1
EXHIBIT 10.6
MORTGAGE AND SECURITY AGREEMENT
THIS MORTGAGE AND SECURITY AGREEMENT
IS MADE as of the 14th day of March, 1995,
BETWEEN
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
(hereinafter called "Mortgagor"),
AND
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
a Delaware corporation
(hereinafter called "Mortgagee").
Mortgagor has executed and delivered to Mortgagee a certain
Mortgage Note (hereinafter called the "Note") of even date herewith, payable to
the order of Mortgagee in the principal sum of Six Million Five Hundred
Thousand Dollars ($6,500,000.00), lawful money of the United States of America,
and has provided therein for payment of additional moneys loaned or advanced
thereunder by Mortgagee, together with interest thereon (including Additional
Interest and the Acceleration Premium, as defined in the Note) at the rate
provided in the Note, in the manner and at the times therein set forth,
containing certain other terms and conditions, all of which are specifically
incorporated herein by reference.
NOW, THEREFORE, in consideration of such debt or principal sum
and as security for the payment of the same and interest as aforesaid, together
with all other sums payable hereunder or under the terms of the Note, and for
performance of the agreements, conditions, covenants, provisions and
stipulations contained herein, Mortgagor does grant, bargain, sell, release,
mortgage and convey unto Mortgagee, its successors and assigns:
ALL THAT CERTAIN tract or piece of ground, situate at and
known as 1120 State Route 73, Mount Laurel Township, Burlington County, New
Jersey, as more particularly described in Exhibit "A" attached hereto, and
TOGETHER WITH:
(1) any and all buildings and improvements erected or
hereafter erected thereon;
(2) any and all fixtures, appliances, machinery and
equipment, and other articles of personal property, belonging to Mortgagor, at
any time now or hereafter installed in, attached to or situated in or upon the
above described real estate or the buildings and improvements to be erected
thereon, or used or intended to be used in connection with the real estate, or
in the operation of the buildings and improvements, plant, business or dwelling
situate thereon, whether or not the personal property is or shall be affixed
thereto; including, without limitation of the foregoing, all furniture,
furnishings, floor coverings, household appliances, office equipment, and
articles of interior decoration; all screens, awnings, venetian blinds,
shutters, shades, storm windows and storm doors; all kitchen cabinets, mirrors,
mantles; all office, restaurant, bar, kitchen and laundry fixtures, utensils,
appliances, and equipment; all cleaning, venti lation, refrigerating, vending,
incinerating, waste disposal, communications, alarms, fire prevention and fire
extinguishing systems, apparatus and equipment; all television, radio and other
musical equipment; all passenger and freight elevators, escalators and
machinery and equipment pertaining thereto; all building materials, equipment
and machinery; all pipes, conduits, pumps, boilers, tanks, motors, engines and
furnaces; all heating, lighting, sprinkling, plumbing, air conditioning,
gas-burning, oil-burning, and electric fixtures, machinery and equipment of
whatsoever kind and nature;
2
(3) all building materials, fixtures, building machinery
and building equipment delivered on site to the real estate during the course
of, or in connection with, construction of any repairs of or renovations to the
buildings and improvements;
(4) any and all tenements, hereditaments and
appurtenances belonging to the real estate or any part thereof hereby mortgaged
or intended so to be, or in any way appertaining thereto, and all streets,
alleys, passages, ways, water courses and all easements and covenants now
existing or hereafter created for the benefit of the Mortgagor or any
subsequent owner or tenant of the mortgaged real estate over ground adjoining
the mortgaged real estate and all rights to enforce the maintenance thereof,
and all other rights, liberties and privileges of whatsoever kind or character,
and the reversions and remainders, income, rents, issues and profits arising
therefrom, and all the estate, right, title, interest, property, possession,
claim and demand whatsoever, at law or in equity, of the Mortgagor in and to
the real estate or any part thereof; and
(5) all right, title and interest of Mortgagor in and to:
(A) all present and future leases between
Mortgagor, as landlord, and any occupant of the Mortgaged Property, as tenant
(which present and future leases, and Mortgagor's interest thereunder, are
herein referred to as the "Leases"); and
(B) all rents, issues and profits payable under
the Leases and under any future renewals, amendments or modifications thereof.
(All of the above-mentioned real estate, buildings, improvements, fixtures,
machinery, equipment, tenements, hereditaments appurtenances, Leases and other
property interests are sometimes collectively referred to herein as the
"Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property hereby conveyed or
mentioned and intended so to be, unto Mortgagee, its successors and assigns, to
its own use forever.
PROVIDED, HOWEVER, that if Mortgagor shall pay to Mortgagee
the aforesaid debt or principal sum, including additional loans or advances and
all other sums payable by Mortgagor to Mortgagee hereunder and under the terms
of the Note, together with interest thereon (including Additional Interest
and/or Acceleration Premium), and shall keep and perform each of the covenants,
conditions and agreements hereinafter set forth until such sums have been paid,
then this Mortgage and the estate hereby granted and conveyed shall become
void.
THIS MORTGAGE is executed and delivered subject to the
following covenants, conditions and agreements:
1. WARRANTIES OF MORTGAGOR
Mortgagor warrants and agrees:
(a) that Mortgagor presently possesses an unencumbered
fee simple title to the real estate described in Exhibit "A" hereto (the
"Land"), except for those title objections not removed from Title Policy No.
F-38350 issued by First American Title Insurance Company to Mortgagee insuring
the lien of this Mortgage; that this Mortgage is a valid and enforceable first
lien on the Land, subject only to the aforesaid title objections; and that
Mortgagee shall, subject to Mortgagor's right of possession prior to default,
quietly enjoy and possess the Mortgaged Property. Mortgagor shall preserve
such title and the validity and priority of the lien hereof and shall forever
warrant and defend the same to Mortgagee against the claims of all parties and
persons whomsoever; and
(b) that Mortgagor is, and will hereafter be, the sole
owner of the landlord's interest in the Leases; and that the Leases are and
will be valid and subsisting leases of the real property demised thereby for
the terms therein set forth and subject to the provisions set forth therein;
and
(c) that Mortgagor shall make, execute, acknowledge and
deliver in form reasonably satisfactory to Mortgagee all such further or other
instruments or assurances as may at any time hereafter be reasonably desired or
-2-
3
required by Mortgagee for more fully and effectually granting, assigning,
transferring and setting over the Mortgaged Property and Mortgagor's interest
in the Leases hereby mortgaged, or intended so to be, unto Mortgagee for the
purpose aforesaid, and Mortgagor will pay all costs of recording or filing any
such statements or documents in such public offices as Mortgagee may reasonably
require.
