Exhibit 99.1
OPEN END MORTGAGE, AND SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
WITH ASSIGNMENT OF LEASES AND RENTS
(THIS MORTGAGE TO SECURE PRESENT AND FUTURE LOANS
UNDER RHODE ISLAND GENERAL LAWS CHAPTER 25 OF TITLE 34)
Dated as of
January 11, 1999
granted by
KVH Industries, Inc., a Delaware Corporation
to
IDS Life Insurance Company
Prepared
by
and
after
recording,
return
to:
Michael D. Moriarty, Esq. Locke Reynolds Boyd & Weisell
1000 Capital Center South
201 North Illinois Street
Indianapolis, IN 46204
(317) 237-3800
Open End Mortgage, and Security Agreement
and Fixture Financing Statement
with Assignment of Leases and Rents
(THIS MORTGAGE TO SECURE PRESENT AND FUTURE LOANS
UNDER RHODE ISLAND GENERAL LAWS CHAPTER 25 OF TITLE 34)
TABLE OF CONTENTS
Section Heading Page
Parties and Recitals
Granting Clause
ARTICLE I GENERAL REPRESENTATIONS AND WARRANTIES 5
SECTION 1.1 REPRESENTATIONS AND WARRANTIES 5
SECTION 1.2 CONTINUING OBLIGATION 7
ARTICLE 2 COVENANTS AND AGREEMENTS 8
SECTION 2.1 PAYMENT OF INDEBTEDNESS; OBSE~VANCE 8
SECTION 2.2 MAINTENANCE; REPAIRS 8
SECTION 2.3 PAYMENT OF OPERATING COSTS, LIENS AND OTHER INDEBEDNESS 9
SECTION 2.4 PAYMENT OF IMPOSITIONS 9
SECTION 2.5 CONTEST OF LIENS AND IMPOSITIONS 9
SECTION 2 6 PROTECTION OF SECURITY 10
SECTION 2.7 ANNUAL STATEMENTS 10
SECTION 2.8 ADDITIONAL ASSURANCES 11
SECTION 2.9 DUE ON SALE OR MORTGAGING, ETC II
SECTION 2.10 TRANSFER PERMITTED 12
ARTICLE 3 INSURANCE AND ESCROWS 14
SECTION 3.1 INSURANCE 14
SECTION 3.2 ESCROWS 16
ARTICLE 4 UNIFORM COMMERCIAL CODE 18
SECTION 4.1 SECURITY AGREEMENT 18
SECTION 4.2 FIXTURE FILING 18
SECTION 4.3 REPRESENTATIONS AND AGREEMENTS 18
SECTION 4.4 MAINTENANCE OF PROPERTY 19
ARTICLE 5 APPLICATION OF INSURANCE AND AWARDS 20
SECTION 5.1 DAMAGE OR DESTRUCTION OF THE PREMISES 20
SECTION 5.2 CONDEMNATION 20
SECTION 5.3 DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS 21
*SECTION 5.4 MORTGAGEE TO MAKE INSURANCE PROCEEDS AVAILABLE 23
ARTICLE 6 LEASES AND RENTS 23
SECTION 6.1 MORTGAGOR TO COMPLY WITH LEASES 23
SECTION 6.2 MORTGAGEE'S RIGHT TO PERFORM UNDER LEASES 24
SECTION 6.3 ASSIGNMENT OF LEASES AND RENTS 24
SECTION 6.4 BANKRUPTCY 26
ARTICLE 7 RIGHTS OF MORTGAGEE 27
SECTION 7.1 RIGHT TO CURE EVENT OF DEFAULT 27
SECTION 7.2 NO CLAIM AGAINST MORTGAGEE 27
SECTION 7.3 INSPECTION 27
SECTION 7.4 WAIVERS; RELEASES; RESORT TO OTHER SECURITY, ETC 28
SECTION 7.5 RIGHTS CUMULATIVE 28
SECTION 7.6 SUBSEQUENT AGREEMENTS 28
SECTION 7.7 WAIVER OF APPRAISEMENT, HOMESTEAD, MARSHALING 28
SECTION 7.8 BUSINESS LOAN REPRESENTATION 29
SECTION 7.9 DISHONORED CHECKS 29
ARTICLE 8 EVENTS OF DEFAULT AND REMEDIES 29
SECTION 8.1 EVENTS OF DEFAULT 29
SECTION 8.2 MORTGAGEE'S RIGHT TO ACCELERATE 30
SECTION 8.3 REMEDIES OF MORTGAGEE AND RIGHT TO FORECLOSE 30
SECTION 8.4 RECEIVER 31
SECTION 8.5 RIGHTS UNDER UNIFORM COMMERCIAL CODE 31
SECTION 8.6 RIGHT TO DISCONTINUE PROCEEDINGS 31
SECTION 8.7 WAIVERS 32
ARTICLE 9 HAZARDOUS MATERIALS 32
SECTION 9.I DEFINITIONS 32
SECTION 9:2 REPRESENTATIONS BY MORTGAGOR 32
SECTION 9.3 COVENANTS OF MORTGAGOR 33
SECTION 9.4 EVENTS OF DEFAULT AND REMEDIES 34
SECTION 9.5 INDEMNIFICATION 34
SECTION 9.6 LOSS OF VALUE 35
ARTICLE 10 MISCELLANEOUS 35
SECTION 10.1 RELEASE OF MORTGAGE 35
SECTION 10.2 CHOICE OF LAW 35
SECTION 10.3 SUCCESSORS AND ASSIGNS 35
SECTION 10.4 PARTIAL INVALIDITY 35
SECTION 10.5 CAPTIONS AND HEADINGS 35
SECTION 10.6 NOTICES 36
SECTION 10.7 BUILDING USE 36
SE~ON 10.8 MANAGEMENT OF THE PREMISES 36
SECTION 10.9 AMENDMENT/MODIFICATION 36
SECTION 10.10 REPRESENTATIONS OF MORTGAGOR 36
SECTION 10.11 MORTGAGEE'S EXPENSE 37
SECTION 10.12 MORTGAGEE'S RIGHT TO COUNSEL 37
SECTION 10.13 OTHER REPRESENTATIONS AND WARRANTIES 38
SECTION 10.14 LIMITATION OF INTEREST 38
SECTION 10.15 TIME OF THE ESSENCE 38
SECTION 10.16 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS 39
SECTION 10.17 WAIVER OF JURY TRIAL 39
SECTION 10.18 MINIMUM REQUIREMENT 39
SECTION 10.19 FUTURE ADVANCE MORTGAGE 39
EXHIBIT 42
LEGAL DESCRIPTION 42
EXHIBIT 43
PERMITTED ENCUMBRANCES 43
OPEN END MORTGAGE, AND SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
WITH ASSIGNMENT OF LEASES AND RENTS
(THIS MORTGAGE TO SECURE PRESENT AND FUTURE LOANS
UNDER RHODE ISLAND GENERAL LAWS CHAPTER 25 OF TITLE 34)
THIS Indenture ("Mortgage") is made and delivered as of the 11th day of
January, 1999 by KVH Industries, Inc., a Delaware corporation ("Mortgagor"),
having a mailing address of 50 Enterprise Center, Middletown, Rhode Island
02842, Attention: Mr. Richard Forsythe, for the benefit of IDS Life Insurance
Company, a Minnesota corporation ("Mortgagee"), having a mailing address of do
American Express Financial Corporation, 733 Marquette Avenue, Minneapolis,
Minnesota 55402, Attention: Real Estate Loan Management, Unit #401.
WITNESSETH, that Mortgagor, in consideration of the Indebtedness
hereinafter defined and the sums advanced to Mortgagor in hand paid by
Mortgagee, receipt whereof is hereby acknowledged, does hereby MORTGAGE, WARRANT
WITH WARRANTY COVENANTS AND MORTGAGE COVENANTS, GRANT, BARGAIN, SELL AND CONVEY
AND THIS MORTGAGE IS MADE UPON THE STATUTORY CONDITION AND WITH THE STATUTORY
POWER OF SALE unto Mortgagee, its successors and assigns, forever, AND GRANTS TO
MORTGAGEE A SECURITY INTEREST IN the following properties to secure payment of
the Note and all amounts owing under the Note and any documents securing the
Note (all of the following being hereafter collectively referred to as the
"Premises"):
GRANTING CLAUSE A
REAL PROPERTY
All the tracts or parcels of real property lying and being in
Middletown, County of Newport, State of Rhode Island, all as more fully
described in Exhibit "A" attached hereto and made a part hereof, together with
all the estates and rights in and to the real property, water, mineral or oil
rights and in and to lands lying in streets, alleys and roads or gores of land
adjoining the real property and all buildings, structures, improvements and
annexations, access rights, easements, rights of way or use, servitudes,
licenses, tenements, hereditaments and appurtenances now or hereafter belonging
or pertaining to the real property and all proceeds and products derived
therefrom whether now owned or hereafter acquired.
GRANTING CLAUSE B
IMPROVEMENTS, FIXTURES, EOUIPMENT
PERSONAL PROPERTY
All buildings, equipment, fixtures, improvements, building supplies and
materials and personal property, now or hereafter attached to and necessary for
the management or maintenance of the improvements on the Premises including, but
without being limited to, all machinery, fittings, fixtures, apparatus,
equipment or articles used to supply heating, gas, electricity, air
conditioning, water, light, waste disposal, power, refrigeration, ventilation,
and fire and sprinkler protection, as well as all elevators, escalators,
overhead cranes, hoists and assists, and the like, and all furnishings,
draperies, maintenance and repair equipment, window and structural cleaning rigs
and equipment, floor coverings, appliances, screens, storm windows, blinds,
awnings, shrubbery and plants (including Mortgagor's interest in any lease of
the foregoing) now or hereafter necessary for the management or maintenance of
the Premises, it being understood that the enumeration of specific articles of
property shall in ~o way be held to exclude like items of property not
specifically enumerated, as well as renewals, replacements, proceeds, additions,
accessories, increases, parts, fittings, insurance payments, awards and
substitutes thereof, together with all interest of Mortgagor in any such items
hereafter acquired, and all personal property which by the terms of any lease
for occupancy of the Premises shall become the property of Mortgagor at the
termination of such lease, all of which personal property mentioned herein shall
be deemed fixtures and accessory to the freehold and a part of the realty and
not severable in whole or in part without material injury to the Premises, but
excluding therefrom the removable personal property owned by any tenants and
Mortgagor, in the Premises and also specifically excluding Mortgagor's
inventory, trademarks, tradenames (other than the name "50 Enterprise Center"),
accounts receivable and other items of personal property and Mortgagor's
machinery or fixtures relating to the conduct of Mortgagor's business.
GRANTING CLAUSE C
RENTS, LEASES AND PROFITS
All rents, issues, income, revenue, receipts, fees, and profits now due
or which may hereafter become due under or by virtue of and together with all
right, title and interest of Mortgagor in and to any lease, license, sublease,
contract or other kind of occupancy agreement, whether written or verbal, for
the use or occupancy of the Premises or any part thereof together with all
security therefor and all monies payable thereunder, including, without
limitation, tenant security deposits, and all books and records which contain
information pertaining to payments made thereunder and security therefor,
subject, however, to the conditional permission herein given to Mortgagor to
collect the rents, income and other normal income benefits arising under any
agreements. Mortgagee shall have the right, not as a limitation or condition
hcreof but as a personal covenant available only to Mortgagee, at any time and
from time to time, to notify any lessee of the rights of Mortgagee hereunder.
Together with all right, title and interest of Mortgagor in and to any
and all contracts for sale and purchase of all or any part of the property
described in Granting Clauses A, B and C hereof, and any down payments, earnest
money deposits or other sums paid or deposited in connection therewith.
GRANTING CLAUSE D
JUDGMENTS, CONDEMNATION AWARDS,
INSURANCE PROCEEDS,
AND OTHER RIGHTS
All awards, compensation or settlement proceeds made by any
governmental or other lawful authorities for the threatened or actual taking or
damaging by eminent domain of the whole or any part of the Premises, including
any awards for a temporary taking, change of grade of streets or taking of
access, together with all insurance proceeds resulting from a casualty to any
portion of the Premises; all rights and interests of Mortgagor against others,
including adjoining property owners, arising out of damage to the property
including damage due to environmental injury or release of hazardous substances.
GRANTING CLAUSE E
LICENSES, PERMITS, EOUIPMENT LEASES
AND SERVICE AGREEMENTS
All right, title and interest of Mortgagor in and to any licenses,
permits, regulatory approvals, government authorizations and equipment or
chattel leases, service contracts or agreements and all proceeds therefrom,
arising from, issued in connection with or in any way related to the management,
maintenance or security of the Premises, together with all replacements,
additions, substitutions and renewals thereof, which may be assigned pursuant to
agreement or law.
GRANTING CLAUSE F
ACCOUNTS, GENERAL INTANGIBLES AND TRADENAMES
All escrow accounts, if any, established pursuant to Section 3.2 hereof
as security for the payment of Impositions (as defined in Section 2.4 hereof)
and insurance premiums, and the name "50 Enterprise Center" or any derivation
thereof), now owned or hereafter acquired by the Mortgagor, and all proceeds
therefrom, whether cash or non-cash, all as defined in Article 9 of the Uniform
Commercial Code of the State of Rhode Island, as amended.
GRANTING CLAUSE G
PROCEEDS
All sale proceeds, refinancing proceeds or other proceeds, including
deposits and down payments derived from or relating to the property described in
Granting Clauses A through F above.
AND MORTGAGOR for Mortgagor, Mortgagor's successors and assigns,
covenants with Mortgagee, its successors and assigns, that Mortgagor is lawfully
seized of the Premises and has good right to sell and convey the same; that the
Premises are free from all encumbrances except as may be set forth in Exhibit
"B" attached hereto and made a part hereof (hereinafter referred to as the
"Permitted Encumbrances"); that Mortgagee, its successors and assigns, shall
quietly enjoy and possess the Premises; and that Mortgagor, its successors and
assigns, will WARRANT AND DEFEND the title to the same against all lawful claims
not specifically excepted in this Mortgage.
TO HAVE AND TO HOLD THE SAME, together with the possession and right of
possession of the Premises, unto Mortgagee, its successors and assigns, forever.
PROVIDED NEVERTHELESS, that if Mortgagor, Mortgagor's heirs,
administrators, personal representatives, successors or assigns, shall pay to
Mortgagee, its successors or assigns, the sum of Three Million and 00/100
Dollars and 00/100 Dollars ($3,000,000.00), according to the terms of that
certain Promissory Note in said principal amount (hereinafter referred to as the
"Note") of a contemporaneous date herewith executed by Mortgagor and payable to
Mortgagee, the terms and conditions of which are incorporated herein by
reference (including the maturity date of such Note which is (February 1, 2009)
and made a part hereof, together with any extensions or renewals thereof, due
and payable with interest thereon as provided therein, the balance of said
principal sum together with interest thereon being due and payable, and shall
repay to Mortgagee, its successors or assigns, at the times demanded and with
interest thereon at the same rate specified in the Note, all sums advanced
hereunder in protecting the lien of this Mortgage, in payment of taxes on the
Premises, in payment of insurance premiums covering improvements thereon, in
payment of principal and interest on prior liens, in payment of expenses and
reasonable attorneys' fees herein provided for and all sums advanced for any
other purpose authorized herein (the Note and all such sums, together with
interest thereon, and premium, if any, being hereinafter collectively referred
to as the "Indebtedness"), and shall keep and perform all of the covenants and
agreements herein contained, then this Mortgage (and other recorded loan
documents) shall become null and void, and shall be released and discharged at
Mortgagor's expense.
AND IT IS FURTHER COVENANTED AND AGREED AS FOLLOWS:
ARTICLE 1
GENERAL REPRESENTATIONS AND WARRANTIES
SECTION 1.1 REPRESENTATIONS AND WARRANTIES. Mortgagor represents and
warrants to Mortgagee, its successors and assigns,
that, as of the date hereof:
(a) Mortgagor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware has been duly
qualified to do business in the State of Rhode Island, and has all
requisite power and authority to own and operate the Premises, to enter
into the Note, this Mortgage, that certain Assignment of Leases,
Assignment of Rents and Hazardous Materials Indemnity Agreement of
contemporaneous date herewith ("Assignment of Leases", "Assignment of
Rents", and "Hazardous Materials Indemnity Agreement", respectively and
any other document securing the Note, to execute all other documents
relating to the loan evidenced by the Note (the "Loan") and make all
representations and covenants contained in such documentation. The
Note, this Mortgage, the Assignment of Leases, the Assignment of Rents,
the Hazardous Materials Indemnity Agreement, all UCC Financing
Statements and all other documents, instruments and agreements relating
to any of them or evidencing or securing the Loan are herein
individually and collectively referred to as the "Loan Documents."
