UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K-A
AMENDMENT NO. 1
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-14377
Krupp Realty Limited Partnership-VII
(Exact name of registrant as specified in its charter)
Massachusetts 04-2842924
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
470 Atlantic Avenue, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (617) 423-2233
<PAGE>
This amendment is being filed to submit the following exhibits listed
below:
(b) Exhibits:
Number and Description
Under Regulation S-K
The following reflects all applicable exhibits required under
Item 601 of Regulation S-K:
(10) Material Contracts
Nora Corners Shopping Center
(10.22) Promissory Note dated September 27, 1994,
effective October 6, 1994, by and between Krupp
Realty Limited Partnership-VII and John Hancock
Mutual Life Insurance Company. (File No. 0-
14377).+
(10.23) Mortgage, Security Agreement, Assignment of Leases
and Fixture Filing dated September 27, 1994,
effective October 6, 1994, by and between Krupp
Realty Limited Partnership-VII and John Hancock
Mutual Life Insurance Company. (File No. 0-
14377).+
+ Filed herein
<PAGE>
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, thereunto duly authorized, on the 30th day of March, 1995.
KRUPP REALTY LIMITED PARTNERSHIP-VII
By: The Krupp Corporation, a General
Partner
By: /s/George Krupp
George Krupp, Co-Chairman
(Principal Executive Officer)
and Director of The Krupp
Corporation
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated, on the 30th day of March, 1995.
Signatures Title(s)
/s/Douglas Krupp Co-Chairman (Principal Executive Officer)
Douglas Krupp and Director of The Krupp Corporation, a General Partner.
/s/George Krupp Co-Chairman (Principal Executive Officer)
George Krupp and Director of The Krupp Corporation, a General Partner.
/s/Laurence Gerber President of The Krupp Corporation, a
Laurence Gerber General Partner.
/s/Marianne Pritchard Treasurer and Chief Accounting Officer of
Marianne Pritchard The Krupp Corporation, a General Partner
PROMISSORY NOTE
$4,250,000.00 September 27. 1994
For Value Received, the undersigned, KRUPP REALTY LIMITED PARTNERSHIP
- Vll, a Massachusetts limited partnership (together with its successors and
assigns, "Maker"), hereby promises to pay, without relief from valuation and
appraisement laws, to the order of JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
a Massachusetts corporation, at its Home Office at John Hancock Place, P.O. Box
111, Boston, Massachusetts 02117, or at such other place, or to such other
party or parties, as the holder of this note (together with any successor
holder or holders, "Holder"") may from time to time designate, the principal
sum of Four Million two Hundred Fifty Thousand Dollars ($4,250,000.00) with
interest to be computed from the date of disbursement of loan proceeds, at
the rate of nine per centum (9%) per annum, payable on the first day of each
and every month, beginning December 1, 1994, upon all principal remaining
from time to time unpaid; principal and interest to be paid in installments
as follows: $35,665.85 on December 1, 1994 and $35,665.85 on the first day
of each and every month thereafter to November 1, 2004, inclusive; provided,
however, that the amount of the final payment aforesaid shall be for the
amount of principal and interest then remaining unpaid. If the
loan proceeds are not disbursed on the first day of a month , then interest
only at the rate specified above from and including the date of disbursement
of the loan proceeds to the first day of the month following such disbursement
shall be due and payable in advance on the date of such disbursement.
The privilege is reserved of prepaying the full balance of prinicpal on or after
the commencement date of the fourth (4th) Loan Year, but not before, subject
to giving not less than thirty (30) nor more than ninety (90) days' prior
written notice to Holder and to payment to Holder of a premium equal to the
greater of:
(a) The sum obtained by multiplying the then
outstanding principal balance due hereunder by the difference
obtained by subtracting the yield rate on publicly traded United
States Treasury Securities (as published in The Wall Street
Journal or other business publication of general circulation five
(5) business days prior to the date of said payment) having the
closest matching maturity date to the maturity date of the loan
from the stated interest rate on this note adjusted to its semi-
annual equivalent rate (9.170%), times the number of scheduled
monthly payments remaining until the conclusion of the loan
term hereunder, divided by 12; or
(b) One percent (1%) of the then outstanding
principal balance.
Provided, however, no premium will be required if prepaid during the last
ninety (90) days of the loan term if proper notice is given or in the event of a
prepayment resulting from an application of insurance proceeds or condemnation
awards to the indebtedness evidenced by this note. Notwithstanding the above,
if the yield rate on publicly traded United States Treasury Securities is not
obtainable, then the nearest equivalent issue or index shall be selected, at
the reasonable determination of Holder, and used to calculate the prepayment
premium. No partial prepayment shall be permitted at any time. A "Loan\
Year" is defined as any twelve month period commencing with the date on
which the first monthly payment of principal and interest is due, or any
anniversary thereof.
<PAGE>
Reference is made to Paragraph 28 of the Mortgage which provides for payment
of a premium in the event of acceleration of this note.
While any default exists beyond any applicable grace period in the making of
any of said payments or in the performance or observance of any of the
covenants or agreements of this note or of any instrument now or hereafter
evidencing or securing the indebtedness
evidenced hereby (the "Security Documents"), and after maturity, Maker
further promises to pay, on each date aforesaid, additional interest on the
principal balance of this note then outstanding at the rate (the "default
rate") representing the difference between the aforesaid rate and sixteen
per centum (16%) per annum, provided that any additional interest which
has accrued shall be paid at the time of and as a condition precedent to the
curing of any default. Upon any such default Holder may apply payments
received on any amounts due hereunder or under the terms of any Security
Document as Holder may determine and, if Holder so elects, notice of election
being expressly waived except as may be provided in the Mortgage, the principal
remaining unpaid with accrued interest shall at once become due
and payable.
Maker waives presentment, protest and demand, notice of protest, demand and
dishonor of this note and agrees to pay all costs of collection when
incurred, including attorneys' fees, and to perform and comply with each of
the covenants, conditions, provisions and agreements of Maker contained in
every Security Document. No extension of the time for the payment of this
note or any installment hereof made by agreement with any person
now or hereafter liable for the payment of this note shall operate to release,
discharge, modify, change or affect the original liability under this note,
either in whole or in part, of any of the undersigned not a party to such
agreement. Notwithstanding any provision herein or in any Security Document,
the total liability for payments in the nature of interest shall
not exceed the limits now imposed by the usury laws of the State of Indiana.
This note is given for a loan of Four Million Two Hundred Fifty Thousand
Dollars ($4,250,000.00) and is secured by a mortgage of even date herewith (the
"Mortgage") which is a lien on real estate in Marion County, Indiana and shall
be construed by the law of said State.
In any action brought to enforce the obligation of Maker to pay the
indebtedness evidenced hereby or to enforce the obligation of Maker to pay
any indebtedness or obligation created or arising under this instrument,
the judgment or decree shall be enforceable against Maker only to the extent
of its interest in the property securing this note, and any such judgment
shall not be subject to execution on, nor be a lien on, assets of Maker or
any partner of Maker other than their interest in the property securing this
note. Notwithstanding the foregoing, the immediately preceding exculpatory
provisions shall not extend, in any event, to (a) loss resulting from or
relating to fraud or intentional misrepresentation by Maker, (b) loss
resulting from or relating to misappropriation or misapplication of any
insurance or condemnation proceeds, (c) rents and other payments
collected by Maker subsequent to the occurrence of an event of default
hereunder or under any Security Document and (d) loss resulting from or
relating to the breach of any representation, warranty or covenant made
by Maker in Paragraphs 33 or 34 of the Mortgage or the failure of Maker to
observe and perform its obligations under Paragraph
35 of the Mortgage and under the Environmental Indemnification Agreement between
Maker and Holder of even date with this note. It is provided further that
nothing contained herein: (a) shall constitute a waiver by Holder or the
release or impairment by Holder of any obligation of Maker evidenced by,
secured by or contained herein or in any Security Document; (b) shall impair
the right of Holder to name Maker as a party defendant in any
action or suit for judicial foreclosure and sale under any Security Document;
and (c) shall not impair the right of Holder to obtain the appointment of a
receiver.
KRUPP REALTY LIMITED PART NERSHIP - Vll
a Massachusetts limited partnership
By: The Krupp Corporation, a Massachusetts
corporation, its general partner
By:-------------------------------------------
--------------------------------------------
(Print Name)
Vice President and
(Title)
<PAGE>
MORTGAGE. SECURITY AGREEMENT,
ASSIGNMENT OF LEASES AND FIXTURE FILING
THIS INDENTURE WITNESSETH, That KRUPP REALTY LIMITED
PARTNERSHIP - VII, a Massachusetts limited partnership, with offices at 470
Atlantic Avenue, Boston, Massachusetts 02210, hereinafter called the mortgagor,
which term shall be construed to include heirs, executors, administrators,
successors and assigns, hereby mortgages and warrants to JOHN HANCOCK MUTUAL
LIFE INSURANCE COMPANY, a Massachusetts corporation, having its home office
at John Hancock Place, Post Office Box 111, Boston, Massachusetts 02117,
hereinafter called the mortgagee, which term shall be construed to include
successors and assigns, the following described interests in real estate
situated in Marion County, Indiana to-wit:
(a) Leasehold interest in that certain property described as Parcel
I on Exhibit A as created by that certain "Lease" by Cornelius M. Bowen and
Wilma Bowen, lessors, and Burger Chef Systems, Inc., dated October 15, 1962,
as evidenced by Notice of Lease recorded September 25, 1963, in Misc.