2. PAYMENT AND PERFORMANCE
(a) Mortgagor shall pay to Mortgagee, in accordance with
the terms of the Note and this Mortgage, the principal and interest (including
Additional Interest and Acceleration Premium, if any), and other sums therein
set forth; and shall perform and comply with all the agreements, conditions,
covenants, provisions and stipulations of the Note and this Mortgage. THE
AMOUNT SECURED BY THIS MORTGAGE SHALL EXPRESSLY INCLUDE ALL ADVANCES MADE
HEREUNDER OR COSTS OTHERWISE INCURRED HEREUNDER OR IN CONNECTION WITH THE LOAN
BY MORTGAGEE TO PROTECT THE SECURITY FOR THE LOAN, INCLUDING, WITHOUT
LIMITATION, ADVANCES MADE AND COSTS INCURRED BY MORTGAGEE FOR TAXES, INSURANCE
PREMIUMS, AND ENVIRONMENTAL INSPECTIONS (WHETHER UNDERTAKEN BEFORE OR AFTER AN
EVENT OF DEFAULT OR A FORECLOSURE HEREUNDER, PROVIDED THAT ENVIRONMENTAL
INSPECTIONS WILL ONLY BE UNDERTAKEN BY MORTGAGEE BEFORE AN EVENT OF DEFAULT IF
MORTGAGEE HAS REASONABLE GROUNDS TO SUSPECT THE EXISTENCE OF A POTENTIAL
ENVIRONMENTAL PROBLEM). The parties expressly agree that this Mortgage shall
have the full force, effect, and benefits of a mortgage to secure such advances
of money, the lien of which advances shall relate to the date of this Mortgage.
This Mortgage shall secure not only existing indebtedness, but also all
Additional Interest, all Acceleration Premium and all future advances, whether
such advances are obligatory or to be made at the option of Mortgagee, or
otherwise, to the same extent as if such future advances were made on the date
hereof.
(b) Mortgagor will not violate any term or covenant
contained in the Assignment of Leases and Agreement of even date herewith
(hereinafter called the "Assignment of Leases"), delivered to Mortgagee as
additional security with respect to the Leases.
3. PAYMENT OF CHARGES
From time to time until the debt and interest are fully paid,
Mortgagor shall:
(a) Pay and discharge, when and as the same shall become
due and payable, all real estate and other taxes, assessments, sewer and water
rents, and other charges and claims assessed or levied from time to time by any
lawful authority upon any part of the Mortgaged Property and which shall or
might have priority in lien or payment to the debt secured hereby;
(b) Pay all ground rents reserved from the Mortgaged
Property and pay and discharge, or bond, all mechanics' liens or judgments
which may be filed against the Mortgaged Property;
(c) Pay and discharge any documentary stamp or other tax,
including interest and penalties thereon, if any, now or hereafter becoming
payable on the Note evidencing the debt secured hereby, or on this Mortgage, or
on the underlying indebtedness;
(d) Provide, renew and maintain in effect by paying the
necessary premiums and charges thereon, such policies of hazard and liability
insurance with such companies as Mortgagee may from time to time require
pursuant to Section 10; and
(e) Promptly submit to Mortgagee evidence of the due and
punctual payment of all the foregoing charges.
4. MAINTENANCE OF MORTGAGED PROPERTY
(a) Mortgagor shall abstain from and shall not permit the
commission of waste in or about the Mortgaged Property; shall not remove or
demolish, or alter the structural character of, any building erected at any
time on the Mortgaged Property, without the prior written consent of Mortgagee;
and shall not permit the Mortgaged Property to become deserted or unguarded,
and shall maintain the Mortgaged Property in good condition and repair,
reasonable wear and tear and damage by fire or other casualty excepted.
Mortgagee, or its agent, shall have the right to enter upon
-3-
4
the Mortgaged Property upon reasonable prior notice for the purpose of
inspecting the order, condition and repair of the buildings and improvements
erected thereon. Mortgagor represents and warrants that, to the best of
Mortgagor's knowledge, the Mortgaged Property complies with all applicable
laws, ordinances, regulations and orders relating to the Mortgaged Property,
including, without limitation, all environmental and wetlands laws, issued by
all Federal, state, municipal and other governmental authorities. Mortgagor
shall promptly comply with all future laws, ordinances, regulations and orders
relating to the Mortgaged Property by all federal, state, municipal and other
governmental authorities.
(b) Mortgagor warrants and represents that, to the best
of Mortgagor's knowledge:
(i) no hazardous substances (as "hazardous
substances" is defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), 42 U.S.C. Section 9601(14),
as amended by the Superfund Amendments and Re-authorization Act of 1986 (Pub.
L. No. 99-499, 100 Stat. 1613 (1986) (SARA)) or hazardous waste or solid waste
(as defined in 40 CFR Section 261) are present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(ii) no polychlorinated biphenyls (PCBs) or
substances containing PCBs, no asbestos or materials containing asbestos, no
gasoline, kerosene or other hydrocarbons, no pesticides, herbicides or
radioactive materials and no urea formaldehyde foam insulation has been stored,
used or installed or is otherwise present on the Mortgaged Property in
quantities in excess of those permitted by applicable law;
(iii) no portion of the Mortgaged Property
lies in or constitutes a wetland or floodplain;
(iv) no radon gas or radioactive decay
products of radon gas, in a concentration above 4 picocuries/liter, are present
on the Mortgaged Property;
(v) no underground or above-ground storage
tanks are present on the Mortgaged Property;
(vi) Mortgagor has not received any notice
that Mortgagor has been identified in any litigation, administrative proceeding
or investigation as a responsible party for any liability under CERCLA, SARA,
or any other Federal, state or municipal law, ordinance or regulation;
(vii) The Mortgaged Property has never been
used by previous owners and/or operators to refine, produce, store, handle,
transfer, process or transport "Hazardous substances," as such term is defined
in N.J.S.A. 58:10-23.11b(k), and Mortgagor has not used in the past, nor does
Mortgagor intend to use in the future, the Mortgaged Property for the purpose
of refining, producing, storing, handling, transferring, processing or
transporting "Hazardous substances" (as above defined). Mortgagor has retained
Lippincott Engineering Associates ("Consultant") to conduct a complete and
thorough on-site inspection of the Mortgaged Property, to determine the
presence of "Hazardous substances" (as defined above), and the Consultant found
no evidence of the presence of such "Hazardous substances" on or in the
Mortgaged Property.
(c) Mortgagor shall not commit or allow to occur, and has
not received a summons, citation, directive, letter or other communication,
written or oral, from the New Jersey Department of Environmental Protection and
Energy concerning, any intentional or unintentional action or omission on
Mortgagor's part resulting in the releasing, spilling, leaking, pumping,
pouring, emitting, emptying or dumping of "Hazardous substances" (as above
defined) into the waters or onto the lands of the State of New Jersey, or into
the waters outside the jurisdiction of the State of New Jersey, resulting in
damage to the lands, waters, fish, shellfish, wildlife, biota, air and other
resources owned, managed, held in trust or otherwise controlled by the State of
New Jersey.
(d) Should Mortgagor commit or allow to occur any
intentional or unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping of
"Hazardous substances" (as above defined) into the waters or onto the lands of
the State of New Jersey, or into the waters outside the jurisdiction of the
State of New Jersey, resulting in damage to the lands, waters, fish, shellfish,
wildlife, biota, air or other resources owned, managed or held in trust or
otherwise controlled by the State of New Jersey, without having obtained a
-4-
5
permit issued by the appropriate governmental authorities, Mortgagor shall
promptly clean up such spill, leak, etc. in accordance with the provisions of
the New Jersey Spill Compensation and Control Act.
