Exhibit 2.3
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PR BEAVER VALLEY LIMITED PARTNERSHIP, as mortgagor
to
COLUMN FINANCIAL, INC., as mortgagee
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OPEN-END MORTGAGE AND
SECURITY AGREEMENT
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Dated as of April 4, 2002
PROPERTY SITUATED IN THE COUNTY OF BEAVER, COMMONWEALTH OF
PENNSYLVANIA, KNOWN AS THE BEAVER VALLEY MALL, LOCATED IN CENTER
TOWNSHIP.
THIS INSTRUMENT IS TO BE FILED AND INDEXED IN THE REAL ESTATE RECORDS
AND IS ALSO TO BE INDEXED IN THE INDEX OF FINANCING STATEMENTS UNDER
THE NAMES OF MORTGAGOR, AS "DEBTOR", AND MORTGAGEE, AS "SECURED PARTY".
(THIS IS AN OPEN-END MORTGAGE AND SECURES FUTURE ADVANCES PURSUANT TO
42 PA. C.S. ss.ss.8143 AND 8144, ACT NO. 126 OF 1990)
DOCUMENT PREPARED BY AND
WHEN RECORDED, RETURN TO:
Winston & Strawn
200 Park Avenue
New York, New York 10166
Attn: Corey A. Tessler
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OPEN-END MORTGAGE AND SECURITY AGREEMENT
THIS OPEN-END MORTGAGE AND SECURITY AGREEMENT (this "Security
Instrument") is made as of the 4th day of April, 2002, by PR BEAVER VALLEY
LIMITED PARTNERSHIP, a Pennsylvania limited partnership, having its principal
place of business at 200 S. Broad St., 3rd Floor, Philadelphia, Pennsylvania
19102, as mortgagor ("Mortgagor"), to COLUMN FINANCIAL, INC., having an address
at 11 Madison Avenue, New York, New York 10010-3629, Attention: Edmund Taylor,
as mortgagee (together with its successors and assigns, "Mortgagee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Security Instrument is given to secure a loan
(the "Loan") in the principal sum of Forty Eight Million and No/100 Dollars
($48,000,000.00) advanced pursuant to that certain Loan Agreement, dated as of
the date hereof, between Mortgagor and Mortgagee (as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time, the
"Loan Agreement") and evidenced by that certain Promissory Note, dated the date
hereof, made by Mortgagor in favor of Mortgagee (such Promissory Note, together
with all extensions, renewals, replacements, restatements or modifications
thereof, being hereinafter referred to as the "Note");
WHEREAS, Mortgagor desires to secure the payment of the Debt
(as defined in the Loan Agreement) and the performance of all of its obligations
under the Note, the Loan Agreement and the other Loan Documents (as herein
defined); and
WHEREAS, this Security Instrument is given pursuant to the
Loan Agreement, and payment, fulfillment, and performance by Mortgagor of its
obligations thereunder and under the other Loan Documents are secured hereby,
and each and every term and provision of the Loan Agreement, the Note, and that
certain Assignment of Leases and Rents dated as of the date hereof, made by
Mortgagor in favor of Mortgagee, delivered in connection with this Security
Agreement (as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time, the "Assignment of Leases"), including,
without limitation, the rights, remedies, obligations, covenants, conditions,
agreements, indemnities, representations and warranties of the parties therein,
are hereby incorporated by reference herein as though set forth in full and
shall be considered a part of this Security Instrument (the Loan Agreement, the
Note, this Security Instrument, the Assignment of Leases and all other documents
evidencing or securing the Debt or executed or delivered in connection
therewith, are hereinafter referred to collectively as the "Loan Documents").
NOW, THEREFORE, in consideration of the making of the Loan by
Mortgagee to Mortgagor and the covenants, agreements, representations and
warranties set forth in this Security Instrument, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Mortgagor hereby agrees as follows:
ARTICLE 1 - GRANTS OF SECURITY
Section 1.1 Property Mortgaged. Mortgagor does hereby
irrevocably MORTGAGE, GRANT, BARGAIN, SELL, PLEDGE, ASSIGN, WARRANT, TRANSFER
AND CONVEY to Mortgagee and its successors and assigns the following property,
rights, interests and estates now owned, or hereafter acquired by Mortgagor
(collectively, the "Property"):
(a) Land. The real property described in Exhibit A
attached hereto and made a part hereof (the "Land");
(b) Additional Land. All additional lands, estates and
development rights hereafter acquired by Mortgagor for use in connection with
the Land and the development of the Land and all additional lands and estates
therein which may, from time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security Instrument;
(c) Improvements. The buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter erected or located on the Land (collectively, the
"Improvements");
(d) Easements. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys, passages, sewer rights,
water, water courses, water rights and powers, air rights and development
rights, and all estates, rights, titles, interests, privileges, liberties,
servitudes, tenements, hereditaments and appurtenances of any nature whatsoever,
in any way now or hereafter belonging, relating or pertaining to the Land and
the Improvements and the reversions and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front of or adjoining
the Land, to the center line thereof and all the estates, rights, titles,
interests, rights of dower, rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Mortgagor of, in and to the
Land and the Improvements and every part and parcel thereof, with the
appurtenances thereto;
(e) Equipment. All "equipment," as such term is
defined in Article 9 of the Uniform Commercial Code (as hereinafter defined),
now owned or hereafter acquired by Mortgagor, which is used at or in connection
with the Improvements or the Land or is located thereon or therein (including,
but not limited to, all machinery, equipment, furnishings, and electronic
data-processing and other office equipment now owned or hereafter acquired by
Mortgagor and any and all additions, substitutions and replacements of any of
the foregoing), together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto (collectively, the
"Equipment"). Notwithstanding the foregoing, "Equipment" shall not include any
property belonging to tenants under leases except to the extent that Mortgagor
shall have any right or interest therein;
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(f) Fixtures. All Equipment now owned, or the
ownership of which is hereafter acquired, by Mortgagor which is so related to
the Land and the Improvements forming part of the Property that it is deemed
fixtures or real property under the law of the particular state in which the
Equipment is located, including, without limitation, all building or
construction materials intended for construction, reconstruction, alteration or
repair of or installation on the Property, construction equipment, appliances,
machinery, plant equipment, fittings, apparatuses, fixtures and other items now
or hereafter attached to, installed in or used in connection with (temporarily
or permanently) any of the Improvements or the Land, including, but not limited
to, engines, devices for the operation of pumps, pipes, plumbing, call and
sprinkler systems, fire extinguishing apparatuses and equipment, heating,
ventilating, incinerating, electrical, air conditioning and air cooling
equipment and systems, gas and electric machinery, appurtenances and equipment,
pollution control equipment, security systems, disposals, dishwashers,
refrigerators and ranges, recreational equipment and facilities of all kinds,
and water, gas, electrical, storm and sanitary sewer facilities, utility lines
and equipment (whether owned individually or jointly with others, and, if owned
jointly, to the extent of Mortgagor's interest therein) and all other utilities
whether or not situated in easements, all water tanks, water supply, water power
sites, fuel stations, fuel tanks, fuel supply, and all other structures,
together with all accessions, appurtenances, additions, replacements,
betterments and substitutions for any of the foregoing and the proceeds thereof
(collectively, the "Fixtures"). Notwithstanding the foregoing, "Fixtures" shall
not include any property which tenants are entitled to remove pursuant to leases
except to the extent that Mortgagor shall have any right or interest therein;
(g) Personal Property. All furniture, furnishings,
objects of art, machinery, goods, tools, supplies, appliances, general
intangibles, contract rights, accounts, accounts receivable, franchises,
licenses, certificates and permits, and all other personal property of any kind
or character whatsoever as defined in and subject to the provisions of the
Uniform Commercial Code, whether tangible or intangible, other than Fixtures,
which are now or hereafter owned by Mortgagor and which are located within or
about the Land and the Improvements, together with all accessories, replacements
and substitutions thereto or therefor and the proceeds thereof (collectively,
the "Personal Property"), and the right, title and interest of Mortgagor in and
to any of the Personal Property which 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 Property is located (the "Uniform Commercial Code"),
superior in lien to the lien of this Security Instrument and all proceeds and
products of the above;
(h) Leases and Rents. All leases, subleases or
sub-subleases, lettings, licenses, concessions or other agreements (whether
written or oral) pursuant to which any Person is granted a possessory interest
in, or right to use or occupy all or any portion of the Land and the
Improvements, and every modification, amendment or other agreement relating to
such leases, subleases, sub-subleases, or other agreements entered into in
connection with such leases, subleases, sub-subleases, or other agreements and
every guarantee of the performance and observance of the covenants, conditions
and agreements to be performed and observed by the other party thereto,
heretofore or hereafter entered into (collectively, the "Leases"), whether
before or after the filing by or against Mortgagor of any petition for relief
under 11 U.S.C. ss.101 et seq., as the same may be amended from time to time
(the "Bankruptcy Code") and all right, title and interest of Mortgagor, its
successors and assigns therein and thereunder, including, without limitation,
cash or securities deposited thereunder to secure the performance by the lessees
of their obligations thereunder and all rents, additional rents, revenues,
issues and profits (including all oil and gas or other mineral royalties and
bonuses) from the Land and the Improvements whether paid or accruing before or
after the filing by or against Mortgagor of any petition for relief under the
Bankruptcy Code (collectively, the "Rents"), and 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;
(i) Condemnation Awards. All awards or payments,
including interest thereon, which may heretofore and hereafter be made with
respect to the Property, whether from the exercise of the right of eminent
domain (including, but not limited to, any transfer made in lieu of or in
anticipation of the exercise of the right), or for a change of grade, or for any
other injury to or decrease in the value of the Property;
(j) Insurance Proceeds. All proceeds in respect of the
Property under any insurance policies covering the 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 Property;
(k) Tax Certiorari. All refunds, rebates or credits in
connection with reduction in real estate taxes and assessments charged against
the Property as a result of tax certiorari or any applications or proceedings
for reduction;
(l) Conversion. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including, without limitation,
proceeds of insurance and condemnation awards, into cash or liquidation claims;
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(m) Rights. The right, in the name and on behalf of
Mortgagor, to appear in and defend any action or proceeding brought with respect
to the Property and to commence any action or proceeding to protect the interest
of Mortgagee in the Property;
(n) Agreements. All agreements, contracts,
certificates, instruments, franchises, permits, licenses, plans, specifications
and other documents, now or hereafter entered into, and all rights therein and
thereto, respecting or pertaining to the use, occupation, construction,
management or operation of the Land and any part thereof and any Improvements or
any business or activity conducted on the Land and any part thereof and all
right, title and interest of Mortgagor therein and thereunder, including,
without limitation, the right, upon the happening of any default hereunder, to
receive and collect any sums payable to Mortgagor thereunder;
(o) Trademarks. All tradenames, trademarks,
servicemarks, logos, copyrights, goodwill, books and records and all other
general intangibles relating to or used in connection with the operation of the
Property;
(p) Accounts. All reserves, escrows and deposit
accounts maintained by Mortgagor with respect to the Property, including,
without limitation, all accounts established pursuant to the Cash Management
Agreement, including, without limitation, that certain Account Number
_______________ at Wilmington Trust of Pennsylvania; together with all deposits
or wire transfers made to the Lockbox Account (as defined in the Loan Agreement)
and all cash, checks, drafts, certificates, securities, investment property,
financial assets, instruments and other property held therein from time to time
and all proceeds, products, distributions or dividends or substitutions thereon
and thereof; and
(q) Other Rights. Any and all other rights of
Mortgagor in and to the items set forth in Subsections (a) through (p) above.