Record 737, Page 381, and assigned to Nora Corners Building Associates,
Ltd., an Illinois limited partnership, by Notice of Assignment dated February
14, 1985 and recorded February 25, 1985, as Instrument No. 85-13596, and
recorded on March 6, 1985, as Instrument No. 85-16525, and assigned to
mortgagor by Assignment of Lease dated September 24, 1986 and recorded
September 25, 1986, as Instrument No. 86-95848, all as recorded in the Office
of the Recorder of Marion County, Indiana (the "Ground Lease");
(b) Fee simple interest in that certain property described as Parcel
II on Exhibit A;
(c) Easement interest in that certain property described as Parcel
III on Exhibit A;
together with all of mortgagor's right, title and interest in and to all
buildings, structures, apparatus, chattels, equipment, personal property and
fixtures owned by mortgagor now or hereafter erected or placed in or upon
said real estate or now or hereafter attached to or used in connection
with said real estate, whether or not the same have or would become
part of said real estate by attachment thereto, including, without limiting
the generality of the foregoing, all furnaces, heaters, stoves, ranges, gas
and electric light fixtures, refrigerating and air conditioning apparatus,
elevators, screens, doors, awnings, blinds, floor coverings,
lobby furnishings, gas and oil tanks and equipment, pipes, wires and plumbing,
refrigerators,ovens, hoods and fans, disposal, dishwashers, carpets, dryers,
washers, furniture, air conditioner and mechanical equipment, all of which
shall be subject to the lien of this mortgage. To the extent permitted by
law, the foregoing items should be considered part
of the hereinabove described real estate.
To Have and to Hold said mortgaged premises, with all said tenements,
hereditaments, easements, appurtenances and other rights and privileges
thereunto belonging or in any way now or hereafter appertaining unto and to
the use of the mortgagee, its successors and assigns, forever.
THE MORTGAGOR HEREBY COVENANTS AND AGREES:
1. That this mortgage is given as security for the performance and
observance of the covenants and agreements herein contained and to secure
to the mortgagee the payment of the sum of Four Million Two Hundred Fifty
Thousand Dollars ($4,250,000.00) and interest thereon, evidenced by the
mortgagor's promissory note of even date herewith the "note"), payable
according to its terms, to the order of the mortgagee, the final payment
of the entire indebtedness being due and payable October 1, 2004.
<PAGE>
2. The mortgagor is well and lawfully seized of the mortgaged premises,
has either a good and indefeasible leasehold estate or estate in fee simple,
as described above, and has good right and full power to mortgage, assign and
convey the same; the mortgaged premises are free and clear of all encumbrances,
except as set forth on Exhibit B attached hereto ("Permitted Exceptions"); the
mortgagor will make any further assurances of title that the mortgagee may
require and will warrant and defend said mortgaged premises against
all lawful claims and demands whatsoever.
3. Mortgagor will pay said note in accordance with its terms and will
perform and comply with all of the terms and provisions thereof. In addition,
mortgagor will pay to mortgagee its regularly established administrative fees
charged with respect to, and shall reimburse mortgagee for all costs and
expenses, including without limitation reasonable attorneys' fees, incurred
in connection with, the review and processing of requests of mortgagor made
subsequent to the date of this mortgage.
4. Mortgagor will keep protected and in good order, repair and
condition
at all times the buildings and improvements (including fixtures) now standing
or hereafter erected or placed upon the mortgaged premises and any and all
appurtenances, apparatus and
articles of personal property, including but not limited to furniture,
furnishings and equipment, now or hereafter in or attached to or used in
connection with said buildings or improvements, promptly replacing any of
the aforesaid which may become lost, destroyed or unsuitable for use, and
will keep insured the aforesaid real and personal property and
the interests and liabilities incident to the ownership thereof (including
but not limited to rent loss insurance), in manner, forms, companies, sums
and length of terms satisfactory to the mortgagee and as required under the
Ground Lease. All insurance policies are to be held by and, to the extent
of its interests, are to be for the benefit of and first payable in
case of loss to the mortgagee, and the mortgagor shall deliver to the mortgagee
a new policy as replacement for any expiring policy at least fifteen (15)
days before the date of such expiration; that all amounts recoverable under
any policy are hereby assigned to the
mortgagee and in the event of a loss the amount collected may, at the option of
the
mortgagee, be used in any one or more of the following ways: (1) applied
upon the
indebtedness secured hereby, whether such indebtedness then be matured or
unmatured,
(2) used to fulfill any of the covenants contained herein as the mortgagee
may determine,
(3) used to replace or restore the property to the condition prior to such
loss, or (4)
released to the mortgagor. The mortgagee is hereby irrevocably appointed by
the mortgagor
as attorney of the mortgagor to assign any policy in the event of the
foreclosure of this
mortgage or other extinguishment of the indebtedness secured hereby.
5. Subject to the provisions of paragraph 43, Mortgagor will pay before
same
become delinquent or any penalty attaches thereto for non-payment, all taxes,
assessments
and charges of every nature and to whomever assessed that may now or
hereafter be levied
or assessed, or by reason of non-payment become a lien prior to this mortgage,
upon the
mortgaged premises or any part thereof, upon the rents, issues, income or
profits thereof,
whether any or all of said taxes, assessments or charges be levied directly or
indirectly or
as excise taxes or as income taxes, and will thereupon submit to the mortgagee
e such
evidence of the due and punctual payment of such taxes, etc. as the mortgagee
may require,
and mortgagor will also pay all taxes, assessments or charges which may be
levied on the
note secured hereby, or the interest thereon, excepting the Federal income tax
imposed
under the laws of the United States of America or state or local taxes imposed
upon
mortgagee's income under the laws of Indiana.
6. If mortgagor shall neglect or refuse to keep in good repair the
property
referred to in paragraph 4, to replace the same as therein agreed, to
maintain and pay the
premiums for insurance which may be required under paragraph 4 or to pay and
discharge
all taxes, assessments and charges of every nature and to whomever assessed,
as provided
for in paragraph 5, the mortgagee may, at its election, cause such repairs
or replacements
to be made, obtain such insurance or pay said taxes, assessments and charges
and any
amounts paid as a result thereof, together with interest thereon at the rate
of sixteen percent
(16%) per annum (the "Default Rate") from the date of payment shall be
immediately due
and payable by the mortgagor to the mortgagee, and until paid shall be added to
and
become a part of the principal debt secured hereby, and the same may be collecte
as a part
of said principal debt in any suit hereon or upon the note; or the mortgagee, by
the payment
of any tax, assessment or charge, may, if it sees fit, be thereby subrogated to
the rights of
the State, County, Village and all political or governmental subdivisions. No
such advances
shall be deemed to relieve the mortgagor from any default hereunder or impair
any right
or remedy consequent thereon, and the exercise of the rights to make advances
granted in
this paragraph shall be optional with the mortgagee and not obligatory and the
mortgagee
shall not in any case be liable to the mortgagor for a failure to exercise any
such right.
<PAGE>
7. Mortgagor will keep the mortgaged premises in good order and repair
and will
not commit or suffer any strip or waste of the mortgaged premises or any
violation of any
law, regulation, ordinance or contract affecting the mortgaged premises, will
not commit or
suffer any demolition, removal or material alteration of any of the buildings
or
improvements (including fixtures) on the mortgaged premises without the
mortgagee's
written consent; provided, however, mortgagor may replace personal property in
the manner and subject to the conditions specified in paragraph 31(b) and may
make alterations in the
ordinary course of business to prepare space for occupancy by tenants as long
as the cost
of such alterations in any one instance does not exceed Fifty Thousand Dollars
($50,000.00).
8. Mortgagor will not file any declaration of condominium, map or other
document having the effect of subjecting the mortgaged premises to the
condominium or
co-operative form of ownership without, in any such event, the written consent
of the
mortgagee, which consent may be withheld by mortgagee in its absolute
discretion.
