enforcing the
provisions of the Leases and Contracts; provided, however, that all amounts so
collected shall be applied toward operating expenses, real estate taxes and
insurance relating to the Property, capital repair items necessary to the
operation of the Property, and the payment of sums due and owing under the Note,
and this Mortgage prior to any other expenditure or distribution by Mortgagor.
From and after the occurrence of an Event of Default (whether or not Mortgagee
shall have exercised Mortgagee's option to declare the Note immediately due and
payable), such license shall be automatically revoked without any action
required by Mortgagee. Any amounts received by Mortgagor or its agents in the
performance of any acts prohibited by the terms of this Mortgage, including but
not limited to any amounts received in connection with any cancellation,
modification or amendment of any of the Leases prohibited by the terms of this
Mortgage and any amounts received by Mortgagor as rents, income, issues or
profits from the Property from and after an Event of Default under this
Mortgage, the Note, or any of the other Related Agreements, shall be held by
Mortgagor as trustee for Mortgagee and all such amounts shall be accounted for
to Mortgagee and shall not be commingled with other funds of the Mortgagor. Any
person acquiring or receiving all or any portion of such trust funds shall
acquire or receive the same in trust for Mortgagee as if such person had actual
or constructive notice that such funds were impressed with a trust in accordance
herewith.
(C) Upon the occurrence of an Event of Default, the
Mortgagee shall have the right but not the obligation to perform as landlord
under the Leases and as a party under the Contracts. The assignment of Rents and
Profits set forth herein constitutes an irrevocable direction and authorization
of all tenants under the Leases to pay all Rents and Profits to Mortgagee upon
demand and without further consent or other action by Mortgagor. Mortgagor
irrevocably appoints Mortgagee its true and lawful attorney, at the option of
Mortgagee at any time, to demand, receive and enforce payment, to give receipts,
releases and satisfactions, and to xxx, either in the name of Mortgagor or in
the name of Mortgagee, for all such Rents and Profits and apply the same to the
indebtedness secured by this Mortgage.
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(D) Neither the foregoing assignment of Rents and
Profits, Leases and Contracts to Mortgagee nor the exercise by Mortgagee of any
of its rights or remedies under Article III shall be deemed to make Mortgagee a
"mortgagee-in-possession" or otherwise liable in any manner with respect to the
Property, unless Mortgagee, in person or by agent, assumes actual possession
thereof. Nor shall appointment of a receiver for the Property by any court at
the request of Mortgagee or by agreement with Mortgagor, or the entering into
possession of the Property by such receiver, be deemed to make Mortgagee a
"mortgagee-in-possession" or otherwise liable in any manner with respect to the
Property.
(E) In the event Mortgagee collects and receives any
Rents and Profits under this section 1.07 pursuant to any Monetary or
Performance Default as defined in section 2.01 hereof, such collection or
receipt shall in no way constitute a curing of the Monetary or Performance
Default.
(F) Mortgagor shall not, without the prior written
consent of Mortgagee which consent shall not be unreasonably withheld or
delayed, (1) enter into, or consent to or permit the assignment or subletting
of, any leases except that Mortgagee's prior written approval shall not be
required with respect to Leases demising no more than 10,000 rentable square
feet of the Property which provide for a term of ten (10) years or less and a
rental rate, including rental concessions, at least equal to that charged for
comparable properties within the Property's submarket area, have been negotiated
at arm's length, and do not contain material modifications to the form of lease
previously approved by Mortgagee; (2) modify, extend, cancel, consent to any
surrender or in any way alter the terms of any Leases or take any action under
or with respect to any such Leases which would materially decrease either the
obligations of the tenant thereunder or the rights or remedies of the landlord
or otherwise fail to perform the landlord's obligations under the Leases; (3)
alter, modify, change or terminate the terms of any guaranties of the Leases;
(4) create or permit any lien or encumbrance which, upon foreclosure, would be
superior to any such Leases or in any other manner impair Mortgagee's rights and
interest with respect to the Rents and Profits, (5) pledge, transfer, mortgage
or otherwise encumber or assign the Leases, the Contracts or the Rents and
Profits; or (6) collect rents more than thirty (30) days prior to their due
date. Any lease submitted for Mortgagee's consent shall, at Mortgagee's option,
be accompanied by a Subordination, Nondisturbance and Attornment Agreement in
Mortgagee's then current form.
(G) Mortgagor shall promptly give notice to Mortgagee of
any default under any of the Leases meeting the criteria of a lease for which
Mortgagee's consent would have been required pursuant to paragraph 1.07(F)
regardless of whether such leases were executed before or after the date of this
Mortgage, together with a complete copy of any notices delivered to or by the
tenant as a result of such default. Mortgagee shall have the right, but not the
obligation, to cure any default of Mortgagor under any of the Leases and all
amounts disbursed in connection with said cure shall be deemed to be
indebtedness secured hereby.
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(H) Mortgagee shall have the right to approve any lease
forms used by Mortgagor for lease of space in the Property.
(I) Mortgagor hereby represents, warrants and agrees
that:
(1) Mortgagor has the right, power and capacity
to make this assignment and that no person, firm or corporation or
other entity other than Mortgagor has or will have any right, title or
interest in or to the Leases or the Rents and Profits.
(2) Mortgagor shall, at its sole cost and
expense, perform and discharge all of the obligations and undertakings
of the landlord under the Leases. Mortgagor shall enforce the
performance of each obligation of the tenants under the Leases and will
appear in and prosecute or defend any action connected with the Leases
or the obligations of the tenants thereunder.
(J) Mortgagee shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge, any obligation,
duty or liability under the Leases or under or by reason of this assignment.
Mortgagor shall and does hereby agree to indemnify Mortgagee for and to defend
and hold Mortgagee harmless from any and all liability, loss or damage which
Mortgagee may or might incur under the Leases or under or by reason of this
assignment, and from any and all claims whatsoever which may be asserted against
Mortgagee by reason of any alleged obligations or undertakings on Mortgagee's
part to perform or discharge any of the terms, covenants or agreements contained
in the Leases. Should Mortgagee incur any liability, loss or damage under the
Leases or under or by reason of this assignment, or in the defense of any of
such claims or demands, the amount thereof, including costs, expenses and
attorneys' fees, shall be secured by this Mortgage; and Mortgagor shall
reimburse Mortgagee therefor immediately upon demand, and upon failure of
Mortgagor to do so, Mortgagee may declare all sums so secured to be immediately
due and payable.
(K) Mortgagee may take or release other security, may
release any party primarily or secondarily liable for any indebtedness secured
hereby, may grant extensions, renewals or indulgences with respect to such
indebtedness, and may apply any other security therefor held by it to the
satisfaction of such indebtedness, without prejudice to any of its rights
hereunder.
(L) Nothing herein contained and no act done or omitted
by Mortgagee pursuant to the powers and rights granted it herein shall be deemed
to be a waiver by Mortgagee of its other rights and remedies under the Note and
this Mortgage, and this assignment is made and accepted without prejudice to any
of the other rights and remedies possessed by Mortgagee under the terms thereof.
The right of Mortgagee to collect said indebtedness and to enforce any other
security therefor held by it may be exercised by Mortgagee either prior to,
simultaneously with, or subsequent to any action taken by it hereunder. It is
the intent of both Mortgagor and Mortgagee that this assignment be supplementary
to, and not in substitution or derogation of, any
15
other provision contained in this Mortgage giving Mortgagee any interest in or
rights with respect to the Leases or Rents and Profits.
(M) Neither this assignment nor pursuit of any remedy
hereunder by Mortgagee shall cause or constitute a merger of the interests of
the tenant and the Mortgagor under any of the Leases such that any of the Leases
hereby assigned are no longer valid and binding legal obligations of the parties
executing the same.
(N) Mortgagor agrees, from time to time, to execute and
deliver, upon demand, all assignments and any and all other writings as
Mortgagee may reasonably deem necessary or desirable to carry out the purpose
and intent hereof, or to enable Mortgagee to enforce any right or rights
hereunder.
1.08. Acceleration Upon Sale or Encumbrance. If (A) the Property or
any part thereof, or any interest in the Property or in Mortgagor is sold or
conveyed; (B) title to the Property or any interest therein is divested; (C) the
Property or any ownership interest in the Mortgagor is further encumbered; (D)
any lease giving the tenant any option to purchase the Property or any part
thereof is entered into; or (E) the ownership of shares of the Mortgagor or any
corporate partner of Mortgagor or the general partnership interests in any
partnership which is a general partner of the Mortgagor is encumbered,
transferred or changed, without the prior written consent of Mortgagee, then
Mortgagee shall have the right, at its option, to declare the indebtedness
secured by this Mortgage, irrespective of the maturity date specified in the
Note, immediately due and payable. Except as expressly consented to in writing
by Mortgagee, Mortgagor shall not permit any additional encumbrances on the
Property.
1.09. Preservation and Maintenance of Property. Mortgagor shall hire
competent and responsive property managers who shall be reasonably acceptable to
Mortgagee. Mortgagor or its property manager, if applicable shall keep the
Property and every part thereof in good condition and repair, in accordance with
sound property management practices and shall promptly and faithfully comply
with and obey all laws, ordinances, rules, regulations, requirements and orders
of every duly constituted governmental authority or agent having jurisdiction
with respect to the Property. Mortgagor shall not permit or commit any waste,
impairment, or deterioration of the Property, nor commit, suffer or permit any
act upon or use of the Property in violation of law or applicable order of any
governmental authority, whether now existing or hereafter enacted, or in
violation of any covenants, conditions or restrictions affecting the Property or
bring or keep any article in the Property or cause or permit any condition to
exist thereon which would be prohibited by or invalidate the insurance coverage
required to be maintained hereunder. Mortgagor shall not make any material
structural changes or alterations to the Property nor remove or demolish the
Improvements or any portion thereof without the prior written consent of
Mortgagee. Mortgagor shall promptly restore any portion of the Property which
may be damaged or destroyed. Mortgagor shall promptly bond or discharge any
mechanics' liens against the Property.