AND without limiting any of the other provisions of this
Security Instrument, to the extent permitted by applicable law, Mortgagor
expressly grants to Mortgagee, as secured party, a security interest in the
portion of the Property which is or may be subject to the provisions of the
Uniform Commercial Code which are applicable to secured transactions; it being
understood and agreed that the Improvements and the Fixtures are part and parcel
of the Land (the Land, the Improvements and the Fixtures being collectively
referred to herein as the "Real Property") appropriated to the use thereof and,
whether affixed or annexed to the Real Property or not, shall for the purposes
of this Security Instrument be deemed conclusively to be real estate and
mortgaged hereby.
Section 1.2 Assignment of Rents. Mortgagor hereby absolutely
and unconditionally assigns to Mortgagee all of Mortgagor's right, title and
interest in and to 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. Nevertheless, subject to the
terms of the Assignment of Leases, the Cash Management Agreement and Section
7.1(h) of this Security Instrument, Mortgagee grants to Mortgagor a revocable
license to collect, receive, use and enjoy the Rents and Mortgagor shall hold
the Rents, or a portion thereof sufficient to discharge all current sums due on
the Debt, for use in the payment of such sums.
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Section 1.3 Security Agreement. This Security Instrument is
both a real property mortgage and a "security agreement" within the meaning of
the Uniform Commercial Code. The Property includes both real and personal
property and all other rights and interests, whether tangible or intangible in
nature, of Mortgagor in the Property. By executing and delivering this Security
Instrument, Mortgagor hereby grants to Mortgagee, as security for the
Obligations (hereinafter defined), a security interest in the Fixtures, the
Equipment and the Personal Property to the full extent that the Fixtures, the
Equipment and the Personal Property may be subject to the Uniform Commercial
Code (said portion of the Property so subject to the Uniform Commercial Code
being called the "Collateral"). If an Event of Default (as defined in the Loan
Agreement) shall occur and be continuing, 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 after the occurrence and during the continuance
of an Event of Default, Mortgagor shall, at its expense, assemble the Collateral
and make it available to Mortgagee at a convenient place (at the Land if
tangible property) reasonably acceptable to Mortgagee. Mortgagor shall pay to
Mortgagee on demand any and all expenses, including reasonable legal expenses
and attorneys' fees, incurred or paid by Mortgagee in protecting its interest in
the Collateral and in enforcing its rights hereunder with respect to the
Collateral after the occurrence and during the continuance of an Event of
Default. 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 ten (10) days prior to such action, shall, except as
otherwise provided by applicable law, constitute reasonable notice to Mortgagor.
The proceeds of any disposition of the Collateral, or any part thereof, may,
except as otherwise required by applicable law, be applied by Mortgagee to the
payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper. Mortgagor's (debtor's) principal place of business
is as set forth on page one hereof and the address of Mortgagee (secured party)
is as set forth on page one hereof.
Section 1.4 Fixture Filing. Certain of the Property is or will
become "fixtures" (as that term is defined in the Uniform Commercial Code) on
the Land, and this Security Instrument, upon being filed for record in the real
estate records of the city or county wherein such fixtures are situated, shall
operate also as a financing statement filed as a fixture filing in accordance
with the applicable provisions of said Uniform Commercial Code upon such of the
Property that is or may become fixtures.
Section 1.5 Pledges of Monies Held. Mortgagor hereby pledges
to Mortgagee any and all monies now or hereafter held by Mortgagee or on behalf
of Mortgagee, including, without limitation, any sums deposited in the Lockbox
Account, the Reserve Funds (as defined in the Loan Agreement) and Net Proceeds
(as defined in the Loan Agreement), as additional security for the Obligations
until expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described 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, the Loan Agreement and this
Security Instrument, shall well and truly perform the Other Obligations
(hereinafter defined) as set forth in this Security Instrument and shall well
and truly abide by and comply with each and every covenant and condition set
forth herein and in the Note, the Loan Agreement and the other Loan Documents,
these presents and the estate hereby granted shall cease, terminate and be void;
provided, however, that Mortgagor's obligation to indemnify and hold harmless
Mortgagee pursuant to the provisions hereof shall survive any such payment or
release.
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ARTICLE 2 - DEBT AND OBLIGATIONS SECURED
Section 2.1 Debt. This Security Instrument and the grants,
assignments and transfers made in Article 1 are given for the purpose of
securing the Debt.
Section 2.2 Other Obligations. This Security Instrument and
the grants, assignments and transfers made in Article 1 are also given for the
purpose of securing the following (the "Other Obligations"):
(a) the performance of all other obligations of
Mortgagor contained herein;
(b) the performance of each obligation of Mortgagor
contained in the Loan Agreement and any other Loan Document; and
(c) the performance of each obligation of Mortgagor
contained in any renewal, extension, amendment, modification, consolidation,
change of, or substitution or replacement for, all or any part of the Note, the
Loan Agreement or any other Loan Document.
Section 2.3 Debt and Other Obligations. Mortgagor's
obligations for the payment of the Debt and the performance of the Other
Obligations shall be referred to collectively herein as the "Obligations."
ARTICLE 3 - MORTGAGOR COVENANTS
Mortgagor covenants and agrees that:
Section 3.1 Payment of Debt. Mortgagor will pay the Debt at
the time and in the manner provided in the Loan Agreement, the Note and this
Security Instrument.
Section 3.2 Incorporation by Reference. All the covenants,
conditions and agreements contained in (a) the Loan Agreement, (b) the Note and
(c) all and any of the other Loan Documents, are hereby made a part of this
Security Instrument to the same extent and with the same force as if fully set
forth herein.
Section 3.3 Insurance. Mortgagor shall obtain and maintain, or
cause to be maintained, in full force and effect at all times insurance with
respect to Mortgagor and the Property as required pursuant to the Loan
Agreement.
Section 3.4 Maintenance of Property. Mortgagor shall cause the
Property to be maintained in a good and safe condition and repair. The
Improvements, the Fixtures, the Equipment and the Personal Property shall not be
removed, demolished or materially altered (except for normal replacement of the
Fixtures, the Equipment or the Personal Property, tenant finish and
refurbishment of the Improvements) without the consent of Mortgagee. Mortgagor
shall promptly repair, replace or rebuild any part of the Property which may be
destroyed by any Casualty (as defined in the Loan Agreement) or become damaged,
worn or dilapidated or which may be affected by any Condemnation (as defined in
the Loan Agreement), and shall complete and pay for any structure at any time in
the process of construction or repair on the Land.
