MORTGAGE AND SECURITY AGREEMENT
D- 750905
THIS MORTGAGE AND SECURITY AGREEMENT made as of December 14, 1995, by and
between COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation, having a
principal place of business at 000 X. Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000-0000, herein called Mortgagor, and PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY, an Iowa corporation, having its principal place of business and post
office address at 000 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000, herein called
Mortgagee,
WITNESSETH:
THAT Mortgagor is justly indebted to Mortgagee for money borrowed in the
principal sum of Thirteen Million One Hundred Fifty Thousand and No/100 Dollars
($13,150,000.00) evidenced by Mortgagor's promissory note (herein called the
Note) of even date herewith, made payable and delivered to Mortgagee, in which
Note Mortgagor promises to pay to Mortgagee the said principal sum or so much
thereof as may be advanced from time to time by Mortgagee, together with
interest at the rate, at the times, and in installments as in the Note provided,
until the entire principal and accrued interest have been paid, but in any
event, the unpaid balance (if any) remaining due on the Note shall be due and
payable on the 15th day of December, 1999 ("Maturity Date").
THAT Mortgagor has delivered this date, as security for the Note, deeds of
trust, mortgages or similar instruments (collectively, Other Mortgages )
necessary to grant a mortgage lien on those certain properties more particularly
described on Exhibit B attached hereto and made a part hereof ( Related
Premises ).
THAT the Mortgagor and Mortgagee intend for this mortgage and the Other
Mortgages to be of equal priority.
NOW, THEREFORE, to secure the payment of the said indebtedness in
accordance with the terms and conditions hereof and of the Note, and all
extensions, modifications and renewals thereof and the performance of the
covenants and agreements contained herein, and also to secure the payment of any
and all other indebtedness, including without limitation indebtedness arising
under the Other Mortgages, direct or contingent, that may now or hereafter
become owing from Mortgagor to Mortgagee, and in consideration of Ten Dollars in
hand paid, receipt of which is hereby acknowledged, Mortgagor does by these
presents give, grant, bargain, sell, alien, enfeoff, convey and confirm unto
Mortgagee, its successors and assigns forever, that certain real estate and all
of Mortgagor's estate, right, title and interest therein, located in the County
of Monmouth, State of New Jersey, more particularly described in Exhibit A
attached hereto and made a part hereof, which real estate, together with the
following described property, rights and interests, is collectively referred to
herein as the "Premises."
Together with Mortgagor's interest as lessor in and to all leases of the
said Premises, or any part thereof, heretofore or hereafter made and entered
into by Mortgagor during the life of this mortgage or any extension or renewal
hereof and all rents, issues, proceeds and profits accruing and to accrue from
the Premises (which are pledged primarily and on a parity with the real estate
and not secondarily).
Together with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, rights in trade
names, other rights, liberties and privileges thereof or in any way now or
hereafter appertaining, including homestead and any other claim at law or in
equity as well as any after-acquired title, franchise or license and the
reversion and reversions and remainder and remainders thereof.
Together with, the right in case of foreclosure hereunder of the
encumbered property for Mortgagee to take and use the name by which the
buildings and all other improvements situated on the Premises are commonly known
and the right to manage and operate the said buildings under any such name and
variants thereof.
Together with all right, title and interest of Mortgagor in any and all
buildings and improvements of every kind and description now or hereafter
erected or placed on the said real estate and all materials intended for
construction, reconstruction, alteration and repairs of such buildings and
improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the Premises immediately upon the delivery thereof
to the Premises, and all fixtures now or hereafter owned by Mortgagor and
attached to or contained in and used in connection with the Premises including,
but not limited to, all machinery, motors, elevators, fittings, radiators,
awnings, shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air-conditioning and sprinkler equipment and
fixtures and appurtenances thereto; and all items of furniture, furnishings,
equipment and personal property owned by Mortgagor used or useful in the
operation of the Premises; and all renewals or replacements thereof or articles
in substitution therefor, whether or not the same are or shall be attached to
said buildings or improvements in any manner; it being mutually agreed, intended
and declared that all the aforesaid property owned by Mortgagor and placed by it
on the real estate or used in connection with the operation or maintenance of
the Premises shall, so far as permitted by law, be deemed to form a part and
parcel of the real estate and for the purpose of this mortgage to be real estate
and covered by this mortgage, and as to any of the property aforesaid which does
not so form a part and parcel of the real estate or does not constitute a
"fixture" (as such term is defined in the Uniform Commercial Code) this mortgage
is hereby deemed to be, as well, a Security Agreement under the Uniform
Commercial Code for the purpose of creating hereby a security interest in such
property which Mortgagor hereby grants to Mortgagee as Secured Party. Mortgagor
agrees to execute any and all documents, including financing statements which
may be required to perfect the security interest granted hereby.
Together with all right, title and interest of Mortgagor, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Mortgagor, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.
Together with all funds now or hereafter held by Mortgagee under any
escrow security agreement or under any of the terms hereof, including but not
limited to funds held under the provisions of paragraph 4 hereof.
THIS IS A FIRST MORTGAGE.
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and
assigns forever, for the purposes and uses herein set forth.
Mortgagor represents that it is the absolute owner in fee simple of the
Premises described in Exhibit A, which Premises are free and clear of any liens
or encumbrances except for Permitted Exceptions (as hereinafter defined), and
except for taxes which are not yet due or delinquent. Permitted Exceptions , as
used in this mortgage means those matters approved by Mortgagee in the
Mortgagee s title insurance policy insuring the lien of this mortgage.
Mortgagor shall forever warrant and defend the title to the Premises against all
claims and demands of all persons whomsoever and will on demand execute any
additional instrument which may be required to give Mortgagee a valid first lien
on all of the Premises, except for Permitted Exceptions.
Mortgagor further represents that: (i) the Premises is not subject to any
casualty damage; (ii) except as disclosed in those certain Phase I Environmental
Reports conducted by Ecolsciences, Inc. and dated November 27, 1995 and November
28, 1995, respectively (collectively, the "Report"), there is no Hazardous
Material (as hereinafter defined) on the Premises, nor has any Hazardous
Material been discharged from the Premises or penetrated any surface or
subsurface rivers or streams crossing or adjoining the Premises or the aquifer
underlying the Premises; and (iii) Mortgagor has complied or caused the Premises
to comply with all statutes, laws, ordinances, rules and regulations of all
local, state or federal authorities having jurisdiction over the Premises or its
use relative to any Hazardous Material. "Hazardous Material" as used in this
mortgage means any hazardous or toxic material, substance, pollutant,
contaminant or waste which is defined by those or similar terms or is regulated
as such under any statute, law, ordinance, rule or regulation of any local,
state or federal authority having jurisdiction over the Premises or its use,
including but not limited to (a) the Federal Water Pollution Control Act (33
U.S.C. Section 1251) as amended; (b) the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et. seq.) as amended; (c) the Comprehensive
Environmental Response, Compensation and Liability Act, (42 U.S.C. Section
9601 et. seq.) as amended; (d) the Federal Clean Air Act (42 U.S.C. Section
7401 et. seq.) as amended; (e) the New Jersey Industrial Site Recovery Act,
P.L. 1993 c. 139 ( ISRA ), formerly the New Jersey Environmental Cleanup
Responsibility Act, N.J.S.A. 13:1K-6 et seq. ( ECRA ); (f) the New Jersey
Spill Compensation and Control Act, as amended; N.J.S.A. 58:10-23.11 et seq.
(the Spill Act ) and (g) the New Jersey Underground Storage of Hazardous
Substances Act, as amended, N.J.S.A. 58:10A-21 et seq. ( USTA ) (hereinafter
referred to collectively as "Environmental Laws") but shall not include
products typically sold by Lessee (hereinafter defined) in the ordinary
course of its business and supplies for cleaning and maintenance and standard
office supplies in commercially reasonable amounts provided, however, that such
items are incidental to the use of the Premises and are stored and used in
compliance with all Environmental Laws.
