MORTGAGE AND SECURITY AGREEMENT
WITH ASSIGNMENT OF RENTS
THIS MORTGAGE AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS
(this "Mortgage"), dated as of the 2nd day of May 1996, given by GNOC,
CORP. (successor by merger to GNAC, Corp. ("GNAC")), a New Jersey
corporation ("Mortgagor"), having an office at Boston and Pacific Avenues,
P.O. Box 1737, Atlantic City, New Jersey 08404 to FIRST UNION NATIONAL BANK
(formerly known as First Fidelity Bank, National Association), a national
banking association ("First Union"), having an office at 550 Broad Street,
Newark, New Jersey 07102 and MIDLANTIC BANK, NATIONAL ASSOCIATION (formerly
known as Midlantic National Bank), a national banking association
("Midlantic"), having an address at 2 Tower Center, East Brunswick, New
Jersey 08816 (First Union and Midlantic are together referred to as the
"Mortgagee").
It is the intention of the Mortgagor that this instrument be a
"Pari Passu Mortgage" within the meaning of the indenture dated as of March
10, 1993 (the "Indenture"), among GNF Corp., a New Jersey Corporation
("GNF"), GNAC as guarantor, Mortgagor, and Amalgamated Bank of Chicago as
Trustee (the "Trustee"). Pursuant to the Mortgage and Security Agreement
with Assignment of Rents dated as of May 2, 1996 given by Mortgagor to
Amalgamated Bank of Chicago, as mortgagee, the lien created by this
instrument ranks pari passu with the lien created by said Mortgage (the
"Trustee's Mortgage").
The rights of Mortgagee under this Mortgage are governed by an
intercreditor agreement dated April 16, 1993 (as the same may now or
hereafter be amended, the "Intercreditor Agreement") executed by the
Mortgagee, GNAC, the Mortgagor, GNF and the Trustee. To the extent any of
the terms of this Mortgage are inconsistent with the terms of the
Intercreditor Agreement, the terms of the Intercreditor Agreement shall
control. Any capitalized terms not defined herein or not referred to as
part of the Indenture shall have the meaning set forth in the Loan
Agreement (as hereinafter defined).
W I T N E S S E T H:
To secure the following obligations and liabilities: (a) the
payment to Mortgagee under that certain loan agreement dated as of April
16, 1993 by GNOC, Corp. as the borrower, GNAC and GNF, Corp, as guarantors,
which loan agreement was amended by the first amendment to loan agreement
dated as of December 31, 1993, which loan agreement, as amended, was
amended and restated pursuant to that certain loan agreement dated as of
September 30, 1994, and which amended and restated loan agreement was
further amended and restated pursuant to that certain second amended and
restated loan agreement dated as of May 2, 1996 by and between Mortgagor
and Mortgagee (the " Loan Agreement"), of (i) the indebtedness in the
maximum principal amount of TWENTY MILLION DOLLARS, evidenced by Revolving
Credit Notes (as defined in the Loan Agreement) issued pursuant to the
provisions of the Loan Agreement, (ii) any and all interest due or to
become due on the Revolving Credit Notes in accordance with the provisions
of the Loan Agreement and the Revolving Credit Notes, and (iii) any and all
other sums due or to become due under the Loan Agreement, the Revolving
Credit Notes, this Mortgage and any further or subsequent advances or
expenditures made under any other Loan Document (hereinafter defined) by
Mortgagee pursuant to the provisions hereof (the items set forth in clauses
(i)-(iii) above being hereinafter collectively referred to as the
"Indebtedness"), and (b) the performance of all of the terms, covenants,
conditions, agreements, obligations, and liabilities of Mortgagor (which,
together with the Indebtedness is referred to collectively as the
"Obligations") under (i) this Mortgage, (ii) the Loan Agreement, (iii) the
Revolving Credit Notes, and (iv) the Assignment of Leases and Rents dated
as of the date hereof given by Mortgagor to Mortgagee (the "Assignment"),
(v) and other documents executed by the Mortgagor in connection with the
foregoing, and (vi) any extensions, renewals, replacements or modifications
of any of the foregoing (this Mortgage, the Loan Agreement, the Assignment,
the Revolving Credit Notes, and all other documents executed in connection
with the foregoing being hereinafter collectively referred to as the "Loan
Documents" and, individually, as a "Loan Document").
Mortgagor does hereby encumber, give, grant, bargain, sell,
warrant, alienate, remise, release, convey, assign, transfer, hypothecate,
deposit, pledge, set over, create and grant a security interest in and
confirm to Mortgagee the following described real property, personal
property, rights, collateral and all substitutions for and all
replacements, reversions and remainders of such tangible personal property,
whether now owned or held or hereafter acquired by Mortgagor (collectively,
the "Encumbered Property"):
The Mortgagor's interest in all those plots, pieces or parcels of
land more particularly described in Exhibit A-1 annexed hereto and made a
part hereof, together with the right, title and interest of Mortgagor, if
any, in and to the streets and in and to the land lying in the bed of any
streets, roads or avenues, open or proposed, public or private, in front
of, adjoining or abutting said land to the center line thereof, the air
space and development rights pertaining to said land and the right to use
such air space and development rights, all rights of way, privileges,
liberties, tenements, hereditaments and appurtenances belonging, or in any
way appertaining thereto, all easements now or hereafter benefiting said
land and all royalties and rights appertaining to the use and enjoyment of
said land, including, but without limiting the generality of the foregoing,
all alley, vault, drainage, mineral, water, oil, coal, gas and other
similar rights (all of the foregoing being hereinafter collectively
referred to as the "Land");
TOGETHER with Mortgagor's interest, right and title in and to
that certain Amended and Restated Ground Lease (the "Ground Lease") of even
date herewith between Bally's Park Place, Inc., as lessor, and Mortgagor,
as lessee, covering the land described in Exhibit A-2 annexed hereto and
made a part hereof (the "Leasehold Estate");
TOGETHER with Mortgagor's interest, right and title in and to the
buildings and other improvements now or hereafter erected on the Land
and/or the Leasehold Estate (such buildings and other improvements being
hereinafter collectively referred to as the "Buildings"), the Land, the
Leasehold Estate and the Buildings being hereinafter collectively referred
to as the "Real Property";
TOGETHER with all and singular the reversion or reversions,
remainder or remainders, rents and revenues produced in connection with the
Real Property and all of the estate, right, title, interest, property,
possession, claim and demand whatsoever, both in law and at equity, of
Mortgagor of, in and to the Real Property and of, in and to every part and
parcel thereof, with the appurtenances, at any time belonging or in any way
appertaining thereto;
TOGETHER with Mortgagor's right, title and interest in and to all
chattels, furnishings, goods, equipment, fixtures, tangible personal
property, materials, and all other contents of every kind and nature,
including, without limitation, all tangible personal property used in
connection with the hotel, casino and restaurant facilities located on the
Real Property and all gaming equipment, tables and slots that shall be
owned or hereafter acquired, used in connection with or placed prior to the
satisfaction of the Indebtedness and Obligations on the Real Property
including machinery, fixtures, systems, apparatus, fittings, materials and
equipment now or which may hereafter be used in the operation of the Real
Property, including, but without limiting the generality of the foregoing,
all heating, electrical, mechanical, lighting, lifting, plumbing,
ventilating, air conditioning and air-cooling fixtures, systems, machinery,
apparatus and equipment, refrigerating, incinerating and power fixtures,
systems, machinery, apparatus and equipment, loading and unloading
fixtures, systems, machinery, apparatus and equipment, escalators,
elevators, boilers, communication systems, casino gambling equipment,
switchboards, sprinkler systems and other fire prevention and extinguishing
fixtures, systems, machinery, apparatus and equipment, and all engines,
motors, dynamos, machinery, wiring, pipes, pumps, tanks, conduits and ducts
constituting a part of any of the foregoing, and all additions to,
substitutions for, renewals and proceeds of any of the foregoing, together
with all attachments, substituted parts, accessories, accessions,
improvements and replacements thereof, including the equity of Mortgagor in
any such item that is subject to a purchase money or other prior security
interest (all such personal property, fixtures, additions, substitutions
and proceeds being sometimes hereinafter collectively referred to as the
"Personal Property");
TOGETHER with Mortgagor's right, title and interest to and under
all leases, subleases, underletting, licenses and other occupancy
agreements which now or hereafter may affect the Real Property or any
portion thereof and under any and all guarantees, modifications, renewals
and extensions thereof (collectively, the "Leases") (including, without
limitation, the Ground Lease and any and all rights of Mortgagor to refunds
of rent, security deposits, real estate taxes and assessments and water,
sewer and other charges under the Ground Lease), and to and under all
documents and instruments made or hereafter made in respect of the Leases,
and in and to any and all deposits made or hereafter made as security under
the Leases (excluding, however, any sums paid as "key money" in connection
with the execution or renewal thereof or any sums paid in connection with
the execution or renewal of a Lease as advance rental, to the extent the
same has been paid prior to the occurrence of an Event of Default
(hereinafter defined)), subject to the legal rights under the Leases of the
persons or entities making such deposits, together with any and all of the
benefits, rentals, revenues, issues, profits, income and rents due or to
become due or to which Mortgagor is now or hereafter may become entitled
arising out of the Leases (collectively, the "Rents");
TOGETHER with all plans, specifications, engineering reports,
land planning maps, surveys, and any other reports, exhibits or plans used
or to be used in connection with the operation or maintenance of the Real
Property, together with all amendments and modifications thereof;
TOGETHER with (a) subject to the provisions of Article VI hereof,
Mortgagor's interest in and to all proceeds which now or hereafter may be
paid under any insurance policies now or hereafter obtained by Mortgagor in
connection with the conversion of the Encumbered Property or any portion
thereof into cash or liquidated claims, together with the interest payable
thereon and the right to collect and receive the same, including, but
without limiting the generality of the foregoing, proceeds of casualty
insurance, title insurance, business interruption insurance and any other
insurance now or hereafter maintained with respect to the Real Property or
in connection with the use or operation thereof (collectively, the
"Insurance Proceeds"), and (b) subject to the provisions of Article VII
hereof, all of Mortgagor's right, title and interest in and to all awards,
payments and/or other compensation, together with the interest payable
thereon and the right to collect and receive the same, which now or
hereafter may be made with respect to the Encumbered Property as a result
of (i) a taking by eminent domain, condemnation or otherwise, (ii) the
change of grade of any street, road or avenue or the widening of any
streets, roads or avenues adjoining or abutting the Land, or (iii) any
other injury to or decrease in the value of the Encumbered Property or any
portion thereof (collectively, the "Awards"), in any of the foregoing
circumstances described in clauses (a) or (b) above to the extent of the
entire amount of the Indebtedness outstanding as of the date of
Depositary's (hereinafter defined) receipt of any such Insurance Proceeds
or Awards, notwithstanding that the entire amount of the Indebtedness may
not then be due and payable, and also to the extent of reasonable
attorneys' fees, costs and disbursements incurred by Depositary or
Mortgagee in connection with the collection of any such Insurance Proceeds
or Awards. Subject to the provisions of Articles VI and VII hereof,
Mortgagor hereby assigns to Mortgagee, and Depositary is hereby authorized
to collect and receive, all Insurance Proceeds and Awards and to give
proper receipts and acquittance therefor and to apply the same in
accordance with the provisions of this Mortgage. Mortgagor hereby agrees
to make, execute and deliver, from time to time, upon demand, further
documents, instruments or assurances to confirm the assignment of the
Insurance Proceeds and the Awards to Depositary and Mortgagee, free and
clear of any interest of Mortgagor whatsoever therein, except as
specifically permitted in this Mortgage, and free and clear of any other
liens, claims or encumbrances of any kind or nature whatsoever;
TOGETHER with all right, title and interest of Mortgagor in and
to all improvements, betterments, renewals and all substitutes and
replacements of, and all additions and appurtenances to, the Real Property,
and in each such case, the foregoing shall be deemed a part of the Real
Property and shall become subject to the lien of this Mortgage as fully and
completely, and with the same priority and effect, as though now owned by
Mortgagor and specifically described herein, without any further mortgage,
conveyance, assignment or other act by Mortgagor;
TOGETHER with all proceeds of any or all of the foregoing; and
TO HAVE AND TO HOLD the Encumbered Property and the rights and
privileges hereby encumbered or intended so to be unto Mortgagee and its
successors and assigns for the uses and purposes herein set forth.
Mortgagor, for itself and its successors and assigns, further
represents, warrants, covenants and agrees with Mortgagee as follows:
I. Warranty of Title.
Mortgagor warrants to Mortgagee that (i) it has good and
marketable fee simple title to the Land described in Exhibit A-1, (ii)
Mortgagor is the owner of a valid and subsisting leasehold interest in the
Leasehold Estate and the Buildings described on Exhibit A-2 under the
Ground Lease, subject to no mortgage, lien, charge or encumbrance, except
the Trustee's Mortgage and an Assignment of Leases and Rents in favor of
the Trustee, (iii) it has good and marketable fee simple title to the
Buildings located on the Land and good and marketable title to the Personal
Property located on or used in connection with the Real Property, (iv) it
has the right to mortgage the Real Property and the Leases in accordance
with the provisions set forth in this Mortgage, (v) it has the right to
grant a security interest in the Personal Property and the Rents in
accordance with the provisions set forth in this Mortgage, and (vi) this
Mortgage is a valid and enforceable first lien on the Encumbered Property
(including the Leasehold Estate), subject, as of the date hereof, only to
the exceptions to title listed on Schedule B of Title Insurance Commitment
No. 963670009 issued by Chicago Title Insurance Company redated the date
hereof (collectively, the "Closing Encumbrances"). Mortgagor shall (i)
preserve such title and the validity and priority of the lien of this
Mortgage and shall forever warrant and defend the same, subject to the
Closing Encumbrances and the Permitted Liens (as that term is defined in
the Loan Agreement) (collectively, the Closing Encumbrances and the
Permitted Liens are referred to as the "Permitted Encumbrances"), unto
Mortgagee against the claims of all and every person or persons,
corporation or corporations and parties whomsoever, and (ii) make, execute,
acknowledge and deliver all such further or other deeds, documents,
instruments or assurances and cause to be done all such further acts and
things as may at any time hereafter be reasonably required to confirm and
fully protect the lien and priority of this Mortgage.
II. Payment of Indebtedness.
A. Mortgagor shall pay the Indebtedness at the times and places
and in the manner specified in the Loan Documents and shall perform all of
the Obligations in accordance with the provisions set forth herein and in
the other Loan Documents.
B. Any payment made in accordance with the terms of this Mortgage
by any person at any time liable for the payment of the whole or any part
of the Indebtedness, or by any subsequent owner of the Encumbered Property,
or by any other person whose interest in the Encumbered Property might be
prejudiced in the event of a failure to make such payment, or by any
stockholder, officer or director of a corporation or by any partner of a
partnership which at any time may be liable for such payment or may own or
have such an interest in the Encumbered Property, shall be deemed, as
between Mortgagee and all persons who at any time may be liable as
aforesaid or may own the Encumbered Property, to have been made on behalf
of all such persons.
