Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 25, 1998
CV REIT, INC.
(Exact name of registrant as specified in its charter.
Delaware 1-8073 59-0950354
(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Identification
Incorporation) Number)
100 Century Boulevard, West Palm Beach, Florida 33417
(Address of Principal Executive Offices) (zip code)
Registrant's telephone number, including area code:
(407) 640-3155.
Item 2. Acquisition or Disposition of Assets.
On June 25, 1998, Marlton Plaza Associates, L.P., a Delaware
limited partnership ("Purchaser"), consummated the acquisition of
the Marlton Crossing Shopping Center - Phase II, located in
Evesham Township, Burlington County, New Jersey, together with
certain personal property and other interests related thereto
(collectively, the "Property"). The Property consists of an
approximately 141,795 square foot retail shopping center.
Tenants of the Property include Burlington Coat Factory, Dress
Barn and T.J. Maxx. The Property is 91.2% occupied. The
Property was acquired from Marlton KDA Limited Partnership, a New
Jersey limited partnership ("Seller"), pursuant to the terms of a
Real Estate Purchase Agreement by and between Seller and
Purchaser, as amended from time to time (collectively,
the "Agreement").
The purchase price for the Property under the Agreement was
Twelve Million Three Hundred Fifty Thousand Dollars ($12,350,000)
(the "Purchase Price"). The Purchase Price was funded in part by
a loan in the amount of $9,300,000 (the "Loan") made by GMAC
Commercial Mortgage Corporation ("GMAC") to Purchaser pursuant to
the terms of a Mortgage and Security Agreement dated as of June
25, 1998 (the "Security Agreement").
In connection with the Security Agreement: (a) Purchaser has
delivered a $9,300,000 Promissory Note to GMAC; (b) Purchaser has
granted GMAC a first mortgage on the Property and a security
interest in all of its personal property located on the Property;
(c) Montgomery CV Realty L.P., a Delaware limited partnership
(the "Operating Partnership") guaranteed the Loan pursuant to a
Guaranty and Suretyship Agreement; and (d) the Registrant
guaranteed the Loan pursuant to a Guaranty and Suretyship
Agreement.
As a result of this acquisition by Purchaser, the Registrant
indirectly obtained an interest in the Property. The
Registrant's ownership interest in the Property is held through
Montgomery CV Realty Trust, a Delaware business trust of which
Registrant is the one hundred percent (100%) beneficial owner
(the "Trust"). The Trust holds the general partner interest in
and approximately eighty-two percent (82%) of the limited partner
interests in the Operating Partnership. The Operating
Partnership is the sole member of Marlton Plaza LLC, a Delaware
limited liability company (the "LLC") which is the sole general
partner of Purchaser. The Operating Partnership is also the sole
limited partner of Purchaser.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements of Business Acquired - Audited
financial statements of the Property are not included in this
report, and will be filed on or before August 9, 1998.
(b) Pro Forma Financial Information - Pro Forma information is
not included in this report, and will be filed on or before
August 9, 1998.
(c) Exhibits
2.1 Real Estate Purchase Agreement dated January 27, 1998
by and between Seller and Purchaser.
2.2 Amendment to Real Estate Purchaser Agreement dated
February 26, 1998 by and between Seller and Purchaser.
2.3 Second Amendment to Real Estate Purchase Agreement
dated March 31, 1998 by and between Seller and Purchaser.
2.4 Mortgage and Security Agreement dated as of June 25,
1998 by and between Marlton Plaza Associates, L.P., as Borrower,
and GMAC Commercial Mortgage Corporation, as Lender.
2.5 $9,300,000 Promissory Note dated as of June 25, 1998
from Marlton Plaza Associates, L.P. to GMAC Commercial Mortgage
Corporation.
2.6 Guaranty and Suretyship Agreement dated as of June 25,
1998 by CV Reit, Inc. to GMAC Commercial Mortgage Corporation.
2.7 Guaranty and Suretyship Agreement dated as of June 25,
1998 by Montgomery CV Realty L.P. to GMAC Commercial Mortgage
Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CV REIT, INC.
(Registrant)
Date: July 7, 1998 /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President and Chief Executive
Officer
EXHIBIT INDEX
2.1 Real Estate Purchase Agreement dated Janury 27, 1998 by
and between Seller and Purchaser.
2.2 Amendment to Real Estate Purchaser Agreement dated
February 26, 1998 by and between Seller and Purchaser.
2.3 Second Amendment to Real Estate Purchase Agreement
dated March 31, 1998 by and between Seller and
Purchaser.
2.4 Mortgage and Security Agreement dated as of June 25,
1998 by and between Marlton Plaza Associates, L.P., as
Borrower, and GMAC Commercial Mortgage Corporation, as
Lender.
2.5 $9,300,000 Promissory Note dated as of June 25, 1998
from Marlton Plaza Associates, L.P. to GMAC Commercial
Mortgage Corporation.
2.6 Guaranty and Suretyship Agreement dated as of June 25,
1998 by CV Reit, Inc. to GMAC Commercial Mortgage
Corporation.
2.7 Guaranty and Suretyship Agreement dated as of June 25,
1998 by Montgomery CV Realty L.P. to GMAC Commercial
Mortgage Corporation.
EXHIBIT 2.1
REAL ESTATE PURCHASE AGREEMENT
THIS REAL ESTATE PURCHASE AGREEMENT is made and entered into
as of January 27, 1998 by and between (1) MARLTON KDA LIMITED
PARTNERSHIP, a New Jersey limited partnership (hereinafter
referred to as "Seller") and (ii) LINPRO MARLTON CROSSING
COMMERCIAL LAND II, LIMITED PARTNERSHIP, A New Jersey limited
partnership, a New Jersey limited partnership (hereinafter
referred to as "Seller")
W I T N E S S E T H:
WHEREAS, Seller is the record and beneficial owner of all
that certain real property located in Evesham Township,
Burlington County, New Jersey, as more particularly described on
Exhibit A attached hereto (the "Land"), together with a shopping
center containing approximately 141,795 square feet of rentable
area and all other buildings and improvements situated thereon
(collectively, the "Building"), all personal property and
fixtures located therein (the "Personalty"), and all
appurtenances, rights, licenses, leases, easements, permits,
rights-of-way, tenements and hereditaments incident thereto (the
"Additional Property") (the Land, Building, Personalty and
Additional Property are hereinafter collectively referred to as
the "Property"); and WHEREAS, Purchaser desires to purchase the
Property from Seller and Seller desires to sell and transfer the
same to Purchaser.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Purchase and Sale. Purchaser agrees to buy and Seller
agrees to sell and convey the Property for and in consideration
of the purchase price and upon the terms and conditions set forth
herein.
2. Purchase Price. The Purchase Price shall be
$12,350,000 as adjusted for closing or other adjustments herein
provided, payable by cash or wire transfer of immediately
available federal funds, as Seller may direct at Closing
3. Deposit.
(a) Within one (1) business day after the date of
delivery to Purchaser of an original of this Agreement executed
by Seller, together with completed Exhibits hereto (the date of
such delivery by Seller being the "Acceptance Date"), Purchaser
shall deliver to Chicago Title Insurance Company, 220 Commerce
Drive, Suite 200, Fort Washington, Pennsylvania 19034 (the "Title
Company"), as escrow agent, (i) either cash or (ii) an
irrevocable, unconditional letter of credit with an expiration
date that is one hundred thirty-nine days (139) from the date of
this Agreement or later, in the amount of One Hundred Ten
Thousand Dollars ($110,000.00) as a good faith deposit (the
"Deposit"). The Deposit shall be held by the Title Company
pursuant to the terms and conditions of this Agreement.
(b) The Title Company will immediately provide Seller
with written evidence of receipt of such Deposit. The Deposit
shall be held by the Title Company pursuant to the terms and
conditions of this Agreement.
(c) In the event that, at any time prior to Closing,
Seller or Purchaser provides Title Company with a certification
(a copy of which shall be delivered contemporaneously to the
other party) that the Seller or Purchaser, as the case may be, is
entitled to the Deposit pursuant to the terms of this Agreement,
Title Company shall deliver the Deposit to such party within five
(5) business days after receipt of said notice and upon
24-hours prior written notice to each party, unless the other
party disputes such certification by written notice to Title
Company (a copy of which shall be delivered contemporaneously to
the other party) delivered within three (3) business days of
Title Company's receipt of the initial certification. In such
event, Title Company shall hold the Deposit pending resolution
of such dispute.
(d) The parties acknowledge that Title Company is
acting solely as a stakeholder at their request and for their
convenience, that Title Company shall not be deemed to be the
agent of either of the parties, and Title Company shall not be
liable to either of the parties for any act or omission on its
part unless taken or suffered in bad faith, in willful disregard
to this Agreement or involving gross negligence. Seller and
Purchaser shall jointly and severally indemnify and hold Title
Company harmless from and against all costs, claims and expenses,
including reasonable attorneys' fees, incurred in connection with
the performance of Title Company's duties hereunder, except with
respect to actions or omissions taken or suffered by Title
Company in bad faith, in willful disregard of this Agreement or
involving gross negligence on the part of Title Company.
4. Closing. Except as otherwise provided in this
Agreement, the purchase and sale contemplated herein shall be
consummated at the "Closing," which shall take place on the date
(the "Closing Date") specified by Purchaser on not less than ten
(10) days notice to Seller, provided that the Closing Date shall
be on or before the earlier of (i) thirty (30) days following
satisfaction of Purchaser's contingencies as set forth in Section
8 hereof or (ii) seventy-eight (78) days from the date of this
Agreement. Purchaser shall have the right to one thirty (30) day
extension of the Closing Date (the "Extension Option"). The
Extension Option is exercised by Purchaser as follows:
(i) Purchaser must provide Seller with written notice
(the "Option Notice") of Purchaser's intention to exercise the
Extension Option on or before five (5) business days prior to the
Closing Date (the "Notice Date"); and
(ii) Purchaser must deliver to the Title Company, as
escrow agent, (i) either cash or (ii) an irrevocable,
unconditional letter of credit with an expiration date that is
one hundred thirty-nine days (139) from the date of this
Agreement or later, in the amount of One Hundred Ten Thousand
($110,000) Dollars (the "Option Deposit") and provide Seller with
evidence of the Option Deposit (that is reasonably satisfactory
to Seller) on or before the Notice Date. The Option Deposit
shall be deemed to be part of the Deposit and shall be held
and delivered by the Title Company according to the terms of this
Agreement.
The Closing shall take place at the offices of the Seller, or at
such other place as may mutually agreed upon by Seller and
Purchaser.
5. Representations and Warranties of Seller. In order
to induce Purchaser to enter into this Agreement and to purchase
the Property, Seller hereby makes the following representations
and warranties, each of which shall be deemed remade at Closing
and shall survive Closing for a period of one (1) year (unless
expressly provided that it will survive Closing without time
limitation):
(a) Authority of Seller. Seller is a limited
partnership duly organized and existing and in good standing
under the laws of the State of New Jersey. Seller has all
necessary power and authority and has taken all necessary
partnership or corporate action to execute, deliver and perform
this Agreement and consummate all of the transactions
contemplated by this Agreement. This Agreement is the valid and
binding obligation of Seller, enforceable against it in
accordance with its terms.
(b) Title. Seller is the sole owner of fee simple
title to the Property with the authority to sell and convey the
Property to Purchaser without the consent of any other party, and
such title is marketable and good of record and, to the best of
Seller's knowledge, free and clear of all liens, encumbrances,
covenants, conditions, restrictions and other matters affecting
title, except for the Permitted Exceptions (as defined in Section
8(a)(iii)).
(c) Compliance With Existing Laws. To the best of
Seller's knowledge, the present use of the property is not in
violation of applicable zoning laws and, ordinances. To the best
of Seller's knowledge, there does not exist any notice of an
uncorrected violation of the applicable housing, building, safety
or fire ordinances.
(d) Leases. True, correct and complete copies of all
of the leases of the Property and any amendments thereto
(collectively, the "Leases") have been delivered to Purchaser.
Attached hereto as Exhibit B is a description of all of the
Leases and a current rent schedule ("Rent Schedule") covering the
Leases. There are no leases or tenancies of any space in the
Property other than those set forth in Exhibit B or any subleases
or subtenancies unless otherwise noted therein. Except as
otherwise set forth in the Leases in Exhibit B or elsewhere in
this Agreement:
(i) The Leases are in full force and effect and
are assignable by Seller to Purchaser;
(ii) no renewal or expansion options have been
granted to the tenants;
(iii) to the best of Seller's knowledge, Seller
is not in default under the Leases and has not received any
notice of any default under the Leases;
(iv) the rents set forth on the Rent Schedule are
being collected on a current basis and there are no arrearages in
excess of one month (other than as noted thereon) nor has any
tenant paid any rent, additional rent or other charge of any
nature for a period of more than thirty (30) days in advance;
(v) all work for tenant alterations and other work
or materials contracted for by Seller and any tenant has been
completed, and all work and materials have been fully paid for;
(vi) Seller has not sent written notice to any
tenant claiming that such tenant is in default, which default
remains uncured, and to the best of Seller's knowledge, no tenant
is in default under its Lease;
(vii) there are no security deposits other than
those set forth in Exhibit B; and
(viii) no brokers or other intermediaries are
entitled to receive any leasing brokerage or other compensation
out of or with respect to rents accruing under the Leases.
(e) Service Contracts. Except as set forth in
Exhibit C, to the best of Seller's knowledge there are no service
contracts relating to the management, leasing, operation,
maintenance or repair of the Property (the "Service Contracts").
True and correct copies of all of the Service Contracts have been
delivered to Purchaser. No Service Contract which Purchaser
notifies Seller that it agrees to assume will be terminated,
amended, modified or supplemented prior to the Closing Date
without Purchaser's prior written approval; otherwise, Service
Contracts will be terminated as of the Closing Date.
(f) Tax Bills. Attached hereto as Exhibit D are
true and correct copies of tax bills issued by any applicable
federal, sta te or local governmental authority to Seller with
respect to the Property for the most recent past and current tax
years, and any new assessment received with respect to a current
or future tax year. As of the date of this Agreement, Seller
has received no notice of any special assessment with respect to
a current or future tax year.
(g) Insurance. Attached hereto as Exhibit E are
certificates of all hazard, liability and other insurance
policies presently affording coverage with respect to the
Property. Seller shall maintain in full force and effect all
such policies until the Closing Date and shall cause its insurer
to name Purchaser as an additional insured as a contract party on
its rent loss policy with respect to the Property.
(h) Condition. Possession of Property shall be
delivered to Purchaser at Closing in "as is, where is" condition
as of the date of Purchaser's execution of this Agreement, and
Purchaser is relying solely on its own investigations,
inspections and business judgment as to the condition of the
Property.
(i) Intentionally Omitted.
(j) Condemnation Proceedings. Seller has received
no written notice that any condemnation or eminent domain
proceedings are pending or, to the best of Seller's knowledge,
threatened against the Property or any part thereof, and Seller
has made no commitments to and has received no written notice of
the desire of any public authority or other entity to take or use
the Property or any part thereof whether temporarily or
permanently, for easements, rights-of-way, or other public or
quasi-public purposes.
(k) Litigation. Except as provided in Exhibit F,
no litigation is pending or, to the best of Seller's knowledge,
threatened, including administrative actions or orders relating
to governmental regulations, affecting the Property or any part
thereof or Seller's right to sell the Property.
(1) No Defaults. Neither the execution of
this Agreement nor the consummation of the transactions
contemplated hereby will: (i) conflict with, or result in a
breach of, the terms, conditions or provisions of, or constitute
a default under, any agreement or instrument to which Seller is a
party or by which the Property is bound, (ii) violate any
restriction, requirement, covenant or condition to which the
Seller is subject or by which the Property is bound, (iii)
constitute a violation of any applicable code, resolution, law,
statute, regulation, ordinance, rule, judgment, decree or order,
or (iv) result in the cancellation of any lease pertaining to the
Property.
(m) Hazardous Waste. Seller has no knowledge of
any discharge, spillage, uncontrolled loss, seepage, filtration,
soluble, friable or uncontrolled presence (a "Spill") of oil,
petroleum or chemical liquids or solids, asbestos, PCBs, liquid
or gaseous products or any hazardous waste or hazardous substance
(as those terms are used in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, or in
any other applicable federal, state or local laws, ordinances,
rules or regulations relating to protection of public health,
safety or the environment, as such laws may be amended from time
to time, collectively, "Hazardous Substances") at, upon, under or
within the Land or any contiguous real estate. To the best of
Seller's knowledge, there is no proceeding or action pending or
threatened by any person or governmental agency regarding the
environmental condition of the Property.
(n) Certificates of Occupancy. To the extent
available, attached hereto as Exhibit G are true and correct
copies of the certificates of occupancy for all of the Property.
Seller will not amend such certificates and will maintain them in
full force and effect.
(o) Licenses and Permits. Attached hereto as Exhibit H
are true and correct copies of the required permits and/or
licenses (collectively, the "Licenses") which are necessary for
the ownership and operation of the Property. Seller has received
no notice, nor has any knowledge, that it is lacking any required
Licenses which are necessary for the ownership and operation of
the Property.
(p) Operating Statements. Attached hereto as Exhibit
I are true and correct copies of the year-end operating
statements of the Property for 1995, 1996 and 1997 and, such
operating statements fairly present the operating results of
the Property for the periods indicated.
(q) Personal Property. Attached hereto as Exhibit J
is a true, correct and complete inventory of all personal
property ("Personal Property"), if any, used in the management,
maintenance and operation of the Property (other than trade
fixtures or personal property of tenants).
For the purposes of the representations and warranties
of Seller set forth in this Agreement, the words "to the best of
Seller's knowledge"or "knowledge" shall be limited to being the
actual knowledge and information (as distinguished from, and
shall exclude, constructive knowledge or receipt of constructive
notice) of those persons, including, without limitation, Jeffrey
M. Rotter, currently employed by Seller or its affiliates who are
responsible for the current management and operation of the
Property, and shall not include any information which Seller or
its agents, counsel, directors, officers or employees, management
companies or leasing agents, as a reasonably prudent person,
should reasonably have known, and shall expressly exclude any
state of facts or matters of which Purchaser has actual
knowledge as of the Closing Date (provided that such inaccuracy
of any representation was not due to the willful misconduct or
bad faith of Seller).
6. Obligations of Seller Pending Closing. From and
after the date of this Agreement through the Closing Date, Seller
covenants and agrees as follows:
(a) Maintenance and Operation of Premises. Seller will
cause the Property to be maintained in its present order and
condition, normal wear and tear excepted, and will cause the
continuation of the normal operation thereof, including the
marketing of the shopping center, the maintenance of the roof in
a water-tight condition and repair of fixtures and equipment, and
the continuation of the normal practice with respect to
maintenance and repairs so that the Property will, except for
normal wear and tear, be in substantially the same condition on
the Closing Date as of the Acceptance Date.
(b) Licenses. Seller shall use commercially reasonable
efforts to preserve in force all Licenses and to cause those
expiring to be renewed.
(c) Changes in Representations. Seller shall notify
Purchaser promptly, and Purchaser shall notify Seller promptly,
if either becomes aware of any occurrence prior to the Closing
Date which would make any of its representations, warranties or
covenants contained herein not true in any material respect.
(d) Obligations as to Leases. Seller shall not,
without Purchaser's prior written consent (which consent shall
not be unreasonably withheld or delayed), amend, modify, renew or
extend any Lease in any respect unless required by law, or enter
into new leases or approve any assignment of leases or subletting
of leased space, or terminate any Lease. Seller hereby further
agrees that if any space is vacant on the Closing Date, Purchaser
shall accept the Property subject to such vacancy, provided that
the vacancy was not permitted or created by Seller in violation
of any restrictions contained in this Agreement. Prior to
Closing, Seller shall not apply all or any part of the security
deposit of any tenant unless such tenant has vacated the Property
or defaulted under its Lease.
(e) Tenant Estoppel. Seller shall use commercially
reasonable efforts to obtain and deliver to Purchaser prior to
Closing, a tenant estoppel letter substantially in the
form attached hereto as Exhibit K (or such other form as
required by Purchaser's mortgage lender or required by such
tenant) from each of the tenants of the Property.
7. Representations and Warranties of Purchaser. In
order to induce Seller to enter into this Agreement and to sell
the Property, Purchaser hereby makes the following
representations and warranties, each of which is material and
shall survive Closing, notwithstanding any investigation at any
time made by or on behalf of Seller:
(a) Authority of Purchaser. Purchaser is a limited
partnership duly organized and existing and in good standing
under the laws of the State of Delaware. Purchaser has all
necessary power and authority to execute, deliver and perform
this Agreement and consummate all of the transactions
contemplated by this Agreement. This Agreement is the valid and
binding obligation of Purchaser, enforceable against it in
accordance with its terms.
(b) No Defaults. Neither the-execution of this
Agreement nor the consummation of the transactions contemplated
hereby will: (i) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default
under, any agreement or instrument to which Purchaser is a party,
(ii) violate any restriction, requirement, covenant or condition
to which Purchaser is subject, and (iii) constitute a violation
of any applicable code, resolution, law, statute, regulation,
ordinance, rule, judgment, decree or order.
(c) Contacts with Tenants. Purchaser shall not contact
any tenant of the Property without the consent of Seller.
(d) Third Party Reports. If this Agreement shall be
terminated by either party, Purchaser shall delivery to Seller
(at Seller's request and without cost to Seller) copies of
applications, licenses, permits, plans, drawings, surveys,
reports, studies, tests, analyses and other documents obtained by
Purchaser from third parties with respect to its potential
purchase of the Property.
8. Conditions Precedent to Closing.
(a) It shall be a condition precedent of Purchaser's
obligation to make a full settlement hereunder that each and
every one of the following conditions shall exist on the
Closing Date provided, however, that Purchaser shall have the
right to waive any such condition in writing:
(i) Representations and Warranties. Seller's
representations and warranties hereunder shall be true and
correct in all material respects in the same manner and with the
same effect as though such representations and warranties had
been made on and as of the Closing.
(ii) Zoning. No proceedings shall have occurred or
be pending to change, redesignate or redefine the zoning
classification of the Property to a more restrictive
classification than presently exists on the date of Purchaser's
execution of this Agreement.
(iii) Title. Title to the Property shall be
marketable, good of record, and insurable by the Title Company,
pursuant to a full coverage ALTA Form-B (Rev. 1992) owner's title
insurance policy in the amount of the Purchase Price (or an
unconditional commitment therefor) without any exceptions
("Printed form" or otherwise) other than the Permitted
Exceptions, and in addition, providing affirmative coverage
insuring against any mechanic's or materialmen's lien arising
from goods, labor or materials provided to the Property prior to
the Closing Date. Promptly after the date of execution of
this Agreement by Seller, Purchaser shall, at its sole cost and
expense, request an interim title binder from the Title Company
and within ten (10) days after receipt thereof shall notify
Seller of any reasonable objection of any exceptions to title to
the Property which are unacceptable to Purchaser. The "Permitted
Exceptions" are the lien of current real estate taxes and special
assessments not yet due and payable and all exceptions shown on
the title binder which are not objected to by Purchaser within
the aforementioned ten (10) day period. Purchaser shall take
title to the Property subject to all Permitted Exceptions.
Seller may, at its sole option and its sole expense, correct such
exceptions which are objected to by Purchaser within the
aforementioned ten (10) day period at least thirty (30) days
prior the Closing Date; provided however, that notwithstanding
anything to the contrary, Seller shall, at or prior to Closing,
cause all mortgages, deeds of trusts, financing statements,
mechanics liens, judgement liens and other matters that may be
satisfied by a liquidated sum (the "Liquidated Exceptions") to be
satisfied and released of record or bonded over or to provide an
indemnity or other assurance to the Title Company so as to permit
the Title Company to issue the owner's title insurance policy
required above (provided Seller is diligently pursuing resolution
of such encumbrances). If Seller elects to eliminate any such
exceptions, Seller may extend the Closing Date for an additional
reasonable period of time, not to exceed thirty (30) days from
the Closing Date. If Seller is unable or does not desire to
eliminate any of the exceptions, Seller shall notify Purchaser
within five (5) days of Purchaser's notice to Seller; otherwise
Seller shall be deemed to have elected to eliminate such
exceptions. Upon receipt of such notice, Purchaser shall have
the option to either (i)terminate this Agreement, or (ii) close
on the purchase of the Property and waive such defects in title
other than the Liquidated Exceptions and those exceptions which
Seller has agreed to eliminate. In the event of termination of
this Agreement, Seller and Purchaser shall be relieved of all
liabilities under this Agreement and the Deposit shall be
returned to Purchaser. If Purchaser does not terminate this
Agreement, Purchaser shall be deemed to have waived all
objections to such matters other than the Liquidated
Exceptions and those exceptions which Seller has agreed
to eliminate.
(iv) Existing Mortgages. Seller shall have
delivered to the Title Company such releases or other instruments
necessary to release of record and beneficially any and all
existing mortgages, deeds of trust, financing statements or other
security documents affecting the Property (collectively, the
"Existing Mortgages").
(v) Survey. If Purchaser shall have obtained a
current ALTA survey for the Property, such survey shall show no
gaps or gores in the Property boundary and no easements or other
matters which would adversely affect the current use of the
Property. Within thirty (30) days of the complete execution
hereof, Purchaser shall obtain such survey, at its expense, and
shall give Seller written notice of any such matters which are
objectional. Seller shall remedy such objectional matters by the
Closing Date. If Purchaser fails to give Seller written notice
of objectional matters within such thirty (30) day period,
Purchaser shall be deemed to have waived the condition contained
in this clause (v).
(vi) Environmental. As of the Closing Date,
there shall have occurred no Spill of Hazardous Substances at the
Property nor shall there exist any condition relating to the
environmental condition of the Property which would adversely
affect Purchaser's use of the Property, which would increase
the cost to Purchaser of any intended repair or upgrade
at the Property or which materially violates any applicable law
or regulation (an "Environmental Condition). On or before 5:00
p.m. of the date which is thirteen (13) days from the date of
this Agreement, Purchaser shall have an environmental audit
of the Property performed, at its expense. If Purchaser
identifies any such Spill or Environmental Condition, Purchaser
shall give written notice to Seller, together with a copy of such
audit, requesting that Seller remedy such Spill or
Environmental Condition ("Environmental Notice"). Seller shall
have a period of ten (10) business days from receipt of the
Environmental Notice within which to send Purchaser a written
notice electing to either remedy such Spill or Environmental
Condition (which may include giving Purchaser a credit against
the Purchase Price in the amount of the estimated cost of such
remedy as determined by Purchaser's environmental audit) or
terminate this Agreement ("Environmental Election Notice"). If
Seller's Environmental Election Notice elects to terminate this
Agreement, Purchaser shall have a period of five (5) business
days within which to withdrawal its Environmental Notice, waive
the condition contained in this clause (v) and proceed to
Closing. If Purchaser fails to give an Environmental Notice on
or before 5:00 p.m. of the date which is thirteen (13) days from
the date of this Agreement, it shall be deemed to have waived the
condition contained in this clause (vi).
(vii) Performance by Seller. Seller shall have
complied with and not be in breach of any of its covenants or
obligations under this Agreement.
(viii) Tenant Estoppels. On or before the date
of Closing, Purchaser shall have received (A) a tenant estoppel
letter substantially in the form attached hereto as Exhibit K
from, at a minimum tenants satisfying the requirements described
on Exhibit K-1 (or from such tenants and in such form as
required by Purchaser's mortgage lender), confirming the
information set forth in Section 5(d) and in the Lease and Rent
Schedule attached hereto as Exhibit B for such tenants and
containing no material changes from the Rent Schedule, and (B)
any subordination and attornment agreements required by
Purchaser's mortgage lender.
(ix) Structural Condition. On or before 5:00
p.m. of the date which is thirteen (13) days from the date of
this Agreement, Purchaser shall obtain, at its sole cost and
expense, a structural engineering report (the "Report") for the
Building. The Report shall be prepared by an independent
professional engineering firm chosen by Purchaser. In the event
the Report identifies one or more Structural Defects (as defined
below) and the estimated cost to remedy such Structural Defects,
in the aggregate, exceeds the amount of 1.75% of the purchase
price then Purchase shall give written notice to Seller, together
with a copy of the Report, requesting that Seller remedy such
Structural Defects in the aggregate (the "Structural Notice").
The term "Structural Defect" shall mean any structural repairs or
replacements of the Building but shall not include ordinary
repairs, individual deferred maintenance items under $10,000,
normal wear and tear, and/or repairs or improvements as they
may pertain to future tenants. Seller shall have a period of ten
(10) business days from receipt of the Structural Notice within
which to send Purchaser a written notice electing to either
remedy such Structural Defect (which may include giving Purchaser
a credit against the Purchase Price in the amount of the
estimated cost of such remedy) or terminate this Agreement
("Structural Election Notice"). If Seller's Structural Election
Notice elects to terminate this Agreement, Purchaser shall have a
period of five (5) business days within which to withdraw its
Structural Notice and waive the condition contained in this
clause (ix). If Purchaser fails to give a Structural Notice on
or before 5:00 p.m. of the date which is thirteen (13) days from
the date of this Agreement, it shall be deemed to have waived
the condition contained in this claus (ix).
(b) Failure of Condition. In the event of the failure
by the Closing Date (or such earlier date as may be set forth in
a specific clause of Section 8(a) above) of any condition
precedent set forth above, then Purchaser, at its sole election,
may (a) terminate this Agreement, in which event the Deposit
shall be returned to Purchaser and, except as otherwise provided
in Paragraph 17 hereof, neither party shall have any further
obligations or liabilities to the other; or (b) waive such
conditions and proceed to Closing.
(c) It shall be a condition precedent of Seller's
obligation to make a full settlement hereunder that each and
every one of the following conditions shall exist on the
Closing Date.
(i) Representations and Warranties. Purchaser's
representations and warranties hereunder shall be true and
correct in all material respects in the same manner and with the
same effect as though such representations and warranties has
been made on and as of the Closing.
9. Leasing Brokerage and Property Management
Agreements. Seller shall have terminated any and all leasing,
brokerage and property management agreements with respect
to the Property effective as of the Closing. Except as provided
in Section 12 (e), all responsibility for dealings with any such
brokers, including the payment of any claims (if deemed warranted
by Seller) shall be the sole responsibility of Seller. Seller
agrees that it will indemnify and hold Purchaser, its successors,
assigns, partners, agents and employees, harmless against any
such claims and/or losses which might be incurred by such
indemnities in connection with any additional and/or contingent
leasing commissions or fees or management fees. The provisions
of this Section 9 shall survive Closing without time
limitation.