MORTGAGOR COVENANTS AND AGREES AS FOLLOWS:
1. Mortgagor shall
(a) pay each item of indebtedness secured by this mortgage when
due according to the terms hereof and of the Note;
(b) pay a late charge equal to four percent (4%) of any payment of
principal, interest or premium which is not paid on or before
the due date thereof to cover the expense involved in handling
such late payment;
(c) pay on or before the due date thereof any indebtedness which
may be secured by a lien or charge on the Premises (except for
construction liens, which are prohibited under paragraph 1(f)
hereof), and upon request of Mortgagee exhibit satisfactory
evidence of the discharge thereof;
(d) except as otherwise expressly permitted by the Lease (as
hereinafter defined), so long as the Leases are in full force
and effect (provided, however, if Lessees are obligated to
obtain the consent of Mortgagor, as landlord, then Mortgagee s
consent shall be required prior to such action being taken)
complete within a reasonable time the construction of any
building now or at any time in process of construction upon
the real estate;
(e) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) make no material alteration to the
Premises without the prior written consent of Mortgagee,
except such as are required by law or ordinance;
(f) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) remove or demolish no building or
other improvement at any time a part of the Premises, and
shall keep the Premises, including the buildings and
improvements, in good condition and repair, without waste, and
free from construction liens or other liens or claims for
liens and encumbrances not expressly subordinated to the lien
hereof;
(g) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) comply, and cause each lessee or
other user of the Premises to comply, with all requirements of
law and ordinance, and all rules and regulations, now or
hereafter enacted, by authorities having jurisdiction of the
Premises and the use thereof, all orders and directions of the
National Fire Protection Association or similar body, and all
covenants, conditions and restrictions of record pertaining to
the Premises, including the buildings and improvements, and
the use thereof;
(h) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) cause or permit no change to be
made in the general use of the Premises without Mortgagee's
prior written consent;
(i) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) initiate or acquiesce in no zoning
reclassification or material change in zoning without
Mortgagee's prior written consent;
(j) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) make or permit no use of the
Premises that could with the passage of time result in the
creation of any right of use, or any claim of adverse
possession or easement on, to or against any part of the
Premises in favor of any person or the public;
(k) except as otherwise expressly permitted by the Leases, so long
as the Leases are in full force and effect (provided, however,
if Lessees are obligated to obtain the consent of Mortgagor,
as landlord, then Mortgagee s consent shall be required prior
to such action being taken) subject to the provisions of
paragraph 5(c) hereof, promptly repair, restore or rebuild any
buildings or improvements now or hereafter a part of the
Premises which may become damaged or be destroyed by any cause
whatsoever, so that upon completion of the repair, restoration
and rebuilding of the buildings and improvements there will be
no liens of any nature arising out of the construction and the
Premises will be of substantially the same character and will
have a commercial value at least as great as the commercial
value thereof prior to the damage or destruction;
(l) not, directly or indirectly, due to assignment of beneficial
interest under a trust, partnership interest in a partnership,
or otherwise, cause or permit any sale, transfer or conveyance
of the Premises, including the sale, transfer or conveyance of
the Premises to Lessees (as hereinafter defined), or create,
suffer or permit any encumbrance or lien on the Premises other
than the lien hereof, the leases of the Premises assigned to
Mortgagee and other exceptions expressly referred to herein
(except for construction liens, which are prohibited under
paragraph 1(f) hereof), it being understood and agreed that
the indebtedness evidenced by the Note and its terms are
personal to Mortgagor and in accepting the same Mortgagee has
relied upon what it perceived as the willingness and ability
of Mortgagor to perform its obligations hereunder, under the
Note, and as lessor under leases of the Premises; Mortgagee
may consent to a sale, transfer, conveyance or encumbrance and
expressly waive this provision in writing to Mortgagor however
any such consent and waiver shall not constitute any consent
or waiver of this provision as to any sale, transfer,
conveyance or encumbrance other than that for which the
consent and waiver was expressly granted; Mortgagee's ability
to consent to any sale, transfer, conveyance or encumbrance
and waive this provision implies no standard of reasonableness
in determining whether or not such consent shall be granted
and the same may be based upon what Mortgagee solely deems to
be in its best interest; without limiting Mortgagee's right to
withhold its consent and waiver entirely, such consent and
waiver may be conditioned upon an increase in the rate of
interest under the Note and the imposition of other terms and
conditions thereunder or hereunder; any sale, transfer,
conveyance or encumbrance made, created or permitted in
violation of this provision shall be null and void and in
addition to the other rights and remedies available to
Mortgagee hereunder, Mortgagee shall have the option of
declaring the unpaid principal balance of the Note, together
with all accrued and unpaid interest, premium, if any and all
other sums and charges evidenced thereby or owing hereunder,
immediately due and payable;
(m) not cause or permit any Hazardous Material to exist on or
discharge from the Premises, and comply with all Environmental
Laws and promptly: (i) pay any claim against Mortgagor or the
Premises, (ii) remove any charge or lien upon the Premises,
and (iii) indemnify and hold Mortgagee harmless from any and
all loss or damage, resulting from any Hazardous Material that
exists on or is discharged from the Premises; provided,
however, that this indemnity does not apply to Hazardous
Material that exists on or is discharged from the Premises due
to acts or omissions occurring after Mortgagor or any person
or entity in any way related to Mortgagor no longer holds
title to or has any interest in the Premises;
(n) not cause or permit any Hazardous Material to exist on or
discharge from any property owned or used by Mortgagor which
would result in any charge or lien upon the Premises;
(o) notify Mortgagee of any Hazardous Material that exists on or
is discharged from the Premises within ten (10) days after
Mortgagor first has knowledge of such existence or discharge;
(p) if other than a natural person, do all things necessary to
preserve and keep in full force and effect its existence,
franchises, rights and privileges under the laws of the state
of its formation and, if other than its state of formation,
the state where the Premises is located;
(q) do all things necessary to preserve and keep in full force and
effect Mortgagee's title insurance coverage insuring the lien
of this mortgage as a first and prior lien, subject only to
the Permitted Exceptions and any other exceptions after the
date of this mortgage approved in writing by Mortgagee,
including without limitation, delivering to Mortgagee not less
than 30 days prior to the effective date of any rate
adjustment, modification or extension of the Note any new
policy or endorsement which may be required to assure
Mortgagee of such continuing coverage;
(r) not directly or indirectly, commit waste;
(s) pay or cause any lessee to pay all utilities on the Premises
prior to becoming delinquent; and
(t) at all times cause its interest in the Premises to be leased
to (i) Raceway Village, L.T., Inc., a New Jersey corporation
d/b/a Linens N Things ( Linens ) under a lease dated December
15, 1993, and any and all amendments and supplements (the
Linens Lease) and (ii) Xxxxxxxx s of Freehold, N.J., Inc.
( Marshalls ) under a lease dated December 15, 1993 and any
and all amendments and supplements (the Xxxxxxxx Lease )
(Linens and Marshalls are herein collectively and
individually, as the context may require, referred to as
Lessee and Linens Lease and Marshalls Lease are herein
collectively and individually, as the context may require,
referred to as the Lease ) and shall punctually perform all
obligations, covenants and agreements required to be performed
as lessor under the Lease in accordance therewith and do all
things necessary to compel performance by Lessee of all its
obligations, covenants and agreements under the Lease and the
Lessee Estoppel Certificate executed by Lessee and delivered
to Mortgagee in connection with the delivery of this mortgage
and funding of the Note (the Estoppel ). The term Lease
used herein shall include any future lease of the Premises
approved by Mortgagee and the term Lessee shall include any
future lessee of a future lease approved by Mortgagee.
2. (a) Mortgagor shall pay or cause to be paid when due and before
any penalty attaches or interest accrues all general taxes,
special taxes, assessments (including assessments for benefits
from public works or improvements whenever begun or
completed), water charges, sewer service charges, CAM charges,
if any, vault or space charges and all other like charges
against or affecting the Premises or against any property or
equipment located on the Premises, or which might become a
lien on the Premises, and shall, within 10 days following
Mortgagee's request, furnish to Mortgagee a duplicate receipt
of such payment. If any such tax, assessment or charge may
legally be paid in installments, Mortgagor may, at its option,
pay such tax, assessment or charge in installments.
(b) To prevent default hereunder Mortgagor shall pay or cause to
be paid in full, under protest in the manner provided by law,
any tax, assessment or charge which Mortgagor may desire to
contest; provided, however, that
(i) if contest of any tax, assessment or charge may be made
without the payment thereof, and
(ii) such contest shall have the effect of preventing the
collection of the tax, assessment or charge so contested
and the sale or forfeiture of the Premises or any part
thereof or any interest therein to satisfy the same,
then Mortgagor may at its option and in its discretion and
upon the giving of written notice to Mortgagee of its intended
action and upon the furnishing to Mortgagee of such security
or bond as Mortgagee may require, contest any such tax,
assessment or charge in good faith and in the manner provided
by law. All costs and expenses incidental to such contest
shall be paid by Mortgagor. In the event of a ruling or
adjudication adverse to Mortgagor, Mortgagor shall promptly
pay such tax, assessment or charge. Mortgagor shall indemnify
and save harmless the Mortgagee and the Premises from any loss
or damage arising from such contest and shall, if necessary to
prevent sale, forfeiture or any other loss or damage to the
Premises or to the Mortgagee, pay such tax, assessment or
charge or take whatever action is necessary to prevent any
sale, forfeiture or loss.
3. (a) Mortgagor shall at all times keep in force (i) property
insurance insuring all buildings and improvements which now
are or hereafter become a part of the Premises for perils
covered by an all-risk or a causes of loss-special form
insurance policy with an ordinance or law coverage endorsement
containing both replacement cost and agreed amount
endorsements or options; (ii) commercial general liability
insurance naming Mortgagee as additional insured protecting
Mortgagor and Mortgagee against liability for bodily injury or
property damage occurring in, on or adjacent to the Premises,
with a combined single limit of not less than One Million
Dollars ($1,000,000.00) per occurrence with not less than a
Five Million Dollar ($5,000,000.00) aggregate limit and excess
umbrella liability insurance of not less than Twenty Five
Million Dollars ($25,000,000.00); (iii) boiler and machinery
insurance if the property has a boiler or is an office
building; (iv) rental value insurance for the perils specified
herein for one hundred percent (100%) of the rents (including
operating expenses, real estate taxes, assessments and
insurance costs which are lessee's liability) for a period of
twelve (12) months; and (v) insurance against all other
hazards as may be reasonably required by Mortgagee, including,
without limitation, insurance against loss or damage by flood
and earthquake.
(b) All insurance shall be in form, content and amounts approved
by Mortgagee and written by an insurance company or companies
rated A, class size X or better in the most current issue of
Best's Insurance Reports and which is licensed to do business
in the state in which the Premises are located and domiciled
in the United States or a governmental agency or
instrumentality approved by Mortgagee. The policies for such
insurance shall have attached thereto standard mortgagee
clauses in favor of and permitting Mortgagee to collect any
and all proceeds payable thereunder and shall include a 30 day
(except for nonpayment of premium, in which case, a 10 day)
notice of cancellation clause in favor of Mortgagee. All
policies or certificates of insurance shall be delivered to
and held by Mortgagee as further security for the payment of
the Note and any other obligations arising under the Loan
Documents, with evidence of renewal coverage delivered to
Mortgagee at least 30 days before the expiration date of any
policy. Not more frequently than once every three years, if
Mortgagee has a reasonable belief that the replacement cost
value is not correct, it shall notify Mortgagor and Mortgagor,
at its expense, will furnish Mortgagee with an appraisal of
the full insurable replacement cost value of the Premises,
made by fire insurance appraisers satisfactory to Mortgagee
and fire insurance companies generally. Mortgagor shall not
carry separate insurance, concurrent in kind or form and
contributing in the event of loss, with any insurance required
herein.
