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EXHIBIT 10.10
POLARIS CENTER, LLC
as Mortgagor
to
FIRST UNION NATIONAL BANK,
as Mortgagee
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OPEN-END MORTGAGE AND SECURITY AGREEMENT
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Date: May 17, 2000
PREPARED BY AND UPON RECORDATION RETURN TO:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
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THIS INSTRUMENT AFFECTS REAL AND PERSONAL PROPERTY SITUATED IN THE XXXXX XX
XXXX, XXXX XX XXXXXXXX, XXXXXX OF DELAWARE.
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS AND IS
ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS UNDER THE NAMES OF
MORTGAGOR, AS "DEBTOR", AND MORTGAGEE, AS "SECURED PARTY".
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MORTGAGE AND SECURITY AGREEMENT
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this "Mortgage") is made
as of May 17, 2000 by POLARIS CENTER, LLC, a Delaware limited liability company,
as Mortgagor ("Mortgagor"), whose address is c/o Glimcher Properties Limited
Partnership, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, to FIRST UNION
NATIONAL BANK, a national banking association, as Mortgagee ("Mortgagee"), whose
address is Xxx Xxxxx Xxxxx Xxxxxx XX-0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000.
W I T N E S S E T H:
THAT FOR AND IN CONSIDERATION OF THE SUM OF TEN AND NO/100 DOLLARS
($10), AND OTHER VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH
ARE HEREBY ACKNOWLEDGED, MORTGAGOR HEREBY IRREVOCABLY MORTGAGES, GRANTS,
BARGAINS, SELLS, CONVEYS, TRANSFERS, PLEDGES, SETS OVER AND ASSIGNS TO
MORTGAGEE, with power of sale, all of Mortgagor's estate, right, title and
interest in, to and under any and all of the following described property,
whether now owned or hereafter acquired by Mortgagor (collectively, the
"Mortgaged Property"):
(A) All that certain real property situated in the County
of Delaware, State of Ohio, more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (the
"Premises"), together with all of the easements, rights, privileges,
franchises, tenements, hereditaments and appurtenances now or hereafter
thereunto belonging or in any way appertaining thereto, and all of the
estate, right, title, interest, claim and demand whatsoever of
Mortgagor therein or thereto, either at law or in equity, in possession
or in expectancy, now or hereafter acquired;
(B) All structures, buildings and improvements of every
kind and description now or at any time hereafter located or placed on
the Premises (the "Improvements");
(C) All furniture, furnishings, fixtures, goods,
equipment, inventory or personal property owned by Mortgagor and now or
hereafter located on, attached to or used in and about the
Improvements, including, but not limited to, all machines, engines,
boilers, dynamos, elevators, stokers, tanks, cabinets, awnings,
screens, shades, blinds, carpets, draperies, lawn mowers, and all
appliances, plumbing, heating, air conditioning, lighting, ventilating,
refrigerating, disposal and incinerating equipment, and all fixtures
and appurtenances thereto, and such other goods and chattels and
personal property owned by Mortgagor as are now or hereafter used or
furnished in operating the Improvements, or the activities conducted
therein, and all building materials and equipment hereafter situated on
or about the Premises or Improvements, and all warranties and
guaranties relating thereto, and all additions thereto and
substitutions and replacements therefor (exclusive of any of the
foregoing owned or leased by tenants of space in the Improvements);
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(D) All easements, rights-of-way, strips and gores of
land, vaults, streets, ways, alleys, passages, sewer rights, and other
emblements now or hereafter located on the Premises or under or above
the same or any part or parcel thereof, and all estates, rights,
titles, interests, tenements, hereditaments and appurtenances,
reversions and remainders whatsoever, in any way belonging, relating or
appertaining to the Mortgaged Property or any part thereof, or which
hereafter shall in any way belong, relate or be appurtenant thereto,
whether now owned or hereafter acquired by Mortgagor;
(E) All water, ditches, xxxxx, reservoirs and drains and
all water, ditch, well, reservoir and drainage rights which are
appurtenant to, located on, under or above or used in connection with
the Premises or the Improvements, or any part thereof, whether now
existing or hereafter created or acquired;
(F) All minerals, crops, timber, trees, shrubs, flowers
and landscaping features now or hereafter located on, under or above
the Premises;
(G) All cash funds, deposit accounts and other rights and
evidence of rights to cash, now or hereafter created or held by
Mortgagee pursuant to this Mortgage or any other of the Loan Documents
(as hereinafter defined), including, without limitation, all funds now
or hereafter on deposit in the Impound Account, the Replacement Reserve
and the Repair and Remediation Reserve (each as hereinafter defined);
(H) All leases (including, without limitation, oil, gas
and mineral leases), licenses, concessions and occupancy agreements of
all or any part of the Premises or the Improvements (each, a "Lease"
and collectively, "Leases"), whether written or oral, now or hereafter
entered into and all rents, royalties, issues, profits, revenue,
income, rights and other benefits (collectively, the "Rents and
Profits") of the Premises or the Improvements, now or hereafter arising
from the use or enjoyment of all or any portion thereof or from any
present or future Lease or other agreement pertaining thereto or
arising from any of the Leases or any of the General Intangibles (as
hereinafter defined) and all cash or securities deposited to secure
performance by the tenants, lessees or licensees (each, a "Tenant" and
collectively, "Tenants"), as applicable, of their obligations under any
such Leases, whether said cash or securities are to be held until the
expiration of the terms of said Leases or applied to one or more of the
installments of rent coming due prior to the expiration of said terms,
subject, however, to the provisions contained in Section 1.11
hereinbelow;
(I) That certain Operation and Easement Agreement between
Xxxxxx Xxxxxx Corporation ("Target") and Mortgagor, dated as of
December 23, 1998, and recorded December 24, 1998 in Volume 655, Page
324 in the office of the Recorder of Delaware County, Ohio, as amended
by that First Amendment to Operation and Easement Agreement between
Target, Xxxx'x Home Center, Inc. and Mortgagor dated as of August 11,
1999 in Volume 670, Page 001 in the office of the Recorder of Delaware
County, Ohio (the "REA") and all contracts and agreements now or
hereafter entered into covering any part of the Premises or the
Improvements (collectively, the "Contracts") and all revenue, income
and other benefits thereof, including, without limitation, management
agreements, service contracts, maintenance contracts, equipment leases,
personal property
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leases and any contracts or documents relating to construction on any
part of the Premises or the Improvements (including plans, drawings,
surveys, tests, reports, bonds and governmental approvals) or to the
management or operation of any part of the Premises or the
Improvements;
(J) All present and future monetary deposits given to any
public or private utility with respect to utility services furnished to
any part of the Premises or the Improvements;
(K) All present and future funds, accounts, instruments,
accounts receivable, documents, causes of action, claims, general
intangibles (including, without limitation, trademarks, trade names,
service marks and symbols now or hereafter used in connection with any
part of the Premises or the Improvements, all names by which the
Premises or the Improvements may be operated or known, all rights to
carry on business under such names, and all rights, interest and
privileges which Mortgagor has or may have as developer or declarant
under any covenants, restrictions or declarations now or hereafter
relating to the Premises or the Improvements) and all notes or chattel
paper now or hereafter arising from or by virtue of any transactions
related to the Premises or the Improvements (collectively, the "General
Intangibles");
(L) All water taps, sewer taps, certificates of
occupancy, permits, licenses, franchises, certificates, consents,
approvals and other rights and privileges now or hereafter obtained in
connection with the Premises or the Improvements and all present and
future warranties and guaranties relating to the Improvements or to any
equipment, fixtures, furniture, furnishings, personal property or
components of any of the foregoing now or hereafter located or
installed on the Premises or the Improvements;
(M) All building materials, supplies and equipment now or
hereafter placed on the Premises or in the Improvements and all
architectural renderings, models, drawings, plans, specifications,
studies and data now or hereafter relating to the Premises or the
Improvements;
(N) All right, title and interest of Mortgagor in any
insurance policies or binders now or hereafter relating to the
Mortgaged Property, including any unearned premiums thereon;
(O) All proceeds, products, substitutions and accessions
(including claims and demands therefor) of the conversion, voluntary or
involuntary, of any of the foregoing into cash or liquidated claims,
including, without limitation, proceeds of insurance and condemnation
awards and all refunds of taxes or assessments levied against all or
any portion of the Mortgaged Property; and
(P) All other or greater rights and interests of every
nature in the Premises or the Improvements and in the possession or use
thereof and income therefrom, whether now owned or hereafter acquired
by Mortgagor.
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FOR THE PURPOSE OF SECURING:
(1) The debt evidenced by that certain Promissory Note
(such Promissory Note, together with any and all renewals, amendments,
modifications, consolidations and extensions thereof, is hereinafter
referred to as the "Note") of even date with this Mortgage, made by
Mortgagor payable to the order of Mortgagee in the principal face
amount of FORTY THREE MILLION AND NO/100 DOLLARS ($43,000,000.00),
together with interest as therein provided;
(2) The full and prompt payment and performance of all of
the provisions, agreements, covenants and obligations herein contained
and contained in any other agreements, documents or instruments now or
hereafter evidencing, securing or otherwise relating to the Debt (as
hereinafter defined) including, but not limited to, that certain
Indemnity and Guaranty Agreement from Indemnitor (as hereinafter
defined) of even date herewith and the Environmental Indemnity
Agreement (as hereinafter defined)(the Note, this Mortgage, and such
other agreements, documents and instruments, together with any and all
renewals, amendments, extensions, consolidations, replacements and
modifications thereof, are hereinafter collectively referred to as the
"Loan Documents") and the payment of all other sums herein or therein
covenanted to be paid;
(3) Any and all additional advances made by Mortgagee to
protect or preserve the Mortgaged Property or the lien or security
interest created hereby on the Mortgaged Property, or for taxes,
assessments or insurance premiums as hereinafter provided or for
performance of any of Mortgagor's obligations hereunder or under the
other Loan Documents or for any other purpose provided herein or in the
other Loan Documents (whether or not the original Mortgagor remains the
owner of the Mortgaged Property at the time of such advances). The
Mortgage secures advances for the protection of the security under
5301.233, Ohio Revised Code; and
(4) Any and all other indebtedness now owing or which may
hereafter be owing by Mortgagor to Mortgagee, including, without
limitation, all prepayment fees, however and whenever incurred or
evidenced, whether express or implied, direct or indirect, absolute or
contingent, or due or to become due, and all renewals, amendments,
modifications, consolidations, replacements and extensions thereof, it
being contemplated by Mortgagor and Mortgagee that Mortgagor may
hereafter become so indebted to Mortgagee.
(All of the sums referred to in Paragraphs (1) through (4) above are herein
referred to as the "Debt").
TO HAVE AND TO HOLD the Mortgaged Property unto Mortgagee, its
successors and assigns forever, and Mortgagor does hereby bind itself, its
successors and assigns, to WARRANT AND FOREVER DEFEND the title to the Mortgaged
Property, subject to the Permitted Encumbrances (as hereinafter defined), to
Mortgagee against every person whomsoever lawfully claiming or to claim the same
or any part thereof;
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PROVIDED, HOWEVER, that if the principal and interest and all other
sums due or to become due under the Note or under the other Loan Documents,
including, without limitation, any prepayment fees required pursuant to the
terms of the Note, shall have been paid at the time and in the manner stipulated
therein and the Debt shall have been paid and all other covenants contained in
the Loan Documents shall have been performed, then, in such case, the liens,
security interests, estates and rights granted by this Mortgage shall be
satisfied and the estate, right, title and interest of Mortgagee in the
Mortgaged Property shall cease, and upon payment to Mortgagee of all reasonable
and necessary costs and expenses incurred for the preparation of the release
hereinafter referenced and all recording costs if allowed by law, Mortgagee
shall promptly satisfy and release this Mortgage and all other recorded or filed
Loan Documents of record and the lien, security interest, operation and effect
hereof by proper instrument.
ARTICLE I
COVENANTS OF MORTGAGOR
For the purpose of further securing the Debt and for the protection of
the security of this Mortgage, for so long as the Debt or any part thereof
remains unpaid, Mortgagor covenants and agrees as follows:
1.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MORTGAGOR.
Mortgagor, for itself and its successors and assigns, does hereby represent,
warrant and covenant to and with Mortgagee, its successors and assigns, that:
(a) Mortgagor has good, marketable and indefeasible fee
simple title to the Premises and Improvements, subject only to those matters
expressly set forth as exceptions to or subordinate matters in the title
insurance policy insuring the lien of this Mortgage delivered as of the date
hereof which Mortgagee has agreed to accept (such items being the "Permitted
Encumbrances"), and has full power and lawful authority to assign, pledge,
encumber and mortgage its interest in the Mortgaged Property in the manner and
form hereby done or intended. Mortgagor will preserve its interest in and title
to the Mortgaged Property and will forever warrant and defend the same to
Mortgagee against any and all claims whatsoever and will forever warrant and
defend the validity and priority of the lien and security interest created
herein against the claims of all persons and parties whomsoever, subject in all
cases to the Permitted Encumbrances. The foregoing warranty of title shall
survive the foreclosure of this Mortgage and shall inure to the benefit of and
be enforceable by Mortgagee in the event Mortgagee acquires title to the
Mortgaged Property pursuant to any foreclosure;
(b) No bankruptcy or insolvency proceedings are pending
or contemplated by Mortgagor or, to the best knowledge of Mortgagor, against
Mortgagor or by or against any endorser or cosigner of the Note or of any
portion of the Debt, or any guarantor or indemnitor under any guaranty or
indemnity agreement executed in connection with the Note or the loan evidenced
thereby and secured hereby (an "Indemnitor");
(c) All reports, certificates, affidavits, statements and
other data furnished by or on behalf of Mortgagor (or any affiliate or principal
thereof)to Mortgagee in connection with the loan evidenced by the Note are true
and correct in all material respects and do not omit to
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state any fact or circumstance necessary to make the statements contained
therein not misleading in any material respect;
(d) The execution, delivery and performance of this
Mortgage, the Note and all of the other Loan Documents have been duly authorized
by all action necessary to be, and are, binding and enforceable against
Mortgagor in accordance with the respective terms thereof and do not contravene,
result in a breach of or constitute a default (nor upon the giving of notice or
the passage of time or both will same constitute a default) under the operating
agreement or other organizational documents of Mortgagor or any contract or
agreement of any nature to which Mortgagor is a party or by which Mortgagor or
any of its property may be bound and do not violate or contravene any law,
order, decree, rule or regulation to which Mortgagor is subject;
(e) The Premises and the Improvements and the current
intended use thereof by Mortgagor comply in all material respects with all
applicable restrictive covenants, zoning ordinances, subdivision and building
codes, flood disaster laws (if necessary), health and environmental laws and
regulations and all other ordinances, orders or requirements issued by any
state, federal or municipal authorities lawfully having jurisdiction over the
Mortgaged Property. The Premises constitutes one or more separate tax parcels
for purposes of ad valorem taxation. The Premises and Improvements do not
require any rights over, or restrictions against, other property that have not
been obtained in order to comply with any of the aforesaid governmental
ordinances, orders or requirements;
(f) All utility services necessary and sufficient for the
full use, occupancy, operation and disposition of the Premises and the
Improvements for their present purposes are available thereto, including water,
storm sewer, sanitary sewer, gas, electric, cable and telephone facilities,
through public rights-of-way or perpetual private easements approved by
Mortgagee;
(g) All streets, roads, highways, and bridges contiguous
to and necessary for access to the present use, occupancy and operation of the
Premises and the Improvements have been completed, have been dedicated to and
accepted by the appropriate municipal authority and are open and available to
the Premises and the Improvements without further condition or cost to
Mortgagor;
(h) All curb cuts, driveways and traffic signals shown on
the survey delivered to Mortgagee prior to the execution and delivery of this
Mortgage are existing and have been fully approved by the appropriate
governmental authority;
(i) Except as disclosed in writing to Mortgagee prior to
the execution and delivery of this Mortgage there are no judicial,
administrative, mediation or arbitration actions, suits or proceedings pending
or threatened against or affecting Mortgagor (or, if Mortgagor is a partnership
or a limited liability company, any of its general partners or members) or the
Mortgaged Property which, if adversely determined, would materially impair
either the Mortgaged Property or Mortgagor's ability to perform the covenants or
obligations required to be performed under the Loan Documents;
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(j) The Mortgaged Property is free from delinquent water
charges, sewer rents, taxes and assessments;
(k) Except as otherwise disclosed in the Engineering
Report (as hereinafter defined) as of the date of this Mortgage, the Mortgaged
Property is free from unrepaired damage caused by fire, flood, accident or other
casualty;
(l) As of the date of this Mortgage, no part of the
Premises or the Improvements has been taken in condemnation, eminent domain or
like proceeding nor is any such proceeding pending or, to Mortgagor's knowledge
and belief, threatened or contemplated;
(m) Mortgagor possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits necessary for the
conduct of its business substantially as now conducted on the Premises;
(n) Except as may otherwise be disclosed in the
Engineering Report, the Improvements are structurally sound, in good repair and
free of defects in materials and workmanship and to the best of Mortgagor's
knowledge, information and belief and have been constructed and installed in
substantial compliance with the plans and specifications relating thereto. All
major building systems located within the Improvements, including, without
limitation, the heating and air conditioning systems and the electrical and
plumbing systems, are in good working order and condition;
(o) Mortgagor has delivered to Mortgagee true, correct
and complete copies of all material Contracts and all amendments thereto or
modifications thereof;
(p) Each Contract constitutes the legal, valid and
binding obligation of Mortgagor and, to the best of Mortgagor's knowledge and
belief, is generally enforceable against any other party thereto. As of the date
hereof, no default exists on the part of Mortgagor or to the best of Mortgagor's
knowledge and belief, on the part of any other party thereto, or with the
passing of time or the giving of notice or both would exist, under any Contract
which would, in the aggregate, have a material adverse effect on Mortgagor or
the Mortgaged Property;
(q) No Contract other than the Permitted Encumbrances
provides any party with the right to obtain a lien or encumbrance upon the
Mortgaged Property superior to the lien of this Mortgage;
(r) Mortgagor and the Mortgaged Property are free from
any past due obligations for sales and payroll taxes;
(s) There are no security agreements or financing
statements affecting all or any portion of the Mortgaged Property other than (i)
as disclosed in writing by Mortgagor to Mortgagee prior to the date hereof and
(ii) the security agreements and financing statements created in favor of
Mortgagee;
(t) Mortgagor has delivered true, correct and complete
schedules and other documents (collectively, the "Rent Roll") as of the date
hereof, which as of the date thereof
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accurately and completely sets forth in all material respects for each Lease
affecting the Mortgaged Property, the following: the name of the Tenant, the
Lease expiration date, extension and renewal provisions, the base rent payable,
and any security deposit held thereunder;
(u) Each Lease constitutes the legal, valid and binding
obligation of Mortgagor and, to the best of Mortgagor's knowledge and belief, is
enforceable against the Tenant thereof in all material respects. As of the date
hereof, no default on the part of Mortgagor or to the best of Mortgagor's
knowledge and belief, on the part of any other party thereto exists, or with the
passing of time or the giving of notice or both would exist, under any Lease
which would, in the aggregate, have a material adverse effect on Mortgagor or
the Mortgaged Property;
(v) No Tenant under any Lease has, as of the date hereof,
paid rent more than thirty (30) days in advance, and the rents under such Leases
have not been waived, released, or otherwise discharged or compromised;
(w) As of the date hereof, all work to be performed by
Mortgagor under the Leases has been substantially performed, all contributions
to be made by Mortgagor to the Tenants thereunder have been made and all other
conditions precedent to each such Tenant's obligations thereunder have been
satisfied except as disclosed to Mortgagee;
(x) As of the date hereof, each Tenant under a Lease has
entered into occupancy of the demised premises except as disclosed to Mortgagee;
(y) As of the date hereof, Mortgagor has delivered to
Mortgagee true, correct and complete copies of all Leases described in the Rent
Roll;
(z) To the best of Mortgagor's knowledge and belief, each
Tenant is free from bankruptcy, reorganization or arrangement proceedings or a
general assignment for the benefit of creditors;
(aa) No Lease provides any party with the right to obtain
a lien or encumbrance upon the Mortgaged Property superior to the lien of this
Mortgage;
(bb) Mortgagor is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended,
and the related Treasury Department regulations, including temporary
regulations;
(cc) The Permitted Encumbrances do not and will not
materially adversely affect (i) the ability of Mortgagor to pay in full the Debt
in a timely manner and (ii) the use of the Mortgaged Property for the use
currently being made thereof, the operation of the Mortgaged Property as
currently being operated or the value of the Mortgaged Property; and
(dd) The REA is in full force and effect and no material
default, breach or violation exists on the part of Mortgagor or to its knowledge
on the part of other parties thereto, or with the passing of time or giving of
notice or both, will exist under the REA. Neither the execution and delivery of
the Loan Documents, the Mortgagor's performance thereunder, the
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recordation of this Mortgage, nor the exercise of any remedies by Mortgagee,
will constitute a breach or default under the REA.
1.2. DEFENSE OF TITLE. If, while this Mortgage is in force, the
title to the Mortgaged Property or the interest of Mortgagee therein shall be
the subject, directly or indirectly, of any action at law or in equity, or be
attached directly or indirectly, or endangered, clouded or adversely affected in
any manner, Mortgagor, at Mortgagor's expense, shall take all necessary and
proper steps for the defense of said title or interest, including the employment
of counsel approved by Mortgagee, the prosecution or defense of litigation, and
the compromise or discharge of claims made against said title or interest.
Notwithstanding the foregoing, in the event that Mortgagee determines that
Mortgagor is not adequately performing its obligations under this Section and
that such failure may materially and adversely impair the Mortgaged Property or
any portion thereof the security of any lien or security interest created
hereunder or under any of the other Loan Documents, Mortgagee may after
reasonable notice, without limiting or waiving any other rights or remedies of
Mortgagee hereunder, take such steps with respect thereto as Mortgagee shall
deem necessary or proper and any and all costs and expenses reasonably incurred
by Mortgagee in connection therewith, together with interest thereon at the
Default Interest Rate (as defined in the Note) from the date incurred by
Mortgagee until actually paid by Mortgagor, shall be immediately paid by
Mortgagor on demand and shall be secured by this Mortgage and by all of the
other Loan Documents securing all or any part of the indebtedness evidenced by
the Note.
1.3. PERFORMANCE OF OBLIGATIONS. Mortgagor shall pay when due the
principal of and the interest on the Debt in accordance with the terms of the
Note. Mortgagor shall also pay all charges, fees and other sums required to be
paid by Mortgagor as provided in the Loan Documents, in accordance with the
terms of the Loan Documents, and shall observe, perform and discharge all
obligations, covenants and agreements to be observed, performed or discharged by
Mortgagor set forth in the Loan Documents in accordance with their terms.
Further, Mortgagor shall promptly and strictly perform and comply with all
material covenants, conditions, obligations and prohibitions required of
Mortgagor in connection with any other material document or instrument affecting
title to the Mortgaged Property, or any part thereof, regardless of whether such
document or instrument is superior or subordinate to this Mortgage.
1.4. INSURANCE. Mortgagor shall, at Mortgagor's expense, maintain
in force and effect on the Mortgaged Property at all times while this Mortgage
continues in effect the following insurance:
(a) Insurance against loss or damage to the Mortgaged
Property by fire, windstorm, tornado and hail and against loss and damage by
such other, further and additional risks as may be now or hereafter embraced by
an "all-risk" form of insurance policy. The amount of such insurance shall be
not less than one hundred percent (100%) of the full replacement cost (insurable
value) of the Improvements (as established by an MAI appraisal), without
reduction for depreciation. The determination of the replacement cost amount
shall be adjusted annually to comply with the requirements of the insurer
issuing such coverage or, at Mortgagee's election, by reference to such indices,
appraisals or information as Mortgagee determines in its reasonable discretion
in order to reflect increased value due to inflation. Absent
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such annual adjustment, each policy shall contain inflation guard coverage
insuring that the policy limit will be increased over time to reflect the effect
of inflation. Full replacement cost, as used herein, means, with respect to the
Improvements, the cost of replacing the Improvements without regard to deduction
for depreciation, exclusive of the cost of excavations, foundations and footings
below the lowest basement floor. Mortgagor shall also maintain insurance against
loss or damage to furniture, furnishings, fixtures, equipment and other items
(whether personalty or fixtures) included in the Mortgaged Property and owned by
Mortgagor from time to time to the extent applicable. Each policy shall contain
a replacement cost endorsement and either an agreed amount endorsement (to avoid
the operation of any co-insurance provisions) or a waiver of any co-insurance
provisions, all subject to Mortgagee's approval. The maximum deductible shall be
$100,000.00.
(b) Commercial General Liability Insurance against claims
for personal injury, bodily injury, death and property damage occurring on, in
or about the Premises or the Improvements in amounts not less than $1,000,000.00
per occurrence and $5,000,000.00 in the aggregate plus umbrella coverage in an
amount not less than $5,000,000.00. Mortgagee hereby retains the right to
periodically review the amount of said liability insurance being maintained by
Mortgagor and to require an increase in the amount of said liability insurance
should Mortgagee deem an increase to be reasonably prudent under then existing
circumstances.