III. Requirements; Proper Care and Use.
A. Subject to the right of Mortgagor to contest a Legal
Requirement (hereinafter defined) as provided in Article X hereof,
Mortgagor promptly shall comply with, or cause to be complied with, in all
material respects, all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, injunctions, rules, regulations,
restrictions and requirements (collectively, "Legal Requirements") of every
Governmental Authority (hereinafter defined) having jurisdiction over
Mortgagor or the Encumbered Property or the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or Restoration
(hereinafter defined) of the Encumbered Property, without regard to the
nature of the work to be done or the cost of performing the same, whether
foreseen of unforeseen, ordinary or extraordinary, and shall perform, or
cause to be performed, in all material respects, all obligations,
agreements, covenants, restrictions and conditions now or hereafter of
record which may be applicable to Mortgagor or to the Encumbered Property
or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration, repair or Restoration of the Encumbered Property;
provided, however, that Mortgagor shall not be required to comply with any
Legal Requirement which, by its terms, does not require that the Encumbered
Property so comply, or if such failure would not have a Material Adverse
Effect.
B. Mortgagor shall except as otherwise provided herein (i) not
abandon the Encumbered Property or any portion thereof that does not have a
material adverse effect on the Encumbered Property, (ii) maintain, in all
material respects, the Encumbered Property in good repair, order and
condition, reasonable wear and tear excepted, and supplied with all
necessary equipment, (iii) promptly make all necessary repairs, renewals,
replacements, additions and improvements to the Encumbered Property which,
in the reasonable judgment of Mortgagor, may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times, (iv) refrain from impairing or
diminishing in any material manner the value of the Encumbered Property or
the priority or security of the lien of this Mortgage, (v) not remove or
demolish any of the Encumbered Property, if such removal or demolition
might materially impair the value of the Encumbered Property except in
accordance with Article 12 of the Indenture, except that Mortgagor shall
have the right to remove and dispose of, free of the lien of this Mortgage,
such Personal Property as may, from time to time, become worn out or
obsolete or which, in accordance with good business practices, should be
removed or disposed of, provided that if such removal shall materially
adversely effect the value of the Encumbered Property, simultaneously with,
or prior to, such removal, any such Personal Property shall be replaced
with other Personal Property which shall have a value and utility at least
equal to that of the replaced Personal Property and which shall be free of
any security agreements or other liens or encumbrances except in accordance
with Article 12 of the Indenture, (vi) not make, install or permit to be
made or installed any alterations or additions to the Encumbered Property
if doing so would materially impair the value of the Encumbered Property
except in accordance with Article 12 of the Indenture, (vii) not make,
suffer or permit any nuisance (it being acknowledged that casino use shall
not be deemed to be a nuisance) to exist on the Encumbered Property or any
portion thereof, and (viii) subject to the rights of tenants and other
persons or entities in possession, permit Mortgagee and its agents, at all
reasonable times and with reasonable prior notice (except in the case of an
emergency), to enter upon the Real Property for the purpose of inspecting
and appraising the Encumbered Property or any portion thereof.
C. Mortgagor shall not, by any act or omission, permit any
building or other improvement located on any property which is not subject
to the lien of this Mortgage to rely upon the Real Property or any portion
thereof or any interest therein to fulfill any Legal Requirement, except to
the extent that such reliance exists as of the date hereof, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or
any portion of the Real Property or any interest therein to be so used.
Mortgagor shall not, by any act or omission, impair the integrity of the
Real Property, as it exists today, as a single or multiple zoning lot or
lots, as the case may be, separate and apart from all its premises. Any
act or omission by Mortgagor which would result in a violation of any of
the provisions of this Article III shall be null and void. Notwithstanding
the foregoing, Mortgagor shall have the right to grant easements, rights of
way and similar interests which are subordinate to the lien of this
Mortgage and which do not materially impair the value of the Encumbered
Property.
D. Mortgagor has and will maintain in effect at all times until
the Obligations are satisfied in full, all necessary licenses (including
without limitation all licenses necessary under the Act (hereinafter
defined) or otherwise to operate the casino portion of the Encumbered
Property as a casino), authorizations, registrations and approvals to own,
use, occupy and operate the Real Property, and Mortgagor has full power and
authority to carry on its business at the Real Property as currently
conducted and has not received any notice of any violation of any Legal
Requirement that materially impairs the value of the Encumbered Property.
E. During the term of this Mortgage and any renewals or extensions
hereof, as to any (i) "license," as such term is defined in N.J.S.A.
5:12-30, issued pursuant to the New Jersey Casino Control Act and
regulations promulgated thereunder (collectively being referred to herein
as the "Act") which is material to the continued lawful operation of
Mortgagor as a casino licensed pursuant to the provisions of the Act, and
(ii) any material requirements of the "Operation Certificate," as such term
is defined in N.J.S.A. 5:12-35, issued with regard to the Encumbered
Property (the foregoing subparagraphs (i) and (ii) are herein collectively
referred to as the "Operational Requirements"):
a. As of the date hereof, the Operational Requirements are to
the best of Mortgagor's knowledge in good standing, free of material
violations, and all conditions under which they have been issued or renewed
have been or are being satisfied and fulfilled.
b. Mortgagor will keep, maintain and preserve the Operational
Requirements in full force and effect and in good standing.
c. Mortgagor will not knowingly violate, nor will it
knowingly suffer any violation of, the Operational Requirements.
d. In the event Mortgagor knows of any fact, circumstances,
or occurrence which may result in a violation of the Operation
Requirements, Mortgagor shall promptly give Mortgagee written notice
thereof.
IV. Taxes on Mortgagee.
A. If the United States of America, the State of New Jersey or any
political subdivision thereof or any city, town, county or municipality in
which the Encumbered Property is located or any agency, department, bureau,
board, commission, including the Casino Control Commission as defined in
the Loan Agreement, or instrumentality of any of the foregoing now existing
or hereafter created (collectively, "Governmental Authorities" and,
individually, a "Governmental Authority") shall, at any time after the date
hereof (whether or not the lien of this Mortgage shall have been released),
levy, assess or charge any tax, assessment or imposition upon this Mortgage
or any other Loan Document, the Indebtedness, the Obligations or the
interest of Mortgagee in the Encumbered Property by reason of this Mortgage
or any other Loan Document, the Indebtedness or the Obligations (excepting
therefrom any income tax on payments made under the Loan Agreement and any
franchise tax), Mortgagor shall pay all such taxes, assessments and
impositions to, for, or on account of, Mortgagee, as they become due and
payable and, on demand, shall furnish proof of such payment to Mortgagee.
If Mortgagor shall fail to pay any such tax, assessment or imposition, then
Mortgagee, at its option (but without any obligation to do so), upon thirty
(30) days' notice to Mortgagor (or such shorter period as Mortgagee may
deem reasonable if Mortgagee believes that failure to pay any such tax,
assessment or imposition promptly may subject the Encumbered Property (or
any portion thereof) to loss, forfeiture or a material diminution in
value), may pay such tax, assessment or imposition and, in such event, the
amount so paid (i) shall be deemed to be Indebtedness, (ii) shall be a lien
on the Encumbered Property prior to any right or title to, interest in, or
claim upon, the Encumbered Property subordinate to the lien of this
Mortgage and (iii) immediately shall be due and payable, on demand,
together with interest thereon at the rate of interest then payable under
the Loan Agreement, including, in calculating such rate of interest, any
additional interest which may be imposed under the Loan Agreement by reason
of any default thereunder (such rate of interest being hereinafter referred
to as the "Interest Rate"), from the date of any such payment by Mortgagee
to the date of repayment to Mortgagee.
B. If any Governmental Authority shall at any time require
revenue, documentary or similar stamps to be affixed to this Mortgage or
any other Loan Document or shall require the payment of any tax with
respect to the ownership or recording of this Mortgage or any other Loan
Document, Mortgagor, upon demand, shall pay for such stamps in the required
amount and shall deliver the same to Mortgagee, together with a copy of the
receipted bill therefor. If Mortgagor shall fail to pay for any such
stamps, then Mortgagee, at its option (but without any obligation to do
so), upon thirty (30) days' notice to Mortgagor (or such shorter period as
Mortgagee may deem reasonable if Mortgagee believes that failure to pay for
any such stamps promptly may subject the Encumbered Property (or any
portion thereof) to loss, forfeiture or a material diminution in value),
may pay for the same and, in such event, the amount so paid (i) shall be
deemed to be Indebtedness, (ii) shall be a lien on the Encumbered Property
prior to any right or title to, or interest in, or claim upon, the
Encumbered Property subordinate to the lien of this Mortgage and (iii)
immediately shall be due and payable, on demand, together with interest
thereon at the Interest Rate, from the date of any such payment by
Mortgagee to the date of repayment to Mortgagee.
C. In the event of the passage, after the date of this Mortgage,
of any law of the jurisdiction in which the Encumbered Property is located
which shall deduct from the value of the Encumbered Property, for purposes
of taxation, any lien thereon shall change in any way the laws for the
taxation of mortgages or debts secured by mortgages for state of local
purposes or the manner of the collection of any such taxes and shall impose
a tax, either directly or indirectly, on this Mortgage or any other Loan
Document, then, so long as Mortgagor, Mortgagee, this Mortgage or the Loan
Agreement is not exempt from payment of such tax and if Mortgagor shall be
permitted by law to pay the whole or such tax in addition to all other
payments required hereunder and under the other Loan Documents, Mortgagor
shall pay such tax when the same shall be due and payable and shall agree
in writing to pay such tax when thereafter levied or assessed against the
Encumbered Property.
V. Payment of Impositions.
A. Subject to the provisions of Article X hereof, not later than
the date on which payment of the same shall be due, that is, the day before
the date on which any fine, penalty, interest, late charge or loss may be
added thereto or imposed by reason of the nonpayment thereof, Mortgagor
shall pay and discharge all taxes (including, but without limiting the
generality of the foregoing, all real property taxes and assessments and
personal property taxes), charges for any easement or agreement maintain
for the benefit of the Encumbered Property or any portion thereof, general
and special assessments and levies, permit, inspection and license fees,
water and sewer rents and charges and any other charges of every kind and
nature whatsoever, foreseen or unforeseen, ordinary or extraordinary,
public or private, which, at any time, are imposed upon or levied or
assessed against Mortgagor in connection with the Encumbered Property or
any portion thereof, or which arise with respect to, or in connection with,
the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or Restoration of the Encumbered Property or any portion
thereof, together with any penalties, interest or late charges which may be
imposed in connection with any of the foregoing (all of the foregoing
taxes, assessments, levies and other charges, together with such interest,
penalties and late charges, being hereinafter collectively referred to as
"Impositions" and, individually, as an "Imposition"); provided, however,
that Mortgagor shall have the right to file for an extension in connection
with the payment of any Imposition and, if granted, to pay the Imposition
on or before the date specified in the extension, together with any
interest or penalty which may be imposed as a result of such extension.
If, however, any Legal Requirement shall allow that any imposition may, at
Mortgagor's option, be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Mortgagor may exercise
the option to pay such Imposition in such installments, and, in such event,
Mortgagor shall be responsible for the payment of all such installments,
together with the interest, if any, thereon, in accordance with the
provisions of the applicable Legal Requirement. Not later than thirty (30)
days after request therefor by Mortgagee, Mortgagor shall deliver to
Mortgagee evidence reasonably acceptable to Mortgagee showing the payment
of such Imposition. Mortgagor also shall deliver to Mortgagee, within
thirty (30) days after request therefor, copies of all settlements and
notices pertaining to any Imposition which may be issued by any
Governmental Authority.
B. Upon the occurrence of an Event of Default or in the event that
Mortgagor shall fail, for two consecutive quarters, to make payments on
real property taxes and assessments on a timely basis, Mortgagee may, but
shall not be obligated to, require Mortgagor to deposit with Mortgagee,
monthly, one-twelfth (1/12th) of the annual charges for real property taxes
and assessments and other charges which might become a lien upon the
Encumbered Property or any portion thereof (each, an "Escrow Deposit"). If
the amounts so required to be deposited are estimated, based upon charges
for the preceding year, and Mortgagee determines, in its reasonable good
faith judgment, that the aggregate of the sums to be deposited in escrow as
aforesaid will be insufficient to make each of the payments aforementioned,
Mortgagor shall, on demand by Mortgagee, simultaneously therewith deposit
or cause to be deposited with Mortgagee, a sum of money which, together
with the monthly installments aforementioned, due subsequent to the date of
such demand, will be sufficient to make such payments at least ten (10)
days prior to the date such payments are due. Should said charges not be
ascertainable at the time any Escrow Deposit is required to be made with
Mortgagee, the Escrow Deposit shall be made on the basis of the charges for
the prior year, and when the charges are fixed for the then current year,
Mortgagor shall deposit any deficiency with Mortgagee. All funds so
deposited with Mortgagee shall be deposited in a federally insured interest
bearing account or liquid assets account in any state in the United States
or the District of Columbia, may be commingled by Mortgagee with its
general funds and, provided that Mortgagee shall not otherwise have used a
portion of such funds in accordance with the provisions of this Mortgage,
such funds (less the amounts, if any, which are payable into the escrow
fund to be used to pay real property taxes and assessments not yet due and
payable) shall be applied in payment of the aforementioned charges when and
as payable, to the extent Mortgagee shall have such funds on hand. In the
event that there shall occur an Event of Default, the funds deposited with
Mortgagee, as aforementioned, may be applied in payment of the charges for
which such funds shall have been deposited or the payment of the
Indebtedness or any other charges affecting the security of this Mortgage,
as Mortgagee determines, in its sole discretion, but no such application
shall be deemed to have been made by operation of law or otherwise until
actually made by Mortgagee as herein provided. If Escrow Deposits are
being made with Mortgagee as aforesaid, Mortgagor shall furnish Mortgagee
with bills for the charges for which such deposits are required to be made
hereunder and/or such other documents necessary for the payment of same, on
the later to occur of (i) fifteen (15) days prior to the date on which the
charges first become due and payable and (ii) the date on which such bills
are received by Mortgagor.
C. Nothing contained in this Mortgage shall affect any right or
remedy of Mortgagee under this Mortgage or otherwise to pay, upon thirty
(30) days' notice to Mortgagor (or such shorter period as Mortgagee may
deem reasonable if Mortgagee believes that the failure to pay any such
Imposition promptly may subject the Encumbered Property (or any portion
thereof) to loss, forfeiture or a material diminution in value), any
Imposition from and after the date on which such Imposition shall have
become due and payable and, in such event and provided Mortgagee shall not
have paid such Imposition with sums being held by Mortgagee pursuant to
subparagraph (B) of this Article V (provided, however, that Mortgagee shall
have no right to pay such Imposition which Mortgagor is contesting the
validity, enforceability or application of the same pursuant to the
provisions of Article X hereof or is otherwise paying such Imposition in
installments in accordance with the provisions hereof), the amount so paid
(i) shall be deemed to be Indebtedness, (ii) shall be a lien on the
Encumbered Property prior to any right or title to, interest in, or claim
upon, the Encumbered Property subordinate to the lien of this Mortgage and
(iii) shall be immediately due and payable, on demand, together with
interest thereon at the Interest Rate, from the date of any such payment by
Mortgagee to the date of repayment to Mortgagee.