Mortgagor has the power and authority to borrow the monies and
otherwise assume and perform as contemplated hereunder and under all
documents relating to or executed in connection with the Indebtedness,
and is in compliance with all laws, regulations, ordinances and orders
of public authorities applicable to it.
(b) Neither the borrowing of the monies nor the execution and delivery
of the Note, this Mortgage, the Assignment of Leases, the Assignment of
Rents, the Hazardous Materials Indemnity Agreement or any other Loan
Document nor the performance or the provisions of the agreements
therein contained on the part of Mortgagor will contravene, violate or
constitute a default under the Articles of Incorporation or By-Laws of
Mortgagor, or any agreement with the shareholders of Mortgagor, or any
creditors of Mortgagor, or any law, ordinance, governmental regulation,
agreement or indenture to which Mortgagor is a party or by which
Mortgagor or Mortgagor's properties are bound.
(c) There are no (i) bankruptcy proceedings involving Mortgagor and
none is contemplated; (ii) dissolution proceedings involving Mortgagor
and none is contemplated; (iii) unsatisfied judgments of record against
Mortgagor; or (iv) tax liens filed against Mortgagor.
(d) The Note, this Mortgage, the Assignment of Leases, the Assignment
of Rents and the other Loan Documents have been duly executed and
delivered by Mortgagor and constitute the legal, valid and binding
obligations of Mortgagor, enforceable in accordance with their terms.
(e) There are no judgments, suits, actions or proceedings at law or in
equity or by or before any governmental instrumentality or agency now
pending against or, to the best of Mortgagor's knowledge, threatened
against Mortgagor or its properties, or both, nor has any judgment,
decree or order been issued against Mortgagor or its properties, or
both, which would have a material adverse effect on the Premises or the
financial condition of Mortgagor or Mortgagor's properties.
(f) No consent or approval of any regulatory authority having
jurisdiction over Mortgagor is necessary or required by law as a
prerequisite to the execution, delivery and performance of the terms of
the Note, this Mortgage, the Assignment of Leases, the Assignment of
Rents, the Hazardous Materials Indemnity Agreement, or any other Loan
Document.
(g) Mortgagor is not, as of the date hereof, in default in the payment
or performance of any of Mortgagor's material obligations in connection
with borrowed money or any other major obligation.
(h) The Premises is free from any mechanics' or materialmen's liens or
claims. There has been no labor or materials furnished to the Premises
that has not been paid for in full.
(i) Mortgagor has no notice, information or knowledge of any change
contemplated in any applicable law, ordinance, regulation, or
restriction, or any judicial, administrative, governmental or
quasi-governmental action, or any action by adjacent land owners, or
natural or artificial condition existing upon the Premises which would
limit, restrict, or prevent the contemplated or intended use and
purpose of the Premises.
(j) There is no pending condemnation or similar proceeding affecting
the Premises, or any portion thereof, nor to the best knowledge of
Mortgagor, is any such action being presently contemplated.
(k) No part of the Premises is being used for agricultural purposes or
being used for a personal residence by Mortgagor or any shareholder of
Mortgagor.
(l) The Premises is undamaged by fire, windstorm, or other casualty.
(m) Except as otherwise disclosed in writing to Mortgagee, the
Premises complies with all zoning ordinances, energy and environmental
codes, building and use restrictions and codes, and any requirements
with respect to licenses, permits and agreements necessary for the
lawful use and operation of the Premises.
(n) The heating, electrical, sanitary sewer plumbing, storm sewer
plumbing, potable water plumbing and other building equipment, fixtures
and fittings in the existing improvements on the Premises are in good
condition and working order, are adequate in quantity and quality for
normal and usual use, and are fit for the purposes intended and the use
contemplated.
(o) The Premises is covered by a tax parcel(s) which pertain to the
Premises only and not to any property which is not subject to the
Mortgage.
(p) The Premises is improved with a three (3)-story office building
containing approximately seventy five thousand (75,000) net rentable
square feet and related on-site parking for approximately two hundred
ninety five (295) vehicles which is located at 50 Enterprise Center,
Middletown, Rhode Island and commonly known as 50 Enterprise Center and
has frontage on, and direct access for ingress and egress to Enterprise
Center.
(q) Mortgagor has good and clear record and marketable title in fee to
such of the Premises as is real property, subject to no liens,
encumbrances or restrictions other than Permitted Encumbrances.
SECTION 1.2 CONTINUING OBLIGATION. Mortgagor further warrants and
represents that all statements made hereunder are true and correct and that all
financial statements, data and other information provided to Mortgagee by
Mortgagor relating to or provided in connection with this transaction has not
and does not contain any statement which, at the time and in the light of the
circumstances under which it was made, would be false or misleading with respect
to any material fact, or would omit any material fact necessary in order to make
any such statement contained therein not false or misleading in any material
respect, and since such statement, data or information was provided there has
been no material change thereto or to the condition of Mortgagor. Should
Mortgagor subsequently obtain knowledge that any such representation was or is
untrue, Mortgagor shall immediately notify Mortgagee as to the untrue nature of
said representation and agrees, to the extent possible, to take action as may be
necessary to cause such representation to become true.
ARTICLE 2
COVENANTS AND AGREEMENTS
Mortgagor covenants and agrees for the benefit of Mortgagee, its
successors and assigns, as follows:
SECTION 2.1 PAYMENT OF INDEBTEDNESS; OBSERVANCE OF COVENANTS. Mortgagor
will duly and punctually pay each and every installment of principal, premium,
if any, and interest on the Note, all deposits required herein, and all other
Indebtedness secured hereby, as and when the same shall become due, and shall
duly and punctually perform and observe all of the covenants, agreements and
provisions contained herein, in the Note and any other instrument given as
security for the payment of the Note as such instrument may be amended,
modified, restated and in effect from time to time.
SECTION 2.2 MAINTENANCE; REPAIRS. Mortgagor agrees that it will keep and
maintain the Premises in good, first class condition, repair and operating
condition free from any waste or misuse, and will comply with all requirements
of law, municipal ordinances and regulations, restrictions and covenants
affecting the Premises and their use, and will promptly repair or restore any
buildings, improvements or structures now or hereafter on the Premises, which
may become damaged or destroyed, to their condition prior to any such damage or
destruction. Mortgagor further agrees that without the prior written consent of
Mortgagee (which such consent shall not be unreasonably withheld or delayed), it
will not remove or expand any improvements on the Premises, erect any new
improvements or make any material alterations in any improvements which will
alter the basic structure, adversely affect the market value or change the
existing architectural character of the Premises, and agrees that any other
buildings, structures and improvements now or hereafter constructed on or in the
Premises or repairs made to the Premises shall be completed in a good and
workmanlike manner, in accordance with all applicable governmental laws,
regulations, requirements and permits and in accordance with plans and
specifications previously delivered to and approved in advance in writing by
Mortgagee. Mortgagor agrees not to acquiesce in any rezoning classification,
modification or restriction affecting the Premises without the written consent
of Mortgagee. Mortgagor agrees that it will not abandon or vacate the Premises.
Mortgagor agrees that it will provide, improve, grade, surface and thereafter
maintain, clean, repair and adequately light all parking areas within the
Premises, together with any sidewalks, aisles, streets, driveways and curb cuts
and sufficient paved areas for ingress and right-of-way to and from the adjacent
public thoroughfare necessary or desirable for the use thereof and maintain all
landscaping thereon. Mortgagor shall obtain and at all times keep in full force
and effect such governmental approvals as may be necessary to comply with all
governmental requirements relating to Mortgagor and the Premises.
SECTION 2.3 PAYMENT OF OPERATING COSTS; LIENS AND OTHER INDEBTEDNESS.
Mortgagor agrees that it will pay all operating costs and expenses of the
Premises; keep the Premises free from mechanics' liens, materialmen's liens,
judgment liens and other liens, executions, attachments or levies (hereinafter
collectively referred to as "Liens"); and will pay when due all permitted
indebtedness which may be secured by a mortgage, lien or charge on the Premises,
whether prior to, subordinate to or of equal priority with the lien hereof, and
upon request will exhibit to Mortgagee satisfactory evidence of such payment and
discharge.
SECTION 2.4 PAYMENT OF IMPOSITIONS. Mortgagor will pay when due and
before any penalty or interest attaches because of delinquency in payment, all
taxes, installments of assessments, water charges, sewer charges, and other
fees, taxes, charges and assessments of every kind and nature whatsoever
assessed or charged against or constituting a lien on the Premises or any
interest therein or the Indebtedness (hereinafter collectively referred to as
the "Impositions"); and will upon demand furnish to Mortgagee proof of the
payment of any such Impositions. In the event of a court decree or an enactment
after the date hereof by any legislative authority of any law imposing upon
mortgagees the payment of the whole or any part of the Impositions herein
required to be paid by Mortgagor, or changing in any way the laws relating to
the taxation of mortgages or debts secured by mortgages or a mortgagee's
interest in mortgaged premises, so as to impose such Imposition on Mortgagee or
on the interest of Mortgagee in the Premises, then, in any such event, Mortgagor
shall bear and pay the full amount of such Imposition, provided that if for any
reason payment by Mortgagor of any such Imposition would be unlawful, or if the
payment thereof would constitute usury or render the Indebtedness wholly or
partially usurious, Mortgagee, at its option, may declare the whole sum secured
by this Mortgage with interest thereon to be immediately due and payable,
without prepayment fee, or Mortgagee, at its option, may pay that amount or
portion of such Imposition as renders the Indebtedness unlawful or usurious, in
which event Mortgagor shall concurrently therewith pay the remaining lawful and
non-usurious portion or balance of said Imposition.
SECTION 2.5 CONTEST OF LIENS AND IMPOSITIONS. Mortgagor shall not be
required to pay, discharge or remove any Liens or Impositions so long as
Mortgagor shall in good faith contest the same or the validity thereof, by
appropriate legal proceedings which shall operate to prevent the collection of
the Liens or Impositions so contested and the sale of the Premises, or any part
thereof to satisfy the same, provided that Mortgagor shall, prior to any such
contest, have given such security as may be demanded by Mortgagee to ensure such
payments and prevent any sale or forfeiture of the Premises by reason of such
nonpayment. Any such contest shall be prosecuted in accordance with the laws and
rules pertaining to such contests and in all events with due diligence and
Mortgagor shall promptly after final determination thereof pay the amount of any
such Liens or Impositions so determined, together with all interest and
penalties, which may be payable in connection therewith. Notwithstanding the
provisions of this Section, Mortgagor shall (and if Mortgagor shall fail so to
do, Mortgagee may but shall not be required to) pay any such Liens or
Impositions notwithstanding such contest if, in the reasonable opinion of
Mortgagee, the Premises shall be in jeopardy or in danger of being forfeited or
foreclosed.
SECTION 2.6 PROTECTION OF SECURITY Mortgagor agrees to promptly notify
Mortgagee of and appear in and defend any suit, action or proceeding that
affects the value of the Premises, the Indebtedness or the rights or interest of
Mortgagee hereunder. Mortgagee may elect to appear in or defend any such action
or proceeding and Mortgagor agrees to indemnify and reimburse Mortgagee from any
and all loss, damage, expense or cost arising out of or incurred in connection
with any such suit, action or proceeding, including costs of evidence of title
and reasonable attorneys' fees.
SECTION 2.7 ANNUAL STATEMENTS. Within one hundred twenty (120) days
after the end of each of its fiscal years during the term of this Mortgage,
Mortgagor, and any successor to the interest of Mortgagor in the Premises, will
furnish to Mortgagee annual financial statements of Mortgagor or such successor
and of any guarantor of the Loan and annual certified operating statements of
the Premises, which shall include all relevant financial information showing at
a minimum, but shall not be limited to, gross income (itemized as to source),
operating expenses (itemized), depreciation charges, and net income before and
after federal income taxes and such additional information as Mortgagee may from
time to time reasonably request. The financial statements and the operating
statements shall be certified by the Mortgagor. Both the financial and operating
statements shall be prepared at the expense of Mortgagor. All of the above
required statements shall be prepared in reasonable detail, conform to generally
accepted accounting principles, and be reasonably satisfactory in form and
content to Mortgagee. Mortgagor or any successor Mortgagor, if the Premises are
conveyed pursuant to a transfer permitted by Mortgagee, shall provide (a) as to
a corporate entity, such entity shall submit annual audited financial statements
of the corporation and any supplemental schedules provided corporate
stockholders, (b) as to an individual(s), such individual(s) shall submit annual
statements certified by each individual or by an independent certified public
accountant in good standing and shall include a balance sheet and a profit and
loss statement, and (c) as to a partnership, trust entity or limited liability
company, the partnership, trust or limited liability company shall submit annual
reports certified by an authorized partner, trustee or member. Mortgagor
covenants that it shall keep true and accurate records of the operation of the
Premises. In the event Mortgagor fails after notice to furnish any of the
statements as required herein or upon an Event of Default, as herein defined,
Mortgagee may cause an audit to be made of the respective books and records at
the sole cost and expense of Mortgagor. Mortgagee also shall have the right to
examine at their place of safekeeping all books, accounts and records relating
to the operation of the Premises, to make copies or abstracts therefrom and to
discuss the affairs, finances or accounts with the officers of Mortgagor and
Mortgagor's accountants. Said examination shall be at Mortgagee's expense unless
an Event of Default has occurred or Mortgagor's statements are found to contain
significant discrepancies, in which case the examination shall be at Mortgagor's
expense.
Mortgagor shall also furnish a rent roll in form reasonably acceptable
to Mortgagee of all tenants having leases on the Premises on an annual basis
along with the operating statements provided for above or at such other times as
requested by Mortgagee from time to time. Notwithstanding the foregoing
provisions of this Section 2.7, provided Mortgagor is the obligor under the Note
and the sole occupant of the Premises and there is no Event of Default
hereunder, Mortgagee shall not require submission of annual operating statements
of the Premises or an annual rent roll.
SECTION 2.8 ADDITIONAL ASSURANCES. Mortgagor agrees upon request by
Mortgagee to execute and deliver further instruments, financing statements
and/or continuation statements under the Uniform Commercial Code and assurances
and will do such further acts as may be reasonably necessary or proper to carry
Out more effectively the purposes of this Mortgage and without limiting the
foregoing, to make subject to the lien hereof any property agreed to be
subjected hereto or covered by the granting clause hereof, or intended so to be.
Mortgagor agrees to pay any recording fees, filing fees, stamp taxes or other
charges arising Out of or incident to the filing, the issuance and delivery of
the Note, the filing or recording of the Mortgage or the delivery filing and
recording of such further assurances and instruments as may be required pursuant
to the terms of this Section.
SECTION 2.9 DUE ON SALE OR MORTGAGING, ETC. In the event that without
the written consent of Mortgagee being first obtained: (a) Mortgagor, or any
successor, sells, conveys, transfers, further mortgages, changes the form of
ownership, or encumbers or disposes of the Premises, or any part thereof, or any
interest therein, or agrees so to do except as otherwise permitted herein; or
(b) any shares of corporate stock or ownership interest in Mortgagor, or any
successor, are sold, conveyed, transferred, pledged or encumbered or there is an
agreement so to do; (c) any partnership, trust, corporate or member ownership
interest in Mortgagor is sold, transferred, conveyed, pledged or encumbered or
there is an agreement to do so; or (d) any partnership, trust, corporate or
member ownership interest in any general partner or member of Mortgagor is sold,
conveyed, transferred, pledged or encumbered or there is an agreement so to do;
whether any such event described in (a), (b), (c), or (d) above is voluntary,
involuntary or by operation of law, then at Mortgagee's sole option, Mortgagee
may declare the Indebtedness immediately due and payable in full and call for
payment of the same at once, together with the prepayment fee then in effect
under the terms of the Note. In the event that Mortgagor or any permitted
subsequent owner of the Premises is a partnership or limited partnership, trust,
a privately held corporation or limited liability company, a transfer of a
general partnership, beneficial interest, stock interest or interest of a
member, as applicable, shall constitute a transfer or conveyance for purposes of
this Section 2.9. The death, incapacity or dissolution of a general partner,
beneficiary, stockholder or member of Mortgagor or of any guarantor of the Loan,
shall constitute a transfer or conveyance of such interest. In the event of such
death, incapacity or dissolution, Mortgagor shall deliver notice thereof to
Mortgagee within thirty (30) days and Mortgagor shall within ninety (90) days
provide a replacement general partner, beneficiary, stockholder, member or
guarantor for acceptance by Mortgagee. In the event of the death, dissolution or
incapacity of any guarantor of the Loan, Mortgagor shall within thirty (30) days
thereof provide notice to Mortgagee and, in the event of dissolution or
incapacity, provide to Mortgagee a substitute guarantor of the Loan acceptable
to Mortgagee, within ninety (90) days of such dissolution or incapacity, and in
the event of death, provide to Mortgagee a substitute guarantor of the Loan
acceptable to Mortgagee within one (1) year of the death of such guarantor or
prior to any distribution of assets to any devisee, heir or other beneficiary,
whichever is sooner. If such replacement is acceptable to Mortgagee, such
transfer shall be permitted without a transfer fee or change in the Loan terms.