(c) Boiler and machinery insurance is required if steam
boilers or other pressure-fired vessels are in operation at the Premises.
Minimum liability coverage per accident must equal the greater of the
replacement cost (insurable value) of the Improvements housing such boiler or
pressure-fired machinery or $2,000,000.00. If one or more large HVAC units is in
operation at the Premises, "Systems Breakdowns" coverage shall be required, as
determined by Mortgagee. Minimum liability coverage per accident must equal the
value of such unit(s).
(d) If the Improvements or any part thereof is situated
in an area designated by the Federal Emergency Management Agency ("FEMA") as a
special flood hazard area (Zone A or Zone V), flood insurance in an amount equal
to the lesser of: (a) the minimum amount required, under the terms of coverage,
to compensate for any damage or loss on a replacement basis (or the unpaid
balance of the Debt if replacement cost coverage is not available for the type
of building insured), or (b) the maximum insurance available under the
appropriate National Flood Insurance Administration program. The maximum
deductible shall be $3,000.00 per building or a higher minimum amount as
required by FEMA or other applicable law.
(e) During the period of any construction, renovation or
alteration of the existing Improvements which exceeds the lesser of 10% of the
principal amount of the Note or $500,000, at Mortgagee's request, a completed
value, "All Risk" Builder's Risk form or "Course of Construction" insurance
policy in non-reporting form, in an amount approved by Mortgagee, may be
required. During the period of any construction of any addition to the existing
Improvements, a completed value, "All Risk" Builder's Risk form or "Course of
Construction" insurance policy in non-reporting form, in an amount approved by
Mortgagee, shall be required.
(f) When and to the extent required by applicable law,
ordinance or other regulation, Worker's Compensation and Employer's Liability
Insurance covering all persons
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subject to the worker's compensation laws of the state in which the Mortgaged
Property is located.
(g) Business income (loss of rents) insurance in amounts
sufficient to compensate Mortgagor for all Rents or income during a period of
not less than eighteen (18) months. The amount of coverage shall be adjusted
annually to reflect the Rents or income payable during the succeeding eighteen
(18) month period.
(h) Such other insurance on the Mortgaged Property or on
any replacements or substitutions thereof or additions thereto as may from time
to time be reasonably required by Mortgagee against other insurable hazards or
casualties which at the time are commonly insured against in the case of
property similarly situated including, without limitation, Sinkhole, Mine
Subsidence, Earthquake and Environmental insurance, due regard being given to
the height and type of buildings, their construction, location, use and
occupancy.
All such insurance shall (i) be with insurers fully licensed and
authorized to do business in the state within which the Premises is located and
who have and maintain a rating of at least A-XI from A.M. Best, (ii) contain the
complete address of the Premises (or a complete legal description), (iii) be for
terms of at least one year, with premium prepaid, and (iv) be subject to the
reasonable approval of Mortgagee as to insurance companies, amounts, content,
forms of policies, method by which premiums are paid and expiration dates, and
(vi) include a standard, non-contributory, mortgagee clause naming EXACTLY:
First Union National Bank,
its Successors and Assigns ATIMA
Attn.: Structured Products Servicing
0000 Xxxxxxxx Xxxxx, Xxxxxxxx XXX0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
(a) as an additional insured under all liability insurance policies, (b) as the
first mortgagee on all property insurance policies and (c) as the loss payee on
all loss of rents or loss of business income insurance policies.
Mortgagor shall, as of the date hereof, deliver to Mortgagee evidence
that said insurance policies have been prepaid as required above and certified
copies of such insurance policies and original certificates of insurance signed
by an authorized agent of the applicable insurance companies evidencing such
insurance satisfactory to Mortgagee. Mortgagor shall renew all such insurance
and deliver to Mortgagee certificates and policies evidencing such renewals at
least thirty (30) days before any such insurance shall expire. Mortgagor further
agrees that each such insurance policy: (i) shall provide for at least thirty
(30) days' prior written notice to Mortgagee prior to any policy reduction or
cancellation for any reason other than non-payment of premium and at least ten
(10) days' prior written notice to Mortgagee prior to any cancellation due to
non-payment of premium; (ii) shall contain an endorsement or agreement by the
insurer that any loss shall be payable to Mortgagee in accordance with the terms
of such policy notwithstanding any act or negligence of Mortgagor which might
otherwise result in forfeiture of such insurance; (iii) shall waive all rights
of subrogation against Mortgagee; (iv) in the event that the Premises or the
12
Improvements constitutes a legal non-conforming use under applicable building,
zoning or land use laws or ordinances, shall include an ordinance or law
coverage endorsement which will contain Coverage A: "Loss Due to Operation of
Law" (with a minimum liability limit equal to Replacement Cost With Agreed Value
Endorsement), Coverage B: "Demolition Cost" and Coverage C: "Increased Cost of
Construction" coverages; and (v) may be in the form of a blanket policy provided
that, in the event that any such coverage is provided in the form of a blanket
policy, Mortgagor hereby acknowledges and agrees that failure to pay any portion
of the premium therefor which is not allocable to the Mortgaged Property or by
any other action not relating to the Mortgaged Property which would otherwise
permit the issuer thereof to cancel the coverage thereof, will require the
Mortgaged Property to be insured by a separate, single-property policy. The
blanket policy must properly identify and fully protect the Mortgaged Property
as if a separate policy were issued for 100% of Replacement Cost at the time of
loss and otherwise meet all of Mortgagee's applicable insurance requirements set
forth in this Section 1.4. The delivery to Mortgagee of the insurance policies
or the certificates of insurance as provided above shall constitute an
assignment of all proceeds payable under such insurance policies relating to the
Mortgaged Property by Mortgagor to Mortgagee as further security for the Debt.
In the event of foreclosure of this Mortgage, or other transfer of title to the
Mortgaged Property in extinguishment in whole or in part of the Debt, all right,
title and interest of Mortgagor in and to all proceeds payable under such
policies then in force concerning the Mortgaged Property shall thereupon vest in
the purchaser at such foreclosure, or in Mortgagee or other transferee in the
event of such other transfer of title. Approval of any insurance by Mortgagee
shall not be a representation of the solvency of any insurer or the sufficiency
of any amount of insurance. In the event Mortgagor fails to provide, maintain,
keep in force or deliver and furnish to Mortgagee the policies of insurance
required by this Mortgage or evidence of their renewal as required herein,
Mortgagee may, but shall not be obligated to, procure such insurance and
Mortgagor shall pay all reasonable amounts advanced by Mortgagee therefor,
together with interest thereon at the Default Interest Rate from and after the
date advanced by Mortgagee until actually repaid by Mortgagor, promptly upon
demand by Mortgagee. Any amounts so advanced by Mortgagee, together with
interest thereon, shall be secured by this Mortgage and by all of the other Loan
Documents securing all or any part of the Debt. Mortgagee shall not be
responsible for nor incur any liability for the insolvency of the insurer or
other failure of the insurer to perform, even though Mortgagee has caused the
insurance to be placed with the insurer after failure of Mortgagor to furnish
such insurance. Mortgagor shall not obtain insurance for the Mortgaged Property
in addition to that required by Mortgagee without the prior written consent of
Mortgagee, which consent will not be unreasonably withheld provided that (i)
Mortgagee is a named insured on such insurance, (ii) Mortgagee receives complete
copies of all policies evidencing such insurance, and (iii) such insurance
complies with all of the applicable requirements set forth herein.
Notwithstanding anything to the contrary, Mortgagor shall not be required to
insure those portions of the Improvements that tenants are, by the terms of
their leases, required to insure, if and for so long as such tenants actually
provide such insurance.
1.5. PAYMENT OF TAXES. Mortgagor shall pay or cause to be paid,
except to the extent provision is actually made therefor pursuant to Section 1.6
of this Mortgage, all taxes and assessments which are or may become a lien on
the Mortgaged Property or which are assessed against or imposed upon the
Mortgaged Property. Mortgagor shall furnish Mortgagee with receipts (or if
receipts are not immediately available, with copies of canceled checks
evidencing
13
payment with receipts to follow promptly after they become available) showing
payment of such taxes and assessments at least fifteen (15) days prior to the
applicable delinquency date therefor. Notwithstanding the foregoing, Mortgagor
may, in good faith, by appropriate proceedings and upon notice to Mortgagee,
contest the validity, applicability or amount of any asserted tax or assessment
so long as (a) such contest is diligently pursued, and (b) Mortgagee determines,
in its reasonable opinion, that such contest suspends the obligation to pay the
tax and that nonpayment of such tax or assessment will not result in the sale,
loss, forfeiture or diminution of the Mortgaged Property or any part thereof or
any interest of Mortgagee therein, or (c) prior to the earlier of the
commencement of such contest or the delinquency date of the asserted tax or
assessment, Mortgagor deposits in the Impound Account (as hereinafter defined)
an amount determined by Mortgagee to be adequate to cover the payment of such
tax or assessment and a reasonable additional sum equal to or reasonable
estimate of possible interest, costs and penalties; provided, however, that
Mortgagor shall promptly cause to be paid any amount adjudged by a court of
competent jurisdiction to be due, with all interest, costs and penalties
thereon, promptly after such judgment becomes final; and provided further that
in any event each such contest shall be concluded and the taxes, assessments,
interest, costs and penalties shall be paid prior to the date any writ or order
is issued under which the Mortgaged Property may be sold, lost or forfeited.
1.6. TAX AND INSURANCE IMPOUND ACCOUNT. Mortgagor shall establish
and maintain at all times while this Mortgage continues in effect an impound
account (the "Impound Account") with Mortgagee for payment of real estate taxes
and assessments and insurance on the Mortgaged Property and as additional
security for the Debt. Simultaneously with the execution hereof, Mortgagor shall
deposit in the Impound Account an amount reasonably determined by Mortgagee to
be necessary to ensure that there will be on deposit with Mortgagee an amount
which, when added to the monthly payments subsequently required to be deposited
with Mortgagee hereunder on account of real estate taxes, assessments and
insurance premiums, will result in there being on deposit with Mortgagee in the
Impound Account an amount sufficient to pay the next due installment of real
estate taxes and assessments on the Mortgaged Property at least one (1) month
prior to the earlier of (a) the due date thereof or (b) any such date by which
Mortgagor or Mortgagee is required by law to pay same and the next due insurance
premiums with respect to the Mortgaged Property at least one (1) month prior to
the due date thereof. Commencing on the first monthly payment date under the
Note and continuing thereafter on each monthly payment date under the Note,
Mortgagor shall pay to Mortgagee, concurrently with and in addition to the
monthly payment due under the Note and until the Debt is fully paid and
performed, deposits in an amount equal to one-twelfth (1/12) of the amount of
the annual real estate taxes and assessments that will next become due and
payable on the Mortgaged Property, plus one-twelfth (1/12) of the amount of the
annual premiums that will next become due and payable on insurance policies
which Mortgagor is required to maintain hereunder, each as estimated and
determined by Mortgagee. So long as no Event of Default has occurred, all sums
in the Impound Account shall be held by Mortgagee in the Impound Account to pay
said taxes, assessments and insurance premiums before the same become
delinquent. Mortgagor shall be responsible for ensuring the receipt by
Mortgagee, at least thirty (30) days prior to the respective due date for
payment thereof, of all bills, invoices and statements for all taxes,
assessments and insurance premiums to be paid from the Impound Account, and so
long as no Event of Default
14
has occurred, Mortgagee shall pay the governmental authority or other party
entitled thereto directly to the extent funds are available for such purpose in
the Impound Account. In making any payment from the Impound Account, Mortgagee
shall be entitled to rely on any xxxx, statement or estimate procured from the
appropriate public office or insurance company or agent without any inquiry into
the accuracy of such xxxx, statement or estimate and without any inquiry into
the accuracy, validity, enforceability or contestability of any tax, assessment,
valuation, sale, forfeiture, tax lien or title or claim thereof. No interest on
funds contained in the Impound Account, if any, shall be paid by Mortgagee to
Mortgagor.
1.7. Intentionally Omitted Prior To Execution.
1.8. REPLACEMENT RESERVE.
(a) As additional security for the Debt, Mortgagor shall
establish and maintain at all times while this Mortgage continues in effect a
repair reserve (the "Replacement Reserve") with Mortgagee for payment of costs
and expenses incurred by Mortgagor in connection with the performance of work to
the Improvements including but not limited to roofs, chimneys, gutters,
downspouts, paving, curbs, ramps, driveways, balconies, porches, patios,
exterior walls, exterior doors and doorways, windows, elevators and mechanical,
electrical, plumbing and HVAC equipment (collectively, the "Repairs"), provided
such costs and expenses are incurred for repairs (i) not incurred for ordinary
wear and tear at the Mortgaged Property and (ii) categorized under generally
accepted accounting principles as a capital expense and not as an operating
expense. Commencing on June 1, 2004 and continuing on each monthly Payment Date
thereafter under the Note, Mortgagor shall pay to Mortgagee, concurrently with
and in addition to the monthly payment due under the Note and until the Debt is
fully paid and performed, a deposit to the Replacement Reserve in an amount
equal to $3,502.70 per month. So long as no Event of Default has occurred, all
sums in the Replacement Reserve shall be held by Mortgagee in the Replacement
Reserve to pay the costs and expenses of Repairs. So long as no Default (as
hereinafter defined) or Event of Default has occurred, Mortgagee shall, to the
extent funds are available in the Replacement Reserve, disburse to Mortgagor the
amount incurred and paid by Mortgagor in performing such Repairs within ten (10)
days following: (a) the receipt by Mortgagee of a written request from Mortgagor
for disbursement from the Replacement Reserve and a certification by Mortgagor
in the form attached hereto as Exhibit B; (b) the delivery to Mortgagee of paid
invoices, receipts or other evidence reasonably satisfactory to Mortgagee,
verifying the cost and payment of performing the Repairs; (c) for disbursement
requests in excess of $10,000.00 per item, the delivery to Mortgagee of
affidavits, lien waivers or other evidence reasonably satisfactory to Mortgagee
showing that all materialmen, laborers, subcontractors and any other parties who
might or could claim statutory or common law liens and are furnishing or have
furnished material or labor to the Mortgaged Property have been paid all amounts
due for labor and materials furnished to the Mortgaged Property, conditioned
only upon such parties' actual receipt (if by check, subject to collection) of
such amount due for said labor and materials; (d) for disbursement requests in
excess of $10,000.00 per item, delivery to Mortgagee of a certification from an
inspecting architect or other third party acceptable to Mortgagee describing the
completed Repairs and verifying the state of completion of the Repairs and the
value of the completed Repairs; and (e) for disbursement requests in excess of
$10,000.00 per item, delivery to Mortgagee of a new certificate of occupancy for
the portion of the Improvements covered by
15
such Repairs, if said new certificate of occupancy is required by law, or a
certification by Mortgagor that no new certificate of occupancy is required; and
(f) the receipt by Mortgagee of an administrative fee in the amount of $150.00.
Mortgagee shall not be required to make advances from the Replacement Reserve
more frequently than once in any thirty (30) day period. In making any payment
from the Replacement Reserve, Mortgagee shall be entitled to rely on such
request from Mortgagor without any inquiry into the accuracy, validity or
contestability of any such amount. Mortgagee may, at Mortgagor's expense, make
or cause to be made during the term of this Mortgage an annual inspection of the
Mortgaged Property to determine the need, as determined by Mortgagee in its
reasonable judgment, for further Repairs of the Mortgaged Property. In the event
that such inspection reveals that further Repairs of the Mortgaged Property are
required, Mortgagee shall provide Mortgagor with a written description of the
required Repairs and Mortgagor shall complete such Repairs to the reasonable
satisfaction of Mortgagee within ninety (90) days after the receipt of such
description from Mortgagee, or such later date as may be approved by Mortgagee
in its reasonable discretion. Interest on the funds contained in the Replacement
Reserve shall be credited to Mortgagor as provided in Section 4.31 hereof.
(b) As additional security for the payment and
performance by Mortgagor of all duties, responsibilities and obligations under
the Note and the other Loan Documents, Mortgagor hereby unconditionally and
irrevocably assigns, conveys, pledges, mortgages, transfers, delivers, deposits,
sets over and confirms unto Mortgagee, and hereby grants to Mortgagee a security
interest in, (i) the Impound Account, the Replacement Reserve, the Repair and
Remediation Reserve (as hereinafter defined) and any other reserve or escrow
account established pursuant to the terms hereof or of any other Loan Document
(collectively, the "Reserves"), (ii) the accounts into which the Reserves have
been deposited, (iii) all insurance on said accounts, (iv) all accounts,
contract rights and general intangibles or other rights and interests pertaining
thereto, (v) all sums now or hereafter therein or represented thereby, (vi) all
replacements, substitutions or proceeds thereof, (vii) all instruments and
documents now or hereafter evidencing the Reserves or such accounts, (viii) all
powers, options, rights, privileges and immunities pertaining to the Reserves
(including the right to make withdrawals therefrom), and (ix) all proceeds of
the foregoing. Mortgagor hereby authorizes and consents to the account into
which the Reserves have been deposited being held in Mortgagee's name or the
name of any entity servicing the Note for Mortgagee and hereby acknowledges and
agrees that Mortgagee, or at Mortgagee's election, such servicing agent, shall
have exclusive control over said account, subject to the applicable provisions
of the Loan Documents. Notice of the assignment and security interest granted to
Mortgagee herein may be delivered by Mortgagee at any time to the financial
institution wherein the Reserves have been established, and Mortgagee, or such
servicing entity, shall have possession of all passbooks or other evidences of
such accounts. Mortgagor hereby assumes all risk of loss with respect to amounts
on deposit in the Reserves so long as such amounts are deposited into "Permitted
Investments" as defined in Exhibit D. Mortgagor hereby knowingly, voluntarily
and intentionally stipulates, acknowledges and agrees that the advancement of
the funds from the Reserves as set forth herein is at Mortgagor's direction and
is not the exercise by Mortgagee of any right of set-off or other remedy upon an
event, which with the passage of time or the giving of notice or both would
constitute an Event of Default (a "Default") or an Event of Default. Mortgagor
hereby waives all right to withdraw funds from the Reserves except as provided
for in this Mortgage. If an Event of Default shall
16
occur hereunder or under any other of the Loan Documents Mortgagee may, without
notice or demand on Mortgagor, at its option: (A) withdraw any or all of the
funds (including, without limitation, interest) then remaining in the Reserves
and apply the same, after deducting all costs and expenses of safekeeping,
collection and delivery (including, but not limited to, reasonable attorneys'
fees, costs and expenses) to the Debt or any other obligations of Mortgagor
under the other Loan Documents in such manner as Mortgagee shall deem
appropriate in its sole discretion, and the excess, if any, shall be paid to
Mortgagor, (B) exercise any and all rights and remedies of a secured party under
any applicable Uniform Commercial Code, or (C) exercise any other remedies
available at law or in equity. No such use or application of the funds contained
in the Reserves shall be deemed to cure any Default or Event of Default.
(c) The Reserves shall not, unless otherwise explicitly
required by applicable law, be or be deemed to be escrow or trust funds, but, at
Mortgagee's option and in Mortgagee's discretion, may either be held, subject to
the applicable provisions of the Loan Documents, in a separate account or be
commingled by Mortgagee with the general funds of Mortgagee. The Reserves are
solely for the protection of Mortgagee and entail no responsibility on
Mortgagee's part beyond the payment of the respective items for which they are
held following receipt of bills, invoices or statements therefor in accordance
with the terms hereof. Upon assignment of this Mortgage by Mortgagee, any funds
in the Reserves shall be turned over to the assignee and Mortgagee, as assignor
shall have no responsibility for such funds from and after the date that the
assignee assumes Mortgagee's obligations with respect to such funds under the
Loan Documents. If the funds in the applicable Reserve shall exceed the amount
of payments actually applied by Mortgagee for the purposes and items for which
the applicable Reserve is held, such excess may be credited by Mortgagee on
subsequent payments to be made hereunder or, at the option of Mortgagee,
refunded to Mortgagor. If, however, the applicable Reserve shall not contain
sufficient funds to pay the sums required by the dates on which such sums are
required to be on deposit in such account, Mortgagor shall, within ten (10) days
after receipt of written notice thereof, deposit with Mortgagee the full amount
of any such deficiency. If Mortgagor shall fail to deposit with Mortgagee the
full amount of such deficiency as provided above, Mortgagee shall have the
option, but not the obligation, to make such deposit, and all amounts so
deposited by Mortgagee, together with interest thereon at the Default Interest
Rate from the date so deposited by Mortgagee until actually paid by Mortgagor,
shall be immediately paid by Mortgagor on demand and shall be secured by this
Mortgage and by all of the other Loan Documents securing all or any part of the
Debt. If there is an Event of Default under this Mortgage, Mortgagee may, but
shall not be obligated to, apply at any time the balance then remaining in any
or all of the Reserves against the Debt in whatever order Mortgagee shall
subjectively determine. No such application of any or all of the Reserves shall
be deemed to cure any Event of Default. Upon full payment of the Debt in
accordance with its terms or at such earlier time as Mortgagee may elect, the
balance of any or all of the Reserves then in Mortgagee's possession shall be
paid over to Mortgagor and no other party shall have any right or claim thereto.
1.9. CASUALTY AND CONDEMNATION. Mortgagor shall give Mortgagee
prompt written notice of the occurrence of any casualty affecting, or the
institution of any proceedings for eminent domain or for the condemnation of,
the Mortgaged Property or any portion thereof. All insurance proceeds on the
Mortgaged Property, and all causes of action, claims, compensation, awards and
recoveries for any damage, condemnation or taking of all or any part of the
17
Mortgaged Property or for any damage or injury to it for any loss or diminution
in value of the Mortgaged Property occasioned thereby, are hereby assigned to
and shall be paid to Mortgagee. Mortgagee will consult with Mortgagor concerning
any damage, condemnation or taking, provided such obligation to consult shall in
no way impair Mortgagee's rights, powers and privileges to participate and/or
act with respect to any such damage, condemnation or taking. Mortgagee may
participate in any suits or proceedings relating to any such proceeds, causes of
action, claims, compensation, awards or recoveries, and Mortgagee is hereby
authorized, in its own name or in Mortgagor's name, to adjust any loss covered
by insurance or any condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and Mortgagor
shall from time to time deliver to Mortgagee any instruments required to permit
such participation; provided, however, that, so long as no Default or Event of
Default shall have occurred, Mortgagee shall not have the right to participate
in the adjustment of any loss which is not in excess of the lesser of (i) five
percent (5%) of the then outstanding principal balance of the Note and (ii)
$2,150,000.00. Mortgagee shall apply any sums received by it under this Section
first to the payment of all of its costs and expenses (including, but not
limited to, reasonable legal fees and disbursements) incurred in obtaining those
sums, and then, as follows:
(a) In the event that less than sixty percent (60%) of
the gross leasable area of the Improvements located on the Premises have been
taken or destroyed, then if and so long as:
(i) no Default or Event of Default has occurred
hereunder or under any of the other Loan Documents, and
(ii) the Mortgaged Property can, in Mortgagee's
reasonable judgment, with diligent restoration or repair, be returned to a
condition at least equal to the condition thereof that existed prior to the
casualty or partial taking causing the loss or damage within the earlier to
occur of (i) nine (9) months after the receipt of insurance proceeds or
condemnation awards by either Mortgagor or Mortgagee, and (ii) sixty (60) days
prior to the stated maturity date of the Note, and
(iii) all necessary governmental approvals can be
obtained to allow the rebuilding and reoccupancy of the Mortgaged Property as
described in Section (a)(ii) above, and
(iv) there are sufficient sums available (through
insurance proceeds or condemnation awards and contributions by Mortgagor, the
full amount of which shall, at Mortgagee's option, have been deposited with
Mortgagee (or as to business interruption insurance, will be deposited with
Mortgagor) for disbursement to contractors and suppliers as work proceeds) for
such restoration or repair (including, without limitation, for any reasonable
and customary costs and expenses of Mortgagee to be incurred in administering
said restoration or repair) and for payment of principal and interest to become
due and payable under the Note during such restoration or repair, and
(v) the economic feasibility of the Improvements
after such restoration or repair will be such that income from their operation
is reasonably anticipated to be sufficient to pay operating expenses of the
Mortgaged Property and debt service on the Debt in full with the same coverage
ratio considered by Mortgagee in its determination to make the loan secured
18
hereby, including an assessment of the impact of the termination of any Leases
due to such casualty or condemnation, and
(vi) in the event that the insurance proceeds or
condemnation awards received as a result of such casualty or partial taking
exceed the lesser of (i) five percent (5%) of the then outstanding principal
balance of the Note and (ii) $2,150,000, Mortgagor shall have delivered to
Mortgagee, at Mortgagor's sole cost and expense, an appraisal report in form and
substance satisfactory to Mortgagee appraising the value of the Mortgaged
Property as proposed to be restored or repaired to be not less than the
appraised value of the Mortgaged Property considered by Mortgagee in its
determination to make the loan secured hereby, and
(vii) Mortgagor so elects by written notice
delivered to Mortgagee within ten (10) days after settlement of the aforesaid
insurance or condemnation claim to restore,
then, Mortgagee shall, solely for the purposes of such restoration or repair,
advance so much of the remainder of such sums as may be required for such
restoration or repair, and any funds deposited by Mortgagor therefor, to
Mortgagor in the manner and upon such terms and conditions as would be required
by a prudent interim construction lender, including, but not limited to, the
prior approval by Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of permits, bonds, lien
waivers, invoices, receipts and affidavits from contractors and subcontractors,
in form and substance reasonably satisfactory to Mortgagee. If after completion
of such restoration, any amount remains undisbursed, Mortgagee shall disburse to
Mortgagor an amount equal to any cash deposits made by Mortgagor, to the extent
available, and shall apply any remainder to payment of the Debt in whatever
order Mortgagee directs in its absolute discretion.
