Loan No. 4130963
================================================================================
RD ELMWOOD ASSOCIATES, L.P.,
Mortgagor,
and
WASHINGTON MUTUAL BANK, FA,
Mortgagee
_____________________________
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT
_____________________________
Dated as of November 22, 2002
================================================================================
This instrument affects real and personal property situated in the State of New
Jersey, County of Bergen, Borough of Elmwood Park in Xxxx 0 & 0 xx Xxxxx 000,
xxx Xxx 0 xx Xxxxx 301, and known by the street address of 58, 80 and 000
Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx.
================================================================================
RECORD AND RETURN TO:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att'n: Xxxxxxx Xxxxxxx, Esq.
Title Company: Land Title Agency, Inc.,
as Agent of Commonwealth Land Title Insurance Company
Title No.: 02-LT-0967
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT, made as of November 22, 0000, xxxx XX XXXXXXX ASSOCIATES, L.P., a
Delaware limited partnership, having an address at c/o Acadia Realty Trust, 00
Xxxxxxxxx Xxxxxxxxxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 ("Mortgagor"), to
WASHINGTON MUTUAL BANK, FA, a banking corporation chartered under the laws of
the United States, having an address at EAB Plaza, Xxxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx 00000-0000 (together with its successors in such capacity,
"Mortgagee"),
W I T N E S S E T H T H A T:
------------------- --------
WHEREAS, Mortgagor is on the date of this Mortgage the owner
of fee title to one or more parcels of land and the improvements thereon located
at Elmwood Park Shopping Center, 58, 80 and 000 Xxxxxxxx, Xxxxxxx xx Xxxxxxx
Xxxx, Xxxxxx of Bergen, and State of New Jersey, more particularly described in
Schedule A annexed hereto and made part hereof;
WHEREAS, concurrently with the execution and delivery of this
Mortgage, Assignment of Leases and Security Agreement (this "Mortgage"),
Mortgagor will borrow from Mortgagee up to $20,000,000 or so much thereof as
shall be advanced to Mortgagor pursuant to the Revolving Loan Agreement
identified below, which borrowing will be secured by this Mortgage;
WHEREAS, Borrower has executed and delivered its Promissory
Note, dated the date hereof, in the amount of up to $20,000,000 to Mortgagee,
which note obligates Mortgagor to pay the Mortgage Amount, or so much thereof as
may be advanced from time to time in accordance with the terms of the Loan
Agreement (said Promissory Note, as the same may hereafter be amended, modified,
extended, severed, assigned, renewed, replaced or restated, and including any
substitute or replacement notes, is hereinafter referred to individually and
collectively as the "Note"); and
WHEREAS, in order to secure the payment of the Note, Mortgagor
has duly authorized the execution and delivery of this Mortgage.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained,
TO SECURE (a) the full, faithful and punctual (i) payment by
Borrower of all sums payable under the Note or any other Loan Document (as
hereinafter defined) up to the Mortgage Amount and (ii) performance of and
compliance with each and every term, condition, agreement, undertaking, covenant
and provision to be performed or complied with by Mortgagor pursuant to the Loan
Documents, and (b) the truth, accuracy and completeness of all representations
and warranties made by Mortgagor to Mortgagee in the Loan Documents or otherwise
in connection with the Loan, Mortgagor hereby creates in favor of Mortgagee a
security interest in, and gives, grants, bargains, sells, warrants, aliens,
remises, releases, conveys, assigns, transfers, mortgages, hypothecates,
deposits, pledges, sets over and confirms unto Mortgagee, its successors and
assigns, WITH MORTGAGE COVENANTS and the other covenants and agreements set
forth herein, all of Mortgagor's estate, right, title, interest, claim and
demand (whether at law or in equity, in possession or expectancy) in, to and
under the following described property (collectively, the "Mortgaged Property"),
whether now owned or held or hereafter acquired by Mortgagor:
(i) the premises described in Schedule A, including all
easements, rights, privileges and appurtenances that in any way belong
or appertain to such premises, and all estate, right, title, interest,
claim or demand whatsoever of Mortgagor therein and in the streets and
ways adjacent thereto, whether in law or in equity, in possession or
expectancy, now or hereafter acquired, together with any and all
options held by Mortgagor to purchase, lease, or sublease or otherwise
acquire such premises or any portion thereof or interest therein, and
any greater estate in such premises now owned or hereafter acquired by
Mortgagor (collectively, the "Premises");
(ii) all structures, buildings or other improvements now or
hereafter located upon the Premises or on any part thereof, including
all plant, equipment, apparatus, machinery and fixtures forming part of
said structures, buildings and other improvements (all, collectively,
the "Improvements");
(iii) all fixtures, fittings, furniture, furnishings,
appliances, apparatus, equipment, machinery and other articles of
personal property (including without limitation all building service
equipment and building materials and supplies), other than those owned
by lessees, now or at any time hereafter attached to, placed upon, or
used or to be used in any way in connection with the use, enjoyment,
occupancy or operation of the Premises or the Improvements (all,
collectively, the "Chattels");
(iv) all leases, subleases, tenancies, subtenancies and rental
and occupancy agreements for the use and occupancy of all or any
portion of the Mortgaged Property which are now in existence or which
may exist at any time during the period that this Mortgage is in
effect, together with any modifications, amendments, renewals or
extensions of any of the foregoing, whether or not written and, if
written, whether or not recorded (all of which present and future
leases, subleases, tenancies, subtenancies and rental and occupancy
agreements, as modified, amended, renewed or extended, are hereinafter
referred to, each as a "Lease" and, collectively, as the "Leases"), and
all estate, right, title, interest, claim and demand of Mortgagor under
the Leases, including, without limitation, any cash, letters of credit
or securities deposited by lessees or others to secure their
performance, the rents and all other sums payable thereunder and the
right to receive and collect the rents, revenues, receipts, income,
earnings, issues, accounts receivable and profits derived from the
Mortgaged Property (collectively, the "Rents") (subject, however, to
any license to collect the Rents granted by Mortgagee to Mortgagor
herein or in a separate assignment of leases and rents, and all
guarantees of the performance of lessees and other obligors under such
leases and other agreements and instruments;
2
(v) all Authorizations (as hereinafter defined), agreements,
franchises, applications, and other authorizations relating to the use,
occupation, development, subdivision or operation of the Mortgaged
Property or any business or activity conducted by or on behalf of
Mortgagor on the Mortgaged Property, including, without limitation, all
trade names and other names under or by which the Mortgaged Property or
any of the Improvements may at any time be operated or known and all
rights to conduct business under any such names or any variant thereof,
and all trademarks, good will, operating agreements, contract rights,
service rights, accounts receivable, books and records and general
intangibles (as such term is defined in the Uniform Commercial Code in
effect in the state where the Premises are situated (as same may
hereafter be amended from time to time, the "Uniform Commercial Code"))
now owned or hereafter acquired, in any way relating to the Mortgaged
Property or any part thereof;
(vi) all shares of stock or other evidence of ownership of any
part of the Mortgaged Property that is owned by Mortgagor in common
with others and all rights of Mortgagor in any owners' or members'
association or similar group having responsibility for managing or
operating any part of the Mortgaged Property;
(vii) all present and future insurance policies now or
hereafter in effect insuring the Mortgaged Property or any portion
thereof or any Rents derived therefrom, and any unearned premiums
therefor accrued or to be accrued and all proceeds payable thereunder,
together with all moneys now or hereafter on deposit for the payment of
premiums in respect of such policies and Impositions (as defined in
Section 1.7(a)), and all refunds of real estate taxes and assessments;
(viii) all proceeds 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, judgments, awards of damages and settlements made as a result
or in lieu of any condemnation, together with all claims, demands,
causes of action and recoveries for any loss or diminution in value of
any of the foregoing;
(ix) all warranties, guarantees, plans and specifications,
shop and working drawings, soil tests and other environmental site
tests and all other documents and materials (of any and every kind and
nature) now or hereafter existing in respect of the Mortgaged Property;
(x) all betterments, renewals, extensions and replacements of,
all substitutions for, and all additions, accessions and appurtenances
to, the Mortgaged Property, hereafter acquired by or released to
Mortgagor or constructed, assembled or placed by or for Mortgagor at,
on or beneath the Premises or attached to the Premises or the Mortgaged
Property, as more particularly provided in Section 1.6 of this
Mortgage;
3
(xi) all rights of Mortgagor under promissory notes, letters
of credit, electronic chattel paper, proceeds from accounts, payment
intangibles, and general intangibles related to the Mortgaged Property,
as the terms "accounts", "general intangibles", and "payment
intangibles" are defined in the applicable Uniform Commercial Code
Article 9, as the same may be modified or amended from time to time;
(xii) all claims (of any and every kind and nature) relating
to the foregoing components of the Mortgaged Property;
(xiii) all other assets of Mortgagor related in any way to the
Mortgaged Property, subject to certain limitations that may be set
forth in the security agreements; and
(xiv) all proceeds 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, judgments, awards of damages and settlements made as a result
or in lieu of any condemnation, together with all claims, demands,
causes of action and recoveries for any loss or diminution in value of
any of the foregoing.
TO HAVE AND TO HOLD unto Mortgagee, its successors and assigns
forever. Mortgagor further agrees as follows:
CERTAIN DEFINITIONS
Unless the context otherwise specifies or requires, each term
specified below shall have the meaning ascribed to it below.
"Authorizations" (each, an "Authorization") means all permits,
certificates, approvals, consents, licenses and authorizations (including,
without limitation, Environmental Authorizations) required to be obtained from
Governmental Authorities (as hereinafter defined) in order that the Mortgaged
Property shall be owned, used, operated and maintained, and that Mortgagor's
business thereat shall be conducted, in accordance with pertinent Requirements
(as hereinafter defined).
"Default Rate" means the rate (or, if more than one, the
highest of the rates) of interest per annum provided in the Note plus 5%, but in
no event to exceed the maximum rate allowed by law.
"Environmental Authorizations" means all Authorizations that
pertain to health, Hazardous Substances (as hereinafter defined) or
environmental or ecological conditions at, on, under or about the Mortgaged
Property.
"Environmental Conditions" (each, an "Environmental
Condition") means all conditions relating to Hazardous Substances present at or
emanating from the Mortgaged Property, including, without limitation, the past,
present or future Release (as hereinafter defined) of Hazardous Substances and
their presence in the environment. This term also includes the residual
contamination of equipment and/or facilities and off-site treatment, recycling,
reclamation, transportation, storage, handling or disposal of Hazardous
Substances from the Mortgaged Property.
4
"Environmental Laws" (each, an "Environmental Law") means all
Requirements pertaining to health, Hazardous Substances or environmental or
ecological conditions at, on, under or about the Mortgaged Property.
"Event of Default" is defined in Section 2.1.
"Governmental Authority" (collectively, "Governmental
Authorities" means the United States of America, the state and city, town or
other municipality in which the Premises are situated, any agency, court,
department, commission, board, bureau, instrumentality or political subdivision
of any of the foregoing, and any arbitration panel or tribunal, in each instance
now existing or hereafter created, having or claiming jurisdiction over
Mortgagor, the Mortgaged Property or the use, occupancy, operation or condition
of the Mortgaged Property or any portion thereof.
"Guarantor(s)" means Acadia Realty Limited Partnership, a
Delaware limited partnership.
"Hazardous Substances" (each, a "Hazardous Substance") means
(i) asbestos and asbestos-containing materials, radon, polychlorinated
biphenyls, formaldehyde, flammable explosives, radioactive materials, petroleum
and products containing or derived from petroleum, underground storage tanks and
other underground storage facilities (i.e., any tank or facility and related
piping system of which ten percent (10%) or more by volume is underground), (ii)
any and all materials, substances, pollutants, contaminants and wastes subject
to, or defined as "hazardous substances", "hazardous waste", "hazardous
material", "hazardous air pollutant", or "petroleum products" under, any
Environmental Law, and (iii) any and all other hazardous or toxic materials,
substances, pollutants, contaminants and wastes.
"Loan" means Mortgagee's loan made to Mortgagor the same day
as this Mortgage, in an amount equal to the maximum principal amount of the
Note.
"Loan Agreement" means that certain Revolving Loan Agreement,
dated as of the date hereof, between Mortgagor, as borrower, and Mortgagee, as
lender, as the same may hereafter be amended, modified or supplemented from time
to time.
"Loan Documents" (each, a "Loan Document") means,
collectively, the Loan Agreement, this Mortgage; the Note; any guaranty(ies)
executed in connection with the Loan (including, without limitation, the
Indemnity Agreement); and any and all other instruments delivered (whether now
or hereafter and whether by Mortgagor or any other person) to the holder of the
Note in connection with this Mortgage and the Loan.
"Loan Maturity Date" means the Maturity Date of the Note.
5
"Note" means the Promissory Note dated the same day as this
Mortgage executed by Mortgagor in favor of Mortgagee in the amount of up to
Twenty Million Dollars ($20,000,000), together with any and all amendments,
extensions, renewals, modifications, refinancings and increases in the amount
of, and substitutions for, same.
"Notices" (each, a "Notice") means: (i) citizen or
governmental notices of intent to xxx under an Environmental Law or common law
cause of action; (ii) requests for information under the authority of an
Environmental Law; (iii) notices of administrative actions or orders seeking
penalties, fines, or remedial activity under any Environmental Law; (iv) any
"potentially responsible party" letters under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. xx.xx. 6902 et seq.
("CERCLA"); (v) judicial complaints; (vi) notices of administrative or judicial
enforcement actions related to any Environmental Law; (vii) notices of violation
related to any Environmental Law received by any Guarantor, or (viii) any notice
of formal or informal investigation by any agency, or any consent order, whether
proposed or final.
"Prepayment Charge" means the Prepayment Charge provided for
in the Note, if any.
"Principal(s) of Mortgagor" means Acadia Realty Limited
Partnership, a Delaware limited partnership.
"Requirements" (each, a "Requirement") means all laws,
statutes, regulations, ordinances, codes, rules, rulings, directives,
determinations, judgments, decrees, orders, injunctions, arbitral decisions,
Authorizations, Environmental Laws and other requirements of every Governmental
Authority now or hereafter in effect (including any of the foregoing that
heretofore have been promulgated but which are not yet in effect), in each
instance as modified, amended, renewed and/or extended, which are applicable to
Mortgagor, to the Mortgaged Property or any portion thereof, to the use, manner
of use, occupancy, possession, condition, operation, maintenance, alteration,
repair, replacement, or restoration of the Mortgaged Property or any portion
thereof or to the conduct of Mortgagor's business at the Mortgaged Property.
"To the best of Mortgagor's knowledge" means, with respect to
any representation, warranty or certification contained in this Mortgage as to
which such phrase is expressly applied, that, after due inquiry, Mortgagor knows
of no fact(s) and has received no communication(s), oral or written, which would
cause a reasonably prudent person in the position of Mortgagor to refrain from
making the representation, warranty or certification in question.
Article I
Mortgagor's Covenants
---------------------
Mortgagor covenants and agrees for the benefit of Mortgagee as
follows:
1.1. Title. This Mortgage is and shall remain a valid and
enforceable first lien on the Mortgaged Property, subject solely to the
exceptions referred to in Section 3.1. At Mortgagor's sole cost and expense,
Mortgagor shall defend and fully protect and preserve such title and the
validity and priority of the lien of this Mortgage against the claims of all
other persons and entities.
6
1.2. Security Agreement. This Mortgage shall constitute a
security agreement with respect to such components of the Mortgaged Property as
to which a security interest may attach under the Uniform Commercial Code and,
with respect to such of the Chattels as at any time may be fixtures, a fixture
filing under the Uniform Commercial Code. The Mortgaged Property consists of
both real and personal property. The filing of UCC-1 financing statements
("UCC-1s") in the records customarily pertaining to personal property shall not
be construed as in any way derogating from the intention of the parties hereto
that all Chattels and other property used in connection with the production of
Rents or which are referred to in this Mortgage are, and at all times and for
all purposes and in all proceedings, both legal and equitable, shall be,
regarded as real estate whether or not (a) any such item is physically attached
to the Premises or any of the Improvements, (b) serial numbers are used for the
better identification of certain of the Chattels capable of being thus
identified in a recital contained herein or (c) any such item is referred to in
any UCC-1 so filed at any time. Similarly, the mention in the UCC-1s of (x) the
rights in the proceeds of any fire and/or hazard insurance policy, (y) any award
in condemnation or eminent domain proceedings for a taking or for loss of value,
or (z) the debtor's interest as lessor in any present or future Lease or rights
to income growing out of the use or occupancy of the Mortgaged Property, whether
pursuant to a Lease or otherwise, shall never be construed as in any way
derogating from, or altering, any of the rights of Mortgagee set forth in this
Mortgage or impugning the priority of Mortgagee's lien granted hereby or by any
other recorded instrument, but such mention in the UCC-1s is declared to be for
the protection of Mortgagee in the event any court or judge shall at any time
hold with respect to (x), (y) or (z) above that notice of Mortgagee's priority
of interest, to be effective against a particular class of persons, must be
filed in the Uniform Commercial Code records. The addresses of Mortgagor
(Debtor) and Mortgagee (Secured Party) are set forth on page 1 of this Mortgage.