In the event Mortgagor shall request the consent of Mortgagee in accordance with
this Section 2.9 Mortgagor shall deliver a written request to Mortgagee together
with (i) a review fee of Five Hundred and No/100 Dollars ($500.00) and (ii)
complete information regarding such conveyance or encumbrance (including
complete information concerning the person or entity to acquire the interest
conveyed). Mortgagee shall be allowed thirty (30) days after receipt of all
requested information for evaluation of such request. In the event that such
request is not approved within such thirty (30) day period, it shall be deemed
not approved. If such a conveyance or encumbrance is approved, Mortgagor shall
pay to Mortgagee a processing fee in the amount of Three Thousand and No/100
Dollars ($3,000.00) to compensate Mortgagee for processing the request. Approval
may be conditioned upon payment of a one percent (1 %) transfer fee and such
modification of the Loan terms, interest rate and maturity date as determined by
Mortgagee in its sole discretion. Consent as to any one transaction shall not be
deemed to be a waiver of the right to require consent to future or successive
transactions. Notwithstanding the foregoing provisions of this Section 2.9,
Mortgagee hereby consents to the transfer of shares of Mortgagor while shares of
Mortgagor are registered under the Securities Exchange Act of 1934 or otherwise
publicly traded.
SECTION 2.10 TRANSFER PERMITTED. Notwithstanding the above
restrictions, and provided no Event of Default has occurred and remains uncured,
Mortgagee will approve one and only one transfer of the Premises at any time and
will not require modification of the interest rate or maturity date stated in
the Note, provided:
(a) The transfer shall be to a reputable and competent transferee who
Mortgagee determines, in its sole discretion,
(i) has experience in the business of owning commercial real estate of
similar type, size and quality to the Premises and has a favorable
reputation, with respect to such business; and
(ii) has experience or has retained management with experience in the
management of similar properties; and
(iii) has the necessary financial strength and will assume by written
instrument reasonably acceptable to Mortgagee all of Mortgagor's
obligations under the Loan Documents including, without limitation, the
Hazardous Materials Indemnity Agreement;
(b) For the twelve (12) month period immediately preceding the date of
the proposed transfer, the annualized net operating income prior to the payment
of debt service is at least one hundred fifteen percent (115%) of the annual
debt service on the Note and on all subordinate financing secured by the
Premises, or any part thereof;
(c) The proposed purchaser must assume and agree to perform all
obligations under the Note, the Mortgage, the Assignment of Leases, the
Assignment of Rents and all other Loan Documents pursuant to an assumption
agreement reasonably acceptable to Mortgagee. Mortgagor and all existing
guarantors shall remain liable for payment of the Note and performance of the
other terms and conditions of the Note, this Mortgage, the Assignment of Leases,
the Assignment of Rents and any other Loan Documents, including any separate
guarantees or indemnity agreements made in favor of Mortgagee;
(d) In addition to the modification and review processing, Mortgagee
shall receive an additional transfer fee equal to one percent (1 %) of the
outstanding principal balance of the Note. If a request for the one-time
transfer is made during the first (1st) Loan Year and such transfer is approved
by Mortgagee, the transfer fee shall be two percent (2%) of the outstanding
principal balance of the Note, and if the request is approved the Five Hundred
Dollar ($500.00) review fee will be credited to the processing fee;
(e) The purchaser must acknowledge that future transfers and
encumbrances will be subject to Mortgagee's approval, which may, at Mortgagee's
sole discretion, be withheld or be conditioned upon payment of a fee and/or
modification of the terms of the Note and/or other Loan Documents;
(f) Notice of such transfer together with such documentation regarding
the transfer and the assuming person or entity as Mortgagee shall request shall
be given to Mortgagee at least thirty (30) days prior to such transfer;
(g) Transfer of the Premises may only be as a whole and not in part;
(h) Mortgagor shall pay all costs and expenses in connection with such
transfer including Mortgagee's attorneys' fees, in reviewing and processing such
consent to assumption and/or transfer and the fees of any broker;
(i) Mortgagor shall execute, deliver and record (when necessary) such
amendments, supplements, corrections and replacements in regard to the Loan
Documents and shall deliver endorsements to the Mortgagee's title insurance
policy as Mortgagee may require including an endorsement to the title policy
insuring the first lien position of the Mortgage, such endorsement to insure
that transferee is the owner of the Premises, subject to no liens or
encumbrances other than those shown in the title policy and current taxes not
yet due and payable;
(j) Mortgagee shall receive an appraisal of the Premises (exclusive of
chattels), satisfactory to it, which shows sufficient value so that the total of
all loans secured by the Premises does not exceed seventy-five percent (75%) of
such appraised value. If the appraisal shows that the total of all liens against
the Premises exceeds seventy-five percent (75%) of the value of the Premises,
Mortgagee may require, at Mortgagee's option, payment on the Note or payment of
other liens on the Premises so that such total will not exceed seventy-five
percent (75%) of value; and
(k) Mortgagor shall recognize that the total debt to be secured by the
Premises may not exceed the maximum permitted by Mortgagee.
Notwithstanding the foregoing provisions of this Section 2.10,
Mortgagee shall not apply the provisions of Section 2. 10(a)(i) and (ii) and
Section 2.10(b) if the approval for a request for transfer is made under this
Section 2.10 50 long as Mortgagor is the sole tenant of the Premises and remains
the sole tenant of the Premises after such transfer.
For the purposes of a permitted transfer, the term "net operating
income" for any period shall mean the aggregate rent, receipts and other
revenues which have accrued to the benefit of/received by the owner of the
Premises during such period from bona fide arms-length tenants in actual
possession of space in the Premises (based upon the then current certified rent
roll), less the sum of all operating expenses, maintenance costs, insurance
premiums, real estate taxes and assessments, and other costs, expenses and
expenditures (including required capital expenditures) attributable to ownership
of the Premises which is paid or accrued during such period, calculated in
accordance with generally accepted accounting principles and management
practices, but not including payments of principal or interest on the
Indebtedness or on any secondary financing on the Premises, depreciation or
other noncash charges and income taxes accrued during such period. Mortgagor
shall have the right to require delivery of evidence it reasonably deems
necessary to establish net/operating income from the Premises.
ARTICLE 3
INSURANCE AND ESCROWS
SECTION 3.1 INSURANCE. During the term of this Mortgage, Mortgagor
shall obtain and keep in full force and effect at its sole cost and expense the
following insurance:
(a) Insurance against loss by fire, lightning and risk customarily
covered by standard extended coverage endorsement, including the cost of debris
removal, together with a vandalism and malicious mischief endorsement, sprinkler
leakage endorsement, such perils endorsements as determined by Mortgagee, all in
the amount of not less than full replacement cost without deduction for
depreciation of the improvements, (as shown in the appraisal submitted to and
approved by Mortgagee), and an agreed-amount endorsement, a replacement cost
endorsement and a waiver of subrogation endorsement;
(b) Broad Form Boiler and Machinery Insurance on all equipment and
pressure fired vessels or apparatus located on the Premises, and providing for
full repair and replacement cost coverage;
(c) Flood Insurance in the maximum amount available at any time during
the term of this Mortgage that the Premises are designated as lying within a
flood plain as defined by the Federal Insurance Administration;
(d) Loss of Rents and/or Business Interruption Insurance covering risk
of loss due to the occurrence of hazards insured against under the policies
required in Subsections (a), (b) and (c) hereof in an amount equal to: (i)
rental for a twelve (12) month period, plus (ii) real estate taxes, special
assessments, insurance premiums and other expenses required to be paid by the
tenants under each lease of the Premises for such twelve (12) month period.
(e) Comprehensive General Public Liability Insurance covering the legal
liability of Mortgagor against claims for bodily injury, death or property
damage occurring on, in or about the Premises in such minimal amounts and with
such minimal limits as Mortgagee may reasonably require;
(f) Builders Risk Insurance and Worker's Compensation Insurance during
the making of any alterations or improvements to the Premises; and
(g) Such other forms of insurance as Mortgagee may reasonably require
or as may be required by law.
In addition, Mortgagee is to be furnished with such engineering data as
it may reasonably require regarding the risk of earthquake or sinkhole damage to
the Premises. If Mortgagee shall reasonably determine in its sole opinion that
there is a material earthquake or sinkhole risk, or if insurance against
earthquake or sinkhole is required by law, Mortgagor will provide earthquake or
sinkhole insurance. Insurance policies shall be written on forms and with
insurance companies which are reasonably satisfactory to Mortgagee, shall name
as the insured parties Mortgagor and Mortgagee, as their interests may appear,
shall be in amounts sufficient to prevent the Mortgagor from becoming a
co-insurer of any loss thereunder, and shall bear a satisfactory mortgagee
clause in favor of Mortgagee with loss proceeds under any such policies to be
made payable to Mortgagee. All required policies of insurance together with
evidence of the payment of current premiums therefor shall be delivered to
Mortgagee and shall provide that Mortgagee shall receive at least thirty (30)
days' advance written notice prior to cancellation, amendment or termination of
any such policy of insurance. Mortgagor shall, within ten (10) days prior to the
expiration of any such policy, deliver evidence acceptable to Mortgagee, in
Mortgagee's sole judgment, verifying the renewal of such insurance together with
evidence of the payment of current premiums therefor. Mortgagor shall at its
expense furnish on renewal of insurance policies or upon request of Mortgagee
evidence of the replacement value of the improvements on the Premises in form
satisfactory to Mortgagee. Insurance coverage must at all times be maintained in
proper relationship to such replacement value and must always provide for agreed
amount coverage. Notwithstanding anything contained herein to the contrary, if
Mortgagor currently has a blanket policy of insurance that satisfies the
coverages required hereunder for the Premises, Mortgagee will accept a certified
or conformed copy of the blanket policy together with an original Certificate of
Insurance naming Mortgagee as mortgagee of the Premises.
In the event of foreclosure of this Mortgage or acquisition of the
Premises by Mortgagee, all such policies and any proceeds payable therefrom,
whether payable before or after a foreclosure sale, or during the period of
redemption, if any, shall become the absolute property of Mortgagee to be
utilized at its discretion. In the event of foreclosure or the failure to obtain
and keep any required insurance, Mortgagor empowers Mortgagee to effect
insurance upon the Premises at Mortgagor's expense and for the benefit of
Mortgagee in the amounts and types aforesaid for a period of time covering the
time lapse of insurance including lapse during redemption from foreclosure sale,
and if necessary, to cancel any or all existing insurance policies. Mortgagor
agrees to furnish Mortgagee copies of all inspection reports and insurance
recommendations received by Mortgagor from any insurer. Mortgagee makes no
representations that the above insurance requirements are adequate protection
for a prudent mortgagor.
Mortgagor shall comply with all provisions of any insurance policy
covering or applicable to the Premises or any part thereof, all requirements of
the issuer of any such policy, and all orders, rules, regulations and other
requirements of the Rhode Island Board of Fire Underwriters (or any other body
exercising similar functions) applicable to or affecting the Premises or any
part thereof or any use or condition of the Premises of any part thereof.
SECTION 3.2 ESCROWS. Mortgagor shall deposit with Mortgagee, or at
Mortgagee's request, with its servicing agent, on the first day of each and
every month, commencing with the date the first payment of interest and/or
principal and interest shall become due on the Indebtedness, a deposit to pay
the Impositions and insurance premiums (hereinafter collectively referred to as
the "Charges") in an amount equal to:
(a) One-twelfth (1/12) of the annual Impositions next to become due
upon the Premises; provided that, with the first such deposit, there
shall be deposited in addition an amount as estimated by Mortgagee
which, when added to monthly deposits to be made thereafter as provided
for herein, shall assure to Mortgagee's satisfaction that there will be
sufficient funds on deposit to pay the Impositions as they come due;
plus
(b) One-twelfth (1/12) of the annual premiums on each policy of
insurance required to be maintained hereunder; provided that with the
first such deposit there shall be deposited, in addition, an amount
equal to one-twelfth (1/12) of such annual insurance premiums
multiplied by the number of months elapsed between the date premiums on
each policy were last paid to and including the date of deposit;
provided that the amount of such deposits shall be based upon
Mortgagee's estimate as to the amount of Impositions and insurance
premiums next to be payable and may require that the full amount of
such payment will be available to Mortgagee at least one month in
advance of the due date. Mortgagee will, upon timely presentation to
Mortgagee by Mortgagor of the bills therefor, pay the Charges from such
deposits. Mortgagor agrees to cooperate and assist in obtaining of tax
bills when requested by Mortgagee. In the event the deposits on hand
shall not be sufficient to pay all of the estimated Charges when the
same shall become due from time to time, or the prior deposits shall be
less than the currently estimated monthly amounts, then Mortgagor shall
immediately pay to Mortgagee on demand any amount necessary to make up
the deficiency. The excess of any such deposits shall be credited
towards subsequent Charges.
If an Event of Default shall occur under the terms of this Mortgage,
Mortgagee may, at its option, without being required so to do, apply any
deposits on hand to the payment of Charges whether then due or not or to the
Indebtedness, in such order and manner as Mortgagee may elect. When the
Indebtedness has been fully paid any remaining deposits shall be returned to
Mortgagor as its interest may appear. All deposits are hereby pledged as
additional security for the Indebtedness, shall be held for the purposes for
which made as herein provided, may be held by Mortgagee or its servicing agent
and may be commingled with other funds of Mortgagee, or its servicing agent,
shall be held without allowance of interest thereon and without fiduciary
responsibility on the part of Mortgagee or its agents and shall not be subject
to the direction or control of Mortgagor. Neither Mortgagee nor its servicing
agent shall be liable for any act or omission made or taken in good faith. In
making any payments, Mortgagee or its servicing agent may rely on any statement,
bill or estimate procured from or issued by the payee without inquiry into the
validity or accuracy of the same. If the taxes shown in the tax statement shall
be levied on property more extensive than the Premises, Mortgagee shall be under
no duty to seek a tax division or apportionment of the tax bill, and any payment
of taxes based on a larger parcel shall be paid by Mortgagor and Mortgagor shall
expeditiously cause a tax subdivision to be made.
ARTICLE 4
UNIFORM COMMERCIAL CODE
SECTION 4.1 SECURITY AGREEMENT. This Mortgage shall constitute a
security agreement as defined in the Uniform Commercial Code in effect in the
State of Rhode Island, as amended from time to time (hereinafter referred to as
the "Code"), and Mortgagor hereby grants to Mortgagee a security interest within
the meaning of the Code in favor of Mortgagee on the Improvements, Fixtures,
Equipment and Personal Property, the Rents, Leases and Profits, the Judgments,
Condemnation Awards and Insurance Proceeds and other rights, and the Licenses,
Permits, Equipment Leases and Service Agreements and the Accounts Receivable and
General Intangibles described in Granting Clauses B, C, D, E, F and G of this
Mortgage (hereinafter referred to as the "Collateral").
SECTION 4.2 FIXTURE FILING. As to those items of Collateral described
in this Mortgage that are, or are to become fixtures related to the real estate
mortgaged herein, and all products and proceeds thereof, it is intended as to
those items that THIS MORTGAGE SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED
AS A FIXTURE FILING from the date of its filing in the real estate records of
the County where the Premises are situated. The name of the record owner of said
real estate is Mortgagor set forth in page 1 to this Mortgage. Information
concerning the security interest created by this instrument may be obtained from
Mortgagee, as secured party, at its address as set forth in page 1 of this
Mortgage. The address of Mortgagor, as debtor, is as set forth in page 1 to this
Mortgage. This document covers goods which are or are to become fixtures.