(b) In all other cases, namely, in the event that sixty
percent (60%) or more of the Improvements located on the Premises have been
taken or destroyed or Mortgagor does not elect to restore or repair the
Mortgaged Property pursuant to clause (a) above or otherwise fails to meet the
requirements of clause (a) above, then, in any of such events, Mortgagee shall
elect, in Mortgagee's absolute discretion and without regard to the adequacy of
Mortgagee's security, to do either of the following: (1) accelerate the maturity
date of the Note and declare any and all of the Debt to be immediately due and
payable and apply the remainder of such sums received pursuant to this Section
to the payment of the Debt in whatever order Mortgagee directs in its absolute
discretion, with any remainder being paid to Mortgagor, or (2) notwithstanding
that Mortgagor may have elected not to restore or repair the Mortgaged Property
pursuant to the provisions of Section 1.9(a)(vii) above, require Mortgagor to
restore or repair the Mortgaged Property in the manner and upon such terms and
conditions as would be required by a prudent interim construction lender,
including, but not limited to, the deposit by Mortgagor with Mortgagee, within
thirty (30) days after demand therefor, of any deficiency reasonably determined
by Mortgagee to be necessary in order to assure the availability of sufficient
funds to pay for such restoration or repair, including Mortgagee's reasonable
and customary costs and expenses to be incurred in connection therewith, the
prior approval by Mortgagee of plans and specifications, contractors and form of
construction contracts and the furnishing to Mortgagee of permits, bonds, lien
waivers, invoices, receipts and affidavits from contractors and subcontractors,
in form and substance reasonably satisfactory to Mortgagee in its discretion,
and apply the remainder of such
19
sums toward such restoration and repair, with any balance thereafter remaining
being applied by Mortgagee for payment of the Debt in whatever order Mortgagee
directs in its absolute discretion.
Any reduction in the Debt resulting from Mortgagee's application of any sums
received by it hereunder shall take effect only when Mortgagee actually receives
such sums and applies such sums to the Debt and, in any event, the unpaid
portion of the Debt shall remain in full force and effect and Mortgagor shall
not be excused in the payment thereof. Partial payments received by Mortgagee,
as described in the preceding sentence, shall be applied to the final principal
payment due under the Note and thereafter to the monthly installments due under
the Note in the inverse order of their due date; provided, however, that in such
event, no prepayment premium or fee shall be due and Mortgagee shall be deemed
to have waived the benefit of Section 1.04 of the Note relative to the amounts
so applied in reduction of the Debt provided no Event of Default, nor any event
which with the giving of notice of passage of time or both shall have occurred
and be continuing. If Mortgagor elects or Mortgagee directs Mortgagor to restore
or repair the Mortgaged Property after the occurrence of a casualty or partial
taking of the Mortgaged Property as provided above, Mortgagor shall promptly and
diligently, at Mortgagor's sole cost and expense and regardless of whether the
insurance proceeds or condemnation award, as appropriate, shall be sufficient
for the purpose, restore, repair, replace and rebuild the Mortgaged Property as
nearly as possible to its value, condition and character immediately prior to
such casualty or partial taking in accordance with the foregoing provisions and
Mortgagor shall pay to Mortgagee all reasonable and customary costs and expenses
of Mortgagee incurred in administering said rebuilding, restoration or repair,
provided that Mortgagee makes such proceeds or award available for such purpose.
Mortgagor agrees to execute and deliver from time to time such further
instruments as may be requested by Mortgagee to confirm the foregoing assignment
to Mortgagee of any award, damage, insurance proceeds, payment or other
compensation. Mortgagee is hereby irrevocably constituted and appointed the
attorney-in-fact of Mortgagor (which power of attorney shall be irrevocable so
long as any portion of the Debt is outstanding, shall be deemed coupled with an
interest, shall survive the voluntary or involuntary dissolution of Mortgagor
and shall not be affected by any disability or incapacity suffered by Mortgagor
subsequent to the date hereof), with full power of substitution, subject to the
terms of this Section, to settle for, collect and receive any such awards,
damages, insurance proceeds, payments or other compensation from the parties or
authorities making the same, to appear in and prosecute any proceedings therefor
and to give receipts and acquittances therefor.
1.10. CONSTRUCTION LIENS. Mortgagor shall pay when due all
claims and demands of mechanics, materialmen, laborers and others for any work
performed or materials delivered for the Premises or the Improvements; provided,
however, that, Mortgagor shall have the right to contest in good faith any such
claim or demand, so long as it does so diligently, by appropriate proceedings
and without prejudice to Mortgagee and provided that neither the Mortgaged
Property nor any interest is or could reasonably be in any danger of sale, loss
or forfeiture as a result of such proceeding or contest. In the event Mortgagor
shall contest any such claim or demand, Mortgagor shall promptly notify
Mortgagee of such contest and thereafter shall, upon Mortgagee's request,
promptly provide a bond, cash deposit or other security satisfactory to
Mortgagee in Mortgagee's reasonable discretion to protect Mortgagee's interest
and security or cause the title insurer to affirmatively insure Mortgagee's
interest over any lien arising therefrom
20
should the contest be unsuccessful. If Mortgagor shall fail to promptly
discharge or provide security against any such claim or demand or to provide
title insurance coverage as aforesaid, Mortgagee may do so and any and all
expenses reasonably incurred by Mortgagee, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the Debt.
1.11. RENTS AND PROFITS. As additional and collateral security for
the payment of the Debt and cumulative of any and all rights and remedies herein
provided for, Mortgagor hereby absolutely and presently assigns to Mortgagee all
existing and future Rents and Profits. Mortgagor hereby grants to Mortgagee the
sole, exclusive and immediate right, without taking possession of the Mortgaged
Property, to demand, collect (by suit or otherwise), receive and give valid and
sufficient receipts for any and all of said Rents and Profits, for which purpose
Mortgagor does hereby irrevocably make, constitute and appoint Mortgagee its
attorney-in-fact with full power to appoint substitutes or a trustee to
accomplish such purpose (which power of attorney shall be irrevocable so long as
any portion of the Debt is outstanding, shall be deemed to be coupled with an
interest, shall survive the voluntary or involuntary dissolution of Mortgagor,
and shall not be affected by any disability or incapacity suffered by Mortgagor
subsequent to the date hereof). Mortgagee shall be without liability for any
loss which may arise from a failure or inability to collect Rents, proceeds or
other payments. However, until the occurrence of an Event of Default under this
Mortgage or under any other of the Loan Documents, Mortgagor shall have a right
and license to collect, receive, use and enjoy the Rents and Profits when due
and prepayments thereof for not more than one (1) month prior to due date
thereof. Upon the occurrence of an Event of Default, Mortgagor's license shall
automatically terminate without notice to Mortgagor and Mortgagee may
thereafter, without taking possession of the Mortgaged Property, collect the
Rents and Profits itself or by an agent or receiver. From and after the
termination of such license, Mortgagor shall be the agent of Mortgagee in
collection of the Rents and Profits, and all of the Rents and Profits so
collected by Mortgagor shall be held in trust by Mortgagor for the sole and
exclusive benefit of Mortgagee, and Mortgagor shall, within one (1) business day
after receipt of any Rents and Profits, pay the same to Mortgagee to be applied
by Mortgagee as hereinafter set forth. Neither the demand for or collection of
Rents and Profits by Mortgagee shall constitute any assumption by Mortgagee of
any obligations under any agreement relating thereto. Mortgagee is obligated to
account only for such Rents and Profits as are actually collected or received by
Mortgagee. Mortgagor irrevocably agrees and consents that the respective payors
of the Rents and Profits shall, upon demand and notice from Mortgagee of an
Event of Default, pay said Rents and Profits to Mortgagee without liability on
such payor's part to determine the actual existence of any Event of Default
claimed by Mortgagee. Mortgagor hereby waives any right, claim or demand which
Mortgagor may now or hereafter have against any such payor by reason of such
payment of Rents and Profits to Mortgagee, and any such payment shall discharge
such payor's obligation to make such payment to Mortgagor. All Rents collected
or received by Mortgagee may be applied against all reasonable and customary
expenses of collection, including, without limitation, reasonable attorneys'
fees, against costs of operation and management of the Mortgaged Property and
against the Debt, in whatever order or priority as to any of the items so
mentioned as Mortgagee directs in its sole subjective discretion and without
regard to the adequacy of its security. Neither the exercise by Mortgagee of any
21
rights under this Section nor the application of any Rents to the Debt shall
cure or be deemed a waiver of any Event of Default. The assignment of Rents and
Profits hereinabove granted shall continue in full force and effect during any
period of foreclosure or redemption with respect to the Mortgaged Property.
Mortgagor has executed an Assignment of Leases and Rents dated of even date
herewith (the "Assignment") in favor of Mortgagee covering all of the right,
title and interest of Mortgagor, as landlord, lessor or licensor, in and to any
Leases. All rights and remedies granted to Mortgagee under the Assignment shall
be in addition to and cumulative of all rights and remedies granted to Mortgagee
hereunder.
1.12. LEASES.
(a) Mortgagor covenants and agrees that it shall not
enter into any Lease which (A) affects the lesser of (x) five percent (5%) of
the gross leaseable area of the Improvements of the Premises and (y) 20,000
square feet or more of the Mortgaged Property or (B) has a term of more than
(10) years, without the prior written approval of Mortgagee, which approval
shall not be unreasonably withheld. The request for approval of each such
proposed new Lease shall be made to Mortgagee in writing and shall state that,
pursuant to the terms of this Mortgage, failure to approve or disapprove such
proposed Lease within ten (10) business days is deemed approval and Mortgagor
shall furnish to Mortgagee (and any loan servicer specified from time to time by
Mortgagee): (i) complete biographical and financial information about the
proposed Tenant as Mortgagee may reasonably require in conjunction with its
review, (ii) a copy of the proposed form of Lease, and (iii) a summary of the
material terms of such proposed Lease (including, without limitation, rental
terms and the term of the proposed lease and any options). It is acknowledged
that Mortgagee intends to include among its criteria for approval of any such
proposed Lease the following: (i) such Lease shall be with a bona-fide
arm's-length lessee; (ii) such Lease shall not contain any rental or other
concessions which are not then customary and reasonable for similar properties
and leases in the market area of the Premises; (iii) such Lease shall provide
that the Tenant pays for a share of taxes, utilities, common area maintenance
charges and other expenses attributable to its occupancy; (iv) the rental and
other economic terms thereof shall, in the aggregate, be at least at the market
rate then prevailing for similar properties and leases in the market areas of
the Premises; and (v) such Lease shall contain subordination and attornment
provisions in form and content acceptable to Mortgagee in its reasonable
discretion. Failure of Mortgagee to approve or disapprove any such proposed
Lease within ten (10) business days after receipt of such written request and
all the documents and information required to be furnished to Mortgagee with
such request shall be deemed approval by Mortgagee, provided that the written
request for approval specifically mentioned the same. Notwithstanding anything
to the contrary, the approval procedures for the Leases that are set forth in
this Section 1.12(a) shall apply to the submission of all Leases and all
amendments, modifications, supplements, restatements, extensions, renewals,
waivers, releases, consents, assignments, terminations and other Lease-related
actions and documents for which Mortgagee's consent or approval is required
under the Loan Documents.
(b) Prior to execution of any Leases of space in the
Improvements or otherwise at the Mortgaged Property after the date hereof,
Mortgagor shall submit to Mortgagee, for Mortgagee's prior approval, which
approval shall not be unreasonably withheld, a copy of the form lease Mortgagor
plans to use in leasing space in the Improvements or at the Mortgaged
22
Property. All such Leases of space in the Improvements or at the Mortgaged
Property shall be on terms consistent with the terms for similar leases in the
market area of the Premises, shall provide for free rent only if the same is
consistent with prevailing market conditions and shall provide for market rents
then prevailing in the market area of the Premises. Such Leases shall also
provide for security deposits where warranted by the tenant's financial
condition in reasonable amounts consistent with prevailing market conditions.
Mortgagor shall also submit to Mortgagee for Mortgagee's approval or deemed
approval within the time provided thereunder in Section 1.12(a), which approval
shall not be unreasonably withheld, prior to the execution thereof, any proposed
Lease of the Improvements or any portion thereof that differs materially and
adversely from the aforementioned form Lease. Mortgagor shall not execute any
Lease for all or a substantial portion of the Mortgaged Property, except for an
actual occupancy by the Tenant, lessee or licensee thereunder, and shall at all
times promptly and faithfully perform, or cause to be performed, all of the
covenants, conditions and agreements contained in all Leases with respect to the
Mortgaged Property, now or hereafter existing, on the part of the landlord,
lessor or licensor thereunder to be kept and performed. Mortgagor shall furnish
to Mortgagee, within ten (10) days after a request by Mortgagee to do so, but in
any event by January 1 of each year, a current Rent Roll, certified by Mortgagor
as being true and correct, containing the names of all Tenants with respect to
the Mortgaged Property, the terms of their respective Leases, the spaces
occupied and the rentals or fees payable thereunder and the amount of each
Tenant's security deposit. Upon the request of Mortgagee, Mortgagor shall
deliver to Mortgagee a copy of each such Lease not previously delivered.
Mortgagor shall not do or suffer to be done any act, or omit to take any action,
that might result in a default by the landlord, lessor or licensor under any
such Lease or allow the Tenant thereunder to withhold payment of rent or cancel
or terminate such Lease pursuant to the provisions thereof, except as otherwise
provided herein. Mortgagor shall not further assign any such Lease or any such
Rents and Profits. Except as otherwise provided herein, Mortgagor, at no cost or
expense to Mortgagee, shall enforce in a commercially reasonable manner, short
of termination, the performance and observance of each and every condition and
covenant of each of the parties under such Leases and Mortgagor shall not
anticipate, discount, release, waive, compromise or otherwise discharge any rent
payable under any of the Leases. Mortgagor shall not, without the prior written
consent of Mortgagee, modify any of the Leases, terminate or accept the
surrender of any Leases, waive or release any other party from the performance
or observance of any obligation or condition under such Leases (including,
without limitation, modifying, terminating or releasing any guaranty, letter of
credit or other credit support thereof) except, with respect only to (A) Leases
affecting less than the lesser of (x) five percent (5%) of the gross leaseable
area of the Improvements and (y) 20,000 square feet, or (B) having a term of
less than ten (10) years, in the normal course of business in a manner which is
consistent with sound and customary leasing and management practices for similar
properties in the community in which the Mortgaged Property is located.
Mortgagor shall not permit the prepayment of any rents under any of the Leases
for more than one (1) month prior to the due date thereof.
(c) Each Lease executed after the date hereof affecting
any of the Premises or the Improvements must provide, in a manner reasonably
approved by Mortgagee, that the Tenant will recognize as its landlord, lessor or
licensor, as applicable, and attorn to any person succeeding to the interest of
Mortgagor upon any foreclosure of this Mortgage or deed in lieu of
23
foreclosure. Each such Lease shall also provide that, upon request of said
successor-in-interest, the Tenant shall execute and deliver an instrument or
instruments confirming its attornment as provided for in this Section; provided,
however, that neither Mortgagee nor any successor-in-interest shall be bound by
any payment of rent for more than one (1) month in advance (unless said rent is
actually received by Mortgagee or such successor-in-interest, and then only to
the extent thereof), or any amendment or modification of said Lease made without
the express written consent of Mortgagee or said successor-in-interest unless
such amendment or modification is deemed approved in accordance with the
provisions of Section 1.12(a), if such consent is otherwise required under
Section 1.12(a) or (b). Mortgagee may at any time and from time to time by
specific written instrument intended for such purpose, unilaterally subordinate
the lien of this Mortgage to any Lease, without joinder or consent of, or notice
to, Mortgagor, any Tenant or any other person. Notice is hereby given to each
Tenant under a Lease of such right to subordinate. No subordination referred to
in this Section shall constitute a subordination to any lien or other
encumbrance, whenever arising, or improve the right of any junior lienholder.
Nothing herein shall be construed as subordinating this Mortgage to any Lease.
(d) Upon the occurrence of an Event of Default under this
Mortgage, whether before or after the whole principal sum secured hereby is
declared to be immediately due or whether before or after the institution of
legal proceedings to foreclose this Mortgage, forthwith, upon demand of
Mortgagee, Mortgagor shall surrender to Mortgagee, and Mortgagee shall be
entitled to take actual possession of, the Mortgaged Property or any part
thereof personally, or by its agent or attorneys. In such event, Mortgagee shall
have, and Mortgagor hereby gives and grants to Mortgagee, the right, power and
authority to make and enter into Leases with respect to the Mortgaged Property
or portions thereof for such rents and for such periods of occupancy and upon
conditions and provisions as Mortgagee may deem desirable in its sole
discretion, and Mortgagor expressly acknowledges and agrees that the term of any
such Lease may extend beyond the date of any foreclosure sale of the Mortgaged
Property, it being the intention of Mortgagor that in such event Mortgagee shall
be deemed to be and shall be the attorney-in-fact of Mortgagor for the purpose
of making and entering into Leases of parts or portions of the Mortgaged
Property for the rents and upon the terms, conditions and provisions deemed
desirable to Mortgagee in its sole discretion and with like effect as if such
Leases had been made by Mortgagor as the owner in fee simple of the Mortgaged
Property free and clear of any conditions or limitations established by this
Mortgage. The power and authority hereby given and granted by Mortgagor to
Mortgagee shall be deemed to be coupled with an interest, shall not be revocable
by Mortgagor so long as any portion of the Debt is outstanding, shall survive
the voluntary or involuntary dissolution of Mortgagor and shall not be affected
by any disability or incapacity suffered by Mortgagor subsequent to the date
hereof. In connection with any action taken by Mortgagee pursuant to this
Section, Mortgagee shall not be liable for any loss sustained by Mortgagor
resulting from any failure to let the Mortgaged Property, or any part thereof,
or from any other act or omission of Mortgagee in managing the Mortgaged
Property other than Mortgagee's or its agent's, employee's and contractor's
gross negligence, willful misconduct or breach of express provisions of the Loan
Documents, nor shall Mortgagee be obligated to perform or discharge any
obligation, duty or liability under any Lease covering the Mortgaged Property or
any part thereof or under or by reason of this instrument or the exercise of
rights or remedies hereunder. Mortgagor shall, and does hereby, indemnify
Mortgagee for, and hold
24
Mortgagee harmless from, any and all claims, actions, demands, liabilities, loss
or damage which may or might be incurred by Mortgagee under any such Lease or
under this Mortgage or by the exercise of rights or remedies hereunder and from
any and all claims and demands whatsoever which may be asserted against
Mortgagee by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants or agreements contained in any
such Lease other than those finally determined by a court of competent
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of Mortgagee. Should Mortgagee incur any such liability covered by
such indemnity, the amount thereof, including, without limitation, costs,
expenses and reasonable attorneys' fees, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately due and payable to Mortgagee by Mortgagor on
demand and shall be secured hereby and by all of the other Loan Documents
securing all or any part of the Debt. Nothing in this Section shall impose on
Mortgagee any duty, obligation or responsibility for the control, care,
management or repair of the Mortgaged Property, or for the carrying out of any
of the terms and conditions of any such Lease, nor shall it operate to make
Mortgagee responsible or liable for any waste committed on the Mortgaged
Property by the Tenants or by any other parties or for any dangerous or
defective condition of the Mortgaged Property, or for any negligence in the
management, upkeep, repair or control of the Mortgaged Property except for
Mortgagee's gross negligence or willful misconduct.
1.13. ALIENATION AND FURTHER ENCUMBRANCES.
(a) Mortgagor acknowledges that Mortgagee has relied upon
the principals of Mortgagor and their experience in owning and operating the
Mortgaged Property and properties similar to the Mortgaged Property in
connection with the closing of the loan evidenced by the Note. Accordingly, and
except for dispositions of minor amounts of used personal property in the normal
course of business (because of obsolescence or otherwise), disbursements from
the Reserves permitted by Mortgagee, termination of Contracts for default, as
otherwise required by the terms of the Loan Documents, and except as permitted
under Section 1.23 hereof and, except as specifically allowed hereinbelow in
this Section 1.13 and notwithstanding anything to the contrary contained in
Section 4.6 hereof, in the event that the Mortgaged Property or any part thereof
or interest therein shall be sold, conveyed, disposed of, alienated,
hypothecated, leased (except to Tenants of space in the Improvements or of the
Premises in accordance with the provisions of Section 1.12 hereof), assigned,
pledged, mortgaged, further encumbered or otherwise transferred or Mortgagor
shall be divested of its title to the Mortgaged Property or any interest
therein, in any manner or way, whether voluntarily or involuntarily, without the
prior written consent of Mortgagee being first obtained, which consent may be
withheld in Mortgagee's sole discretion, then the same shall constitute an Event
of Default and Mortgagee shall have the right, at its option, to declare any or
all of the Debt, irrespective of the maturity date specified in the Note,
immediately due and payable and to otherwise exercise any of its other rights
and remedies contained in Article III hereof. For the purposes of this Section:
(i) in the event either Mortgagor or any of its general partners or managing
members is a corporation or trust, the sale, conveyance, transfer or disposition
of more than 49% of the issued and outstanding capital stock of Mortgagor or any
of its general partners or managing members or of the beneficial interest of
such trust (or the issuance of new shares of capital stock in Mortgagor or any
of its general partners or managing members so that immediately after such
issuance the total
25
capital stock then issued and outstanding is more than 149% of the total
immediately prior to such issuance) shall be deemed to be a transfer of an
interest in the Mortgaged Property; and (ii) in the event Mortgagor or any
general partner or managing member of Mortgagor is a limited or general
partnership, a joint venture or a limited liability company, a change in the
ownership interests in any general partner, any joint venturer or any managing
member, either voluntarily, involuntarily or otherwise, or the sale, conveyance,
transfer, disposition, alienation, hypothecation or encumbering of all or any
portion of the interest of any such general partner, joint venturer or managing
member in Mortgagor or such general partner (whether in the form of a beneficial
or partnership interest or in the form of a power of direction, control or
management, or otherwise), shall be deemed to be a transfer of an interest in
the Mortgaged Property. Notwithstanding the foregoing, however, (i) up to 49% of
the limited partnership interests and/or non-managing member interests in
Mortgagor or in any general or limited partner or member of Mortgagor shall be
freely transferable without the consent of Mortgagee, (ii) any involuntary
transfer caused by the death of Mortgagor or any general partner, shareholder,
joint venturer, member or beneficial owner of a trust shall not be an Event of
Default under this Mortgage so long as Mortgagor is promptly reconstituted, if
required, following such death and so long as those persons responsible for the
management of the Mortgaged Property and Mortgagor remain unchanged as a result
of such death or any replacement management is approved by Mortgagee,, (iii)
Glimcher Properties Limited Partnership, as a member of Mortgagor, may purchase
any other member's (other than the managing member's interest) interest in the
Mortgagor without the consent of Mortgagee and (iv) gifts for estate planning
purposes of any individual's interests in Mortgagor or in any of Mortgagor's
general partners, managing members or joint venturers to the spouse or any
lineal descendant of such individual, or to a trust for the benefit of any one
or more of such individual, spouse or lineal descendant, shall not be an Event
of Default under this Mortgage so long as Mortgagor is reconstituted, if
required, following such gift and so long as those persons responsible for the
management of the Mortgaged Property and Mortgagor remain unchanged following
such gift or any replacement management is approved by Mortgagee.
Notwithstanding anything to the contrary, but subject to Section 1.13(a)(iii)
above and Section 1.13(c) below, no person or entity may become an owner of a
direct or indirect interest in Mortgagor, which interest exceeds forty-nine
(49%) percent, without Mortgagee's written consent in each instance and a
written statement from the applicable rating agency to the effect that the
transfer of interest will not result in a downgrading, withdrawal or
qualification of the respective ratings in effect immediately prior to such
transfer for any securities issued in connection with a Secondary Market
Transaction (as hereinafter defined).
