<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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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) April 21, 1995
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Brandywine Realty Trust
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(Exact Name of Registrant as Specified in Charter)
Maryland 1-9106 23-2413352
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(State or Other (Commission File Number) (IRS Employer
Jurisdiction of Incorporation) Identification No.)
200 Berwyn Park, Suite 100, Berwyn, PA 19312
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 610-251-9111
-----------------------------
<PAGE>
BRANDYWINE REALTY TRUST
Item 5. Other Events
As disclosed in the Trust's previously filed Form 10-Q for the quarterly period
ended March 31, 1995, on April 21, 1995, the Trust refinanced the then existing
mortgage note of $6,899,000 borrowing $9 million under nonrecourse mortgage
loans which provide for a fixed rate of interest and are cross-collateralized by
the Specified Projects. The $9 million mortgage loans provide for a term of six
years with the lender having the right to call the loans at par at the end of
year three. Monthly payments of interest and principal are due based on a
25-year amortization schedule. The interest rate is set at 8.75% for the first
twelve months, 9.0% for the succeeding six months and 9.31% for the remainder of
the term of the loans. In addition, the lender is entitled to hold escrow cash
reserves for both real estate taxes and capital needs in two interest-bearing
accounts. Deposits to the real estate tax escrow account are required monthly
pro rata based upon annual tax bills. Amounts held in the capital escrow account
may be advanced, from time to time, subject to the new lender's verification of
the Trust's compliance with certain stated conditions to pay for capital
improvements, tenant improvements and leasing commissions associated with the
Specified Projects and distributions to shareholders of the Trust. This capital
escrow account held by the lender is not additional collateral for the mortgage
loan. An initial deposit of $1,559,000 was made to this account on April 21,
1995. Ongoing monthly deposits are required of $10,000 per month during the
first year of the loans and $25,000 per month over the remainder of the term of
the loans.
Item 7. Financial Statements and Exhibits
Documents filed as part of this report:
(a) Financial Statements of Businesses Acquired -- None
(b) Pro Forma Financial Information -- The pro forma financial information
previously filed as part of the Trust's Form 10-Q for the quarterly period
ended March 31, 1995 is incorporated by reference as part of this report.
(c) Exhibits
Index to Exhibits:
Exhibit Number Description
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10.31 Secured Promissory Notes, Security Agreements and
Assignments of Leases and Rents
10.32 Indemnity Agreement
10.33 Escrow Agreement
<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 hereunto duly authorized.
BRANDYWINE REALTY TRUST
By: /s/ Gerard H. Sweeney
-----------------------------
Gerard H. Sweeney
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 23, 1995
SECURED PROMISSORY NOTE
D-750594
$6,250,000.00 ___April 20_______, 1995
_____________, New Jersey
FOR VALUE RECEIVED, the undersigned, BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership, hereby promises to pay to the order of
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation, at the Home Office
of Principal Mutual Life Insurance Company at 711 High Street, Des Moines, Iowa
50392, or at such other place as the holder of this Note may designate, the
principal sum of Six Million Two Hundred Fifty Thousand and 00/100 Dollars
($6,250,000.00) or so much thereof as shall from time to time have been
advanced, together with interest on the unpaid balance of said sum from
______April 21 _____, 1995 at the rate of eight and seventy-five one-hundredths
percent (8.75%) per annum, computed on the basis of a 360 day year composed of
twelve 30-day months, in installments as follows:
Beginning on May 15, 1995, principal and interest shall be due and payable
in installments of Fifty-one Thousand Three Hundred Eighty-three and 98/100
Dollars ($51,383.98), with an installment in a like amount due and payable
on the same day of each month thereafter continuing to and including April
15, 1996.
On April 15, 1996, the per annum interest rate applicable from April 15,
1996 until October 15, 1996 shall be adjusted to nine percent (9.00%) per
annum. Beginning on May 15, 1996, principal and interest payments shall be
due and payable in installments of Fifty-two Thousand Four Hundred
Twenty-five and 40/100 Dollars ($52,425.40), with an installment in a like
amount due and payable on the same day of each month thereafter continuing
to and including October 15, 1996.
On October 15, 1996, the per annum interest rate shall be adjusted to nine
and thirty-one one-hundredths percent (9.31%) per annum. Beginning on
November 15, 1996, principal and interest payments shall be due and payable
in installments of Fifty-three Thousand Seven Hundred Twelve and 61/100
Dollars ($53,712.61), with an installment in a like amount due and payable
on the same day of each month thereafter continuing to and including April
15, 1998. On April 15, 1998 the per annum interest rate shall be adjusted to
an interest rate established by the holder of this note ("Adjusted Interest
Rate") based upon the holder of this note's evaluation of: (i) the then
current financial performance and projected risk of the Mortgaged Premises,
as hereinafter defined, which shall encompass various factors, including but
not limited to contract debt service coverage, loan-to-value ratio, economic
debt service coverage, occupancy, frequency of tenant rollover, financial
strength and stability of tenants; (ii) the then current financial status of
the undersigned, which shall include but not be limited to creditworthiness,
financial strength, percentage of liabilities to liquid assets, and annual
net income; and (iii) the remaining term and current outstanding balance of
the note. Commencing on May 15, 1998, monthly installments of principal and
interest shall be due and payable in an amount determined by amortizing the
then principal balance of this note over a twenty-two (22) year term at the
Adjusted Interest Rate, and a like amount shall be due and payable on the
same day of each month thereafter until said principal and interest shall be
<PAGE>
paid, except that all remaining principal and interest shall be due and
payable on April 15, 2001 ("Maturity Date"). Each installment shall be
credited first upon interest then accrued and the remainder upon principal,
and interest shall cease to accrue upon principal so credited. If on the
date of the first installment, interest is accrued for more or less than one
installment period, the amount of said installment shall be increased or
decreased by the amount that the interest accrued exceeds or is less than
the interest for one installment period based on the actual number of days
elapsed to the date of said installment. All principal and interest shall be
paid Paragraph 8by automated clearing house transfer through such bank or
financial institution as shall be approved in writing by the holder hereof,
shall be made to an account designated by holder, and shall be initiated by
holder or shall be made in such other manner as the holder hereof may direct
from time to time.
The holder of this Note shall notify the undersigned in writing on or
before February 15, 1998 of holder's election to offer the undersigned the
Adjusted Interest Rate, and the rate thereof, or of holder's intention to
declare this Note to be due and payable in full. In the event holder notifies
the undersigned of its intention to declare this Note to be due and payable in
full in lieu of offering an Adjusted Interest Rate or in the event the
undersigned fails to notify the holder in writing on or before March 1, 1998
that the undersigned accepts the Adjusted Interest Rate or in the event the
undersigned fails to pay a One Thousand Five Hundred Dollar ($1,500.00) rate
adjustment fee to holder on or before March 1, 1998 in connection with the
undersigned's acceptance of the Adjusted Interest Rate, this Note shall on May
15, 1998 ("Call Date"), become due and payable in full, without premium, and all
principal, interest accrued or to accrue to said date and all other amounts then
unpaid on this Note or due or to become due under any instrument by which it is
secured shall become immediately due and payable in full. Notwithstanding any
other provision herein, holder shall not be obligated to offer an Adjusted
Interest Rate if any default exists under this Note or the Mortgage.
As security for the payment of the moneys owing hereon, the undersigned has
executed and delivered to the holder hereof a Mortgage and Security Agreement
(the "Mortgage") on lands in the township of Evesham, County of Burlington and
State of New Jersey (the "Mortgaged Premises") and an Assignment of Leases and
Rents (the "Assignment"). All of the above documents are of even date herewith.
