RIDGEWOOD ORLANDO, INC.
(Mortgagor)
To
BLOOMFIELD ACCEPTANCE COMPANY, L.L.C.
(Mortgagee)
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND
SECURITY AGREEMENT
Dated: As of June 30, 1995
Property Location:
Ramada Inn North Orlando
2025 West State Road 434
Longwood, Florida 32779
Loan No.: 04-05-FL-0000
RECORD AND RETURN TO:
Simpson Zelenock, P.C.
260 East Brown Street
Suite 300
Birmingham, Michigan 48009 6232
Attn: Jeffrey C. Urban, Esq.
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY
AGREEMENT (the "Mortgage"), made as of June 30, 1995, by RIDGEWOOD
ORLANDO, INC., a Florida corporation, having its principal place
of business at 2025 West State Road 434, Longwood, Florida 32779,
("Mortgagor"), to BLOOMFIELD ACCEPTANCE COMPANY, L.L.C., a
Michigan limited liability company, having its principal place of
business at Suite 100, 260 East Brown Street, Birmingham, Michigan
48009-6233 ("Mortgagee").
WITNESSETH:
To secure the payment of an indebtedness in the original
principal sum of Two Million Eight Hundred Thousand Dollars
($2,800,000), lawful money of the United States of America, to be
paid with interest according to a certain mortgage note of even
date herewith made by Mortgagor to Mortgagee (the mortgage note
together with all extensions, renewals or modifications thereof
being hereinafter collectively called the "Note") and all other
sums due hereunder and under the Note (said indebtedness and
interest due under the Note and all other sums due hereunder and
under the Note being hereinafter collectively referred to as the
"Debt"), Mortgagor has mortgaged, given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, warranted, pledged,
assigned, and hypothecated and by these presents does hereby
mortgage, give, grant, bargain, sell, alien, enfeoff, convey,
confirm, warrant, pledge, assign and hypothecate unto Mortgagee
each with power of sale, the real property described in Exhibit A
attached hereto (the "Premises") and the buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter located
thereon (the "Improvements");
TOGETHER WITH: all right, title, interest and estate of
Mortgagor now owned, or hereafter acquired, in and to the
following property, rights, interests and estates (the Premises,
the Improvements, and the property, rights, interests and estates
hereinafter described are collectively referred to herein as the
"Mortgaged Property"):
(a) all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development
rights, all rights to oil, gas, minerals, coal and other
substances of any kind or character, and all estates, rights,
titles, interests, privileges, liberties, tenements, hereditaments
and appurtenances of any nature whatsoever, in any way belonging,
relating or pertaining to the Premises and the Improvements and
the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road, highway, alley or
avenue, opened, vacated or proposed, in front of or adjoining the
Premises, to the center line thereof and all the estates, rights,
titles, interests, dower and rights of dower, curtesy and rights
of curtesy, property, possession, claim and demand whatsoever,
both at law and in equity, of Mortgagor of, in and to the Premises
and the Improvements and every part and parcel thereof, with the
appurtenances thereto;
(b) all machinery, furniture, furnishings, equipment,
computer software and hardware, fixtures (including, without
limitation, all heating, air conditioning, plumbing, lighting,
communications and elevator fixtures, inventory and articles of
personal property and accessions thereof and renewals,
replacements thereof and substitutions therefor, if any
(including, but not limited to, beds, bureaus, chiffoniers,
chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs,
carpeting, drapes, draperies, curtains, shades, venetian blinds,
screens, paintings, hangings, pictures, divans, couches, luggage
carts, luggage racks, stools, sofas, chinaware, linens, pillows,
blankets, glassware, foodcarts, cookware, dry cleaning facilities,
dining room wagons, keys or other entry systems, bars, bar
fixtures, liquor and other drink dispensers, icemakers, radios,
televisions sets, intercom and paging equipment, electric and
electronic equipment, dictating equipment, private telephone
systems, medical equipment, potted plants, heating, lighting and
plumbing fixtures, fire prevention and extinguishing apparatus,
cooling and air-conditioning systems, elevators, escalators,
fittings, plants, apparatus, stoves, ranges, refrigerators,
laundry machines, tools, machinery, engines, dynamos, motors,
boilers, incinerators, switchboards, conduits, compressors, vacuum
cleaning systems, floor cleaning, waxing and polishing equipment,
call systems, brackets, electrical signs, bulbs, bells, ash and
fuel, conveyors, cabinets, lockers, shelving, spotlighting
equipment, dishwashers, garbage disposals, washers and dryers),
other customary hotel equipment and other property of every kind
and nature, whether tangible or intangible, whatsoever owned by
Mortgagor, or in which Mortgagor has or shall have an interest,
now or hereafter located upon the Premises and the Improvements,
or appurtenant thereto, and usable in connection with the present
or future operation and occupancy of the Premises and the
Improvements and all building equipment, materials and supplies of
any nature whatsoever owned by Mortgagor, or in which Mortgagor
has or shall have an interest, now or hereafter located upon the
Premises and the Improvements, or appurtenant thereto, or usable
in connection with the present or future operation, enjoyment and
occupancy of the Premises and the Improvements (hereinafter
collectively referred to as the "Equipment"), including any leases of any of
the foregoing, any deposits existing at any time in connection with any of
the foregoing, and the proceeds of any sale or transfer of the foregoing, and
the right, title and interest of Mortgagor in and to any of the Equipment
that may be subject to any "security interests' as defined in the Uniform
Commercial Code, as adopted and enacted by the State or States where any of
the Mortgaged Property is located (the "Uniform Commercial Code"), superior
in lien to the lien of this Mortgage;
(c) all awards or payments, including interest thereon, that
may heretofore and hereafter be made with respect to the Premises
and the Improvements, whether from the exercise of the right of
eminent domain or condemnation (including, without limitation, any
transfer made in lieu of or in anticipation of the exercise of
said rights), or for a change of grade, or for any other injury to
or decrease in the value of the Premises and Improvements;
(d) all leases and other agreements or arrangements
heretofore or hereafter entered into affecting the use, enjoyment
or occupancy of, or the conduct of any activity upon or in, the
Premises and the Improvements, including any extensions, renewals,
modifications or amendments thereof (hereinafter collectively
referred to as the "Leases") and all rents, rent equivalents,
moneys payable as damages or in lieu of rent or rent equivalents,
royalties (including, without limitation, all oil and gas or other
mineral royalties and bonuses), income, receivables, receipts,
revenues, deposits (including, without limitation, security,
utility and other deposits), accounts, cash, issues, profits,
charges for services rendered, and other consideration of whatever
form or nature received by or paid to or for the account of or
benefit of Mortgagor or its agents or employees from any and all
sources arising from or attributable to the Premises and the
Improvements, including, without limitation, all revenues and
credit card receipts collected from guest rooms, restaurants,
bars, meeting rooms, banquet rooms and recreational facilities,
all receivables, customer obligations, installment payment
obligations and other obligations now existing or hereafter
arising or created out of the sale, lease, sublease, license,
concession or other grant of the right of the use and occupancy of
property or rendering of services by Mortgagor or any operator or
manager of the hotel or the commercial space located in the
Improvements or acquired from others (including, without
limitation, from the rental of any office space, retail space,
guest rooms or other space, halls, stores, and offices, and
deposits securing reservations of such space), license, lease,
sublease and concession fees and rentals, health club membership
fees, food and beverage wholesale and retail sales, service
charges, vending machine sales and proceeds, if any, from business
interruption or other loss of income insurance (the "Rents"),
together with all proceeds from the sale or other disposition of
the Leases and the right to receive and apply the Rents to the
payment of the Debt;
(e) all proceeds of and any unearned premiums on any
insurance policies covering the Mortgaged Property, including,
without limitation, the right to receive and apply the proceeds of
any insurance, judgments, or settlements made in lieu thereof, for
damage to the Mortgaged Property;
(f) the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect
to the Mortgaged Property and to commence any action or proceeding
to protect the interest of Mortgagee in the Mortgaged Property;
(g) all accounts, escrows, documents, instruments, chattel
paper, claims, deposits and general intangibles, as the foregoing
terms are defined in the Uniform Commercial Code, and all
franchises, trade names, trademarks, symbols, service marks,
books, records, plans, specifications, designs, drawings, permits,
consents, licenses (to the extent assignable), franchise and/or
license agreements, management agreements, contract rights
(including, without limitation, any contract with any architect or
engineer or with any other provider of goods or services for or in
connection with any construction, repair, or other work upon the
Mortgaged Property), approvals, actions, refunds of real estate
taxes and assessments (and any other governmental impositions
related to the Mortgaged Property), and causes of action that now
or hereafter relate to, are derived from or are used in connection
with the Mortgaged Property, or the use, operation, maintenance,
occupancy or enjoyment thereof or the conduct of any
business or activities thereon (hereinafter collectively referred
to as the "Intangibles");
and
(h) all proceeds, products, offspring, rents and profits
from any of the foregoing, including, without limitation, those
from sale, exchange, transfer, collection, loss, damage,
disposition, substitution or replacement of any of the foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged
Property unto and to the use and benefit of Mortgagee and its successors
and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Mortgagor shall well and truly pay to Mortgagee
the Debt at the time and in the manner provided in the Note and
this Mortgage and shall well and truly abide by and comply with
each and every covenant and condition set forth herein, in the
Note and in the other Loan Documents (hereinafter defined) in a
timely manner, these presents and the estate hereby granted shall
cease, terminate and be void;
AND Mortgagor represents and warrants to and covenants and agrees
with Mortgagee as follows:
1 . Payment of Debt and Incorporation of Covenants,
Conditions and Agreements. Mortgagor shall pay the Debt at the
time and in the manner provided in the Note and in this Mortgage.
All the covenants, conditions and agreements contained in (i) the
Note and (ii) all and any of the documents, including the Note and
this Mortgage, now or hereafter executed by Mortgagor and/or
others and by or in favor of Mortgagee, which evidences, secures
or guarantees all or any portion of the payments due under the
Note or otherwise is executed and/or delivered in connection with
the Note and this Mortgage (the "Loan Documents") are hereby made
a part of this Mortgage to the same extent and with the same force
as if fully set forth herein. The Note is evidence of that
certain loan made to the Mortgagor by the Mortgagee (the "Loan").
2. Warranty of Title. Mortgagor warrants that Mortgagor has
good, marketable and insurable title to the Mortgaged Property and
has the full power, authority and right to execute, deliver and
perform its obligations under this Mortgage and to encumber,
mortgage, give, grant, bargain, sell, alienate, enfeoff, convey,
confirm, pledge, assign and hypothecate the same and that
Mortgagor possesses an unencumbered fee estate in the Premises and
the Improvements and that it owns the Mortgaged Property free and
clear of all liens, encumbrances and charges whatsoever except for
those exceptions shown in the title insurance policy insuring the
lien of this Mortgage and that this Mortgage is and will remain a
valid and enforceable first lien on and security interest in the
Mortgaged Property, subject only to said exceptions. Mortgagor
shall forever warrant, defend and preserve such title and the
validity and priority of the lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against the
claims of all persons whomsoever.
3. Insurance.
(a) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall obtain and maintain
during the entire term of this Mortgage (the "Term") policies of
insurance against loss or damage by fire and lightning and against
loss or damage by all other risks and hazards covered by a
standard extended coverage insurance policy including, without
limitation, riot and civil commotion, vandalism, malicious
mischief, burglary and theft. Such insurance shall be in an
amount equal to the greater of (i) the full insurable value of the
Mortgaged Property, (ii)the then full replacement cost of all
insurable items, portions and components of the Mortgaged
Property, including all Improvements and Equipment, without
deduction for physical depreciation, and (iii) such amount that
the insurer would not deem Mortgagor to be a co-insurer under said
policies. The policies of insurance carried in accordance with
this paragraph shall be paid annually in advance and shall contain
a "Replacement Cost Endorsement" with a waiver of depreciation,
and shall have a deductible no greater than $25,000.00 unless so
agreed by Mortgagee.
(b) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall also obtain and maintain
during the Term the following policies of insurance:
(i) Flood insurance if any part of the Mortgaged Property is
located in an area identified by the Federal Emergency
Management Agency as an area having special flood hazards and
in which flood insurance has been made available under the
National Flood Insurance Program in an amount equal to the
insurable Improvements and Equipment under said program.
(ii) Earthquake insurance if any part of the Mortgaged Property is
identified by the insurance industry or other experts (i.e.,
a professional engineer selected by and acceptable to
Mortgagee) as located within an area that is a high probable
earthquake area, in an amount equal to the maximum limit of
coverage available with respect to the insurable Improvements
and Equipment.
(iii) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air
conditioning equipment, high pressure piping, machinery and
equipment, pressure vessels or similar apparatus now or
hereafter installed in the Improvements (without exclusion for
explosions), in an amount at least equal to the outstanding
principal amount of the Note or $2,000,000, whichever is less.
(iv) Comprehensive public liability insurance, including broad
form property damage, blanket contractual and personal
injuries (including death resulting therefrom) coverages and
containing minimum limits per occurrence of $1,000,000 and
$2,000,000 in the aggregate for any policy year. In addition, at least
$10,000,000 excess and/or umbrella liability insurance shall be obtained
and maintained for any and all claims, including all legal liability
imposed upon Mortgagor and all court costs and attorneys' fees incurred
in connection with the ownership, operation and maintenance of the
Mortgaged Property.
(v) Rental loss and/or business interruption insurance in an
amount equal to the greater of (A) estimated gross revenues
from the operations of the Mortgaged Property for a period of
18 months or (B) the projected annual operating expenses
(including debt service) for the maintenance and operation of
the Mortgaged Property (and including such rental loss
insurance in the event of earthquake and/or flood, where
casualty insurance is required for those perils). The amount
of such rental loss insurance shall be increased from time to
time during the Term as and when new Leases and renewal
Leases are entered into and the Rents increase or the annual
estimate of (or the actual) gross revenue, as may be
applicable, increases.
(vi) Worker's compensation insurance with respect to any employees
of Mortgagor, as required by any governmental authority or
legal requirement.
(vii) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the
full insurable value of the Mortgaged Property against such
risks (including, without limitation, fire and extended
coverage and collapse of the Improvements to agreed limits)
as Mortgagee may request, in form and substance acceptable to
Mortgagee.
(viii) If the Mortgaged Property is or becomes a "non-
conforming use" under applicable zoning and building
ordinances, ordinance or law coverage to compensate for the
cost of demolition after an insured casualty and for the
increased cost of construction in connection with the repair
or restoration of the Mortgaged Property thereafter.
(ix) Sinkhole and mine subsidence insurance shall be obtained and
maintained, in an amount up to the full principal balance of
the Loan as determined by Mortgagee in the exercise of its
sole discretion, if in the opinion of a professional
engineer, selected by and acceptable to Mortgagee, there is a
foreseeable risk of loss due to the perils customarily
insured by that coverage.
(x) Such other insurance as may from time to time be reasonably
required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "Policies") required
pursuant to this paragraph: (i) shall be issued by
companies approved by Mortgagee and licensed to do
business in the state where the Mortgaged Property is located,
with a claims paying ability rating of "AA" or better by Standard
& Poor's Ratings Group or a rating of "A:X" or better in the
current Best's Insurance Reports; (ii) shall name Mortgagee and
successors and/or assigns as their interests may appear as the
mortgagee; (iii) shall contain a Non-Contributory Standard
Mortgagee Clause and a Lender's Loss Payable Endorsement (Form 438
BFU NS), or their equivalents, naming Mortgagee as the person to
which all payments made by such insurance company shall be paid;
(iv) shall contain a waiver of subrogation against Mortgagee; (v)
shall be maintained throughout the Term without cost to Mortgagee;
(vi) shall be assigned and the originals delivered to Mortgagee;
(vii) shall contain such provisions as Mortgagee deems reasonably
necessary or desirable to protect its interest including, without
limitation, endorsements providing that neither Mortgagor,
Mortgagee nor any other party shall be a co-insurer under said
Policies and that Mortgagee shall receive at least thirty (30)
days prior written notice of any modification, reduction or
cancellation; and (viii) shall be satisfactory in form and
substance to Mortgagee and shall be approved by Mortgagee as to
amounts, form, risk coverage, deductibles, loss payees and
insureds. Mortgagor shall pay the premiums for such Policies (the
"Insurance Premiums") as the same become due and payable and shall
furnish to Mortgagee evidence of the renewal of each of the
Policies with receipts for the payment of the Insurance Premiums
or other evidence of such payment reasonably satisfactory to
Mortgagee (provided, however, that Mortgagor is not required to
furnish such evidence of payment to Mortgagee in the event that
such Insurance Premiums have been paid by Mortgagee pursuant to
Paragraph 5 hereof). If Mortgagor does not furnish such evidence
and receipts at least thirty (30) days prior to the expiration of
any expiring Policy, then Mortgagee may procure, but shall not be
obligated to procure, such insurance and pay the Insurance
Premiums therefor, and Mortgagor agrees to reimburse Mortgagee for
the cost of such Insurance Premiums promptly on demand. Within
thirty (30) days after request by Mortgagee, Mortgagor shall
obtain such increases in the amounts of coverage required
hereunder as may be reasonably requested by Mortgagee, taking into
consideration changes in the value of money over time, changes in
liability laws, changes in prudent customs and practices, and the
like.