(b) Notwithstanding the foregoing provisions of this
Section, Mortgagee shall consent to one or more sales, conveyances or transfers
of the Mortgaged Property in its entirety (hereinafter, a "Sale") to any person
or entity provided that, for each Sale, each of the following terms and
conditions are satisfied:
(i) No Default and no Event of Default is then
continuing hereunder or under any of the other Loan Documents;
(ii) Mortgagor gives Mortgagee written notice of
the terms of such prospective Sale not less than sixty (60) days before the date
on which such Sale is scheduled to close and, concurrently therewith, gives
Mortgagee all such information concerning the proposed
26
transferee of the Mortgaged Property (hereinafter, "Buyer") as Mortgagee would
require in evaluating an initial extension of credit to a borrower and pays to
Mortgagee a non-refundable application fee in the amount of $5,000. Mortgagee
shall have the right to approve or disapprove the proposed Buyer. In determining
whether to give or withhold its approval of the proposed Buyer, Mortgagee shall
consider the Buyer's experience and track record in owning and operating
facilities similar to the Mortgaged Property, the Buyer's financial strength,
the Buyer's general business standing and the Buyer's relationships and
experience with contractors, vendors, tenants, lenders and other business
entities; provided, however, that, notwithstanding Mortgagee's agreement to
consider the foregoing factors in determining whether to give or withhold such
approval, such approval shall be given or withheld on a commercially reasonable
basis; provided further, however, that the Mortgagee's consent shall not be
unreasonably withheld if (A) the proposed Buyer or the key principal thereof has
a "net worth" on the date immediately following such Sale of not less than $50
Million, (B) qualifies as a "Qualified Manager" (as said term is defined
herein)and (C) has the business experience and reputation at least equal to that
of Glimcher Properties Limited Partnership on the date hereof ;
(iii) Mortgagor pays Mortgagee, concurrently with
the closing of such Sale, a non-refundable assumption fee in an amount equal to
all out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees, incurred by Mortgagee in connection with the Sale, plus an
amount equal to one percent (1.0%) of the then outstanding principal balance of
the Note or, (x) if such Buyer is affiliated with Glimcher Properties Limited
Partnership, said fee shall be waived so long as Buyer is a single asset,
special purpose bankruptcy remote entity acceptable to Mortgagee;
(iv) The Buyer assumes and agrees to pay the Debt
subject to the provisions of Section 4.27 hereof and, prior to or concurrently
with the closing of such Sale, the Buyer executes, without any cost or expense
to Mortgagee, such documents and agreements as Mortgagee shall reasonably
require to evidence and effectuate said assumption and delivers such legal
opinions as Mortgagee may require;
(v) A party associated with the Buyer approved
by Mortgagee in its sole discretion assumes the obligations of the current
Indemnitor under its guaranty or indemnity agreement and such party associated
with the Buyer executes, without any cost or expense to Mortgagee, a new
guaranty or indemnity agreement in substantially the same form and substance as
delivered by Indemnitor on the date hereof and delivers such legal opinions as
Mortgagee may require;
(vi) As delivered by Indemnitor on the date
hereof the Buyer execute, without any cost or expense to Mortgagee, new
financing statements or financing statement amendments and any additional
documents reasonably requested by Mortgagee;
(vii) Mortgagor delivers to Mortgagee, without any
cost or expense to Mortgagee, such endorsements to Mortgagee's title insurance
policy, hazard insurance policy endorsements or certificates and other similar
materials as Mortgagee may reasonably deem necessary at the time of the Sale,
all in form and substance reasonably satisfactory to Mortgagee, including,
without limitation, an endorsement or endorsements to Mortgagee's title
insurance
27
policy insuring the lien of this Mortgage, extending the effective date of such
policy to the date of execution and delivery (or, if later, of recording) of the
assumption agreement referenced above in subparagraph (iv) of this Section
1.13(b), with no additional exceptions except those permitted under the loan
documents added to such policy, and insuring that fee simple title to the
Mortgaged Property is vested in the Buyer;
(viii) Mortgagor executes and delivers to
Mortgagee, without any cost or expense to Mortgagee, a release of Mortgagee, its
officers, directors, employees and agents, from all claims and liability
relating to the transactions evidenced by the Loan Documents, through and
including the date of the closing of the Sale, which agreement shall be in form
and substance satisfactory to Mortgagee and shall be binding upon the Buyer;
(ix) Subject to the provisions of Section 4.27
hereof, such Sale is not construed so as to relieve Mortgagor of any personal
liability under the Note or any of the other Loan Documents for any acts or
events occurring or obligations arising prior to or simultaneously with the
closing of such Sale, whether or not same is discovered prior or subsequent to
the closing of such Sale, and Mortgagor executes, without any cost or expense to
Mortgagee, such documents and agreements as Mortgagee shall reasonably require
to evidence and effectuate the ratification of said personal liability under
Section 2.04 of the Note. Mortgagor shall be released from and relieved of any
personal liability under the Note or any of the other Loan Documents for any
acts or events occurring or obligations arising after the closing of such Sale
which are not caused by or arising out of any acts or events occurring or
obligations arising prior to or simultaneously with the closing of such Sale;
(x) Such Sale is not construed so as to relieve
any current Indemnitor of its obligations under any guaranty or indemnity
agreement for any acts or events occurring or obligations arising prior to or
simultaneously with the closing of such Sale, and each such current indemnitor
executes, without any cost or expense to Mortgagee, such documents and
agreements as Mortgagee shall reasonably require to evidence and effectuate the
ratification of each such guaranty and indemnity agreement to the date of sale
as aforesaid. Each such current Indemnitor shall be released from and relieved
of any repeat above of its obligations under any guaranty or indemnity agreement
executed in connection with the loan secured hereby for any acts or events
occurring or obligations arising after the closing of such Sale which are not
caused by or arising out of any acts or events occurring or obligations arising
prior to or simultaneously with the closing of such Sale;
(xi) The Buyer shall furnish, if the Buyer is a
corporation, partnership or other entity, all appropriate papers evidencing the
Buyer's capacity and good standing, and the due Authority of the signers to
execute the assumption of the Debt, which papers shall include certified copies
of all documents relating to the organization and formation of the Buyer and of
the entities, if any, which are partners of the Buyer. The Buyer and such
constituent partners, members or shareholders of Buyer (as the case may be), as
Mortgagee shall require, shall be single purpose, "bankruptcy remote" entities,
whose formation documents shall be approved by counsel to Mortgagee. There shall
be an Independent Director of the Buyer (if the Buyer is a corporation) or the
Buyer's corporate general partner or as independent member or, in Mortgagee's
discretion, as manager, of Buyer if the Buyer is a limited liability company.
The consent of such independent party shall be required for, among other things,
any merger,
28
consolidation, dissolution, bankruptcy or insolvency of such independent party
or of the Buyer; and
(xii) Mortgagor delivers to Mortgagee a written
statement from the applicable rating agency to the effect that the Sale will not
result in a downgrading, withdrawal or qualification of the respective ratings
(an "Adverse Rating Impact") in effect immediately prior to such Sale for any
securities issued in connection with a Secondary Market Transaction (as
hereinafter defined). In the event the Secondary Market Transaction has not yet
occurred, Mortgagee shall, in its sole discretion, have determined that the Sale
would not have resulted in an Adverse Rating Impact had the Secondary Market
Transaction theretofore occurred.
(c) Mortgagor, by its acceptance of this Mortgage and
reliance hereon, agrees that, notwithstanding the provisions of Section 1.13 or
any similar provision in any Loan Document; there shall be no restriction on the
transfer, pledge, encumbrance or hypothecation of any stock or shares of
Glimcher Realty Trust ("Glimcher"), which on the date hereof owns, indirectly, a
50% interest in the Mortgagor, except that Glimcher shall not merge or
consolidate into another entity in a transaction where Glimcher is not the
surviving entity; provided, however, that such merger or consolidation shall not
be prohibited, constitute a Default or Event of Default or result in the payment
of any fee to Mortgagee under the Loan Documents, so long as:
(i) No Event of Default has occurred and is continuing;
(ii) Mortgagee receives twenty (20) days prior written
notice of such proposed merger or consolidation;
(iii) The surviving entity executes any and all documents,
including certificates and opinions (including any non-consolidation opinion
letters) as may reasonably be required by Mortgagee;
(iv) The "net worth" of the surviving entity shall be no
less than Fifty Million Dollars ($50,000,000.00) as of the date of the
consummation of such merger or consolidation;
(v) If, as a result of such merger or consolidation, the
manager of the Mortgaged Property changes, the replacement manager is a
"Qualified Manager" or such other replacement manager approved by Mortgagee; and
(vi) The business experience and reputation of the
surviving entity shall be at least equal to that of Glimcher on the date hereof.
As used herein the term "Qualified Manager" means any person or entity that (i)
has not less than five (5) years experience in managing shopping centers similar
in type and size to the Mortgaged Property and (ii) at the time in question
manages not less than 5 shopping centers that are similar in type and size to
the Mortgaged Property.
1.14. PAYMENT OF UTILITIES, ASSESSMENTS, CHARGES, ETC. Mortgagor
shall pay when due all utility charges which are incurred by Mortgagor or which
may become a charge or lien against any portion of the Mortgaged Property for
gas, electricity, water and sewer services furnished to the Premises and/or the
Improvements and all other assessments or charges of a
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similar nature, or assessments payable pursuant to any restrictive covenants,
whether public or private, affecting the Premises and/or the Improvements or any
portion thereof, whether or not such assessments or charges are or may become
liens thereon.
1.15. ACCESS PRIVILEGES AND INSPECTIONS. Mortgagee and the agents,
representatives and employees of Mortgagee shall, subject to the rights of
Tenants, have full and free access to the Premises and the Improvements and any
other location where books and records concerning the Mortgaged Property are
kept at all reasonable times and, except in the event of an emergency, upon not
less than 2 Business Days prior notice (which notice may be telephonic) for the
purposes of inspecting the Mortgaged Property and of examining, copying and
making extracts from the books and records of Mortgagor relating to the
Mortgaged Property. Mortgagor shall lend reasonable and customary assistance to
all such agents, representatives and employees of Mortgagee.
1.16. WASTE; ALTERATION OF IMPROVEMENTS. Mortgagor shall not commit,
suffer or permit any waste on the Mortgaged Property nor take any actions that
might invalidate any insurance carried on the Mortgaged Property. Mortgagor
shall maintain the Mortgaged Property in good condition and repair. No part of
the Improvements may be removed, demolished or materially altered, without the
prior written consent of Mortgagee unless promptly replaced with construction of
equal or greater utility or required in connection with Mortgagor's ongoing
leasing activities conducted in accordance with the provisions of Section 1.12
hereof, or unless otherwise required to comply with the Loan documents. Without
the prior written consent of Mortgagee, Mortgagor shall not commence
construction of any improvements on the Premises other than improvements
required for the maintenance or repair of the Mortgaged Property, or required in
connection with Mortgagor's ongoing leasing activities conducted in accordance
with the provisions of Section 1.12 hereof, or required to comply with the Loan
Documents.
1.17. ZONING. Without the prior written consent of Mortgagee, which
shall not be unreasonably withheld, Mortgagor shall not seek, make, suffer,
consent to or acquiesce in any change in the zoning or conditions of use of the
Premises or the Improvements. Mortgagor shall comply with and make all payments
required under the provisions of any covenants, conditions or restrictions
affecting the Premises or the Improvements. Mortgagor shall comply with all
existing and future requirements of all governmental authorities having
jurisdiction over the Mortgaged Property. Mortgagor shall keep all licenses,
permits, franchises and other approvals necessary for the operation of the
Mortgaged Property in full force and effect. Mortgagor shall operate the
Mortgaged Property as a retail shopping center for so long as the Debt is
outstanding. If, under applicable zoning provisions, the use of all or any part
of the Premises or the Improvements is or becomes a nonconforming use, Mortgagor
shall not cause or permit such use to be discontinued or abandoned without the
prior written consent of Mortgagee. Further, without Mortgagee's prior written
consent, Mortgagor shall not file or subject any part of the Premises or the
Improvements to any declaration of condominium or co-operative or convert any
part of the Premises or the Improvements to a condominium, co-operative or other
form of multiple ownership and governance.
1.18. FINANCIAL STATEMENTS AND BOOKS AND RECORDS. Mortgagor shall
keep accurate books and records of account of the Mortgaged Property and its own
financial affairs sufficient to
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permit the preparation of financial statements therefrom in accordance with
generally accepted accounting principles. Mortgagee and its duly authorized
representatives shall have the right to examine, copy and audit Mortgagor's
records and books of account at all reasonable times. So long as this Mortgage
continues in effect, Mortgagor shall provide to Mortgagee, in addition to any
other financial statements required hereunder or under any of the other Loan
Documents, the following financial statements and information, all of which must
be certified to Mortgagee as being true and correct by Mortgagor or the person
or entity to which they pertain, as applicable, and, with respect to the
financial statements and information set forth in subsection (c) hereof, audited
by an independent certified public accountant, be prepared in accordance with
generally accepted accounting principles consistently applied, and be in form
and substance acceptable to Mortgagee:
(a) copies of all tax returns filed by Mortgagor, within
thirty (30) days after the date of filing;
(b) quarterly operating statements for the Mortgaged
Property, within thirty (30) days after the end of each March, June, September
and December commencing with the first (1st) of such months to occur following
the first (1st) anniversary of the date hereof;
(c) annual balance sheets for the Mortgaged Property and
annual financial statements for Mortgagor, each managing member or general
partner in Mortgagor, and each Indemnitor, within ninety (90) days after the end
of each calendar year; and
(d) such other information with respect to the Mortgaged
Property, Mortgagor, the managing members or general partners in Mortgagor, and
Indemnitor, which may be reasonably requested from time to time by Mortgagee,
within a reasonable time after the applicable request.
If any of the aforementioned materials are not furnished to Mortgagee within the
applicable time periods or Mortgagee is reasonably dissatisfied with the
contents of any of the foregoing and has notified Mortgagor of its
dissatisfaction, in addition to any other rights and remedies of Mortgagee
contained herein, Mortgagee shall have the right, but not the obligation, to
obtain the same by means of an audit by an independent certified public
accountant selected by Mortgagee, in which event Mortgagor agrees to pay, or to
reimburse Mortgagee for, all reasonable and customary costs and expenses of such
audit and further agrees to provide all necessary information to said accountant
and to otherwise cooperate in the making of such audit.
1.19. FURTHER DOCUMENTATION.
(a) Mortgagor shall, on the request of Mortgagee and at
the expense of Mortgagor: (a) promptly correct any defect, error or omission
which may be discovered in the contents of this Mortgage or in the contents of
any of the other Loan Documents; (b) promptly execute, acknowledge, deliver and
record or file such further instruments (including, without limitation, further
mortgages, deeds of trust, security deeds, security agreements, financing
statements, continuation statements and assignments of rents or leases) and
promptly do such further acts as may be necessary, desirable or proper to carry
out more effectively the purposes of
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this Mortgage and the other Loan Documents and to subject to the liens and
security interests hereof and thereof any property intended by the terms hereof
and thereof to be covered hereby and thereby, including specifically, but
without limitation, any renewals, additions, substitutions, replacements or
appurtenances to the Mortgaged Property; (c) promptly execute, acknowledge,
deliver, procure and record or file any document or instrument (including
specifically, without limitation, any financing statement) deemed advisable by
Mortgagee in its reasonable discretion to protect, continue or perfect the liens
or the security interests hereunder against the rights or interests of third
persons; and (d) promptly furnish to Mortgagee, upon Mortgagee's request, a duly
acknowledged written estoppel certificate addressed to such party or parties as
directed by Mortgagee and in form and substance supplied by Mortgagee, setting
forth to the best of its knowledge the principal balance of and date to which
interest due under the Note has been paid, stating whether any Default or Event
of Default has occurred hereunder, stating whether any offsets or defenses exist
against the Debt and containing such other matters as Mortgagee may reasonably
require.
(b) Mortgagor acknowledges that Mortgagee and its
successors and assigns may effectuate a Secondary Market Transaction. Mortgagor
shall cooperate in good faith with Mortgagee in effecting any such Secondary
Market Transaction provided that same shall not impose any material cost or
liability upon Mortgagor and shall cooperate in good faith to implement all
requirements imposed by any rating agency involved in any Secondary Market
Transaction including, without limitation, all structural or other changes to
the Debt, and modifications to any documents evidencing or securing the loan;
provided, however, that the Mortgagor shall not be required to modify any
documents evidencing or securing the Debt which would modify (A) the interest
rate payable under the Note, (B) the stated maturity of the Note, (C) the
amortization of principal of the Note, or (D) any other material economic term
of the Debt. Mortgagor shall provide such information within Mortgagor's
possession or control, and documents relating to Mortgagor, any guarantor or
indemnitor, the Mortgaged Property and any tenants of the Improvements as
Mortgagee may reasonably request in connection with such Secondary Market
Transaction. Mortgagor shall make available to Mortgagee all information
concerning its business and operations that Mortgagee may reasonably request.
Mortgagee shall be permitted to share all such information with the investment
banking firms, rating agencies, accounting firms, law firms and other
third-party advisory firms involved with the Loan Documents or the applicable
Secondary Market Transaction. Mortgagor acknowledges that certificates may be
offered in a public offering registered with the Securities Exchange Commission
("SEC"), in a provate placement or Rule 144A transaction, in an unregistered
public offering outside the United States or in some combination thereof, and
Mortgagor understanding and agrees that any of the information provided or to be
provided by Mortgagor in connection with the Secondary Market Transaction,
whether hereunder or under any Loan Documents or otherwise (collectively, the
"Provided Information") may be included in a prospective offering statute or
similar disclosure document "Disclosure Document") and in filings with the SEC
pursuant to the Securities Act or the Exchange Act, or, subject to the
provisions of this Section 1.19(b), provided or made available to investors or
prospective investors in the course of effecting a Secondary Market Transaction.
Upon request, Mortgagor will provide Mortgagee and any underwriter or placement
agent for any certificates with written conformation of the origin and/or
accuracy of any Provided Information. In the event that a Disclosure Document is
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required to be revised prior to the sale of all securities, Mortgagor will
cooperate with Mortgagee or the holder of the Note in updating the Provided
Information for inclusion or summary in such Disclosure Document by providing
all current information in Mortgagor's possession or reasonably obtainable by
Mortgagor (to the extent that the disclosure of such information would not
violate any applicable law or breach any confidentiality agreement pertaining to
Mortgagor or the Mortgaged Property) necessary to keep such covered in the
Provided Information. Mortgagor hereby consents (on behalf of itself and each of
its related Persons) to the inclusion in any such Disclosure Document of any
Provided Information now in possession of Mortgagee or acquired by Mortgagee
pursuant to this Agreement or otherwise.
(c) Mortgagor hereby agrees to deliver the certificates,
amendments and Provided Information described in Section 1.19(b) above and
provide the indemnification set forth in Section 1.19(d) below; provided that
Mortgagor has been given at least a five (5) Business Day period to review the
applicable Disclosure Document or filing (such five (5) Business Day period,
being referred to herein as the "Review Period") so that Mortgagor may, with
respect to the portions contained therein relating to Mortgagor, the Mortgaged
Property or the loan (the "Mortgagor Disclosure Information") either confirm
that the same is accurate and complete in all material respects or propose in
writing to Mortgagee such corrections, additions, deletions or qualifications as
shall be reasonably required by Mortgagor to provide the certificates,
amendments and the Provided Information described above and the indemnification
set forth in Section 1.19(d) below.
(d) In connection with each Disclosure Document which
Mortgagor has had an opportunity to review pursuant to Section 1.19(c) above and
which reflect any changes reasonably required by Mortgagor in writing prior to
the expiration of the Review. Mortgagor hereby agrees to indemnity and hold
Mortgagee harmless, with respect to such Disclosure Document. Mortgagee and all
of the aforesaid third-party advisors and professional firms shall be entitled
to rely on the information supplied by, or on behalf of, Mortgagor and Mortgagor
indemnifies Mortgagee as to any losses, claims, damages or liabilities that
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in such information or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated in such information or necessary in order to make the statements in
such information, or in light of the circumstances under which they were made,
not misleading. Mortgagee may publicize the existence of the Debt in connection
with its marketing for a Secondary Market Transaction or otherwise as part of
its business development. For purposes hereof, a "Secondary Market Transaction"
shall be (a) any sale of the Mortgage, Note and other Loan Documents to one or
more investors as a whole loan; (b) a participation of the Debt to one or more
investors, (c) any deposit of the Mortgage, Note and other Loan Documents with a
trust or other entity which may sell certificates or other instruments to
investors evidencing an ownership interest in the assets of such trust or other
entity, or (d) any other sale or transfer of the Debt or any interest therein to
one or more investors.
1.20. PAYMENT OF COSTS; REIMBURSEMENT TO MORTGAGEE. Mortgagor shall
pay all costs and expenses reasonably incurred in connection with the closing of
the loan evidenced by the Note and secured hereby or otherwise attributable or
chargeable to Mortgagor as the owner of the Mortgaged Property, including,
without limitation, appraisal fees, recording fees,
33
documentary, stamp, mortgage or intangible taxes, brokerage fees and
commissions, title policy premiums and title search fees, uniform commercial
code/tax lien/litigation search fees, escrow fees and reasonable attorneys'
fees. If Mortgagor defaults in any such payment, which default is not cured
within any applicable grace or cure period, Mortgagee may pay the same and
Mortgagor shall reimburse Mortgagee on demand for all such costs and expenses
incurred or paid by Mortgagee, together with such interest thereon at the
Default Interest Rate from and after the date of Mortgagee's making such payment
until reimbursement thereof by Mortgagor. Any such sums disbursed by Mortgagee,
together with such interest thereon, shall be additional indebtedness of
Mortgagor secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. Further, Mortgagor shall promptly notify
Mortgagee in writing of any litigation or threatened litigation affecting the
Mortgaged Property, or any other demand or claim, which, if enforced, could
impair or threaten to impair Mortgagee's security hereunder. Without limiting or
waiving any other rights and remedies of Mortgagee hereunder, if Mortgagor fails
to perform any of its covenants or agreements contained in this Mortgage or in
any of the other Loan Documents and such failure is not cured within any
applicable grace or cure period, or if any action or proceeding of any kind
(including, but not limited to, any bankruptcy, insolvency, arrangement,
reorganization or other debtor relief proceeding) is commenced which might
affect Mortgagee's interest in the Mortgaged Property or Mortgagee's right to
enforce its security, then Mortgagee may, at it option, with or without notice
to Mortgagor, make any appearances, disburse any sums and take any actions as
may be necessary or desirable to protect or enforce the security of this
Mortgage or to remedy the failure of Mortgagor to perform its covenants and
agreements (without, however, waiving any default of Mortgagor). Mortgagor
agrees to pay on demand all expenses of Mortgagee reasonably incurred with
respect to the foregoing (including, but not limited to, reasonable fees and
disbursements of counsel), together with interest thereon at the Default
Interest Rate from and after the date on which Mortgagee incurs such expenses
until reimbursement thereof by Mortgagor. Any such expenses so incurred by
Mortgagee, together with interest thereon as provided above, shall be additional
indebtedness of Mortgagor secured by this Mortgage and by all of the other Loan
Documents securing all or any part of the Debt. The necessity for any such
actions and of the amounts to be paid shall be reasonably determined by
Mortgagee. Mortgagee is hereby empowered to enter and to authorize others to
enter upon the Mortgaged Property or any part thereof for the purpose of
performing or observing any such defaulted term, covenant or condition without
thereby becoming liable to Mortgagor or any person in possession holding under
Mortgagor. Mortgagor hereby acknowledges and agrees that the remedies set forth
in this Section 1.20 shall be exercisable by Mortgagee, and any and all payments
made or costs or expenses incurred by Mortgagee pursuant to and in accordance
with the provisions hereof shall be secured hereby and shall be, without demand,
immediately repaid by Mortgagor with interest thereon at the Default Interest
Rate, notwithstanding the fact that such remedies were exercised and such
payments made and costs incurred by Mortgagee after the filing by Mortgagor of a
voluntary case or the filing against Mortgagor of an involuntary case pursuant
to or within the meaning of the Bankruptcy Reform Act of 1978, as amended, Title
11 U.S.C., or after any similar action pursuant to any other debtor relief law
(whether statutory, common law, case law or otherwise) of any jurisdiction
whatsoever, now or hereafter in effect, which may be or become applicable to
Mortgagor, Mortgagee, any Indemnitor, the Debt or any of the Loan Documents.
Mortgagor hereby indemnifies and holds Mortgagee harmless from and against all
loss, cost and
34
expenses with respect to any Event of Default hereof, any liens (i.e.,
judgments, mechanics' and materialmen's liens, or otherwise), charges and
encumbrances filed against the Mortgaged Property, and from any claims and
demands for damages or injury, including claims for property damage, personal
injury or wrongful death, arising out of or in connection with any accident or
fire or other casualty on the Premises or the Improvements or any nuisance made
or suffered thereon, except those that are due to Mortgagee's gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction, including, without limitation, in any case, reasonable attorneys'
fees, costs and expenses as aforesaid, whether at pretrial, trial or appellate
level, and such indemnity shall survive payment in full of the Debt. This
Section shall not be construed to require Mortgagee to incur any expenses, make
any appearances or take any actions.