10. Seller's Deliveries. Seller shall execute,
acknowledge and deliver to Purchaser at the Closing the following
documents, dated on the Closing Date:
(a) a special warranty deed, in form and substance
satisfactory to Title Company, conveying good and marketable fee
simple title to the Property, free and clear of all liens,
encumbrances, easements and restrictions except for the Permitted
Exceptions;
(b) a special warranty bill of sale which shall
convey to Purchaser, without warranty as to its condition, in an
"as-is" and "where-is" condition, good title to all the
Personalty, free and clear of all liens, security interests and
encumbrances;
(c) an affidavit setting forth that all of
Seller's representations and warranties are true and correct in
all material respects on the Closing Date;
(d) an assignment and assumption of the Leases,
security deposits, and all guarantees, if any, executed in
connection therewith, together with all originally executed
Leases, security deposits and guarantees, if any, shall be
assigned to Purchaser;
(e) an assignment and assumption of Licenses,
permits and Service Contracts, if any, which are to be assumed by
Purchaser at Purchaser's request, together with the originally
executed Service Contracts and Licenses which are to be assumed;
(f) a schedule updating the Rent Schedule and
setting forth all arrearages in rents and all prepayments of
rents;
(g) copies of books, records, operating reports,
files and other materials related to the ownership, use and
operation of the Property, to the extent that any exist and
are in the possession of Seller, which obligation shall survive
Closing;
(h) Tenant estoppel letters as required in Section 8(a)
(viii);
(i) an original letter executed by Seller advising the
tenants of the sale of the Property to Purchaser and directing
that rents and other payments thereafter be sent to Purchaser or
as Purchaser may direct;
(j) possession of the Property in the condition
required by this Agreement, and the keys therefore;
(k) the Certification of Non-foreign Status as provided
in Treas. Reg. 1. 1445-2T(b)(2)(iii)(B) or in any other form as
may be required by the Internal Revenue Code or the regulations
issued thereunder;
(1) such other items and instruments, at no additional
cost or expense to Seller, as shall be required by the Title
Company in connection with the issuance of its title insurance
policy to Purchaser pursuant to Section 8(a) (iii) (including
customary Seller's or owner's affidavit);
(m) any and all documents necessary to release the
letter of credit constituting the Deposit from escrow with the
Title Company and to have said letter of credit returned to
Purchaser;
(n) a letter from the New Jersey Department of
Environmental Protection confirming that the New Jersey
Industrial Site Recovery Act does not apply to a conveyance
of the Property; and
(o) any other documents required by this Agreement to
be delivered by Seller.
11. Purchaser's Performance. At Closing,
simultaneously with the deliveries of Seller pursuant to the
provisions of Paragraph 10, Purchaser shall pay to Seller the
Purchase Price in the manner specified in Paragraph 2, whereupon
the Deposit, and any interest accrued thereon, shall be returned
to Purchaser by the Title Company. Purchaser shall also execute
and deliver to Seller an assignment and assumption of Leases and
such other documents reasonably requested to effectuate the
purposes of this transaction.
12. Settlement Charges, Prorations and Adjustments.
Purchaser shall pay for thetitle examination, the title insurance
premium, notary fees,recording fees (i.e., per pagecharges) and
other such charges incident to Closing. The cost ofpreparation
of the deed forthe Property shall be borne by Seller. Any real
estate transfertaxes in connection with thistransaction shall be
borne equally by Seller and by Purchaser. Purchaser and Seller
shall eachpay its own legal fees related to the preparation of
thisAgreement and all documents requiredto settle the transaction
contemplated hereby. Provided,however, that in the event
Purchaseris permitted to and does assign its rights under this
Agreementand such assignee makesadditional payments of any kind
in connection with suchassignment of this Agreement, Purchaser
shall be solely responsible for any additional transfer taxes
assessed as a result thereof and Purchaser shall pay such
additional taxes at settlement and recording of the deed;
Seller shall have no liability for any taxes assessed based on
any consideration greater than the Purchase Price, and Purchaser
shall indemnify Seller for any such additional taxes. In
addition to the foregoing, at the Closing, the following
adjustments and prorations shall be computed as of the Closing
Date and the Purchase Price shall be adjusted to reflect such
prorations, as follows:
(a) Taxes. Real estate and personal property taxes
shall be apportioned as of the Closing Date.
(b) Assessments. All special assessments and other
similar charges which have become a lien upon the Property or any
part thereof and are due and payable on or before the last day of
the Feasibility Period, if any, shall be paid in full by Seller
at the Closing. All other special assessments or similar charges
shall be adjusted as of the Closing Date, if possible; otherwise,
they shall be the responsibility of Purchaser after Closing.
(c) Rent. Rent for the month of Closing and any month
after Closing collected by Seller prior to Closing shall be
apportioned as of the Closing Date. If any tenant is in arrears
in the payment of rent on the Closing Date, rents received from
such tenant after the Closing shall be applied in the following
order of priority: (a) first, to the payment of current rent
then due; (b) second, to delinquent rent for any period after the
Closing Date; and (c) third, to delinquent rent for any period
prior to the Closing Date. Such delinquent rent shall be paid to
Seller within thirty (30) days of receipt by Purchaser.
Purchaser does not guarantee or undertake any obligation to sue
or take other action for collection of arrearages in rents due
from tenants as of the Closing Date; provided, however, Seller
shall have the right to pursue and collect such delinquent rents
by any remedies available to it at law or equity. If rents or
any portion thereof received by Seller or Purchaser after the
Closing Date are payable to the other party by reason of this
allocation, the appropriate sum, less a proportionate share of
any reasonable attorneys' fees, costs and expenses of collection
thereof, if any, shall be promptly paid to the other party, which
obligation shall survive the Closing.
If any tenants are required to pay percentage
rents, escalation charges for real estate taxes, operating
expenses, cost-of-living adjustments or other charges of a
similar nature ("Additional Rents") and any Additional Rents are
collected by Purchaser after the Closing which are attributable
in whole or in part to any period prior to the Closing, then
Purchaser shall promptly pay to Seller Seller's proportionate
share thereof, provided that, Purchaser has been paid current
rent, less a proportionate share of any reasonable attorneys'
fees, costs and expenses of collection thereof, if any, if and
when the tenant paying the same has made such payments of
Additional Rent then due to Purchaser pursuant to the tenant's
Lease, which obligation shall survive the Closing.
(d) Miscellaneous. All other charges and fees
customarily prorated and adjusted in similar transactions,
including utilities, insurance premiums and charges for
Service Contracts to be assumed by Purchaser, shall be prorated
as of the Closing Date. In the event that accurate prorations
and other adjustments cannot be made at Closing because
current bills are not obtainable or the amount to be adjusted is
not yet ascertainable (as, for example, in the case of utility
bills) the parties shall prorate on the best available
information, subject to further adjustment promptly upon receipt
of the final bill or upon completion of final computations.
Seller agrees that an appropriate amount in respect of water
consumption charges may be held in escrow by the Title Company in
connection with its issuance of a title insurance policy to
Purchaser. Seller shall use commercially reasonable efforts to
have all utility meters read on the Closing Date so as to
accurately determine its share of current utility bills.
(e) Leasing Commissions, Etc. Seller shall
be reimbursed at the Closing for the full amount of any leasing
commissions or tenant improvement costs paid by Seller pursuant
to any new, expanded or renewed lease for space in the Property
executed by Seller after the date of this Agreement and consented
to by Purchaser pursuant to this Agreement.
(f) Commission Credit. Seller shall give to
Purchaser at Closing a credit against the Purchase Price in the
amount of $3,114 for the leasing commission due with respect to
the tenant which has agreed to lease the space formerly occupied
by Baskin Robbins.
13. Risk of Loss. The risk of loss or damage to the
Property by fire or other casualty until recordation of the deed
of conveyance shall be borne by Seller. If prior to Closing (i)
condemnation proceedings are commenced against all or any portion
of the Property, or (ii) if the Property is damaged by fire or
other casualty to the extent that the cost of repairing such
damage shall be Two Hundred Fifty Thousand Dollars
($250,000.00) or more, or (iii) if the Property is damaged by an
uninsured risk, or (iv) the Property becomes subject to
litigation which may deprive Purchaser of any material benefit to
which it would become entitled pursuant to this Agreement, then
Purchaser shall have the right, upon notice in writing to the
Seller delivered within thirty (30) days after actual notice of
such condemnation or fire or other casualty or litigation, to
terminate this Agreement, and thereupon the parties shall be
released and discharged from any further obligations to each
other and the Deposit shall be refunded to Purchaser. If
Purchaser does not elect to terminate this Agreement, or in the
event of fire or other casualty not giving rise to a right to
terminate this Agreement by Purchaser, this Agreement shall
continue in full force and effect and the Purchaser Price shall
not be reduced except as hereinafter set forth, but Purchaser
shall be entitled to an assignment of Seller's share of (i) the
proceeds of fire or other casualty insurance and (ii) that
portion or any rent insurance proceeds payable with respect to
the period after Closing or (iii) proceeds of the condemnation
award, as the case may be, and Seller shall have no obligation to
repair or restore the Property; provided, however, that the
Purchase Price shall be reduced (but only if the total insurance
proceeds are less than the Purchase Price) by an amount equal to
(a) the "deductible" applied by Seller's insurance policy, or (c)
if Seller is self-insured, the cost of repairing such damage. If
Purchase elects not to terminate this Agreement, Purchaser shall
have the right to participate in the negotiation and settlement
of any litigation, casualty or condemnation-related claim.
14. Inspection of Property.
(a) Purchaser's Right of Inspection. Purchaser shall
have the right, at its own risk, cost and expense, at any time or
times prior to Closing (upon at least 24 hours prior verbal
notice to Seller and during reasonable hours and with a
representative of Seller, if required by Seller), to enter, or
cause its agents or representatives to enter, upon the Property
for the purpose of making surveys, or any tests, investigations
and/or studies relating to the Property or Purchaser's intended
acquisition thereof which Purchaser deems appropriate, in its
sole discretion. Purchaser shall further have complete access to
all documentation, agreements and other information in the
possession of Seller related to the ownership, use and
operation of the Property, to the extent it is readily available
to Seller, and shall have the right to make copies of same.
Purchaser agrees to repair any damage to the Property that
may be caused by its inspections and to indemnify and defend
Seller and its partners, affiliates, agents and employees, and
hold Seller and its partners, affiliates, agents and
employees harmless against any property damage or physical injury
suffered as a result of such inspections, investigations, studies
or tests. Purchaser agrees not to enter upon the Property until
such time as Purchaser has furnished Seller with evidence of a
commercial general liability insurance policy with an insurer
reasonably satisfactory to Seller covering any activities of
Purchaser on the Property and containing limits of liability
reasonably satisfactory to Seller.
(b) Audit. Seller hereby agrees to allow its
books and records related to the Property to be audited (at
Purchaser's sole expense) by an independent, certified public
accounting firm selected by Purchaser, and Seller will cooperate
and cause its employees and other agents to cooperate in such
auditing process, including any customary certifications
required by the auditors. Purchaser shall provide Seller with
prior notice of such audit.
15. Indemnifications.
(a) Indemnification by Seller. Seller hereby
indemnifies and agrees to defend and hold harmless Purchaser and
its partners, affiliates and subsidiaries, and any officer,
director, employee or agent of any of them, and their
respective successors and assigns, from and against any and all
claims, expenses, costs, damages, losses and liabilities
(including reasonable attorneys' fees) which may at any time be
asserted against or suffered by Purchaser or the Property, or any
part thereof, whether before or after the Closing Date, as
a result of, on account of or arising from (a) any breach of any
covenant, representation, warranty or agreement on the part of
Seller made herein or in any instrument or document delivered
pursuant to this Agreement, and/or (b) any third party claim
relating to or arising out of any contract, agreement, debt or
other obligation, or encumbrance or other occurrence (other than
encumbrances expressly approved by Purchaser and other than
occurrences which are the subject of the representations and/or
warranties covered by Section 5(m) above) created, arising or
accruing prior to the Closing Date, regardless of when asserted
and relating to the Property or its operations, provided such
claim is derived from an occurrence or breach which took place
prior to Closing. The foregoing indemnifications set forth in
this Section 15(a) shall survive Closing without time limitation
(other than indemnification for breach of representation or
warranties on the part of Seller made herein which are subject to
a limited survival period under this Agreement, in which case the
survival of such indemnification shall be limited to the survival
period of such representation or warranty).
(b) Indemnification by Purchaser. Purchaser
hereby indemnifies and agrees to defend and hold harmless Seller
and its partners and subsidiaries, and any officer, director,
employee or agent of any of them, and their respective successors
and assigns, from and against any and all claims, expenses,
costs, damages, losses and liabilities (including reasonable
attorneys' fees) which may at any time be asserted against or
suffered by Seller as a result of, on account of or arising from
(a) any breach of any covenant, representation, warranty or
agreement on the part of Purchaser made herein or in any
instrument or document delivered pursuant to this Agreement,
and/or (b) any obligation, claims, suit, liability, contract,
agreement, debt or encumbrance or other occurrence created,
arising or accruing on or after the Closing Date and relating to
the Property or its operations. The foregoing indemnifications
set forth in this Section 15 (b) shall survive closing without
time limitation.
16. Brokerage Commission. Seller and Purchaser
represent and warrant to each other that no brokerage fee or real
estate commission is or shall be due or owing in connection with
this transaction, and Seller and Purchaser hereby indemnify and
hold the other harmless from any and all claims of-any other
broker or agent so claiming based on action or alleged action of
the indemnifying party. The Legislature of the Commonwealth of
Pennsylvania has established a Real Estate Recovery Fund. The
purpose of the Fund is to compensate persons who obtain a
judgment because of fraud, misrepresentation or deceit of
an agent. For further information call (717) 783-3658.
17. Default Provisions: Remedies.
(a) Purchaser's Default. If Purchaser shall default in
performance of its obligations under this Agreement, and such
default is not cured within five (5) days after written notice
thereof from Seller, or fails to consummate the purchase and sale
contemplated herein when required to do so pursuant to the
provisions hereof, then the Title Company shall deliver the
Deposit to Seller as full and complete liquidated damages, and as
the exclusive and sole right and remedy of Seller, whereupon this
Agreement shall terminate and neither party shall have any
further obligations or liabilities to any other party.
Notwithstanding the foregoing, Purchaser agrees that Purchaser
not be exculpated from any personal liability with respect to the
indemnifications set forth in Section 14(a) hereof.
(b) Seller's Default. Except for any
breaches waived in writing by Purchaser, if Seller has breached
any of its covenants or obligations under this Agreement or
has failed, refused or is unable to consummate the purchase and
sale contemplated herein by the Closing Date or if any of the
representations and warranties made by Seller under this
Agreement shall be inaccurate or incorrect, then Purchaser shall
be entitled to as its sole and exclusive remedies to either (i)
waive such breach, default or failure, (ii) extend the Closing
for such reasonable time or times as may be necessary in order to
enable Seller to remedy such breach, default or failure, (iii)
terminate this Contract and obtain the return of the Deposit, or
(iv) pursue an action for specific performance. In the event
that Purchaser elects to pursue specific performance and
Purchaser prevails in such litigation, Seller shall be
obligated to pay all reasonable legal fees, costs and expenses
incurred by Purchaser.
18. Miscellaneous Provisions.
(a) Completeness and Modification. This Agreement
(together with Exhibits A to K attached hereto) contains the
entire agreement between Purchaser and Seller with respect to the
transactions contemplated herein, and it supersedes all prior
discussions, understandings or agreements between the parties.
This Agreement shall not be modified or amended except by an
instrument in writing signed by all of the parties hereto.
(b) Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and
their respective successors and assigns.
(c) Assignment. This Agreement shall not be
freely assignable by Purchaser, without the consent of Seller
provided that this Agreement may be assigned at Closing without
Seller's consent to an operating partnership or other entity
controlled by, controlling or under common control with Purchaser
or which will be managed by principals of the Purchaser or which
employ principals of the Purchaser.
(d) Waiver: Modification. Failure by Purchaser or
Seller to insist upon or enforce any of its rights hereto shall
not constitute a waiver or modification thereof.
(e) Governing Law. This Agreement shall be
governed by and construed under the laws of the State of New
Jersey without regard to choice of law principles.
(f) Headings. The headings are herein used for
convenience or reference only and shall not be deemed to vary the
content of this Agreement or the covenants, agreements,
representations and warranties herein set forth, or the scope of
any provision hereof.
(g) Continuing Documentation and Access. From and
after Closing, Seller shall cooperate with Purchaser to provide
all information in its possession concerning the ownership, use
and operation of the Property (including the right to copy same
at the expense of Purchaser) for purposes of any tax examination
or audit or other similar purpose, subject to the agreements of
Purchaser concerning confidentiality set forth herein.
(h) All Warranties Joint and Several. Subject to
Section 17(a), each and every warranty, covenant, undertaking and
agreement of Seller and Purchaser hereunder shall be deemed a
joint and several warranty, covenant, undertaking and agreement
of each person and entity, other than the limited partners of
Purchaser and Seller, collectively comprising the Seller and
Purchaser.
(i) Counterparts. To facilitate execution, this
Agreement may be executed in as many counterparts as may be
required; it shall be sufficient that the signature of, or on
behalf of, each party, or that the signatures of the persons
required to bind any party, appear on one or more such
counterparts. All counterparts shall collectively constitute a
single agreement.
(j) Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be
personally delivered or mailed by first-class registered or
certified mail, return receipt requested, postage prepaid or
delivered by commercial courier, telecopy or overnight courier
(e.g., Federal Express), against receipt, to the addresses
indicated below:
(i) if to Purchaser:
Linpro Marlton Crossing Commercial Land II,
Limited Partnership
c/o LCOR Incorporated
300 Berwyn Park,
Plymouth Plaza, Suite 104
Berwyn, PA 19312
Attn: Peter P. DiLullo
Fax: (610) 640-0516
with a copy to:
Glenn L. Madere, Esquire
c/o LCOR Incorporated
300 Berwyn Park, Suite 115
Berwyn, PA 19312
Fax: (610) 640-0516
(ii) if to Seller:
Marlton KDA Limited Partnership
c/o CMS Affiliated Partners
Two Bala Plaza, Suite 300
Bala Cynwyd, PA 19004
Attn: John S. Green, Esquire, Jeffrey M.
Rotter and Ingrid R. Welch, Esquire
Telecopy: (215) 246-3068
Such notice shall be deemed given on the date of
receipt by the addressee or the date receipt would have been
effectuated if delivery were not refused. Each party may
designate a new address by written notice to the other in
accordance with this Paragraph 18(j).
(k) Business Day(s). A "business day" shall be Mondays
through Fridays, less and excepting all legal holidays observed
by the United States Government or the Government of the State of
New Jersey. Any date specified in this Agreement which does
not fall on a business day shall be automatically extended until
the first business day after such date.
(1) Time of Essence. TIME SHALL BE OF THE ESSENCE IN
THE PAYMENT OF ALL SUMS, PERFORMANCE OF ALL OBLIGATIONS, GIVING
OF ALL NOTICES AND THE EXERCISE OF ALL RIGHTS UNDER THIS
AGREEMENT.
(m) Confidentiality. Before Closing, Purchaser shall
not issue any press release or other publicity of any kind
whatsoever with respect to this Agreement or any of the
transactions contemplated hereby, without the prior written
consent of Seller in each instance. Seller shall notify
Purchaser of its consent or refusal within two (2) business days
after Seller's requests for consent. Before Closing, Purchaser
agrees that it will keep confidential, and will make reasonable
efforts to have the respective partners, employees, officers,
directors, shareholders, agents, counsel, accountants and
affiliates of Purchaser, keep confidential, all information,
records, materials and other data pertaining to the Property,
including third party inspection reports, environmental audits
and other consultant's reports, which was acquired or learned as
a result of due diligence in connection with the transactions
contemplated hereby, except (i) to the extent necessary to effect
the transactions contemplated hereby, (ii) pursuant to compulsion
by due process of law, (iii) in connection with the
resolution of any dispute between Purchaser and Seller, or (iv)
if such information was obtained, or is otherwise available, in
the public domain or from other sources. The provisions of this
paragraph shall survive the Closing and the termination of this
Agreement.
(n) Recording. Neither this Agreement nor any
memorandum or assignment hereof shall be filed in any public
place of record. If recorded, such recording shall not
constitute constructive or other notice to any third
party. The recording or attempt to record this Agreement or any
memorandum or assignment hereof, by or on behalf of Purchaser,
shall constitute a default of this Agreement by Purchaser and a
waiver and release by Purchaser of all rights of Purchaser under
this Agreement.
(o) Except as expressly set forth in this Agreement in
the documents to be delivered at Closing, Seller hereby expressly
disclaims any and all warranties, express or implied, relating in
any way to the Property, including, without limitation, any
warranty provided for under statutory or common law or the
uniform commercial code, including but not limited to warranties
of merchantability and fitness for a particular purpose. Both
Purchaser and Seller are acting at arm's length to protect their
own interests, and both Purchaser and Seller shall use their own
independent business judgment concerning the sale and purchaser
of the Property. Purchaser shall complete to its satisfaction,
all investigations, inspections and tests which Purchaser deems
necessary.
IN WITNESS WHEREOF, the parties hereto have executed this
Real Estate Purchase Agreement as of the day and year first
written above.
PURCHASER:
LINPRO MARLTON CROSSING COMMERCIAL
LAND II, LIMITED PARTNERSHIP
By: /s/ Basil S. Donnelly
Basil S. Donnelly
Managing Trustee
Date of execution by
Purchaser: January 27, 1998
SELLER:
MARLTON KDA , LIMITED PARTNERSHIP
By: CMS Marlton , L.P.
By: CMS Marlton Associates, L.P.
Its general Partner
By: MSPS Marlton Associates, Inc.
Its general partner
By: /s/ Marian Cohen
Name: Marian Cohen
Vice President
Date of execution by
Seller: January 27, 1998
EXHIBIT 2.2
AMENDMENT TO REAL ESTATE PURCHASE AGREEMENT
THIS AMENDMENT TO REAL ESTATE PURCHASE AGREEMENT is dated as
of the 26TH day of February, 1998, by and between MARLTON KDA
LIMITED PARTNERSHIP, a New Jersey limited partnership ("Seller")
and MARLTON PLAZA ASSOCIATES, L.P., a Delaware limited
partnership, or its assignee ("Buyer").
BACKGROUND
Seller is the owner of that certain parcel of land, with the
improvements thereon, located in Evesham Township, Burlington
County, New Jersey ("Property"). Pursuant to that certain Real
Estate Purchase Agreement, dated as of January 27, 1998
("Original Agreement"), Seller agreed to sell to Buyer, and
Buyer agreed to buy, the Property. Section 8(a)(iii) of the
Original Agreement provides that, if the Seller is unable to or
elects not to eliminate certain unacceptable title exceptions
from the owner's title policy to be issued to the Purchaser at
the closing under the Original Agreement, the Purchaser shall
have the right to terminate the Agreement "upon receipt" of
notice of such election from the Seller. By letter dated
February 9, 1998 ("Purchaser's Title Notice"), Purchaser
notified Seller of its objection to certain exceptions to title
to the Property. By letter dated February 18, 1998 ("Seller's
Title Response"), Seller notified Purchaser of Seller's inability
to or election not to eliminate certain of the title exceptions
to which Purchaser objected in Purchaser's Title Notice. The
parties acknowledge that Purchaser's Title Notice and Seller's
Title Response satisfy the parties' initial notice obligations
under Section 8(a)(iii) of the Agreement. The parties wish to
amend the Original Agreement to clarify the provisions of Section
8(a)(iii) and to establish a deadline by which Purchaser must
respond to Seller's Title Response.
NOW, THEREFORE, for good and valuable consideration and
intending to be legally bound hereby, the parties hereto agree as
follows:
1. The sentence beginning with the words "Upon receipt of such
notice" in line 20 of page 9 of the Original Agreement is
hereby deleted in its entirety and the following
sentence is hereby inserted in its place: "If the Seller
delivers such notice to the Purchaser, the Purchaser shall
have the option, to be exercised in writing on or before
March 31, 1998, to either (a) terminate this Agreement, or
(b) waive such defects in title other than the Liquidated
Exceptions and those exceptions which Seller has agreed to
eliminate."
2. Any capitalized terms not otherwise defined herein shall be
deemed to have the meaning set forth therefor in the
Original Agreement.
3. All other terms and conditions of the Original Agreement, as
amended hereby, shall remain in full force and effect, as
amended hereby.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to Real Estate Purchase Agreement to be executed as of
the day and year first above written.
MARLTON KDA LIMITED PARTNERSHIP
By: CMS Marlton, L.P., its general partner
By: CMS Marlton Associates, L.P., its
general partner
By: MSPS Marlton Associates, Inc., its
general partner
By: /s/ Marian Cohen
Name: Marian Cohen
Vice President
MARLTON PLAZA ASSOCIATES, L.P.
By: Marlton Plaza LLC, its general partner
By: Montgomery CV Realty L.P., its sole
member
By: Montgomery CV Realty Trust, its
general partner
By:/s/ Jeffrey Hipple
Jeffrey Hipple, Managing
Trustee
EXHIBIT 2.3
SECOND AMENDMENT TO REAL ESTATE PURCHASE AGREEMENT
This SECOND AMENDMENT TO REAL ESTATE PURCHASE AGREEMENT
AND AGREEMENT AS TO TITLE MATTERS ("Amendment") is made and
entered into as of March 31, 1998, by and between MARLTON KDA
LIMITED PARTNERSHIP, a New Jersey limited partnership ("Seller"),
and MARLTON PLAZA ASSOCIATES, L.P. or its assignee ("Purchaser").
BACKGROUND
Seller and Purchaser are parties to a certain Real Estate
Purchase Agreement dated January 27, 1997 as amended by an
Amendment to Real Estate Purchase Agreement dated February 26,
1998 (the "Purchase Agreement"), pursuant to which Seller agreed
to sell to Purchaser, and Purchaser agreed to purchase from
Seller, a shopping center containing approximately one hundred
forty-one thousand seven hundred ninety-five (141,795) square
feet of rentable area and certain other buildings, improvements,
personal property and other interests related thereto, all of
which is defined collectively in the Purchase Agreement and
herein as the "Property". Capitalized terms not otherwise
defined herein shall have the meanings that are ascribed to such
terms in the Purchase Agreement.
Seller and Purchaser are also parties to a certain Agreement
as to Title Matters dated March 13, 1998 (the "Title Agreement"),
concerning the rights and obligations of the parties with respect
to certain matters concerning a title insurance commitment issued
to Purchaser pursuant to the Purchase Agreement.
The parties hereto now desire to further amend the Purchase
Agreement and to amend the Title Agreement. Accordingly, for
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Amendment to Purchase Agreement.
a. Section 3(a) of the Purchase Agreement is hereby
amended by adding the following sentence at the end of such
section:
"In the event that the Closing has not occurred by
June 6, 1998 and this Agreement is still in effect, then
Purchaser shall deliver to the Title Company a substitute
irrevocable, unconditional letter of credit with an expiration
date of August 15, 1998 or later in the amount of the Deposit,
and the Title Company shall return the letter of credit which it
had been holding as the Deposit under the Agreement to
Purchaser."
b. Section 4 of the Purchase Agreement is hereby amended
by (i) deleting the date "April 15, 1998" where it appears
therein, and replacing such date with the date "July 1, 1998",
and (ii) deleting the date "June 15, 1998" where it appears
therein, and replacing such date with the date "August
15, 1998".
2. Amendment to Title Agreement. The Title Agreement is hereby
amended by deleting the date "March 31, 1998" where it appears in
Section 2(d) thereof, and replacing such date with the date "June
5, 1998".
3. Ratification. Except as amended hereby, the Purchase
Agreement and Title Agreement are hereby ratified and confirmed
and shall remain in full force and effect. The parties
acknowledge that they each retain their respective rights and
obligations under such agreements. Further, Seller acknowledges
that Purchaser shall not prejudice any of its rights under the
Purchase Agreement or Title Agreement in the event that
Purchaser or an entity controlled by, controlling or under
common control with Purchaser enters into a binding agreement
with Marlton Crossing Shopping Center Limited Partnership, the
owner of certain property adjacent to the Property that is the
subject of the Purchase Agreement, for Purchaser's
acquisition of such adjacent property, or if Purchaser
consummates such acquisition.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date and year first above written.
MARLTON KDA LIMITED PARTNERSHIP, a
New Jersey limited partnership
By: CMS MARLTON, L.P.,
its general partner
By: CMS MARLTON ASSOCIATES, L.P.,
its general partner
By: MSPS MARLTON ASSOCIATES, INC.,
its general partner
By: /s/ Marian Cohen
Its: Vice President
MARLTON PLAZA ASSOCIATES, L.P.