(d) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (an "Insured
Casualty"), Mortgagor shall give prompt notice thereof to
Mortgagee. Following the occurrence of an Insured Casualty,
Mortgagor, regardless of whether insurance proceeds are available,
shall promptly proceed to restore, repair, replace or rebuild the
same to be of at least equal value and of substantially the same
character as prior to such damage or destruction, all to be
effected in accordance with applicable law. The expenses incurred
by Mortgagee in the adjustment and collection of insurance
proceeds shall become part of the Debt and be secured hereby and
shall be reimbursed by Mortgagor to Mortgagee upon demand.
(e) In case of loss or damages covered by any of the Policies,
the following provisions shall apply:
(i) In the event of an Insured Casualty that does not exceed
$100,000.00, Mortgagor may settle and adjust any claim
without the consent of Mortgagee and agree with the insurance
company or companies on the amount to be paid upon the loss;
provided that such adjustment is carried out in a competent
and timely manner. In such case Mortgagor is hereby
authorized to collect and receipt for any such insurance
proceeds.
(ii) In the event an Insured Casualty shall exceed $100,000.00,
then and in that event, Mortgagee may settle and adjust any
claim without the consent of Mortgagor and agree with the
insurance company or companies on the amount to be paid on
the loss and the proceeds of any such policy shall be due and
payable solely to Mortgagee and held in escrow by Mortgagee
in accordance with the terms of this Mortgage.
(iii)In the event of an Insured Casualty where the loss is in an
aggregate amount less than twenty-five percent (25%) of the
original principal balance of the Note, and if, in the reasonable
judgment of Mortgagee, the Mortgaged Property can be restored
within six (6) months (and prior to the maturity of the Note) to
an economic unit not less valuable (including an assessment of the
impact of the termination of any Leases due to such Insured Casualty)
and not less useful than the same was prior to the Insured Casualty, and
after such restoration will adequately secure the outstanding balance of
the Debt, then, if no Event of Default (as hereinafter defined) shall
have occurred and be then continuing, the proceeds of insurance (after
reimbursement of any expenses incurred by Mortgagee) shall be applied to
reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to the Insured
Casualty, in the manner set forth below. Mortgagor hereby covenants and
agrees to commence and diligently to prosecute such restoring,
repairing, replacing or rebuilding; provided always, that Mortgagor
shall pay all costs (and if required by Mortgagee, Mortgagor shall
deposit the total thereof with Mortgagee in advance) of such restoring,
repairing, replacing or rebuilding in excess of the net proceeds of
insurance made available pursuant to the terms hereof.
(iv) Except as provided above, the proceeds of insurance collected upon any
Insured Casualty shall, at the option of Mortgagee in its sole
discretion, be applied to the payment of the Debt or applied to
reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to the Insured
Casualty, in the manner set forth below. Any such application to the
Debt shall be without any prepayment consideration except that if an
Event of Default, or an event with notice and/or the passage of time
would constitute an Event of Default, has occurred then the Mortgagor
shall pay to Mortgagee an additional amount equal to the Yield
Maintenance Premium (hereinafter defined), if any, that would be
required under Paragraph .57 hereof if a Defeasance Deposit (hereinafter
defined) was to be made by Mortgagor. Any such application to the Debt
shall be applied to those payments of principal and interest last due
under the Note and shall not postpone or reduce any payments otherwise
required pursuant to the Note other than such last due payments.
(v) In the event Mortgagor is entitled to reimbursement out of insurance
proceeds held by Mortgagee, such proceeds shall be disbursed from time
to time upon Mortgagee being furnished with (1) evidence satisfactory to
it of the estimated cost of completion of the restoration, repair,
replacement and rebuilding, (2) funds or, at Mortgagee's option,
assurances satisfactory to Mortgagee that such funds are available,
sufficient in addition to the proceeds of insurance to complete the
proposed restoration, repair, replacement and rebuilding, and (3) such
architect's certificates, waivers of lien, contractor's sworn
statements, title insurance endorsements, bonds, plats of survey and
such other evidences of cost, payment and performance as Mortgagee may
reasonably require and approve. Mortgagee may, in any event, require
that all plans and specifications for such restoration, repair,
replacement and rebuilding be submitted to and approved by Mortgagee
prior to commencement of work. No payment made prior to the final
completion of the restoration, repair, replacement and rebuilding shall
exceed ninety percent (90%) of the value of the work performed from time
to time; funds other than proceeds of insurance shall be disbursed prior
to disbursement of such proceeds; and at all times, the undisbursed
balance of such proceeds remaining in the hands of Mortgagee, together
with funds deposited for that purpose or irrevocably committed to the
satisfaction of Mortgagee by or on behalf of Mortgagor for that purpose,
shall be at least sufficient in the reasonable judgment of Mortgagee to
pay for the cost of completion of the restoration, repair, replacement
or rebuilding, free and clear of all liens or claims for lien. Any
surplus which may remain out of insurance proceeds held by Mortgagee
after payment of such costs of restoration, repair, replacement or
rebuilding shall be paid to any party entitled thereto.
4. Payment of Taxes, Etc. Mortgagor shall pay all taxes, assessments,
water rates and sewer rents, now or hereafter levied or assessed or imposed
against the Mortgaged Property or any part thereof (the "Taxes") and all
ground rents, maintenance charges, other impositions, and other charges,
including, without limitation, vault charges and license fees for the use of
vaults, chutes and similar areas adjoining the Premises, now or hereafter
levied or assessed or imposed against the Mortgaged Property or any part
thereof (the "Other Charges") as the same become due and payable. Mortgagor
will deliver to Mortgagee receipts for payment or other evidence satisfactory
to Mortgagee that the Taxes and Other Charges have been so paid or are not
then delinquent no later than thirty (30) days prior to the date on which the
Taxes and/or Other Charges would otherwise be delinquent if not paid.
Mortgagor shall not suffer and shall promptly cause to be paid and discharged
any lien or charge whatsoever which may be or become a lien or charge against
the Mortgaged Property, and shall promptly pay for all utility services
provided to the Mortgaged Property. Mortgagor shall furnish to Mortgagee
receipts for the payment of the Taxes and the Other Charges prior to the date
the same shall become delinquent (provided, however, that Mortgagor is not
required to furnish such receipts for payment of Taxes in the event that such
Taxes have been paid by Mortgagee pursuant to Paragraph 5 hereof).
5. Tax and Insurance Escrow Fund. Mortgagor shall pay to Mortgages on
the first day of each calendar month (a) one-twelfth of the Taxes that
Mortgagee estimates will be payable during the next ensuing twelve (12)
months in order to accumulate with Mortgagee sufficient funds to pay all such
Taxes at least thirty (30) days prior to their respective due dates, and (b)
one-twelfth of the Insurance Premiums that Mortgagee estimates will be
payable for the renewal of the coverage afforded by the Policies upon the
expiration thereof in order to accumulate with Mortgagee sufficient funds to
pay all such Insurance Premiums at least thirty (30) days prior to the
expiration of the Policies (said amounts in (a) and (b) above hereinafter
called the "Tax and Insurance Escrow Fund"). The Tax and Insurance Escrow
Fund and the payments of interest or principal or both, payable pursuant to
the Note, shall be added together and shall be paid as an aggregate sum by
Mortgagor to Mortgagee. Mortgagor hereby pledges to Mortgagee and grants to
Mortgagee a security interest in any and all monies now or hereafter
deposited in the Tax and Insurance Escrow Fund as additional security for the
payment of the Debt. Mortgagee will apply the Tax and Insurance Escrow Fund
to payments of Taxes and Insurance Premiums required to be made by Mortgagor
pursuant to Paragraphs 3 and 4 hereof. In making any payment relating to the
Tax and Insurance Escrow Fund, Mortgagee may do so according to any bill,
statement or estimate procured from the appropriate public office (with
respect to Taxes) or insurer or agent (with respect to Insurance Premiums),
without inquiry into the accuracy of such bill, statement or estimate or into
the validity of any tax, assessment, sale, forfeiture, tax lien or title or
claim thereof. If the amount of the Tax and Insurance Escrow Fund shall
exceed the amounts due for Taxes and Insurance Premiums pursuant to
Paragraphs 3 and 4 hereof, Mortgagee shall, in its sole discretion, return
any excess to Mortgagor or credit such excess against future payments to be
made to the Tax and Insurance Escrow Fund. In allocating such excess,
Mortgagee may deal with the person shown on the records of Mortgagee to be
the owner of the Mortgaged Property. If at any time Mortgagee determines
that the Tax and Insurance Escrow Fund is not or will not be sufficient to
pay the items set forth in (a) and (b) above, Mortgagee shall notify
Mortgagor of such determination and Mortgagor shall increase its monthly
payments to Mortgagee by the amount that Mortgagee estimates is sufficient to
make up the deficiency at least thirty (30) days prior to delinquency of the
Taxes and/or expiration of the Policies, as the case may be. Upon the
occurrence of an Event of Default, Mortgagee may apply any sums then present
in the Tax and Insurance Escrow Fund to the payment of the Debt in any order
in its sole discretion. Until expended or applied as above provided, any
amounts in the Tax and Insurance Escrow Fund shall constitute additional
security for the Debt. The Tax and Insurance Escrow Fund shall not
constitute a trust fund and may be commingled with other monies held by
Mortgagee. No earnings or interest on the Tax and Insurance Escrow Fund
shall be payable to Mortgagor. If Mortgagee so elects at any time, Mortgagor
shall provide, at Mortgagor's expense, a tax service contract for the Term
issued by a tax reporting agency acceptable to Mortgagee. If Mortgagee does
not so elect, Mortgagor shall reimburse Mortgagee for the cost of making
annual tax searches throughout the Term.
6. Replacement Escrow Fund. Mortgagor shall pay to Mortgagee on the
first day of each calendar month one-twelfth of four percent (4%) of the
total revenues of Mortgagor arising out of or in connection with the
Mortgaged Property during the preceding calendar year as the amount estimated
by Mortgagee in its sole discretion to be due for replacements and capital
repairs and repairs and replacements to furniture, fixtures and equipment
required to be made to the Mortgaged Property during each calendar year (the
"Replacement Escrow Fund"). Mortgagor hereby pledges to Mortgagee any and all
monies now or hereafter deposited in the Replacement Escrow Fund as
additional security for the payment of the Debt. Mortgagee may reassess its
estimate of the amount necessary for the Replacement Escrow Fund from time to
time in its sole discretion, and may adjust the monthly amounts required to
be deposited into the Replacement Escrow Fund upon thirty (30) days notice to
Mortgagor. Mortgagee shall make disbursements from the Replacement Escrow
Fund as requested by Mortgagor, and approved by Mortgagee in its sole
discretion, on a quarterly basis in increments of no less than $5,000.00 upon
delivery by Mortgagor of Mortgagee's standard form of draw request
accompanied by copies of paid invoices for the amounts requested and, if
required by Mortgagee, lien waivers and releases from all parties furnishing
materials and/or services in connection with the requested payment.
Mortgagee may require an inspection of the Mortgaged Property at Mortgagor's
expense prior to making a quarterly disbursement in order to verify
completion of replacements and repairs for which reimbursement is sought.
The Replacement Escrow Fund shall be held in an interest bearing account in
Mortgagee's name at a financial institution selected by Mortgagee in its sole
discretion and subject to an administrative fee determined by Mortgagee in
its sole discretion. Upon the occurrence of an Event of Default, Mortgagee
may apply any sums then present in the Replacement Escrow Fund to the payment
of the Debt in any order in its sole discretion. Until expended or applied
as above provided, the Replacement Escrow Fund shall constitute additional
security for the Debt. The Replacement Escrow Fund shall not constitute a
trust fund and may be commingled with other monies held by Mortgagee. All
earnings or interest on the Replacement Escrow Fund shall be and become part
of such Replacement Escrow Fund and shall be disbursed as provided in this
paragraph.
7. Condemnation. Mortgagor shall promptly give Mortgagee written
notice of the actual or threatened commencement of any condemnation or
eminent domain proceeding (a "Condemnation") and shall deliver to Mortgagee
copies of any and all papers served in connection with such Condemnation.
Following the occurrence of a Condemnation, Mortgagor, regardless of whether
an Award (hereinafter defined) is available, shall promptly proceed to
restore, repair, replace or rebuild the same to the extent practicable to be
of at least equal value and of substantially the same character as prior to
such Condemnation, all to be effected in accordance with applicable law.
(a) Mortgagee is hereby irrevocably appointed as Mortgagor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment ("Award") for any taking accomplished
through a Condemnation (a "Taking") and to make any compromise or settlement
in connection with such Condemnation, subject to the provisions of this
Mortgage. Notwithstanding any Taking by any public or quasi-public authority
(including, without limitation, any transfer made in lieu of or in
anticipation of such a Taking), Mortgagor shall continue to pay the Debt at
the time and in the manner provided for in the Note, in this Mortgage and the
other Loan Documents and the Debt shall not be reduced unless and until any
Award shall have been actually received and applied by Mortgagee to expenses
of collecting the Award and to discharge of the Debt. Mortgagee shall not be
limited to the interest paid on the Award by the condemning authority but
shall be entitled to receive out of the Award interest at the rate or rates
provided in the Note. Mortgagor shall cause any Award that is payable to
Mortgagor to be paid directly to Mortgagee.
(b) In the event of any Condemnation where the Award is in an
aggregate amount less than fifteen percent (15%) of the original principal
balance of the Note, and if, in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within six (6) months (and prior to
maturity of the Note) to an economic unit not less valuable (including an
assessment of the impact of the termination of any Leases due to such
Condemnation) and not less useful than the same was prior to the
Condemnation, and after such restoration will adequately secure the
outstanding balance of the Debt, then, if no Event of Default shall have
occurred and be then continuing, the proceeds of the Award (after
reimbursement of any expenses incurred by Mortgagee) shall be applied to
reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to Condemnation, in
the manner set forth below. Mortgagor hereby covenants and agrees to
commence and diligently to prosecute such restoring, repairing, replacing or
rebuilding; provided always, that Mortgagor shall pay all costs (and if
required by Mortgagee, Mortgagor shall deposit the total thereof with
Mortgagee in advance) of such restoring, repairing, replacing or rebuilding
in excess of the Award made available pursuant to the terms hereof.
(c) Except as provided above, the Award collected upon any Condemnation
shall, at the option of Mortgagee in its sole discretion, be applied to the
payment of the Debt or applied to reimburse Mortgagor for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to the Condemnation, in the manner set forth below. Any such
application to the Debt shall be without any prepayment consideration except
that if an Event of Default, or an event with notice and/or the passage of
time would constitute an Event of Default, has occurred then the Mortgagor
shall pay to Mortgagee an additional amount equal to the Yield Maintenance
Premium, if any, that would be required under Paragraph 57 hereof if a
Defeasance Deposit was to be made by Mortgagor. Any such application to the
Debt shall be applied to those payments of principal and interest last due
under the Note and shall not postpone or reduce any payments otherwise
required pursuant to the Note other than such last due payments. If the
Mortgaged Property is sold, through foreclosure or otherwise, prior to the
receipt by Mortgagee of such Award, Mortgagee shall have the right, whether
or not a deficiency judgment on the Note shall be recoverable or shall have
been sought, recovered or denied, to receive all or a portion of said Award
sufficient to pay the Debt.