(e) The Mortgaged Property is not and has not been used
as a "Major facility," as such term is defined in N.J.S.A. 58:10-23.11b(l), and
the Mortgaged Property will not be used as a "Major facility" after completion
of any construction, renovation, restoration and other developmental work which
Mortgagor intends to undertake thereon. If Mortgagor hereafter becomes an
owner or operator of a "Major facility", then Mortgagor shall furnish the New
Jersey Department of Environment Protection and Energy with all the information
required by N.J.S.A.58:10-23.11d2, and Mortgagor shall duly file or cause to
be duly filed with the Director of the Division of Taxation in the New Jersey
Department of the Treasury a tax report or return and shall pay or make
provision for the payment of all taxes due therewith, all in accordance with
and pursuant to N.J.S.A. 58:10-23.11h.
(f) No lien has been attached to any revenues or to the
Mortgaged Property as a result of the chief executive of the New Jersey Spill
Compensation Fund expending monies from such fund pursuant to N.J.S.A.
58:10-23.11(g) and/or to pay for "Cleanup and removal costs," as such term is
defined in N.J.S.A. 58:10-23.11b(d). In the event that there shall be filed a
lien against the Mortgaged Property by the New Jersey Department of
Environmental Protection and Energy, pursuant to the provisions of N.J.S.A.
58:10-23.11f(f), as a result of the chief executive of the New Jersey Spill
Compensation Fund having expended monies from such fund pursuant to N.J.S.A.
58:10-23.11g, and/or to pay for "Cleanup and removal costs" (as defined above),
then Mortgagor shall, within sixty (60) days from the date that Mortgagor is
given notice that the lien has been placed against the Mortgaged Property or
within such shorter period of time in the event that the State of New Jersey
has commenced steps to cause the Mortgaged Property to be sold pursuant to the
lien, either (i) pay the claim and remove the lien from the Mortgaged Property,
or (ii) furnish (A) a bond satisfactory to Mortgagee in the amount of the claim
out of which the lien arises, (B) a cash deposit in the amount of the claim out
of which the lien arises, or (C) other security satisfactory to Mortgagee in an
amount sufficient to discharge the claim out of which the lien arises.
(g) Mortgagor is not required to furnish the New Jersey
Department of Environmental Protection and Energy with the information required
by N.J.S.A. 58:10-23.11d2, with respect to the Mortgaged Property or any other
real property owned and/or operated by Mortgagor and located in New Jersey.
(h) In connection with the purchase of the Mortgaged
Property and any other real property acquired by Mortgagor on or after January
1, 1984, Mortgagor required that the seller of the real property, including the
Mortgaged Property, comply with the provisions of the New Jersey Industrial
Site Recovery Act (N.J.S.A. 13:1K-6 et seq.) and the seller did comply
therewith. A copy of a Nonapplicability Letter received by Mortgagor from such
seller has been supplied to Mortgagee.
(i) Mortgagor hereby agrees that in the event the
provisions of the New Jersey Industrial Site Recovery Act, become applicable to
the Mortgaged Property subsequent to the date hereof, Mortgagor shall give
prompt written notice thereof to the Mortgagee and shall take immediate
requisite action to insure full compliance with such Act.
(j) Mortgagor shall not permit or allow the Mortgaged
Property to be used in a manner so as to be considered an "Industrial
establishment," as such term is defined in N.J.S.A. 13:1K-8(f), without the
prior express written consent of the Mortgagee.
5. PAYMENTS BY MORTGAGEE
In the event Mortgagor neglects or refuses to pay the charges
mentioned in Section 3 above, or fails to maintain the buildings and
improvements and to comply with applicable regulations, as aforesaid, Mortgagee
may do so, at its sole option, and add the cost thereof to the principal debt
secured hereby, and collect the same as a part of the principal debt, together
with interest thereon at the Default Rate, as provided in the Note secured
hereby. In addition to any other debt or obligation secured hereby, this
Mortgage shall secure unpaid balances of advances made with respect
-5-
6
to the Mortgaged Property for the payment of taxes, assessments, insurance
premiums, or costs incurred for the protection of the Mortgaged Property
(including, without limitation, inspection costs).
6. SECONDARY FINANCING
Except as expressly set forth herein or in any other written
agreement between Mortgagor and Mortgagee, Mortgagor covenants and agrees not
to create, nor permit to accrue, upon all or any part of the Mortgaged
Property, any debt, lien or charge other than the lien of this Mortgage,
without the prior written consent of Mortgagee, which consent may be withheld
in Mortgagee's sole and absolute discretion.
7. TRANSFER OF TITLE
Except as expressly set forth herein or in any other written
agreement between Mortgagor and Mortgagee, without the prior written consent of
Mortgagee (which consent, except as expressly set forth hereafter, may be
withheld in Mortgagee's sole and absolute discretion), Mortgagor shall not
voluntarily, or involuntarily, or by operation of law, sell, transfer, convey,
lease, or in any other manner change the ownership of, or title to, all or any
portion of the Mortgaged Property, or of any interest therein, legal or
equitable, or any shares or interests in any partnership or corporation having
an ownership interest in the Mortgaged Property, except for individual leases
of space in the Mortgaged Property upon terms as set forth in the Assignment of
Leases.
8. CONDEMNATION
In the event of any condemnation or taking of any part of the
Mortgaged Property by eminent domain, alteration of the grade of any street, or
other injury to, or decrease in value of, the Mortgaged Property by any public
or quasi-public authority or corporation, all proceeds (that is, the award or
agreed compensation for the damages sustained) shall be applicable first to
payment of the indebtedness secured hereby. No settlement for the damages
sustained shall be made by Mortgagor without Mortgagee's prior written
approval. Mortgagor shall continue to pay the installments of principal,
interest and other charges until payment of the proceeds shall have been
received by the Mortgagee. All of the proceeds shall be applied in the order
and in the amounts that Mortgagee, in Mortgagee's sole discretion, may elect,
to the payment of principal (whether or not then due and payable), interest on
any sums secured by this Mortgage, or toward payment to the Mortgagor, on such
terms as the Mortgagee may specify, to be used for the sole purpose of
altering, restoring or rebuilding any part of the Mortgaged Property which may
have been altered, damaged or destroyed as a result of the taking, alteration
of grade or other injury to the Mortgaged Property.
9. TAXES, ASSESSMENTS AND CHARGES
(a) Mortgagor shall, in addition to and concurrently with
the monthly installments of interest, pay to the Mortgagee installments of
casualty insurance premiums and taxes and assessments assessed or levied upon
the Mortgaged Property, as well as all taxes for which any party in whom title
to the Mortgaged Property shall or may hereafter vest, may be or become liable
under any present or future law of the United States of America or of the State
of New Jersey and which, under the provisions of such laws, may be or become a
lien upon the Mortgaged Property or have priority in payment of the mortgage
debt out of the proceeds of any judicial sale of the Mortgaged Property. Such
installments shall be equal respectively to 1/12 of the annual amount of such
premiums, taxes and assessments as are estimated by Mortgagee and shall be held
by Mortgagee to pay premiums, assessments and taxes when due. No amount so
paid shall be deemed to be trust funds but may be commingled with general funds
of Mortgagee, and no interest shall be payable thereon. If, pursuant to any
provision of this Mortgage, the whole amount of the unpaid principal debt
becomes due and payable, Mortgagee shall have the right, at its election, to
apply any amount so held against the entire indebtedness secured hereby.
