Executive 46
Loan No. 87532
Prepared By and
After Recording Return To:
Kimberly T. Feltman, Esq.
AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5223
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ATTENTION: COUNTY CLERK--THIS INSTRUMENT COVERS GOODS THAT ARE OR WILL BECOME
FIXTURES ON THE DESCRIBED REAL PROPERTY AND SHOULD BE FILED FOR RECORD IN THE
REAL PROPERTY RECORDS WHERE MORTGAGES ON REAL ESTATE ARE RECORDED. THIS
INSTRUMENT SHOULD ALSO BE INDEXED AS A UNIFORM COMMERCIAL CODE FINANCING
STATEMENT COVERING GOODS THAT ARE OR WILL BECOME FIXTURES ON THE DESCRIBED
REAL PROPERTY. THE MAILING ADDRESSES, TELEPHONE NUMBERS, AND FAX NUMBERS OF
THE MORTGAGEE/SECURED PARTY AND THE MORTGAGOR/DEBTOR ARE WITHIN.
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MORTGAGE AND SECURITY AGREEMENT
(WITH UCC FINANCING STATEMENT FOR FIXTURE FILING)
710 RT. 46 REALTY, LLC., C/O PRINCIPAL INVESTMENT GROUP, INC.,
Mortgagor
having an office at
c/o Principal Investment Group
950 3rd Avenue
31st floor
New York, New York 10022
to
LIFE INVESTORS INSURANCE COMPANY OF AMERICA
an Iowa corporation,
Mortgagee,
having an office c/o AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5223
LOAN AMOUNT: $6,600,000
PREMISES: 710 ROUTE 46, FAIRFIELD, ESSEX COUNTY, NEW JERSEY
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MORTGAGE AND SECURITY AGREEMENT
(WITH UCC FINANCING STATEMENT FOR FIXTURE FILING)
THIS MORTGAGE AND SECURITY AGREEMENT IS MADE AND GIVEN AS OF THE 29 of April
by 710 RT. 46 REALTY, LLC., c/o Principal Investment Group, Inc., a limited
liability company organized under the laws of New Jersey, having an office at
c/o Principal Investment Group, 950 3rd Avenue, 31st floor, New York,
New York 10022 ("Mortgagor"), to LIFE INVESTORS INSURANCE COMPANY OF
AMERICA, an Iowa corporation having an office c/o AEGON USA Realty Advisors,
Inc., 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5223 ("Mortgagee").
The definitions of capitalized terms used in this Mortgage may be found
either in Section 3 below, or through the cross-references provided in that
Section.
1. RECITALS
A. Under the terms of a commercial Mortgage Loan Application and
Commitment dated December 3, 1996 (the "Commitment"), AEGON USA Realty
Advisors, Inc. ("AEGON"), as agent for Mortgagee, agreed to fund a loan
in an original principal amount to be determined in accordance with
procedures described in the Commitment (the "Loan").
B. Mortgagee has funded the Loan in the principal amount of $6,600,000
in accordance with the Commitment, and to evidence the Loan, Mortgagor
has executed and delivered to Mortgagee a certain secured promissory
note, of even date, in the amount of $6,600,000.
C. The Commitment requires that the Loan be secured by certain real
property and by certain tangible and intangible personal property.
2. GRANTING CLAUSE
To secure the repayment of the Indebtedness and performance of
Mortgagor's other Obligations, and in consideration of the sum of ten
dollars ($10.00) and other valuable consideration, the receipt and
sufficiency of which are acknowledged, Mortgagor mortgages, grants,
bargains, sells, warrants, conveys, alienates, releases, assigns, sets
over and confirms to Mortgagee, and to its successors and assigns
forever, a mortgage interest in the Real Property, the Leases, the
Rents, the Assigned Accounts, the Assigned Rights, the Condemnation
Proceeds, and the Insurance Proceeds, and grants to Mortgagee a security
interest in the Personal Property.
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DEFINED TERMS
1. "ABSOLUTE ASSIGNMENT OF LEASES AND RENTS" means the Loan Document
bearing this heading.
2. "APPURTENANT EASEMENTS" means the declarations, easements, covenants,
restrictions and agreements, if any, identified on the attached Exhibit A.
3. "ASSIGNED ACCOUNTS" means all rights to the present or future payment of
money, if the amounts to be paid relate to the use or operation of the Real
Property, from any construction on the Real Property, or from the deposit of
any such amounts with banks, savings and loan institutions, brokerage firms
or other financial institutions, title insurance companies or agencies, or
courts, including property management accounts (whether held in the name of
Borrower or of a property manager), accounts receivable, reserves, deferred
payments, escrow funds, disputed Rents, refunds (including tax, insurance and
utility rebates, credits or refunds), earnest money or sales contract
deposits, chattel paper, securities entitlements, instruments, documents,
notes, drafts and letters of credit (other than letters of credit in favor of
Mortgagee).
4. "ASSIGNED RIGHTS" means all of Mortgagor's rights (whether presently
existing or arising in the future) under all contracts, claims and licenses
that relate to the Real Property and may benefit its owner, including air
rights, mineral rights, water rights, claims against third parties for
damages to the Property, franchises, construction, roof and equipment
guarantees and warranties, building licenses and permits, development
permits, licenses and applications (whether or not yet approved or issued)
management contracts, service contracts, leases of Fixtures or of Personal
Property, and all of Mortgagor's right, title and interest (whether presently
existing or arising in the future) in and to unearned insurance premiums, any
greater estate in the Real Property, trade names, property management files,
trademarks, tradestyles, service marks, copyrights, accounting books and
records, site plans, surveys, blueprints, and construction drawings, plans
and specifications, and the work product of architects, environmental
consultants, property tax consultants, engineers, and any other third party
contractors whose services benefit the Real Property.
5. "BUSINESS DAY" means any day when state and federal banks are open for
business in Cedar Rapids, Iowa.
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6. "CODE" means the Uniform Commercial Code, as in effect in New Jersey.
7. "CONDEMNATION PROCEEDS" means all money or other property that has been
or is in the future, awarded or agreed to be paid or given in connection with
any taking by eminent domain of all or any part of the Real Property
(including a taking through the vacation of any street dedication or through
a change of grade of such a street), either permanent or temporary, or in
connection with any purchase in lieu of such a taking, or as a part of any
related settlement.
8. "DEFAULT" means any of the acts, omissions, or circumstances specified
in Section 10 below.
9. "ENVIRONMENTAL LAWS" means all present and future laws, statutes,
ordinances, rules, regulations, orders, guidelines, rulings, decrees, notices
and determinations of any Governmental Authority pertaining to health,
underground storage tank regulation or removal, protection of the
environment, natural resources, wetlands, conservation, wildlife, waste
management, regulation of activities involving Hazardous Substances, and
pollution, or relating to waste disposal or environmental protection with
respect to the exposure to, or manufacture, possession, presence, use,
generation, storage, transportation, treatment, release, emission, discharge,
disposal, abatement, cleanup, removal, remediation or handling of any
Hazardous Substances, including, for example, the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 ET SEQ.,
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
Section 9601(20)(D), the Resource Conservation and Recovery Act, 42 U.S.C.
Section 9601 ET SEQ., the Federal Water Pollution Control Act, as amended by
the Clean Water Act, 33 U.S.C. Section 1251 ET SEQ., the Clean Air Act,
42 U.S.C. Section 7401 ET SEQ. and the Toxic Substances Control Act,
15 U.S.C. Section 2601 ET SEQ., and all administrative and judicial actions
respecting such legislation, all as amended from time to time.
10. "ESA" means the written environmental site assessment of the Real
Property obtained under the terms of Section 4.2.2 of the Commitment.
11. "ESCROW EXPENSES" means those expenses in respect of Insurance Premiums
and Impositions that Mortgagee elects to pay directly from the Escrow Fund
using monies accumulated through the collection of Monthly Escrow Payments.
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12. "ESCROW FUND" means the accounting entry maintained on the books of
Mortgagee as funds available for the payment of Escrow Expenses under the
terms of this Mortgage.
13. "FINANCING STATEMENTS" means the Uniform Commercial Code financing
statements filed to perfect the security interests securing the indebtedness,
as amended or extended from time to time.
14. "FIXTURES" means all materials, supplies, equipment, apparatus and other
items now or hereafter attached to or installed on the Real Property in a
manner that causes them to become fixtures under the law of New Jersey,
including all built-in or attached furniture or appliances, elevators,
escalators, heating, ventilating and air conditioning system components,
emergency electrical generators and related fuel storage or delivery systems,
septic system components, storm windows, doors, electrical equipment,
plumbing, water conditioning, lighting, cleaning, snow removal, lawn,
landscaping, irrigation, security, incinerating, firefighting, sprinkler or
other fire safety equipment, bridge cranes or other installed materials
handling equipment, satellite dishes or other telecommunication equipment,
built-in video conferencing equipment, sound systems or other audiovisual
equipment, and cable television distribution systems. Fixtures do not include
trade fixtures, office furniture and office equipment owned by tenants and
neither necessary nor desirable for the operation of the Real Property as
income-producing commercial real estate.
15. "GOVERNMENTAL AUTHORITY" means any political entity with the legal
authority to impose any requirement on the Property, including the
governments of the United States, the State of New Jersey, County of Essex,
Township of Fairfield and any other entity with jurisdiction to decide,
regulate, or affect the ownership, construction, use, occupancy, possession,
operation, maintenance, alteration, repair, demolition or reconstruction of
any portion or element of the Real Property.
16. "HAZARDOUS SUBSTANCES" means: (A) any hazardous wastes or toxic
chemicals, materials, substances or wastes as defined by the Environmental
Laws; (B) any "oil," as defined by the Federal Water Pollution Control Act
and regulations promulgated thereunder (including crude oil or any fraction
of crude oil); (C) any substance, the presence of which is now or in the
future prohibited, regulated or controlled by any Environmental Law or any
other law, regulation, statute or ordinance of any Governmental Authority;
(D) any asbestos or asbestos containing materials, (E) any polychlorinated
biphenyls ("PCBs"), (E) urea formaldehyde, (F) atmospheric radon at levels
over four picocuries per cubic liter, (G) any solid, liquid, gaseous or
thermal irritant or contaminant,
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such as smoke, vapor, soot, fumes, alkalis, acids, chemicals, pesticides,
herbicides, sewage, industrial sludge or similar wastes, and (H) any
industrial, nuclear or medical by-products. However, "Hazardous
Substances" include neither (a) immaterial quantities of automotive motor
oil leaked inadvertently from vehicles in the ordinary course of the
operation of the Real Property and cleaned up in accordance with
reasonable property management procedures and any applicable law nor (b)
immaterial quantities of substances customarily and prudently used in
the cleaning and maintenance of the Real Property in accordance with any
applicable law.
17. "IMPOSITIONS" means all real and personal property taxes, assessments,
and all other charges that appear on a real property tax bill or
other billing by a governmental or quasi-governmental taxing
authority; general or special assessments; personal and ad valorem
property taxes; fees for any easement, license or agreement
maintained for the benefit of the Property and which may be
assessed, levied or imposed as a lien on the Property; and any and
all other taxes, levies, user fees, claims, charges and assessments
whatsoever that at any time may be assessed, levied or imposed as a
lien on the Property or upon its ownership, use, occupancy or
enjoyment, and any related costs, interest or penalties. In
addition, "Impositions" include all documentary, stamp or intangibles
taxes that may become due in connection with any future advance made
by Mortgagee to Mortgagor.