9. Mortgagor agrees that all awards heretofore or hereafter made by any
public
or quasi-public authority to the present and all subsequent owners of the
premises covered
by this mortgage by virtue of an exercise of the right of eminent domain by such
authority,
including without limitation any award for a taking of title, possession or righ
of access to
a public way, or for any change of grade of streets affecting said premises, are
hereby
assigned to the mortgagee; and the mortgagee, at its option, is hereby
authorized, directed
and empowered to collect and receive the proceeds of any such award and awards
from the
authorities making the same and to give proper receipts and acquittances
therefor, and may,
at the mortgagee's election, use such proceeds in any one or more of the
following ways: (1)
apply the same or any part thereof upon the indebtedness secured hereby, whether
such
indebtedness then be matured or unmatured, (2) use the same or any part thereof
to fulfill
any of the covenants contained herein as the mortgagee may determine, (3) use
the same
or any part thereof to replace or restore the property to a condition reasonably
satisfactory
to the mortgagee, or (4) release the same to the mortgagor; and the mortgagor
hereby
covenants and agrees to and with the mortgagee, upon request by the mortgagee,
to make,
execute and deliver any and all assignments and other instruments sufficient for
the purpose
of assigning all such awards to the mortgagee free, clear and discharged of any
and all
encumbrances of any kind or nature whatsoever.
10. Mortgagor will pay to mortgagee, to the extent requested by the
mortgagee,
on dates upon which interest is payable, such amounts as the mortgagee from time
to time
reasonably estimates as necessary to create and maintain a reserve fund from
which to pay
before the same become due, all rents under the Ground Lease, all taxes,
assessments, liens
and charges on or against the property hereby mortgaged, and premiums for
insurance as
is herein covenanted to be furnished by the mortgagor. Payments from said
reserve funds
for said purposes may be made by the mortgagee at its discretion even though
subsequent
owners of the property described herein may benefit thereby. Any reserve fund
required
herein may be accomplished by way of an escrow account established at a bank
acceptable
to the mortgagee with the bank reporting to the mortgagee as monthly deposits
are made,
and which deposits will be in an amount sufficient to cover the charges for
which reserves
are required. The account will be interest-bearing and governed by a "Bank Tax
Escrow
Agreement" in the form previously submitted to mortgagor except with respect to
ground
rents, which are governed by a "Trust Agreement Relating to Ground Lease" in the
form
previously submitted to mortgagor. If an Event of Default (as defined in
paragraph 24
below) occurs under the terms of this mortgage, any part or all of said reserve
funds may
be applied to any part of the indebtedness hereby secured and in refunding any
part of said
reserve fund the mortgagee may deal with whomever is represented to be the owner
of said
property at that time.
<PAGE>
11. Mortgagor will, within ninety (90) days after the expiration of
each calendar
year, deliver to the mortgagee (i) a statement of annual income and expenses,
in detail and
form satisfactory to the mortgagee, in connection with the operation of the
mortgaged
premises prepared by mortgagor, its accountant or its chief financial officer
and, prior to the
occurrence of an Event of Default, certified by an officer of the general
partner of
mortgagor and subsequent to an Event of Default certified by a certified public
accountant
who is a member of the American Institute of Certified Public Accountants or as
otherwise
acceptable to the mortgagee and (ii) a rent roll of the property showing the
name of all
tenants in occupancy, the rent currently collectible, their respective lease
commencement
and expiration dates, the amount of square footage occupied by each tenant, the
rent per
square foot for each tenant, the amount of common area contribution, if any, and
the
amount of the tax stop, if any. The rent roll shall also indicate whether there
are any
concessions, free rent periods or rebates. All deliveries and notices to be made
to
mortgagee under the note, this mortgage, or any other instrument relating to the
indebtedness secured hereby shall be given by U.S. certified mail, return
receipt requested,
or by overnight courier, addressed to John Hancock Mutual Life Insurance Co.,
Post Office
Box 111, Boston, Massachusetts 02117, ATTENTION: Real Estate Investment Group
(T-53) Loan No. 516399.
12. If any action or proceeding is commenced, excepting an action to
foreclose this
mortgage or to collect the debt hereby secured, to which action or proceeding
the mortgagee
is made a party by reason of the execution of this mortgage or the note which it
secures, or
in which it becomes necessary to defend or uphold the lien of this mortgage, all
sums paid
by the mortgagee for the expense of any litigation to prosecute or defend the
rights and lien
created hereby, shall be paid by the mortgagor together with interest thereon
from date of
payment at the Default Rate and any such sum and the interest thereon shall be
immediately due and payable and be secured hereby, having the benefit of the
lien hereby
created, as a part thereof, and of its priority; provided that mortgagor shall
have no
obligation to reimburse mortgagee in any action between the two where mortgagor
is the
prevailing party.
13. Subject to the provisions of paragraph 43, Mortgagor shall pay all
sums, the
failure to pay which may result in the acquisition of a lien prior to or on a
parity with the
lien of this mortgage, before such a lien may attach, or which may result in
conferring upon
a tenant of any part of the mortgaged premises a right to recover such sums as
prepaid rent,
or as a credit or offset against any future rental obligation.
14. Mortgagee shall be subrogated for further security to the lien,
although
released of record, of any and all encumbrances paid out of the proceeds of
the loan
secured by this mortgage.
<PAGE>
15. As further security for the indebtedness secured hereby, Mortgagor
assigns to
mortgagee its entire interest, as lessor, in all present and future leases, all
rental and other
income from the mortgaged premises and all agreements, contracts, licenses and
permits
pertaining to the mortgaged premises; but, so long as there is no default in any
of the terms
or conditions of this mortgage, the note or any other loan document, or of any
extension or
renewal thereof, mortgagor may continue to collect all income arising from the
premises as
it accrues. This assignment shall not be construed as a consent by mortgagee to
any such
lease, license, permit, agreement or contract hereby assigned nor impose upon
mortgagee
any obligations with respect thereto. In the event of a default beyond any
applicable grace
period in any of the terms and conditions of this mortgage, the note, or any
other loan
document, mortgagor shall, upon demand therefor made by mortgagee, surrender
possession
of the premises to mortgagee, or its duly constituted agents, who may thereafter
take
possession and assume the management of the premises and collect either with or
without
so taking possession the rentals and other income therefrom, rent or lease the
premises or
any portion thereof, upon such terms and for such time as it may deem best,
terminate any
tenancy and maintain proceedings to recover rents or possession of the premises
from any
tenant or trespasser, and apply the net proceeds of such rent and income to the
following
purposes and in the following order: (a) preservation and management of the
premises; (b)
payment of taxes and other impositions; (c) payment of insurance premiums;
(d) payment
of installments of interest upon the note; and (e) payment of the
installments of principal
upon the note. Mortgagee shall be liable to account only for those rents
actually received.
16. With respect to the leases identified in Exhibit C and such others as
are
hereafter specifically identified by mortgagee, mortgagor shall not cancel any
of the leases
assigned to mortgagee pursuant to paragraph 15 above, nor terminate or accept a
surrender
thereof or reduce the payment of the rent thereunder or modify any of said
leases
or accept
any prepayment of rent therein (except any amount which may be required to be
prepaid
by the terms of any such lease) without first obtaining, on each occasion, the
written
approval of mortgagee.
17. Mortgagor shall faithfully keep and perform all of the material
obligations of
the landlord under all of the leases assigned to the mortgagee pursuant to
paragraph 15
above and shall not permit to accrue to any tenant under any such lease any
right to prepaid
rent pursuant to the terms of any lease other than the usual prepayment of rent
as would
result from the acceptance on the first day of each month of the rent for the
ensuing month,
according to the terms of the various leases.
18. Mortgagor shall operate such property at all times as a commercial
retail
shopping center and office use ancillary thereto and shall not acquire any
fixtures,
equipment, furnishings or apparatus covered by this mortgage subject to any
security interest
or other charge or lien taking precedence over this mortgage.
19. Mortgagor shall pay to mortgagee, its legal representatives and
assigns,
attorney's fee, in addition to all other legal costs, as often as any proceeding
is taken to
foreclose this mortgage for default in any of its terms, covenants or agreements
, which shall
be an additional lien on said premises.
<PAGE>
20. Mortgagor shall not and will not apply for or avail itself of any
appraisement,
valuation, stay, extension or exemption laws, or any so-called "Moratorium Laws"
, now
existing or hereafter enacted, in order to prevent or hinder the enforcement or
foreclosure
of this mortgage, and hereby waives the benefit of such laws. Mortgagor for
itself and all
who may claim through or under it waives any and all right to have the property
and estates
comprising the mortgaged property marshalled upon any foreclosure of the lien
hereof, and
agrees that any court having jurisdiction to foreclose such lien may order the
mortgaged
property sold as an entirety.
21. In the event that any provision of this mortgage or the note
secured hereby
conflicts with applicable law, such conflict shall not affect the other
provisions of this
mortgage or the note which can be given effect without the conflicting provision
and, to this
end, the provisions of this mortgage and the note are declared to be severable.
22. This mortgage creates a continuing lien to secure the full and
final payment
of said note and the performance of all the other obligations imposed hereby and
hereafter arising.
23. The mortgaged premises being located in the State of Indiana, this
mortgage
and the rights and indebtedness hereby secured shall, without regard to place of
contract
or payment, be construed and enforced according to the laws of the State of
Indiana.
24. The occurrence of any of the following events shall constitute an
event of
default hereunder (an "Event of Default").