Notwithstanding the foregoing, Mortgagee waives the right to collect
installments of insurance premiums prior to an Event of Default hereunder.
(b) Mortgagor hereby assigns to Mortgagee, as further
collateral for the full prompt payment and performance of all of Mortgagor's
obligations hereunder, all of Mortgagor's right, title and interest in any and
all proceeds of or claims to rebates, refunds, and abatements of real estate
and personal property taxes pertaining to the
-6-
7
Mortgaged Property, or any portion thereof, with respect to tax periods arising
at any time prior to the discharge hereof, even though such taxes may relate to
periods before the execution hereof.
10. INSURANCE
Mortgagor shall keep the Mortgaged Property continuously
insured against loss or damage by fire, with extended coverage, and against
other hazards as Mortgagee may reasonably require, with insurance companies
(having a Best's rating of A-:VIII) reasonably satisfactory to Mortgagee, and
in such total amount as Mortgagee may require from time to time, but not
exceeding the full replacement value thereof. Without limiting the foregoing,
such policies of insurance shall be All Risk Replacement Cost Insurance, with
Agreed Amount Endorsement or similar affirmative endorsement that the coverage
limits will prevent Mortgagor or Mortgagee from becoming a co-insurer in the
event of a partial loss. Mortgagor shall also maintain rental insurance in an
amount equal to one year's gross income, boiler insurance (if any building has
a boiler), and commercial general liability insurance with limits and coverages
acceptable to Mortgagee. All policies, including policies for any amounts
carried in excess of the required minimum and policies not specifically
required by Mortgagee, shall be in form reasonably satisfactory to Mortgagee,
shall be maintained in full force and effect, shall be assigned and delivered
to Mortgagee, with premiums prepaid, as collateral security for payment of the
indebtedness secured hereby, shall be endorsed with a standard mortgagee clause
in favor of Mortgagee, not subject to contribution, and shall provide for at
least ten (10) days' prior written notice of cancellation to Mortgagee. If the
insurance, or any part thereof, shall expire or be withdrawn, or become void by
reason of Mortgagor's breach of any condition thereof, or become void or unsafe
by reason of the failure or impairment of the capital of any company in which
the insurance may then be carried, or if for any reason whatever the insurance
shall be unsatisfactory to Mortgagee, Mortgagor shall place new insurance on
the Mortgaged Property satisfactory to Mortgagee. All renewal policies, with
premiums paid, shall be delivered to Mortgagee at least thirty (30) days before
expiration of the old policies. In the event of loss, Mortgagor will give
immediate written notice thereof to Mortgagee, and Mortgagee may make proof of
loss if not made promptly by Mortgagor. Each insurance company concerned is
hereby authorized and directed to make payment under such insurance, including
return of the unearned premiums, directly to Mortgagee instead of to Mortgagor
and Mortgagee jointly, and Mortgagor appoints Mortgagee, irrevocably, as
Mortgagor's attorney-in-fact to endorse any draft therefor. Mortgagee shall
have the right to retain and apply the proceeds of any such insurance,
including any unearned premiums, at its election, to reduction of the
indebtedness secured hereby, or to restoration or repair of the property
damaged. If Mortgagee becomes the owner of the Mortgaged Property or any part
thereof by foreclosure or otherwise, such policies, including all right, title
and interest of the Mortgagor thereunder, shall become the absolute property of
Mortgagee.
11. SECURITY AGREEMENT
(a) This Mortgage constitutes a security agreement under
the New Jersey Uniform Commercial Code and creates a security interest in the
personal property included in the Mortgaged Property and the proceeds thereof.
Mortgagor represents and warrants that all such personal property (other than
personal property of individual tenants) is owned by Mortgagor free and clear
of all security interests, and all such personal property and replacements of,
substitutions for and additions to such personal property shall be owned (and
not leased) by Mortgagor free and clear of all security interests. Mortgagor
shall execute, deliver, file and refile any financing statements or other
security agreements Mortgagee may require from time to time to confirm the lien
of this Mortgage with respect to such property. Without limiting the foregoing,
Mortgagor hereby irrevocably appoints Mortgagee attorney-in-fact for Mortgagor
to execute, deliver and file such instruments for and on behalf of Mortgagor.
Mortgagee, pursuant to the appropriate provisions of the Code, shall have an
option to proceed with respect to both the real property and personal property
included in the Mortgaged Property in accordance with its rights, powers and
remedies with respect to the real property, in which event the default
provisions of the Code shall not apply. The parties agree that if Mortgagee
shall elect to proceed with respect to the personal property separately from
the real property, fifteen (15) days' notice of the sale of the personal
property shall constitute reasonable notice. The expenses of retaking,
holding, preparing the sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, attorneys' fees and legal expenses incurred by
Mortgagee. Mortgagor agrees that, without the prior written consent of
Mortgagee, Mortgagor will not remove or permit to be removed from the Mortgaged
Property any of the personal property, except that so long as no Event of
Default has occurred hereunder, Mortgagor shall be permitted to sell or
otherwise dispose of the personal property when obsolete, worn out, inadequate,
unserviceable or unnecessary for use in the operation of the Mortgaged
Property, but only upon replacing the same or substituting for the same other
personal property at least equal in value and utility to the initial value and
utility of that disposed of and in such a manner that such replacement or
substituted personal property
-7-
8
shall be subject to the security interest created hereby and that the security
interest of Mortgagee shall be perfected and first in priority, it being
expressly understood and agreed that all replacements, substitutions and
additions to the per sonal property shall be and become immediately subject to
the security interest of this Mortgage and covered hereby.
(b) The Mortgaged Property includes goods which are or
are to become fixtures and this Mortgage is intended to serve as a fixture
filing under Section 9-313 of the New Jersey Uniform Commercial Code.
12. FINANCIAL STATEMENTS
No later than June 1 each year, Mortgagor shall, at its sole
cost and expense, furnish to Mortgagee an annual financial statement of
Mortgagor, covering only the Mortgaged Property, prepared and certified by an
independent certified public accountant acceptable to Mortgagee. Mortgagor
shall also furnish to Mortgagee in addition to and simultaneous with the
financial statements, a statement reflecting the complete rental status of the
Mortgaged Property, which shall include the name of each tenant, the area in
square feet occupied by such tenant and the rental being paid, and, at any time
upon request therefor, such other information regarding occupancy and current
rentals as Mortgagee may require.