18. "IMPROVEMENTS" means all buildings and improvements of any kind erected or
placed on the Land now or in the future, including the Fixtures, together
with all appurtenant rights, privileges, easements, tenements,
hereditaments, titles, reversions, remainders and other interests.
19. "INDEBTEDNESS" means all sums that are owed or become due pursuant to the
terms of the Note, this Mortgage, or any of the other Loan Documents,
including scheduled principal payments, scheduled interest payments,
default interest, late charges, prepayment premiums, accelerated or
matured principal balances, advances, collection costs, receivership costs
and all other financial obligations of Mortgagor incurred in connection
with the Loan transaction.
20. "INDEMNIFICATION AGAINST ENVIRONMENTAL LIABILITIES" means the document
bearing that heading.
21. "INSURANCE PREMIUMS" means all premiums or other charges required to
maintain in force any and all insurance policies that this Mortgage
requires that Mortgagor maintain.
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22. "INSURANCE PROCEEDS" means all proceeds of all insurance now or hereafter
carried by or payable to Mortgagor with respect to the Property, or the
interruption of rents or income derived from the Property, all unearned
insurance premiums and all related claims or demands.
23. "LAND" means that certain tract of land located in Fairfield, Essex
County, New Jersey, which is described on the attached Exhibit A, together
with all appurtenances, including all Mortgagor's right title and interest
to and in the air space above the Land and all alley, party wall,
drainage, sewer, mineral, water, oil and gas, vault and other rights,
estates, titles, interests, privileges, easements, tenements,
hereditaments, titles, royalties, reversions, remainders and other
interests.
24. "LEASES" means all leases, subleases, licenses, concessions, extensions,
renewals and other agreements (whether written or oral, and whether
presently effective or made in the future) through which Mortgagor grants
any possessory interest in and to, or any right to occupy or use, all or
any part of the Real Property, and any related guaranties.
25. "LEGAL REQUIREMENTS" means all laws, statutes, rules, regulations,
ordinances, judicial decisions, administrative decisions, building
permits, development permits, certificates of occupancy, or other
requirements of any Governmental Authority.
26. "LOAN DOCUMENTS" means all documents evidencing the Loan or delivered in
connection with the Loan, whether entered into at the closing of the Loan
or in the future.
27. "MONTHLY ESCROW PAYMENT" means the sum of the Monthly Imposition
Requirement, the Monthly Insurance Premium Requirement, and the Monthly
Reserve Requirement.
28. "MONTHLY IMPOSITION REQUIREMENTS" means one-twelfth of the annual amount
that Mortgagee estimates (based on available historical data and, if
future Impositions are as yet undetermined, on a 5% annual inflation
factor) will be required to permit the timely payment by Mortgagee of
those Impositions that Mortgagee elects, from time to time, to pay from
the Escrow Fund.
29. "MONTHLY INSURANCE PREMIUM REQUIREMENT" means one-twelfth of the annual
amount that Mortgagee estimates (based on available historical data and
using, if future Insurance Premiums are as yet undetermined, a 5%
inflation factor) will be required to permit the timely payment of the
Insurance Premiums by Mortgagee.
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30. "MONTHLY RESERVE REQUIREMENT" means the amount that Mortgagee estimates
will, over the subsequent twelve months, result in the accumulation of a
surplus in the Escrow Fund equal to one-sixth of the sum of the Annual
Imposition Requirement and the Annual Insurance Premium Requirement.
(Once the reserve of one-sixth of the sum of the Annual Imposition
Requirement and the Annual Insurance Premium Requirement is accumulated,
then the Monthly Reserve Requirement shall be met).
31. "NOTE" means the promissory note made by Mortgagor today to evidence the
Indebtedness in the original principal amount of $6,600,000, together
with all extensions and modifications.
32. "NOTICE" means a notice given in accordance with the provisions of
Subsection 14(K).
33. "OBLIGATIONS" means all of the obligations required to be performed under
the terms and conditions of any of the Loan Documents by any person other
than the Mortgagee.
34. "OBLIGOR" means Mortgagor or any other natural person, trust or business
organization that is liable under the Loan Documents for the payment of
any portion of the Indebtedness, or the performance of any other
Obligation, under any circumstances.
35. "PERMITTED ENCUMBRANCES" means the encumbrances or other matters listed on
Exhibit B.
36. "PERMITTED TRANSFER" means a transfer specifically described in Section 14
as permitted.
37. "PERSONAL PROPERTY" means (A) all materials, appliances, equipment or
items located at the Real Property now or in the future and that may be
incorporated in the Real Property through construction, attachment, or
installation, and that are used, or are capable of being used, in the
operation of the Real Property as commercial real estate, including (i)
appliances, equipment or items required under any lease to be provided by
Mortgagor to any tenant, (ii) materials or equipment for use in the
maintenance, alteration, landscaping or repair of the Real Property,
including snow removal, lawn, landscaping, irrigation, security,
incineration, and hazardous waste storage, monitoring, testing,
containment or abatement supplies and equipment, (iii) electrical lights
and fixtures (whether or not permanently wired), backup generators and
related fuel storage and delivery systems, (iv) rugs, carpeting, office
furnishings, art work, decorations, window treatments and equipment
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located in any on-site leasing office, located in any lobby, hall or
other common area, or used in connection with any "executive suites"
operation, (v) vehicles (if any) used to transport prospective tenants
or to maintain or operate the Real Property, (vi) components of heating,
ventilation and air conditioning systems and air quality testing
equipment, (vii) spare or detached parts for elevators, escalators or
other mechanical systems, (viii) all site or building plans and
specifications, construction records, and architectural or engineering
drawings relating to the Real Property, (ix) sewer or septic system
components, (x) water wells, whether for purposes of water supply or
groundwater testing or sampling, (xi) components of plumbing and water
conditioning systems, (xii) firefighting, sprinkler or other fire safety
equipment, (xiii) central telephone switches, antennae, satellite
dishes or other telecommunication equipment, and (xiv) video
conferencing equipment, audio equipment and cable television distribution
systems; and (B) the Assigned Rights and the Assigned Accounts, to the
extent that they comprise personal property subject to the Code.
38. "PROPERTY" means the Real Property, the Personal Property, the Leases, the
Rents, the Assigned Rights, the Assigned Accounts, the Condemnation
Proceeds and the Insurance Proceeds.
39. "REAL PROPERTY" means the Land, the Improvements, the Fixtures, and all of
Mortgagor's right, title and interest to all appurtenant rights,
privileges, tenements, hereditaments, easements, or other interests that
run with the Land, including any Appurtenant Easements, benefits of
railroad sidings, drainage rights, sewer rights and rights of ingress and
egress.
40. "RECOURSE OBLIGATIONS" means the recourse obligations, or "carveouts,"
that are defined in the Note and in Section 21.
41. "RENTS" means all rents, lease termination fees, proceeds of letters of
credit or other devices securing future rental payments, revenues, income,
proceeds, royalties, profits and other benefits paid or payable for
using, leasing, licensing, possessing, operating from or in, residing
in, selling, mining, extracting minerals from, or otherwise enjoying the
Real Property, whether presently existing or arising in the future, to
which Mortgagor may now or thereafter become entitled or may demand or
claim.
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TITLE
Mortgagor represents to and covenants with Mortgagee and with its
successors and assigns that, at the point in time of the grant of the lien
created by this Mortgage, Mortgagor is well seized of good and indefeasible
estate to the Real Property, in fee simple absolute, subject to no lien or
encumbrance except the Permitted Encumbrances. Mortgagor has good and
merchantable title to the Personal Property, and has the incontestable right
to grant a first priority security interest in the Personal Property, free of
any rights of lessors or of sellers under conditional sales contracts or
other financing arrangements. Mortgagor warrants this estate and title to
Mortgagee and to its successors and assigns forever, against all lawful
claims and demands. Mortgagor shall maintain mortgage title insurance from a
solvent carrier, covering the Real Property in an amount at least equal to
the amount of the Indebtedness. This Mortgage is and shall remain a valid and
enforceable first lien on the Real Property, and if the validity or
enforceability of this first lien is attacked or called into question,
Mortgagor shall diligently and continuously defend it through appropriate
proceedings. Should it fail to do so, Mortgagee may at Mortgagor's expense
take all necessary and proper action, including the engagement and
compensation of legal counsel, the prosecution or defense of litigation, and
the compromise or discharge of claims. Mortgagor shall defend, indemnify and
hold Mortgagee harmless in any suit or proceeding brought to challenge or
attack the validity, enforceability or priority of the lien granted by this
Mortgage. If a prior construction, mechanics' or materialmen's lien on the
Real Property arises by operation of statute during any construction or
repair of the Improvements, Mortgagor, shall either cause the lien to be
discharged by paying when due any amounts owed to such persons, or shall
comply with Section 12 of this Mortgage.
REPRESENTATION AND WARRANTIES
Mortgagor (i) represents to Mortgagee, and to its successors and assigns,
that the following statements are true as of the date of this Mortgage, and
(ii) warrants to Mortgagee, and to its successors and assignes, that the
following statements shall remain true during the term of the Loan:
A) FORMATION AND EXISTENCE
Mortgagor is a limited liability company duly formed and validly
existing under the laws of New Jersey, is duly qualified to do business
in and is in good standing under, the laws of New Jersey, and has
obtained all licenses and permits and filed all statements
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of fictitious name and registrations necessary for the lawful operation
of its business.
B) POWER AND AUTHORITY
Mortgagor has full power and authority to carry on its business as
presently conducted, to own the Property, to execute and deliver the Loan
Documents that it has executed, and to perform its obligations under them.
C) DUE AUTHORIZATION
The Loan transaction and the performance of all of Mortgagor's
obligations under the Loan Documents have been duly authorized by all
requisite limited liability company action, and each individual executing
any Loan Document on behalf of the Mortgagor has been duly authorized to
do so.
D) NO DEFAULT OR VIOLATIONS
The execution and performance of Mortgagor's obligations under the
Loan Documents will not result in any breach of, or constitute a default
under, any contract, agreement, document or other instrument to which
Mortgagor is a party or by which Mortgagor may be bound or affected, and
do not and will not violate or contravene any law to which Mortgagor is
subject; nor do any such other instruments impose or contemplate any
obligations which are or will be inconsistent with the Loan Documents.
E) NO FURTHER APPROVAlS OR ACTIONS REQUIRED
No approval by, authorization of, or filing with any federal, state
or municipal or other governmental commission, board or agency or other
governmental authority is necessary in connection with the authorization,
execution and delivery of the Loan Documents by Mortgagor.
F) DUE EXECUTION AND DELIVERY
Each of the Loan Documents to which Mortgagor is a party has been
duly executed and delivered on behalf of Mortgagor.
G) LEGAL, BINDING, VALID AND ENFORCEABLE
Each of the Loan Documents to which Mortgagor is a party
constitutes the legal, valid and binding obligation of Mortgagor,
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enforceable against Mortgagor in accordance with its terms, except to
the extent that its enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar
laws affecting the enforceability of creditors' rights generally or by
equitable principles of general application (whether considered in an
action or law or in equity).
H) ACCURATE FINANCIAL INFORMATION
All financial information furnished by Mortgagor to Mortgagee in
connection with the application for the Loan is true, correct and
complete in all material respects and does not omit to state any fact or
circumstance necessary to make the statements in them not misleading, and
there has been no material adverse change in the financial condition of
Mortgagor since the date of such financial information.