(d) In the event Mortgagor is entitled to reimbursement out of the
Award received by Mortgagee, such proceeds shall be disbursed from time to
time upon Mortgagee being furnished with (1) evidence satisfactory to it of
the estimated cost of completion of the restoration, repair, replacement and
rebuilding resulting from such Condemnation, (2) funds, or, at Mortgagee's
option, assurances satisfactory to Mortgagee that such funds are available,
sufficient in addition to the proceeds of the Award to complete the proposed
restoration, repair, replacement and rebuilding, and (3) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of costs,
payment and performance as Mortgagee may reasonably require and approve; and
Mortgagee may, in any event, require that all plans and specifications for
such restoration, repair, replacement and rebuilding be submitted to and
approved by Mortgagee prior to commencement of work. No payment made prior
to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than proceeds of the Award shall be
disbursed prior to disbursement of such proceeds; and at all times, the
undisbursed balance of such proceeds remaining in the hands of Mortgagee,
together with funds deposited for that purpose or irrevocably committed to
the satisfaction of Mortgagee by or on behalf of Mortgagor for that purpose,
shall be at least sufficient in the reasonable judgment of Mortgagee to pay
for the costs of completion of the restoration, repair, replacement or
rebuilding, free and clear of all liens or claims for lien. Any surplus
which may remain out of the Award received by Mortgagee after payment of such
costs of restoration, repair, replacement or rebuilding shall, in the sole
and absolute discretion of Mortgagee, be retained by Mortgagee and applied to
payment of the Debt.
8. Leases and Rents.
(a) Mortgagor does hereby absolutely and unconditionally assign to
Mortgagee, all Mortgagor's right, title and interest in all current and
future Leases and Rents, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for
additional security only. Such assignment to Mortgagee shall not be
construed to bind Mortgagee to the performance of any of the covenants,
conditions or provisions contained in any such Lease or otherwise impose any
obligation upon Mortgagee. Mortgagor agrees to execute and deliver to
Mortgagee such additional instruments, in form and substance satisfactory to
Mortgagee, as may hereafter be requested by Mortgagee to further evidence and
confirm such assignment. Nevertheless, subject to the terms of this
paragraph, Mortgagee grants to Mortgagor a revocable license to operate and
manage the Mortgaged Property and to collect the Rents. Mortgagor shall hold
the Rents, or a portion thereof, sufficient to discharge all current sums due
on the Debt, in trust for the benefit of Mortgagee for use in the payment of
such sums. Upon an Event of Default, and without the need for notice or
demand, the license granted to Mortgagor herein shall automatically be
revoked, and Mortgagee shall immediately be entitled to possession of all
Rents, whether or not Mortgagee enters upon or takes control of the Mortgaged
Property. Mortgagee is hereby granted and assigned by Mortgagor the right,
at its option, upon revocation of the license granted herein, to enter upon
the Mortgaged Property in person, by agent or by court appointed receiver to
collect the Rents. Any Rents collected after the revocation of the license
may be applied toward payment of the Debt in such priority and proportions as
Mortgagee in its sole discretion shall deem proper.
(b) All Leases shall be written on the standard form of lease which has
been approved by Mortgagee. Upon request, Mortgagor shall furnish Mortgagee
with executed copies of all Leases. No material changes may be made to the
Mortgagee approved standard lease without the prior written consent of
Mortgagee. All Leases shall provide that they are subordinate to this
Mortgage and that the tenant agrees to attorn to Mortgagee. Unless otherwise
approved by Mortgagee, each Lease shall contain a provision requiring
continuous operations of tenant's business on the premises. None of the
Leases shall contain any option to purchase, any right of first refusal to
lease or purchase, any right to terminate the lease term (except in the event
of the destruction of all or substantially all of the Mortgaged Property),
any nondisturbance or similar recognition agreement or any other similar
provisions which adversely affect the Mortgaged Property or which might
adversely affect the rights of any holder of the Mortgaged Loan without the
prior written consent of Mortgagee. Each tenant shall conduct business only
in that portion of the Mortgaged Property covered by its lease. Upon
request, Mortgagor shall furnish Mortgagee with executed copies of all
Leases.
(c) Mortgagor (i) shall observe and perform all the obligations imposed
upon the lessor under the Leases and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii)
shall promptly send copies to Mortgagee of all notices of material default by
Mortgagor which Mortgagor shall receive with respect to any Leases; (iii)
shall not collect any of the Rents more than one (1) month in advance; (iv)
shall not execute any other assignment of the lessor's interest in the Leases
or the Rents; (v) shall deliver to Mortgagee, upon request, tenant estoppel
certificates from each commercial tenant at the Mortgaged Property, in form
and substance reasonably satisfactory to Mortgagee, provided that Mortgagor
shall not be required to deliver such certificates more frequently than two
(2) times in any calendar year; and (vi) shall execute and deliver at the
request of Mortgagee all such further assurances, confirmations and
assignments in connection with the Mortgaged Property as Mortgagee shall from
time to time require. Upon request by Mortgagee after an Event of Default,
Mortgagor shall promptly send copies to Mortgagee of all notices of default
which Mortgagor shall send under the Leases. Except to the extent Mortgagor
is acting in the ordinary course of business as a prudent operator of
property similar to the Mortgaged Property, Mortgagor (A) shall enforce all
of the terms, covenants and conditions contained in the Leases upon the part
of the tenant thereunder to be observed or performed, short of termination
thereof; (B) shall not alter, modify or change the terms of the Leases in any
material respect without the prior written consent of Mortgagee; (C) shall
not convey or transfer or suffer or permit a conveyance or transfer of the
Mortgaged Property or of any interest therein so as to effect a merger of the
estates and rights of, or a termination or diminution of the obligations of,
tenants under the Leases; (D) shall not consent to any assignment of or
subletting under the Leases not in accordance with their terms, without the
prior written consent of Mortgagee; and (E) shall not cancel or terminate the
Leases or accept a surrender thereof, except if a tenant is in default
thereunder; provided, however, that any Lease may be canceled if at the time
of the cancellation thereof a new Lease is entered into on substantially the
same terms or more favorable terms as the canceled Lease.
(d) Mortgagor, as the lessor thereunder, may enter into proposed lease
renewals and new leases without the prior written consent of Mortgagee if
such proposed Lease or extension: (i) is not for greater than or equal to 1
0,000 square feet of the net rentable area of the Mortgaged Property, or
greater than or equal to ten percent (10%) of the total net rentable area of
the Mortgaged Property; (ii) shall have an initial term of not less than
three (3) years or greater than ten (1 0) years; (iii) shall provide for
rental rates comparable to existing local market rates and shall be an
arms length transaction; (iv) shall not contain any options for renewal or
expansion by the tenant thereunder at rental rates which are either below
comparable market levels or less than the rental rates paid by the tenant
during the initial lease term; (v) shall be to a tenant which is experienced,
creditworthy and reputable; (vi) shall provide that it is subordinate to this
Mortgage and that the tenant thereunder agrees to attorn to Mortgagee; and
(vii) shall comply with the provisions of subparagraph (b), above. Mortgagor
may enter into a proposed lease which does not satisfy all of the conditions
set forth in clauses (i) through (vii) immediately above, provided Mortgagee
consents in writing to such proposed lease, such consent not to be
unreasonably withheld or delayed. Mortgagor expressly understands that any
and all proposed leases are included in the definition of "Lease" or "Leases"
as such terms may be used throughout this Mortgage, the Note and the other
Loan Documents.
(e) All security deposits of tenants, whether held in cash or any other
form, shall not be commingled with any other funds of Mortgagor and, if cash,
shall be deposited by Mortgagor at such commercial or savings bank or banks
as may be reasonably satisfactory to Mortgagee. Notwithstanding the
foregoing, security deposits of tenants which are received by Mortgagor in
cash may be commingled with other funds of Mortgagor if (i) permitted by law
and (ii) a bond for the full amount thereof is posted in accordance with the
provisions of law and the following provisions of this subparagraph (d). Any
bond or other instrument which Mortgagor is permitted to hold in lieu of cash
security deposits under any applicable legal requirements shall be maintained
in full force and effect in the full amount of such deposits unless replaced
by cash deposits as hereinabove described, shall be issued by an institution
reasonably satisfactory to Mortgagee, shall, if permitted pursuant to any
legal requirements, name Mortgagee as payee or mortgagee thereunder (or at
Mortgagee's option, be fully assignable to Mortgagee) and shall, in all
respects, comply with any applicable legal requirements and otherwise be
reasonably satisfactory to Mortgagee. Mortgagor shall, upon request, provide
Mortgagee with evidence reasonably satisfactory to Mortgagee of Mortgagor's
compliance with the foregoing. Following the occurrence and during the
continuance of any Event of Default, Mortgagor shall, upon Mortgagee's
request, if permitted by any applicable legal requirements, turn over to
Mortgagee the security deposits (and any interest theretofore earned thereon)
with respect to all or any portion of the Mortgaged Property, to be held by
Mortgagee subject to the terms of the Leases.
9. Representations and Covenants Concerning Loan. Mortgagor represents,
warrants and covenants as follows:
(a) The Note, this Mortgage and the other Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, nor would the operation of any of the terms
of the Note, this Mortgage and the other Loan Documents, or the exercise of
any right thereunder, render this Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury.
(b) All certifications, permits, licenses and approvals, including,
without limitation, certificates of completion and occupancy permits required
for the legal use, occupancy and operation of the Mortgaged Property as a
hotel (collectively, the "Licenses"), have been obtained and are in full
force and effect (including, without limitation, any applicable liquor
license). The Mortgagor shall keep and maintain all licenses necessary for
the operation of the Mortgaged Property as a hotel. The Mortgaged Property
is free of material damage and is in good repair, and there is no proceeding
pending for the total or partial condemnation of, or affecting, the Mortgaged
Property.
(c) All of the Improvements which were included in determining the
appraised value of the Mortgaged Property lie wholly within the boundaries
and building restriction lines of the Mortgaged Property, and no improvements
on adjoining properties encroach upon the Mortgaged Property, and no
easements or other encumbrances upon the Premises encroach upon any of the
Improvements, so as to affect the value or marketability of the Mortgaged
Property except those which are insured against by title insurance. All of
the Improvements comply with all material requirements of any applicable
zoning and subdivision laws and ordinances.
(d) The Mortgaged Property is not subject to any Leases other than the
Leases described in the rent roll delivered to Mortgagee in connection with
this Mortgage. No person has any possessory interest in the Mortgaged
Property or right to occupy the same except under and pursuant to the
provisions of the Leases, The current Leases are in full force and effect and
there are no defaults thereunder by Mortgagor or (to Mortgagor's knowledge)
by any tenant thereunder, and there are no conditions which, with the giving
of notice, the passage of time, or both, would constitute defaults thereunder
by Mortgagor or (to Mortgagor's knowledge) by any tenant thereunder.
(e) The survey of the Mortgaged Property delivered to Mortgagee in
connection with this Mortgage, has been performed by a duly licensed surveyor
or registered professional engineer in the jurisdiction in which the
Mortgaged Property is situated, and does not fail to reflect any material
matter affecting the Mortgaged Property or the title thereto.
(f) The Mortgaged Property is and shall at all times remain in
compliance with all statutes, ordinances, regulations and other governmental
or quasigovernmental requirements and private covenants now or hereafter
relating to the ownership, construction, use or operation of the Mortgaged
Property, but Mortgagor, upon providing Mortgagee with security satisfactory
to the Mortgagee in its sole discretion, may proceed diligently and in good
faith to contest the validity or applicability of any such statute,
ordinance, regulation or requirement.
(g) There has not been committed by Mortgagor (or any Person
affiliated with Mortgagor, including any Person managing the Mortgaged
Property, or to Mortgagor's knowledge any other Person in occupancy of the
Mortgaged Property) any act or omission affording the Federal government or
any state or local government the right of forfeiture as against the
Mortgaged Property or any part thereof or any monies paid in performance of
Mortgagor's obligations under any of the Loan Documents. Mortgagor hereby
covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture.
(h) The License Agreement dated December 29, 1993 (the "License
Agreement"), between Mortgagor and Ramada Franchise Systems, Inc., pursuant
to which Mortgagor has the right to operate the hotel located on the
Mortgaged Property under a name and/or hotel system controlled by such
franchisor, is in full force and effect and there is no default, breach or
violation existing thereunder by any party thereto and no event has occurred
(other than payments due but not yet delinquent) that, with the passage of
time or the giving of notice. or both, would constitute a default, breach or
violation by any party thereunder.
(i) The Hotel Management Agreement dated June 29, 1995 (the "Management
Agreement"), between Mortgagor and Ridgewood Properties, Inc., pursuant to
which such hotel manager operates the Mortgaged Property as a hotel, is in
full force and effect and there is no default, breach or violation existing
thereunder by any party thereto and no event has occurred (other than
payments due but not yet delinquent) that, with the passage of time or the
giving of notice, or both, would constitute a default, breach or violation by
any party thereunder.
(j) Neither the execution and delivery of the Loan Documents, the
Mortgagor's performance thereunder, the recordation of this Mortgage, nor the
exercise of any remedies by Mortgagee, will adversely affect Mortgagor's
rights under the License Agreement, the Management Agreement, or any of the
Licenses.
10. Single Purpose Entity/Separateness. Mortgagor represents, warrants and
covenants as follows:
(a) Mortgagor does not own and will not own any encumbered asset or
property other than (i) the Mortgaged Property, and (ii) incidental personal
property necessary for the ownership or operation of the Mortgaged Property.
(b) Mortgagor will not engage in any business other than the ownership,
management and operation of the Mortgaged Property and Mortgagor will conduct
and operate its business as presently conducted and operated.
(c) Mortgagor will not enter into any contract or agreement with any
affiliate of the Mortgagor, any constituent party of Mortgagor, any guarantor
(a "Guarantor") of the Debt or any part thereof or any affiliate of any
constituent party or Guarantor, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available
on an arms-length basis with third parties other than any such party.
(d) Mortgagor has not incurred and will not incur any indebtedness,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (i) the Debt, (ii) trade and
operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are normal and reasonable under the
circumstances, and (iii) debt incurred in the financing of equipment and
other personal property used on the Premises. No indebtedness other than the
Debt may be secured (subordinate or @pari passu) by the Mortgaged Property.
(e) Mortgagor has not made and will not make any loans or advances to
any third party (including any affiliate or constituent party, any Guarantor
or any affiliate of any constituent party or Guarantor).
(f) Mortgagor is and will remain solvent and Mortgagor will pay its
debts and liabilities (including employment and overhead expenses) from its
assets as the same shall become due.
(g) Mortgagor has done or caused to be done and will do all things
necessary to observe corporate formalities and preserve its existence, and
Mortgagor will not, nor will Mortgagor permit any constituent party or
Guarantor to amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, trust or other
organizational documents of Mortgagor or such constituent party or Guarantor
in a manner which would adversely affect the Mortgagor's existence as a
single purpose entity.
(h) Mortgagor will maintain books and records and bank accounts
separate from those of its affiliates and any constituent party and Mortgagor
will file its own tax returns.
(i) Mortgagor will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity
(including any affiliate of Mortgagor, any constituent party of Mortgagor,
any Guarantor or any affiliate of any constituent party or Guarantor), and
shall maintain and utilize separate stationery, invoices and checks.
(j) Mortgagor will maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light
of its contemplated business operations.
(k) Neither Mortgagor nor any constituent party will seek the
dissolution or winding up, in whole or in part, of the Mortgagor.
(l) Mortgagor will not commingle the funds and other assets of
Mortgagor with those of any affiliate or constituent party, any Guarantor, or
any affiliate of any constituent party or Guarantor, or any other person.
(m) Mortgagor has and will maintain its assets in such a manner that it
will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or constituent party, any
Guarantor, or any affiliate of any constituent party or Guarantor, or any
other person.
(n) Mortgagor does not and will not hold itself out to be responsible
for the debts or obligations of any other person.
11. Maintenance of Mortgaged Property. Mortgagor shall cause the
Mortgaged Property to be maintained in a good and safe condition and repair.
The Improvements and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment) without
the consent of Mortgagee. Mortgagor shall promptly comply with all laws,
orders and ordinances affecting the Mortgaged Property, or the use thereof.
Mortgagor shall promptly repair, replace or rebuild any part of the Mortgaged
Property that is destroyed by any casualty, or becomes damaged, worn or
dilapidated or that is affected by any proceeding of the character referred
to in Paragraph 7 hereof and shall complete and pay for any structure at any
time in the process of construction or repair on the Premises.