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Unless required by applicable law or unless Mortgagee has otherwise
first agreed in writing. Mortgagor shall not make or allow any changes which
will adversely affect the value of the Property to be made in the nature of the
occupancy or use of the Property or any part thereof for which the Property or
such part was intended at the time this Mortgage was delivered. Mortgagor shall
not initiate or acquiesce in any change which will adversely affect the value of
the Property in any zoning or other land use classification now or hereafter in
effect and affecting the Property or any part thereof without in each case
obtaining Mortgagee's prior written consent thereto.
1.10. Offset Certificates. Mortgagor, within three (3) days upon
request in person or within ten (10) days upon request by mail, shall furnish a
written statement duly acknowledged and notarized, of all amounts due on any
indebtedness secured hereby or secured by any of the Related Agreements, whether
for principal or interest on the Note or otherwise, and stating whether any
offsets or defenses exist against the indebtedness secured hereby and covering
such other matters with respect to any such indebtedness as Mortgagee may
reasonably require.
1.11. Intentionally Deleted.
1.12. Protection of Security; Costs and Expenses. Mortgagor and its
property manager, if applicable, shall appear in and defend any action or
proceeding purporting to affect the security of this Mortgage or any additional
or other security for the obligations secured hereby, or the rights or powers of
the Mortgagee, and shall pay all costs and expenses actually incurred,
including, without limitation, cost of evidence of title and actual attorneys'
fees, in any such action or proceeding in which Mortgagee may appear, and in any
suit brought by Mortgagee to foreclose this Mortgage or to enforce or establish
any other rights or remedies of Mortgagee hereunder or under any other security
for the obligations secured hereby. If Mortgagor fails to perform any of the
covenants or agreements contained in this Mortgage, or if any action or
proceeding is commenced which affects Mortgagee's interest in the Property or
any part thereof, including, eminent domain, code enforcement, or proceedings of
any nature whatsoever under any federal or state law, whether now existing or
hereafter enacted or amended, relating to bankruptcy, insolvency, arrangement,
reorganization or other form of debtor relief, or to a decedent, then Mortgagee
may, but without obligation to do so and without notice to or demand upon
Mortgagor, perform such covenant or agreement and compromise any encumbrance,
charge or lien which in the judgment of Mortgagee appears to be prior or
superior hereto. Mortgagor shall further pay all expenses of Mortgagee actually
incurred (including reasonable and actual fees and disbursements of counsel)
incident to the protection or enforcement of the rights of Mortgagee hereunder,
and enforcement or collection of payment of the Note or any Future Advance
whether by judicial or nonjudicial proceedings, or in connection with any
bankruptcy, insolvency, arrangement, reorganization or other debtor relief
proceeding of Mortgagor, or otherwise. Any amounts disbursed by Mortgagee
pursuant to this section or section 1.11 shall be additional indebtedness of
Mortgagor secured by this Mortgage and each of the Related Agreements as of the
date of disbursement and shall bear interest at the Default Rate set forth in
the Note, from demand until paid. All such amounts shall be payable by Mortgagor
immediately
17
upon demand. Nothing contained in this section shall be construed to require
Mortgagee to incur any expense, make any appearance, or take any other action.
1.13. Mortgagor's Covenants Respecting Collateral.
(A) Mortgagor shall execute and deliver financing and
continuation statements covering the Collateral from time to time and in such
form as Mortgagee may require to perfect and continue the perfection of
Mortgagee's security interest with respect to such property, and Mortgagor shall
pay all reasonable costs and expenses of any record searches for financing
statements Mortgagee may require.
(B) Without the prior written consent of Mortgagee,
Mortgagor shall not create or suffer to be created any other security interest
in the Collateral, including replacements and additions thereto.
(C) Without the prior written consent of Mortgagee or
except in the ordinary course of business, Mortgagor shall not sell, transfer or
encumber any of the Collateral, or remove any of the Collateral from the
Property unless Mortgagor shall promptly substitute and replace the property
removed with similar property of at least equivalent value on which Mortgagee
shall have a continuing security interest ranking at least equal in priority to
Mortgagee's security interest in the property removed.
(D) Mortgagor shall (1) upon reasonable notice (unless an
emergency or Event of Default exists) permit Mortgagee and its representatives
to enter upon the Property to inspect the Collateral and Mortgagor's books and
records relating to the Collateral and make extracts therefrom and to arrange
for verification of the amount of Collateral, under procedures acceptable to
Mortgagee, directly with Mortgagor's debtors or otherwise at Mortgagor's
expense; (2) promptly notify Mortgagee of any attachment or other legal process
levied against any of the Collateral and any information received by Mortgagor
relative to the Collateral, Mortgagor's debtors or other persons obligated in
connection therewith, which may in any way affect the value of the Collateral or
the rights and remedies of Mortgagee in respect thereto; (3) reimburse Mortgagee
upon demand for any and all costs actually incurred, including, without
limitation, reasonable and actual attorneys' and accountants' fees, and other
expenses incurred in collecting any sums payable by Mortgagor under any
obligation secured hereby, or in the checking, handling and collection of the
Collateral and the preparation and enforcement of any agreement relating
thereto; (4) notify Mortgagee of each location at which the Collateral is or
will be kept, other than for temporary processing, storage or similar purposes,
and of any removal thereof to a new location, including, without limitation,
each office of Mortgagor at which records relating to the Collateral are kept;
(5) provide, maintain and deliver to Mortgagee originals or certified copies of
the policies of insurance and certificates of insurance insuring the Collateral
against loss or damage by such risks and in such amounts, form and by such
companies as Mortgagee may require and with loss payable to Mortgagee, and in
the event Mortgagee takes possession of the Collateral, the insurance policy or
policies and any unearned or returned premium thereon
18
shall at the option of Mortgagee become the sole property of Mortgagee; and (6)
do all acts necessary to maintain, preserve and protect all Collateral, keep
all Collateral in good condition and repair and prevent any waste or unusual or
unreasonable depreciation thereof.
(E) Until Mortgagee exercises its right to collect
proceeds of the Collateral pursuant hereto, Mortgagor will collect with
diligence any and all proceeds of the Collateral. If an Event of Default exists,
any proceeds received by Mortgagor shall be held in trust for Mortgagee, and
Mortgagor shall keep all such collections separate and apart from all other
funds and property so as to be capable of identification as the property of
Mortgagee and shall deliver to Mortgagee such collections at such time as
Mortgagee may request in the identical form received, properly endorsed or
assigned when required to enable Mortgagee to complete collection thereof.
(F) Mortgagee shall have all of the rights and remedies
granted to a secured party under the Uniform Commercial Code of the state in
which the Collateral is located, as well as all other rights and remedies
available at law or in equity. During the continuance of any Event of Default
hereunder or under the Note, Mortgagee shall have the right to take possession
of all or any part of the Collateral, to receive directly or through its
agent(s) collections of proceeds of the Collateral (including notification of
the persons obligated to make payments to Mortgagor in respect of the
Collateral), to release persons liable on the Collateral and compromise disputes
in connection therewith, to exercise all rights, powers and remedies which
Mortgagor would have, but for the security agreement contained herein, to all of
the Collateral and proceeds thereof, and to do all other acts and things and
execute all documents in the name of Mortgagor or otherwise, deemed by Mortgagee
as necessary, proper and convenient in connection with the preservation,
perfection or enforcement of its rights hereunder; and
(G) After any Event of Default hereunder or under the
Note, Mortgagor shall, at the request of Mortgagee, assemble and deliver the
Collateral and books and records pertaining to the Property at a place
designated by Mortgagee, and Mortgagee may, with reasonable notice to Mortgagor
(unless an emergency or Event of Default exists), enter onto the Property and
take possession of the Collateral. It is agreed that public or private sales,
for cash or on credit to a wholesaler or retailer or investor, or user of
collateral of the types subject to the security agreement, or public auction,
are all commercially reasonable since differences in the sales prices generally
realized in the different kinds of sales are ordinarily offset by the
differences in the costs and credit risks of such sales. The proceeds of any
sale of the Collateral shall be applied first to the expenses of Mortgagee
actually incurred in retaking, holding, preparing for sale, or selling the
Collateral or similar matters, including reasonable and actual attorneys' fees,
and then, as Mortgagee shall solely determine.
1.14. Covenants Regarding Financial Statements.
(A) Mortgagor shall keep true books of record and account
in which full, true and correct entries in accordance with sound accounting
practice and principles applied on a
19
consistent basis from year to year shall be made of all dealings or transactions
with respect to the Property.
(B) (1) Mortgagor shall deliver to Mortgagee:
(A) Within sixty (60) days after the
last day of each fiscal year of the Mortgagor during the term of the
Note, unaudited annual financial reports prepared on an accrual basis,
including balance sheets, income statements and cash flow statements
covering the operation of the Property, the financial condition of
Mortgagor, Mortgagor's general partners(s), shareholder(s), member(s)
and such principals of the Mortgagor as Mortgagee may from time to time
designate, for the previous fiscal year, all certified to Mortgagee to
be complete, correct and accurate by the individual, managing general
partner, manager or chief financial officer of the party whom the
report concerns; and
(B) If available, within thirty (30)
days after receipt by Mortgagor, original annual audit reports of an
independent certified public accountant prepared in accordance with
generally accepted accounting principles containing an unqualified
opinion, including balance sheets, income statements and cash flow
statements covering the operation of the Property and the financial
condition of the Mortgagor, Mortgagor's general partner(s),
shareholder(s), member(s) and such principals of the Mortgagor as
Mortgagee may from time to time designate, for the previous fiscal
year;
(2) At the request of Mortgagee from time to
time (but no more often than once in each fiscal quarter of the Mortgagor during
the term of the Note), Mortgagor shall also deliver to Mortgagee unaudited
financial reports prepared on an accrual basis, including balance sheets, income
statements and cash flow statements covering the operation of the Property and
the financial condition of the Mortgagor, [Mortgagor's general partner(s),
shareholder(s), member(s)] and such principals of the Mortgagor as Mortgagee may
from time to time request, for the previous fiscal quarter, a portfolio analysis
report covering the operation of all properties of which Mortgagor or any of
Mortgagor's general partners, shareholder(s), member(s) or principals designated
by Mortgagee is the owner or a general partner of the owner, setting out a cash
flow statement (including debt service payments) for each such property, and a
current rent roll of the Property, all certified to Mortgagee to be complete,
correct and accurate by the individual, managing [general partner] [member] or
chief financial officer of the party whom the report concerns.