By: MARLTON PLAZA LLC,
Its general partner
By: MONTGOMERY CV REALTY L.P.,
its sole member
By: MONTGOMERY CV REALTY TRUST,
its general partner
By: /s/ Jeffrey Hipple
Its: Managing Trustee
EXHIBIT 2.4
MARLTON PLAZA ASSOCIATES, L.P., as mortgagor
(Mortgagor)
to
GMAC COMMERCIAL MORTGAGE CORPORATION, as mortgagee
(Lender)
___________________________________
MORTGAGE AND
SECURITY AGREEMENT
___________________________________
Dated: June 25, 1998
Location: Route 73 and Old Marlton Pike
Evesham Township, Burlington County, New Jersey
Parcel Identification No: Block 24.21, Lot 1
Commonly known as Marlton Crossing Shopping Center
- Phase II
PREPARED BY, AND UPON RECORDATION RETURN TO:
Kathleen M. Sandone, Esquire
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
(215) 864-8706
TABLE OF CONTENTS
Page
Article 1 - GRANTS OF SECURITY . . . . . . . . . . . . . . . . .1
Section 1.1 Property Mortgaged . . . . . . . . . . . . . .1
Section 1.2 Assignment of Leases and Rents. . . . . . . .4
Section 1.3 Security Agreement. . . . . . . . . . . . . .4
Section 1.4 Pledge of Monies Held. . . . . . . . . . . .5
Article 2 - OBLIGATIONS SECURED. . . . . . . . . . . . . . . . .5
Section 2.1 Debt.. . . . . . . . . . . . . . . . . . . . .5
Section 2.2 Debt and Other Obligations. . . . . . . . . .7
Article 3 - MORTGAGOR COVENANTS. . . . . . . . . . . . . . . . .7
Section 3.1 Performance of Obligations.. . . . . . . . . .7
Section 3.2 Incorporation by Reference.. . . . . . . . . 7
Section 3.3 Insurance. . . . . . . . . . . . . . . . . . .7
Section 3.4 Payment of Taxes, Etc. . . . . . . . . . . . 12
Section 3.5 Escrow Fund. . . . . . . . . . . . . . . . . 13
Section 3.6 Condemnation.. . . . . . . . . . . . . . . . 14
Section 3.7 Leases and Rents.. . . . . . . . . . . . . . 14
Section 3.8 Maintenance of Property. . . . . . . . . . . 15
Section 3.9 Waste. . . . . . . . . . . . . . . . . . . 16
Section 3.10 Compliance With Laws. . . . . . . . . . . . 16
Section 3.11 Books and Records. . . . . . . . . . . . . 17
Section 3.12 Payment For Labor and Materials. . . . . . 17
Section 3.13 Performance of Other Agreements. . . . . 17
Section 3.14 Existence. . . . . . . . . . . . . . . . . 17
Article 4 - SPECIAL COVENANTS. . . . . . . . . . . . . . . . . 18
Section 4.1 Property Use. . . . . . . . . . . . . . . . 18
Section 4.2 Restoration After Casualty/Condemnation. . . 18
Article 5 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 23
Section 5.1 Warranty of Title. . . . . . . . . . . . . . 23
Section 5.2 Authority. . . . . . . . . . . . . . . . . . 23
Section 5.3 Legal Status and Authority. . . . . . . . . 23
Section 5.4 Validity of Documents. . . . . . . . . . . 23
Section 5.5 Litigation. . . . . . . . . . . . . . . . . 24
Section 5.6 Status of Property.. . . . . . . . . . . . . 24
Section 5.7 No Foreign Person. . . . . . . . . . . . . . 26
Section 5.8 Separate Tax Lot.. . . . . . . . . . . . . . 26
Section 5.9 ERISA Compliance.. . . . . . . . . . . . . . 26
Section 5.10 Leases. . . . . . . . . . . . . . . . . . . 26
Section 5.11 Financial Condition. . . . . . . . . . . . 27
Section 5.12 Taxes.. . . . . . . . . . . . . . . . . . . 27
Section 5.13 No Change in Facts or Circumstances.. . . . 27
Section 5.14 Disclosure. . . . . . . . . . . . . . . . . 27
Section 5.15 Third Party Representations.. . . . . . . . 27
Section 5.16 Illegal Activity. . . . . . . . . . . . . . 27
Article 6 - FURTHER ASSURANCES . . . . . . . . . . . . . . . . 28
Section 6.1 Recording of Security Instrument, Etc. . . . 28
Section 6.2 Further Acts, Etc. . . . . . . . . . . . . . 28
Section 6.3 Changes in Tax, Debt Credit and Documentary
Stamp Laws.29
Section 6.4 Estoppel Certificates. . . . . . . . . . . . 29
Section 6.5 Flood Insurance. . . . . . . . . . . . . . . 30
Section 6.6 Replacement Documents. . . . . . . . . . . . 30
Section 6.7 Amended Financing Statements.. . . . . . . . 30
Article 7 - DUE ON SALE/ENCUMBRANCE. . . . . . . . . . . . . . 31
Section 7.1 No Sale/Encumbrance. . . . . . . . . . . . . 31
Section 7.2 Sale/Encumbrance Defined.. . . . . . . . . . 31
Section 7.3 Lender's Rights. . . . . . . . . . . . . . . 32
Article 8 - PREPAYMENT . . . . . . . . . . . . . . . . . . . . 32
Section 8.1 Prepayment Only in Accordance with Note. . . 32
Article 9 - DEFAULT. . . . . . . . . . . . . . . . . . . . . . 33
Section 9.1 Events of Default. . . . . . . . . . . . . . 33
Article 10 - RIGHTS AND REMEDIES . . . . . . . . . . . . . . . 35
Section 10.1 Remedies. . . . . . . . . . . . . . . . . . 35
Section 10.2 Application of Proceeds.. . . . . . . . . . 38
Section 10.3 Right to Cure Defaults. . . . . . . . . . . 38
Section 10.4 Actions and Proceedings.. . . . . . . . . . 39
Section 10.5 Recovery of Sums Required To Be Paid. . . . 39
Section 10.6 Examination of Books and Records. . . . . . 39
Section 10.7 Other Rights, Etc.. . . . . . . . . . . . . 39
Section 10.8 Right to Release Any Portion of the
Property. . . . . . . . . . . . . . . . ..40
Section 10.9 Violation of Laws.. . . . . . . . . . . . . 40
Section 10.10 Right of Entry.. . . . . . . . . . . . . . 40
Article 11 - ENVIRONMENTAL HAZARDS . . . . . . . . . . . . . . 41
Section 11.1 Environmental Representations and
Warranties. . . . . . . . . . . . . . . . 41
Section 11.2 Environmental Covenants.. . . . . . . . . . 42
Section 11.3 Lender's Rights.. . . . . . . . . . . . . . 43
Article 12 - INDEMNIFICATION . . . . . . . . . . . . . . . . . 44
Section 12.1 General Indemnification.. . . . . . . . . . 44
Section 12.2 Mortgage and/or Intangible Tax. . . . . . . 45
Section 12.3 ERISA Indemnification. . . . . . . . . . . 46
Section 12.4 Duty to Defend; Attorneys' Fees and
Other Fees and Expenses.. . . . . . . . . 46
Article 13 - WAIVERS . . . . . . . . . . . . . . . . . . . . . 46
Section 13.1 Waiver of Counterclaim. . . . . . . . . . . 46
Section 13.2 Marshalling and Other Matters.. . . . . . . 46
Section 13.3 Waiver of Notice. . . . . . . . . . . . . . 47
Section 13.4 Sole Discretion of Lender.. . . . . . . . . 47
Section 13.5 Survival. . . . . . . . . . . . . . . . . . 47
Section 13.6 Waiver of Trial By Jury . . . . . . . . . . 48
Article 14 - Intentionally Omitted . . . . . . . . . . . . . . 48
Article 15 - NOTICES . . . . . . . . . . . . . . . . . . . . . 48
Section 15.1 Notices.. . . . . . . . . . . . . . . . . . 48
Article 16 - APPLICABLE LAW. . . . . . . . . . . . . . . . . . 49
Section 16.1 Choice of Law.. . . . . . . . . . . . . . . 49
Section 16.2 Usury Laws. . . . . . . . . . . . . . . . . 49
Section 16.3 Provisions Subject to Applicable Law. . . . 50
Section 16.4 Inapplicable Provision. . . . . . . . . . . 50
Article 17 - SECONDARY MARKET. . . . . . . . . . . . . . . . . 50
Section 17.1 Dissemination of Information. . . . . . . . 50
Article 18 - COSTS . . . . . . . . . . . . . . . . . . . . . . 51
Section 18.1 Performance at Mortgagor's Expense. . . . . 51
Section 18.2 Attorneys' Fees for Enforcement.. . . . . . 51
Article 19 - DEFINITIONS . . . . . . . . . . . . . . . . . . . 52
Section 19.1 General Definitions.. . . . . . . . . . . . 52
Section 19.2 Headings, Etc.. . . . . . . . . . . . . . . 52
Article 20 - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . 52
Section 20.1 No Oral Change. . . . . . . . . 52
Section 20.2 Liability.. . . . . . . . . . . . . . . . . 52
Section 20.3 Duplicate Originals; Counterparts.. . . . . 52
Section 20.4 Number and Gender.. . . . . . . . . . . . . 53
Section 20.5 Subrogation.. . . . . . . . . . . . . . . . 53
Section 20.6 Entire Agreement. . . . . . . . . . . . . . 53
Article 21 - PERFORMANCE BY MONTGOMERY . . . . . . . . . . . . 53
Article - LOCAL LAW PROVISIONS. . . . . . . . . . . . . . . . 54
Exhibits -
Exhibit A - Description of Land
Exhibit B - Local Law Provisions
Definitions
The terms set forth below are defined in the following Sections
of this Security
Instrument:
(1) ADA: Subsection 3.10(a);
(2) Applicable Law: Subsection 3.10(a);
(3) Attorneys' Fees/Counsel Fees: Section
19.1, 19.1;
(4) Bankruptcy Code: Subsection 1.1(f);
(5) Borrower: Preamble;
(6) Casualty Amount: Subsection 4.2(a);
(7) Casualty Consultant: Subsection
4.2(b)(iii);
(8) Casualty Retainage: Subsection
4.2(b)(iv);
(9) Collateral: Section 1.3;
(10) Debt: Recitals;
(11) Environmental Indemnity: Subsection
9.1(c);
(12) Environmental Law: Section 11.1;
(13) Environmental Liens: Section 11.2;
(14) Environmental Report: Section 11.1;
(15) Escrow Fund: Section 3.5;
(16) Event: Section 18.1;
(17) Event of Default: Section 9.1;
(18) Intentionally Deleted;
(19) Investor: Section 17.1;
(20) Force Majeure: Subsection 4.2(b);
(21) Guarantor: Section 5.5;
(22) Hazardous Substances: Section 11.1;
(23) Improvements: Subsection 1.1(c);
(24) Indemnified Parties: Section 12.1;
(25) Indemnitor: Subsection 9.1(c);
(26) Insurance Premiums: Subsection 3.3(b);
(27) Investor: Section 17.1;
(28) Land: Subsection 1.1(a);
(29) Lease Guaranty: Section 3.7;
(30) Leases: Subsection 1.1(f);
(31) Lender: Preamble;
(32) Loan Agreement: Recitals;
(33) Loan Application: Section 5.13;
(34) Losses: Section 12.1;
(35) Montgomery: Recitals;
(36) Mortgagor: Preamble;
(37) Net Proceeds: Subsection 4.2(b);
(38) Net Proceeds Deficiency: Subsection
4.2(b)(vi);
(39) Note: Recitals;
(40) Obligations: Section 2.2;
(41) Other Charges: Subsection 3.4(a);
(42) Other Security Documents: Section 3.2;
(43) Participations: 17.1;
(44) Permitted Exceptions: Section 5.1;
(45) Person: Section 19.1;
(46) Personal Property: Subsection 1.1(e);
(47) Policies/Policy: Subsection 3.3(b),
3.3(b);
(48) Property: Section 1.1;
(49) Qualified Insurer: Subsection 3.3(b);
(50) Rating Agency: Subsection 3.3(b);
(51) Release: Section 11.1;
(52) Remediation: Section 11.1;
(53) Rents: Subsection 1.1(f);
(54) Restoration: Subsection 3.3(d);
(55) Securities: Section 17.1;
bd Securitization: Section 17.1;
(56) Security Instrument: Preamble;
(57) Taxes: Subsection 3.4(a); and
(58) Uniform Commercial Code: Subsection
1.1(e).
THIS MORTGAGE AND SECURITY AGREEMENT (the "Security
Instrument") is made as of the 25th day of June 1998, by MARLTON
PLAZA ASSOCIATES, L.P., a Delaware limited partnership having its
principal place of business c/o Marlton Plaza LLC at Plymouth
Plaza, 580 West Germantown Pike, Suite 200, Plymouth Meeting,
Pennsylvania 19462, as mortgagor ("Mortgagor") to GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation having
an address at 650 Dresher Road, Horsham, Pennsylvania 19044-8015,
as mortgagee ("Lender").
RECITALS:
Mortgagor, by its promissory note of even date herewith
(the note together with all extensions, renewals, modifications,
consolidations, substitutions, replacements, restatements and
increases thereof shall collectively be referred to as the
"Note") given to Lender is indebted to Lender in the principal
sum of $9,300,000 in lawful money of the United States of
America, (the indebtedness evidenced by the Note, together with
all interest, default interest, late charges and other sums
agreed or provided to be paid by Mortgagor in the Note or the
Loan Agreement (as hereinafter defined), is hereinafter
collectively referred to as the "Debt") with interest from the
date thereof at the rates set forth in the Note, principal and
interest to be payable in accordance with the terms and
conditions provided in the Note.
Montgomery CV Realty L.P., a Delaware limited
partnership ("Montgomery") and Lender have entered into a Loan
and Credit Facility Agreement dated March 31, 1998 (as the same
may be amended, modified or restated, the "Loan Agreement"),
setting forth the agreements and understandings of Montgomery and
Lender with respect to the Debt and other loans made by Lender to
Montgomery or its affiliates.
Mortgagor, an affiliate of Montgomery, for good and
valuable consideration the receipt of which is hereby
acknowledged, desires to secure its obligations under the Note.
Article 1 - GRANTS OF SECURITY
Section 1.1 Property Mortgaged. Mortgagor does hereby
irrevocably (i) mortgage, grant, bargain, sell, pledge, assign,
warrant, transfer and convey to Lender and to its successors and
assigns in accordance with the terms and conditions hereof, for
the use and benefit of Lender, and (ii) grant a security interest
to Lender and to its successors and assigns in the following
property, rights, interests and estates now owned, or hereafter
acquired by Mortgagor (collectively, the "Property"):
(a) Land. The real property described in Exhibit A
attached hereto and made a part hereof (the "Land");
(b) Additional Land. All additional lands, estates
and development rights hereafter acquired by Mortgagor for use in
connection with the Land and the development of the Land that
may, from time to time, by supplemental mortgage or otherwise be
expressly made subject to the lien of this Security Instrument;
(c) Improvements. The buildings, structures,
fixtures, additions, enlargements, extensions, modifications,
repairs, replacements and improvements now or hereafter erected
or located on the Land (the "Improvements");
(d) Easements. All easements, rights-of-way or use,
rights, strips and gores of land, streets, ways, alleys,
passages, sewer rights, water, water courses, water rights and
powers, air rights and development rights, and all estates,
rights, titles, interests, privileges, liberties, servitudes,
tenements, hereditaments and appurtenances of any nature
whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion and
reversions, remainder and remainders, and all land lying in the
bed of any street, road or avenue, opened or proposed, in front
of or adjoining the Land, to the center line thereof and all the
estates, rights, titles, interests, dower and rights of dower,
curtesy and rights of curtesy, property, possession, claim and
demand whatsoever, both at law and in equity, of Mortgagor of, in
and to the Land and the Improvements and every part and parcel
thereof, with the appurtenances thereto;
(e) Fixtures and Personal Property. All machinery,
equipment, fixtures (including, but not limited to all heating,
air conditioning, plumbing, lighting, communications and elevator
fixtures) and other property of every kind and nature whatsoever
owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Land or the
Improvements, or appurtenant thereto, and used in connection with
the present or future operation and occupancy of the Land and the
Improvements and all building equipment, materials and supplies
of any nature whatsoever owned by Mortgagor, or in which
Mortgagor has or shall have an interest, now or hereafter located
upon the Land and the Improvements, or appurtenant thereto,
or used in connection with the present or future operation and
occupancy of the Land and the Improvements (collectively, the
"Personal Property"), and the right, title and interest of
Mortgagor in and to any of the Personal Property which may be
subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the state or states
where any of the Property is located (the "Uniform Commercial
Code"), superior in lien to the lien of this Security Instrument
and all proceeds and products of the above;
(f) Leases and Rents. All leases and other agreements
affecting the use, enjoyment or occupancy of all or any part of
the Land or the Improvements heretofore or hereafter entered into
whether before or after the filing by or against Mortgagor of any
petition for relief under 11 U.S.C. 101 et seq. (the
"Bankruptcy Code"), as the same may be amended from time to time
(the "Leases") and all right, title and interest of Mortgagor,
its successors and assigns therein and thereunder, including,
without limitation, all guarantees, letters of credit and any
other credit support given by any guarantor in connection
therewith, cash or securities deposited under the Leases to
secure the performance by the lessees of their obligations
thereunder and all rents, additional rents, revenues, issues and
profits (including all oil and gas or other mineral royalties and
bonuses) from the Land and the Improvements whether paid or
accruing before or after the filing by or against Mortgagor of
any petition for relief under the Bankruptcy Code (the "Rents")
and all proceeds from the sale or other disposition of the
Leases and the right to receive and apply the Rents to the
payment of the Debt;
(g) Condemnation Awards. All awards or payments,
including interest thereon, which may heretofore and hereafter be
made with respect to the Property, whether from the exercise of
the right of eminent domain (including, but not limited to
any transfer made in lieu of or in anticipation of the exercise
of the right), or for a change of grade, or for any other injury
to or decrease in the value of the Property;
(h) Insurance Proceeds. All proceeds of and any
unearned premiums on any insurance policies covering the
Property, including, without limitation, the right to receive and
apply the proceeds of any insurance judgments, or settlements
made in lieu thereof, for damage to the Property;
(i) Tax Certiorari. All refunds, rebates or credits
in connection with a reduction in real estate taxes and
assessments charged against the Property as a result of tax
certiorari or any applications or proceedings for reduction;
(j) Rights. The right, in the name and on behalf of
Mortgagor, to commence any action or proceeding to protect the
interest of Lender in the Property and while an Event of Default
(defined in Section 10.1) remains uncured, to appear in
and defend any action or proceeding brought with respect to the
Property;
(k) Agreements. All agreements, contracts,
certificates, instruments, franchises, permits, licenses, plans,
specifications and other documents, now or hereafter entered
into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or
operation of the Land and any part thereof and any Improvements
or respecting any business or activity conducted on the Land and
any part thereof and all right, title and interest of Mortgagor
therein and thereunder, including, without limitation, the right,
while an Event of Default remains uncured, to receive and
collect any sums payable to Mortgagor thereunder;
(l) Intangibles. All accounts, escrows, chattel
paper, licenses, claims, deposits, trade names, trademarks,
servicemarks, logos, copyrights, goodwill, books and records and
all other general intangibles specific to or used in connection
with the operation of the Property, if any;
(m) Conversion. All proceeds of the conversion,
voluntary or involuntary, of any of the foregoing including,
without limitation, proceeds of insurance and condemnation
awards, into cash or liquidation claims; and
(n) Other Rights. Any and all other rights of
Mortgagor in and to the items set forth in Subsections (a)
through (m) above.
Section 1.2 Assignment of Leases and Rents. Mortgagor
hereby absolutely and unconditionally assigns to Lender
Mortgagor's right, title and interest in and to all current and
future Leases and Rents; it being intended by Mortgagor that this
assignment constitutes a present, absolute assignment and not an
assignment for additional security only. Nevertheless, subject
to the terms of this Section 1.2 and Section 3.7, Lender grants
to Mortgagor a revocable license to collect and receive the
Rents. Mortgagor shall hold the Rents, or a portion thereof,
sufficient to discharge all current sums due on the Debt, for use
in the payment of such sums.
Section 1.3 Security Agreement. This Security
Instrument is both a real property mortgage and a "security
agreement" within the meaning of the Uniform Commercial Code.
The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in
nature, of Mortgagor in the Property. By executing and
delivering this Security Instrument, Mortgagor hereby grants
to Lender, as security for the Obligations (defined in Section
2.3), a security interest in the Property to the full extent that
the Property may be subject to the Uniform Commercial Code (said
portion of the Property so subject to the Uniform Commercial
Code, the "Collateral"). This Security Instrument is also a
financing statement filed as a "fixture filing" for the purposes
of Articles 12A:9-402(6) of Division 9 of the Uniform
Commercial Code. For the purposes of compliance with the
aforesaid section of the Uniform Commercial Code, Lender is the
secured party, the Mortgagor is the debtor, and the address of
the secured party from which information concerning the security
interest granted hereby may be obtained is set forth in the first
paragraph on page 1 of this Security Instrument. Certain of the
Personal Property is or is to become fixtures related to the Land
and Improvements.
Section 1.4 Pledge of Monies Held. Mortgagor hereby
pledges to Lender, and grants to Lender a security interest in,
any and all monies now or hereafter held by Lender, including,
without limitation, any sums deposited in the Escrow Fund
(defined in Section 3.5) and the Net Proceeds (defined in Section
4.2(b)), as additional security for the Obligations until
expended or applied as provided in this Security Instrument.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described
Property unto the Lender and its successors and assigns forever;
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Mortgagor shall well and truly pay to Lender
the Debt at the time and in the manner provided in the Note and
this Security Instrument, shall well and truly perform
the Other Obligations as set forth in this Security Instrument
and shall well and truly abide by and comply with each and every
covenant and condition set forth herein and in the Note, these
presents and the estate hereby granted shall cease, terminate and
be void.
Article 2 - OBLIGATIONS SECURED
Section 2.1 Debt. This Security Instrument and the
grants, assignments and transfers made in Article 1 are given for
the purpose of securing the following, in such order of priority
as Lender may determine in its sole discretion:
(a) the performance of all of Mortgagor's obligations
under the Note;
(b) the payment of all sums advanced pursuant to this
Security Instrument to protect and preserve the Property and the
lien and the security interest created hereby;
(c) the payment of all sums advanced and costs and
expenses incurred by Lender in connection with the Debt or any
part thereof, any renewal, extension, modification,
consolidation, change, substitution, replacement, restatement or
increase of the Debt or any part thereof, or the acquisition or
perfection of the security therefore;
(d) the performance of all obligations of Mortgagor
contained herein and in the Other Security Documents;
(e) the performance of all obligations of Indemnitor
(defined in Subsection 9.1(c)) and of any Guarantor (defined in
Section 5.5) contained in the Other Security Documents;
(f) the performance of each obligation of Mortgagor,
Indemnitor and any Guarantor contained in any renewal, extension,
modification, consolidation, change, substitution, replacement
for, restatement or increase of all or any part of the Note, this
Security Instrument or the other Security Documents;
(g) the payment of all sums advanced and costs and
expenses incurred by Lender pursuant to the Loan Agreement,
including without limitation, future loans from Lender to
Montgomery or an affiliate of Montgomery.
(h) the performance of all of Montgomery's or any
borrower's obligations under any other note executed pursuant to
the Loan Agreement (collectively, the "Other Facility Notes");
the Other Facility Notes executed as of the date hereof are
identified on Schedule 1 attached hereto and made a part hereof;
(i) the payment of all sums advanced pursuant to any
security instrument executed pursuant to the Loan Agreement to
protect and preserve the property thereunder, (collectively, the
"Other Facility Security Instruments") and the lien and the
security interest created thereby; the Other Facility Security
Instruments executed as of the date hereof are identified on
Schedule 2 attached hereto and made a part hereof;
(j) the payment of all sums advanced and costs and
expenses incurred by Lender in connection with any debt incurred
pursuant to the Loan Agreement, or any part thereof, any renewal,
extension, modification, consolidation, change, substitution,
replacement, restatement or increase of the such debt or any part
thereof, or the acquisition or perfection of the security
therefor;
(k) the performance of all obligations of any
mortgagor contained in any Other Facility Security Instrument or
in any other security document executed pursuant to the Loan
Agreement;
(l) the performance of each obligation of any
indemnitor and of any guarantor contained in any other security
document executed pursuant to the Loan Agreement;
(m) the performance of each obligation of any
mortgagor, any indemnitor and any guarantor contained in any
renewal, extension, modification, consolidation, change,
substitution, replacement for, restatement or increase of
all or any part of any Other Facility Note, any Other Facility
Security Instrument or any other security documents executed
pursuant to the Loan Agreement; and
(n) the payment of all sums advanced and costs and
expenses incurred by Lender pursuant to the Loan Agreement or to
any Facility Loan Document executed pursuant to the Loan
Agreement.
Section 2.2 Debt and Other Obligations. Mortgagor's
obligations for the payment of the Debt and the performance of
the obligations shall be referred to collectively below as the
"Obligations."
Article 3 - MORTGAGOR COVENANTS
Mortgagor covenants and agrees with Lender that:
Section 3.1 Performance of Obligations. Mortgagor
will perform all of its obligations under the Note at the time
and in the manner provided in the Note and in this Security
Instrument.
Section 3.2 Incorporation by Reference. All the
covenants, conditions and agreements contained in (a) the Note,
(b) the Loan Agreement, and (c) all and any of the documents
other than the Note, the Loan Agreement or this Security
Instrument now or hereafter executed by Montgomery, Mortgagor
and/or others and by or in favor of Lender, which wholly or
partially secure or guaranty payment of the Note or the
obligations (the "Other Security Documents"), are hereby made a
part of this Security Instrument to the same extent and with the
same force as if fully set forth herein.
Section 3.3 Insurance.
(a) Mortgagor shall obtain and maintain, or cause to
be maintained, insurance for Mortgagor and the Property providing
at least the following coverages:
(i) Property Insurance. Insurance with
respect to the Improvements and building equipment insuring
against any peril included within the classification "All Risks
of Physical Loss" in amounts at all times sufficient to prevent
Lender from becoming a co-insurer within the terms of the
applicable policies and under applicable law, but in any event
such insurance shall be maintained in an amount equal to 100% of
the full insurable value of the Improvements and building
equipment, the term "full insurable value" to mean the actual
replacement cost of the Improvements and building equipment
(without taking into account any depreciation, and exclusive of
excavations, footings and foundations, landscaping and paving)
determined annually by an insurer, a recognized independent
insurance broker or an independent appraiser selected and paid by
Mortgagor and in no event less than the coverage required
pursuant to the terms of any Lease. Absent such annual
adjustment, each policy shall contain inflation guard coverage
insuring that the policy limit will be increased over time to
reflect the effect of inflation. Mortgagor shall also maintain
insurance against loss or damage to such furniture, furnishings,
fixtures, equipment and other items (whether personalty or
fixtures) included in the Property and owned by Mortgagor from
time to time, to the extent applicable, in the amount of the cost
of replacing the same, in each case, with inflation guard
coverage to reflect the effect of inflation, or annual valuation.
Each policy or policies shall contain a replacement cost
endorsement and either an agreed amount endorsement (to avoid the
operation of any co-insurance provisions) or a waiver of any
co-insurance provisions, all subject to Lender's approval. The
maximum deductible shall be $10,000.00;
(ii) Liability Insurance. Comprehensive
general liability insurance, including personal injury, bodily
injury, death and property damage liability, insurance
against any and all claims, including all legal liability to the
extent insurable and imposed upon Lender and all court costs and
attorneys' fees and expenses, arising out of or connected with
the possession, use, leasing, operation, maintenance or condition
of the Property in such amounts as are generally available at
commercially reasonable premiums and are generally required by
institutional lenders for properties comparable to the Property
but in no event for a combined single limit of less than
$1,000,000. During any construction of the Property, Mortgagor's
general contractor for such construction shall also provide the
insurance required in this Subsection (a) Lender hereby retains
the right to periodically review the amount of said liability
insurance being maintained by Mortgagor and to require an
increase in the amount of said liability insurance should Lender
deem an increase to be reasonably prudent under then existing
circumstances;
(iii) Workers' Compensation Insurance.
Statutory workers' compensation insurance with respect to any
work on or about the Property covering all persons subject to the
workers' compensation laws of the state in which the Property is
located;
(iv) Business Interruption. Business
interruption and/or loss of "rental income" insurance in an
amount sufficient to avoid any co-insurance penalty and
to provide proceeds which will cover a period of not less than
one (1) year from the date of casualty or loss, the term "rental
income" to mean the sum of (A) the total then ascertainable Rents
payable under the Leases and (B) the total ascertainable amount
of all other amounts to be received by Mortgagor from third
parties which are the legal obligation of the tenants, reduced to
the extent such amounts would not be received because of
operating expenses not incurred during a period of non-occupancy
of that portion of the Property then not being occupied. The
amount of coverage shall be adjusted annually to reflect the
rents payable during the succeeding twelve (12) month period.
(v) Boiler and Machinery Insurance.
Broad form boiler and machinery insurance (without exclusion for
explosion) covering all boilers or other pressure vessels,
machinery, and equipment located in, on or about the Property and
insurance against loss of occupancy or use arising from any
breakdown in such amount per accident equal to the replacement
value of the improvements housing the machinery or $2,000,000 or
such other amount reasonably determined by Lender. If one or
more large HVAC units is in operation at the Property, "System
Breakdowns" coverage shall be required, as determined by
Mortgagee. Minimum liability coverage per accident must
equal the value of such unit(s);
(vi) Flood Insurance. If required by
Subsection 5.6(a) hereof, flood insurance in an amount at least
equal to the lesser of (A) the minimum amount required, under the
terms of coverage, to compensate for any damage or loss on a
replacement basis (or the unpaid balance of the indebtedness
secured hereby if replacement cost coverage is not available for
the type of building insured); or (B) the maximum insurance
available under the appropriate National Flood Insurance
Administration program. The maximum deductible shall be less
than or equal to 5% of the Appraised Value (as defined in the
Loan Agreement) of the Property or a higher minimum amount as
required by the Federal Emergency Management Agency or other
applicable law.
(vii) During the period of any
construction, renovation or alteration of the Improvements which
exceeds the lesser of 10% of the principal amount of the
Note or $500,000, at Lender's request, a completed value, "All
Risk" Builder's Risk form, or "Course of Construction" insurance
policy in non-reporting form for any Improvements under
construction, renovation or alteration in an amount approved by
Lender may be required. During the period of any construction of
any addition to the existing Improvements, a completed value,
"All Risk" Builder's Risk form or "Course of Construction"
insurance policy in non-reporting form, in an amount approved by
Lender, shall be required.
(viii) Other Insurance. Such other
insurance with respect to the Property or on any replacements or
substitutions thereof or additions thereto as may from time to
time be required by Lender against other insurable hazards or
casualties which at the time are commonly insured against in the
case of property similarly situated, including, without
limitation, sinkhole, mine subsidence, earthquake and
environmental insurance, due regard being given to the height and
type of buildings, their construction, location, use and
occupancy.