Any Event of Default (as defined therein) in the covenants and conditions of the
Mortgage, or the Assignment (which covenants and conditions are made a part
hereof as though set forth herein at length), shall be an Event of Default of
this Note.
No privilege is reserved by the undersigned to prepay any principal of this
note prior to the Maturity Date except on or anytime after May 15, 1996 with
thirty (30) days written notice to the holder, and provided that the Other Note,
as hereinafter defined, is simultaneously prepaid in full. If this Note is
prepaid during this period, undersigned shall pay this Note in full, together
with a Make Whole Premium, as hereinafter defined, including all principal,
interest accrued and to accrue to the date of prepayment, and all other amounts
then unpaid on this Note or due or to become due under any instrument securing
this Note. Notwithstanding anything herein to the contrary, no premium or
penalty, including, but not limited to, the Make Whole Premium, shall be
applicable to any prepayment hereunder due to the application of the proceeds
<PAGE>
from any condemnation or casualty in accordance with the terms of the Mortgage,
provided no Event of Default exists under the Loan Documents, as hereinafter
defined.
Notwithstanding anything herein to the contrary, the undersigned may prepay
the amount of this Note allocated to one of the three Greentree office buildings
commonly known as One Greentree Centre, Two Greentree Centre and Three Greentree
Centre provided (A) the remaining two Greentree office buildings (i) provide for
a loan to value ratio equal to or less than 55%, as reasonably determined by the
holder of this Note, and (ii) provide for a debt service coverage (annual net
operating income from all approved executed leases in effect on the Other
Premises divided by the total annual installment payments due under the Other
Note including accrued or capitalized interest) of not less than 1.75, as
reasonably determined by the holder of this Note, and (B) the undersigned pays a
Make Whole Premium, based upon the unamortized loan balance of the applicable
building. The initial loan balances allocated to each Greentree office building
are as follows:
One Greentree Centre $1,900,000.00
Two Greentree Centre $1,900,000.00
Three Greentree Centre $2,450,000.00
The undersigned agrees that if the holder of this Note accelerates the whole
or any part of the principal sum evidenced hereby, or applies any proceeds as if
such application had been made as a result of such acceleration, pursuant to the
provisions of the Mortgage, the undersigned waives any right to prepay said
principal sum in whole or in part without premium and agrees to pay, as
liquidated damages and not as a penalty, a "Make Whole Premium." The Make Whole
Premium shall mean an amount equal to the greater of one percent (1%) of the
principal amount to be prepaid or a premium calculated as follows:
(a) Determine the "Reinvestment Yield." The Reinvestment Yield will be equal
to the yield on the applicable* U.S. Treasury Bond, Note or Bill
("primary issue")** published two weeks prior to the date of prepayment
and converted to an equivalent monthly compounded nominal yield.
*As set forth above, the U.S. Treasury Bond, Note or Bill
applicable for each prepayment period is as follows:
<PAGE>
Prepayment Period U.S. Treasury Issue
----------------- --------------------
To May 15, 1998 May 1998, 9%
May 15, 1998 to April 15, 2001 ***
**In the event there is no market activity involving the primary issue
at the time of prepayment, the holder of this Note shall choose a
comparable Treasury Bond, Note or Bill ("secondary issue") which the
holder of this Note deems to be similar to the primary issue's
characteristics (i.e., rate, remaining time to maturity, yield).
***At this time there is not a U.S. Treasury Issue for this
prepayment period. At the time of prepayment, holder shall select in its
sole and absolute discretion a U.S. Treasury Issue with similar
remaining time to maturity as this Note.
(b) Calculate the "Present Value of the Mortgage." The Present Value of the
Mortgage is the present value of the payments to be made in accordance
with this Note (all installment payments and any remaining payment due
on the Paragraph 21Call Date, or if the Call Date has already passed, on
the Maturity Date) discounted at the Reinvestment Yield for the number
of months remaining from the date of prepayment to the Paragraph 22Call
Date, or if the Call Date has already passed, to the Maturity Date. In
the event of a partial prepayment hereunder, the Present Value of the
Mortgage shall be calculated in accordance with the preceding sentence
multiplied by the fraction which results from dividing the amount of the
prepaid proceeds by the principal balance of the loan immediately prior
to prepayment.
(c) Subtract the amount of the prepaid proceeds from the Present Value of
the Mortgage as of the date of prepayment. Any resulting positive
differential shall be the premium.
If any payment of principal, interest or premium is not made when due,
damages will be incurred by the holder of this Note, including additional
expense in handling overdue payments, the amount of which is difficult and
impractical to ascertain. The undersigned therefore agrees to pay, upon demand,
the sum of four cents ($.04) for each one dollar ($1.00) of each said payment
which becomes overdue as a reasonable estimate of the amount of said damages,
subject, however, to the limitations contained in the fourth immediately
succeeding paragraph.
If any payment of principal, interest or premium is not made for a period
exceeding ten (10) days after due under this Note or the Other Note, or if any
Event of Default has occurred and is continuing under any instrument by which
this Note or the Other Note is, or may hereafter be, secured, the entire
principal balance, interest then accrued, and premium, whether or not otherwise
then due, shall at the option of the holder of this Note or the Other Note,
become immediately due and payable without demand or notice, and whether or not
the holder of this Note or the Other Note has exercised said option, interest
shall accrue on the entire principal balance, interest then accrued, and any
premium then due, at a rate equal to the lesser of (i) four percent (4.0%) per
annum above the then applicable rate of interest payable under this Note and the
<PAGE>
Other Note or (ii) the maximum rate allowed by applicable law until fully paid
or if the holder of this Note or the Other Note has not exercised said option,
for the duration of such Event of Default.
The term the "Other Note" as used herein shall mean that certain Secured
Promissory Note of even date herewith in the original principal amount of
$2,750,000.00 given by the undersigned to Principal Mutual Life Insurance
Company. Any Event of Default by the undersigned under the Other Note shall
constitute an Event of Default under this note.
Notwithstanding anything herein or in any instrument by which this Note may
be secured to the contrary, no provision contained herein or therein which
purports to obligate the undersigned to pay any amount of interest or any fees,
costs or expenses which are in excess of the maximum permitted by applicable
law, shall be effective to the extent it calls for the payment of any interest
or other amount in excess of such maximum. Any such excess shall, at the option
of the holder of this Note, either be paid to the undersigned or be credited to
principal. All agreements between the undersigned and the holder hereof, whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of demand for payment or
acceleration of the maturity hereof or otherwise, shall the interest contracted
for, charged or received by the holder hereof exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to the holder hereof in excess of the maximum lawful
amount, the interest payable to the holder hereof shall be reduced to the
maximum amount permitted under applicable law; and if from any circumstance the
holder hereof shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall, at the option of the holder hereof, be applied to the reduction
of the principal hereof and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal hereof such excess shall be
refunded to the undersigned. This paragraph shall control all agreements between
the undersigned and the holder hereof.
The undersigned and any endorsers or guarantors waive presentment, protest
and demand, notice of protest, demand and dishonor and nonpayment, and except as
expressly provided in the Mortgage or any other document evidencing, governing
or securing this Note, notice of default, notice of intent to accelerate
maturity and notice of acceleration of maturity and agree the due date of this
Note or any installment may be extended without affecting any liability
hereunder, and further promise to pay all reasonable costs and expenses,
including attorney's fees, incurred by the holder hereof in connection with any
default or in any proceeding to interpret and/or enforce any provision of this
Note or any instrument by which it is secured. No release of the undersigned
from liability hereunder shall release any other maker, endorser or guarantor
hereof.