I) COMPLIANCE WITH LEGAL REQUIREMENTS
All governmental approvals and licenses required in order for
Mortgagor to conduct its business and maintain and operate the Real
Property in compliance with applicable law are in full force and effect,
and the Real Property currently is being operated in compliance with the
Legal Requirements in all material respects.
J) CONTRACTS AND FRANCHISES
All contracts and franchises necessary in order for Mortgagor to
conduct its business and operate in Real Property in accordance with good
commercial practice are in force.
K) NO CONDEMNATION PROCEEDING
The Mortgagor has no knowledge of any present, pending or
threatened condemnation proceeding or award affecting the Real Property.
L) NO CASUALTY
No damage to the Real Property by any fire or other casualty has
occurred and remained unrepaired.
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M) COMPLETE LOTS AND TAX PARCELS
The Land is comprised exclusively of tax parcels that are entirely
included within the Land, and of subdivision lots that are entirely
included within the Land.
COVENANTS
A) PAYMENT AND PERFORMANCE
Mortgagor shall pay the indebtedness and perform all of its other
obligations under the Loan Documents, as and when the Loan Documents
require such payment and performance.
B) PAYMENT OF IMPOSITIONS
(1) The Mortgagor shall pay the impositions on or before the last day
on which they may be paid without penalty or interest, and shall, within
thirty days, furnish Mortgagee with a paid receipt or a cancelled check
as evidence of payment. If Mortgagee does not receive such evidence,
Mortgagee may secure it directly. It if does so, Mortgagee will charge
Mortgagor an administrative fee of $250 for securing the evidence of
payment. This fee will be a demand obligation under the terms of this
Mortgage. The Mortgagor may meet the requirements of the Subsection by
remitting the Monthly Escrow Payments when due, by immediately providing
notice to Mortgagee of any new Imposition or increased Imposition unknown
to Mortgagee, and by paying to Mortgagee on demand any amount required to
increase the Escrow Fund to an amount sufficient to permit Mortgagee to
pay all Impositions from the Escrow Fund on time. If Mortgagor wishes to
contest the validity or amount of an Imposition, it may do so by
complying with Section 12.
(2) If any new Legal Requirement (other than a general tax on income
or on interest payments) taxes the Mortgage so that the yield on the
Indebtedness would be reduced, and Mortgagor may lawfully pay the tax or
reimburse Mortgagee for its payment, Mortgagor shall do so.
C) MAINTENANCE OF THE REAL PROPERTY
Mortgagor shall not commit or permit any waste of the Real Property
as a physical or economic asset, and agrees to maintain in good repair
the improvements, including structures, roofs,
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mechanical systems, parking lots or garages, and other components of the
Real Property that are necessary or desirable for the use of the Real
Property, or which Mortgagor as landlord under any Lease is required to
maintain for the benefit of any tenant. In its performance of this
obligation, Mortgagor shall promptly and in a good and workmanlike manner
repair or restore, as required hereunder, any elements of the Improvements
that are damaged or destroyed. The Mortgagor shall also replace roofs,
parking lots, mechanical systems, and other elements of the Real Property
requiring periodic replacement. The Mortgagor shall carry out such
replacements no less frequently than would any commercially reasonable
owner intending to maintain the maximum income-generating potential of
the Real Property over its reasonable economic life. Mortgagor shall not,
without the prior written consent of Mortgagee (except as to tenant
improvements pursuant to leases approved or deemed approved by Mortgagee),
demolish, reconfigure, or materially alter the Improvements, but Mortgagee
agrees that any request for its consent to such an action shall be deemed
given if Mortgagee declines to respond within fifteen (15) Business
Days to any written request for such a consent, if the request is
accompanied by all materials required to permit Mortgagee to analyze the
proposed action.
D) USE OF THE REAL PROPERTY
The Mortgagor shall cause the Real Property to be used as a
commercial office property and for no other purpose.
E) LEGAL REQUIREMENTS
The Mortgagor shall comply with all Legal Requirements relating to
the Real Property at all times.
F) INDEPENDENCE OF THE REAL PROPERTY
The Mortgagor shall maintain the independence of the Real Property
from other land and improvements not included within or located on the
Land. In fulfilling this covenant, Mortgagor shall neither take any
action which would make it necessary to own or control any property other
than the Real Property in order to meet the obligations of the landlord
under any Lease, or in order to comply with the Legal Requirements, nor
take any action which would cause any land or improvements other than the
Land and the Improvements to rely upon the Land or the Improvements for
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those purposes, nor impair the integrity of the Land as one or more
complete subdivided lots and tax parcels.
G) REBUILDING UPON CASUALTY AND REMEDIATION OF EFFECT OF CONDEMNATION
If a casualty occurs, Mortgagor shall rebuild the Improvements
provided that, to the extent and as required hereunder, Mortgagee makes
available to Mortgagor any Insurance Proceeds received with respect to
such casualty. If any portion of the Real Property is taken by power of
eminent domain, Mortgagor shall remedy its effects. In either case, the
rebuilding or remediation shall restore the Real Property's value and
potential to generate income in proportion to the amount of the
indebtedness remaining after any application of Insurance Proceeds or
Condemnation Proceeds to the Indebtedness.
H) PERFORMANCE OF LANDLORD OBLIGATIONS
Mortgagor shall perform its obligations as landlord under the
Leases, and shall neither take any action, nor fail to take any action,
if the action or failure would be inconsistent with the commercially
reasonable management of the property for the purpose of enhancing its
long-term performance and value. Mortgagor shall not, without Mortgagee's
written consent, extend, modify, terminate or enter into any lease of the
Real Property, except in compliance with the Agreement Concerning
Leasing, which Mortgagee and Mortgagor have entered into today, and which
grants certain rights, personally, to Mortgagor.
I) FINANCIAL REPORTS AND OPERATING STATEMENTS
During the term of the Loan, Mortgagor shall maintain complete and
accurate accounting and operational records including copies of all
Leases and other written contracts relating to the Real Property, copies
of all tax statements, and evidence to support the payment of all material
property-related expenses. Within 120 days of the end of each fiscal
year, Mortgagor shall deliver to Mortgagee a balance sheet, an operating
statement, and an income and expense statement for the Real Property,
together with supporting schedules and a complete rent roll, all
certified as true and correct by Mortgagor and in form satisfactory to
Mortgagee. The balance sheet, operating statement and income and expense
statement need not, as an initial matter, be certified by an independent
public accountant as having been prepared in
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accordance with generally accepted accounting principles, consistently
applied, or in accordance with generally accepted auditing standards,
but Mortgagee may require such certification if it has reason to
believe that any previously provided financial information is
misleading in any material respect. The rent roll must include each
tenant's name, premises, square footage, rent (including percentage
rent and the basis for its calculation), lease expiration date, renewal
options and related rental rates, delinquencies, vacancies, and the
existence of any unsatisfied landlord obligations in respect of tenant
improvements or other leasing costs. If Mortgagor fails to deliver the
items required in this Subsection, Mortgagee may, after giving
Mortgagor fifteen (15) days' prior notice, engage an accounting firm to
prepare the required items. In connection with the engagement of this
firm and its supervision, Mortgagor shall pay Mortgagee an
administrative fee of $1,000. The Mortgagor shall cooperate fully with
any investigative audit required to permit the accounting firm to
produce these items, and the fees and expenses incurred in connection
with their preparation shall be paid on demand by Mortgagor.
(J) ESTOPPEL STATEMENTS
Upon request by the Mortgagee, Mortgagor shall, within ten Business
Days of Notice of the request, furnish to Mortgagee or to whom it may
direct a written statement acknowledging the amount of the Indebtedness
and disclosing whether any offsets or defenses exist against the
Indebtedness. Thereafter, Mortgagor shall be estopped from asserting
any other offsets or defenses alleged to have arisen as of the date of
the statement.
INSURANCE REQUIREMENTS
At all times until the Indebtedness is paid in full, Mortgagor shall maintain
insurance coverage and administer insurance claims in compliance with this
Section.
(A) REQUIRED COVERAGES
(a) ALL RISK/OPEN PERILS SPECIAL FORM PROPERTY
The Mortgagor shall maintain coverage of 100% of the replacement
cost of all insurable elements of the Real Property and of all
tangible Personal Property. If a coinsurance clause is in effect, an
agreed amount
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endorsement is required. Blanket policies must include limits by
property location. Coverage shall extend to the Real Property and
to all tangible Personal Property.
(b) BROAD FORM BOILER AND MACHINERY
If any such item is located on or about the Real Property,
Mortgagor shall maintain this coverage, including a form of business
income coverage.
(c) FLOOD
If the Real Property is located in a special flood hazard area
according to the most current flood insurance rate map issued by
the Federal Emergency Management Agency and if flood insurance is
available, Mortgagor shall maintain flood insurance coverage
of all insurable elements of Real Property and of all tangible
Personal Property.
(d) BUSINESS INTERRUPTION
The Mortgagor shall maintain a form of business income coverage
in the amount of 80% of one year's business income from the Property.
Blanket policies must include limits by property location.
(e) COMPREHENSIVE/GENERAL LIABILITY
The Mortgagor shall maintain such coverage (which may be in the
form of umbrella/excess liability insurance) with a $1,000,000
combined single limit per occurrence and a minimum aggregate limit
of $2,000,000.
(f) LIQUOR LIABILITY
The Mortgagor shall maintain such coverage, if applicable law
may impose liability on those selling, serving, or giving alcoholic
beverages to others and if such beverages will be sold, served or
given on the Real Property by Mortgagor.
(g) ELECTIVE COVERAGES
Mortgagee may require additional coverages appropriate to the
property type and site location. Additional coverages may include
earthquake, mine subsidence,
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sinkhole, personal property, supplemental liability, or coverages
of other property-specific risks.
(B) HOW MORTGAGEE SHOULD BE NAMED
On all property policies and coverages (including coverage against
loss of business income), Mortgagee must be named as "first mortgagee"
under a standard mortgage clause. On all liability policies and
coverages, Mortgagee must be named as an "additional insured." Mortgagee
should be referred to verbatim as follows: "(Name of Mortgagee) and its
successors, assigns, and affiliates; as their interest may appear; c/o
AEGON USA Realty Advisors, Inc.; Mortgage Loan Dept.; 4333 Edgewood Rd.,
NE; Cedar Rapids, Iowa 52499-5223."
(C) RATING
Each insurance carrier must be rated A, Class XII, or better by
Best's Rating Service, without regard to its parent's or any reinsurer's
rating.
(D) DEDUCTIBLE
The maximum deductible on all coverages and policies is $25,000.
(E) NOTICES, CHANGES AND RENEWALS
All policies must require the insurance carrier to give Mortgagee a
minimum of thirty (30) days notice in the event of cancellation or
non-renewal. Mortgagor shall report to Mortgagee immediately any vacancy,
change of title, tenant occupancy or use, physical damage, additional
improvements or other factors affecting any insurance contract. An original
or certified copy of each policy is required upon renewal. If no such copy
is available, Mortgagee will accept a binder for a period not to exceed
90 days. All binders, certificates of insurance, and original or certified
copies of policies must name Mortgagee as a named insured, or as an
additional insured, must include the complete and accurate property
address and must bear the original signature of the issuing insurance
agent.