This Mortgage is to be filed for record with the recorder of deeds of the county
or counties in which the Premises are situated. Mortgagor is the record owner of
the Mortgaged Property.
1.3. Recordation; Certain Costs and Expenses.
(a) Recording and Filing. Upon the execution and delivery of
this Mortgage, and thereafter from time to time, whether or not Mortgagee so
demands, Mortgagor, at Mortgagor's sole cost and expense, shall cause this
Mortgage and any other instrument creating or evidencing Mortgagee's lien upon,
or security interest in, the Mortgaged Property and each Document of Further
Assurance (as defined in Section 1.26) to be filed, registered or recorded, as
the case may be, in such manner and in such places as may be required by any
Requirement in order to publish notice of, and fully to protect and preserve,
the liens and security interests created by and granted pursuant to this
Mortgage with respect to the Mortgaged Property.
7
(b) Fees and Costs of Mortgage, Related Documents. Mortgagor
shall punctually pay in strict compliance with applicable Requirements (i) all
filing, registration or recording fees with respect to, and all other expenses
incident to, the execution, acknowledgment and filing, registration or recording
of this Mortgage, any amendment, extension, renewal or modification hereof, any
mortgage supplemental hereto, any other security instrument with respect to the
Mortgaged Property, any Document of Further Assurance, and any other Loan
Document, and (ii) all stamp taxes and other taxes, duties, imposts, assessments
and charges imposed by Governmental Authorities arising out of or in connection
with the execution, delivery, filing, registration, or recording of any of the
foregoing.
1.4. Obligation to Pay. Mortgagor shall punctually pay in
strict compliance with the Loan Documents (a) the principal, interest,
Prepayment Charge and all other sums evidenced by the Note and (b) all other
moneys, indebtedness, obligations and liabilities (of any and every kind or
nature) now or hereafter owing (whether to Mortgagee, any Governmental Authority
or any other third party) pursuant to any one or more of the Loan Documents. All
of the foregoing shall be deemed to be indebtedness secured by this Mortgage and
shall be paid without any abatement, credit, reduction, deduction, claim,
counterclaim, set-off or offset whatsoever, and free and clear of all defenses.
1.5. Compliance with Requirements.
(a) Legal Requirements. Mortgagor shall fully, faithfully and
punctually comply (and shall cause all lessees and other persons and entities
that occupy or enter upon the Mortgaged Property at all times so to comply) with
all applicable Requirements, including, without limitation, Requirements that,
if violated, would cause the Mortgaged Property or a part thereof to be subject
to forfeiture. Mortgagor, if a corporation, partnership, trust or other legal
entity, shall do all things necessary to preserve and keep in full force and
effect in all jurisdictions where the same presently are in force and effect
Mortgagor's existence, franchises, rights and privileges.
(b) Insurance Policy Requirements. Mortgagor shall fully,
faithfully and punctually comply (and shall cause all lessees and other persons
and entities that occupy or enter upon the Mortgaged Property so to comply) with
all provisions of all insurance policies covering or applicable to any portion
of the Mortgaged Property, all requirements of the issuer of any such policies
and all orders, rules, regulations, directives, codes and other requirements of
the National Board of Fire Underwriters (or any successor body or other body
performing similar functions) applicable to Mortgagor, to the Mortgaged Property
or to the use, manner of use, occupancy, possession, operation, maintenance,
alteration or repair of the Mortgaged Property or any portion thereof, except
that Mortgagor shall not effect any such compliance that necessitates structural
changes to any of the Improvements without the prior written consent of
Mortgagee.
8
(c) Senior Liens. If this Mortgage is a second or more junior
mortgage on the Mortgaged Property, then: (i) Mortgagor shall fully, faithfully
and punctually perform and comply with each and every term, covenant, and
condition of any more senior mortgage (a "Senior Mortgage") and never permit the
same to go into default; (ii) the occurrence of any circumstance or event that
would permit the holder of any Senior Mortgage to exercise any remedy under such
Senior Mortgage shall automatically and immediately (upon the expiration of any
applicable grace period provided for under the Senior Mortgage) and without
notice from Mortgagee constitute an Event of Default under this Mortgage; (iii)
Mortgagor shall not make any agreement with the holder of any Senior Mortgage
that shall in any way modify, change, alter or extend any of the terms or
conditions set forth in such Senior Mortgage or in any instrument executed in
connection therewith, nor shall Mortgagor request or accept any future advances
under such Senior Mortgage or any such other instrument, without Mortgagee's
express written consent; and (iv) so long as the Senior Mortgage has not been
discharged, notwithstanding anything to the contrary in this Mortgage, the
relative priorities of this Mortgage and the Senior Mortgage(s) shall be
governed by otherwise applicable law.
1.6. Scope of Security. All right, title and interest of
Mortgagor in and to all betterments, renewals, extensions and replacements of,
all substitutions for, and all additions, accessions and appurtenances to, the
Mortgaged Property, hereafter acquired by, or released to, Mortgagor or
constructed, assembled or placed by or for Mortgagor at, on or beneath the
Premises or attached to the Improvements, and all conversions of any of the
foregoing, immediately upon such acquisition, release, construction, assembling,
placement or conversion, as the case may be, without any further mortgage,
conveyance, assignment or other act of Mortgagor, shall become subject to the
liens and security interests created by or pursuant to this Mortgage as fully
and completely, and with the same effect, as if now owned by Mortgagor and
specifically described herein. Mortgagor shall, however, execute and deliver to
Mortgagee any and all such further assurances, mortgages, conveyances or
assignments thereof as Mortgagee may reasonably require for the purpose of
expressly and specifically subjecting the same to the lien of this Mortgage.
1.7. Payment of Impositions for Mortgaged Property.
(a) Taxes, Charges, Etc. Except to the extent that Mortgagee
exercises the right specified in Section 1.11, Mortgagor shall, at least ten
days before the applicable due date, pay and discharge all taxes and other
charges of every kind and nature imposed upon or assessed against Mortgagor or
the Mortgaged Property or any portion thereof or upon the Rents derived
therefrom or arising in respect of the occupancy, use, possession or transfer
thereof, including, without limitation, real estate, school, personal property,
income, gross receipts and franchise taxes; water, water meter and sewer rents,
rates and charges; service charges with respect to police protection, fire
protection, street and highway construction, maintenance and lighting,
sanitation and water supply; assessments and levies; permit, inspection and
license fees; and all other public and private charges, general and special,
ordinary and extraordinary, foreseen and unforeseen, together with all interest,
fines and penalties applicable thereto (each of the foregoing, an "Imposition"
and, collectively, "Impositions"). Mortgagor shall, upon Mortgagee's request,
promptly deliver to Mortgagee documentation reasonably satisfactory to Mortgagee
evidencing such payments.
9
(b) Liens and Claims. Mortgagor shall promptly pay all lawful
claims and demands of mechanics, materialmen, laborers and others that, if not
timely paid, might result in, or permit the creation of, a lien, other
encumbrance or charge on the Mortgaged Property or any part thereof, or on the
Rents derived therefrom, or lead to the interruption or suspension of any
business of Mortgagor. Mortgagor shall, upon Mortgagee's request, promptly
deliver to Mortgagee evidence reasonably satisfactory to Mortgagee of any such
payment. Mortgagor shall not create or permit to be created any mortgage, lien,
other encumbrance or charge on the Mortgaged Property or any part thereof or on
the interest of Mortgagor or Mortgagee other than this Mortgage and promptly
shall cause any such mortgage, lien, other encumbrance or charge to be
discharged, bonded or otherwise secured to Mortgagee's satisfaction.
(c) Mortgagor's Right to Contest. Mortgagor, in good faith and
at Mortgagor's sole cost and expense and after Mortgagee shall have received
written notice thereof from Mortgagor, may contest the amount or the validity of
any Imposition by appropriate legal proceedings, provided that (i) Mortgagor
shall prosecute such proceedings diligently; (ii) no Event of Default shall
exist during the pendency of any such proceedings; (iii) such proceedings shall
operate to suspend the collection of any such Imposition or other realization
thereon and neither the Mortgaged Property nor any part thereof nor interest
therein nor any of the Rents derived therefrom would, by reason of such
suspension, be forfeited or lost, or subjected to any lien, other encumbrance or
charge and neither Mortgagor nor Mortgagee would, by reason thereof, be subject
to civil or criminal liability; (iv) during such contest Mortgagor shall, at the
option of Mortgagee, provide security satisfactory to Mortgagee assuring the
payment of the contested Imposition and of any additional charge, fine, penalty
or expense arising from or incurred as a result of such contest and any costs or
expenses incurred or to be incurred by Mortgagee in connection with or as a
consequence of Mortgagor's contest; and (v) if at any time nonpayment of any
Imposition would result in the delivery of a tax deed or similar instrument to
the Mortgaged Property or any portion thereof or any forfeiture with respect to
the Mortgaged Property, then Mortgagor shall pay such Imposition (together with
all applicable fines, penalties and other governmental charges and any interest
or costs with respect thereto) in time to prevent the delivery of such deed or
instrument or the effectuation of such forfeiture.
1.8. Indemnity by Mortgagor. Mortgagor shall defend and
indemnify Mortgagee and all directors, officers, shareholders, employees,
attorneys and agents of Mortgagee (collectively, the "Indemnified Parties")
against, and save the Indemnified Parties harmless from, and shall reimburse the
Indemnified Parties with respect to, any and all claims, demands, actions,
causes of action, injuries, orders, losses, liabilities (statutory or
otherwise), obligations, damages (including, without limitation, consequential
damages), fines, penalties, taxes, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by, imposed upon
or asserted against the Indemnified Parties or any one or more of them by reason
of, or in connection with, (a) Mortgagee's interest in any Loan Document or the
Mortgaged Property, (b) any misrepresentation or other incorrect statement or
certification by Mortgagor or any Guarantor contained in this Mortgage or any
other Loan Document, (c) any failure by Mortgagor to comply with any of the
10
terms, conditions or other provisions set forth in this Mortgage or any other
Loan Document or in any recorded instrument that affects the Mortgaged Property,
(d) any acts or omissions of Mortgagee in connection with the exercise by
Mortgagee of any right, power or remedy available to Mortgagee under this
Mortgage or any other Loan Document, (e) any use, non-use, possession,
occupancy, alteration, repair, condition (whether patent or latent), operation,
maintenance or management of the Mortgaged Property or any portion thereof, or
(f) any accident, injury (including death at any time resulting therefrom) or
damage to any person or property occurring in, on or about the Mortgaged
Property or any portion thereof, whether resulting from any act or omission of
Mortgagor or any agent, employee, contractor, lessee, sublessee, licensee or
invitee of Mortgagor or otherwise. Mortgagor shall pay, and save Mortgagee
harmless from, any taxes, impositions, charges, assessments or levies except
income and franchise taxes imposed on Mortgagee by reason of Mortgagee's
ownership of the Note or this Mortgage or any other Loan Document or by reason
of a sale or other transfer of the Mortgaged Property or any portion thereof.
All amounts payable to Mortgagee under this Section 1.8 shall be payable upon
demand by Mortgagee, together with interest at the Default Rate from the date of
such demand until the date of receipt by Mortgagee of full payment, and shall be
secured by this Mortgage. Mortgagor's obligations under this Section 1.8 shall
survive payment in full of the Note and the other Loan Documents and any
discharge, release or satisfaction of this Mortgage, any complete or partial
foreclosure of this Mortgage and/or the delivery of one or more deeds in lieu of
any such foreclosure.
1.9. Insurance and Casualty.
(a) Casualty Insurance. Mortgagor shall keep the Improvements
and Chattels insured for the benefit of Mortgagee for one hundred percent (100%)
of full replacement cost in so-called "all-risk" form (which may contain an
exception or exclusion for terrorism, unless coverage for terrorism is both
required by Mortgagee and available at commercially reasonable costs). The
applicable policies shall include (i) coverage against loss or damage by fire,
flood, earthquake, underground hazards, collapse and explosion and such other
hazards as may be specified at any time by Mortgagee, (ii) replacement cost and
agreed amount endorsements or the equivalent thereof (with no reduction for
depreciation), an endorsement covering the costs of demolition and the increased
costs of construction attributable to the enforcement of laws, building codes
and/or ordinances, and (iii) "time element" coverage, which shall ensure payment
to Mortgagee of all moneys due Mortgagee under the Loan Documents and "extra
expense" (i.e., soft costs) coverage.
(b) Other Insurance. Mortgagor shall also maintain (i)
policies that provide boiler and machinery comprehensive coverage for all
mechanical and electrical equipment at the Premises insuring against breakdown
or explosion of such equipment on a replacement cost value basis; such policies
shall provide the coverage specified in clause (iii) of the preceding paragraph
(a); (ii) business interruption or loss of rental income insurance for a period
of not less than one year in connection with all policies of property and boiler
and machinery insurance; (iii) commercial general liability insurance (including
contractual liability) covering the Premises and Mortgagor's operations in an
amount not less than One Million Dollars ($1,000,000) per occurrence and Two
Million Dollars ($2,000,000) in the aggregate per location; (iv) commercial
automobile liability insurance with a limit of not less than One Million Dollars
($1,000,000) combined single limit and endorsed to cover owned, hired and
11
non-owned automobiles; (v) worker's compensation insurance covering all of
Mortgagor's employees situated at the Premises in accordance with statutory
requirements of the State of New York and including an endorsement for
employer's liability coverage; and (vi) umbrella liability insurance in excess
of the foregoing liability coverage with a limit of not less than Five Million
Dollars ($5,000,000) or such higher limits as Mortgagee may specify. The
foregoing commercial general liability and umbrella liability policies shall
also contain a so-called "products-completed operations endorsement." If any
part of the Premises is at any time used for the sale or dispensing of beer,
wine or any other alcoholic beverages, so-called "Dram Shop" or "Liquor Law
Liability Insurance" against claims brought by, or liability arising directly or
indirectly to, persons or property on account of such sale or dispensing of
beer, wine or other alcoholic beverages shall also be furnished (including
coverage against loss of means of support), all in such amounts as Mortgagee may
specify. To the extent applicable, special coverages must also be furnished for
other operations of Mortgagor or any tenants at the Premises, including garage
operations, asbestos removal and such other operations as may be designated by
Mortgagee from time to time. In addition, if any underground fuel storage tank
is situated at the Premises, then Mortgagor shall maintain, in such amounts as
Mortgagee may specify, "Environmental Impairment Liability Insurance" covering
the cost of clean up and/or removal (on or off the Premises) associated with a
spill or a leak emanating from such tank.
(c) No Separate Insurance. Mortgagor shall not procure
separate insurance concurrent in form or contributing in the event of loss with
that required to be maintained under this Section 1.9.
(d) Flood Insurance. If the Mortgaged Property is located in
an area that has been, or at any time is, identified by the Secretary of Housing
and Urban Development as a flood hazard area, Mortgagor shall keep the
Improvements and Chattels insured against loss by flood in such amount as
Mortgagee shall require. All proceeds of any such insurance shall be payable to
Mortgagee and may be applied as set forth in Section 1.9(h) below.
(e) Policy Requirements. All insurance required or permitted
to be maintained pursuant to this Section 1.9 shall (i) be maintained at the
sole cost and expense of Mortgagor; (ii) be written in such forms and by such
companies as are satisfactory to Mortgagee (each such company, in any event,
shall be authorized to do business in the state where the Premises are situated
and shall have an Xxxxxx X. Best Company, Inc. rating of "A-:X" or higher);
(iii) contain the standard New York State Mortgagee Clause or an equivalent
satisfactory to Mortgagee or, with respect to any insurance as to which the
foregoing shall not be applicable, provide for Mortgagee to be named as an
additional insured; (iv) name Mortgagee as the loss payee; (v) include waivers
by all insurers of all rights of subrogation against any named or additional
insured, the indebtedness secured hereby and the Mortgaged Property; (vi) except
as otherwise agreed to in writing by Mortgagee, provide for no deductible in
excess of $50,000 per loss; and (vii) provide that no cancellation (including,
12
without limitation, for nonpayment of premiums), reduction in amount or material
change in coverage shall be effective until at least thirty (30) days after
receipt by Mortgagee of written notice thereof; (viii) provide that no act or
omission or negligence of Mortgagor or any other named insured or violation of
warranties, declarations or conditions by Mortgagor or any other named insured
shall affect or limit the obligation of the insurer to pay the amount of any
loss sustained; and (ix) contain such other provisions as Mortgagee may require.