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Section 3.5 Waste. Mortgagor shall not commit or suffer any
waste of the Property or make any change in the use of the Property which will
in any way materially increase the risk of fire or other hazard arising out of
the operation of the Property, or take any action that might invalidate or allow
the cancellation of any Policy (as defined in the Loan Agreement), or do or
permit to be done thereon anything that may in any way materially impair the
value of the Property or the security of this Security Instrument. Mortgagor
will not, without the prior written consent of Mortgagee, permit any drilling or
exploration for or extraction, removal, or production of any minerals from the
surface or the subsurface of the Land, regardless of the depth thereof or the
method of mining or extraction thereof.
Section 3.6 Payment for Labor and Materials.
(a) Mortgagor will promptly pay when due all bills and
costs for labor, materials, and specifically fabricated materials ("Labor and
Material Costs") incurred in connection with the Property and never permit to
exist beyond the due date thereof in respect of the Property or any part thereof
any lien or security interest, even though inferior to the liens and the
security interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or additional lien or
security interest other than the liens or security interests hereof except for
the Permitted Encumbrances (as defined in the Loan Agreement).
(b) After prior written notice to Mortgagee,
Mortgagor, at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the
amount or validity or application in whole or in part of any of the Labor and
Material Costs, provided that (i) no Event of Default has occurred and is
continuing under the Loan Agreement, the Note, this Security Instrument or any
of the other Loan Documents, (ii) Mortgagor is permitted to do so under the
provisions of any other mortgage, deed of trust or deed to secure debt affecting
the Property, (iii) such proceeding shall suspend the collection of the Labor
and Material Costs from Mortgagor and from the Property or Mortgagor shall have
paid all of the Labor and Material Costs under protest, (iv) such proceeding
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Mortgagor is subject and shall not constitute a
default thereunder, (v) neither the Property nor any part thereof or interest
therein will be in danger of being sold, forfeited, terminated, canceled or
lost, and (vi) Mortgagor shall have furnished the security as may be required in
the proceeding, or as may be reasonably requested by Mortgagee to insure the
payment of any contested Labor and Material Costs, together with all interest
and penalties thereon.
Section 3.7 Performance of Other Agreements. Mortgagor shall
observe and perform each and every term, covenant and provision to be observed
or performed by Mortgagor pursuant to the Loan Agreement, any other Loan
Document and any other agreement or recorded instrument affecting or pertaining
to the Property and any amendments, modifications or changes thereto.
Section 3.8 Change of Name, Identity or Structure. Mortgagor
shall not change Mortgagor's name, identity (including its trade name or names)
or, if not an individual, Mortgagor's corporate, partnership or other structure
without notifying Mortgagee of such change in writing at least thirty (30) days
prior to the effective date of such change and, in the case of a change in
Mortgagor's structure, without first obtaining the prior written consent of
Mortgagee. Mortgagor shall execute and deliver to Mortgagee, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Mortgagee to establish or
maintain the validity, perfection and priority of the security interest granted
herein. At the request of Mortgagee, Mortgagor shall execute a certificate in
form satisfactory to Mortgagee listing the trade names under which Mortgagor
intends to operate the Property, and representing and warranting that Mortgagor
does business under no other trade name with respect to the Property.
Section 3.9 Title. Mortgagor has good, marketable and
insurable fee simple title to the real property comprising part of the Property
and good title to the balance of such Property, free and clear all Liens (as
defined in the Loan Agreement) whatsoever except the Permitted Encumbrances,
such other Liens as are permitted pursuant to the Loan Documents and the Liens
created by the Loan Documents. The Permitted Encumbrances in the aggregate do
not materially and adversely affect the value, operation or use of the Property
or Mortgagor's ability to repay the Loan. This Security Instrument, when
properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection
therewith, will create (a) a valid, perfected first priority lien on the
Property, subject only to Permitted Encumbrances and the Liens created by the
Loan Documents and (b) perfected security interests in and to, and perfected
collateral assignments of, all personalty (including the Leases), all in
accordance with the terms thereof, in each case subject only to any applicable
Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. There are no claims for
payment for work, labor or materials affecting the Property which are past due
and are or may become a lien prior to, or of equal priority with, the Liens
created by the Loan Documents unless such claims for payments are being
contested in accordance with the terms and conditions of this Security
Instrument.
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ARTICLE 4 - OBLIGATIONS AND RELIANCES
Section 4.1 Relationship of Mortgagor and Mortgagee. The
relationship between Mortgagor and Mortgagee is solely that of debtor and
creditor, and Mortgagee has no fiduciary or other special relationship with
Mortgagor, and no term or condition of any of the Loan Agreement, the Note, this
Security Instrument and the other Loan Documents shall be construed so as to
deem the relationship between Mortgagor and Mortgagee to be other than that of
debtor and creditor.
Section 4.2 No Reliance on Mortgagee. The general partners,
members, principals and (if Mortgagor is a trust) beneficial owners of Mortgagor
are experienced in the ownership and operation of properties similar to the
Property, and Mortgagor and Mortgagee are relying solely upon such expertise and
business plan in connection with the ownership and operation of the Property.
Mortgagor is not relying on Mortgagee's expertise, business acumen or advice in
connection with the Property.
Section 4.3 No Mortgagee Obligations.
(a) Notwithstanding the provisions of Subsections
1.1(h) and (n) or Section 1.2, Mortgagee is not undertaking the performance of
(i) any obligations under the Leases; or (ii) any obligations with respect to
such agreements, contracts, certificates, instruments, franchises, permits,
trademarks, licenses and other documents.
(b) By accepting or approving anything required to be
observed, performed or fulfilled or to be given to Mortgagee pursuant to this
Security Instrument, the Loan Agreement, the Note or the other Loan Documents,
including, without limitation, any officer's certificate, balance sheet,
statement of profit and loss or other financial statement, survey, appraisal, or
insurance policy, Mortgagee shall not be deemed to have warranted, consented to,
or affirmed the sufficiency, the legality or effectiveness of same, and such
acceptance or approval thereof shall not constitute any warranty or affirmation
with respect thereto by Mortgagee.
Section 4.4 Reliance. Mortgagor recognizes and acknowledges
that in accepting the Loan Agreement, the Note, this Security Instrument and the
other Loan Documents, Mortgagee is expressly and primarily relying on the truth
and accuracy of the warranties and representations set forth in Section 4.1 of
the Loan Agreement without any obligation to investigate the Property and
notwithstanding any investigation of the Property by Mortgagee; that such
reliance existed on the part of Mortgagee prior to the date hereof, that the
warranties and representations are a material inducement to Mortgagee in making
the Loan; and that Mortgagee would not be willing to make the Loan and accept
this Security Instrument in the absence of the warranties and representations as
set forth in Section 4.1 of the Loan Agreement.
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ARTICLE 5 - FURTHER ASSURANCES
Section 5.1 Recording of this Security Instrument, Etc.
Mortgagor forthwith upon the execution and delivery of this Security Instrument
and thereafter, from time to time, will cause this Security Instrument and any
of the other Loan Documents creating a lien or security interest or evidencing
the lien hereof upon the 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 and perfect the lien or security interest hereof upon, and the interest
of Mortgagee in, the Property. Mortgagor will pay all taxes, filing,
registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, this Security
Instrument, the other Loan Documents, any note, deed of trust or mortgage
supplemental hereto, any security instrument with respect to the Property and
any instrument of further assurance, and any modification or amendment of the
foregoing documents, 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 Security Instrument, any deed of trust or
mortgage supplemental hereto, any security instrument with respect to the
Property or any instrument of further assurance, and any modification or
amendment of the foregoing documents, except where prohibited by law so to do.
Section 5.2 Further Acts, etc. Mortgagor will, at the cost of
Mortgagor, and without expense to Mortgagee, do, execute, acknowledge and
deliver all and every further acts, deeds, conveyances, deeds of trust,
mortgages, assignments, notices of assignments, transfers and assurances as
Mortgagee shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring, and confirming unto Mortgagee the property
and rights hereby mortgaged, deeded, granted, bargained, sold, conveyed,
confirmed, pledged, assigned, warranted and transferred 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 Security Instrument or for filing,
registering or recording this Security Instrument, or for complying with all
Legal Requirements (as defined in the Loan Agreement). Mortgagor, on demand,
will execute and deliver, and in the event it shall fail to so execute and
deliver, 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 to evidence more effectively the security
interest of Mortgagee in the 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 Section 5.2.
Section 5.3 Changes in Tax, Debt, Credit and Documentary Stamp
Laws.
(a) If any law is enacted or adopted or amended after
the date of this Security Instrument which deducts the Debt from the value of
the Property for the purpose of taxation or which imposes a tax, either directly
or indirectly, on the Debt or Mortgagee's interest in the Property, Mortgagor
will pay the tax, with interest and penalties thereon, if any. If Mortgagee is
advised by counsel chosen by it that the payment of tax by Mortgagor would be
unlawful or taxable to Mortgagee or unenforceable or provide the basis for a
defense of usury then Mortgagee shall have the option by written notice of not
less than one hundred twenty (120) days to declare the Debt immediately due and
payable.
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(b) 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 (as those terms are defined in the Loan Agreement) assessed
against the Property, or any part thereof, and no deduction shall otherwise be
made or claimed from the assessed value of the Property, or any part thereof,
for real estate tax purposes by reason of this Security Instrument or the Debt.