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(F) UNEARNED PREMIUMS
If this Mortgage is foreclosed, Mortgagee may at its discretion cancel
any of the insurance policies required under this Section and apply any
unearned premiums to the Indebtedness.
(G) FORCED PLACEMENT
If Mortgagor fails to comply with the requirements of this Section,
the Mortgagee may, at its discretion, procure any required insurance. If
time permits, Mortgagee shall give Mortgagor fifteen (15) days' prior
notice before procuring such required insurance, but if Mortgagee in its
reasonable discretion determines that there is a deficiency in insurance
coverage and it is not prudent to wait, Mortgagee may proceed to procure
such insurance without prior notice to Mortgagor. Any premiums paid for
such insurance, or the allocable portion of any premium paid by
Mortgagee under a blanket policy for such insurance, shall be a demand
obligation under this Mortgage, and any unearned premiums under such
insurance shall comprise Insurance Proceeds and therefore a portion of the
Property.
INSURANCE AND CONDEMNATION PROCEEDS
(A) ADJUSTMENT OF INSURANCE CLAIMS AND COMPROMISE OF CONDEMNATION AWARDS
The Mortgagor may settle and collect directly any insurance claim or
condemnation proceeding if the effect of the casualty or the condemnation
may be remediated for $50,000 or less. If a greater sum is required,
Mortgagor may not settle any such claim or proceeding without the
advance written consent of Mortgagee. If a Default exists, Mortgagor may
not settle any insurance claim or condemnation proceeding without the
advance written consent of Mortgagee.
(B) DIRECT PAYMENT TO MORTGAGEE OF PROCEEDS
If the Insurance Proceeds received in connection with a casualty or
the Condemnation Proceeds received in respect of a condemnation exceed
$50,000, or if there is a Default, then such proceeds shall be paid
directly to Mortgagee. Mortgagee shall have the right to endorse
instruments that evidence proceeds which it is entitled to receive
directly.
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(C) AVAILABILITY TO MORTGAGOR OF PROCEEDS
The Mortgagor shall have the right to use the Insurance Proceeds or
the Condemnation Proceeds to rebuild the Improvements following a
casualty, or to remedy the effect on the Real Property of any condemnation,
if the amount received is less than $250,000, provided (a) no condition of
Default then exists, (b) no Default with respect to any payment obligation
under any of the Loan Documents shall have occurred during the preceding
twelve months, (c) no nonmonetary default shall have occurred, been noticed
and remained uncured beyond the applicable cure period and (d) the proceeds
received by Mortgagee, together with any additional funds deposited with
Mortgagee by Mortgagor, are then sufficient, in Mortgagee's discretion,
to restore the Improvements to their condition before the casualty, or
to remedy the effect on the Real Property of the condemnation. Mortgagee
may condition disbursements on approval of plans and specifications,
minimum disbursement requirements, submittal of certificates of
occupancy and other appropriate evidence of completion, updating of
Mortgagee's mortgagee title insurance coverage to insure the absence of
mechanics' or materialmen's liens, disbursement on a percentage of
completion basis with a ten percent holdback on all disbursements pending
final completion, and other customary safeguards for construction lenders.
All transactional expenses shall be paid by Mortgagor. If the amount
received in respect of a casualty or condemnation equals or exceeds
$250,000, then such proceeds may, at Mortgagor's option, be used to rebuild
or to remedy subject to all of the provisions and procedures described
above, but only if the Loan-to-Value ratio of the Property on completion
will be 75% or less, as determined by Mortgagee based on its appraisal
review, as determined by repeating the appraisal procedure described in
Section 4.2.1 of the Commitment. If necessary, Mortgagor shall make a
prepayment of the Loan, without premium, sufficient to achieve this Loan-
to-Value ratio. The independent fee appraisal shall be at Mortgagor's
expense, and Mortgagor shall pay Mortgagee an administrative fee of
$2,500 in connection with its review. Mortgagee may require that Mortgagor
deposit $10,000 with Mortgagee as security for these expenses or may pay
the fee appraiser's and administrative fees from the proceeds at its sole
discretion.
Unless Mortgagor has the right to use the Insurance Proceeds or the
Condemnation Proceeds under the foregoing paragraph, Mortgagee may, in
its sole and absolute discretion, either apply
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them to the Loan balance or disburse them for the purposes of repair
and reconstruction, or to remedy the effects of the condemnation. No
prepayment premium will be charged on amounts applied to reduce the
principal balance of the Loan.
ESCROW FUND
The Mortgagor shall pay the Monthly Escrow Payment on the first day of every
month, commencing June, 1997. Any Monthly Escrow Payment received after the
tenth day of the month in which it is due shall be subject to a late charge
of five percent, which shall not be applied to the Escrow Fund. Mortgagee
shall hold Monthly Escrow Payments in a non-interest-bearing fund from which
Mortgagee will pay on a timely basis those Escrow Expenses that Mortgagee has
anticipated will become payable on a regular basis during the Loan's term,
and on which Mortgagee has based its determination of the Monthly Imposition
Requirement, the Monthly Insurance Premium Requirement and the Monthly Reserve
Requirement. The Escrow Fund will be maintained as an accounting entry in
Mortgagee's general account, where it may be commingled with Mortgagee's
other funds. Mortgagee may reanalyze the projected Escrow Expenses from time
to time and shall advise Mortgagor of any change in the amount of the Monthly
Escrow Payment. Upon the foreclosure of the Mortgage, the delivery of a deed
in lieu of foreclosure, or the payoff of the Loan, the Lender shall apply
amounts in the Escrow Fund, net of accrued Escrow Expenses, to the
Indebtedness. Mortgagee shall remit any amounts in excess of the Indebtedness
to Mortgagor.
DEFAULT
(A) EXISTENCE OF DEFAULT
A Default shall exist immediately upon the occurrence of any
of the acts, omissions or circumstances specified in Subsection B
(Monetary Defaults) below or in Subsection D (Incurable Nonmonetary
Default) below. Upon the occurrence of any of the acts, omissions or
circumstances specified in Subsection C (Curable Nonmonetary Default)
below; Mortgagee shall, prior to exercising any remedies hereunder,
deliver written Notice to Mortgagor of the existence of such an act,
omission or circumstance, and such an act, omission or circumstance
shall, if uncured within thirty days following delivery of such Notice,
constitute a Default under the Loan Documents, or if, following such
Notice, Mortgagor either ceases to pursue the cure of such an
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act, omission or circumstance with diligence, or repudiates its
obligation to effect such a cure.
(B) MONETARY DEFAULTS
A monetary default shall exist upon any of the following:
(a) MONTHLY PRINCIPAL AND INTEREST PAYMENTS
The Mortgagor's failure to pay, or to cause to be paid, any
regular monthly payment of principal and interest under the Note, or
any required Monthly Escrow Payment, so that Mortgagee receives
the payment on or before the tenth day of the month in which the
payment is due.
(b) MATURED INDEBTEDNESS
The Mortgagor's failure to pay, or to cause to be paid, the
Indebtedness when the Loan matures by acceleration under Section 16,
because of a transfer or encumbrance under Section 13, or by lapse
of time.
(c) DEMAND OBLIGATIONS
The Mortgagor's failure to pay, or to cause to be paid, within
thirty (30) days of Mortgagee's demand, any amount due under this
Mortgage or any of the other Loan Documents other than as provided
in subsection (a) (Monthly Principal and Interest Payments) or (b)
(Matured Indebtedness) above.
(C) CURABLE NONMONETARY DEFAULT
A curable nonmonetary default shall exist upon any of the following:
(a) ENTRY OF A MATERIAL JUDGMENT
The entry of any judgment against Mortgagor or any other
Obligor, if the judgment may materially and adversely affect the
value, use or operation of the Real Property.
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(b) TAX LIEN
The filing of any federal, state or local tax lien against
Mortgagor or any other Obligor, or against the Real Property.
(c) FAILURE OF WARRANTY
Any representation made in Section 5 or warranted in any other
Loan Document shall become untrue or misleading in any material
respect.
(d) OTHER DEFAULTS
The Mortgagor's failure to observe any promise or covenant
made in this Mortgage, if the failure is not described in
Subsection B (Monetary Defaults) above, in Subsection D (Incurable
Nonmonetary Default) below, or elsewhere in this Subsection C
(Curable Nonmonetary Default).
(D) INCURABLE NONMONETARY DEFAULT
An incurable nonmonetary default shall exist upon any of the
following:
(a) MATERIAL UNTRUTH OR MISREPRESENTATION
Mortgagee's discovery that any representation made by the
Borrower or by any other Obligor in any Loan Document in connection
with the Loan was untrue or misleading in any material respect at
the time it was made.
(b) VOLUNTARY BANKRUPTCY FILING
The filing by Mortgagor or by any other Obligor of a petition in
bankruptcy or for relief from creditors under any present or future
law that affords general protection from creditors.
(c) INVOLUNTARY BANKRUPTCY OR SIMILAR FILING
The Mortgagor or any other Obligor becomes the subject of an
involuntary petition in bankruptcy or of any other action that may
result in a composition of its debts, that may provide for the
marshaling of its assets for the
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satisfaction of Mortgagor's or such other Obligor's debts, or that
may result in the judicially ordered sale of the its assets for the
purpose of satisfying its obligations to creditors, unless a motion
for the dismissal of the petition or other action is filed within
ten days and results in its dismissal within sixty days of the
filing of the petition or other action.
(d) INSOLVENCY
An adjudication that Mortgagor or any other Obligor is insolvent.
(e) RECEIVERSHIP
The appointment of a receiver or trustee to take possession of
any of the assets of Mortgagor or of any other Obligor.
(f) LEVY OR ATTACHMENT
The taking or seizure of any material portion of the Property
under levy of execution or attachment.
(g) DEATH, DISSOLUTION OR LIQUIDATION
The dissolution or liquidation of any Obligor that is not a
natural person, or the cessation of its legal existence shall
cease, or the death of any Obligor who is a natural person (unless
the dissolution, liquidation, cessation or death results in a
Permitted Transfer).
(h) ABANDONMENT
The Mortgagor's abandonment of the Real Property.
(i) IMPAIRMENT OF THE LIEN BY LEGAL REQUIREMENT
The promulgation by any Governmental Authority of a Legal
Requirement, or a ruling by a court of competent jurisdiction, if
the effect of the Legal Requirement or ruling is to make the payment
of the Indebtedness unlawful or usurious, to prevent Mortgagor or any
other Obligor from legally performing any material obligation under
any Loan Documents, to materially impair the right of Mortgagee to
accelerate the indebtedness upon the occurrence of a material Default,
or to materially impair the right of
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Mortgagee, upon the failure of Mortgagor to pay the Indebtedness at
its maturity through acceleration or lapse of time, to cause the sale
of the Real Property and to apply the proceeds of the sale to the
Indebtedness.
(j) IMPAIRMENT OF YIELD THROUGH TAXATION
The promulgation of any Legal Requirement (other than income
taxes) that taxes the Mortgage so that the yield on the
Indebtedness would be reduced, if Mortgagor may neither lawfully pay
the tax nor lawfully reimburse Mortgagee for its payment.
(k) DEFAULT UNDER OTHER LOAN DOCUMENTS
The existence of a "Default" as defined in any other Loan
Document.
(l) PROCEEDING TO CONTEST LIEN
The Mortgagor's institution of any proceeding to contest the
validity of Mortgagee's lien on the Property.