Notwithstanding the foregoing, in the event that a sufficient amount of the
proceeds of casualty insurance from an Insured Casualty exist (together with
other funds provided to Mortgagee's satisfaction by Mortgagor from other
sources) which would permit the replacement or rebuilding of that portion of
the Mortgaged Property which has been damaged or destroyed by that Insured
Casualty, but Mortgagee shall not elect to permit Mortgagor to use those
proceeds for that purpose, Mortgagor shall not be required to rebuild or
replace the damaged or destroyed portion of the Mortgaged Property (except
that Mortgagor shall under all circumstances be required to rebuild, replace
or restore, as necessary, any portion or element of the Mortgaged Property
that represents a dangerous condition or that threatens damage or destruction
to the remaining elements of the Mortgaged Property). Mortgagor shall not
initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Mortgaged Property or
any part thereof. If under applicable zoning provisions the use of all or
any portion of the Mortgaged Property is or shall become a nonconforming use,
Mortgagor will not cause or permit such nonconforming use to be discontinued
or abandoned without the express written consent of Mortgagee. Mortgagor
shall not (i) change the use of the Mortgaged Property, (ii) permit or suffer
to occur any waste on or to the Mortgaged Property or to any portion thereof,
or (iii) take any steps whatsoever to convert the Mortgaged Property, or any
portion thereof, to a condominium or cooperative form of management.
Mortgagor will not install or permit to be installed on the Premises any
underground storage tank.
12. Transfer or Encumbrance of the Mortgaged Property.
(a) Mortgagor acknowledges that Mortgagee has examined and relied on
the creditworthiness and experience of Mortgagor in owning and operating
properties such as the Mortgaged Property in agreeing to make the Loan, and
that Mortgagee will continue to rely on Mortgagor's ownership of the
Mortgaged Property as a means of maintaining the value of the Mortgaged
Property as security for repayment of the Debt. Mortgagor acknowledges that
Mortgagee has a valid interest in maintaining the value of the Mortgaged
Property so as to ensure that, should Mortgagor default in the repayment of
the Debt, Mortgagee can recover the Debt by a sale of the Mortgaged Property.
Mortgagor shall not, without the prior written consent of Mortgagee, sell,
convey, alienate, mortgage, encumber, pledge or otherwise Transfer (as
defined below) the Mortgaged Property or any part thereof, or permit the
Mortgaged Property or any part thereof to be sold, conveyed, alienated,
mortgaged, encumbered, pledged or otherwise transferred.
(b) A "Transfer" within the meaning of this Paragraph 12, shall mean
any sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer
of the Mortgaged Property or any interest therein, or any change in the
control of Mortgagor or any Person who controls Mortgagor, and shall be
deemed to include: (i) an installment sales agreement wherein Mortgagor
agrees to sell the Mortgaged Property or any part thereof for a price to be
paid in installments; (ii) an agreement by Mortgagor leasing all or a
substantial part of the Mortgaged Property for other than actual occupancy by
a space tenant thereunder or a sale, assignment or other transfer of, or the
grant of a security interest in, Mortgagor's right, title and interest in and
to any Leases or any Rents; (iii) if Mortgagor, any Guarantor, or any
managing partner, general partner or manager of Mortgagor or Guarantor is a
corporation, partnership, limited partnership, joint venture or limited
liability company (an "Entity"), the voluntary or involuntary sale,
conveyance or transfer of such Entity's stock, general or limited partnership
interests, membership interests or other indicia of ownership (the
"Interests") (or the Interests of any entity directly or indirectly
controlling such Entity by operation of law or otherwise) or the creation or
issuance of new Interests, in one or a series of transactions by which an
aggregate of more than 10% of such Entity's Interests shall be vested in a
party or parties who are not now stockholders, partners, general partners,
limited partners, joint venturers or members, or a change in control of such
Entity; and (iv) if Mortgagor, any Guarantor or any general partner, managing
partner, manager or joint venturer of Mortgagor or any Guarantor is a limited
or general partnership or joint venture, the change, removal, resignation or
addition of a general partner, managing partner, manager or joint venturer or
the transfer of the Interest of any general partner, managing partner,
manager or joint venturer. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether
through ownership of voting securities, by contract or otherwise.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon any Transfer which
occurs without Mortgagee's consent. This provision shall apply to every
Transfer regardless of whether voluntary or not, or whether or not Mortgagee
has consented to any previous Transfer.
(d) Mortgagee's consent to one proposed Transfer shall not be deemed to
be a waiver of Mortgagee's right to require such consent to any future
occurrence of same. Any Transfer made in contravention of this paragraph
shall be null and void and of no force and effect.
(e) Mortgagor agrees to bear and shall pay or reimburse Mortgagee on
demand for all reasonable expenses (including, without limitation, reasonable
attorney's fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Mortgagee in connection with the review,
approval and documentation of any such proposed Transfer.
(f) The following shall not be considered Transfers subject to the
foregoing provisions and requirements:
(i) A Transfer that occurs by inheritance, devise, or bequest or by
operation of law upon the death of a natural person who is an owner of the
Mortgaged Property or the owner of a direct or indirect ownership interest in
Mortgagor, except if that Transfer shall effect a change in control of
Mortgagor from among those Persons who exercise control over Mortgagor as of
the date of this Mortgage.
(ii) The sale or other disposition of obsolete or worn out personal
property which is contemporaneously replaced by comparable personal property
of equal or greater value which is free and clear of liens, encumbrances and
security interests other than those created by this Mortgage or the other
Loan Documents.
(iii) The grant of an easement, if prior to the granting of the easement
Mortgagor causes to be submitted to Mortgagee all information required by
Mortgagee to evaluate the easement, and if Mortgagee, in its sole discretion,
determines that the easement will not materially affect the operation of the
Mortgaged Property or Mortgagee's interest in the Mortgaged Property and
Mortgagor pays to Mortgagee, on demand, all cost and expenses incurred by
Mortgagee in connection with reviewing Mortgagor's request.
13. Estoppel Certificates and No Default Affidavits.
(a) After request by Mortgagee, Mortgagor shall within ten (10) days
furnish Mortgagee with a statement, duly acknowledged and certified, setting
forth (i) the amount of the original principal amount of the Note, (ii) the
unpaid principal amount of the Note, (iii) the rate of interest of the Note,
(iv) the date installments of interest and/or principal were last paid, (v)
any offsets or defenses to the payment of the Debt, if any, and (vi) that the
Note, this Mortgage and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification.
(b) After request by Mortgagee, Mortgagor shall within ten (10) days
furnish Mortgagee with a certificate reaffirming all representations and
warranties of Mortgagor set forth herein and in the other Loan Documents as
of the date requested by Mortgagee or, to the extent of any changes to any
such representations and warranties, so stating such changes.
(c) Mortgagor shall deliver to Mortgagee upon request, tenant estoppel
certificates from each commercial tenant at the Mortgaged Property in form
and substance reasonably satisfactory to Mortgagee provided that Mortgagor
shall not be required to deliver such certificates more frequently than two
(2) times in any calendar year.
14. Changes in Laws Regarding Taxation. If any law is enacted or
adopted or amended after the date of this Mortgage which deducts the Debt
from the value of the Mortgaged Property for the purpose of taxation or which
imposes a tax, either directly or indirectly, on the Debt or Mortgagee's
interest in the Mortgaged Property, Mortgagor will pay such tax, with
interest and penalties thereon, if any. In the event Mortgagee is advised by
counsel chosen by it that the payment of such tax or interest and penalties
by Mortgagor would be unlawful or taxable to Mortgagee or unenforceable or
provide the basis for a defense of usury, then in any such event, Mortgagee
shall have the option, by written notice of not less than ninety (90) days,
to declare the Debt immediately due and payable.
15. No Credits on Account of the Debt. Mortgagor will not claim or
demand or be entitled to any credit or credits on account of the Debt for any
part of the Taxes or Other Charges assessed against the Mortgaged Property,
or any part thereof, and no deduction shall otherwise be made or claimed from
the assessed value of the Mortgaged Property, or any part thereof, for real
estate tax purposes by reason of this Mortgage or the Debt. In the event
such claim, credit or deduction shall be required by law, Mortgagee shall
have the option, by written notice of not less than ninety (90) days, to
declare the Debt immediately due and payable.
16. Documentary Stamps. If at any time the United States of America,
any State thereof or any subdivision of any such State shall require revenue
or other stamps to be affixed to the Note or this Mortgage, or impose any
other tax or charge on the same, Mortgagor will pay for the same, with
interest and penalties thereon, if any.
17. Controlling Agreement. It is expressly stipulated and agreed to be
the intent of Mortgagor and Mortgagee at all times to comply with applicable
state law or applicable United States federal law (to the extent that it
permits Mortgagee to contract for, charge, take, reserve, or receive a
greater amount of interest than under state law) and that this Paragraph 17
shall control every other covenant and agreement in this Mortgage and the
other Loan Documents. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for under
the Note or under any of the other Loan Documents, or contracted for,
charged, taken, reserved, or received with respect to the Debt, or if
Mortgagee's exercise of the option to accelerate the maturity of the Note, or
if any prepayment by Mortgagor results in Mortgagor having paid any
interest-in excess of that permitted by applicable law, then it is
Mortgagor's and Mortgagee's express intent that all excess amounts
theretofore collected by Mortgagee shall be credited on the principal balance
of the Note and all other Debt (or, if the Note and all other Debt have been
or would thereby be paid in full, refunded to Mortgagor), and the provisions
of the Note and the other Loan Documents immediately be deemed reformed and
the amounts thereafter collectible hereunder and thereunder reduced, without
the necessity of the execution of any new documents, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder or thereunder. All sums paid or agreed to be
paid to Mortgagee for the use, forbearance, or detention of the Debt shall,
to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term of the Debt until payment in full
so that the rate or amount of interest on account of the Debt does not exceed
the maximum lawful rate from time to time in effect and applicable to the
Debt for so long as the Debt is outstanding. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not
the intention of Mortgagee to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
18. Financial Statements.
(a) The financial statements heretofore furnished to Mortgagee are, as
of the dates specified therein, complete and correct and fairly present the
financial condition of the Mortgagor, the Mortgaged Property, and any other
persons or entities that are the subject of those financial statements.
Mortgagor does not have any contingent liabilities, liabilities for taxes,
unusual forward or long term commitments or unrealized or anticipated losses
from any unfavorable commitments that are known to Mortgagor and reasonably
likely to have a materially adverse effect on the Mortgaged Property or the
operation thereof as a hotel and/or motel and restaurant, except as referred
to or reflected in said financial statements. Since the date of such
financial statements, there has been no materially adverse change in the
financial condition, operation or business of Mortgagor from that set forth
in said financial statements.
(b) Mortgagor will maintain full and accurate books of accounts and
other records reflecting the results of the operations of the Mortgaged
Property and will furnish, or cause to be furnished, to Mortgagee on or
before forty-five (45) days after the end of each calendar quarter the
following items, accompanied by a certificate of the chief financial officer
of Mortgagor or the general partner of Mortgagor, as applicable, stating that
such items are true, correct, accurate, and complete and fairly present the
financial condition and results of the operations of Mortgagor and the
Mortgaged Property and are prepared in accordance with generally accepted
accounting principles, consistently applied (subject to normal year-end
adjustments): (i) a written statement dated as of the last day of each such
calendar quarter identifying each of the Leases by the term, space occupied,
rental required to be paid, security deposit paid, any rental concessions,
and identifying any defaults or payment delinquencies thereunder, a report of
occupancy for the subject quarter including an average daily rate, and any
and all franchise inspection reports received by Mortgagor during the subject
quarter; (ii) monthly and year to date operating statements prepared for each
calendar month during each such calendar quarter, noting Net Operating
Income, Gross Income from Operations, and Hotel Operating Expenses (all as
hereinafter defined), and other information necessary and sufficient under
generally accepted accounting practices to fairly represent the financial
position and results of operation of the Mortgaged Property during such
calendar month, all in form satisfactory to Mortgagee; (iii) a property
balance sheet for each such calendar quarter; (iv) a comparison of the
budgeted income and expenses and the actual income and expenses for each
calendar quarter and year to date together with a detailed explanation of any
variances of five percent (5%) or more between budgeted and actual amounts
for such quarterly periods and year to date; and (v) a calculation reflecting
the Debt Service Coverage Ratio (hereinafter defined) as of the last day of
each such calendar quarter. All monthly operating statements shall be
prepared based upon the Uniform System of Accounts for Hotels, current
edition.
(c) As used herein the term "Net Operating income" means the amount
obtained by subtracting Hotel Operating Expenses from Gross Income from
Operations. "Gross Income from Operations" shall mean all income, computed on
an accrual basis in accordance with generally accepted accounting practices
and principles, derived for each full or partial month during the Term from
the ownership and operation of the Mortgaged Property from whatever source,
including, but not limited to, all guest room revenues, all food, beverage,
and merchandise sales receipts, all interest income, if any, rent, utility
charges, escalations, forfeited security deposits, service fees or charges,
license fees, parking fees, rent concessions or credits, and any business
interruption insurance proceeds but excluding sales, use and occupancy or
other taxes on receipts required to be accounted for by Mortgagor to any
government or governmental agency, refunds and uncollectible accounts, sales
of furniture, fixtures and equipment, proceeds of casualty insurance and
condemnation awards, and interest on credit accounts. Gross income shall not
be diminished as a result of the Mortgage or the creation of any intervening
estate or interest in the Mortgaged Property or any part thereof. "Hotel
Operating Expenses" shall mean the total of all expenditures of whatever kind
relating to the operation, maintenance and management of the Mortgaged
Property that are incurred on a regular monthly or other periodic basis,
including without limitation, utilities, ordinary repairs and maintenance,
insurance, license fees, taxes and assessments, advertising expenses,
management fees, franchise and/or license fees, contributions to the
Replacement Escrow Fund, payroll and related taxes, computer processing
charges, operational equipment or other lease payments as approved by
Mortgagee, and other similar costs, but excluding depreciation, debt service,
and capital expenditures, all calculated on a monthly basis in accordance
with generally accepted accounting practices and principles consistently
applied.
(d) Within ninety (90) days following the end of each calendar year,
Mortgagor shall furnish statements of its financial affairs and condition
including a balance sheet and a statement of profit and loss for the
Mortgagor in such detail as Mortgagee may request, and setting forth the
financial condition and the income and expenses for the Mortgaged Property
for the immediately preceding calendar year, including without limitation
statements of annual Net Operating Income, Gross Income from Operations and
Hotel Operating Expenses prepared by a certified public accountant approved
by Mortgagee. Mortgagor's annual financial statements shall be accompanied
by a certificate executed by the chief financial officer of Mortgagor or the
general partner of Mortgagor, as applicable, stating that each such annual
financial statement presents fairly the financial condition of the Mortgaged
Property being reported upon and has been prepared in accordance with
generally accepted accounting principles consistently applied and the Uniform
System of Accounts for Hotels, current edition. At any time and from time to
time Mortgagor shall deliver to Mortgagee or its agents such other financial
data as Mortgagee or its agents shall reasonably request with respect to the
ownership, maintenance, use and operation of the Mortgaged Property.
(e) In the event that Mortgagor fails to provide to Mortgagee or its
designee any of the financial statements, certificates, reports or
information (the "Required Records") required by this Paragraph 18 within
thirty (30) days after the date upon which such Required Record is due,
Mortgagor shall pay to Mortgagee, at Mortgagee's option and in its sole
discretion, an amount equal to $5,000 for each Required Record that is not
delivered, provided that. Mortgagee has given at least fifteen (15) days
prior written notice to Mortgagor of such failure by Mortgagor to timely
submit the applicable Required Record.
19. Performance of Other Agreements. Mortgagor shall observe and
perform each and every term to be observed or performed by Mortgagor pursuant
to the terms of any agreement or recorded instrument affecting or pertaining
to the Mortgaged Property.