Notwithstanding anything hereinabove to the contrary,
Mortgagee agrees to accept the coverage amounts and carriers
provided to Mortgagee as of the date hereof. In the event of
a default under the Loan Documents or Lease or a decline in
the rating of an approved carrier then Mortgagee shall have
the right to require Mortgagor to obtain the insurance
required pursuant to this paragraph 3.
4. (a) Mortgagor shall, upon request of Mortgagee, deposit with and
pay to Mortgagee, on each payment date specified in the Note ,
a sum equivalent to: (1) the taxes and assessments assessed
or levied against and next due on the Premises divided by the
number of payments that will become due and payable under the
Note before the date when such taxes and assessments will
become due and payable, plus (2) the premiums that will next
become due and payable for insurance required by this mortgage
to be furnished by Mortgagor divided by the number of payments
that will become due and payable under the Note before the
date when such premiums will become due and payable.
Mortgagee shall use such deposits to pay the taxes,
assessments and premiums when the same become due. Mortgagee
shall not be liable for interest on such deposits. Mortgagor
shall procure and deliver to Mortgagee, in advance, statements
for such charges. If the total payments made by Mortgagor
under this paragraph plus interest, if any, accrued thereon
exceed the amount of payments actually made by Mortgagee for
taxes, assessments and insurance premiums, such excess shall
be credited by Mortgagee on subsequent deposits to be made by
Mortgagor. If, however, the deposits are insufficient to pay
the taxes, assessments and insurance premiums when the same
shall be due and payable, Mortgagor will pay to Mortgagee any
amount necessary to make up the deficiency, five (5) business
days before the date when payment of such taxes, assessments
and insurance premiums shall be due. If at any time Mortgagor
shall tender to Mortgagee, in accordance with the provisions
of the Note secured by this mortgage, full payment of the
entire indebtedness represented thereby, Mortgagee shall, in
computing the amount of such indebtedness, credit to the
account of Mortgagor any balance remaining in the funds
accumulated and held by Mortgagee under the provisions of this
paragraph. If there is a default under any of the provisions
of this mortgage resulting in a public sale of the Premises,
or if Mortgagee otherwise acquires the Premises after default,
Mortgagee shall apply, at the time of commencement of such
proceedings, or at the time the Premises is otherwise
acquired, the balance then remaining in the funds accumulated
under this paragraph as a credit on the interest accrued and
unpaid and the balance to the principal then remaining unpaid
under the Note. The provisions of this paragraph shall not
affect the enforceability of the covenants relating to taxes,
assessments and insurance premiums provided for in this
mortgage except to the extent that obligations for the same
have been actually met by compliance with this paragraph.
(b) Any funds held under this paragraph shall not constitute any
deposit or account of the Mortgagor or moneys to which the
Mortgagor is entitled upon demand, or upon the mere passage of
time, or sums to which Mortgagor is entitled to any interest
or crediting of interest by virtue of Mortgagee's mere
possession of such deposits. Mortgagee shall not be required
to segregate such deposits or hold such deposits in any
separate account for the benefit of Mortgagor. Mortgagee may
hold such deposits in its general account or any other account
and may commingle such deposits with any other moneys of
Mortgagee or moneys which Mortgagee is holding on behalf of
any other person or entity. Mortgagor hereby consents to the
investment of such deposits by Mortgagee as outlined herein.
(c) Notwithstanding anything hereinabove to the contrary, so long
as the Lease is in full force and effect and there are no
defaults under the Lease, this Mortgage, the Note or any other
instrument securing the Note, Mortgagor shall not be obligated
to make the deposits required by this Section 4.
5. In the event of any damage to or destruction of the buildings or
improvements which are a part of the Premises:
(a) Mortgagor will immediately notify Mortgagee thereof in the
manner provided in this mortgage for the giving of notices.
Mortgagee may in its discretion (and it is hereby authorized
to) either settle and adjust any claim under such insurance
policies, or allow Mortgagor to agree with the insurance
company or companies on the amount to be paid upon the loss.
In either case, the proceeds shall be paid to Mortgagee and
Mortgagee is authorized to collect and to give receipts
therefor. In the event Mortgagee elects to either settle or
adjust any claim under such insurance policies, and provided
there is no Event of Default or event which with the passage
of time or notice or both would constitute an Event of Default
which has occurred and is continuing, Mortgagor shall have the
right to participate in said settlement or adjustment;
provided, however, that any settlement or adjustment shall be
subject to the written approval of Mortgagee.
(b) Such proceeds, after deducting therefrom any expenses incurred
in the collection thereof, including reasonable attorneys'
fees and costs, shall be applied at the option of Mortgagee
either to the cost of rebuilding and restoring the buildings
and improvements or in reduction of the indebtedness secured
hereby whether or not then due and payable, provided however,
that if no Event of Default has occurred and Mortgagee has not
otherwise previously accelerated the whole or any part of the
indebtedness secured hereby, such reduction shall be without
Make Whole Premium. Any excess proceeds remaining after said
indebtedness is fully paid shall be promptly remitted to
Mortgagor.
(c) Regardless of the cause of the damage or destruction or the
availability or sufficiency of insurance proceeds until all
indebtedness secured hereby shall be fully paid, Mortgagor
shall be obligated to repair, restore and rebuild any
buildings or improvements so damaged or destroyed, provided
however, that if any insurance proceeds have been paid to
Mortgagee under any insurance policies maintained by Mortgagor
under the provisions of Paragraph 3 hereof, Mortgagor shall be
so obligated only if Mortgagee elects to apply such proceeds
to the cost of rebuilding and restoration. Repair and
restoration of the buildings and improvements shall be
commenced promptly after the occurrence of the loss and shall
be prosecuted to completion diligently, and the buildings and
improvements shall be so restored and rebuilt as to be of at
least equal value and substantially the same character as
prior to such damage and destruction. In the event the
estimated costs of rebuilding and restoration exceed 25% of
the indebtedness then remaining unpaid as secured hereby, the
drawings and specifications pertaining to such rebuilding and
restoration shall be subject to the prior written approval of
Mortgagee.
(d) In the event that Mortgagor is to be reimbursed out of the
insurance proceeds, such proceeds shall be made available from
time to time upon the furnishing to Mortgagee of satisfactory
evidences of the estimated cost of completion thereof and such
architect's certificates, waivers of lien, contractor's sworn
statements, and other evidence of cost and of payment and of
the continued priority of the lien hereof over any potential
liens of mechanics and materialmen as Mortgagee may require
and approve. No payment made by Mortgagee prior to the final
completion of the work shall, together with all payments
theretofore made, exceed 90% of the value of the work
performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least
sufficient to pay for the cost of completion of the work free
and clear of liens. Any proceeds remaining after payment of
the cost of rebuilding and restoration shall, at the option of
Mortgagee, either be applied in reduction of the indebtedness
secured hereby, provided, however, that if no Event of Default
has occurred and Mortgagee has not otherwise previously
accelerated the whole or any part of the indebtedness secured
hereby, such reduction shall be without Make Whole Premium, or
paid to Mortgagor.
(e) Should such damage or destruction occur after foreclosure or
sale proceedings have been instituted, the proceeds of any
such insurance policy or policies, if not applied in
rebuilding or restoration of the buildings or improvements,
shall be used to pay the indebtedness, then due and owing in
the event of a non-judicial sale or the amount due in
accordance with any decree of foreclosure or deficiency
judgment that may be entered in connection with such
proceedings, and the balance, if any, shall be paid to the
owner of the equity of redemption if he shall then be entitled
to the same, or otherwise as any court having jurisdiction may
direct. Following any foreclosure sale, or other sale of the
Premises by Mortgagee pursuant to the terms hereof, Mortgagee
is authorized without the consent of Mortgagor to assign any
and all insurance policies to the purchaser at the sale and to
take such other steps as Mortgagee may deem advisable to cause
the interests of such purchaser to be protected by any of such
insurance policies.
(f) Notwithstanding anything hereinabove to the contrary, so long
as the Lease is in full force and effect, there are no
defaults by Mortgagor, as landlord, under the Lease, which are
not cured within any applicable grace period, and there is no
Event of Default under this mortgage, all proceeds shall be
applied and any obligation to reconstruct and repair shall be
in accordance with the terms of the Lease. In the event the
Lease expressly permits the Lessee to reconstruct and repair
the Premises without giving approval rights to Mortgagor, as
landlord, or to Mortgagee, then Mortgagee s approval shall not
be required. If the Lease requires Lessee to obtain the
approval of Mortgagor, as landlord or of Mortgagee prior to
reconstructing and repairing the Premises or the Mortgagor is
obligated to reconstruct and repair the Premises, the
Mortgagee s prior written approval shall be required.
6. Mortgagor hereby assigns, transfers and sets over to Mortgagee the
entire proceeds of any award or claim for damage to any of the
Premises taken or damaged under the power of eminent domain or by
condemnation. In the event of the commencement of any eminent
domain or condemnation proceeding affecting the Premises:
(a) Mortgagor shall notify Mortgagee thereof in the manner
provided in this mortgage for the giving of notices.
Mortgagee may participate in such proceeding, and Mortgagor
shall deliver to Mortgagee all documents requested by it to
permit such participation.
(b) Mortgagee may elect to apply the proceeds of the award upon or
in reduction of the indebtedness secured hereby whether or not
then due and payable, provided however, that if no Event of
Default has occurred and Mortgagee has not otherwise
previously accelerated the whole or any part of the
indebtedness secured hereby, such reduction shall be without
Make Whole Premium, or require Mortgagor to restore or
rebuild, in which event the proceeds shall be held by
Mortgagee and used to reimburse Mortgagor for the cost of
restoring and rebuilding all buildings and improvements in
accordance with plans and specifications to be submitted to
and approved by Mortgagee.