SECTION 4.3 REPRESENTATIONS AND AGREEMENTS. Mortgagor represents and
agrees: (a) Mortgagor is and will be the true and lawful owner of the
Collateral, subject to no liens, charges, security interest and encumbrances
other than the lien hereof and the Permitted Encumbrances; (b) the Collateral is
to be used by Mortgagor solely for business purposes being installed upon the
Premises for Mortgagor's own use or as the equipment and furnishing leased or
furnished by Mortgagor, as landlord, to tenants of the Premises; (c) the
Collateral will not be removed from the Premises without the consent of
Mortgagee except in accordance with Section 4.4 hereof; (d) unless stated
otherwise in this Mortgage the only persons having any interest in the
Collateral are Mortgagor and Mortgagee and no financing statement covering any
such property and any proceeds thereof is on file in any public office except
pursuant hereto; (e) the remedies of Mortgagee hereunder are cumulative and
separate, and the exercise of any one or more of the remedies provided for
herein or under the Code shall not be construed as a waiver of any of the other
rights of Mortgagee including having such Collateral deemed part of the realty
upon any foreclosure thereof; (f) if notice to any party of the intended
disposition of the Collateral is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given at least ten (10) days
prior to such intended disposition and may be given by advertisement in a
newspaper accepted for legal publications either separately or as part of a
notice given to foreclose the real property or may be given by private notice if
such parties are known to Mortgagee; (g) Mortgagor will from time to time
provide Mortgagee on request with itemizations of all Collateral; (h) the filing
of a financing statement pursuant to the Code shall never impair the stated
intention of this Mortgage that all Improvements, Fixtures, Equipment and
Personal Property described in Granting Clause B hereof are, and at all times
and for all purposes and in all proceedings both legal or equitable shall be
regarded as part of the real property mortgaged hereunder irrespective of
whether such item is physically attached to the real property or any such item
is referred to or reflected in a financing statement; (i) Mortgagor will on
demand deliver all financing statements and/or continuations that may from time
to time be required by Mortgagee to establish and perfect the priority of
Mortgagee's security interest in such Collateral and all costs, including
recording fees, shall be paid by Mortgagor; (j) Mortgagor shall give advance
written notice of any proposed change in Mortgagor's name, address, identity or
structure and will execute and deliver to Mortgagee prior to or concurrently
with such change all additional financing statements that Mortgagee may require
to establish and perfect the priority of Mortgagee's security interest; and (k)
Mortgagor shall renew and pay all expenses of renewing the financing statement
covering the Collateral in the event the security interest in such Collateral
will expire by reason of statutory law prior to the end of the term of this
Mortgage.
Mortgagor does hereby consent to and approve of the filing of Financing
Statements by electronic or computer technology, and further, Mortgagor does
hereby adopt as Mortgagor's signature the electronic or computer generated
typewritten signature of Mortgagor as if the same were the original handwritten
signature of Mortgagor.
SECTION 4.4 MAINTENANCE OF PROPERTY. Subject to the provisions of this
Section, in any instance where Mortgagor in its discretion determines that any
item subject to a security interest under this Mortgage has become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary for the operation of
the Premises, Mortgagor may, at its expense, remove and dispose of it and
substitute and install other items not necessarily having the same function,
provided, that such removal and substitution shall be of comparable quality and
shall not impair the operating utility and unity of the Premises. All substitute
items shall become a part of the Premises and subject to the lien of Mortgage.
Any amounts received or allowed Mortgagor upon the sale or other disposition of
the removed items of property shall be applied only against the cost of
acquisition and installation of the substitute items. Nothing herein contained
shall be construed to prevent any tenant or subtenant from removing from the
Premises trade fixtures, furniture and equipment installed by tenant and
removable by such tenant under its terms of the lease, on the condition,
however, that all damages to the Premises resulting from or caused by the
removal thereof be repaired at the sole cost of Mortgagor if such tenant shall
fail to so repair.
ARTICLE 5
APPLICATION OF INSURANCE AND AWARDS
SECTION 5.1 DAMAGE OR DESTRUCTION OF THE PREMISES. Mortgagor will give
Mortgagee prompt notice of damage to or destruction of the Premises, and in case
of loss covered by policies of insurance, Mortgagee (whether before or after
foreclosure sale) is hereby authorized at its option to settle and adjust any
claim arising out of such policies and collect and receipt for the proceeds
payable therefrom, provided, if Mortgagor is not in default hereunder, Mortgagor
may itself adjust and collect for any losses arising out of a single occurrence
aggregating not in excess of Fifty Thousand and No/100 Dollars ($50,000.00). Any
expense incurred by Mortgagee in the adjustment and collection of insurance
proceeds (including the cost of any independent appraisal of the loss or damage
on behalf of Mortgagee) shall be reimbursed to Mortgagee first out of any such
insurance proceeds. The insurance proceeds or any part thereof shall be applied
to reduction of the Indebtedness then most remotely ~ be paid, whether due or
not, or to the restoration or repair of the Premises, the choice of application
to be solely at the discretion of Mortgagee. In the event Mortgagee does not
make insurance proceeds available for restoration and applies the insurance
proceeds to payment of the Indebtedness no prepayment fee shall be due on the
insurance proceeds so applied and the monthly installment payments of principal
and interest set forth in the Note shall be adjusted to an amount sufficient to
reamortize the then unpaid principal balance of the Note together with interest
in equal monthly installment payments over the then remaining portion of the
original amortization period. In the event Mortgagee does not make insurance
proceeds available for reconstruction of the Premises, Mortgagor shall have the
right to prepay the Loan in full without a prepayment fee.
SECTION 5.2 CONDEMNATION. Mortgagor will give Mortgagee prompt notice of any
action, actual or threatened, in condemnation or eminent domain and hereby
assigns, transfers, and sets over to Mortgagee the entire proceeds of any award
or claim for damages for all or any part of the Premises taken or damaged under
the power of eminent domain or condemnation (herein referred to as
Condemnation), Mortgagee being hereby authorized to intervene in any such action
and to collect and receive from the condemning authorities and give proper
receipts and acquittances for such proceeds. Mortgagor will not enter into any
agreements with the condemning authority permitting or consenting to the taking
of the Premises unless prior written consent of Mortgagee is obtained. Any
expenses incurred by Mortgagee in intervening in such action or collecting
Condemnation proceeds (including the cost of any independent appraisal) shall be
reimbursed to Mortgagee out of Condemnation proceeds prior to other payments or
disbursements. Mortgagor shall deliver all Condemnation proceeds to Mortgagee
within five (5) days of receipt thereof and shall at Mortgagee's request direct
the condemning authority to deliver the condemnation proceeds to Mortgagee.
Condemnation proceeds or any part thereof shall be applied upon or in reduction
of the Indebtedness then most remotely to be paid, whether due or not, or to the
restoration or repair of the Premises, the choice of application to be solely at
the discretion of Mortgagee. In the event Mortgagee does not make Condemnation
proceeds available for restoration and applies Condemnation proceeds to payment
of debt, no prepayment fee shall be due on Condemnation proceeds so applied and
the monthly installment payments of principal and interest set forth in the Note
shall be adjusted to an amount sufficient to reamortize the then unpaid
principal balance of the Note together with interest in equal monthly
installment payments over the then remaining portion of the original
amortization period. In the event Mortgagee does not make insurance proceeds
available for reconstruction of the Premises, Mortgagor shall have the right to
prepay the Loan in full without a prepayment fee.
SECTION 5.3 DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS. Should
any insurance or Condemnation proceeds be applied to the restoration or repair
of the Premises in accordance with this Article 5 the restoration or repair
shall be done under the supervision of an architect reasonably acceptable to
Mortgagee (or, at Mortgagee's discretion, an engineer reasonably acceptable to
Mortgagee) and pursuant to site and building plans and specifications reasonably
approved by Mortgagee. The proceeds from insurance or Condemnation, after
payment of costs and expenses of collection ("Net Proceeds"), shall be held by
Mortgagee for such purposes and will from time to time be disbursed by Mortgagee
to defray the costs of such restoration or repair under such safeguards and
controls as Mortgagee may require and in accordance with standard construction
loan procedures. Net Proceeds may at the option of Mortgagee be disbursed
through a Litle insurance company selected by Mortgagee and at the sole cost of
Mortgagor. Prior to making Net Proceeds available for the payment of costs of
repair or restoration of the improvements upon the Premises, Mortgagee shall be
entitled to receive the following:
(a) Evidence that no Event of Default exists under any of the terms,
covenants and conditions of this Mortgage, the Note, or other Loan Documents.
(b) Evidence that all leasing requirements for the Premises as
established by Mortgagee have been met.
(c) Satisfactory proof that all improvements have been fully restored,
or, if Mortgagee approves disbursements in installments, that the undisbursed
proceeds will be sufficient to pay the cost of repair, restoration or rebuilding
the improvements located on the Premises free and clear of all liens, except the
lien of this Mortgage. In the event Net Proceeds shall be insufficient to pay
for such repairs, restoration or rebuilding, Mortgagor shall deposit with
Mortgagee funds equaling such deficiency, which, together with the Net Proceeds,
shall be sufficient to pay for restoration, repair and rebuilding.
(d) A statement of Mortgagor's architect, certifying the extent of the repair
and restoration completed to the date thereof, and that such repairs,
restoration and rebuilding have been performed to date in conformity with the
plans and specifications that have been approved by Mortgagee, together with
appropriate evidence of payment for labor or materials furnished to the
Premises, and total or partial lien waivers substantiating such payments.
(e) A waiver of subrogation from any insurer to the effect that such
insurer has no liability against Mortgagor or the then owner or other insured
under the policy of insurance in question.
(f) Such performance and payment bonds, and such insurance, in such
amounts, issued by such company or companies and in such forms and substance, as
are reasonably required by Mortgagee.
(g) Evidence that zoning, building and other necessary permits and
approvals have been obtained.
(h) An opinion of Mortgagor's counsel in form and content reasonably
acceptable to Mortgagee that such repair and reconstruction will not violate any
authority or agreement to which Mortgagor may be subject.
(i) Reasonably satisfactory evidence is delivered to Mortgagee that the
improvements can be rebuilt substantially to the same as those originally
financed and can with restoration and repair continue to be operated for the
purposes utilized prior to such damage.
(j) Evidence that the then current Loan balance shall not exceed
seventy five percent (75%) of the appraised value of the Premises after such
restoration or repair.
(k) Tenants of the Premises as designated by Mortgagee shall certify to
Mortgagee their intention to continue to occupy the Premises without any
abatement or adjustment of rental payments (other than temporary abatements
during the period of restoration and repair).
(1) Evidence of fulfillment of all other reasonable requirements which
Mortgagee may make in connection with repair of the improvements on the
Premises.
In the event Mortgagor shall fail to restore, repair or rebuild the improvements
upon the Premises within a reasonable time, then such failure shall constitute
an Event of Default hereunder and Mortgagee, at its option and upon not less
than thirty (30) days written notice to Mortgagor, may in addition to its
remedies contained in Article 8 hereof (i) restore, repair or rebuild the said
improvements for or on behalf of Mortgagor and for such purpose, may perform all
necessary or appropriate acts to accomplish such restoration, repair or
rebuilding or (ii) apply all or any part of Net Proceeds on account of the last
maturing installments of the Indebtedness whether then due or not. In the event
insurance proceeds or an eminent domain award shall exceed the amount necessary
to complete the repair, restoration, or the rebuilding of the improvements upon
the Premises, such excess may, at Mortgagee's option, be applied on account of
the last maturing installments of the Indebtedness, irrespective of whether such
installments are then due and payable, without application of a prepayment fee,
or be returned to Mortgagor.
Damage to the Premises shall not excuse or defer payment on the
indebtedness as it comes due. Lender shall not make Net Proceeds available for
restoration or repair during the final Loan Year.
SECTION 5.4 MORTGAGEE TO MAKE INSURANCE PROCEEDS AVAILABLE.
Notwithstanding the provisions of Section 5.1 above, in the event of insured
damage to the improvements on the Premises, Mortgagee agrees to make insurance
proceeds available to the restoration or repair of the improvements on the
Premises in accordance with the provisions of Section 5.3 hereof provided: (a)
satisfactory evidence is delivered to Mortgagee that the total cost of
restoration and repair does not exceed twenty five percent (25%) of the then
outstanding principal balance of the Note; (b) Mortgagor complies with the terms
and conditions of Section 5.3 hereof.
ARTICLE 6
LEASES AND RENTS
SECTION 6.1 MORTGAGOR TO COMPLY WITH LEASES. Mortgagee acknowledges that as of
the date hereof that Mortgagor is the sole occupant (and owner) of the Premises,
and as such, there exists no leases in effect for the Premises, and that the
provisions of this Article 6 (and elsewhere in this Mortgage with respect to
leases and rents) are intended to an shall cover and apply to any future leases
of or on the Premises. Mortgagor will, at its own cost and expense, perform,
comply with and discharge all of the obligations of Mortgagor under leases of
all or any part of the Premises and use its reasonable efforts to enforce or
secure the performance of each obligation and undertaking of the respective
tenants under any such leases and will appear in and defend, at its own cost and
expense, any action or proceeding arising out of or in any manner connected with
Mortgagor's interest in any leases pertaining to the Premises. Mortgagor will
not enter any new leases, nor modify, extend, renew, terminate, accept a
surrender of, or in any way alter the terms of such leases, nor borrow against,
pledge or assign any rentals due under the leases nor consent to a subordination
or assignment of the interest of a tenant thereunder to any party other than
Mortgagee, nor anticipate the rents thereunder for more than one (1) month in
advance or reduce the amount of rents and other payments thereunder, nor waive,
excuse, condone or in any manner release or discharge a tenant of or from any
obligations, covenants, conditions and agreements to be performed nor incur any
indebtedness to a tenant, nor agree to any "free rent period without Mortgagee's
consent which shall not be unreasonably withheld, nor enter into any additional
leases of all or any part of the Premises without the prior written consent of
Mortgagee. Mortgagor shall give Mortgagee a copy of any notice of default given
by Mortgagor to any tenants of the Premises.
SECTION 6.2 MORTGAGEE'S RIGHT TO PERFORM UNDER LEASES. Upon the
occurrence of an Event of Default and should Mortgagor fail to perform, comply
with or discharge any obligations of Mortgagor under any lease of all or any
part of the Premises or should Mortgagee become aware of or be notified by a
tenant under any such lease of a failure on the part of Mortgagor to so perform,
comply with or discharge its obligations under said lease, Mortgagee may, but
shall not be obligated to, and without flirther demand upon Mortgagor, and
without waiving or releasing Mortgagor from any obligation contained in this
Mortgage, remedy such failure, and Mortgagor agrees to repay upon demand all
sums incurred by Mortgagee in remedying any such failure including, without
limitation, Mortgagee's reasonable attorneys' fee together with interest at the
Default Rate as defined under the terms of the Note. All such sums, together
with interest as aforesaid shall become so much additional Indebtedness, but no
such advance shall be deemed to relieve Mortgagor from any default hereunder.
SECTION 6.3 ASSIGNMENT OF LEASES AND RENTS. Mortgagor does hereby
unconditionally and absolutely sell, assign and transfer unto Mortgagee all of
the leases, rents, issues, income and profits now due and which may hereafter
become due under or by virtue of any lease, whether written or verbal, or any
agreement or license for the use or occupancy of the Premises, whether now
existing or entered into at any time during the term of this Mortgage, all
guaranties of any lessee's obligations under any such lease and all security
deposits, it being the intention of this Mortgage to establish an absolute
transfer and assignment of all such leases and agreements and all of the rents
and profits from the Premises and/or Mortgagor's operation or ownership thereof
unto Mortgagee and Mortgagor does hereby appoint irrevocably Mortgagee as
Mortgagor's true and lawfiil attorney in Mortgagor's name and stead, which
appointment is coupled with an interest, to collect all of said rents and
profits; provided, Mortgagor shall have the right to collect and retain such
rents and profits unless and until an Event of Default exists under this
Mortgage. Mortgagor assigns to Mortgagee all guarantees of lessee's obligation
under leases and all proceeds from settlements relating to terminations of
leases and all claims for damages arising from rejection of any lease under the
bankruptcy laws. Upon the occurrence of an Event of Default and whether before
or after the institution of legal proceedings to foreclose the lien hereof or
before or after sale thereunder or during any period of redemption existing by
law, forthwith, upon demand of Mortgagee, Mortgagor shall surrender to Mortgagee
and Mortgagee shall be entitled to enter upon and take and maintain possession
of the Premises and any leases thereunder and collect and retain any rents and
profits from the Premises and hold, operate, manage and control the Premises and
any such leases and to do such things in its discretion as may be deemed proper
or necessary to enforce the payment or security of the rents and profits of the
Premises and the performance of the tenants' obligations under any leases of the
Premises, with hill power to cancel or terminate any lease for any cause or on
any grounds which would entitle Mortgagor to cancel the same and to elect to
disaffirm any lease made subsequent to this Mortgage or subordinated to the lien
hereof. All rents and payments received by Mortgagor after Mortgagee has
exercised any of its rights under this assignment shall be held by Mortgagor in
trust for Mortgagee and shall be delivered to Mortgagee immediately without
demand.