Mortgagor shall deliver the original policies of insurance to Mortgagee, but
Mortgagee shall under no circumstance be deemed to have knowledge of the
contents of such policies by reason of its custody thereof. Mortgagor shall
deliver to Mortgagee new or renewal policies to replace expiring policies at
least thirty (30) days before their respective expiration dates. Each such new
or renewal policy shall bear a notation by the insurer or its authorized agent
evidencing payment of the required premium. If any policy shall be cancelled by
the insurer, become void by reason of any act(s) or omission(s) of Mortgagor or
any other person or entity or by reason of the impairment of the capital of the
insurer thereunder, or if for any reason in Mortgagee's sole discretion said
policy shall become unsatisfactory to Mortgagee, Mortgagor shall immediately
procure new or additional insurance satisfactory to Mortgagee. Mortgagee's
approval of any insurance procured by Mortgagor shall not be construed, or
relied upon by Mortgagor, as a representation of the solvency of any insurer or
the sufficiency of any amount of insurance. If Mortgagor shall fail in a timely
manner either to keep in force any insurance required under this Mortgage or to
deliver to Mortgagee any policy required hereunder, Mortgagee shall have the
right, but shall not be obligated, to remedy any such failure by the expenditure
of moneys or otherwise, in which event the provisions of Section 1.10 below
shall be applicable.
(f) Unearned Premiums. Mortgagor hereby irrevocably and
unconditionally assigns to Mortgagee the unearned premiums on all insurance
policies furnished hereunder and consents to the cancellation of such policies
(and the refund of all unearned premiums to Mortgagee) if Mortgagee purchases
the Mortgaged Property at foreclosure sale. Any such unearned premiums shall be
applied against sums due to Mortgagee under the Note or this Mortgage.
(g) Effect of Foreclosure. Upon a foreclosure of this Mortgage
or other transfer of title to the Mortgaged Property in full or partial payment
of the Loan, all right, title, and interest of Mortgagor in and to any insurance
policies then in force shall pass to the purchaser or grantee or other person
designated by the holder of the Note, and Mortgagor hereby irrevocably and
unconditionally appoints Mortgagee as Mortgagor's true and lawful
attorney-in-fact, coupled with an interest, in Mortgagor's name and stead, with
full power of substitution, to assign and transfer all such policies and the
proceeds thereof to such purchaser, grantee or other person.
(h) Casualty; Application of Insurance Proceeds. Mortgagor
shall give Mortgagee immediate notice of any damage or destruction affecting the
Mortgaged Property. Promptly thereafter Mortgagor shall make proof of loss and
diligently undertake (if necessary, by means of legal proceedings) to obtain
payment of the proceeds under applicable insurance policies, except that
Mortgagee shall have the right to join Mortgagor in adjusting any loss in excess
of Two Hundred Fifty Thousand Dollars ($250,000). All insurance proceeds shall
13
be paid directly to Mortgagee, and all insurance companies are hereby
irrevocably and unconditionally directed by Mortgagor to make payment for any
covered loss to Mortgagee. Whether or not repairs or restoration shall have been
made, Mortgagee shall have the right to apply such proceeds (i) first to
reimbursing Mortgagee for all costs incurred by it in the collection of such
proceeds, (ii) second to the prepayment of the principal of the Note, in whole
or in part (to installments in inverse order of maturity), all accrued and
unpaid interest thereon and Prepayment Charge, and (iii) third to the payment of
such other obligations and/or liabilities of Mortgagor under the Loan Documents
as Mortgagee shall determine. The balance, if any, of such proceeds shall be
paid to whoever may be legally entitled to the same.
(i) Application of Insurance Proceeds. Notwithstanding
anything to the contrary set forth in the preceding Section 1.9(h), if the
Mortgaged Property is damaged or destroyed and Mortgagee reasonably determines
that all of the conditions specified in this Section 1.9(i) have been satisfied,
then Mortgagee shall apply the proceeds of insurance (i) first to reimbursing
itself for all costs incurred by it in the collection of such proceeds and (ii)
second to reimbursing Mortgagor for such actual costs as shall have been
incurred by Mortgagor in restoring the Mortgaged Property and shall be approved
by Mortgagee. Insurance proceeds shall be applied to such restoration solely if
(A) Mortgagee reasonably determines that: (i) the Mortgaged Property is capable
of being suitably restored in accordance with applicable Requirements to the
value, condition, character and general utility existing prior to such damage or
destruction, and, in any event, to a value at least 1.35 times the amount then
outstanding under the Note; (ii) sufficient funds are unconditionally available
(from proceeds of insurance and/or from funds of Mortgagor) to enable Mortgagor
promptly to commence, and thereafter diligently to prosecute to completion, such
restoration; (iii) Mortgagor is not in default or in breach of any obligations
under any Loan Document, no uncured Event of Default exists under any Loan
Document and no facts or circumstances exist that would constitute an Event of
Default with the passage of time or the giving of notice or both; and (iv)
neither the validity, enforceability nor priority of the lien of this Mortgage
shall be adversely affected; (B) Mortgagor has entered into a written agreement,
satisfactory in form and substance to Mortgagee, containing such conditions to
disbursements as are employed at the time by Mortgagee for construction loans;
(C) Mortgagor has delivered to Mortgagee such security as Mortgagee might have
reasonably required to assure completion of restoration in accordance with the
standards specified above; and (D) Mortgagor has complied with such further
reasonable requirements as Mortgagee might have specified.
1.10. Advances, Etc., by Mortgagee. If Mortgagor fails fully,
faithfully or punctually to perform or comply with any obligation set forth in
or to be performed or complied with pursuant to any Loan Document, then
Mortgagee shall have the right, but shall not be obligated, to perform or comply
with the same and make such advances therefor as, in Mortgagee's opinion, may be
necessary or appropriate, all for the account and at the expense of Mortgagor.
To the extent of all sums so advanced (including, without limitation, attorneys'
fees and disbursements), Mortgagee shall have a lien upon the Mortgaged Property
which shall be secured by this Mortgage. Mortgagor shall repay on demand all
14
sums so advanced on Mortgagor's behalf with interest computed at the Default
Rate on each such sum from the date advanced by Mortgagee until the date
Mortgagee has received repayment thereof. Mortgagee's exercise of its rights
under this Section 1.10 shall not be deemed to cure any circumstance that would
otherwise constitute an Event of Default or to impair any of Mortgagee's other
rights or remedies with respect thereto, and the obligations of Mortgagor under
this Section 1.10 shall pertain irrespective of whether the failure of Mortgagor
referred to in the initial sentence of this Section results in the existence of
an Event of Default. Mortgagor shall permit Mortgagee and its agents and
representatives to enter the Mortgaged Property at all reasonable times for the
purposes of (a) inspecting the same, (b) determining whether Mortgagor is in
compliance with all of Mortgagor's obligations under this Mortgage, (c)
performing or complying with, in Mortgagee's sole election, any one or more of
Mortgagor's obligations under the Loan Documents and (d) undertaking such other
acts as are consistent with the provisions of this Mortgage. No such entry shall
make Mortgagee a "mortgagee in possession," nor shall Mortgagee be liable for
inconvenience, annoyance, disturbance, loss of business or other damage arising
out of, or in connection with, actions taken by Mortgagee in good faith under
this Section 1.10.
1.11. Escrow Requirements. Notwithstanding anything to the
contrary set forth in any Loan Document, Mortgagor shall pay to Mortgagee, at
the time of each payment of a monthly installment of interest or principal under
the Note, a sum equal to one-twelfth of the estimated annual amount of all real
estate taxes and similar Impositions, and, at Mortgagee's option following a
default in the payment thereof, a sum equal to one-twelfth of the annual amount
of any other Impositions or any other recurring charges with respect to the
Mortgaged Property (such as insurance premiums), so that at least one month
before the due date of each such charge Mortgagee shall hold sufficient funds to
pay each such charge in full. The determination of the amount so payable and of
the fractional part thereof to be deposited with Mortgagee, so that the
aggregate of such deposits shall be sufficient for this purpose, shall be made
by Mortgagee. Such amounts shall be held by Mortgagee, but not in trust and
without interest, and applied to the payment of such charges in such order or
priority as Mortgagee shall determine, on or before the respective dates on
which the same or any of them would become delinquent. If at any time before the
date payment of any such charge is due, Mortgagee determines that the amounts
then on deposit therefor shall be insufficient for the payment of such
obligation in full, then Mortgagor, within ten days after demand, shall deposit
the amount of the deficiency with Mortgagee. This Section 1.11 does not affect
any right or remedy of Mortgagee under any provisions of this Mortgage or of any
statute or rule of law to pay any such amount and to add the amount so paid,
together with interest at the Default Rate, to the indebtedness secured by this
Mortgage, as more fully described in Section 1.10. Upon the occurrence of an
Event of Default, Mortgagee may, at its option and without notice to Mortgagor,
apply any funds held pursuant to this Section in payment of any of the
obligations described above or to any unpaid principal or interest under the
Note in such order as Mortgagee may determine.
15
1.12. Financial Reporting.
(a) Mortgagor's Books and Records. Mortgagor shall keep proper
books and records of account in accordance with the applicable provisions of the
Loan Agreement.
(b) Financial Statements. Mortgagor shall deliver to
Mortgagee, and shall cause the Guarantor(s), if any, to deliver to Mortgagee,
such financial statements and balance sheets as are required pursuant to the
applicable provisions of the Loan Agreement.
1.13. Maintenance and Operation of Mortgaged Property.
Mortgagor shall not commit any waste on the Mortgaged Property or make any
change in the use of the Mortgaged Property that would in Mortgagee's judgment
in any way increase the likelihood of fire or other hazard, increase any
insurance rates for the Mortgaged Property, or reduce the value or utility of
the Mortgaged Property. Mortgagor shall, at all times, maintain the Mortgaged
Property in good and efficient operating order and condition and shall promptly
make, from time to time, all necessary or desirable repairs, renewals,
replacements, additions and improvements thereto, whether structural or
nonstructural, exterior or interior, ordinary or extraordinary, foreseen or
unforeseen. Mortgagor shall promptly comply with all requirements necessary to
preserve and extend any and all rights, licenses, permits, privileges,
franchises and concessions that apply to the Mortgaged Property or have been (or
subsequently are) granted to or contracted for by Mortgagor in connection with
any existing or proposed use of the Mortgaged Property. The Improvements shall
not be removed, demolished or substantially altered without the prior written
consent of Mortgagee. (If, however, Article VI recites that this Mortgage is a
construction mortgage or a building loan mortgage, then Mortgagor's strict
compliance with the Building Loan Agreement shall not constitute a violation of
the preceding sentence.) No Chattels shall be removed without Mortgagee's prior
written consent, unless Mortgagor immediately makes appropriate replacements
free of superior title, liens and claims and of a quality and value at least
equal to that of the Chattels so removed. Mortgagor shall cause all lessees and
other persons and entities occupying the Mortgaged Property to comply with the
obligations imposed upon Mortgagor in this Section 1.13.
1.14. Condemnation. Mortgagor, immediately upon obtaining
knowledge of the institution of any proceeding for either (a) the condemnation
of the Mortgaged Property or any portion thereof, or (b) the change of grade or
widening of streets affecting or abutting the Premises shall notify Mortgagee of
the pendency of such proceeding. Mortgagee may participate in any such
proceeding, in its own name and/or as Mortgagor's attorney-in-fact, as
hereinbelow provided (with Mortgagee being represented in either case by
attorneys selected by Mortgagee, whose fees and expenses Mortgagor shall pay
upon demand), and, upon Mortgagee's request, Mortgagor shall deliver to
Mortgagee instruments which shall facilitate such participation. Mortgagor
hereby irrevocably and unconditionally (x) assigns to Mortgagee all of
16
Mortgagor's right, title and interest in and to any award or other compensation
payable pursuant to or in connection with any such proceeding and agrees to pay
(and directs all Governmental Authorities to pay) to Mortgagee any such award or
other compensation, and (y) appoints Mortgagee as Mortgagor's true and lawful
attorney-in-fact, coupled with an interest, in Mortgagor's name and stead, with
full power of substitution to commence, appear in and prosecute any such
proceeding, to settle or compromise any claim in connection therewith, to
collect and receive such award or other compensation and to take such other
actions as Mortgagee may determine are necessary or desirable. Mortgagee shall
be under no obligation to question the amount of any such award or other
compensation and may accept the same in the amount in which the same shall be
paid. The proceeds of any award or other compensation so received (including any
award for change of grade or widening of streets affecting or abutting the
Premises) shall be applied (i) first to reimbursing Mortgagee for all costs
incurred by it in any such proceeding, (ii) second to the prepayment of the
principal of the Note, in whole or in part (to installments in inverse order of
maturity), all accrued and unpaid interest thereon at the rate of interest
provided therein and in the Loan Agreement, including any applicable Prepayment
Charge, and (iii) third to the payment of such other obligations and/or
liabilities of Mortgagor under the Loan Documents as Mortgagee shall determine.
The balance, if any, of such proceeds shall be payable to whoever may be legally
entitled to the same. Unless and until Mortgagee has actually received moneys
with respect to the subject matter of this Section 1.14 and applied such moneys
to reduction of the indebtedness secured by this Mortgage, Mortgagor shall
continue to make all payments provided for in the Loan Documents strictly in
accordance with the provisions thereof. Notwithstanding the provisions of the
immediately preceding paragraph, provided no default exists hereunder, Mortgagee
agrees to apply any such condemnation award proceeds received by it to the
reimbursement of Mortgagor's costs of restoring the Improvements. Advances of
condemnation award proceeds shall be made to Mortgagor from time to time in the
same manner and subject to the same conditions as advances of building loan
proceeds are made under the Loan Agreement, or if this Mortgage is not a
building loan mortgage, in accordance with Mortgagee's standard construction
lending practices, terms and conditions; amounts not required for such purposes
shall be applied, at Mortgagee's option, to the prepayment of the Note and to
interest accrued and unpaid thereon (at the rate of interest provided therein
regardless of the rate of interest payable on the award by the condemning
authority) in such order and proportions as Mortgagee may elect. In no event
shall Mortgagee be required to advance such proceeds to Mortgagor unless
Mortgagee shall have (i) received satisfactory evidence that the
funding/expiration dates of the commitment, if any, for the permanent financing
of the Improvements have been extended for such period of time as is reasonably
necessary to complete said restoration and (ii) reasonably determined that the
restoration of the Improvements to an economically viable architectural whole
can be completed by the then Maturity Date of the Note at a cost which does not
exceed the amount of available condemnation award proceeds or, in the event that
such proceeds are reasonably determined by Mortgagee to be inadequate, Mortgagee
shall have received from Mortgagor a cash deposit equal to the excess of said
estimated cost of restoration over the amount of said available proceeds. If the
conditions for the advance of condemnation award proceeds for restoration set
forth in clauses (i) and (ii) above are not satisfied within sixty (60) days of
Mortgagee's receipt thereof or if the actual restoration shall not have been
commenced within such period, Mortgagee shall have the option at any time
thereafter to apply such condemnation award proceeds to the payment of the Note
and to interest accrued and unpaid thereon (at the rate of interest provided
therein regardless of the rate of interest payable on the award by the
condemning authority) in such order and proportions as Mortgagee may elect.
17
1.15. Leasing of Mortgaged Property.
(a) Existing Leases. Mortgagor represents and warrants to
Mortgagee that, as to each existing Lease, (i) the Lease has been duly executed
by the lessor and lessee thereunder, is in full force and effect and is valid,
binding and enforceable against each of said parties in accordance with its
terms; (ii) the copy of the Lease heretofore delivered to Mortgagee by Mortgagor
is a true, correct and complete copy of the entire Lease; (iii) neither the
lessor nor the lessee has failed to comply with any obligation imposed upon such
party thereunder; (iv) neither the Lease nor any Rents payable thereunder have
heretofore been sold, assigned, transferred or set over by any instrument now in
force, nor, unless indicated to the contrary herein, is the Lease other than a
direct lease from Mortgagor to a lessee; (v) Mortgagor is entitled to receive
and enjoy all Rents payable under the Lease; (vi) no installment of Rents has
been paid more than thirty (30) days prior to the due date for such installment;
(vii) the lessee does not have and has not claimed any defense, abatement,
deduction, offset, claim or counterclaim affecting the payment of Rents or
compliance with the lessee's other obligations thereunder, and all Rents
provided for in the Lease are currently being collected free thereof and without
any violation of any law or other governmental regulation or requirement; (viii)
the Lease contains no option to buy or right of first refusal with respect to an
offer to sell the Mortgaged Property or any part thereof; (ix) Mortgagor has the
sole and unconditional right and power to sell, assign, transfer and set over
the Lease to Mortgagee and to confer upon Mortgagee the rights, interests, power
and authority herein granted and conferred; and (x) the Lease is, by its express
terms, unconditionally subject and subordinate to the lien of this Mortgage.