This Note is secured by instruments and agreements of even date herewith
executed and delivered by the undersigned to Principal Mutual Life Insurance
Company creating among other things legal and valid encumbrances on and an
assignment of all of the undersigned's interest in any leases of certain
Mortgaged Premises located in the County of Burlington, State of New Jersey.
Terms used herein which are defined in such instruments or agreements and not
otherwise defined herein have the same definition as in such instruments and
agreements. In no event shall such documents be construed inconsistently with
the terms of this Note, and in the event of any discrepancy between any such
<PAGE>
documents and this Note, the terms hereof shall govern. The proceeds of this
Note are to be used for business, commercial, investment or other similar
purposes, and no portion thereof will be used for any personal, family or
household use. This Note shall be governed by and construed in accordance with
the laws of the State where the Mortgaged Premises is located.
Notwithstanding any provision to the contrary in this Note, the Mortgage,
or any other instrument or agreement by which this Note is secured (collectively
referred to herein as the "Loan Documents"), and except as otherwise provided in
this paragraph, the liability of the undersigned and any general partner of the
undersigned under the Loan Documents shall be limited to the interest of the
undersigned and any general partner of the undersigned in the Mortgaged Premises
and the rents, issues, proceeds and profits thereof. In the event of foreclosure
of the liens evidenced by the Loan Documents, no judgment for any deficiency
upon the indebtedness evidenced by the Loan Documents shall be sought or
obtained by the holder of this Note against the undersigned or any general
partner of the undersigned. Nothing contained in this paragraph shall:
(a) prevent the failure of the undersigned to make any payment or to perform
any obligation under any of the Loan Documents within the time periods
provided therein from being an Event of Default thereunder;
(b) be construed as limiting the obligations of the undersigned
to any tenant under any lease of the Mortgaged Premises;
(c) in any way limit or impair the lien or enforcement of the
Loan Documents pursuant to the terms thereof; or
(d) limit the obligations of any indemnitor or guarantor, if any, of
obligations of the undersigned under the Loan Documents.
Notwithstanding the foregoing paragraph, the undersigned and any general
partner of the undersigned shall be personally liable to the holder of this Note
for:
(a)failure of the undersigned to comply with paragraphs 2 (taxes and
assessments) and 3 (insurance) of the Mortgage, provided that the
undersigned's personal liability shall be limited to the extent that the
undersigned received rents, issues, proceeds and profits from the
Mortgaged Premises (A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default under the Loan
Documents has occurred and is continuing, and such rents, issues,
proceeds and profits are not first applied to (y) expenses for the
operation or maintenance of the Mortgaged Premises and the taxes,
assessments, utility charges and insurance of the Mortgaged Premises,
taking into account sufficient reserves for the same and for replacements
and recurring items, and (z) payment of principal, interest and other
charges when due under the Loan Documents, and further provided that any
payments to parties related to the undersigned shall be considered as
<PAGE>
expenses of operation only if they are at market rates or fees consistent
with market rates or fees for the same or similar services;
(b) any event or circumstance for which the undersigned indemnifies the
holder of this Note under paragraph 1(m) (environmental indemnity) of
the Mortgage;
(c) failure of the undersigned to pay utilities on or before the date such
payments are due; provided that the undersigned's personal liability
shall be limited to the extent that the undersigned received rents,
issues, proceeds and profits from the Mortgaged Premises (A) during the
eighteen (18) month period prior to an Event of Default and/or (B) after
an Event of Default under the Loan Documents has occurred and is
continuing, and such rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or maintenance of the
Mortgaged Premises and the taxes, assessments, utility charges and
insurance of the Mortgaged Premises, taking into account sufficient
reserves for the same and for replacements and recurring items, and (z)
payment of principal, interest and other charges when due under the Loan
Documents, and further provided that any payments to parties related to
the undersigned shall be considered as expenses of operation only if
they are at market rates or fees consistent with market rates or fees
for the same or similar services;
(d) operation and maintenance of the Mortgaged Premises, provided that the
undersigned's personal liability shall be limited to the extent that the
undersigned received rents, issues, proceeds and profits from the
Mortgaged Premises (A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default under the Loan
Documents has occurred and is continuing, and such rents, issues,
proceeds and profits are not first applied to (y) expenses for the
operation or maintenance of the Mortgaged Premises and the taxes,
assessments, utility charges and insurance of the Mortgaged Premises,
taking into account sufficient reserves for the same and for
replacements and recurring items, and (z) payment of principal, interest
and other charges when due under the Loan Documents, and further
provided that any payments to parties related to the undersigned shall
be considered as expenses of operation only if they are at market rates
or fees consistent with market rates or fees for the same or similar
services;
(e) any sums expended by the holder of this Note in fulfilling the
obligations of the undersigned as lessor under any lease of the
Mortgaged Premises prior to a sale of the Mortgaged Premises pursuant to
foreclosure or power of sale, a bona fide sale (permitted by the terms
of paragraph 1(l) of the Mortgage or consented to in writing by the
holder of this Note) to an unrelated third party or upon conveyance to
the holder of this Note of the Mortgaged Premises by a deed acceptable
to the holder of this Note in form and content (each of which shall be
referred to as a "Sale" for purposes of this paragraph) or expended by
the holder of this Note after a Sale of the Mortgaged Premises for
obligations of the undersigned which arose prior to a Sale of the
Mortgaged Premises; provided that the undersigned's personal liability
shall be limited to the extent that the undersigned received rents,
<PAGE>
issues, proceeds and profits from the Mortgaged Premises (A) during the
eighteen (18) month period prior to an Event of Default and/or (B) after
an Event of Default under the Loan Documents has occurred and is
continuing, and such rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or maintenance of the
Mortgaged Premises and the taxes, assessments, utility charges and
insurance of the Mortgaged Premises, taking into account sufficient
reserves for the same and for replacements and recurring items, and (z)
payment of principal, interest and other charges when due under the Loan
Documents, and further provided that any payments to parties related to
the undersigned shall be considered as expenses of operation only if
they are at market rates or fees consistent with market rates or fees
for the same or similar services;
(f) any rents or other income regardless of type or source of payment
(including, but not limited to, CAM charges, lease termination payments,
refunds of any type, prepayment of rents, settlements of litigation, or
settlements of past due rents) from the Mortgaged Premises which the
undersigned has received after an Event of Default under the Loan
Documents has occurred and is continuing, and which are not applied to
(A) expenses of operation and maintenance of the Mortgaged Premises and
the taxes, assessments, utility charges and insurance of the Mortgaged
Premises, taking into account sufficient reserves for the same and for
replacements and recurring items, and (B) payment of principal, interest
and other charges when due under the Loan Documents; provided that any
payments to parties related to the undersigned shall be considered
expenses of operation only if they are at market rates or fees
consistent with market rates or fees for the same or similar services;
(g) any unforfeited security deposits of tenants not turned over to the
holder of this Note upon conveyance of the Mortgaged Premises to the
holder of this Note pursuant to foreclosure or power of sale or by a
deed acceptable to the holder of this Note in form and content;
(h) misapplication or misappropriation of tax reserve accounts, tenant
improvement reserve accounts, security deposits, prepaid rents or other
similar sums paid to or held by the undersigned or any other entity or
person in connection with the operation of the Mortgaged Premises;
(i) any waste committed or allowed by the undersigned with
respect to the Mortgaged Premises; and
(j) any insurance or condemnation proceeds or other similar funds or
payments applied by the undersigned in a manner other than as expressly
provided in the Loan Documents.