(3) All reports shall include, without
limitation, balance sheets and statements of income and of partner's equity, if
applicable, setting forth in each case in comparative form the figures for the
previous fiscal quarter or year, as the case may be. The interim quarterly
reports shall also include a breakdown of all categories of revenues and
expenses, and any supporting schedules and data requested by Mortgagee. Each set
of annual or
20
quarterly financial reports or quarterly rent rolls delivered to Mortgagee
pursuant to this section 1.14 shall also be accompanied by a certificate of the
chief financial officer or the managing [general partner] [member] of Mortgagor,
stating whether any condition or event exists or has existed during the period
covered by the annual or quarterly reports which then constituted or now
constitutes an Event of Default under the Note or this Mortgage, and if any such
condition or event then existed or now exists, specifying its nature and period
of existence and what Mortgagor did or proposes to do with respect to such
condition or event.
(C) In the event such statements are not in a form
reasonably acceptable to Mortgagee or Mortgagor fails to furnish such statements
and reports, then Mortgagee shall have the immediate and absolute right to audit
the respective books and records of the Property and Mortgagor at the expense of
Mortgagor.
1.15. Environmental Covenants. Mortgagor covenants: (A) that no
Hazardous Materials (as defined below) shall be installed, used, generated,
manufactured, treated, handled, refined, produced, processed, stored or disposed
of, in, on or under the Property; (B) that no activity shall be undertaken on
the Property which would cause (1) the Property to become a hazardous waste
treatment, storage or disposal facility under any Hazardous Material Law (as
defined below), (2) a release or threatened release of Hazardous Material from
the Property in violation of any Hazardous Material Law, or (3) the discharge of
Hazardous Material into any watercourse, body of surface or subsurface water or
wetland, or the discharge into the atmosphere of any Hazardous Material which
would require a permit under any Hazardous Material Law and for which no such
permit has been issued; (C) that no activity shall be undertaken or permitted to
be undertaken, by the Mortgagor on the Property which would result in a
violation under any Hazardous Material Law, and (D) to obtain and deliver to
Mortgagee, within a reasonable time following completion of actions required by
an appropriate governmental agency, certifications of engineers or other
professionals reasonably acceptable to Mortgagee, in form and substance
satisfactory to Mortgagee, certifying that all necessary and required actions to
clean up, remove, contain, prevent and eliminate all releases or threats of
release of Hazardous Materials on or about the Property to the levels required
by the appropriate governmental agencies have been taken and, to the knowledge
of such professional, the Property is then in compliance with applicable
Hazardous Material Laws as then in effect and applicable to such actions. For
purposes of this Mortgage, "Hazardous Materials" means and includes asbestos or
any substance containing asbestos, polychlorinated biphenyls, any explosives,
radioactive materials, chemicals known or suspected to cause cancer or
reproductive toxicity, pollutants, effluents, contaminants, emissions,
infectious wastes, any petroleum or petroleum-derived waste or product or
related materials and any items defined as hazardous, special or toxic
materials, substances or waste under any Hazardous Material Law, or any material
which shall be removed from the Property pursuant to any administrative order or
enforcement proceeding or in order to place the Property in a condition that is
suitable for ordinary use. "Hazardous Material Laws" collectively means and
includes any present and future local, state, federal or international law or
treaty relating to public health, safety or the environment including without
limitation, the Resource Conservation and Recovery Act, as amended ("RCRA"), 42
U.S.C. Section 6901 et seq., the
21
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), 42 U.S.C. Section 9601 et seq., as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the Clean Water Act, 33
U.S.C. Section 1251 et seq., the Clean Air Act, as amended 42 U.S.C. Section
7401 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.,
the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., the Uranium Mill
Tailings Radiation Control Act, 42 U.S.C. Section 7901 et seq., the Occupational
Safety and Health Act, 29 U.S.C. Section 655 et seq., the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Section 136 et seq., the National
Environmental Policy Act, 42 U.S.C. Section 4321 et seq., the Noise Control Act,
42 U.S.C. Section 4901 et seq., and the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Section 11001 et seq., and the amendments,
regulations, orders, decrees, permits, licenses or deed restrictions now or
hereafter promulgated thereunder.
1.16 Covenants Relating to Subordinate Liens.
(A) Mortgagor shall have no right to permit the holder of
any subordinate mortgage or other subordinate lien, whether or not consented to
by Mortgagee, to terminate any lease of all or a portion of the Property whether
or not such lease is subordinate (whether by law or the terms of such lease or a
separate agreement) to the lien of this Mortgage without first obtaining the
prior written consent of Mortgagee. The holder of any subordinate mortgage or
other subordinate lien shall have no such right, whether by foreclosure of its
mortgage or lien or otherwise, to terminate any such lease, whether or not
permitted to do so by Mortgagor or as a matter of law, and any such attempt to
terminate any such lease shall be ineffective and void without first obtaining
the prior written consent of Mortgagee.
(B) No mortgage, lien or other encumbrance of any type,
whether voluntary or involuntary, shall be permitted to be filed or entered
against the Property without the prior written consent of Mortgagee. If any such
mortgage, lien or other encumbrance is filed or entered, Mortgagor shall have it
removed of record within fifteen (15) days after it is filed or entered by
either paying it, having it bonded in a manner which removes it of record or
otherwise having it removed of record. By placing a mortgage, lien or other
encumbrance of any type, whether voluntary or involuntary, against the Property
the holder thereof shall be deemed to have agreed, without any further act or
documentation being required, that its mortgage, lien, or other encumbrance
shall be subordinated in lien to any future amendments, consolidations or
extensions to this Mortgage (including, without limitation, amendments which
increase the interest rate on the Note, provide for Future Advances secured by
this Mortgage or provide for the release of portions of the Property with or
without consideration).
(C) The holder of any subordinate mortgage, lien or other
encumbrance, whether or not consented to by Mortgagee, expressly agrees by
acceptance of such subordinate mortgage, lien or other encumbrance that it
waives and relinquishes any rights which it may have, whether under a legal
theory of marshalling of assets or any other theory at law or in equity, to
restrain Mortgagee from, or recover damages from Mortgagee as a result of,
Mortgagee's exercising its various remedies hereunder and under any other
documents or instruments
22
evidencing or securing the indebtedness secured hereby, in such order and with
such timing as Mortgagee shall deem appropriate in its sole and absolute
discretion.
(D) The holder of any subordinate mortgage, lien or other
encumbrance, whether or not consented to by Mortgagee, expressly agrees by
acceptance of such subordinate mortgage, lien or other encumbrance that
Mortgagee may, at any time or from time to time, renew, extend or increase the
amount of this Mortgage, or alter or modify the terms of this Mortgage or the
Note in any way, or waive any of the terms, covenants or conditions hereof or of
the Note in whole or in part and may release any portion of the Mortgaged
Property or any other security, and grant such extensions and indulgences in
relation to the indebtedness secured hereby as the Mortgagee may determine,
without the consent of any junior lienor or encumbrancer and without any
obligation to give notice of any kind thereto and without in any manner
affecting the priority or the lien hereof on all or any part of the Mortgaged
Property.
1.17 Covenants Regarding Ground Lease.
(A) Any default under the Ground Lease shall be an Event
of Default under this Mortgage. The occurrence of any event which, with the
giving of notice or the lapse of time, would constitute a default or breach of
condition under the Ground Lease or which would entitle the landlord under the
Ground Lease to deprive Mortgagor of the estate or interest vested in Mortgagor
by the Ground Lease shall, for the purposes of this Mortgage, be treated as a
default under the Ground Lease.
(B) Mortgagor shall pay or cause to be paid, not later
than the date upon which the same become due and payable by Mortgagor pursuant
to the provisions of the Ground Lease (1) all base rent, additional rent, rent
increases and adjustments to rent and other payments required to be paid by the
lessee under the Ground Lease and (2) all real estate taxes, assessments, water
and sewer rates and charges, and all other governmental levies and charges of
every kind whatsoever, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, which shall be assessed, levied, confirmed,
imposed, or become a lien upon or against the Property, or which shall become
payable with respect thereto (collectively the "Impositions"), provided that
nothing contained herein shall imit the right of Mortgagee to require that
deposits be made into an escrow for real estate taxes, regular or special
assessments, and insurance premiums pursuant to paragraph 1.04 of this Mortgage.
Within ten days after demand by Mortgagee, Mortgagor shall deliver to Mortgagee
a copy of the official receipt evidencing such payment or other proof of payment
of such rent and Impositions satisfactory to Mortgagee, and failure of Mortgagor
to deliver to Mortgagee the receipts or to submit other proof satisfactory to
Mortgagee shall constitute a default under this Mortgage. Mortgagee will accept
as proof of payment of rent payable under the Ground Lease a certification
executed by an officer or general partner of Mortgagor to the effect that such
rent has been paid. To the extent that the Ground Lease or this Mortgage shall
grant to Mortgagor the privilege to postpone or defer the payment of any
Impositions, the failure of Mortgagor to pay the same shall not constitute a
default under this Mortgage so long as Mortgagor shall faithfully comply with
all of the terms, covenants and
23
conditions under the Ground Lease and this Mortgage with respect to the exercise
of such privilege.