If such claim, credit or deduction shall be required by law, Mortgagee shall
have the option, by written notice of not less than one hundred twenty (120)
days, to declare the Debt immediately due and payable.
(c) 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, this Security Instrument, or any of the
other Loan Documents or impose any other tax or charge on the same, Mortgagor
will pay for the same, with interest and penalties thereon, if any.
Section 5.4 Severing of Documents. This Security Instrument
and the Note shall, at any time until the same shall be fully paid and
satisfied, at the sole election of Mortgagee, be severed into two or more notes
and two or more security instruments in such denominations as Mortgagee shall
determine in its sole discretion, each of which shall cover all or a portion of
the Property to be more particularly described therein. To that end, Mortgagor,
upon written request of Mortgagee, shall execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered by the then owner of the
Property, to Mortgagee and/or its designee or designees substitute notes and
security instruments in such principal amounts, aggregating not more than the
then unpaid principal amount of this Security Instrument, and containing terms,
provisions and clauses similar to those contained herein and in the Note, and
such other documents and instruments as may be required by Mortgagee, however,
any such substitute notes shall have the same initial weighted average coupon of
the original note (but such substitute notes may change the interest rate and
amortization of the Loan so long as the aggregate monthly payment of such
note(s) shall be the same as the constant monthly payment due under the Note).
Section 5.5 Replacement Documents. Upon receipt of an
affidavit of an officer of Mortgagee as to the loss, theft, destruction or
mutilation of the Note or any other Loan Document which is not of public record,
and, in the case of any such mutilation, upon surrender and cancellation of such
Note or other Loan Document, Mortgagor will issue, in lieu thereof, a
replacement Note or other Loan Document, dated the date of such lost, stolen,
destroyed or mutilated Note or other Loan Document in the same principal amount
thereof and otherwise of like tenor. Mortgagee, simultaneously with the delivery
of a replacement Note in accordance with the forgoing sentence shall deliver to
Mortgagor or cause any custodian or loan servicer who was responsible for the
safekeeping of the Note at the time of its loss, theft, destruction or
mutilation to deliver to Mortgage, an indemnity indemnifying and holding
Mortgagor harmless from and against any liability, cost or expense arising
solely as a result of the Note having been lost, stolen, destroyed or mutilated.
ARTICLE 6 - DUE ON SALE/ENCUMBRANCE
Section 6.1 Mortgagee Reliance. Mortgagor acknowledges that
Mortgagee has examined and relied on the experience of Mortgagor and its general
partners, members, principals and (if Mortgagor is a trust) beneficial owners in
owning and operating properties such as the Property in agreeing to make the
Loan, and will continue to rely on Mortgagor's ownership of the Property as a
means of maintaining the value of the Property as security for repayment of the
Debt and the performance of the Other Obligations. Mortgagor acknowledges that
Mortgagee has a valid interest in maintaining the value of the Property so as to
ensure that, should Mortgagor default in the repayment of the Debt or the
performance of the Other Obligations, Mortgagee can recover the Debt by a sale
of the Property.
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Section 6.2 No Sale/Encumbrance. Neither Mortgagor nor any
Restricted Party (as defined in the Loan Agreement) shall Transfer (as defined
in the Loan Agreement) the Property or any part thereof or any interest therein
or permit or suffer the Property or any part thereof or any interest therein to
be Transferred other than as expressly permitted pursuant to the terms of the
Loan Agreement.
ARTICLE 7 - RIGHTS AND REMEDIES UPON DEFAULT
Section 7.1 Remedies. Upon the occurrence and during the
continuance of any Event of Default, Mortgagor agrees that Mortgagee may take
such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Property, including, but
not limited to, 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:
(a) declare the entire unpaid Debt to be immediately
due and payable;
(b) institute proceedings, judicial or otherwise, for
the complete foreclosure of this Security Instrument under any applicable
provision of law, in which case the 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;
(c) 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 Security Instrument for the portion of the Debt
then due and payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Debt not then due, unimpaired
and without loss of priority;
(d) sell for cash or upon credit the Property or any
part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to 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;
(e) institute an action, suit or proceeding in equity
for the specific performance of any covenant, condition or agreement contained
herein, in the Note, the Loan Agreement or in the other Loan Documents;
(f) recover judgment on the Note either before, during
or after any proceedings for the enforcement of this Security Instrument or the
other Loan Documents;
(g) apply for the appointment of a receiver, trustee,
liquidator or conservator of the Property, without notice and without regard for
the adequacy of the security for the Debt and without regard for the solvency of
Mortgagor, any guarantor or indemnitor with respect to the Loan or any Person
liable for the payment of the Debt, and Mortgagor hereby consents to the
appointment of such receiver, trustee, liquidator or conservator;
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(h) the license granted to Mortgagor under Section 1.2
hereof shall automatically be revoked and Mortgagee may enter into or upon the
Property, either personally or by its agents, nominees or attorneys, and
dispossess Mortgagor and its agents and servants therefrom, without liability
for trespass, damages or otherwise and exclude Mortgagor and its agents or
servants wholly therefrom, and take possession of all books, records and
accounts relating thereto and Mortgagor agrees to surrender possession of the
Property and of such books, records and accounts to Mortgagee upon demand, and
thereupon Mortgagee may (i) use, operate, manage, control, insure, maintain,
repair, restore and otherwise deal with all and every part of the Property and
conduct the business thereat; (ii) complete any construction on the Property in
such manner and form as Mortgagee deems advisable; (iii) make alterations,
additions, renewals, replacements and improvements to or on the Property; (iv)
exercise all rights and powers of Mortgagor with respect to the 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 of the Property and every
part thereof; (v) 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 such part of the Property as may be occupied
by Mortgagor; (vi) require Mortgagor to vacate and surrender possession of the
Property to Mortgagee or to such receiver and, in default thereof, Mortgagor may
be evicted by summary proceedings or otherwise; and (vii) apply the receipts
from the Property to the payment of the Debt, in such order, priority and
proportions as Mortgagee shall deem appropriate in its sole discretion after
deducting therefrom all expenses (including reasonable attorneys' fees) incurred
in connection with the aforesaid operations and all amounts necessary to pay the
Taxes, Other Charges, insurance and other expenses in connection with the
Property, as well as just and reasonable compensation for the services of
Mortgagee, its counsel, agents and employees;
(i) exercise 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: (i) the right to take
possession of the Fixtures, the Equipment and the Personal Property or any part
thereof, and to take such other measures as Mortgagee may deem necessary for the
care, protection and preservation of the Fixtures, the Equipment and the
Personal Property, and (ii) request Mortgagor at its expense to assemble the
Fixtures, the Equipment and the Personal Property and make it available to
Mortgagee at a convenient place acceptable to Mortgagee. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the Fixtures,
the Equipment and/or the Personal Property sent to Mortgagor in accordance with
the provisions hereof at least ten (10) days prior to such action, shall
constitute commercially reasonable notice to Mortgagor;
(j) apply any sums then deposited or held in escrow or
otherwise by or on behalf of Mortgagee in accordance with the terms of the Loan
Agreement, this Security Instrument or any other Loan Document to the payment of
the following items in any order in its uncontrolled discretion:
(i) Taxes and Other Charges,
(ii) Insurance Premiums (as defined in the Loan
Agreement),
(iii) Interest on the unpaid principal balance of
the Note,
(iv) Amortization of the unpaid principal balance
of the Note, and
(v) All other sums payable pursuant to the Note,
the Loan Agreement, this Security Instrument and the other
Loan Documents, including, without limitation, advances made
by Mortgagee pursuant to the terms of this Security
Instrument;
(k) apply the undisbursed balance of any Net Proceeds
Deficiency deposit (as defined in the Loan Agreement), together with interest
thereon, to the payment of the Debt in such order, priority and proportions as
Mortgagee shall deem to be appropriate in its discretion; or
(l) pursue such other remedies as Mortgagee may have
under applicable law.
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In the event of a sale, by foreclosure, power of sale or otherwise, of less than
all of Property, this Security Instrument shall continue as a lien and security
interest on the remaining portion of the Property unimpaired and without loss of
priority.
Section 7.2 Application of Proceeds. The purchase money,
proceeds and avails of any disposition of the Property, and/or any part thereof,
or any other sums collected by Mortgagee pursuant to the Note, this Security
Instrument or the other Loan Documents, may be applied by Mortgagee to the
payment of the Debt in such priority and proportions as Mortgagee in its
discretion shall deem proper.
Section 7.3 Right to Cure Defaults. Upon the occurrence and
during the continuance of any Event of Default, 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 any payment or do any
act required of Mortgagor hereunder in such manner and to such extent as
Mortgagee may deem necessary to protect the security hereof. Mortgagee is
authorized to enter upon the Property for such purposes, or appear in, defend,
or bring any action or proceeding to protect its interest in the Property or to
foreclose this Security Instrument or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees to the extent permitted by law),
with interest as provided in this Section 7.3, shall constitute a portion of the
Debt and shall be due and payable to Mortgagee upon demand. All such costs and
expenses incurred by Mortgagee in remedying such Event of Default or such failed
payment or act or in appearing in, defending, or bringing any such action or
proceeding shall bear interest at the Default Rate (as defined in the Loan
Agreement), for the period after notice from Mortgagee that such cost or expense
was incurred to the date of payment to Mortgagee. All such costs and expenses
incurred by Mortgagee together with interest thereon calculated at the Default
Rate shall be deemed to constitute a portion of the Debt and be secured by this
Security Instrument and the other Loan Documents and shall be immediately due
and payable upon demand by Mortgagee therefor.