Notwithstanding anything to the contrary in the Loan Documents, the
limitation on liability contained in the second immediately preceding paragraph
SHALL BECOME NULL AND VOID and shall be of no further force and effect in the
event:
<PAGE>
(a) of any breach or violation of paragraph 1(l) (due on sale or
encumbrance) of the Mortgage, other than the filing of a nonmaterial
mechanic's lien affecting the Mortgaged Premises, the granting of any
utility or other nonmaterial easement or servitude burdening the
Mortgaged Premises, or any other transfer or encumbrance not in the
nature of a transfer, reduction or impairment of any material economic
interest in the Mortgaged Premises; or
(b) of any fraud or willful misrepresentation by the undersigned regarding
the Mortgaged Premises, the making or delivery of any of the Loan
Documents or in any materials or information provided by the undersigned
or any general partner of the undersigned in connection with the loan.
If more than one, all obligations and agreements of the undersigned are
joint and several.
This Note may not be changed or terminated orally, but only by an agreement
in writing and signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought. All of the rights privileges and
obligations hereunder shall inure to the benefit of the heirs, successors and
assigns of the holder hereof and shall bind the heirs, successors and assigns of
the undersigned.
The remedies of the holder hereof, as provided herein, shall be cumulative
and concurrent and may be pursued singly, successively or together, at the sole
discretion of the holder hereof, and may be exercised as often as occasion
therefor shall occur; and the failure to exercise any such right or remedy shall
in no event be construed as a waiver or release thereof.
This Note shall be construed and enforced in accordance with the
substantive law of the State of New Jersey; the Courts of New Jersey shall have
exclusive jurisdiction over suits as to this Note and the other documents
described above; and the undersigned hereby consents to the jurisdiction of the
Courts of New Jersey.
<PAGE>
If any provision of this Note shall, for any reason, be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Note shall be construed as if such invalid or
unenforceable provision had never been contained herein.
BRANDYWINE REALTY PARTNERS, a Pennsylvania
general partnership
By: BRANDYWINE REALTY TRUST, a
Maryland real estate
investment trust, general partner
By ___/s/ Gerard H. Sweeney__________
Gerard H. Sweeney
President and CEO
BB/dt/s:750594/spn
2/13/95
<PAGE>
SECURED PROMISSORY NOTE
D-750595
$2,750,000.00 ___April 20________, 1995
__________, North Carolina
FOR VALUE RECEIVED, the undersigned, BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership, hereby promises to pay to the order of
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation, at the Home Office
of Principal Mutual Life Insurance Company at 711 High Street, Des Moines, Iowa
50392, or at such other place as the holder of this Note may designate, the
principal sum of Two Million Seven Hundred Fifty Thousand and 00/100 Dollars
($2,750,000.00) or so much thereof as shall from time to time have been
advanced, together with interest on the unpaid balance of said sum from ___April
21__________, 1995 at the rate of eight and seventy-five one-hundredths percent
(8.75%) per annum, computed on the basis of a 360 day year composed of twelve
30-day months, in installments as follows:
Beginning on May 15, 1995, principal and interest shall be due and payable
in installments of Twenty-two Thousand Six Hundred Eight and 95/100 Dollars
($22,608.95), with an installment in a like amount due and payable on the
same day of each month thereafter continuing to and including April 15,
1996.
On April 15, 1996, the per annum interest rate applicable from April 15,
1996 until October 15, 1996 shall be adjusted to nine percent (9.00%) per
annum. Beginning on May 15, 1996, principal and interest payments shall be
due and payable in installments of Twenty-three Thousand Sixty-seven and
18/100 Dollars ($23,067.18), with an installment in a like amount due and
payable on the same day of each month thereafter continuing to and including
October 15, 1996.
On October 15, 1996, the per annum interest rate shall be adjusted to nine
and thirty-one one-hundredths percent (9.31%) per annum. Beginning on
November 15, 1996, principal and interest payments shall be due and payable
in installments of Twenty-three Thousand Six Hundred Thirty-three and 55/100
Dollars ($23,633.55), with an installment in a like amount due and payable
on the same day of each month thereafter continuing to and including April
15, 1998. On April 15, 1998 the per annum interest rate shall be adjusted to
an interest rate established by the holder of this note ("Adjusted Interest
Rate") based upon the holder of this Note's evaluation of: (i) the then
current financial performance and projected risk of the Mortgaged Premises,
as hereinafter defined, which shall encompass various factors, including but
not limited to contract debt service coverage, loan-to-value ratio, economic
debt service coverage, occupancy, frequency of tenant rollover, financial
strength and stability of tenants; (ii) the then current financial status of
the undersigned, which shall include but not be limited to creditworthiness,
financial strength, percentage of liabilities to liquid assets, and annual
net income; and (iii) the remaining term and current outstanding balance of
the note. Commencing on May 15, 1998, monthly installments of principal and
interest shall be due and payable in an amount determined by amortizing the
then principal balance of this note over a twenty-two (22) year term at the
<PAGE>
Adjusted Interest Rate, and a like amount shall be due and payable on the
same day of each month thereafter until said principal and interest shall be
paid, except that all remaining principal and interest shall be due and
payable on April 15, 2001 ("Maturity Date"). Each installment shall be
credited first upon interest then accrued and the remainder upon principal,
and interest shall cease to accrue upon principal so credited. If on the
date of the first installment, interest is accrued for more or less than one
installment period, the amount of said installment shall be increased or
decreased by the amount that the interest accrued exceeds or is less than
the interest for one installment period based on the actual number of days
elapsed to the date of said installment. All principal and interest shall be
paid Paragraph 8by automated clearing house transfer through such bank or
financial institution as shall be approved in writing by the holder hereof,
shall be made to an account designated by holder, and shall be initiated by
holder or shall be made in such other manner as the holder hereof may direct
from time to time.
The holder of this Note shall notify the undersigned in writing on or
before February 15, 1998 of holder's election to offer the undersigned the
Adjusted Interest Rate, and the rate thereof, or of holder's intention to
declare this Note to be due and payable in full. In the event holder notifies
the undersigned of its intention to declare this Note to be due and payable in
full in lieu of offering an Adjusted Interest Rate or in the event the
undersigned fails to notify the holder in writing on or before March 1, 1998
that the undersigned accepts the Adjusted Interest Rate or in the event the
undersigned fails to pay a One Thousand Dollar ($1,000.00) rate adjustment fee
to holder on or before March 1, 1998 in connection with the undersigned's
acceptance of the Adjusted Interest Rate, this Note shall on May 15, 1998 ("Call
Date"), become due and payable in full, without premium, and all principal,
interest accrued or to accrue to said date and all other amounts then unpaid on
this Note or due or to become due under any instrument by which it is secured
shall become immediately due and payable in full. Notwithstanding any other
provision herein, holder shall not be obligated to offer an Adjusted Interest
Rate if any default exists under this Note or the Deed of Trust, Security
Agreement and Assignment of Rents of even date herewith ("Deed of Trust").
No privilege is reserved by the undersigned to prepay any principal of this
Note except the undersigned may prepay this Note in full, but not in part,
anytime during the term of this Note with thirty (30) days written notice to the
holder provided: (A) the remaining Greentree office buildings that holder has
not released from the Mortgage and Security Agreement of even date herewith by
and between undersigned and holder (the "Mortgage") commonly known as One
Greentree Centre, Two Greentree Centre and Three Greentree Centre: (i) provide
for a loan to value ratio under the Other Note (as hereinafter defined) equal to
or less than 55%, as reasonably determined by an appraisal prepared by holder;
and (ii) provide for a debt service coverage (annual net operating income from
all approved executed leases in effect on the Other Premises divided by the
total annual installment payments due under the Other Note including accrued or
capitalized interest) of not less than 1.75, as reasonably determined by holder;
and (B) undersigned pays to holder a Make Whole Premium (as hereinafter
defined). Notwithstanding anything herein to the contrary, no premium or
penalty, including, but not limited to, the Make Whole Premium, shall be
applicable to any prepayment hereunder due to the application of the proceeds
<PAGE>
from any condemnation or casualty in accordance with the terms of the Deed of
Trust, provided no Event of Default exists under the Loan Documents, as
hereinafter defined.