RIGHT TO CURE
Upon Default or upon the failure of Mortgagor, following a notice given under
Subsection 10(B) (Monetary Defaults), to diligently pursue the cure of any
act, omission or circumstance that may cause Default, Mortgagee shall have
the right to cure the Default or the act, omission or circumstance. The
expenses of doing so shall be part of the Indebtedness, and Mortgagor shall
pay them to Mortgagee on demand.
CONTEST RIGHTS
Mortgagor may secure the right to contest Impositions and construction,
mechanics' or materialmen's liens, through appropriate proceedings conducted
in good faith, by depositing with Mortgagee an amount equal to 125% of the
amount of the Imposition or the lien, or by obtaining and maintaining in
effect a bond or other security in the same amount (with the proceeds of the
bond payable directly to Mortgagee), or in such greater amount as shall be
required by the surety or by the court to obtain a court order to stay the
foreclosure of the lien pending resolution of the dispute, and to release the
lien of record if the Mortgagor's fails to prevail in contesting the lien.
The surety issuing such a bond shall be acceptable to
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Mortgagee in its sole discretion. After such a deposit is made or bond
issued, the Borrower shall promptly commence the contest of the lien and
continuously pursue that contest in good faith and with reasonable diligence.
If the contest of the related Imposition or lien is unsuccessful, Mortgagee
shall use the amount deposited, or the proceeds of the bond or other
security, to pay the Imposition or to satisfy the obligation from which the
lien has arisen. Any surplus shall be refunded to Mortgagor.
DUE ON TRANSFER OR ENCUMBRANCE
Upon the sale of any portion of the Real Property, or upon any other
conveyance, transfer or vesting of any direct or indirect interest in
Mortgagor or the Property, including (i) the direct or indirect transfer of,
or the granting of a security interest in, the ownership of Mortgagor, (ii)
any encumbrance (other than a Permitted Encumbrance) of the Real Property
(unless the Borrower contests the encumbrance in compliance with Section 12)
and (iii) the granting of any security interest in the Property, the
Indebtedness shall, at Mortgagee's option, become immediately due and payable
without notice, unless the sale, conveyance, transfer or vesting is a
Permitted Transfer.
PERMITTED TRANSFERS
A) TRANSFER TO AN APPROVED PURCHASER
The Mortgagor shall have the right, on one occasion during the term
of the Loan, to sell or transfer the Property in a transaction approved
by Mortgagee. Mortgagee agrees to approve a transfer if the following
conditions are satisfied.
(A) NO DEFAULT
No Default shall exist, and no act, omission or circumstance
shall exist which, if uncured following notice and the passage of
time, would become a Default.
(B) REQUEST AND SUPPORTING MATERIALS
Mortgagee shall receive a written request for its approval at
least ninety days in advance notice of the proposed transfer. The
request shall specify the identity of the proposed transferee and
the terms of the transaction, and shall be accompanied by the
financial statements, tax
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returns, and organizational documents of the proposed transferee
and its principals.
(C) CRITERIA TO BE CONSIDERED
The financial strength, credit history and demonstrated
property management expertise of the proposed transferee and its
principals shall be satisfactory to Mortgagee in its reasonable
discretion. Mortgagee expressly reserves the right to withhold its
approval of the proposed transfer if the proposed transferee or any
of its principals is or has been subject of any bankruptcy,
insolvency, or similar proceeding.
(D) ASSUMPTION AGREEMENT
Under the terms of the proposed transfer, the proposed
transferee shall assume the Loan, without modification, under the
terms of an assumption agreement and additional documentation
satisfactory to Mortgagee in form and substance.
(E) RETENTION OF RECOURSE OBLIGATIONS
Under the terms of the assumption agreement and additional
documentation, (i) liability for Recourse Obligations arising after
the date of the transfer and assumption shall be assumed by the
principals of the proposed transferee, (ii) those liable for
Recourse Obligations before the transfer shall be released from
liability therefor as to matters arising after the date of the
transfer and assumption, and (iii) liability for Recourse
Obligations arising before or in connection with the transfer shall
be retained by those liable for them before the transfer.
(F) TITLE INSURANCE ENDORSEMENT
The Mortgagor shall agree to provide an endorsement to
Mortgagee's mortgagee title insurance policy, insuring the continued
validity and priority of the Mortgage following the assumption.
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(G) ASSUMPTION FEE
Mortgagee shall receive an assumption fee of one and one-half
percent (1-1/2%) of the outstanding balance of the Loan, and
Mortgagor shall agree to reimburse Mortgagee's out-of-pocket
expenses incurred in connection with the proposed transfer,
including title, recording, and attorney's fees, regardless of
whether the transfer is consummated.
B) TRANSFER OF MEMBERSHIP INTERESTS
A transfer of membership interest in the Mortgagor limited
liability company (i) among the members of the Mortgagor as of the date
hereof (the "Current Members") or (ii) to immediate family members of
the Current Members or to a trust for the benefit of such immediate
family members will be permitted if the following conditions are
satisfied:
(a) the Current Members retain management control of the Mortgagor;
(b) all of the Current Members retain an interest in the Mortgagor;
(c) the Mortgagee is satisfied in its sole discretion that the
transfer will not impair the financial strength of the Mortgagor;
(d) the Mortgagor provides prior notice to the Mortgagee of such
transfer and the annual financial information provided by the
Mortgagor hereunder includes an updated list of members in the
Mortgagor;
(e) the Mortgagor pays the Mortgagee a processing fee of $1,000.
C) COSTS AND EXPENSES
In all cases of a Permitted Transfer hereunder, the Mortgagor shall
pay all the Mortgagee's out-of-pocket expenses, including the fees
of outside counsel, incurred in the review and/or approval of any
Permitted Transfer.
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D) CONTINUING LIABILITY
In connection with a Permitted Transfer of the Property (which for
the purposes of this subsection shall include a foreclosure action
or deed-in-lieu-of-foreclosure), (i) the Mortgagor and any Obligor
no longer holding any direct or indirect interest in the owner of
the Property shall remain liable after the date of the Permitted
Transfer under the Loan Documents only for fraud or written
material misrepresentation and failure to perform under the
environmental covenants or indemnifications set forth in the Loan
Documents and (ii) the Mortgagor and any Obligor no longer holding
any direct or indirect interest in the owner of the Property will
be released from all other liability in connection with the Loan
Documents.
NOTICE OF ABSOLUTE ASSIGNMENT OF LEASES AND RENTS
Under the Absolute Assignment of Leases and Rents, Mortgagor has assigned to
Mortgagee, and to its successors and assigns, all of Mortgagor's right and
title to, and interest in, the Leases, including all rights under the Leases
and all benefits to be derived from them. The rights assigned include all
authority of Mortgagor to modify or terminate Leases, or to exercise any
remedies, and the benefits assigned include all Rents. This assignment is
present and absolute, but under the terms of the Absolute Assignment of
Leases and Rents, Mortgagee has granted the Mortgagor a conditional license
to collect and use the Rents, and to exercise the rights assigned, in a
manner consistent with the Obligations. Mortgagee may, however, terminate the
license by written Notice upon either (i) Default or (ii) the occupancy of
more than one-half of the leasable space in the Improvements by a single
tenant that is the subject of a petition under the Bankruptcy Code, that has
threatened to file such a petition, or whose insolvency is imminent. If the
license to collect Rents is terminated under clause (ii) and there is no
Default, then Mortgagee collects the Rents directly, applies them to that
portion of the Indebtedness then due and payable, and promptly remits any
excess amount to Mortgagor. Mortgagor agrees to collect in trust for
Mortgagee any Rents remitted to Mortgagor after the expiration or termination
of Mortgagor's license to collect the Rents. Mortgagor further agrees to pay
any such Rents to Mortgagee's promptly after they are received.
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ACCELERATION
Under the terms of the Note, if a Default exists, Mortgagee may, at its
option, without Notice to Mortgagor, declare the Indebtedness to be
immediately due and payable.
RIGHTS OF ENTRY AND TO OPERATE
A) ENTRY ON REAL PROPERTY
If a Default exists, Mortgagee may without notice enter upon the
Real Property and take exclusive possession of the Real Property and of
all books, records and accounts, all without notice and without being
guilty of trespass. If Mortgagor remains in possession of all or any
part of the Property after Default and without Mortgagee's prior written
consent, Mortgagee may, without notice to Mortgagor, invoke any and all
legal remedies to dispossess Mortgagor.
B) OPERATION OF REAL PROPERTY
Following Default, Mortgagee may hold, lease, manage, operate or
otherwise use or permit the use of the Real Property, either itself or
by other persons, firms or entities, in such manner, for such time and
upon such other terms as Mortgagee may deem to be prudent and reasonable
under the circumstances (making such repairs, alterations, additions and
improvements thereto and taking any and all other action with reference
thereto, from time to time, as Mortgagee deems necessary or desirable),
and apply all Rents and other amounts collected by Mortgagee in
accordance with the provisions of the Absolute Assignment of Leases and
Rents.
RECEIVERSHIP
Following Default, Mortgagee may apply to a court of competent jurisdiction
for the appointment of a receiver of the Property, whether or not the value
of the Property exceeds the Indebtedness, whether or not waste or
deterioration of the Real Property has occurred, and whether or not other
arguments based on equity would justify the appointment. Mortgagor
irrevocably consents to such an appointment. Any such receiver shall have all
the rights and powers customarily given to receivers in New Jersey, including
the rights and powers granted to Mortgagee by
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this Mortgage, the power to maintain, lease and operate the Real Property on
terms approved by the court, and the power to collect the Rents and apply
them to the Indebtedness or otherwise as the court may direct. Once appointed,
a receiver may at Mortgagee's option remain in place until the Indebtedness
has been paid in full.
FORECLOSURE
Upon the occurrence of a Default, Mortgagee may immediately proceed to
foreclose the lien of this Mortgage against all or part of the Real Property
by foreclosure in accordance with the laws of New Jersey.
WAIVERS
To the maximum extent permitted by law, Mortgagor irrevocably and
unconditionally WAIVES and RELEASES any present or future rights (a) of
redemption (b) that may exempt the Property from any civil process, (c) to
appraisal or valuation of the Property, (d) to extension of time for payment,
(e) that may subject Mortgagee's exercise of its remedies to the
administration of any decedent's estate or to any partition or liquidation
action, (f) to any homestead exemption and (g) that in any way would delay or
defeat the right of Mortgagee to cause the sale of the Real Property for the
purpose of satisfying the Indebtedness. Mortgagor agrees that the price paid
at a lawful foreclosure sale, whether by Mortgagee or by a third party, and
whether paid through cancellation of all or a portion of the Indebtedness or
in cash, shall conclusively establish the value of the Real Property.