(C) Mortgagor shall promptly perform and observe all of
the terms, covenants and conditions required to be performed and observed by
Mortgagor under the Ground Lease within the stated opportunity to cure periods
provided in the Ground Lease or such lesser opportunity to cure periods as are
provided in the default provisions of this Mortgage, and shall do all things
necessary to preserve and to keep unimpaired Mortgagor's rights under the Ground
Lease.
(D) If Mortgagor shall fail to pay any base rent or
additional rent or adjusted rent required under the Ground Lease or any
Impositions, or to make any other payment required to be paid by Mortgagor under
the Ground Lease at the time and in the manner provided in the Ground Lease, or
if Mortgagor shall fail to perform or observe any other term, covenant or
condition required to be performed or observed by Mortgagor under the Ground
Lease, then, without limiting the generality of any other provision of this
Mortgage and without releasing Mortgagor from any of its obligations under this
Mortgage, Mortgagee shall have the right, but not the obligation, to pay base
rent or additional rent and/or any Impositions, or other payment, and may take
such action as may be appropriate to cause such other term, covenant or
condition to be promptly performed or observed on behalf of Mortgagor, to the
end that Mortgagor's rights, under the Ground Lease shall be kept unimpaired
from default, and Mortgagor shall permit Mortgagee to enter upon the Property
with or without notice and to do anything which Mortgagee shall deem necessary
or prudent for such purpose.
If Mortgagee shall make any payment or take action in
accordance with the preceding paragraph, Mortgagee, within thirty (30) days
thereafter, shall give to Mortgagor written notice of the making of any such
payment or the taking of any such action. All moneys expended by Mortgagee in
connection therewith including, but not limited to, legal expenses, together
with interest thereon at the Contract Rate (as defined in the Note) plus 5% per
annum compounded monthly from the date of each such expenditure, shall be paid
by Mortgagor to Mortgagee upon demand by Mortgagee, and shall be secured by this
Mortgage. Mortgagee shall have, in addition to any other right or remedy of
Mortgagee, the same rights and remedies in the event of nonpayment of any such
sums by Mortgagor as in the case of a default by Mortgagor in the payment of the
Note. If, pursuant to the Ground Lease, the lessor thereunder shall deliver to
Mortgagee a duplicate copy of any notice given by lessor to Mortgagor, such
notice shall constitute full protection to Mortgagee for any action taken or
omitted to be taken by Mortgagee, in good faith, in reliance thereon.
(E) Mortgagor shall (1) promptly notify Mortgagee in
writing of any default by Mortgagor under the Ground Lease or of the receipt by
Mortgagor of any notice (other than notices customarily sent on a regular
periodic basis) from the lessor under the Ground Lease, including without
limitation any notice claiming any default by Mortgagor in the performance or
observance of any of the terms, covenants, or conditions to be performed or
observed by
24
Mortgagor under the Ground Lease; (2) promptly notify Mortgagee in writing of
the receipt by Mortgagor of any notice from the lessor under the Ground Lease of
termination of the Ground Lease pursuant to the provisions of the Ground Lease;
and (3) promptly cause a copy of each such notice received by Mortgagor to be
delivered to Mortgagee.
(F) If the Ground Lease provides for arbitration,
Mortgagor shall promptly notify Mortgagee in writing of any request made by
either party to the Ground Lease for arbitration proceedings pursuant to the
Ground Lease and of the institution of any arbitration proceedings, as well as
of all proceedings thereunder, and shall promptly deliver to Mortgagee a copy of
the determination of the arbitrators in each such arbitration proceeding.
Mortgagee shall have the right to participate in such arbitration proceedings in
association with Mortgagor or on its own behalf as an interested party.
(G) Mortgagor shall not, without the prior written
consent of Mortgagee, consent to any agreement which releases the Mortgagor from
any of its obligations under the Ground Lease, exercise any option to purchase
the Property contained in the Ground Lease, or consent to or permit any waiver,
modification or cancellation of any provision of the Ground Lease, the surrender
or termination of the Ground Lease, or the subordination of the Ground Lease to
any mortgage of the fee interest of the lessor of the Property. The entire
interest of Mortgagor as tenant under the Ground Lease has been mortgaged and
assigned to Mortgagee, so that no such modification, amendment, release,
cancellation, surrender, termination or subordination shall be of any force or
effect whatsoever unless Mortgagee shall have given its prior written consent
thereto.
(H) If at any time Mortgagor, or any party claiming by,
through or under Mortgagor, and/or any trustee in bankruptcy, shall have the
right to assume or reject the Ground Lease pursuant to Section 365(a) of the
Bankruptcy Reform Act of 1978 or any successor statute, then Mortgagee shall
have (and is hereby granted) the exclusive right to exercise such right to
assume or reject. In the event that the foregoing grant is held to be
unenforceable by a court of competent jurisdiction, then and in such case
Mortgagor hereby covenants and agrees that Mortgagor, any party claiming by,
through or under Mortgagor, and/or any trustee in bankruptcy shall not exercise
any rights to assume or reject the Ground Lease without having first obtained
the prior written consent of Mortgagee.
(I) Mortgagor, irrevocably, hereby designates, makes,
constitutes and appoints Mortgagee (and all persons designated by Mortgagee) as
Mortgagor's true and lawful attorney and agent-in-fact, with power upon the
occurrence of an Event of Default under this Mortgage or default under the
Ground Lease, without notice to Mortgagor and at such time or times thereafter
as Mortgagee, at its sole election, may determine, in the name of Mortgagor,
Mortgagee or in both names: (i) to exercise all of the Mortgagor's rights,
interests and remedies in and under the Ground Lease; (ii) to acquire the land
and other property subject to the Ground Lease in the manner provided for in the
Ground Lease; (iii) to initiate such legal proceedings and to settle, adjust or
compromise any legal proceedings deemed necessary by Mortgagee in its sole
25
discretion in order to enforce the provisions of the Ground Lease or prevent the
termination thereof; (iv) to commence or institute arbitration proceedings, or
to participate in any arbitration proceedings commenced or instituted, pursuant
to the Ground Lease, if any; (v) to approve all arbitration determinations,
awards or findings made pursuant to the provisions of the Ground Lease, if any;
(vi) to do any and all things necessary, in Mortgagee's sole opinion, to
preserve and keep unimpaired Mortgagee's rights under this Mortgage and/or the
Ground Lease; and (vii) to do all acts and things necessary, in Mortgagee's sole
discretion, to carry out any or all of the foregoing.
(J) Mortgagor shall execute and deliver, on request of
Mortgagee, such instruments as Mortgagee may deem useful or required to permit
Mortgagee to cure any default under the Ground Lease or to permit Mortgagee to
take such other action as Mortgagee considers desirable to cure or remedy the
matter in default and preserve the interest of Mortgagee in the Property.
(K) If the Ground Lease shall be terminated prior to the
natural expiration of its term due to default by Mortgagor, and if Mortgagee
shall acquire from the lessor under the Ground Lease a new ground lease,
Mortgagor shall have no right, title, or interest in or to such new ground lease
or the leasehold estate created thereby.
(L) Mortgagor shall not sell, transfer or assign the
Ground Lease or any portion of Mortgagor's interest therein without the prior
written consent of Mortgagee and the Ground Lessor first had and obtained.
(M) In case of a sale in foreclosure, any such sale may
be made subject to the requirement that the purchaser shall assume the
performance of all of the terms, covenants, and conditions of the Ground Lease
by instrument in writing to be delivered to the lessor under the Ground Lease.
Any such sale shall also be made subject to all of the provisions of the Ground
Lease and to any curable default or defaults then existing thereunder.
(N) The generality of the provisions of sections in this
Mortgage relating to the Ground Lease shall not be limited by other provisions
of this Mortgage setting forth particular obligations of Mortgagor which are
also required of the Mortgagor as the lessee under the Ground Lease.
(O) The improvements on the Property shall not be
demolished without the prior written consent of Mortgagee. Mortgagor further
covenants that it will not make, authorize, or permit to be made any material
alterations to the buildings without the prior written approval of the Ground
Lessor, if required under the Ground Lease, and that all such permitted material
alterations, if any, shall be performed by Mortgagor in the manner set forth in
the Ground Lease, and subject to the further condition that no structural
alteration shall be undertaken without the prior written consent of Mortgagee
consistent with the terms of this Mortgage; and any bond, for the completion or
payment of any such material alteration, furnished to or for the benefit of the
26
lessor under the Ground Lease shall also name Mortgagee as a party for whose
benefit such bond is issued, or a similar bond shall be furnished to and for the
benefit of Mortgagee.
(P) In the event that Mortgagor acquires the fee interest
in the Property subject to the Ground Lease, whether by exercise of any purchase
option contained in the Ground Lease or otherwise, so long as any of Mortgagor's
obligations to Mortgagee remain unpaid, the fee title to and the leasehold
estate in the Property, or any portion thereof, shall not merge, but shall
always be kept separate and distinct, notwithstanding the union of such estates
either in the landlord or the tenant under the Ground Lease or in a third party,
by purchase or otherwise. Mortgagor shall not agree to any merger of the
leasehold and fee without the prior written consent of Mortgagee. The lien of
this Mortgage, securing payment of the Note and performance of the obligations
under this Mortgage, shall not merge, and shall always remain a separate and
distinct mortgage lien, notwithstanding the fact that such mortgage lien may
from time to time be held by the same party that holds the tenant's interest in
the Ground Lease or by any entity controlled by, controlling or under common
control with such party; provided, however, that the holder of this Mortgage may
at any time, by a suitable instrument, duly executed by Mortgagee and filed of
public record, elect to effect a merger of such liens upon the Mortgaged
Property. If at any time Mortgagee shall acquire all or any part of the fee
estate, such acquisition shall not cause a merger with Mortgagee's interest as
holder of this Mortgage; provided, however, that Mortgagee may at any time, by
suitable instrument duly executed by Mortgagee and filed of public record, elect
to effect a merger of such interests in the Mortgaged Property.