Mortgagee shall not be obligated to perform or discharge any obligation
or liability of the landlord under any of said leases and Mortgagor shall and
does hereby agree to indemnify and hold Mortgagee harmless of and from any and
all expenses, liability, loss or damage which it might incur under said leases
or under or by reason of this Mortgage. Any amounts incurred by Mortgagee in
connection with its rights hereunder, including costs, expenses and reasonable
attorneys' fees, shall bear interest thereon at the Default Rate stated in the
Note, shall be additional Indebtedness and Mortgagor shall reimburse Mortgagee
therefor immediately upon demand. Mortgagee may apply any of said rents and
profits received to the costs and expenses of collection, including reasonable
attorneys' fees, to the payment of taxes, assessments and insurance premiums and
expenditures for the upkeep of the Premises, to the performance of the
landlord's obligations under the lease, to the performance of any of Mortgagor's
covenants hereunder, and to any Indebtedness in such order as Mortgagee may
determine. The entering upon and taking possession of the Premises, the
collection of such rents and profits and the application thereof as aforesaid
shall not cure or waive any Event of Default under this Mortgage nor in any way
operate to prevent Mortgagee from pursuing any other remedy which it may now or
hereafter have under the terms of this Mortgage nor shall it in any way be
deemed to constitute Mortgagee a mortgagee-in-possession. The rights hereunder
shall in no way be dependent upon and shall apply without regard to whether the
Premises are in danger of being lost, materially injured or damaged or whether
the Premises are adequate to discharge the Indebtedness. Mortgagor represents
and agrees that no rent has been or will be paid by any person in possession of
any portion of the Premises for more than one installment in advance and that
the payment of none of the rents to accrue for any portion of the Premises has
been or will be waived, released, reduced, discounted, or otherwise discharged
or compromised by Mortgagor. Mortgagor waives any right of set off against any
person in possession of any portion of the Premises. Mortgagor further agrees
that Mortgagor will not execute or agree to any subsequent assignment of any of
the rents or profits from the Premises without the prior written consent of
Mortgagee. The rights contained herein are in addition to and shall be
cumulative with the rights given in the Assignment of Leases and Assignment of
Rents. To the extent inconsistent with the terms of this Article 6, the terms of
the Assignment of Leases and Assignment of Rents shall control.
It is understood and agreed by the Mortgagor that upon the occurrence of an
Event of Default hereunder or under the Note or any of the Loan Documents, the
rents and profits of the Premises shall not be available to pay the costs of the
defense of any action, proceeding or claim brought by the Mortgagee against the
Mortgagor or the Premises (including the reasonable fees, and expenses of the
Mortgagor's attorney or attorneys or the attorneys for the Guarantors (or any of
them) in defending against such action, proceeding or claim) and upon the
occurrence of a voluntary or involuntary bankruptcy of the Mortgagor under the
Bankruptcy Code (as defined in Section 6.4 hereof below), rents and profits from
the Premises shall not be available to pay administrative expenses of the
bankruptcy estate where such administrative expenses constitute fees and
expenses of the Mortgagor's attorneys, representatives or agents. After the
occurrence of an Event of Default, all rents and profits of the Premises
collected by the Mortgagor or his agents or representatives shall be held in
trust for the Mortgagee.
SECTION 6.4 BANKRUPTCY. (a) Mortgagor hereby unconditionally assigns,
transfers and sets over to Mortgagee all of Mortgagor's claims and rights to the
payment of damages arising from any rejection by any lessee of any lease of the
Premises under the Bankruptcy Code, 11 U.S.C. ~ 101, et seq., as amended (the
"Bankruptcy Code"). Mortgagee shall have the right to proceed in its own name or
in the name of the Mortgagor in respect of any claim, suit, action of proceeding
relating to the rejection of such lease, including, without limitation, the
right to file and prosecute, to the exclusion of the Mortgagor any proofs of
claim, complaints, motions, applications, notices and other documents, in any
case in respect of such lessee under the Bankruptcy Code. This assignment
constitutes a present, irrevocable and unconditional assignment of the foregoing
claims, rights and remedies, and shall continue in effect until all of the
indebtedness secured by this Mortgage shall have been satisfied and discharged
in full. Mortgagor agrees to execute and deliver any separate assignments of
claim or proofs of claim requested by the Mortgagee for filing in any bankruptcy
proceedings relating to a tenant leasing all or a portion of the Premises. Any
amounts received by Mortgagee as damages arising out of rejection for a lease as
aforesaid shall be applied first to all costs and expenses of Mortgagee
(including, without limitation, reasonable attorneys' fees) incurred in
connection with the exercise of any of its rights or remedies under this Section
6.4, second to any interest, late payment charges or other amounts due and
payable to the Mortgagee under the Note or this Mortgage and third to principal
due on the Note. To the extent proceeds collected by the Mortgagee under any
lease pursuant to this Section 6.4 is applied to principal payable on the Note,
no prepayment premium shall be due on such proceeds and to the extent such
proceeds are applied to the principal indebtedness on the Note, and provided no
Event of Default has occurred under this Mortgage or under any other Loan
Document, the monthly payments of principal and interest set forth in the Note
shall be adjusted to an amount sufficient to reamortize the then unpaid
principal balance of the Note, together with interest, in equal monthly
installment payments over the then remaining portion of the original twenty (20)
year amortization period.
(b) If there shall be filed by or against the Mortgagor a petition under the
Bankruptcy Code, and the Mortgagor, as lessor under the leases of the Premises,
shall decide to reject the leases (or any of them) of the Premises pursuant to
Section 365 (a) of the Bankruptcy Code, the Mortgagor shall give the Mortgagee
not less than ten (10) days prior notice of the date on which the Mortgagor
shall apply to the bankruptcy court for authority to reject the lease. The
Mortgagee shall have the right to the fullest extent permitted by applicable
law, but not the obligation, to serve upon the Mortgagor within such ten (10)
day period a notice stating that (a) the Mortgagee demands that the Mortgagor
assume and assign the leases to the Mortgagee pursuant to Section 365 of the
Bankruptcy Code and (b) the Mortgagee covenants to cure or provide adequate
assurance of future performance under the lease to the fullest extent permitted
by applicable law. If the Mortgagee serves upon the Mortgagor the notice
described in the preceding sentence, the Mortgagor shall not seek to reject the
leases (or any of them) and shall comply with the demand provided for in clause
(a) of the preceding sentence within thirty (30) days after the notice shall
have been given, subject to the performance by the Mortgagee of the covenant
provided for in clause (b) of the preceding sentence.
ARTICLE 7
RIGHTS OF MORTGAGEE
SECTION 7.1 RIGHT TO CURE EVENT OF DEFAULT. If Mortgagor shall fail to
comply with any of the covenants or obligations of this Mortgage, Mortgagee may
upon an Event of Default, but shall not be obligated to, without demand upon
Mortgagor, and without waiving or releasing Mortgagor from any obligation in
this Mortgage contained, remedy such failure, and Mortgagor agrees to repay upon
demand all sums incurred by Mortgagee in remedying any such failure together
with expenses and reasonable attorneys' fees and with interest at the Default
Rate as defined under the terms of the Note. All such sums, together with
interest as aforesaid shall become Indebtedness. No such advance shall be deemed
to relieve Mortgagor from any failure hereunder.
SECTION 7.2 NO CLAIM AGAINST MORTGAGEE. Nothing contained in this
Mortgage shall constitute any consent or request by Mortgagee, express or
implied, for the performance of any labor or services or for the furnishing of
any materials or other property in respect of the Premises or any part thereof,
nor as giving Mortgagor or any party in interest with Mortgagor any right, power
or authority to contract for or permit the performance of any labor or services
or the furnishing of any materials or other property in such fashion as would
create any personal liability against Mortgagee in respect thereof or would
permit the making of any claim that any lien based on the performance of such
labor or services or the furnishing of any such materials or other property in
such fashion as would create any personal liability against Mortgagee in respect
thereof or would permit the making of any claim that any lien based on the
performance of such labor or services or the furnishing of any such materials or
other property is prior to the lien of this Mortgage.
SECTION 7.3 INSPECTION. Mortgagor will permit Mortgagee or its authorized
representatives upon reasonable prior notice (except in the event of an
emergency, in which case no notice shall be required) to enter the Premises at
all times during normal business hours for the purpose of inspecting the same;
provided Mortgagee shall have no duty to make such inspections and shall not
incur any liability or obligation for making or not making any such inspections.
SECTION 7.4 WAIVERS, RELEASES, RESORT TO OTHER SECURITY ETC. Without
affecting the liability of any party liable for payment of any Indebtedness or
performance of any obligation contained herein, and without affecting the rights
of Mortgagee with respect to any security not expressly released in writing,
Mortgagee may, at any time, and without notice to or the consent of Mortgagor or
any party in interest with the Premises or the Note: (a) release any person
liable for payment of all or any part of the Indebtedness or for performance of
any obligation herein; (b) make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the Indebtedness or
modifying or waiving any obligation, or subordinating, modifying or otherwise
dealing with the lien or charge hereof; (c) accept any additional security; (d)
release or otherwise deal with any property, real or personal, including any or
all of the Premises, including making partial releases of the Premises; or (e)
resort to any security agreements, pledges, contracts of guarantee, assignments
of rents and leases or other securities, and exhaust any one or more of said
securities and the security hereunder, either concurrently or independently and
in such order as it may determine.
SECTION 7.5 RIGHTS CUMULATIVE. Each right, power or remedy herein
conferred upon Mortgagee is cumulative and in addition to every other right,
power or remedy, express or implied, now or hereafter arising, available to
Mortgagee, at law or in equity, or under the Code, or under any other agreement,
and each and every right, power and remedy of Mortgagee herein set forth or
otherwise so existing shall be cumulative to the maximum extent permitted by law
and may be exercised from time to time as often and in such order as may be
deemed expedient by Mortgagee and any such exercise shall not be a waiver of the
right to exercise at any time thereafter any other right, power or remedy. No
delay or omission by Mortgagee in the exercise of any right, power or remedy
arising hereunder or arising otherwise shall impair any such right, power or
remedy or the right of Mortgagee to resort thereto at a later date or be
construed to be a waiver of any Event of Default under this Mortgage or the
Note.
SECTION 7.6 SUBSEOUENT AGREEMENTS. Any agreement hereafter made by
Mortgagor and Mortgagee pursuant to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance.
SECTION 7.7 WAIVER OF APPRAISEMENT, HOMESTEAD, MARSHALING. Mortgagor hereby
waives to the full extent lawfully allowed the benefit of any homestead,
appraisement, valuation, stay and extension laws now or hereinafter in force.
Mortgagor hereby waives any rights available with respect to marshaling of
assets so as to require the separate sales of any portion of the Premises, or as
to require Mortgagee to exhaust its remedies against a specific portion of the
Premises before proceeding against the other and does hereby expressly consent
to and authorize the sale of the Premises or any part thereof as a single unit
or parcel. Mortgagor also hereby waives any and all rights of reinstatement and
redemption from sale under any order or decree of foreclosure pursuant to rights
herein granted, on behalf of the Mortgagor, and each and every person acquiring
any interest in, or title to the Premises described herein subsequent to the
date of this Mortgage, and on behalf of all other persons to the extent
permitted by applicable law.
SECTION 7.8 BUSINESS LOAN REPRESENTATION. Mortgagor represents and
warrants to Mortgagee that the Loan evidenced by the Note is a business loan
transacted solely for the purpose of carrying on the business of Mortgagor and
not a consumer transaction and that the Premises does not constitute the
homestead of Mortgagor.
SECTION 7.9 DISHONORED CHECKS. In the event Mortgagor shall send to
Mortgagee two (2) or more checks in any twelve (12) month period which are not
honored by the bank, for any reason, Mortgagee shall have the right to require
that all future payments be made by certified check, or other good funds, at
Mortgagee's option.
ARTICLE 8
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1 EVENTS OF DEFAULT. The occurrence of any of the following
shall be deemed an event of default under this Mortgage (hereinafter referred to
as an "Event of Default"):
(a) Mortgagor or any co-maker, guarantor or surety shall fail to pay
any principal, premium, if any, or interest on the Note when and as the same
becomes due (whether at the stated maturity or at a date fixed for any
installment payment or any accelerated payment date or otherwise); or
(b) Mortgagor shall fail to deposit the Charges with Mortgagee or to
pay when due any other Indebtedness; or
(c) Mortgagor shall fail to comply with or perform any other term,
condition or covenant of the Note, this Mortgage, the Assignment of Leases, the
Assignment of Rents, the Hazardous Materials Indemnity Agreement or any other
document securing the Note after the expiration of thirty (30) days of the
giving of notice by Mortgagee to Mortgagor of such failure to comply or perform,
provided, however, if such failure is incapable of being cured within such
thirty (30) days, Mortgagor shall have an additional cure period of thirty (30)
days to cure (such total cure period not to exceed sixty (60) days) so long as
Mortgagor is diligently and continuously pursuing such cure; or
(d) Mortgagor or any maker, guarantor or surety of the Note shall make
an assignment for the benefit of its creditors, or shall admit in writing its
inability to pay its debts as they become due, or shall file a petition in
bankruptcy, or shall be adjudicated a bankrupt or insolvent, or shall file a
petition seeking any reorganization, dissolution, liquidation, arrangement,
composition, readjustment or similar relief under any present or future
bankruptcy or insolvency statute, law or regulation or shall file an answer
admitting to or not contesting the material allegations of a petition filed
against it in such proceedings, or shall not within ninety (90) days after the
filing of such a petition have the same dismissed or vacated, or shall seek or
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of a material part of its properties, or shall not within ninety (90)
days after the appointment of a trustee, receiver or liquidator of any material
part of its properties without Mortgagor's consent have such appointment
vacated; or
(e) Any certification, representation or warranty made by Mortgagor
herein, in the Note or in any other instrument or certificate given as security
for the Note or made in connection with the application for the Loan evidenced
by the Note or given as an inducement to Mortgagee to make the Joan shall be
false, breached or dishonored; or
(f) The Premises shall be transferred in any manner other than that
allowed herein;
or
(g) Subject to the provisions of Sections 2.9 and 2.10 hereof,
Mortgagor or any of the guarantors of the Indebtedness shall die, be dissolved,
liquidated or go out of existence; or
(h) The occurrence of an Event of Default under Sections 9~4 or ~0.8
hereof.
SECTION 8.2 MORTGAGEE'S RIGHT TO ACCELERATE. If an Event of Default
shall occur Mortgagee may immediately and without notice to Mortgagor declare
the entire unpaid principal balance of the Note together with all other
Indebtedness to be immediately due and payable and thereupon all such unpaid
principal balance of the Note together with all accrued interest thereon, any
prepayment premium under the term~ of the Note and all other Indebtedness shall
be and become immediately due and payable.
SECTION 8.3 REMEDIES OF MORTGAGEE AND RIGHT TO FORECLOSE. Upon the occurrence of
an Event of Default, Mortgagor hereby authorizes and fully empowers Mortgagee to
foreclose this Mortgage by judicial proceedings, by advertisement, or by such
other statutory procedures including, without limitation, the statutory power of
sale available in the state in which the Premises are located, at the option of
Mortgagee, with full authority to sell the Premises at public auction or such
other means permitted by law and convey the same to the purchaser in fee simple,
all in accordance with and in the manner prescribed by law, and out of the
proceeds arising from sale and foreclosure to retain the principal, prepayment
fee, if any, and interest due on the Note and all other Indebtedness together
with all sums of money as Mortgagee shall have expended or advanced pursuant to
this Mortgage or pursuant to statute together with interest thereon as herein
provided and all costs and expenses of such foreclosure, including lawful
attorneys' fees, with the balance, if any, to be paid to the persons entitled
thereto by law.
SECTION 8.4 RECEIVER. Upon the occurrence of an Event of Default,
Mortgagee shall be entitled as a matter of right without notice and without
regard to the solvency or insolvency of Mortgagor, or the existence of waste of
the Premises or the value of the Premises, and without giving bond apply for the
appointment of a receiver in accordance with the statutes and law made and
provided for who shall collect the rents, and all other income of any kind;
manage the Premises so to prevent waste; execute leases within or beyond the
period of receivership, pay all expenses for normal maintenance of the Premises
and perform the terms of this Mortgage and apply the rents, issues, income and
profits to the costs and expenses of the receivership, including attorneys'
fees, to the repayment of the Indebtedness and to the operation, maintenance and
upkeep and repair of the Premises, including payment of taxes on the Premises
and payments of premiums of insurance on the Premises and any other rights
permitted by law. Mortgagor does hereby irrevocably consent to such appointment.
The receiver may, to the extent permitted under applicable law, without notice,
enter upon and take possession of the Premises, or any part thereof, by force,
summary proceedings, ejectment or otherwise, and remove Mortgagor or any other
person or entity and any personal property therefrom, and may hold, operate and
manage the same, receive all rents, earnings, incomes, issues and proceeds and
do the things the receiver finds necessary to preserve and protect the Premises,
whether during pendency of foreclosure, during a redemption period, if any, or
otherwise.
SECTION 8.5 RIGHTS UNDER UNIFORM COMMERCIAL CODE. In addition to the
rights available to a mortgagee of real property, Mortgagee shall also have all
the righ~, remedies and recourse available to a secured party under the Code
including the right to proceed under the provisions of the Code governing
default as to any Collateral as defined in this Mortgage which may be included
on the Premises or which may be deemed nonrealty in a foreclosure of this
Mortgage or to proceed as to such Collateral in accordance with the procedures
and remedies available pursuant to a foreclosure of real estate.