1.21. SECURITY INTEREST. This Mortgage is also intended to encumber
and create a security interest in, and Mortgagor hereby grants to Mortgagee a
security interest in, all sums on deposit with Mortgagee pursuant to the
provisions of Section 1.6, Section 1.7, Section 1.8 and Section 1.34 hereof or
any other Section hereof or of any other Loan Document and all fixtures,
chattels, accounts, equipment, inventory, contract rights, general intangibles
and other personal property included within the Mortgaged Property, all
renewals, replacements of any of the aforementioned items, or articles in
substitution therefor or in addition thereto or the proceeds thereof (said
property is hereinafter referred to collectively as the "Collateral"), whether
or not the same shall be attached to the Premises or the Improvements in any
manner. It is hereby agreed that to the extent permitted by law, all of the
foregoing property is to be deemed and held to be a part of and affixed to the
Premises and the Improvements. The foregoing security interest shall also cover
Mortgagor's leasehold interest in any of the foregoing property which is leased
by Mortgagor. Notwithstanding the foregoing, all of the foregoing property shall
be owned by Mortgagor and no leasing or installment sales or other financing or
title retention agreement in connection therewith shall be permitted without the
prior written approval of Mortgagee. Mortgagor shall, from time to time upon the
request of Mortgagee, supply Mortgagee with a current inventory of all of the
property in which Mortgagee is granted a security interest hereunder, in such
detail as Mortgagee may reasonably require. Mortgagor shall promptly replace all
of the Collateral subject to the lien or security interest of this Mortgage when
worn or obsolete with Collateral comparable to the worn out or obsolete
Collateral when new and will not, without the prior written consent of
Mortgagee, remove from the Premises or the Improvements any of the Collateral
subject to the lien or security interest of this Mortgage except such as is
replaced by an article of equal suitability and value as above provided, owned
by Mortgagor free and clear of any lien or security interest except that created
by this Mortgage and the other Loan Documents. All of the Collateral shall be
kept at the location of the Premises except for financial and accounting records
which are maintained at the principal place of business of Mortgagor or as
otherwise required or permitted by the terms of the Loan Documents. Mortgagor
shall not use any of the Collateral in violation of any applicable statute,
ordinance or insurance policy.
1.22. SECURITY AGREEMENT. This Mortgage constitutes a security
agreement between Mortgagor and Mortgagee with respect to the Collateral in
which Mortgagee is granted a security interest hereunder, and, cumulative of all
other rights and remedies of Mortgagee hereunder, Mortgagee shall have all of
the rights and remedies of a secured party under any applicable Uniform
Commercial Code. Mortgagor hereby agrees to execute and deliver on demand and
35
hereby irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor to execute and deliver and, if appropriate, to file with the
appropriate filing officer or office, such security agreements, financing
statements, continuation statements or other instruments as Mortgagee may
request or require in order to impose, perfect or continue the perfection of the
lien or security interest created hereby. To the extent specifically provided
herein, from and after an Event of Default and subject to the Cash Management
Agreement (as hereinafter defined) Mortgagee shall have the right of possession
of all cash, securities, instruments, negotiable instruments, documents,
certificates and any other evidences of cash or other property or evidences of
rights to cash rather than property, which are now or hereafter a part of the
Mortgaged Property, and Mortgagor shall promptly deliver the same to Mortgagee,
endorsed to Mortgagee, without further notice from Mortgagee. Mortgagor agrees
to furnish Mortgagee with notice of any change in the name, identity,
organizational structure, residence, or principal place of business or mailing
address of Mortgagor within ten (10) days of the effective date of any such
change. Upon the occurrence of any Event of Default, Mortgagee shall have the
rights and remedies as prescribed in this Mortgage, or as prescribed by general
law, or as prescribed by any applicable Uniform Commercial Code, all at
Mortgagee's election. Any disposition of the Collateral may be conducted by an
employee or agent of Mortgagee. Any person, including both Mortgagor and
Mortgagee, shall be eligible to purchase any part or all of the Collateral at
any such disposition. Expenses of retaking, holding, preparing for sale, selling
or the like (including, without limitation, Mortgagee's reasonable attorneys'
fees and legal expenses), together with interest thereon at the Default Interest
Rate from the date incurred by Mortgagee until actually paid by Mortgagor, shall
be paid by Mortgagor on demand and shall be secured by this Mortgage and by all
of the other Loan Documents securing all or any part of the Debt. Upon the
occurrence of an Event of Default, Mortgagee shall have the right to enter upon
the Premises and the Improvements or any real property where any of the
Collateral is located to take possession of, assemble and collect the same or to
render it unusable, or Mortgagor, upon demand of Mortgagee, shall assemble such
property and make it available to Mortgagee at the Premises, or at a place which
is mutually agreed upon or, if no such place is agreed upon, at a place
reasonably designated by Mortgagee to be reasonably convenient to Mortgagee and
Mortgagor. If notice is required by law, Mortgagee shall give Mortgagor at least
ten (10) days' prior written notice of the time and place of any public sale of
such property, or adjournments thereof, or of the time of or after which any
private sale or any other intended disposition thereof is to be made, and if
such notice is sent to Mortgagor, as the same is provided for the mailing of
notices herein, it is hereby deemed that such notice shall be and is reasonable
notice to Mortgagor. No such notice is necessary for any such property which is
perishable, threatens to decline speedily in value or is of a type customarily
sold on a recognized market. Any sale made pursuant to the provisions of this
Section shall be deemed to have been a public sale conducted in a commercially
reasonable manner if held contemporaneously with a foreclosure sale as provided
in Section 3.1(e) hereof upon giving the same notice with respect to the sale of
the Mortgaged Property hereunder as is required under said Section 3.1(e).
Furthermore, to the extent permitted by law, in conjunction with, in addition to
or in substitution for the rights and remedies available to Mortgagee pursuant
to any applicable Uniform Commercial Code:
(a) In the event of a foreclosure sale, the Mortgaged
Property may, at the option of Mortgagee, be sold as a whole; and
36
(b) It shall not be necessary that Mortgagee take
possession of the aforementioned Collateral, or any part thereof, prior to the
time that any sale pursuant to the provisions of this Section is conducted and
it shall not be necessary that said Collateral, or any part thereof, be present
at the location of such sale; and
(c) Mortgagee may appoint or delegate any one or more
persons as agent to perform any act or acts necessary or incident to any sale
held by Mortgagee, including the sending of notices and the conduct of the sale,
but in the name and on behalf of Mortgagee.
The name and address of Mortgagor (as Debtor under any applicable Uniform
Commercial Code) are:
Polaris Center, LLC
c/o Glimcher Properties Limited Partnership
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
The name and address of Mortgagee (as Secured Party under any applicable Uniform
Commercial Code) are:
First Union National Bank
One First Union Center, DC6
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
1.23. EASEMENTS AND RIGHTS-OF-WAY. Mortgagor shall not grant any
easement or right-of-way with respect to all or any portion of the Premises or
the Improvements without the prior written consent of Mortgagee, which consent
shall not be unreasonably withheld, provided that the granting of same does not
have a material adverse effect on the utility or value of the Mortgaged
Property. The purchaser at any foreclosure sale hereunder may, at its
discretion, disaffirm any easement or right-of-way granted in violation of any
of the provisions of this Mortgage and may take immediate possession of the
Mortgaged Property free from, and despite the terms of, such grant of easement
or right-of-way. If Mortgagee consents to the grant of an easement or
right-of-way, Mortgagee agrees to grant such consent without charge to Mortgagor
other than expenses, including, without limitation, reasonable attorneys' fees,
incurred by Mortgagee in the review of Mortgagor's request and in the
preparation of documents effecting the subordination.
1.24. COMPLIANCE WITH LAWS. Mortgagor shall at all times comply with
all statutes, ordinances, regulations and other governmental or
quasi-governmental requirements and private covenants now or hereafter relating
to the ownership, construction, use or operation of the Mortgaged Property,
including, but not limited to, those concerning employment and compensation of
persons engaged in operation and maintenance of the Mortgaged Property and any
environmental or ecological requirements, even if such compliance shall require
structural changes to the Mortgaged Property; provided, however, that, Mortgagor
may, upon providing Mortgagee with security reasonably satisfactory to
Mortgagee, proceed diligently and in good faith to contest the validity or
applicability of any such statute, ordinance, regulation or
37
requirement so long as during such contest the Mortgaged Property shall not be
subject to any lien, charge, fine or other liability and shall not be in danger
of being forfeited, lost or closed. Mortgagor shall not use or occupy, or allow
the use or occupancy of, the Mortgaged Property in any manner which violates any
Lease of or any other agreement applicable to the Mortgaged Property or any
applicable law, rule, regulation or order or which constitutes a public or
private nuisance or which makes void, voidable or cancelable, or materially
increases the premium of, any insurance then in force with respect thereto.
1.25. ADDITIONAL TAXES. In the event of the enactment after the date
hereof of any law of the state in which the Mortgaged Property is located or of
any other governmental entity deducting from the value of the Mortgaged Property
for the purpose of taxing any lien or security interest thereon, or imposing
upon Mortgagee the payment of the whole or any part of the taxes or assessments
or charges or liens herein required to be paid by Mortgagor, or changing in any
way the laws relating to the taxation of mortgages or security agreements or
debts secured by mortgages or security agreements or the interest of the
beneficiary, mortgagee or secured party in the property covered thereby, or the
manner of collection of such taxes, so as to adversely affect this Mortgage or
the Debt or Mortgagee, then, and in any such event, Mortgagor, upon demand by
Mortgagee, shall pay such taxes, assessments, charges or liens, or reimburse
Mortgagee therefor; provided, however, that if in the opinion of counsel for
Mortgagee (a) it might be unlawful to require Mortgagor to make such payment, or
(b) the making of such payment might result in the imposition of interest beyond
the maximum amount permitted by law, then and in either such event, Mortgagee
may elect, by notice in writing given to Mortgagor, to declare all of the Debt
to be and become due and payable in full thirty (30) days from the giving of
such notice, and, in connection with the payment of such Debt, no prepayment
premium or fee shall be due and Mortgagee shall be deemed to have waived the
benefit of Section 1.04 of the Note relative thereto unless, at the time of such
payment, an Event of Default or a Default shall have occurred, which Default or
Event of Default is unrelated to the provisions of this Section 1.25, in which
event any applicable prepayment premium or fee in accordance with the terms of
the Note shall be due and payable.
1.26. SECURED INDEBTEDNESS. It is understood and agreed that this
Mortgage shall secure payment of not only the indebtedness evidenced by the Note
but also any and all substitutions, replacements, renewals and extensions of the
Note, any and all indebtedness and obligations arising pursuant to the terms
hereof and any and all indebtedness and obligations arising pursuant to the
terms of any of the other Loan Documents, all of which indebtedness is equally
secured with and has the same priority as any amounts advanced as of the date
hereof. It is agreed that any future advances made by Mortgagee to or for the
benefit of Mortgagor from time to time under this Mortgage or the other Loan
Documents and whether or not such advances are obligatory or are made at the
option of Mortgagee, or otherwise, made for any purpose, within twenty (20)
years from the date hereof, and all interest accruing thereon, shall be equally
secured by this Mortgage and shall have the same priority as all amounts, if
any, advanced as of the date hereof and shall be subject to all of the terms and
provisions of this Mortgage. The maximum amount of loan indebtedness which may
be outstanding at any time under this Mortgage, exclusive of interest thereon,
is Forty-Three Million Dollars ($43,000,000).
38
1.27. MORTGAGOR'S WAIVERS. To the full extent permitted by law,
Mortgagor agrees that Mortgagor shall not at any time insist upon, plead, claim
or take the benefit or advantage of any law now or hereafter in force providing
for any appraisement, valuation, stay, moratorium or extension, or any law now
or hereafter in force providing for the reinstatement of the Debt prior to any
sale of the Mortgaged Property to be made pursuant to any provisions contained
herein or prior to the entering of any decree, judgment or order of any court of
competent jurisdiction, or any right under any statute to redeem all or any part
of the Mortgaged Property so sold. Mortgagor, for Mortgagor and Mortgagor's
successors and assigns, and for any and all persons ever claiming any interest
in the Mortgaged Property, to the full extent permitted by law, hereby
knowingly, intentionally and voluntarily, with and upon the advice of competent
counsel: (a) waives, releases, relinquishes and forever forgoes all rights of
valuation, appraisement, stay of execution, reinstatement and notice of election
or intention to mature or declare due the Debt (except such notices as are
specifically provided for herein); (b) waives, releases, relinquishes and
forever forgoes all right to a marshaling of the assets of Mortgagor, including
the Mortgaged Property, to a sale in the inverse order of alienation, or to
direct the order in which any of the Mortgaged Property shall be sold in the
event of foreclosure of the liens and security interests hereby created and
agrees that any court having jurisdiction to foreclose such liens and security
interests may order the Mortgaged Property sold as an entirety; and (c) waives,
releases, relinquishes and forever forgoes all rights and periods of redemption
provided under applicable law. To the full extent permitted by law, Mortgagor
shall not have or assert any right under any statute or rule of law pertaining
to the exemption of homestead or other exemption under any federal, state or
local law now or hereafter in effect, the administration of estates of decedents
or other matters whatever to defeat, reduce or affect the right of Mortgagee
under the terms of this Mortgage to a sale of the Mortgaged Property, for the
collection of the Debt without any prior or different resort for collection, or
the right of Mortgagee under the terms of this Mortgage to the payment of the
Debt out of the proceeds of sale of the Mortgaged Property in preference to
every other claimant whatever. Furthermore, Mortgagor hereby knowingly,
intentionally and voluntarily, with and upon the advice of competent counsel,
waives, releases, relinquishes and forever forgoes all present and future
statutes of limitations as a defense to any action to enforce the provisions of
this Mortgage or to collect any of the Debt to the fullest extent permitted by
law. Mortgagor covenants and agrees that upon the commencement of a voluntary or
involuntary bankruptcy proceeding by or against Mortgagor, Mortgagor shall not
seek a supplemental stay or otherwise shall not seek pursuant to 11 U.S.C.
Section 105 or any other provision of the Bankruptcy Reform Act of 1978, as
amended, or any other debtor relief law (whether statutory, common law, case
law, or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,
which may be or become applicable, to stay, interdict, condition, reduce or
inhibit the ability of Mortgagee to enforce any rights of Mortgagee against any
guarantor or indemnitor of the Debt or any other party liable with respect
thereto by virtue of any indemnity, guaranty or otherwise.
1.28. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
(a) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, (i) SUBMITS TO PERSONAL JURISDICTION IN THE STATE IN WHICH
THE PREMISES IS LOCATED OVER ANY SUIT, ACTION OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THE NOTE, THIS
39
MORTGAGE OR ANY OTHER OF THE LOAN DOCUMENTS, (ii) AGREES THAT ANY SUCH ACTION,
SUIT OR PROCEEDING MAY BE BROUGHT IN THE STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN THE COUNTY IN WHICH THE PREMISES IS LOCATED, (iii)
SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND (iv) AGREES THAT IT WILL NOT
BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM (BUT NOTHING HEREIN
SHALL AFFECT THE RIGHT OF MORTGAGEE TO BRING ANY ACTION, SUIT OR PROCEEDING IN
ANY OTHER FORUM). MORTGAGOR FURTHER CONSENTS AND AGREES TO SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING
BY REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE MORTGAGOR AT THE
ADDRESS FOR NOTICES DESCRIBED IN SECTION 4.5 HEREOF, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE
(BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED
IN ANY OTHER MANNER PERMITTED BY LAW).
(b) MORTGAGOR, TO THE FULL EXTENT PERMITTED BY LAW,
HEREBY KNOWINGLY, INTENTIONALLY AND VOLUNTARILY, WITH AND UPON THE ADVICE OF
COMPETENT COUNSEL, WAIVES, RELINQUISHES AND FOREVER FORGOES THE RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY
RELATING TO THE DEBT OR ANY CONDUCT, ACT OR OMISSION OF MORTGAGEE OR MORTGAGOR,
OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES,
AGENTS OR ATTORNEYS, OR ANY OTHER PERSONS AFFILIATED WITH MORTGAGEE OR
MORTGAGOR, IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.
1.29. ATTORNEY-IN-FACT PROVISIONS. With respect to any provision of
this Mortgage or any other Loan Document whereby Mortgagor grants to Mortgagee a
power-of-attorney, provided no Default or Event of Default has occurred under
this Mortgage, Mortgagee shall first give Mortgagor written notice at least
three (3) days prior to acting under such power, which notice shall demand that
Mortgagor first take the proposed action within such period and advising
Mortgagor that if it fails to do so, Mortgagee will so act under the power;
provided, however, that, in the event that a Default or an Event of Default has
occurred, or if necessary to prevent imminent death, serious injury, material
damage, loss, forfeiture or diminution in value to the Mortgaged Property or any
surrounding property or to prevent any material adverse affect on Mortgagee's
interest in the Mortgaged Property, Mortgagee may act immediately and without
first giving such notice. In such event, Mortgagee will give Mortgagor notice of
such action as soon thereafter as reasonably practical.
1.30. MANAGEMENT. The management of the Mortgaged Property shall be
by either: (a) Mortgagor or an entity affiliated with Mortgagor approved by
Mortgagee for so long as Mortgagor or said affiliated entity is managing the
Mortgaged Property in a first class manner; or (b) a professional property
management company approved by Mortgagee. Such management by an affiliated
entity or a professional property management company shall be pursuant to a
written agreement approved by Mortgagee. In no event shall any manager be
removed or replaced or the
40
terms of any management agreement modified or amended without the prior written
consent of Mortgagee. After an Event of Default or a default under any
management contract then in effect, which default is not cured within any
applicable grace or cure period, Mortgagee shall have the right to terminate, or
to direct Mortgagor to terminate, such management contract upon thirty (30)
days' notice and to retain, or to direct Mortgagor to retain, a new management
agent approved by Mortgagee.
All Rents and Profits generated by or derived from the
Mortgaged Property shall first be utilized solely for current expenses directly
attributable to the ownership and operation of the Mortgaged Property,
including, without limitation, current expenses relating to Mortgagor's
liabilities and obligations with respect to this Mortgage and the other Loan
Documents, and none of the Rents and Profits generated by or derived from the
Mortgaged Property (including management fees and leasing costs and commissions)
shall be diverted by Mortgagor and utilized for any other purposes unless all
such current expenses attributable to the ownership and operation of the
Mortgaged Property (including management fees and leasing costs and commissions)
have been fully paid and satisfied.
1.31. HAZARDOUS WASTE AND OTHER SUBSTANCES.
(a) Mortgagor hereby represents and warrants to Mortgagee
that, as of the date hereof except as disclosed in any environmental site
assessment report or tenant estoppel certificate delivered to Mortgagee prior to
the date hereof: (i) to the best of Mortgagor's knowledge, information and
belief, none of Mortgagor nor the Mortgaged Property nor any Tenant at the
Premises nor the operations conducted thereon is in direct or indirect violation
of or otherwise exposed to any liability under any local, state or federal law,
rule or regulation or common law duty pertaining to human health, natural
resources or the environment (collectively, "Environment Laws"), including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), the Resource
Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean
Air Act (42 U.S.C. Section 7401 et seq.), the Emergency Planning and
Community-Right-to-Know Act (42 U.S.C. Section 11001 et seq.), the Endangered
Species Act (16 U.S.C. Section 1531 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) and the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), regulations promulgated pursuant to said laws, all
as amended from time to time or otherwise exposed to any liability under any
Environmental Law relating to or affecting the Mortgaged Property, whether or
not used by or within the control of Mortgagor; (ii) no hazardous, toxic or
harmful substances, wastes, materials, pollutants or contaminants (including,
without limitation, asbestos or asbestos-containing materials, lead based paint,
polychlorinated biphenyls, petroleum or petroleum products or byproducts,
flammable explosives, radioactive materials, infectious substances, radon gas or
raw materials which include hazardous constituents) or any other substances or
materials, which are regulated by Environmental Laws (collectively, "Hazardous
Substances") are located on, in or under or have been handled, generated,
stored, processed or disposed of on or released or discharged from the Mortgaged
Property (including underground contamination), except for those substances used
by Mortgagor or any Tenant in the ordinary course of their respective businesses
and in compliance with all Environmental Laws and where such could not
reasonably
41
be expected to give rise to liability under Environmental Laws; (iii) the
Mortgaged Property is not subject to any private or governmental lien or
judicial or administrative notice or action arising under Environmental Laws;
(iv) there is no pending, nor, to Mortgagor's knowledge, information or belief,
threatened litigation arising under Environmental Laws affecting Mortgagor or
the Mortgaged Property; there are no and have been no existing or closed
underground storage tanks or other underground storage receptacles for Hazardous
Substances or landfills or dumps on the Mortgaged Property; (v) Mortgagor has
received no notice of, and to the best of Mortgagor's knowledge and belief,
there exists no investigation, action, proceeding or claim by any agency,
authority or unit of government or by any third party which could result in any
liability, penalty, sanction or judgment under any Environmental Laws with
respect to the Mortgaged Property, nor does Mortgagor know of any basis for such
an investigation, action, proceeding or claim; and (vi) radon is not present at
the Mortgaged Property in excess or in violation of Environmental Laws that
require disclosure to any tenant or occupant of or invitee to the Mortgaged
Property or to any governmental agency or the general public.
(b) Except as disclosed in any environmental site
assessment report or tenant estoppel certificate delivered to Mortgagee prior to
the date hereof, Mortgagor has not received nor to the best of Mortgagor's
knowledge, information and belief has there been issued, any notice,
notification, demand, request for information, citation, summons, or order in
any way relating to any actual, alleged or potential violation or liability
arising under Environmental Laws; and
(c) Except as disclosed in any environmental site
assessment report or tenant estoppel certificate delivered to Mortgagee prior to
the date hereof, to the best of Mortgagor's knowledge, information and belief,
neither the Mortgaged Property, nor any property to which Mortgagor has, in
connection with the maintenance or operation of the Mortgaged Property, directly
or indirectly transported or arranged for the transportation of any Hazardous
Substances is listed or, to the best of Mortgagor's knowledge, information and
belief, proposed for listing on the National Priorities List promulgated
pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal
or state list of sites requiring environmental investigation or clean-up.
(d) Mortgagor shall comply with all applicable
Environmental Laws. Mortgagor shall keep or cause the Mortgaged Property to be
kept free from Hazardous Substances (except those substances used by Mortgagor
or any Tenant in the ordinary course of their respective businesses and except
in compliance with all Environmental Laws and where such could not reasonably be
expected to give rise to liability under Environmental Laws) and in compliance
with all Environmental Laws, Mortgagor shall not install or use any underground
storage tanks, shall expressly prohibit the use, generation, handling, storage,
production, processing and disposal of Hazardous Substances by all Tenants in
quantities or conditions that would violate or give rise to any obligation to
take remedial or other action under any applicable Environmental Laws. Without
limiting the generality of the foregoing, during the term of this Mortgage,
Mortgagor shall not install in the Improvements or permit to be installed in the
Improvements any asbestos or asbestos-containing asbestos.
42
(e) Mortgagor shall promptly notify Mortgagee if
Mortgagor shall become aware of (i) the actual or potential existence of any
Hazardous Substances on the Mortgaged Property other than those occurring in the
ordinary course of Mortgagor's business and which do not violate, or would not
otherwise give rise to liability under Environmental Laws, (ii) any direct or
indirect violation of any Environmental Laws, (iii) any lien, action or notice
affecting the Mortgaged Property or Mortgagor resulting from any violation or
alleged violation of or liability or alleged liability under any Environmental
Laws, (iv) the institution of any investigation, inquiry or proceeding
concerning Mortgagor or the Mortgaged Property pursuant to any Environmental
Laws or otherwise relating to Hazardous Substances, or (v) the discovery of any
occurrence, condition or state of facts which would render any representation or
warranty contained in this Mortgage incorrect in any respect if made at the time
of such discovery. Immediately upon receipt of same, Mortgagor, shall deliver to
Mortgagee copies of any and all requests for information, complaints, citations,
summonses, orders, notices, reports or other communications, documents or
instruments in any way relating to any actual, alleged or potential violation or
liability of any nature whatsoever arising under Environmental Laws and relating
to the Mortgaged Property or to Mortgagor. Mortgagor shall remedy or cause to be
remedied in a timely manner (and in any event within the time period permitted
by applicable Environmental Laws) any violation of Environmental Laws or any
condition that could give rise liability under Environmental Laws. Without
limiting the foregoing, Mortgagor shall, promptly and regardless of the source
of the contamination or threat to the environment or human health, at its own
expense, take all actions as shall be necessary or prudent, to bring any and all
portions of the Mortgaged Property into compliance with Environmental Laws or
other affected property, including, without limitation, all investigative,
monitoring, removal, containment and remedial actions in accordance with all
applicable Environmental Laws (and in all events in a manner reasonably
satisfactory to Mortgagee) and shall further pay or cause to be paid, at no
expense to Mortgagee, all clean-up, administrative and enforcement costs of
applicable governmental agencies which may be asserted against the Mortgaged
Property. In the event Mortgagor fails to do so, Mortgagee may, but shall not be
obligated to, cause the Mortgaged Property or other affected property to be
brought into conformance with Environmental Laws and any and all costs and
expenses incurred by Mortgagee in connection therewith, together with interest
thereon at the Default Interest Rate from the date incurred by Mortgagee until
actually paid by Mortgagor, shall be immediately paid by Mortgagor on demand and
shall be secured by this Mortgage and by all of the other Loan Documents
securing all or any part of the Debt. Mortgagor hereby grants to Mortgagee and
its agents and employees, subject to the rights of any Tenants, access to the
Mortgaged Property and a license to remove any items deemed by Mortgagee to be
in violation of Environmental Laws and to do all things Mortgagee shall deem
necessary in its reasonable discretion to bring the Mortgaged Property into
conformance with Environmental Laws.