(b) All insurance provided for in Subsection 3.3(a)
hereof shall be obtained under valid and enforceable policies
(the "Policies" or in the singular, the "Policy"), and shall be
issued by one or more domestic primary insurer(s) having (i) an
investment grade rating or a claims paying ability assigned by
one or more credit rating agencies approved by Lender (a "Rating
Agency") and (ii) a general policy rating of A or better and a
financial class of VI or better by A.M. Best Company, Inc. (each
such insurer shall be referred to below as a "Qualified
Insurer"). All insurers providing insurance required by this
Security Instrument shall be authorized to issue insurance in
the state in which the Property is located. The Policy referred
to in Subsection 3.3(a)(ii) above shall name Lender as an
additional named insured and the Policy referred to in
Subsection 3.3(a)(i), (iv), (v) and (vi) above shall provide that
all proceeds be payable to Lender as set forth in Section 4.4
hereof. The Policies referred to in Subsections
3.3(a)(i), (v) and (vi) shall also contain: (i) a standard
"non-contributory mortgagee" endorsement or its equivalent
relating, inter alia, to recovery by Lender notwithstanding
the negligent or willful acts or omission of Lender; (ii) to the
extent available at commercially reasonable rates, a waiver of
subrogation endorsement as to Lender; and (iii) an endorsement
providing for a deductible per loss of an amount not more than
that which is customarily maintained by prudent owners of similar
properties in the general vicinity of the Property, but in no
event in excess of $250,000. All Policies described in
Subsection 3.3(a) above shall contain (i) a provision that such
Policies shall not be canceled or terminated, nor shall they
expire, without at least thirty (30) days' prior written notice
to Lender in each instance; and (ii) include effective waivers by
the insurer of all claims for Insurance Premiums (defined below)
against any loss payees, additional insureds and named insureds
(other than Mortgagor). In the event that the Property or
the Improvements constitutes a legal non-conforming use under
applicable building, zoning or land use laws or ordinances, the
policy shall include an ordinance or law coverage endorsement
which will contain Coverage A: "Loss Due to Operation of Law"
(with a minimum liability limit equal to Replacement Cost With
Agreed Value Endorsement), Coverage B: "Demolition Cost" and
Coverage C: "Increased Cost of Construction" coverages.
Certificates of insurance with respect to all renewal and
replacement Policies shall be delivered to Lender not less than
thirty (30) days prior to the expiration date of any of the
Policies required to be maintained hereunder which
certificates shall bear notations evidencing payment of
applicable premiums (the "Insurance Premiums"). Originals or
certificates of such replacement Policies shall be
delivered to Lender promptly after Mortgagor's receipt thereof
but in any case within thirty (30) days after the effective date
thereof. If Mortgagor fails to maintain and deliver to Lender
the original Policies or certificates of insurance required by
this Security Instrument, upon ten (10) days' prior notice to
Mortgagor, Lender may procure such insurance at Mortgagor's sole
cost and expense.
(c) Mortgagor shall comply with all insurance
requirements and shall not bring or keep or permit to be brought
or kept any article upon any of the Property or cause or permit
any condition to exist thereon which would be prohibited by an
insurance requirement, or would invalidate the insurance coverage
required hereunder to be maintained by Mortgagor on or with
respect to any part of the Property pursuant to this Section 3.3.
(d) If the Property shall be damaged or destroyed, in
whole or in part, by fire or other casualty, Mortgagor shall give
prompt notice of such damage to Lender and provided that
Mortgagor shall have received the Net Proceeds, Mortgagor shall
promptly commence and diligently prosecute the completion of the
repair and restoration of the Property as nearly as possible to
the condition the Property was in immediately prior to such fire
or other casualty, with such alterations as may be approved by
Lender (the "Restoration") and otherwise in accordance with
Section 4.4 of this Security Instrument.
(e) The insurance coverage required under Section
3.3(a) may be effected under a blanket policy or policies
covering the Property and other properties and assets not
constituting a part of the security hereunder; provided that any
such blanket policy shall specify, except in the case of public
liability insurance, the portion of the total coverage of such
policy that is allocated to the Property, and any sublimit in
such blanket policy applicable to the Property, and shall in any
case comply in all other respects with the requirements of this
Section 3.3.
(f) The insurance coverage required under Subsection
3.3(a)(ii) may be satisfied by a layering of Comprehensive
General Liability, Umbrella and Excess Liability Policies, but in
no event will the Comprehensive General Liability policy be
written for an amount less than $5,000,000 combined single limit
for bodily injury and property damage liability.
(g) The delivery to Lender of the insurance policies
or the certificates of insurance as provided above shall
constitute an assignment of all proceeds payable under such
insurance as relating to the Property by Mortgagor to
Lender as further security for the indebtedness secured hereby.
In the event of foreclosure of this Security Instrument, or other
transfer of title to the Property in extinguishment in whole or
in part of the secured indebtedness, all right, title and
interest of Mortgagor in and to all proceeds payable under such
policies then in force concerning the Property shall
thereupon vest in the purchaser at such foreclosure, or in Lender
or other transferee in the event of such other transfer of title.
Approval of any insurance by Lender shall not be a representation
of the solvency of any insurer or the sufficiency of any amount
of insurance.
(h) Lender shall not be responsible for nor incur any
liability for the insolvency of the insurer or other failure of
the insurer to perform, even though Lender has caused the
insurance to be placed with the insurer after failure of
Mortgagor to furnish such insurance. Mortgagor shall not obtain
insurance for the Property in addition to that required by Lender
without the prior written consent of Lender, which consent will
not be unreasonably withheld provided that (i) Lender is named
insured on such insurance, (ii) Lender receives complete copies
of all policies evidencing such insurance, and (iii) such
insurance complies with all of the applicable requirements set
forth herein.
Section 3.4 Payment of Taxes, Etc.
(a) Mortgagor shall pay by their due date all taxes,
assessments, water rates, sewer rents, governmental impositions,
and other charges, including, without limitation, vault charges
and license fees for the use of vaults, chutes and similar areas
adjoining the Land, now or hereafter levied or assessed or
imposed against the Property or any part thereof (the "Taxes"),
all ground rents, maintenance charges and similar charges, now or
hereafter levied or assessed or imposed against the Property or
any part thereof (the "Other Charges"), and all charges for
utility services provided to the Property as same become due and
payable. Mortgagor will deliver to Lender, promptly upon
Lender's request, evidence satisfactory to Lender that the
Taxes, Other Charges and utility service charges have been so
paid or are not then delinquent. Mortgagor shall not suffer and
shall promptly cause to be paid and discharged any lien or charge
whatsoever which may be or become a lien or charge against the
Property. Except to the extent sums sufficient to pay all Taxes
and Other Charges have been deposited with Lender in accordance
with the terms of this Security Instrument, Mortgagor shall
furnish to Lender paid receipts for the payment of the Taxes and
Other Charges prior to the date the same shall become delinquent.
(b) After prior written notice to Lender, Mortgagor,
at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due
diligence, the amount or validity or application in whole or in
part of any of the Taxes, provided that (i) no Event of Default
has occurred and is continuing under the Note, the Loan
Agreement, this Security Instrument or any of the Other
Security Documents, (ii) Mortgagor is permitted to do so under
the provisions of any other mortgage, deed of trust or deed to
secure debt affecting the Property, (iii) such proceeding shall
suspend the collection of the Taxes from Mortgagor and from the
Property or Mortgagor shall have paid all of the Taxes under
protest, (iv) such proceeding shall be permitted under and be
conducted in accordance with the provisions of any other
instrument to which Mortgagor is subject and shall not constitute
a default thereunder, (v) neither the Property nor any part
thereof or interest therein will be in danger of being sold,
forfeited, terminated, canceled or lost, (vi) Mortgagor shall
have set aside adequate reserves for the payment of the Taxes,
together with all interest and penalties thereon, unless
Mortgagor has paid all of the Taxes under protest, and (vii)
Mortgagor shall have furnished the security as may be required in
the proceeding, or as may be reasonably requested by Lender to
insure the payment of any contested Taxes, together with all
interest and penalties thereon, taking into consideration the
amount in the Escrow Fund available for payment of Taxes.
Section 3.5 Escrow Fund. At the option of Lender,
Lender may require Mortgagor to establish an Escrow Fund (defined
below) sufficient to discharge its obligations for the payment of
Insurance Premiums and Taxes pursuant to Sections 3.3
and 3.4 hereof. Initial deposits of Taxes and Insurance Premiums
shall be made by Mortgagor to Lender in amounts determined by
Lender in its discretion on the date hereof to be held by Lender
in escrow. Additionally, Mortgagor shall pay to Lender on
the first day of each calendar month (a) one-twelfth of an amount
which would be sufficient to pay the Taxes payable, or estimated
by Lender to be payable, upon the due dates established by the
appropriate taxing authority during the next ensuing twelve (12)
months and (b) one-twelfth of an amount which would be sufficient
to pay the Insurance Premiums due for the renewal of the coverage
afforded by the Policies upon the expiration thereof (the initial
deposits together with the amounts in (a) and (b) above
shall be called the "Escrow Fund"). Mortgagor agrees to notify
Lender immediately of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance Premiums of
which it has obtained knowledge and authorizes Lender or its
agent to obtain the bills for Taxes and Other Charges directly
from the appropriate tax authority. Provided there are
sufficient amounts in the Escrow Fund and no Event of
Default exists, Lender shall be obligated to pay the Taxes and
Insurance Premiums as they become due on their respective due
dates on behalf of Mortgagor by applying the Escrow Fund to the
payments of such Taxes and Insurance Premiums required to be
made by Mortgagor pursuant to Sections 3.3 and 3.4 hereof. If
the amount of the Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums pursuant to Sections 3.3 and 3.4
hereof, Lender shall, in its discretion, return any excess to
Mortgagor or credit such excess against future payments to be
made to the Escrow Fund. In allocating such excess, Lender may
deal with the person shown on the records of Lender to be the
owner of the Property. If the Escrow Fund is not sufficient to
pay the items set forth in (a) and (b) above, Mortgagor shall
promptly pay to Lender, upon demand, an amount which Lender shall
reasonably estimate as sufficient to make up the deficiency. The
Escrow Fund shall not constitute a trust fund and may be
commingled with other monies held by Lender. Unless otherwise
required by Applicable Law (defined in Section 3.10(a), no
earnings or interest on the Escrow Fund shall be payable
to Mortgagor.
Section 3.6 Condemnation. Mortgagor shall promptly
give Lender notice of the actual or threatened commencement of
any condemnation or eminent domain proceeding and shall deliver
to Lender copies of any and all papers served in connection
with such proceedings. Lender may participate in any such
proceedings to the extent permitted by law. Upon an Event of
Default, Mortgagor shall deliver to Lender all instruments
requested by it to permit such participation. Mortgagor shall,
at its expense, diligently prosecute any such proceedings, and
shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such
proceedings. Mortgagor shall not make any agreement in lieu of
condemnation of the Property or any portion thereof without the
prior written consent of Lender in each instance, which consent
shall not be unreasonably withheld or delayed in the case of a
taking of an insubstantial portion of the Property.
Notwithstanding any taking by any public or quasi-public
authority through eminent domain or otherwise (including, but not
limited to any transfer made in lieu of or in anticipation of the
exercise of such taking), Mortgagor shall continue to pay the
Debt at the time and in the manner provided for its payment in
the Note and in this Security Instrument and the Debt shall not
be reduced until any award or payment therefor shall have been
actually received and applied by Lender, after the deduction of
expenses of collection, to the reduction or discharge of
the Debt. Lender shall not be limited to the interest paid on
the award by the condemning authority but shall be entitled to
receive out of the award interest at the rate or rates provided
herein or in the Note. If the Property or any portion thereof is
taken by the power of eminent domain, Mortgagor shall promptly
commence and diligently prosecute the Restoration of the Property
and otherwise comply with the provisions of in accordance with
Section 4.4 of this Security Instrument. If the Property
is sold, through foreclosure or otherwise, prior to the receipt
by Lender of the award or payment, Lender shall have the right,
whether or not a deficiency judgment on the Note shall have been
sought, recovered or denied, to receive the award or payment, or
a portion thereof sufficient to pay the Debt.
Section 3.7 Leases and Rents. (a) Except as
otherwise consented to by Lender, all Leases shall be written on
a standard form of lease which shall have been approved by
Lender. Upon request, Mortgagor shall furnish Lender with
executed copies of all Leases. No material changes may be made
to the Lender-approved standard lease without the prior written
consent of Lender, which consent shall not be unreasonably
withheld or delayed. All proposed leases shall be subject to the
prior approval of Lender except that all proposed leases which
(i) are on the same form of lease which has been approved by
Lender, (ii) are the result of an arms-length transaction, (iii)
which provide for rental rates comparable to existing market
rates, (iv) where space to be leased does not exceed more than
ten percent (10%) of total rentable space of the Property, (v)
where the proposed tenant is an independent third party not
affiliated with the Mortgagor, and (vi) do not contain any terms
which would materially affect Lender's rights under this Security
Instrument, the Note or the Other Security Documents, shall not
be subject to the prior approval of Lender. Mortgagor (i)
shall observe and perform all the obligations imposed upon the
lessor under the Leases if the failure to perform or observe the
same would materially and adversely affect the value of the
Property taken as a whole and shall not do or permit to be done
anything to impair the value of the Leases as security for the
Debt; (ii) shall promptly send copies to Lender of all notices of
default which Mortgagor shall send or receive thereunder; (iii)
shall enforce in a commercially reasonable manner all of the
terms, covenants and conditions contained in the Leases upon the
part of the lessee thereunder to be observed or performed; (iv)
shall not collect any of the Rents more than one (1) month in
advance (provided that a security deposit shall not be deemed
rent collected in advance); (v) shall not execute any other
assignment of the lessor's interest in the Leases or the Rents;
(vi) shall not (A) materially alter, modify or change the terms
of the Leases without the prior written consent of Lender, which
consent shall not be unreasonably withheld or delayed if the
alteration, modification or change does not materially and
adversely affect the value of the Property taken as a whole and
provided further that such Lease, as altered, modified or
changed, is otherwise in compliance with the requirements of this
Security Instrument, or (B) cancel or terminate any Lease (except
for defaults thereunder) of more than ten (10%) percent of the
rentable space of the Property or accept a surrender thereof or
convey or transfer or suffer or permit a conveyance ortransfer of
the Land or of any interest therein so as to effect a merger of
the estates and rights of, or a termination or diminution of the
obligations of, lessees thereunder; (vii) shall not alter,
modify or change the terms of any guaranty, letter of credit or
other credit support with respect to the Leases (the "Lease
Guaranty") or cancel or terminate such Lease Guaranty
without the prior written consent of Lender; and (viii) shall not
consent to any assignment of or subletting under the Leases not
in accordance with their terms, without the prior written consent
of Lender.
Section 3.8 Maintenance of Property. Mortgagor shall
cause the Property to be maintained in a good and safe condition
and repair. The Improvements and the Personal Property shall not
be removed, demolished or materially altered (except for normal
replacement of the Personal Property) without the consent
of Lender. Mortgagor shall promptly repair, replace or rebuild
any part of the Property which may be destroyed by any casualty,
or become damaged, worn or dilapidated or which may be
affected by any proceeding of the character referred to in
Section 3.6 hereof and shall complete and pay for any structure
at any time in the process of construction or repair on the Land.
Mortgagor shall not initiate, join in, acquiesce in, or consent
to any change in any private restrictive covenant, zoning law or
other public or private restriction, limiting or defining the
uses which may be made of the Property or any part thereof. If
under applicable zoning provisions the use of all or any portion
of the Property is or shall become a nonconforming use, Mortgagor
will not cause or permit the nonconforming use or Improvement to
be discontinued or abandoned without the express written consent
of Lender.
Section 3.9 Waste. Mortgagor shall not commit or
suffer any waste of the Property or make any change in the use of
the Property which will in any way materially increase the risk
of fire or other hazard arising out of the operation of the
Property, or take any action that might invalidate or give cause
for cancellation of any Policy, or do or permit to be done
thereon anything that may in any way impair the value of the
Property or the security of this Security Instrument. Mortgagor
will not, without the prior written consent of Lender, permit any
drilling or exploration for or extraction, removal, or production
of any minerals from the surface or the subsurface of the Land,
regardless of the depth thereof or the method of mining or
extraction thereof.
Section 3.10 Compliance With Laws.
(a) Mortgagor shall promptly comply with all existing
and future federal, state and local laws, orders, ordinances,
governmental rules and regulations or court orders affecting the
Property, or the use thereof including, but not limited to, the
Americans with Disabilities Act ("ADA") (collectively,
"Applicable Law").
(b) Mortgagor shall from time to time, upon Lender's
request, provide Lender with evidence reasonably satisfactory to
Lender that the Property complies with all Applicable Laws or is
exempt from compliance with Applicable Laws.
(c) Notwithstanding any provisions set forth herein or
in any document regarding Lender's approval of alterations of
the Property, Mortgagor shall not alter the Property in any
manner which would materially increase Mortgagor's
responsibilities for compliance with Applicable Laws without the
prior written approval of Lender. Lender's approval of the
plans, specifications, or working drawings for alterations of the
Property shall create no responsibility or liability on behalf of
Lender for their completeness, design, sufficiency or their
compliance with Applicable Laws. The foregoing shall apply
to tenant improvements constructed by Mortgagor or by any of its
tenants. Lender may condition any such approval upon receipt of
a certificate of compliance with Applicable Laws from an
independent architect, engineer, or other person acceptable to
Lender.
(d) Mortgagor shall give prompt notice to Lender of
the receipt by Mortgagor of any notice related to a violation of
any Applicable Laws and of the commencement of any proceedings or
investigations which relate to compliance with Applicable Laws.
(e) After prior written notice to Lender, Mortgagor,
at its own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due
diligence, the Applicable Laws affecting the Property, provided
that (i) no Event of Default has occurred and is continuing under
the Note, the Loan Agreement, this Security Instrument or any of
the Other Security Documents; (ii) Mortgagor is permitted to do
so under the provisions of any other mortgage, deed of
trust or deed to secure debt affecting the Property; (iii) such
proceeding shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which
Mortgagor is subject and shall not constitute a default
thereunder; (iv) neither the Property nor any part thereof or
interest therein nor any of the tenants or occupants thereof
shall be affected in any material adverse way as a result of such
proceeding; and (v) Mortgagor shall have furnished to Lender all
other items reasonably requested by Lender.
Section 3.11 Books and Records. Borrower and any
Guarantors shall furnish to Lender the financial statements and
project reports required by and in the manner set forth in
Section 4.4 of the Loan Agreement.
Section 3.12 Payment For Labor and Materials.
Mortgagor will promptly pay when due all bills and costs for
labor, materials, and specifically fabricated materials
incurred in connection with the Property and never permit to
exist beyond the due date thereof in respect of the Property or
any part thereof any lien or security interest, even
though inferior to the liens and the security interests hereof,
and in any event never permit to be created or exist in respect
of the Property or any part thereof any other or additional lien
or security interest other than the liens or security interests
hereof, except for the Permitted Exceptions (defined in Section
5.1) or liens for which Mortgagor has provided security or a bond
acceptable to Lender.
Section 3.13 Performance of Other Agreements.
Mortgagor shall observe and perform each and every term to be
observed or performed by Mortgagor pursuant to the terms of any
agreement or recorded instrument affecting or pertaining to
the Property.
Section 3.14 Existence. Mortgagor will continuously
maintain (a) its existence and shall not dissolve or permit its
dissolution, (b) its rights to do business in the state where the
Property is located and (c) its franchises and trade names.
Article 4 - SPECIAL COVENANTS
Mortgagor covenants and agrees with Lender that:
Section 4.1 Property Use. The Property shall be used
only for a commercial shopping center (which may include, without
limitation, medical and other professional offices) and for no
other use without the prior written consent of Lender,
which consent may be withheld in Lender's discretion.
Section 4.2 Restoration After Casualty/Condemnation.
In the event of a casualty or a taking by eminent domain, the
following provisions shall apply in connection with the
Restoration of the Property:
(a) If (i) the Net Proceeds (defined below) do not
exceed $250,000 ("Casualty Amount"); (ii) the costs of completing
the Restoration as reasonably estimated by Mortgagor shall be
less than or equal to the Casualty Amount; (iii) no Event of
Default shall have occurred and be continuing under the Note, the
Loan Agreement, this Security Instrument or any of the Other
Security Documents; (iv) the Property and the use thereof after
the Restoration will be in compliance with, and permitted under,
all applicable zoning laws, ordinances, rules and regulations
(including, without limitation, all applicable Environmental Laws
(defined in Section 12.1); and (v) such fire or other casualty or
taking, as applicable, does not materially impair access to the
Property or the Improvements (unless, in Lender's opinion, the
damage can be repaired by use of the Net Proceeds) then the Net
Proceeds will be disbursed directly to Mortgagor and
Mortgagor shall commence and diligently prosecute to completion,
subject to Force Majeure (defined herein), the Restoration of the
Property to as nearly as possible the condition it was in
immediately prior to such fire or other casualty or to such
taking. Except upon the occurrence and continuance of an Event of
Default, Mortgagor shall settle any insurance claims with respect
to the Net Proceeds which in the aggregate are less than or equal
to the Casualty Amount. Lender shall have the right to
participate in and reasonably approve any settlement for
insurance claims with respect to the Net Proceeds which in the
aggregate are equal to or greater than the Casualty Amount. If
an Event of Default shall have occurred and be continuing,
Mortgagor hereby irrevocably empowers Lender, in the name of
Mortgagor as its true and lawful attorney-in-fact, to file and
prosecute such claim and to collect and to make receipt for any
such payment. If the Net Proceeds are received by Mortgagor,
such Net Proceeds shall, until the completion of the related
work, be held in trust for Lender and shall be segregated
from other funds of Mortgagor to be used to pay for the cost of
the Restoration in accordance with the terms hereof.
(b) If the Net Proceeds are greater than the Casualty
Amount, such Net Proceeds shall, subject to the provisions of the
Leases that are superior to the lien of this Security Instrument
or with respect to which subordination, non-disturbance
agreements binding upon Lender have been entered into concerning
the deposits of Net Proceeds, be forthwith paid to Lender to be
held by Lender in a segregated account to be made available to
Mortgagor for the Restoration in accordance with the provisions
of this Subsection 4.2(b). Mortgagor shall commence and
diligently prosecute to completion, subject to Force Majeure
(defined below), the Restoration (in the case of a taking, to the
extent the Property is capable of being restored). The term "Net
Proceeds" for purposes of this Section 4.2 shall mean: (i) the
net amount of all insurance proceeds received by Lender under the
Policies carried pursuant to Subsections 3.3(a)(i), (iv), (v),
(vi) and (vii) of this Security Instrument as a result of such
damage or destruction, after deduction of its reasonable costs
and expenses (including, but not limited to reasonable
counsel fees), if any, in collecting the same, or (ii) the net
amount of all awards and payments received by Lender with respect
to a taking referenced in Section 3.6 of this Security
Instrument, after deduction of its reasonable costs and
expenses (including, but not limited to reasonable counsel fees),
if any, in collecting the same, whichever the case may be. The
term "Force Majeure" for the purpose of this Section 4.4 shall
have the following meaning: Mortgagor shall be excused for the
period of any delay in the performance of any obligations
hereunder when prevented from so doing by cause or causes beyond
Mortgagor's control such as, without limitation, all labor
disputes, civil commotion, war, war-like operations, invasion,
rebellion, hostilities, military or usurped power, sabotage,
governmental regulations or controls, fire or other casualty,
inability to obtain any materials or services, and acts of God.
(i) The Net Proceeds shall be made available
to Mortgagor for payment of, or reimbursement of Mortgagor's
expenses in connection with, the Restoration, subject to the
following conditions:
(A) no Event of Default shall have occurred
and be continuing under the Note, the Loan Agreement, this
Security Instrument or any of the Other Security Documents;
(B) Lender shall, within a reasonable period
of time prior to request for initial disbursement, be furnished
with an estimate of the cost of the Restoration accompanied by an
independent architect's certification as to such costs and
appropriate plans and specifications for the Restoration;
(C) the Net Proceeds, together with any cash
or cash equivalent deposited by Mortgagor with Lender, are
sufficient to cover the cost of the Restoration as such costs are
certified by the independent architect;
(D) (1) in the event that the Net Proceeds are
insurance proceeds, less than fifty percent (50%) of the total
floor area of the Improvements has been damaged or destroyed, or
rendered unusable as a result of such fire or other casualty; or
(2) in the event that the Net Proceeds are condemnation awards,
less than fifty percent (50%) of the Land constituting the
Property is taken, such Land that is taken is located along the
perimeter or periphery of the Property and no portion of the
Improvements is located in such Lands;
(E) Lender shall be satisfied that any
operating deficits, including all scheduled payments of principal
and interest under the Note which will be incurred with respect
to the Property as a result of the occurrence of any such fire or
other casualty or taking, whichever the case may be, will be
covered out of (1) the Net Proceeds, or (2) other funds of
Mortgagor;
(F) Lender shall be satisfied that, upon the
completion of the Restoration and related lease-up, if
applicable, the net cash flow of the Property will be restored to
a level sufficient to cover all carrying costs and operating
expenses of the Property, including, without limitation, debt
service coverage requirements set forth in the Loan Agreement;
(G) the Restoration can reasonably be
completed on or before the earliest to occur of (1) six (6)
months prior to the Maturity Date (as defined in the Note), (2)
the earliest date required for such completion under the terms of
any Lease and (3) such time as may be required under applicable
zoning law, ordinance, rule or regulation in order to repair and
restore the Property to as nearly as possible the condition it
was in immediately prior to such fire or other casualty or to
such taking, as applicable;
(H) the Property and the use thereof after the
Restoration will be in compliance with, and permitted under, all
applicable zoning laws, ordinances, rules and regulations
(including, without limitation, all applicable Environmental Laws
(defined in Section 12.1); and
(I) such fire or other casualty or taking, as
applicable, does not materially impair access to the Property or
the Improvements.
(ii) The Net Proceeds shall be held by Lender
and, until disbursed in accordance with the provisions of this
Subsection 4.2(b), shall constitute additional security for the
Obligations. The Net Proceeds other than the Net Proceeds paid
under the Policy described in Subsection 3.3(a)(iv) shall be
disbursed by Lender to, or as directed by, Mortgagor from time to
time during the course of the Restoration, upon receipt of
evidence satisfactory to Lender that (A) all materials
installed and work and labor performed (except to the extent that
they are to be paid for out of the requested disbursement) in
connection with the Restoration have been paid for in full, and
(B) there exist no notices of pendency, stop orders, mechanic's,
materialman's or contractor's liens or notices of intention to
file same, or any other liens or encumbrances of any nature
whatsoever on the Property arising out of the Restoration
which have not either been fully bonded and discharged of record
or in the alternative fully insured to the satisfaction of Lender
by the title company insuring the lien of this Security
Instrument.
(iii) Lender shall have the use of the plans and
specifications and all permits, licenses and approvals required
or obtained in connection with the Restoration. The identity of
the contractors, subcontractors and materialmen engaged in
the Restoration, as well as the contracts under which they have
been engaged, shall be subject to prior review and acceptance by
Lender and an independent consulting engineer selected by Lender
(the "Casualty Consultant"), such acceptance not to be
unreasonably withheld or delayed. All costs and expenses incurred
by Lender in connection with making the Net Proceeds available
for the Restoration including, without limitation, reasonable
counsel fees and disbursements and the Casualty Consultant's
fees, shall be paid by Mortgagor.
(iv) In no event shall Lender be obligated to make
disbursements of the Net Proceeds in excess of an amount equal to
the costs actually incurred from time to time for work in place
as part of the Restoration, as certified by the Casualty
Consultant, minus the Casualty Retainage. The term "Casualty
Retainage" as used in this Subsection 4.2(b) shall mean an amount
equal to 10% of the costs actually incurred for work in place as
part of the Restoration, as certified by the Casualty Consultant,
until such time as the Casualty Consultant certifies to Lender
that 50% of the required Restoration has been completed. There
shall be no Casualty Retainage with respect to costs actually
incurred by Mortgagor for work in place in completing the last
50% of the required Restoration. The Casualty Retainage shall in
no event, and notwithstanding anything to the contrary set forth
above in this Subsection 4.2(b), be less than the amount
actually held back by Mortgagor from contractors, subcontractors
and materialmen engaged in the Restoration. The Casualty
Retainage shall not be released until the Casualty Consultant
certifies to Lender that the Restoration has been completed in
accordance with the provisions of this Subsection 4.2(b) and that
all approvals necessary for the re-occupancy and use of the
Property have been obtained from all appropriate governmental and
quasi-governmental authorities, and Lender receives evidence
satisfactory to Lender that the costs of the Restoration have
been paid in full or will be paid in full out of the Casualty
Retainage, provided, however, that Lender will release the
portion of the Casualty Retainage being held with respect to any
contractor, subcontractor or materialman engaged in the
Restoration as of the date upon which the Casualty Consultant
certifies to Lender that the contractor, subcontractor or
materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the
contractor's, subcontractor's or materialman's contract, and the
contractor, subcontractor or materialman delivers the lien
waivers and evidence of payment in full of all sums due to the
contractor, subcontractor or materialman as may be reasonably
requested by Lender or by the title company insuring the lien of
this Security Instrument. If required by Lender, the release of
any such portion of the Casualty Retainage shall be approved by
the surety company, if any, which as issued a payment or
performance bond with respect to the contractor, subcontractor
or materialman.
(v) Lender shall not be obligated to make
disbursements of the Net Proceeds more frequently than once every
calendar month.
(vi) If at any time the Net Proceeds or the
undisbursed balance thereof shall not, in the opinion of Lender,
be sufficient to pay in full the balance of the costs which are
estimated by the Casualty Consultant to be incurred in connection
with the completion of the Restoration, Mortgagor shall deposit
the deficiency (the "Net Proceeds Deficiency") with Lender before
any further disbursement of the Net Proceeds shall be made. The
Net Proceeds Deficiency deposited with Lender shall be held by
Lender and shall be disbursed for costs actually incurred in
connection with the Restoration on the same conditions applicable
to the disbursement of the Net Proceeds, and until so disbursed
pursuant to this Subsection 4.2(b) shall constitute additional
security for the Obligations.
(vii) The excess, if any, of the Net Proceeds and
the remaining balance, if any, of the Net Proceeds Deficiency
deposited with Lender after the Casualty Consultant certifies to
Lender that the Restoration has been completed in accordance
with the provisions of this Subsection 4.2(b), and the receipt by
Lender of evidence satisfactory to Lender that all costs incurred
in connection with the Restoration have been paid in full, shall
be remitted by Lender to Mortgagor, provided no Event of
Default shall have occurred and shall be continuing under the
Note, the Loan Agreement, this Security Instrument or any of the
Other Security Documents.