Section 7.4 Actions and Proceedings. Mortgagee has the right
to appear in and defend any action or proceeding brought with respect to the
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, decides should be brought to
protect its interest in the Property.
Section 7.5 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.
Section 7.6 Examination of Books and Records. At reasonable
times and upon reasonable notice, Mortgagee, its agents, accountants and
attorneys shall have the right to examine the records, books, management and
other papers of Mortgagor which reflect upon its financial condition, at the
Property or at any office regularly maintained by Mortgagor where the books and
records are located. Mortgagee and its agents shall have the right to make
copies and extracts from the foregoing records and other papers. In addition, at
reasonable times and upon reasonable notice, Mortgagee, its agents, accountants
and attorneys shall have the right to examine and audit the books and records of
Mortgagor pertaining to the income, expenses and operation of the Property
during reasonable business hours at any office of Mortgagor where the books and
records are located. This Section 7.6 shall apply throughout the term of the
Note and without regard to whether an Event of Default has occurred or is
continuing.
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Section 7.7 Other Rights, Etc.
(a) 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 Security Instrument. Mortgagor shall not be relieved of Mortgagor's
obligations hereunder by reason of (i) the failure of Mortgagee to comply with
any request of Mortgagor or any guarantor or indemnitor with respect to the Loan
to take any action to foreclose this Security Instrument or otherwise enforce
any of the provisions hereof or of the Note or the other Loan Documents, (ii)
the release, regardless of consideration, of the whole or any part of the
Property, or of any person liable for the Debt or any portion thereof, or (iii)
any agreement or stipulation by Mortgagee extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Security
Instrument or the other Loan Documents.
(b) It is agreed that the risk of loss or damage to
the Property is on Mortgagor, and Mortgagee shall have no liability whatsoever
for decline in value of the Property, for failure to maintain the Policies, or
for failure to determine whether insurance in force is adequate as to the amount
of risks insured. Possession by Mortgagee shall not be deemed an election of
judicial relief if any such possession is requested or obtained with respect to
any of the Property or collateral not in Mortgagee's possession.
(c) 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 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 foreclose this Security Instrument. The rights
of Mortgagee under this Security Instrument 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.
Section 7.8 Right to Release Any Portion of the Property.
Mortgagee may release any portion of the Property for such consideration as
Mortgagee may require without, as to the remainder of the Property, in any way
impairing or affecting the lien or priority of this Security Instrument, or
improving the position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall have been reduced by
the actual monetary consideration, if any, received by Mortgagee for such
release, and may accept by assignment, pledge or otherwise any other property in
place thereof as Mortgagee may require without being accountable for so doing to
any other lienholder. This Security Instrument shall continue as a lien and
security interest in the remaining portion of the Property.
Section 7.9 Violation of Laws. If the Property is not in
material compliance with Legal Requirements, Mortgagee may impose reasonable
additional requirements upon Mortgagor in connection herewith including, without
limitation, monetary reserves or financial equivalents.
Section 7.10 Recourse and Choice of Remedies. Notwithstanding
any other provision of this Security Instrument or the Loan Agreement,
including, without limitation, Section 9.4 of the Loan Agreement, Mortgagee and
other Indemnified Parties (as hereinafter defined) are entitled to enforce the
obligations of Mortgagor, any guarantor and indemnitor contained in Sections
9.2, 9.3 and 9.4 herein without first resorting to or exhausting any security or
collateral and without first having recourse to the Note or any of the Property,
through foreclosure or acceptance of a deed in lieu of foreclosure or otherwise,
and in the event Mortgagee commences a foreclosure action against the Property,
Mortgagee is entitled to pursue a deficiency judgment with respect to such
obligations against Mortgagor and any guarantor or indemnitor with respect to
the Loan. The provisions of Sections 9.2, 9.3 and 9.4 herein are exceptions to
any non-recourse or exculpation provisions in the Loan Agreement, the Note, this
Security Instrument or the other Loan Documents, and Mortgagor and any guarantor
or indemnitor with respect to the Loan are fully and personally liable for the
obligations pursuant to Sections 9.2, 9.3 and 9.4 herein. The liability of
Mortgagor and any guarantor or indemnitor with respect to the Loan pursuant to
Sections 9.2, 9.3 and 9.4 herein is not limited to the original principal amount
of the Note. Notwithstanding the foregoing, nothing herein shall inhibit or
prevent Mortgagee from foreclosing or exercising any other rights and remedies
pursuant to the Loan Agreement, the Note, this Security Instrument and the other
Loan Documents, whether simultaneously with foreclosure proceedings or in any
other sequence. A separate action or actions may be brought and prosecuted
against Mortgagor pursuant to Sections 9.2, 9.3 and 9.4 herein whether or not
action is brought against any other Person or whether or not any other Person is
joined in the action or actions. In addition, Mortgagee shall have the right but
not the obligation to join and participate in, as a party if it so elects, any
administrative or judicial proceedings or actions initiated in connection with
any matter addressed in Article 8 or Section 9.4 herein.
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Section 7.11 Right of Entry. Upon reasonable notice to
Mortgagor, Mortgagee and its agents shall have the right to enter and inspect
the Property at all reasonable times.
ARTICLE 8 - ENVIRONMENTAL HAZARDS
Section 8.1 Environmental Representations and Warranties.
Except as otherwise disclosed by that certain Phase I environmental report (or
Phase II environmental report, if required) with respect to the Property
delivered to Mortgagee by Mortgagor in connection with the origination of the
Loan (such report is referred to below as the "Environmental Report"), (a) there
are no Hazardous Substances (defined below) or underground storage tanks in, on,
or under the Property, except those that are both (i) in compliance with
Environmental Laws (defined below) and with permits issued pursuant thereto and
(ii) fully disclosed to Mortgagee in writing pursuant the Environmental Report;
(b) there are no past, present or, to the best of Mortgagor's knowledge,
threatened Releases (defined below) of Hazardous Substances in, on, under or
from the Property which has not been fully remediated in accordance with
Environmental Law; (c) there is, to the best of Mortgagor's knowledge, no threat
of any Release of Hazardous Substances migrating to the Property; (d) there is
no past or present non-compliance with Environmental Laws, or with permits
issued pursuant thereto, in connection with the Property which has not been
fully remediated in accordance with Environmental Law; (e) Mortgagor does not
know of, and has not received, any written or oral notice or other communication
from any Person (including but not limited to a Governmental Authority) relating
to Hazardous Substances or Remediation (defined below) thereof, of possible
liability of any Person pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with any of the foregoing;
and (f) Mortgagor has truthfully and fully provided to Mortgagee, in writing,
any and all information relating to conditions in, on, under or from the
Property that is known to Mortgagor and all information that is contained in
Mortgagor's files and records, including, but not limited to, any reports
relating to Hazardous Substances in, on, under or from the Property and/or to
the environmental condition of the Property. As used herein:
(a) "Environmental Law" means any present and future
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened danger to human
health or the environment and applicable to Mortgagor or the Property. The term
"Environmental Law" includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated pursuant
thereto, and any state or local statutes, ordinances, rules, regulations and the
like addressing similar issues: the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community
Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including but not limited to Subtitle I relating
to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking
Water Act; the Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the
Endangered Species Act; the National Environmental Policy Act; and the River and
Harbors Appropriation Act. The term "Environmental Law" also includes, but is
not limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations, permits or authorizations, and the like, as well
as common law, that (i) condition transfer of property upon a negative
declaration or other approval of a Governmental Authority of the environmental
condition of the Property; (ii) require notification or disclosure of Releases
of Hazardous Substances or other environmental condition of the Property to any
Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property; (iii) impose conditions or
requirements in connection with permits or other authorization for lawful
activity; (iv) relate to nuisance, trespass or other causes of action related to
the Property; or (v) relate to wrongful death, personal injury, or property or
other damage in connection with any physical condition or use of the Property.
15
(b) "Hazardous Substances" include, but are not
limited to, any and all substances (whether solid, liquid or gas) defined,
listed, or otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present or future Environmental Laws or
that may have a negative impact on human health or the environment, including
but not limited to petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon,
radioactive materials, flammables and explosives, but excluding substances of
kinds and in amounts ordinarily and customarily used or stored in similar
properties for the purpose of cleaning or other maintenance or operations and
otherwise in compliance with all Environmental Laws.
(c) "Release" of any Hazardous Substance includes but
is not limited to any release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.