13. DECLARATION OF NO SET-OFF
Within five (5) business days after a written request to do so
by Mortgagee, Mortgagor shall certify to Mortgagee or to any proposed assignee
of this Mortgage, in a writing duly acknowledged, the amount of principal,
interest and other charges then owing on the obligation secured by this
Mortgage and whether there are any set-offs or defenses against it.
14. EVENTS OF DEFAULT
Each of the following shall constitute an event of default
hereunder ("Event of Default"):
(a) Failure of Mortgagor to pay any installment of
principal or interest or any other sum within five (5) business days of the
date on which such installment or sum is due under the Note, this Mortgage or
the Assignment of Leases (provided that Mortgagee will only grant such 5-day
grace period twice in any twelve-month period, and any failure thereafter to
make a payment on the due date shall constitute an Event of Default without any
grace period).
(b) Mortgagor's nonperformance of or noncompliance with,
for a period of twenty (20) days after written notice shall have been given to
Mortgagor, any of the other agreements, conditions, covenants, representations,
provisions or stipulations contained in the Note, this Mortgage or the
Assignment of Leases (provided that if such nonperformance or noncompliance
cannot reasonably be cured within twenty (20) days, an Event of Default shall
not occur hereunder if Mortgagor initiates curing the nonperformance or
noncompliance within such 20-day period and diligently pursues such cure to
completion within a reasonable time thereafter, not to exceed ninety (90) days
after such written notice).
(c) Any assignment for the benefit of creditors made by
Mortgagor.
(d) Appointment of a receiver, liquidator or trustee of
the Mortgagor or of any of the property of Mortgagor, insolvency of the
Mortgagor or the adjudication of Mortgagor as a bankrupt or the filing by the
Mortgagor (or against the Mortgagor if the same shall not be discharged within
60 days) of any case or petition for the bankruptcy, reorganization or
arrangement of Mortgagor pursuant to the Federal Bankruptcy Code or any similar
statute, or the institution of any proceeding for the dissolution or
liquidation of Mortgagor.
(e) Any material default by Mortgagor under any of the
Leases affecting the Mortgaged Property;
(f) Any dissolution, merger or change in legal form or
status of Borrower under applicable Delaware or New Jersey law.
-8-
9
(g) Any warranty, representation or other statement made
by or on behalf of Mortgagor in or pursuant to this Mortgage (including,
without limitation, any financial statement delivered pursuant to Section 12)
proves to be false, incorrect or misleading in any material and adverse
respect.
(h) Entry of a final judgment not covered by insurance in
excess of $25,000 against Mortgagor or any person constituting Mortgagor, and
if, within thirty (30) days after entry thereof, such judgment shall not have
been discharged or execution thereof stayed pending appeal, or if, within
thirty (30) days after the expiration of any such stay, such judgment shall not
have been discharged.
(i) For purposes of this subsection, the word "Mortgagor"
shall include the persons named as Mortgagor herein, and any subsequent owner
of the Mortgaged Property; and for purposes of subsections (c), (d), (g) and
(h) hereof, the word "Mortgagor" shall include the general partners of
Mortgagor. All grace periods contained herein and in the Note or any of the
other documents evidencing or securing the Note shall run concurrently and not
consecutively.
15. REMEDIES
(a) Upon the happening of any Event of Default, the
entire unpaid balance of the principal, the accrued interest, the Acceleration
Premium (determined as set forth in the Note), and all other sums secured by
this Mortgage shall become immediately due and payable, at the option of
Mortgagee, without notice or demand.
(b) When the entire indebtedness shall become due and
payable, either because of maturity or because of the occurrence of any Event
of Default, or otherwise, then forthwith:
(i) Foreclosure: Mortgagee may institute
an action of mortgage foreclosure against the Mortgaged Property, or take such
other action, at law or in equity, for the enforcement of this Mortgage and
realization on the mortgage security or any other security herein or elsewhere
provided for, as the law may allow, and may proceed therein to final judgment
and execution for the entire unpaid balance of the principal debt, with
interest at the Default Rate stipulated in the Note to the date of such
judgment, and thereafter at the same rate (but if not permissible, then at the
highest judgment rate permitted by law), together with all other sums due by
Mortgagor in accordance with the provisions of the Note and this Mortgage,
including all sums which may have been loaned by Mortgagee to Mortgagor after
the date of this Mortgage, and all sums which may have been advanced by
Mortgagee for taxes, water or sewer rents, charges or claims, insurance,
inspection fees or repairs to the Mortgaged Property, all costs of suit, and a
reasonable attorney's commission for collection; and
(ii) Possession: Mortgagee may enter into
possession of the Mortgaged Property, with or without legal action; collect
therefrom all rentals (which term shall also include sums payable for use and
occupation), and, after deducting all costs of collection and administration
expense, apply the net rentals to the payment of taxes, water and sewer rents,
charges and claims, insurance premiums and all other carrying charges, and to
the inspection (including, without limitation, environmental inspection),
maintenance, repair or restoration of the Mortgaged Property, or on account and
in reduction of the principal or interest, or both, hereby secured, in such
order and amounts as Mortgagee, in Mortgagee's sole discretion, may elect; and
for that purpose, Mortgagor hereby assigns to Mortgagee all rentals due and to
become due under any Lease or rights to use and occupation of the Mortgaged
Property hereafter created, as well as all rights and remedies provided in such
Lease or at law or in equity for the collection of the rentals, and agrees to
confirm the aforesaid assignment by such collateral document or documents as
Mortgagee may require.
(c) Upon a foreclosure sale, the Mortgaged Property may
be sold as a single parcel or as any number of separate parcels, at Mortgagee's
option, and Mortgagor for itself and anyone claiming by, through or under it,
further hereby agrees that Mortgagee shall in no manner, in law or in equity,
be limited, except as herein provided, in the exercise of its rights in the
Mortgaged Property or in any other security hereunder or otherwise appertaining
to the Note or any other obligation secured by this Mortgage, whether by any
statute, rule or precedent which may otherwise require such security to be
marshalled in any manner, and Mortgagor, for itself and others as aforesaid,
hereby expressly waives and releases any right to or benefit thereof.
(d) Mortgagor hereby expressly waives and releases: (i)
all benefit that might accrue to Mortgagor by virtue of any present or future
law exempting the Mortgaged Property, or any part of the proceeds arising
-9-
10
from any sale thereof, from attachment, levy or sale on execution, or providing
for any appraisement, valuation, stay of execution, exemption from civil
process, redemption or extension of time for payment, and (ii) unless
specifically required herein, all notices of Mortgagor's default or of
Mortgagee's election to exercise, or Mortgagee's actual exercise of, any option
or remedy under the Note or any security documents. Neither Mortgagor nor any
other person now or hereafter obligated for payment of all or any part of the
indebtedness secured hereby shall be relieved of such obligations by reason of
the failure of Mortgagee to comply with any request of Mortgagor or of any
other person so obligated to take action to foreclose on this Mortgage or
otherwise enforce any provisions of any security documents or the Note, or by
reason of the release, regardless of consideration, of all or any part of the
security held for the debt secured hereby, or by reason of any agreement or
stipulation between any subsequent owner of the Mortgaged Property and
Mortgagee extending the time of payment or modifying the terms of this Mortgage
or the Note without first having obtained the consent of Mortgagor or such
other persons; and in the latter event, Mortgagor and all other such persons
shall continue to be liable to make payment according to the terms of any such
extension or modification agreement, unless expressly released and discharged
in writing by Mortgagee. Mortgagee may release, regardless of consideration,
any part of the security held for the debt secured hereby without, as to the
remainder of the security, in any way impairing or affecting the lien of this
Mortgage or its priority over any subordinate lien. For payment of the debt
secured hereby, Mortgagee may resort to any other security therefor held by
Mortgagee in such order and manner as Mortgagee may elect.