(c) All Net Proceeds not required (i) to be made
available for the Restoration or (ii) to be returned to Mortgagor
as excess Net Proceeds pursuant to Subsection 4.2(b)(vii) shall
be retained and applied by Lender toward the payment of the
Debt whether or not then due and payable in such order, priority
and proportions as Lender in its discretion shall deem proper or,
at the discretion of Lender, the same shall be paid, either in
whole or in part, to Mortgagor. If Lender shall receive and
retain Net Proceeds, the lien of this Security Instrument shall
be reduced only by the amount received and retained by Lender and
actually applied by Lender in reduction of the Debt.
Article 5 - REPRESENTATIONS AND WARRANTIES
Mortgagor represents and warrants to Lender that:
Section 5.1 Warranty of Title. Mortgagor has good and
marketable title to the Property and has the right to mortgage,
grant, bargain, sell, pledge, assign, warrant, transfer and
convey the same and that Mortgagor possesses an unencumbered
fee simple absolute estate in the Land and the Improvements and
that it owns the Property free and clear of all liens,
encumbrances and charges whatsoever except for those exceptions
shown in the title insurance policy insuring the lien of this
Security Instrument (the "Permitted Exceptions"). The Permitted
Exceptions do not materially interfere with the security intended
to be provided by this Security Instrument or the use
and operations of the Property. Mortgagor shall forever warrant,
defend and preserve the title and the validity and priority of
the lien of this Security Instrument and shall forever warrant
and defend the same to Lender against the claims of all persons
whomsoever. Upon the recordation of this Security Instrument and
the filing of a Uniform Commercial Code Financing Statement in
the office of the Secretary of State for the state where the
Property is located, the Lender will have a first priority
perfected security interest in all personal property owned by
Mortgagor.
Section 5.2 Authority. Mortgagor (and the undersigned
representative of Mortgagor, if any) has full power, authority
and legal right to execute this Security Instrument, and to
mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey the Property pursuant to the terms hereof and to keep
and observe all of the terms of this Security Instrument on
Mortgagor's part to be performed.
Section 5.3 Legal Status and Authority. Mortgagor (a)
is duly organized, validly existing and in good standing under
the laws of its state of organization or incorporation; (b) is
duly qualified to transact business and is in good standing in
the State where the Property is located; and (c) has all
necessary approvals, governmental and otherwise, and full power
and authority to own the Property and carry on its business as
now conducted and proposed to be conducted. Mortgagor now has
and shall continue to have the full right, power and authority to
operate and lease the Property, to encumber the Property as
provided herein and to perform all of the other obligations to
be performed by Mortgagor under this Security Instrument and the
Other Security Documents.
Section 5.4 Validity of Documents. (a) The execution,
delivery and performance of this Security Instrument and the Note
(i) are within the power and authority of Mortgagor; (ii) have
been authorized by all requisite organizational action; (iii)
have received all necessary approvals and consents, corporate,
governmental or otherwise; (iv) will not violate, conflict with,
result in a breach of or constitute (with notice or lapse of
time, or both) a default under any provision of law (including,
without limitation, any usury laws), any order or judgment of any
court or governmental authority, the articles of incorporation,
by-laws, partnership or operating agreement, or other governing
instrument of Mortgagor, or any indenture, agreement or other
instrument to which Mortgagor is a party or by which it or any of
its assets or the Property is or may be bound or affected; (v)
will not result in the creation or imposition of any lien, charge
or encumbrance whatsoever upon any of its assets, except the lien
and security interest created hereby; and (vi) will not require
any authorization or license from, or any filing with, any
governmental or other body (except for the recordation of
this instrument in appropriate land records in the State where
the Property is located and except for Uniform Commercial Code
filings relating to the security interest created hereby), and
(b) this Security Instrument and the Note constitute the legal,
valid and binding obligations of Mortgagor.
Section 5.5 Litigation. There is no action, suit or
proceeding, judicial, administrative or otherwise (including any
condemnation or similar proceeding), pending or, to the best of
Mortgagor's knowledge, threatened or contemplated against
Mortgagor, any person or entity guaranteeing the payment of the
Debt or any portion thereof or performance by Mortgagor of any
terms of this Security Instrument (a "Guarantor"), if any, an
Indemnitor, if any, or against or affecting the Property
that (a) has not been disclosed to Lender, and has a material,
adverse effect on the Property or Mortgagor's, any Guarantor's or
any Indemnitor's ability to perform its obligations under the
Note, the Loan Agreement, this Security Instrument or the Other
Security Documents, or (b) is not adequately covered by
insurance, each as determined by Lender in its sole and
absolute discretion.
Section 5.6 Status of Property.
(a) No portion of the Improvements is located in an
area identified by the Secretary of Housing and Urban Development
or any successor thereto as an area having special flood hazards
pursuant to the National Flood Insurance Act of 1968 or the Flood
Disaster Protection Act of 1973, or the National Flood Insurance
Reform Act of 1994, as each may be amended, or any successor law,
or, if any portion of the Improvements is now or at any time in
the future located within any such area, Mortgagor has obtained
and will maintain the insurance prescribed in Section 3.3 hereof.
(b) Except building and occupancy permits for
currently vacant space, Mortgagor has obtained all necessary
certificates, licenses and other approvals, governmental and
otherwise, necessary for the operation of the Property and the
conduct of its business and all required zoning, building code,
land use, environmental and other similar permits or approvals,
all of which are in full force and effect as of the date hereof
and not subject to revocation, suspension, forfeiture or
modification.
(c) The Property and the present and contemplated use
and occupancy thereof do not and will not violate in any material
respect all Applicable Laws, including, without limitation,
zoning ordinances, building codes, land use and Environmental
Laws, laws relating to the disabled (including but not limited
to, the ADA) and other similar laws.
(d) The Property is served by all utilities required
for the current or contemplated use thereof. All utility service
is provided by public utilities and the Property has accepted or
is equipped to accept such utility service.
(e) All public roads and streets necessary for service
of and access to the Property for the current or contemplated use
thereof have been completed, are serviceable and all-weather and
are physically and legally open for use by the public.
(f) The Property is served by public water and sewer
systems.
(g) The Property is free from damage caused by fire or
other casualty.
(h) All costs and expenses of any and all labor,
materials, supplies and equipment used in the construction of the
Improvements have been paid in full.
(i) Mortgagor has paid in full for, and is the owner
of, all furnishings, fixtures and equipment (other than tenants'
property) used in connection with the operation of the Property,
free and clear of any and all security interests, liens or
encumbrances, except the lien and security interest created
hereby.
(j) All liquid and solid waste disposal, septic and
sewer systems located on the Property are in a good and safe
condition and repair and in compliance with all Applicable Laws.
(k) All security deposits relating to the Leases
reflected on the certified rent roll delivered to Lender have
been collected by Mortgagor except as noted on the certified rent
roll.
(l) Mortgagor has received no notice of an actual or
threatened condemnation or eminent domain proceeding by any
public or quasi-public authority.
(m) All the Improvements lie within the boundaries of
the Property.
Section 5.7 No Foreign Person. Mortgagor is not a
"foreign person" within the meaning of Section 1445(f)(3) of the
Internal Revenue Code of 1986, as amended and the related
Treasury Department regulations, including temporary
regulations.
Section 5.8 Separate Tax Lot. The Property is
assessed for real estate tax purposes as one or more wholly
independent tax lot or lots, separate from any adjoining
land or improvements not constituting a part of such lot or lots,
and no other land or improvements is assessed and taxed together
with the Property or any portion thereof.
Section 5.9 ERISA Compliance.
(a) As of the date hereof and throughout the term of
this Security Instrument, (i) Mortgagor is not and will not be an
"employee benefit plan" as defined in Section 3(3) of ERISA,
which is subject to Title I of ERISA, and (ii) the assets of
Mortgagor do not and will not constitute "plan assets" of one or
more such plans for purposes of Title I of ERISA; and
(b) As of the date hereof and throughout the term of
this Security Instrument, (i) Mortgagor is not and will not be a
"governmental plan" within the meaning of Section 3(3) of ERISA,
and (ii) transactions by or with Mortgagor are not and will not
be subject to state statutes applicable to Mortgagor regulating
investments of and fiduciary obligations with respect to
governmental plans.
Section 5.10 Leases. Except as disclosed in the rent
roll for the Property delivered to and approved by Lender, (a)
Mortgagor is the sole owner of the entire lessor's interest in
the Leases; (b) the Leases are valid and enforceable; (c) the
terms of all alterations, modifications and amendments to the
Leases are reflected in the certified rent roll delivered to and
approved by Lender; (d) none of the Rents reserved in the
Leases have been assigned or otherwise pledged or hypothecated
(except to Lender); (e) none of the Rents have been collected for
more than one (1) month in advance (provided that a security
deposit shall not be deemed rent collected in advance); (f) the
premises demised under the Leases have been completed and the
tenants under the Leases have accepted the same and have taken
possession of the same on a rent-paying basis; (g) there exist no
offsets or defenses to the payment of any portion of the Rents;
(h) Mortgagor has received no notice from any tenant challenging
the validity or enforceability of any Lease; (i) there are no
agreements with the tenants under the Leases other than expressly
set forth in each Lease; (j) the Leases are valid and
enforceable against Mortgagor and the tenants set forth therein;
(k) no Lease contains an option to purchase, right of first
refusal to purchase, or any other similar provision; (l)
no person or entity has any possessory interest in, or right to
occupy, the Property except under and pursuant to a Lease; (m)
each Lease is subordinate to this Security Instrument, either
pursuant to its terms or a recorded subordination agreement; (n)
no Lease has the benefit of a non-disturbance agreement that
would be considered unacceptable to prudent institutional
lenders; and (o) no brokerage commissions or finders fees are due
and payable regarding any Lease, except as reflected in the
certified rent roll delivered to and approved by Lender.
Section 5.11 Financial Condition. (a) Mortgagor is
solvent, and no bankruptcy, reorganization, insolvency or similar
proceeding under any state or federal law with respect to
Mortgagor has been initiated, and (b) the granting of this
Security Instrument does not constitute a fraudulent conveyance.
Section 5.12 Taxes. Mortgagor, any Guarantor and any
Indemnitor have filed all federal, state, county, municipal, and
city income and other tax returns required to have been filed by
them and have paid all taxes and related liabilities which have
become due pursuant to such returns or pursuant to any
assessments received by them. Neither Mortgagor, any Guarantor
nor any Indemnitor knows of any basis for any additional
assessment in respect of any such taxes and related
liabilities for prior years.
Section 5.13 No Change in Facts or Circumstances. All
information in the application for the loan submitted to Lender
(the "Loan Application") and in all financing statements, rent
rolls, reports, certificates and other documents submitted in
connection with the Loan Application or in satisfaction of the
terms thereof, are accurate, complete and correct in all
respects. There has been no adverse change in any condition,
fact, circumstance or event that would make any such
information inaccurate, incomplete or otherwise misleading.
Section 5.14 Disclosure. Mortgagor has disclosed to
Lender all material facts and has not failed to disclose any
material fact that could cause any representation or warranty
made herein to be materially misleading.
Section 5.15 Third Party Representations. Each of the
representations and the warranties made by each Guarantor and
Indemnitor herein or in any Other Security Document(s) is true
and correct in all material respects.
Section 5.16 Illegal Activity. No portion of the
Property has been or will be purchased, improved, fixtured,
equipped or furnished with proceeds of any criminal or
other illegal activity and to the best of Mortgagor's knowledge,
there are no illegal activities or activities relating to
controlled substance at the Property.
Article 6 - FURTHER ASSURANCES
Section 6.1 Recording of Security Instrument, Etc.
Mortgagor forthwith upon the execution and delivery of this
Security Instrument and thereafter, from time to time, will cause
this Security Instrument and any of the Other Security Documents
creating a lien or security interest or evidencing the lien
hereof upon the Property and each instrument of further assurance
to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order
to publish notice of and fully to protect and perfect the lien or
security interest hereof upon, and the interest of Lender in, the
Property. Mortgagor will pay all taxes, filing, registration
or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of the Note, this
Security Instrument, the Other Security Documents, any note or
mortgage supplemental hereto, any security instrument with
respect to the Property and any instrument of further
assurance, and any modification or amendment of the foregoing
documents, and all federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in
connection with the execution and delivery of this Security
Instrument, any mortgage supplemental hereto, any security
instrument with respect to the Property or any instrument of
further assurance, and any modification or amendment of the
foregoing documents, except where prohibited by law so to do.
Section 6.2 Further Acts, Etc. Mortgagor will, at the
cost of Mortgagor, and without expense to Lender, do, execute,
acknowledge and deliver all and every such further acts, deeds,
conveyances, mortgages, assignments, notices of assignments,
transfers and assurances as Lender shall, from time to time,
reasonably require, for the better assuring, conveying,
assigning, transferring, and confirming unto Lender, the
property and rights hereby mortgaged, granted, bargained, sold,
conveyed, confirmed, pledged, assigned, warranted and transferred
or intended now or hereafter so to be, or which Mortgagor may be
or may hereafter become bound to convey or assign to Lender,
or for carrying out the intention or facilitating the performance
of the terms of this Security Instrument or for filing,
registering or recording this Security Instrument, or for
complying with all Applicable Laws. Mortgagor, on demand, will
execute and deliver and hereby authorizes Lender to execute in
the name of Mortgagor or without the signature of Mortgagor to
the extent Lender may lawfully do so, one or more financing
statements, chattel mortgages or other instruments, to evidence
or perfect more effectively the security interest of Lender in
the Property. Mortgagor grants to Lender an irrevocable power of
attorney coupled with an interest for the purpose of exercising
and perfecting any and all rights and remedies available to
Lender pursuant to this Section 6.2.
Section 6.3 Changes in Tax, Debt Credit and
Documentary Stamp Laws.
(a) If on or after the date hereof, the adoption of
any applicable law, rule, or regulation, or any change therein,
or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable
agency charged with the interpretation or administration thereof,
or compliance by the Lender with any request or directive
(whether or not having the force of law) of any such
authority, central bank, or comparable agency shall subject
Lender to any tax, duty or other charge with respect to the Debt,
or shall change the basis of taxation of payments
to Lender of the principal of or interest on the Debt or any
other amounts due under the Note or in respect of the Debt or its
obligation to advance the Debt (except for changes in the rate of
tax on the overall net income of the Lender) and the result of
the foregoing is to increase the cost to Lender of making or
maintaining the Debt, or to reduce the amount of any sum received
or receivable by Lender under the Note with respect thereto, by
an amount reasonably deemed by Lender to be material, then,
within fifteen days after demand by Lender, Mortgagor shall pay
to Lender such additional amount or amounts as will compensate
Lender for such increased cost or reduction.
(b) Lender will promptly notify Mortgagor of any event
of which it has knowledge, occurring after the date hereof, which
will entitle Lender to compensation pursuant to this Section. A
certificate of Lender claiming compensation under this Section,
setting forth the additional amount or amounts to be paid to it
hereunder and evidence reasonably substantiating Lender's claim
for compensation shall be conclusive in the absence of manifest
error. In determining such amount, Lender may use any
reasonable averaging and attribution methods.
Section 6.4 Estoppel Certificates.
(a) After request by Lender, Mortgagor, within ten (10)
days, shall furnish Lender or any proposed assignee with a
statement, duly acknowledged and certified, setting forth (i)
that, except as provided in such statement, there are no defaults
or events which with the passage of time or the giving of notice
or both, would constitute an event of default under this Security
Instrument, (ii) that this Security Instrument is a valid, legal
and binding obligation and has not been modified or if modified,
giving particulars of such modification, (iii) whether any
offsets or defenses exist against the obligations secured hereby
and, if any are alleged to exist, a detailed description thereof,
(iv) that all Leases are in full force and effect and have not
been modified (or if modified, setting forth all modifications),
(v) the date to which the Rents thereunder have been paid
pursuant to the Leases, (vi) whether or not, to the best
knowledge of Mortgagor, any of the lessees under the Leases are
in default under the Leases, and, if any of the lessees are in
default, setting forth the specific nature of all such defaults,
(vii) the amount of security deposits held by Mortgagor under
each Lease and that such amounts are consistent with the amounts
required under each Lease, and (viii) as to any other matters
reasonably requested by Lender and reasonably related to the
Leases, the obligations secured hereby, the Property or this
Security Instrument.
(b) Mortgagor shall deliver to Lender, promptly upon
request, duly executed estoppel certificates from any one or more
lessees as required by Lender attesting to such facts regarding
the Lease as Lender may require, including, but not limited to
attestations that each Lease covered thereby is in full force and
effect with no defaults thereunder on the part of any party (or
if any defaults thereunder are alleged, setting forth the
specific nature of such defaults), that none of the Rents have
been paid more than one month in advance, except as security, and
that the lessee claims no defense or offset against the full and
timely performance of its obligations under the Lease.
(c) Upon any transfer or proposed transfer
contemplated by Section 17.1 hereof, at Lender's request,
Mortgagor, any Guarantors and any Indemnitors shall
provide an estoppel certificate to the Investor (defined in
Section 17.1) or any prospective Investor confirming the accuracy
of information provided by such person to Lender under or in
respect of this Security Instrument. Section 6.5 Flood
Insurance. After Lender's request, Mortgagor shall
deliver evidence satisfactory to Lender that no portion of the
Improvements is situated in a federally designated "special flood
hazard area" or, if it is, that Mortgagor has obtained insurance
meeting the requirements of Section 3.3(a)(vi).
Section 6.6 Replacement Documents. Upon receipt of an
affidavit of an officer of Lender as to the loss, theft,
destruction or mutilation of the Note or any Other Security
Document which is not of public record, and, in the case
of any such mutilation, upon surrender and cancellation of such
Note or Other Security Document, Mortgagor will issue, in lieu
thereof, a replacement Note or Other Security Document, dated the
date of such lost, stolen, destroyed or mutilated Note or Other
Security Document in the same principal amount thereof and
otherwise of like tenor; provided, however, Mortgagor shall not
be required to issue a replacement Note unless Lender provides
adequate assurance or an indemnity to Mortgagor.
Section 6.7 Amended Financing Statements. Mortgagor
will execute and deliver to the Lender, prior to or
contemporaneously with the effective date of any such
change, any financing statement or financing statement change
required by the Lender to establish or maintain the validity,
perfection and priority of the security interest granted
herein. At the request of the Lender, Mortgagor shall execute a
certificate in form satisfactory to the Lender listing the trade
names under which Mortgagor intends to operate the Property, and
representing and warranting that Mortgagor does business
under no other trade name with respect to the Property.
Article 7 - DUE ON SALE/ENCUMBRANCE
Section 7.1 No Sale/Encumbrance. Except as otherwise
provided in the Loan Agreement, Mortgagor agrees that Mortgagor
shall not, without the prior written consent of Lender, sell,
convey, mortgage, grant, bargain, encumber, pledge, assign, or
otherwise transfer the Property or any part thereof or permit the
Property or any part thereof to be sold, conveyed, mortgaged,
granted, bargained, encumbered, pledged, assigned, or otherwise
transferred.
Section 7.2 Sale/Encumbrance Defined. A sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer within the meaning of this
Article 7 shall be deemed to include, but not limited to (a) an
installment sales agreement wherein Mortgagor agrees to sell the
Property or any part thereof for a price to be paid in
installments; (b) an agreement by Mortgagor leasing
all or a substantial part of the Property for other than actual
occupancy by a space tenant thereunder or a sale, assignment or
other transfer of, or the grant of a security interest in,
Mortgagor's right, title and interest in and to any Leases or any
Rents; (c) if Mortgagor, any Guarantor, any Indemnitor, or any
general partner or managing member (or if no managing member, any
member) of Mortgagor, Guarantor or Indemnitor is a corporation,
(i) the voluntary or involuntary sale, conveyance or transfer of
such corporation's stock (or the stock of any corporation
directly or indirectly controlling such corporation by operation
of law or otherwise) or the creation or issuance of new stock by
which an aggregate of more than 50% of such corporation's stock
shall be vested in a party or parties who are not now owners of
more than 50% of such corporation's stock, or (ii) the pledge of
any such corporation's stock; (d) if Mortgagor, any Guarantor or
Indemnitor or any general partner or managing member (or if no
managing member, any member) of Mortgagor, any Guarantor or
Indemnitor is a limited or general partnership or joint venture,
the change, removal or resignation of a general partner or the
transfer or pledge of the partnership interest of any general
partner or any profits or proceeds relating to such partnership
interest; and (e) if Mortgagor, any Guarantor, any Indemnitor or
any general partner or member of Mortgagor, any Guarantor or any
Indemnitor is a limited liability company, the change, removal or
resignation of a managing member (or if no managing member, any
member) or the transfer or pledge of the membership interest of a
managing member (or if no managing member, any member) or any
profits or proceeds relating to such membership interest.
Notwithstanding the foregoing, the following transfers shall not
be deemed to be a sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment or transfer within the meaning of
this Article 7: (a) transfer by devise or descent or by operation
of law upon the death of a member, general partner or stockholder
of Mortgagor, any Guarantor or Indemnitor or any member or
general partner thereof, and (b) a sale, transfer or
hypothecation of a membership, partnership or shareholder
interest in Mortgagor, whichever the case may be, by a current
member, general partner or shareholder, as applicable, to an
immediate family member (i.e., parents, spouses, siblings,
children or grandchildren) of such member, general partner or
shareholder, or to a trust for the benefit of an immediate family
member of such member, general partner or shareholder. To the
extent that the definitions contained in this Section 7.2
are inconsistent with the Loan Agreement, then the provisions of
the Loan Agreement shall govern.
Section 7.3 Lender's Rights. Lender reserves the
right to condition the consent required hereunder upon a
modification of the terms hereof and on assumption
of the Note, this Security Instrument and the Other Security
Documents as so modified by the proposed transferee, payment of a
transfer fee and all of Lender's expenses incurred in connection
with such transfer, or such other conditions as Lender shall
determine in its sole discretion to be in the interest of Lender.
Lender shall not be required to demonstrate any actual impairment
of its security or any increased risk of default hereunder in
order to declare the Debt immediately due and payable upon
Mortgagor's sale, conveyance, mortgage, grant, bargain,
encumbrance, pledge, assignment, or transfer of the Property
without Lender's consent. This provision shall apply to every
sale, conveyance, mortgage, grant, bargain, encumbrance, pledge,
assignment, or transfer of the Property regardless of whether
voluntary or not, or whether or not Lender has consented to any
previous sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer of the Property.
Article 8 - PREPAYMENT
Section 8.1 Prepayment Only in Accordance with Note.
The Debt may be prepaid only in strict accordance with the
express terms and conditions of the Note and the Loan Agreement
including, without limitation, payment of the Exit Fee (as
defined in the Loan Agreement) if applicable.
Article 9 - DEFAULT
Section 9.1 Events of Default. The occurrence of any
one or more of the following events shall constitute an "Event of
Default":
(a) if any portion of the Debt is not paid on the date
when due (subject to any applicable cure period), or if the
entire Debt is not paid on or before the Maturity Date;
(b) if Mortgagor violates or does not comply with any
of the provisions of Sections 3.7 or 8.1;
(c) if any representation or warranty of Mortgagor,
Indemnitor (as defined in that certain Environmental Indemnity
Agreement dated as of the date hereof (the "Environmental
Indemnity") or any Guarantor, or any member, general partner,
principal or beneficial owner of any of the foregoing, made
herein or in the Environmental Indemnity or in any guaranty, or
in any certificate, report, financial statement or other
instrument or document furnished to Lender shall have been false
or misleading in any material respect when made;
(d) if any default occurs under any guaranty or
indemnity executed in connection herewith and such default
continues after the expiration of applicable grace periods, if
any;
(e) except for the specific defaults set forth in this
Section 9.1 any other default hereunder or under the Note, the
Loan Agreement or any of the Other Security Documents by
Montgomery or Mortgagor, which default is not cured within
fifteen (15) days after written notice from Lender to Montgomery
or Mortgagor, as applicable; provided that if such default cannot
reasonably be cured within such fifteen (15) day period and
Montgomery or Mortgagor shall have commenced to cure such default
within such fifteen (15) day period and thereafter diligently and
expeditiously proceeds to cure the same, such fifteen (15) day
period shall be extended for so long as it shall require
Montgomery or Mortgagor in the exercise of due diligence to cure
such default, it being agreed that no such extension shall be for
a period in excess of sixty (60) days;
(f) if Mortgagor, any Guarantor or Indemnitor shall
make an assignment for the benefit of creditors or if Mortgagor
shall generally not be paying its debts as they become due; or
(g) if the Policies are not kept in full force and
effect, or Mortgagor has not delivered evidence of the renewal of
the Policies ten (10) days prior to their expiration as provided
in Section 3.3(b); or
(h) If the Property is, in the judgment of Lender,
materially injured or destroyed, by fire or otherwise, and is not
otherwise required to be restored pursuant to the terms of
Section 4.2 hereof and Mortgagor does not bring the Outstanding
Facility Amount (as defined in the Loan Agreement) into
compliance with the loan-to-value and debt service coverage
requirements of Sections 2.9 and 3.1 of the Loan Agreement,
within thirty (30) days of such occurrence; or
(i) Any court of competent jurisdiction shall sign an
order (i) adjudicating Mortgagor or a Guarantor bankrupt, (ii)
appointing a trustee or receiver of the Property, or of a
substantial part of the Property of Mortgagor or a Guarantor or
(iii) approving a petition for, or effecting, an arrangement in
bankruptcy, or any other judicial modification or alteration of
the rights of Lender or of other creditors of Mortgagor or a
Guarantor; or if Mortgagor, or a Guarantor shall (A) file any
petition or (B) consent to any other action seeking any such
judicial order; or
(j) If Mortgagor or any Guarantor or their members,
board of directors or stockholders shall institute any
proceedings for the dissolution or liquidation of
Mortgagor, or such Guarantor or fail to secure and protect their
ability to do business in the state where the Property is
located; or
(k) Unless adequately covered by insurance in the sole
opinion of Lender, the entry of a final judgment for the payment
of money involving more than $100,000 against Mortgagor or a
Guarantor, and the failure of Mortgagor, or such Guarantor to
cause the same to be discharged or bonded off to the
satisfaction of Lender within sixty (60) days from the date the
order, decree or process under which or pursuant to which such
judgment was entered; or
(l) A material adverse change occurs in the financial
condition of Mortgagor or any Guarantor or the business, or
Changes in Management or Changes in Control (as defined in the
Loan Agreement) of Mortgagor or any Guarantor, which is
not corrected to the reasonable satisfaction of Lender; or
(m) Any litigation is initiated or threatened against
Mortgagor or a Guarantor which, in the sole opinion of Lender, is
likely to have a material adverse affect on the financial
condition or business of Mortgagor or such Guarantor; or
(n) Mortgagor shall fail to keep in full force and
effect any permit or approval issued by any governmental
authority necessary for the construction, occupancy
or use of the Property or with respect to the matters
contemplated hereby, and either Mortgagor fails to take all
appropriate action to reinstate such permit or approval within
five days after demand by Lender, or such permit or approval
cannot be reinstated; or
(o) An Event of Default (as defined in any Facility
Loan Document) occurs under such Facility Loan Document in
connection with any other loan from Lender to Montgomery or an
affiliate of Montgomery pursuant to the Loan Agreement.
Article 10 - RIGHTS AND REMEDIES
Section 10.1 Remedies.
(a) Upon the occurrence of any Event of Default,
Mortgagor agrees that Lender may take such action, without notice
or demand, as it deems advisable to protect and enforce the
rights of Lender against Mortgagor in and to the Property,
including, but not limited to the following actions, each of
which may be pursued concurrently or otherwise, at such time and
in such order as Lender may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and
remedies of Lender:
(i) declare the entire unpaid Debt to be
immediately due and payable;
(ii) institute proceedings, judicial or
otherwise, for the complete foreclosure of this Security
Instrument under any applicable provision of law in which
case the Property or any interest therein may be sold for cash or
upon credit in one or more parcels or in several interests or
portions and in any order or manner;
(iii) with or without entry, to the extent
permitted and pursuant to the procedures provided by applicable
law, institute proceedings for the partial foreclosure of this
Security Instrument for the portion of the Debt then due and
payable, subject to the continuing lien and security interest of
this Security Instrument for the balance of the Debt not then
due, unimpaired and without loss of priority;
(iv) sell for cash or upon credit the Property or
any part thereof and all estate, claim, demand, right, title and
interest of Mortgagor therein and rights of redemption thereof,
at one or more sales, as an entity or in parcels, at such time
and place, upon such terms and after such notice thereof as may
be required or permitted by law;
(v) subject to the provisions of Article 14,
institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement
contained herein, in the Note or in the Other Security
Documents;
(vi) subject to the provisions of Article 14,
recover judgment on the Note either before, during or after any
proceedings for the enforcement of this Security Instrument or
the Other Security Documents;
(vii) apply for the appointment of a receiver,
trustee, liquidator or conservator of the Property, without
notice and without regard for the adequacy of the security for
the Debt and without regard for the solvency of Mortgagor, any
Guarantor, Indemnitor or of any person, firm or other entity
liable for the payment of the Debt;
(viii) subject to any applicable law, the license
granted to Mortgagor under Section 1.2 shall automatically be
revoked and Lender may enter into or upon the Property, either
personally or by its agents, nominees or attorneys and dispossess
Mortgagor and its agents and servants therefrom, without
liability for trespass, damages or otherwise and exclude
Mortgagor and its agents or servants wholly therefrom, and
take possession of all books, records and accounts relating
thereto and Mortgagor agrees to surrender possession of the
Property and of such books, records and accounts to
Lender upon demand, and thereupon Lender may (A) use, operate,
manage, control, insure, maintain, repair, restore and otherwise
deal with all and every part of the Property and conduct the
business thereat; (B) complete any construction on the
Property in such manner and form as Lender deems advisable; (C)
make alterations, additions, renewals, replacements and
improvements to or on the Property; (D) exercise all rights and
powers of Mortgagor with respect to the Property, whether in the
name of Mortgagor or otherwise, including, without limitation,
the right to make, cancel, enforce or modify Leases, obtain and
evict tenants, and demand, sue for, collect and receive all
Rents of the Property and every part thereof; (E) require
Mortgagor to pay monthly in advance to Lender, or any receiver
appointed to collect the Rents, the fair and reasonable rental
value for the use and occupation of such part of the Property as
may be occupied by Mortgagor; (F) require Mortgagor to vacate and
surrender possession of the Property to Lender or to such
receiver and, in default thereof, Mortgagor may be evicted by
summary proceedings or otherwise; and (G) apply the receipts from
the Property to the payment of the Debt, in such order, priority
and proportions as Lender shall deem appropriate in its sole
discretion after deducting therefrom all expenses (including
reasonable attorneys' fees) incurred in connection with the
aforesaid operations and all amounts necessary to pay the Taxes,
Other Charges, insurance and other expenses in connection with
the Property, as well as just and reasonable compensation for the
services of Lender, its counsel, agents and employees;
(ix) exercise any and all rights and remedies
granted to a secured party upon default under the Uniform
Commercial Code, including, without limiting the generality of
the foregoing: (A) the right to take possession of the Collateral
or any part thereof, and to take such other measures as Lender
may deem necessary for the care, protection and preservation of
the Collateral, and (B) request Mortgagor at its expense
to assemble the Collateral and make it available to Lender at a
convenient place acceptable to Lender. Any notice of sale,
disposition or other intended action by Lender with respect to
the Collateral sent to Mortgagor in accordance with the
provisions hereof at least five (5) days prior to such action,
shall constitute commercially reasonable notice to Mortgagor;
(ix) apply any sums then deposited in the Escrow
Fund and any other sums held in escrow or otherwise by Lender in
accordance with the terms of this Security Instrument or any
Other Security Document to the payment of the following
items in any order in its sole and absolute discretion:
(A) Taxes and Other Charges;
(B) Insurance Premiums;
(C) Interest on the unpaid principal
balance of the Note;
(D) amortization of the unpaid principal balance
of the Note; and all other sums payable
pursuant to the Note, this Security
Instrument and the Other Security Documents,
including, without limitation, advances made
by Lender pursuant to the terms of this
Security Instrument;
(x) surrender the Policies maintained
pursuant to Article 3 hereof, collect the unearned Insurance
Premiums and apply such sums as a credit on the Debt in
such priority and proportion as Lender in its discretion shall
deem proper, and in connection therewith, Mortgagor hereby
appoints Lender as agent and attorney-in-fact (which is coupled
with an interest and is therefore irrevocable) for Mortgagor to
collect such Insurance Premiums;
(xi) apply the undisbursed balance of any Net
Proceeds or any Net Proceeds Deficiency deposit, together with
interest thereon, to the payment of the Debt in such order,
priority and proportions as Lender shall deem to be appropriate
in its discretion;
(xii) prohibit Mortgagor and anyone claiming on
behalf of or through Mortgagor from making use of or withdrawing
any sums from any lock box account;
(xiii) pursue such other remedies as Lender may
have under applicable law.