(c) In the event Mortgagee elects to reimburse Mortgagor for the
costs of restoring and rebuilding the Premises, then the
proceeds of the award shall be paid out in the same manner as
provided in this mortgage for the payment of insurance
proceeds in reimbursement of the costs of rebuilding and
restoration. If the amount of such award is insufficient to
cover the cost of restoring and rebuilding, Mortgagor shall
pay such cost in excess of the award before being entitled to
reimbursement out of the award. Any proceeds remaining after
payment of cost of restoring and rebuilding shall, at the
option of Mortgagee, either be applied on account of the
indebtedness secured hereby, provided, however, that if no
Event of Default has occurred and Mortgagee has not otherwise
previously accelerated the whole or any part of the
indebtedness secured hereby, such reduction shall be without
Make Whole Premium, or be paid to Mortgagor.
(d) Notwithstanding anything hereinabove to the contrary, so long
as the Lease is in full force and effect, there are no
defaults by Mortgagor, as landlord, under the Lease, which are
not cured within any applicable grace period, and there is no
Event of Default under this mortgage, all proceeds of the
award shall be applied and all reconstruction and repair shall
be undertaken in accordance with the terms of the Lease. In
the event the Lease permits Lessee to reconstruct and repair
the Premises without approval rights given to Mortgagor, as
landlord, or to Mortgagee, the Mortgagee s approval shall not
be required. If the Lease expressly requires Lessee to obtain
the approval of Mortgagor, as landlord, or of Mortgagee prior
to reconstructing and repairing the Premises, or the Mortgagor
is obligated to reconstruct and repair the Premises, then
Mortgagee s prior written approval shall be required.
7. If by the laws of the United States of America or of any state or
governmental subdivision having jurisdiction of Mortgagor or of the
Premises or of the transaction evidenced by the Note and this
mortgage, any tax or fee is due or becomes due in respect of the
issuance of the Note hereby secured or the making, recording and
registration of this mortgage, except for Mortgagee's income tax,
Mortgagor covenants and agrees to pay such tax or fee in the manner
required by such law, and to hold harmless and indemnify Mortgagee,
its successors and assigns, against any liability incurred by reason
of the imposition of any such tax or fee.
8. In the event of the enactment after the date hereof of any
applicable law deducting from the value of land for the purpose of
taxation any lien thereon, or imposing upon Mortgagee the payment of
the whole or any part of the taxes or assessments or charges or
liens herein required to be paid by Mortgagor, or changing in any
way the laws relating to the taxation of mortgages or debts secured
by mortgages or Mortgagee's interest in the Premises, or the manner
of collection of taxes, so as to affect this mortgage or the debt
secured hereby or the holder thereof, except for Mortgagee's income
tax, then and in any such event Mortgagor shall, upon demand by
Mortgagee, pay such taxes or assessments or reimburse Mortgagee
therefor; provided, however, that, if in the opinion of counsel for
Mortgagee (a) it might be unlawful to require Mortgagor to make such
payment or (b) the making of such payment might be construed as
imposing a rate of interest beyond the maximum permitted by law,
then and in such event Mortgagee may elect to declare all of the
indebtedness secured hereby to be and become due and payable 60 days
from the giving of written notice of such election to Mortgagor,
provided, however, that if no Event of Default has occurred and
Mortgagee has not otherwise previously accelerated the whole or any
part of the indebtedness secured hereby, such reduction shall be
without Make Whole Premium.
9. (a) Upon the occurrence of any Event of Default under this
mortgage, Mortgagee may, but need not, make any payment or
perform any act herein required of Mortgagor, in any form and
manner deemed expedient and may, but need not, make full or
partial payments of principal or interest on prior
encumbrances, if any, and purchase, discharge, compromise or
settle any tax lien or other prior lien or title or claim
thereof, or redeem from any tax sale or forfeiture affecting
said Premises, or contest any tax or assessment. All moneys
paid for any of the purposes herein authorized and all
reasonable expenses paid or incurred in connection therewith,
including reasonable attorneys' fees and costs and reasonable
attorneys' fees and costs on appeal, and any other money
advanced by Mortgagee to protect the Premises and the lien
hereof, shall be so much additional indebtedness secured
hereby and shall become immediately due and payable without
notice and with interest thereon at the Default Rate (as
hereinafter defined) from the date of expenditure or advance
until paid.
(b) In making any payment hereby authorized relating to taxes or
assessments or for the purchase, discharge, compromise or
settlement of any prior lien, Mortgagee may make such payment
according to any xxxx, statement or estimate secured from the
appropriate public office without inquiry into the accuracy
thereof or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof or without
inquiry as to the validity or amount of any claim for lien
which may be asserted.
10. If one or more of the following events (herein called "Events of
Default") shall have occurred:
(a) default shall be made in the payment of any principal,
interest or premium, utilities, taxes or assessments referred
to in this mortgage or insurance premiums for the insurance
required pursuant to this mortgage when due under the Note or
this mortgage, and such default shall have continued for 10
days; or
(b) Mortgagor shall be dissolved, or a decree or order for relief
shall be entered by a court having jurisdiction in respect of
Mortgagor in a voluntary or involuntary case under the
Federal Bankruptcy Code as now or hereafter constituted, or
Mortgagor shall file a voluntary petition in bankruptcy or
for reorganization or an arrangement or any composition,
readjustment, liquidation, dissolution or similar relief
pursuant to any similar present or future state or federal
bankruptcy law, or shall be adjudicated a bankrupt or become
insolvent, or shall commit any act of bankruptcy as defined in
such law, or shall take any action in furtherance of any of
the foregoing; or
(c) a petition or answer shall be filed proposing the adjudication
of Mortgagor as a bankrupt or its reorganization or
arrangement, or any composition, readjustment, liquidation,
dissolution or similar relief with respect to it pursuant to
any present or future federal or state bankruptcy or similar
law, and Mortgagor shall consent to the filing thereof, or
such petition or answer shall not be discharged within 60 days
after the filing thereof; or
(d) by the order of a court of competent jurisdiction, a receiver,
trustee or liquidator of the Premises or any part thereof or
of Mortgagor or of substantially all of its assets shall be
appointed and shall not be discharged or dismissed within 60
days after such appointment, or if Mortgagor shall consent to
or acquiesce in such appointment; or
(e) with respect to the matters not described in the other
subparagraphs of this paragraph 10, default shall be made in
the due observance or performance of any covenant, condition
or agreement of the Mortgagor contained in this mortgage, the
Note and Assignment of Lease and Rents of even date herewith
from Mortgagor to Mortgagee or in any other instrument or
agreement by which the Note is secured (the "Loan Documents"),
and such default shall have continued for 30 days after notice
specifying such default is given by Mortgagee to Mortgagor; or
(f) any representation or warranty made by Mortgagor in the Loan
Documents shall prove to be untrue or inaccurate in any
material respect; or
(g) the failure of Mortgagor to give notice to Mortgagee in the
manner provided in this mortgage for the giving of notices
within 30 days after the death of any natural person who is
personally liable for the payment of the indebtedness secured
hereby or any part thereof, whether such person is the
Mortgagor or any indemnitor or guarantor and whether or not
such person has executed the Note or this mortgage;
(h) the death of any natural person who is personally liable for
the payment of the indebtedness secured hereby or any part
thereof, whether such person is the Mortgagor or any
indemnitor or guarantor and whether or not such person has
executed the Note or this mortgage or the death of any general
partner of Mortgagor; or
(i) an Event of Default under any mortgage or deed of trust made
by Mortgagor in favor of Mortgagee encumbering a Related
Premises;
(j) amendment, modification or termination by Mortgagor of the
Lease without Mortgagee s prior written consent; or
(k) default by Mortgagor under the Lease and (a) with respect to a
non-monetary obligation, either (i) Mortgagor shall not have
commenced cure thereof within five (5) days following receipt
of notice from Lessee, (ii) Mortgagor shall have failed to
proceed diligently to complete said cure within the time
allowed for such cure under the terms of the Lease, or (iii)
Mortgagor shall have failed to provide Mortgagee with weekly
progress reports of its efforts to effect said cure, and (b)
with respect to a monetary obligation, Mortgagor shall have
failed to make the payment required to effect the cure of said
default no later than four (4) days prior to the last day
allowed for such cure under the terms of the Lease and
Mortgagor has failed to provide Mortgagee with evidence of
said payment.
then, in each and every such case, the whole of said principal sum
hereby secured shall, at the option of the Mortgagee and without
further notice to Mortgagor, become immediately due and payable
together with accrued interest thereon and a Make Whole Premium
calculated in accordance with the provisions hereof, and whether or
not Mortgagee has exercised said option, interest shall accrue on
the entire principal balance and any interest or premium then due,
at the Default Rate until fully paid or if Mortgagee has not
exercised said option, for the duration of any Event of Default.
If any default under "(e)" above shall be of such nature that it
cannot be cured or remedied within 30 days, Mortgagor shall be
entitled to a reasonable period of time to cure or remedy such Event
of Default, provided Mortgagor commences the cure or remedy thereof
within the 30 day period following the giving of notice and
thereafter proceeds with diligence to complete such cure or remedy.
11. Mortgagor agrees that if Mortgagee accelerates the whole or any part
of the principal sum hereby secured, or applies any proceeds as if
such application had been made as a result of such acceleration,
pursuant to the provisions hereof, Mortgagor waives any right to
prepay the principal sum hereby secured in whole or in part without
premium and agrees to pay, as yield maintenance protection and not
as a penalty, a "Make Whole Premium," except as otherwise provided
herein.
The "Make Whole Premium" shall be the greater of (a) one percent
(1%) of the principal amount to be prepaid, or (b) the excess, if
any, of
(i) the aggregate present value as of the date of payment or
prepayment noticed as set forth above (hereinafter, the
"Payment Date") of each dollar of principal being paid
or prepaid (taking into account the application of such
prepayment as set forth herein) and the amount of
interest (exclusive of interest accrued to the Payment
Date) that would have been payable in respect of such
dollar of principal being paid or prepaid if such
payment or prepayment had not been made, determined by
discounting such amounts monthly at a rate which is
equal to the "Treasury Rate" from the due date of this
Note, plus fifty (50) basis points, over
(ii) 100% of the principal amount being paid or prepaid.