VI. Insurance.
A. Mortgagor shall provide and keep in full force and effect, or
require to be provided and kept in full force and effect, for the benefit
of Mortgagee as hereinafter provided:
1. insurance for the Buildings and the Personal Property (t)
against loss or damage by fire, lightning, windstorm, tornado, hail and
such other further and additional hazards of whatever kind or nature as are
now or hereafter may be covered by standard extended coverage, (u) with
"all risk" endorsements (including, but without limiting the generality of
the foregoing, vandalism, malicious mischief and damage by water), (v)
against war risks as, when and to the extent such insurance is obtainable
from the United States of America or an agency thereof, (w) against flood
disaster pursuant to the Flood Disaster Protection Act of 1973, 84 Stat.
572, 42 U.S.C. 4001, if the Real Property is located in an area identified
by the United States Department of Housing and Urban Development as a flood
hazard area (it being understood and agreed that Mortgagor may obtain such
insurance from a private carrier satisfactory to the Mortgagee), (x)
against earthquakes (including subsidence), (y) against loss of rentals and
business interruption due to any of the foregoing causes for a minimum
period of nine (9) months or for a longer period, and (z) against any other
risk commonly insured against by persons operating properties similar to
the Encumbered Property and located in the vicinity of the Encumbered
Property or conducting operations similar the operations conducted at the
Real Property;
2. demolition and increased cost of construction coverage;
3. if a sprinkler system shall be located in the Buildings,
sprinkler leakage insurance;
4. commercial general liability insurance in respect to the
operation of the Encumbered Property with limits of not less than
$100,000,000 combined single limit for bodily injury per occurrence and/or
property damage liability per occurrence (collectively, the "Minimum
Liability Coverage"); provided, however, that the Minimum Liability
Coverage may be reduced from time to time, but in no event to limits of
less than $25,000,000 on a "claims made" basis, provided that Mortgagor
shall deliver to Mortgagee, within thirty (30) days after the expiration of
the policy or policies containing the Minimum Liability Coverage and
thereafter within thirty (30) days after the end of each fiscal year of
Mortgagor until the Minimum Liability Coverage shall be reinstated, an
Officer's Certificate for each Mortgagor (signed by (i) a Secretary or
Assistant Secretary of each Mortgagor and (ii) the Chairman, Vice Chairman,
President, Vice President or Treasurer of each Mortgagor; provided,
however, that such certificate may be signed by two of the officers listed
in clause (ii) above in lieu of being signed by one of such officers or
directors listed in such clause (ii) and one of the officers listed in
clause (i) above) stating that Mortgagor was unable to obtain commercial
general liability insurance coverage in excess of the amount actually
obtained or on other than a "claims made" basis; and
5. such other insurance in such amounts as may from time to
time be commonly insured against in the case of properties similar to the
Encumbered Property and located in the vicinity of the Encumbered Property
or conducting operations similar to the operations conducted at the Real
Property.
All insurance provided hereunder shall be in such form as is
commonly obtained by owners of property similar to the Encumbered Property
and located in the vicinity of the Encumbered Property or conducting
operations similar to the operations conducted at the Real Property, shall
not contain a coinsurance provision whereby Mortgagor in the event of loss
becomes a co-insurer, shall, in the case of casualty insurance, name
Mortgagee as a named insured under a standard New York mortgagee
endorsement or its equivalent, which shall be acceptable to Mortgagee,
shall name Mortgagee as a named insured in the case of insurance other than
casualty insurance, shall provide for loss payable to Mortgagees, except
policies insuring against damage by fire or other casualty, which shall
provide for loss payable as more particularly set forth in Paragraph VI(J)
hereof, shall be provided by insurance companies which have a then current
Alfred M. Best Company, Inc., general policyholder's rating of at least
"A-12" or a financial rating reasonably acceptable to Mortgagee or by such
other insurance companies as are reasonably acceptable to Mortgagee, shall
be cancelable only upon thirty (30) days' prior written notice to
Mortgagee, may provide for a standard deduction not to exceed $500,000 in
the case of all insurance other than commercial general liability
insurance, and $1,000,000 in the case of commercial general liability
insurance, and otherwise shall be acceptable to Mortgagee in its reasonable
discretion. For purposes hereof, "Depositary" shall mean a depositary
designated by the Trustee to serve as Depositary pursuant to the Trustee's
Mortgage or if none shall be designated then it shall mean a bank, trust
company, insurance company, savings bank or governmental pension,
retirement or welfare fund, reasonably acceptable to Mortgagor. Anything
contained herein to the contrary notwithstanding, in no event shall the
insurance provided under clause (t) of Paragraph VI(A)(1) hereof be in an
amount which is less than One Hundred Percent (100%) of the full
replacement cost of the Buildings and the Personal Property, including the
cost of debris removal, but excluding the value of foundations and
excavations, as reasonably determined from time to time by Mortgagee.
Mortgagor shall assign and deliver to Mortgagee all such certificates,
policies of insurance or duplicate originals thereof, as collateral and
further security for payment of the Indebtedness and performance of the
Obligations. If any insurance required to be provided hereunder shall
expire, be withdrawn, become void by breach of any condition thereof by
Mortgagor or by any lessee of the Real Property or any portion thereof, or
become void or questionable by reason of the failure or impairment of the
capital of any insurer, of if for any other reason whatsoever any such
insurance shall become unsatisfactory to Mortgagee, as determined in its
reasonable judgment, Mortgagor immediately shall obtain new or additional
insurance which shall be satisfactory to Mortgagee in its reasonable
discretion. If any insurance required to be provided hereunder shall
become unavailable to property owners in the area in which the Encumbered
Property is located, then Mortgagor shall, within thirty (30) days after
demand by Mortgagee, obtain such other types of insurance, in such amounts
as may be reasonable required by Mortgagee. Mortgagor shall not take out
any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise reasonably satisfactory
to Mortgagee in all respects.
B. Mortgagor shall (i) pay as they become due all premiums for the
insurance required hereunder (it being understood that Mortgagor may pay
all such premiums in installments), and (ii) not later than thirty (30)
days prior to the expiration of each such policy, deliver to Mortgagee a
renewal policy or a duplicate original thereof or a certificate evidencing
the insurance required to be provided hereunder, accompanied by such
evidence of payment of the initial installment as shall be satisfactory to
Mortgagee in its reasonable discretion.
C. If Mortgagor shall be in default of its obligation to so insure
or deliver any such prepaid insurance or policies or certificate or
certificates of insurance to Mortgagee in accordance with the provisions
hereof, Mortgagee, at its option (but without any obligation do so) and
upon twenty-four (24) hours notice, unless Mortgagor provides satisfactory
evidence that all insurance requirements under this Mortgage and the Loan
Agreement, have been complied with, may effect such insurance from year to
year, and pay the premium or premiums therefor, and, in such event, the
amount of all such premium or premiums (i) shall be deemed to be
Indebtedness, (ii) shall be a lien on the Encumbered Property prior to any
right or title to, or interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage and (iii) shall be immediately due
and payable, on demand, together with interest thereon at the Interest
Rate, from the date of any such payment by Mortgagee to the date of
repayment to Mortgagee.
D. Mortgagor shall adjust the amount of insurance required to be
provided pursuant to the provisions of clause (t) of Paragraph VI(A)(1)
hereof at the time that each such policy of insurance is renewed (but, in
no event, less frequently than once during each twelve (12) month period)
by using the F. W. Dodge Building Index to determine whether there shall
have been an increase in the replacement cost of the Buildings and the
Personal Property since the most recent adjustment to any such policy and,
if there shall have been any such increase, the amount of insurance
required to be provided hereunder shall be adjusted accordingly.
E. Mortgagor promptly shall comply with, and shall cause the
Buildings and the Personal Property to comply with, (i) all of the
provisions of each such insurance policy, and (ii) all of the requirements
of the insurers thereunder applicable to Mortgagor or to any of the
Buildings or the Personal Property or to the use, manner of use, occupancy,
possession, operation, maintenance, alteration, repair or Restoration of
any of the Buildings or Personal Property, even if such compliance would
necessitate structural changes or improvements or would result in
interference with the use or enjoyment of the Encumbered Property or any
portion thereof. If Mortgagor shall use the Encumbered Property or any
portion thereof in any manner which would permit the insurer to cancel any
insurance required to be provided hereunder, Mortgagor immediately shall
obtain a substitute policy which shall be reasonably satisfactory to
Mortgagee and which shall be effective on or prior to the date on which any
such other insurance policy shall be canceled.
F. If the Buildings or the Personal Property or any portion
thereof shall be damaged, destroyed or injured by fire or any other
casualty, Mortgagor shall give immediate notice thereof to Mortgagee and
Mortgagor promptly shall commence and diligently shall continue and
complete the repair, restoration, replacement or rebuilding of the
Buildings in a good and workmanlike manner ("Restoration") and the Personal
Property so damage, destroyed or injured substantially to their value,
condition and character immediately prior to such damage, destruction or
injury, in full compliance with all Legal Requirements. In addition, if
the Restoration to be done may materially impair the structural integrity
of a material portion of the Buildings or if the cost of the Restoration as
estimated by Mortgagee shall exceed the sum of Eight Million Dollars
($8,000,000) (in either case, "Major Restoration"), then Mortgagor shall,
prior to the commencement of the Major Restoration, furnish or cause to be
furnished to Mortgagee: (1) complete plans and specifications for the Major
Restoration, bearing the signed approval thereof by an architect reasonably
satisfactory to Mortgagee (the "Architect") and accompanied by the
Architect's signed estimate, bearing the Architect's seal, of the entire
cost of completing the work (the "Plans"), which Plans shall be submitted
to Mortgagee for approval, which approval shall be granted or denied within
twenty one (21) days of Mortgagee's receipt thereof (it being understood
that if Mortgagee shall fail to respond within such twenty-one (21)-day
period, Mortgagee shall be deemed to have granted its approval) and which
approval shall not be unreasonably withheld; provided, however, that
Mortgagee's approval of the Plans shall not be required in the case of (i)
Major Restoration consisting primarily of demolition or construction of the
Buildings for safety purposes, (ii) Major Restoration for which no permits
or approvals by Governmental Authorities are required by law, (iii) Major
Restoration consisting primarily of temporary, non-permanent construction,
or (iv) Major Restoration consisting primarily of painting or other items
of decorative work; (2) certified or photo-static copies of all permits and
approvals required by law in connection with the commencement and conduct
of the Major Restoration; and (3) either (x) a payment and performance bond
for, and/or guaranty of the payment for and completion of, the Major
Restoration, which bond or guaranty shall be in form reasonably
satisfactory to Mortgagee, and shall be signed by a surety or sureties, or
guarantor or guarantors, as the case may be, who are reasonably acceptable
to Mortgagee, and shall be in an amount not less than One Hundred Ten
Percent (110%) of the Architect's estimate of the entire cost of completing
the Major Restoration, less the amount of Insurance Proceeds, if any, then
held by Depositary for application toward the cost of the Major
Restoration, or, at Mortgagor's option, (y) such other security as may be
reasonably satisfactory to Mortgagee. Notwithstanding anything to the
contrary contained herein, Mortgagee acknowledges that Major Restoration
may be performed on a "fast track" basis and, in such event, Mortgagor
shall not be required to submit full and complete Plans for approval prior
to the commencement of the Major Restoration, but shall submit such Plans
as and when they are prepared and submitted for approval to the applicable
Governmental Authorities.
G. Mortgagor shall not commence any of the Major Restoration until
Mortgagor shall have complied with the applicable requirements referred to
in clause (F) above, and after commencing Major Restoration, Mortgagor
shall perform the Major Restoration diligently in a good and workmanlike
manner and in good faith substantially in accordance with the Plans, if
applicable, and in compliance with all applicable laws.
H. Any Insurance Proceeds received by Depositary attributable to
business interruption insurance shall be promptly paid over to Mortgagor
upon receipt of the same by Depositary. All Insurance Proceeds delivered
to Depositary as aforesaid, other than proceeds attributable to business
interruption insurance, together with all Insurance Proceeds or portions
thereof paid directly to Depositary on account of damage or destruction to
the Buildings and/or the Personal Property (all of which Insurance Proceeds
or portions thereof, other than proceeds attributable to business
interruption insurance, shall be deposited by Depositary in an
interest-bearing account), together with any interest thereon, less the
cost, if any, to Mortgagee and Depositary of such recovery and of paying
out such Insurance Proceeds (including reasonable attorneys' fees and costs
allocable to inspecting the work and reviewing the Plans therefor), upon
the written request of Mortgagor and subject to compliance with the
provisions of this Article VI, shall be made available for application by
Depositary to the payment of the cost of the Major Restoration referred to
in clause (F) above and shall be paid out from time to time to Mortgagor
and/or, at Mortgagee's or Depositary's option, exercisable from time to
time, directly to the contractor, subcontractors, materialmen, laborers,
engineers, architects and other persons rendering services or materials in
connection with the Major Restoration, as said Major Restoration
progresses, except as otherwise hereinafter provided, but subject to the
following conditions, any of which Mortgagee and Depositary may waive:
1. If the Restoration to be done is Major Restoration, as
determined by Mortgagee, the Architect shall be in charge of the
Restoration.
2. Each request for payment shall be made at least ten (10)
days prior to the requested date of disbursement and shall be accompanied
by a certificate of the Architect stating (1) that all of the Major
Restoration completed has been done in a good and workman-like manner and
in substantial compliance with the approved Plans, if any be required under
clause (F) hereof, and in accordance with the provisions of all applicable
laws; (2) the sum requested is justly required to reimburse Mortgagor for
payments by Mortgagor to, or is justly due to, the contractor,
subcontractors, materialmen, laborers, engineers, architects or other
persons rendering services or materials in connection with the Major
Restoration (giving a brief description of such services and materials),
and that when added to all sums previously paid out by Depositary, if any,
does not exceed the value of the Major Restoration (including the value of
any "soft costs", such as engineers' or architects' fees incurred in
connection therewith) done to the date of such certificate; and (3) that
the amount of Insurance Proceeds remaining in the hands of Depositary,
together with other funds otherwise available to Mortgagor, provided that
Mortgagor certifies to architect that such funds are available, will be
sufficient on completion of the Major Restoration to pay for the same in
full (giving in such reasonable detail as Mortgagee or Depositary may
require an estimate of the cost of such completion and if such other funds
are required, including a certificate of an officer of Mortgagor, as to the
sources of such funds).