(b) In the event of a sale, by foreclosure or
otherwise, of less than all of the Property, this Security
Instrument shall continue as a lien and security interest on the
remaining portion of the Property unimpaired and without loss of
priority. Notwithstanding the provisions of this Section 10.1 to
the contrary, if any Event of Default as described in Subsection
9.1 (i) shall occur, the entire unpaid Debt shall be
automatically due and payable, without any further notice, demand
or other action by Lender.
(c) Lender may adjourn from time to time any sale by
it to be made under or by virtue of this Security Instrument by
announcement at the time and place appointed for such sale or for
such adjourned sale or sales; and, except as otherwise
provided by any applicable provision of law, Lender, without
further notice or publication, may make such sale at the time and
place to which the same shall be so adjourned.
(d) Upon any sale made under or by virtue of this
Section 10.1, whether made under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale,
Lender may bid for and acquire the Property or any part thereof
and in lieu of paying cash therefor may make settlement for the
purchase price by crediting upon the Debt the net sales price
after deducting therefrom the expenses of the sale and costs of
the action and any other sums which Lender is authorized to
deduct under this Security Instrument.
Section 10.2 Application of Proceeds. The purchase
money, proceeds and avails of any disposition of the Property, or
any part thereof, or any other sums collected by Lender pursuant
to the Note, this Security Instrument or the Other Security
Documents, may be applied by Lender to the payment of the Debt in
such priority and proportions as Lender in its discretion shall
deem proper.
Section 10.3 Right to Cure Defaults. Upon the
occurrence of any Event of Default, Lender may, but without any
obligation to do so and without notice to or demand on Mortgagor
and without releasing Mortgagor from any obligation hereunder,
cure the same in such manner and to such extent as Lender may
deem necessary to protect the security hereof. Lender is
authorized to enter upon the Property for such purposes, or
appear in, defend, or bring any action or proceeding to protect
its interest in the Property or to foreclose this Security
Instrument or collect the Debt, and the cost and expense thereof
(including reasonable attorneys' fees to the extent permitted by
law), with interest as provided in this Section 10.3, shall
constitute a portion of the Debt and shall be due and payable to
Lender upon demand. All such costs and expenses incurred by
Lender in remedying such Event of Default or in appearing in,
defending, or bringing any such action or proceeding shall bear
interest at the Default Rate, for the period after notice from
Lender that such cost or expense was incurred to the date of
payment to Lender. All such costs and expenses incurred by
Lender together with interest thereon calculated at the Default
Rate shall be deemed to constitute a portion of the Debt and be
secured by this Security Instrument and the Other Security
Documents and shall be immediately due and payable upon demand by
Lender therefor.
Section 10.4 Actions and Proceedings. After the
occurrence and during the continuance of an Event of Default,
Lender has the right to appear in and defend any action or
proceeding brought with respect to the Property and to bring any
action or proceeding, in the name and on behalf of Mortgagor,
which Lender, in its discretion, decides should be brought to
protect its interest in the Property.
Section 10.5 Recovery of Sums Required To Be Paid.
Lender shall have the right from time to time to take action to
recover any sum or sums which constitute a part of the Debt as
the same become due, without regard to whether or not the balance
of the Debt shall be due, and without prejudice to the right of
Lender thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Mortgagor existing at the
time such earlier action was commenced.
Section 10.6 Examination of Books and Records.
Lender, its agents, accountants and attorneys shall have the
right upon prior written notice to examine the records, books,
management and other papers of Mortgagor and any Guarantor or
Indemnitor which reflect upon their financial condition, at the
Property or at any office regularly maintained by Mortgagor or
any Guarantor or Indemnitor where the books and records are
located. Lender and its agents shall have the right upon notice
to make copies and extracts from the foregoing records and other
papers. In addition, Lender, its agents, accountants and
attorneys shall have the right to examine and audit the books
and records of Mortgagor or of any Guarantor or Indemnitor
pertaining to the income, expenses and operation of the Property
during reasonable business hours at any office of Mortgagor or
any Guarantor or Indemnitor where the books and records are
located.
Section 10.7 Other Rights, Etc.
(a) The failure of Lender to insist upon strict
performance of any term hereof shall not be deemed to be a waiver
of any term of this Security Instrument. Mortgagor shall not be
relieved of Mortgagor's obligations hereunder by reason of (i)
the failure of Lender to comply with any request of Mortgagor,
any Guarantor or any Indemnitor to take any action to foreclose
this Security Instrument or otherwise enforce any of the
provisions hereof or of the Note or the Other Security
Documents, (ii) the release, regardless of consideration, of the
whole or any part of the Property, or of any person liable for
the Debt or any portion thereof, or (iii) any agreement or
stipulation by Lender extending the time of payment or otherwise
modifying or supplementing the terms of the Note, this Security
Instrument or the Other Security Documents.
(b) It is agreed that the risk of loss or damage to
the Property is on Mortgagor, and Lender shall have no liability
whatsoever for decline in value of the Property, for failure to
maintain the Policies, or for failure to determine whether
insurance in force is adequate as to the amount of risks insured.
Possession by Lender shall not be deemed an election of judicial
relief, if any such possession is requested or obtained, with
respect to any Property or collateral not in Lender's possession.
(c) Lender may resort for the payment of the Debt to
any other security held by Lender in such order and manner as
Lender, in its discretion, may elect. Lender may take action to
recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Lender
thereafter to foreclose this Security Instrument. The rights of
Lender under this Security Instrument shall be separate, distinct
and cumulative and none shall be given effect to the exclusion of
the others. No act of Lender shall be construed as an election
to proceed under any one provision herein to the exclusion of any
other provision. Lender shall not be limited exclusively to the
rights and remedies herein stated but shall be entitled to every
right and remedy now or hereafter afforded at law or in equity.
Section 10.8 Right to Release Any Portion of the
Property. Lender may release any portion of the Property for
such consideration as Lender may require without, as to the
remainder of the Property, in any way impairing or affecting the
lien or priority of this Security Instrument, or improving the
position of any subordinate lienholder with respect thereto,
except to the extent that the obligations hereunder shall
have been reduced by the actual monetary consideration, if any,
received by Lender for such release, and may accept by
assignment, pledge or otherwise any other property in place
thereof as Lender may require without being accountable for
so doing to any other lienholder. This Security Instrument shall
continue as a lien and security interest in the remaining portion
of the Property.
Section 10.9 Violation of Laws. If the Property is
not in compliance with Applicable Laws, Lender may impose
additional requirements upon Mortgagor in connection herewith
including, without limitation, monetary reserves or financial
equivalents.
Section 10.10 Right of Entry. Lender and its agents
shall have the right upon prior written notice to enter and
inspect the Property at all reasonable times upon not less than
five (5) Business Days' notice (except in the case of emergencies
when no notice shall be required) to Mortgagor.
Article 11 - ENVIRONMENTAL HAZARDS
Section 11.1 Environmental Representations and
Warranties. Mortgagor represents and warrants, based upon that
certain Phase I Environmental Site Assessment of the Property and
that certain Property Condition Survey of the Property, each
dated March 1, 1998, prepared by EMG and previously delivered to
Lender (each and collectively, the "Environmental Report") and
information that Mortgagor knows, that: (a) there are no
Hazardous Substances (defined below) or underground storage tanks
in, on, or under the Property, except those that are both (i) in
compliance with Environmental Laws (defined below) and with
permits issued pursuant thereto, if any, and (ii) fully disclosed
to Lender in writing pursuant to any Environmental Report; (b)
there are no past or present Releases (defined below) of
Hazardous Substances in violation of any Environmental Law or
which would require Remediation (defined below) by a Governmental
Authority in, on, under or from the Property except as
described in the Environmental Report; (c) there is no past or
present non-compliance with Environmental Laws, or with permits
issued pursuant thereto, in connection with the Property except
as described in the Environmental Report; (d) Mortgagor does not
know of, and has not received, any written or oral notice or
other communication from any person or entity (including, but not
limited to a governmental entity) relating to Hazardous
Substances or Remediation thereof, of possible liability of any
person or entity pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any
actual administrative or judicial proceedings in connection with
any of the foregoing; and (e) Mortgagor has truthfully and fully
provided to Lender, in writing, any and all information relating
to environmental conditions in, on, under or from the Property
that is known to Mortgagor and that is contained in Mortgagor's
files and records, including, but not limited to any reports
relating to Hazardous Substances in, on, under or from the
Property and/or to the environmental condition of the
Property. "Environmental Law" means any present, and for the
purposes of Sections 11.2, 11.3 and 12.4 only, future, federal,
state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law, relating to
protection of human health or the environment, relating to
Hazardous Substances, relating to liability for or costs of
Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened
danger to human health or the environment. "Environmental Law"
includes, but is not limited to, the following statutes, as
amended, any successor thereto, and any regulations promulgated
pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability
Act; the Emergency Planning and Community Right-to-Know Act; the
Hazardous Substances Transportation Act; the Resource
Conservation and Recovery Act (including, but not limited to
Subtitle I relating to underground storage tanks); the
Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act;
the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and
Rodenticide Act; the Endangered Species Act; the National
Environmental Policy Act; and the River and Harbors Appropriation
Act. "Environmental Law" also includes, but is not limited to,
any present, and for the purposes of Sections 11.2, 11.3 and 12.4
only, future, federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as
common law: conditioning transfer of property upon a negative
declaration or other approval of a governmental authority of the
environmental condition of the property; requiring notification
or disclosure of Releases of Hazardous Substances or other
environmental condition of the Property to any governmental
authority or other person or entity, whether or not in connection
with transfer of title to or interest in property. "Hazardous
Substances" include but are not limited to any and all
substances (whether solid, liquid or gas) (i) defined, listed, or
otherwise classified as pollutants, hazardous wastes, hazardous
substances, hazardous materials, extremely hazardous wastes, or
words of similar meaning or regulatory effect under any present,
or for the purposes of Sections 11.2. 11.3 and 12.4 only, future,
Environmental Laws or (ii) that may have a negative impact on
human health or the environment, including, but not limited to
petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables and explosives.
"Release" of any Hazardous Substance includes, but is not limited
to any release, deposit, discharge, emission, leaking, spilling,
seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous
Substances. "Remediation" includes, but is not limited to any
response, remedial removal, or corrective action, any activity to
cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, any actions to prevent, cure
or mitigate any Release of any Hazardous Substance, any action to
comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study,
monitoring, assessment, audit, sampling and testing, laboratory
or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in this Article 11.
Section 11.2 Environmental Covenants. Mortgagor
covenants and agrees that so long as the Mortgagor owns, manages,
is in possession of, or otherwise controls the operation of the
Property: (a) all uses and operations on or of the Property,
whether by Mortgagor or any other person or entity, shall be in
compliance with all Environmental Laws and permits issued
pursuant thereto; (b) there shall be no Releases of Hazardous
Substances in, on, under or from the Property; (c) there shall be
no Hazardous Substances in, on, or under the Property, except
those that are in compliance with all Environmental Laws and with
permits issued pursuant thereto, if and to the extent required;
(d) Mortgagor shall keep the Property free and clear of all liens
and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Mortgagor or any other
person or entity (the "Environmental Liens"); (e) Mortgagor
shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to Section 11.3 below,
including, but not limited to providing all relevant information
and making knowledgeable persons available for interviews; (f)
Mortgagor shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of
environmental conditions in connection with the Property,
pursuant to any reasonable written request of Lender after Lender
has reason to believe this Section 11.2 has been violated
(including, but not limited to sampling, testing and
analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas), and share
with Lender the reports and other results thereof, and
Lender and other Indemnified Parties (defined in Section 12.1)
shall be entitled to rely on such reports and other results
thereof; (g) Mortgagor shall, at its sole cost and expense,
comply with all reasonable written requests of Lender to
(i) reasonably effectuate Remediation of any condition
(including, but not limited to a Release of a Hazardous
Substance) in, on, under or from the Property, (ii) comply with
any Environmental Law, (iii) comply with any directive from any
governmental authority, and (iv) take any other reasonable action
necessary or appropriate for protection of human health or the
environment; (h) Mortgagor shall not do or allow any tenant or
other user of the Property to do any act that materially
increases the dangers to human health or the environment, poses
an unreasonable risk of harm to any person or entity (whether on
or off the Property), impairs or may impair the value of the
Property, is contrary to any requirement of any insurer,
constitutes a public or private nuisance, constitutes waste, or
violates any covenant, condition, agreement or easement
applicable to the Property; and (i) Mortgagor shall immediately
notify Lender in writing promptly after it has become aware of
(A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property
which is required to be reported to a governmental authority
under any Environmental Law, (B) any actual Environmental
Lien affecting the Property, (C) any required Remediation of
environmental conditions relating to the Property, and (D) any
written or oral notice or other communication of which Mortgagor
becomes aware from any source whatsoever (including, but not
limited to a governmental entity) relating in any way to
Hazardous Substances or Remediation thereof, possible liability
of any person or entity pursuant to any Environmental Law,
other environmental conditions in connection with the Property,
or any actual or threatened administrative or judicial
proceedings in connection with anything referred to in this
Article 11.
Section 11.3 Lender's Rights. Lender, its
environmental consultant, and any other person or entity
designated by Lender, including, but not limited to any
receiver and any representative of a governmental entity, shall
have the right, but not the obligation, at intervals of not less
than one year, or more frequently if the Lender reasonably
believes that a Hazardous Substance or other environmental
condition violates or threatens to violate any Environmental Law,
after notice to Mortgagor, to enter upon the Property at all
reasonable times to assess any and all aspects of the
environmental condition of the Property and its use, including,
but not limited to conducting any environmental assessment or
audit of the Property or portions thereof to confirm Mortgagor's
compliance with the provisions of this Article 11, and Mortgagor
shall cooperate in all reasonable ways with Lender in connection
with any such audit. Such audit shall be performed in a manner
so as to minimize interference with the conduct of business at
the Property. If such audit discloses that a violation of or a
liability under any Environmental Law exists or if such audit was
required or prescribed by law, regulation or governmental or
quasi-governmental authority, Mortgagor shall pay all costs and
expenses incurred in connection with such audit; otherwise, the
costs and expenses of such audit shall, notwithstanding anything
to the contrary set forth in this Section, be paid by Lender.
Article 12 - INDEMNIFICATION
Section 12.1 General Indemnification. Mortgagor
shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless the Indemnified Parties from and
against any and all claims, suits, liabilities (including,
without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages, losses, costs, expenses,
diminutions in value, fines, penalties, charges, fees, expenses,
judgments, awards, amounts paid in settlement, or punitive
damages, of whatever kind or nature (including, but not limited
to reasonable attorneys' fees and other costs of defense) (the
"Losses") imposed upon or incurred by or asserted against any
Indemnified Parties and directly or indirectly arising out of or
in any way relating to any one or more of the following (but
excluding Losses arising out of Lender's gross negligence or
willful misconduct): (a) ownership of this Security Instrument,
the Property or any interest therein or receipt of any Rents; (b)
any amendment to, or restructuring of, the Debt, and the Note,
the Loan Agreement, this Security Instrument, or any Other
Security Documents; (c) any and all lawful action that may be
taken by Lender in connection with the enforcement of the
provisions of this Security Instrument, the Loan Agreement, the
Note or any of the Other Security Documents, whether or not suit
is filed in connection with same, or in connection with
Mortgagor, any Guarantor or Indemnitor and/or any member,
partner, joint venturer or shareholder thereof becoming a party
to a voluntary or involuntary federal or state bankruptcy,
insolvency or similar proceeding; (d) any accident, injury to
or death of persons or loss of or damage to property occurring
in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (e) any use, nonuse or condition in, on
or about the Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (f) any failure on the part of Mortgagor to
perform or be in compliance with any of the terms of this
Security Instrument or the Other Security Documents; (g)
performance of any labor or services or the furnishing of
any materials or other property in respect of the Property or any
part thereof; (h) the failure of any person to file timely with
the Internal Revenue Service an accurate Form 1099-B, Statement
for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange Transactions, which may be required in connection with
the Security Instrument, or to supply a copy thereof in a timely
fashion to the recipient of the proceeds of the transaction in
connection with which this Security Instrument is made; (i)
any failure of the Property to be in compliance with any
Applicable Laws; (j) the enforcement by any Indemnified Party of
the provisions of this Article 12; (k) any and all claims and
demands whatsoever which may be asserted against Lender by reason
of any alleged obligations or undertakings on its part to perform
or discharge any of the terms, covenants, or agreements contained
in any Lease; (l) the payment of any commission, charge or
brokerage fee to anyone which may be payable in connection with
the funding of the loan evidenced by the Note and secured by this
Security Instrument; or (m) any misrepresentation made by
Mortgagor in this Security Instrument, the Other Security
Documents, or any documents or information provided pursuant to
Section 17.1 hereof. Any amounts payable to Lender by reason of
the application of this Section 12.1 shall become immediately due
and payable and shall bear interest at the Default Rate from
the date loss or damage is sustained by Lender until paid. For
purposes of this Article 12, the term "Indemnified Parties" means
Lender and any person or entity who is or will have been involved
in the origination of this loan, any person or entity who is or
will have been involved in the servicing of this loan, any person
or entity in whose name the encumbrance created by this Security
Instrument is or will have been recorded, persons and entities
who may hold or acquire or will have held a full or partial
interest in this loan (including, but not limited to Investors or
prospective Investors in the Securities, as well as custodians,
trustees and other fiduciaries who hold or have held a full or
partial interest in this loan for the benefit of third parties)
as well as the respective directors, officers, shareholders,
members, partners, employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assigns of any and all of the
foregoing (including, but not limited to any other person or
entity who holds or acquires or will have held a participation or
other full or partial interest in this loan or the Property,
whether during the term of this loan or as a part of or following
a foreclosure of this loan and including, but not limited to any
successors by merger, consolidation or acquisition of all or a
substantial portion of Lender's assets and business).
Section 12.2 Mortgage and/or Intangible Tax.
Mortgagor shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or
incurred by or asserted against any Indemnified Parties and
directly or indirectly arising out of or in any way
relating to any tax on the making and/or recording of this
Security Instrument, the Note or any of the Other Security
Documents or in connection with a transfer of all or a
portion of the Property pursuant to a foreclosure, deed in lieu
of foreclosure or otherwise.
Section 12.3 ERISA Indemnification. Mortgagor shall,
at its sole cost and expense, protect, defend, indemnify, release
and hold harmless the Indemnified Parties from and against any
and all Losses (including, without limitation, reasonable
attorneys' fees and costs incurred in the investigation, defense,
and settlement of Losses incurred in correcting any prohibited
transaction or in the sale of a prohibited loan, and
in obtaining any individual prohibited transaction exemption
under ERISA that may be required, in Lender's sole discretion)
that Lender may incur, directly or indirectly, as a
result of a default under Section 5.9.
Section 12.4 Duty to Defend; Attorneys' Fees and Other
Fees and Expenses. Upon written request by any Indemnified
Party, Mortgagor shall defend such Indemnified Party (if
requested by any Indemnified Party, in the name of the
Indemnified Party) by attorneys and other professionals approved
by the Indemnified Parties. Notwithstanding the foregoing, any
Indemnified Parties may, in their sole and absolute discretion,
engage their own attorneys and other professionals to defend or
assist them, and, at the option of Indemnified Parties, their
attorneys shall control the resolution of claim or proceeding.
Upon demand, Mortgagor shall pay or, in the sole and absolute
discretion of the Indemnified Parties, reimburse, the Indemnified
Parties for the payment of reasonable fees and disbursements of
attorneys, engineers, environmental consultants, laboratories and
other professionals in connection therewith.
Article 13 - WAIVERS
Section 13.1 Waiver of Counterclaim. Mortgagor hereby
waives the right to assert a counterclaim, other than a mandatory
or compulsory counterclaim, in any action or proceeding brought
against it by Lender arising out of or in any way connected
with this Security Instrument, the Note, any of the Other
Security Documents, or the Obligations.
Section 13.2 Marshalling and Other Matters. Mortgagor
hereby waives, to the extent permitted by law, the benefit of all
appraisement, valuation, stay, extension, reinstatement and
redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Property or
any part thereof or any interest therein. Further, Mortgagor
hereby expressly waives any and all rights of redemption from
sale under any order or decree of foreclosure of this Security
Instrument on behalf of Mortgagor, and on behalf of each and
every person acquiring any interest in or title to the Property
subsequent to the date of this Security Instrument and on behalf
of all persons to the extent permitted by Applicable Law.
Section 13.3 Waiver of Notice. To the extent
permitted by Applicable Law, Mortgagor shall not be entitled to
any notices of any nature whatsoever from Lender except with
respect to matters for which this Security Instrument
specifically and expressly provides for the giving of notice by
Lender to Mortgagor and except with respect to matters for which
Lender is required by Applicable Law to give notice, and
Mortgagor hereby expressly waives the right to receive any notice
from Lender with respect to any matter for which this Security
Instrument does not specifically and expressly provide for the
giving of notice by Lender to Mortgagor.
Section 13.4 Sole Discretion of Lender. Wherever
pursuant to this Security Instrument (a) Lender exercises any
right given to it to approve or disapprove, (b) any arrangement
or term is to be satisfactory to Lender, or (c) any other
decision or determination is to be made by Lender, the decision
of Lender to approve or disapprove all decisions that
arrangements or terms are satisfactory or not satisfactory, and
all other decisions and determinations made by Lender, shall be
in the sole and absolute discretion of Lender and shall be final
and conclusive, except as may be otherwise expressly and
specifically provided herein.
Section 13.5 Survival. Except as hereinafter
specifically set forth below, the representations and warranties,
covenants, and other obligations arising under Article 11 shall
in no way be impaired by: any satisfaction or other termination
of this Security Instrument, any assignment or other transfer of
all or any portion of this Security Instrument or Lender's
interest in the Property (but, in such case, shall benefit both
Indemnified Parties and any assignee or transferee), any exercise
of Lender's rights and remedies pursuant hereto including, but
not limited to foreclosure or acceptance of a deed in lieu of
foreclosure, any exercise of any rights and remedies pursuant to
the Note, the Loan Agreement, or any of the Other Security
Documents, any transfer of all or any portion of the Property
(whether by Mortgagor or by Lender, following foreclosure or
acceptance of a deed in lieu of foreclosure or at any other
time), any amendment to this Security Instrument, the Note, the
Loan Agreement or the Other Security Documents, and any act or
omission that might otherwise be construed as a release or
discharge of Mortgagor from the obligations pursuant hereto. All
obligations and liabilities of Mortgagor under Article 11 shall
cease and terminate on the first (1st) anniversary of the
date of payment to Lender in cash of the entire Debt, provided
that contemporaneously with or subsequent to such payment,
Mortgagor at its sole cost and expense, delivers to
Lender an environmental audit of the Property in form and
substance, and prepared by a qualified environmental consultant,
reasonably satisfactory in all respects to Lender and
indicating the Property is in full compliance with all applicable
Environmental Laws.
Section 13.6 Waiver of Trial By Jury. Mortgagor HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER
IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY
TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE
LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY
INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR
OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR
AGENTS IN CONNECTION THEREWITH.
Article 14 - Intentionally Omitted
Article 15 - NOTICES
Section 15.1 Notices. All notices or other written
communications hereunder shall be deemed to have been given (a)
upon receipt, if personally delivered (unless subject to clause
(b)) or is mailed by registered or certified mail, (b) at noon on
the date after dispatch is sent by overnight courier or (c) upon
the completion of transmission (which is confirmed telephonically
by the receiving party) if transmitted by telecopy or other means
of facsimile which provides immediate or near immediate
transmission to compatible equipment in the possession of the
recipient, and in any case to the parties at the following
addresses or telecopy numbers (or at such other address or
telecopy number for a party as will be specified by like notice):
If to Mortgagor:
Marlton Plaza Associates, L.P.
c/o Marlton Plaza LLC
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, Pennsylvania 19426
Attention: Chief Financial Officer
Telecopy No: 610/834-8110
With a copy to:
Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, 10th Floor
Philadelphia, Pennsylvania 19103-3291
Attention: Stanley S. Cohen, Esquire
Telecopy No: 215/299-2150
If to Lender: GMAC Commercial Mortgage Corporation
650 Dresher Road
Horsham, Pennsylvania 19044-8015
Attention: Loan Servicing Department
Telecopy No: 215/328-1378
Article 16 - APPLICABLE LAW
Section 16.1 Choice of Law. THE CREATION, PERFECTION,
PRIORITY AND ENFORCEMENT OF THE LIEN OF THIS SECURITY
INSTRUMENT SHALL BE GOVERNED, CONSTRUED, AND APPLIED IN
ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE PROPERTY IS
LOCATED AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. SUBJECT TO THE FOREGOING AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, IN ALL OTHER RESPECTS THIS
SECURITY INSTRUMENT SHALL BE GOVERNED BY THE SUBSTANTIVE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 16.2 Usury Laws. This Security Instrument and
the Note are subject to the express condition that at no time
shall Mortgagor be obligated or required to pay interest on the
Debt at a rate which could subject the holder of the Note to
either civil or criminal liability as a result of being in excess
of the maximum interest rate which Mortgagor is permitted by
applicable law to contract or agree to pay. If by the terms of
this Security Instrument or the Note, Mortgagor is at any time
required or obligated to pay interest on the Debt at a rate in
excess of such maximum rate, the rate of interest under the
Security Instrument and the Note shall be deemed to be
immediately reduced to such maximum rate and the interest payable
shall be computed at such maximum rate and all prior interest
payments in excess of such maximum rate shall be applied and
shall be deemed to have been payments in reduction of the
principal balance of the Note. All sums paid or agreed to be
paid to Lender for the use, forbearance, or detention of the
Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full
stated term of the Note until payment in full so that the
rate or amount of interest on account of the Debt does not exceed
the maximum lawful rate of interest from time to time in effect
and applicable to the Debt for so long as the Debt is
outstanding.
Section 16.3 Provisions Subject to Applicable Law.
All rights, powers and remedies provided in this Security
Instrument may be exercised only to the extent that
the exercise thereof does not violate any applicable provisions
of law and are intended to be limited to the extent necessary so
that they will not render this Security Instrument invalid,
unenforceable or not entitled to be recorded, registered
or filed under the provisions of any Applicable Law.
Section 16.4 Inapplicable Provision. If any term of
this Security Instrument or any application thereof shall be
invalid or unenforceable, the remainder of this Security
Instrument and any other application of the term shall not be
affected thereby.
Article 17 - SECONDARY MARKET
Section 17.1 Dissemination of Information. If Lender
determines at any time to sell, transfer or assign the Note, this
Security Instrument and the Other Security Documents, and any or
all servicing rights with respect thereto, or to grant
participations therein (the "Participations") or issue mortgage
pass-through certificates or other securities (such sale and/or
issuance, the "Securitization") evidencing a beneficial interest
in a rated or unrated public offering or private placement (the
"Securities"), Lender may forward to each purchaser, transferee,
assignee, servicer, participant, investor, or their
respective successors in such Participations and/or Securities
(collectively, the "Investor") or any Rating Agency rating such
Securities and each prospective Investor, all documents
and information which Lender now has or may hereafter acquire
relating to the Debt and to Mortgagor, any Guarantor, any
Indemnitors and the Property (including, without limitation, all
financial statements), which shall have been furnished by
Mortgagor, any Guarantor or any Indemnitors, as Lender determines
necessary or desirable. Mortgagor, any Guarantor and any
Indemnitor agree to cooperate with Lender in connection with
any transfer made or any Securities created pursuant to this
Section, including, without limitation, the delivery of an
estoppel certificate required in accordance with Subsection
6.4(c) hereof and such other documents as may be reasonably
requested by Lender and, upon Lender's reasonable request,
meeting with any Rating Agency for due diligence
purposes. Mortgagor shall also furnish and Mortgagor, any
Guarantor and any Indemnitor consent to Lender furnishing to such
Investors or such prospective Investors or any Rating Agency any
and all information concerning the Property, the Leases, the
financial condition of Mortgagor, any Guarantor and any
Indemnitor as may be requested by Lender, any Investor or any
prospective Investor or Rating Agency in connection with any
sale, transfer or Participation. Any dissemination of
information pursuant to this Section shall comply with the
requirements of the Securities and Exchange Commission and shall
not impose a material financial burden on Borrower.