SECTION 8.6 RIGHT TO DISCONTINUE PROCEEDINGS. In the event Mortgagee
shall have proceeded to invoke any right, remedy or recourse permitted under
this Mortgage and shall thereafter elect to discontinue or abandon the same for
any reason, Mortgagee shall have the unqualified right to do so and in such
event Mortgagor and Mortgagee shall be restored to their former positions with
respect to the Indebtedness in which case this Mortgage and all rights, remedies
and recourse of Mortgagee shall continue as if such action or exercise of a
right had not been invoked.
SECTION 8.7 WAIVERS. Mortgagor also waives the benefit of all laws now
existing or that may hereinafter be enacted providing for (i) any appraisal
before sale of any portion of the Premises, and (ii) in any way extending the
time for the enforcement and collection of the Note or the Mortgage or creating
or extending a period of redemption from any sale made in collecting said debt.
To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not
at any time insist upon, plead, claim or take the benefit or advantage of any
law now or hereafter enforced providing for any appraisal, valuation, stay,
extension or redemption and Mortgagor, to the extent permitted by law, waives
and releases all rights of redemption, valuation, appraisal, stay of execution,
notice of election to mature or declare due the whole of the Mortgage and
marshaling in the event of foreclosure of the liens hereby created.
ARTICLE 9
HAZARDOUS MATERIALS
SECTION 9.1 DEFINITIONS. The term "Hazardous Materials or Wastes" shall
mean any hazardous or toxic materials, pollutants, chemicals, or contaminants,
including without limitation asbestos, polychlorinated biphenyls (PCBs) and
petroleum products as defined, determined or identified as such in any Laws, as
hereinafter defined. The term "Laws" means any federal, state or local laws,
rules or regulations (whether now existing or hereinafter enacted or
promulgated) including, without limitation, the Clean Water Act, 33 U.S.C.
ss.ss. 1251 et seq. (1972), the Clean Air Act, 42 U.S.C. ~ss. 7401 et seq.
(1970), the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Subsection 1802, and The Resource
Conservation and Recovery Act, 42 U.S.C. Subsection 6901 et.seq., and any
similar state laws, as well as any judicial or administrative interpretation
thereof, including any judicial or administrative orders or judgments.
SECTION 9.2 REPRESENTATIONS BY MORTGAGOR. Mortgagor hereby represents to
Mortgagee that: (a) to the best of Mortgagor's knowledge after due inquiry, the
Premises has never been used either by previous owners or occupants or by
Mortgagor or current occupants to generate, manufacture, refine, transport,
treat, store, handle or dispose of asbestos or any Hazardous Materials or Wastes
and no such Hazardous Materials or Wastes exist on the Premises or in its soil
or groundwater; (b) to the best of Mortgagor's knowledge after due inquiry, no
portion of the improvements on the Premises has been constructed with asbestos,
asbestos-containing materials, urea formaldehyde insulation or any other
chemical or substance which has been determined to be a hazard to health and/or
the environment; (c) to the best of Mortgagor's knowledge after due inquiry,
there are not now nor have there been electrical transformers or other equipment
which have dielectric fluid-containing polychlorinated biphenyls (PCBs) located
in, on or under the Premises; (d) to the best of Mortgagor's knowledge after due
inquiry, the Premises has never contained any underground storage tanks; and (e)
Mortgagor has not received nor does it have any knowledge of any summons,
citation, directive, letter or other communication, written or oral, from any
local, state or federal governmental agency concerning (i) the existence of
Hazardous Materials or Wastes on the Premises or in the immediate vicinity or
(ii) the releasing, spilling, leaking, pumping, pouring, emitting, emptying, or
dumping of Hazardous Materials or Wastes onto the Premises or into waters or
other lands.
The above representations shall not be deemed to include Hazardous
Materials or Wastes which are used in the ordinary course of the operation of
businesses on the Premises and which are stored, used and disposed of in
accordance with all applicable Laws and ordinances and for which any necessary
permits have been obtained.
SECTION 9.3 COVENANTS OF MORTGAGOR. Mortgagor hereby covenants to
Mortgagee that: (a) Mortgagor shall (i) comply and shall cause all occupants of
the Premises to comply with all federal, state and local laws, rules,
regulations and orders with respect to the discharge, generation, removal,
transportation, storage and handling of Hazardous Materials or Wastes, (ii)
remove any Hazardous Materials or Wastes immediately upon discovery of same, in
accordance with applicable laws, ordinances and orders of governmental
authorities having jurisdiction thereof, (iii) pay or cause to be paid all costs
associated with such removal; and (iv) indemnify Mortgagee from and against all
losses, claims and costs arising out of the migration of Hazardous Materials or
Wastes from or through the Premises onto or under other properties; (b)
Mortgagor shall keep the Premises free of any lien imposed pursuant to any state
or federal law, rule, regulation or order in connection with the existence of
Hazardous Materials or Wastes on the Premises; (c) Mortgagor shall not install
or permit to be installed or to exist in or on the Premises any asbestos,
asbestos-containing materials, urea formaldehyde insulation or any other
chemical or substance which has been determined to be a hazard to health and
environment; and (d) Mortgagor shall not cause or permit to exist, as a result
of an intentional or unintentional act or omission on the part of Mortgagor or
any occupant of the Premises, a releasing, spilling, leaking, pumping, emitting,
pouring, emptying or dumping of any Hazardous Materials or Wastes onto the
Premises or into waters or other lands; and (e) Mortgagor shall give all
notifications and prepare all reports required by Laws or any other law with
respect to Hazardous Materials or Wastes existing on, released from or emitted
from the Premises.
The above covenants shall not be deemed to prohibit Hazardous Materials
or Wastes which are used in the ordinary course of the operation of businesses
on the Premises and which are stored, used and disposed of in accordance with
all applicable Laws and ordinances and for which any necessary permits have been
obtained.
SECTION 9.4 EVENTS OF DEFAULT AND REMEDIES. It shall constitute an
Event of Default hereunder and Mortgagee shall be entitled to exercise all
remedies available to it hereunder if: (a) any of Mortgagor's representations
contained in Section 9.2 hereof prove to be false, inaccurate or misleading; (b)
Mortgagor shall fail to comply with the covenants contained in Section 9.3
hereof; (c) any Hazardous Materials or Wastes are hereafter found to exist on
the Premises or in its soil or groundwater; or (d) any summons, citation,
directive, letter or other communication, written or oral, shall be issued by
any local, state or federal governmental agency concerning the matters described
in Section 9.2(e)(i) and (ii) above, provided, in any such case, the Mortgagor
shall have failed to cure such default within thirty (30) days after giving
written notice thereof to the Mortgagor (or, if the default is of a nature that
it cannot reasonably be cured within such thirty (30) day period, such
additional period of time not to exceed sixty (60) additional days as may be
reasonably required so long as Mortgagor has immediately commenced its cure and
thereafter diligently prosecutes such cure to completion). The existence of
Hazardous Materials or Wastes which are used in the ordinary course of the
operation of businesses on the Premises and which are stored, used and disposed
of in accordance with all applicable Laws and ordinances and for which any
necessary permits have been obtained shall not constitute an Event of Default
under this Section 9.4. Mortgagor hereby grants Mortgagee and its employees and
agents an irrevocable and non-exclusive license to enter the Premises, subject
to rights of tenants and upon reasonable prior notice, in order to inspect, and
to conduct testing and remove Hazardous Materials or Wastes. All costs of such
inspection, testing and removal shall immediately become due and payable to
Mortgagee, shall be secured by this Mortgage and shall constitute additional
Indebtedness.
SECTION 9.5 INDEMNIFICATION. Mortgagor hereby agrees to defend,
indemnify and hold harmless Mortgagee, its directors, officers, employees,
agents, contractors, subcontractors, licensees, invitees, successors and assigns
("Indemnified Parties") from and against any and all claims, losses, damages,
liabilities, judgments, costs and expenses (including, without limitation,
reasonable attorneys' fees, and costs incurred in the investigation, defense and
settlement of claims or remediation of contamination) incurred by the
Indemnified Parties as a result of or in connection with the presence or removal
of Hazardous Materials or Wastes or as a result of or in connection with
activities prohibited under this Article. Mortgagor shall bear, pay and
discharge, as and when the same become due and payable, any and all such
judgments or claims for damages, penalties or otherwise, against the Indenmified
Parties, shall hold the Indemnified Parties harmless against all claims, losses,
damages, liabilities, costs and expenses, and shall assume the burden and
expense of defending all suits, administrative proceedings, and negotiations of
any description with any and all persons, political subdivisions or government
agencies arising out of any of the occurrences set forth in this Article. This
indemnification shall remain in full force and effect and shall survive the
repayment of the Indebtedness and the satisfaction of the documents securing the
same, as well as the exercise of any remedy by Mortgagee hereunder or under the
other documents securing this Mortgage, including a foreclosure of this Mortgage
or the acceptance of a deed in lieu of foreclosure.
The indemnities contained herein shall not apply to actions taken by
any party or to Hazardous Materials or Wastes first existing on the Premises
after the date on which the Mortgagor is no longer fee owner of the Premises.
SECTION 9.6 LOSS OF VALUE. Mortgagor hereby assures Mortgagee that
Mortgagee will not suffer loss due to diminution of value of the Premises,
whether during the term hereof or thereafter, due to Hazardous Material or
Wastes upon the Premises, except for those Mortgagor proves were introduced onto
the Premises after title has passed to Mortgagee by foreclosure or otherwise and
will, upon demand, reimburse Mortgagee for any such loss of value.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1 RELEASE OF MORTGAGE. When all Indebtedness has been paid,
this Mortgage and all assignments herein contained shall, except as otherwise
provided herein, terminate and shall be released by Mortgagee at Mortgagor's
expense.
SECTION 10.2 CHOICE OF LAW. This Mortgage is made and executed under
the laws of the State of Rhode Island and is intended to be governed by the laws
of said State without resort to its conflicts of laws rules.
SECTION 10.3 SUCCESSORS AND ASSIGNS. This Mortgage and each and every
covenant agreement and other provision hereof shall be binding upon Mortgagor
and its successors and assigns, including, without limitation each and every
person or entity that may, from time to time, be record owner of the Premises
and any person, or entity, other than Mortgagee, having an interest therein,
shall run with the land and shall inure to the benefit of Mortgagee and its
successors and assigns. As used herein the words "successors and assigns" shall
also be deemed to include the heirs, representatives, administrators and
executors of any natural person who is a party to this Mortgage. Nothing in this
Section shall be construed to constitute consent by Mortgagee to assignment by
Mortgagor.
SECTION 10.4 PARTIAL INVALIDITY. All rights, powers and remedies
provided herein are intended to be limited to the extent necessary so that they
will not render this Mortgage invalid, unenforceable or not entitled to be
recorded, registered or filed under any applicable law. If any term of this
Mortgage shall be held to be invalid, illegal or unenforceable, the validity and
enforceability of the other terms of this Mortgage shall in no way be affected
thereby.
SECTION 10.5 CAPTIONS AND HEADINGS. The captions and headings of the various
sections of this Mortgage are for convenience only and are not to be construed
as confining or limiting in any way the scope or intent of the provisions
hereof. Whenever the context requires or permits the singular shall include the
plural, the plural shall include the singular and the masculine, feminine and
neuter shall be freely interchangeable.
SECTION 10.6 NOTICES. Any notice which any party hereto may desire or
may be required to give to any other party shall be in writing and either (a)
mailed by certified mail, return receipt requested, or (b) sent by an overnight
carrier which provides for a return receipt, or (c) sent by facsimile followed
up by mailing of such notice by either of the methods set forth in 10.6(a) or
(b) above on the day of sending such facsimile or the next succeeding business
day. Any such notice shall be sent to the respective party's address as set
forth on Page 1 of this Mortgage or to such other address as such party may, by
notice in writing, designate as its address. Any such notice shall constitute
service of notice hereunder three (3) days after the mailing thereof by
certified mail, one (1) day after the sending thereof by overnight carrier, and
on the same day as the sending of a facsimile pursuant to the terms hereof.
SECTION 10.7 BUILDING USE. During the entire term of the Note and this
Mortgage, Mortgagor agrees not to convert the Premises to a condominium or
cooperative of any kind or to any use other than an office, research and
development, manufacturing or warehouse building. Further, Mortgagor
acknowledges that the second and third floor of the Premises shall only be used
for office purposes and not converted for any other approved use of the
Premises. In that connection, Mortgagor covenants that the sale of units and/or
recording of condominium or cooperative documents on the Premises or any part
thereof shall constitute an Event of Default hereunder.
SECTION 10.8 MANAGEMENT OF THE PREMISES. Mortgagor acknowledges that
the successful management of the Premises is of critical importance to Mortgagee
and a primary inducement in the making of the loan evidenced by the Note and
secured by this Mortgage. In the event management becomes unsatisfactory,
Mortgagee shall notify Mortgagor of the same and Mortgagor shall, within thirty
(30) days of such notice, correct any management deficiencies. Failure to so
correct shall constitute an Event of Default hereunder. Present management of
the Premises by Mortgagor is acceptable to Mortgagor at this time.
SECTION 10.9 AMENDMENT/MODIFICATION. Amendment to, waiver of or
modification of any provision of this Mortgage must be made in writing. No oral
waiver, amendment, or modification may be implied.
SECTION 10.10 REPRESENTATIONS OF MORTGAGOR. Mortgagor affirmatively represents
and warrants that the written terms of the Note, this Mortgage, the Assignment
of Leases, the Assignment of Rents, the financing statements, any other Loan
Documents and any other documents executed in connection with the Loan, and each
of them, accurately reflect the understanding of Mortgagor, as to all matters
addressed therein, and Mortgagor further represents and warrants that there are
no other agreements or understandings, written or oral, which exist between
Mortgagor and Mortgagee relating to the matters addressed in said documents.
SECTION 10.11 MORTGAGEE'S EXPENSE. Should Mortgagee make any payments
hereunder or under the Note or under any of the other documents securing the
Note or incur any liability, loss or damage under or by reason of this Mortgage,
the Note or any of the other documents securing the Note, or in the defense of
any claims or demands, the amount thereof, and afl costs and expenses, including
all filing, recording, and title fees and any other expenses relating to the
Loan, including without limitation filing fees for UCC continuation statements
and any expense involving modification thereto, reasonable attorneys' fees, and
any and all costs and expenses incurred in connection with making, performing,
or collecting the Indebtedness or exercising any of Mortgagee's rights under the
Note, the Mortgage or any other Loan Documents, including reasonable attorneys'
fees, the cost of appraisals and the cost of any environmental inspections (as
provided in Section 9.4) in connection therewith, and all claims for brokerage
and finder's fees which may be made in connection with the making of the Loan,
together with interest thereon, at the Default Rate as defined in the Note,
shall become part of the Indebtedness and shall be secured by this Mortgage and
the other Loan Documents and Mortgagor hereby agrees to reimburse Mortgagee
therefor immediately upon demand. Such sums, costs and expenses shall be, until
so paid, part of the Indebtedness and Mortgagee shall be entitled, to the extent
permitted by law, to receive and retain the f~ll amount of the Indebtedness in
any action for redemption by Mortgagor, for an accounting for the proceeds of a
foreclosure sale or of insurance proceeds or for apportionment of an eminent
domain damage award.
SECTION 10.12 MORTGAGEE'S RIGHT TO COUNSEL. If Mortgagee retains
attorneys to enforce any of the terms hereof or the Note or of any of the other
Loan Documents or because of the breach by Mortgagor of any of the terms hereof
or of any of the Loan Documents, or for the recovery of any Indebtedness secured
hereby or by any of the other Loan Documents, Mortgagor shall pay to Mortgagee
reasonable attorneys' fees, and all costs and expenses, whether or not an action
is actually commenced and the right to such reasonable attorneys' fees, and all
costs and expenses shall be deemed to have accrued on the date such attorneys
are retained, shall include fees and costs in connection with litigation,
arbitration, mediation and/or administrative proceedings, and shall be
enforceable whether or not such action is prosecuted to judgment and shall
include all appeals. Attorneys' fees and expenses shall for purposes of this
Mortgage include all paralegal, electronic research, legal specialists and all
other costs in connection with that performance of Mortgagee's attorneys.
If Mortgagee is, by reason of being the holder of this Mortgage, made a party
defendant of any litigation concerning this Mortgage or the Premises or any part
thereof or therein, or the construction, maintenance, operation or the occupancy
or use thereof by Mortgagor, then Mortgagor shall indemnify, defend and hold
Mortgagee harmless from and against all liability by reason of said litigation,
including reasonable attorneys' fees, and all costs and expenses incurred by
Mortgagee in any such litigation or other proceedings, whether or not any such
litigation or other proceedings is prosecuted to judgment or other
determination.