3. Each request shall be accompanied by waivers or releases
of liens, reasonably satisfactory to Mortgagee and Depositary, covering
that part of the Major Restoration previously paid for, if any, and by a
search prepared by a title company or by other evidence reasonably
satisfactory to Mortgagee and Depositary that there has not been filed with
respect to the Encumbered Property, or any part thereof, any mechanic's
lien or other lien or instrument for the retention of title not discharged
of record (by bonding or otherwise) in respect of any part of the work and
that there exist no encumbrances on or affecting the Encumbered Property,
or any part thereof. other than Permitted Encumbrances and those which may
have been approved by Mortgagee.
4. There shall be no Event of Default or Potential Default
under this Mortgage, the Loan Agreement or any other Loan Document.
5. The request for any payment after the Major Restoration
has been completed shall be accompanied by a copy of any certificate or
certificates required by law to render occupancy and operation of the
Encumbered Property legal.
Upon completion of the Restoration and payment in full therefor
and provided there shall not then be continuing any Event of Default or
Potential Default under any Loan Document, any Insurance Proceeds (together
with any interest earned thereon) shall be paid to the Mortgagor. Upon
failure on the part of Mortgagor promptly to commence or diligently to
continue the Restoration, Mortgagee may, subject to the terms of the
Intercreditor Agreement, apply the amount of any Insurance Proceeds
(together with any interest earned thereon) then or thereafter in the hands
of Depositary to the payment of the Indebtedness; provided, however, that
nothing herein contained shall prevent Mortgagee from applying at any time
the whole or any part of such Insurance Proceeds (together with any
interest earned thereon), and Mortgagee may so apply such Insurance
Proceeds (together with any interest earned thereon), to the curing of any
Event of Default under this Mortgage or the Loan Agreement or any other
Loan Document.
I. If within one (1) year after the occurrence of any damage or
destruction to the Buildings and Personal Property or any portion of either
thereof requiring Major Restoration in order to restore the Buildings and
Personal Property, Mortgagor shall not have submitted Plans in accordance
with paragraph (F) of this Article VI to Mortgagee for the Major
Restoration of the Buildings and the Personal Property so damaged or
destroyed, or if, after such Plans are approved by all necessary
Governmental Authorities and Mortgagee, Mortgagor shall fail to commence
promptly such Major Restoration, or if thereafter Mortgagor fails
diligently to continue such Major Restoration or is delinquent in the
payment to mechanics, materialmen or others of the costs incurred in
connection with such Major Restoration (other than those costs which
Mortgagor is, in good faith, disputing), or, in the case of any damage or
destruction to the Buildings and/or the Personal Property or any part of
either thereof not requiring Major Restoration, as reasonably determined by
Mortgagee, in order to restore the Encumbered Property, if Mortgagor shall
fail to repair, restore and rebuild promptly the Buildings and Personal
Property so damaged or destroyed, or in any other respect fails to comply
with its obligations under this Article VI, then, in addition to all other
rights herein set forth, Mortgagee or any lawfully appointed receiver of
the Buildings and Personal Property may, at their respective options (but
without any obligation to do so), perform or cause to be performed such
Major Restoration and may take such other steps as they deem advisable to
perform such work. In such event, Depositary shall pay over the Insurance
Proceeds (together with any interest earned thereon) held by it to
Mortgagee or such receiver, as the case may be, upon request, to the extent
not previously paid to Mortgagor hereunder in accordance with the terms of
this Mortgage. Mortgagor hereby waives, for itself and all others holding
under it, any claim against Mortgagee and such receiver arising out of
anything done by Mortgagee or such receiver pursuant hereto, other than due
to the negligence or wilful misconduct of Mortgagee or such receiver, and
Mortgagee may apply all or a portion of the Insurance Proceeds (without the
need to fulfill any other requirements of this Article VI) to reimburse
Mortgagee and/or such receiver, for all amounts reasonably expended or
incurred by them, respectively, in connection with the performance of such
Major Restoration, and any excess costs shall be paid by Mortgagor to
Mortgagee upon demand.
J. Insurance Proceeds which are payable in connection with any
damage to, or destruction of, or injury to, the Buildings or the Personal
Property (i) in the case of a loss equal to or in excess of Ten Million
Dollars ($10,000,000), shall all be paid to Depositary and disbursed in
accordance with the provisions hereof; (ii) in the case of a loss in excess
of Eight Million Dollars ($8,000,000), but less than Ten Million Dollars
($10,000,000), the first Eight Million Dollars ($8,000,000) shall be paid
to Mortgagor and the remaining Insurance Proceeds shall be paid to
Depositary and disbursed in accordance with the provisions hereof; and
(iii) in the case of a loss of Eight Million Dollars ($8,000,000) or less,
shall be paid directly to Mortgagor. Mortgagor is hereby authorized to
settle all claims under all policies of insurance and to execute and
deliver all necessary proofs of loss, receipts, vouchers and releases
required by the insurers, however, Mortgagee shall have the right, but not
the obligation, to join with Mortgagor in settling, and approving the
settlement of, any such claims except in the event of a claim where the
amount of insurance reasonably anticipated to be received with respect to
such claim is less than Eight Million Dollars ($8,000,000). Each insurer
is hereby authorized and directed to make payment of any Insurance Proceeds
or the portion thereof, as described in this Paragraph VI(J), under any
policies of insurance in connection with a loss in excess of Ten Million
Dollars ($10,000,000) directly to Depositary instead of to Mortgagor and
Depositary jointly, and Depositary is hereby authorized to endorse any
draft therefor as Mortgagor's attorney-in-fact if Mortgagor shall fail to
do so for ten (10) days (or such lesser period of time as Mortgagee may
reasonably believe to be required) after request therefor by Mortgagee or
Depositary. If, prior to the receipt by Depositary or Mortgagor or both,
as the case may be, of any Insurance Proceeds or portion thereof, the
Encumbered Property or any portion thereof shall have been sold by
Mortgagee pursuant to the power of sale provided herein, Mortgagee shall
have the right to receive the Insurance Proceeds to the extent of any
deficiency found to be due upon such sale, whether or not a deficiency
judgment on this Mortgage shall have been sought or recovered or denied,
together with interest thereon at the Interest Rate, and the reasonable
attorneys' fees, costs and disbursements incurred by Mortgagee in
connection with the collection of the Insurance Proceeds.
K. The insurance required by this Mortgage may, at the option of
Mortgagor, be effected by blanket and/or umbrella policies issued to
Mortgagor covering the Buildings and the Personal Property as well as other
properties (real and personal) which are owned or leased by Mortgagor,
provided that, in each case, the policies otherwise comply with the
provisions of this Mortgage and allocate to the Buildings and the Personal
Property, from time to time, the coverage specified by Mortgagee, without
possibility of reduction or coinsurance by reason of, or damage to, any
other property (real or personal) named therein. If the insurance required
by this Mortgage shall be effected by any such blanket or umbrella
policies, Mortgagor shall furnish to Mortgagee original policies or
duplicate originals thereof or certificates, with schedules attached
thereto showing the amount of the insurance provided under such policies
which is applicable to the Buildings and the Personal Property.
L. Any conveyance or foreclosure of the Encumbered Property
pursuant to Mortgagee's rights in accordance with the provisions hereof
shall transfer therewith all of Mortgagor's interest in all insurance
policies then covering the Buildings and the Personal Property or the
operations conducted at the Real Property.
M. Mortgagor hereby acknowledges that in the event Mortgagee is
permitted or required to exercise any discretion under this Article,
Mortgagee shall not be deemed to have abused such discretion provided that
Mortgagee shall have relied, at the reasonable expense of Mortgagor, on a
recognized insurance consultant with regard to insurance matters, a
recognized construction consultant with regard to restoration matters or
such other recognized consultants as may be appropriate or necessary to
fulfill its obligation hereunder.
N. With respect to the Leasehold Estate, the insurance
requirements and the restoration obligations shall satisfy the requirements
of the Ground Lease.
VII. Condemnation/Eminent Domain.
A. Notwithstanding (i) any taking by eminent domain, condemnation
or otherwise of all or any portion of the Encumbered Property, or (ii) the
change of grade of any street or the widening of streets, roads or avenues
adjoining or abutting the Land, or (iii) any other injury to or decrease in
value of the Encumbered Property by any Governmental Authority (any of the
foregoing events being hereinafter referred to as a "Taking"), Mortgagor
shall continue to make all payments due under this Mortgage and under the
Loan Agreement and the other Loan Documents in accordance with the
provisions of this Mortgage, the Loan Agreement and the applicable
provisions of the other Loan Documents. Mortgagor shall notify Mortgagee
immediately upon obtaining knowledge of the institution of any proceedings
for any Taking or of any contemplated Taking of which Mortgagor is aware.
No such proceeding with respect to any Taking shall be settled without the
prior express written consent of Mortgagee, which consent shall not be
unreasonably withheld or delayed, it being agreed that if Mortgagee shall
have failed to have either granted or denied its consent thereto within
twenty-one (21) days after request therefor, the same shall be deemed to
have been given; provided, however, that a proceeding where the amount
reasonably anticipated to be received by the Mortgagor collectively is less
than Eight Million Dollars ($8,000,000) shall not require such consent.
Each Governmental Authority is hereby authorized and directed to make
payment of any Award made in connection with any Taking directly to
Mortgagor or Depositary in accordance with the provisions of the next
succeeding sentence and Paragraph VII(B) hereof instead of to Mortgagor and
Depositary jointly, and Depositary is hereby authorized to endorse any
draft therefor as Mortgagor's attorney-in-fact if Mortgagor shall fail to
endorse any such draft for ten (10) days after request therefor by
Mortgagee or Depositary. Anything contained in any Legal Requirement, this
Mortgage, to the contrary notwithstanding, if there shall be a Taking of
less than the entire Encumbered Property and if there shall remain a
sufficient portion of the Encumbered Property so that it shall be possible
for Mortgagor to continue to conduct its business at such remaining
Encumbered Property (a "Partial Taking"), (i) in the event that the Award
is less than Eight Million Dollars ($8,000,000), the same shall be paid to
Mortgagor, (ii) in the event that the Award shall be equal to or be in
excess of Eight Million Dollars ($8,000,000), but shall be less than Ten
Million Dollars ($10,000,000), the first Eight Million Dollars ($8,000,000)
of such Award shall be paid to Mortgagor and the remaining portion of the
Award shall be paid to Depositary, or (iii) in the event that the Award
shall be equal to or greater than Ten Million Dollars ($10,000,000), the
entire Award shall be paid to Depositary and, in the case of (i) and (ii)
above, Depositary shall pay the Award or portion thereof received (after
deducting therefrom all costs and expenses, including, but without limiting
the generality of the foregoing, reasonable attorneys' fees, costs and
disbursements incurred by Mortgagee in connection with the collection
thereof and any expenses of Depositary) to Mortgagor, in accordance, and
upon there being compliance, with the provisions of Article VI hereof, for
the sole purpose of Mortgagor's Restoration of the Buildings and the
Personal Property remaining after any such Partial Taking, it being
understood and agreed, however, that neither Mortgagee nor Depositary shall
have any obligation whatsoever to see to the proper application of any
Award so paid to Mortgagor. Mortgagor promptly shall commence and
diligently shall continue and complete the Restoration of the Buildings and
the Personal Property remaining after such Partial Taking substantially to
their value, condition and character immediately prior to such Partial
Taking, in accordance with the provisions of Article VI hereof, as if such
Partial Taking had resulted in "damage or destruction to the Buildings or
Personal Property" (within the meaning of Paragraph VI(F) hereof), with
Mortgagor, Mortgagee and Depositary each having the same rights and
obligations with respect to the Award and Restoration as are set forth in
Paragraphs VI(F) through VI(J) hereof with respect to Insurance Proceeds,
except that, notwithstanding the provisions of Paragraph VI(F) hereof,
Mortgagor shall restore the Buildings and the Personal Property
substantially to their value, condition and character immediately prior to
such Partial Taking, only to the extent practicable, but otherwise in
accordance with the provisions of Paragraph VI(F). Any Award remaining
after completion of such Restoration shall be paid to Mortgagor, provided
that there shall not then be continuing any Event of Default hereunder. If
there shall then be continuing an Event of Default hereunder, any such
Award shall be paid to the Mortgagee, and subject to the terms of the
Intercreditor Agreement, may be applied to the payment of the Indebtedness
then outstanding.
B. Notwithstanding anything contained herein to the contrary, in
the event of a total Taking or a Taking other than a Partial Taking, each
Governmental Authority is hereby authorized and directed to make payment of
any Award made in connection with any such Taking to the Mortgagee. The
proceeds of such Award shall be distributed in accordance with the terms of
the Intercreditor Agreement.
C. Reduction of the outstanding amount of the Indebtedness
resulting from the application of any such Award by Mortgagee in accordance
with the provisions hereof shall be deemed to take effect only on the date
of Mortgagee's receipt of such Award in accordance with the terms of this
Mortgage and in such order of priority as Mortgagee may elect. If, prior
to the receipt by Mortgagee of any Award, the Encumbered Property or any
portion thereof shall have been sold by Mortgagee pursuant to the power of
sale provided herein, Mortgagee shall have the right to receive the Award
to the extent of any deficiency found to be due upon such sale, whether or
not a deficiency judgment on this Mortgage shall have been sought or
recovered or denied, together with interest thereon at the Interest Rate
and the reasonable attorneys' fees, costs and disbursements incurred by
Mortgagee in connection with the collection of the Award.
D. Mortgagor hereby acknowledges that in the event Mortgagee is
permitted or required to exercise any discretion under this Article,
Mortgagee shall not be deemed to have abused such discretion provided that
Mortgagee shall have relied, at the reasonable expense of Mortgagor, on a
recognized construction consultant, an appraiser who is a member of the
American Institute of Real Estate Appraisers and who has been designated a
"Member American Institute", or such other recognized consultants as may be
appropriate or necessary to fulfill its obligations hereunder. Any
consultants referred to herein shall have not less than 10 years
experience.
VIII. Sale of Encumbered Property; Additional Financing.
Except as permitted under the terms of the Loan Agreement,
Mortgagor shall not, at any time assign, transfer or convey all or any part
of the Encumbered Property or any interest therein.
IX. Discharge of Liens.
Subject to the provisions of Article X hereof and except as
permitted by the Loan Agreement or this Mortgage, Mortgagor at all times
shall keep the Encumbered Property free from the liens of mechanics,
laborers, contractors, subcontractors and materialmen and, except for the
Permitted Encumbrances, and any new or additional mortgages which may be
made to Mortgagee, free from any and all other liens, claims, charges or
encumbrances of any kind or nature whatsoever. If any such liens, claims,
charges or encumbrances shall be recorded, Mortgagor shall forthwith
deliver copies thereof to Mortgagee and Mortgagor shall within thirty (30)
days after request therefor by Mortgagee, cause the same to be discharged
of record by payment or bonding.