The undersigned agrees that if the holder of this Note accelerates the whole
or any part of the principal sum evidenced hereby, or applies any proceeds as if
such application had been made as a result of such acceleration, pursuant to the
provisions of the Deed of Trust, the undersigned waives any right to prepay said
principal sum in whole or in part without premium and agrees to pay, as
liquidated damages and not as a penalty, a "Make Whole Premium." The Make Whole
Premium shall mean an amount equal to the greater of one percent (1%) of the
principal amount to be prepaid or a premium calculated as follows:
(a) Determine the "Reinvestment Yield." The Reinvestment Yield will be equal
to the yield on the applicable* U.S. Treasury Bond, Note or Bill
("primary issue")** published two weeks prior to the date of prepayment
and converted to an equivalent monthly compounded nominal yield.
*As set forth above, the U.S. Treasury Bond, Note or Bill
applicable for each prepayment period is as follows:
Prepayment Period U.S. Treasury Issue
----------------- -------------------
To May 15, 1998 May 1998, 9%
May 15, 1998 to April 15, 2001 ***
**In the event there is no market activity involving the primary issue
at the time of prepayment, the holder of this Note shall choose a
comparable Treasury Bond, Note or Bill ("secondary issue") which the
holder of this Note deems to be similar to the primary issue's
characteristics (i.e., rate, remaining time to maturity, yield).
***At this time there is not a U.S. Treasury Issue for this
prepayment period. At the time of prepayment, holder shall select in its
sole and absolute discretion a U.S. Treasury Issue with similar
remaining time to maturity as this Note.
(b) Calculate the "Present Value of the Mortgage." The Present Value of the
Mortgage is the present value of the payments to be made in accordance
with this Note (all installment payments and any remaining payment due
on the Paragraph 21Call Date, or if the Call Date has already passed, on
the Maturity Date) discounted at the Reinvestment Yield for the number
of months remaining from the date of prepayment to the Paragraph 22Call
Date, or if the Call Date has already passed, to the Maturity Date. In
the event of a partial prepayment hereunder, the Present Value of the
Mortgage shall be calculated in accordance with the preceding sentence
multiplied by the fraction which results from dividing the amount of the
prepaid proceeds by the principal balance of the loan immediately prior
to prepayment.
<PAGE>
(c) Subtract the amount of the prepaid proceeds from the Present Value of
the Mortgage as of the date of prepayment. Any resulting positive
differential shall be the premium.
If any payment of principal, interest or premium is not made when due,
damages will be incurred by the holder of this Note, including additional
expense in handling overdue payments, the amount of which is difficult and
impractical to ascertain. The undersigned therefore agrees to pay, upon demand,
the sum of four cents ($.04) for each one dollar ($1.00) of each said payment
which becomes overdue for a period exceeding fifteen (15) days or such shorter
period of time as may be permitted by North Carolina law as a reasonable
estimate of the amount of said damages, subject, however, to the limitations
contained in the fourth immediately succeeding paragraph.
If any payment of principal, interest or premium is not made for a period
exceeding ten (10) days after due under this Note or the Other Note, or if any
Event of Default has occurred and is continuing under any instrument by which
this Note or the Other Note is, or may hereafter be, secured, the entire
principal balance, interest then accrued, and premium, whether or not otherwise
then due, shall at the option of the holder of this Note or the Other Note,
become immediately due and payable without demand or notice, and whether or not
the holder of this Note or the Other Note has exercised said option, interest
shall accrue on the entire principal balance, interest then accrued, and any
premium then due, at a rate equal to the lesser of (i) four percent (4.0%) per
annum above the then applicable rate of interest payable under this Note and the
Other Note or (ii) the maximum rate allowed by applicable law until fully paid
or if the holder of this Note or the Other Note has not exercised said option,
for the duration of such Event of Default.
The term the "Other Note" as used herein shall mean that certain Secured
Promissory Note of even date herewith in the original principal amount of
$6,250,000.00 given by the undersigned to Principal Mutual Life Insurance
Company. Any Event of Default by the undersigned under the Other Note shall
constitute an Event of Default under this note.
Notwithstanding anything herein or in any instrument by which this Note may
be secured to the contrary, no provision contained herein or therein which
purports to obligate the undersigned to pay any amount of interest or any fees,
costs or expenses which are in excess of the maximum permitted by applicable
law, shall be effective to the extent it calls for the payment of any interest
or other amount in excess of such maximum. Any such excess shall, at the option
of the holder of this Note, either be paid to the undersigned or be credited to
principal. All agreements between the undersigned and the holder hereof, whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of demand for payment or
acceleration of the maturity hereof or otherwise, shall the interest contracted
for, charged or received by the holder hereof exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to the holder hereof in excess of the maximum lawful
amount, the interest payable to the holder hereof shall be reduced to the
maximum amount permitted under applicable law; and if from any circumstance the
holder hereof shall ever receive anything of value deemed interest by applicable
<PAGE>
law in excess of the maximum lawful amount, an amount equal to any excessive
interest shall, at the option of the holder hereof, be applied to the reduction
of the principal hereof and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal hereof such excess shall be
refunded to the undersigned. This paragraph shall control all agreements between
the undersigned and the holder hereof.
The undersigned and any endorsers or guarantors waive presentment, protest
and demand, notice of protest, demand and dishonor and nonpayment, and except as
expressly provided in the Deed of Trust or any other document evidencing,
governing or securing this Note, notice of default, notice of intent to
accelerate maturity and notice of acceleration of maturity and agree the due
date of this Note or any installment may be extended without affecting any
liability hereunder, and further promise to pay all reasonable costs and
expenses, including attorney's fees, incurred by the holder hereof in connection
with any default or in any proceeding to interpret and/or enforce any provision
of this Note or any instrument by which it is secured. No release of the
undersigned from liability hereunder shall release any other maker, endorser or
guarantor hereof.
This Note is secured by instruments and agreements of even date herewith
executed and delivered by the undersigned to Principal Mutual Life Insurance
Company creating among other things legal and valid encumbrances on and an
assignment of all of the undersigned's interest in any leases of certain
Mortgaged Premises located in the County of Wake, State of North Carolina. Terms
used herein which are defined in such instruments or agreements and not
otherwise defined herein have the same definition as in such instruments and
agreements. In no event shall such documents be construed inconsistently with
the terms of this Note, and in the event of any discrepancy between any such
documents and this Note, the terms hereof shall govern. The proceeds of this
Note are to be used for business, commercial, investment or other similar
purposes, and no portion thereof will be used for any personal, family or
household use. This Note shall be governed by and construed in accordance with
the laws of the State where the Mortgaged Premises is located.