20. Further Acts, Etc.
(a) Mortgagor will, at the cost of Mortgagor, and without expense to
Mortgagee, do, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, mortgages, assignments, notices of assignment,
Uniform Commercial Code financing statements or continuation statements,
transfers and assurances as Mortgagee shall, from time to time, require, for
the better assuring, conveying, assigning, transferring, and confirming unto
Mortgagee the property and rights hereby mortgaged, given, granted,
bargained, sold, alienated, enfeoffed, conveyed, confirmed, pledged, assigned
and hypothecated or intended now or hereafter so to be, or which Mortgagor
may be or may hereafter become bound to convey or assign to Mortgagee, or for
carrying out the intention or facilitating the performance of the terms of
this Mortgage or for filing, registering or recording this Mortgage or for
facilitating the sale of the Loan and the Loan Documents as described in the
following subparagraph (b). Mortgagor, on demand, will execute and deliver
and hereby authorizes Mortgagee to execute in the name of Mortgagor or
without the signature of Mortgagor to the extent Mortgagee may lawfully do
so, one or more financing statements, chattel mortgages or other instruments,
to evidence more effectively the security interest of Mortgagee in the
Mortgaged Property. Upon foreclosure, the appointment of a receiver or any
other relevant action, Mortgagor will, at the cost of Mortgagor and without
expense to Mortgagee, cooperate fully and completely to effect the assignment
or transfer of any license, permit, agreement or any other right necessary or
useful to the operation of the Mortgaged Property. Mortgagor grants to
Mortgagee an irrevocable power of attorney coupled with an interest for the
purpose of exercising and perfecting any and all rights and remedies
available to Mortgagee at law and in equity, including, without limitation,
such rights and remedies available to Mortgagee pursuant to this paragraph.
(b) Mortgagor acknowledges that Mortgagee and its successors and
assigns may (i) sell this Mortgage, the Note and other Loan Documents to one
or more investors as a whole loan, (ii) participate the Loan secured by this
Mortgage to one or more investors, (iii) deposit this Mortgage, the Note and
other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses [i] through [iv] are hereinafter each referred to as
"Secondary Market Transaction"). Mortgagor shall cooperate with Mortgagee in
effecting any such Secondary Market Transaction and shall cooperate to
implement all requirements imposed by any Rating Agency (herein defined)
involved in any Secondary Market Transaction. Mortgagor shall provide such
information and documents relating to Mortgagor, Guarantor, if any, the
Mortgaged Property and any tenants of the Improvements as Mortgagee may
reasonably request in connection with such Secondary Market Transaction. In
addition, Mortgagor shall make available to Mortgagee all information
concerning its business and operations that Mortgagee may reasonably request.
Mortgagee shall be permitted to share all such information with the
investment banking firms, Rating Agencies (herein defined), accounting firms,
law firms and other third-party advisory firms involved with the Loan and the
Loan Documents or the applicable Secondary Market Transaction. It is
understood that the information provided by Mortgagor to Mortgagee may
ultimately be incorporated into the offering documents for the Secondary
Market Transaction and thus various investors may also see some or all of the
information. Mortgagee and all of the aforesaid third-party advisors and
professional firms shall be entitled to rely on the information supplied by,
or on behalf of, Mortgagor. Mortgagee may publicize the existence of the
Loan in connection with its marketing for a Secondary Market Transaction or
otherwise as part of its business development. The term "Rating Agencie.1'as
used herein shall mean each of Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., Moody's Investors Service, Inc., Duff & Phelps Credit
Rating Co. and Fitch Investors Service, Inc. or any other nationally
recognized statistical rating agency which has been approved by Mortgagee;
21. Recording of Mortgage, Etc. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time,
will cause this Mortgage, and any security instrument creating a lien or
security interest or evidencing the lien hereof upon the Mortgaged Property
and each instrument of further assurance to be filed, registered or recorded
in such manner and in such places as may be required by any present or future
law in order to publish notice of and fully to protect the lien or security
interest hereof upon, and the interest of Mortgagee in, the Mortgaged
Property. Mortgagor will pay all filing, registration or recording fees, and
all expenses incident to the preparation, execution and acknowledgment of
this Mortgage, any mortgage supplemental hereto, any security instrument with
respect to the Mortgaged Property and any instrument of further assurance,
and all federal, state, county and municipal, taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution
and delivery of this Mortgage, any mortgage supplemental hereto, any security
instrument with respect to the Mortgaged Property or any instrument of
further assurance, except where prohibited by law so to do. Mortgagor shall
hold harmless and indemnify Mortgagee, its successors and assigns, against
any liability incurred by reason of the imposition of any tax on the making
and recording of this Mortgage.
22. Reporting Requirements. Mortgagor agrees to give prompt notice to
Mortgagee of the insolvency or bankruptcy filing of Mortgagor or the death,
insolvency or bankruptcy filing of any Guarantor.
23. Events of Default. The Debt shall become immediately due and
payable at the option of Mortgagee, upon the happening of any one or more of
the following events of default (each an "Event of Default"):
(a) if any regular installment of principal and/or interest on the Debt
is not paid within the period provided in the Note, and/or if any sum payable
by Mortgagor under the provisions of paragraph 5 hereof with respect to the
Tax and Insurance Escrow Fund is not paid within the period provided in the
Note for payment of installments of principal and interest, or if any other
portion of the Debt is not paid within five (5) days after the same is due;
(b) subject to Mortgagor's right to contest as provided herein, if any
of the Taxes or Other Charges are not paid when the same are due and payable;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to Mortgagee upon request;
(d) if Mortgagor Transfers or encumbers any portion of the Mortgaged
Property without Mortgagee's prior written consent;
(e) if any representation or warranty of Mortgagor, or of any
Guarantor, made herein or in any other Loan Document, or in any certificate,
report, financial statement or other instrument or document furnished to
Mortgagee shall have been false or misleading in any material respect when
made;
(f) if Mortgagor or any Guarantor shall make an assignment for the
benefit of creditors or if Mortgagor shall generally not be paying its debts
as they become due;
(g) if a receiver, liquidator or trustee of Mortgagor or of any
Guarantor shall be appointed or if Mortgagor or any Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any
similar federal or state law, shall be filed by or against, consented to, or
acquiesced in by, Mortgagor or any Guarantor or if any proceeding for the
dissolution or liquidation of Mortgagor or of any Guarantor shall be
instituted; however, if such appointment, adjudication, petition or
proceeding was involuntary and not consented to by Mortgagor or such
Guarantor, upon the same not being discharged, stayed or dismissed within
sixty (60) days;
(h) if Mortgagor shall be in default under any other mortgage or
security agreement covering any part of the Mortgaged Property whether it be
superior or junior in lien to this Mortgage;
(i) subject to Mortgagor's right to contest as provided herein, if the
Mortgaged Property becomes subject to any mechanic's, materialman's or other
lien except a lien for local real estate taxes and assessments not then due
and payable;
(j) if Mortgagor fails to cure properly any violations of laws or
ordinances affecting or which may be interpreted to affect the Mortgaged
Property within thirty (30) days after Mortgagor first receives notice of any
such violations;
(k) except as permitted in this Mortgage, the actual or threatened
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Mortgagee;
(l) if Mortgagor shall continue to be in default under any term,
covenant, or provision of the Note, or any of the other Loan Documents,
beyond applicable cure periods contained in those documents;
(m) if Mortgagor fails to cure a default under any other term, covenant
or provision of this Mortgage within thirty (30) days after Mortgagor first
receives notice of any such default; provided, however, if such default is
reasonably susceptible of cure, but not within such thirty (30) day period,
then Mortgagor may be permitted up to an additional sixty (60) days to cure
such default provided that Mortgagor diligently and continuously pursues such
cure;
(n) if without Mortgagee's prior consent, (i) the hotel manager for the
Mortgaged Property under the Management Agreement (or any successor
management agreement) resigns or is removed, or (ii) the ownership,
management or control of such hotel manager is transferred to a person or
entity other than the general partner or managing partner of the Mortgagor,
or (iii) there is any material change in the Management Agreement (or any
successor management agreement);
(o) if a default has occurred and continues beyond any applicable cure
period under the Management Agreement (or any successor management agreement)
if such default permits the hotel manager to terminate or cancel the
Management Agreement (or any successor management agreement);
(p) if without Mortgagee's prior consent, there is any material change
in the License Agreement (or any successor franchise and/or license
agreement);
(q) if a default has occurred and continues beyond any applicable cure
period under the License Agreement (or any successor franchise and/or license
agreement) if such default permits the franchiser to terminate or cancel the
License Agreement (or any successor franchise and/or license agreement); or
(r) if Mortgagor ceases to do business as a hotel or motel on the
Mortgaged Property or terminates such business for any reason whatsoever
(other than temporary cessation in connection with any renovations to the
Mortgaged Property).
24. Late Payment Charge. If any portion of the Debt is not paid on the
date on which it is due, Mortgagor shall pay to Mortgagee upon demand an
amount equal to the lesser of five percent (5%) of such unpaid portion of the
Debt or the maximum amount permitted by applicable law in order to defray a
portion of the expenses incurred by Mortgagee in handling and processing such
delinquent payment and to compensate Mortgagee for the loss of the use of
such delinquent payment, and such amount shall be secured by this Mortgage.
25. Right To Cure Defaults. Upon the occurrence of any Event of Default
or if Mortgagor fails to make any payment or to do any act as herein
provided, Mortgagee may, but without any obligation to do so and without
notice to or demand on Mortgagor and without releasing Mortgagor from any
obligation hereunder, make or do the same in such manner and to such extent
as Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Mortgaged Property for such purposes or appear
in, defend, or bring any action or proceeding to protect its interest in the
Mortgaged Property or to foreclose this Mortgage or collect the Debt, and the
cost and expense thereof (including reasonable attorneys' fees and
disbursements to the extent permitted by law), with interest at the Default
Rate (as defined in the Note) for the period after notice from Mortgagee that
such cost or expense was incurred to the date of payment to Mortgagee, shall
constitute a portion of the Debt, shall be secured by this Mortgage, and the
other Loan Documents and shall be due and payable to Mortgagee upon demand.
26. Remedies.
(a) Upon the occurrence of any Event of Default, Mortgagee may take
such action, without notice or demand except as may be required by law or the
terms of this Mortgage, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property by Mortgagee
itself or otherwise, including, without limitation, the following actions,
each of which may be pursued concurrently or otherwise, at such time and in
such order as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Mortgagee;
(i) declare the entire Debt to be immediately due and payable (and the
institution by Mortgagee of any action or process of foreclosure shall
automatically constitute the election by Mortgagee to accelerate the entire
Debt, unless specifically stated otherwise in writing by the Mortgagee);
(ii) institute a proceeding or proceedings, judicial or nonjudicial, by
advertisement or otherwise, for the complete foreclosure of this Mortgage in
which case the Mortgaged Property or any interest therein may be sold for
cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;
(iii) 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 Debt then due and
payable, subject to the continuing lien of this Mortgage for the balance of
the Debt not then due;
(iv) sell for cash or upon credit the Mortgaged Property or any part
thereof and all estate, claim, demand, right, title and interest of Mortgagor
therein and rights of redemption thereof, pursuant to the power of sale or
otherwise, at one or more sales, as an entirety or in parcels, at such time
and place, upon such terms and after such notice thereof as may be required
or permitted by law.
(v) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein or in
the other Loan Documents;
(vi) recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Mortgage;
(vii) apply for the appointment of a trustee, receiver, liquidator or
conservator of the Mortgaged Property, without notice and without regard for
the adequacy of the security for the Debt, and without regard for the
solvency of the Mortgagor, any Guarantor or of any person, firm or other
entity liable for the payment of the Debt;
(viii) enforce Mortgagee's interest in the Leases and Rents and enter
into or upon the Mortgaged Property, either personally or by its agents,
nominees or attorneys and dispossess Mortgagor and its agents and servants
therefrom, and thereupon Mortgagee may (A) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every part
of the Mortgaged Property and conduct the business thereat; (B) complete any
construction on the Mortgaged Property in such manner and form as Mortgagee
deems advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Mortgaged Property; (D) exercise all rights and
powers of Mortgagor with respect to the Mortgaged Property, whether in the
name of Mortgagor or otherwise, including, without limitation, the right to
make, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and receive all Rents; and (E) apply the receipts from the
Mortgaged Property to the payment of Debt, after deducting therefrom all
expenses (including reasonable attorneys' fees and disbursements) incurred in
connection with the aforesaid operations and all amounts necessary to pay the
taxes, assessments insurance and other charges in connection with the
Mortgaged Property, as well as just and reasonable compensation for the
services of Mortgagee, its counsel, agents and employees;
(ix) require Mortgagor to pay monthly in advance to Mortgagee, or any
receiver appointed to collect the Rents, the fair and reasonable rental value
for the use and occupation of any portion of the Mortgaged Property occupied
by Mortgagor and require Mortgagor to vacate and surrender possession to
Mortgagee of the Mortgaged Property or to such receiver and, in default
thereof, evict Mortgagor by summary proceedings or otherwise; or
(x) pursue such other rights and remedies as may be available at law or
in equity or under the Uniform Commercial Code including without limitation
the right to receive and/or establish a lock box for all Rents, proceeds from
the Intangibles, and any other receivables or rights to payments of Mortgagor
relating to the Mortgaged Property.
In the event of a sale, by foreclosure or otherwise, of less than all of
the Mortgaged Property, this Mortgage shall continue as a lien on the
remaining portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this paragraph,
together with any other sums which then may be held by Mortgagee under this
Mortgage, whether under the provisions of this paragraph or otherwise, shall
be applied by Mortgagee to the payment of the Debt in such priority and
proportion as Mortgagee in its sole discretion shall deem proper.
(c) 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, Mortgagee, without
further notice or publication, may make such sale at the time and place to
which the same shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto, 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.
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 Mortgaged Property and rights so
sold and for that purpose 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 sale or sales made under or by virtue of this paragraph, 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, right, 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 Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph, whether
made under a power of sale or under or by virtue of judicial proceedings or
of a judgment or decree of foreclosure and sale, Mortgagee may bid for and
acquire the Mortgaged Property or any part thereof and in lieu of paying cash
therefor may make settlement for the purchase price by crediting upon the
Debt the net sales price after deducting therefrom the expenses of the sale
and costs of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
(g) Mortgagee may terminate or rescind any proceeding or other action
brought in connection with its exercise of the remedies provided in this
paragraph at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(h) Mortgagee may resort to any remedies and the security given by the
Note, this Mortgage, or in any of the other Loan Documents in whole or in
part, and in such portions and in such order as determined by Mortgagee's
sole discretion. No such action shall in any way be considered a waiver of
any rights, benefits or remedies evidenced or provided by the Note, this
Mortgage or the other Loan Documents. The failure of Mortgagee to exercise
any right, remedy or option provided in the Note, this Mortgage or the other
Loan Documents shall not be deemed a waiver of such right, remedy or option
or of any covenant or obligation secured by the Note, this Mortgage or the
other Loan Documents. No acceptance by Mortgagee of any payment after the
occurrence of any Event of Default and no payment by Mortgagee of any
obligation for which Mortgagor is liable hereunder shall be deemed to waive
or cure any Event of Default with respect to Mortgagor, or Mortgagor's
liability to pay such obligation. No sale of all or any portion of the
Mortgaged Property, no forbearance on the part of Mortgagee, and no extension
of time for the payment of the whole or any portion of the Debt or any other
indulgence given by Mortgagee to Mortgagor, shall operate to release or in
any manner affect the interest of Mortgagee in the remaining Mortgaged
Property or the liability of Mortgagor to pay the Debt. No waiver by
Mortgagee shall be effective unless it is in writing and then only to the
extent specifically stated. All costs and expenses of Mortgagee in
exercising its rights and remedies under this Paragraph 26 (including
reasonable attorneys' fees and disbursements to the extent permitted by law),
shall be paid by Mortgagor immediately upon notice from Mortgagee, with
interest at the Default Rate for the period after notice from Mortgagee and
such costs and expenses shall constitute a portion of the Debt and shall be
secured by this Mortgage.
(i) The interests and rights of Mortgagee under the Note, this Mortgage
or the other Loan Documents shall not be impaired by any indulgence,
including (i) any renewal, extension or modification which Mortgagee may
grant with respect to any of the Debt, (ii) any surrender, compromise,
release, renewal, extension, exchange or substitution which Mortgagee may
grant with respect to the Mortgaged Property or any portion thereof; or (iii)
any release or indulgence granted to any maker, endorser, Guarantor or surety
of any of the Debt.
27. Right of Entry. In addition to any other rights or remedies granted
under this Mortgage, Mortgagee and its agents shall have the right to enter
and inspect the Mortgaged Property at any reasonable time during the Term.
In the event that Mortgagee determines, as a result of the inspection of the
Mortgaged Property, that an Event of Default exists, or a condition that with
the passage of time or the giving of notice, or both, would constitute such
an Event of Default, the costs of that inspection and, if additional costs or
expenses are incurred in connection with any such Event of Default all
follow-up or additional investigations or inquiries deemed reasonably
necessary by Mortgagee as a result of such inspection or condition, then
those additional expenses and costs, shall be borne by Mortgagor, and the
amount thereof shall be secured by this Mortgage and shall bear interest
thereafter at the Default rate until paid to Mortgagee in full upon demand.