EXCULPATION CLAUSE AND RECOURSE ("CARVEOUT") OBLIGATIONS
Mortgagee agrees that it shall not seek to enforce any monetary judgment
against Mortgagor except through recourse to the Property, unless the
obligation from which the judgment arises is a Resource Obligation. Recourse
Obligations include Mortgagee's costs, expenses (including reasonable
attorneys' fees), losses and actual damages caused by, or incurred in
connection with, (i) waste, not including ordinary wear and tear, unless
Mortgagor fails to maintain the Real Property with ordinary care; (ii) fraud
or written material misrepresentation; (iii) failure to pay taxes,
assessments, ground rent or any other lienable impositions as required under
the Loan Documents; (iv) misapplication of tenant security deposits,
insurance proceeds or condemnation proceeds, or the
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unavailability to the Mortgagee of condemnation proceeds because a lease of
the Real Property grants a tenant the right to a portion of the award for the
estate taken (unless that portion is specifically awarded to the tenant or
allocated to the tenant's interest by the condemning authority; (v) failure
while in monetary default to pay to Lender all rents, income and profits, net
of reasonable and customary operating expenses; (vi) failure to perform under
the environmental covenants or indemnifications set forth in the Loan
Documents; (vii) destruction or removal from the Real Property of fixtures or
personal property securing the Loan, unless replaced by items of equal value;
(viii) terminating, amending or entering into a lease of the Real Property in
violation of the Loan Documents; or (ix) willful or grossly negligent
violation of applicable law. The Mortgagor may also assume recourse liability
under Loan Documents or other agreements that expressly provide for such
personal liability, and such Loan Documents or agreements, if any, shall not
be subject to the exculpation from personal liability set forth in this
Paragraph.
In addition, the Mortgagor shall have personal liability for the entire
indebtedness if the Mortgagor (a) voluntarily transfers or encumbers the
Property in violation of the Loan Documents, or (b) files a voluntary
petition for reorganization under the Bankruptcy Code and has not offered,
prior to the filing, to enter into the Mortgagee's choice of either an
agreement to permit an uncontested foreclosure or an agreement to deliver a
deed in lieu of foreclosure, within sixty days of Mortgagee's acceptance of
the offer. Following Mortgagee's acceptance of such an offer, default by the
Mortgagor shall trigger personal liability for the entire indebtedness. No
such offer shall be conditioned on any payment by the Mortgagee, on the
release of any obligor from any recourse obligation, or on any other
concession.
SECURITY AGREEMENT AND FIXTURE FILING
A) SECURITY AGREEMENT
This Mortgage shall be self-operative and shall constitute a
Security Agreement pursuant to the provisions of the Code with respect
to those items comprising Property that may be subject to a security
interest under the Code. Mortgagor, as debtor, hereby grants Mortgagee,
as secured party, a security interest in those items and in all related
additions, replacements, substitutions and proceeds, for the purpose of
securing the Indebtedness. Mortgagor hereby agrees to execute and
deliver on demand, and
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irrevocably constitutes and appoints Mortgagee the attorney-in-fact of
Mortgagor, to execute, deliver and, if appropriate, to file with the
appropriate filing officer or office, such security agreements,
financing statements or other instruments as Mortgagee may require in
order to create, perfect, or continue this security interest. Mortgagor
shall pay all related filing fees and costs, all reasonable costs and
expenses of any record searches (or their continuations), as Mortgagee
may reasonably require. Without the prior written consent of Mortgagee,
Mortgagor shall not create or suffer the creation of any other lien on
or security interest in any of the Property subject to the security
interest. Upon Default, Mortgagee shall have the rights and remedies of
a secured party under the Code as well as all other rights and remedies
available at law or in equity, and, at Mortgagee's option,
Mortgagee may also invoke the remedied provided elsewhere in this Mortgage
as to such property. Mortgagor and Mortgagee agree that the rights
granted to Mortgagee as secured party under this Section 22 are in
addition to rather than a limitation on any of Mortgagee's other rights
under this Mortgage with respect to the Personal Property. No failure to
mention any item in a financing statement shall limit the scope of
Mortgagor's assignment of any Property, impair the priority of
Mortgagee's lien on any Personal Property, or alter Mortgagee's rights
to Insurance Proceeds and Condemnation Proceeds, except to the extent
that a court holds that mention of the item in the Code records was
required in order for Mortgagee's interest to enjoy priority over the
interests of third parties.
B) FIXTURE FILING
This Mortgage constitutes a financing statement filed as a fixture
filing in the Official Records of the County Recorder of Essex County,
New Jersey with respect to any and all fixtures comprising Property. The
"debtor" is 710 Rt. 46 Realty, LLC., c/o Principal Investment Group,
Inc., a limited liability company organized under New Jersey law, the
"secured party" is Life Investors Insurance Company of America, an Iowa
corporation, the collateral is as described in Section herein and the
granting clauses in this Mortgage, and the addresses of the debtor and
secured party are the addresses stated in Subsection 24(K) of this
Mortgage for notices to such parties.
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ENVIRONMENTAL MATTERS
A) REPRESENTATIONS
The Mortgagor represents as follows:
(A) NO HAZARDOUS SUBSTANCES
To the best of Mortgagor's knowledge following due inquiry as
a duly diligent property owner, and except as disclosed in the
ESA, the Real Property has been, and is, free of contamination from
Hazardous Substances, and no Hazardous Substances have been
released on or about the Real Property.
(B) COMPLIANCE WITH ENVIRONMENTAL LAWS
To the best of Mortgagor's knowledge following due inquiry as
a duly diligent property owner, and except as disclosed in the ESA,
the Real Property and its current use and presently contemplated
uses comply with all Environmental Laws and, in connection with the
ownership, operation and use of the Real Property, all necessary
permits, licenses, authorizations, and other consents and approvals
have been obtained, and all necessary notices, publications, and
filings have been made and given, with respect to the storage, use,
and disposal of any Hazardous Substances in, on, or about the Real
Property.
(C) NO ACTIONS OR PROCEEDINGS
There is no present or, to the best of Mortgagor's knowledge
following due inquiry as a duly diligent property owner, no past or
threatened action, proceeding or investigation by any governmental
authority or agency related to any suspected or actual violation of
any Environmental Law with respect to, or the presence of any
Hazardous Material on, the Real Property.
(D) NO "MAJOR FACILITY"
No real property owned or occupied by the Mortgagor and
located in New Jersey has been or is being used as a "Major
Facility", as such term is defined in N.J.S.A. 58:10-
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23.11b(1), nor will any such real property be so used without
Mortgagee's written consent.
B) COVENANTS
Mortgagor covenants as follows:
(A) COMPLIANCE WITH ENVIRONMENTAL LAWS
Mortgagor shall, and Mortgagor shall cause all employees,
agents, contractors, and tenants of Mortgagor and any other persons
present on or occupying the Real Property, to keep and maintain the
Real Property in compliance with all Environmental Laws. Neither
Mortgagor nor any of its employees, agents, contractors, or tenants
or any other persons occupying or present on the Real Property
shall use, generate, manufacture, store or dispose on, under or
about the Real Property, or transport to or from the Real Property,
any "Hazardous Substances," as such term is defined in N.J.S.A.
58:10-23.11b(k). No other real property in New Jersey that is owned
or occupied by the Mortgagor shall be used to refine, produce,
store, handle, transfer, process or transport such "Hazardous
Substances," except in the normal course of Mortgagor's business
and in compliance with all applicable laws. If the Department of
Environmental Protection of the State of New Jersey (the
"Department"), shall serve upon Mortgagor a directive to remove or
arrange for the removal or discharge of any Hazardous Substances on
the Property, Mortgagor shall within fifteen (15) days following
receipt of such directive (i) comply with the directive within the
time period provided therein to the satisfaction of the Department
and (ii) provide a bond or title insurance endorsement, satisfactory
to Mortgagee, insuring to Mortgagee a continuing first lien on the
Real Property, notwithstanding the directive as to the Real Property.
(B) NOTICES, ACTIONS AND CLAIMS
The Mortgagor shall immediately advise Mortgagee in writing of
(i) any notices from any governmental or quasi-governmental agency or
authority of violation or potential violation of any Environmental Law
received by Mortgagor, (ii) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or
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threatened pursuant to any Environmental Law; (iii) all claims made or
threatened by any third party against Mortgagor or the Real Property
relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Substances, and (iv) discovery by
Mortgagor of any occurrence or condition on any real property adjoining
or in the vicinity of the Real Property that could cause the Real
Property to become contaminated by or with Hazardous Substances.
C) MORTGAGEE'S RIGHT TO CONTROL CLAIMS
Mortgagee shall have the right (but not the obligation) to join
and participate in, as a party if it so elects, any legal proceedings or
actions initiated in connection with any Hazardous Substances and to
have its related and reasonable attorneys' and consultants' fees paid by
Mortgagor upon demand.
D) INDEMNIFICATION
Mortgagor shall be solely responsible for, and shall indemnify,
defend, and hold harmless Mortgagee and its directors, officers,
employees, agents, successors and assigns from and against, any claim,
judgment, loss, damage, demand, cost, expense or liability of whatever
kind or nature, known or unknown, contingent or otherwise, directly or
indirectly arising out of or attributable to the use, generation,
storage, release, threatened release, discharge, disposal, or presence
(whether prior to or after the date of this Mortgage) of Hazardous
Substances on, in, under or about the Real Property (whether by
Mortgagor, a predecessor in title, any tenant, or any employees, agents,
contractor or subcontractors of any of the foregoing or any third
persons at any time occupying or present on the Real Property),
including: (i) personal injury; (ii) death; (iii) damage to property;
(iv) all consequential damages; (v) the cost of any required or
necessary repair, cleanup or detoxification of the Real Property,
including the soil and ground water thereof, and the preparation and
implementation of any closure, remedial or other required plans;
(vi) damage to any natural resources; and (vii) all reasonable costs and
expenses incurred by Mortgagee in connection with clauses (i) through
(vi), including reasonable attorneys' and consultants' fees; provided,
however, that nothing contained in this Section shall be deemed to
preclude Mortgagor from seeking indemnification from, or otherwise
proceeding against, any third party including any
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tenant or predecessor in title to the Real Property. The covenants,
agreements, and indemnities set forth in this Section shall be binding
upon Mortgagor and its heirs, personal representatives, successors and
assigns, and shall survive repayment of the indebtedness, foreclosure of
the Real Property, and Mortgagor's granting of a deed to the Real
Property in lieu of foreclosure. Payment shall not be a condition
precedent to this indemnity. Any costs or expenses incurred by Mortgagee
for which Mortgagor is responsible or for which Mortgagor has
indemnified Mortgagee shall be paid to Mortgagee on demand, with
interest at the Default Rate from the date incurred by Mortgagee until
paid in full, and shall be secured by this Mortgage. Without the prior
written consent of Mortgagee, Mortgagor shall not enter into any
settlement agreement, consent decree, or other compromise in respect to
any claims relating to Hazardous Substances.
E) ENVIRONMENTAL AUDITS
At such times as Mortgagee reasonably determines that an
environmental audit of the Real Property for the presence of Hazardous
Substances is necessary in order to determine whether the value of the
Real Property has been or may in the future be impaired by the presence
of Hazardous Substances on, about or under the Real Property (but no
more often than once every five years unless Mortgagee has reason to
believe that Hazardous Substances may be present). Mortgagor shall
retain, upon request of Mortgagee, or Mortgagee may retain directly, at
the sole cost and expense of Mortgagor, a licensed geologist, industrial
hygienist or an environmental consultant (the "Environmental
Consultant") acceptable to Mortgagee to conduct an environmental audit
of the Real Property. Mortgagor shall afford any person conducting an
environmental audit access to the Real Property and all materials
reasonably requested in connection with the environmental audit. In
light of the possible passage of title to Mortgagee as a result of
Default, any requirement of an environmental audit by Mortgagee shall be
deemed reasonable if a Default exists. Such a requirement shall also be
deemed reasonable if Mortgagee has received notice of the likely
existence of Hazardous Substances on, about or under the Real Property.