Notwithstanding any provision to the contrary in this Note, the Deed of
Trust, or any other instrument or agreement by which this Note is secured
(collectively referred to herein as the "Loan Documents"), and except as
otherwise provided in this paragraph, the liability of the undersigned and any
general partner of the undersigned under the Loan Documents shall be limited to
the interest of the undersigned and any general partner of the undersigned in
the Mortgaged Premises and the rents, issues, proceeds and profits thereof. In
the event of foreclosure of the liens evidenced by the Loan Documents, no
judgment for any deficiency upon the indebtedness evidenced by the Loan
Documents shall be sought or obtained by the holder of this Note against the
undersigned or any general partner of the undersigned. Nothing contained in this
paragraph shall:
(a) prevent the failure of the undersigned to make any payment or to perform
any obligation under any of the Loan Documents within the time periods
provided therein from being an Event of Default thereunder;
<PAGE>
(b) be construed as limiting the obligations of the undersigned
to any tenant under any lease of the Mortgaged Premises;
(c) in any way limit or impair the lien or enforcement of the
Loan Documents pursuant to the terms thereof; or
(d) limit the obligations of any indemnitor or guarantor, if any, of
obligations of the undersigned under the Loan Documents.
Notwithstanding the foregoing paragraph, the undersigned and any general
partner of the undersigned shall be personally liable to the holder of this Note
for:
(a)failure of the undersigned to comply with paragraphs 2 (taxes and
assessments) and 3 (insurance) of the Deed of Trust, provided that the
undersigned's personal liability shall be limited to the extent that the
undersigned received rents, issues, proceeds and profits from the
Mortgaged Premises (A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default under the Loan
Documents has occurred and is continuing and such rents, issues, proceeds
and profits are not first applied to (y) expenses for the operation or
maintenance of the Mortgaged Premises and the taxes, assessments, utility
charges and insurance of the Mortgaged Premises, taking into account
sufficient reserves for the same and for replacements and recurring
items, and (z) payment of principal, interest and other charges when due
under the Loan Documents, and further provided that any payments to
parties related to the undersigned shall be considered as expenses of
operation only if they are at market rates or fees consistent with market
rates or fees for the same or similar services;
(b)any event or circumstance for which the undersigned indemnifies the
holder of this Note under paragraph 1(m) (environmental indemnity) of
the Deed of Trust;
(c) failure of the undersigned to pay utilities on or before the date such
payments are due; provided that the undersigned's personal liability
shall be limited to the extent that the undersigned received rents,
issues, proceeds and profits from the Mortgaged Premises (A) during the
eighteen (18) month period prior to an Event of Default and/or (B) after
an Event of Default under the Loan Documents has occurred and is
continuing and such rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or maintenance of the
Mortgaged Premises and the taxes, assessments, utility charges and
insurance of the Mortgaged Premises, taking into account sufficient
reserves for the same and for replacements and recurring items, and (z)
payment of principal, interest and other charges when due under the Loan
Documents, and further provided that any payments to parties related to
the undersigned shall be considered as expenses of operation only if
they are at market rates or fees consistent with market rates or fees
for the same or similar services;
<PAGE>
(d) operation and maintenance of the Mortgaged Premises, provided that the
undersigned's personal liability shall be limited to the extent that the
undersigned received rents, issues, proceeds and profits from the
Mortgaged Premises (A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default under the Loan
Documents has occurred and is continuing and such rents, issues,
proceeds and profits are not first applied to (y) expenses for the
operation or maintenance of the Mortgaged Premises and the taxes,
assessments, utility charges and insurance of the Mortgaged Premises,
taking into account sufficient reserves for the same and for
replacements and recurring items, and (z) payment of principal, interest
and other charges when due under the Loan Documents, and further
provided that any payments to parties related to the undersigned shall
be considered as expenses of operation only if they are at market rates
or fees consistent with market rates or fees for the same or similar
services;
(e) any sums expended by the holder of this Note in fulfilling the
obligations of the undersigned as lessor under any lease of the
Mortgaged Premises prior to a sale of the Mortgaged Premises pursuant to
foreclosure or power of sale, a bona fide sale (permitted by the terms
of paragraph 1(l) of the Deed of Trust or consented to in writing by the
holder of this Note) to an unrelated third party or upon conveyance to
the holder of this Note of the Mortgaged Premises by a deed acceptable
to the holder of this Note in form and content (each of which shall be
referred to as a "Sale" for purposes of this paragraph) or expended by
the holder of this Note after a Sale of the Mortgaged Premises for
obligations of the undersigned which arose prior to a Sale of the
Mortgaged Premises, provided that the undersigned's personal liability
shall be limited to the extent that the undersigned received rents,
issues, proceeds and profits from the Mortgaged Premises (A) during the
eighteen (18) month period prior to an Event of Default and/or (B) after
an Event of Default under the Loan Documents has occurred and is
continuing and such rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or maintenance of the
Mortgaged Premises and the taxes, assessments, utility charges and
insurance of the Mortgaged Premises, taking into account sufficient
reserves for the same and for replacements and recurring items, and (z)
payment of principal, interest and other charges when due under the Loan
Documents, and further provided that any payments to parties related to
the undersigned shall be considered as expenses of operation only if
they are at market rates or fees consistent with market rates or fees
for the same or similar services;
(f) any rents or other income regardless of type or source of payment
(including, but not limited to, CAM charges, lease termination payments,
refunds of any type, prepayment of rents, settlements of litigation, or
settlements of past due rents) from the Mortgaged Premises which the
undersigned has received after an Event of Default under the Loan
Documents has occurred and is continuing, and which are not applied to
(A) expenses of operation and maintenance of the Mortgaged Premises and
the taxes, assessments, utility charges and insurance of the Mortgaged
<PAGE>
Premises, taking into account sufficient reserves for the same and for
replacements and recurring items, and (B) payment of principal, interest
and other charges when due under the Loan Documents; provided that any
payments to parties related to the undersigned shall be considered
expenses of operation only if they are at market rates or fees
consistent with market rates or fees for the same or similar services;
(g) any unforfeited security deposits of tenants not turned over to the
holder of this Note upon conveyance of the Mortgaged Premises to the
holder of this Note pursuant to foreclosure or power of sale or by a
deed acceptable to the holder of this Note in form and content;
(h) misapplication or misappropriation of tax reserve accounts, tenant
improvement reserve accounts, security deposits, prepaid rents or other
similar sums paid to or held by the undersigned or any other entity or
person in connection with the operation of the Mortgaged Premises;
(i) any waste committed or allowed by the undersigned with
respect to the Mortgaged Premises; and
(j) any insurance or condemnation proceeds or other similar funds or
payments applied by the undersigned in a manner other than as expressly
provided in the Loan Documents.
Notwithstanding anything to the contrary in the Loan Documents, the
limitation on liability contained in the second immediately preceding paragraph
SHALL BECOME NULL AND VOID and shall be of no further force and effect in the
event:
(a) of any breach or violation of paragraph 1(l) (due on sale or
encumbrance) of the Deed of Trust, other than the filing of a
nonmaterial mechanic's lien affecting the Mortgaged Premises, the
granting of any utility or other nonmaterial easement or servitude
burdening the Mortgaged Premises, or any other transfer or encumbrance
not in the nature of a transfer, reduction or impairment of any material
economic interest in the Mortgaged Premises; or
(b) of any fraud or willful misrepresentation by the undersigned regarding
the Mortgaged Premises, the making or delivery of any of the Loan
Documents or in any materials or information provided by the undersigned
or any general partner of the undersigned in connection with the loan.
If more than one, all obligations and agreements of the undersigned are
joint and several.
This Note may not be changed or terminated orally, but only by an agreement
in writing and signed by the party against whom enforcement of any waiver,
<PAGE>
change, modification or discharge is sought. All of the rights privileges and
obligations hereunder shall inure to the benefit of the heirs, successors and
assigns of the holder hereof and shall bind the heirs, successors and assigns of
the undersigned.
This Note shall be construed and enforced in accordance with the substantive
law of the State of North Carolina; the Courts of North Carolina shall have
exclusive jurisdiction over suits as to this Note and the other documents
described above; and the undersigned hereby consents to the jurisdiction of the
Courts of North Carolina.