(b) Covenants by Mortgagor. Mortgagor covenants that, with
respect to each Lease, it will not, without Mortgagee's prior written consent:
(i) accept prepayment of any installment of Rents payable thereunder other than
prepayment of one month's Rents; (ii) amend or modify the Lease so as to reduce
the unexpired term thereof, decrease the amount of Rents payable thereunder or
otherwise diminish any obligation imposed therein upon the lessee; (iii) unless
the lessee has failed to comply with a material obligation imposed upon it in
the Lease, terminate, accept surrender of or permit cancellation of the Lease if
the unexpired term thereof is one year or longer; (iv) modify, amend, extend,
renew, terminate or accept the surrender of the Lease if ten percent (10%) or
more of the rentable area of the Premises is demised thereunder (any such Lease,
a "Major Lease"); (v) pledge, mortgage, assign or otherwise transfer the Lease
or any interest of Mortgagor therein or all or any portion of the Rents payable
by the lessee thereunder as security for any obligation; (vi) subordinate the
Lease to any mortgage (other than this Mortgage) or other encumbrance; (vii)
sell, assign, transfer or set over the Lease or any interest therein or Rents
thereunder, except in connection with a conveyance of the Premises and then only
if expressly made subject to this Mortgage and if permitted by the express terms
of the Mortgage; (viii) consent to, waive or permit to continue any violation of
any obligation imposed upon the lessee under the Lease; or (ix) consent to or
18
permit the modification, amendment, termination or surrender of any guaranty of
the Lease. In addition, Mortgagor covenants that it will not, without
Mortgagee's prior written consent, (A) enter into a Major Lease; execute,
consent to or permit an assignment of a Major Lease; or consent to or permit the
subletting, in whole or in part, of any space leased pursuant to a Major Lease
(Mortgagee's consent with respect to the transactions referred to in this clause
(A) not to be unreasonably withheld or delayed); or (B) enter into any Lease (x)
except for actual occupancy by the lessee of all of the space demised
thereunder, (y) unless the Lease, by its express terms, (1) is unconditionally
subject and subordinate to the lien of this Mortgage and provides that, in the
event Mortgagee or its designee or nominee succeeds to the interest of Mortgagor
under such Lease, the lessee thereunder shall, at the option of Mortgagee or
such designee or nominee, promptly attorn to Mortgagee or such successor in
interest and recognize such party as lessor under the Lease and confirm such
attornment and recognition in writing, and (2) requires the lessee upon demand
to duly execute, acknowledge and deliver to Mortgagee a certificate (an
"Estoppel Certificate") with respect to the status of such Lease and such
matters relating to the status of such Lease as any mortgagee may reasonably
require, or (z) pursuant to which the lessee or any other person or entity shall
have an option, right of first refusal or other right with respect to the
acquisition by it of the Premises or any part thereof.
(c) Additional Covenants by Mortgagor. Mortgagor covenants
that, with respect to each Lease, it will: (i) fully, faithfully and punctually
comply with all of the obligations imposed upon the lessor thereunder; (ii)
within five days after request therefor by Mortgagee, (A) deliver to Mortgagee
copies of executed originals of all Leases and other instruments affecting the
Mortgaged Property and (B) request an Estoppel Certificate from any lessee
designated by Mortgagee; (iii) give prompt notice to Mortgagee of the failure by
either the lessor or the lessee to comply with any obligation imposed upon such
party under the Lease, with a copy of any notice of default or other
communication with respect thereto given by either the lessor or the lessee to
the other; and (iv) enforce compliance by the lessee with all obligations
imposed upon it therein.
To the extent that any part of the Premises is located in the
State of New York, reference is hereby made to Section 291-f of the Real
Property Law of the State of New York for the purpose of obtaining for Mortgagee
the benefits of said Section in connection with this Mortgage.
(d) List of Lessees. Mortgagor shall furnish to Mortgagee,
within fifteen days after Mortgagee's request, a written statement containing
the names and social security or taxpayer identification numbers of all lessees
of the Mortgaged Property or any portion thereof, the terms of their respective
Leases, the space occupied and the rentals payable and security deposited
thereunder.
(e) Effect of Event of Default. Notwithstanding anything to
the contrary in this Mortgage, during the pendency of any uncured Event of
Default, Mortgagor shall not enter into any Lease, relocate any existing lessee,
or make or permit any modification, amendment, extension or assignment of an
existing Lease or the subletting, in whole or in part, of any space leased
pursuant to an existing Lease without Mortgagee's prior written consent.
19
1.16. Casualty to Mortgaged Property. In the event of any
damage or destruction affecting the Mortgaged Property (other than damage or
destruction that, in Mortgagee's good faith judgment, renders the Mortgaged
Property unsuitable for restoration), Mortgagor shall promptly commence and
thereafter diligently prosecute to completion, at the sole cost and expense of
Mortgagor, in accordance with all applicable Requirements and in a good and
workmanlike manner the replacement, repair or restoration of the Mortgaged
Property as nearly as practicable to the value, condition, character and general
utility thereof immediately prior to such damage or destruction, whether or not
the insurance proceeds paid in respect of such damage or destruction shall be
made available to Mortgagor or, if made available, shall be sufficient for such
purpose. The lien of this Mortgage shall continue to apply to the Mortgaged
Property as replaced, repaired or restored.
1.17. Interest after Default. If an Event of Default shall
occur under this Mortgage, then all interest required to be paid by Mortgagor
with respect to the entire principal of the Note then outstanding and other
components of the indebtedness secured by the Loan Documents (including, without
limitation, expenses referred to in Article II of this Mortgage) shall be
computed at the Default Rate from and after the occurrence of the default that
is the basis of such Event of Default until the date that payment of such
indebtedness in its entirety is received by Mortgagee in accordance with the
Loan Agreement.
1.18. Due on Transfer. Mortgagor shall not without the prior
written consent of Mortgagee (a) sell, assign, lease, convey, mortgage, pledge,
hypothecate, make the subject of any security interest, exchange, subdivide or
permit to be divided into multiple condominium units, or in any other manner
whatever transfer or encumber all or part of, or any interest in, or any of the
Rents derived from, or control of, the Mortgaged Property, or suffer or permit
any of the foregoing to occur, whether by operation of law or otherwise; or (b)
agree in writing (whether on a conditional or unconditional basis) to do any of
the foregoing; or (c) effectuate or permit a reduction in the ownership
interests of Acadia Realty Trust in Mortgagor below 51%; or (d) effectuate or
permit a closing of any public or private offering of ownership interests in
Mortgagor; or (e) effectuate or permit a transfer of the controlling interest in
Mortgagor, other than to an entity owned and controlled by Acadia Realty Trust.
Other than as set forth in the immediately preceding sentence, "transfer of the
controlling interest in Mortgagor" includes: (i) the sale, assignment, issuance,
redemption, diminution or pledge, whether through a single transaction or a
series of transactions, of the direct or indirect controlling ownership interest
of Mortgagor; (ii) the modification of any organizational documents of Mortgagor
or of any entity that directly or indirectly controls Mortgagor if the effect of
such modification is to transfer ownership or control of such entity; and (iii)
the dissolution or termination, whether by operation of law or otherwise, of
Mortgagor or of any entity that directly or indirectly controls Mortgagor.
Nothing in this Section 1.18 shall, however, prohibit (y) Leases that comply
with this Mortgage and all other applicable Loan Documents, or (z) if Mortgagor
is a cooperative apartment corporation, the transfer and mortgaging from time to
time of Lease(s) to individual apartment units and the appurtenant shares.
20
1.19. Costs of Litigation and Certain Proceedings. If any
action or proceeding of any kind (including, without limitation, any bankruptcy,
insolvency, arrangement, reorganization or other debtor relief proceeding or any
action arising under or in respect of any Lease) is commenced, or if there
occurs any other event or is created any circumstance that Mortgagee determines
might affect Mortgagor's or Mortgagee's interest in the Mortgaged Property, or
the validity, enforceability or priority of the lien of this Mortgage, or
Mortgagee's rights or remedies under any of the Loan Documents, then Mortgagee
may, without notice (Mortgagor expressly waiving any such notice) and at
Mortgagee's option, make such appearances, disburse such sums and take any such
other actions (including, without limitation, the commencement and prosecution
of any action against Mortgagor to enforce the terms of any Loan Document) as
Mortgagee deems necessary or desirable. If Mortgagee takes any action referred
to in the preceding sentence, then Mortgagor shall, upon demand by Mortgagee,
pay all reasonable fees and costs incurred by Mortgagee in connection therewith
(including, without limitation, attorneys' fees and expenses). Mortgagee's right
to receive any payment provided for hereinabove shall be deemed to have accrued
upon the commencement of the applicable action or proceeding and shall be
enforceable by Mortgagee whether or not same is prosecuted to judgment. At
Mortgagee's direction, any payment(s) that Mortgagor is obligated to make
pursuant to this Section 1.19 shall be made to third parties rather than to
Mortgagee.
1.20. Late Charge. If all or any portion of any payment
required to be made to Mortgagee (whether pursuant to the Note, the Loan
Agreement or any other Loan Document) is not received on or before the tenth
(10th) day after the date such payment is due (without reference to any grace
period provided for in the Loan Documents), a late charge of four percent (4%)
of the amount so overdue shall immediately be due to Mortgagee. At the option of
Mortgagee, the charges specified in this section may be deducted from the funds
held by Mortgagee pursuant to Section 1.11.
1.21. Trust Fund. If the Mortgaged Property is situated in New
York State, this Mortgage is made subject to the trust fund provisions of
Section 13 of the New York Lien Law, and Mortgagor covenants that it shall
receive all moneys and advances secured hereby and shall hold the right to
receive such advances as a trust fund to be applied first for the purpose of
paying costs of improvement before using any part of the same for any other
purpose.
1.22. Charges for Tax Searches, Etc. Mortgagor shall pay the
reasonable fees and costs (including attorneys' fees and expenses) incurred by
Mortgagee in obtaining tax searches and tax bills and of processing, or
otherwise dealing with, ownership transfers, insurance payments, releases,
modifications, prepayments, extensions, consents, assignments, reduction
certificates, satisfactions and other matters. At the option of Mortgagee,
charges for these items may be deducted from the funds held by Mortgagee
pursuant to Section 1.11.
21
1.23. Prepayment. The Note may not be prepaid in whole or in
part except in accordance with the provisions of the Note and the Loan
Agreement.
1.24. Restrictions Affecting Mortgaged Property. Mortgagor
shall not (a) initiate, join in, execute or consent to any change in any
covenant, condition, restriction, declaration, zoning ordinance, or other public
or private restriction limiting, defining or otherwise controlling construction
on, or use(s) of, all or any part of the Mortgaged Property (collectively,
"Restrictions"), (b) suffer or permit any building or other improvement situated
on land that is not part of the Mortgaged Property to rely on the Premises in
order to comply with any Requirement or (c) impair the integrity of the
Mortgaged Property as a zoning lot separate and apart from all other premises.
Mortgagor shall at all times strictly comply with all Restrictions.
1.25. Hazardous Substances.
(a) Compliance With Environmental Laws. Mortgagor shall at all
times promptly comply, and shall cause all lessees and other persons and
entities which occupy or enter upon the Mortgaged Property at all times promptly
to comply, with all Environmental Laws insofar as same apply to the Mortgaged
Property. Without limiting the generality of the foregoing, (i) Mortgagor shall
cause all Environmental Authorizations to be maintained in full force and
effect, (ii) Mortgagor shall not cause, suffer or permit (or suffer or permit
any lessee or any other person or entity to cause, suffer or permit) any
Hazardous Substance to be used, received, handled, generated, manufactured,
produced, processed, treated, stored, released, placed, spilled, discharged,
disposed of or dispersed at, on under or about the Mortgaged Property except
pursuant to and in accordance with Environmental Laws, and (iii) if, other than
in accordance with the provisions of the immediately preceding clause (ii), any
Hazardous Substance(s) shall at any time be present at, on or under the
Mortgaged Property, Mortgagor, whether or not so directed by Mortgagee, shall
undertake the appropriate Remedial Work (as defined below) or take such other
action as shall be necessary in order to cause said Hazardous Substance(s)
promptly to be removed therefrom.
(b) Liens. If any lien shall be filed against, or imposed
upon, the Mortgaged Property with respect to non-compliance with any
Environmental Law, Mortgagor promptly shall (i) give Mortgagee notice thereof
and (ii) cause such lien to be discharged or bonded or otherwise secured to
Mortgagee's satisfaction.
(c) Notice to Mortgagee. If Mortgagor shall (i) obtain
knowledge of any fact or circumstance which might render inaccurate any
representation or warranty contained in Section 3.14 below, Mortgagor shall
promptly give Mortgagee notice thereof, or (ii) receive any summons, citation,
directive, order, Notice or other communication from any Governmental Authority
relating to the application of any Environmental Law to the Mortgaged Property,
Mortgagor shall promptly send a copy of same to Mortgagee. In addition, if any
Environmental Law requires that an Environmental Condition be reported (as, for
example, when a Release of Hazardous Substances occurs), Mortgagor shall
promptly make such report in accordance with such Environmental Law and
simultaneously provide Mortgagee with all information contained therein,
"Release" shall have the definition set forth in Section 101(22) of the
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 6902 et
seq.
22
(d) Representations, Etc. Mortgagor shall not take or omit to
take (or suffer or permit any lessee or other person or entity occupying the
Mortgaged Property to take or omit to take) any action which, if taken or
omitted to be taken, would render inaccurate any representation or warranty
contained in Section 3.14.
(e) Remedial Work. If Mortgagee, acting in its sole and
absolute discretion,
(i) determines that any investigation, site monitoring,
environmental audit and risk assessment, containment, clean-up,
encapsulation, removal, restoration or other remedial work of any kind
(any of the foregoing, "Remedial Work") is necessary or desirable in
connection with (A) the known or suspected presence at, on, under or
about the Mortgaged Property of any Hazardous Substance(s) or (B) the
requirements of any Environmental Law or the suspected violation of any
Environmental Law, or
(ii) determines that the condition of the Mortgaged Property
or the validity, priority or enforceability of the lien of this
Mortgage has been or may be impaired or in any way adversely affected
by reason of (A) any failure to comply with any Environmental Law as
the same pertains to the Mortgaged Property, (B) any other failure by
Mortgagor fully to comply with any obligation imposed upon Mortgagor in
this Section 1.25, or (C) the inaccuracy of any representation or
warranty contained in Section 3.14, then, in any such event, Mortgagor
shall, promptly after written demand by Mortgagee for performance
thereof, either (I) commence to perform and thereafter diligently
prosecute to completion the Remedial Work, or (II) take such other
action as Mortgagee may specify. All Remedial Work shall be performed
by contractors employed by Mortgagor and in accordance with plans that
first shall have been approved by an independent consultant employed by
Mortgagee but paid by Mortgagor.
For the purpose of making a determination pursuant to this Section 1.25(e), (i)
Mortgagor shall provide, upon twenty-four (24) hours advance notice, access to
Mortgagee and its agents and employees to the Mortgaged Property and all
applicable books and records (including, without limitation, those which pertain
to Authorizations), and (ii) Mortgagee shall be entitled, from time to time, in
addition to all of Mortgagee's other rights and remedies under this Mortgage, to
cause an environmental audit and risk assessment of the Mortgaged Property to be
conducted by an independent engineering firm or other environmental audit
manager designated by Mortgagee. In the event Mortgagor fails timely to commence
or diligently to prosecute to completion any Remedial Work or other action
required to be undertaken pursuant to this Section 1.25, Mortgagee may, but
shall not be required to (and without any liability or obligation by Mortgagee
to Mortgagor with respect thereto), arrange for same to be performed. All costs
and expenses incurred pursuant to, or with respect to the subject matter of,
this Section 1.25 shall be borne by Mortgagor, and all moneys paid by Mortgagee
and all costs and expenses incurred by Mortgagee in connection with this Section
1.25, together with interest thereon computed at the Default Rate, shall be
repaid to Mortgagee in accordance with the provisions of Section 1.10 above.