28. Security Agreement. This Mortgage is both a real property mortgage
and a "security agreement" within the meaning of the Uniform Commercial Code.
The Mortgaged Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Mortgagor
in the Mortgaged Property. Mortgagor by executing and delivering this
Mortgage has granted and hereby grants to Mortgagee, as security for the
Debt, a security interest in the Mortgaged Property to the full extent that
the Mortgaged Property may be subject to the Uniform Commercial Code (said
portion of the Mortgaged Property so subject to the Uniform Commercial Code
being called in this paragraph the "Collateral"). Mortgagor hereby agrees
with Mortgagee to execute and deliver to Mortgagee, in form and substance
satisfactory to Mortgagee, such financing statements and such further
assurances as Mortgagee may from time to time, reasonably consider necessary
to create, perfect, and preserve Mortgagee's security interest herein
granted. This Mortgage shall also constitute a "fixture filing" for the
purposes of the Uniform Commercial Code. As such, this Mortgage covers all
items of the Collateral that are or are to become fixtures. Information
concerning the security interest herein granted may be obtained from the
parties at the addresses of the parties set forth in the first paragraph of
this Mortgage. If an Event of Default shall occur, Mortgagee, in addition to
any other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including,
without limiting the generality of the foregoing, the right to take
possession of the Collateral or any part thereof, and to take such other
measures as Mortgagee may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Mortgagee,
Mortgagor shall at its expense assemble the Collateral and make it available
to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall
pay to Mortgagee on demand any and all expenses, including attorneys' fees
and disbursements, incurred or paid by Mortgagee in protecting the interest
in the Collateral and in enforcing the rights hereunder with respect to the
Collateral. Any notice of sale, disposition or other intended action by
Mortgagee with respect to the Collateral sent to Mortgagor in accordance with
the provisions hereof at least five (5) days prior to such action, shall
constitute commercially reasonable notice to Mortgagor. The proceeds of any
disposition of the Collateral, or any part thereof, may be applied by
Mortgagee to the payment of the Debt in such priority and proportions as
Mortgagee in its sole discretion shall deem proper. In the event of any
change in name, identity or structure of any Mortgagor, such Mortgagor shall
notify Mortgagee thereof and promptly after request shall execute, file and
record such Uniform Commercial Code forms as are necessary to maintain the
priority of Mortgagee's lien upon and security interest in the Collateral,
and shall pay all expenses and fees in connection with the filing and
recording thereof. If Mortgagee shall require the filing or recording of
additional Uniform Commercial Code forms or continuation statements,
Mortgagor shall, promptly after request, execute, file and record such
Uniform Commercial Code forms or continuation statements as Mortgagee shall
deem necessary, and shall pay all expenses and fees in connection with the
filing and recording thereof, it being understood and agreed, however, that
no such additional documents shall increase Mortgagor's obligations under the
Note, this Mortgage and the other Loan Documents. Mortgagor hereby
irrevocably appoints Mortgagee as its attorney-in-fact, coupled with an
interest, to file with the appropriate public office on its behalf any
financing or other statements signed only by Mortgagee, as secured party, in
connection with the Collateral covered by this Mortgage.
29. Actions and Proceedings. Mortgagee has the right to appear in and
defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its sole discretion, decides should be brought
to protect their interest in the Mortgaged Property. Mortgagee shall, at its
option, be subrogated to the lien of any mortgage or other security
instrument discharged in whole or in part by the Debt, and any such
subrogation rights shall constitute additional security for the payment of
the Debt.
30. Waiver of Setoff and Counterclaim. All amounts due under this
Mortgage, the Note and the other Loan Documents shall be payable without
setoff, counterclaim or any deduction whatsoever. Mortgagor hereby waives the
right to assert a setoff, counterclaim (other than a mandatory or compulsory
counterclaim) or deduction in any action or proceeding in which Mortgagee is
a participant, or arising out of or in any way connected with this Mortgage,
the Note, any of the other Loan Documents, or the Debt.
31. Contest of Certain Claims. Notwithstanding the provisions of
Paragraphs 4 and 23 hereof, Mortgagor shall not be in default for failure to
pay or discharge Taxes, Other Charges or mechanic's or materialman's lien
asserted against the Mortgaged Property if, and so long as, (a) Mortgagor
shall have notified Mortgagee of same within five (5) days of obtaining
knowledge thereof; (b) Mortgagor shall diligently and in good faith contest
the same by appropriate legal proceedings which shall operate to prevent the
enforcement or collection of the same and the sale of the Mortgaged Property
or any part thereof, to satisfy the same; (c) Mortgagor shall have furnished
to Mortgagee a cash deposit, or an indemnity bond satisfactory to Mortgagee
with a surety satisfactory to Mortgagee, in the amount of the Taxes, Other
Charges or mechanic's or materialman's lien claim, plus a reasonable
additional sum to pay all costs, interest and penalties that may be imposed
or incurred in connection therewith, to assure payment of the matters under
contest and to prevent any sale or forfeiture of the Mortgaged Property or
any part thereof; (d) Mortgagor shall promptly upon final determination
thereof pay the amount of any such Taxes, Other Charges or claim so
determined, together with all costs, interest and penalties which may be
payable in connection therewith; (e) the failure to pay the Taxes, Other
Charges or mechanic's or materialman's lien claim does not constitute a
default under any other deed of trust, mortgage or security interest covering
or affecting any part of the Mortgaged Property; and (f) notwithstanding the
foregoing, Mortgagor shall immediately upon request of Mortgagee pay (and if
Mortgagor shall fail so to do, Mortgagee may, but shall not be required to,
pay or cause to be discharged or bonded against) any such Taxes, Other
Charges or claim notwithstanding such contest, if in the opinion of
Mortgagee, the Mortgaged Property or any part thereof or interest therein may
be in danger of being sold, forfeited, foreclosed, terminated, canceled or
lost. Mortgagee may pay over any such cash deposit or part thereof to the
claimant entitled thereto at any time when, in the judgment of Mortgagee, the
entitlement of such claimant is established.
32. Recovery of Sums Required to be Paid. Mortgagee shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Debt as the same become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice to
the right of Mortgagee thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Mortgagor existing at the time
such earlier action was commenced.
33. Marshaling and Other Matters. Mortgagor hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and
all rights of marshaling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor
hereby expressly waives any and all rights of redemption from sale under any
order or decree of foreclosure of this Mortgage on behalf of Mortgagor, and
on behalf of each and every person acquiring any interest in or title to the
Mortgaged Property subsequent to the date of this Mortgage and on behalf of
all persons to the extent permitted by applicable law.
34. Hazardous Substances. Mortgagor hereby represents and warrants to
Mortgagee that, to the best of Mortgagor's knowledge, after due inquiry and
investigation: (a) the Mortgaged Property is not in direct or indirect
violation of any local, state, federal or other governmental authority,
statute, ordinance, code, order, decree, law, rule or regulation pertaining
to or imposing liability or standards of conduct concerning environmental
regulation, contamination or clean-up including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended ("CERCLA"), the Resource Conservation and Recovery Act, as amended
("RCRA"), the Emergency Planning and Community Right-to-Know Act of 1986, as
amended, the Hazardous Substances Transportation Act, as amended, the Solid
Waste Disposal Act, as amended, the Clean Water Act, as amended, the Clean
Air Act, as amended, the Toxic Substance Control Act, as amended, the Safe
Drinking Water Act, as amended, the Occupational Safety and Health Act, as
amended, any state super-lien and environmental clean-up statutes, and all
regulations adopted in respect to the foregoing laws (collectively,
"Environmental Laws"); (b) the Mortgaged Property is not subject to any
private or governmental lien or judicial or administrative notice or action
or inquiry, investigation or claim relating to hazardous and/or toxic,
dangerous and/or regulated, substances, wastes, materials, raw materials
which include hazardous constituents, pollutants or contaminants, including
without limitation petroleum, tremolite, anthlophylie, actinolite or
polychlorinated biphenyls and any other substances or materials which are
included under or regulated by Environmental Laws or which are considered by
scientific opinion to be otherwise dangerous in terms of the health, safety
or welfare of humans (collectively, "Hazardous Substances"); (c) no Hazardous
Substances are or have been (including the period prior to Mortgagor's
acquisition of the Mortgaged Property) discharged, generated, treated,
disposed of or stored on, incorporated in, or removed or transported from the
Mortgaged Property other than in compliance with all Environmental Laws; (d)
no Hazardous Substances are present in, on or under any nearby real property
which could migrate to or otherwise affect the Mortgaged Property; (e) no
underground storage tanks exist on any of the Mortgaged Property; and (f) no
Hazardous Substances which are upon the Property, but which are not subject
to the Environmental Laws, present a threat to the health, safety or welfare
of any person. So long as Mortgagor owns or is in possession of the
Mortgaged Property, Mortgagor (i) shall keep or cause the Mortgaged Property
to be kept free from Hazardous Substances and in compliance with all
Environmental Laws, (ii) shall promptly notify Mortgagee if Mortgagor shall
become aware of any Hazardous Substances on or near the Mortgaged Property
and/or if Mortgagor shall become aware that the Mortgaged Property is in
direct or indirect violation of any Environmental Laws and/or if Mortgagor
shall become aware of any condition on or near the Mortgaged Property which
shall pose a threat to the health, safety or welfare of humans, and (iii)
shall remove such Hazardous Substances and/or cure such violations and/or
remove such threats, as applicable, as required by law (or as shall be
required by Mortgagee in the case of removal which is not required by law,
but in response to the opinion and recommendation of a licensed
hydrogeologist, licensed environmental engineer or other qualified consultant
engaged by Mortgagee ("Mortgagee's Consultant")), promptly after Mortgagor
becomes aware of same, at Mortgagor's sole expense. Nothing herein shall
prevent Mortgagor from recovering such expenses from any other party that may
be liable for such removal or cure. The obligations and liabilities of
Mortgagor under this paragraph shall survive any termination, satisfaction or
assignment of this Mortgage and the exercise by Mortgagee of any of its
rights or remedies hereunder, including, but not limited to, the acquisition
of the Mortgaged Property by foreclosure or a conveyance in lieu of
foreclosure.
35. Asbestos. Mortgagor represents and warrants that, to the best of
Mortgagor's knowledge, after due inquiry and investigation, no asbestos or
any substance or material containing asbestos ("Asbestos") is located on the
Mortgaged Property, except as may have been disclosed in an environmental
report delivered to Mortgagee prior to the date of this Mortgage. Mortgagor
shall not install in the Mortgaged Property, nor permit to be installed in
the Mortgaged Property, Asbestos and shall remove any Asbestos promptly upon
discovery to the satisfaction of Mortgagee, at Mortgagor's sole expense.
Mortgagor shall in all instances comply with, and ensure compliance by all
occupants of the Mortgaged Property with, all applicable federal, state and
local laws, ordinances, rules and regulations with respect to Asbestos, and
shall keep the Mortgaged Property free and clear of any liens imposed
pursuant to such laws, ordinances, rules or regulations. In the event that
Mortgagor receives any notice or advice from any governmental agency or any
source whatsoever with respect to Asbestos on, affecting or installed on the
Mortgaged Property, Mortgagor shall immediately notify Mortgagee. The
obligations and liabilities of Mortgagor under this paragraph shall survive
any termination, satisfaction or assignment of this Mortgage and the exercise
by Mortgagee of any of its rights or remedies hereunder, including, but not
limited to, the acquisition of the Mortgaged Property by foreclosure or a
conveyance in lieu of foreclosure.
36. Environmental Monitoring. Mortgagor shall give prompt written
notices to Mortgagee of: (a) any proceeding or inquiry by any party with
respect to the presence of any Hazardous Substance or Asbestos on, under,
from or about the Mortgaged Property, (b) all claims made or threatened by
any third party against Mortgagor or the Mortgaged Property relating to any
loss or injury resulting from any Hazardous Substance or Asbestos, and (c)
Mortgagor's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Mortgaged Property that could cause the
Mortgaged Property to be subject to any investigation or cleanup pursuant to
any Environmental Law. Mortgagor shall permit Mortgagee to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated with respect to the Mortgaged Property in connection with any
Environmental Law, Hazardous Substance or Asbestos, and Mortgagor shall pay
all attorneys' fees and disbursements incurred by Mortgagee in connection
therewith. In the event that any environmental site assessment report
prepared for the Mortgaged Property recommends that an operations and
maintenance plan be implemented for Asbestos or any Hazardous Substance,
Mortgagor shall cause such operations and maintenance plan to be prepared and
implemented at Mortgagor's expense upon request of Mortgagee. In the event
that any investigation, site monitoring, containment, cleanup, removal,
restoration or other work of any kind is reasonably necessary or desirable
under any applicable Environmental Law (the "Remedial Work"), Mortgagor shall
commence and thereafter diligently prosecute to completion all such Remedial
Work within thirty (30) days after written demand by Mortgagee for
performance thereof (or such shorter period of time as may be required under
applicable law). All Remedial Work shall be performed by contractors
approved in advance by Mortgagee, and under the supervision of a consulting
engineer approved by Mortgagee. All costs and expenses of such Remedial Work
shall be paid by Mortgagor including, without limitation, Mortgagee's
reasonable attorneys' fees and disbursements incurred in connection with
monitoring or review of such Remedial Work. In the event Mortgagor shall
fail to timely commence, or cause to be commenced, or fail to diligently
prosecute to completion, such Remedial Work, Mortgagee may, but shall not be
required to, cause such Remedial Work to be performed, and all costs and
expenses thereof, or incurred in connection therewith, shall be added to the
Debt and shall bear interest thereafter, until paid, at the Default Rate.
37. Environmental Audits. Upon Mortgagee's request, at any time and
from time to time while this Mortgage is in effect, Mortgagor shall permit
Mortgagee and/or its agents to inspect or conduct an environmental inspection
or audit of the Mortgaged Property for the presence of Hazardous Substances
or Asbestos, and Mortgagor hereby grants to Mortgagee and its employees and
agents access to the Mortgaged Property and a license to undertake such
inspection or audit. Mortgagor shall reimburse Mortgagee for the cost of any
such inspection or audit (including the cost of licensed hydrologists or
licensed environmental engineer, and similarly qualified third parties
approved by Mortgagee) conducted by or at Mortgagee's direction, if: (i)
Mortgagee shall initiate that inspection or audit based upon a good faith
concern relating to the potential presence of Hazardous Substances or
Asbestos on the Mortgaged Property (including, by way of illustration and not
of limitation, any additional investigation or analysis initiated based upon
a recommendation contained in the report of any Phase I audit or inspection,
even if no Asbestos or Hazardous Substances are discovered as a result of
that additional investigation or analysis); or (ii) the results of any
inspection or audit disclose the presence of any Hazardous Substance or
Asbestos, and if any Remedial Work (as defined and provided in paragraph 35
of this Mortgage) shall be required in connection therewith. Notwithstanding
the foregoing, Mortgagor shall be required to reimburse the Mortgagee once
during the first ten years during the term of this Mortgage and thereafter
once during each successive five year period during the term of this Mortgage
for the costs of any such "Phase I" inspection or audit, without regard to
the basis upon which Mortgagee shall determine to conduct that inspection or
audit, with the exception that Mortgagee shall not charge Mortgagor for the
costs of any inspection or audit undertaken solely in connection with the
sale, assignment or transfer of the Note and this Mortgage or any interest
therein (unless payment by Mortgagor would otherwise be required under the
provisions of the foregoing clause [ii]). The cost of any such inspection or
audit for which Mortgagor shall be required to reimburse Mortgagee shall be
added to the principal balance of the sums due under the Note and this
Mortgage and shall bear interest thereafter, until paid, at the Default Rate.
The obligations and liabilities of Mortgagor under this paragraph shall
survive any termination, satisfaction, or assignment of this Mortgage and the
exercise by Mortgagee of any of its rights or remedies hereunder, including,
without limitation, the acquisition of the Mortgaged Property by foreclosure
or a conveyance in lieu of foreclosure.
38. Handicapped Access.
(a) Mortgagor agrees that the Mortgaged Property shall at all times
strictly comply to the extent applicable with the requirements of the
Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of
1988 (if applicable), all state and local laws and ordinances related to
handicapped access and all rules, regulations, and orders issued pursuant
thereto including, without limitation, the Americans with Disabilities Act
Accessibility Guidelines for Buildings and Facilities (collectively "Access
Laws").