X. Right of Contest.
Mortgagor, at its sole cost and expense, may, in good faith,
contest, by proper legal actions or proceedings, the validity of any Legal
Requirement or the application thereof to Mortgagor or the Encumbered
Property, or the validity or amount of any Imposition or the validity of
the claims of any mechanics, laborers, subcontractors, contractors or
materialmen ("Contractor's Claims"). During the pendency of any such
action or proceeding, compliance with such contested Legal Requirement or
payment of such contested Imposition or payment of such contested
Contractor's Claim may be deferred, provided that, in each case, at the
time of the commencement of any such action or proceeding, and during the
pendency of such action or proceeding, (a) no Event of Default shall exist
hereunder, (b) adequate reserves with respect thereto are maintained on
Mortgagor's books in accordance with generally accepted accounting
principles and the applicable provisions of the Loan Agreement, and (c)
Mortgagor reasonably believes that noncompliance with the contested Legal
Requirement or non-payment of the contested Imposition or non-payment of
such contested Contractor's Claim would not have a material adverse effect
upon the business of Mortgagor, the Encumbered Property or the operation
thereof or the Mortgagee. Notwithstanding any such reserves or the
furnishing of any bond or other security, thirty (30) days after notice
from Mortgagee, Mortgagor shall comply with any contested Legal Requirement
or shall pay any contested Imposition or Contractor's Claim, and compliance
therewith or payment thereof shall not be deferred, if, at any time, such
deferral would have a material adverse effect on Mortgagor and its
subsidiaries taken as a whole or be disadvantageous in any material respect
to the Holders. If such action or proceeding is terminated or discontinued
adversely to Mortgagor and is not subject to appeal, Mortgagor shall,
within thirty (30) days of receiving request therefor, deliver to Mortgagee
evidence reasonably satisfactory to Mortgagee of Mortgagor's compliance
with such contested Legal Requirement or payment of such contested
Imposition or Contractor's Claim, as the case may be. Notwithstanding the
foregoing, Mortgagee shall have no obligation to request any matters
referred to herein and shall request such matters in Mortgagee's sole
discretion.
XI. Leases.
A. Each Lease entered into from and after the date hereof
including, without limitation, all Leases which provide for an annual
"base" or "minimum" rent in excess of $100,000 (a "Major Lease") shall (i)
not permit the lessee thereunder to terminate or invalidate the terms
thereof as a result of any action taken by Mortgagee to enforce this
Mortgage, including, without limitation, any sale of the Encumbered
Property or any portion thereof by Mortgagee pursuant to the power of sale
provided herein or otherwise, (ii) include a subordination clause providing
that the Lease and the interest of the lessee in the Encumbered Property
are in all respects subject and subordinate to this Mortgage, (iii) provide
that, at the option of Mortgagee or the purchaser at a sale by Mortgagee
pursuant to the power of sale provided herein or otherwise or the grantee
in a voluntary conveyance in lieu of such Mortgagee's sale, the lessee
thereunder shall attorn to Mortgagee or to such purchaser or grantee under
all of the terms of the Lease and recognize such entity as the lessor under
the Lease for the balance of the term of the Lease, and (iv) provide that,
in the event of the enforcement by Mortgagee of the remedies provided by
law or in equity or by this Mortgage, any person succeeding to the interest
of Mortgagee as a result of such enforcement shall not be bound by or
liable for any (A) prepayment of installments of Rent for more than thirty
(30) days in advance of the time when the same shall become due (excluding,
however, any payments of "key money" made by any lessee in connection with
the execution or renewal of its Lease or any other sums paid in connection
with the execution or renewal of a Lease as advance rental, to the extent
the same has been paid prior to the occurrence of an Event of Default) or
(B) prior act or omission of any prior landlord. Any lessee under any
Lease may encumber any of lessee's personalty, furniture, fixtures and
equipment originally installed by such lessee in such lessee's leased
space.
B. Mortgagor shall (i) perform all of the provisions of the Leases
on the part of the lessor thereunder to be performed within the time period
required under the Leases, (ii) appear in and defend any action or
proceeding arising under, growing out of, or in any manner connected with,
the Leases or the obligations of the lessor or the lessees thereunder,
(iii) exercise, within thirty (30) days after demand by Mortgagee, any
right to request from the lessee under any Major Lease a certificate with
respect to the status thereof, (iv) deliver to Mortgagee, within thirty
(30) days after demand by Mortgagee, a written statement containing the
names of all lessees, the terms of all Leases and the spaces occupied and
rentals payable thereunder and a statement of all Leases which are then in
default of any monetary obligation, including the magnitude of any such
monetary default and, in the case of any non-monetary default, a statement
of all Leases which, to the best of Mortgagor's knowledge, are then in
default of any non-monetary obligation, including the nature and magnitude
of any such non-monetary default, (v) promptly deliver to Mortgagee, a
fully executed copy of each Lease upon the execution of the same.
Notwithstanding the foregoing, Mortgagee shall have no obligation to
request any matters referred to herein and shall request such matters in
Mortgagee's sole discretion.
C. Mortgagor hereby assigns to Mortgagee, from and after the date
hereof, primarily on a parity with the Encumbered Property, and not
secondarily, as further security for the payment of the Indebtedness and
the performance of the Obligations, the Leases and the Rents. Nothing
contained in this Article XI shall be construed to bind Mortgagee to the
performance of any of the terms, covenants, conditions or agreements
contained in any Lease or otherwise impose any obligation on Mortgagee
(including, but without limiting the generality of the foregoing, any
liability under the covenant of quiet enjoyment contained in any Lease in
the event that any lessee shall have been joined as a party defendant in
any action commenced by reason of an Event of Default hereunder or in the
event of the sale of the Encumbered Property by Mortgagee pursuant to the
power of sale contained herein or otherwise or in the event lessee shall
have been barred and foreclosed of any or all right, title and interest and
equity of redemption in the Encumbered Property), except that Mortgagee
shall be accountable for any money actually received pursuant to the
aforesaid assignment. Mortgagor hereby further grants to Mortgagee the
right, but not the obligation, (i) to enter upon and take possession of the
Encumbered Property for the purpose of collecting the Rents, (ii) to
dispossess by the usual summary proceedings any lessee defaulting in making
any payment due under any Lease to Mortgagee or defaulting in the
performance of any of its other obligations under its Lease, (iii) to let
the Encumbered Property or any portion thereof, (iv) to apply the Rents on
account of the indebtedness, it being understood that the excess Rents, if
any, remaining after all such payments shall have been made shall be the
property of and paid to Mortgagor, provided there exists no Event of
Default, and (v) to perform such other acts as Mortgagee is entitled to
perform pursuant to this Article XI. Such assignment and grant shall
continue in effect until the entire amount of the Indebtedness shall have
been fully paid pursuant to the terms hereof and the other Loan Documents,
and all Obligations shall have been fully performed in accordance with all
provisions hereof and the other Loan Documents, the execution of this
Mortgage constituting and evidencing the irrevocable consent of Mortgagor
to the entry upon and taking possession of the Encumbered Property by
Mortgagee pursuant to such grant, subject, however, to the rights of any
and all parties in possession thereof, whether or not the Encumbered
Property shall have been sold by Mortgagee pursuant to the power of sale
contained herein or otherwise and without applying for a receiver.
Mortgagee, however, grants to Mortgagor, not as a limitation or condition
hereof, but as a personal covenant available only to Mortgagor and its
successors and not to any lessee or other person, a license, automatically
revocable by Mortgagee upon an Event of Default, to collect all of the
Rents and to retain, use and enjoy the same and to do all acts and perform
such Obligations as Mortgagor is required to perform under the Leases.
D. Upon notice and demand, Mortgagor shall, from time to time,
execute, acknowledge and deliver to Mortgagee, or shall cause to be
executed, acknowledged and delivered to Mortgagee, in form reasonably
satisfactory to Mortgagee, one or more separate assignments (confirmatory
of the general assignment provided in this Article XI subject to
Mortgagor's license) of the lessor's interest in any Lease. Mortgagor shall
pay to Mortgagee the reasonable expenses incurred by Mortgagee in
connection with the preparation and recording of any such instrument.
E. With respect to any Major Lease upon notice and demand,
Mortgagee shall, from time to time, execute, acknowledge and deliver to
Mortgagor or cause to be executed, acknowledged and delivered to Mortgagor,
and to any tenant, a subordination, attornment and non-disturbance
agreement in a form reasonably acceptable to the Mortgagee. With respect
to any Major Lease in which Mortgagor requests a subordination, attornment
and non-disturbance agreement such Major Lease shall be subject to the
reasonable approval of Mortgagee.
XII. Estoppel Certificates.
Mortgagor and Mortgagee, within thirty (30) business days after
request by the other, shall deliver, in form reasonably satisfactory to the
other, a written statement, duly executed and acknowledged, setting forth
the amount of the Indebtedness then outstanding and whether, to the best
knowledge of the affiant, any offsets, claims, counterclaims or defenses
exist against the Indebtedness secured by this Mortgage.
XIII. Loan Document Expenses.
Mortgagor shall pay, together with any interest or penalties
imposed in connection therewith, all reasonable expenses of Mortgagee
incident to the preparation, execution, acknowledgement, delivery and/or
recording of this Mortgage, the Assignment and UCC-1 financing statements
executed in connection with this Mortgage, including, but without limiting
the generality of the foregoing, all filing, registration and recording
fees and charges, documentary stamps, intangible taxes and all federal,
state, county and municipal taxes, duties, imposts, assessments and charges
now or hereafter required by reason of, or in connection with, this
Mortgage, the Assignment, such UCC-1 financing statements and UCC-3
continuation statements, and, in any event, otherwise shall comply with the
provisions set forth in Article IV hereof.
XIV. Mortgagee's Right to Perform.
In the event of any Event of Default hereunder, Mortgagee may
(but shall be under no obligation to), at any time, without waiving or
releasing Mortgagor from any Obligations or any Event of Default under this
Mortgage, perform the Obligations and, in such event, the cost thereof,
including, but without limiting the generality of the foregoing, reasonable
attorneys' fees, costs and disbursements incurred in connection therewith,
(a) shall be deemed to be Indebtedness secured by this Mortgage, (b) shall
be a lien on the Encumbered Property prior to any right or title to,
interest in, or claim upon, the Encumbered Property subordinate to the lien
of this Mortgage, and (c) shall be payable, on demand, together with
interest thereon at the Interest Rate, from the date of any such payment by
Mortgagee to the date of repayment to Mortgagee. No payment or advance of
money by Mortgagee pursuant to the provisions of this Article XIV shall
cure, or shall be deemed or construed to cure, any such Event of Default by
Mortgagor hereunder or waive any rights or remedies of Mortgagee hereunder
or at law or in equity by reason of any such Event of Default.
XV. Mortgagee's Costs and Expenses.
If (a) an Event of Default shall occur under this Mortgage,
beyond applicable grace periods, if any, or an Event of Default under any
other Loan Document, including the Loan Agreement, beyond any applicable
grace period, or (b) Mortgagee shall exercise any of its rights or remedies
to which it is entitled hereunder, or (c) any action or proceeding is
commenced in which it becomes necessary to defend or uphold the lien or
priority of this Mortgage or any action or proceeding relating to this
Mortgage or any other Loan Document is commenced to which Mortgagee is or
becomes a party, or (d) the taking, holding or servicing of this Mortgage
by or on behalf of Mortgagee is alleged to subject Mortgagee to any civil
or criminal fine or penalty, or (e) Mortgagee's review and approval of any
document, including, but without limiting the generality of the foregoing,
any Major Lease (but excluding Leases that are not Major Leases), is
requested by Mortgagor or required by Mortgagee, then, in any such event,
all such reasonable costs, expenses and fees incurred by Mortgagee in
connection therewith (including, but without limiting the generality of the
foregoing, any civil or criminal fines or penalties and attorneys' fees,
costs and disbursements) (i) shall be deemed to be Indebtedness secured by
this Mortgage, (ii) shall be a lien on the Encumbered Property prior to any
right or title to, interest in, or claim upon, the Encumbered Property
subordinate to the lien of this Mortgage, and (iii) shall be payable, on
demand, together with interest thereon at the Interest Rate, from the date
of any such payment by Mortgagee to the date of repayment to Mortgagee. In
any action to enforce any remedy under this Mortgage, including, but
without limiting the generality of the foregoing, sale of the Encumbered
Property by Mortgagee pursuant to the power of sale contained herein or
otherwise, or to recover or collect the Indebtedness or any portion
thereof, the provisions of this Article XV with respect to the recovery of
costs, expenses, disbursements and penalties shall prevail unaffected by
the provisions of any Legal Requirement with respect to the same to the
extent that the provisions of this Article XV are not inconsistent
therewith or violative thereof.
XVI. Events of Defaults.
The occurrence of an "Event of Default" under the terms of the
Loan Agreement shall be an Event of Default hereunder; provided, however,
if Mortgagor shall fail or neglect to comply with or otherwise perform,
keep or observe, any non-monetary term, provision, condition or covenant
contained in this Mortgage, such failure or neglect shall not constitute an
Event of Default under the Loan Agreement, this Mortgage or any other Loan
Document unless the Mortgagee shall have given written notice of such
failure or neglect to the Mortgagor, and the Mortgagor shall have failed to
cure within 30 days following such notice; provided, further, if Mortgagor
cannot cure any non-monetary breach of any provision, covenant or
condition, it shall not constitute an Event of Default if such breach
cannot reasonably be cured within such 30 day grace period because of any
strikes, lockouts, unavailability of materials, failure of power, delays in
settling insurance or condemnation claims, governmental or quasi-
governmental laws or regulations, riots, insurrections, adverse weather
conditions, war or any other reason beyond Mortgagee's reasonable control
("Force Majeure"), so long as upon the termination of the event or events
constituting the Force Majeure, the Mortgagor diligently acts to cure the
breached provision, condition or covenant within a reasonable period of
time.
If the Ground Lease is terminated, canceled or surrendered, or if any
default shall have occurred under the Ground Lease which is not remedied
within the time permitted thereunder, then an Event of Default shall be
deemed to have occurred under this Mortgage. In no event shall the time to
cure such Event of Default under this Mortgage, if any, exceed the time
permitted to cure such default under the Ground Lease.
XVII. Remedies.
A. Upon the occurrence of any Event of Default hereunder,
Mortgagee may, without further notice, presentment, demand or protest, all
of which are hereby expressly waived by Mortgagor, take such action as
Mortgagee deems advisable, in its sole discretion, to protect and enforce
the rights of Mortgagee against the Mortgagor and in and to the Encumbered
Property or any part thereof, including, but without limiting the
generality of the foregoing, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Mortgagee hereunder or
at law or in equity:
1. Mortgagee may elect to cause the Encumbered Property or
any portion thereof to be sold in accordance with the provisions hereof and
applicable law.