(f) Mortgagor covenants and agrees, at Mortgagor's sole
cost and expense, to indemnify, defend (at trial and appellate levels, and with
attorneys, consultants and experts reasonably acceptable to Mortgagee), and hold
Mortgagee harmless from and against any and all liens, damages (including
without limitation, punitive or exemplary damages), losses, liabilities
(including, without limitation, strict liability), obligations, settlement
payments, penalties, fines, assessments, citations, directives, claims,
litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses of any kind or of any nature whatsoever
43
(including, without limitation, reasonable attorneys', consultants' and experts'
fees and disbursements actually incurred in investigating, defending, settling
or prosecuting any claim, litigation or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against Mortgagee or the
Mortgaged Property, and arising directly or indirectly from or out of: (i) any
violation or alleged violation of, or liability or alleged liability under, any
Environmental Law; (ii) the presence, release or threat of release of or
exposure to any Hazardous Substances or radon on, in, under or affecting all or
any portion of the Mortgaged Property or any surrounding areas, regardless of
whether or not caused by or within the control of Mortgagor; (iii) any
transport, treatment, recycling, storage, disposal or arrangement therefor of
Hazardous Substances whether on the Mortgaged Property, originating from the
Mortgaged Property, or otherwise associated with Mortgagor or any operations
conducted on the Mortgaged Property at any time; (iv) the failure by Mortgagor
to comply fully with the terms and conditions of this Section 1.31; (v) the
breach of any representation or warranty contained in this Section 1.31; (vi)
the enforcement of this Section 1.31, including, without limitation, the cost of
assessment, investigation, containment, removal and/or remediation of any and
all Hazardous Substances from all or any portion of the Mortgaged Property or
any surrounding areas, the cost of any actions taken in response to the
presence, release or threat of release of any Hazardous Substances on, in, under
or affecting any portion of the Mortgaged Property or any surrounding areas to
prevent or minimize such release or threat of release so that it does not
migrate or otherwise cause or threaten danger to present or future public
health, safety, welfare or the environment, and costs incurred to comply with
Environmental Laws in connection with all or any portion of the Mortgaged
Property or any surrounding areas. The indemnity set forth in this Section 1.31
shall also include any diminution in the value of the security afforded by the
Mortgaged Property or any future reduction in the sales price of the Mortgaged
Property by reason of any matter set forth in this Section 1.31. The foregoing
indemnity shall specifically not include any such costs relating to Hazardous
Substances which are initially placed on, in or under the Mortgaged Property
after foreclosure or other taking of title to the Mortgaged Property by
Mortgagee or its Agents, employees, contractors, successor or assigns.
Mortgagee's rights under this Section shall survive payment in full of the Debt
and shall be in addition to all other rights of Mortgagee under this Mortgage,
the Note and the other Loan Documents.
(g) Upon Mortgagee's request, at any time after the
occurrence of an Event of Default or at such other time as Mortgagee has
reasonable grounds to believe that Hazardous Substances are or have been
released, stored or disposed of on the Mortgaged Property in violation of
Environmental Laws, or on property contiguous with the Mortgaged Property, or
that the Mortgaged Property may be in violation of the Environmental Laws,
Mortgagor shall perform or cause to be performed, at Mortgagor's sole cost and
expense and in scope, form and substance reasonably satisfactory to Mortgagee,
an inspection or audit of the Mortgaged Property prepared by a hydrogeologist or
environmental engineer or other appropriate consultant reasonably approved by
Mortgagee indicating the presence or absence of Hazardous Substances on the
Mortgaged Property, the compliance or non-compliance status of the Mortgaged
Property and the operations conducted thereon with applicable Environmental
Laws, or an inspection or audit of the Mortgaged Property prepared by an
engineering or consulting firm reasonably approved by Mortgagee indicating the
presence or absence of friable asbestos or substances containing lead based
paint ("Lead Based Paint") on the Mortgaged Property. If Mortgagor fails to
provide
44
reports of such inspection or audit within forty-five (45) days after such
request, Mortgagee may order the same, and Mortgagor hereby grants to Mortgagee
and its employees and agents subject to the rights of Tenant's access to the
Mortgaged Property an irrevocable license to undertake such inspection or audit.
The cost of such inspection or audit, together with interest thereon at the
Default Interest Rate from the date incurred by Mortgagee until actually paid by
Mortgagor, shall be immediately paid by Mortgagor on demand and shall be secured
by this Mortgage and by all of the other Loan Documents securing all or any part
of the Debt.
(h) Reference is made to that certain Environmental
Indemnity Agreement of even date herewith by and among Mortgagor, Glimcher
Properties Limited Partnership and Mortgagee (the "Environmental Indemnity
Agreement"). The provisions of this Mortgage and the Environmental Indemnity
Agreement shall be read together to maximize the coverage with respect to the
subject matter thereof, as determined by Mortgagee.
(i) Intentionally Omitted Prior To Execution.
(j) Mortgagor agrees that if it has been, or if at any
time hereafter it is, determined that the Mortgaged Property contains Lead Based
Paint, on or before thirty (30) days following such determination, if such
determination is hereafter made, as applicable, Mortgagor shall, at its sole
cost and expenses, develop and implement, and thereafter diligently and
continuously carry out (or cause to be developed and implemented and thereafter
diligently and continually to be carried out), an operations, abatement and
maintenance plan for the Lead Based Paint on the Mortgaged Property, which plan
shall be prepared by an expert, and be in form, scope and substance, acceptable
to Mortgagee (together with any Lead Based Paint Report, the "O&M Plan"). (If an
O&M Plan has been prepared prior to the date hereof, Mortgagor agrees to
diligently and continually carry out (or cause to be carried out) the provisions
thereof.) Compliance with the O&M Plan shall require or be deemed to require,
without limitation, the proper preparation and maintenance of all records,
papers and forms required under the Environmental Laws.
1.32. INDEMNIFICATION; SUBROGATION.
(a) Mortgagor shall indemnify, defend and hold Mortgagee
harmless against: (i) any and all claims for brokerage, leasing, finders or
similar fees which may be made relating to the Mortgaged Property or the Debt,
and (ii) any and all liability, obligations, losses, damages, penalties, claims,
actions, suits, costs and expenses (including Mortgagee's reasonable attorneys'
fees) of whatever kind or nature which may be asserted against, imposed on or
incurred by Mortgagee in connection with the Debt, this Mortgage, the Mortgaged
Property, or any part thereof, or the exercise by Mortgagee of any rights or
remedies granted to it under this Mortgage; provided, however, that nothing
herein shall be construed to obligate Mortgagor to indemnify, defend and hold
harmless Mortgagee from and against any and all liabilities, obligations,
losses, damages, penalties, fines, claims, actions, suits, costs and expenses
asserted against, imposed on or incurred by Mortgagee by reason of Mortgagee's
or its Agent's, employee's or contractor's willful misconduct or gross
negligence.
45
(b) If Mortgagee is made a party defendant to any
litigation or any claim is threatened or brought against Mortgagee concerning
the Debt, this Mortgage, the Mortgaged Property, or any part thereof, or any
interest therein, or the construction, maintenance, operation or occupancy or
use thereof, then Mortgagor shall indemnify, defend and hold Mortgagee harmless
from and against all liability by reason of said litigation or claims, including
reasonable attorneys' fees and expenses incurred by Mortgagee in any such
litigation or claim, whether or not any such litigation or claim is prosecuted
to judgment provided, however, that nothing herein shall be construed to
obligate Mortgagor to indemnify, defend and hold harmless Mortgagee from and
against any and all liabilities, obligations, losses, damages, penalties, fines,
claims, actions, suits, costs and expenses asserted against, imposed on or
incurred by Mortgagee by reason of Mortgagee's or its Agent's, employee's or
contractor's willful misconduct or gross negligence. If Mortgagee commences an
action against Mortgagor to enforce any of the terms hereof or to prosecute any
breach by Mortgagor of any of the terms hereof or to recover any sum secured
hereby, Mortgagor shall pay to Mortgagee its reasonable attorneys' fees and
expenses if Mortgagee prevails in such action. The right to such attorneys' fees
and expenses shall be deemed to have accrued on the commencement of such action,
and shall be enforceable whether or not such action is prosecuted to judgment.
If Mortgagor breaches any term of this Mortgage, Mortgagee may engage the
services of an attorney or attorneys to protect its rights hereunder, and in the
event of such engagement following any breach by Mortgagor, Mortgagor shall pay
Mortgagee reasonable attorneys' fees and expenses incurred by Mortgagee, whether
or not an action is actually commenced against Mortgagor by reason of such
breach. All references to "attorneys" in this Subsection and elsewhere in this
Mortgage shall include, without limitation, any attorney or law firm engaged by
Mortgagee and Mortgagee's in-house counsel, and all references to "fees and
expenses" in this Subsection and elsewhere in this Mortgage shall include,
without limitation, any fees of such attorney or law firm, any reasonable
appellate counsel fees, if applicable, and any reasonable allocable charges and
allocable costs of Mortgagee's in-house counsel.
(c) A waiver of subrogation shall be obtained by
Mortgagor from its insurance carrier and, consequently, Mortgagor waives any and
all right to claim or recover against Mortgagee, its officers, employees, agents
and representatives, for loss of or damage to Mortgagor, the Mortgaged Property,
Mortgagor's property or the property of others under Mortgagor's control from
any cause insured against or required to be insured against by the provisions of
this Mortgage.
1.33. COVENANTS WITH RESPECT TO INDEBTEDNESS, OPERATIONS,
FUNDAMENTAL CHANGES OF MORTGAGOR. (A) Mortgagor hereby represents, warrants and
covenants as of the date hereof and until such time as the Debt is paid in full,
that Mortgagor:
(a) will not, nor will any partner, limited or general,
member or shareholder thereof, as applicable, amend, modify or otherwise change
its partnership certificate, partnership agreement, articles of incorporation,
by-laws, operating agreement, articles of organization, or other formation
agreement or document, as applicable, in any material term or manner, or in a
manner which adversely affects Mortgagor's existence as a single purpose
bankruptcy remote entity;
46
(b) will not liquidate or dissolve (or suffer any
liquidation or dissolution), or enter into any transaction of merger or
consolidation, or acquire by purchase or otherwise all or substantially all the
business or assets of, or any stock or other evidence of beneficial ownership of
any entity;
(c) has not and will not guarantee, pledge its assets for
the benefit of, or otherwise become liable on or in connection with, any
obligation of any other person or entity;
(d) does not own and will not own any asset other than
(i) the Mortgaged Property and additions thereto contemplated or permitted by
the Loan Documents, and (ii) incidental personal property necessary for the
operation of the Mortgaged Property;
(e) is not engaged and will not engage, either directly
or indirectly, in any business other than the ownership, management, leasing and
operation of the Mortgaged Property;
(f) will not enter into any contract or agreement with
any general partner, principal, affiliate or member of Mortgagor, as applicable,
or any affiliate of any general partner, principal or member of Mortgagor,
except upon terms and conditions that are substantially similar to those that
would be available on an arms-length basis with third parties other than an
affiliate on the open market;
(g) except as permitted by this Mortgage, has not
incurred and will not incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than (i) the Debt, and (ii) trade
payables or accrued expenses (not exceeding five (5%) percent in the aggregate
of the original principal amount of the Note) incurred in the ordinary course of
business of owning and operating the Mortgaged Property (provided, however, that
all such sums shall be paid in full promptly by Mortgagor, but in no event later
than sixty (60) days of the date incurred), and except as permitted by this
Mortgage, no other debt will be secured (senior, subordinate or pari passu) by
the Mortgaged Property;
(h) has not made and will not make any loans or advances
to any third party (including any affiliate) other than normal distributions and
dividends;
(i) is and will be solvent and pay its debts from its
assets as the same shall become due;
(j) has done or shall use commercially reasonable efforts
to cause caused to be done and will do all things necessary to preserve its
existence, and will observe all formalities applicable to it;
(k) will conduct and operate its business in its own name
and as presently conducted and operated;
(l) will maintain financial statements, books and records
and bank accounts separate from those of its affiliates, including, without
limitation, its general partners or members, as applicable;
47
(m) will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity
(including, without limitation, any affiliate, general partner, or member, as
applicable, or any affiliate of any general partner or member of Mortgagor, as
applicable);
(n) will file its own tax returns; if required by law to
file its own return;
(o) will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations;
(p) will establish and maintain an office through which
its business will be conducted separate and apart from those of its affiliates
or, if sharing office space, shall allocate fairly and reasonably any overhead
and expense for shared office space;
(q) will not commingle the funds and other assets of
Mortgagor with those of any general partner, member, affiliate, principal or any
other person;
(r) has and will maintain its assets in such a manner
that it is not costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or any other person;
(s) does not and will not hold itself out to be
responsible for the debts or obligations of any other person;
(t) will pay any liabilities out of its own funds
(including contributions to its capital), including salaries of its employees,
not funds of any affiliate;
(u) will use stationery, invoices, and checks separate
from its affiliates;
(v) will not do any act which would make it impossible to
carry on the ordinary business of Mortgagor;
(w) will not possess the Mortgaged Property or incidental
personal property necessary for the operation of the Mortgaged Property for
other than a business or company purpose;
(x) will not sell, encumber or otherwise dispose of all
or substantially all of the Mortgaged Property or incidental personal property
necessary for the operation of the Mortgaged Property, except as permitted by
the Loan Documents;
(y) will not hold title to Mortgagor's assets other than
in Mortgagor's name; and
(z) will not, without the affirmative consent of the
members of Mortgagor (including the unanimous consent of the board of directors
of the managing member, including the Independent Director (as defined below),
institute proceedings to be adjudicated bankrupt or
48
insolvent; or consent to the institution of bankruptcy or insolvency proceedings
against it; or file a petition seeking, or consent to, reorganization or relief
under any applicable federal or state law relating to bankruptcy; or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Mortgagor or a substantial part of Mortgagor's
property; or make any assignment for the benefit of creditors; or admit in
writing its inability to pay its debts generally as they become due; or take any
action in furtherance of any such action.
B. If Mortgagor is a limited partnership or a limited liability
company, its general partner or managing member (the "SPC Entity") shall be a
corporation whose sole asset is its interest in Mortgagor and the SPC Entity
will at all times comply with each of the representations, warranties, and
covenants contained in Exhibit E attached hereto and made a part hereof.
C. Mortgagor shall at all times cause there to be at least one
duly appointed member of the board of directors (an "Independent Director") of
the SPC Entity reasonably satisfactory to Mortgagee. Independent Director means
a person who (i) except in the capacity as a director of the corporation, is not
an employee, officer, advisor, agent, or shareholder, member or director of the
corporation or any Affiliate (as defined herein), or a former employee, officer,
advisor, agent, or shareholder, member or director of the corporation or any
Affiliate, (ii) is not a spouse, child, grandchild or sibling of any of (i)
above, (iii) is not (and is not affiliated with an entity that is) a significant
advisor or consultant to the corporation, (iv) is not affiliated with a company
of which the corporation is a significant customer or supplier and (v) has not
yet received, is not entitled to receive and was not a partner, member, officer
or an employee of an entity that received, or is entitled to receive, in any
year within the five years immediately preceding or any years during such
person's incumbency as a director, fees or other income from the corporation or
any Affiliate of those entities in the aggregate in excess of 1% of the gross
income, for any applicable year, of such person, firm or business. For purposes
of this definition, "significant," with respect to any relationship between two
persons or entities shall mean any transaction, services of transactions or
relationship involving more than the lesser of (a) $60,000 per calendar year or
(b) -1/2 of 1% of either person's or entity's annual income. In the event of the
death, incapacity, resignation or removal of an Independent Director, the Board
of Directors of the corporation shall promptly appoint a replacement Independent
Director and no action requiring the consent of the Independent Director shall
be taken until a replacement Independent Director has been appointed. In
addition, no Independent Director may be removed unless his or her successor
satisfying the definition hereunder has been appointed. A person shall not be
disqualified from serving as the Independent Director solely because such person
acts as an Independent Director for any Affiliate which has obtained financing
from the Mortgagor or any of its Affiliates or such person is in the business of
being, or is an employee of an entity that provides, independent directors.
D. Mortgagor shall not cause or permit the board of directors of
the SPC Entity to take any action which, under the terms of any certificate of
incorporation, by-laws or any voting trust agreement with respect to any common
stock, requires a vote of the board of directors of the SPC Entity unless at the
time of such action there shall be at least one member who is an Independent
Director; and
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E. Mortgagor shall conduct its business and shall cause each
Covered Party (as hereinafter defined) to conduct its business so that the
assumptions made with respect to each party discussed (each a "Covered Party")
in that certain opinion letter dated the date hereof (the "Insolvency Opinion")
delivered by Squire, Xxxxxxx & Xxxxxxx in connection with the loan secured
hereby shall be true and correct in all respects.
1.34. Intentionally Omitted Prior To Execution.
1.35. CASH MANAGEMENT AGREEMENT. On or before the date hereof
Mortgagor covenants and agrees to enter into one or more servicing account
agreements, lockbox servicing agreements and/or cash management agreements
acceptable to Mortgagee between Mortgagor, the manager of the Mortgaged
Property, Mortgagee and, as applicable, one or more certain financial
institutions (together with any modification, amendment, substitution or
replacement thereof, hereinafter collectively referred to as the "CASH
MANAGEMENT AGREEMENT"). During any Sweep Period (as defined in the Cash
Management Agreement), all Rents and Profits shall be applied as set forth in
the Cash Management Agreement and the escrows and reserves required hereunder
shall be funded as provided therein. Mortgagor shall pay all costs and expenses
of the servicer and any bank as required under the Cash Management Agreement.
Upon the occurrence of an Event of Default, Mortgagee may apply any sums then
held pursuant to the Cash Management Agreement to the payment of the Debt in any
order in its sole discretion. Until expended or applied, amounts held pursuant
to the Cash Management Agreement shall constitute additional security for the
Debt.
1.36. COVENANTS WITH RESPECT TO REA
(a) Mortgagor shall:
(i) promptly perform and/or observe all of the
material covenants and agreements required to be performed and observed by
Mortgagor under the REA, and do all things necessary to preserve and to keep
unimpaired its material rights thereunder;
(ii) promptly notify Mortgagee of any default
under the REA of which it is aware;
(iii) promptly enforce the performance and
observance of all of the material covenants and agreements required to be
performed and/or observed by the other parties to the REA.
(b) Mortgagor shall not, without Mortgagee's prior
consent:
(i) surrender, terminate or cancel the REA;
(ii) reduce or consent to the reduction of the
term of the REA;
(iii) increase or consent to the increase of the
amount of any charges payable by Mortgagor to another party to the REA pursuant
to the provisions thereof; or
50
(iv) otherwise modify, change, supplement, alter
or amend, or waive or release any of its rights and remedies under, the REA in
any material respect.
(c) Notwithstanding anything to the contrary, the
approval procedures for the Leases that are set forth in Section 1.12(a) hereof
shall apply to the submission and approval of all amendments, modifications and
terminations of REA for which Mortgagee's consent or approval is required under
the Loan Documents.
ARTICLE II
EVENTS OF DEFAULT
2.1. EVENTS OF DEFAULT. The occurrence of any of the following
events shall be an Event of Default hereunder:
(a) Mortgagor fails to pay any money to Mortgagee
required hereunder at the time or within any applicable grace period set forth
herein, or if no grace period is set forth herein, then within seven (7) days of
the date such payment is due (except those regarding payments to be made under
the Note, which failure is subject to any grace periods set forth in the Note).
(b) Mortgagor fails to provide insurance as required by
Section 1.4 hereof or fails to perform any covenant, agreement, obligation, term
or condition set forth in Sections 1.5, 1.15, 1.31, 1.33 or 1.34 hereof.
(c) Mortgagor fails to perform any other covenant,
agreement, obligation, term or condition set forth herein, other than those
otherwise described in this Section 2.1, and, to the extent such failure or
default is susceptible of being cured, the continuance of such failure or
default for thirty (30) days after written notice thereof from Mortgagee to
Mortgagor; provided, however, that if such default is susceptible of cure but
such cure cannot be accomplished with reasonable diligence within said period of
time, and if Mortgagor commences to cure such default promptly after receipt of
notice thereof from Mortgagee, and thereafter prosecutes the curing of such
default with reasonable diligence, such period of time shall be extended for
such period of time as may be necessary to cure such default with reasonable
diligence, but not to exceed an additional ninety (90) days.
(d) Any representation or warranty made herein, in or in
connection with any application or commitment relating to the loan evidenced by
the Note, or in any of the other Loan Documents to Mortgagee by Mortgagor, by
any principal, general partner, manager or member in Mortgagor, or by any
Indemnitor is determined by Mortgagee to have been false or misleading in any
material respect at the time made.
(e) There shall be a sale, conveyance, disposition,
alienation, hypothecation, leasing, assignment, pledge, mortgage, granting of a
security interest in or other transfer or further encumbrancing of the Mortgaged
Property, Mortgagor or its general partners or managing members, or any portion
thereof or any interest therein, in violation of Section 1.13 hereof.
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(f) A default occurs under any of the other Loan
Documents which has not been cured within any applicable grace or cure period
therein provided.
(g) Mortgagor, any general partner or managing member in
Mortgagor or Indemnitor becomes insolvent, or makes a transfer in fraud of
creditors, or makes an assignment for the benefit of creditors, or files a
petition in bankruptcy, or is voluntarily adjudicated insolvent or bankrupt or
admits in writing the inability to pay its debts as they mature, or petitions or
applies to any tribunal for or consents to or fails to contest the appointment
of a receiver, trustee, custodian or similar officer for Mortgagor, for any such
general partner or managing member of Mortgagor or for any Indemnitor or for a
substantial part of the assets of Mortgagor, of any such general partner or
managing member of Mortgagor or of any Indemnitor, or commences any case,
proceeding or other action under any bankruptcy, reorganization, arrangement,
readjustment or debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect.
(h) A petition is filed or any case, proceeding or other
action is commenced against Mortgagor, against any general partner or managing
member of Mortgagor or against Indemnitor seeking to have an order for relief
entered against it as debtor or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or other relief under
any law relating to bankruptcy, insolvency, arrangement, reorganization,
receivership or other debtor relief under any law or statute of any
jurisdiction, whether now or hereafter in effect, or a court of competent
jurisdiction enters an order for relief against Mortgagor, against any general
partner or managing member of Mortgagor or against Indemnitor, as debtor, or an
order, judgment or decree is entered appointing, with or without the consent of
Mortgagor, of any such general partner or managing member of Mortgagor or of
Indemnitor, a receiver, trustee, custodian or similar officer for Mortgagor, for
any such general partner or managing member of Mortgagor or for any Indemnitor,
or for any substantial part of any of the properties of Mortgagor, of any such
general partner or managing member of Mortgagor or of Indemnitor, and if any
such event shall occur, such petition, case, proceeding, action, order, judgment
or decree is not dismissed within ninety (90) days after being commenced.
(i) The Mortgaged Property or any part thereof is taken
on execution or other process of law in any action against Mortgagor other than
by eminent domain.
(j) Mortgagor abandons all or a portion of the Mortgaged
Property except as permitted hereby.
(k) The holder of any lien or security interest on the
Mortgaged Property (without implying the consent of Mortgagee to the existence
or creation of any such lien or security interest), whether superior or
subordinate to this Mortgage or any of the other Loan Documents, declares a
default and such default is not cured within any applicable grace or cure period
set forth in the applicable document or such holder institutes foreclosure or
other proceedings for the enforcement of its remedies thereunder subject to
Mortgagor's right to contest as more particularly described in Section 1.10.
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(l) The Mortgaged Property, or any part thereof, is
subjected to waste or to removal, demolition or material alteration (except as
expressly permitted hereby) so that the value of the Mortgaged Property is
materially diminished thereby and Mortgagee reasonably determines that it is not
adequately protected from any loss, damage or risk associated therewith.
(m) Any dissolution, termination, partial or complete
liquidation, merger or consolidation of Mortgagor, any of its principals, any
general partner or any managing member, or any Indemnitor except as permitted by
Section 1.13.
(n) SPC Entity fails to perform any covenant, agreement,
obligation, term or condition of Section 1.33.
(o) If a default on the part of the Mortgagor occurs
under the REA which remains uncured after the giving of any required notice and
the expiration of any applicable cure period, or if the REA expires or
terminates and is not immediately replaced with another reciprocal easement
agreement acceptable to Mortgagee in its sole and absolute discretion.
ARTICLE III
REMEDIES
3.1. REMEDIES AVAILABLE. If there shall occur an Event of Default
under this Mortgage, then this Mortgage is subject to foreclosure as provided by
law and Mortgagee may, at its option and by or through a trustee, nominee,
assignee or otherwise, to the fullest extent permitted by law, exercise any or
all of the following rights, remedies and recourses, either successively or
concurrently:
(a) Acceleration. Accelerate the maturity date of the
Note and declare any or all of the Debt to be immediately due and payable
without any presentment, demand, protest, notice or action of any kind whatever
(each of which is hereby expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable. Upon any such acceleration, payment of
such accelerated amount shall constitute a prepayment of the principal balance
of the Note and any applicable prepayment fee provided for in the Note shall
then be immediately due and payable.