SECTION 10.13 OTHER REPRESENTATIONS AND WARRANTIES. All statements
contained in any loan application, certificate or other instrument delivered by
or on behalf of Mortgagor to Mortgagee or Mortgagee's representatives in
connection with the Loan shall constitute representations and warranties made by
Mortgagor hereunder. Such representations and warranties made hereunder and
thereunder shall survive the delivery of this Mortgage, and any
misrepresentations thereunder shall be deemed as misrepresentations hereunder.
SECTION 10.14 LIMITATION OF INTEREST. It is the intent of Mortgagor and
Mortgagee in the execution of this Mortgage and the Note and all other
instruments securing the Note to contract in strict compliance with the usury
laws of the State of Rhode Island governing the Note. In furtherance thereof,
Mortgagee and Mortgagor stipulate and agree that none of the terms and
provisions contained herein or in the Note or in any Loan Document shall ever be
construed to create a contract for the use, forbearance or detention of money
requiring payment of interest at a rate in excess of the maximum interest rate
permitted to be charged by the laws of the State of Rhode Island. Mortgagor, or
any guarantors, endorser or other party now or hereafter becoming liable for the
payment of the Note shall never be required to pay interest on the Note at a
rate in excess of the maximum interest that may be lawfully charged under the
laws of the State of Rhode Island and the provisions of this Section shall
control over all other provisions of the Note and any other instrument executed
in connection herewith which may be in apparent conflict herewith. If, from any
circumstances whatsoever fulfillment of any provision of the Note, this Mortgage
or any Loan Document, at the time performance of such provision shall be due,
shall involve transcending the limit on interest presently prescribed by any
applicable usury statute or any other applicable law, with regard to obligations
of like character and amount, then Mortgagee may, at its option (i) reduce the
obligations to be fulfilled to such limit on interest, or (ii) apply the amount
that would exceed such limit on interest to the reduction of the outstanding
principal balance of the Note, and not to the payment of interest, with the same
force and effect as though the Mortgagor had specifically designated such sums
to be so applied to principal and Mortgagee had agreed to accept such extra
payment(s) as a prepayment without a fee, so that in no event shall any exaction
be possible under the Note that is in excess of the applicable limit on
interest.
SECTION 10.15 TIME OF TIlE ESSENCE. Mortgagor agrees that time is of
the essence with respect to all of the covenants, agreements and representations
under this Mortgage.
SECTION 10.16 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations covenants and warranties contained herein or in any other
Loan Document, executed by Mortgagor in connection herewith shall survive the
delivery of the Note, this Mortgage and all other Loan Documents, executed in
connection herewith and the provisions hereof shall continue to inure to the
benefit of Mortgagee, its successors and assigns.
SECTION 10.17 WAIVER OF JURY TRIAL. No party to this Mortgage or any
assignee, successor, heir or personal representative of a party shall seek a
jury trial in any lawsuit, proceeding, counterclaim, or any other litigation
proceedings based upon or arising out of this Mortgage, any related agreement or
instrument, any other collateral for the Indebtedness or the dealings or the
relationship between or among the parties, or any of them. No party will seek to
consolidate any such action. in which a jury trial has been waived, with any
other action in which a jury trial cannot or has not been waived. The provisions
of this paragraph have been fully discussed by the parties hereto, and these
provisions shall be subject to no exceptions. No party has in any way agreed
with or represented to any other party that the provisions of this paragraph
will not be fully enforced in all instances.
SECTiON 10.18 MINIMUM REOUIREMENT. Mortgagor recognizes that the
requirements imposed upon Mortgagor hereunder, including, without limitation,
insurance requirements, are minimum requirements as determined by Mortgagee and
do not constitute a representation that the requirements are complete or
adequate. Mortgagor understands that it is Mortgagor's duty and responsibility
to act prudently and responsibly at all times for Mortgagor's protection and for
the protection of the Premises.
SECTION 10.19 OPEN END ADVANCE MORTGAGE. This Mortgage permits and
secures any and all current and future advances to the Mortgagor evidenced by
(or pursuant to) any one or more of the following: the Note, the Assignment of
Leases, the Assignment of Rents or any other Loan Documents, such other note or
notes as may be signed by the Mortgagor payable to Mortgagee and such other
agreements) as may be entered into by Mortgagor with Mortgagee and signed by
Mortgagor. The unpaid principal balance of indebtedness outstanding under this
Mortgage shall at no time exceed $3,000,000.00. Mortgagee will accept notices
pursuant to Sections 34-25-10(b) and 34-25-11 of the General Laws of the State
of Rhode Island at the address and in the manner set forth in this Mortgage.
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be executed
and delivered by its this 11th day of January, 1999
"MORTGAGOR"
KVH Industries, Inc., a Delaware
corporation
By: ______________________________
(Printed), Title
STATE OF Rhode Island )
) SS:
COUNTY OF Newport )
In __Newport________, on the __11th_ day of January, 1999, before me
personally appeared Richard C. Forsyth to me known and known by me to be the of
KVH Industries, Inc., a Delaware corporation and the person executing the
foregoing document on behalf of said corporation, and he acknowledged said
document executed by him to be his free act and deed, his free act and deed in
said capacity and the free act and deed of said corporation.
Print Name: Eneida M. DeJesus
Notary Public
My Commission Expires: 7/6/2002
This document prepared by and after recording should be returned to
Michael D. Moriarty, Attorney at Law, LOCKE REYNOLDS BOYD & WEISELL, 1000
Capital Center South, 201 North Illinois Street, Indianapolis, IN 46204, (317)
237-3800.
EXHIBIT "A"
To
OPEN END MORTGAGE, AND SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
WITH ASSIGNMENT OF LEASES AND RENTS
Legal Description:
That certain parcel of land with all buildings and improvements
situated thereon, located on the northerly side of East Main Road in the Town of
Middletown, County of Newport, State of Rhode Island being bounded and described
as follows:
Beginning at a point on the northerly line of East Main Road, said point
being the most southwesterly corner of the parcel herein described, and the most
southeasterly corner of land now or formerly of Israel M. Resnikoff and David T.
Chase;
Thence running North 84(Degree) 49' 31" East, along the northerly line
of East Main Road, a distance of forty-nine and ninety-three one hundredths
(49~93) feet to a bound;
Thence running northeasterly along a curve bounded southeasterly having
an interior central angle of 89(Degree) 58' 23", a radius of forty and zero one
hundredths (40.00) feet, and an arc length of sixty-two and eighty-one
hundredths (62.81) feet to a bound;
Thence running northeasterly bounded southeasterly along a curve having
an exterior central angle of 18(Degree) 35' 51", a radius of one thousand five
and zero one hundredths (1005.00) feet and an arc length of three hundred
twenty-six and twenty-one one hundredths (326.21) feet to a bound;
Thence running northeasterly, bounded southeasterly along a curve
having an exterior central angle of 75(Degree) 49' 32", a radius of three
hundred fifty and zero one-hundredths (350.00) feet, an arc length of four
hundred sixty-three and nineteen one hundredths (463.19) feet to a point, the
last three course bounding Enterprise Road;
Thence running on a line having a bearing of North 06(Degree) 51' 02"
West, bounded easterly by Lot 2 of land now or formerly of Gilbane Properties,
Inc., a distance of two hundred sixty and fifty-nine one hundredths (260.59)
feet to a point;
Thence turning and running on a line having a bearing of South
83(Degree) O8' 58" West, bounded northerly by land now or formerly of Saint
Lucy's Church a distance of twenty-four and eighty-two one hundredths (24.82)
feet to a point;
Thence running on a line having a bearing of South 82(Degree) 33' 11"
West, bounded northerly by a parcel of land now or formerly of James A. and
Zenaila Taylor, Frank and Ruth Norlin, Mark S. Silva, and Lucelle and Roger
Choumaid, a distance of two hundred thirty-five and ninety-six one hundredths
(235.96) feet to a point;
Thence running along a line having a bearing of South 83(Degree) 53' 42"
West bounded northerly by land now or formerly of Lucelle and Roger Choumaid,
Donald M. and Maureen Guerrera, Donna A. and Carol J. Wells, and Daniel S. and
Donna M. Kinricks, a distance of two hundred fifty-six and eighty-two one
hundredths (256.82) feet to a point;
Thence running along a line having a bearing of South 86(Degree) 13'
46" West, bounded northerly by land now or formerly of Mary Elizabeth Ward, and
Joseph E. and Alice V. Neves a distance of one hundred seventy-four and
eighty-four one hundredths (174.84) feet to a point;
Thence running on a line having a bearing of South 84(Degree) 31' 11"
West, bounded northerly by land now or formerly of Alfred M. Freitas a distance
of two hundred fifty-seven and eight one hundredths (257.08) feet to point;
Thence running on a line having a bearing of South 01(Degree) 06' 48"
West, bounded westerly a distance of one hundred seventeen and seven one
hundredths (117.07) feet to a point;
Thence running on a line having a bearing of South 02(Degree) 17' 22" East,
bounded westerly a distance of one hundred forty-seven and ninety-one one
hundredths (147.91) feet to a point, the last two courses bounding on land now
or formerly of Manuel M. and Mary E. Reis;
Thence running on a line having a bearing of North 84(Degree) 09' 56"
East, bounded southerly a distance of three hundred ninety-nine and eighty-two
one hundredths (399.82) feet to a point;
Thence running southeasterly bounded southwesterly, along a curve
having an exterior central angle of 103(Degree) 51' 26", a radius of two hundred
and zero one hundredths (200.00) feet, and an arc length of three hundred
sixty-two and fifty-three one hundredths (362.53) feet to a point;
Thence running along a line having a bearing of South 08(Degree) 01'
22" West, bounded westerly a distance of one hundred forty-seven and forty
one-hundredths (147.40) feet to a point;
Thence running on a line having a bearing South 20(Degree) 32' 06"
West, bounded westerly a distance of two hundred and eighty-three one hundredths
(200.83) feet to a point;
Thence running on a line having a bearing of South 04(Degree) 08' 50" East,
bounded westerly a distance of seventeen and eighteen one hundredths (17.18)
feet to a point, said point being the point and place of beginning, the last
five courses bounding on land now or formerly of Israel M. Resnikoff and David
T. Chase;
Being the same premises conveyed to Rhode Island Industrial Facilities
Corporation dated by deed from Middletown Technology Associates, III, L.P.,
recorded with the Records of Land Evidence in the Town of Middletown in Book 174
at page 25.
Being the same premises shown on the plan entitled "Plan of Land in
Middletown, Rhode Island, Prepared By Vanasse/Hangen Engineering, Inc., dated
July 28, 1986, and recorded with said Records of Land Evidence in Planning Book
13, Page 303".
Said premises have the benefits of all appurtenant rights and
easements.
EXHIBIT "B"
To
MORTGAGE AND SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
WITH ASSIGNMENT OF LEASES AND RENTS
Permitted Encumbrances:
1. Real estate taxes and municipal charges which are not yet due and payable.
2. Restrictions recorded in Book 160 at Page 234.
3. Easement as set forth in Book 156 at Page 841.
4. Easement as set forth in Book 149 at Page 28.
IDS Life Insurance Company
Loan #694-001790
PROMISSORY NOTE
$3,000,000.00
January 11, 1999
Middletown, Rhode Island
1. Agreement to Pay. For value received, the undersigned KVH
Industries, Inc., a Delaware corporation (hereinafter referred to as "Borrower")
(whose mailing address is 50 Enterprise Center, Middletown, Rhode Island 02842),
hereby agrees and promises to pay to order of IDS Life Insurance Company, a
Minnesota corporation, its endorsees, successors and assigns (hereinafter
referred to as "Lender"), at its principal office and mailing address at do
American Express Financial Corporation, 733 Marquette Avenue, Minneapolis,
Minnesota 55440, Attention: Real Estate Loan Management, Unit #401, or such
other address as Lender may from time to time designate, the principal sum of
Three Million and 00/100 Dollars and 00/100 Dollars ($3,000,000.00) or so much
as may from time to time be disbursed hereon, together with interest on the
unpaid principal balance hereof from the date hereof until said amounts shall
have been paid in full at the rate provided for herein and all other sums due as
provided herein, payable in lawful money of the United States of America, which
shall be legal tender for public and private debt at the time of payment (the
"Loan").
2. Interest Rate. The outstanding principal balance hereof shall bear
interest at the rate of seven percent (7.0%) per annum (the "Regular Rate")
computed on the basis of the actual days elapsed on the assumption that each
month contains thirty (30) days and each year contains three hundred sixty (360)
days.
3. Monthly Payment; Maturity Date. Principal and interest upon this
Note shall be paid as follows:
(a) On the date hereof, interest only at the Regular Rate shall be due
and payable on the unpaid principal balance hereof equal to accrued
interest from the date of disbursement hereunder through the last day
of January, 1999.
(b) On the first day of March, 1999, and continuing on the first day of
each month thereafter through and including January 1, 2009, interest
at the Regular Rate and principal payments shall be made in two hundred
thirty-nine (239) equal installments of Twenty-three Thousand Two
Hundred Fifty-eight and 97/100 Dollars ($23,258.97) each (based on a
twenty (20) year amortization of the principal amount of this Note
commencing on February 1, 1999).
(c) On the first day of February, 2009 (the "Maturity Date"), a final
payment shall he due and payable in the amount of the entire unpaid
principal and interest on this Note.
(d) This is a balloon note, and on the Maturity Date a substantial
portion of the principal amount of this Note will remain unpaid by the
monthly payments above required.
(e) All payments shall be applied first to late charges due hereunder,
second to any prepayment fee due hereunder, third to accrued interest
at the rate then in effect under the terms hereof, and fourth to
principal. However, upon the occurrence of an Event of Default (as
hereinafter defined), any monies received shall be applied, at the
option and discretion of Lender, to any sums due under the Note or
instrument securing this Note, including, without limitation,
reasonable attorneys' fees, and other costs of collection as provided
herein.
(f) All payments hereunder which are due on a Saturday, Sunday or
holiday shall he deemed to be payable on the next business day.
4. Default Interest Rate. Upon the earlier to occur of (a) the date on
which the indebtedness evidenced hereby is accelerated by Lender, or (b) the
date on which an Event of Default (as hereinafter defined) occurs which is not
cured within thirty (30) days, or (c) upon nonpayment at the Maturity Date, the
interest rate payable hereunder shall thereafter increase and shall be payable
on the whole of the unpaid principal balance at a rate equal to the lesser of
(i) four percent (4%) per annum in excess of the rate of interest then in effect
under the terms of this Note or (ii) the highest rate of interest permitted
under the laws of the State of Rhode Island (hereinafter referred to as the
"Default Rate"). Interest on this Note at the Default Rate shall be immediately
due and payable without notice or demand. The Default Rate shall be applicable
whether or not Lender has exercised its option to accelerate the maturity of
this Note and declare the entire unpaid principal indebtedness to be due and
payable. The Default Rate shall continue until Borrower has cured all defaults
as permitted herein, Borrower has paid all indebtedness evidenced by this Note
in full, or all foreclosure proceedings have been completed and all redemption
periods have expired, whichever shall occur first. This provision shall not be
deemed to excuse a default and shall not be deemed a waiver of any other rights
Lender may have, including the right to declare the entire unpaid principal
balance and accrued interest immediately due and payable.
5. Late Charge. Any monthly installment payment, including monthly
payments of escrows for real estate taxes, special assessments and/or insurance
premiums required by the "Mortgage" (as hereinafter defined) not made by
Borrower within ten (10) days of the due date shall be subject to a late payment
charge equal to five percent (5%) of the amount of such monthly payment. The
late charge shall apply individually to all payments past due with no daily
adjustment and shall be used to defray the cost of Lender incident to collecting
such late payment.
This provision shall not be deemed to excuse a late payment or be deemed a
waiver of any other rights Lender may have, including the right to declare the
entire unpaid principal balance and accrued interest immediately due and
payable.
6. Security. This Note is given to evidence an actual loan in the above
amount and is the Note referred to in and secured by:
(a) An Open End Mortgage, And Security Agreement And Fixture Financing
Statement With Assignment Of Leases And Rents (the "Mortgage") given by
Borrower, as mortgagor, to Lender, as mortgagee, of a contemporaneous
date herewith, encumbering certain real property and the improvements
thereon located in the Town of Middletown, County of Newport, State of
Rhode Island (the "Premises"); and
(b) An Assignment of Leases (the "Assignment of Leases") and Assignment
of Rents (the "Assignment of Rents") given by Borrower, as assignor, to
Lender, as assignee, of a contemporaneous date herewith, assigning to
assignee all of the rents, issues, profits and leases of the Premises;
and
(c) Other collateral security agreements (the "Security Documents")
given Borrower or guarantors of the Loan to Lender, all of a
contemporaneous date herewith.