(Q) Mortgagor shall not exercise any election available
to Mortgagor under the Ground Lease with respect to the application of proceeds
of insurance and condemnation without first having obtained the prior written
consent thereof by Mortgagee.
(R) If this Mortgage is still of public record on the
date which is thirty (30) days prior to the last date on which the tenant under
the Ground Lease has a right to extend the term of the Ground Lease and
Mortgagor has not given Mortgagee written evidence of Mortgagor's proper
exercise of such extension option, Mortgagee may (but shall not be obligated to)
at any time thereafter exercise such extension option on behalf of Mortgagor,
and Mortgagor hereby grants Mortgagee a power of attorney to exercise such
extension option, which power of attorney is irrevocable and coupled with an
interest.
(S) Nothing contained in this Section 1.17 is intended to
limit or impair any rights which may be granted to Mortgagee under the terms of
the Ground Lease.
27
ARTICLE II
EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of
Default") hereunder:
2.01. Monetary and Performance Defaults.
(A) Failure to make any payment due under the Note or any
note evidencing a Future Advance, other than the final payment and Prepayment
Premium, or to make any payment due under this Mortgage to Mortgagee or any
other party, including without limitation, payment of escrow deposits, real
estate taxes, insurance premiums and ground rents, if any, on or before the
fifth day of the month in which such payment is due; or
(B) Failure to make the final payment or the Prepayment
Premium due under the Note or any note evidencing a Future Advance when such
payment is due whether at maturity, by reason of acceleration, as part of a
prepayment or otherwise (the defaults in (A) and (B) hereinafter "Monetary
Default"); or
(C) Breach or default in the performance of any of the
covenants or agreements of Mortgagor contained herein or in any Related
Agreement ("Performance Default"), if such Performance Default shall continue
for fifteen (15) days or more after written notice to Mortgagor from Mortgagee
specifying the nature of the Performance Default; provided, however, that if
such Performance Default is of a nature that it cannot be cured within the
fifteen (15) day period, then Mortgagor shall not be in default if it commences
good faith efforts to cure the Performance Default within the fifteen (15) day
period, demonstrates continuous diligent efforts to cure the Performance Default
in a manner satisfactory to Mortgagee and, within a reasonable period, not to
exceed one hundred eighty (180) days after the date of the original written
notice of the Performance Default, completes the cure of such Performance
Default.
2.02. Bankruptcy, Insolvency, Dissolution.
(A) Any court of competent jurisdiction shall sign an
order (1) adjudicating Mortgagor, or any person, partnership or corporation
holding an ownership interest in Mortgagor or in any partnership comprising
Mortgagor, or any guarantor (which term when used in this Mortgage shall mean
guarantor of payment of the indebtedness) bankrupt or insolvent, (2) appointing
a receiver, trustee or liquidator of the Property or of a substantial part of
the property of Mortgagor, or any person, partnership or corporation holding an
ownership interest in Mortgagor, or in any partnership comprising Mortgagor, or
any guarantor, or (3) approving a petition for, or effecting an arrangement in
bankruptcy, or any other judicial modification or alteration of the rights of
Mortgagee or of other creditors of Mortgagor, or any person, partnership or
corporation holding an ownership interest in Mortgagor, or in any partnership
comprising Mortgagor, or any guarantor; or
28
(B) Mortgagor, any partnership or corporation holding an
ownership interest in Mortgagor or in any partnership comprising Mortgagor,
shall (1) apply for or consent to the appointment of a receiver, trustee or
liquidator for it or for any of its property, (2) as debtor, file a voluntary
petition in bankruptcy, or petition or answer seeking reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material allegations of a petition filed
against it and any proceeding under such law, (3) admit in writing an inability
to pay its debts as they mature, or (4) make a general assignment for the
benefit of creditors; or
(C) An involuntary petition in bankruptcy is filed
against Mortgagor, or any person, partnership or corporation holding an
ownership interest in Mortgagor or in any partnership comprising Mortgagor and
the same is not vacated or stayed within thirty (30) days of the filing date.
2.03. Misrepresentation. Mortgagor makes or furnishes a
representation, warranty, statement, certificate, schedule and/or report to
Mortgagee in or pursuant to this Mortgage or any of the Related Agreements which
is false or misleading in any material respect as of the date made or furnished.
2.04. Default under Subordinate Loans. If Mortgagee in its sole
discretion consents to a subordinate mortgage on the Property, then an
occurrence of a default under any loan subordinate to this Mortgage which is not
an independent default under this Mortgage which results in the commencement of
foreclosure proceedings against the Property or the taking of any other remedial
action under such subordinate loan.
2.05 Default under the Ground Lease. The occurrence of a default
under the Ground Lease.
ARTICLE III
REMEDIES
Upon the occurrence of any Event of Default, Mortgagee shall have the
following rights and remedies:
3.01. Acceleration. Notwithstanding the stated maturity date in the
Note, or any note evidencing any Future Advance, Mortgagee may without notice or
demand, declare the entire principal amount of the Note and/or any Future
Advances then outstanding and accrued and unpaid interest thereon, and all other
sums or payments required thereunder, including but not limited to the
Prepayment Premium described in the Note, to be due and payable immediately.
3.02. Entry. Irrespective of whether Mortgagee exercises the option
provided in section 3.01 above, Mortgagee in person or by agent or by
court-appointed receiver (and
29
Mortgagee shall have the right to the immediate appointment of such a receiver
without regard to the adequacy of the security and Mortgagor hereby irrevocably
consents to such appointment and waives notice of any application therefor) may,
at its option, without any action on its part being required, without in any way
waiving such Event of Default, with or without the appointment of a receiver, or
an application therefor:
(A) take possession of the Property and conduct tests of,
manage or hire a manager to manage, lease and operate the Property or any part
thereof, on such terms and for such period of time as Mortgagee may deem proper,
with full power to make, from time to time, all alterations, renovations,
repairs or replacements thereto as may seem proper to Mortgagee;
(B) with or without taking possession of the Property,
collect and receive all Rents and Profits, notify tenants under the Leases or
any other parties in possession of the Property to pay Rents and Profits
directly to Mortgagee, its agent or a court-appointed receiver and apply such
Rents and Profits to the payment of:
(1) all costs and expenses incident to taking
and retaining possession of the Property, management and operation of the
Property, keeping the Property properly insured and all alterations,
renovations, repairs and replacements to the Property;
(2) all taxes, charges, claims, assessments, and
any other liens which may be prior in lien or payment to this Mortgage or the
Note, and premiums for insurance, with interest on all such items; and
(3) the indebtedness secured hereby together
with all costs and attorneys' fees, in such order or priority as to any of such
items as Mortgagee in its sole discretion may determine, any statute, law,
custom or use to the contrary notwithstanding;
(C) exclude Mortgagor, its agents and servants, wholly
from the Property;
(D) have joint access with Mortgagor to the books,
papers and accounts of Mortgagor relating to the Property, at the expense of
Mortgagor;
(E) commence, appear in and/or defend any action or
proceedings purporting to affect the interests, rights, powers and/or duties of
Mortgagee hereunder, whether brought by or against Mortgagor or Mortgagee; and
(F) pay, purchase, contest or compromise any claim, debt,
lien, charge or encumbrance which in the judgment of Mortgagee may affect or
appear to affect the interest of Mortgagee or the rights, powers and/or duties
of Mortgagee hereunder.
The receipt by Mortgagee of any Rents and Profits pursuant to this Mortgage
after the institution of foreclosure or other proceedings under the Mortgage
shall not cure any such Event of Default
30
or affect such proceedings or any sale pursuant thereto. After deducting the
expenses and amounts set forth above in this section 3.02, as well as just and
reasonable compensation for all Mortgagee's employees and other agents
(including, without limitation, reasonable and actual attorneys' fees and
management and rental commissions) engaged and employed, the moneys remaining,
at the option of Mortgagee, may be applied to the indebtedness secured hereby.
Whenever all amounts due on the Note and under this Mortgage shall have been
paid and all Events of Default have been cured and any such cure has been
accepted by Mortgagee, Mortgagee shall surrender possession to Mortgagor. The
same right of entry, however, shall exist if any subsequent Event of Default
shall occur; provided, however, Mortgagee shall not be under any obligation to
make any of the payments or do any of the acts referred to in this section 3.02.
THE FOLLOWING PARAGRAPH SETS FORTH A WARRANT OF AUTHORITY FOR
AN ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR. IN GRANTING THIS WARRANT
OF ATTORNEY TO CONFESS JUDGMENT AGAINST THE MORTGAGOR, THE MORTGAGOR HEREBY
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, AND, ON THE ADVICE OF SEPARATE COUNSEL
OF THE MORTGAGOR, UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE MORTGAGOR HAS OR
MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE
CONSTITUTIONS AND LAWS OF THE UNITED STATES AND THE COMMONWEALTH OF
PENNSYLVANIA.