The "Treasury Rate" will be equal to the arithmetic mean of the
yields to maturity converted to a monthly equivalent of United
States Treasury obligations with a constant maturity (as compiled by
and published in the United States Federal Reserve Bulletin [H.R.
15] (hereinafter "H.R. 15") or its successor publication for each of
the two weeks immediately preceding the Payment Date) most nearly
equal to the remaining "Weighted Average Life to Maturity" of this
Note as of the Payment Date. If the yields referred to in the
preceding sentence shall not have been so published, the yields
corresponding to the Payment Date shall be calculated on the basis
of the arithmetic mean of the arithmetic means of the secondary
market ask rates, as of approximately 3:30 P.M., New York City time,
on the last business days of each of the two weeks preceding the
Payment Date, for the actively traded U.S. Treasury security or
securities with a maturity or maturities most closely corresponding
to the "Weighted Average Life to Maturity", as reported by three
primary United States Government securities dealers in New York City
of national standing selected in good faith by the holder of this
Note. If no maturity exactly corresponding to such remaining
"Weighted Average Life to Maturity" should appear therein, yields
for the next longer and the next shorter published maturities shall
be calculated pursuant to the foregoing sentence and the Treasury
Rate shall be interpolated from such yields on a straight-line basis
(rounding to the nearest month).
The "Weighted Average Life to Maturity" with respect to this Note
means, at the Payment Date, the number of years obtained by dividing
the "Remaining Dollar-years" of this Note by the outstanding
principal amount hereof. "Remaining Dollar-years" means the sum of
the product obtained by multiplying (A) the amount of each then
remaining required principal repayment (including repayment of any
principal at the due date of this Note) by (B) the number of years
(rounded to the nearest one-twelfth) which will elapse between the
Payment Date and the date such required payment is due.
12. Upon the occurrence of any Event of Default, in addition to any
other rights or remedies provided in the Loan Documents, at law, in
equity or otherwise, Mortgagee shall have the right to foreclose the
lien hereof, and to the extent permitted herein and by applicable
law to sell the Premises by sale independent of the foreclosure
proceedings. In any suit to foreclose the lien hereof, and in any
sale of the Premises, there shall be allowed and included as
additional indebtedness payable by Mortgagor to Mortgagee and
secured hereby all expenditures and expenses which may be paid or
incurred by or on behalf of Mortgagee for attorneys' fees and costs,
including attorneys' fees and costs on appeal, appraisers' fees,
expenditures for documentary and expert evidence, stenographer's
charges, publication and advertising costs, survey costs,
environmental audits and costs (which may be estimated as to items
to be expended after the entry of any decree) of procuring all such
abstracts of title, title searches and examinations, title insurance
policies, Torrens certificates and similar data and assurances with
respect to title as Mortgagee deems reasonably necessary either to
prosecute such suit or to consummate such sale or to evidence to
bidders at any sale the true condition of the title to or the value
of the Premises.
13. The proceeds of any foreclosure sale, or other sale of the Premises
in accordance with the terms hereof or as permitted by law, shall be
distributed and applied in the following order of priority: First,
to the payment of all costs and expenses incident to the foreclosure
and/or sale proceedings, including all items as are mentioned in any
preceding or succeeding paragraph hereof; second, to the payment of
all other items which under the terms hereof constitute secured
indebtedness in addition to that evidenced by the Note, with
interest thereon as herein provided; third, to the payment of all
principal and accrued interest remaining unpaid on the Note; fourth,
any surplus to the Mortgagor, its successors or assigns, as their
rights may appear.
14. During the continuance of any Event of Default, Mortgagor shall
forthwith upon demand of Mortgagee surrender to Mortgagee possession
of the Premises, and Mortgagee shall be entitled to take actual
possession of the Premises or any part thereof personally or by its
agents or attorneys, and Mortgagee in its discretion may, with or
without force and with or without process of law, enter upon and
take and maintain possession of all or any part of the Premises
together with all documents, books, records, papers and accounts of
the Mortgagor or the then owner of the Premises relating thereto,
and may exclude Mortgagor, its agents or assigns wholly therefrom,
and may as attorney-in-fact or agent of the Mortgagor, or in its own
name as Mortgagee and under the powers herein granted:
(a) hold, operate, manage or control the Premises and conduct the
business, if any, thereof, either personally or by its agents,
and with full power to use such measures, legal or equitable,
as in its discretion it deems proper or necessary to enforce
the payment or security of the income, rents, issues and
profits of the Premises, including actions for the recovery of
rent, actions in forcible detainer and actions in distress for
rents, hereby granting full power and authority to exercise
each and every of the rights, privileges and powers herein
granted at any and all times hereafter, without notice to
Mortgagor;
(b) cancel or terminate any lease or sublease for any cause or on
any ground which would entitle Mortgagor to cancel the same;
(c) elect to cancel any lease or sublease made subsequent to this
mortgage or subordinated to the lien hereof unless this
mortgage has specifically been made subordinate to such lease
or sublease;
(d) extend or modify any then existing leases and make new leases,
which extensions, modifications or new leases may provide for
terms to expire, or for options to lessees to extend or renew
terms to expire, beyond the Maturity Date of the Note and the
issuance of a deed or deeds to a purchaser or purchasers at a
foreclosure sale, it being understood and agreed that any such
leases, and the options or other such provisions to be
contained therein, shall be binding upon Mortgagor and all
persons whose interests in the Premises are subject to the
lien hereof and shall be binding also upon the purchaser or
purchasers at any foreclosure sale, notwithstanding any
redemption from sale, discharge of the indebtedness secured
hereby, satisfaction of any foreclosure decree, or issuance of
any certificate of sale or deed to any purchaser;
(e) make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and
improvements to the Premises as it may deem judicious, insure
and reinsure the same and all risks incidental to Mortgagee's
possession, operation and management thereof, and receive all
income, rents, issues and profits.
Mortgagee shall not be obligated to perform or discharge, nor does
it hereby undertake to perform or discharge, any obligation, duty or
liability under any lease, and the Mortgagor shall and does hereby
agree to indemnify and to hold Mortgagee harmless of and from all
liability, loss or damage which it might incur under said leases or
under or by reason of the assignment thereof, and of and from any
and all claims or demands whatsoever which may be asserted against
it by reason of any alleged obligations or undertakings on its part
to perform or discharge any of the terms, covenants or agreements
contained in said leases, except if caused by Mortgagee s gross
negligence or willful misconduct. Should Mortgagee incur any such
liability, loss or damage under any of said leases, or under or by
reason of the assignment thereof, or in the defense of any claims or
demands, the amount thereof, including costs, expenses and
reasonable attorneys' fees and costs, including reasonable
attorneys' fees and costs on appeal, shall be secured hereby and
Mortgagor shall reimburse Mortgagee therefor immediately upon
demand, together with interest at the Default Rate from the date of
payment by Mortgagee to the date of reimbursement.
15. Mortgagee in the exercise of the rights and powers hereinabove
conferred upon it shall have the full power to use and apply the
avails, rents, issues and profits of the Premises to the payment of
or on account of the following, at the election of Mortgagee and in
such order as Mortgagee may determine:
(a) to the payment of the expenses of operating the Premises,
including cost of management and leasing thereof (which shall
include reasonable compensation to Mortgagee and its agent or
agents if management is delegated to an agent or agents, and
shall also include lease commissions and other compensation
and expenses of seeking and procuring tenants and entering
into leases), established claims for damages, if any, and
premiums on insurance as hereinabove authorized;
(b) to the payment of taxes and special assessments now due or
which may hereafter become due on the Premises;
(c) to the payment of all repairs, decorating, renewals,
replacements, alterations, additions, betterments and
improvements of the Premises and of placing the Premises in
such condition as will in the judgment of Mortgagee make it
readily rentable; and/or
(d) to the payment of any principal, interest or other
indebtedness secured hereby or any deficiency which may result
from any foreclosure sale.
16. During the continuance of any Event of Default under this mortgage,
Mortgagee may apply to any court having jurisdiction for the
appointment of a receiver of the Premises. Such appointment may be
made either before or after sale, without notice, without regard to
the solvency or insolvency of Mortgagor at the time of application
for such receiver and without regard to the then value of the
Premises or the adequacy of Mortgagee's security. Mortgagee or any
holder of the Note may be appointed as such receiver. The receiver
shall have power to collect the rents, issues and profits of the
Premises during the pendency of any foreclosure proceedings and, in
case of a sale, during the full redemption period, if any, as well
as during any further times when Mortgagor, except for the
intervention of such receiver, would be entitled to collect such
rents, issues and profits. In addition, the receiver shall have all
other powers which shall be necessary or are usual in such cases for
the protection, possession, control, management and operation of the
Premises during the whole of said period. The court from time to
time may authorize the receiver to apply the net income in his hands
at Mortgagee's election and in such order as Mortgagee may determine
in payment in full or in part of:
(a) principal, interest and all other indebtedness secured hereby
or provided by any decree foreclosing this mortgage, or any
tax, special assessment or other lien which may be or become
superior to the lien hereof or of such decree, provided such
application is made prior to foreclosure sale; and
(b) the deficiency in case of a sale and deficiency.
17. (a) Mortgagor agrees that all reasonable costs, charges and
expenses, including reasonable attorneys' fees, incurred or
expended by Mortgagee arising out of or in connection with any
action, proceeding or hearing, legal, equitable or
quasi-legal, including the preparation therefor and any appeal
therefrom, in any way affecting or pertaining to this
mortgage, the Note or the Premises, shall be promptly paid by
Mortgagor. All such sums not promptly paid by Mortgagor shall
be added to the indebtedness secured hereby and shall bear
interest at the Default Rate from the date of such advance and
shall be due and payable on demand.