(b) Entry on the Mortgaged Property. Either in person or
by agent, with or without bringing any action or proceeding, or by a receiver
appointed by a court and without regard to the adequacy of its security, enter
upon and take possession of the Mortgaged Property, or any part thereof, without
force or with such force as is permitted by law and without notice or process or
with such notice or process as is required by law, unless such notice and
process is waivable, in which case Mortgagor hereby waives such notice and
process, and do any and all acts and perform any and all work which may be
desirable or necessary in Mortgagee's judgment to complete any unfinished
construction on the Premises, to preserve the value, marketability or
rentability of the Mortgaged Property, to increase the income therefrom, to
manage and operate the Mortgaged Property or to protect the security hereof, and
all sums expended by Mortgagee therefor, together with interest thereon at the
Default Interest Rate, shall be immediately due and
53
payable to Mortgagee by Mortgagor on demand and shall be secured hereby and by
all of the other Loan Documents securing all or any part of the Debt.
(c) Collect Rents. With or without taking possession of
the Mortgaged Property, xxx or otherwise collect the Rents, including those past
due and unpaid.
(d) Appointment of Receiver. Upon, or at any time prior
or after, initiating the exercise of any power of sale, instituting any judicial
foreclosure or instituting any other foreclosure of the liens and security
interests provided for herein or any other legal proceedings hereunder, make
application to a court of competent jurisdiction for appointment of a receiver
for all or any part of the Mortgaged Property, as a matter of strict right and
without notice to Mortgagor and without regard to the adequacy of the Mortgaged
Property for the repayment of the Debt or the solvency of Mortgagor or any
person or persons liable for the payment of the Debt, and Mortgagor does hereby
irrevocably consent to such appointment, waive any and all notices of and
defenses to such appointment and agree not to oppose any application therefor by
Mortgagee, but nothing herein is to be construed to deprive Mortgagee of any
other right, remedy or privilege Mortgagee may now have under the law to have a
receiver appointed, provided, however, that the appointment of such receiver,
trustee or other appointee by virtue of any court order, statute or regulation
shall not impair or in any manner prejudice the rights of Mortgagee to receive
payment of the Rents pursuant to other terms and provisions hereof. Any such
receiver shall have all of the usual powers and duties of receivers in similar
cases, including, without limitation, the full power to hold, develop, rent,
lease, manage, maintain, operate and otherwise use or permit the use of the
Mortgaged Property upon such terms and conditions as said receiver may deem to
be prudent and reasonable under the circumstances as more fully set forth in
Section 3.3 below. Such receivership shall, at the option of Mortgagee, continue
until full payment of all of the Debt or until title to the Mortgaged Property
shall have passed by foreclosure sale under this Mortgage or deed in lieu of
foreclosure.
(e) Foreclosure. Immediately commence an action to
foreclose this Mortgage or to specifically enforce its provisions with respect
to any of the Debt, pursuant to the statutes in such case made and provided, and
sell the Mortgaged Property or cause the Mortgaged Property to be sold in
accordance with the requirements and procedures provided by said statutes in a
single parcel or in several parcels at the option of Mortgagee. In the event
foreclosure proceedings are instituted by Mortgagee, all expenses incident to
such proceedings, including, but not limited to, reasonable attorneys' fees and
costs, shall be paid by Mortgagor and secured by this Mortgage and by all of the
other Loan Documents securing all or any part of the Debt. The Debt and all
other obligations secured by this Mortgage, including, without limitation,
interest at the Default Interest Rate, any prepayment charge, fee or premium
required to be paid under the Note in order to prepay principal (to the extent
permitted by applicable law), reasonable attorneys' fees and any other amounts
due and unpaid to Mortgagee under the Loan Documents, may be bid by Mortgagee in
the event of a foreclosure sale hereunder. In the event of a judicial sale
pursuant to a foreclosure decree, it is understood and agreed that Mortgagee or
its assigns may become the purchaser of the Mortgaged Property or any part
thereof.
(f) Judicial Remedies. Proceed by suit or suits, at law
or in equity, instituted by or on behalf of Mortgagee, to enforce the payment of
the Debt or the other obligations of
54
Mortgagor hereunder or pursuant to the Loan Documents, to foreclose the liens
and security interests of this Mortgage as against all or any part of the
Mortgaged Property, and to have all or any part of the Mortgaged Property sold
under the judgment or decree of a court of competent jurisdiction. This remedy
shall be cumulative of any other non-judicial remedies available to Mortgagee
with respect to the Loan Documents. Proceeding with the request or receiving a
judgment for legal relief shall not be or be deemed to be an election of
remedies or bar any available non-judicial remedy of Mortgagee.
(g) Other. Exercise any other right or remedy available
hereunder, under any of the other Loan Documents or at law or in equity.
3.2. APPLICATION OF PROCEEDS. To the fullest extent permitted by
law, the proceeds of any sale under this Mortgage shall be applied, to the
extent funds are so available, to the following items in such order as Mortgagee
in its discretion may determine:
(a) To payment of the reasonable costs, expenses and fees
of taking possession of the Mortgaged Property, and of holding, operating,
maintaining, using, leasing, repairing, improving, marketing and selling the
same and of otherwise enforcing Mortgagee's rights and remedies hereunder and
under the other Loan Documents, including, but not limited to, receivers' fees,
court costs, attorneys', accountants', appraisers', managers' and other
professional fees, title charges and transfer taxes.
(b) To payment of all sums expended by Mortgagee under
the terms of any of the Loan Documents and not yet repaid, together with
interest on such sums at the Default Interest Rate.
(c) To payment of the Debt and all other obligations
secured by this Mortgage, including, without limitation, interest at the Default
Interest Rate and, to the extent permitted by applicable law, any prepayment
fee, charge or premium required to be paid under the Note in order to prepay
principal, in any order that Mortgagee chooses in its sole discretion.
(d) The remainder, if any, of such funds shall be
disbursed to Mortgagor or to the person or persons legally entitled thereto.
3.3. RIGHT AND AUTHORITY OF RECEIVER OR MORTGAGEE IN THE EVENT OF
DEFAULT; POWER OF ATTORNEY. Upon the occurrence of an Event of Default, and
entry upon the Mortgaged Property pursuant to Section 3.1(b) hereof or
appointment of a receiver pursuant to Section 3.1(d) hereof, and under such
terms and conditions as may be prudent and reasonable under the circumstances in
Mortgagee's or the receiver's sole discretion, all at Mortgagor's expense,
Mortgagee or said receiver, or such other persons or entities as they shall
hire, direct or engage, as the case may be, may do or permit one or more of the
following, successively or concurrently: (a) enter upon and take possession and
control of any and all of the Mortgaged Property; (b) take and maintain
possession of all documents, books, records, papers and accounts relating to the
Mortgaged Property; (c) exclude Mortgagor and its agents, servants and employees
wholly from the Mortgaged Property; (d) manage and operate the Mortgaged
Property; (e) preserve and maintain the Mortgaged Property; (f) make repairs and
alterations to the Mortgaged Property; (g)
55
complete any construction or repair of the Improvements, with such changes,
additions or modifications of the plans and specifications or intended
disposition and use of the Improvements as Mortgagee may in its sole discretion
deem appropriate or desirable to place the Mortgaged Property in such condition
as will, in Mortgagee's sole discretion, make it or any part thereof readily
marketable or rentable; (h) conduct a marketing or leasing program with respect
to the Mortgaged Property, or employ a marketing or leasing agent or agents to
do so, directed to the leasing or sale of the Mortgaged Property under such
terms and conditions as Mortgagee may in its sole discretion deem appropriate or
desirable; (i) employ such contractors, subcontractors, materialmen, architects,
engineers, consultants, managers, brokers, marketing agents, or other employees,
agents, independent contractors or professionals, as Mortgagee may in its sole
discretion deem appropriate or desirable to implement and effectuate the rights
and powers herein granted; (j) execute and deliver, in the name of Mortgagee as
attorney-in-fact and agent of Mortgagor or in its own name as Mortgagee, such
documents and instruments as are necessary or appropriate to consummate
authorized transactions; (k) enter into such leases, whether of real or personal
property, or tenancy agreements, under such terms and conditions as Mortgagee
may in its sole discretion deem appropriate or desirable; (1) collect and
receive the Rents from the Mortgaged Property; (m) eject tenants or repossess
personal property, as provided by law, for breaches of the conditions of their
leases or other agreements; (n) xxx for unpaid Rents, payments, income or
proceeds in the name of Mortgagor or Mortgagee; (o) maintain actions in forcible
entry and detainer, ejectment for possession and actions in distress for rent;
(p) compromise or give acquittance for Rents, payments, income or proceeds that
may become due; (q) delegate or assign any and all rights and powers given to
Mortgagee by this Mortgage; and (r) do any acts which Mortgagee in its sole
discretion deems appropriate or desirable to protect the security hereof and use
such measures, legal or equitable, as Mortgagee may in its sole discretion deem
appropriate or desirable to implement and effectuate the provisions of this
Mortgage. This Mortgage shall constitute a direction to and full authority to
any lessee, or other third party who has heretofore dealt or contracted or may
hereafter deal or contract with Mortgagor or Mortgagee, at the request of
Mortgagee, to pay all amounts owing under any lease, contract, concession,
license or other agreement to Mortgagee without proof of the Event of Default
relied upon. Any such lessee or third party is hereby irrevocably authorized to
rely upon and comply with (and shall be fully protected by Mortgagor in so
doing) any request, notice or demand by Mortgagee for the payment to Mortgagee
of any Rents or other sums which may be or thereafter become due under its
lease, contract, concession, license or other agreement, or for the performance
of any undertakings under any such lease, contract, concession, license or other
agreement, and shall have no right or duty to inquire whether any Event of
Default under this Mortgage or under any of the other Loan Documents has
actually occurred or is then existing. Mortgagor hereby constitutes and appoints
Mortgagee, its assignees, successors, transferees and nominees, as Mortgagor's
true and lawful attorney-in-fact and agent, with full power of substitution in
the Mortgaged Property, in Mortgagor's name, place and stead, to do or permit
any one or more of the foregoing described rights, remedies, powers and
authorities, successively or concurrently, and said power of attorney shall be
deemed a power coupled with an interest and irrevocable so long as any portion
of the Debt is outstanding. Any money advanced by Mortgagee in connection with
any action taken under this Section 3.3, together with interest thereon at the
Default Interest Rate from the date of making such advancement by Mortgagee
until actually paid
56
by Mortgagor, shall be a demand obligation owing by Mortgagor to Mortgagee and
shall be secured by this Mortgage and by every other instrument securing all or
any portion of the Debt.
3.4. OCCUPANCY AFTER FORECLOSURE. In the event there is a
foreclosure sale hereunder and at the time of such sale, Mortgagor or
Mortgagor's representatives, successors or assigns, or any other persons
claiming any interest in the Mortgaged Property by, through or under Mortgagor
(except tenants of space in the Improvements subject to Leases entered into
prior to the date of such foreclosure and which have been approved by the
Mortgagee), who are occupying or using the Mortgaged Property, or any part
thereof, then, to the extent not prohibited by applicable law, each and all
shall, at the option of Mortgagee or the purchaser at such sale, as the case may
be, immediately become the tenant of the purchaser at such sale, which tenancy
shall be a tenancy from day-to-day, terminable at the will of either landlord or
tenant, at a reasonable rental per day based upon the value of the Mortgaged
Property occupied or used, such rental to be due daily to the purchaser.
Further, to the extent permitted by applicable law, in the event the tenant
fails to surrender possession of the Mortgaged Property upon the termination of
such tenancy, the purchaser shall be entitled to institute and maintain an
action for unlawful detainer of the Mortgaged Property in the appropriate court
of the county in which the Premises is located.
3.5. NOTICE TO ACCOUNT DEBTORS. Mortgagee may, at any time after an
Event of Default, notify the account debtors and obligors of any accounts,
chattel paper, negotiable instruments or other evidences of indebtedness due or
payable to Mortgagor included as part of the Mortgaged Property to pay Mortgagee
directly. Mortgagor shall at any time or from time to time upon the request of
Mortgagee provide to Mortgagee a current list of all such account debtors and
obligors and their addresses.
3.6. CUMULATIVE REMEDIES. All remedies contained in this Mortgage
are cumulative and Mortgagee shall also have all other remedies provided at law
and in equity or in any other Loan Documents. Such remedies may be pursued
separately, successively or concurrently at the sole subjective direction of
Mortgagee and may be exercised in any order and as often as occasion therefor
shall arise. No act of Mortgagee shall be construed as an election to proceed
under any particular provisions of this Mortgage to the exclusion of any other
provision of this Mortgage or as an election of remedies to the exclusion of any
other remedy which may then or thereafter be available to Mortgagee. No delay or
failure by Mortgagee to exercise any right or remedy under this Mortgage shall
be construed to be a waiver of that right or remedy or of any Event of Default.
Mortgagee may exercise any one or more of its rights and remedies at its option
without regard to the adequacy of its security.
3.7. PAYMENT OF EXPENSES. Mortgagor shall pay on demand all of
Mortgagee's expenses incurred in any efforts to enforce any terms of this
Mortgage, whether or not any lawsuit is filed and whether or not foreclosure is
commenced but not completed, including, but not limited to, reasonable legal
fees and disbursements, foreclosure costs and title charges, together with
interest thereon from and after the date incurred by Mortgagee until actually
paid by Mortgagor at the Default Interest Rate, and the same shall be secured by
this Mortgage and by all of the other Loan Documents securing all or any part of
the Debt.
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ARTICLE IV
MISCELLANEOUS TERMS AND CONDITIONS
4.1. TIME OF ESSENCE. Time is of the essence with respect to all
provisions of this Mortgage.
4.2. RELEASE OF MORTGAGE. If all of the Debt be paid, then and in
that event only, all rights under this Mortgage, except for those provisions
hereof which by their terms survive, shall terminate and the Mortgaged Property
shall become wholly clear of the liens, security interests, conveyances and
assignments evidenced hereby, which shall be promptly released of record by
Mortgagee in due form at Mortgagor's cost. No release of this Mortgage or the
lien hereof shall be valid unless executed by Mortgagee.
4.3. CERTAIN RIGHTS OF MORTGAGEE. Without affecting Mortgagor's
liability for the payment of any of the Debt, Mortgagee may from time to time
and without notice to Mortgagor: (a) release any person liable for the payment
of the Debt; (b) extend or modify the terms of payment of the Debt; (c) accept
additional real or personal property of any kind as security or alter,
substitute or release any property securing the Debt; (d) recover any part of
the Mortgaged Property; (e) consent in writing to the making of any subdivision
map or plat thereof; (f) join in granting any easement therein; or (g) join in
any extension agreement of this Mortgage or any agreement subordinating the lien
hereof.
4.4. WAIVER OF CERTAIN DEFENSES. No action for the enforcement of
the lien hereof or of any provision hereof shall be subject to any defense which
would not be good and available to the party interposing the same in an action
at law upon the Note or any of the other Loan Documents.
4.5. NOTICES. All notices, demands, requests or other
communications to be sent by one party to the other hereunder or required by law
shall be in writing and shall be deemed to have been validly given or served by
delivery of the same in person to the intended addressee, or by depositing the
same with Federal Express or another reputable private courier service that
obtains a receipt upon delivery for next business day delivery, or by depositing
the same in the United States mail, postage prepaid, registered or certified
mail, return receipt requested, in any event addressed to the intended addressee
to Mortgagor at its address set forth on the first page of this Mortgage, to
Mortgagee at First Union National Bank, One First Union Center, DC 6, 000 Xxxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attn: Xxxxx Xxxxxxxxx,
Real Estate Capital Markets Contract Finance, or at such other address as may be
designated by either party as herein provided. All notices, demands and requests
shall be effective upon such personal delivery, or one (1) business day after
being deposited with the private courier service, or three (3) business days
after being deposited in the United States mail as required above. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given as herein provided shall be deemed to be receipt of
the notice, demand or request sent. By giving to the other party hereto at least
fifteen (15) days' prior written notice thereof in accordance with the
provisions hereof, the parties hereto shall have the right from time to time to
change their respective addresses and each shall have the right to specify as
its address any other or additional address within the United States of America.
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4.6. SUCCESSORS AND ASSIGNS; JOINT AND SEVERAL LIABILITY. The
terms, provisions, indemnities, covenants and conditions hereof shall be binding
upon Mortgagor and the successors and assigns of Mortgagor, including all
successors in interest of Mortgagor in and to all or any part of the Property,
and shall inure to the benefit of Mortgagee, its directors, officers,
shareholders, employees and agents and their respective successors and assigns
and shall constitute covenants running with the land. All references in this
Mortgage to Mortgagor or Mortgagee shall be deemed to include all such parties'
successors and assigns, and the term "Mortgagee" as used herein shall also mean
and refer to any lawful holder or owner, including pledgees and participants, of
any of the indebtedness secured hereby. If Mortgagor or Mortgagee consists of
more than one person or entity, each will be jointly and severally liable to
perform the obligations of Mortgagor.
4.7. SEVERABILITY. A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision, and any determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to any other persons or circumstances.
4.8. GENDER. Within this Mortgage, words of any gender shall be
held and construed to include any other gender, and words in the singular shall
be held and construed to include the plural, and vice versa, unless the context
otherwise requires.
4.9. WAIVER; DISCONTINUANCE OF PROCEEDINGS. Mortgagee may waive any
single Event of Default by Mortgagor hereunder without waiving any other prior
or subsequent Event of Default. Mortgagee may remedy any Event of Default by
Mortgagor hereunder without waiving the Event of Default remedied. Neither the
failure by Mortgagee to exercise, nor the delay by Mortgagee in exercising, any
right, power or remedy upon any Event of Default by Mortgagor hereunder shall be
construed as a waiver of such Event of Default or as a waiver of the right to
exercise any such right, power or remedy at a later date. No single or partial
exercise by Mortgagee of any right, power or remedy hereunder shall exhaust the
same or shall preclude any other or further exercise thereof, and every such
right, power or remedy hereunder may be exercised at any time and from time to
time. No modification or waiver of any provision hereof nor consent to any
departure by Mortgagor therefrom shall in any event be effective unless the same
shall be in writing and signed by Mortgagee, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
given. No notice to nor demand on Mortgagor in any case shall of itself entitle
Mortgagor to any other or further notice or demand in similar or other
circumstances. Acceptance by Mortgagee of any payment in an amount less than the
amount then due on any of the Debt shall be deemed an acceptance on account only
and shall not in any way affect the existence of an Event of Default. In case
Mortgagee shall have proceeded to invoke any right, remedy or recourse permitted
hereunder or under the other Loan Documents and shall thereafter elect to
discontinue or abandon the same for any reason prior to completion thereof,
Mortgagee shall have the unqualified right to do so and, in such an event,
Mortgagor and Mortgagee shall be restored to their former positions with respect
to the Debt, the Loan Documents, the Mortgaged Property and otherwise, and the
rights, remedies, recourses and powers of Mortgagee shall continue as if the
same had never been invoked.
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4.10. SECTION HEADINGS. The headings of the sections and paragraphs
of this Mortgage are for convenience of reference only, are not to be considered
a part hereof and shall not limit or otherwise affect any of the terms hereof.
4.11. GOVERNING LAW. THIS MORTGAGE WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED,
PROVIDED THAT TO THE EXTENT THAT ANY OF SUCH LAWS MAY NOW OR HEREAFTER BE
PREEMPTED BY FEDERAL LAW, SUCH FEDERAL LAW SHALL SO GOVERN AND BE CONTROLLING,
AND PROVIDED FURTHER THAT THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED
SHALL GOVERN AS TO THE CREATION, PRIORITY AND ENFORCEMENT OF LIENS AND SECURITY
INTERESTS IN THE MORTGAGED PROPERTY LOCATED IN SUCH STATE.
4.12. COUNTING OF DAYS. The term "days" when used herein shall mean
calendar days. If any time period ends on a Saturday, Sunday or holiday
officially recognized by the state within which the Premises is located, the
period shall be deemed to end on the next succeeding business day. The term
"business day" when used herein shall mean a weekday, Monday through Friday,
except a legal holiday or a day on which banking institutions in New York, New
York are authorized by law to be closed.
4.13. RELATIONSHIP OF THE PARTIES. The relationship between
Mortgagor and Mortgagee is that of a borrower and a lender only and neither of
those parties is, nor shall it hold itself out to be, the agent, employee, joint
venturer or partner of the other party.
4.14. APPLICATION OF THE PROCEEDS OF THE NOTE. To the extent that
proceeds of the Note are used to pay indebtedness secured by any outstanding
lien, security interest, charge or prior encumbrance against the Mortgaged
Property, such proceeds have been advanced by Mortgagee at Mortgagor's request
and Mortgagee shall be subrogated to any and all rights, security interests and
liens owned by any owner or holder of such outstanding liens, security
interests, charges or encumbrances, irrespective of whether said liens, security
interests, charges or encumbrances are released.
4.15. UNSECURED PORTION OF INDEBTEDNESS. If any part of the Debt
cannot be lawfully secured by this Mortgage or if any part of the Mortgaged
Property cannot be lawfully subject to the lien and security interest hereof to
the full extent of such indebtedness, then all payments made shall be applied on
said indebtedness first in discharge of that portion thereof which is unsecured
by this Mortgage.
4.16. CROSS DEFAULT. An Event of Default hereunder which has not
been cured within any applicable grace or cure period shall be a default under
each of the other Loan Documents.
4.17. INTEREST AFTER SALE. In the event the Mortgaged Property or
any part thereof shall be sold upon foreclosure as provided hereunder, to the
extent permitted by law, the sum for which the same shall have been sold shall,
for purposes of redemption (pursuant to the laws of the State of in which the
Premises is located), bear interest at the Default Interest Rate.
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4.18. INCONSISTENCY WITH OTHER LOAN DOCUMENTS. In the event of any
inconsistency between the provisions hereof and the provisions in any of the
other Loan Documents, it is intended that the provisions of the Note shall
control over the provisions of this Mortgage, and that the provisions of this
Mortgage shall control over the provisions of the Assignment of Leases and
Rents, the Guaranty and Indemnity Agreement, the Environmental Indemnity
Agreement, and the other Loan Documents.
4.19. CONSTRUCTION OF THIS DOCUMENT. This document may be construed
as a mortgage, security deed, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or
contract, or any one or more of the foregoing, in order to fully effectuate the
liens and security interests created hereby and the purposes and agreements
herein set forth.
4.20. NO MERGER. It is the desire and intention of the parties
hereto that this Mortgage and the lien hereof do not merge in fee simple title
to the Mortgaged Property. It is hereby understood and agreed that should
Mortgagee acquire any additional or other interests in or to the Mortgaged
Property or the ownership thereof, then, unless a contrary intent is manifested
by Mortgagee as evidenced by an appropriate document duly recorded, this
Mortgage and the lien hereof shall not merge in such other or additional
interests in or to the Mortgaged Property, toward the end that this Mortgage may
be foreclosed as if owned by a stranger to said other or additional interests.
4.21. RIGHTS WITH RESPECT TO JUNIOR ENCUMBRANCES. Any person or
entity purporting to have or to take a junior mortgage or other lien upon the
Mortgaged Property or any interest therein shall be subject to the rights of
Mortgagee to amend, modify, increase, vary, alter or supplement this Mortgage,
the Note or any of the other Loan Documents, and to extend the maturity date of
the Debt, and to increase the amount of the Debt, and to waive or forebear the
exercise of any of its rights and remedies hereunder or under any of the other
Loan Documents and to release any collateral or security for the Debt, in each
and every case without obtaining the consent of the holder of such junior lien
and without the lien or security interest of this Mortgage losing its priority
over the rights of any such junior lien.
4.22. MORTGAGEE MAY FILE PROOFS OF CLAIM. In the case of any
receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment,
composition or other proceedings affecting Mortgagor or the principals, general
partners or managing members in Mortgagor, or their respective creditors or
property, Mortgagee, to the extent permitted by law, shall be entitled to file
such proofs of claim and other documents as may be necessary or advisable in
order to have the claims of Mortgagee allowed in such proceedings for the entire
Debt at the date of the institution of such proceedings and for any additional
amount which may become due and payable by Mortgagor hereunder after such date.
4.23. FIXTURE FILING. This Mortgage shall be effective from the date
of its recording as a financing statement filed as a fixture filing with respect
to all goods constituting part of the Mortgaged Property which are or are to
become fixtures. This Mortgage shall also be effective as a financing statement
covering minerals or the like (including oil and gas) and is to be filed for
record in the real estate records of the county where the Premises is situated.
The mailing
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address of Mortgagor and the address of Mortgagee from which information
concerning the security interests may be obtained are set forth in Section 1.22
above.
4.24. AFTER-ACQUIRED MORTGAGED PROPERTY. All property acquired by
Mortgagor after the date of this Mortgage which by the terms of this Mortgage is
subject to the lien and the security interest created hereby, shall immediately
upon the acquisition thereof by Mortgagor and without further mortgage,
conveyance or assignment become subject to the lien and security interest
created by this Mortgage. Nevertheless, Mortgagor shall execute, acknowledge,
deliver and record or file, as appropriate, all and every such further
mortgages, security agreements, financing statements, assignments and assurances
as Mortgagee shall require for accomplishing the purposes of this Mortgage.