(d) "Remediation" includes, but is not limited to, (i)
any response, remedial, removal, or corrective action; (ii) any activity to
cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous
Substance; (iii) any actions to prevent, cure or mitigate any Release of any
Hazardous Substance; (iv) any action to comply with any Environmental Laws or
with any permits issued pursuant thereto; and (v) any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing, laboratory or other
analysis, or evaluation relating to any Hazardous Substances or to anything
referred to in this Article 8.
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(e) Environmental Covenants. Mortgagor covenants and
agrees that: (a) all uses and operations on or of the Property, whether by
Mortgagor or any other Person, shall be in compliance with all Environmental
Laws and permits issued pursuant thereto; (b) there shall be no Releases of
Hazardous Substances in, on, under or from the Property that remain unremedied
in accordance with Environmental Law for a period of thirty (30) days from the
date of Mortgagor obtaining knowledge (actual or constructive) of such Release;
(c) there shall be no Hazardous Substances in, on, or under the Property, except
those that are both (i) in compliance with all Environmental Laws and with
permits issued pursuant thereto and (ii) fully disclosed to Mortgagee in
writing; (d) Mortgagor shall keep the Property free and clear of all liens and
other encumbrances imposed pursuant to any Environmental Law, whether due to any
act or omission of Mortgagor or any other Person (the "Environmental Liens");
(e) Mortgagor shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to Section 8.3 below, including but not
limited to providing all relevant information and making knowledgeable persons
available for interviews; (f) Mortgagor shall, at its sole cost and expense,
perform any environmental site assessment or other investigation of
environmental conditions in connection with the Property, pursuant to any
written request of Mortgagee made after the occurrence of an Event or Default or
in the event that Mortgagee has reason to believe that an environmental hazard
exists on the Property (including but not limited to sampling, testing and
analysis of soil, water, air, building materials and other materials and
substances whether solid, liquid or gas), and share with Mortgagee the reports
and other results thereof, and Mortgagee and the other Indemnified Parties shall
be entitled to rely on such reports and other results thereof; (g) Mortgagor
shall, at its sole cost and expense, comply with all reasonable written requests
of Mortgagee made in the event that Mortgagee has reason to believe that an
environmental hazard exists on the Property (i) effectuate Remediation of any
condition (including, but not limited to, a Release of a Hazardous Substance)
in, on, under or from the Property, (ii) comply with any Environmental Law,
(iii) comply with any directive from any Governmental Authority, provided,
however, that after prior written notice to Mortgagee, Mortgagor, at its own
expense, may contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the validity or application in
whole or in part of any of such directive, provided that (T) no Event of Default
has occurred and is continuing under the Loan Agreement, the Note, this Security
Instrument or any of the other Loan Documents, (U) Mortgagor is permitted to do
so under the provisions of any other mortgage, deed of trust or deed to secure
debt affecting the Property, (V) such proceeding shall suspend the obligation of
Mortgagor to comply with such directive, (W) such proceeding shall be permitted
under and be conducted in accordance with the provisions of any other instrument
to which Mortgagor is subject and shall not constitute a default thereunder, (X)
neither the Property nor any part thereof or interest therein will be in danger
of being sold, forfeited, terminated, canceled or lost, (Y) Mortgagor shall have
furnished the security as may be required in the proceeding, or as may be
reasonably requested by Mortgagee to insure the compliance with such directive,
and (Z) such proceeding shall be permitted under and be conducted in accordance
with Environmental Law; and (iv) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (h) Mortgagor
shall not do or allow any tenant or other user of the Property to do any act
that materially increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any Person (whether on or off the Property),
impairs or may impair the value of the Property, is contrary to any requirement
of any insurer, constitutes a public or private nuisance, constitutes waste, or
violates any covenant, condition, agreement or easement applicable to the
Property; (i) Mortgagor shall immediately notify Mortgagee in writing of (i) any
presence or Releases or threatened Releases of Hazardous Substances in, on,
under, from or migrating towards the Property of which Mortgagor has actual
knowledge, (ii) any non-compliance with any Environmental Laws related in any
way to the Property of which Mortgagor has actual knowledge, (iii) any actual or
potential Environmental Lien of which Mortgagor has actual knowledge, (iv) any
required or proposed Remediation of environmental conditions relating to the
Property of which Mortgagor has actual knowledge, and (v) any written or oral
notice or other communication of which Mortgagor becomes aware from any source
whatsoever (including, but not limited to, a governmental entity) relating in
any way to Hazardous Substances or Remediation thereof, possible liability of
any Person pursuant to any Environmental Law, other environmental conditions in
connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Article 8;
and (j) Mortgagor covenants and agrees: (A) within thirty (30) days after the
date hereof, to (i) notify Sears (as defined in the Loan Agreement) that it must
reissue the appropriate documentation to the Pennsylvania Department of
Environmental Protection correcting inconsistencies contained in the document
dated October 25, 1999 in connection with the closure of the former waste oil
tank as more particularly described in that certain phase II environmental site
assessment for the Property prepared by URS dated March 6, 2002, and (ii) use
its best efforts to ensure that same is completed to the satisfaction of
Mortgagor and in compliance with all Environmental Laws, and (B) within fifteen
(15) days of Mortgagor's receipt of evidence of the reissuing of such
documentation, to provide copies of same to Mortgagee.
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Section 8.2 Mortgagee's Rights. In the event that Mortgagee
has reason to believe that an environmental hazard exists on the Property that
does not, in Mortgagee's sole discretion, endanger any tenants or other
occupants of the Property or their guests or the general public or materially
and adversely affect the value of the Property, upon reasonable notice from
Mortgagee, Mortgagor shall, at Mortgagor's expense, promptly cause an engineer
or consultant satisfactory to Mortgagee to conduct any environmental assessment
or audit (the scope of which shall be determined in Mortgagee's sole and
absolute discretion) and take any samples of soil, groundwater or other water,
air, or building materials or any other invasive testing requested by Mortgagee
and promptly deliver the results of any such assessment, audit, sampling or
other testing; provided, however, if such results are not delivered to Mortgagee
within a reasonable period or if Mortgagee has reason to believe that an
environmental hazard exists on the Property that, in Mortgagee's sole judgment,
endangers any tenant or other occupant of the Property or their guests or the
general public or may materially and adversely affect the value of the Property,
upon reasonable notice to Mortgagor, Mortgagee and any other Person designated
by Mortgagee, including but not limited to any receiver, any representative of a
governmental entity, and any environmental consultant, shall have the right, but
not the obligation, to enter upon the Property at all reasonable times to assess
any and all aspects of the environmental condition of the Property and its use,
including but not limited to conducting any environmental assessment or audit
(the scope of which shall be determined in Mortgagee's sole and absolute
discretion) and taking samples of soil, groundwater or other water, air, or
building materials, and reasonably conducting other invasive testing. Mortgagor
shall cooperate with and provide Mortgagee and any such Person designated by
Mortgagee with access to the Property.
ARTICLE 9 - INDEMNIFICATION
Section 9.1 General Indemnification. Mortgagor shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, judgments, awards, amounts paid in settlement,
punitive damages, and foreseeable and unforeseeable consequential damages, of
whatever kind or nature (including, but not limited to, reasonable attorneys'
fees and other costs of defense) (collectively, the "Losses") imposed upon or
incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (a) ownership of this Security Instrument, the Property or any
interest therein or receipt of any Rents; (b) any amendment to, or restructuring
of, the Debt, the Note, the Loan Agreement, this Security Instrument, or any
other Loan Documents; (c) any and all lawful action that may be taken by
Mortgagee in connection with the enforcement of the provisions of this Security
Instrument, the Loan Agreement, the Note or any of the other Loan Documents,
whether or not suit is filed in connection with same, or in connection with
Mortgagor, any guarantor or Mortgagor and/or any partner, joint venturer or
shareholder thereof becoming a party to a voluntary or involuntary federal or
state bankruptcy, insolvency or similar proceeding; (d) any accident, injury to
or death of persons or loss of or damage to property occurring in, on or about
the Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, streets or ways; (e) any use, nonuse or
condition in, on or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(f) any failure on the part of Mortgagor to perform or be in compliance with any
of the terms of this Security Instrument, the Note, the Loan Agreement or any of
the other Loan Documents; (g) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with the Internal
Revenue Service an accurate Form 1099-B, Statement for Recipients of Proceeds
from Real Estate, Broker and Barter Exchange Transactions, which may be required
in connection with this Security Instrument, or to supply a copy thereof in a
timely fashion to the recipient of the proceeds of the transaction in connection
with which this Security Instrument is made; (i) any failure of the Property to
be in compliance with any Legal Requirements; (j) the enforcement by any
Indemnified Party of the provisions of this Article 9; (k) any and all claims
and demands whatsoever which may be asserted against Mortgagee by reason of any
alleged obligations or undertakings on its part to perform or discharge any of
the terms, covenants, or agreements contained in any Lease; (l) the payment of
any commission, charge or brokerage fee to anyone claiming through Mortgagor
which may be payable in connection with the funding of the Loan; or (m) any
misrepresentation made by Mortgagor in this Security Instrument or any other
Loan Document; excepting, in each of the foregoing events described in clauses
(a) through (k), inclusive, any such Losses that arise solely out of the gross
negligence or willful misconduct of any Indemnified Party. Any amounts payable
to Mortgagee by reason of the application of this Section 9.1 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. For purposes of this
Article 9, the term "Indemnified Parties" means Mortgagee and any Person who is
or will have been involved in the origination of the Loan, any Person who is or
will have been involved in the servicing of the Loan secured hereby, any Person
in whose name the encumbrance created by this Security Instrument is or will
have been recorded, persons and entities who may hold or acquire or will have
held a full or partial interest in the Loan secured hereby (including, but not
limited to, investors or prospective investors in the Securities (as defined in
the Loan Agreement), as well as custodians, trustees and other fiduciaries who
hold or have held a full or partial interest in the Loan secured hereby for the
benefit of third parties) as well as the respective directors, officers,
shareholders, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any and all of the foregoing (including, but not limited to, any
other Person who holds or acquires or will have held a participation or other
full or partial interest in the Loan or the Property, whether during the term of
the Loan or as a part of or following a foreclosure of the Loan and any
successors by merger, consolidation or acquisition of all or a substantial
portion of Mortgagee's assets and business).