(b) Notwithstanding any provisions set forth herein or in any other
document regarding Mortgagee's approval of alterations of the Mortgaged
Property, Mortgagor shall not alter the Mortgaged Property in any manner
which would increase Mortgagor's responsibilities for compliance with the
applicable Access Laws without the prior written approval of Mortgagee. The
foregoing shall apply to tenant improvements constructed by Mortgagor or by
any of its tenants. Mortgagee may condition any such approval upon receipt
of a certificate of Access Law compliance from an architect, engineer, or
other person acceptable to Mortgagee.
(c) Mortgagor agrees to give prompt notice to Mortgagee of the receipt
by Mortgagor of any complaints related to violation of any Access Laws and of
the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
39. Indemnification. In addition to any other indemnifications provided
herein or in the other Loan Documents, Mortgagor shall protect, defend,
indemnify and save harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements), imposed upon or incurred by or asserted
against Mortgagee by reason of (a) ownership of this Mortgage, the Mortgaged
Property or any interest therein or receipt of any Rents; (b) any accident,
injury to or death of persons or loss of or damage to property occurring in,
on or about the Mortgaged Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or
ways; (c) any use, nonuse or condition in, on or about the Mortgaged Property
or any part thereof or on adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (d) any failure on the part of
Mortgagor to perform or comply with any of the terms of this Mortgage; (e)
performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof; (f)
the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release, or threatened release of any Hazardous Substance or
Asbestos on, from, or affecting the Mortgaged Property or any other property;
(g) any personal injury (including wrongful death) or property damage (real
or personal) arising out of or related to such Hazardous Substance or
Asbestos; (h) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substance or Asbestos; (i) any
violation of the Environmental Laws, which are based upon or in any way
related to such Hazardous Substance or Asbestos including, without
limitation, the costs and expenses of any Remedial Work, attorney and
consultant fees and disbursements, investigation and laboratory fees, court
costs, and litigation expenses; 0) any failure of the Mortgaged Property to
comply with any Access Laws; (k) any representation or warranty made in the
Note, this Mortgage or the other Loan Documents being false or misleading in
any material respect as of the date such representation or warranty was made;
(1) any claim by brokers, finders or similar persons claiming to be entitled
to a commission in connection with any Lease or other transaction involving
the Mortgaged Property or any part thereof under any legal requirement or any
liability asserted against Mortgagee with respect thereto; and (m) the claims
of any tenant of any or any portion of the Mortgaged Property or any person
acting through or under any tenant or otherwise arising under or as a
consequence of any Lease. Any amounts payable to Mortgagee by reason of the
application of this paragraph shall be secured by this Mortgage and shall
become immediately due and payable and shall bear interest at the Default
Rate from the date loss or damage is sustained by Mortgagee until paid. The
obligations and liabilities of Mortgagor under this paragraph shall survive
any termination, satisfaction or assignment of this Mortgage and the exercise
by Mortgagee of any of its rights or remedies hereunder, including, but not
limited to, the acquisition of the Mortgaged Property by foreclosure or a
conveyance in lieu of foreclosure.
40. Notices. Any notice, demand, statement, request or consent made
hereunder shall be in writing and shall be deemed to be received by the
addressee on the third (3rd) day following the day such notice is deposited
with the United States postal service first class certified mail, return
receipt requested, addressed to the address, as set forth above, of the party
to whom such notice is to be given, or to such other address as Mortgagor or
Mortgagee, as the case may be, shall in like manner designate in writing.
41. Authority. (a) Mortgagor (and the undersigned representative of
Mortgagor, if any) represent and warrant that it (or they, as the case may
be) has full power, authority and right to execute, deliver and perform its
obligations pursuant to this Mortgage, and to mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and
assign the Mortgaged Property pursuant to the terms hereof and to keep and
observe all of the terms of this Mortgage on Mortgagor's part to be
performed; and (b) Mortgagor represents and warrants that Mortgagor is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended and the related Treasury Department
regulations, including temporary regulations.
42. Waiver of Notice. Mortgagor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
this Mortgage specifically and expressly provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee
is required by applicable law to give notice, and Mortgagor hereby expressly
waives the right to receive any notice from Mortgagee with respect to any
matter for which this Mortgage does not specifically and expressly provide
for the giving of notice by Mortgagee to Mortgagor.
43. Remedies of Mortgagor. In the event that a claim or adjudication is
made that Mortgagee has acted unreasonably or unreasonably delayed acting in
any case where by law or under the Note, this Mortgage or the other Loan
Documents, it has an obligation to act reasonably or promptly, Mortgagee
shall not be liable for any monetary damages, and Mortgagor's remedies shall
be limited to injunctive relief or declaratory judgment.
44. Sole Discretion of Mortgagee. Wherever pursuant to this Mortgage,
Mortgagee exercises any right given to it to consent or not consent or
approve or disapprove, or any arrangement or term is to be satisfactory to
Mortgagee, the decision of Mortgagee to consent or not consent, to approve or
disapprove or to decide that arrangements or terms are satisfactory or not
satisfactory shall be in the sole discretion of Mortgagee and shall be final
and conclusive, except as may be otherwise expressly and specifically
provided herein.
45. Non-Waiver. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term
of this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any
request of Mortgagor or Guarantor to take any action to foreclose this
Mortgage or otherwise enforce any of the provisions hereof or of the Note or
the other Loan Documents, (b) the release, regardless of consideration, of
the whole or any part of the Mortgaged Property, or of any person liable for
the Debt or any portion thereof, or (c) any agreement or stipulation by
Mortgagee extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or the other Loan
Documents. Mortgagee may resort for the payment of the Debt to any other
security held by Mortgagee in such order and manner as Mortgagee, in its sole
discretion, may elect. Mortgagee may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of Mortgagee thereafter to foreclosure this Mortgage. The rights and
remedies of Mortgagee under this Mortgage shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No
act of Mortgagee shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Mortgagee shall not
be limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded at law or in
equity.
46. No Oral Change. This Mortgage, and any provisions hereof, may not
be modified, amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor or Mortgagee,
but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought.
47. Liability. If Mortgagor consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. Subject to the provisions hereof requiring Mortgagee's consent to
any transfer of the Mortgaged Property, this Mortgage shall be binding upon
and inure to the benefit of Mortgagor and Mortgagee and their respective
successors and assigns forever.
48. Inapplicable Provisions. If any term, covenant or condition of the
Note or this Mortgage is held to be invalid, illegal or unenforceable in any
respect, the Note and this Mortgage shall be construed without such
provision.
49. Headings, Etc. The headings and captions of various paragraphs of
this Mortgage are for convenience of reference only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
50. Duplicate Originals. This Mortgage may be executed in any number
of duplicate originals and each such duplicate original shall be deemed to be
an original.
51. Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise specifically provided herein, words used in this Mortgage
may be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor and any subsequent owner or owners of
the Mortgaged Property or any part thereof or any interest therein," the word
"Mortgagee" shall mean "Mortgagee and any subsequent holder of the Note," the
word "Note" shall mean "the Note and any other evidence of indebtedness
secured by this Mortgage," the word "person" shall include an individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, and any other entity, the words "Mortgaged Property"
shall include any portion of the Mortgaged Property and any interest therein
and the words "attorneys' fees shall include any and all attorneys' fees,
paralegal and law clerk fees, including, without limitation, fees at the
pre-trial, trial and appellate levels incurred or paid by Mortgagee in
protecting its interest in the Mortgaged Property and Collateral and
enforcing its rights hereunder. Notwithstanding anything to the contrary in
this Mortgage, no reference in this Mortgage to the other Loan Documents
shall be deemed to include the Environmental and Hazardous Substance
Indemnity Agreement executed by Mortgagor in favor of Mortgagee (the
"Environmental Indemnity"). Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural
and vice versa.
52. Homestead. Mortgagor hereby waives and renounces all homestead and
exemption rights provided by the Constitution and the laws of the United
States and of any state, in and to the Mortgaged Property as against the
collection of the Debt, or any part hereof.
53. Assignments. Mortgagee shall have the right to assign or transfer
its rights under this Mortgage without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Mortgagee under
this Mortgage.
54. Waiver of Jury Trial. MORTGAGOR HEREBY AGREES NOT TO ELECT A TRIAL
BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL
BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST
WITH REGARD TO THE NOTE, THIS MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
MORTGAGOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
MORTGAGEE IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY MORTGAGOR.
55. Miscellaneous.
(a) Any consent or approval by Mortgagee in any single instance shall
not be deemed or construed to be Mortgagee's consent or approval in any like
matter arising at a subsequent date, and the failure of Mortgagee to promptly
exercise any right, power, remedy, consent or approval provided herein or at
law or in equity shall not constitute or be construed as a waiver of the same
nor shall Mortgagee be estopped from exercising such right, power, remedy,
consent or approval at a later date. Any consent or approval requested of
and granted by Mortgagee pursuant hereto shall be narrowly construed to be
applicable only to Mortgagor and the matter identified in such consent or
approval and no third party shall claim any benefit by reason thereof, and
any such consent or approval shall not be deemed to constitute Mortgagee a
venturer or partner with Mortgagor nor shall privity of contract be presumed
to have been established with any such third party. If Mortgagee deems it to
be in its best interest to retain assistance of persons, firms or
corporations (including, without limitation, attorneys, title insurance
companies, appraisers, engineers and surveyors) with respect to a request for
consent or approval, Mortgagor shall reimburse Mortgagee for all costs
reasonably incurred in connection with the employment of such persons, firms
or corporations.
(b) Mortgagor covenants and agrees that during the Term, unless
Mortgagee shall have previously consented in writing, (a) Mortgagor will take
no action that would cause it to become an "employee benefit plan" as defined
in 29 C.F.R. Section 2510.3-1 01, or "assets of a governmental plan" subject
to regulation under the state statutes, and (b) Mortgagor will not sell,
assign or transfer the Mortgaged Property, or any portion thereof or interest
therein, to any transferee that does not execute and deliver to Mortgagee its
written assumption of the obligations of this covenant. Mortgagor further
covenants and agrees to protect, defend, indemnify and hold Mortgagee
harmless from and against all loss, cost, damage and expense (including
without limitation, all attorneys' fees and excise taxes, costs of correcting
any prohibited transaction or obtaining an appropriate exemption) that
Mortgagee may incur as a result of Mortgagor's breach of this covenant. This
covenant and indemnity shall survive the extinguishment of the lien of this
Mortgage by foreclosure or action in lieu thereof; furthermore, the foregoing
indemnity shall supersede any limitations on Mortgagor's liability under any
of the Loan Documents.
(c) The Loan Documents contain the entire agreement between Mortgagor
and Mortgagee relating to or connected with the Loan. Any other agreements
relating to or connected with the Loan not expressly set forth in the Loan
Documents are null and void and superseded in their entirety by the
provisions of the Loan Documents.
(d) Mortgagor represents and warrants to Mortgagee that there has not
been committed by Mortgagor or any other person in occupancy of or involved
with the operation or use of the Mortgaged Property any act or omission
affording the federal government or any state or local government the right
of forfeiture as against the Mortgaged Property or any part thereof or any
monies paid in performance of Mortgagor's obligations under the Note or under
any of the other Loan Documents. Mortgagor hereby covenants and agrees not
to commit, permit or suffer to exist any act, omission or circumstance
affording such right of forfeiture. In furtherance thereof, Mortgagor hereby
indemnities Mortgagee and agrees to defend and hold Mortgagee harmless from
and against any loss, damage or injury by reason of the breach of the
covenants and agreements or the representations and warranties set forth in
this paragraph. Without limiting the generality of the foregoing, the filing
of formal charges or the commencement of proceedings against Mortgagor or all
or any part of the Mortgaged Property under any federal or state law for
which forfeiture of the Mortgaged Property or any part thereof or of any
monies paid in performance of Mortgagor's obligations under the Loan
Documents is a potential result, shall, at the election of Mortgagee,
constitute an Event of Default hereunder without notice or opportunity to
cure.
56. Non-Recourse Provisions. Subject to the qualifications below,
Mortgagee shall not enforce the liability and obligation of Mortgagor to
perform and observe the obligations contained in this Mortgage, the Note or
the other Loan Documents by any action or proceeding wherein a money judgment
shall be sought against Mortgagor, except that Mortgagee may bring a
foreclosure action, an action for specific performance or any other
appropriate action or proceeding to enable Mortgagee to enforce and realize
upon its interests under the Note, this Mortgage or the other Loan Documents
or in the Mortgaged Property, the Rents or any other collateral given to
Mortgagee pursuant to this Mortgage and the other Loan Documents; provided,
however, that, except as specifically provided herein, any judgment in any
such action or proceeding shall be enforceable against Mortgagor only to the
extent of Mortgagor's interest in the Mortgaged Property, in the Rents and in
any other collateral given to Mortgagee, and Mortgagee, by accepting this
Mortgage, the Note and the other Loan Documents, agrees that it shall not sue
for, seek or demand any deficiency judgment against Mortgagor, in any such
action or proceeding, under or by reason of or in connection with this
Mortgage, the Note or the other Loan Documents. The provisions of this
paragraph shall not, however, (i) constitute a waiver, release or impairment
of any obligation evidenced or secured by this Mortgage, the Note or the
other Loan Documents; (ii) impair the right of Mortgagee to name Mortgagor as
a party defendant in any action or suit for foreclosure and sale under this
Mortgage; (iii) affect the validity or enforceability of any guaranty made in
connection with the Loan or any of the rights and remedies of the Mortgagee
thereunder; (iv) impair the right of Mortgagee to obtain the appointment of a
receiver; (v) impair the enforcement of the Assignment of Leases and Rents or
the Environmental Indemnity executed in connection herewith; or (vi)
constitute a waiver of the right of Mortgagee to enforce the liability and
obligation of Mortgagor, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Mortgagee (including attorneys' fees and costs reasonably incurred) arising
out of or in connection with the following:
(a) fraud or intentional misrepresentation by Mortgagor or any
Guarantor in connection with the Loan:
(b) the gross negligence or willful misconduct of Mortgagor;
(c) physical waste of the Mortgaged Property;
(d) the breach of any provision in that certain Environmental and
Hazardous Substance Indemnification Agreement of even date herewith given by
Mortgagor to Mortgagee or in this Mortgage concerning Environmental Laws,
Hazardous Substances and Asbestos and any indemnification of Mortgagee with
respect thereto in either document;
(e) the removal or disposal of any portion of the Mortgaged Property
after an Event of Default;
(f) the misapplication or conversion by Mortgagor of (i) any insurance
proceeds paid by reason of any loss, damage or destruction to the Mortgaged
Property, (ii) any awards or other amounts received in connection with the
condemnation of all or a portion of the Mortgaged Property, or (iii) any
Rents following an Event of Default;
(g) costs incurred by Mortgagee (including reasonable attorneys' fees)
in the collection or enforcement of the Debt, the protection or foreclosure
of the security therefor, or the enforcement of the Loan Documents;
(h) failure to pay taxes (provided that the liability of Mortgagor
shall be only for amounts in excess of the amount held by Mortgagee in escrow
for the payment of taxes, computed without taking into consideration any
portion of any such escrow that Mortgagee may have applied in satisfaction of
any portion of the Debt other than those taxes), assessments, charges for
labor or materials or other charges that can create liens on any portion of
the Mortgaged Property; and
(i) any security deposits collected with respect to the Mortgaged
Property which are not delivered to Mortgagee upon a foreclosure of the
Mortgaged Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in any of the Loan Documents,
(i) Mortgagee shall not be deemed to have waived any right which Mortgagee
may have under Sections 506(a), 506(b), 1111(b) or any other provisions of
the U.S. Bankruptcy Code to file a claim for the full amount of the Debt
secured by this Mortgage or to require that all collateral shall continue to
secure all of the Debt owing to Mortgagee in accordance with the Loan
Documents, and (ii) the Debt shall be fully recourse to Mortgagor, and
Mortgagor shall be liable for all damages, (including but not limited to
attorneys' fees and expenses reasonably incurred) arising, in the event that:
(i) the first full monthly payment of principal and interest under the
Note is not paid when due;
(ii) Mortgagor tails to permit on-site inspections of the Mortgaged
Property, tails to provide financial information (if unremedied as permitted
in paragraph 22[m] of this Mortgage), or fails to maintain its status as a
single purpose entity, each as required by, and in accordance with the terms
of, this Mortgage;
(iii) Mortgagor fails to obtain Mortgagee's prior written consent to any
subordinate financing or other voluntary lien encumbering the Mortgaged
Property; or
(iv) Mortgagor fails to obtain Mortgagee's prior written consent to any
Transfer (as defined in this Mortgage), as required by this Mortgage.