4.25. NO REPRESENTATION. By accepting delivery of any item required
to be observed, performed or fulfilled or to be given to Mortgagee pursuant to
the Loan Documents, including, but not limited to, any officer's certificate,
balance sheet, statement of profit and loss or other financial statement,
survey, appraisal or insurance policy, Mortgagee shall not be deemed to have
warranted, consented to, or affirmed the sufficiency, legality, effectiveness or
legal effect of the same, or of any term, provision or condition thereof, and
such acceptance of delivery thereof shall not be or constitute any warranty,
consent or affirmation with respect thereto by Mortgagee.
4.26. COUNTERPARTS. This Mortgage may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument, for the same effect as if all parties hereto had signed the
same signature page. Any signature page of this Mortgage may be detached from
any counterpart of this Mortgage without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this Mortgage
identical in form hereto but having attached to it one or more additional
signature pages.
4.27. PERSONAL LIABILITY. Notwithstanding anything to the contrary
contained in this Mortgage, the liability of Mortgagor and its officers,
directors, general partners, managers, members and principals for the Debt and
for the performance of the other agreements, covenants and obligations contained
herein and in the Loan Documents shall be limited as set forth in Section 2.04
of the Note.
4.28. RECORDING AND FILING. Mortgagor will cause the Loan Documents
and all amendments and supplements thereto and substitutions therefor to be
recorded, filed, re-recorded and re-filed in such manner and in such places as
Mortgagee shall reasonably request, and will pay on demand all such recording,
filing, re-recording and re-filing taxes, fees and other charges. Mortgagor
shall reimburse Mortgagee, or its servicing agent, for the costs incurred in
obtaining a tax service company to verify the status of payment of taxes and
assessments on the Mortgaged Property.
4.29. ENTIRE AGREEMENT AND MODIFICATIONS. This Mortgage and the
other Loan Documents contain the entire agreements between the parties relating
to the subject matter hereof and thereof and all prior agreements relative
hereto and thereto which are not contained herein or therein are terminated.
This Mortgage and the other Loan Documents may not be amended,
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revised, waived, discharged, released or terminated orally but only by a written
instrument or instruments executed by the party against which enforcement of the
amendment, revision, waiver, discharge, release or termination is asserted. Any
alleged amendment, revision, waiver, discharge, release or termination which is
not so documented shall not be effective as to any party.
4.30. MAXIMUM INTEREST. The provisions of this Mortgage and of all
agreements between Mortgagor and Mortgagee, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand or acceleration of
the maturity of the Note or otherwise, shall the amount paid, or agreed to be
paid to Mortgagee for the use, forbearance or retention of the money loaned
under the Note ("Interest") exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, performance or fulfillment
of any provision hereof or of any agreement between Mortgagor and Mortgagee
shall, at the time performance or fulfillment of such provision shall be due,
exceed the limit for Interest prescribed by law or otherwise transcend the limit
of validity prescribed by applicable law, then, ipso facto, the obligation to be
performed or fulfilled shall be reduced to such limit, and if, from any
circumstance whatsoever, Mortgagee shall ever receive anything of value deemed
Interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive Interest shall be applied to the reduction of the
principal balance owing under the Note in the inverse order of its maturity
(whether or not then due) or, at the option of Mortgagee, be paid over to
Mortgagor, and not to the payment of Interest. All Interest (including any
amounts or payments deemed to be Interest) paid or agreed to be paid to
Mortgagee shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal balance of the Note so that the Interest thereon for such full
period will not exceed the maximum amount permitted by applicable law. This
Section will be paramount to all other agreements between Mortgagor and
Mortgagee.
4.31. INTEREST PAYABLE TO MORTGAGOR. Mortgagee shall cause funds in
the Replacement Reserve to be deposited into interest bearing accounts of the
type customarily maintained by Mortgagee or its servicing agent for the
investment of similar reserves, which accounts may not yield the highest
interest rate then available. Interest payable on such amounts shall be computed
based on the daily outstanding balance in the Replacement Reserve. Such interest
shall be calculated on a simple, non-compounded interest basis based solely on
contributions made to the Replacement Reserve by Mortgagor. All interest earned
on amounts contributed to the Replacement Reserve shall be retained by Mortgagee
and accumulated for the benefit of Mortgagor and added to the balance in the
Replacement Reserve and shall be disbursed for payment of the items for which
other funds in the Replacement Reserve are to be disbursed.
4.32. DISSEMINATION OF INFORMATION.
(a) If Mortgagee determines at any time to sell, transfer
or assign the Note, this Mortgage and the other Loan Documents, and any or all
servicing rights with respect thereto, or to grant participations therein (the
"Participations") or issue mortgage pass-through certificates or other
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities"), Mortgagee may forward to each
purchaser, transferee, assignee,
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servicer, participant, investor, or their respective successors in such
Participations and/or Securities (collectively, the "Investor") or any rating
agency rating such Securities, each prospective Investor and each of the
foregoing's respective counsel, all documents and information which Mortgagee
now has or may hereafter acquire relating to the Debt and to Mortgagor, any
Guarantor, any Indemnitor and the Mortgaged Property, which shall have been
furnished by Mortgagor, any Guarantor or any Indemnitor as Mortgagee determines
necessary or desirable.
(b) Secondary Market. Mortgagee may sell, transfer and
deliver the Loan Documents to one or more Investors in the secondary mortgage
market. In connection with such sale, may retain or assign responsibility for
servicing the loan or may delegate some or all of such responsibility and/or
obligations to a servicer, including, but not limited to, any subservicer or
master servicer, on behalf of the investors. All references to Mortgagee herein
shall refer to and include, without limitation, any such servicer, to the extent
applicable.
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IN WITNESS WHEREOF, Mortgagor has executed this Mortgage on the day and
year first written above.
MORTGAGOR:
POLARIS CENTER, LLC,
a Delaware limited liability company
By: Glimcher PTC, Inc.,
a Delaware corporation,
its managing member
By: ___________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
Chief Operating Officer/
Chief Financial Officer
Signed and acknowledged
in the presence of:
______________________
Signature
______________________
Print name
______________________
Signature
______________________
Print name
CONSENTED AND AGREED TO AS TO
THE PROVISIONS OF SECTION 1.33(B)
GLIMCHER PTC, INC.
a Delaware corporation
By: ___________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
Chief Operating Officer/Chief Financial Officer
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STATE OF _________________,
COUNTY OF _______________, SS:
On this ____ day of May, 2000, before me, a notary public in and for
said County and State, personally appeared Xxxxxxx X. Xxxxxxx, named in the
foregoing instrument as the Executive Vice President and COO/CFO of Glimcher
PTC, Inc., a Delaware corporation, the managing member of Polaris Center, LLC
named as "Mortgagor" in the foregoing instrument, who, being first duly sworn,
acknowledged to me that he signed the foregoing instrument on behalf of the
managing member of mortgagor, being duly authorized, and that the same was the
free act and deed of Mortgagor and his free act and deed.
WITNESS my hand and official seal.
____________________________________
Notary Public
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EXHIBIT A
LEGAL DESCRIPTION
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EXHIBIT B
MORTGAGOR'S CERTIFICATE
The undersigned is the ______________________ of
_________________, the general partner of (the "Mortgagor") and has made due
investigation as to the matters hereinafter set forth and does hereby certify
the following to induce FIRST UNION NATIONAL BANK, (the "Mortgagee") to advance
the aggregate sum of $___________________ (the "Disbursement") [from the
Replacement Reserve or Repair and Remediation Reserve or Environmental Reserve]
to the Mortgagor pursuant to the terms of that certain Mortgage and Security
Agreement, dated as of ______ ___, 199_, between the Mortgagee and the Mortgagor
(together with any amendments, modifications, supplements and replacements
thereof or therefor, the "Mortgage"), dated ____________, pursuant to that
certain Disbursement request which is being submitted to the Mortgagee.
(Capitalized terms used and not otherwise define shall have the respective
meanings given to them in the Mortgage.)
1. No default beyond any applicable notice and/or grace
period exists under the Mortgage or under any of the other Loan Documents.
2. The [Repairs, Deferred Maintenance or Environmental
Work] relative to the Disbursement have been delivered or provided to Mortgagor
and are properly, completely and permanently installed on or about the Mortgaged
Property or otherwise properly completed, as applicable.
3. All of the statements, invoices, receipts and
information delivered in connection with the Disbursement request being
submitted to the Mortgagee in connection herewith are true and correct as of the
date hereof, and the amount requested in said Disbursement request accurately
reflects the precise amounts due and payable during the period covered by such
Disbursement request. All of the funds to be received pursuant to such
Disbursement request shall be used solely for the purpose of reimbursing the
Mortgagor for items previously paid.
4. Nothing has occurred subsequent to the date of the
Mortgage which has or may result in the creation of any lien, charge or
encumbrance upon the Premises or the Improvements or any part thereof, or
anything affixed thereto or used in connection therewith, or which has or may
substantially and adversely impair the ability of the Mortgagor to make any
payments of principal and interest on the Note or the ability of the Mortgagor
to meet its obligations under the Mortgage.
5. None of the labor, materials, overhead or other items
of expense specified in the Disbursement request submitted herewith has
previously been the basis of any Disbursement request by the Mortgagor or any
payment by the Mortgagee and, when added to all sums previously disbursed by
Mortgagee on account of the [Deferred Maintenance, Repairs or Environmental
Work], do not exceed the costs of all [Deferred Maintenance, Repairs or
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Environmental Work] services completed, installed and/or delivered, as
applicable, to the date of that certificate.
6. The amount remaining in the [Account] allocated to
the payment of items on the [Deferred Maintenance, Repairs or Environmental
Work] will be sufficient to pay in full the entire remaining cost of [Deferred
Maintenance, Repairs or Environmental Work] required to be completed in
accordance with the Mortgage.
7. All work required permits and approvals required to
complete the work which work is now in process or was previously completed have
been obtained.
8. All conditions to the Disbursement to be made in
accordance with the Disbursement request submitted herewith have been met in
accordance with the terms of the Mortgage.
By:____________________________
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EXHIBIT C
INTENTIONALLY OMITTED PRIOR TO EXECUTION
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EXHIBIT D
"Permitted Investments" shall mean any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
including those issued by Mortgagor, any servicer, REMIC Trustee or any of their
respective affiliates:
(i) direct obligations of, or obligations
fully guaranteed as to payment of principal
and interest by, (a) the United States or
any agency or instrumentality thereof
provided such obligations are backed by the
full faith and credit of the United States
of America, or (b) FHLMC, FNMA, the Federal
Farm Credit System or the Federal Home Loan
Banks provided such obligations at the time
of purchase or contractual commitment for
purchase are qualified by the Rating
Agencies as a Permitted Investment hereunder
as evidenced in writing;
(ii) fully FDIC-insured demand and time
deposits in or certificates of deposit of,
or bankers' acceptances issued by, any bank
or trust company, savings and loan
association or savings bank, provided that
the commercial paper and long-term unsecured
debt obligations of such depository
institution or trust company have the
highest rating available for such securities
by the Rating Agencies, or such lower rating
as will not result in the downgrading or
withdrawal of the rating then assigned to
the Certificates by any Rating Agency as
evidenced in writing;
(iii) repurchase obligations with respect to
any security described in clause (i) above
entered into with a depository institution
or trust company (acting as principal)
described in clause (ii) above;
(iv) general obligations of or obligations
guaranteed by any State of the United States
or the District of Columbia receiving the
highest long-term unsecured debt rating
available for such securities by the Rating
Agencies, or such lower rating as will not
result in the downgrading or withdrawal of
the rating then assigned to the Certificates
by any Rating Agency as evidenced in
writing;
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(v) securities bearing interest or sold at a
discount that are issued by any corporation
incorporated under the laws of the United
States of America or any State thereof or
the District of Columbia and is rated by the
Rating Agencies in their highest long-term
unsecured rating categories at the time of
such investment or contractual commitment
providing for such investment; provided,
however, that securities issued by any such
corporation will not be Permitted
Investments to the extent that investment
therein will cause the then outstanding
principal amount of securities issued by
such corporation and held as part of the
Central Account to exceed 20% of the
aggregate principal amount of all Permitted
Investments held in the Central Account;
(vi) commercial or finance company paper
(including both non-interest-bearing
discount obligations and interest-bearing
obligations payable on demand or on a
specified date not more than one year after
the date of issuance thereof) that is rated
by the Rating Agencies in their highest
short-term unsecured debt rating available
at the time of such investment or
contractual commitment providing for such
investment, and is issued by a corporation
the outstanding senior long-term debt
obligations of which are then rated by the
Rating Agencies in their highest rating
available in their short-term and long-term
unsecured debt ratings, or such lower rating
as will not result in the downgrading or
withdrawal of the rating then assigned to
the Certificates by any Rating Agency as
evidenced in writing;
(vii) guaranteed reinvestment agreements
acceptable to the Rating Agencies issued by
any bank, insurance company or other
corporation rated in the highest long-term
unsecured rating levels available to such
issuers by the Rating Agencies throughout
the duration of such agreements, or such
lower rating as will not result in the
downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating
Agency as evidenced in writing;
(viii) units of taxable money market funds,
which funds are regulated investment
companies, seek to
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maintain a constant net asset value per
share and invest solely in obligations
backed by the full faith and credit of the
United States, which funds have been
designated in writing by the Rating Agencies
as Permitted Investments with respect to
this definition; and
(ix) if previously confirmed in writing to
the REMIC Trustee, any other demand, money
market or time deposit, or any other
obligation, security or investment, that may
be acceptable to the Rating Agencies as a
permitted investment of funds backing
securities having ratings equivalent to
their initial rating of the Certificates;
provided, however, that no instrument or security shall be a Permitted
Investment if (y) such instrument or security evidences a right to receive only
interest payments or (z) the right to receive principal and interest payments
derived from the underlying investment provide a yield to maturity in excess of
120% of the yield to maturity at par of such underlying investment.
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Exhibit E
The SPC Entity will at all times comply with each of the following
representations, warranties and covenants:
(a) the SPC Entity shall be a Single Purpose Entity and
at all times act as the managing member of Mortgagor.
(b) the SPC Entity shall not take any action that would
cause it or the Mortgagor not to each be a Single
Purpose Entity.
(c) the SPC Entity shall not engage in or consent to any
Transfer.
(d) the SPC Entity shall use commercially reasonable
efforts to cause to be done and will do all things
necessary to preserve its existence (and not
dissolve) for so long as a solvent member exists and
will observe all formalities applicable to it and not
amend this Certificate of Incorporation, Bylaws or
other formation agreement or document in any material
term or manner or in a manner that may adversely
effect its SPC Entity's or Mortgagor's existence as a
Single Purpose Entity without the prior written
consent of Lender and written confirmation from the
relevant Rating Agencies that such amendment will not
cause any Rating Agency to withdraw, qualify or
downgrade the then-applicable rating on any security
issued in connection with any securitization.
(e) the SPC Entity shall continue to serve in its
capacity as a managing member of the Mortgagor.
(f) the SPC Entity shall not incur any indebtedness,
except as it is liable for the Mortgagor's
indebtedness in its capacity as a managing member of
the Mortgagor.
(g) the SPC Entity shall not (a) liquidate or dissolve
the SPC Entity or Mortgagor in whole or in part and
(b) consolidate, merge or enter into any form of
consolidation or cause the Mortgagor to consolidate,
merge or enter into any form of consolidation with or
into any other Person, nor convey, transfer or lease
its assets or cause the Mortgagor to convey, transfer
or lease its assets substantially as an entirety to
any Person nor permit any Person to consolidate,
merge or enter into any form of consolidation with or
into the SPC Entity or Mortgagor, nor convey,
transfer or lease its assets or cause the Mortgagor
to convey, transfer or lease its assets substantially
as an entirety to any Person.
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(h) the unanimous consent of all of the directors of the
SPC Entity (including the consent of the Independent
Director) is required for the SPC Entity to, and for
the SPC Entity to cause the Mortgagor to:
(i) File or consent to the filing of any
bankruptcy, insolvency or reorganization,
petition, case or proceeding; institute any
proceedings under any applicable insolvency
law or otherwise seek relief under any
applicable federal or state law relating to
the relief from debts or the protection of
debtors generally or to bankruptcy;
(ii) Seek or consent to the appointment of a
receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar
official for the SPC Entity or the Mortgagor
or a substantial portion of either of their
properties or admit in writing its inability
to pay its debts generally as the become
due;
(iii) Make any assignment for the benefit of the
creditors of the SPC Entity or the
Mortgagor; or
(iv) Take any corporate action in furtherance of
any of the foregoing.
(i) the SPC Entity shall and shall cause the Mortgagor
to:
(i) File its tax returns separate from those of
any other Person and shall not file a
consolidated federal income tax return with
any other Person; provided, however, that if
such Person is a real estate investment
trust (a "REIT"), the items of income,
deduction and credit of the SPC Entity may
be included on the income tax return of the
REIT to the extent required by the Internal
Revenue Code; provided, however, that any
such tax return shall contain a note
indicating that the Company is a separate
legal entity and that its assets are not and
will not be available to pay the debts of
the REIT, its obligations do not and will
not constitute obligations of the REIT, and
the REIT is not and will not be liable for
any of the liabilities of the Company,
except as provided in the Loan Documents.
(ii) Maintain a sufficient number of employees in
light of its contemplated business
operations; and
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(iii) Not make loans to any other Person or buy or
hold evidence of indebtedness issued by any
other Person (other than cash and
investment-grade securities).
(j) the SPC Entity shall not intentionally take any
action if, as a result of such action, the SPC Entity
would be required to register as an investment
company under the Investment Company Act of 1940, as
amended.
As used herein, the following terms shall have the following
meanings ascribed to them:
"Affiliate" shall mean, with reference to a specified Person,
any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common
control with the specified Person. For the purposes of this
definition, "control" shall mean (i) the ownership of fifty
percent (50%) or more of the beneficial interest in the Person
referred to, without regard to preferences or priorities in
distribution of cash, or (ii) the power to direct or cause the
direction of the management policies of the Person in
question.
"Person" shall mean an individual, partnership, SPC Entity,
trust, company, foundation, unincorporated association or any
other entity
"Rating Agencies" means Fitch IBCA, Inc., Xxxxx'x Investors
Service, Inc., Duff & Xxxxxx Credit Rating Co. and Standard &
Poors or any successor thereto, and any other nationally
recognized statistical rating organization to the extent that
any of the foregoing have been or will be engaged by Lender or
its designees in connection with or in anticipation of a
securitization (each, individually a "Rating Agency").
"Single Purpose Entity" means a limited liability company or
corporation which:
(i) will be organized solely for the purpose of (w)
owning the Mortgaged Property, or (x) acting as the
managing member of a limited liability company that
owns the Mortgaged Property,
(ii) has not engaged and will not engage, either directly
or indirectly, in any business unrelated to the (w)
the ownership, management, leasing and operation of
the Mortgaged Property, or (x) acting as a managing
member of a limited liability company which owns the
Mortgaged Property,
(iii) has not had and will not have or own any assets other
than (w) those related to the Mortgaged Property and
additions thereto contemplated or
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permitted by the Loan Documents, (x) incidental
personal property necessary for the operation of the
Mortgaged Property or (y) its membership interest in
the limited liability company which owns the
Mortgaged Property,
(iv) has not engaged and will not engage in, seek or
consent to any dissolution, winding up, liquidation,
consolidation or merger, and, except as otherwise
expressly permitted by the Loan Documents, has not
engaged and will not engage in, seek or consent to
any asset sale, transfer of membership or shareholder
interests, or amendment of its limited liability
company agreement, certificate of organization or
certificate of incorporation, as applicable,
(v) if such entity is a limited liability company, will
have as its only managing members, entities which are
and will be Single-Purpose Entities which are
corporations,
(vi) if such entity is a corporation, at all relevant
times has and will have at least one Independent
Director,
(vii) if such entity is a corporation, the board of
directors of such entity has not taken and will not
take any action requiring the unanimous affirmative
vote of 100% of the members of the board of directors
unless all of the directors, including without
limitation all Independent Directors, shall have
participated in such vote,
(viii) has not failed and will not fail to correct any known
misunderstanding regarding the separate identity of
such entity,
(ix) without the unanimous consent of all of the Members
(including without limitation the board of directors
of the Managing Member and all Independent
Directors), as applicable, has not and will not with
respect to itself or to any Affiliate file or consent
to the filing of any other bankruptcy, insolvency or
reorganization petition or proceeding or otherwise
institute insolvency proceedings or otherwise seek
any relief under any laws relating to the relief from
debts or the protection of debtors generally or to
bankruptcy; (b) seek or consent to the appointment of
a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for
such entity or all or any portion of such entity's
properties; (c) make any assignment for the benefit
of such entity's creditors; or (d) take any action
that might cause such entity to become insolvent,
(x) has maintained and will maintain its financial
statements, accounts, books and records and bank
accounts separate from any other Person (including
its Affiliates),
(xi) has maintained and will maintain its books, records,
resolutions and agreements as official records,
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(xii) has not commingled and will not commingle its funds
or assets with those of any Person or Affiliate,
(xiii) has and will maintain its assets in such a manner
that it is not costly or difficult to segregate,
ascertain or identify its individual assets from
those of any Affiliate or any other Person, except as
permitted by the Loan Documents;
(xiv) has conducted and will conduct its business in its
name as presently conducted and operated,
(xv) has maintained and will maintain its financial
statements (except to the extent that consolidated
financial statements are required under generally
accepted accounting principles), accounting records
and other Person documents separate from any other
Person,
(xvi) is and will be solvent and has paid and will pay its
own liabilities and debt out of its own funds
(including contributions to its capital) and assets,
(xvii) has observed and will observe all limited liability
company or corporate formalities as applicable and
all customary formalities regarding the corporate
existence of the SPC Entity, including holding
meetings of, or obtaining the consent of, its board
of directors, as appropriate, and its stockholders
and maintaining current accurate minute books
separate from those of any of its Affiliates,
(xviii) has maintained and will maintain an arms-length
relationship with its Affiliates,
(xix) except as permitted by the Loan Documents, has not
incurred and will not incur any debt, secured or
unsecured, direct or contingent (including
guaranteeing any obligation), other than (i) the
Debt, and (ii) trade payables or accrued expenses
(not exceeding five (5%) percent in the aggregate of
the original principal amount of the Note) in the
ordinary course of business of owning and operating
the Mortgaged Property (provided, however, that all
such sums shall be paid in full promptly by the
Company, but in no event later than sixty (60) days
of the date incurred), and except as permitted by the
Loan Documents, no other debt will be secured
(senior, subordinate or pari passu) by the Mortgaged
Property;
(xx) has not assumed or guaranteed and will not assume or
guarantee or become obligated for the debts of any
other Person or hold out its credit as being
available to satisfy the obligations of any other
Person except for the Indebtedness,
(xxi) has not acquired and will not acquire obligations or
securities of its members or shareholders, as
applicable,
78
(xxii) except pursuant to the Loan Documents, has not
pledged and will not pledge its assets for the
benefit of any other Person,
(xxiii) has held and identified itself and will hold itself
out and identify itself at all times out to the
public as a separate and distinct entity under its
own name and not as a division, department or part of
any other Person,
(xxiv) has not made and will not make loans or advances to
any Person (including any Affiliates) other than
normal distributions and dividends,
(xxv) has not identified and will not identify its members
or shareholders or any Affiliates of any of them as a
division or part of it,
(xxvi) has not entered and will not enter into or be a party
to, any transaction, contract or agreement with its
general partners, principals, members, shareholders,
Affiliate or any Affiliates of any of them, except in
the ordinary course of its business and on terms
which are intrinsically fair and are no less
favorable to it then would be obtained in a
comparable arms-length transaction with an unrelated
third party, other than an Affiliate, on the open
market,
(xxvii) has paid and will pay the salaries of its own
employees, if any, from its own funds,
(xxviii) has maintained and will maintain adequate capital for
the normal obligations reasonably foreseeable in a
business of its size and character and in light of
its contemplated business operations,
(xxix) if such entity is a limited liability company, and
such entity has one or more managing members, then
such entity shall continue (and not dissolve) for so
long as a solvent managing member exists, and such
entity's organizational documents shall contain such
provision,
(xxx) shall allocate fairly and reasonably any material
overhead expenses that are shared with an Affiliate,
including paying for office space and services
performed by any employee of an Affiliate,
(xxxi) will use checks separate from its Affiliates,
(xxxii) will not do any act which would make it impossible to
carry on the ordinary business of Company,
(xxxiii) will not possess the Mortgaged Property or incidental
personal property necessary for the operation of the
Mortgaged Property for other than a business or
company purpose,
(xxxiv) will not sell, encumber or otherwise dispose of all
or substantially all of the Mortgaged Property or
incidental personal property necessary for the
operation of the Mortgaged Property, except as
permitted by the Loan Documents, and
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(xxxv) will not hold title to Company's assets other than in
Company's name.
"Transfer" means any conveyance, transfer (including, without
limitation, any transfer of any direct or indirect legal or
beneficial interest (including, without limitation, any profit
interest) in the SPC Entity or the Mortgagor), sale, lease
(including, without limitation, any amendment, extension,
modification, waiver or renewal thereof), or Lien, whether by
law or otherwise, of, on or affecting the Mortgaged Property,
the Mortgagor or the SPC Entity, other than as permitted under
the Loan Documents.
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