(i) a default in the payment of the indebtedness hereby secured or of any
installment thereof as
they severally become due,
(ii) a default in the payment of the rents under the Ground Lease or
the taxes, assessments or
charges aforesaid,
(iii) if strip or waste be committed on or improvements be removed from
the mortgaged premises
without the written consent of the mortgagee,
(iv) a default in the performance and observance of any other of the
terms, covenants or
agreements of this mortgage (including but not limited to paragraphs 29 or 30
herein), the note secured
hereby, or in any other instrument now or hereafter evidencing, securing or in
any manner relating to the
debt secured hereby, including without limiting the generality of the foregoing,
the Ground Lease and that
certain "Trust Agreement Relating to Ground Lease",
(v) upon the institution of any foreclosure proceeding by the holder of
any mortgage or lien upon
the mortgaged premises,
(vi) if any law is hereafter passed by the United States of America or
the State of Indiana
deducting from the value of land for the purpose of taxation any lien thereon
or changing in
any way the laws now in force for the taxation of mortgages, or
debts, and the interest thereon, secured by mortgages, for state
or local purposes, or changing the manner of collection of any
such taxation so as to adversely affect this mortgage,
(vii) in case the mortgagor should become insolvent,
or apply to the bankruptcy court to be adjudicated a voluntary
bankrupt, or proceedings be instituted against the mortgagor to
put it in involuntary bankruptcy which are not dismissed within
ninety (90) days of the commencement thereof, or should any
proceedings be taken against the mortgagor looking to the
appointment of a receiver which are not dismissed within ninety
(90) days of the commencement thereof or should the property
herein mortgaged be seized under any writ or process of court,
or by any trustee acting under any mortgage,
(viii) any change in the ownership (exclusive of limited
partnership interests) or control of mortgagor without the prior
written consent of mortgagee, or
(ix) if any representation to mortgagee made by
mortgagor is determined by mortgagee to be false or materially
misleading, or if any warranty made to mortgagee is breached
by mortgagor, or if mortgagee determines that mortgagor has
not fully disclosed to mortgagee all facts material to the
mortgaged premises, mortgagor, mortgagor's business
operations and all guarantors of the obligations of mortgagor to
mortgagee,
then in any of said events, the whole of the indebtedness hereby secured shall,
at the
election of the mortgagee, become immediately due and payable and the mortgagee,
at its
option, may proceed to foreclose this mortgage without relief under valuation
and
appraisement laws; and thereupon, or at any time during the existence of any
such default,
the mortgagee shall be entitled to enter into possession of the premises an
with
or without
so taking possession to collect the rents, issues and profits thereof, accrued
and to accrue,
and to apply the same on any indebtedness secured hereby or, if the mortgagee so
elects,
the mortgagee shall be entitled to the appointment of a receiver in any court of
competent
jurisdiction to collect such rents, issues and profits under direction of the
court, notice of
the exercise thereof being hereby waived.
25. No failure by mortgagee in the exercise of any of its rights under this
mortgage
shall preclude mortgagee from the exercise thereof in the event of a subsequent
default by
mortgagor hereunder, and no delay by mortgagee in the exercise of its rights
under this
mortgage shall preclude mortgagee from the exercise thereof so long as mortgago
r is in
default hereunder. Mortgagee may enforce any one or more of its rights or
remedies
hereunder successively or concurrently.
26. The covenants, conditions and agreements contained in this mortgage shall
bind, and the benefits thereof shall inure to, the respective parties hereto and
their
respective successors and assigns.
27. Notwithstanding any provision herein or in said note, the total liability
for
payments in the nature of interest shall not exceed the limits now imposed by
the usury laws
of the State of Indiana.
<PAGE>
28. Mortgagor acknowledges that the indebtedness evidenced by the note secured
by this mortgage was made
on the basis and assumption that mortgagee would receive the payments of
principal and interest set forth
in the note for the full term thereof, subject to prepayment rights as set forth
in the note. If the
maturity of the indebtedness evidenced by the note is accelerated by reason of a
default under the note,
an Event of Default under this mortgage (exclusive of a default under paragraph
24(vi) of this mortgage),
or a default under any other document or instrument evidencing or securing the
indebtedness evidenced
by the note, which default occurs prior to the time period in which prepayment
is allowed,
including an acceleration by reason of sale, conveyance, further encumbrance or
other
default (which acceleration shall be at mortgagee's sole option), but excluding
a prepayment
resulting from the application of insurance proceeds or condemnation awards
to the
indebtedness secured hereby, there shall be due, in addition to the outstanding
principal
balance, accrued interest and other sums due under the note, this mortgage and
any other
document evidencing or securing the indebtedness evidenced by the note, an
amount equal
to the greater of:
(a) The sum obtained by multiplying the then outstanding principal
balance due under the note by the difference obtained by subtracting the
yield
rate on publicly traded United States Treasury Securities (as published
in The
Wall Street Journal or other business publication of general circulation five
(5)
business days prior to the date of said payment) having the closest matching
maturity date to the maturity date of the note from the interest rate on the
note adjusted to its semi-annual equivalent rate (i.e., 9.170% per annum),
times the number of scheduled monthly payments remaining in the term of
the indebtedness evidenced by the note, divided by 12, or
(b) An amount equal to ten percent (10%) of the then outstanding
principal balance of the note.
If such default occurs on or after the date on which prepayment is permitted,
then in lieu
of the above amount, payment of an amount calculated in the manner set forth in
the note
for prepayment in full shall be required. If the yield rate on publicly traded
United States
Treasury Securities is not obtainable, then the nearest equivalent issue or
index shall be
selected, at the mortgagee's reasonable determination, and used to calculate
such amounts.
Any tender of the amount necessary to satisfy the entire indebtedness, paid
at any time
following such default or acceleration, including at a foreclosure sale shall
be deemed a
voluntary prepayment, and, at mortgagee's option, such payment shall include an
amount
equal to the sum first described above as being due after default and
acceleration. The
foregoing provision for the payment of a fee in the event of payment prior to
the stated
maturity date of the note (including as a consequence of acceleration) has been
specially
negotiated by mortgagor and mortgagee.
29. Mortgagor shall have no right during the term of this mortgage to, and shall
not, voluntarily or by operation of law, sell or otherwise transfer the
mortgaged
premises,
or any portion thereof (except leasing in the normal course of business), or
enter into a
contract for sale of the mortgaged premises or any part thereof, without the
prior written
consent of the mortgagee. If mortgagee elects to accelerate the maturity of the
loan
pursuant to this paragraph 29, then mortgagee shall be entitled to receive a
premium
determined pursuant to paragraph 28, the payment of which shall be secured
by the
lien of
this mortgage. Notwithstanding the foregoing, this paragraph shall not apply to
the sale,
assignment or transfer of limited partnership interests in the mortgagor.
<PAGE>
30. Mortgagor shall have no right during the term of this mortgage to, and shall
not, grant, or permit to exist, any lien against or any security interest in all
or any portion
of the mortgaged premises other than the lien of this mortgage and the other
loan
documents in favor of mortgagee and Permitted Exceptions. In the event that
the
mortgaged premises are encumbered in violation of the foregoing provisions of
this
paragraph 30, such encumbrance shall, at the option of mortgagee, constitute an
Event of
Default hereunder and mortgagee may, if it so elects, declare the loan secured
hereby
immediately due and payable. If mortgagee elects to accelerate the maturity of
the loan
pursuant to this paragraph 30, then mortgagee shall be entitled to receive a
premium
determined pursuant to paragraph 28, the payment of which shall be secured by
the lien of
this mortgage.
31. (a) This mortgage shall constitute a security agreement with respect to,
and
mortgagor hereby grants to mortgagee a security interest in, (i) any part of the
mortgaged
premises which may now or hereafter be construed as personal property and all
apparatus,
fittings, machinery, equipment and articles of personal property, including
fixtures, now
owned or hereafter acquired by the mortgagor and located on the real estate
constituting
a part of the mortgaged premises and used or held for use in connection with the
operation
or maintenance thereof, (ii) all amounts held by the "Trustee" under that
certain "Trust
Agreement Relating to Ground Lease" of even date herewith and (iii) all amounts
held by
the "Escrow Agent" pursuant to that certain "Bank Tax Escrow Agreement" of
even date
herewith (collectively, the "collateral"). The mortgagee shall have full
authority to execute
and file financing statements signed only by a representative of the mortgagee
covering the
security interest of the mortgagee in the collateral. Upon the occurrence of any
Event of
Default hereunder, the mortgagee, at its option and without notice or demand,
shall be
entitled to enter upon the mortgaged premises and take such other action as it
may deem
expedient to obtain immediate possession of the collateral. Upon request, the
mortgagor
shall assemble and make the collateral available to the mortgagee at a place to
be
designated by the mortgagee which is reasonably convenient to both parties. Upon
repossession, the mortgagee may retain the collateral in partial satisfaction of
the
indebtedness secured hereby or sell all or any portion of the collateral at
public or private
sale in accordance with the Uniform Commercial Code in force in Indiana, or by
any other
applicable statute. If the mortgagee disposes of any or all of the collateral
after default, the
proceeds thereof shall be applied in the following order: (i) to payment of the
expenses of
retaking, holding, preparing for sale, selling and the like; (ii) to the payment
of attorneys'
fees and expenses incurred by the mortgagee; and (iii) to the satisfaction of
the mortgage
debt.