18
Section 9.2 Mortgage and/or Intangible Tax. Mortgagor shall,
at its sole cost and expense, protect, defend, indemnify, release and hold
harmless the Indemnified Parties from and against any and all Losses imposed
upon or incurred by or asserted against any Indemnified Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this Security Instrument, the Note or any of the other Loan
Documents, but excluding any income, franchise or other similar taxes.
Section 9.3 ERISA Indemnification. Mortgagor shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified Parties from and against any and all Losses (including, without
limitation, reasonable attorneys' fees and costs incurred in the investigation,
defense, and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited transaction exemption under ERISA that may be required, in
Mortgagee's sole discretion) that Mortgagee may incur, directly or indirectly,
as a result of a default under Sections 4.1.9 or 5.2.12 of the Loan Agreement.
Section 9.4 Environmental Indemnification. Mortgagor shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the Indemnified Parties from and against any and all Losses and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including, but not
limited to, sampling, testing, and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas)
imposed upon or incurred by or asserted against any Indemnified Parties, and
directly or indirectly arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property; (b) any past, present or threatened Release of Hazardous
Substances in, on, above, under or from the Property; (c) any activity by
Mortgagor, any Person affiliated with Mortgagor or any tenant or other user of
the Property in connection with any actual, proposed or threatened use,
treatment, storage, holding, existence, disposition or other Release,
generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous Substances at any tine located in, under, on or
above the Property; (d) any activity by Mortgagor, any Person affiliated with
Mortgagor or any tenant or other user of the Property in connection with any
actual or proposed Remediation of any Hazardous Substances at any time located
in, under, on or above the Property, whether or not such Remediation is
voluntary or pursuant to court or administrative order, including, but not
limited to, any removal, remedial or corrective action; (e) any past or present
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Property or operations
thereon, including, but not limited to, any failure by Mortgagor, any Affiliate
of Mortgagor or any tenant or other user of the Property to comply with any
order of any Governmental Authority in connection with any Environmental Laws;
(f) the imposition, recording or filing of any Environmental Lien encumbering
the Property; (g) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in Article 8 and this
Section 9.4; (h) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Property, including, but
not limited to, costs to investigate and assess such injury, destruction or
loss; (i) any acts of Mortgagor or other users of the Property in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Substances owned or possessed by such
Mortgagor or other users, at any facility or incineration vessel owned or
operated by another Person and containing such or any similar Hazardous
Substance; (j) any acts of Mortgagor or other users of the Property in accepting
any Hazardous Substances for transport to disposal or treatment facilities,
incineration vessels or sites from which there is a Release or a threatened
Release of any Hazardous Substance which causes the incurrence of costs for
Remediation; (k) any personal injury, wrongful death, or property damage arising
under any statutory or common law or tort law theory, including, but not limited
to, damages assessed for the maintenance of a private or public nuisance or for
the conducting of an abnormally dangerous activity on or near the Property in
violation of any Environmental Law or resulting from the presence on the
Property of any Hazardous Substance; (1) any misrepresentation or inaccuracy in
any representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to Article 8. This indemnity shall
survive any termination, satisfaction or foreclosure of this Security
Instrument, subject to the provisions of Section 10.5.
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Section 9.5 Duty to Defend; Attorneys' Fees and Other Fees and
Expenses. Upon written request by any Indemnified Party, Mortgagor shall defend
such Indemnified Party (if requested by any Indemnified Party, in the name of
the Indemnified Party) by attorneys and other professionals reasonably approved
by the Indemnified Parties. Notwithstanding the foregoing, if the defendants in
any such claim or proceeding include both Mortgagor and any Indemnified Party
and Mortgagor and such Indemnified Party shall have reasonably concluded that
there are any legal defenses available to it and/or other Indemnified Parties
that are different from or additional to those available to Mortgagor, such
Indemnified Party shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party, provided that no compromise or settlement
shall be entered without Mortgagor's consent, which consent shall not be
unreasonably withheld. Upon demand, Mortgagor shall pay or, in the sole and
absolute discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of attorneys,
engineers, environmental consultants, laboratories and other professionals in
connection therewith.
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ARTICLE 10 - WAIVERS
Section 10.1 Waiver of Counterclaim. To the extent permitted
by applicable law, Mortgagor hereby waives the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought against it by Mortgagee arising out of or in any way connected with this
Security Instrument, the Loan Agreement, the Note, any of the other Loan
Documents, or the Obligations.
Section 10.2 Marshalling and Other Matters. To the extent
permitted by applicable law, Mortgagor hereby waives the benefit of all
appraisement, valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of marshalling in the event of any sale
hereunder of the 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 Security Instrument on behalf
of Mortgagor, and on behalf of each and every person acquiring any interest in
or title to the Property subsequent to the date of this Security Instrument and
on behalf of all persons to the extent permitted by applicable law.
Section 10.3 Waiver of Notice. To the extent permitted by
applicable law, Mortgagor shall not be entitled to any notices of any nature
whatsoever from Mortgagee except with respect to matters for which this Security
Instrument 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 Security Instrument does not specifically and expressly provide for
the giving of notice by Mortgagee to Mortgagor.
Section 10.4 Waiver of Statute of Limitations. To the extent
permitted by applicable law, Mortgagor hereby expressly waives and releases to
the fullest extent permitted by law, the pleading of any statute of limitations
as a defense to payment of the Debt or performance of its Other Obligations.
Section 10.5 Survival. The indemnifications made pursuant to
Sections 9.3 and 9.4 herein and the representations and warranties, covenants,
and other obligations arising under Article 8 hereof, shall continue
indefinitely in full force and effect and shall survive and shall in no way be
impaired by any of the following: (a) any satisfaction or other termination of
this Security Instrument; (b) any assignment or other transfer of all or any
portion of this Security Instrument or Mortgagee's interest in the Property
(but, in such case, shall benefit both Indemnified Parties and any assignee or
transferee); (c) any exercise of Mortgagee's rights and remedies pursuant
hereto, including, but not limited to, foreclosure or acceptance of a deed in
lieu of foreclosure; (d) any exercise of any rights and remedies pursuant to the
Loan Agreement, the Note or any of the other Loan Documents; (e) any transfer of
all or any portion of the Property (whether by Mortgagor or by Mortgagee
following foreclosure or acceptance of a deed in lieu of foreclosure or at any
other time); (f) any amendment to this Security Instrument, the Loan Agreement,
the Note or the other Loan Documents; and (g) any act or omission that might
otherwise be construed as a release or discharge of Mortgagor from the
obligations pursuant hereto.
ARTICLE 11 - EXCULPATION
The provisions of Section 9.4 of the Loan Agreement are hereby
incorporated by reference into this Security Instrument to the same extent and
with the same force as if fully set forth herein.
21
ARTICLE 12 - NOTICES
All notices or other written communications hereunder shall be
delivered in accordance with Section 10.6 of the Loan Agreement.
ARTICLE 13 - APPLICABLE LAW
Section 13.1 Governing Law. This Security Instrument shall be
governed in accordance with the terms and provisions of Section 10.3 of the Loan
Agreement.
Section 13.2 Usury Laws. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, (a) all
agreements and communications between Mortgagor and Mortgagee are hereby and
shall automatically be limited so that, after taking into account all amounts
deemed interest, the interest contracted for, charged or received by Mortgagee
shall never exceed the maximum lawful rate or amount; (b) in calculating whether
any interest exceeds the lawful maximum, all such interest shall be amortized,
prorated, allocated and spread over the full amount and term of all principal
indebtedness of Mortgagor to Mortgagee; and (c) if through any contingency or
event, Mortgagee receives or is deemed to receive interest in excess of the
lawful maximum, any such excess shall be deemed to have been applied toward
payment of the principal of any and all then outstanding indebtedness of
Mortgagor to Mortgagee, or if there is no such indebtedness, shall immediately
be returned to Mortgagor.
Section 13.3 Provisions Subject to Applicable Law. All rights,
powers and remedies provided in this Security Instrument may be exercised only
to the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this Security Instrument invalid, unenforceable or not
entitled to be recorded, registered or filed under the provisions of any
applicable law. If any term of this Security Instrument or any application
thereof shall be invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be affected thereby.