If any provision of this Note shall, for any reason, be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Note shall be construed as if such invalid or
unenforceable provision had never been contained herein.
BRANDYWINE REALTY PARTNERS, a Pennsylvania
general partnership
ATTEST: By: BRANDYWINE REALTY TRUST, a
Maryland real estate investment trust,
general partner
/s/ Francine M. Haulenbeek By /s/ Gerard H. Sweeney
- -------------------------------- -------------------------------
Francine M. Haulenbeek Gerard H. Sweeney
Secretary President and CEO
BB/dt/s:750594/spn
2/13/95
<PAGE>
Record and return to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-1360
ATTN: Commercial Real Estate Closing
Bob Bailey
MORTGAGE AND SECURITY AGREEMENT
D-750594
THIS MORTGAGE AND SECURITY AGREEMENT (the "Mortgage") made as of __April
20_____, 1995, by and between BRANDYWINE REALTY PARTNERS, a Pennsylvania general
partnership, having a principal place of business at 200 Berwyn Park, Suite 100,
Berwyn, Pennsylvania 19312, herein called Mortgagor, and PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY, an Iowa corporation, having its principal place of business
and post office address at 711 High Street, Des Moines, Iowa 50392, herein
called Mortgagee,
WITNESSETH:
THAT Mortgagor is justly indebted to Mortgagee for money borrowed in the
principal sum of Six Million Two Hundred Fifty Thousand and 00/100 Dollars
($6,250,000.00) evidenced by Mortgagor's promissory note (herein called the
Note) of even date herewith, made payable and delivered to Mortgagee, in which
Note Mortgagor promises to pay to Mortgagee the said principal sum or so much
thereof as may be advanced from time to time by Mortgagee, together with
interest at the rate, at the times, and in installments as in the Note provided,
until the entire principal and accrued interest have been paid, but in any
event, the unpaid balance (if any) remaining due on the Note shall be due and
payable on the fifteenth day of April, 2001 ("Maturity Date").
The term the "Other Note" as used herein shall mean the Secured Promissory
Note dated the date hereof in the principal amount of $2,750,000.00 payable to
Mortgagee, and the term the "Other Mortgage" shall mean the Deed of Trust,
Security Agreement and Assignment of Rents dated the date hereof in the
principal amount of $2,750,000.00 from the Mortgagor creating a lien on the
Other Premises (as hereinafter defined).
NOW, THEREFORE, to secure the payment of the said indebtedness in
accordance with the terms and conditions hereof and of the Note, and all
extensions, modifications and renewals thereof and the performance of the
covenants and agreements contained herein, and also to secure the payment of any
and all other indebtedness, direct or contingent, that may now or hereafter
become owing from Mortgagor to Mortgagee under the Note, the Other Note (as
defined herein), this Mortgage and the Other Mortgage (as defined herein), and
in consideration of Ten Dollars in hand paid, receipt of which is hereby
acknowledged, Mortgagor does by these presents Paragraph 3give, grant, bargain,
sell, alien, enfeoff, convey and confirm unto Mortgagee, its successors and
assigns forever, that certain real estate and all of Mortgagor's estate, right,
title and interest therein, located in the County of Burlington, State of New
Jersey, more particularly described in Exhibit A attached hereto and made a part
<PAGE>
hereof, and that certain real estate and all of Mortgagor's estate, right, title
and interest therein, located in the County of Wake, State of North Carolina,
more particularly described in Exhibit A-1 attached hereto and made a part
hereof ("Other Premises"), which real estate, together with the following
described property, rights and interests, is collectively referred to herein as
the "Premises."
Together with Mortgagor's interest as lessor in and to all leases of the
said Premises, or any part thereof, heretofore or hereafter made and entered
into by Mortgagor during the life of this Mortgage or any extension or renewal
hereof and all rents, issues, proceeds and profits accruing and to accrue from
the Premises (which are pledged primarily and on a parity with the real estate
and not secondarily).
Together with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, rights in trade
names (other than the name "Brandywine" or any derivation thereof), other
rights, liberties and privileges thereof or in any way now or hereafter
appertaining, including homestead and any other claim at law or in equity as
well as any after-acquired title, franchise or license and the reversion and
reversions and remainder and remainders thereof.
Together with, the right in case of foreclosure hereunder of the encumbered
property for Mortgagee to take and use the name by which the buildings and all
other improvements situated on the Premises are commonly known and the right to
manage and operate the said buildings under any such name and variants thereof
(other than the name "Brandywine" or any derivation thereof).
Together with all right, title and interest of Mortgagor in any and all
buildings and improvements of every kind and description now or hereafter
erected or placed on the said real estate and all materials intended for
construction, reconstruction, alteration and repairs of such buildings and
improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the Premises immediately upon the delivery thereof
to the Premises, and all fixtures now or hereafter owned by Mortgagor and
attached to or contained in and used in connection with the Premises including,
but not limited to, all machinery, motors, elevators, fittings, radiators,
awnings, shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air-conditioning and sprinkler equipment and
fixtures and appurtenances thereto; and all items of furniture, furnishings,
equipment and personal property owned by Mortgagor used or useful in the
operation of the Premises; and all renewals or replacements thereof or articles
in substitution therefor, whether or not the same are or shall be attached to
said buildings or improvements in any manner; it being mutually agreed, intended
and declared that all the aforesaid property owned by Mortgagor and placed by it
on the real estate or used in connection with the operation or maintenance of
the Premises shall, so far as permitted by law, be deemed to form a part and
parcel of the real estate and for the purpose of this Mortgage to be real estate
and covered by this Mortgage, and as to any of the property aforesaid which does
not so form a part and parcel of the real estate or does not constitute a
"fixture" (as such term is defined in the Uniform Commercial Code) this Mortgage
is hereby deemed to be, as well, a Security Agreement under the Uniform
Commercial Code for the purpose of creating hereby a security interest in such
property which Mortgagor hereby grants to Mortgagee as Secured Party. Mortgagor
agrees to execute any and all documents, including financing statements which
may be required to perfect the security interest granted hereby.
<PAGE>
Together with all right, title and interest of Mortgagor, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Mortgagor, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.
Together with all funds now or hereafter held by Mortgagee under any escrow
security agreement, except that certain Escrow Agreement dated the date hereof,
or under any of the terms hereof, including but not limited to funds held under
the provisions of paragraph 4 hereof.
Mortgagor has concurrently executed a Deed of Trust, Security Agreement and
Assignment of Rents in favor of Mortgagee dated the date hereof covering certain
real property in the County of Wake, State of North Carolina as additional
security for the payment of the indebtedness secured hereby.
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and assigns
forever, for the purposes and uses herein set forth.
Mortgagor represents that it is the absolute owner in fee simple of the
Premises described in Exhibit A, which Premises are free and clear of any liens
or encumbrances except as set out in Exhibit B attached hereto, and except for
taxes which are not yet due or delinquent. Mortgagor shall forever warrant and
defend the title to the Premises against all claims and demands of all persons
whomsoever and will on demand execute any additional instrument which may be
required to give Mortgagee a valid first lien on all of the Premises, except as
stated in Exhibit B.