(b) Mortgagor agrees that, without the written consent of mortgagee,
mortgagor will not remove or permit to be removed from the mortgaged premises
any of
the collateral except that so long as mortgagor is not in default hereunder,
mortgagor shall
be permitted to sell or otherwise dispose of the collateral when obsolete, worn
out,
inadequate, unserviceable or unnecessary for use in the operation of the
mortgaged
premises, but only upon replacing the same or substituting for the same other
collateral at
least equal in value and utility to the initial value and utility of that
disposed of and in such
a manner that said replacement or substituted collateral shall be subject to the
security
interest created hereby and that the security interest of mortgagee shall be
perfected and
first in priority, it being expressly understood and agreed that all
replacements
, substitutions and additions to the collateral shall be and become immediately
subject to the security
interest of this mortgage and covered hereby. Mortgagor shall, from time to
time,
on
request of mortgagee, deliver to mortgagee, at the cost of mortgagor: (i)
such further
<PAGE>
financing statements and security documents and assurances as mortgagee may
reasonably
require, to the end that the liens and security interests created hereby or
intended by
mortgagee to be created hereby shall be and remain perfected and protected in
accordance
with the requirements of any present or future law; and (ii) an inventory of the
collateral
in reasonable detail. Mortgagor covenants and represents that all collateral now
is, and that
all replacements thereof, substitutions therefor or additions thereto, unless
mortgagee
otherwise consents, will be free and clear of liens, encumbrances, title
retention devices and
security interests of others.
32. Portions of the mortgaged premises are or are to become fixtures. The
mortgagor covenants and agrees that this mortgage is to be filed for record in
the Office of
the Recorder of Marion County, Indiana, and upon such filing shall also operate
from the
time of filing as a fixture filing with respect to all personal property, as
described herein,
constituting part of the mortgaged premises which are or are to become fixtures
related to
the real estate described herein. For such purpose, the following information
is set forth:
(a) Name and Address of Debtor:
Krupp Realty Limited Partnership - Vll, having an address at
c/o The Krupp Companies, 470 Atlantic Avenue, Boston,
Massachusetts 02210, Attention: Chief Financial Officer.
(b) Name and Address of Secured Party:
John Hancock Mutual Life Insurance Company, having its
principal office and place of business at John Hancock Place,
Post Office Box 111, Boston, Massachusetts 02117, Attention:
Real Estate Investment Group (T-53).
(c) This document covers personal property which is or is to
become fixtures. To the extent this document secures an
obligation for the construction of any improvements on the
mortgaged premises, it shall be deemed a construction
mortgage under the Indiana Uniform Commercial Code.
33. Mortgagor shall obtain and at all times maintain in full force and
effect such governmental approvals,
rulings, permits and licenses as may be necessary to comply with all
Environmental Laws (as defined below)
and other governmental requirements relating to the mortgaged premises and the
operation thereof.
Mortgagor represents and warrants that, except as set forth in the Environment
Assessment prepared by ATEC
Associates, Inc. dated August 1, 1994 (the "Assessment"): (a) to the best
knowledge of mortgagor, there
have been no releases at, upon, under, or within, nor past or ongoing migration
from
neighboring lands to, the mortgaged premises, of hazardous materials (as
defined below);
(b) mortgagor has not received any notice from any governmental authority or
from any
tenant or other occupant or from any other person with respect to any release or
threatened
release of hazardous materials at, upon, under, or within the mortgaged
premises; (c) to the
best of mortgagor's knowledge, no hazardous materials have been generated,
stored, treated
or disposed of or are expected to be generated, stored, treated or disposed of
on the
mortgaged premises, no oil or petroleum products are now being stored on the
mortgaged
premises other than minor amounts stored for personal, household or routine
maintenance
purposes; and there are no underground or other storage tanks on the
mortgaged premises;
<PAGE>
(d) to the best of mortgagor's knowledge, there is no asbestos or asbestos-
containing
materials, polychlorinated biphenyls ("PCB's"), radon gas or urea formaldehyde
foam
insulation located in, on or under the mortgaged premises and (e) to the best of
mortgagor's
knowledge, no environmental assessment or investigation pertaining to the
mortgaged
premises or any portion thereof has been made by mortgagor, any tenant or any
prior owner
of the mortgaged premises other than the Assessment and the assessments,
investigations
and certificates identified on Exhibit D attached hereto.
As used in this mortgage, the term "Environmental Laws" means all federal
, state and
local laws, statutes, regulations, ordinances, codes, rules, and other
governmental restrictions,
requirements, standards and guidelines relating to the discharge of air
pollutants, water
pollutants, soil pollutants or contaminants or process waste water or otherwise
relating to
the environment or hazardous substances or hazardous waste, including but not
limited to
asbestos, radon gas, PCB's and urea formaldehyde foam insulation. It includes,
without
limitation, the Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal
Water Pollution Control Act (the "Clean Water Act"), the Federal Resource
Conservation
and Recovery Act ("RCRA"), the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Federal Toxic
Substance Control
Act ("TSCA"), regulations of the Environmental Protection Agency, regulations
of the
Nuclear Regulatory Agency and regulations of any state department of natural
resources or
state environmental protection agency now or at any time after the date of this
Mortgage
in force and effect.
As used in this mortgage, "hazardous materials" means any elements,
compounds,
solutions, mixtures, substances, materials or other matter of any kind,
including solid, liquid
or gaseous materials which are (i) listed or defined as a "hazardous material",
"hazardous
substance" or "toxic substance" under any Environmental Laws, (ii) oil and
petroleum
products, (iii) asbestos, and asbestos-containing materials, (iv) PCB's, (v)
designated a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, (vi)
defined as
"hazardous waste" pursuant to Section 1004 of RCRA, (vii) defined as a
"hazardous
substance" pursuant to Section 101 of CERCLA, (viii) defined as a toxic
substance in TSCA,
(ix) contaminants of soil or ground water and cause degradation of the soil
and/or water
to the extent that mitigation methods are needed to restore the soil or water
to its natural
state, or (x) causes or contributes to damage to human health or the
environment.
34. Mortgagor represents and warrants to, and covenants with mortgagee, that:
(a) Mortgagor has not been, is not, and will not become involved
in operations at the mortgaged premises which could lead to the imposition
on mortgagor of liability under RCRA, CERCLA, or any other applicable
Environmental Laws;
(b) Mortgagor will strictly comply with the requirements of RCRA,
CERCLA, and all other applicable Environmental Laws, and will notify
mortgagee of any release or threatened release of hazardous materials at,
upon, under, or within the mortgaged premises involving mortgagor, or of the
presence of hazardous materials, radon gas, or urea formaldehyde foam
insulation at the mortgaged premises, or of the receipt by mortgagor of any
notice from any governmental agency or authority or from any tenant or other
occupant or from any other person with respect to any alleged such release
or presence, promptly upon discovery of such release or presence or receipt
<PAGE>
of such notice, and will send mortgagee copies of all results of tests of
underground storage tanks at the mortgaged premises;
(c) at any time while the loan is outstanding, mortgagee may (but
will not be obliged to) enter the mortgaged premises upon reasonable notice
(except in the event of an emergency) to make reasonable inspections of its
condition, including but not limited to soil and groundwater sampling and
monitoring, and including but not limited to inspections for hazardous
materials, radon gas, and/or urea formaldehyde foam insulation;
(d) all of the answers on the Environmental Certificate attached to
the loan application as Exhibit C are true and complete; and
(e) mortgagor will notify mortgagee in writing immediately upon
leaning that any of the answers on the Environmental Certificate either was
not true when made or is no longer true.
35. Mortgagor hereby indemnifies and agrees to hold mortgagee harmless from
and against any and all loss, cost, damage, liability and expense, including
attorneys' fees,
suffered or incurred by mortgagee in connection with the mortgaged premises or
the loan
secured hereby, at any time, whether before, during or after enforcement of its
rights and
remedies upon default, on account of any release or threatened release of
hazardous
materials at, upon, under, or within the mortgaged premises, or resulting from
the presence
of hazardous materials, radon gas, or urea formaldehyde foam insulation at, on,
in, under
or about the mortgaged premises, including without limitation (i) the imposition
by any
governmental authority of any lien or so-called "super priority lien" upon the
mortgaged
premises or any part thereof, (ii) clean-up costs, (iii) liability for personal
injury or property
damage or damage to the environment and (iv) fines, penalties and punitive
damages. The
provisions of this paragraph 35 shall survive foreclosure of this mortgage,
a deed in lieu of
foreclosure, discharge of this mortgage or a transfer of the mortgaged premises.