2. Mortgagee may, without releasing Mortgagor from any
Obligation under this Mortgage or any other obligation under the Guaranty
or any other Loan Document and without waiving any Event of Default,
exercise any of its rights and remedies under Article XIV hereof.
3. if the Indebtedness shall have been declared due and
payable in accordance with the provisions of the Loan Agreement, then
Mortgagee may (x) institute and maintain an action with respect to the
Encumbered Property under any other Loan Document, or (y) take such other
action as may be allowed at law or in equity for the enforcement of this
Mortgage and the other Loan Documents. Mortgagee may proceed in any such
action to final judgment and execution thereon for the whole of the
Indebtedness, together with interest thereon at the Interest Rate, from the
date on which Mortgagee shall declare the same to be due and payable to the
date of repayment to Mortgagee, and all costs of any such action,
including, but without limiting the generality of the foregoing, reasonable
attorneys' fees, costs and disbursements.
4. Mortgagee, if it has not already revoked the license
granted pursuant to Article XI hereof, may revoke the license and may,
without releasing Mortgagor from any Obligation under this Mortgage, and
without waiving any Event of Default, enter upon and take possession of the
Encumbered Property or any portion thereof, either personally or by its
agents, nominees or attorneys, and dispossess Mortgagor and its agents and
servants therefrom and, thereupon, Mortgagee may (w) use, manage, operate,
control, insure, maintain, repair, restore and otherwise deal with all and
every part of the Encumbered Property, (x) complete any construction on the
Encumbered Property, in such manner and form as Mortgagee deems advisable,
(y) make alterations, additions, renewals, replacements and improvements to
or on the Encumbered Property and (z) exercise all rights and powers of
Mortgagor with respect to the Encumbered Property, either in the name of
Mortgagor or otherwise, including, but without limiting the generality of
the foregoing, the right to make, cancel, enforce or modify Leases, obtain
and evict lessees, establish or change the amount of any Rents and the
manner of collection thereof and perform any acts which Mortgagee deems
proper, in its sole discretion, to protect the security of this Mortgage.
Mortgagee may, but shall not be obligated to, take any action pursuant to
the Laws of the State of New Jersey to enforce the provisions of any
Operational Requirements and to secure continued operation of the
Encumbered Property as a licensed casino operation. After deduction of all
reasonable costs and expenses of operating and managing the Encumbered
Property, including, but without limiting the generality of the foregoing,
attorneys' fees, costs and disbursements, administration expenses,
management fees and brokers' commissions, satisfaction of liens on any of
the Encumbered Property, payment of Impositions, claims and insurance
premiums, invoices of persons who may have supplied goods and services to
or for the benefit of any of the Encumbered Property and all costs and
expenses of the maintenance, repair, Restoration, alteration or improvement
of any of the Encumbered Property, Mortgagee may apply the Rents received
by Mortgagee to payment of the Indebtedness or performance of the
Obligations. Mortgagee may apply the Rents received by Mortgagee to the
payment of any or all of the foregoing in such order and amounts as
Mortgagee, in its sole discretion, may elect. Mortgagee may, in its sole
discretion, determine the method by which, and extent to which, the Rents
will be collected and the obligations of the lessees under the Leases
enforced and Mortgagee may waive or fail to enforce any right or remedy of
the lessor under any Lease.
5. Mortgagee may disaffirm and cancel any Lease affecting the
Encumbered Property or any portion thereof at any time during the period
that it is exercising its remedies under this Article XVII, even though
Mortgagee shall have enforced such Lease, collected Rents thereunder or
taken any action that might be deemed by law to constitute an affirmance of
such Lease. Such disaffirmance shall be made by notice addressed to the
lessee at the Real Property or, at Mortgagee's option, such other address
of the lessee as may be set forth in such Lease.
6. Mortgagee may declare the entire unpaid Indebtedness to be
immediately due and payable.
7. Mortgagee may institute proceedings for the complete
foreclosure of this Mortgage in which case the Encumbered Property or the
Mortgagor's interest therein may be sold for cash or upon credit in one or
more portions.
8. Mortgagee may, with or without entry, to the extent
permitted and pursuant to the procedures provided by applicable law,
institute proceedings for the partial foreclosure of this Mortgage for the
portion of the Indebtedness then due and payable, subject to the continuing
lien of this Mortgage for the balance of the Indebtedness not then due.
9. Mortgagee may sell for cash or upon credit the Encumbered
Property or any part thereof and all estate, claim, demand, right, title
and interest of the Mortgagor therein and rights of redemption thereof,
pursuant to power of sale or otherwise, at one or more sales, in its
entirety or in portions, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law, and in the
event of a sale, by foreclosure or otherwise, of less than all of the
Encumbered Property this Mortgage shall continue as a lien on the remaining
portion of the Encumbered Property.
10. Mortgagee may institute an action, suit or proceeding in
equity for the specific performance of any covenant, condition or agreement
contained herein or in the Notes or in the Assignment or in any other Loan
Document or Document.
11. Mortgagee may recover judgment on the Revolving Credit
Notes either before, during or after any proceedings for the enforcement of
this Mortgage.
12. Mortgagee shall be entitled to the appointment of a
trustee, receiver, liquidator or conservator of the Encumbered Property,
without regard for the adequacy of the security for the Indebtedness and
without regard for the solvency of the Mortgagor, any guarantor or of any
person, firm or the entity liable for the payment of the Indebtedness.
13. Mortgagee may cure such Event of Default, without
relieving the Mortgagor of any liability in connection with such Event of
Default, and (1) the Mortgagor, on demand, shall reimburse the Mortgagee
for any and all costs and expenses incurred by the Mortgagee in connection
with the curing of any Event of Default, together with any defaulted
interest payable pursuant to the Loan Agreement from the date such costs
and expenses are incurred until the same are paid to the Mortgagee, and (2)
the Mortgagee shall be entitled to apply any sums then held by the
Mortgagee pursuant to the provisions of this Mortgage to the curing of such
Event of Default or to reimburse the Mortgagee for costs and expenses
incurred in connection therewith; and/or
14. Mortgagee may pursue such other remedies as the Mortgagee
may have under any applicable law.
B. Subject to the terms of the Intercreditor Agreement, the
purchase money proceeds or avails of any sale of the Encumbered Property
made under or by virtue of this Article XVII, together with any other sums
which then may be held by the Mortgagee under this Mortgage, whether under
the provisions of this Article XVII or otherwise, shall be applied as
follows:
First: To the payment of the costs and expenses of any such
sale, including reasonable compensation to the Mortgagee's agents and
counsel, and of any judicial proceedings wherein the same may be made, and
of all expenses, liabilities and advances made or incurred by the Mortgagee
under this Mortgage and together with interest as provided herein on all
advances made by the Mortgagee and all taxes or assessments, except any
taxes, assessments or other charges subject to which the Encumbered
Property shall have been sold.
Second: To the payment of amounts then due and unpaid for
principal and interest on the Revolving Credit Notes.
Third: To the payment of the amount of Indebtedness then
outstanding and performance of all of the other Obligations, in such a
manner and order of priority or preference as Mortgagee may, in its sole
discretion, determine.
Fourth: To the payment of outstanding Impositions.
Fifth: To the payment of the surplus, if any, to whomsoever may
lawfully be entitled to receive the same, including, without limitation,
the Mortgagor. The Mortgagee and any receiver of the Encumbered Property,
or any part thereof, shall be liable to account for only those rents,
issues and profits actually received by it.
C. Mortgagee, in any action to enforce this Mortgage, shall be
entitled to the appointment of a receiver by a court of competent
jurisdiction or may, in connection with any foreclosure proceeding
hereunder, request the Casino Control Commission, as defined in the Loan
Agreement, to petition a court of the State of New Jersey for the
appointment of a supervisor to conduct the normal gaming activities on the
Real Property following such foreclosure proceeding. If it shall become
necessary, or in the opinion of Mortgagee advisable, for Mortgagee or an
agent or representative of Mortgagee to become licensed under the
provisions of the laws of the State of New Jersey, or rules and regulations
adopted pursuant there-to, as a condition to receiving the benefit of the
Real Property, the Personal Property or other collateral hereby encumbered
for the benefit of Mortgagee, Mortgagor does hereby give its consent to the
granting of such license or licenses and agree to execute such further
documents as may be reasonably required in connection with the evidencing
of such consent.
D. The remedies and rights granted to Mortgagee hereunder are
cumulative and are not in lieu of, but are in addition to, and shall not be
affected by the exercise of, any other remedy or right available to
Mortgagee whether now or hereafter existing either at law or in equity or
under this Mortgage or any other Loan Document.
E. The Mortgagee may adjourn from time to time any sale by it to
be made under or by virtue of this Mortgage by announcement at the time and
place appointed for such sale or for such adjourned sale or sales; and,
except as otherwise provided by any applicable provision of law, the
Mortgagee, without further notice or publication, may make such sale at the
time and place to which the same shall be so adjourned.
F. Upon the completion of any sale or sales made by the Mortgagee
under or by virtue of this Article XVII, the Mortgagee, or an officer of
any court empowered to do so, shall execute and deliver to the accepted
purchaser or purchasers a good and sufficient instrument, or good and
sufficient instruments, conveying, assigning and transferring all estate,
right, title and interest in and to the property and rights sold. The
Mortgagee is hereby irrevocably appointed the true and lawful attorney of
Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Encumbered Property and rights
so sold and for that purpose the Mortgagee may execute all necessary
instruments of conveyance, assignment and transfer, and may substitute one
or more persons with like power, Mortgagor hereby ratifying and confirming
all that its said attorney or such substitute or substitutes shall lawfully
do by virtue hereof. Any such sale or sales made under or by virtue of
this Article XVII, whether made under the power of sale herein granted or
under or by virtue of judicial proceedings or of a judgment or decree of
foreclosure and sale, shall operate to divest all the estate, rights,
title, interest, claim and demand whatsoever, whether at law or in equity,
of Mortgagor in and to the properties and rights so sold, and shall be a
perpetual bar both at law and in equity against Mortgagor and against any
and all persons claiming or who may claim the same, or any part thereof
from, through or under the Mortgagor.
G. Anything contained in the Loan Agreement or in this Mortgage to
the contrary notwithstanding, in the event of any sale made under or by
virtue of this Article XVII (whether made under the power of sale herein
granted or under or by virtue of judicial proceedings or a judgment or
decree of foreclosure and sale) the entire Indebtedness, if not previously
due and payable, immediately thereupon shall become due and payable.
H. Upon any sale made under or by virtue of this Article XVII
(whether made under the power of sale herein granted or under or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and
sale), the Mortgagee may bid for and acquire the Encumbered Property or any
part thereof and in lieu of paying cash therefor may make settlement for
the purchase price by crediting against the sales price the Indebtedness
and the expenses of the sale, and the costs of the action and any other
sums which the Mortgagee is authorized to deduct under this Mortgage.
I. No recovery of any judgment by the Mortgagee and no levy of an
execution under any judgment upon the Encumbered Property or upon any
property of Mortgagor shall affect in any manner or to any extent, the lien
of this Mortgage upon the Encumbered Property or any part thereof, or any
liens, rights, powers or remedies of the Mortgagee hereunder, but such
liens, rights, powers and remedies of the Mortgagee shall continue
unimpaired as before.
J. Upon the occurrence of any Event of Default and the
acceleration of the maturity hereof, if, at any time prior to the
foreclosure sale, Mortgagor or any other person tenders payment of the
amount necessary to satisfy the Indebtedness, the same shall constitute an
evasion of the payment terms hereof and shall be deemed to be a voluntary
prepayment hereunder, in which case such payment must include the premium
required under the prepayment provisions, if any, contained herein or in
the Loan Agreement or the Revolving Credit Notes.
K. Upon the occurrence of any Event of Default hereunder, it is
agreed that Mortgagor, if it is an occupant of the Real Property or any
part thereof, shall immediately surrender possession of the Real Property
so occupied to the Mortgagee, and if such occupant is permitted to remain
in possession, the possession shall be as tenant of the Mortgagee and, on
demand such occupant subject to applicable law (a) shall pay to the
Mortgagee monthly, in advance, a reasonable rental for the space so
occupied and in default thereof, and (b) may be dispossessed by the usual
summary proceedings. The covenants herein contained may be enforced by a
receiver of the Encumbered Property or any part thereof.
L. If any payment due hereunder or under the Loan Agreement or the
Revolving Credit Notes is not paid when due after any applicable grace
period, either at stated or accelerated maturity or pursuant to any of the
terms hereof, then and in such event, the Mortgagor shall pay or shall
cause to be paid interest thereon from and after the date on which such
payment first becomes due at the defaulted interest pursuant to the Loan
Agreement and such interest shall be due and payable, on demand, at such
rate until the entire amount due is paid to the Mortgagee, whether or not
any action shall have been taken or proceeding commenced to recover the
same or to foreclose this Mortgage. Nothing in this Section or in any
other provision of this Mortgage shall constitute an extension of the time
of payment of the Indebtedness.
M. After the happening of any Event of Default and immediately
upon the commencement of any action, suit or other legal proceedings by the
Mortgagee to obtain judgment for the Indebtedness, or of any other nature
in aid of the enforcement of the Loan Agreement, the Revolving Credit Notes
or of this Mortgage, Mortgagor shall (a) waive the issuance and service of
process and enter their voluntary appearance in such action, suit or
proceeding, and (b) if required by the Mortgagee, consent to the
appointment of a receiver or receivers of the Encumbered Property and of
all the profits thereof.
N. Notwithstanding the appointment of any receiver, liquidator or
trustee of Mortgagor, or of any of its property, or of the Encumbered
Property or any part thereof, the Mortgagee shall be entitled to retain
possession and control of all property now and hereafter covered by this
Mortgage.
XVIII. Security Agreement under Uniform Commercial Code.
It is the intention of Mortgagor and Mortgagee that this Mortgage
shall constitute and this Mortgage does hereby constitute a Security
Agreement between Mortgagor and Mortgagee within the meaning of the Uniform
Commercial Code of the State of New Jersey. Notwithstanding the filing of
a financing statement covering any of the Encumbered Property in the
records normally pertaining to personal property, all of the Encumbered
Property, for all purposes and in all proceedings, legal or equitable,
shall be regarded, at Mortgagee's option (to the extent permitted by law),
as part of the Real Property whether or not any such item is physically
attached to the Real Property or serial numbers are used for the better
identification of certain items. The mention in any such financing
statement of any of the Encumbered Property shall never be construed in any
way as derogating from or impairing this declaration and hereby stated
intention of the Mortgagor and Mortgagee that such mention in the financing
statement is hereby declared to be for the protection of Mortgagee in the
event any court shall at any time hold that notice of Mortgagee's priority
of this Mortgage, to be effective against any third party, including the
Federal government or any authority or agency thereof, must be filed in the
Uniform Commercial Code records. Pursuant to the provisions of the Uniform
Commercial Code, if Mortgagor shall fail to execute any such financing or
continuation statements for twenty (20) days after request therefor is made
by Mortgagee, Mortgagor hereby authorizes Mortgagee, without the signature
of Mortgagor, to execute and file financing and continuation statements if
Mortgagee shall determine, in its sole discretion, that such financing or
continuation statements are necessary or advisable in order to preserve or
perfect its security interest in the Personal Property covered by this
Mortgage, and Mortgagor shall pay to Mortgagee, on demand, any reasonable
expenses incurred by Mortgagee in connection with the preparation,
execution and filing of such statements that may be filed by Mortgagee.