(b) Mortgagor hereby agrees that upon the occurrence of an Event
of Default and the acceleration of the principal sum secured
hereby pursuant to this mortgage, to the full extent that such
rights can be lawfully waived, Mortgagor hereby waives and
agrees not to insist upon, plead, or in any manner take
advantage of, any notice of acceleration, any stay, extension,
exemption, homestead, marshaling or moratorium law or any law
providing for the valuation or appraisement of all or any part
of the Premises prior to any sale or sales thereof under any
provision of this mortgage or before or after any decree,
judgment or order of any court or confirmation thereof, or
claim or exercise any right to redeem all or any part of the
Premises so sold and hereby expressly waives to the full
extent permitted by applicable law on behalf of itself and
each and every person or entity acquiring any right, title or
interest in or to the all or any part of the Premises, all
benefit and advantage of any such laws which would otherwise
be available to Mortgagor or any such person or entity, and
agrees that neither Mortgagor nor any such person or entity
will invoke or utilize any such law to otherwise hinder, delay
or impede the exercise of any remedy granted or delegated to
Mortgagee herein but will permit the exercise of such remedy
as though any such laws had not been enacted. Mortgagor
hereby further expressly waives to the full extent permitted
by applicable law on behalf of itself and each and every
person or entity acquiring any right, title or interest in or
to all or any part of the Premises any and all rights of
redemption from any sale or any order or decree of foreclosure
obtained pursuant to provisions of this mortgage.
18. Mortgagor hereby assigns to Mortgagee directly and absolutely, and
not merely collaterally, the rents, issues, profits, royalties, and
payments payable under any lease of the Premises, or portion
thereof, including any oil, gas or mineral lease, or any
installments of money payable pursuant to any agreement or any sale
of the Premises or any part thereof, subject only to a license, if
any, granted by Mortgagee to Mortgagor with respect thereto prior to
the occurrence of a default hereunder. Mortgagee, without regard to
the adequacy of any security for the indebtedness hereby secured,
shall be entitled to (a) collect such rents, issues, profits,
royalties, payments and installments of money and apply the same as
more particularly set forth in this paragraph, all without taking
possession of the Premises, or (b) enter and take possession of the
Premises or any part thereof, in person, by agent, or by a receiver
to be appointed by the court and to xxx for or otherwise collect
such rents, issues, profits, royalties, payments and installments of
money. Mortgagee may apply any such rents, issues, profits,
royalties, payments and installments of money so collected, less
costs and expenses of operation and collection, including reasonable
attorneys' fees and costs and reasonable attorneys' fees and costs
on appeal, upon any principal, interest and all other indebtedness
secured hereby, at Mortgagee's option and in such order as Mortgagee
may determine, and, if such costs and expenses and reasonable
attorneys' fees and costs shall exceed the amount collected, the
excess shall be immediately due and payable. The collection of such
rents, issues, profits, royalties, payments and installments of
money and the application thereof as aforesaid shall not cure or
waive any Event of Default or notice of default hereunder or
invalidate any act done pursuant to such notice, except to the
extent any such Event of Default is fully cured. Failure or
discontinuance of Mortgagee at any time, or from time to time, to
collect any such moneys shall not impair in any manner the
subsequent enforcement by Mortgagee of the right, power and
authority herein conferred on Mortgagee. Nothing contained herein,
including the exercise of any right, power or authority herein
granted to Mortgagee, shall be, or be construed to be, an
affirmation by Mortgagee of any tenancy, lease or option, or an
assumption of liability under, or the subordination of the lien or
charge of this mortgage to any such tenancy, lease or option.
Mortgagor hereby agrees that, in the event Mortgagee exercises its
rights as in this paragraph provided, Mortgagor waives any right to
compensation for the use of Mortgagor's furniture, furnishings or
equipment in the Premises for the period such assignment of rents or
receivership is in effect, it being understood that the rents,
issues, profits, royalties, payments and installments of money
derived from the use of any such items shall be applied to
Mortgagor's obligations hereunder as above provided.
19. (a) Mortgagor has executed and delivered that certain Assignment
of Leases and Rents of even date herewith assigning to
Mortgagee directly and absolutely, and not merely
collaterally, the interest of Mortgagor as lessor under the
existing leases of the Premises, as well as all other leases
which may hereafter be made in respect of the Premises, and
the rents and other income arising thereunder and from the use
of the Premises. Said Assignment of Leases and Rents grants
to Mortgagee specific rights and remedies in respect of said
leases and governs the collection of rents and other income
thereunder and from the use of the Premises, and such rights
and remedies so granted shall be cumulative of those granted
herein.
(b) Mortgagor shall keep and perform all terms, conditions and
covenants required to be performed by it as lessor under the
aforesaid leases; shall promptly advise Mortgagee in writing
of any claim of default by Mortgagor made by a lessee under
any such lease or of any default thereunder by a lessee; and
shall promptly provide Mortgagee with a copy of any notice of
default or other notice served upon Mortgagor by any such
lessee. Mortgagor will not cancel, modify or alter, or accept
the surrender of, any existing or future lease of the Premises
or any part thereof without first obtaining written consent of
Mortgagee unless otherwise specifically permitted in the
Assignment of Leases and Rents of even date herewith.
20. (a) All rights and remedies granted to Mortgagee in the Loan
Documents shall be in addition to and not in limitation of any
rights and remedies to which it is entitled in equity, at law
or by statute, and the invalidity of any right or remedy
herein provided by reason of its conflict with applicable law
or statute shall not affect any other valid right or remedy
afforded to Mortgagee. No waiver of any Event of Default or
of any default in the performance of any covenant contained in
the Note or any other instrument securing the Note shall at
any time thereafter be held to be a waiver of any rights of
the Mortgagee hereunder, nor shall any waiver of a prior Event
of Default or default operate to waive any subsequent Event of
Default or default. All remedies provided for herein, in the
Note and in any other instrument securing the Note are
cumulative and may, at the election of Mortgagee, be exercised
alternatively, successively, or concurrently. No act of
Mortgagee shall be construed as an election to proceed under
any one provision herein to the exclusion of any other
provision or to proceed against one portion of the Premises to
the exclusion of any other portion.
(b) This mortgage is subject to any existing statutory condition
and upon the further condition that all covenants and
agreements of Mortgagor herein shall be fully or timely
performed, time being of the essence under this mortgage. No
breach of any such condition or agreement shall be permitted,
and in the event of any such breach, Mortgagee shall have any
statutory power of sale, and this mortgage shall be subject to
foreclosure as provided by law.
21. By accepting payment of any sum secured hereby after its due date,
Mortgagee does not waive its right either to require prompt payment
when due of all other sums or installments so secured or to declare
a default for failure to pay such other sums or installments.
22. Notwithstanding anything herein or in the Note to the contrary, no
provision contained herein or in the Note which purports to obligate
Mortgagor to pay any amount of interest or any fees, costs or
expenses which are in excess of the maximum permitted by applicable
law, shall be effective to the extent that it calls for the payment
of any interest or other sums in excess of such maximum. All
agreements between Mortgagor and Mortgagee, whether now existing or
hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of demand for payment of
or acceleration of the maturity of any of the indebtedness secured
hereby or otherwise, shall the interest contracted for, charged or
received by Mortgagee exceed the maximum amount permissible under
applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to Mortgagee in excess of the maximum
lawful amount, the interest payable to Mortgagee shall be reduced to
the maximum amount permitted under applicable law; and if from any
circumstance Mortgagee shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount,
an amount equal to any excessive interest shall at Mortgagee's
option, be refunded to Mortgagor or be applied to the reduction of
the principal balance of the indebtedness secured hereby and not to
the payment of interest or, if such excessive interest exceeds the
unpaid balance of principal of the indebtedness secured hereby, such
excess shall be refunded to Mortgagor. This paragraph shall control
all agreements between Mortgagor and Mortgagee.
23. In the event one or more provisions of the Loan Documents shall be
held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any
other provision hereof, and this mortgage shall be construed as if
any such provision had never been contained herein.
24. If the payment of the indebtedness secured hereby or of any part
thereof shall be extended or varied, or if any part of the security
be released, all persons now or at any time hereafter liable
therefor, or interested in said Premises, shall be held to assent to
such extension, variation or release, and their liability and the
lien and all provisions hereof shall continue in full force, the
right of recourse against all such persons being expressly reserved
by Mortgagee notwithstanding such variation or release.
25. Upon payment in full of the indebtedness secured hereby and the
performance by Mortgagor of all of the obligations imposed on
Mortgagor in the Loan Documents, these presents shall be null and
void, and Mortgagee shall release this mortgage and the lien hereof
by proper instrument executed in recordable form.
26. If no Event of Default has occurred and is continuing under this
mortgage, Mortgagor shall have the privilege of making prepayments
on the principal of the Note (in addition to the required payments)
if and only to the extent and upon the terms and conditions, if any,
expressly set forth in the Note. If not expressly so set forth, the
Note is not subject to such prepayment.
27. (a) Subject to restrictions applicable to Mortgagor, as landlord,
expressly provided in the Lease, so long as the Lease is in
full force and effect, Mortgagor hereby grants to Mortgagee
and its respective agents, attorneys, employees, consultants,
contractors and assigns, an irrevocable license and
authorization to enter upon and inspect the Premises and all
facilities located thereon at reasonable times and the right
to conduct a Phase I environmental audit after the occurrence
of an Event of Default or in the event of any sale or
conveyance of this mortgage.