Article 18 - COSTS
Section 18.1 Performance at Mortgagor's Expense.
Mortgagor acknowledges and confirms that Lender shall impose
certain administrative processing and/or commitment fees in
connection with (a) the extension, renewal, modification,
amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining certain
consents, waivers and approvals with respect to the
Property, or (d) the review of any Lease or proposed Lease or the
preparation or review of any subordination, non-disturbance
agreement (the occurrence of any of the above shall be called an
"Event"). Mortgagor further acknowledges and confirms that it
shall be responsible for the payment of all costs of reappraisal
of the Property or any part thereof, whether required by law,
regulation, Lender or any governmental or quasi-governmental
authority, subject to the Loan Agreement. Mortgagor hereby
acknowledges and agrees to pay, immediately, with or without
demand, all such fees (as the same may be increased or decreased
from time to time), and any additional fees of a similar type or
nature which may be imposed by Lender from time to time, upon the
occurrence of any Event or otherwise. Wherever it is provided
for herein that Mortgagor pay any costs and expenses, such costs
and expenses shall include, but not be limited to, all legal fees
and disbursements of Lender (whether of retained firms, the
reimbursement for the expenses of in-house staff or otherwise).
Section 18.2 Attorneys' Fees for Enforcement. (a)
Mortgagor shall pay all reasonable legal fees incurred by Lender
in connection with (i) the preparation of the Note, the Loan
Agreement, this Security Instrument and the Other Security
Documents; and (ii) the items set forth in Section 18.1 above,
and (b) Mortgagor shall pay to Lender on demand any and all
expenses, including reasonable legal expenses and attorneys'
fees, incurred or paid by Lender in protecting its interest in
the Property or the Collateral or in collecting any amount
payable hereunder or in enforcing its rights hereunder with
respect to the Property or the Collateral, whether or not any
legal proceeding is commenced hereunder or thereunder and whether
or not any default or Event of Default shall have occurred and is
continuing, together with interest thereon at the Default Rate
from the date paid or incurred by Lender until such expenses are
paid by Mortgagor.
Article 19 - DEFINITIONS
Section 19.1 General Definitions. Unless the context
clearly indicates a contrary intent or unless otherwise
specifically provided herein, words used in this Security
Instrument may be used interchangeably in singular or
plural form and the word "Mortgagor" shall mean "each Mortgagor
and any subsequent owner or owners of the Property or any part
thereof or any interest therein," the word "Lender" shall mean
"Lender and any subsequent holder of the Note," the word "Note"
shall mean "the Note and any other evidence of indebtedness
secured by this Security Instrument," the word "person" shall
include an individual, corporation, limited liability company,
partnership, trust, unincorporated association, government,
governmental authority, and any other entity, the word "Property"
shall include any portion of the Property and any interest
therein, and the phrases "attorneys' fees" and "counsel fees"
shall include any and all attorneys', paralegal and law clerk
fees and disbursements, including, but not limited to
fees and disbursements at the pre-trial, trial and appellate
levels incurred or paid by Lender in protecting its interest in
the Property, the Leases and the Rents and enforcing
its rights under this Security Instrument.
Section 19.2 Headings, Etc. The headings and captions
of various Sections of this Security Instrument are for
convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the
provisions hereof.
Article 20 - MISCELLANEOUS PROVISIONS
Section 20.1 No Oral Change. This Security
Instrument, and any provisions hereof, may not be modified,
amended, waived, extended, changed, discharged or terminated
orally or by any act or failure to act on the part of Mortgagor
or Lender but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment, waiver,
extension, change, discharge or termination is sought.
Section 20.2 Liability. If Mortgagor consists of more
than one person, the obligations and liabilities of each such
person hereunder shall be joint and several. This Security
Instrument shall be binding upon and inure to the benefit of
Mortgagor and Lender and their respective successors and assigns
forever.
Section 20.3 Duplicate Originals; Counterparts. This
Security Instrument may be executed in any number of duplicate
originals and each duplicate original shall be deemed to be an
original. This Security Instrument may be executed in several
counterparts, each of which counterparts shall be deemed an
original instrument and all of which together shall constitute a
single Security Instrument. The failure of any party
hereto to execute this Security Instrument, or any counterpart
hereof, shall not relieve the other signatories from their
obligations hereunder.
Section 20.4 Number and Gender. Whenever the context
may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and
vice versa.
Section 20.5 Subrogation. If any or all of the
proceeds of the Note have been used to extinguish, extend or
renew any indebtedness heretofore existing against the
Property, then, to the extent of the funds so used, Lender shall
be subrogated to all of the rights, claims, liens, titles, and
interests existing against the Property heretofore held
by, or in favor of, the holder of such indebtedness and such
former rights, claims, liens, titles, and interests, if any, are
not waived but rather are continued in full force and
effect in favor of Lender and are merged with the lien and
security interest created herein as cumulative security for the
repayment of the Debt, the performance and discharge of
Mortgagor's obligations hereunder, under the Note, the Loan
Agreement and the Other Security Documents and the performance
and discharge of the Other Obligations.
Section 20.6 Entire Agreement. The Note, the Loan
Agreement, this Security Instrument and the Other Security
Documents constitute the entire understanding and agreement
between Mortgagor and Lender with respect to the
transactions arising in connection with the Debt and supersede
all prior written or oral understandings and agreements between
Mortgagor and Lender with respect thereto. Mortgagor hereby
acknowledges that, except as incorporated in writing in the Note,
the Loan Agreement, this Security Instrument and the Other
Security Documents, there are not, and were not, and no persons
are or were authorized by Lender to make, any representations,
understandings, stipulations, agreements or promises, oral or
written, with respect to the transaction which is the subject of
the Note, the Loan Agreement, this Security Instrument and the
Other Security Documents.
Section 20.7 Acknowledgment of Receipt. Borrower
hereby acknowledges receipt, without charge, of a true copy of
this Security Instrument.
Article 21 - PERFORMANCE BY MONTGOMERY
Lender acknowledges and agrees that Mortgagor's
covenants, agreements and obligations under or pursuant to
Sections 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.10, 3.11, 3.12,
6.1, 6.3, 18.1 and 18.2 hereunder may be performed by Montgomery
on behalf of Mortgagor.
Article - LOCAL LAW PROVISIONS
The provisions set forth on Exhibit B annexed hereto
are incorporated herein by reference as if fully set forth
herein.
IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been
executed by Mortgagor the day and year first above written.
MORTGAGOR:
MARLTON PLAZA ASSOCIATES, L.P.
By: Marlton Plaza, LLC, a Delaware limited liability
company, its sole general partner
By: Montgomery CV Realty L.P., a Delaware
limited partnership, its sole member
By: Montgomery CV Realty Trust, a
Delaware business trust,
its sole general partner
By: /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President
EXHIBIT 2.5
NOTE
$9,300,000,00 Philadelphia, Pennsylvania
June 25, 1998
FOR VALUE RECEIVED, the undersigned, MARLTON PLAZA
ASSOCIATES, L.P., a Delaware limited partnership having an
address c/o Marlton Plaza LLC at Plymouth Plaza, 580
West Germantown Pike, Suite 200, Plymouth Meeting, Pennsylvania
19462 ("Borrower"), hereby promises to pay to the order of GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation having
an address at 650 Dresher Road, P.O. Box 1015, Horsham,
Pennsylvania 19044-8015 ("Lender"), its successors and permitted
assigns as holder of this Note (Lender, its successors and
permitted assigns, being hereinafter sometimes referred to
collectivelyas "Holder"), at Lender's address set forth above or
at such other place or to such other person as may be designated
in writing to Borrower by Lender, the principal sum of Nine
Million Three Hundred Thousand Dollars ($9,300,000.00) (the
"Loan"), together with interest on the unpaid balance thereof at
the rates hereinafter set forth.
ON THE TERMS AND SUBJECT TO THE CONDITIONS which are
hereinafter set forth:
Section 1. Interest Rate and Payment Dates.
1.1 Initial Rate and Initial Payment. Interest shall
accrue on the balance of the principal amount outstanding
hereunder from time to time from and after the date hereof at the
rate of 7.40625% per annum until the first Rate Adjustment Date
(as defined below). On each successive Rate Adjustment Date, the
rate of interest at which interest accrues shall be adjusted to
the then applicable LIBOR Rate (as defined below) for the
calendar month commencing on such date. Interest for the period
beginning on the date of the first advance hereunder and ending
on and including the last day of the month in which this Note is
dated shall be payable on the date hereof. Interest shall be
calculated on the basis of a 360-day year and shall be charged on
the principal balance outstanding from time to time for the
actual number of days elapsed.
1.2 Rate Adjustment Date. The interest rate shall be
adjusted on the dates (each being a "Rate Adjustment Date")
described in this paragraph. The first Rate Adjustment Date
shall be July 1, 1998, and subsequent Rate Adjustment Dates shall
fall on the first day of each subsequent calendar month
thereafter.
1.3 Default Interest Rate. If Borrower fails to make any
payment of principal, interest or fees on the date on which such
payment becomes due and payable, whether at maturity or by
acceleration, such payment shall bear interest beginning on the
eleventh day following the date which such amount became due and
payable until paid at the fluctuating rate (the "Default Rate")
which is four (4) percentage points above the then applicable
LIBOR Rate, but in no event shall the rate of interest payable
hereunder exceed the highest rate allowed by law.
1.4 LIBOR Rate. The "LIBOR Rate" shall mean the rate per
annum determined solely by Holder as of each Rate Adjustment
Date, and shall be one and seventy-five one-hundredths
percent (1.75%) per annum in excess of one month LIBOR (stated as
a number out to five decimal places), determined in the manner
set forth below. On each Rate Adjustment Date, Holder will
determine one month LIBOR from the appropriate Bloomberg display
page, available as of the close of business on the last business
day of the month immediately preceding the Rate Adjustment
Date. In the event Bloomberg ceases publication or ceases to
publish one month LIBOR, Holder shall select a comparable
publication to determine one month LIBOR and provide notice
thereof to Borrower. LIBOR may or may not be the lowest rate
based upon the market for U.S. Dollar deposits in the London
Interbank Eurodollar Market at which Holder prices loans on the
date on which the LIBOR Rate is determined by Holder as set forth
above.
1.5 LIBOR Rate Adjustments. This Note shall bear interest
at the rate set forth above or at the applicable LIBOR Rate until
a new LIBOR Rate is determined on each Rate Adjustment
Date in accordance with the provisions hereof; provided, however,
that, if Holder at any time determines, in its sole discretion,
that it has miscalculated the amount of the monthly payment of
interest, then Holder shall give notice to Borrower of the
corrected amount of such monthly payment (and the corrected
amount of the LIBOR Rate, if applicable) and (a) if the corrected
amount of such monthly payment represents an increase thereof,
then Borrower shall, within ten (10) calendar days thereafter,
pay to Holder any sums that Borrower would have otherwise been
obligated under this Note to pay to Holder had the amount of such
monthly payment not been miscalculated, or (b) if the corrected
amount of such monthly payment represents a decrease
thereof and Borrower is not otherwise in breach or default under
any of the terms and provisions of this Note or the Mortgage (as
defined below), then Borrower shall, within (10) calendar days
thereafter be paid the sums that Borrower would not have
otherwise been obligated to pay to Holder had the amount of such
monthly payment not been miscalculated.
1.6 LIBOR Unascertainable. Anything herein to the contrary
notwithstanding, if (i) on any date on which the LIBOR Rate would
otherwise be set Holder shall have determined in good
faith (which determination shall be conclusive) that (A) adequate
and reasonable means do not exist for ascertaining one month
LIBOR, or (B) a contingency has occurred which materially and
adversely affects the London Interbank Eurodollar Market at which
Holder prices loans on the date on which the LIBOR Rate is
determined by Holder as set forth above, or (ii) at any time
Holder shall have determined in good faith (which determination
shall be conclusive) that the making, maintenance or funding of
any part of the Loan has been made impracticable or unlawful by
compliance by Holder in good faith with any applicable law,
regulation or guideline or interpretation or administration
thereof by any governmental authority charged with the
interpretation or administration thereof or with any request or
directive of any such governmental authority (whether or not
having the force of law); then, and in any such event, Holder may
notify Borrower of such determination. Upon such date as shall
be specified in such notice (which shall not be earlier than the
date such notice is given) the obligation of Holder to charge
interest to Borrower at the LIBOR Rate shall be suspended until
Holder shall have later notified Borrower of Holder's
determination in good faith (which determination shall
be conclusive) that the circumstances giving rise to such
previous determination no longer exist.
1.7 Treasury Rate. If Holder notifies Borrower of a
determination under Section 1.6 hereof, the LIBOR Rate shall
automatically be converted to the Treasury Rate as of the date
specified in such notice (and accrued interest thereon shall be
due and payable on such date). "Treasury Rate" shall mean a rate
equal to the "Index" of the weekly average yield on United
States Treasury Securities adjusted to a constant maturity of one
year, as made available by the Federal Reserve Board 45 days
prior to each Rate Adjustment Date (the "Yield"), plus or minus,
as the case may be, the difference between the Yield and the last
available LIBOR Rate (stated as a number out to five decimal
places).
1.8 Increased Cost and Reduced Return.
(a) If on or after the date hereof, the adoption of
any applicable law, rule, or regulation, or any change therein,
or any change in the interpretation or administration thereof by
any governmental authority, central bank, or comparable agency
charged with the interpretation or administration thereof, or
compliance by the Holder with any request or directive (whether
or not having the force of law) of any such authority, central
bank, or comparable agency shall subject Holder to any tax, duty
or other charge with respect to the Loan, or shall change the
basis of taxation of payments to Holder of the principal of or
interest on the Loan or any other amounts due under the Notes or
in respect of the Loan or its obligation to make the Loan (except
for changes in the rate of tax on the overall net income of the
Holder) and the result of the foregoing is to increase the cost
to Holder of making or maintaining the Loan, or to reduce the
amount of any sum received or receivable by Holder under this
Note with respect thereto, by an amount reasonably deemed by
Holder to be material, then, within fifteen days after demand by
Holder, Borrower shall pay to Holder such additional amount or
amounts as will compensate Holder for such increased cost or
reduction.
(b) Holder will promptly notify Borrower of any event
of which it has knowledge, occurring after the date hereof, which
will entitle Holder to compensation pursuant to this Section. A
certificate of Holder claiming compensation under this Section,
setting forth the additional amount or amounts to be paid to it
hereunder and evidence reasonably substantiating Holder's claim
for compensation shall be conclusive in the absence of manifest
error. In determining such amount, Holder may use any reasonable
averaging and attribution methods.
Section 2. Interest Payments. Commencing on August 1,
1998, and continuing on the first day of each calendar month
thereafter through and including the Maturity Date (as defined
below), interest shall be due and payable by Borrower to Holder
hereunder in arrears at the applicable LIBOR Rate (or the
Treasury Rate, if applicable) determined as of the immediately
preceding Rate Adjustment Date, on the then outstanding principal
balance of the Loan. Lender will use its best efforts to deliver
to Borrower prior to the first of each month an invoice which
sets forth the amount of interest due to Lender.
Section 3. Application of Payments. Payments made by
Borrower on account hereof shall be applied first toward any Late
Fees (as defined below) or other fees and charges due hereunder,
second toward payment of any interest due at the Default Rate,
third toward payment of any interest due at the then applicable
LIBOR Rate set forth in Section 1.4 hereof (or the Treasury
Rate, if applicable), and fourth toward payment of principal.
Notwithstanding the foregoing, if any advances made by Holder
under the terms of any instruments securing this Note have not
been repaid, any payments made may, at the option of Holder, be
applied first to repay such advances, and interest thereon, with
the balance, if any, applied as set forth in the preceding
sentence.
Section 4. Maturity Date. Anything in this Note to the
contrary notwithstanding, the entire unpaid balance of the
principal amount thereof and all interest accrued thereon
(including, without limitation, interest accruing at the Default
Rate), all Late Fees (hereinafter defined) and all other
amounts due hereunder and under any other instrument or document
evidencing or securing the Loan which has been executed by
Borrower and/or others and by or in favor of Holder
(collectively, the "Loan Documents"), shall, unless sooner paid,
and except to the extent that payment thereof is sooner demanded
in accordance with the terms of the Loan Documents, be and
become due and payable on December 1, 2000 (the "Maturity Date").
Section 5. Prepayment. Prepayment of the Loan in full or
in part shall be permitted only in accordance with the Loan
Agreement (the "Loan Agreement") dated as of March 31, 1998 by
and between Montgomery CV Realty L.P., as borrower, Century Plaza
Associates, L.P. and CV Reit, Inc., as guarantors (each a
"Guarantor") and Holder, as the Loan Agreement may be amended,
supplemented, replaced or otherwise modified from time to time.
Section 6. Method of Payment. All payments to be made
under this Note shall be paid directly to Holder in lawful tender
of the United States of America. Each such payment shall be
paid by 1:00 p.m. at Horsham, Pennsylvania, time on the date such
payment is due, except if such date is not a business day such
payment shall then be due on the first business day after such
date, but interest shall continue to accrue until the date
payment is received. Any payment received after 1:00 p.m.
Horsham, Pennsylvania, time shall be deemed to have been received
on the immediately following business day for all purposes,
including, without limitation, the accrual of interest on
principal.
Section 7. Security. The debt evidenced by this Note is
secured by, among other things, a Mortgage and Security Agreement
(the "Mortgage") of even date herewith and intended to be
recorded in the office of the Recorder of Deeds for Burlington
County, New Jersey by and between Borrower and Holder, covering
all of that real property in such county which is described in
Exhibit A thereto (the "Property"), and other property, as more
particularly described therein, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.
Section 8. Default.
8.1 Events of Default.
The entire outstanding principal sum of this Note,
together with all interest accrued and unpaid thereon and all
other sums due under the Mortgage, the Loan Documents and this
Note (all such sums hereinafter collectively referred to as the
"Debt"), or any portion thereof, shall without notice become
immediately due and payable at the option of Holder if any
payment required under this Note is not paid within ten (10) days
of the date when due or on the happening of any other default,
after the expiration of any applicable notice and grace periods,
herein or under the terms of the Mortgage or the Loan Documents
(hereinafter each an "Event of Default"). Time is of the essence
in this Note, the Mortgage and the Loan Documents. All of the
terms, covenants and conditions contained in the Mortgage and the
Loan Documents are hereby made part of this Note to the same
extent and with the same force as if they were fully set forth
herein. In the event that Holder employs counsel to collect the
Debt or to protect or foreclose the security hereof, Borrower
also agrees to pay on demand all costs of collection incurred by
Holder, including reasonable attorneys' fees for the services of
counsel whether or not suit be brought.
Borrower does hereby agree that upon the occurrence of
an Event of Default which is not cured within any applicable
grace or notice period, or upon the failure of Borrower to pay
the Debt in full on the Maturity Date, Holder shall be entitled
to receive and Borrower shall pay interest on the entire unpaid
principal sum at the Default Rate. The Default Rate shall be
computed from the occurrence of the Event of Default until the
actual receipt and collection of the Debt. This charge shall be
added to the Debt, and shall be deemed secured by the Mortgage.
This clause, however, shall not be construed as an agreement or
privilege to extend the date of the payment of the Debt, nor as a
waiver of any other right or remedy accruing to Holder by reason
of the occurrence of any Event of Default. In the event the
Default Rate would otherwise exceed the maximum rate permitted by
applicable law, the Default Rate shall be the maximum rate
permitted by applicable law.
8.2 No Impairment of Rights; Premium Due. Nothing in this
Section shall be deemed in any way to alter or impair any right
which Holder has under this Note or the Mortgage, or any
of the other Loan Documents or at law or in equity, to accelerate
such debt on the occurrence of any Event of Default provided
herein or therein, whether or not relating to this Note. Upon
the acceleration of this Note because of an Event of Default,
Holder shall be entitled to receive, in addition to all other
amounts due Holder, the Exit Fee (as defined in the Loan
Agreement).
8.3 Late Fees. Without limiting the generality of the
foregoing provisions of this Section, if any sum payable under
this Note is not paid within ten (10) days after the date on
which it becomes due and payable, Borrower shall thereupon
automatically become obligated immediately to pay to Holder a
late charge equaling five (5%) percent of the amount of such
payment ("Late Fees"), which shall be due and payable immediately
thereupon, to defray the expenses incurred by Holder in handling
and processing such delinquent payment and to compensate Holder
for the loss of the use of such delinquent payment and such
amount shall be secured by the Mortgage and the Loan Documents.
Section 9. Costs of Enforcement. Borrower shall pay to
Holder on demand by the latter the amount of any and all expenses
incurred by Holder in enforcing its rights hereunder or under
the Mortgage and/or the other Loan Documents following an Event
of Default, including but not limited to the expense of
collecting any amount owed hereunder, and of any and all
reasonable attorneys' fees incurred by Holder in connection with
such default, whether suit be brought or not, or in protecting
the security hereof. Such expenses shall be added to the
principal amount hereof, shall be secured by the Mortgage and
shall accrue interest at the Default Rate.
Section 10. Borrower's Waiver of Certain Rights. Borrower
hereby waives the exercise of any and all exemption rights which
it holds at law or in equity with respect to the debt evidenced
by this Note, and of any and all rights which it holds at law or
in equity to have or receive any presentment, protest, demand and
notice of dishonor, protest, demand and nonpayment as a
condition to Holder's exercise of any of its rights under this
Note or the Loan Documents.
Section 11.. Extensions. The Maturity Date and/or any
other date by which any payment is required to be made hereunder
may be extended by Holder from time to time in the exercise of
its sole discretion, without in any way altering or impairing
Borrower's liability hereunder.
Section 12. General.
12.1 Applicable Law. This Note shall be given effect and
construed by application of the laws of the Commonwealth of
Pennsylvania, and any action or proceeding arising hereunder,
and each of Holder and Borrower submits (and waives all rights to
object) to non-exclusive personal jurisdiction in the
Commonwealth of Pennsylvania, for the enforcement of any and all
obligations under this Note and the Loan Documents except that if
any such action or proceeding arises under the Constitution, laws
or treaties of the United States of America, or if there is a
diversity of citizenship between the parties thereto, so that it
is to be brought in a United States District Court, it shall be
brought in the United States District Court for the Eastern
District of Pennsylvania or any successor federal court having
original jurisdiction.
12.2 Headings. The headings of the Sections, subsections,
paragraphs and subparagraphs hereof are provided herein for and
only for convenience of reference, and shall not be considered
in construing their contents.
12.3 Construction. As used herein, (a) the term "person"
means a natural person, a trustee, a corporation, a limited
liability company, a partnership and any other form of legal
entity, and (b) all references made (i) in the neuter, masculine
or feminine gender shall be deemed to have been made in all such
genders, (ii) in the singular or plural number shall be deemed to
have been made, respectively, in the plural or singular number as
well, and (iii) to any Section, subsection, paragraph or
subparagraph shall, unless therein expressly indicated to the
contrary, be deemed to have been made to such Section,
subsection, paragraph or subparagraph of this Note.
12.4 Severability. No determination by any court,
governmental body or otherwise that any provision of this Note or
any amendment hereof is invalid or unenforceable in any instance
shall affect the validity or enforceability of (a) any other such
provision, or (b) such provision in any circumstance not
controlled by such determination. Each such provision shall be
valid and enforceable to the fullest extent allowed by, and shall
be construed wherever possible as being consistent with,
applicable law.
12.5 No Waiver. Holder shall not be deemed to have waived
the exercise of any right which it holds hereunder unless such
waiver is made expressly and in writing. No delay or
omission by Holder in exercising any such right (and no allowance
by Holder to Borrower of an opportunity to cure a default in
performing its obligations hereunder) shall be deemed a waiver of
its future exercise. No such waiver made as to any instance
involving the exercise of any such right shall be deemed a waiver
as to any other such instance, or any other such right. Further,
acceptance by Holder of all or any portion of any sum payable
under, or partial performance of any covenant of, this Note, the
Mortgage or any of the other Loan Documents, whether before, on,
or after the due date of such payment or performance, shall not
be a waiver of Holder's right either to require prompt and full
payment and performance when due of all other sums payable or
obligations due thereunder or hereunder or to exercise any of
Holder's rights and remedies hereunder or thereunder.
12.6 Waiver of Jury Trial; Service of Process; Court Costs.
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO WHICH BORROWER AND HOLDER MAY BE PARTIES ARISING OUT OF, IN
CONNECTION WITH, OR IN ANY WAY PERTAINING TO, THIS NOTE AND/OR
ANY OF THE LOAN DOCUMENTS. IT IS AGREED AND UNDERSTOOD THAT THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS
AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING BUT
NOT LIMITED TO CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS
NOTE. THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE
BY BORROWER, AND BORROWER HEREBY REPRESENTS THAT NO
REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY
INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER FURTHER REPRESENTS AND
WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE
AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR
HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL
COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE
OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. BORROWER AGREES
TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY'S FEES INCURRED BY
HOLDER IN CONNECTION WITH ENFORCING ANY PROVISION OF THIS NOTE.
12.7 Offset. Upon the occurrence of an Event of Default,
Holder may set-off against any
principal and interest owing hereunder, any and all credits,
money, stocks, bonds or other security
or property of any nature whatsoever on deposit with, or held by,
or in the possession of, Holder,
to the credit of or for the account of Borrower, without notice
to or consent of Borrower or any
Guarantor, provided that Holder shall give subsequent notice to
Borrower of any such set-off.
12.8 Non-Exclusivity of Rights and Remedies. None of the
rights and remedies herein conferred upon or reserved to Holder
is intended to be exclusive of any other right or remedy
contained herein or in any of the Loan Documents and each and
every such right and remedy shall be cumulative and concurrent,
and may be enforced separately, successively or together, and may
be exercised from time to time as often as may be deemed
necessary or desirable by Holder.
12.9 Incorporation by Reference. All of the agreements,
conditions, covenants and provisions contained in each of the
Loan Documents are hereby made a part of this Note to the
same extent and with the same force and effect as if they were
fully set forth herein. Borrower covenants and agrees to keep
and perform, or cause to be kept and performed, all such
agreements, conditions, covenants and provisions strictly in
accordance with their terms.
12.10 Joint and Several Liability. If Borrower consists
of more than one person and/or entity, each such person and/or
entity agrees that its liability hereunder is joint and several.
12.11 Business Purpose. Borrower represents and
warrants that the Loan is being obtained solely for the purpose
of acquiring or carrying on a business, professional or
commercial activity and is not for personal, agricultural, family
or household purposes.
12.12 Interest Limitation. This Note is subject to the
express condition that at no time shall Borrower be obligated or
required to pay interest on the Loan and other sums due hereunder
or any portion thereof at a rate which could subject Lender to
either civil or criminal liability as a result of being in excess
of the maximum interest rate which Borrower is permitted by
applicable law to contract or agree to pay. If by the terms of
this Note, Borrower is at any time required or obligated to pay
interest on the Loan and other sums due hereunder or any portion
thereof at a rate in excess of such maximum rate, the rate of
interest under this Note shall be deemed to be immediately
reduced to such maximum rate and the interest payable
shall be computed at such maximum rate and all prior interest
payments in excess of the maximum rate shall be deemed to
have been payments in reduction of principal and not on account
of the interest due hereunder.
12.13 Modification. This Note may not be modified,
amended, extended, changed, discharged, terminated or waived
orally or by any act or failure to act on the part of Borrower or
Holder, but only by an agreement in writing signed by the party
against whom enforcement of any modification, amendment,
extension, change, discharge, termination or waiver is sought.
12.14 Time of the Essence. Time is strictly of the
essence of this Note.
12.15 Negotiable Instrument. Borrower agrees that this
Note shall be deemed a negotiable instrument, even though this
Note may not otherwise qualify, under applicable law, absent this
paragraph, as a negotiable instrument. Borrower agrees that
Holder shall have the right to transfer, sell and assign this
Note, the Mortgage and the Loan Documents, and the obligations
hereunder, provided that Holder shall promptly give Borrower
subsequent notice of such transfer, sale or assignment.
12.16 Interest Rate After Judgment. If judgment is
entered against Borrower on this Note, the amount of the judgment
entered (which may include principal, interest, fees, Late Fees
and costs) shall bear interest at the Default Rate, to be
determined on the date of the entry of the judgment.
12.17 Relationship. Borrower and Holder intend that the
relationship between them shall be solely that of creditor and
debtor. Nothing contained in this Note or in any of the other
Loan Documents shall be deemed or construed to create a
partnership, tenancy-in-common, joint tenancy, joint venture or
co-ownership by or between Borrower and Holder.