XIX. Representations and Warranties.
Mortgagor represents and warrants that: (a) such Mortgagor has
the requisite power and lawful authority to execute and deliver this
Mortgage and to perform the Obligations it is required to perform under the
Loan Documents; (b) the execution and delivery of this Mortgage by
Mortgagor and performance of its obligations under this Mortgage will not
result in Mortgagor being in default under any provision of its Certificate
of Incorporation or By-Laws or of any deed of trust, mortgage, document,
instrument, credit or other agreement to which it is a party or by which
its assets are bound; (c) the Board of Directors of such Mortgagor has duly
authorized the execution and delivery of this Mortgage; (d) on the date
hereof, no portion of the Buildings or the Personal Property has been
materially damaged, destroyed or injured by fire or other casualty which is
not now fully restored or in the process of being restored; (e) Mortgagor
has all necessary licenses, authorizations, registrations and approvals to
own, use, occupy and operate the Encumbered Property and has full power and
authority to carry on its business at the Real Property as currently
conducted and has not received any notice of any violation of any Legal
Requirement that materially impairs the value of the Encumbered Property;
and (f) as of the date hereof, Mortgagor has not received any notice of any
Taking of the Encumbered Property as the case may be) or any portion
thereof and Mortgagor has no knowledge that any such Taking is
contemplated.
XX. No Waivers, Etc.
No failure by Mortgagee to insist upon the strict performance by
each Mortgagor of any of the terms and provisions of this Mortgage shall be
deemed to be a waiver of any of the terms, covenants, conditions and
provisions hereof and Mortgagee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance by each
Mortgagor of any and all of the terms, covenants, conditions and provisions
of this Mortgage to be performed by such Mortgagor. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Encumbered Property,
any part of the security held for payment of the Indebtedness or any
portion thereof or for the performance of the Obligations secured by this
Mortgage without, as to the remainder of the security, in any manner
whatsoever, impairing or affecting the lien of this Mortgage or the
priority of the lien of this Mortgage over any subordinate lien. In the
event of an occurrence of an Event of Default hereunder, Mortgagee may
resort for the payment of the Indebtedness secured by this Mortgage to any
other security therefor held by Mortgagee in such order and manner as
Mortgagee may elect.
XXI. Brokerage.
Mortgagor hereby represents and warrants that it has dealt with
no broker, finder, or like agent in connection with the Loan Agreement, the
Revolving Credit Notes or this Mortgage.
XXII. Mortgage Subject to the Provisions of the Act.
Each provision of this Mortgage is subject to the provisions of
the Act, as defined in Article III, paragraph (E).
XXIII. Environmental Matters.
A. Mortgagor represents and warrants that:
1. To the best of Mortgagor's knowledge, none of the real
property owned and/ or occupied by Mortgagor and located in the State of
New Jersey, including, but not limited to, the Encumbered Property (the
"New Jersey Real Property"), has ever been used to treat, store, handle,
transfer, process or dispose of "Hazardous Wastes" as that term is defined
in applicable state or federal law. Mortgagor has not in the past, does
not at present, and shall not in the future, use, or allow the use of, in
any material respect its real property, including, but not limited to, the
Encumbered Property, for the purpose of refining, producing, storing,
handling, transferring, processing, treating, disposing of or transporting
"Hazardous Substances" as that term is defined in applicable state or
federal law. Mortgagor shall not, and shall not allow any other person to,
treat, store, dispose of or release any such Hazardous Waste on or in the
New Jersey Real Property, except for temporary storage of Hazardous Waste
generated on the property in strict compliance with all applicable laws.
2. To the best of Mortgagor's knowledge, none of the New
Jersey Real Property has ever been used by previous owners and/or operators
as a "Major Facility," as such term is defined in N.J.S.A. 58:10-23.llb(1),
and said New Jersey Real Property is not now and will not be used in the
future as a "Major Facility."
3. No lien has been attached to any revenues or any New
Jersey Real Property or personal property owned by Mortgagor and located in
the State of New Jersey, including, but not limited to, the Encumbered
Property, and to the best of Mortgagor's knowledge there are no events,
conditions, facts or circumstances that could lead to the imposition of
such a lien, under any law relating to pollution or the discharge of
materials into the environment. Mortgagor shall not permit the imposition
of any such lien on any property which it owns.
4. Mortgagor has not received any summons, citation,
directive, or other written communication requiring, requesting, or
alleging the need for corrective action of Mortgagor from the New Jersey
Department of Environmental Protection and Energy or any other person or
entity relating to the releasing, spilling, leaking, pumping, pouring,
emitting, emptying, dumping or threatened release of "Hazardous
Substances," as such term is defined in applicable state or federal law.
To the best of Mortgagor's knowledge, there are no events, conditions,
facts or circumstances that could justify or give rise to any such
communication.
5. To the best of Mortgagor's knowledge, there are and have
been no underground storage tanks ("Underground Storage Tanks") on any New
Jersey Real Property as such term is defined in applicable state or federal
law and no New Jersey Real Property contains any asbestos or asbestos
containing materials other than in de minimis amounts.
B. Mortgagor covenants and agrees that:
1. If Mortgagor is presently an owner or operator of a "Major
Facility" in the State of New Jersey, as such term is defined in N.J.S.A.
58:10-23.11b(1), or if Mortgagor ever becomes such an owner or operator,
then Mortgagor shall furnish the New Jersey Department of Environmental
Protection and Energy with all the information required by N.J.S.A.
58:10-23.lld to the extent applicable.
2. Mortgagor shall not cause or permit to exist a releasing,
spilling, leaking, pumping, emitting, pouring, emptying or dumping of a
"Hazardous Substance," as such term is defined in applicable state or
federal law into waters of the State of New Jersey or onto lands from which
it might flow or drain into said waters, or into waters outside the
jurisdiction of the State of New Jersey, except in strict compliance with
the terms of applicable law, including any permit in force.
3. So long as Mortgagor shall own or operate any real
property located in the State of New Jersey, which is used as a "Major
Facility," as such term is defined in N.J.S.A. 58:10-23.11b(1), Mortgagor
shall duly file or cause to be duly filed with the Director of the Division
of Taxation in the New Jersey Department of the Treasury, a tax report or
return and shall pay or make provision for the payment of all taxes due
therewith, all in accordance with and pursuant to N.J.S.A. 58:10-23.11h to
the extent applicable.
4. In the event that there shall be filed a lien against the
Encumbered Property under any law relating to pollution or the discharge of
materials into the environment, then Mortgagor shall promptly but no later
than thirty (30) days from the date that Mortgagor is given notice that the
lien has been placed against the Encumbered Property, either (1) pay the
claim and remove the lien from the Encumbered Property, or (2) furnish (x)
a bond satisfactory to Mortgagee in the amount of the claim out of which
the lien arises, (y) a cash deposit in the amount of the claim out of which
the lien arises, or (z) other security reasonably satisfactory to Mortgagee
in an amount sufficient to discharge the claim out of which the lien
arises.
5. Should Mortgagor cause or permit any intentional or
unintentional action or omission resulting in the releasing, spilling,
leaking, pumping, pouring, emitting, emptying or dumping of materials into
the waters or onto lands of the State of New Jersey, or into the waters
outside the jurisdiction of the State of New Jersey, Mortgagor shall
promptly, diligently and expeditiously report and proceed to clean up such
release, spill, leak, pumping, pour, emission, emptying or dumping in
strict compliance with all applicable laws.
6. If Mortgagor shall fail to take any action required by
this Section, upon notice to Mortgagor (which may be telephonic or by any
other means of communication), Mortgagee may make advances or payments
towards performance or satisfaction of the same but shall be under no
obligation to do so; and all sums so advanced or paid, including, without
limitation, reasonable counsel fees, fines, penalties, payments or sums
advanced or paid in connection with any judicial or administrative
investigation or proceeding relating thereto (1) shall be deemed to be
Indebtedness, (2) shall be a lien on the Encumbered Property pari passu
with the Indebtedness and (3) immediately shall be due and payable, on
demand. Mortgagor shall execute and deliver promptly after request, such
instruments as Mortgagee may deem useful or required to permit Mortgagee to
take any such action.
7. Without limiting the foregoing, Mortgagor shall comply in
all material respects with all applicable laws relating to pollution or the
discharge of materials into the environment or the indoor workplace.
8. Mortgagor absolutely and unconditionally agrees to
indemnify and to hold Mortgagee harmless from and against any and all loss,
liability, cost or expense incurred by Mortgagee as a result of Mortgagor's
failure to comply with existing and future laws relating to pollution or
the discharge of materials into the environment, orders, ordinances, rules
and regulations, including those related to the presence of asbestos
affecting the Encumbered Property, which indemnification, notwithstanding
the provisions of this Mortgage or the Loan Documents, shall survive the
release and discharge of this Mortgage of record, and foreclosure or sale
of the Encumbered Property under this Mortgage, payment of the Revolving
Credit Notes, the Loan Agreement, or any other discharge of the
Indebtedness by operation of law or otherwise.
XXIV. Waivers by Mortgagor.
A. Mortgagor hereby waives all errors and imperfections, to the
extent permitted by law, in any proceedings instituted by Mortgagee under
this Mortgage, the Loan Agreement or any other Loan Document and all
benefit of any present or future statute of limitations or any other
present or future statute, law, stay, moratorium, appraisal or valuation
law, regulation or judicial decision, nor shall Mortgagor at any time
insist upon or plead, or in any manner whatsoever, claim or take any
benefit or advantage of any such statute, law, stay, moratorium, regulation
or judicial decision which (i) provides for the valuation or appraisal of
the Encumbered Property prior to any sale or sales thereof which may be
made pursuant to any provision herein or pursuant to any decree, judgment
or order of any court of competent jurisdiction, (ii) exempts any of the
Encumbered Property or any other property, real or personal, or any part of
the proceeds arising from any sale thereof, from attachment, levy or sale
under execution, (iii) provides for any stay of execution, moratorium,
marshalling of assets, exemption from civil process, redemption or
extension of time for payment, (iv) requires Mortgagee to institute
proceedings in foreclosure against the Encumbered Property before
exercising any other remedy afforded Mortgagee hereunder in the event of an
Event of Default, (v) affects any of the terms, covenants, conditions or
provisions of this Mortgage or (vi) conflicts with or may affect, in a
manner which may be adverse to Mortgagee, any provision, covenant,
condition or term of this Mortgage, the Loan Agreement or any other Loan
Document, nor shall Mortgagor at any time after any sale or sales of the
Encumbered Property pursuant to any provision herein, claim or exercise any
right under any present or future statute, law, stay, moratorium,
regulation or judicial decision to redeem the Encumbered Property or the
portion thereof so sold.
B. Mortgagor hereby waives the right, if any, to require any sale
to be made in parcels, or the right, if any, to select parcels to be sold,
and there shall be no requirement for marshalling of assets.
XXV. Notices.
Whenever it is provided herein that any notice, demand, request,
consent, approval, declaration or other communication shall or may be given
to or served upon Mortgagor or Mortgagee, or whenever Mortgagor or
Mortgagee shall desire to give or serve upon the other any such
communication with respect to this Mortgage or the Encumbered Property,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and either shall be delivered in person
with receipt acknowledged or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
A. If to Mortgagee:
First Union National Bank
550 Broad Street
Newark, New Jersey 07101
Attn: Robert K. Strunk
and Midlantic Bank, National Association
2 Tower Center
East Brunswick, New Jersey 08816
Attn:
With a copy to:
McCarter & English
100 Mulberry Street
Newark, New Jersey 07102
Attn: Curtis A. Johnson, Esq.
B. If to Mortgagor:
GNOC, Corp.
Boston & Pacific Avenues
P.O. Box 1737
Atlantic City, New Jersey 08041
Attn: President
With a copy to:
Benesch, Friedlander, Coplan & Aronoff P.L.L.
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114
Attn: Chairman, Real Estate Department
C. or to such other address as Mortgagor or Mortgagee may
substitute by notice given as herein provided. Every notice, demand,
request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which
personally delivered, with receipt acknowledged, or on the date of actual
receipt or the date on which the same shall be returned to the sender by
the Post Office as unclaimed. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other
communication to the persons designated herein to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
XXVI. Conflict with Loan Agreement.
If there shall be any inconsistencies between the terms,
covenants, conditions and provisions set forth in this Mortgage and the
terms, covenants, conditions and provisions set forth in the Loan
Agreement, then, unless this Mortgage expressly provides otherwise by
specific reference to the Loan Agreement, the terms, covenants, conditions
and provisions of the Loan Agreement shall prevail.
XXVII. No Modification; Binding Obligations.
This Mortgage may not be modified, amended, discharged or waived
in whole or in part except by an agreement in writing signed by Mortgagor
and Mortgagee. The covenants of this Mortgage shall run with the Real
Property and shall bind each Mortgagor and its respective successors and
assigns and all present and subsequent encumbrancers, lessees and
sublessees of any of the Encumbered Property and shall inure to the benefit
of Mortgagee and its respective successors, assigns and endorsees.
XXVIII. Miscellaneous.
A. The Article headings in this Mortgage are used only for
convenience and are not part of this Mortgage and are not to be used in
determining the intent of the parties or otherwise in interpreting this
Mortgage. As used in this Mortgage, the singular shall include the plural
as the context requires and the following words and phrases shall have the
following meanings: (a) "provisions" shall mean "provisions, terms,
covenants and/or conditions"; (b) "lien" shall mean "lien, charge, pledge,
security interest, mortgage, deed of trust or other encumbrance of any
kind"; (c) "obligation" shall mean "obligation, duty, covenant and/or
condition"; (d) "any of the Encumbered Property" shall mean "the Encumbered
Property or any portion thereof or interest therein"; and (e) "the Real
Property" shall mean "the Real Property or any portion thereof or interest
therein." Any act which Mortgagee is permitted to perform under this
Mortgage, the Loan Agreement or any other Loan Document may be performed at
any time and from time to time by Mortgagee or by any person or entity
designated by Mortgagee. Each appointment of Mortgagee as attorney-in-fact
for Mortgagor under this Mortgage, the Loan Agreement or any other Loan
Document shall be irrevocable and coupled with an interest. If Mortgagee
shall fail or refuse to consent, approve, accept or indicate its
satisfaction, Mortgagor shall not be entitled to any damages for any
withholding or delay of such consent, approval, acceptance or indication of
satisfaction by Mortgagee, it being intended that Mortgagor's sole remedy
shall be to bring an action for an injunction or specific performance,
which remedy of an injunction or specific performance shall be available
only in those cases where Mortgagee has expressly agreed hereunder or under
any other Loan Document not to unreasonably withhold or delay its consent,
approval, acceptance or indication of satisfaction.