36. Mortgagor covenants and warrants that no part of the proceeds of the loan
evidenced by the note secured hereby will be used for the purpose (whether
immediate,
incidental or ultimate) of "purchasing" or "carrying" any "margin stock", as
such terms are
defined in Regulation G (12 CFR part 207) of the Board of Governors of the
Federal
Reserve System or for the purpose of reducing or retiring any indebtedness which
was
originally incurred for any such purpose.
37. To the best of mortgagor's knowledge, after diligent inquiry and
investigation,
none of the mortgaged premises is within the definition of the term "property"
contained in
Section 6 (IC 13-7-22.5-6) of the Indiana Responsible Property Transfer Law
("IRPTL") (IC
13-7-22.5) and no person is required as a result of the execution of this
mortgage to furnish
the environmental disclosure document described and provided for in IRPTL.
38. In addition to making payment of all rent and other payments and charges
required to be made by mortgagor, as lessee under and pursuant to the provisions
of the
Ground Lease, mortgagor covenants that it will:
<PAGE>
(a) diligently perform and observe all of the terms, conditions and
covenants of the Ground Lease required to be performed and observed by
mortgagor as such lessee, to the end that all things shall be done which are
necessary to keep unimpaired mortgagor's rights under the Ground Lease;
(b) promptly notify mortgagee in writing of any default by the lessor
under the Ground Lease in the performance and observance by such lessor
of any of the terms, conditions or covenants to be performed or observed by
such lessor under the Ground Lease;
(c) promptly notify mortgagee in writing of any default by
mortgagor as such lessee in the performance and observance of any of the
terms, conditions or covenants to be performed or observed by mortgagor
under the Ground Lease;
(d) promptly notify mortgagee in writing of the giving of any notice
under the Ground Lease of any default by mortgagor in the observance of any
terms, covenants or conditions thereof; and
(e) not surrender any of its rights, title or interest under the Ground
Lease, nor terminate or cancel the Ground Lease or enter into any agreement
(whether oral or written) modifying, supplementing or amending the Ground
Lease, without the prior written consent of mortgagee.
Mortgagor covenants that no release or forbearance of any of the
obligations of
mortgagor under the Ground Lease, pursuant to the Ground Lease or otherwise,
shall
release mortgagor from any of its obligations under this mortgage, including,
without
limitation, mortgagor's obligations under subparagraph (a) of this paragraph.
39. Mortgagee shall have the right (but shall not be obligated) to take
any action mortgagee deems
necessary or desirable to prevent or to cure any default by mortgagor in
the performance of or compliance with any of the mortgagor's obligations
under the Ground
Lease. Upon receipt by mortgagee of any written notice of default by mortgagor
under the
Ground Lease, mortgagee may rely thereon and take any action as aforesaid to
cure such
default even though the existence of such default or the nature thereof be
questioned or
denied by mortgagor or by any party on behalf of mortgagor. Mortgagor hereby
expressly
grants to mortgagee, and agrees that mortgagee shall have, the absolute and
immediate right
to enter in and upon the mortgaged premises or any part thereof to such extent
and as often
as mortgagee, in its sole discretion, deems necessary or desirable in order to
prevent or to
cure any such default by mortgagor. Mortgagee may pay and expend such sums
of money
as mortgagee in its sole discretion deems necessary for any such purpose, and
mortgagor
hereby agrees to pay to mortgagee, within five (5) days of written demand, all
such sums so
paid and expended by Mortgagee, together with interest thereon from the date of
each such
payment at the Default Rate. All sums so paid and expended by mortgagee,
and the
interest thereon, shall be added to and be secured by the lien of this mortgage.
<PAGE>
40. As further security for the repayment of the indebtedness secured hereby
and for the performance of
the covenants contained herein and in the Ground Lease, mortgagor
hereby assigns to mortgagee all of its rights, privileges and prerogatives as
lessee under the
Ground Lease to terminate, cancel, modify, change, supplement, alter, extend or
amend the
Ground Lease and any such termination, cancellation, modification, change,
supplement,
alteration, extension or amendment without the prior written consent thereto by
mortgagee
shall be void and of no force and effect. As further security to mortgagee,
mortgagor shall
deposit with mortgagee a certified copy of the Ground Lease and all amendments,
if any,
thereto, to be retained by mortgagee until all indebtedness secured hereby is
fully paid,
provided, that so long as there is no Event of Default hereunder, mortgagee
shall have no
right to terminate, cancel, modify, change, supplement, alter, extend or amend
the Ground
Lease.
41. Unless mortgagee shall otherwise expressly consent in writing, the fee
title to the real estate
covered by the Ground Lease and the leasehold estate under the Ground
Lease shall not merge, but shall always remain separate and distinct,
notwithstanding the
union of such estates either in the lessor or in the lessee under the Ground
Lease or in a
third party, by purchase or otherwise. In case mortgagor shall acquire fee
title or any other
estate, title or interest in the real estate covered by the Ground Lease, this
mortgage shall
attach to and cover and be a lien upon such other estate so acquired by
mortgagor, and such
other estate so acquired by mortgagor shall be considered as mortgaged,
warranted and
assigned to mortgagee and the lien of this mortgage spread to cover such estate
with the
same force and effect as though specifically herein mortgaged, warranted and
assigned.
42. If the landlord or other fee owner of the real estate covered by the Ground
Lease or any part thereof or interest therein shall commence a case or become
the subject
of a case under the Bankruptcy Code, 11 U.S.C. 101 et seq. (the "Bankruptcy
Code"):
(a) The lien of this mortgage shall attach to all of mortgagor's rights
and remedies at any time arising under or pursuant to Subsection 365(h) of
the Bankruptcy Code, including, without limitation, all of mortgagor's rights
to remain in possession of the real estate covered by the Ground Lease.
(b) Mortgagor shall not without mortgagee's prior written consent
elect to treat the Ground Lease as terminated under Subsection 365(h)(1) of
the Bankruptcy Code, and any such election made without mortgagee's prior
written
consent shall be void.
(c) Mortgagor hereby unconditionally assigns, transfers and sets
over to mortgagee all of mortgagor's claims and rights to the payment of
damages arising from any rejection by landlord of the Ground Lease under
the Bankruptcy Code. Mortgagee shall have the right to proceed in its own
name or in the name of mortgagor in respect of any claim, suit, action or
proceeding relating to the rejection of the Ground Lease, including, without
limitation, the right to file and prosecute, to the exclusion of mortgagor, any
proofs of claim, complaints, motions, applications, notices and other
documents, in any case in respect of landlord or the Ground Lease under the
Bankruptcy Code. This assignment constitutes a present, irrevocable and
unconditional assignment of the foregoing claims, rights and remedies, and
shall continue in effect until all of the indebtedness and obligations secured
<PAGE>
by this mortgage shall have been satisfied and discharged in full. Any
amounts received by mortgagee as damages arising out of the rejection of the
Ground Lease as aforesaid shall be applied first to all costs and expenses of
mortgagee (including, without limitation, attorneys' fees) incurred in
connection with the exercise of any of its rights or remedies under this
paragraph and then in accordance with the other terms of this mortgage.
(d) If, pursuant to subsection 365(h)(2) of the Bankruptcy Code, mortgagor
seeks to offset against
the rent reserved in the Ground Lease the amount of any damages caused by the
non-performance by the
landlord of the Ground Lease or any of the landlord's obligations under the
Ground Lease after the
rejection by the landlord of the Ground Lease under the Bankruptcy
Code, mortgagor shall, prior to effecting such offset, notify mortgagee of its
intent to do so, setting
forth the amounts proposed to be so offset and the basis therefor. Mortgagee
shall have the right to
object to all or any part of such offset and, in the event of such objection,
mortgagor shall not effect
any offset of the amounts so objected to by mortgagee. If mortgagee has failed
to object as aforesaid within thirty (30) days after notice from mortgagor in
accordance with the first
sentence of this paragraph, mortgagor may proceed to effect such offset in the
amounts set forth in
mortgagor's notice. Neither mortgagee's failure to object as aforesaid nor any
objection or other
communication between mortgagee and mortgagor relating to such offset shall
constitute an approval of any such offset by mortgagee. Mortgagor shall
indemnify and save mortgagee
harmless from and against any and all claims, demands, actions, suits,
proceedings, damages, losses, costs
and expenses of every nature whatsoever (including, without limitation,
attorneys' fees) arising from or
relating to any offset by mortgagor against the rent reserved in the Ground
Lease.
(e) If any action, proceeding, motion or notice shall be commenced
or filed in respect of the landlord under the Ground Lease or the real estate
covered by the Ground Lease
in connection with any case under the Bankruptcy Code, mortgagee shall have the
option, exercisable upon
notice from mortgagee to mortgagor, to conduct and control any such litigation
with counsel of mortgagee's
choice. Mortgagee may proceed in its own name or in the name of mortgagor in
connection with any such
litigation, and mortgagor agrees to execute any and all powers, authorizations,
consents or other
documents required by the mortgagee in connection therewith. Mortgagor shall,
within five (5) days after
written demand, pay to mortgagee all costs and expenses (including attorneys'
fees) paid or incurred by
mortgagee in connection with the prosecution or conduct of any such
proceedings .Any such costs or
expenses not paid by mortgagor as foresaid shall accrue interest at the rate of
nine per centum (9%) per
annum from the date of payment by mortgagee and such costs and expenses,
together with such interest,
shall be secured by the lien of this mortgage. Mortgagor shall not commence any
action, suit, proceeding
or case, or file any application or make any motion, in respect of the Ground
Lease in any such case under
the Bankruptcy Code without the prior written consent of mortgagee.