(b) In the event that there has been an Event of Default or an
event which with the passage of time or the giving of notice
or both would constitute an Event of Default or Mortgagee has
formed a reasonable belief, based on its inspection of the
Premises or other factors known to it, that Hazardous
Materials may be present on the Premises, then, subject to
restrictions applicable to Mortgagor, as landlord, expressly
provided in the Lease, so long as the Lease is in full force
and effect, Mortgagor shall perform such tests at Mortgagee's
request, including without limitation, subsurface testing,
soil and ground water testing, and other tests which may
physically invade the Premises or facilities from a consultant
and pursuant to a scope of work approved by Mortgagee (the
"Tests"), as Mortgagee, in its sole discretion, determines as
necessary to (i) investigate the condition of the Premises,
(ii) protect the security interests created under this
mortgage or (iii) determine compliance with all laws relating
to Hazardous Materials, the provisions of this mortgage and
other matters relating thereto, and Mortgagor shall provide
true and accurate written copies of the results of the Tests
to Mortgagee upon receipt of the results. In the event that
Mortgagor fails to conduct the Tests requested by Mortgagee
and to provide Mortgagee with the results within sixty (60)
days of such request or such additional time as Mortgagee
shall agree in writing in its sole discretion, or if Mortgagee
is not reasonably satisfied with the results of any of the
Tests or of any Phase I environmental audit, then, subject to
any restrictions applicable to Mortgagor, as landlord,
expressly provided in the Lease, so long as the Lease is in
full force and effect, Mortgagor grants to Mortgagee and its
respective agents, attorneys, employees, consultants,
contractors and assigns, an irrevocable license and
authorization to conduct the Tests necessary in Mortgagee's
sole discretion to accomplish (i) through (iii) in this
paragraph.
28. Within 15 days after any written request by either party, the other
party shall certify, by a written statement duly acknowledged, the
amount of principal and interest then owing on the Note and whether
the certifying party knows of any offsets or defenses exist against
the indebtedness secured hereby.
29. (a) Mortgagor shall furnish to Mortgagee within 90 days after the
end of each fiscal year of Mortgagor a detailed financial
report prepared in accordance with generally accepted
principles of accounting consistently applied, certified by
Mortgagor s chief financial officer in a manner and otherwise
in form and substance acceptable to Mortgagee covering the
full and complete operation of the Premises, including without
limitation: (i) income and expense statements , and (ii) a
report of the leasing status of the Premises as of the end of
such year, identifying the lessee, square footage leased,
rental amount, rental concessions and/or rental deferments,
escalation rentals, if any, percentage rents, if any,
expiration date under each lease of the Premises and a listing
of sales volumes attained by lessees of the Premises under
percentage leases for the immediately preceding year. Such
reports shall be prepared by an accountant who may be an
employee of Mortgagor, or of an affiliate of Mortgagor,
acceptable to Mortgagee. In addition to the reports referred
to herein, Mortgagor shall promptly supply any additional
information or records relating to the Premises or its
operation as Mortgagee may from time to time reasonably
request.
(b) Mortgagor shall submit to Mortgagee during the life of this
mortgage within 60 days after the end of each quarter
quarterly balance sheets, income statements and statements of
change for Mortgagor. Quarterly internal financial statements
and quarterly 10Qs filed with the Securities and Exchange
Commission will satisfy the requirement contained in this
subparagraph (b).
(c) Mortgagor shall submit to Mortgagee during the life of this
mortgage within 90 days following the end of each fiscal year
annual balance sheets, income statements and statements of
change for Mortgagor. Annual audits with copies of 10Ks
filed with the Securities and Exchange Commission will satisfy
the requirement contained in this subparagraph (c).
30. Any notice which any party hereto may desire or be required to give
to the other shall be deemed to be an adequate and sufficient notice
if given in writing and service is made by either (i) registered or
certified mail, postage prepaid, in which case notice shall be
deemed to have been received three (3) business days following
deposit to the mail; or (ii) nationally recognized overnight air
courier, next day delivery, prepaid, in which case such notice shall
be deemed to have been received one (1) business day following
delivery to such courier. All notices shall be addressed to
Mortgagor at its address given on the first page hereof or to
Mortgagee at 000 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000, Attn:
Commercial Real Estate Loan Administration, Loan No. 750905, or to
such other place as either party may by written notice to the other
hereafter designate as a place for service of notice.
31. This mortgage and all the provisions hereof shall extend to and be
binding upon Mortgagor and all persons claiming by, under or through
Mortgagor, and the word "Mortgagor" when used herein shall include
all such persons and all persons liable for the payment of the
indebtedness secured hereby or any part thereof, whether or not such
persons have executed the Note or this mortgage. The word
"Mortgagee" as used herein shall include the successors and assigns
of the Mortgagee named herein, and the holder or holders from time
to time of the Note secured hereby.
32. Mortgagor has had the opportunity to fully negotiate the terms
hereof and modify the draftsmanship of this mortgage. Therefore,
the terms of this mortgage shall be construed and interpreted
without any presumption, inference, or rule requiring construction
or interpretation of any provision of this mortgage against the
interest of the party causing this mortgage or any portion of it to
be drafted. Mortgagor is entering into this mortgage freely and
voluntarily without any duress, economic or otherwise.
33. This mortgage shall be governed by and construed in accordance with
the laws of the State of New Jersey, except for the provisions
hereof which pertain to the payments of interest or amounts deemed
to constitute interest, all of which provisions, like the Note,
shall be governed by the laws of the State of Florida.
34. As used herein, the term "Default Rate" means a rate equal to the
lesser of (i) 4% per annum above the then applicable interest rate
payable under the Note or (ii) the maximum rate allowed by
applicable law. The Default Rate is not a penalty, but rather a
rate of interest negotiated by the parties to compensate Mortgagee
additionally in the Event of Default.
35. Notwithstanding any provision of this mortgage, the Note or any
other instruments evidencing or securing the loan evidenced by the
Note which might be construed to the contrary, the assignment of
rents and other amounts provided for herein is an absolute
assignment and not merely a collateral assignment or a security
interest, and is effective whether or not a default occurs
hereunder, subject only to a license, if any, granted by Mortgagee
to Mortgagor with respect thereto prior to the occurrence of a
default hereunder, the extent of which may be more fully described
in the Assignment of Leases and Rents. It is the intention of
Mortgagor and Mortgagee that the assignment effectuated by this
mortgage with respect to such rents and other amounts payable under
the leases shall be a direct and currently effective assignment and
shall not constitute merely the granting of a lien, security
interest or pledge for the purpose of securing the indebtedness
secured hereby. In the event that a court of competent jurisdiction
determines that, notwithstanding such expressed intent of the
parties, Mortgagee's interest in the rents and other amounts payable
under the leases constitutes a lien on or security interest in or
pledge thereof, it is agreed and understood that the forwarding of a
notice to Mortgagor after the occurrence of a default, advising
Mortgagor of the revocation of any license then in favor of
Mortgagor to collect such rents or other amounts payable under the
leases, or of the existence of a default, shall be sufficient action
by Mortgagee to (i) perfect such lien on or security interest in or
pledge of the rents and other amounts payable under the leases, (ii)
take possession thereof, and (iii) entitle Mortgagee to immediate
and direct payment of the rents and other amounts payable under the
leases, for application as provided in this mortgage, all without
the necessity of any further action by Mortgagee, including, without
limitation, any action to obtain possession of the land,
improvements or any other portion of the premises. Notwithstanding
the direct and absolute assignment of the rents and other amounts
payable under the leases as herein described, there shall be no
pro tanto reduction in any portion of the indebtedness secured by
this mortgage except with respect to rents and other amounts payable
under the leases actually received by Mortgagee and applied by
Mortgagee toward payment of the indebtedness. Mortgagee may, upon
written notice to Mortgagor, elect to (i) exclude from the
assignment provided in this mortgage any of the leases as specified
in such notice so that the interest under such indicated lease is
not assigned to Mortgagee, and (ii) subordinate the lien and other
terms and provisions of this mortgage to any of the leases as
indicated in said notice to Mortgagor.
36. MORTGAGOR KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO THE
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTIONS BROUGHT BY
MORTGAGOR OR MORTGAGEE IN CONNECTION WITH THIS MORTGAGE, ANY OF THE
LOAN DOCUMENTS, THE INDEBTEDNESS SECURED HEREBY, OR ANY OTHER
STATEMENTS OR ACTIONS OF MORTGAGEE.
37. (a) Notwithstanding any provision to the contrary in the Note,
this mortgage or any other instrument or agreement by which
the Note is secured and except as otherwise provided in this
paragraph, the liability of Mortgagor under the Loan Documents
shall be limited to the interests of Mortgagor in the Premises
and the rents, issues, proceeds and profits thereof. In the
event of foreclosure of the liens evidenced by the Loan
Documents, no judgment for any deficiency upon the
indebtedness evidenced by the Loan Documents shall be sought
or obtained by Mortgagee against Mortgagor. Nothing contained
in this paragraph shall:
(i) prevent the failure of Mortgagor to make any payment or
to perform any obligation under any of the Loan
Documents within the time periods provided therein from
being an Event of Default thereunder;
(ii) be construed as limiting the obligations of Mortgagor to
any tenant under any lease of the Premises;
(iii) in any way limit or impair the lien or enforcement of
the Loan Documents pursuant to the terms thereof; or
(iv) limit the obligations of any indemnitor or guarantor, if
any, of Mortgagor's obligations under the Loan
Documents.