Mortgagor shall pay the cost and expenses of any environmental audit
obtained by Mortgagee on demand. Mortgagor shall at Mortgagee's request
comply, at Mortgagor's sole cost and expense, with all recommendations
contained in the environmental audit required to bring the Real Property
into compliance with all Environmental Laws, or for
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additional testing and studies to further determine the location,
quantity and types of Hazardous Substances detected by an environmental
audit.
MISCELLANEOUS
A) SUCCESSORS AND ASSIGNS
All of the terms of the Loan Documents shall apply to, be binding
upon and inure to the benefit of the heirs, personal representatives,
successors and assigns of the Obligors, or to the holder of the Note, as
the case may be.
B) SURVIVAL OF OBLIGATIONS
Each and all of the Obligations shall survive the execution and
delivery of the Loan Documents and will continue in full force and
effect until the latest of (a) the date the Indebtedness has been paid
in full and the Obligations have been performed and satisfied in full,
(b) the last date permitted by law for bringing any claim or action with
respect to which Mortgagee may seek payment or indemnification in
connection with the Loan Documents, and (c) the date on which any claim
or action for which Mortgagee seeks payment or indemnification is fully
and finally resolved and, if applicable, any compromise thereof of
judgment or award thereon is paid in full.
C) FURTHER ASSURANCES
Mortgagor, upon the request of Mortgagee, shall complete, execute,
acknowledge, deliver and record or file such further instruments and do
such further acts as may be necessary, desirable or proper to carry out
more effectively the purposes of this Mortgage, to subject any property
intended to be covered by this Mortgage to the liens and security
interests it creates, to place third parties on notice of those liens
and security interests, or to correct any defects which may be found in
any Loan Document. Such instruments shall include, if Mortgagee so
requests, a written statement of the Mortgagor, duly executed, showing
the amount due on the Indebtedness and stating whether any offset or
defense exists to the Indebtedness, and providing any other information
which may be reasonably requested in connection with this Mortgage or
the Indebtedness. Mortgagor's failure to provide such an estoppel
certificate within ten Business Days of Mortgagee's
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written request shall be deemed an admission by Mortgagor that the
amount of the Indebtedness is as stated in Mortgagee's estoppel
certificate. Mortgagor irrevocably appoints Mortgagee as its agent to
complete, execute, deliver and record or file all such instruments, to
be exercised, however, only if Mortgagor is in default hereunder beyond
the expiration of any applicable notice and cure period.
D) EXPENSES
Mortgagor shall pay all filing and recording fees, and all expenses
incident to the execution and acknowledgment of this Mortgage, any
supplements or amendments, and any instrument entered into under
Subsection 24(C). Mortgagor shall pay or reimburse Mortgagee, upon
demand, for all costs and expenses, including appraisal and reappraisal
costs of the Property and reasonably attorneys' and legal assistants'
fees, which Mortgagee may incur in connection with enforcement
proceedings hereunder, and reasonable attorneys' and legal assistants'
fees incurred by Mortgagee in any other suit, action, legal proceeding
or dispute of any kind in which Mortgagee is made a party or appears as
party plaintiff or defendant, affecting the Indebtedness, this Mortgage,
or the Property, or required to protect or sustain the lien of this
Mortgage. Mortgagor shall be obligated to pay (or to reimburse
Mortgagee) for such fees, costs and expenses and shall indemnify and
hold Mortgagee harmless from and against any and all loss, cost,
expense, liability, damage and claims and causes of action, including
reasonable attorneys' fees, incurred or accruing by reason of
Mortgagor's failure to promptly repay any such fees, costs and expenses.
E) RECORDING AND FILING
Mortgagor shall cause this Mortgage and all amendments,
supplements, and substitutions to be recorded, filed, re-recorded and
refiled in such manner and in such places as Mortgagee may reasonably
request. Mortgagor and will pay all recording filing, re-recording and
refiling taxes, fees and other charges.
F) NO WAIVER
No deliberate or unintentional failure by Mortgagee to require
strict performance by Mortgagor of any Obligation shall be deemed a
waiver, and Mortgagee shall have the right at any time to require strict
performance by Mortgagor of any Obligation.
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G) COVENANTS RUNNING WITH THE LAND
All Obligations are intended by the parties to be and shall be
construed as covenants running with the Land.
H) SEVERABILITY
The Loan Documents are intended to be performed in accordance with,
and only to the extent permitted by, all applicable Legal Requirements.
Any provision of the Loan Documents that is prohibited or unenforceable
in any jurisdiction shall nevertheless be construed and given effect to
the extent possible. The invalidity or unenforceability of any provision
in a particular jurisdiction shall neither invalidate nor render
unenforceable any other provision of the Loan Document in that
jurisdiction, and shall not affect the validity or enforceability of that
provision in any other jurisdiction. If a provision is held to be
invalid or unenforceable as to a particular person or under a particular
circumstance, it shall nevertheless be presumed valid and enforceable as
to others, or under other circumstances.
I) USURY
The parties intend that no provision of the Note or the Loan
Documents be interpreted, construed, applied, or enforced so as to
permit or require the payment or collection of interest in excess of the
highest rate of interest (the "Maximum Permitted Rate") permitted to be
paid or collected by applicable law with respect to this transaction. In
this regard, Mortgagor and Mortgagee each stipulate and agree that it is
their common and overriding intent to contract in strict compliance with
applicable usury laws. Accordingly, none of the terms of this Mortgage,
the Note or any of the other Loan Documents shall ever be construed to
create a contract to pay, as consideration for the use, forbearance or
detention of money, interest at a rate in excess of the Maximum
Permitted Rate. Mortgagor shall never be liable for interest in excess
of the Maximum Permitted Rate. Therefore, (a) in the event that the
Indebtedness and Obligations are prepaid or the maturity of the
Indebtedness and Obligations is accelerated by reason of an election by
Mortgagee, unearned interest shall be canceled and, if theretofore paid,
shall either be refunded to Mortgagor or credited on the Indebtedness
evidenced by this Note, as Mortgagee may elect; (b) the aggregate of
all interest and other charges constituting interest under applicable
laws and contracted for,
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chargeable or receivable under the Note and the other Loan Documents or
otherwise in connection with the transaction contemplated thereby shall
never exceed the maximum amount of interest, nor produce a rate in
excess of the Maximum Permitted Rate; and (c) if any excess interest is
provided for or received, it shall be deemed a mistake, and the same
shall, at the option of Mortgagee, either be refunded to Mortgagor or
credited on the unpaid principal amount (if any), and the Indebtedness
evidenced by the Note shall be automatically reformed so as to permit
only the collection of the interest at the Maximum Permitted Rate.
Furthermore, if any provision of the Note or any of the other Loan
Documents is interpreted, construed, applied, or enforced, in such a
manner as to provide for interest in excess of the Maximum Permitted
Rate, then the parties intend that such provision automatically shall be
deemed reformed retroactively so as to require payment only of interest
at the Maximum Permitted Rate. If, for any reason whatsoever, interest
paid or received during the full term of the applicable Indebtedness
produces a rate which exceeds the Maximum Permitted Rate, then the
amount of such excess shall be deemed credited retroactively in
reduction of the then outstanding principal amount of the Indebtedness,
together with interest at such Maximum Permitted Rate. Mortgagee shall
credit against the principal of such Indebtedness (or, if such
Indebtedness shall have been paid in full, shall refund to the payor of
such interest) such portion of said interest as shall be necessary to
cause the interest paid to produce a rate equal to the Maximum Permitted
Rate. All sums paid or agreed to be paid to Mortgagee for the use,
forbearance or detention of money shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread in equal
parts throughout the full term of the applicable indebtedness, so that
the interest rate is uniform throughout the full term of such
indebtedness. In connection with all calculations to determine the
Maximum Permitted Rate, the parties intend that all charges be excluded
to the extent they are properly excludable under applicable usury laws,
as they from time to time are determined to apply to this transaction.
The provisions of this Section shall control all agreements, whether now
or hereafter existing and whether written or oral, between Mortgagor and
Mortgagee.
J) ENTIRE AGREEMENT
The Loan Documents contain the entire agreements between the
parties relating to the financing of the Real Property,
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and all prior agreements which are not contained in the Loan Documents are
terminated. The Loan Documents represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous,
or subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
(2) The Loan Documents may be amended, revised, waived, discharged,
released or terminated only by a written instrument or instruments
executed by the party against which enforcement of the amendment,
revision, waiver, discharge, release or termination is asserted. Any
alleged amendment, revision, waiver, discharge, release or termination
that is not so documented shall be null and void.
(3) If Mortgagee and Mortgagor agree to change the terms of the Loan,
and the change is a "modification" as defined in New Jersey P.L. 1985,
c. 353, N.J.S.A. 46;9-8.1, ET SEQ., this Mortgage shall be subject to
the priority provisions of that law.
K) NOTICES
In order for any demand, consent approval or other communication to
be effective under the terms of this Mortgage, "Notice" must be provided
under the terms of this Subsection. All Notices must be in writing.
Notices may be (a) delivered by hand; (b) transmitted by telecopy (with
a duplicate copy sent by first class mail, postage prepaid), (c) send by
certified or registered mail, postage prepaid, return receipt requested,
or (d) sent by reputable overnight courier service, delivery charges
prepaid. Notices shall be addressed as set forth below:
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(2)
If to Mortgagee:
Life Investors Insurance Company of America
c/o AEGON USA Realty Advisors, Inc.
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499-5443
Attn. Mortgage Loan Department; Loan No. 87532
Telecopy Number: (319) 369-2188
If to Mortgagor:
710 Rt. 46 Realty, LLC., c/o Principal Investment Group, Inc.
950 3rd Avenue
31st Floor
New York, New York 10022
Telecopy Number: (212) 838-8180
Notices delivered by hand or by overnight courier shall be deemed given
when actually received or when refused by their intended recipient.
Telecopied notices will be deemed delivered when a legible copy has been
received (provided receipt has been verified by telephone confirmation or
one of the other permitted means of giving Notices under this Subsection).
Mailed Notices shall be deemed received three (3) days after mailing.
Either Mortgagee or Mortgagor may change its address for Notice by giving
at least fifteen Business Days' prior Notice of such change to the other
party.
L) COUNTERPARTS
This Mortgage may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute
but one instrument.
M) APPLICABLE LAW
This Mortgage will be interpreted, construed, applied, and enforced
according to, and will be governed by, the laws of the State of New
Jersey, without regard to any choice of law principles which, but for this
provision, would require the application of the law of another
jurisdiction and regardless of where executed or delivered, where payable
or paid, where any cause of action
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accrues in connection with this transaction, where any action or other
proceeding involving this Mortgage is instituted or pending, or whether
the laws of the State of New Jersey otherwise would apply the laws of
another jurisdiction. Mortgagor agrees that the sole and exclusive forum
for the determination of any action relating to the validity and
enforceability of the Note, this Mortgage and the other Loan Documents,
and any other instruments securing the Note shall be either in an
appropriate court of the State of New Jersey or the applicable United
States District Court.
N) SOLE BENEFIT
This Mortgage and the other Loan Documents have been executed for
the sole benefit of Mortgagor and Mortgagee and the successors and assigns
of Mortgagee. No other party shall have rights thereunder or be entitled
to assume that the parties thereto will insist upon strict performance of
their mutual obligations hereunder, any of which may be waived from time
to time. Mortgagor shall have no right to assign any of its rights under
the Loan Documents to any party whatsoever, except as otherwise permitted
hereunder.