57. Defeasance.
(a) At any time after the date which is three years from the date
hereof and provided no Event of Default exists, Mortgagor may obtain the
release of the Mortgaged Property from the lien of this Mortgage upon the
satisfaction of the following conditions precedent:
(i) not less than thirty (30) days prior written notice to Mortgagee
specifying a regularly scheduled payment date (the "Release Date") on which
the Defeasance Deposit (hereinafter defined) is to be made;
(ii) the payment to Mortgagee of interest accrued and unpaid on the
principal balance of the Note to and including the Release Date;
(iii) the payment to Mortgagee of all other sums, not including
scheduled interest or principal payments, due under the Note, this Mortgage,
the Assignment of Leases, and the other Loan Documents;
(iv) the payment to Mortgagee of the Defeasance Deposit: and
(v) the delivery to Mortgagee of:
(a) a security agreement, in form and substance satisfactory to
Mortgagee, creating a first priority lien on the Defeasance Deposit and the
U.S. Obligations (hereinafter defined) purchased on behalf
of Mortgagor with the Defeasance Deposit in accordance with this provision of
this paragraph (the "Security Agreement");
(b) a release of the Mortgaged Property from the lien of this Mortgage
(for execution by Mortgagee) in a form appropriate for the jurisdiction in
which the Mortgaged Property is located;
(c) an officer's certificate of Mortgagor certifying that the
requirements set forth in this subparagraph (a) have been satisfied;
(d) an opinion of counsel for Mortgagor in form satisfactory to
Mortgagee stating, among other things, that Mortgagee has a perfected first
priority security interest in the Defeasance Deposit and the U.S. Obligations
purchased by Mortgagee on behalf of Mortgagor;
(e) evidence in writing from the applicable Rating Agencies to the
effect that such release will not result in a requalification, reduction or
withdrawal of any rating in effect immediately prior to such defeasance for
any securities issued in connection with a Secondary Market Transaction; and
(f) such other certificates, documents or instruments as Mortgagee may
reasonably request.
In connection with the conditions set forth in subparagraph (a)(v)
above, Mortgagor hereby appoints Mortgagee as its agent and attorney-in-fact
for the purpose of using the Defeasance Deposit to purchase U.S. Obligations
which provide payments on or prior to, but as close as possible to, all
successive scheduled payment dates after the Release Date upon which interest
and principal payments are required under the Note (including the amounts due
on the Maturity Date) and in amounts equal to the scheduled payments due on
such dates under the Note (the "Scheduled Defeasance Payment@'). Mortgagor,
pursuant to the Security Agreement or other appropriate document, shall
authorize and direct that the payments received from the U.S. Obligations may
be made directly to Mortgagee and applied to satisfy the obligations of the
Mortgagor under the Note.
(b) Upon compliance with the requirements of this paragraph, the
Mortgaged Property shall be released from the lien of this Mortgage and the
pledged U.S. Obligations shall be the sole source of collateral securing the
Note. Any portion of the Defeasance Deposit in excess of the amount
necessary to purchase the U.S. Obligations required by subparagraph (a) above
and satisfy the Mortgagor's obligations under this paragraph shall be
remitted to the Mortgagor with the release of the Mortgaged Property from the
lien of this Mortgage. In connection with such release, Nomura Asset Capital
Corporation ("NACC") shall establish or designate a successor entity (the
"Successor Mortgagor") and Mortgagor shall transfer and assign all
obligations, rights and duties under and to the Note together with the
pledged U.S. Obligations to such Successor Mortgagor. The obligation of NACC
to establish or designate a Successor Mortgagor shall be retained by NACC
notwithstanding the sale or transfer of this Mortgage unless such obligation
is specifically assumed by the transferee. Such Successor Mortgagor shall
assume the obligations under the Note and the Security Agreement and
Mortgagor shall be relieved of its obligations thereunder. The Mortgagor
shall pay $1,000 to any such Successor Mortgagor as consideration for
assuming the obligations under the Note and the Security Agreement.
Notwithstanding anything in this Mortgage to the contrary, no other
assumption fee shall be payable upon a transfer of the Note in accordance
with this paragraph, but Mortgagor shall pay all costs and expenses incurred
by Mortgagee, including Mortgagee's attorneys' fees and expenses, incurred in
connection with this paragraph.
(c) For purposes of this paragraph, the following terms shall have
the following meanings:
(i) The term "Defeasance Deposit" shall mean an amount equal to the
remaining principal amount of the Note, the Yield Maintenance Premium, any
costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments and any
revenue, documentary stamp or intangible taxes or any other tax or charge due
in connection with the transfer of the Note or otherwise required to
accomplish the agreements of this Paragraph 57;
(ii) The term "Yield Maintenance Premium" shall mean the amount (if any)
which, when added to the remaining principal amount of the Note, will be
sufficient to purchase U.S. obligations providing the required Scheduled
Defeasance Payments; and
(iii) The term "U.S. Obligations" shall mean direct noncallable
obligations of the United States of America
58. Certain Hotel Covenants. Mortgagor further covenants and agrees with
Mortgagee as follows:
(a) Mortgagor shall cause the hotel located on the Mortgaged Property
to be operated pursuant to the License Agreement and the Management
Agreement.
(b) Mortgagor shall:
(i) promptly perform and/or observe all of the covenants and agreements
required to be performed and observed by it under the License Agreement and
the Management Agreement and do all things necessary to preserve and to keep
unimpaired its material rights thereunder;
(ii) promptly notify Mortgagee of any default under the License
Agreement or the Management Agreement of which it is aware;
(iii) promptly deliver to Mortgagor a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate
received by it under the License Agreement or the Management Agreement; and
(iv) promptly enforce the performance and observance of all of the
covenants and agreements required to be performed and/or observed by the
franchiser under the License Agreement and the manager under the Management
Agreement.
(c) Mortgagor shall not, without Mortgagor's prior consent:
(i) surrender, terminate or cancel the License Agreement or the
Management Agreement;
(ii) reduce or consent to the reduction of the term of the License
Agreement or the Management Agreement;
(iii) increase or consent to the increase of the amount of any charges
under the License Agreement or the Management Agreement; or
(iv) otherwise modify, change, supplement, alter or amend, or waive or
release any of its rights and remedies under, the License Agreement or the
Management Agreement in any material respect.
(d) Mortgagor shall not, without Mortgagee's prior consent, enter into
transactions with any affiliate, including without limitation any arrangement
providing for the managing of the hotel on the Mortgaged Property, the
rendering or receipt of services or the purchase or sale of inventory, except
any such transaction in the ordinary course of business of Mortgagor if the
monetary or business consideration arising therefrom would be substantially
as advantageous to Mortgagor as the monetary or business consideration that
would obtain in a comparable transaction with a person not an affiliate of
Mortgagor.
(e) Mortgagor shall achieve and within forty-five (45) days of the end
of each calendar quarter provide evidence to Mortgagee of the achievement of
a Debt Service Coverage Ratio for the Mortgaged Property of not less than 1.2
to 1 .0. For purposes of this Mortgage, "Debt Service Coverage Ratio" shall
mean a ratio in which:
(i) the first number is the sum of pre-tax income from normal hotel
operations of the Improvements as set forth in the quarterly statements
provided pursuant to Paragraph 18 hereof (and compared against the annual
statements for the operation of the Improvements as required under paragraph
18), without deduction for (A) actual management fees paid in connection with
the operation of the Improvements, (B) franchise and/or license fees, (C)
debt service on the Note, calculated based upon the preceding twelve (12)
months, plus interest expense and non-cash expenses or allowances for
depreciation and amortization of the Mortgaged Property for said period, or
(D) any amounts paid or payable as distributions or other payments to
partners (to the extent not otherwise deducted in determining pretax income,
but whether or not classified as an expense according to generally accepted
accounting principles), less (1) management fees equal to the greater of (w)
assumed management fees of four percent (4%) of total room revenues for said
period or (x) the actual management fees, and (2) franchise and/or license
fees equal to the greater of (y) assumed franchise and/or license fees of
four percent (4%) of total room revenues for said period or (z) the actual
franchise and/or license fees; provided, however, that the total amount to be
subtracted as management and franchise and/or license fees shall be the
higher of the actual combined amount of such fees or 8% of total room
revenues for said period; and
(ii) the second number is the annual aggregate amount of principal and
interest payments on the current portion of the long term debt (i.e.,
obligations that are due more than one (1) year from the date as of which the
computation thereof is made) incurred for the benefit of the Mortgaged
Property (including debt service on the Note). All calculations of Debt
Service Coverage Ratio shall be subject to verification by Mortgagee.
(f) Mortgagor shall maintain the Management Agreement for the operation
of the Mortgaged Property in full force and effect and timely perform all of
Mortgagor's obligations thereunder and enforce performance of all obligations
of the manager thereunder, and not permit the termination or amendment of
such Management Agreement unless the prior written consent of Mortgagee is
first obtained. Mortgagor will enter into and cause the manager to enter
into an assignment and subordination of such Management Agreement in form
satisfactory to Mortgagee, assigning and subordinating the manager's interest
in the Mortgaged Property and all fees and other rights of the manager
pursuant to such Management Agreement to the rights of Mortgagee. Upon an
Event of Default Mortgagor at Mortgagee's request made at any time while such
Event of Default continues, shall terminate the Management Agreement and
replace the manager with a manager approved by Mortgagee.
(g) Notwithstanding anything in this Mortgage or the other Loan
Documents to the contrary, the declaration of a default by Ramada Franchise
Systems, Inc. a Delaware corporation (or its successor in interest, each
hereafter referred to as "Ramada"), under that certain License Agreement
entered into between Ridgewood Properties, Inc., a Delaware corporation, (as
"Licensee"), and Ramada, the Licensee's interest in which has been or is to
be assigned to Mortgagor, shall constitute a matured Event of Default under
this Mortgage, the Note and the other Loan Documents.
Special Florida Provisions.
(a) Future Advances. This Mortgage secures such future or additional
advances as may be made by the Mortgagee or the holder hereof, at its
exclusive option, to the Mortgagor or its successors or assigns in title, for
any purpose, provided that all such advances are made within 20 years from
the date of this Mortgage or within such lesser period of time as may be
provided by law as a prerequisite for the sufficiency of actual notice or
record notice of such optional future or additional advances as against the
rights of creditors or subsequent purchasers for valuable consideration to
the same extent as if such future or additional advances were made on the
date of the execution of this Mortgage. The total amount of indebtedness
secured by this Mortgage may be increased or decreased from time to time, but
the total unpaid balance so secured at any one time shall not exceed twice
the face amount of the Note, plus interest thereon and any disbursements made
under this Mortgage for the payment of impositions, taxes, assessments,
levies, insurance, or otherwise with interest on such disbursements, plus any
increases in the principal balance as the result of negative amortization or
deferred interest, if any. All such future advances shall be secured to the
same extent as if made on the date of the execution of this Mortgage and this
Mortgage shall secure the payment of the Note and any additional advances
made from time to time pursuant hereto, all of said indebtedness being
equally secured hereby and having the same priority as any amounts advanced
as of the date of this Mortgage. It is agreed that any additional sum or
sums advanced by Mortgagee shall be equally secured with and have the same
priority as the original indebtedness and shall be subject to all of the
terms, provisions and conditions of this Mortgage, whether or not such
additional loans or advances are evidenced by other promissory notes or other
guaranties of Mortgagor and whether or not identified by a recital that it or
they are secured by this Mortgage. It is further agreed that any additional
promissory note or guaranty or promissory notes or guaranties executed and
delivered pursuant to this paragraph shall automatically be deemed to be
included in the term "Note" wherever it appears in the context of this
Mortgage. Without the prior written consent of Mortgagee, which Mortgagee
may grant or withhold in its sole discretion, Mortgagor shall not file for
record any notice limiting the maximum principal amount that may be secured
by this Mortgage to a sum less than the maximum principal amount set forth in
this paragraph.
IN WITNESS WHEREOF, Mortgagor has executed this instrument the day and
year first above written.
MORTGAGOR:
Ridgewood Orlando, Inc., a Florida
corporation
By: /s/ N. R. Walden
N. Russell Walden, President
And By: /s/ Karen S. Hughes
Karen S. Hughes, Secretary
STATE OF GEORGIA
COUNTY OF FULTON
The foregoing document was acknowledged before me this 28th date of June,
1995, by N. Russell Walden, President and Karen S. Hughes, Secretary of
Ridgewood Orlando, Inc., a Florida corporation on behalf of the corporation.
N. Russel Walden and Karen, S. Hughes are either personally known to me or
produced Drivers License as identification.
/s/ June D. Smith
Notary Public, Gwinnett County, Georgia
My Commission Expires: August 6, 1995
(SEAL)
EXHIBIT A
Legal Description
A portion of the Southeast quarter of the Northwest quarter of Section 2,
Township 21 South, Range 29 East, County of Seminole, State of Florida, more
particularly described as follows:
Beginning at the Northwest corner of the Northwest Quarter of the Northeast
Quarter of the Southwest Quarter of Section 2, Township 21 South, Range 29
East; thence North 00 degrees 14'19" West 180.52 feet to the True Point of
Beginning; thence North 00 degrees 12'19" West 498.38 feet; thence North
58 degrees 53'58" East 148.74 feet; thence North 00 degrees 15'46" West 45
feet; thence North 89 degrees 44'14" East 245.00 feet to a point on the
Westerly right-of-way line of Interstate Highway 4; thence South 10
degrees 01'51" West 540.95 feet along said right-of-way line; thence south
06 degrees 48'14" West a distance of 88.05 feet along said right-of-way;
thence South 89 degrees 44' 14" West 265.72 feet to the True Point of
Beginning.
TOGETHER with all right, title and interest of Grantor in an easement over
and upon the following described real property:
The South 180.52 feet of the East 35 feet of the Southeast Quarter of the
Southwest Quarter of the Northwest Quarter of Section 2, Township 21 South,
Range 29 East, Seminole County, Florida.
AND: The South 180.52 feet of the West 25 feet of the Southwest Quarter of
the Southeast Quarter of the Northwest Quarter of Section 2, Township 21
South, Range 29 East, Seminole County, Florida.
AND: That part of the West 25 feet of the Northeast Quarter of the Northeast
Quarter of the Southwest Quarter of Section 2, Township 21 South, Range 29
East, Seminole County, Florida, lying North of State Road #434.
AND: That part of the east 35 feet of the Northeast Quarter of the Northwest
Quarter of the Southwest Quarter of Section 2, Township 21 South, Range 29
East, Seminole County, Florida, lying North of State Road #434.
FURTHER TOGETHER WITH (a) a non-exclusive perpetual right, privilege and
easement to connect and tap into an existing sanitary sewer line located as
shown on that certain Special Purpose Sketch prepared for Ridgewood
Properties, Inc. ("RPI") by Ganung & Associates, Inc. dated April 13, 1995
and recertified June 12, 1995, (the "Survey"), and to discharge effluent into
said sanitary sewer line; (b) a non-exclusive perpetual right, privilege and
easement to tap into and use an existing underground water line located as
shown on the Survey; (c) a non-exclusive perpetual right, privilege and
easement to connect and tie into those certain existing storm sewer lines and
facilities located as shown on the Survey together with the right to utilize
the storm and surface water drainage and retention system located thereon;
PROVIDED, HOWEVER, that RPI and its successors and successors-in-title to the
property burdened by said easements shall have and hereby reserve the right
to relocate from time to time the sanitary sewer lines, water lines and storm
sewer lines and retention area and facilities which are located as shown on
the Survey; provided that such relocation shall be at the sole cost and
expense of RPI and its successors and successors-in-title to the property
burdened by said easements, and shall not interrupt, interfere with or
diminish the service provided by such sewer lines, water lines and storm
sewer lines and retention facilities. The easements granted in (a) through
(c) above are expressly made SUBJECT TO the rights of Sanlando Utilities
Corporation ("Sanlando") under that certain Grant of License between
Ridgewood Properties and Sanlando recorded in Official Records Book 1974,
Page 1827, of the Public Records of Seminole County, Florida.