23
(f) Indemnification. Mortgagor shall defend and indemnify the
Indemnified Parties against, and shall save the Indemnified Parties harmless
from, and shall reimburse the Indemnified Parties with respect to, any and all
Liabilities and Expenses (as hereinafter defined) incurred by, imposed upon or
asserted against the Indemnified Parties or any one or more of them by reason
of, or in connection with:
(i) the presence, existence, use, handling, generation,
manufacture, production, processing, treatment, storage, release,
placement, spill, discharge, disposal or dispersal of any Hazardous
Substance(s) on, at or under the Mortgaged Property, or any threatened
occurrence of any of the foregoing, or any Remedial Work or other
action taken by Mortgagee or any of the Indemnified Parties with
respect to any of the foregoing pursuant to this Section 1.25; or
(ii) the inaccuracy of any representation or warranty made by
Mortgagor in Section 3.14 below; or
(iii) the failure of Mortgagor or anyone else to comply with
any Environmental Law(s) as same pertain to the Mortgaged Property or
any provision of the Loan Documents that pertains to the subject matter
of this Section 1.25.
For the purposes of this Section 1.25, "Liabilities and Expenses" shall mean (i)
all claims, demands, actions, causes of action, injuries, orders, losses,
liabilities (statutory or otherwise), obligations, damages (including, without
limitation, consequential damages), fines, penalties, costs and expenses in any
manner arising out of or relating to the subject matter of this Section 1.25
(including, without limitation, any of the foregoing relating to loss of life,
injury to persons, property or business, or damage to natural resources), and
(ii) any and all moneys payable to Mortgagee pursuant to this Section 1.25; as
used herein, "costs and expenses" shall, without limitation, include all fees
charged by and expenses of attorneys, accountants, engineers, contractors,
environmental specialists and other professional consultants and advisors with
respect to the subject matter of this Section 1.25 and the enforcement or
attempted enforcement of Mortgagee's rights under the Loan Documents with
respect to said subject matter (whether incurred in connection with litigation
or bankruptcy proceedings or negotiations with Mortgagor, lienors or other
parties in interest (such as receivers and trustees) or otherwise). Liabilities
and Expenses shall not be limited to the amount of the Loan. All amounts payable
to Mortgagee under this Section 1.25(f) shall be payable upon demand by
Mortgagee, together with interest at the Default Rate from the date of such
demand until the date of receipt by Mortgagee of full payment, and shall be
secured by this Mortgage. Mortgagor's obligations under this Section 1.25(f)
shall survive payment in full of the Note and the other Loan Documents and any
discharge, release or satisfaction of this Mortgage, any complete or partial
foreclosure of this Mortgage and/or the delivery of one or more deeds in lieu of
any such foreclosure.
24
(g) Release. Mortgagor releases and discharges the Indemnified
Parties from, and relinquishes and waives, any and all claims, actions, causes
of action, demands and suits which Mortgagor now or hereafter may or shall have
against the Indemnified Parties or any one or more of them with respect to the
subject matter of this Section 1.25.
1.26. Further Assurances. Mortgagor shall, at Mortgagor's sole
cost and expense, promptly deliver to Mortgagee all Documents of Further
Assurance and undertake such further acts as Mortgagee shall from time to time
request in order to (a) confirm the lien of this Mortgage and the mortgaging to
Mortgagee of the Mortgaged Property (including, without limitation, all
betterments, renewals, extensions and replacements of, all substitutions for,
and all additions, accessions and appurtenances to any portion of the Mortgaged
Property), (b) confirm the security interests herein granted to Mortgagee in
portions of the Mortgaged Property and (c) satisfy any Requirement that
restricts, establishes conditions to, burdens, limits or otherwise affects
Mortgagee's exercise of Mortgagee's rights and remedies under, or with respect
to the subject matter of, this Mortgage. "Documents of Further Assurance" shall
include, without limitation, deeds, mortgages, security agreements, UCC-1s, UCC
continuation statements, assignments, title insurance updates, affidavits,
certificates, opinions of counsel, estoppel letters, insurance certificates and
consent letters. If Mortgagee certifies to Mortgagor that the Note has been
misplaced, lost or mutilated and that Mortgagee has not endorsed, assigned or
otherwise transferred the Note, Mortgagor shall deliver to Mortgagee an original
duplicate note in the same form as the Note, Mortgagee hereby agreeing to
indemnify Mortgagor against any loss or expense incurred by Mortgagor as a
consequence of Mortgagor's having delivered such duplicate note. All
documentation to be delivered by Mortgagor pursuant to this Section 1.26 shall
be in form and substance reasonably satisfactory to Mortgagee.
1.27. Notice to Mortgagee. Mortgagor shall give notice to
Mortgagee promptly upon the occurrence of (a) any Event of Default or any fact,
event or circumstance that after notice or passage of time or both would
constitute an Event of Default; (b) any litigation, proceeding or investigation
commenced by, or that involves, any Governmental Authority that might result in
the impairment of Mortgagee's security for the Loan or any other fact, event or
circumstance that might result in the impairment of such security; and (c) any
material adverse change in the operations or financial or other condition of the
Mortgaged Property or any portion thereof.
1.28. Set-Off. Mortgagor, to further secure Mortgagor's full,
faithful and punctual compliance with the obligations imposed upon it in the
Loan Documents, hereby (i) pledges and grants to Mortgagee, and grants to
Mortgagee a security interest in and to, any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Mortgagee to or for the credit or account of
Mortgagor (collectively, "Deposits") and (ii) irrevocably authorizes and directs
Mortgagee at any time and from time to time upon the occurrence of an Event of
Default, without notice to Mortgagor (any such notice being expressly waived by
Mortgagor) and to the fullest extent permitted by law, to set off and apply any
Deposits against any and all obligations of Mortgagor now or hereafter existing
under the Loan Documents, irrespective of whether or not Mortgagee shall have
made any demand under the Loan Documents and although such obligations may be
contingent or unmatured. From and after the date of the occurrence of any Event
of Default, Mortgagee shall have dominion and control over such Deposits and
shall have the sole ability to make withdrawals with respect to such Deposits.
The rights of Mortgagee under this section are in addition to such other rights
and remedies (including, without limitation, other rights of set-off) as may be
available to Mortgagee under the Loan Documents, at law or in equity.
25
1.29. Obligations Secured. Whenever in this Mortgage or any
other Loan Document it is stated that Mortgagor shall be obligated to pay or
repay any moneys to Mortgagee or to any third party or to reimburse Mortgagee in
respect of costs and expenses incurred by Mortgagee or anyone employed by, or
acting on behalf of, Mortgagee, then any such payment, repayment or
reimbursement obligation shall be deemed to be part of the indebtedness that is
secured by this Mortgage.
Article II
Events of Default and Remedies
------------------------------
2.1. Definition of Event of Default. For all purposes of the
Loan Documents, the occurrence of any one or more of the following shall
constitute an Event of Default:
(a) Nonpayment of Note. If Mortgagor fails to make any payment
required under the Note or the Loan Agreement when and as the same
shall become due and payable, and such failure continues for ten (10)
days, provided, however, that said ten (10)-day grace period shall not
apply to the payment of any moneys required to be paid by Mortgagor
upon the Maturity Date (or sooner, if applicable, by reason of
acceleration); or
(b) Liens. If any proceeding is commenced to foreclose a lien
upon the Mortgaged Property or any portion thereof or if any other
action is taken to enforce any such lien and, within twenty days (20)
after the commencement of such proceeding or taking of such action,
said lien is not discharged of record by payment, deposit, bond, order
of a court of competent jurisdiction or otherwise; or
(c) Action by Governmental Authority. If any Governmental
Authority imposes a fine or penalty with respect to Mortgagor's failure
to pay an Imposition in a timely manner or if, following Mortgagor's
election to contest the amount or validity of any Imposition, Mortgagor
fails to duly perform or comply with any provision set forth in Section
1.7(c); or
(d) Failure to Comply with Section 1.9. If Mortgagor fails
fully, faithfully or punctually to perform or comply with any
obligation on the part of Mortgagor to be performed or complied with
pursuant to Section 1.9; or
26
(e) Failure to Give Notice. If Mortgagor fails to give
Mortgagee, when and as required, any notice required to be given to
Mortgagee by Mortgagor pursuant to this Mortgage or within ten (10)
days of Mortgagor's becoming aware of the need to provide such notice
if no grace period for the giving of such notice is otherwise provided
for in this Mortgage; or
(f) Nonpayment of Certain Charges. If Mortgagor fails to make
any payment required by Section 1.4 (other than a payment to which
paragraph (a) applies), 1.7(a) or 1.11, and such failure continues for
twenty (20) days; or
(g) Default in Performance of Certain Obligations. If
Mortgagor fails fully, faithfully or punctually to perform or comply
with any obligation on the part of Mortgagor to be performed or
complied with pursuant to Section 1.2, 1.3, 1.8, 1.10, 1.12, 1.13, 1.20
or 1.22, and such failure continues for thirty (30) days after
Mortgagee has given Mortgagor written notice thereof; or
(h) Other Failure to Perform. If Mortgagor fails fully,
faithfully or punctually perform or comply with any other obligation on
the part of Mortgagor to be performed or complied with pursuant to any
Loan Document including, without limitation, the Note and the Loan
Agreement (except as described in the preceding paragraphs (a) through
(g)) and such failure continues for the lesser of (i) thirty (30) days
after Mortgagee has given Mortgagor written notice thereof (unless such
default cannot with due diligence be cured within thirty (30) days but
can be cured within a reasonable period, in which case no Event of
Default shall be deemed to exist so long as Mortgagor shall have
commenced to cure the default within thirty (30) days after receipt of
notice, and thereafter diligently and continuously prosecutes such cure
to completion) or (ii) such period of time, if any, as is set forth
with respect to such failure in any other Loan Document; or
(i) Misrepresentation, Etc. If any warranty, representation or
other statement made (i) by or on behalf of Mortgagor or by any
Principal of Mortgagor in, pursuant to, or in connection with any Loan
Document including, without limitation, the Note and the Loan
Agreement, or (ii) in connection with any other loan made by Mortgagee
to Mortgagor or any Principal of Mortgagor or any borrower of which a
Principal of Mortgagor is a principal, or (iii) by or on behalf of any
Guarantor in or pursuant to any guaranty delivered to Mortgagee in
connection with the Loan is materially incorrect; or
(j) Nonpayment of Debts. If Mortgagor shall be generally not
paying Mortgagor's debts as they become due; or
(k) Voluntary Adverse Financial Events. If Mortgagor (i) shall
make an assignment for the benefit of creditors, or (ii) shall
institute any proceeding seeking (A) relief on its behalf as debtor, or
(B) adjudication of Mortgagor as a bankrupt or insolvent, or (C)
reorganization, arrangement, adjustment, winding up, liquidation,
dissolution or composition of Mortgagor or Mortgagor's debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or (D) appointment of a receiver, trustee, conservator,
custodian or other similar official for Mortgagor or the Mortgaged
Property or any part thereof or of any other substantial part of
Mortgagor's property, or (iii) shall consent by answer or otherwise to
the institution of any such proceeding against Mortgagor, or (iv) shall
(if a corporation or other entity having directors or shareholders)
take by itself, or by its directors or shareholders, any action for the
purpose of any of the foregoing; or
27
(l) Involuntary Adverse Financial Events. If any proceeding is
instituted against Mortgagor seeking (i) to have an order for relief
entered against Mortgagor as debtor or to adjudicate Mortgagor a
bankrupt or insolvent, or (ii) reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution or composition of Mortgagor or
Mortgagor's debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or (iii) appointment of a
receiver, trustee, conservator, custodian or other similar official for
Mortgagor or the Mortgaged Property or any portion thereof or any other
substantial part of Mortgagor's property, that either (A) results,
without Mortgagor's consent or acquiescence, in any such entry of an
order for relief, adjudication of bankruptcy or insolvency or issuance
or entry of any other order having a similar effect or (B) remains
undismissed for ninety (90) days; or
(m) Appointment of Trustee, Etc. If a trustee, receiver,
conservator, custodian or other similar official is appointed, without
the consent or acquiescence of Mortgagor, for Mortgagor or the
Mortgaged Property or any portion thereof or any other substantial part
of Mortgagor's property, which appointment is not vacated within ninety
(90) days; or
(n) Changes in Mortgage Taxation. If subsequent to the date of
this Mortgage the law of the state in which the Premises are situated
is changed to Mortgagee's detriment by statutory enactment, judicial
decision, regulation or otherwise, so as (i) to deduct from the value
of land for the purpose of taxation (for state, county, municipal or
other purpose) any lien or charge thereon, or (ii) to change the
taxation of deeds of trust, mortgages or debts secured by land or the
manner of collecting any such taxation; or
(o) Final Judgment. If a final judgment is entered against
Mortgagor, and, within sixty days after its entry, such judgment has
not been discharged or execution thereof stayed pending appeal, or if,
within sixty days after the expiration of any such stay, such judgment
has not been discharged; or
(p) Certain Taxes. If it is or becomes illegal for Mortgagor
to pay any tax required to be paid by Mortgagor pursuant to Section
1.07 or if Mortgagor's payment of such tax would violate any
Requirement; or
(q) Prohibited Transfer. If a transaction prohibited by
Section 1.18 occurs without the prior written consent of Mortgagee; or
28
(r) Other Instruments. If Mortgagor fails to perform, comply
with or discharge any agreement, obligation or undertaking created or
agreed to by Mortgagor in any Loan Document and any applicable cure
periods expire; if any Principal of Mortgagor or Guarantor fails to
perform, comply with or discharge any agreement, obligation or
undertaking created or agreed to by such Principal of Mortgagor or
Guarantor in any Loan Document and any applicable cure periods expire;
or if any event or circumstance described in clause 1.7(c)(iii) occurs;
or
(s) Leases. If Mortgagor leases all or any part of the
Mortgaged Property
in violation of Section 1.15 of this Mortgage or effectuates any change
with respect to a Lease in violation of said section; or
(t) Management of Mortgaged Property. If the Mortgaged
Property ceases to be managed by Mortgagor or such other person or
entity as may be approved by Mortgagee in writing; or
(u) Guarantor. If any act, circumstance or event described in
paragraphs (k) through (n) or (p) is taken by or occurs with respect to
any Guarantor or the property of any such person or entity (each of the
foregoing, an "Insolvency Event"); or
(v) Other Mortgages. If any fact or circumstance occurs that
would permit the holder of any other mortgage encumbering the Mortgaged
Property or any part thereof to foreclose or exercise any other
remedy(ies) available under such other mortgage. If such other mortgage
provides for a grace period and opportunity to cure, an Event of
Default shall not be deemed to have occurred under this paragraph (w)
unless and until such grace period has expired. Concurrently with the
expiration of such grace period, an Event of Default shall be deemed to
have occurred under this Mortgage, and Mortgagor shall have no right
under this Mortgage to receive notice of or any opportunity to cure
such Event of Default. Nothing in this paragraph (w) shall limit in any
way Mortgagor's obligations under this Mortgage or Mortgagee's rights
and remedies under this Mortgage; or
(w) Secondary Financing. If Mortgagor enters into any junior
financing arrangement with any Person with the Mortgaged Property as
collateral therefor, without the prior written consent of Mortgagee,
which consent may be withheld at Mortgagee's sole option.
(x) Cross Default. If an Event of Default occurs under any
other mortgage securing the Note.
2.2. Effect of Event of Default. Upon and after the occurrence
of an Event of Default, Mortgagee shall be entitled to all of the rights and
remedies set forth below. In those instances in which Mortgagee is entitled to
take action with respect to the subject matter of this Article II, such action
may be taken by Mortgagee personally or on Mortgagor's behalf by its agents or
attorneys and, in any such instance, with or without entry upon the Mortgaged
Property. All expenses incurred and advances made by Mortgagee or by any such
agents or attorneys in taking any such action shall be deemed to be for the
account of Mortgagor and shall be repaid to Mortgagee together with interest
thereon computed at the Default Rate from the date each such expense is incurred
or advance is made until the date Mortgagee has received repayment in its
entirety thereof.
29
(a) Automatic Acceleration of Note. If the Event of Default is
one described in paragraphs (l), (m) or (n) of Section 2.1, then the entire
principal of the Note then outstanding, all accrued and unpaid interest thereon,
Prepayment Charge and all other indebtedness secured by this Mortgage shall
automatically become immediately due and payable.
(b) Optional Acceleration of Note. If the Event of Default is
one described in any paragraph of Section 2.1 other than those paragraphs of
Section 2.1 referred to in the preceding paragraph (a), then Mortgagee, by
written notice to Mortgagor, may declare the entire principal of the Note then
outstanding, all accrued and unpaid interest thereon, Prepayment Charge and all
other indebtedness secured hereby to be due and payable immediately. Upon any
such declaration the same shall become immediately due and payable,
notwithstanding anything to the contrary in any Loan Document.