(e) Mortgagor expressly waives the equity of redemption,
statutory right of redemption, dower and homestead and all other rights and
exemptions of every kind in and to the Mortgaged Property, and agrees that the
purchaser or purchasers of the Mortgaged Property shall have an absolute title
in fee simple.
(f) Mortgagee shall have, in addition to other rights and
remedies available at law or in equity, the rights and remedies of a Secured
Party under the New Jersey Uniform Commercial Code. Mortgagee may elect to
foreclose such of the property subject to the lien hereof as then comprise
fixtures pursuant either to the laws applicable to foreclosure of an interest
in real estate or to that applicable to personal property under the Uniform
Commercial Code.
(g) In addition to the foregoing, Mortgagee shall be
entitled to apply for the appointment of a receiver. Mortgagee shall not be
required to give any notice of application for the appointment of a receiver
and shall be entitled to such appointment without regard to the adequacy of any
security for the mortgaged debt or the solvency or insolvency of any person
obligated for the payment thereof, and such receiver shall be entitled to take
possession of the Mortgaged Property from the owner, tenants and/or occupants
of the whole or any part thereof and to collect and receive the rents and
profits and the value of the use and occupation of the Mortgaged Property or
any part thereof from the then owner, tenants and/or occupants thereof for the
benefit of the Mortgagee.
(h) Mortgagee shall have the right, from time to time,
after an Event of Default, to bring an appropriate action to recover any sums
required to be paid by Mortgagor under the terms of this Mortgage, as they
become due, without regard to whether or not the principal indebtedness or any
other sums secured by the Note and this Mortgage shall be due, and without
prejudice to the right of Mortgagee thereafter to bring an action of mortgage
foreclosure, or any other action, for any default by Mortgagor existing at the
time the earlier action was commenced.
(i) All rights and remedies granted or otherwise
available to Mortgagee shall be cumulative and concurrent and may be pursued
singly, successively or together at Mortgagee's sole option, and may be
exercised from time to time and as often as occasion therefor shall occur until
the indebtedness hereby secured with all interest thereon is paid in full.
16. OTHER MORTGAGES OR DEEDS OF TRUST
If Mortgagor shall fail to pay any installment of principal or
interest required under any other mortgage or deed of trust on the Mortgaged
Property (if permitted by Mortgagee), whether subordinate or prior to the lien
of this Mortgage, or shall fail to pay any tax, governmental levy or charge or
insurance premium, or to make any other payment required to be paid by
Mortgagor under such mortgage or deed of trust, at the time and in the manner
provided therein; or if Mortgagor shall fail to perform or observe any other
term, covenant, condition or obligation required to be performed or observed by
Mortgagor therein, then without limiting the generality of any other provision
of this Mortgage, and without waiving or releasing Mortgagor from any of its
obligations hereunder, Mortgagee shall have the right, but shall be under no
obligation, to pay any such installment of principal or interest and/or any
such tax, levy, premium, charge, or other payment, and may perform any other
act or take such action as may be appropriate to cause
-10-
11
such other term, covenant, condition or obligation to be promptly performed or
observed on behalf of Mortgagor, to the end that Mortgagor's right in, to and
under such mortgage or deed of trust shall be kept unimpaired and free from
default. Mortgagee and any person designated by Mortgagee shall have, and is
hereby granted, the right to enter upon the Mortgaged Property at any time and
from time to time for the purpose of taking any such action, and all monies
expended by Mortgagee in connection therewith (including but not limited to,
legal expenses and disbursements), together with interest thereon at the
Default Rate provided for in the Note secured hereby from the date of each
expenditure, shall be paid by Mortgagor to Mortgagee forth with upon demand by
Mortgagee, and shall be secured by this Mortgage. Mortgagee shall have, in
addition to any other right or remedy, the same rights and remedies in the
event of default or nonpayment under any such mortgage or deed of trust as in
the case of a default by Mortgagor in the payment of any installment of
principal or interest due and payable hereunder.
17. PREPAYMENT
Mortgagor may prepay this Mortgage only on the terms and
conditions set forth in the Note.
18. LEASES; ESCROWS FOR LEASE TERMINATION
(a) Mortgagor covenants and agrees that Mortgagor will
not, without the prior written consent of Mortgagee (which consent may be
withheld in Mortgagee's sole discretion):
(i) receive or collect rents (other than
the customary security deposit) from any tenant, subtenant, undersubtenant or
other occupant of the Mortgaged Property for a period of more than one month in
advance; or
(ii) assign the rents, or any part thereof,
of the Mortgaged Property to any person or entity other than Mortgagee; or
(iii) enter into any lease for minimum
rentals less than those approved in writing by Mortgagee or for length of term
less than that approved in writing by Mortgagee; or
(iv) enter into any lease other than that
which is in form and content substantially the same as the form of lease
approved in writing by Mortgagee.
(b) Mortgagor covenants and agrees to perform and to
observe all the material agreements imposed upon Mortgagor under any leases of
or occupancy agreements for the Mortgaged Property or any portions thereof, and
not to do, or to permit to be done, anything to impair the security thereof; if
any of such leases shall require security deposits, to establish if required by
law an interest-bearing security deposit account in accordance with such law,
and to deposit all security deposits therein, and to maintain true and accurate
records of all security deposits received, and to pay interest thereon, if the
same be required by law or by the terms of the leases; and to comply with all
requirements of law concerning security deposits received.
(c) (i) In the event that any Lease is
terminated hereafter and payments or damages of any kind are received by
Mortgagor in connection with such termination (collectively, "Termination
Proceeds"), such Termination Proceeds shall immediately be paid over to GMAC
Mortgage Corporation, or such other agent as Mortgagee shall designate in
writing, to be held in escrow and released for tenant improvement work upon
receipt by Mortgagee of an executed replacement Lease acceptable to Mortgagee
with a term of at least five (5) years and with a rent acceptable to Mortgagee
based on then-current market conditions. Termination Proceeds shall be held in
an interest bearing account, with interest to follow principal. If no tenant
improvement work is required under such approved replacement Lease, the
escrowed payments shall be released to Mortgagor upon occupancy of the leased
space by the tenant under the approved replacement Lease.