(b) Notwithstanding subparagraph (a) above, Mortgagor, but not its
shareholders, officers, directors, employees or agents, shall
be personally liable to Mortgagee for:
(i) Mortgagor's failure to comply with paragraphs 2 (taxes
and assessments) and 3 (insurance) hereof with respect
to amounts accruing prior to a Sale of the Premises, as
defined below;
(ii) any event or circumstance for which Mortgagor
indemnifies Mortgagee under paragraph 1(m)
(environmental indemnity) hereof;
(iii) Mortgagor's failure to pay utilities accruing prior to a
Sale of the Premises, as defined below, on or before the
date such payments are due;
(iv) operation and maintenance of the Premises applicable to
the time period prior to a Sale of the Premises, as
defined below;
(v) any sums expended by Mortgagee in fulfilling the
obligations of Mortgagor as lessor under any lease of
the Premises prior to a sale of the Premises pursuant to
foreclosure or power of sale, a bona fide sale
(permitted by the terms of paragraph 1(l) hereof or
consented to in writing by Mortgagee) to an unrelated
third party or upon conveyance to Mortgagee of the
Premises by a deed acceptable to Mortgagee in form and
content (each of which shall be referred to as a "Sale"
for purposes of this paragraph) or expended by Mortgagee
after a Sale of the Premises for obligations of
Mortgagor which arose prior to a Sale of the Premises;
(vi) any rents or other income regardless of type or source
of payment (including, but not limited to, CAM charges,
lease termination payments, refunds of any type,
prepayment of rents, settlements of litigation, or
settlements of past due rents) from the Premises which
Mortgagor has received or has a right to receive after
an Event of Default under the Loan Documents or an event
which with the passage of time, the giving of notice or
both would constitute an Event of Default, either or
both of which has occurred and is continuing, and which
are not applied to (A) expenses of operation and
maintenance of the Premises and the taxes, assessments,
utility charges and insurance of the Premises, taking
into account sufficient reserves for the same and for
replacements and recurring items, and (B) payment of
principal, interest and other charges when due under the
Loan Documents; provided that any payments to parties
related to Mortgagor shall be considered expenses of
operation only if they are at market rates or fees
consistent with market rates or fees for the same or
similar services;
(vii) any security deposits of tenants not turned over to
Mortgagee upon conveyance of the Premises to Mortgagee
pursuant to foreclosure or power of sale or by a deed
acceptable to Mortgagee in form and content;
(viii) misapplication or misappropriation of tax reserve
accounts, tenant improvement reserve accounts,
security deposits, prepaid rents or other similar
sums paid to or held by Mortgagor or any other
entity or person in connection with the operation
of the Premises;
(ix) any waste committed or allowed by Mortgagor with respect
to the Premises prior to a Sale of the Premises;
(x) any insurance or condemnation proceeds or other similar
funds or payments with respect to a casualty or
condemnation occurring prior to a Sale of the Premises
applied by Mortgagor in a manner other than as expressly
provided in the Loan Documents;
(xi) of any breach or violation of paragraph 1(l) (due on
sale or encumbrance) hereof, other than the filing of a
nonmaterial mechanic's lien affecting the Premises, the
granting of any utility or other nonmaterial easement or
servitude burdening the Premises, or any other transfer
or encumbrance not in the nature of a transfer,
reduction or impairment of any material economic
interest in the Premises; and
(xii) of any fraud or willful misrepresentation by Mortgagor
regarding the Premises, the making or delivery of any of
the Loan Documents or in any materials or information
provided by Mortgagor in connection with the loan.
(c) Notwithstanding anything herein contained to the contrary,
Mortgagor, but not its shareholders, officers, directors,
employees or agents, shall be personally liable to Mortgagee
for $3,664,355.00, if the event relates to the portion of the
Premises leased to Linens or $4,289,470.00 if the event
relates to the portion of the Premises leased to Marshalls,
plus the Make Whole Premium which would be due with respect to
such allocated amount had such amount been prepaid as of the
date of the occurrence set forth below:
(i) in the event of an amendment, modification or
termination by Mortgagor of the Lease without the prior
written consent of Mortgagee.
(ii) in the event Lessee is not obligated to notify Mortgagee
of a default by Mortgagor and Mortgagor defaults under
the Lease and Mortgagee does not receive notice of said
default following the occurrence thereof within a
reasonable period of time to effect cure of said
default; or
(iii) in the event Mortgagor violates any exclusive use or
non-compete provision granted to Lessee under the Lease.
38. This mortgage and the indebtedness secured hereby is for the sole
purpose of conducting or acquiring a lawful business, professional
or commercial activity or for the acquisition or management of real
or personal property as a commercial investment, and all proceeds of
such indebtedness shall be used for said business or commercial
investment purpose. Such proceeds will not be used for the purchase
of any security within the meaning of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto,
including without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System. This is not a purchase
money mortgage where a seller is providing financing to a buyer for
the payment of all or any portion of the purchase price, and the
Premises secured hereby is not a residence or homestead or used for
mining, grazing, agriculture, timber or farming purposes.
39. Unless Mortgagee shall otherwise direct in writing, Mortgagor shall
appear in and defend all actions or proceedings purporting to affect
the security hereunder, or any right or power of the Mortgagee. The
Mortgagee shall have the right to appear in such actions or
proceedings. Mortgagor shall save Mortgagee harmless from all costs
and expenses, including reasonable attorneys' fees and costs of a
title search, continuation of abstract and preparation of survey,
incurred by reason of any action, suit, proceeding, hearing, motion
or application before any court or administrative body in and to
which Mortgagee may be or become a party by reason hereof. Such
proceedings shall include but not be limited to condemnation,
bankruptcy, probate and administration proceedings, as well as any
other action, suit, proceeding, right, motion or application wherein
proof of claim is by law required to be filed or in which it becomes
necessary to defend or uphold the terms of this mortgage or
otherwise purporting to affect the security hereof or the rights or
powers of Mortgagee. All money paid or expended by Mortgagee in
that regard, together with interest thereon from date of such
payment at the Default Rate shall be additional indebtedness secured
hereby and shall be immediately due and payable by Mortgagor without
notice.
40. During the occurrence of an Event of Default, all rents, issues and
profits collected or received by Mortgagor shall be accepted and
held for Mortgagee in trust and shall not be commingled with the
funds and property of Mortgagor, but shall be promptly paid over to
Mortgagee.
41. Mortgagee shall have all rights and remedies provided to a secured
party by the Uniform Commercial Code with respect to such portion of
the Premises, if any, as is governed by the Uniform Commercial Code.
42. In the event Mortgagee s consent is required by the terms of this
mortgage, Mortgagee shall attempt to respond, approve or disapprove
within ten (10) days of receipt of Mortgagor s request therefor.
Mortgagor acknowledges, however, that the failure of Mortgagee to
respond, approve or disapprove any such request shall not be deemed
to be a consent.
43. Mortgagor will comply with all provisions hereof and of the Freehold
Raceway Village Condominium Master Deed and Declaration of
Restrictive Covenants and Protective Covenants ( Master Deed ),
which documents and definitions contained therein are made a part
hereof as if recited at length herein.
44. The Mortgagor acknowledges and agrees that the Mortgagee shall have
the following rights with respect to the Mortgagor s interests in
the Condominium and the Freehold Raceway Village Condominium
Association, Inc. ( Condominium Association ):
(a) The Mortgagor shall notify Mortgagee in writing within ten
(10) days of any of the following events or Mortgagor s
receipt of notice thereof, as the case may be:
(i) any condemnation or any casualty loss which affects the
Condominium or the Premises;
(ii) any delinquency in the payment of assessments or charges
owed by Mortgagor to the Condominium Association; the
suspension of Mortgagor s rights in the Association; and
any default by Mortgagor under the Master Deed or By-
Laws giving rise to a cause of action against the
Mortgagor;
(iii) any lapse, cancellation or material modification of any
insurance policy or fidelity bond required to be
maintained by the Condominium Association; and
(iv) any proposed action which would affect the rights of the
Mortgagee, including but not limited to any amendment of
the Master Deed, termination of the Condominium, or
amendment of the By-Laws of the Condominium Association.
(b) The consent of Mortgagee shall be required (which consent
shall not be unreasonably withheld):
(i) to add or amend any provisions of the Master Deed or By-
Laws of the Association affecting any of the following:
(A) voting;
(B) assessments, assessment liens or subordination of
such liens;
(C) boundaries of the Condominium;
(D) convertibility of the Units into Common Elements
or of Common Elements into the Units (except for
any changes in the location of any access road):
(E) expansion or contraction of the Condominium or the
addition, annexation or withdrawal of property to
or from the Condominium;
(F) imposition of any right of first refusal or
similar restriction on the right of a Unit owner
to sell, transfer or otherwise convey his or her
Units;
(G) creation of Subunits and Subboard; and
(H) any provisions which are for the express benefit
of permitted mortgage holders, insurer or
guarantors of first mortgages on a Unit or which
affects the priority or validity of this Mortgage.
(ii) to terminate the Condominium.
45. Mortgagor and Mortgagee may agree to change the interest rate,
maturity date, or other term or terms of this Mortgage, of any of
the documents referred to herein or of the Indebtedness. Any such
agreement shall be in writing, duly executed by both Mortgagor and
Mortgagee. In the event that any such agreement shall occur, it
shall, to the extent permitted by law, be deemed a "modification" as
defined in N.J.S.A. 46:9-8.1 et seq., and this Mortgage shall be
subject to, and the Mortgagee shall be the beneficiary of, the
mortgage lien priority provisions of such statute.
IN WITNESS WHEREOF, Mortgagor has caused this mortgage to be duly executed
and delivered as of the date first above written.
COMMERCIAL NET LEASE REALTY, INC.,
a Maryland corporation
WITNESS:
By: /s/Xxxxxx X. Xxxxxxxxxx By: /s/Xxxxx X. Xxxxxxx
----------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxxxxxx Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
By: /s/Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
This document prepared by:
Xxxxxxx X. Xxxxxxxxxx
Xxxxxx & Xxxxxxx, Ltd.
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
000-000-0000
State of ILLINOIS )
) SS.
County of XXXX )
I, Xxxxx X. Xxxxxxxxx, a Notary Public, in and for said County, in the
State aforesaid, do hereby certify that Xxxxx X. Xxxxxxx, the Executive Vice
President of COMMERCIAL NET LEASE REALTY, INC., a Maryland corporation, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that (s)he signed and delivered said instrument as his/her own free and
voluntary act and as the free and voluntary act of said corporation for the uses
and purposes therein set forth.
Given under my hand and notarial seal this 14th day of December, 1995.
My commission expires: /s/Xxxxx X. Xxxxxxxxx
-------------------------------------
Notary Public
07/21/98