(c) Entry upon Mortgaged Property. Without notice to Mortgagor
or anyone else, Mortgagee may (i) enter into and upon the Mortgaged Property and
take possession thereof by force, summary proceeding, ejectment or otherwise and
exclude therefrom Mortgagor, Mortgagor's employees and agents and all other
persons, (ii) hold, use, operate, manage, maintain and control the Mortgaged
Property and conduct the business thereof on such terms as Mortgagee shall deem
proper, (iii) collect and receive all Rents including, without limitation, those
past due (instituting, at Mortgagee's election, proceedings in furtherance of
such collection), (iv) apply the Rents as hereinafter provided, (v) amend,
modify and terminate then existing Leases of the Mortgaged Property or any
portion thereof and, in the name of Mortgagor, enter into Leases of all or any
portion of the Mortgaged Property, (vi) complete the construction of the
Improvements, and in the course of such completion make such changes in the
contemplated Improvements as Mortgagee may deem desirable, (vii) make all
necessary or proper repairs, renewals and replacements and such alterations,
additions, improvements and betterments as Mortgagee may deem advisable, and
(viii) generally do everything as fully and effectually as if Mortgagee were the
absolute owner of the Mortgaged Property. Mortgagee shall apply the Rents (A)
first, to paying the costs and expenses incurred by Mortgagee in taking actions
pursuant to this paragraph (including, without limitation, cost and expenses
incurred in furtherance of the rights, remedies and powers specifically set
forth above and those incurred in order to insure the Mortgaged Property, pay
Impositions and pay reasonable compensation for the services of Mortgagee and
its employees, attorneys and agents), and (B) second, to payment of the
principal of the Note then outstanding, all accrued but unpaid interest thereon,
at the rate of interest provided therein and in the Loan Agreement, including
30
any applicable Prepayment Charge, and all other indebtedness secured by this
Mortgage or by any other Loan Document. Mortgagor hereby consents to the
exercise by Mortgagee of the rights, remedies and powers conferred upon
Mortgagee in this paragraph, provided, however, that (x) Mortgagee shall under
no circumstances have any obligation to undertake any act or do anything
pursuant to this paragraph and (y) no entry in or upon the Mortgaged Property or
taking possession thereof or any other action or omission of Mortgagee hereunder
shall make Mortgagee a "mortgagee in possession" (unless Mortgagee expressly
elects such status in writing) or create any liability on the part of Mortgagee
to Mortgagor or to any lessee or other party holding under or claiming through
Mortgagor (whether for trespass, eviction, inconvenience, annoyance,
disturbance, loss of business or otherwise) except if attributable to the
willful misconduct or bad faith of Mortgagee. In furtherance of all of the
foregoing, Mortgagor hereby irrevocably and unconditionally appoints Mortgagee
as Mortgagor's true and lawful attorney-in-fact, coupled with an interest, in
Mortgagor's name and stead, with full power of substitution to act pursuant to
the provisions of this paragraph.
(d) Sale of Mortgaged Property. Mortgagee may sell the
Mortgaged Property and all estate, right, title and interest, claim and demand
therein, and right of redemption thereof, at one or more sales as an entity or
in parcels, in such manner, at such time and place, for such price and upon such
other terms and after such notice thereof as Mortgagee may in its sole
discretion determine, or as may be required by law. Mortgagee may from time to
time adjourn any such sale by announcement at the time and place appointed for
such sale, as same may previously have been adjourned.
(e) Foreclosure. Mortgagee may institute proceedings for the
complete or partial foreclosure of this Mortgage. To the extent the obligations
secured hereby are also secured by a mortgage or mortgages on property other
than the Mortgaged Property (the "Additional Security"), Mortgagor hereby
expressly waives any right to require that Mortgagee exercise remedies with
respect to the Additional Security before instituting any proceeding for the
complete or partial foreclosure hereunder and Mortgagor shall be free to
exercise any and all remedies available hereunder with respect to the Mortgaged
Property or under any other mortgage or security agreement with respect to the
Additional Security in such order and with respect to such amounts as Mortgagee
shall elect in Mortgagee's sole and absolute discretion.
(f) Rights as Secured Party. Mortgagee may exercise such
rights and remedies, whether at law, in equity or by statute (including, without
limitation, the Uniform Commercial Code), as are available to Mortgagee as a
secured party under this Mortgage with respect to the Chattels, including,
without limitation, the right to take possession of the Chattels, to maintain
and preserve the same and to cause any of the Chattels to be sold at any one or
more public or private sales as permitted by applicable law. Any person,
including both Mortgagee and Mortgagor, shall be eligible to purchase any
portion or all of the Chattels thus offered for sale. Any and all expenses
incurred by Mortgagee in connection with taking possession of the Chattels and
maintaining and preserving the same and otherwise preparing for sale, as well as
in the conduct of the sale, such as the fees and expenses of Mortgagee's
attorneys, shall be deemed to be for the account of Mortgagor and shall be
repaid to Mortgagee. Mortgagor, upon Mortgagee's demand, shall assemble the
Chattels and make them available to Mortgagee at such place(s) as Mortgagee may
designate. Mortgagee shall give Mortgagor at least five days' prior written
notice of the time and place of any public sale or other disposition of the
Chattels or of the time at or after which Mortgagee intends to make any private
sale or other disposition (any such notice for all purposes to be deemed
reasonable notice to Mortgagor).
31
(g) Statutory Power of Sale. Mortgagee may exercise the
STATUTORY POWER OF SALE.
(h) Other Remedies. Supplementing the foregoing provisions of
this Section 2.2, Mortgagee may take such other steps as Mortgagee may elect to
protect and enforce its rights, whether by action, suit or proceeding in equity
or at law for the specific performance of any covenant, condition or agreement
set forth in the Note, this Mortgage or in any other Loan Document, or in aid of
the execution of any power herein granted to Mortgagee, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or equitable
right or remedy.
2.3. Foreclosure Sale Implementation.
(a) Deeds, Etc. To effectuate any sale(s) made under or by
virtue of this Article II, whether made under the power of sale herein granted
or under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale (any such sale, an "Article II Sale"), Mortgagor,
Mortgagee, or an officer of any court empowered to do so shall execute and
deliver (i) to the accepted purchaser or purchasers assigning and transferring
all estate, right, title, interest, claim and demand in and to the property and
rights sold and (ii) to the appropriate Governmental Authority any affidavit(s)
or other instrument(s) required pursuant to any Requirement(s). In furtherance
of such purpose, Mortgagor hereby irrevocably and unconditionally appoints
Mortgagee as Mortgagor's true and lawful attorney-in-fact, coupled with an
interest, in Mortgagor's name and stead, with full power of substitution, to
execute and deliver such instrument(s). Mortgagor hereby ratifies and confirms
all that Mortgagee, in its capacity as said attorney-in-fact, or such
substitute(s) shall lawfully do pursuant to this Section 2.3(a). Notwithstanding
the foregoing, Mortgagor, if so requested by Mortgagee or any purchaser, shall
ratify and confirm any such sale or sales by executing and delivering to
Mortgagee or to such purchaser all such instruments as may be designated by the
requesting party. Any such sale or sales shall operate to divest all the estate,
right, title, interest, claim and demand whatsoever, whether at law or in
equity, of Mortgagor in and to the property and rights so sold, and shall be a
perpetual bar, both at law and in equity, against Mortgagor and against any and
all persons claiming or who may claim by, from, through or under Mortgagor.
(b) Acceleration upon Sale. In the event of any Article II
Sale, then, notwithstanding anything to the contrary set forth in any Loan
Document, the entire principal of the Note than outstanding, all accrued and
unpaid interest thereon, at the rate of interest provided therein and in the
Loan Agreement, including any applicable Prepayment Charge, and all other
indebtedness secured by this Mortgage shall immediately become due and payable.
32
(c) Application of Proceeds. The proceeds of any Article II
Sale, together with any other sums that Mortgagee may then hold under any
provision of this Mortgage, shall be applied in the following order of priority:
(i) Sale Costs, Etc. To the payment of the costs and expenses
incurred in connection with such sale, including, without limitation,
the costs and expenses (A) incurred by Mortgagee prior thereto in
taking possession of, and maintaining and preserving, the Mortgaged
Property or any portion thereof and paying Impositions with respect
thereto (other than Impositions subject to which the Mortgaged Property
might have been sold), (B) of any judicial proceedings wherein or
pursuant to which such sale might have been made, (C) of any
receiver(s) appointed with respect to the Mortgaged Property or any
portion thereof, (D) incurred in order to comply with Requirements
applicable to such sale and (E) of paying reasonable compensation to
Mortgagee, its employees, agents and attorneys.
(ii) Principal, Prepayment Charge and Interest. To the payment
of the entire principal of the Note then outstanding, all accrued and
unpaid interest thereon (whether accruing prior or subsequent to the
date of default) at the rate of interest provided therein and in the
Loan Agreement, including any applicable Prepayment Charge.
(iii) Other Sums Due. To the payment of any other sums
required to be paid by Mortgagor pursuant to any provision of any Loan
Document.
(iv) Application of Surplus. To the payment of the surplus, if
any, to whosoever may be lawfully entitled to receive the same.
(d) Bids by Mortgagee. At any Article II Sale, Mortgagee may
bid for and acquire the Mortgaged Property or any part thereof and in lieu of
paying cash therefor may make settlement for the purchase price by crediting
upon the indebtedness of Mortgagor secured by this Mortgage the net sales price
after deducting therefrom the costs and expenses of the sale and all other costs
or expenses attributable to Mortgagor's default under this Mortgage and
Mortgagee's exercise of its rights, powers and remedies under this Mortgage.
2.4. Collection of Debt.
(a) Payments Due upon Acceleration. In the event that the
indebtedness secured by this Mortgage shall become due and payable in accordance
with the provisions of this Mortgage and Mortgagor shall fail forthwith to pay
such amounts to Mortgagee, Mortgagee shall be entitled and empowered to
institute actions or proceedings at law or in equity for the collection of the
sums so due and unpaid, and may prosecute any such actions or proceedings to
judgment or final decree, and may enforce any such judgment or final decree
against Mortgagor and collect, out of the Mortgaged Property and other property
of Mortgagor wherever situated, in any manner provided by law, moneys adjudged
or decreed to be payable.
33
(b) Effect of Foreclosure, Etc. Mortgagee shall be entitled to
recover judgment as aforesaid either before or after or during the pendency of
any proceedings for the enforcement of the provisions of this Mortgage; and the
right of Mortgagee to recover such judgment shall not be affected by any entry
or sale hereunder, or by the exercise of any other right, power or remedy for
the enforcement of the provisions of this Mortgage or the foreclosure of the
lien hereof; and in the event of a sale of the Mortgaged Property and of the
application of the proceeds of sale, as in this Mortgage provided, to the
payment of the debt hereby secured, Mortgagee shall be entitled to enforce
payment of, and to receive all amounts then remaining due and unpaid upon, the
Note and to enforce payment of all other charges, payments and costs due under
this Mortgage, and shall be entitled to recover judgment for any portion of the
debt remaining unpaid, with interest at the maximum rate permitted by law. If
any case shall be commenced against Mortgagor under any applicable insolvency,
bankruptcy or any similar law now or hereafter or any proceedings for
Mortgagor's reorganization or involving the liquidation of Mortgagor's assets,
then Mortgagee shall be entitled to prove the whole amount of principal,
Prepayment Charge and interest due upon the Note to the full amount thereof, and
all other payments, charges and costs due under this Mortgage (including,
without limitation, the fees and expenses of Mortgagee's attorneys in connection
with such proceedings), without deducting therefrom any proceeds obtained from
the sale of the whole or any part of the Mortgaged Property, provided, however,
that in no case shall Mortgagee receive a greater amount than such principal,
Prepayment Charge and interest and such other payments, charges and costs from
the aggregate amount of the proceeds of the sale of the Mortgaged Property and
the distribution from the estate of Mortgagor.
(c) Effect of Judgment. No recovery of any judgment by
Mortgagee and no levy of any execution under any judgment upon the Mortgaged
Property or any part thereof or upon any other property of Mortgagor shall
affect in any manner or to any extent the lien of this Mortgage upon the
Mortgaged Property or any part thereof or any liens, rights, powers or remedies
of Mortgagee hereunder, but such liens, rights, powers and remedies of Mortgagee
shall continue unimpaired as before.
(d) Application of Sums Collected. Any moneys thus collected
by Mortgagee under this Section 2.4 shall be applied by Mortgagee in accordance
with the provisions of paragraph (c) of Section 2.3.
(e) Legal Proceedings. Mortgagor unconditionally and
irrevocably agrees that any action or proceeding against Mortgagor with respect
to the Loan or for the recognition or enforcement of any judgment rendered in
any such action or proceeding may be brought in the United States Courts for any
District in which the Mortgaged Property is situated or in the courts of the
State in which the Mortgaged Property is situated, as Mortgagee may elect, and
by executing and delivering this Mortgage, Mortgagor unconditionally and
irrevocably accepts and submits to the non-exclusive jurisdiction of each of the
aforesaid courts in persona generally with respect to any such action or
proceeding for itself and in respect of its properties. Mortgagor further agrees
that final judgment against it in any action or proceeding shall be conclusive
and may be enforced in any other jurisdiction, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and of the amount of Mortgagor's indebtedness.
34
MORTGAGOR AND MORTGAGEE WAIVE THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING (INCLUDING ANY AND ALL
COUNTERCLAIMS THERETO) THAT DIRECTLY OR INDIRECTLY RELATES TO THE SUBJECT MATTER
OF THIS MORTGAGE. MORTGAGOR HEREBY EXPRESSLY AND UNCONDITIONALLY WAIVES, IN
CONNECTION WITH ANY SUIT, ACTION OR PROCEEDING BROUGHT ON THIS MORTGAGE BY THE
MORTGAGEE ANY AND EVERY RIGHT IT MAY HAVE TO (I) INTERPOSE ANY COUNTERCLAIM
THEREIN (OTHER THAN COMPULSORY COUNTERCLAIMS) AND (II) HAVE THE SAME
CONSOLIDATED WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING
HEREIN CONTAINED SHALL PREVENT OR PROHIBIT MORTGAGOR FROM INSTITUTING OR
MAINTAINING A SEPARATE ACTION AGAINST MORTGAGEE WITH RESPECT TO ANY ASSERTED
CLAIM.
2.5. Appointment of Receiver. After the occurrence of any
Event of Default and during its continuance, whether incidental to any
proceedings to foreclose this Mortgage or to enforce the specific performance
hereof or to any other judicial proceeding to enforce any right of Mortgagee, or
otherwise, Mortgagee shall be entitled, as a matter of right, without the giving
of notice to any other party and without regard to the adequacy or inadequacy of
any security for the Mortgage indebtedness, either before or after declaring the
unpaid principal of the Note to be due and payable, to the appointment of a
receiver or receivers of the Mortgaged Property and of all the Rents thereof.
Mortgagor hereby irrevocably and unconditionally consents to the appointment of
such receiver or receivers (and to the exercise by such receiver or receivers of
such powers as may be requested by Mortgagee of the court that is empowered to
make such appointment), waives any and all defenses to such appointment and
agrees not to oppose Mortgagor's application therefor.
2.6. Possession by Mortgagee. Notwithstanding the appointment
of any receiver, liquidator or trustee of Mortgagor, or of any of Mortgagor's
property, or of the Mortgaged Property or any part thereof, Mortgagee shall be
entitled to retain possession and control of all property now or hereafter held
under this Mortgage.
2.7. Remedies Cumulative. No right or remedy of Mortgagee is
intended to be exclusive of any other right or remedy specified herein, in any
other Loan Document or available to Mortgagee at law or in equity. All such
rights and remedies shall be cumulative and concurrent and, at Mortgagee's
option, may be pursued singularly, successively or together and may be exercised
as often as occasion therefor shall arise. No delay or failure of Mortgagee to
exercise any right, power or remedy hereunder or under any other Loan Document
shall impair any such right, power or remedy or shall be construed to be a
waiver thereof or of any Event of Default, and Mortgagor shall not thereby be
relieved of its obligations. Mortgagee shall be deemed to have waived any such
right, power or remedy only if such waiver is expressly set forth in a written
instrument duly executed by an authorized representative of Mortgagee. No waiver
of any breach shall constitute a waiver of any other then existing or subsequent
breach.