FOR THE PURPOSE OF OBTAINING POSSESSION OF THE PROPERTY IN THE
EVENT OF ANY DEFAULT HEREUNDER OR UNDER THE NOTE, MORTGAGOR HEREBY AUTHORIZES
AND EMPOWERS ANY ATTORNEY OF ANY COURT OF RECORD IN THE COMMONWEALTH OF
PENNSYLVANIA OR ELSEWHERE, AS ATTORNEY FOR MORTGAGOR AND ALL PERSONS CLAIMING
UNDER OR THROUGH MORTGAGOR, TO ENTER IN ANY COMPETENT COURT AN ACTION IN
EJECTMENT FOR POSSESSION OF THE PROPERTY AND TO APPEAR FOR AND CONFESS JUDGMENT
AGAINST MORTGAGOR, AND AGAINST ALL PERSONS CLAIMING UNDER OR THROUGH MORTGAGOR,
IN FAVOR OF MORTGAGEE, FOR RECOVERY BY MORTGAGEE OF POSSESSION OF THE PROPERTY,
FOR WHICH THIS MORTGAGE, OR A COPY THEREOF VERIFIED BY AFFIDAVIT, SHALL BE A
SUFFICIENT WARRANT; AND THEREUPON A WRIT OF POSSESSION MAY IMMEDIATELY ISSUE FOR
POSSESSION OF THE PROPERTY, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER AND
WITHOUT ANY STAY OF EXECUTION. IF FOR ANY REASON AFTER SUCH ACTION HAS BEEN
COMMENCED IT SHALL BE DISCONTINUED, OR POSSESSION OF THE PROPERTY SHALL REMAIN
IN OR BE RESTORED TO MORTGAGOR, MORTGAGEE SHALL HAVE THE RIGHT FOR THE SAME
DEFAULT OR ANY SUBSEQUENT DEFAULT TO BRING ONE OR MORE FURTHER ACTIONS AS ABOVE
PROVIDED TO RECOVER POSSESSION OF THE PROPERTY. MORTGAGEE MAY BRING AN ACTION
FOR EJECTMENT AND/OR POSSESSION AND CONFESS JUDGMENT THEREIN BEFORE OR AFTER THE
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INSTITUTION OF PROCEEDINGS TO FORECLOSE THIS MORTGAGE OR TO ENFORCE THE NOTE, OR
AFTER ENTRY OF JUDGMENT THEREIN OR ON THE NOTE, OR AFTER A SHERIFF'S SALE OR
JUDICIAL SALE OR OTHER FORECLOSURE SALE OF THE PROPERTY IN WHICH MORTGAGEE IS
THE SUCCESSFUL BIDDER, IT BEING THE UNDERSTANDING OF THE PARTIES THAT THE
AUTHORIZATION TO PURSUE SUCH PROCEEDINGS FOR OBTAINING POSSESSION AND CONFESSION
OF JUDGMENT THEREIN IS AN ESSENTIAL PART OF THE REMEDIES FOR ENFORCEMENT OF THE
MORTGAGE AND THE NOTE, AND SHALL SURVIVE ANY EXECUTION SALE TO MORTGAGEE.
3.03. Judicial Action. Mortgagee shall have the right, from time to
time, to bring an appropriate action to enforce any covenant contained herein,
or to recover any sums required to be paid by Mortgagor under the terms of this
Mortgage, as they become due, without regard to whether or not the principal
indebtedness or any other sums secured by the Note and this Mortgage shall be
due, and without prejudice to the right of Mortgagee thereafter to bring an
action of Mortgage Foreclosure, or any other action, for any default by
Mortgagor existing at the time the earlier action was commenced.
3.04. Foreclosure. Mortgagee may institute an action of mortgage
foreclosure against the Property, or take such other action at law or in equity
for the enforcement of this Mortgage and realization on the mortgage security or
any other security herein or elsewhere provided for, as the law may allow, and
may proceed therein to final judgment and execution for the entire unpaid
balance of the principal debt and the Prepayment Premium, with interest at the
rate stipulated in the Note to the date of default, and thereafter at the
Default Rate specified in the Note, together with all other sums due by
Mortgagor in accordance with the provisions of the Note and this Mortgage,
including all sums which may have been advanced or loaned by Mortgagee to
Mortgagor after the date of this Mortgage, including Future Advances, and all
sums which may have been advanced by Mortgagee for taxes, water or sewer rents,
charges or claims, payments on prior liens, insurance, utilities or repairs to
the Property, all costs of suit, together with interest at the Default Rate on
any judgment obtained by Mortgagee from and after the date of any Sheriff or
other judicial sale until actual payment is made of the full amount due
Mortgagee, and an attorney's commission for collection which shall be five
percent (5%) of the total of the foregoing sums.
Any real estate sold pursuant to any writ of execution issued
on a judgment obtained by virtue of the Note or this Mortgage, or pursuant to
any other judicial proceedings under the Mortgage, may be sold in one parcel, as
an entirety, or in such parcels, and in such manner or order as Mortgagee, in
its sole discretion, may elect.
If for any reason after any action in mortgage foreclosure has
been commenced it shall be discontinued, or possession of the Property shall
remain in or be restored to Mortgagor, Mortgagee shall have the right for the
same default or any subsequent event of default to bring one or more further
actions in mortgage foreclosure.
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In any action to foreclose this Mortgage, Mortgagee may, at
its option, have a receiver appointed to take charge of the Property and to
collect such rents, issues and profits, all without consideration of the value
of the Property as security for the amount of indebtedness secured hereby. All
such rents, issues and profits paid to Mortgagee or collected by such receiver
shall be first applied to the cost of collection thereof (including the cost of
such receivership, if any) and then to the payment of the interest on and
principal of the Note. Mortgagor for itself and any subsequent owner of the
Property hereby waives any and all defenses to the application for such receiver
and hereby specifically consents to such appointment without notice.
3.05. Right to Remedy Defaults. If Mortgagor should fail to pay
corporate taxes, real estate or other taxes, assessments, water and sewer rents,
charges and claims, sums due under any prior lien or approved prior lien, or
insurance premiums, or fail to make necessary repairs, or permit waste, or fail
to cure any default under any prior lien or approved prior lien, Mortgagee, at
its election and without notice to Mortgagor, but subject to Mortgagor's right
of contest as set forth in section 1.06 of this Mortgage, shall have the right
to make any payment or expenditure and to take any action which Mortgagor should
have made or taken, or which Mortgagee deems advisable to protect the security
of this Mortgage or the Property, without prejudice to any of Mortgagee's rights
or remedies available hereunder or otherwise, at law or in equity. All such
sums, as well as costs, advanced by Mortgagee pursuant to this Mortgage shall be
due immediately from Mortgagor to Mortgagee, shall be secured hereby and the
lien therefor shall relate back to the date of this Mortgage, and shall bear
interest at the Default Rate specified by the Note from the date of payment by
Mortgagee until the date of repayment.
3.06. Mortgagee's Remedies Respecting Collateral. Mortgagee may
realize upon the Collateral, enforce and exercise all of the Mortgagor's rights,
powers, privileges and remedies in respect of the Collateral, dispose of or
otherwise deal with the Collateral in such order as Mortgagee may in its
discretion determine, and exercise any and all other rights, powers, privileges
and remedies afforded to a secured party under the laws of the state in which
the Property is located as well as all other rights and remedies available at
law or in equity.
3.07. Proceeds of Sales. The proceeds of any sale made under or by
virtue of this Article III, together with all other sums which then may be held
by Mortgagee under this Mortgage, whether under the provisions of this Article
III or otherwise, shall be applied as follows:
FIRST: To the payment of the costs, fees and expenses of sale
wherein the same may be made, and any other sums which are required by
applicable law to be paid prior to distribution being made to Mortgagee;
SECOND: To the payment of any judgment obtained by Mortgagee
on the Note, this Mortgage and/or any Related Agreement, together with interest
thereon as provided in such judgment or under applicable law;
33
THIRD: The remainder, if any, to the person or persons,
including the Mortgagor, legally entitled thereto.
3.08. Condemnation and Insurance Proceeds. All Condemnation
Proceeds, Insurance Proceeds and any interest earned thereon shall be paid over
either by the condemning authority, insurance company or escrow agent to
Mortgagee and shall be applied first toward reimbursement of the costs and
expenses of Mortgagee (including reasonable attorneys' fees), if any, in
connection with the recovery of such Proceeds, and then shall be applied in the
sole and absolute discretion of Mortgagee and without regard to the adequacy of
its security under this Mortgage (A) to the payment or prepayment of all or any
portion of the Note including the Prepayment Premium described in the Note; (B)
to the reimbursement of expenses incurred by Mortgagee in connection with the
restoration of the Property; or (C) to the performance of any of the covenants
contained in this Mortgage as Mortgagee may determine. Any prepayment of the
Note or portion thereof pursuant to Mortgagee's election under this section
shall be subject to the Prepayment Premium described in the Note.
3.09. Waiver of Marshalling, Rights of Redemption, Homestead and
Valuation.
(A) Mortgagor, for itself and for all persons hereafter
claiming through or under it or who may at any time hereafter become holders of
liens junior to the lien of this Mortgage, hereby expressly waives and releases
all rights to direct the order in which any of the Property shall be sold in the
event of any sale or sales pursuant hereto and to have any of the Property
and/or any other property now or hereafter constituting security for any of the
indebtedness secured hereby marshalled upon any foreclosure of this Mortgage or
of any other security for any of said indebtedness.
(B) To the fullest extent permitted by law, Mortgagor,
for itself and all who may at any time claim through or under it, hereby
expressly waives, releases and renounces all rights of redemption from any
foreclosure sale, all rights of homestead, exception, monitoring reinstatements,
forbearance, appraisement, valuation, stay and all rights under any other laws
which may be enacted extending the time for or otherwise affecting enforcement
or collection of the Note, the debt evidenced thereby, or this Mortgage.
3.10. Remedies Cumulative. No remedy herein conferred upon or
reserved to Mortgagee is intended to be exclusive of any other remedy herein or
by law provided, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute. No delay or omission of Mortgagee to exercise any right or power
accruing upon any Event of Default shall impair any right or power or shall be
construed to be a waiver of any Event of Default or any acquiescence therein.