43. Mortgagor shall have the right to contest by appropriate legal proceeding,
but without cost or
expense to mortgagee, the validity of any liens (including liens for taxes,
public improvements and other matters), laws, ordinances, orders, rules and
regulations
affecting the mortgaged premises if compliance therewith may legally be held in
abeyance
without the incurrence of any immediately enforceable charge, lien or liability
against the
mortgaged premises, and mortgagor may postpone compliance therewith until the
final
determination of any such proceedings, provided they shall be prosecuted with
due diligence
and dispatch, and if any lien or charge is incurred, mortgagor may, nevertheless
, make the
contest and delay compliance if mortgagee is furnished with security, reasonably
satisfactory
to it, against any loss or injury by reason of such noncompliance or delay.
<PAGE>
44. In any action brought to enforce the obligation of the maker of the note
secured hereby to pay the indebtedness evidenced by such note or to enforce
the obligation
of the party executing this instrument to pay any indebtedness or obligation
created or
arising under this instrument, the judgment or decree shall be enforceable
against such party
only to the extent of its interest in the property covered hereby or subject to
any other
security instrument securing said note, and any such judgment shall not be
subject to
execution on, nor be a lien on, assets of such party or any partner of such
party other than
their interest in the property covered hereby or subject to any other security
instrument
securing said note. Notwithstanding the foregoing, the immediately preceding
exculpatory
provisions shall not extend, in any event, to (a) loss resulting from or
relating to fraud or
intentional misrepresentation by mortgagor, (b) loss resulting from or
relating to
misappropriation or misapplication of any insurance or condemnation proceeds,
(c) rents
and other payments collected by mortgagor subsequent to the occurrence of an
Event of
Default hereunder or under any other instrument evidencing or securing the
indebtedness
of mortgagor to mortgagee and (d) loss resulting from or relating to the
breach of any
representation, warranty or covenant made by mortgagor in paragraphs 33 or 34 of
this
mortgage or the failure of mortgagor to observe and perform its obligations
under paragraph
35 hereof and under the Environmental Indemnification Agreement between
mortgagor and
mortgagee of even date herewith. It is provided further that nothing contained
herein: (a)
shall constitute a waiver by mortgagee or the release or impairment by mortgagee
of any
obligation of mortgagor evidenced by, secured by or contained herein or in the
note and/or
any other loan documents; (b) shall impair the right of the mortgagee to name
mortgagor
as a party defendant in any action or suit for judicial foreclosure and sale
hereunder or any
other loan document; and (c) shall not impair the right of the mortgagee to
obtain the
appointment of a receiver.
IN WITNESS WHEREOF, the mortgagor has executed this mortgage as of
the 27 day of September, 1994.
KRUPP REALTY LIMITED PARTNERSHIP - Vll
a Massachusetts limited partnership
By: The Krupp Corporation, a Massachusetts
corporation, its general partner
By:--------------------------------------------------------
-----------------------------------------------------------
Vice President (Printed Name)
<PAGE>
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
Before me, a Notary Public in and for said County and State, personally
appeared
-------------------------------------- , personally known to me to be the Vice
President of The
Krupp Corporation, the General Partner of Krupp Realty Limited Partnership - Vll
, who
acknowledged the execution of the foregoing Mortgage, Security Agreement,
Assignment
of Leases and Fixture Filing for and on behalf of said limited partnership, and
who, being
duly sworn, stated that the representations therein contained are true.
WITNESS my hand and Notarial Seal this 27th day o
of September, 1994.
---------------------------------------------------
Notiary Public Residing in Cook County
My Commission Expires: --------------------------
(printed signature)
This instrument prepared by Tom Charles Huston, BARNES & THORNBURG, 1313
Merchants Bank Building, 11 South Meridian Street, Indianapolis, Indiana 46204.
49533 August 31, 1994
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
Parcel I
Ninety-nine year leasehold estate in the following described real estate
located in Marion County,
Indiana, as created by that certain "Lease" by Cornelius M. Bowen and Wilma
Bowen, lessors, and Burger
Chef Systems, Inc., dated October 15, 1962, as evidenced by Notice of Lease
recorded September 25, 1963,
in Misc, Record 737, Page 381, and assigned to Nora Corners Building Associates,
Ltd., a Illinois limited
partnership, by Notice of Assignment dated February 14, 1985 and recorded
February 25, 1985, as Instrument
No. 85-13596, and re-recorded on March 6, 1985, as Instrument No. 85-16525, and
assigned to mortgagor by
Assignment of Lease dated September 24, 1986 and recorded September 25, 1986, as
Instrument No. 86-95848,
all as recorded in the Office of the Recorder of Marion County, Indiana:
Part of the Southeast Quarter of Section 13, Township 17 North, Range 3
East, in Marion
County, Indiana, more particularly described as follows:
Beginning at a point on the South line of the Southeast Quarter of
Section 13, Township 17 North,
Range 3 East, said point being 145 feet East of the Southwest corner of
said Southeast Quarter of
said Section; thence North and parallel with the West line of the
Southeast Quarter of said
Section 220 feet; thence West and parallel with the South line of the
Southeast Quarter of said
Section 62 feet; thence North and parallel with the West line of the
Southeast Quarter of said
Section 336 feet; thence West and parallel with the South line of the
Southeast Quarter of said
section 20 feet; thence North and parallel with the West line of the
Southeast Quarter of said
Section 203 feet; thence West and parallel with the South line of the
Southeast Quarter of said
Section 30 feet; thence North and parallel with the West line of th
e Southeast Quarter of said
Section 125 feet; thence East and parallel with the South line of the
Southeast Quarter of said
Section 399 feet; thence South and parallel with the West line of the
Southeast Quarter of said
Section 884 feet; thence West along the South line of said Section
287 feet to the place of
beginning.
Parcel II
Part of the Southeast Quarter of Section 13, Township 17 North, Range
3 East, Marion County,
Indiana, being more particularly described as follows:
Commencing at the Southwest corner of said Southeast Quarter Section;
thence South 89 degrees 09
minutes 00 seconds East along the South line if said Quarter Section a
distance of 432.00 feet;
thence North 00 degrees 02 minutes 00 seconds East parallel with the
West line of said Quarter
Section 204.30 feet to the point of beginning; thence South 89 degrees
09 minutes 00 seconds East
parallel with the South line of said Quarter Section 368.00 feet to a
point on the centerline of
Westfield Bldv.; thence North 24 degrees 36 minutes 10 seconds East
along said centerline 143.19
feet to the point of curvature of a curve concave Southeasterly having
a central angle of 4
degrees 18 minutes 22 seconds and a radius of 2868.97 feet; thence
Northeasterly along said curve
and along said centerline an arc distance of 215.62 feet (said arc
being subtended by a chord
having a bearing of North 26 degrees 45 minutes 21 seconds East and a
length of 215.57 feet);
thence North 73 degrees 14 minutes 04 seconds West 547.59 feet; thence
South 00 degrees 02 minutes
00 seconds West parallel with the West line of said Quarter Section 475.
09 feet to the point of
beginning.
<PAGE>
Parcel III
A non-exclusive easement for ingress and egress in favor of Parcel I,
over and along the following
described real estate in Marion County, being more particularly described
as follows:
Beginning at the Northeast corner of Parcel I and running thence North
parallel to the West line
of said Quarter Section a distance of 300.63 feet to a point; thence West
parallel with the South line of
said Quarter Section, a distance of 50 feet to a point; thence South parallel
with the West line of said
Quarter Section, a distance of 300.63 feet to a point; thence East to the place
of beginning. 8336x.
<PAGE>
EXHIBIT B
Permitted Exceptions
1. Taxes for 1993 due and payable in 1994, in the name of Helen M. and Charles
Eusey, A.
Bowen and Geneva B. Bowen (1/9 Life Est.) & J. B. Smith, K.B. Richter, P.B.
Story (each
2/27 & 1/27 remainder). Assessment: Land $254,330.00 Improvements
$490,500.00
Exemptions $NONE. Parcel No(s). 800-8000942
Taxing Unit: Washington Township, Sanitation
May Installment: $28,887.61 (PAID) November Installment; $28,887.61
(UNPAID).
Taxes for 1994 due and payable 1995, a lien, but not yet due and payable
and taxes for all
subsequent years, which are not yet a lien. (Parcel I)
2. Taxes for 1993 due and payable in 1994, in the name of Burger Chef
Systems Inc.
Assessment: Land $NONE, Improvements $74,830.00, Exemptions $NONE
Parcel No(s). 800-804766
Taxing Unit: Washington Township, Sanitation
May Installment: $2,902.21 (PAID) November Installment: $2,902.21
(UNPAID).