B. No director, officer, employee, stockholder or incorporator, as
such, past, present or future, of Mortgagor or any successor corporation
shall have any liability for any obligations of Mortgagor hereunder or for
any claim based on, in respect of or by reason of such obligations or its
creation. Mortgagee, by accepting this Mortgage, waives and releases all
such liability.
XXIX. Enforceability.
This Mortgage shall be construed, interpreted, enforced and
governed by and in accordance with the laws of the State of New Jersey.
Whenever possible, each provision of this Mortgage shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Mortgage shall be prohibited by, or invalid under,
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remaining provisions of
this Mortgage. Nothing contained in this Mortgage or in any other Loan
Documents shall require Mortgagor to pay, or Mortgagee to accept, interest
in an amount which would subject Mortgagee to penalty under applicable law.
In the event that the payment of any interest due hereunder or under the
Loan Agreement or any other Loan Document would subject Mortgagee to
penalty under applicable law, then, ipso facto, the obligation of Mortgagor
to make such payment shall be reduced to the highest rate then permitted
under applicable law without penalty.
XXX. Satisfaction.
At such time as the entire amount of the Indebtedness shall have
been fully paid pursuant to the terms hereof and the other Loan Documents,
and all Obligations shall have been fully performed in accordance with all
provisions hereof and the other Loan Documents, then Mortgagee shall
deliver to Mortgagor a satisfaction of this Mortgage in recordable form and
any other documents or instruments reasonably requested by Mortgagor to
release the lien of this Mortgage.
XXXI. Receipt of Copy.
Mortgagor acknowledges that it has received a true copy of this
Mortgage.
XXXII. Leasehold Mortgage Provisions.
A. Mortgagor represents and warrants that (i) the Mortgage is and
will remain a valid and enforceable first lien on the Leasehold Estate;
(ii) the Ground Lease is unmodified and in full force and effect; (iii)
Mortgagor will preserve such title and will forever warrant and defend the
same to Mortgagee and will forever warrant and defend the validity and
priority of the lien hereof against the claims of all persons and parties,
except the Trustee; (iv) all rents (including additional rents and other
charges) reserved in the Ground Lease have been paid to the extent they are
currently payable; (v) Mortgagor enjoys the quiet and peaceful possession
of the premises and improvements covered by the Ground Lease and Mortgagee
will enjoy the quiet and peaceful possession of such premises, subject to
the terms of the Ground Lease, if it succeeds to the rights of Mortgagor;
(vi) there is no default by any party under the terms of the Ground Lease
and no circumstances presently exist which, with notice and/or the passage
of time, would constitute such a default; and all conditions to the
effectiveness or continuing effectiveness thereof required to be satisfied
or performed by either party by the date hereof have been so satisfied or
performed; (vii) Mortgagor will at all times promptly and faithfully keep
and perform, or cause to be kept and performed, all the covenants and
conditions contained in the Ground Lease to be kept and performed; and
Mortgagor will not do or permit anything to be done or refrained or omitted
from being done, the doing or refraining from doing or the omission of
which will impair or tend to impair the security of the Mortgage or will be
grounds for declaring a breach under, or a forfeiture of, the Ground Lease;
(viii) the Ground Lease is prior to all liens, charges and encumbrances
whatsoever on the fee interest of the lessor thereunder, except for
Permitted Encumbrances; (ix) Mortgagor will not subordinate or consent to
the subordination of the Ground Lease to any mortgage on the fee interest
in the premises, except upon the prior written consent of Mortgagee; (x)
Mortgagor will not modify, extend or in any way alter the terms of the
Ground Lease or cancel or surrender the Ground Lease, or assign or sublet
under the Ground Lease (except as otherwise may be provided in the Loan
Agreement), or waive, excuse, condone or in any way release or discharge
any of the material obligations, covenants, conditions or agreements of the
lessor under the Ground Lease, without the consent of Mortgagee; and (xi)
Mortgagor will give immediate notice of any default given by the lessor
under the Ground Lease and promptly deliver to Mortgagee a copy of any
notice of default given to said lessor; Mortgagor will give Mortgagee
immediate notice of an assignment, conveyance, transfer or change of
ownership of the land demised thereunder; Mortgagor will immediately notify
Mortgagee of the receipt and substance of any notice, demand, request or
other material communication it receives from the lessor under the Ground
Lease, whether oral or written, and will promptly deliver a copy of the
same, if written, to Mortgagee; and it will promptly furnish all other
information which Mortgagee may request concerning the performance of the
lessee or the lessor under the Ground Lease.
B. So long as the obligations secured by the Mortgage remain
unpaid, the fee title and leasehold estate in the land demised under the
Ground Lease shall not, without the consent of Mortgagee or any purchaser
at foreclosure, merge but shall always be kept separate and distinct,
notwithstanding the union of said estates either in the lessee or in the
lessor under the Ground Lease, or in a third party, whether by purchase or
otherwise.
C. 1. The lien of this Mortgage attaches to all of
Mortgagor's rights and remedies at any time arising under or pursuant to
Section 365(h) of the Bankruptcy Code, 11 U.S.C. Section 365(h), (The
"Bankrupcy Code") including, without limitation, all of Mortgagor's rights
to retain its rights under the Ground Lease.
2. Mortgagor shall not without Mortgagee's prior written
consent elect to treat the Ground Lease as terminated under Section
365(h)(1) of the Bankruptcy Code. Any such election made without
Mortgagee's prior written consent shall be void.
3. Mortgagor hereby unconditionally assigns, transfers
and sets over to Mortgagee all of Mortgagor's claims and rights to the
payment of damages arising from any rejection by lessor of the Ground Lease
under the Bankruptcy Code. Mortgagee shall have the right to proceed in
its own name or in the name of Mortgagor in respect of any claim, suit,
action or proceeding relating to the rejection of the Ground Lease,
including, without limitation, the right to file and prosecute, to the
exclusion of Mortgagor, any proofs of claim, complaints, motions,
applications, notices and other documents, in any case in respect of lessor
under the Bankruptcy Code. This assignment constitutes a present,
irrevocable and unconditional assignment of the foregoing claims, rights
and remedies, and shall continue in effect until all of the indebtedness
and obligations secured by this Mortgage shall have been satisfied and
discharged in full. Any amounts received by Mortgagee as damages arising
out of the rejection of the Ground Lease as aforesaid shall be applied
first to all costs and expenses of Mortgagee (including, without
limitation, attorneys' fee) incurred in connection with the exercise of any
of this rights or remedies under this paragraph XXXII.
4. If pursuant to Section 365(h)(1) of the Bankruptcy
Code, Mortgagor seeks to offset against the rent reserved in the Ground
Lease the amount of any damages caused by the non-performance by the lessor
any of lessor's obligations under the Ground Lease after the rejection by
lessor of the Ground Lease under the Bankruptcy Code, Mortgagor shall,
prior to effecting such offset, notify the Mortgagee of its intent so to
do, setting forth the amounts proposed to be offset and the basis
therefore. Mortgagee shall have the right to object to all or any part of
such offset, and, in the event of such objection, Mortgagor shall not
effect any offset of the amounts so objected to by Mortgagee. If Mortgagee
has failed to object as aforesaid within ten (10) days after notice from
Mortgagor, Mortgagor may proceed to effect such offset in the amounts set
forth in Mortgagor's notice. Neither Mortgagee's failure to object as
aforesaid nor any objections or other communication between Mortgagee and
Mortgagor relating to such offset shall constitute an approval of any such
offset by Mortgagee. Mortgagor shall indemnify and save Mortgagee harmless
from and against any and all claims, demands, actions, suits, proceedings,
damages, losses, costs and expenses of every nature whatsoever (including,
without limitation, attorneys' fees) arising from or relating to any offset
by Mortgagor against the rent reserved in the Ground Lease.
5. If any action, proceeding, motion or notice shall be
commenced or filed in respect of the Mortgagor or the Encumbered Property
in connection with any case under the Bankruptcy Code, Mortgagee shall have
the option, to the exclusion of Mortgagor, exercisable upon notice from
Mortgagee to Mortgagor, to conduct and control any such litigation with
counsel of Mortgagee's choice. Mortgagee may proceed in its own name or in
the name of Mortgagor in connection with any such litigation, and Mortgagor
agrees to execute any and all powers, authorizations, consents and other
documents required by the Mortgagee in connection therewith. Mortgagor
shall, upon demand, pay to Mortgagee all costs and expenses (including
attorneys' fees) paid or incurred by Mortgagee in connection with the
prosecution or conduct of any such proceedings. Any such costs or expenses
not paid by Mortgagor as aforesaid shall be secured by the lien of this
Mortgage and shall be added to the principal amount of the indebtedness
secured hereby. Mortgagor shall not commence any action, suit, proceedings
or case, or file any application or make any motion, in respect of the
Ground Lease in any such case under the Bankruptcy Code without the prior
written consent of Mortgagee.
6. Mortgagor shall promptly after obtaining knowledge
thereof notify Mortgagee in writing of any filing by or against the lessor
under the Ground Lease of a petition under the Bankruptcy Code, Mortgagor
shall thereafter forthwith give written notice of such filing to Mortgagee,
setting forth any information available to Mortgagor as to the date of such
filing, the court in which such petition was filed, and the relief sought
therein. Mortgagor shall promptly deliver to Mortgagee following receipt
of any and all notices, summonses, pleadings, applications and other
documents received by Mortgagor in connection with any such petition and
any proceedings relating thereto.
7. If there shall be filed by or against the Mortgagor a
petition under the Bankruptcy Code, and the Mortgagor, as lessee under the
Ground Lease, shall determine to reject the Ground Lease pursuant to
Section 365(a) of the Bankruptcy Code, the Mortgagor shall give the
Mortgagee not less than ten (10) days prior notice of the date on which the
Mortgagor shall apply to the bankruptcy court for authority to reject the
Ground Lease. The Mortgagee shall have the right, but not the obligation,
to serve upon the Mortgagor within such ten (10) day period a notice
stating that (a) the Mortgagee demands that the Mortgagor assume and assign
the Ground Lease to the Mortgagee pursuant to Section 365 of the Bankruptcy
Code and (b) the Mortgagee covenants to cure or provide adequate assurance
of prompt cure of all defaults and provide adequate assurance of future
performance under the Ground Lease. If the Mortgagee serves upon the
Mortgagor the notice described in the preceeding sentence, the Mortgagor
shall not seek to reject the Ground Lease and shall comply with the demand
provided for in clause (a) of the preceding sentence within thirty (30)
days after the notice shall have been given, subject to the performance by
the Mortgagee of the covenant provided for in clause (b) of the preceding
sentence.
8. Effective upon the entry of an order for relief in
respect of the Mortgagor under the Bankruptcy Code, the Mortgagee hereby
assigns and transfers to the Mortgagee a non-exclusive right to apply to
the Bankruptcy Court under Section 365(d)(4) of the Bankruptcy Code for an
order extending the period during which the Ground Lease may be rejected or
assumed.
XXXIII. Release Provision.
The property described in Exhibit B annexed hereto and made a part
hereof (the "Sovereign Avenue Property") shall be released by Mortgagee
from the lien created by this Mortgage at such time that Mortgagee receives
a written request to release the Sovereign Avenue Property, provided,
however, that (i) there shall have been no Event of Default under the Loan
Agreement or this Mortgage which has not been cured, (ii) Mortgagee shall
have received evidence satisfactory to Mortgagee in its sole discretion
that the Sovereign Avenue Property shall be dedicated to and accepted and
maintained by the City of Atlantic City and (iii) Mortgagor shall have paid
all reasonable fees and expenses of Mortgagee's counsel in connection with
the release of the Sovereign Avenue Property.
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed and acknowledged under seal as of the day and year first above
written.
MORTGAGOR:
GNOC, CORP.,
a New Jersey corporation
By:___________________________
Name: Donna M. Graham
Title: Chief Financial
Officer, Treasurer
STATE OF NEW JERSEY )
)
COUNTY OF ESSEX )
On the 2nd day of May, 1996, before me personally came Donna M.
Graham, to me known, who, being by me duly sworn, did depose and say that
she is a Chief Financial Officer and Treasurer of GNOC, Corp., a New Jersey
corporation, the corporation described in and which executed the foregoing
instrument by order of the board of directors of said corporation; and that
she signed her name thereto by like order.
_________________________
EXHIBIT A-1
Fee Property Description
EXHIBIT A-2
Leasehold Property Description
EXHIBIT B
Release Property Description
MORTGAGE AND SECURITY AGREEMENT
WITH ASSIGNMENT OF RENTS
given by
GNOC, CORP.,
Mortgagor
to
FIRST UNION NATIONAL BANK
and
MIDLANTIC BANK, NATIONAL ASSOCIATION,
Mortgagee
Dated as of May 2, 1996
Record and Return to:
McCarter & English
Four Gateway Center
100 Mulberry Street
P.O. Box 652
Newark, New Jersey 07101-0652
Attn: Curtis A. Johnson, Esq.
MORTGAGE AND SECURITY AGREEMENT
WITH ASSIGNMENT OF RENTS
TABLE OF CONTENTS
Article Page
I. Warranty of Title 5
II. Payment of Indebtedness 6
III. Requirements; Proper Care and Use 7
IV. Taxes on Mortgagee 9
V. Payment of Impositions 11
VI. Insurance 13
VII. Condemnation/Eminent Domain 23
VIII. Sale of Encumbered Property; Additional Financing 25
IX. Discharge of Liens 25
X. Right of Contest 25
XI. Leases 26
XII. Estoppel Certificates 29
XIII. Loan Document Expenses 29
XIV. Mortgagee's Right to Perform 29
XV. Mortgagee's Costs and Expenses 30
XVI. Events of Defaults 31
XVII. Remedies 31
XVIII. Security Agreement under Uniform Commercial Code 38
XIX. Representations and Warranties 39
XX. No Waivers, Etc. 39
XXI. Brokerage. 40
XXII. Mortgage Subject to the Provisions of the Act 40
XXIII. Environmental Matters 40
XXIV. Waivers by Mortgagor 43
XXV. Notices 44
XXVI. Conflict with Loan Agreement 45
XXVII. No Modification; Binding Obligations 45
XXVIII. Miscellaneous 46
XXIX. Enforceability 47
XXX. Satisfaction 47
XXXI. Receipt of Copy 47
XXXII. Leasehold Mortgage Provisions 47
XXXIII. Release Provisions 51
EXHIBIT A-1
Fee Metes and Bounds Description
EXHIBIT A-2
Leasehold Metes and Bounds Description
EXHIBIT B
Release Metes and Bounds Description