(ii) Notwithstanding the provisions of
subsection (c)(i) above, if Computer Sciences Corporation ("CSC") terminates
its current lease ("CSC Lease"), Mortgagor shall pay into escrow with GMAC
Mortgage Corporation the sum of $75,000 per month for each of the three
consecutive calendar months beginning sixty (60) days after receipt of the
termination notice ("CSC Proceeds"). If CSC subsequently resumes or extends
the CSC Lease, the CSC Proceeds shall be returned to Mortgagor. The CSC
Proceeds shall be held in an interest bearing
-11-
12
account, with interest to follow principal. The CSC Proceeds shall be released
for tenant improvement work, in amount equal to the lesser of $10.00 per square
foot or the actual cost thereof, upon receipt by Mortgagee of an executed
replacement Lease acceptable to Mortgagee with a term of at least five (5)
years and with a gross rent of at least $18.00 per square foot, or with such
other terms as shall be acceptable to Mortgagee based on then-current market
conditions. The provisions of this subsection (c)(ii) shall terminate and
expire upon renewal by Computer Sciences Corporation of the CSC Lease for a
renewal term of at least five (5) years on financial terms at least as
favorable to Mortgagor as those in the CSC Lease.
(iii) Upon the occurrence of an Event of
Default hereunder, and notwithstanding the provisions of Section 28, all
Termination Proceeds and CSC Proceeds then being held by GMAC Mortgage
Corporation or any other agent designated by Mortgagee shall immediately be
released to Mortgagee and applied to any amounts due the Mortgagee following
such an Event of Default.
19. MANAGEMENT OF MORTGAGED PROPERTY
During the term of this Mortgage, the Mortgaged Property shall
be managed, at all times, by a manager (the "Manager") reasonably satisfactory
to Mortgagee, which Manager shall be controlled by Mortgagor. Any substitute
Manager or change in arrangements for leasing and management must be approved
in writing by Mortgagee prior to such substitution or change being effected.
Mortgagor covenants and agrees that this Section 19 is of the essence of this
Mortgage and that Mortgagee will be prejudiced by a violation hereof in that
Mortgagee is relying upon the expertise and business acumen of the Manager.
20. INDEMNIFICATION OF MORTGAGEE
Mortgagor hereby agrees to and does hereby indemnify, protect,
defend and save harmless Mortgagee and its officers, directors, employees,
agents, attorneys and shareholders from and against any and all losses,
damages, expenses or liabilities of any kind or nature and from any suits,
claims or demands, including reasonable counsel fees incurred in investigating
or defending such claims, suffered by any of them and caused by, relating to,
arising out of, resulting from, or in any way connected with this Mortgage and
the transactions contemplated herein, including, but not limited to, (a)
disputes between any architect, general contractor, subcontractor, materialman
or supplier, or on account of any act or failure to act by Mortgagee in
connection with this Mortgage, or (b) losses, damages, expenses or liabilities
sustained by Mortgagee pursuant to any provisions contained in any federal,
state or local environmental law, ordinance, rule or regulation, or (c) any
violation of the covenants and representations contained in Section 4(b)-(j)
hereof. THE INDEMNIFICATION OBLIGATIONS OF MORTGAGOR UNDER THIS SECTION 20(b)
AND (c) SHALL NOT BE SUBJECT TO THE LIMITATIONS OF LIABILITY SET FORTH IN
SECTION 28 HEREOF OR IN THE NOTE. In case any action shall be brought against
Mortgagee based upon any of the above and in respect to which indemnity may be
sought against Mortgagor, Mortgagee shall promptly notify Mortgagor in writing,
and Mortgagor shall assume the defense thereof, including the employment of
counsel selected by Mortgagor and satisfactory to Mortgagee, the payment of all
costs and expenses and the right to negotiate and consent to settlement. Upon
determination made by Mortgagee, Mortgagee shall have the right to employ
separate counsel in any such action and to participate in the defense thereof.
Mortgagor shall not be liable for any settlement of any such action effected
without its consent, but if settled with Mortgagor's consent, or if there be a
final judgment for the claimant in any such action, Mortgagor agrees to
indemnify and save harmless Mortgagee from and against any loss or liability by
reason of such settlement or judgment.
21. IMPOSITION OF TAX
Mortgagor covenants and agrees to pay and discharge when due
any taxes, fees or other charges imposed by any Federal, State or local
authority, including interest and penalties thereon, if any, or thereafter
becoming payable on this Mortgage or the Note secured hereby (excluding any
Federal or state income taxes of Mortgagee). Mortgagor further covenants and
agrees to pay upon demand all fees, charges or taxes (excluding any Federal or
state income taxes of Mortgagee), if any, and interest and penalties thereon,
if any, imposed on Mortgagee as a condition or as a result of the making of
this loan in the State of New Jersey.
-12-
13
22. MISCELLANEOUS
(a) No delay or failure of Mortgagee to exercise any
right or option herein given or reserved shall constitute a waiver of such
right or estop Mortgagee from afterwards exercising such option, and
contracting to pay by Mortgagee of anything Mortgagor has herein agreed to pay
shall not constitute a waiver of the default of Mortgagor in failing to make
such payments and shall not estop Mortgagee from foreclosing this Mortgage on
account of such failure of Mortgagor. The rights, options, powers and remedies
herein provided shall be cumulative and no one or more of them shall be
exclusive of the other or others, or of any right or remedy now or hereafter
given or allowed by law.
(b) Mortgagor waives the benefit of any appraisement laws
of the State of New Jersey.
23. EXTENSIONS AND MODIFICATIONS
No extension or indulgence granted to Mortgagor, and no
alteration, change or modification of the Note consented or agreed to by
Mortgagee, and no other act or omission of Mortgagee, including the taking of
additional security or the release or subordination of any security, shall
constitute a release of the lien and obligation of this Mortgage or be
interposed as a defense against the enforcement of this Mortgage, except a
writing signed by Mortgagee which constitutes an express, effective release and
satisfaction of the Note.
24. NO THIRD PARTY BENEFICIARIES
The parties do not intend the benefits of this Mortgage to
inure to any third party, except for the successors and assigns of Mortgagee.
Notwithstanding anything contained herein or in the Note, or any other document
executed in connection herewith, or any conduct or course of conduct by either
or both of the parties hereto, or their respective affiliated companies, agents
or employees, before or after the execution hereof, this Mortgage shall not be
construed as creating any rights, claims or causes of action in favor of any
person or entity other than Mortgagor and Mortgagee.
25. NOTICES
All notices, requests and demands upon the respective parties
hereto shall be effective when hand delivered to such party at the address set
forth below, or if sent by overnight delivery service, on the next business
day, or if sent by United States mail, postage prepaid, registered or certified
mail, on the second business day after the day on which mailed or sent,
addressed to such party as follows:
To Mortgagee: Sun Life Assurance Company
of Canada (U.S.)
One Sun Life Executive Park
Wellesley Hills, MA 02181
Attention: Virginia M. Ayers,
Sr. Property Investments Officer
With copies to: John Cannon, Assistant Vice President
GMAC Mortgage Corporation
8360 Old York Road
Elkins Park, PA 19117
Gregory Kleiber, Esquire
Fox, Rothschild, O'Brien & Frankel
2000 Market Street
Philadelphia, PA 19103
-13-
14
To Mortgagor: 1120 Associates Limited Partnership
2 Eves Drive
Marlton, New Jersey 08053
With a copy to: Robert E. Schwartz, Esquire
Sherman, Silverstein, Kohl, Rose & Podolsky
4300 Haddonfield Road, Suite 311
Pennsauken, NJ 08109
or to such other address as may be furnished in writing for such purpose.