Taxes for 1994 due and payable 1995, a lien, but not yet due and payable
and taxes for all
subsequent years; which are not yet a lien. (Improvements on leased G.
Parcel #8000942)
3. Taxes for 1993 due and payable in 1994, in the name of Krupp Realty
Limited
Partnership VII
Assessment: Land $134,100.00 Improvements $476,570.00, Exemptions
$NONE.
Parcel No(s). 800-8034655
Taxing Unit: Washington Township, Sanitation
May Installment: $23,684.33 (PAID) November Installment: $23,684.33
(UNPAID).
Taxes for 1994 due and payable 1995, a lien, but not yet due and payable
and taxes for all
subsequent years, which are not yet a lien. (Parcel II)
4. Commitments relative to use or development of insured real estate
recorded
January 15, 1985 as Instrument No. 85-3875.
5. Commitments concerning the Use or Development of Real Estate made in
Connection with Rezoning of Property or Plan Approval, recorded January
15, 1985 as Instruments No. 85-3878.
6. Easements, terms and provisions set out in Easement Agreement by and
between Nora
Corners Building Associated, Ltd., an Illinois Limited Partnership, and
Burger Chef Systems,
dated August 16, 1985 and recorded September 23, 1985 as Instrument
No. 85-82245.
7. Rights of tenants as tenants only as set out in Lease and Restrictive
covenants set out therein
by and between Nora Corners Building Associates, Ltd., as Lessor, and Peoples
Drug Stores,
Incorporated, as lessee, as evidenced by Memorandum for Lease dated September 26
, 1985 and recorded
February 24, 1986, as Instrument No. 86-15560, and recorded March 4, 1986, as
Instrument No. 86-18210, and
amended by First Amendment to Lease dated October 23,1985 and recorded March 4,
1986, as Instrument No.
86-18211.
8. Rights of the public for highway purposes in and to that portion of
insured real estate lying
within the bounds of 86th Street and Westfield Boulevard and as shown on
survey dated
December 13, 1985 and last revised August 2, 1994 by Timothy G. Wolfe,
Registered Land Surveyor.
<PAGE>
9. Easement for electric line granted to Indianapolis Power & Light Company by
instrument
dated November 19, 1985 and recorded December 18, 1985, as Instrument No.
85-111525 and as
shown on survey dated December 13, 1985 and last revised August 2, 1994 by
Timothy G. Wolfe,
Registered Land Surveyor. (Parcel I)
10. Existing rights for a 54 inch R.C.P. used for the relocation and
encasement of the Nora Branch of
Haverstick Creek as shown on survey dated August 2, 1994 by Timothy G. Wolfe,
Registered Land Surveyor.
11. Right of Way granted to State of Indiana by instrument dated June 12,
1944 and recorded September
24, 1946, in Deed Record 1233, page 563 and as shown on survey dated December 13
, 1985 and last revised
August 2, 1994 by Timothy G. Wolfe, Registered Land Surveyor. (Parcel I)
12. Right of Way granted to State of Indiana by instrument dated April 2,
1941 and recorded November
27, 1941, in Deed Record 1076, page 408, as Instrument No. 55899 and as shown on
survey dated December 13,
1985 and last revised August 2, 1994 by Timothy G. Wolfe, Registered Land
Surveyor. (Parcel II)
13. Right of Way granted to the State of Indiana by instrument dated
December 4, 1941 and recorded
April 18, 1942, in Deed Record 1088, page 77, as Instrument No. 16126 and as
shown on survey dated
December 13, 1985 and last revised August 2, 1994 by Timothy G. Wolfe,
Registered Land Surveyor.
14. Easement for electric lines granted to Indianapolis Power & Light
Company by instrument dated
October 28, 1946 and recorded December 16, 1946, in Deed Record 1243, page 188,
as Instrument No. 72183
and as shown on survey dated December 13, 1985 and last revised August 2, 1994
by Timothy G. Wolfe,
Registered Land Surveyor. (Parcel II)
15. Easement for electric lines granted to Indianapolis Power & Light
Company by instrument dated
December 28, 1967 and recorded January 16, 1968, as Instrument No. 68-2231 and
as shown on survey dated
December 13, 1985 and last revised August 2, 1994 by Timothy G. Wolfe
, Registered Land Surveyor (Parcel
II)
16. Easement for telephone lines granted to Indiana Bell Telephone Company,
Incorporated, by
instrument dated March 23, 1942 and recorded April 18, 1942, in Deed Record
1088, page 18, as Instrument
No. 16067, and modified by Partial Release of Easement dated May 6, 1963 and
recorded September 20, 1963,
in Release and Assignment Record 289, as Instrument No. 55665.
17. Easement for telephone lines granted to Indiana Bell Telephone Company,
Incorporated, by
instrument dated October 30, 1941 and recorded November 22, 1941, in Deed Record
1076, page 174, as
Instrument No. 55097, and amended by Partial Release of Easement dated May 6,
1963 and recorded September
20, 1963, in Release and Assignment Record 289, as Instrument No. 55666.
18. Restrictive covenants and easements for buffer and drainage as set out
in instrument recorded
March 13, 1967, as Instrument No. 67-9954. Said easement affects Parcel II as
shown on survey dated
December 13, 1985 and last revised August 2, 1994 by Timothy G. Wolfe,
Registered Land Surveyor. (Parcel
II)
19. Sign easement dated September 17, 1986 and recorded September 25, 1986,
as Instrument No. 86-
95847.
20. Terms, provisions and easements as set out in Lease by and between
Cornelius M. Bowen and Wilma
Bowen, lessors, and Burger Chef Systems, Inc., dated October 15, 1962, as
evidenced by Notice of Lease
recorded September 25, 1963, in Miscellaneous Record 737 page 381, and assigned
to Nora Corners Building
Associates, Ltd., an Illinois Limited Partnership, by Notice of Assignment dated
February 14, 1985 and
recorded February 25, 1985, as Instrument No. 85-13596, and re-recorded March 6,
1985, as Instrument No.
85-16525, and assigned to Krupp Realty Limited Partnership, by Assignment of
Lease dated September 24,
1986 and recorded September 25, 1986, as Instrument No. 86-95848 and amended by
Notice of Change of
Designation of Address for Notice recorded February 26, 1989 as Instrument No.
89-60712. (Parcels I &
III)
<PAGE>
21. Rights of tenants as tenants only as set out in Notice of Lease by and
between Nora Corners
Building Associates, Ltd., an Illinois Partnership, Lessor, and Pizza Hut
of America, Inc., a Delaware
Corporation, lessee, dated October 14, 1986 and recorded April 11, 1988, as
Instrument No. 88-32380.
22. Lease by and between Krupp Realty Limited Partnership, as lessor, and
Marsh Supermarkets, Inc., as
lessee, as evidenced by Memorandum of Lease dated July 30, 1980 and recorded
August 7, 1990, as Instrument
No. 90-79827.
23. Lease by and between Krupp Realty Limited Partnership, as lessor, and
Design: MSA, Inc., as
lessee, as evidenced by Memorandum of Amended and Restated Lease dated January
1, 1991 and recorded May 6,
1991, as Instrument No. 91-41923.
24. Rights of tenants in possession under unrecorded leases as tenants only.
25. Encroachment upon insured premises by the buildings appurtenant to the
property adjoining on the
West, as shown by survey dated August 2, 1994 by Timothy G. Wolfe, Registered
Land Surveyor.
26. Encroachment upon property adjoining on a Southern boundary of Parcel
I and on the East of Parcel
I at Southeast corner by the fences appurtenant to insured premises, as shown
by survey dated August 2,
1994 by Timothy G. Wolfe, Registered Land Surveyor.
27. Overlaps by adjoiners to the North of Parcel II as shown on survey
dated August 2, 1994 by Timothy
G. Wolfe, Registered Land Surveyor.
28. Rights of Northern adjoiners to Parcel II for drainage into existing 54
inch R.C.P. used for the
relocation and encasement of the Nora Branch of Haverstick Creek as shown on
survey dated August 2, 1994
by Timothy G. Wolfe, Registered Land Surveyor.
<PAGE>
EXHIBIT C
Major Leases
1. Lease Agreement dated February 21, 1985 between Nora Corners Building
Associates, Ltd., as lessor,
and Marsh Supermarkets, Inc., as lessee, as reflected in a memorandum of record
as Instrument No. 90-
79827.
2. Lease dated June 20, 1985, between Krupp Realty Ltd. Partners, successor
in interest to Nora
Corners Building Associates, Ltd., as lessor, and American Drug Stores, Inc.,
successor in interest of
Peoples Drug Stores, Inc., as lessee, as reflected in memoranda of record as
Instrument Nos. 86-15560,
86-18210 and 86-18211.
<PAGE>
EXHIBIT D
Prior Environment Reports
Exhibit C to the John Hancock loan application dated May 10, 1994 and the
environment reports identified
therein.