ARTICLE 14 - DEFINITIONS
All capitalized terms not defined herein shall have the
respective meanings set forth in the Loan Agreement. Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Security Instrument 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 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 Security Instrument," the word "Property" shall
include any portion of the Property and any interest therein, and the phrases
"attorneys' fees", "legal fees" and "counsel fees" shall include any and all
attorneys', paralegal and law clerk fees and disbursements, including, but not
limited to, fees and disbursements at the pre-trial, trial and appellate levels
incurred or paid by Mortgagee in protecting its interest in the Property, the
Leases and the Rents and enforcing its rights hereunder.
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ARTICLE 15 - MISCELLANEOUS PROVISIONS
Section 15.1 No Oral Change. This Security Instrument, 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.
Section 15.2 Successors and Assigns. This Security Instrument
shall be binding upon and inure to the benefit of Mortgagor and Mortgagee and
their respective successors and assigns forever.
Section 15.3 Inapplicable Provisions. If any term, covenant or
condition of the Loan Agreement, the Note or this Security Instrument is held to
be invalid, illegal or unenforceable in any respect, the Loan Agreement, the
Note and this Security Instrument shall be construed without such provision.
Section 15.4 Headings, etc. The headings and captions of
various Sections of this Security Instrument 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.
Section 15.5 Number and Gender. 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.
Section 15.6 Subrogation. If any or all of the proceeds of the
Note have been used to extinguish, extend or renew any indebtedness heretofore
existing against the Property, then, to the extent of the funds so used,
Mortgagee shall be subrogated to all of the rights, claims, liens, titles, and
interests existing against the Property heretofore held by, or in favor of, the
holder of such indebtedness and such former rights, claims, liens, titles, and
interests, if any, are not waived but rather are continued in full force and
effect in favor of Mortgagee and are merged with the lien and security interest
created herein as cumulative security for the repayment of the Debt, the
performance and discharge of Mortgagor's obligations hereunder, under the Loan
Agreement, the Note and the other Loan Documents and the performance and
discharge of the Other Obligations.
Section 15.7 Entire Agreement. The Note, the Loan Agreement,
this Security Instrument and the other Loan Documents constitute the entire
understanding and agreement between Mortgagor and Mortgagee with respect to the
transactions arising in connection with the Debt and supersede all prior written
or oral understandings and agreements between Mortgagor and Mortgagee with
respect thereto. Mortgagor hereby acknowledges that, except as incorporated in
writing in the Note, the Loan Agreement, this Security Instrument and the other
Loan Documents, there are not, and were not, and no persons are or were
authorized by Mortgagee to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
transaction which is the subject of the Note, the Loan Agreement, this Security
Instrument and the other Loan Documents.
Section 15.8 Limitation on Mortgagee's Responsibility. No
provision of this Security Instrument shall operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Mortgagee, nor shall it operate to make Mortgagee responsible or liable for any
waste committed on the Property by the tenants or any other Person, or for any
dangerous or defective condition of the Property, or for any negligence in the
management, upkeep, repair or control of the Property resulting in loss or
injury or death to any tenant, licensee, employee or stranger. Nothing herein
contained shall be construed as constituting Mortgagee a "mortgagee in
possession."
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ARTICLE 16 - STATE-SPECIFIC PROVISIONS
Section 16.1 Principles of Construction. In the event of any
inconsistencies between the terms and conditions of this Article 16 and the
terms and conditions of this Security Instrument, the terms and conditions of
this Article 16 shall control and be binding.
Section 16.2 Future Advances. This Security Instrument is an
"Open-End Mortgage" as set forth in 42 PA.C.S.A. ss. 8143 and secures
obligations up to a maximum principal amount of indebtedness outstanding at any
time equal to Forty Eight Million and No/100 Dollars ($48,000,000.00), plus
accrued and unpaid interest, including future advances. It is understood and
agreed that this Security Instrument secures present and future advances made
for the benefit of Mortgagor and that the lien of such future advances shall
relate back to the date of this Security Instrument, and Mortgagor and Mortgagee
intend that this Security Instrument be an Open-End Mortgage as described in 42
PA.C.S.A. ss. 8143 and as such be entitled to all the benefits under 42
PA.C.S.A. ss. 8143. All notices to Mortgagee pursuant to 42 PA.C.S.A. ss. 8142
shall be given personally or by certified mail, return receipt requested, to
Mortgagee at its address first set forth above.
Section 16.3 Interest After Default. If any payment due
hereunder or under the Loan Agreement or the Note is not paid when due, either
at stated or accelerated maturity or pursuant to any of the terms hereof, then
and in such event, Mortgagor shall pay interest thereon from and after the date
on which such payment first becomes due at the interest rate provided for in the
Loan Agreement and such interest shall be due and payable, on demand, at such
rate until the entire amount due is paid to Mortgagee, whether or not any action
shall have been taken or proceeding commenced to recover the same or to
foreclose this Security Instrument. Nothing in this Section 16.3 or in any other
provision of this Security Instrument shall constitute an extension of the time
of payment of the Debt. After entry of a judgment on any of the Loan Documents
or a judgment in mortgage foreclosure hereunder, interest shall continue to
accrue under this Security Instrument at the rates set forth in the Loan
Agreement. This Security Instrument shall not, solely for purposes of
determining interest payable under the Note, merge with any judgment on any Loan
Document or a judgment in mortgage foreclosure under this Security Instrument.
Section 16.4 Additional Advances and Disbursements; Costs of
Enforcement. If any Event of Default exists, Mortgagee shall have the right, but
not the obligation, to cure such Event of Default in the name and on behalf of
Mortgagor. All sums advanced and expenses incurred at any time by Mortgagee
under this Section 16.4, or otherwise under this Security Instrument or any of
the other Loan Documents or applicable law, shall bear interest from the date
that such sum is advanced or expense incurred, to and including the date of
reimbursement, computed at the Default Rate (as defined in the Loan Agreement),
and all such sums, together with interest thereon, shall be secured by this
Security Instrument.
Section 16.5 Acceleration Remedy. Subject to the notice and
cure requirements of the Loan Agreement, upon Mortgagor's breach of any covenant
or agreement contained herein, including, but not limited to, the covenants to
pay when due any sums secured by this Security Instrument, Mortgagee, in its
sole judgment and discretion, may declare all of the sums secured by this
Security Instrument to be immediately due and payable without further demand and
may foreclose this Security Instrument by judicial proceedings and may invoke
any other remedies permitted by applicable law or provided herein. Mortgagee
shall be entitled to collect all costs and expenses incurred in pursuing such
remedies.
24
Section 16.6 Purchase Money Mortgage. If all or part of the
sums secured by this Security Instrument are lent to Mortgagor to acquire title
to the Property, this Security Instrument is hereby declared to be a
purchase-money mortgage.
Section 16.7 Release or Reconveyance. Upon payment in full of
the Debt and performance in full of Mortgagor's obligations under this Security
Instrument and the other Loan Documents, Mortgagee, at Mortgagor's expense,
shall fully release the liens created by this Security Instrument or reconvey
the Property to Mortgagor.
Section 16.8 CONFESSION OF JUDGMENT FOR POSSESSION. Mortgagor
hereby authorizes and empowers any attorney of any court of record in the
Commonwealth of Pennsylvania, as attorney for Mortgagor and all persons claiming
under or through Mortgagor, to sign an agreement for entering in any competent
court an amicable action in ejectment of possession of the Property and to
appear for and confess judgment against Mortgagor for recovery by Mortgagee of
possession of the Property in the event of any default hereunder or under the
Loan Agreement or the Note. This Security Instrument or a copy thereof verified
by affidavit shall be a sufficient warrant therefor, and thereupon a writ of
possession may issue immediately for possession of the Property, without any
prior writ or proceeding and without any stay of execution. Mortgagee may bring
an amicable action in ejectment and confess judgment therein before or after the
institution of proceedings to foreclose the lien of this Security Instrument or
to enforce the Note or the Loan Agreement, or after entry of judgment therein or
on the Note or the Loan Agreement, or after a Sheriff's sale of the Property in
which Mortgagee is the successful bidder. Mortgagor and Mortgagee agree that
this authorization to pursue such proceedings for obtaining possession and
confession of judgment is an essential part of the remedies for enforcement of
this Security Instrument and the Note and the Loan Agreement and that such
authorization shall survive any execution sale to Mortgagee.
[No Further Text on this Page; Signature Page Follows]
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IN WITNESS WHEREOF, this Open-End Mortgage and Security
Agreement has been executed by Mortgagor as of the day and year first above
written.
PR BEAVER VALLEY LIMITED PARTNERSHIP,
a Pennsylvania limited partnership
By: PR Beaver Valley LLC,
a Delaware limited liability company,
its sole general partner
By: PREIT Associates, L.P.,
a Delaware limited partnership,
its sole member
By: Pennsylvania Real Estate
Investment Trust,
a Pennsylvania business trust,
its general partner
By: /s/ Jeffrey A. Linn
-----------------------------------
Name: Jeffrey A. Linn
Title: Executive Vice President
A-1