(d) A Hazardous Materials Indemnity Agreement (the "Hazardous Materials
Agreement") given by Borrower to Lender of a contemporaneous date
herewith providing indemnification to Lender for claims, losses,
liabilities, etc. for matters arising out of Hazardous Materials or
violation of Laws (as those two terms are more particularly defined in
the Hazardous Materials Agreement).
Reference is hereby made to the Mortgage, the Assignment of Leases, the
Assignment of Rents, the Security Documents and the Hazardous Materials
Agreement (which are incorporated herein by reference as fully and with the same
effect as if set forth herein at length) for a description of Premises, a
statement of the covenants and agreements, a statement of the rights and
remedies and securities afforded thereby and all other matters contained
therein. The Note, Mortgage, Assignment of Leases, Assignment of Rents,
Hazardous Materials Agreement and Security Documents shall be referred to
collectively as the Loan Documents.
7. Default and Acceleration. If a default be made in any payment of
principal, interest or any other sum or charge when due in accordance with the
terms and conditions of this Note or the Mortgage, or if an Event of Default (as
that term is defined in the Mortgage) occurs in the Mortgage, or if there is a
nonmonetary default in or nonperformance of any term or obligation of any of the
Loan Documents after the expiration of thirty (30) days of the giving of notice
by Lender to Borrower of such nonmonetary default or nonperformance (or if such
nonmonetary default cannot be cured within thirty (30) days, then such cure
period shall be extended for an additional thirty (30) days for a total cure
period not to exceed sixty (60) days so long as Borrower is continuously and
diligently pursuing such cure), such event shall constitute an Event of Default
hereunder (an "Event of Default"), and the entire unpaid principal balance,
together with accrued interest thereon and the prepayment fee, if appropriate,
shall become, without notice, immediately due and payable at the option of
Lender.
8. Loan Year. "Loan Year" shall mean a period consisting of twelve (12)
consecutive months commencing on the First day of the first calendar month
subsequent to the date hereof, or on any anniversary thereof, the First Loan
Year being a Loan Year commencing the First day of February, 1999. If the date
hereof is the first day of a month, the first Loan Year shall commence on the
date hereof.
9. Prepayment Privilege. For and in consideration of the prepayment fee
described in this Section, to which Borrower and Lender have agreed, the
indebtedness evidenced hereby may be prepaid in accordance with the provisions
of this Section and not otherwise.
(a) Borrower shall have the right to repay this Note in full, but not
in part during the entire term hereof provided that any such payment of
the principal balance of this Note, for whatever reason, whether
voluntary or involuntary, shall be subject to a prepayment fee which
shall be calculated as provided in this Section 9(a). In no event shall
the above calculation result in a reduction of the principal balance or
accrued interest at prepayment. The prepayment fee shall be calculated
as follows:
(i) The annualized yield to maturity, on the date a prepayment
is made of a certain U.S. Government Note maturing on the
Maturity Date (the "Calculation Date"), is hereby defined as
the "Reinvestment Yield". Quotations supplied by the Federal
Reserve Bank of New York shall be the source of this
determination. Any government note that is designated with the
footnote "f" or with similar feature in the future shall not
be considered in connection with the computation to be made.
If there is no quotation for a U. S. Government Note maturing
on the Calculation Date at such time as such prepayment is
made, the Lender shall select a U.S. Government Note having a
maturity date most closely approximate to the Calculation Date
as quoted by the Federal Reserve Bank of New York for purposes
of determining the Reinvestment Yield pursuant to this
subsection. In the event that there is more than one U.S.
Government Note maturing on the Calculation Date at the time
such prepayment is made, Lender shall have the right to select
the applicable U.S. Government Note. In the event that such
quotes are no longer available, then Lender shall have the
sole right to select a reasonably alternative basis on which
to determine the Reinvestment Yield.
Footnote "f" relates to Government Notes which are redeemable
at par and accrued interest to the date of payment, at any
time, upon the death of the owner at the option of the duly
constituted representative of the owner's estate.
(ii) Calculate the monthly interest payment that would be
received by reinvesting the proceeds of the prepayment at an
interest rate equivalent to the Reinvestment Yield. The result
is hereby defined as the "Reinvestment Payment".
(iii) Subtract the Reinvestment Payment from an amount equal
to the monthly interest payment that would be received by
reinvesting the proceeds of the prepayment at an interest rate
equal to the then applicable rate of the Note. The result is
hereby defined as the "Prepayment Differential". In the event
that the Reinvestment Yield is greater than the applicable
rate, the Prepayment Differential shall equal zero.
(iv) Calculate the present value of the Prepayment
Differential using a discount factor equal to the Reinvestment
Yield (monthly compounding) to the number of months remaining
from the date of such prepayment until the Calculation Date.
Such amount shall equal the prepayment due hereunder.
(b) No prepayment fee shall be due if the indebtedness evidenced hereby is
paid in full during the last ninety (90) days prior to the Maturity Date.
(c) At the option of Lender, this Note is also subject to mandatory
prepayment, without prepayment fee of any kind, upon certain events set
forth in the Mortgage; further, if Lender, at its option, does not make
proceeds of insurance or condemnation awards available for repair or
restoration of the Premises, Borrower may prepay this Loan in full
within ninety (90) days of notice of nonavailability without a
prepayment fee.
(d) Prepayments (other than prepayments pursuant to subsection (c)
above) shall be made only upon advance written notice of at least
thirty (30) days to Lender and shall be made on a regularly scheduled
installment payment date. Notice of prepayment shall not suspend nor
reduce required installment payments.
(e) In the event an Event of Default shall occur under the terms of the
Loan Documents and Lender shall accelerate the Loan as part of a
foreclosure proceeding or otherwise and Borrower shall then tender
payment of the Loan in full, or Lender shall obtain judgment for any
portion of the Loan, such tender or judgment shall constitute
prepayment and the fee provided for in this Section shall be due.
Borrower hereby expressly agrees that such prepayment fee constitutes additional
bargained-for consideration given by Borrower to Lender in order to induce
Lender to make the Loan to Borrower.
10. Payment Upon an Event of Default. Upon the occurrence of an Event
of Default and following acceleration of maturity hereof by Lender, a tender of
payment of or entry of judgment for the amount necessary to satisfy the entire
unpaid principal balance due and payable shall be deemed to constitute an
attempted evasion of the aforesaid restrictions on the right of prepayment and
shall be deemed a prepayment hereunder, and such a payment or judgment must,
therefore, include the prepayment fee then in effect under the terms hereof.
Lender shall have the right to include and bid in such prepayment fee as an
amount due to Lender in connection with any foreclosure sale.
11. Effect of Application of Insurance or Condemnation Proceeds.
Not-withstanding anything herein to the contrary, in the event that Lender is
unwilling to make the proceeds of a condemnation award or insurance settlement
on the Premises available for repair or restoration and elects to apply such
award or settlement towards the reduction of the principal balance of this Note
pursuant to the terms of the Mortgage, and the proceeds thereof do not pay in
full the balance outstanding on this Note, provided the Borrower does not elect
to pay the Loan in full without any prepayment fee as provided in Section 10(c)
hereof, then the unpaid principal balance shall be reamortized over the
remaining portion of the amortization period and the debt service payments set
forth in Section 3(1)) hereof shall be reduced accordingly.
12. Costs of Collection. Borrower agrees that if, and as often as, this
Note is placed in the hands of an attorney for collection or to defend or
enforce any of Lender's rights hereunder, or under the Mortgage, the Assignment
of Leases, Assignment of Rents or any other Security Document or Loan Document
securing payment of this Note, Borrower will pay to Lender its reasonable
attorneys' and paralegals' fees, and costs, including, without limitation, all
fees and costs incurred in litigation, mediation, arbitration, bankruptcy and
administrative proceedings, and appeals therefrom, and all court costs and other
expenses, including, without limitation, appraisal fees and costs of
environmental review, incurred in connection therewith.
13. Time. Time is of the essence of this Note and each of the
provisions hereof.
14. Governing Law. This Note shall be governed by the laws of the State
of Rhode Island without resort to Rhode Island's conflict of laws rules
15. Interest Limitation. All agreements between Borrower and Lender are
hereby expressly limited so that in no contingency or event whatsoever, whether
by reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Lender for the use,
forbearance, loaning or detention of the indebtedness evidenced hereby exceed
the maximum permissible under applicable law. If from any circumstance
whatsoever, fulfillment of any provision hereof or of the Mortgage, Assignment
of Leases or any other Security Document or Loan Document at any time given the
amount paid or agreed to be paid shall exceed the maximum permissible under
applicable law, then, the obligation to be fulfilled shall automatically be
reduced to the limit permitted by applicable law, and if from any circumstance
Lender should ever receive as interest an amount which would exceed the highest
lawful rate of interest, such amount which would be in excess of such highest
lawful rate of interest shall be applied to the reduction of the principal
balance evidenced hereby and not to the payment of interest. This provision
shall control every other provision of all agreements between Borrower and
Lender and shall be binding upon and available to any subsequent holder of this
Note.
16. Waivers by Borrower.
(a) Borrower and all other persons or entities liable for all or part
of the principal balance evidenced by this Note severally hereby waive
presentment for payment, protest and notice of non-payment.
(b) Borrower and all persons and entities liable for all or part of the
principal balance evidenced by this Note hereby consent, without
affecting their liability, to the granting, with or without notice, of
any extension or alteration of time for payment of any sum or sums due
hereunder or under the Loan Documents, or for the performance of any
covenant, condition or agreement contained herein or therein on the
ground of any other indulgence, or the taking or releasing or
subordinating of any security for the indebtedness hereunder, or the
acceptance of additional security of any kind, or any other
modification or amendment of this Note or of any of the Loan Documents,
any release of, or resort to any party liable for payment hereof, and
agree that such action will in no way release or discharge the
liability of such parties, whether or not granted or done with the
knowledge or consent of such parties.
(c) Borrower and all persons and entities liable for all or a part of
the principal balance evidenced by this Note hereby waive and renounce,
to the extent permitted by applicable law, all rights to the benefits
of any statute of limitations and any moratorium, reinstatement,
marshalling, forbearance, valuation, stay, extension, redemption,
appraisement, exemption and homestead now provided, or which may
hereafter be provided, by the Constitution or laws of the United States
of America or the State of Rhode Island, both as to itself and in and
to all of its property, real and personal, against the enforcement and
collection of the obligations evidenced by this Note and the Loan
Documents.
(d) Borrower and all the persons liable for all or a part of the
principal balance evidenced by this Note waive any right to set off
and/or recoupment against Lender in connection with claims against
Lender relating to any other claim it now or hereafter may have against
Lender, and agrees it will not urge or assert any claim including but
not limited to a set off and/or recoupment, it may have now or
hereafter, against Lender as a defense against payment of this Note.
17. No Waiver by Lender.
(a) Lender shall not be deemed to have waived any of its rights or
remedies under this Note unless such waiver is expressed in writing by
Lender, and no delay or omission by Lender in exercising, or failure by
Lender on any one or more occasions to exercise, any of Lender's rights
hereunder or under the Loan Documents, or at law or in equity,
including, without limitation, Lender's right, after the occurrence of
any Event of Default by Borrower, to declare the entire indebtedness
evidenced hereby immediately due and payable, shall be construed as a
novation of this Note or shall operate as a waiver or prevent the
subsequent exercise of any or all such rights.
(b) Acceptance by Lender of any portion or all of any sum payable
hereunder, whether before, on or after the due date of such payment
shall not be a waiver of Lender's right either to require prompt
payment when due of all other sums payable hereunder or to exercise any
of Lender's rights, powers and remedies hereunder or under the Loan
Documents. A waiver of any right in writing on one occasion shall not
be construed as a waiver of Lender's rights to insist thereafter upon
strict compliance with the terms hereof without previous notice of such
intention being given to Borrower, and no exercise of any right by
Lender shall constitute or be deemed to constitute an election of
remedies by Lender precluding the subsequent exercise by Lender of any
or all of the rights, powers and remedies available to it hereunder or
under the Loan Documents, or at law or in equity. Borrower expressly
waives the benefit of any statute or rule of law or of equity now
provided, or which may hereafter be provided, which would produce a
result contrary to, or in conflict with, the foregoing.
18. Disbursements. Funds representing the proceeds of the indebtedness
evidenced hereby which are disbursed by Lender by mail, wire transfer or other
delivery to Borrower, to escrows or otherwise for the benefit of Borrower shall,
for all purposes, be deemed outstanding hereunder and to have been received by
Borrower as of the date of such mailing, wire transfer, or other delivery and
until repaid, notwithstanding the fact that such funds may not at any time have
been remitted by such escrows to Borrower or for its benefit.
19. Exempted Transaction. Borrower agrees that (a) the payment
obligations evidenced by this Note and the other instruments securing this Note
are exempted transactions under the Truth in Lending Act 15 USC ss. 1601, et
seq.; (b) the proceeds of the indebtedness evidenced by this Note will not be
used for the purchase of the registered equity securities within the purview of
Regulation "U" issued by the Board of Governors of the Federal Reserve System;
and (c) on the Maturity Date, Lender shall not have any obligation to refinance
the indebtedness evidenced by this Note or to extend further credit to Borrower.
20. Captions. The captions to the Sections of this Note are for
convenience only and shall not be deemed part of the text of the respective
Sections and shall not vary, by implication or otherwise, any of the provisions
of this Note.
21. Due-on-Sale-and-Encumbrance Call Provisions. The Mortgage provides
for certain rights on the part of the Lender to call all outstanding principal
and accrued interest on this Note due and payable in full together with the
prepayment premium then in effect under the terms of this Note in the event that
(a) Borrower should sell, convey, contract to sell or convey, assign or encumber
any property, real or personal, encumbered by the Mortgage in violation of
Section 2.9 of the Mortgage, or (b) certain corporate stock interests in the
Borrower should be sold, conveyed, assigned or encumbered in violation of
Section 2.9 of the Mortgage, without, in each instance, the prior written
consent of the Lender. Reference to the Mortgage must be made for the terms of
these provisions. Such provisions are incorporated herein by this reference.
22. Notices. All notices required or committed to be given hereunder to
Borrower or Lender shall be given in the manner and to the place as provided in
the Mortgage for notices to the "Mortgagor" or the "Mortgagee".
23. Limitations on Sale or Financing. The Mortgage includes certain
limitations on the right of Borrower to sell, convey, contract to sell, convey,
assign or encumber any property, real or personal, encumbered by the Mortgage or
to sell, convey, assign or encumber certain interests in Borrower. Reference to
the Mortgage must be made for the terms of these provisions. Such provisions are
incorporated herein by this reference.
24. Joint and Several Liability. The promises and agreements herein
shall be construed to be and are hereby declared to be the joint and several
promises and agreements of all Borrowers and shall constitute the joint and
several obligations of each Borrower and shall be fully binding upon and
enforceable against each Borrower. Neither the death nor release of any person
or party to this Note shall affect or release the joint and several liability of
any other person or party. Lender may at its option enforce this Note against
one or all of Borrowers, and Lender shall not be required to resort to
enforcement against each Borrower and the failure to proceed against or join any
Borrower shall not affect the joint and several liability of any other Borrower.
25. Miscellaneous. The provisions of this Note may not be waived,
changed or discharged orally, but only by an agreement in writing signed by
Borrower and Lender; and any oral waiver, change or discharge of any term or
provision of this Note shall be without authority and of no force or effect. The
invalidity or unenforceability of any provision of this Note shall not affect
the validity or enforceability of any other term or provision hereof.
26. Jury Trial. NEITHER BORROWER, LENDER, ANY GUARANTOR OR ANY OTHER
PERSON OR ENTITY LIABLE FOR THE INDEBTEDNESS EVIDENCED HEREBY, OR ANY ASSIGNEE,
SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF LENDER, BORROWER, ANY GUARANTOR OR
ANY OTHER PERSON OR ENTITY SHALL SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,
COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON OR ARISING OUT OF THIS
NOTE, THE MORTGAGE, OR ANY INSTRUMENT SECURING THIS NOTE, ANY COLLATERAL FOR THE
PAYMENT HEREOF OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG SUCH PERSONS
OR ENTITIES, OR ANY OF THEM. NEITHER LENDER, BORROWER NOR ANY GUARANTOR OR ANY
SUCH OTHER PERSON OR ENTITY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TIUAL HAS BEEN WAIVED, WITH ANY OTHER ACTION WHICH A JURY TIIJAL CANNOT BE
OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED
BY THE PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES BORROWER ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY LENDER THAT THE
PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH LENDER
HAS RELIED, IS RELYING AND WILL RELY IN MAKING THE LOAN. BORROWER ACKNOWLEDGES
THAT IT HAS CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTANDS THE LEGAL EFFECT OF
THE PROVISIONS OF THIS SECTION.
Borrower has executed this Promissory Note as of the date and year first above
written.
"BORROWER"
KVH Industries, Inc., a Delaware corporation
By:
(Signature), Title
(Printed), Title