Every power and remedy given by this Mortgage to Mortgagee may be exercised
separately, successively or concurrently from time to time as often as may be
deemed expedient by Mortgagee. If there exists additional security for the
performance of the obligations secured hereby, Mortgagee, at its sole option,
and without limiting or affecting any of its rights or
34
remedies hereunder, may exercise any of the rights and remedies to which it may
be entitled hereunder either concurrently with whatever rights and remedies it
may have in connection with such other security or in such order as it may
determine. Any application of any amounts or any portion thereof held by
Mortgagee at any time as additional security or otherwise, to any indebtedness
secured hereby shall not extend or postpone the due dates of any payments due
from Mortgagor to Mortgagee hereunder or under the Note, any Future Advance, or
under any of the Related Agreements, or change the amounts of any such payments
or otherwise be construed to cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to any such default or notice.
3.11. Nonrecourse. Except as otherwise set forth in this paragraph,
the liability of Mortgagor and the general partners of Mortgagor, if any, under
the Note, this Mortgage and the Related Agreements shall be limited to, and
satisfied from, the Property and the proceeds thereof, the Rents and Profits and
all other income arising therefrom, the other assets of Mortgagor arising out of
the Property which are given as collateral for the Note, and any other
collateral given in writing to Mortgagee as security for repayment of the Note
(all of the foregoing collectively referred to as the "Loan Collateral");
provided, however, that nothing contained in this section shall (A) preclude
Mortgagee from foreclosing the lien of this Mortgage or from enforcing any of
its rights or remedies in law or in equity against Mortgagor except as stated in
this section, (B) constitute a waiver of any obligation evidenced by the Note or
secured by this Mortgage or any Related Agreements, (C) limit the right of
Mortgagee to name Mortgagor as a party defendant in any action brought under
this Mortgage, the Note or any Related Agreements, (D) prohibit Mortgagee from
pursuing all of its rights and remedies against any guarantor or surety, whether
or not such guarantor or surety is a partner of Mortgagor, (E) limit the
personal liability of Mortgagor or any shareholder of Mortgagor, or any general
partner of Mortgagor, or of any member of Mortgagor, to Mortgagee, for
misappropriation or misapplication of funds, fraud, waste, willful
misrepresentation or willful damage to the Property, or (F) preclude Mortgagee
from recovering from Mortgagor and the other Indemnitors under that certain
Environmental Indemnity Agreement of even date herewith.
3.12. Evasion of Prepayment Premium. Mortgagor agrees that in the
event Mortgagee exercises its right to accelerate the maturity date of the Note
following an Event of Default, a tender of payment of an amount necessary to
satisfy the entire indebtedness evidenced by the Note, but without including the
Prepayment Premium described in the Note, made at any time prior to foreclosure
sale either by Mortgagor, its successors and assigns or by anyone on behalf of
Mortgagor, shall be deemed to constitute an evasion of the prepayment provisions
of the Note and such payment shall therefore be deemed to be a prepayment under
the Note, and to the extent permitted by law, shall include the Prepayment
Premium described in the Note.
35
ARTICLE IV
MISCELLANEOUS
4.01. Severability. In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Mortgage, but this Mortgage shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein, but only to the extent that it is invalid, illegal or
unenforceable.
4.02. Certain Charges and Brokerage Fees.
(A) Mortgagor agrees to pay Mortgagee for each written
statement requested of Mortgagee as to the obligations secured hereby, furnished
at Mortgagor's request. Mortgagor further agrees to pay the charges of Mortgagee
for any other service rendered Mortgagor, or on its behalf, connected with this
Mortgage or the indebtedness secured hereby, including, without limitation, the
delivery to an escrow holder of a request for full or partial release or
reconveyance of this Mortgage, transmittal to an escrow holder of moneys secured
hereby, changing its records pertaining to this Mortgage and indebtedness
secured hereby to show a new owner of the Property, and replacing an existing
policy of insurance held hereunder with another such policy.
(B) Mortgagor agrees to indemnify and hold Mortgagee
harmless from any responsibility and/or liability for the payment of any
commission charge or brokerage fees to anyone which may be payable in connection
with the funding of the loan evidenced by the Note and this Mortgage or
refinancing of any prior indebtedness, if applicable, based upon any action
taken by Mortgagor. It is understood that any such commission charge or
brokerage fees shall be paid directly by Mortgagor to the entitled parties.
4.03. Notices.
(A) All notices expressly provided hereunder to be given
by Mortgagee to Mortgagor and all notices, demands and other communications of
any kind or nature whatever which Mortgagor may be required or may desire to
give to or serve on Mortgagee shall be in writing and shall be (1)
hand-delivered, effective upon receipt, (2) sent by United States Express Mail
or by private overnight courier, effective upon receipt, or (3) served by
certified mail, to the appropriate address set forth below, or at such other
place as the Mortgagor or Mortgagee, as the case may be, may from time to time
designate in writing by ten (10) days prior written notice thereof. Any such
notice or demand served by certified mail, return receipt requested, shall be
deposited in the United States mail, with postage thereon fully prepaid and
addressed to the party so to be served at its address above stated or at such
other address of which said party shall have theretofore notified in writing, as
provided above, the party giving such notice. Service of any such notice or
demand so made shall be deemed effective on the day of actual delivery as shown
by the addressee's return receipt or the expiration of three (3) business days
after the date of
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mailing, whichever is the earlier in time. Any notice required to be given by
Mortgagee shall be equally effective if given by Mortgagee's agent, if any.
(B) Mortgagor hereby requests that any notice, demand,
request or other communication (including any notice of an Event of Default and
notice of sale as may be required by law) desired to be given or required
pursuant to the terms hereof be addressed to Mortgagor as follows:
Gustine Sixth Avenue Associates, Ltd.
c/o The Gustine Company
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Chief Financial Officer and General Counsel
All notices and other communications to Mortgagee shall be addressed as follows:
Allstate Life Insurance Company
Xxxxxxxx Xxxxx Xxxxx, Xxxxx X0X
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Commercial Mortgage Loan
Servicing Manager
With a copy to:
Allstate Insurance Company
Investment Law Division
Xxxxxxxx Xxxxx Xxxxx, Xxxxx X0X
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
4.04. Mortgagor Not Released.
(A) Extension of the time for payment or modification of
the terms of payment of any sums secured by this Mortgage granted by Mortgagee
to any successor in interest of Mortgagor shall not operate to release, in any
manner, the liability of Mortgagor. Mortgagee shall not be required to commence
proceedings against such successor or refuse to extend time for payment or
otherwise modify the terms of payment of the sums secured by this Mortgage by
reason of any demand made by Mortgagor. Without affecting the liability of any
person, including Mortgagor, but subject to the terms and provisions of section
3.11, for the payment of any indebtedness secured hereby, or the legal operation
and effect of this Mortgage on the remainder of the Property for the full amount
of any such indebtedness and liability unpaid, Mortgagee may from time to time
and without notice (1) release any person liable for the
37
payment of any of the indebtedness; (2) extend the time or otherwise alter the
terms of payment of any of the indebtedness; (3) accept additional real or
personal property of any kind as security therefor, whether evidenced by deeds
of trust, mortgages, security agreements or any other instruments of security;
or (4) alter, substitute or release any property securing the indebtedness.
(B) Mortgagee may, at any time, and from time to time,
(1) consent to the making of any map or plan of the Property or any part
thereof, (2) join in granting any easement or creating any restriction thereon,
(3) join in any subordination or other agreement affecting this Mortgage or the
legal operation and effect or charge hereof, or (4) release or reconvey, without
any warranty, all or part of the Property from the lien of this Mortgage.
4.05. Inspection. Upon reasonable prior notice and subject to the
inspection rights of tenants under the Leases, Mortgagee may at any reasonable
time make or cause to be made entry upon and make inspections, reappraisals,
surveys, construction and environmental testing of the Property or any part
thereof in person or by agent. All of the foregoing shall be at Mortgagor's sole
cost and expense if done (a) after an Event of Default or (b) prior to an Event
of Default where there is a reasonable basis to believe that the action taken is
reasonably necessary in connection with Mortgagee's security.
4.06. Release. Upon the payment in full of all sums secured by this
Mortgage, Mortgagee shall execute and deliver a release or satisfaction of this
Mortgage and shall surrender this Mortgage and all notes evidencing indebtedness
secured by this Mortgage to Mortgagor. The duly recorded release or satisfaction
of this Mortgage shall constitute a reassignment of the Leases by the Mortgagee
to the Mortgagor. Mortgagor shall pay all fees of Mortgagee and costs of
recordation, if any. The recitals in such release or satisfaction of any matters
or facts shall be conclusive proof of the truthfulness thereof.
4.07. Statute of Limitations. Mortgagor hereby expressly waives and
releases to the fullest extent permitted by law, the pleading of any statute of
limitations as a defense to any and all obligations secured by this Mortgage.
4.08. Interpretation. Wherever used in this Mortgage, unless the
context otherwise indicates a contrary intent, or unless otherwise specifically
provided herein, the word "Mortgagor" shall mean and include both Mortgagor and
any subsequent owner or owners of the Property, and the word "Mortgagee" shall
mean and include not only the original Mortgagee hereunder but also any future
owner and holder, including pledgees, of the Note or other obligations secured
hereby. In this Mortgage whenever the context so requires, the masculine gender
includes the feminine and/or neuter, and the neuter includes the feminine and/or
masculine, and the singular number includes the plural. In this Mortgage, the
use of the word "including" shall not be deemed to limit the generality of the
term or clause to which it has reference, whether or not non-limiting language
(such as "without limitation," or "but not limited, to," or words of similar
import) is used with reference thereto.