26. COMMERCIAL LOAN
Mortgagor represents and warrants that the loan secured by
this Mortgage was obtained solely for the purpose of carrying on or acquiring a
business or commercial investment.
27. NO AGENCY, JOINT VENTURE OR PARTNERSHIP BETWEEN
MORTGAGOR AND MORTGAGEE
This Mortgage shall not be construed as a partnership, joint
venture, other business entity formation, lease or sale. Mortgagee is not now
a partner or joint venturer with Mortgagor in any respect or for any purpose in
the conduct of Mortgagor's business. Mortgagor is not the agent,
representative, partner of, or joint venturer with Mortgagee and will act
accordingly. This Mortgage shall not be construed to make Mortgagee liable to
any person or persons for goods or services furnished to the Mortgaged
Property, or for debts or claims accruing therefrom against Mortgagor. There
shall be no contractual relation, either express or implied, between Mortgagee
and any person or per sons supplying any work or materials to the Mortgaged
Property.
28. LIMITED LIABILITY
The liability of Mortgagor hereunder shall be limited to and
enforceable only out of the Mortgaged Property and the rents, issues and
profits therefrom, and the lien of any judgment shall be restricted thereto and
shall not extend to Mortgagor, Mortgagee waving any right Mortgagee may have to
claim a deficiency judgment against Mortgagor; provided, however, that
Mortgagor and Mortgagor's general partner shall not be exonerated or exculpated
from, and shall be liable for, any deficiency, loss or damage suffered by
Mortgagee as a result of any security deposits received or held by Mortgagor,
any rent received or held by Mortgagor after an Event of Default, or any rent
prepaid more than one month in advance; or from Mortgagor's failure to properly
account to Mortgagee for any proceeds of insurance or condemnation proceeds as
required by this Mortgage; or from repairs required by the Mortgaged Property
following a casualty for which insurance proceeds are not available due to a
violation of Section 10 hereof; or from fraud, material misrepresentation or
bad faith by Mortgagor; or from waste of the Mortgaged Property; or from
delinquent taxes or assessments; or from Mortgagor's violation of, or failure
to perform its obligations under, Section 4(b)-(j) or Section 20(b) or (c) of
this Mortgage. Nothing in this subsection, however, shall limit Mortgagee's
rights against any tenants under leases assigned to Mortgagee as additional
security or against any other collateral securing Mortgagor's obligations, now
or hereafter mortgaged, pledged or assigned by Mortgagor or anyone else to
Mortgagee.
29. COUNSEL FEES
(a) If Mortgagee becomes a party to any suit or
proceeding affecting the Mortgaged Property or title thereto, the lien created
by this Mortgage or Mortgagee's interest therein, or if Mortgagee engages
counsel to collect any of the indebtedness or to enforce performance of the
agreements, conditions, covenants, provisions or stipulations of this Mortgage
or the Note, Mortgagee's costs, expenses and reasonable counsel fees, whether
or not suit is instituted, shall be paid to Mortgagee by Mortgagor, on demand,
with interest at the Default Rate set forth in the Note, and until paid, they
shall be deemed to be part of the indebtedness evidenced by the Note and
secured by this Mortgage.
(b) Regardless of whether any proceeds of the loan
evidenced by the Note have been disbursed, this Mortgage also secures the
payment of all loan commissions, service charges, reasonable attorney's fees,
liquidated damages, expenses and advances due to or incurred by Mortgagee in
connection with the loan transaction intended to be
-14-
15
secured hereby, all in accordance with the application of, and the Loan
Commitment issued to and accepted by, Mortgagor in connection with the loan.
30. PARTIAL INVALIDITY
The unenforceability or invalidity of any one or more
provisions, clauses, sentences, and/or paragraphs hereof shall not render any
other provisions, clauses, sentences and/or paragraphs herein contained
unenforceable or invalid.
31. BINDING EFFECT
The covenants, conditions and agreements contained in this
Mortgage shall bind, and the benefits thereof shall inure to, the respective
parties hereto and their respective heirs, personal representatives, successors
and assigns. If Mortgagor is at any time constituted by more than one person,
the obligations of each such person shall be joint and several.
32. SURVIVAL OF COMMITMENT
The covenants, conditions and agreements contained in
Mortgagee's Loan Commitment to Mortgagor dated January 13, 1995, shall survive
the execution hereof, and any breach or violation thereof by Mortgagor shall
con stitute an Event of Default hereunder.
33. GOVERNING LAW
This Mortgage shall be construed in accordance with and
governed by the laws of the State of New Jersey.
34. AMENDMENT
This Mortgage cannot be changed, modified or amended except by
agreement in writing signed by the party against whom enforcement of the
change, modification or amendment is sought.
35. CAPTIONS
The captions preceding the text of the sections of this
Agreement are used solely for convenience of reference and shall not affect the
meaning or construction of this Mortgage.
36. WAIVER
Mortgagor hereby waives the right to trial by jury in any
action by Mortgagee to enforce Mortgagee's rights under the Note, this Mortgage
or any other document evidencing or securing the Note.
37. ACKNOWLEDGMENT
MORTGAGOR ACKNOWLEDGES THAT THIS MORTGAGE CONTAINS A WAIVER OF
TRIAL BY JURY IN SECTION 36.
-15-
16
WITNESS the due execution hereof the day and year first above
written.
1120 ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited partnership
By: Palomino Corporation, a Pennsylvania corporation,
general partner
By: /s/ Joseph D. Gonnelli
--------------------------------------------
Joseph D. Gonnelli, Vice President
Attest: /s/ R. Brian Jackson
----------------------------------------
R. Brian Jackson, Secretary
-16-
17
State of New Jersey, County of __________
I am an officer authorized to take acknowledgments and proofs in this
state.
On March __, 1995, __________________________ ("Witness") appeared
before me in person. The Witness was duly sworn by me according to law under
oath and stated and proved to my satisfaction that:
1. The Witness is the (Assistant) Secretary of the corporation
that executed this document ("Corporation").
2. _______________, the officer who signed this document, is the
President of the corporation ("Corporate Officer").
3. The making, signing, sealing, and delivery of this document
have been duly authorized by a proper resolution of the Board of Directors of
the Corporation.
4. The Witness knows the corporate seal of the Corporation. The
seal affixed to this document is the corporate seal of the Corporation. The
seal was affixed to this document by the Corporate Officer. The Corporate
Officer signed and delivered this document as and for the voluntary act and
deed of the Corporation. All of this was done in the presence of the Witness
who signed this document as attesting witness. The Witness signs this proof to
attest to the truth of these facts.
Sworn to and signed before me on the date written above.
Witness:
-----------------------
Name:
--------------------------
Notary:
-----------------------
Name:
-------------------------
-17-