35
2.8. Right to Withdraw Proceeding, Etc. Any action, suit or
proceeding brought by Mortgagee pursuant to any of the terms of this Mortgage or
otherwise and any claim made by Mortgagee hereunder may be compromised, settled,
withdrawn, abandoned or otherwise dealt with by Mortgagee without any notice to,
agreement or approval of, or consent by, Mortgagor and without any liability of
Mortgagee to Mortgagor.
2.9. Waiver. To the fullest extent permitted by law and with
full awareness of the consequences thereof, Mortgagor hereby unconditionally and
irrevocably (a) waives and relinquishes the benefit of, and releases all rights
of Mortgagor under, all laws now or hereafter in force providing for any
appraisement or valuation before sale of the Mortgaged Property or any portion
thereof, any stay of execution or extension of the time for the enforcement of
the collection of the indebtedness secured by this Mortgage, any extension of a
period of redemption from any sale in furtherance of the collection of said
indebtedness, and any marshalling of the assets of Mortgagor (including, without
limitation, the Mortgaged Property), and (b) 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 of the foregoing. In addition, to
the fullest extent permitted by law and with full awareness of the consequences
thereof, Mortgagor hereby waives and relinquishes the right to assert any
defense based upon laws applicable to sureties and guarantors.
2.10. Use and Occupancy of Mortgaged Property. During the
continuance of any Event of Default and pending the exercise by Mortgagee of its
right to exclude Mortgagor from all or any part of the Mortgaged Property,
Mortgagor agrees to pay to Mortgagee the fair and reasonable rental value for
the use and occupancy of the Mortgaged Property or any part thereof that is in
Mortgagor's possession for such period and, upon default of any such payment,
shall vacate and surrender possession of the Mortgaged Property to Mortgagee or
to a receiver, if any, and in default thereof Mortgagor may be evicted by
summary action or proceeding for the recovery of possession of premises for
nonpayment of rent.
2.11. Mortgagee's Attorneys' Fees. Mortgagor shall upon demand
pay any and all costs, expenses, and attorneys' fees incurred by Mortgagee in
connection with (a) enforcing, or attempting to enforce, Mortgagee's rights
under the Loan Documents; (b) obtaining legal advice regarding Mortgagee's
available legal alternatives and rights under the Loan Documents; and (c)
representation of Mortgagee's interest in any action or proceeding that relates
to the Loan, Mortgagor or the Mortgaged Property.
2.12. Effect of Mortgagor's Tender. If, after the occurrence
of an Event of Default but before the sale of the Mortgaged Property, Mortgagor
tenders to Mortgagee payment of the amount necessary to pay all sums then due
hereunder, then such tender shall constitute a voluntary prepayment of the Note,
and Mortgagor shall pay Mortgagee, together with all other sums then due,
Prepayment Charge computed in accordance with the Note.
36
2.13. Mortgagee's Failure to Allow Cure Period.
Notwithstanding anything to the contrary in any Loan Document, wherever it is
stated in this Mortgage that an Event of Default shall be deemed to have
occurred only after Mortgagee has given notice (a "Cure Notice") of specified
circumstances (an "Unmatured Default") and a specified period of time (the "Cure
Period") has passed, if Mortgagee fails to give the required Cure Notice and
commences foreclosure proceedings under this Mortgage, then, (a) if, within the
Cure Period, as measured from the commencement of the foreclosure proceedings,
Mortgagor cures the applicable Unmatured Default, then Mortgagee shall
discontinue such foreclosure proceedings and reinstate the Loan on the same
terms and conditions, as if the Note had never been accelerated; (b) such
discontinuance of foreclosure proceedings shall constitute Mortgagor's sole
remedy for Mortgagee's failure to have given the required Cure Notice, and
Mortgagee shall have no liability to Mortgagor with respect thereto; and (c)
Mortgagee's failure to give the Cure Notice shall not invalidate, nullify, or
constitute a defense in any foreclosure proceedings that are otherwise properly
commenced.
Article III
Representations and Warranties
------------------------------
Mortgagor represents and warrants to Mortgagee that, as of the
date of the delivery of this Mortgage and as of each date as of which Mortgagor
is required to make any payment under the Note:
3.1. Title, Etc. Mortgagor has good and marketable title to an
indefeasible fee estate in the Mortgaged Property, subject to no lien, charge or
encumbrance except (a) matters listed as typewritten exceptions to title in
Schedule B of Mortgagee's title policy issued by Land Title Agency, Inc. as
agent for Commonwealth Land Title Insurance Company pursuant to title order
number 02-LT-0967, insuring the lien of this Mortgage; and (b) Leases that
comply with this Mortgage. Upon recordation, this Mortgage shall impose upon
such of the Mortgaged Property as constitutes real estate a first priority lien.
Mortgagor owns the Chattels and all other Mortgaged Property free and clear of
liens and claims other than those set forth in said typewritten exceptions.
3.2. Compliance with Requirements, Etc. Mortgagor is in full
compliance with all Requirements and Restrictions. Neither the Mortgaged
Property nor any part thereof was acquired with the proceeds from any
transaction or activity that would cause the Mortgaged Property or any such part
to be subject to forfeiture under any Requirement or Restriction. Furthermore,
Mortgagor has not been responsible for, and has no knowledge of, any action or
omission by any person or entity that would cause the Mortgaged Property or any
such part to be subject to forfeiture.
37
3.3. Rent Roll. Mortgagor has heretofore delivered to
Mortgagee a rent roll listing the Rents payable under all Leases. All Rents
shown in the rent roll are legal and enforceable Rents and are in compliance
with all applicable Requirements.
3.4. Easements, Etc. Mortgagor has all easements, including
those for use, maintenance, and access (by pedestrians, automobiles and trucks)
necessary, appropriate, or convenient for the full and proper operation, repair,
maintenance, occupancy and use of every portion of the Mortgaged Property. The
Mortgaged Property is adequately served by all utilities necessary, appropriate,
or convenient for the full and proper operation, repair, maintenance, occupancy
and use of every portion of the Mortgaged Property.
3.5. No Misrepresentations. Neither this Mortgage, any other
Loan Document, nor any other document or certificate furnished to Mortgagee or
to Mortgagee's attorneys in connection with the transactions contemplated hereby
or thereby contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein or
herein not misleading. All certifications, recitals, representations and
warranties contained in the Loan Documents are true and correct.
3.6. Governmental Approvals. All Authorizations necessary or
appropriate to permit the use and occupancy of the Mortgaged Property and which
are required to be obtained from any Governmental Authority have been duly
obtained and are in full force and effect.
3.7. Approvals of Loan Documents. No consent, approval or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required in connection with the valid execution, delivery and
performance of the Loan Documents or the carrying out of any of the transactions
contemplated thereby.
3.8. Other Beneficiaries. The representations and warranties
contained in the Loan Documents shall inure to the benefit of any purchaser at a
foreclosure sale or other grantee named in a deed delivered in respect of the
Mortgaged Property.
3.9. Federal Law. The proceeds of the Loan are not being and
will not be used, directly or indirectly, for the purpose of "purchasing" or
"carrying" any "margin stock" in contravention of Regulation U or X promulgated
by the Board of Governors of the Federal Reserve System. Mortgagor is incurring
the Loan for business purposes only, and not for personal, family or household
purposes. Neither the Premises nor any part thereof constitutes or is intended
to constitute the personal residence of Mortgagor or any Principal of Mortgagor
at any time while the portion of the Premises so used is encumbered by this
Mortgage. Mortgagor is a United States person, and is not a foreign person, as
defined in the Foreign Investment in Real Property Tax Act.
3.10. Hazardous Substances. Without limiting the generality of
any other representation or warranty contained in this Mortgage, the Mortgaged
Property and the existing uses thereof comply and, to the best of Mortgagor's
knowledge, at all times have complied in all respects with all Environmental
Laws in effect on the date of this Mortgage; all Environmental Authorizations
have been duly issued or granted and are in full force and effect; and Mortgagor
is not, and at no time since Mortgagor acquired ownership or possession of the
Mortgaged Property or any portion thereof has Mortgagor been, in violation of
any Environmental Law with respect to the Mortgaged Property. Without limiting
the generality of the foregoing:
38
(a) No Hazardous Substances are being, or are intended or
threatened to be, and, to the best of Mortgagor's knowledge, no
Hazardous Substances have ever been, used, received, handled,
generated, manufactured, produced, processed, treated, stored,
released, placed, spilled, discharged, disposed of or dispersed at, or
otherwise caused to become situated, at, on, under or about the
Mortgaged Property, and no portion of the Mortgaged Property has been
used at any time as a landfill or as a waste treatment, storage or
disposal facility;
(b) None of the Improvements contains (and, to the best of
Mortgagor's knowledge, none of the Improvements which at any time were
a part of, or were situated at, on or under the Mortgaged Property
contained) any Hazardous Substances;
(c) No underground storage tanks or other underground storage
facilities are, or, to the best of Mortgagor's knowledge, have ever
been, situated on or under the Mortgaged Property;
(d) To the best of Mortgagor's knowledge, (i) the ambient air
quality at the Mortgaged Property complies with the requirements of all
Environmental Laws and (ii) the present levels of radon, formaldehyde,
asbestos and all other Hazardous Substances, to the extent any such
Hazardous Substances exist at, on, under or about the Mortgaged
Property, are within the limits prescribed by all Environmental Laws;
(e) Neither the Mortgaged Property nor, to the best of
Mortgagor's knowledge, any land which adjoins any portion of the
Mortgaged Property, contains or is affected by any dam, well,
reservoir, inland wetland, watercourse or water discharge; and
(f) Mortgagor has not received or had served upon it any
summons, citation, directive, order, Notice or other communication,
oral or written, which (i) claims or alleges any failure to comply with
any Environmental Law with respect to the Mortgaged Property or (ii)
contains any statement(s) or fact(s) which, if true, would signify that
any representation, warranty or statement contained in this Mortgage is
other than complete and correct. With respect to the ownership, use,
operation or maintenance of the Mortgaged Property or the conduct of
Mortgagor's business thereat, (y) no writ, injunction, decree, order or
judgment is outstanding and (z) no suit, claim, action, proceeding or
investigation has been instituted or filed with respect to any
Environmental Law (and, to the best of Mortgagor's knowledge, no basis
for any of the foregoing exists). No lien has been filed against or
imposed upon any of the Mortgaged Property with respect to any
Environmental Law.
39
Each of the representations and warranties contained in this
Section 3.14 shall be deemed made by Mortgagor with respect to all other land,
together with the buildings, structures, equipment and other improvements
thereon, in whole or in part owned, leased, operated or occupied by Mortgagor.
3.11. Split Tax Lots. The tax lot or lots that contain the
Mortgaged Property include no real property other than the Mortgaged Property
and constitute one or more discrete, salable parcels.
Article IV
Miscellaneous
-------------
4.1. Partial Invalidity. If any provision(s) of any Loan
Document are held to be invalid, illegal or unenforceable in any respect, then
such invalidity, illegality or unenforceability shall not affect any other
provision of such instrument(s) and such instrument(s) shall instead be
construed as if it or they had never contained such invalid, illegal or
unenforceable provision.
4.2. Notices. All notices hereunder shall be in writing and
shall be deemed sufficiently given or served for all purposes when delivered
personally or sent by mail to any party hereto at such party's address above
stated (in the case of Mortgagee, attention, Commercial Lending Department, EAB
Plaza, Thirteenth Floor, Uniondale, New York 11556-0123), or at such other
address of which such party shall have notified the other party in writing. Any
notice given by an attorney representing or purporting to represent Mortgagee
shall constitute notice by Mortgagee if such attorney is in fact authorized to
act on behalf of Mortgagee. Upon receipt of any notice from an attorney
purporting to act for Mortgagee, Mortgagor shall have the right, by notice to
Mortgagee in compliance with this Mortgage, to require Mortgagee to deliver
prompt written proof of the attorney's authority. Such a request, if promptly
complied with by Mortgagee, shall not delay or suspend the effectiveness of
Mortgagee's notice to Mortgagor.
4.3. Waiver of Notice. Whenever in this Mortgage the giving of
notice by mail or otherwise is required, the giving of such notice may be waived
in writing by the person or persons entitled to receive such notice.
4.4. Successors and Assigns. All the grants, covenants, terms,
provisions and conditions of this Mortgage shall run with the land, shall apply
to and bind the successors and assigns of Mortgagor (and Mortgagor's heirs, if
Mortgagor is an individual) and all subsequent owners, encumbrancers and tenants
of the Mortgaged Property and shall inure to the benefit of the successors and
assigns of Mortgagee and all subsequent holders of this Mortgage. Nothing in
this Section 4.4 limits the prohibitions of Section 1.18. Mortgagee may freely
assign any or all of Mortgagee's rights and obligations under the Loan
Documents, including without limitation by granting "participations" to other
parties.
40
4.5. Usury Savings. Nothing in any Loan Document shall require
the payment or permit the collection by Mortgagee of interest in an amount
exceeding the maximum amount permitted under applicable law in commercial
mortgage loan transactions between parties of the character of the parties
hereto (the "Maximum Interest Amount"). Mortgagor shall not be obligated to pay
to Mortgagee any interest in excess of the Maximum Interest Amount, and the
amount of interest payable to Mortgagee under the Loan Documents shall under no
circumstance be deemed to exceed the Maximum Interest Amount. To the extent that
any payment made to Mortgagee under the Loan Documents would cause the amount of
interest charged to exceed the Maximum Interest Amount, such payment shall be
deemed a prepayment of principal as to which no Prepayment Charge or notice
shall be required, notwithstanding anything to the contrary in any Loan
Document, or, if the amount of excess interest exceeds the unpaid principal
balance of the Note, such excess shall be refunded to Mortgagor.
4.6. Counterparts. This Mortgage may be executed in any number
of counterparts. Each such counterpart shall for all purposes be deemed an
original. All such counterparts shall together constitute but one and the same
mortgage.
4.7. Governing Law. This Mortgage shall be construed and
enforced in accordance with, and shall be governed by, the laws of the state in
which the Premises are situated.
4.8. Written Amendments. This Mortgage may be amended,
discharged or terminated only by a written instrument executed by Mortgagee and
Mortgagor.
4.9. Actions, Approvals and Determinations. Wherever in this
Mortgage it is provided that (a) as a condition precedent to Mortgagor's
undertaking certain action, Mortgagor shall be required to obtain Mortgagee's
consent or approval or (b) Mortgagee shall have the right to make a
determination (including, without limitation, a determination as to whether a
matter is satisfactory to Mortgagee), or if Mortgagor shall request that
Mortgagee take any action, then, unless expressly provided to the contrary in
the applicable provision of this Mortgage, the decision whether to grant such
consent or approval or to take the requested action, or the determination in
question, shall be in the sole and exclusive discretion of Mortgagee and shall
be final and conclusive. Wherever in this Mortgage it is stated that any consent
or approval shall not be unreasonably withheld or that a determination to be
made by Mortgagee shall be subject to a specified standard, then, if a court of
competent jurisdiction determines, without right to further appeal, that the
consent or approval has been unreasonably withheld or that such specified
standard has been met, the consent or approval shall be deemed granted or the
standard shall be deemed met, as the case may be, and Mortgagee, at the request
of Mortgagor, shall deliver to Mortgagor written confirmation thereof. The
obtaining of such consent or approval or determination that such standard has
been met shall be Mortgagor's sole and exclusive remedy with respect to the
subject matter of this section, and under no circumstance shall Mortgagee,
Mortgagee's counsel or anyone else acting or purporting to act on Mortgagee's
behalf having any liability (whether in damages or otherwise) with respect
thereto. In any instance in which Mortgagor requests, or any Loan Document
provides, that Mortgagee shall consider granting its consent or approval or
making a determination or taking some other action, Mortgagor shall, upon
demand, pay all costs, expenses and attorneys' fees incurred by Mortgagee in
connection therewith.
41
4.10. Receipt of Copy. Mortgagee has delivered to Mortgagor,
without charge, a true and correct copy of this Mortgage. Mortgagor acknowledges
receipt of same.
4.11. Modifications, Releases, Etc. From time to time,
Mortgagee may, at Mortgagee's option, without notice to or consent by Mortgagor,
any Principal of Mortgagor, any Guarantor, any junior lienholder, or any other
person, without liability and despite Mortgagor's breach under any of the Loan
Documents, do any of the following: (a) release from the lien of this Mortgage
any or all of the Mortgaged Property; (b) take or release other or additional
security; (c) consent to any map, plat, restrictions, or easement affecting the
Mortgaged Property; (d) join in any extension or subordination agreement; (e)
alter, substitute or release any property securing the Loan; or (f) agree in
writing with Mortgagor to modify the interest rate, amortization period, payment
amount, or any other provision of the Note or the Loan Agreement. No action
described in the preceding sentence shall affect the lien or priority of lien of
this Mortgage, Mortgagor's obligations under the Loan Documents (except as
Mortgagee agrees in writing), or the obligations of any Guarantor or Principal
of Mortgagor. Mortgagor shall pay Mortgagee a reasonable service charge,
together with such title insurance premiums, attorneys' fees and other costs as
Mortgagee may incur in connection with any such action. Mortgagee shall be under
no obligation whatever to take any such actions.