O) RELEASE OF CLAIMS
Mortgagor hereby RELEASES, DISCHARGES and ACQUITS forever
Mortgagee and its officers, directors, trustees, agents, employees and
counsel (in each case, past present or future) from any and all Claims
existing as of the date hereof (or the date of actual execution hereof by
Mortgagor, if later). As used herein, the term "Claim" shall mean any and
all liabilities, claims, defenses, demands, actions, causes of action,
judgments, deficiencies, interest, liens, costs or expenses (including
court costs, penalties, attorneys' fees and disbursements, and amounts
paid in settlement) of any kind and character whatsoever, including claims
for usury, breach of contract, breach of commitment, negligent
misrepresentation or failure to act in good faith, in each case whether
now known or unknown, suspected or unsuspected, asserted or unasserted or
primary or contingent, and whether arising out of written documents,
unwritten undertakings, course of conduct, tort, violations of laws or
regulations or otherwise.
P) NO PARTNERSHIP
Nothing contained in the Loan Documents is intended to create any
partnership, joint venture or association between
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Mortgagor and Mortgagee, or in any way make Mortgagee a co-principal with
Mortgagor with reference to the Property.
Q) PAYOFF PROCEDURES
If Mortgagor pays or causes to be paid to Mortgagee all so the
Indebtedness, then Mortgagee's interest in the Real Property shall cease,
and upon receipt by Mortgagee of such payment, Mortgagee shall either (a)
release this Mortgage or (b) assign the Loan Documents and endorse the
Note (in either case without recourse or warranty of any kind) to a
takeout lender, upon payment (in the latter case) of an administrative
fee of $750.
R) INTERPRETATION
(A) HEADINGS AND GENERAL APPLICATION
The section, subsection, paragraph and subparagraph headings of
this Mortgage are provided for convenience of reference only and
shall in no way affect, modify or define, or be used in construing,
the text of the sections, subsections, paragraphs or subparagraphs.
If the text requires, words used in the singular shall be read as
including the plural, and pronouns of any gender shall include all
genders.
(B) SOLE DISCRETION
Mortgagee may take any action or decide any matter under the
terms of this Mortgage or of any other Loan Document (including any
consent, approval, acceptance, option, election or authorization)
in its sole and absolute discretion, for any reason or for no reason,
unless the related Loan Document contains specific language to the
contrary. Any approval or consent which the Mortgagee might withhold
may be conditioned in any way.
(C) RESULT OF NEGOTIATIONS
This Mortgage results from negotiations between Mortgagor and
Mortgagee and from their mutual efforts. Therefore, it shall be so
construed, and not as though it had been prepared solely by
Mortgagee.
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(D) REFERENCE TO PARTICULARS
The scope of a general statement made in this Mortgage or in
any other Loan Document shall not be construed as having been
reduced through the inclusion of references to particular items
that would be included within the statement's scope. Therefore,
unless the relevant provision of a Loan Document contains specific
language to the contrary, the term "include" shall mean "include,
but shall not be limited to" and the term "including" shall mean
"including, without limitation."
S) INDEBTEDNESS MAY EXCEED NOTE'S FACE AMOUNT
Mortgagor's successors or assigns are hereby placed on notice that
the Note contains late charge, prepayment and other provisions which may
result in the outstanding principal balance exceeding the face amount of
the Note.
T) JOINT AND SEVERAL LIABILITY
If there is more than one individual or entity executing this
Mortgage as Mortgagor, liability of such individuals and entities under
this Mortgage shall be joint and several.
U) TIME OF ESSENCE
Time is of the essence of each and every covenant, condition and
provision of this Mortgage to be performed by Mortgagor.
V) JURY WAIVER
Mortgagor hereby waives any right to a trial by jury in any action
or proceeding to enforce or defend any rights (i) under this Mortgage or
any other Loan Document or (ii) arising from any lending relationship
existing in connection with this Mortgage or any other Loan Document,
and Mortgagor agrees that any such action or proceeding shall be tried
before a judge and not before a jury.
W) RENEWAL, EXTENSION, MODIFICATION AND WAIVER
Mortgagee, at its option, may at any time renew or extend this
Mortgage, the Note or any other Loan Document. Mortgagee
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may enter into a modification of any Loan Document without the consent
of any person not a party to the document being modified. Mortgagee may
waive any covenant or condition of any Loan Document, in whole or in
part, at the request of any person then having an interest in the
Property or in any way liable for any part of the Indebtedness.
Mortgagee may take, release, or resort to any security for the Note and
the Obligations and may release any party primarily or secondarily
liable on any Loan Document, all without affecting any liability not
expressly released in writing by Mortgagee.
X) CUMULATIVE REMEDIES
Every right and remedy provided in this Mortgage shall be
cumulative of every other right or remedy of Mortgagee, whether
conferred by law or by grant or contract, and may be enforced
concurrently with any such right or remedy. The acceptance of the
performance of any obligation to cure any Default shall not be construed
as a waiver of any rights with respect to any other past, present or
future Default. No waiver in a particular instance of the requirement
that any Obligation be performed shall be construed as a waiver with
respect to any other Obligation or instance.
Y) TRANSFER OF OWNERSHIP
Mortgagee may, without notice to Mortgagor, deal with any person in
whom ownership of any part of the Real Property has vested, without in
any way vitiating or discharging Mortgagor from liability for any of the
Obligations.
Z) NO MERGER
Even though title to the Real Property may be held in the future by
Mortgagee, the interest of the owner of the Real Property and the
interest of the holder of the title or lien granted by this Mortgage
shall at all times be separate, distinct and apart, and shall in no
event be merged by operation of law or otherwise, unless and until all
persons at the time having an interest in the Real Property and this
Mortgage shall join in the execution of a written instrument effecting
such merger of estates (it being understood that this provision shall
survive the payment in full of the Indebtedness).
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AA) ACKNOWLEDGEMENT OF RECEIPT OF MORTGAGE
MORTGAGOR HEREBY DECLARES AND
ACKNOWLEDGES THAT MORTGAGOR HAS RECEIVED,
WITHOUT CHARGE, A TRUE COPY OF THIS MORTGAGE.
IN WITNESS WHEREOF, Mortgagor has executed and delivered this Mortgage
as of the day and year first above written.
WITNESS 710 RT. 46 REALTY, LLC, a New
Jersey limited liability company
/s/ By /s/ Richard F. Wagman [SEAL]
- ----------------------------- -------------------------------
Richard F. Wagman, Member
STATE OF New York
) SS:
CITY/COUNTY OF New York
I HEREBY CERTIFY that on this 29th day of April, 1998, before me, the
undersigned officer, personally appeared Richard F. Wagman, who acknowledged
himself to be the managing member of 710 RT. 46 REALTY, LLC, a New Jersey
limited liability company, the within Mortgagor, and that he, in such
capacity, being authorized to do so, executed the foregoing instrument for
the purposes therein contained, by signing the name of 710 RT. 46 REALTY,
LLC, a New Jersey limited liability company.
IN WITNESS WHEREOF, I hereunto set my hand and Notarial Seal.
/s/ Martin Kravet
----------------------------------
Notary Public
My Commission expires:
MARTIN KRAVET
NOTARY PUBLIC, STATE OF NEW YORK
NO. 41-4974698
QUALIFIED IN QUEENS COUNTY
COMMISSION EXPIRES NOVEMBER 19, 1998
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EXHIBIT A
BLOCK 2901, LOT 20.02
FAIRFIELD TOWNSHIP, ESSEX COUNTY, NEW JERSEY
BEGINNING at a point in the southerly line of U.S. Highway Route 46, said
point being the eastbound point of curvature at Station 198+89.26 on said
southerly line, said point being distant 100.00 feet on a course bearing
South 24DEG.14'35" East from the centerline of said U.S. Route 46 at said
point of curvature; and from thence running
1) easterly along a curve deflecting to the right having a radius of
1877.08 feet an arc distance of 144.70 feet, the chord of which bears
North 67DEG.57'55" East and being 144.66 feet in length, to a point;
thence
2) North 79DEG.06'25" East a distance of 147.30 feet to a point in the
westerly bank of the Passaic River; thence
3) South 12DEG.40'35" East along the said westerly bank 322.04 feet to an
angle point; thence
4) South 03DEG.35'55" East still along the said westerly bank 454.17 feet
to the northeast corner of Lot No. 17 in Block 2901 as shown on the Tax
Maps of the Township of Fairfield; thence
5) South 65DEG.00'35" West along the northerly line of said lot 17, the
northerly terminus of Jane Road and the northerly line of Lot 10 on said
map a distance of 376.12 feet to an angle point; thence
6) South 66DEG.10'05" West still along the northerly line of Lot 10 a
distance of 164.95 feet to a point and corner; thence
7) North 28DEG.09'00" West still along the northerly line of Lot 10 a
distance of 60.00 feet to an angle point; thence
8) North 34DEG.50'00" West still along the said northerly line a distance
of 12.17 feet to an angle point; thence
9) South 42DEG.46'34" West still along the said northerly line a distance
of 212.57 feet to the southeast corner of Lot 6 on said map; thence
10) North 53DEG.54'40" West along the easterly line of said Lot 6 a distance
of 124.08 feet to the southwesterly corner of Lot 20.01 on said map;
thence
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11) North 65DEG.45'25" East along the southerly line of Lot 20.01 a distance
of 213.54 feet to an angle in same; thence
12) North 24DEG.14'35" West at right angles to the previous course and still
along the said southerly line a distance of 19.10 feet to a point; thence
13) North 20DEG.45'25" East still along the said southerly line a distance of
379.95 feet to a point of curvature; thence
14) Northerly on a curve deflecting to the left and having a radius of 64.00
feet, the chord of which bears North 16DEG.05'02" East for a distance of
10.43 feet, an arc distance of 10.44 feet to the southeast corner of
said Lot 10; thence
15) North 24DEG.14'35" West at right angles to U.S. Route 46 and along the
easterly line of Lot 10 a distance of 390.40 feet to the aforementioned
southerly line of U.S. Route 46; thence
16) North 65DEG.45'25" East along the said southerly line of U.S. Route 46 a
distance of 250.46 feet to the point and place of BEGINNING.
Containing 427,755.20 square feet, or 9.820 acres of land.
Together with an ingress/egress easement twelve feet (12') in width through
Lot 20.01 as described in EXHIBIT "D" of an Easement Agreement between Prime
Motor Inns, and Silcito 46 filed in the Office of the Essex County Register
on June 28, 1984 in Deed Book 4833/545, etc.
Together also with a parking easement in Lot 20.01 described in EXHIBIT "E"
in said Easement Agreement.
Subject to an ingress/egress easement twelve feet (12') in width granted to
Lot 20.01 and described in EXHIBIT "C" of the abovementioned Easement
Agreement.
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EXHIBIT B
(Permitted Exceptions)
1. Covenants and Restrictions in Deed Book 4833 page 530.
2. Easements in Deed Book 4942 page 743 and Deed Book 5048 page 62.
3. Stream Encroachment Permit in Deed Book 4688 page 667.
4. Terms, conditions, and provisions in Deed Book 4833 page 545 and Deed
Book 4833 page 537.
5. Rights of Easement of others to drain through or otherwise use the
Passaic River running along or through the premises.
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