12.18 Waiver of Automatic Stay. BORROWER HEREBY AGREES
THAT, IN CONSIDERATION OF HOLDER'S AGREEMENT TO MAKE THE LOAN AND
IN RECOGNITION THAT THE FOLLOWING COVENANT IS A MATERIAL
INDUCEMENT FOR HOLDER TO MAKE THE LOAN, IN THE EVENT THAT
BORROWER SHALL (I) FILE WITH ANY BANKRUPTCY COURT OF COMPETENT
JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER ANY SECTION
OR CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED
("BANKRUPTCY CODE"), OR SIMILAR LAW OR STATUTE; (II) BE THE
SUBJECT OF ANY ORDER FOR RELIEF ISSUED UNDER THE BANKRUPTCY CODE
OR SIMILAR LAW OR STATUTE; (III) FILE OR BE THE SUBJECT OF ANY
PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER
ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY, OR OTHER RELIEF FOR DEBTORS; (IV) HAVE
SOUGHT OR CONSENTED TO OR ACQUIESCED IN THE APPOINTMENT OF ANY
TRUSTEE, RECEIVER, CONSERVATOR, OR LIQUIDATOR; OR (V) BE THE
SUBJECT OF AN ORDER, JUDGMENT OR DECREE ENTERED BY ANY COURT OF
COMPETENT JURISDICTION APPROVING A PETITION FILED AGAINST ANY
BORROWER FOR ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER
ANY PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO
BANKRUPTCY, INSOLVENCY OR RELIEF FOR DEBTORS, THEN, SUBJECT TO
COURT APPROVAL, HOLDER SHALL THEREUPON BY ENTITLED AND
BORROWER HEREBY IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST,
AND AGREES TO STIPULATE TO RELIEF FROM ANY AUTOMATIC STAY OR
OTHER INJUNCTION IMPOSED BY SECTION 362 OF THE BANKRUPTCY CODE,
OR SIMILAR LAW OR STATUTE (INCLUDING, WITHOUT LIMITATION, RELIEF
FROM ANY EXCLUSIVE PERIOD SET FORTH IN SECTION 1121 OF THE
BANKRUPTCY CODE) OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE
RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO HOLDER AS PROVIDED IN
THIS NOTE AND THE LOAN DOCUMENTS, AND AS OTHERWISE PROVIDED BY
LAW, AND BORROWER HEREBY IRREVOCABLY WAIVES ITS RIGHTS TO OBJECT
TO SUCH RELIEF.
12.19 Notices. All notices or other written
communications hereunder shall be given andbecome effective as
provided in the Loan Agreement except that the following
addresses shall be used:
To the Borrower: Marlton Plaza Associates, L.P.
c/o Marlton Plaza LLC
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attn: Chief Financial Officer
Telecopy: (610) 834-8110
With a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-2150
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
To Guarantors: Montgomery CV Realty L.P.
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attn: Chief Financial Officer
Telecopy: (610) 834-8110
and
CV Reit, Inc.
c/o Hilcoast Development Corp.
100 Century Boulevard
West Palm Beach, FL 33417
Attn: ___________________
Telecopy: (561) 640-3160
With a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-2150
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
If to Lender: GMAC Commercial Mortgage Corporation
650 Dresher Road
P.O. Box 1015
Horsham, PA 19044
Attn: Loan Servicing Department
Telecopy: (215) 328-1378
IN WITNESS WHEREOF, Borrower has executed this Note or
caused it to be executed on its behalf by its duly authorized
representatives, the day and year first above written, and the
obligations under this Note shall be binding upon Borrower's
successors and assigns.
MARLTON PLAZA ASSOCIATES, L.P.
By: Montgomery CV Realty Trust, a Delaware
business trust, its sole general partner
By: /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President
EXHIBIT 2.6
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this
"Guaranty") dated as of the 25th day of June, 1998, made by CV
REIT, INC., a Delaware corporation ("Guarantor") to GMAC
COMMERCIAL MORTGAGE CORPORATION, a California corporation
("Lender"),
W I T N E S S E T H :
WHEREAS, pursuant to a Loan and Credit Facility
Agreement dated as of March 31, 1998 between Montgomery CV Realty
L.P., a Delaware limited partnership, as borrower ("Montgomery"),
Guarantor, Century Plaza Associates, L.P., a Delaware limited
partnership ("Century") and Lender (as the same may be amended,
modified or supplemented from time to time, the "Loan
Agreement"), Lender has agreed to make a loan the ("Loan")
of $9,300,000 to Marlton Plaza Associates, L.P., a Delaware
limited partnership ("Borrower");
WHEREAS, the Loan is evidenced by Borrower's
$9,3000,000 Note to Lender of even date herewith (as the same may
be extended, renewed, refinanced, refunded, amended, modified or
supplemented from time to time, the "Note");
WHEREAS, Guarantor acknowledges receipt of copies of
the Loan Agreement, the Note and the other Facility Loan
Documents (as defined in the Loan Agreement); and
WHEREAS, the execution and delivery by Guarantor of
this Guaranty is a condition to Lender's obligation to make the
Loan to Borrower pursuant to the Loan Agreement, and Guarantor
expects to derive financial benefit from the making of the Loan
and other loans by Lender to Borrower;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt of which is
hereby acknowledged by Guarantor, and intending to be legally
bound, Guarantor hereby agrees as follows:
ARTICLE I
GUARANTEE
1.1 Guaranteed Obligations. Guarantor hereby unconditionally
and irrevocably guarantees to Lender and becomes surety to Lender
for the due, punctual and full payment and performance of, and
covenants with Lender to duly, punctually and fully pay and
perform, the following (collectively, the "Guaranteed
Obligations"):
(a) all indebtedness of Borrower to Lender
evidenced by the Note and/or incurred under the Loan Agreement,
including other loans from Lender to Borrower, both principal and
interest, future advances and any refinancing or refunding of any
thereof, and all other amounts due or to become due under the
Loan Agreement, the Note and the other Facility Loan Documents,
and any refinancing or refunding of any thereof, whether now
existing or hereafter arising, contracted or incurred; and
(b) all covenants, agreements, obligations
and liabilities of Montgomery under the Loan Agreement, the Note
and the other Facility Loan Documents, whether now existing or
hereafter arising, contracted or incurred, as and when such
payment or performance shall become due (whether by acceleration
or otherwise) in accordance with the terms of the Facility Loan
Documents.
1.2 Guarantee Unconditional. The obligations of Guarantor
hereunder are continuing, absolute and unconditional,
irrespective of any circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or
defense of a guarantor or surety. Without limiting the generality
of the foregoing, the obligations of Guarantor hereunder shall
remain in full force and effect without regard to, and shall not
be released, discharged or in any way affected by:
(a) any amendment, modification or
supplement to the Loan Agreement, the Note or any other Facility
Loan Document;
(b) any exercise or nonexercise of or delay
in exercising any right, remedy, power or privilege under or in
respect of this Guaranty, the Loan Agreement, the Note or any
other Facility Loan Document (even if any such right, remedy,
power or privilege shall be lost thereby), or any waiver,
consent, indulgence or other action or inaction in respect
thereof;
(c) any bankruptcy, insolvency, arrangement,
composition, assignment for the benefit of creditors or similar
proceeding commenced by or against Borrower;
(d) any failure to perfect or continue
perfection of, or any release or waiver of, any rights given to
Lender in any property as security for the performance of any of
the Guaranteed Obligations;
(e) any extension of time for payment or
performance of any of the Guaranteed Obligations;
(f) the genuineness, validity or
enforceability of the Facility Loan Documents;
(g) any limitation of liability of Borrower
contained in any Facility Loan Document;
(h) any defense that may arise by reason of
the failure of Lender to file or enforce a claim against the
estate of Borrower in any bankruptcy or other proceeding;
(i) any voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of the
property of Borrower, or any marshalling of assets and
liabilities, or other similar proceeding affecting, Borrower
or any of its assets;
(j) the release of Borrower from performance
or observance of any of the agreements, covenants, terms or
conditions contained in the Facility Loan Documents by operation
of law;
(k) the failure of Lender to keep Guarantor
advised of Borrower's financial condition, regardless of the
existence of any duty to do so; or
(l) any other circumstances which might
otherwise constitute a legal or equitable discharge of a
guarantor or surety.
No set-off, claim, reduction or diminution of any obligation, or
any defense of any kind or nature which Borrower or any Guarantor
now has or hereafter may have against Lender, shall be available
hereunder to Guarantor against Lender.
1.3 No Notice or Duty to Exhaust Remedies. Guarantor hereby
waives diligence, presentment, demand, protest and all notices of
any kind, and waives any requirement that Lender exhaust any
right or remedy, or proceed first or at any time, against
Borrower or any other guarantor of, or any security for, any
of the Guaranteed Obligations. This Guaranty constitutes an
agreement of suretyship as well as of guaranty, and Lender may
pursue its rights and remedies under this Guaranty and
under the other Facility Loan Documents in whatever order,
or collectively, and shall be entitled to payment and performance
hereunder notwithstanding such other Facility Loan Documents and
notwithstanding any action taken by Lender or inaction by
Lender to enforce any of its rights or remedies against any
other guarantor or any other person, entity, partnership,
corporation, limited liability company (a "Person") or
property whatsoever.
1.4 SUBORDINATION OF SUBROGATION, ETC. NOTWITHSTANDING ANY
PAYMENTS MADE OR OBLIGATIONS PERFORMED BY GUARANTOR BY
REASON OF THIS GUARANTY (INCLUDING BUT NOT LIMITED TO
APPLICATION OF FUNDS ON ACCOUNT OF SUCH PAYMENTS OR
OBLIGATIONS), GUARANTOR HEREBY IRREVOCABLY (A) SUBORDINATES
TO THE PRIOR PAYMENT IN FULL OF THE GUARANTEED OBLIGATIONS
ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING
DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR
OTHERWISE) TO ASSERT ANY CLAIM AGAINST BORROWER OR ANY
OTHER PERSON, OR AGAINST ANY DIRECT OR INDIRECT SECURITY, ON
ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER
OR PURSUANT TO THIS GUARANTY, INCLUDING WITHOUT LIMITATION
ANY AND ALL RIGHTS OF SUBROGATION, REIMBURSEMENT,
EXONERATION, CONTRIBUTION OR INDEMNITY, AND (B) WAIVES AND
RELEASES ANY RIGHTS IT MAY HAVE AT ANY TIME TO REQUIRE THE
MARSHALING OF ANY ASSETS OF BORROWER, WHICH RIGHT OF
MARSHALING MIGHT OTHERWISE ARISE FROM PAYMENTS MADE OR
OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY,
AND ANY AND ALL RIGHTS THAT WOULD RESULT IN GUARANTOR
BEING DEEMED A "CREDITOR" UNDER THE UNITED STATES BANKRUPTCY
CODE OF BORROWER OR ANY OTHER PERSON.
ARTICLE II
COVENANTS
2.1 Covenants. Guarantor hereby covenants to Lender that:
(i) Promptly upon becoming aware thereof,
Guarantor shall give Lender notice of (i) the commencement,
existence or threat of any proceeding by or before any
governmental authority against or affecting Guarantor which,
if adversely decided, would have a material adverse effect on the
business, operations, condition (financial or otherwise)
or prospects of Guarantor or on its ability to perform its
obligations hereunder or (ii) any material adverse change in the
business, operations, condition (financial or otherwise) or
prospects of Guarantor.
(ii) Guarantor shall permit such Persons as
Lender may designate to examine Guarantor's books and records and
take copies and extracts therefrom and to discuss the affairs of
Guarantor with its officers, employees and independent
accountants at such times and as often as Lender may reasonably
request. Guarantor hereby authorizes such officers, employees
and independent accountants to discuss with Lender the affairs of
Guarantor.
(iii) If Guarantor is a corporation or
partnership, Guarantor shall not dissolve, merge or consolidate
with any other Person or sell, transfer or otherwise dispose of
all or a substantial part of its assets, and shall continue to
engage in its business substantially as currently conducted and
operated and shall not engage in any other business.
ARTICLE III
MISCELLANEOUS
3.1 Effect Of Bankruptcy Proceedings. This Guaranty shall
continue to be effective, or be automatically reinstated, as the
case may be, if at any time payment, in whole or in part, of any
of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned by Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or
similar Law, all as though such payment had not been made. If an
Event of Default (as defined in the Loan Agreement) at any time
shall have occurred and be continuing or exist and declaration of
default or acceleration under or with respect to any of the
Facility Loan Documents shall at such time be prevented by reason
of the pendency against Borrower of a case or proceeding under
any bankruptcy or insolvency law, Guarantor agrees that, for
purposes of this Guaranty and its obligations hereunder, such
Facility Loan Documents shall be deemed to have been declared in
default or accelerated with the same effect as if such Facility
Loan Documents had been declared in default and accelerated in
accordance with the terms thereof, and Guarantor shall forthwith
pay the Guaranteed Obligations in full without further notice or
demand.
3.2 Lender's Right of Set-Off. If an Event of Default shall
occur, Lender shall have the right, in addition to all other
rights and remedies available to it, to set-off against and
to appropriate and apply to the unpaid balance of the
Guaranteed Obligations any debt owing to, and any other funds
held in any manner for the account of Guarantor by
Lender or such holder, including without limitation all
funds in all deposit accounts (general or special) now or
hereafter maintained by Guarantor with Lender or such
holder. Such right shall exist whether or not Lender or any
such holder shall have made any demand under this Guaranty or any
other Facility Loan Document and whether or not the Guaranteed
Obligations are matured or unmatured. Guarantor hereby confirms
the foregoing arrangements and each such holder's and the
Lender's right of banker's lien and set-off and nothing in this
Guaranty or any other Facility Loan Document shall be deemed any
waiver or prohibition of any such holder's or of Lender's right
of banker's lien or set-off.
3.3 Further Assurances. From time to time upon the request of
Lender, Guarantor shall promptly and duly execute, acknowledge
and deliver any and all such further instruments and documents as
Lender may deem necessary or desirable to confirm this
Guaranty, to carry out the purpose and intent hereof or to
enable Lender to enforce any of its rights hereunder.
3.4 Amendments, Waivers, Etc. This Guaranty cannot be
amended, modified, waived, changed, discharged or terminated
except by an instrument in writing signed by the party against
whom enforcement of such amendment, modification, waiver, change,
discharge or termination is sought.
3.5 No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of Lender in exercising any
right, power or privilege under this Guaranty or any other
Facility Loan Document shall affect any other or future exercise
thereof or exercise of any other right, power or privilege; nor
shall any single or partial exercise of any such right, power or
privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any
further exercise thereof or of any other right, power or
privilege. The rights and remedies of Lender under this
Guaranty are cumulative and not exclusive of any rights or
remedies which Lender would otherwise have under the other
Facility Loan Documents, at law or in equity.
3.6 Notices. All notices, requests, demands, directions and
other communications under the provisions of this Guaranty shall
be sent and deemed given in accordance with Section 11.6 of the
Loan Agreement, except that the following addresses shall be
used:
To Guarantor: CV Reit, Inc.
c/o Hilcoast Development Corp.
100 Century Boulevard
West Palm Beach, FL 33417
Telecopy: (561) 640-3160
with a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-3291
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
To Borrower: Marlton Plaza Associates, L.P.
c/o Marlton Plaza LLC
580 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attn: Chief Financial Officer
Telecopy: (610) 834-8110
with a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-3291
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
3.7 Expenses. Guarantor agrees to pay or cause to be paid and
to save Lender harmless against liability for the payment of
all reasonable out-of-pocket expenses, including fees and
expenses of counsel for Lender, incurred by Lender from time
to time arising in connection with Lender's enforcement or
preservation of rights under this Guaranty, including but
not limited to such expenses as may be incurred by Lender in
connection with any default by Guarantor of any of its
obligations hereunder.
3.8 Survival. All obligations of Guarantor to make payments
under Sections 3.01 or 3.07 hereof or to indemnify Lender
(including indemnities by Borrower of Lender under the
Facility Loan Documents) shall survive the payment and
performance in full of the Guaranteed Obligations.
3.9 Jurisdiction; Etc. Guarantor irrevocably (a) agrees that
Lender may bring suit, action or other legal proceedings
arising out of this Guaranty in the courts of the State of
New Jersey or the courts of the United States for the
District of New Jersey; (b) consents to the jurisdiction of
each such court in any such suit, action or proceeding; (c)
waives any objection which such Guarantor may have to the
laying of the venue of any such suit, action or proceeding
in any of such courts; and (d) waives any right Guarantor
may have to a jury trial in connection with any such suit,
action or proceeding.
3.10 Severability. If any term or provision of this Guaranty or
the application thereof to any Person or circumstance shall
to any extent be invalid or unenforceable, the remainder of
this Guaranty, or the application of such term or provision
to Persons or circumstances other than those as to which it
is invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Guaranty shall be valid
and enforceable to the fullest extent permitted by law.
3.11 Counterparts. This Guaranty may be executed in any number
of counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
3.12 Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of New
Jersey.
3.13 Successors and Assigns. This Guaranty shall bind Guarantor
and its successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.
IN WITNESS WHEREOF, Guarantor has duly executed and
delivered this Guaranty as of the date first above written.
CV REIT, INC.
By: /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President
EXHIBIT 2.7
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this
"Guaranty") dated as of the 25th day of June, 1998, made by
MONTGOMERY CV REALTY L.P., a Delaware limited partnership
("Guarantor") to GMAC COMMERCIAL MORTGAGE CORPORATION, a
California corporation ("Lender"),
W I T N E S S E T H :
WHEREAS, pursuant to a Loan and Credit Facility
Agreement dated March 31, 1998 between Guarantor, as borrower,
Century Plaza Associates, L.P., a Delaware limited partnership
("Century"), CV Reit, Inc., a Delaware corporation ("Reit") , and
Lender (as amended, modified or supplemented from time to time,
the "Loan Agreement"), Lender has agreed to make a loan of
$9,300,000 (the "Loan") to Marlton Plaza Associates, L.P., a
Delaware limited partnership ("Borrower");
WHEREAS, the Loan is evidenced by Borrower's $9,300,000
Note to Lender of even date herewith (as the same may be
extended, renewed, refinanced, refunded, amended, modified or
supplemented from time to time, the "Note");
WHEREAS, Guarantor acknowledges receipt of copies of
the Loan Agreement, the Note and the other Facility Loan
Documents (as defined in the Loan Agreement); and
WHEREAS, the execution and delivery by Guarantor of
this Guaranty is a condition to Lender's obligation to make the
Loan to Borrower pursuant to the Loan Agreement, and Guarantor
expects to derive financial benefit from the making of the Loan
by Lender to Borrower;
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt of which is
hereby acknowledged by Guarantor, and intending to be legally
bound, Guarantor hereby agrees as follows:
ARTICLE I
GUARANTEE
1.1 Guaranteed Obligations. Guarantor hereby unconditionally
and irrevocably guarantees to Lender and becomes surety to
Lender for the due, punctual and full payment and
performance of, and covenants with Lender to duly,
punctually and fully pay and perform, the following
(collectively, the "Guaranteed Obligations"):
(a) all indebtedness of Borrower to Lender
evidenced by the Note and/or incurred under the Loan Agreement,
including other loans from Lender to Borrower, both principal and
interest, future advances and any refinancing or refunding of any
thereof, and all other amounts due or to become due under the
Loan Agreement, the Note and the other Facility Loan Documents,
and any refinancing or refunding of any thereof, whether now
existing or hereafter arising, contracted or incurred; and
(b) all covenants, agreements, obligations
and liabilities of Guarantor under the Loan Agreement, the Note
and the other Facility Loan Documents, whether now existing or
hereafter arising, contracted or incurred, as and when such
payment or performance shall become due (whether by acceleration
or otherwise) in accordance with the terms of the Facility Loan
Documents.
1.2 Guarantee Unconditional. The obligations of Guarantor
hereunder are continuing, absolute and unconditional,
irrespective of any circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or
defense of a guarantor or surety. Without limiting the
generality of the foregoing, the obligations of Guarantor
hereunder shall remain in full force and effect without
regard to, and shall not be released, discharged or in any
way affected by:
(a) any amendment, modification or
supplement to the Loan Agreement, the Note or any other Facility
Loan Document;
(b) any exercise or nonexercise of or delay
in exercising any right, remedy, power or privilege under or in
respect of this Guaranty, the Loan Agreement, the Note or any
other Facility Loan Document (even if any such right, remedy,
power or privilege shall be lost thereby), or any waiver,
consent, indulgence or other action or inaction in respect
thereof;
(c) any bankruptcy, insolvency, arrangement,
composition, assignment for the benefit of creditors or similar
proceeding commenced by or against Borrower;
(d) any failure to perfect or continue
perfection of, or any release or waiver of, any rights given to
Lender in any property as security for the performance of any
of the Guaranteed Obligations;
(e) any extension of time for payment or
performance of any of the Guaranteed Obligations;
(f) the genuineness, validity or
enforceability of the Facility Loan Documents;
(g) any limitation of liability of Borrower
contained in any Facility Loan Document;
(h) any defense that may arise by reason of
the failure of Lender to file or enforce a claim against the
estate of Borrower in any bankruptcy or other proceeding;
(i) any voluntary or involuntary
liquidation, dissolution, sale of all or substantially all of the
property of Borrower, or any marshalling of assets and
liabilities, or other similar proceeding affecting, Borrower or
any of its assets;
(j) the release of Borrower from performance
or observance of any of the agreements, covenants, terms or
conditions contained in the Facility Loan Documents by operation
of law;
(k) the failure of Lender to keep Guarantor
advised of Borrower's financial condition, regardless of the
existence of any duty to do so; or
(l) any other circumstances which might
otherwise constitute a legal or equitable discharge of a
guarantor or surety.
No set-off, claim, reduction or diminution of any obligation, or
any defense of any kind or nature which Borrower or any Guarantor
now has or hereafter may have against Lender, shall be available
hereunder to Guarantor against Lender.
1.3 No Notice or Duty to Exhaust Remedies. Guarantor hereby
waives diligence, presentment, demand, protest and all
notices of any kind, and waives any requirement that Lender
exhaust any right or remedy, or proceed first or at any
time, against Borrower or any other guarantor of, or any
security for, any of the Guaranteed Obligations. This
Guaranty constitutes an agreement of suretyship as well as
of guaranty, and Lender may pursue its rights and
remediesunder this Guaranty and under the other Facility
Loan Documents in whatever order, or collectively, and shall
be entitled to payment and performance
hereundernotwithstanding such other Facility Loan Documents
and notwithstanding any action taken by Lender or inaction
by Lender to enforce any of its rights or remedies against
any other guarantor or any other person, entity,
partnership, corporation, limited liability company (a
"Person") or property whatsoever.
1.4 SUBORDINATION OF SUBROGATION, ETC. NOTWITHSTANDING ANY
PAYMENTS MADE OR OBLIGATIONS PERFORMED BY GUARANTOR BY
REASON OF THIS GUARANTY (INCLUDING BUT NOT LIMITED TO
APPLICATION OF FUNDS ON ACCOUNT OF SUCH PAYMENTS OR
OBLIGATIONS), GUARANTOR HEREBY IRREVOCABLY (A) SUBORDINATES
TO THE PRIOR PAYMENT IN FULL OF THE GUARANTEED OBLIGATIONS
ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING
DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR
OTHERWISE) TO ASSERT ANY CLAIM AGAINST BORROWER OR ANY
OTHER PERSON, OR AGAINST ANY DIRECT OR INDIRECT SECURITY, ON
ACCOUNT OF PAYMENTS MADE OR OBLIGATIONS PERFORMED UNDER
OR PURSUANT TO THIS GUARANTY, INCLUDING WITHOUT LIMITATION
ANY AND ALL RIGHTS OF SUBROGATION, REIMBURSEMENT,
EXONERATION, CONTRIBUTION OR INDEMNITY, AND (B) WAIVES AND
RELEASES ANY RIGHTS IT MAY HAVE AT ANY TIME TO REQUIRE THE
MARSHALING OF ANY ASSETS OF BORROWER, WHICH RIGHT OF
MARSHALING MIGHT OTHERWISE ARISE FROM PAYMENTS MADE OR
OBLIGATIONS PERFORMED UNDER OR PURSUANT TO THIS GUARANTY,
AND ANY AND ALL RIGHTS THAT WOULD RESULT IN GUARANTOR
BEING DEEMED A "CREDITOR" UNDER THE UNITED STATES BANKRUPTCY
CODE OF BORROWER OR ANY OTHER PERSON.
ARTICLE II
COVENANTS
2.1 Covenants. Guarantor hereby covenants to Lender that:
(i) Promptly upon becoming aware thereof,
Guarantor shall give Lender notice of (i) the commencement,
existence or threat of any proceeding by or before any
governmental authority against or affecting Guarantor which,if
adversely decided, would have a material adverse effect on the
business, operations, condition (financial or otherwise) or
prospects of Guarantor or on its ability to perform
itsobligations hereunder or (ii) any material adverse change in
the business, operations, condition (financial or otherwise) or
prospects of Guarantor.
(ii) Guarantor shall permit such Persons as
Lender may designate to examine Guarantor's books and records and
take copies and extracts therefrom and to discuss the affairs of
Guarantor with its officers, employees and independent
accountants at such times and as often as Lender may reasonably
request. Guarantor hereby authorizes such officers, employees
and independent accountants to discuss with Lender the affairs of
Guarantor.
(iii) If Guarantor is a corporation or
partnership, Guarantor shall not dissolve, merge or consolidate
with any other Person or sell, transfer or otherwise dispose of
all or a substantial part of its assets, and shall continue to
engage in its business substantially as currently conducted and
operated and shall not engage in any other business.
ARTICLE III
MISCELLANEOUS
3.1 Effect Of Bankruptcy Proceedings. This Guaranty shall
continue to be effective, or be automatically reinstated, as the
case may be, if at any time payment, in whole or in part, of any
of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned by Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or
similar Law, all as though such payment had not been made. If an
Event of Default (as defined in the Loan Agreement) at any time
shall have occurred and be continuing or exist and declaration of
default or acceleration under or with respect to any of the
Facility Loan Documents shall at such time be prevented by reason
of the pendency against Borrower of a case or proceeding under
any bankruptcy or insolvency law, Guarantor agrees that, for
purposes of this Guaranty and its obligations hereunder, such
Facility Loan Documents shall be deemed to have been declared in
default or accelerated with the same effect as if such Facility
Loan Documents had been declared in default and accelerated in
accordance with the terms thereof, and Guarantor shall forthwith
pay the Guaranteed Obligations in full without further notice or
demand.
3.2 Lender's Right of Set-Off. If an Event of Default shall
occur, Lender shall have the right, in addition to all other
rights and remedies available to it, to set-off against and to
appropriate and apply to the unpaid balance of the Guaranteed
Obligations any debt owing to, and any other funds held in any
manner for the account of Guarantor by Lender or such holder,
including without limitation all funds in all deposit accounts
(general or special) now or hereafter maintained by Guarantor
with Lender or such holder. Such right shall exist whether or
not Lender or any such holder shall have made any demand under
this Guaranty or any other Facility Loan Document and
whether or not the Guaranteed Obligations are matured or
unmatured. Guarantor hereby confirms the foregoing arrangements
and each such holder's and the Lender's right of banker's lien
and set-off and nothing in this Guaranty or any other Facility
Loan Document shall be deemed any waiver or prohibition of any
such holder's or of Lender's right of banker's lien or set-off.
3.3 Further Assurances. From time to time upon the request of
Lender, Guarantor shall promptly and duly execute, acknowledge
and deliver any and all such further instruments and documents as
Lender may deem necessary or desirable to confirm this Guaranty,
to carry out the purpose and intent hereof or to enable Lender to
enforce any of its rights hereunder.
3.4 Amendments, Waivers, Etc. This Guaranty cannot be
amended, modified, waived, changed, discharged or terminated
except by an instrument in writing signed by the party against
whom enforcement of such amendment, modification, waiver, change,
discharge or termination is sought.
3.5 No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of Lender in exercising any
right, power or privilege under this Guaranty or any other
Facility Loan Document shall affect any other or future exercise
thereof or exercise of any other right, power or privilege; nor
shall any single or partial exercise of any such right, power or
privilege or any abandonment or discontinuance of steps to
enforce such a right, power or privilege preclude any further
exercise thereof or of any other right, power or privilege. The
rights and remedies of Lender under this Guaranty are cumulative
and not exclusive of any rights or remedies which Lender
would otherwise have under the other Facility Loan Documents, at
law or in equity.
3.6 Notices. All notices, requests, demands, directions and
other communications under the provisions of this Guaranty shall
be sent and deemed given in accordance with Section 11.6 of the
Loan Agreement, except that the following addresses shall be
used:
To Guarantor: Montgomery CV Realty L.P.
Plymouth Plaza
580 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attn: Chief Financial Officer
Telecopy: (610) 834-8110
with a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-3291
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
To Borrower: Marlton Plaza Associates, L.P.
c/o Marlton Plaza LLC
580 West Germantown Pike, Suite 200
Plymouth Meeting, PA 19462
Attn: Chief Financial Officer
Telecopy: (610) 834-8110
with a copy to: Fox, Rothschild, O'Brien & Frankel, LLP
2000 Market Street, Tenth Floor
Philadelphia, PA 19103-3291
Attn: Stanley S. Cohen, Esquire
Telecopy: (215) 299-2150
3.7 Expenses. Guarantor agrees to pay or cause to be paid and
to save Lender harmless against liability for the payment of all
reasonable out-of-pocket expenses, including fees and expenses of
counsel for Lender, incurred by Lender from time to time arising
in connection with Lender's enforcement or preservation of
rights under this Guaranty, including but not limited to such
expenses as may be incurred by Lender in connection with any
default by Guarantor of any of its obligations hereunder.
3.8 Survival. All obligations of Guarantor to make payments
under Sections 3.01 or 3.07 hereof or to indemnify Lender
(including indemnities by Borrower of Lender under the Facility
Loan Documents) shall survive the payment and performance in full
of the Guaranteed Obligations.
3.9 Jurisdiction; Etc. Guarantor irrevocably (a) agrees that
Lender may bring suit, action or other legal proceedings arising
out of this Guaranty in the courts of the State of
New Jersey or the courts of the United States for the
District of New Jersey; (b) consents to the jurisdiction of each
such court in any such suit, action or proceeding;
(c) waives any objection which such Guarantor may have to
the laying of the venue of any such suit, action or proceeding in
any of such courts; and (d) waives any right Guarantor may have
to a jury trial in connection with any such suit, action or
proceeding.
3.10 Severability. If any term or provision of this Guaranty
or the application thereof to any Person or circumstance shall to
any extent be invalid or unenforceable, the remainder of this
Guaranty, or the application of such term or provision to Persons
or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term and
provision of this Guaranty shall be valid and enforceable to the
fullest extent permitted by law.
3.11 Counterparts. This Guaranty may be executed in any number
of counterparts and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and
the same instrument.
3.12 Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the Commonwealth of
Pennsylvania.
3.13 Successors and Assigns. This Guaranty shall bind
Guarantor and its successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.
IN WITNESS WHEREOF, Guarantor has duly executed and
delivered this Guaranty as of the date first above written.
MONTGOMERY CV REALTY, L.P.
By: Montgomery CV Realty Trust, a Delaware
business trust, its sole general partner
By: /s/ Louis P. Meshon, Sr.
Louis P. Meshon, Sr.
President