Mortgagor and Mortgagee shall, upon their mutual agreement to
do so, execute such documents as may be necessary in order to effectuate the
modification of this Mortgage, including the execution of substitute mortgages,
so as to create two or more liens on the Mortgaged Property in such amounts as
may be mutually agreed upon but in no event to exceed, in the aggregate, the
amount set forth in Section 6.2 herein; in such event, Mortgagor covenants and
agrees to pay the reasonable fees and expenses of Mortgagee and its counsel in
connection with any such modification.
4.12. Construction. The Loan Documents shall be construed
without regard to section headings, which are provided for convenience only and
shall not be deemed to modify, or be used to interpret, the provisions of this
Mortgage. References to a section are references to a section within this
Mortgage unless otherwise expressly stated or necessarily implied by the
context. The Loan Documents shall be construed without regard to any presumption
or other rule requiring construction against the party which caused the Loan
Documents to be drafted and, if the Premises are situated in New York State,
without regard to New York Real Property Law Section 254. Nothing herein is
intended or shall be deemed to create a joint venture or partnership between
Mortgagor and Mortgagee or any relationship other than that of mortgagor and
mortgagee.
42
4.13. Non-Merger. Unless expressly provided otherwise, in the
event that ownership of this Mortgage and title to the fee and/or leasehold
estates in the Premises encumbered hereby shall become vested in the same person
or entity, this Mortgage shall not merge in said title but shall continue to be
and remain a valid and subsisting lien on said estates in the Premises for the
amount secured hereby.
Article V
Transfer Taxes
--------------
In the event of any transfer ("Transfer") of the Mortgaged
Property, or any part thereof, including any sale by reason of foreclosure of
this Mortgage or any prior or subordinate mortgage, Mortgagor shall furnish
Mortgagee with a true and complete copy of the transferor and transferee
questionnaires, all supporting documentation, and any affidavits furnished to
the taxing authorities or recording officer applicable thereto, and the vendee
or transferee shall automatically assume and become responsible to perform the
obligations imposed upon Mortgagor under this Article.
Mortgagor also covenants and agrees that in the event of a
Transfer, Mortgagor shall duly complete, execute and deliver to Mortgagee all
forms and supporting documentation required by any taxing authority to estimate
and fix the transfer taxes and other taxes, if any, payable by reason of the
Transfer or recording of the deed evidencing the Transfer.
Mortgagor agrees to pay any tax (including, without
limitation, any transfer tax imposed by any Governmental Authority) that may now
or hereafter become due and payable with respect to any Transfer of the
Mortgaged Property, and in default thereof Mortgagee may at its option pay the
same and the amount of such payment shall be added to the indebtedness secured
hereby and, unless incurred in connection with a foreclosure of this Mortgage,
be secured by this Mortgage.
Mortgagor hereby irrevocably and unconditionally constitutes
and appoints Mortgagee as Mortgagor's true and lawful attorney in fact, coupled
with an interest, in Mortgagor's name and stead, with full power of substitution
to prepare and deliver any questionnaire, statement, affidavit or tax return in
furtherance of any Transfer.
If Mortgagor fails or refuses to pay a tax payable by
Mortgagor after a Transfer by reason of a foreclosure of this Mortgage in
accordance with this Article, the amount of the tax and any interest or penalty
applicable thereto may, at the sole option of Mortgagee, be paid as an expense
of the sale out of the proceeds of the mortgage foreclosure sale.
43
The provisions of this Article shall survive any Transfer and
the delivery of the deed affecting such Transfer.
Nothing in this Article is intended (a) to expand any
obligation of Mortgagee beyond that provided for by law; (b) to confer any
benefit or rights upon any taxing authority; or (c) to limit Section 1.18.
Article VI
Additional Provisions
---------------------
6.1. Assignment of Leases and Rents. This Mortgage is intended
to constitute a present, absolute and irrevocable assignment of all of the Rents
now or hereafter accruing, and Mortgagor, without limiting the generality of the
Granting Clause hereof, specifically hereby presently, absolutely and
irrevocably assigns all of the Rents now or hereafter accruing to Mortgagee. The
aforesaid assignment shall be effective immediately upon the execution of this
Mortgage and is not conditioned upon the occurrence of any Event of Default
hereunder or any other contingency or event, provided, however, that Mortgagee
hereby grants to Mortgagor the right and license to collect and receive the
Rents as they become due so long as no Event of Default exists hereunder.
Immediately upon the occurrence of any such Event of Default, the foregoing
right and license shall be automatically terminated and of no further force or
effect. Nothing contained in this Section 6.1 or elsewhere in this Mortgage
shall be construed to make Mortgagee a mortgagee in possession unless and until
Mortgagee actually takes possession of the Mortgaged Property, nor to obligate
Mortgagee to take any action or incur any expense or discharge any duty or
liability under or in respect of any leases or other agreements relating to the
Mortgaged Property or any part thereof.
6.2. Type of Property. Mortgagor represents and warrants to
Mortgagee that this Mortgage does not cover real property principally improved
or to be improved by one or more structures containing in the aggregate not more
than six residential dwelling units, each having its own separate cooking
facilities.
6.3. Maximum Principal Indebtedness Secured. Notwithstanding
anything set forth in this Mortgage to the contrary, the maximum amount of
principal indebtedness secured hereby at execution, or which under any
contingency may become secured hereby at any time hereafter, is $20,000,000,
with interest (including interest at the Default Rate to the extent provided in
this Mortgage), late charges and such other sums as may (a) be advanced by
Mortgagee pursuant to the Loan Documents for the protection of the Mortgaged
Property or the preservation of the lien of this Mortgage (together with
attorneys' fees and disbursements) and (b) be secured hereby without resulting
in the imposition of mortgage recording tax in addition to the amount of tax due
with respect to the principal indebtedness of $20,000,000.
44
6.4. Exculpation. Neither Mortgagor nor any Principal of
Mortgagor shall be personally liable for payment of the principal of the Note or
interest thereon, and in the event of any failure by Mortgagor to pay any
portion of such principal or interest, Mortgagee will look, with respect to the
then outstanding balance of such principal and interest, solely to the Mortgaged
Property and such other collateral as has been, or hereafter shall be, given to
secure payment of the Note. The foregoing limitation on liability shall not
impair or otherwise affect the validity or enforceability of (a) the debt
evidenced by the Note or of any other obligations evidenced by the Loan
Documents or (b) Mortgagee's liens, security interests, rights and remedies
(including, without limitation, the remedies of foreclosure and/or sale) with
respect to the Mortgaged Property or any other property, security, collateral
and/or assets (including the proceeds thereof) encumbered, pledged or assigned
by this Mortgage or any other security for the Loan. In addition, the foregoing
limitation on liability shall not limit anyone's obligations or be applicable
with respect to: (i) liability under any guaranty(ies) or indemnity(ies)
delivered or afforded to Mortgagee; (ii) any fraud, material misrepresentation
or breach of trust; (iii) taxes of any kind (whether characterized as transfer,
gains or other taxes) payable in connection with the foreclosure sale of the
Mortgaged Property, irrespective of who pays such taxes; (iv) application of any
proceeds of the Loan to any purpose other than as provided in the Loan
Documents; (v) the application of any insurance or condemnation proceeds or
other funds or payments other than strictly in accordance with the Loan
Documents; (vi) the misapplication of any security deposits; (vii) rents, sales
proceeds, or other sums received after default under the Loan Documents which
are not applied to expenses of operating the Mortgaged Property or paid to
Mortgagee or a duly appointed receiver of the Premises; (viii) any failure to
deliver to Mortgagee, after demand therefor, any agreements relating to the
operation, management, leasing, use, occupancy or construction of the Mortgaged
Property; (ix) any intentional physical waste in respect of the Mortgaged
Property; (x) any failure to pay or discharge any real estate tax, other tax,
assessment, fine, penalty or lien against the Mortgaged Property to the extent
revenue from leases of the Mortgaged Property was available to pay same; (xi)
liability to Mortgagee for the reimbursement to Mortgagee, together with
interest as provided in the Loan Documents, of all sums advanced or expended by
Mortgagee after or in respect of any default under the Loan Documents; (xii)
liability as landlord under any lease(s) relating to the Mortgaged Property
which Mortgagee is or becomes obligated for by virtue of Mortgagee's succeeding
to the interests of Mortgagor; (xiii) liability under any agreement relating to
the operation or maintenance of the Mortgaged Property which Mortgagee is or
becomes obligated for by virtue of Mortgagee succeeding to the interests of
Mortgagor; (xiv) liability to pay for the premiums on and keep in full force and
effect insurance in respect of the Mortgaged Property in accordance with the
Loan Documents to the extent revenue from leases of the Mortgaged Property was
available to pay same; or (xv) liability for Hazardous Substances that may exist
upon or be discharged from the Mortgaged Property. Mortgagor and any Principal
of Mortgagor shall in any event be and shall remain personally liable for each
of the matters to which reference is made in the preceding sentence and
Mortgagee may seek, obtain and enforce one or more money judgments in any
appropriate proceeding(s) with respect thereto. The limitation on personal
liability contained in this paragraph shall become automatically null and void
and shall be of no further force or effect, and Mortgagor and each Principal of
Mortgagor shall be and remain personally liable for payment of the principal of
the Note and interest thereon, in the event that Mortgagor, or anyone acting on
behalf of Mortgagor, shall (A) file a petition or answer seeking any relief of
any kind under the bankruptcy laws of the United States (or if an Insolvency
45
Event shall otherwise occur), (B) assert in writing or in any legal proceedings
of any kind that any provisions of any of the Loan Documents are in whole or in
part unenforceable, invalid or not legally binding, or (C) fail fully to
cooperate with Mortgagee or a receiver in Mortgagee's or such receiver's efforts
to collect Rents directly from tenants after a default under the Loan Documents.
6.5. Intentionally Omitted.
6.6. Reduction of Mortgage Amount. Amounts received by
Mortgagee in reduction of the Loan in accordance with the Note and the Loan
Agreement shall not decrease the amounts secured by this Mortgage unless the
aggregate amounts actually received in reduction of the Loan has reduced the
maximum Loan Amount that is or may be outstanding, after taking into
consideration sums that may be advanced pursuant to the Note and the Loan
Agreement, to the Mortgage Amount.
6.7. Revolving Loan Mortgage Provisions. This Mortgage permits
and secures any and all current and future advances to Mortgagor evidenced by
(or pursuant to) any one or more of the following: the Note, the Loan Agreement
and such other agreements as may be entered into by Mortgagor with Mortgagee and
signed by Mortgagor. The unpaid principal balance of indebtedness outstanding
under and secured by this Mortgage shall at no time exceed $20,000,000 plus any
amounts advanced by as permitted by the Loan Documents, including, without
limitation, advances to pay taxes or insurance premiums, to complete the
Improvements or otherwise to preserve and protect the Mortgaged Property and the
lien of this Mortgage thereon.
[Remainder of page intentionally left blank.]
46
IN WITNESS WHEREOF, this Mortgage has been duly executed by
Mortgagor as of the date first above written.
RD ELMWOOD ASSOCIATES, L.P., a Delaware
limited partnership (as Borrower)
By: Acadia Property Holdings, LLC, its general
partner
By: Acadia Realty Limited Partnership,
its sole member
By: Acadia Realty Trust, a Maryland real
estate investment trust, its general
partner
By
--------------------------------
Xxxxxx Xxxxxxx
Senior Vice President
The undersigned joins in the execution and authorizes the
delivery of this Mortgage for the purpose of accepting and agreeing to the
provisions of paragraph 6.4 hereof.
ACADIA REALTY LIMITED PARTNERSHIP
By: Acadia Realty Trust, a Maryland real estate
investment trust, its general partner
By
-------------------------------------
Xxxxxx Xxxxxxx
Senior Vice President
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____
day of November, 2002 by ____________________, an authorized signatory of Acadia
Realty Trust, a Maryland real estate investment trust, the general partner of
Acadia Realty Limited Partnership, the sole member of Acadia Property Holdings,
LLC which is the general partner of RD Elmwood Associates, L.P., a Delaware
limited partnership, on behalf of said entities.
________________________________
Notary Public
My commission expires _____________________
STATE OF ____________ )
) ss.:
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _____
day of November, 2002 by ____________________, an authorized signatory of Acadia
Realty Trust, a Maryland real estate investment trust, the general partner of
Acadia Realty Limited Partnership, on behalf of said entities.
________________________________
Notary Public
My commission expires _____________________
SCHEDULE A
----------
TABLE OF CONTENTS
-----------------
Page
----
CERTAIN DEFINITIONS...........................................................4
Article I Mortgagor's Covenants...................................6
1.1. Title...................................................7
1.2. Security Agreement......................................7
1.3. Recordation; Certain Costs and Expenses.................7
1.4. Obligation to Pay.......................................8
1.5. Compliance with Requirements............................8
1.6. Scope of Security.......................................9
1.7. Payment of Impositions for Mortgaged Property...........9
1.8. Indemnity by Mortgagor.................................10
1.9. Insurance and Casualty.................................11
1.10. Advances, Etc., by Mortgagee...........................14
1.11. Escrow Requirements....................................15
1.12. Financial Reporting....................................16
1.13. Maintenance and Operation of Mortgaged Property........16
1.14. Condemnation...........................................16
1.15. Leasing of Mortgaged Property..........................18
1.16. Casualty to Mortgaged Property.........................20
1.17. Interest after Default.................................20
1.18. Due on Transfer........................................20
1.19. Costs of Litigation and Certain Proceedings............21
1.20. Late Charge............................................21
1.21. Trust Fund.............................................21
1.22. Charges for Tax Searches, Etc..........................21
1.23. Prepayment.............................................22
1.24. Restrictions Affecting Mortgaged Property..............22
1.25. Hazardous Substances...................................22
1.26. Further Assurances.....................................25
1.27. Notice to Mortgagee....................................25
1.28. Set-Off................................................25
1.29. Obligations Secured....................................26
Article II Events of Default and Remedies.........................26
2.1. Definition of Event of Default.........................26
2.2. Effect of Event of Default.............................29
2.3. Foreclosure Sale Implementation........................32
2.4. Collection of Debt.....................................33
2.5. Appointment of Receiver................................35
2.6. Possession by Mortgagee................................35
2.7. Remedies Cumulative....................................35
2.8. Right to Withdraw Proceeding, Etc......................36
(i)
Page
----
2.9. Waiver.................................................36
2.10. Use and Occupancy of Mortgaged Property................36
2.11. Mortgagee's Attorneys' Fees............................36
2.12. Effect of Mortgagor's Tender...........................36
2.13. Mortgagee's Failure to Allow Cure Period...............37
Article III Representations and Warranties.........................37
3.1. Title, Etc.............................................37
3.2. Compliance with Requirements, Etc......................37
3.3. Rent Roll..............................................38
3.4. Easements, Etc.........................................38
3.5. No Misrepresentations..................................38
3.6. Governmental Approvals.................................38
3.7. Approvals of Loan Documents............................38
3.8. Other Beneficiaries....................................38
3.9. Federal Law............................................38
3.10. Hazardous Substances...................................38
3.11. Split Tax Lots.........................................40
Article IV Miscellaneous..........................................40
4.1. Partial Invalidity.....................................40
4.2. Notices................................................40
4.3. Waiver of Notice.......................................40
4.4. Successors and Assigns.................................40
4.5. Usury Savings..........................................41
4.6. Counterparts...........................................41
4.7. Governing Law..........................................41
4.8. Written Amendments.....................................41
4.9. Actions, Approvals and Determinations..................41
4.10. Receipt of Copy........................................42
4.11. Modifications, Releases, Etc...........................42
4.12. Construction...........................................42
4.13. Non-Merger.............................................43
Article V Transfer Taxes.........................................43
Article VI Additional Provisions..................................44
6.1. Assignment of Leases and Rents.........................44
6.2. Type of Property.......................................44
6.3. Maximum Principal Indebtedness Secured.................44
6.4. Exculpation............................................44
6.5. Intentionally Omitted..................................46
6.6. Reduction of Mortgage Amount...........................46
6.7. Revolving Loan Mortgage Provisions.....................46
(ii)