38
4.09. Captions. The captions and headings of the Articles and
sections of this Mortgage are for convenience only and are not to be used to
interpret, define or limit the provisions hereof.
4.10. Consent. The granting or withholding of consent by Mortgagee
to any transaction as required by the terms hereof shall not be deemed a waiver
of the right to require consent to future or successive transactions. Mortgagor
covenants and agrees to reimburse Mortgagee promptly on demand for all legal and
other expenses incurred by Mortgagee or its servicing agent in connection with
all requests by Mortgagor for consent or approval under this Mortgage.
4.11. Delegation to Subagents. Wherever a power of attorney is
conferred upon Mortgagee hereunder or under the Related Agreements, it is
understood and agreed that such power is conferred with full power of
substitution, and Mortgagee may elect in its sole discretion to exercise such
power itself or to delegate such power, or any part thereof, to one or more
subagents.
4.12. Successors and Assigns. All of the grants, obligations,
covenants, agreements, terms, provisions and conditions herein shall run with
the land and shall apply to, bind and inure to the benefit of, the heirs,
administrators, executors, legal representatives, successors and assigns of
Mortgagor (but this shall not permit any assignment prohibited hereby) and the
endorsees, transferees, successors and assigns of Mortgagee. In the event
Mortgagor is composed of more than one party, the obligations, covenants,
agreements, and warranties contained herein as well as the obligations arising
therefrom are and shall be joint and several as to each such party.
4.13. Governing Law. THIS MORTGAGE IS INTENDED TO BE GOVERNED BY AND
CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
MORTGAGOR HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY.
4.14. Intentionally Deleted.
4.15. Changes in Taxation. If, after the date of this Mortgage, any
law is passed by the state in which the Property is located or by any other
governing entity, imposing upon Mortgagee any tax against the Property, or
changing in any way the laws for the taxation of mortgages or deeds of trust or
debts secured by mortgages or deeds of trust so that an additional or substitute
tax is imposed on Mortgagee or the holder of the Note, Mortgagor shall reimburse
Mortgagee for the amount of such taxes immediately upon receipt of written
notice from Mortgagee. Provided, however, that such requirement of payment shall
be ineffective if Mortgagor is permitted by law to pay the whole of such tax in
addition to all other payments required hereunder, without any penalty or charge
thereby accruing to Mortgagee and if Mortgagor in fact pays such tax prior to
the date upon which payment is required by such notice.
39
4.16. Maximum Interest Rate. No provision of this Mortgage or of the
Note or of any note evidencing a Future Advance shall require the payment or
permit the collection of interest in excess of the maximum non-usurious rate
permitted by applicable law. In the event such interest does exceed the maximum
legal rate, it shall be cancelled automatically to the extent that such interest
exceeds the maximum legal rate and if theretofore paid, credited on the
principal amount of the Note or, if the Note has been prepaid, then such excess
shall be rebated to Mortgagor.
4.17. Time of Essence. Time is of the essence of the obligations of
Mortgagor in this Mortgage and each and every term, covenant and condition made
herein by or applicable to Mortgagor.
4.18. Reproduction of Documents. This Mortgage and all documents
relating thereto, specifically excluding the Note but including, without
limitation, consents, waivers and modifications which may hereafter be executed,
financial and operating statements, certificates and other information
previously or hereafter furnished to Mortgagee, may be reproduced by Mortgagee
by any photographic, photostatic, microfilm, micro-card, miniature photographic
or other similar process and Mortgagee may destroy any original document
("Master") so reproduced. Mortgagor agrees and stipulates that any such
reproduction is an original and shall be admissible in evidence as the Master in
any judicial or administrative proceeding (whether or not the Master is in
existence and whether or not such reproduction was made or preserved by
Mortgagee in the regular course of business) and any enlargement, facsimile or
further reproduction of such a reproduction shall be no less admissible.
4.19. No Oral Modifications. This Mortgage may not be amended or
modified orally, but only by an agreement in writing signed by the party against
whom enforcement of any amendment or modification is sought.
IN WITNESS WHEREOF and intending to be legally bound, the undersigned
has executed this Mortgage as a sealed instrument as of the day and year first
hereinabove written.
GUSTINE SIXTH AVENUE ASSOCIATES, LTD., a
Pennsylvania limited partnership, by its
sole general partner:
Gustine Sixth Avenue, Inc., a Pennsylvania
corporation
By: /s/ W. Xxxxx Xxxxxxx
----------------------------------------
W. Xxxxx Xxxxxxx, President
40
COMMONWEALTH OF PENNSYLVANIA )
)SS:
COUNTY OF ALLEGHENY )
On the 23 day of March, 1999, before me, the subscriber, a Notary
Public in and for the State and County aforesaid, personally appeared W. Xxxxx
Xxxxxxx, who acknowledged himself to be the President of Gustine Sixth Avenue,
Inc., a corporation which is the sole general partner of Gustine Sixth Avenue
Associates, Ltd., a limited partnership, and who acknowledged that he, being
authorized to do so, executed the foregoing instrument as the act and deed of
the partnership for the purposes therein contained by signing the name of the
partnership acting through its general partner by himself as President of such
general partner, and desired that the same might be recorded as such.
WITNESS my hand and seal the day and year aforesaid
/s/ Xxxxxx X. Xxxxx
------------------------------------
Notary Public [affix seal and stamp]
[NOTARY STAMP]
41
EXHIBIT A
Legal Description of Fee Estate Land
PARCEL ONE
All that certain lot or piece of ground situate in the Second Xxxx of the City
of Pittsburgh, County of Allegheny and Commonwealth of Pennsylvania, bounded and
described as follows:
Beginning at the intersection of the Southeasterly side of Wood Street and the
Southwesterly side of Sixth Avenue; thence along the said side of Wood Street,
South 30 degrees 57' 40" West, a distance of 36 feet to the property of the
First Presbyterian Church; thence by said property the following 2 courses and
distances: South 60 degrees 02' 20" East, 60 feet to a point; thence North
30 degrees 57' 40" East, 36 feet to a point on the Southwesterly side of Sixth
Avenue; thence by said side of Sixth Avenue, North 60 degrees 02' 20" West, a
distance of 60 feet to the corner of Wood Street and Sixth Avenue at the place
of beginning.
Being designated as Block 2-A, Lot 85-1 in the Deed Registry Office of Allegheny
County, Pennsylvania.
PARCEL TWO
All that certain lot or piece of ground situate in the Second Xxxx of the City
of Pittsburgh, County of Allegheny and Commonwealth of Pennsylvania, bounded and
described as follows:
Beginning at the intersection of the Southeasterly side of Wood Street and the
Northeasterly side of Xxxxxx Avenue; thence along the said side of Wood Street,
North 30 degrees 57' 40" East, a distance of 12 feet to a point on the line of
property of the First Presbyterian Church; thence by said property the following
2 courses and distances: South 59 degrees 54' 20" East, 60 feet to a point,
thence South 30 degrees 57' 40" West, 12 feet to a point on the Northeasterly
side of Xxxxxx Avenue; thence by said side of Xxxxxx Avenue, North 59 degrees
54' 20" West, 60 feet to the corner of Wood Street and Xxxxxx Avenue at the
place of beginning.
Being designated as Block 2-A, Lot 85-2 in the Deed Registry Office of Allegheny
County, Pennsylvania.
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EXHIBIT B
Legal Description of Leasehold Estate Land
PARCEL THREE
All that certain lot or piece of ground situate in the Second Xxxx of the City
of Pittsburgh, Allegheny County, Commonwealth of Pennsylvania, bounded and
described as follows:
Beginning at a point on the Southeasterly side of Wood Street at a distance of
36 feet Southwesterly measured along the said side of Wood Street from the most
Southerly corner of Sixth Avenue and Wood Street; thence along the said side of
Wood Street, South 30 degrees 57' 40" West, 167.39 feet to a point on the line
of land of Pittsburgh Business Properties, Inc.; thence by said property the
following 2 courses and distances: South 59 degrees 54' 20" East, 60 feet to a
point; thence South 30 degrees 57' 40" West, 12 feet to a point on the
Northeasterly side of Xxxxxx Avenue; thence by said side of Xxxxxx Avenue, South
59 degrees 54' 20" East, 40 feet to a point; thence North 30 degrees 57' 40"
East, 215.62 feet to a point on the Southwesterly side of Sixth Avenue; thence
along said side of Sixth Avenue, North 60 degrees 02' 20" West, 40 feet to a
point on the line of land of Pittsburgh Business Properties, Inc.; thence by
said land the following 2 courses and distances: South 30 degrees 57' 40" West,
36 feet to a point; thence North 60 degrees 02' 20" West, 60 feet to Wood
Street, the place of beginning.
PARCEL FOUR
All that certain lot or piece of ground situate in the Second Xxxx of the City
of Pittsburgh, Allegheny County, Commonwealth of Pennsylvania, bounded and
described as follows:
Beginning at a point on the Northeasterly side of Xxxxxx Avenue at the line of
Parcel Three herein described, said point being distant 100 feet measured along
said side of Xxxxxx Avenue from the most Easterly corner of Wood Street and
Xxxxxx Avenue; thence along the line of Parcel Three, North 30 degrees 57' 40"
East, 190 feet to a point; thence by land of The First Presbyterian Church of
Pittsburgh, the following 4 courses and distances: South 59 degrees 54' 20"
East, 10.50 feet to a point; thence South 30 degrees 57' 40" West, 22 feet to a
point; thence South 59 degrees 54' 20" East, 1.50 feet to a point; thence South
30 degrees 57' 40" West, 168.00 feet to a point on the Northeasterly side of
Xxxxxx Avenue; thence by said side of Xxxxxx Avenue, North 59 degrees 54' 20"
West, 12 feet to the place of beginning.
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