Mortgagor further represents that: (i) the Premises is not subject to
any unrepaired casualty damage; (ii) to the best of its knowledge after
due and diligent inquiry and investigation, except as disclosed in that
Asbestos Inspection Report conducted by ATEC Associates, Inc., dated
December 2, 1994 and those Phase I Environmental Reports (3) conducted by
McLaren Hart Environmental Engineering Corporation, each dated March 13,
1995 (the "Report"), and except for supplies for cleaning and maintenance
and standard office supplies in commercially reasonable amounts, there is
no Hazardous Material (as hereinafter defined) on the Premises, nor has
any Hazardous Material been discharged from the Premises or penetrated any
surface or subsurface rivers or streams crossing or adjoining the Premises
or the aquifer underlying the Premises; (iii) Mortgagor has complied and
caused the Premises to comply with all statutes, laws, ordinances, rules
and regulations of all local, state or federal authorities having
jurisdiction over the Premises or its use relative to any Hazardous
Material; and (iv) there is no other property presently owned or used by
Mortgagor from which the existence or discharge of Hazardous Material
would result in any charge or lien upon the Premises. Hazardous Material
as used in this Mortgage means any hazardous or toxic material, substance
or waste which is defined by those or similar terms or is regulated as
such under any statute, law, ordinance, rule or regulation of any local,
state or federal authority having jurisdiction over the Premises or its
use, including but not limited to (a) the Federal Water Pollution Control
Act (33 U.S.C. ss.1251) as amended; (b) the Resource Conservation and
Recovery Act (42 U.S.C. ss.6901 et. seq.) as amended; (c) the Comprehensive
Environmental Response, Compensation and Liability Act, (42 U.S.C. ss.9601
et. seq.) as amended; (d) the Federal Clean Air Act (42 U.S.C. ss.7401 et.
seq.) as amended Paragraph 4(e) the New Jersey Industrial Site Recovery
Act, P.L. 1993 c. 139 ("ISRA"), formerly the New Jersey Environmental
Cleanup Responsibility Act, N.J.S.A. 13:1K-6 eq seq. ("ECRA"); (f) the
<PAGE>
New Jersey Spill Compensation and Control Act, as amended,
N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"); and (g) the New Jersey
Underground Storage of Hazardous Substances Act, as amended, N.J.S.A.
58:10A-21 et seq. ("USTA") (hereinafter referred to collectively as
"Environmental Laws").
MORTGAGOR COVENANTS AND AGREES AS FOLLOWS:
1. Mortgagor shall
(a) pay each item of indebtedness secured by this Mortgage when
due according to the terms hereof and of the Note;
(b) pay a late charge equal to four percent (4.0%) of any payment of
principal, interest or premium which is not paid on or before the
due date thereof to cover the expense involved in handling such late
payment;
(c) pay on or before the due date thereof any indebtedness which may be
secured by a lien or charge on the Premises, and upon request of
Mortgagee exhibit satisfactory evidence of the discharge thereof,
provided, however, Mortgagor may contest any mechanics liens in
accordance with Section 2(b) herein, provided same is less than
$50,000.00 in aggregate;
(d) complete within a reasonable time the construction of any
building now or at any time in process of construction upon
the real estate;
(e) make no material alteration to the Premises without the prior
written consent of Mortgagee, except such as are required by law or
ordinance or by the terms of any lease of the Premises which have
been approved by Mortgagee;
(f) remove or demolish no building or other improvement at any time a
part of the Premises other than as required by law or ordinance, and
shall keep the Premises, including the buildings and improvements,
in good condition and repair, normal wear and tear excepted, without
waste, and free from mechanics' liens or other liens or claims for
liens and encumbrances not expressly subordinated to the lien
hereof, provided, however, Mortgagor may contest any mechanics liens
in accordance with Section 2(b) herein, provided same is less than
$50,000.00 in aggregate;
(g) comply, and use diligent efforts to cause each lessee or other user
of the Premises to comply, with all requirements of law and
ordinance, and all rules and regulations, now or hereafter enacted,
by authorities having jurisdiction of the Premises and the use
thereof, all orders and directions of the National Fire Protection
Association or similar body, and all covenants, conditions and
restrictions of record pertaining to the Premises, including the
buildings and improvements, and the use thereof;
<PAGE>
(h) cause or permit no change to be made in the general use of the
Premises without Mortgagee's prior written consent;
(i) initiate or acquiesce in no zoning reclassification or
material change in zoning without Mortgagee's prior written
consent;
(j) make or permit no use of the Premises that could with the passage of
time result in the creation of any right of use, or any claim of
adverse possession or easement on, to or against any part of the
Premises in favor of any person or the public;
(k) subject to the provisions of paragraph 5(c) hereof, promptly repair,
restore or rebuild any buildings or improvements now or hereafter a
part of the Premises which may become damaged or be destroyed by any
cause whatsoever, so that upon completion of the repair, restoration
and rebuilding of the buildings and improvements there will be no
liens of any nature arising out of the construction and the Premises
will be of substantially the same character and will have a
commercial value at least as great as the commercial value thereof
prior to the damage or destruction;
(l) not, directly or indirectly, due to assignment of beneficial
interest under a trust, partnership interest in a partnership, or
otherwise, cause or permit any sale, transfer or conveyance of the
Premises or create, suffer or permit any encumbrance or lien on the
Premises other than the lien hereof (subject, however, to the
provisions of paragraph 1(f) above), the leases of the Premises
assigned to Mortgagee and other exceptions expressly referred to
herein, it being understood and agreed that the indebtedness
evidenced by the Note and its terms are personal to Mortgagor and in
accepting the same Mortgagee has relied upon what it perceived as
the willingness and ability of Mortgagor to perform its obligations
hereunder, under the Note, and as lessor under leases of the
Premises; Mortgagee may consent to a sale, transfer, conveyance or
encumbrance and expressly waive this provision in writing to
Mortgagor however any such consent and waiver shall not constitute
any consent or waiver of this provision as to any sale, transfer,
conveyance or encumbrance other than that for which the consent and
waiver was expressly granted; Mortgagee's ability to consent to any
sale, transfer, conveyance or encumbrance and waive this provision
implies no standard of reasonableness in determining whether or not
such consent shall be granted and the same may be based upon what
Mortgagee solely deems to be in its best interest; without limiting
Mortgagee's right to withhold its consent and waiver entirely, such
consent and waiver may be conditioned upon an increase in the rate
of interest under the Note and the imposition of other terms and
conditions thereunder or hereunder; any sale, transfer, conveyance
or encumbrance made, created or permitted in violation of this
provision shall be null and void and in addition to the other rights
and remedies available to Mortgagee hereunder, Mortgagee shall have
the option of declaring the unpaid principal balance of the Note,
together with all accrued and unpaid interest, premium, if any and
all other sums and charges evidenced thereby or owing hereunder,
immediately due and payable;
<PAGE>
Notwithstanding anything hereinabove to the contrary, Mortgagee does
hereby consent to the sale, transfer or conveyance of (i) the stock
of Brandywine Realty Trust, and (ii) the limited partnership
interests in Brandywine Specified Property Investors Limited
Partnership.
(m) not cause or permit any Hazardous Material to exist on or
discharge from the Premises, and comply with all Environmental Laws
and promptly: (i) pay any claim against Mortgagor or the Premises,
(ii) remove any charge or lien upon the Premises, and (iii)
indemnify and hold Mortgagee harmless from any and all loss or
damage, resulting from any Hazardous Material that exists on or is
discharged from the Premises; provided, however, that this indemnity
does not apply to Hazardous Material that exists on or is discharged
from the Premises due to acts or omissions occurring after Mortgagor
or any person or entity in any way related to Mortgagor no longer
holds title to or has any interest in the Premises;
(n) not cause or permit any Hazardous Material to exist on or discharge
from any property owned or used by Mortgagor which would result in
any charge or lien upon the Premises; provided, however that
notwithstanding the provisions of subparagraphs (m) and (n),
Mortgagor and/or any tenant under any lease on the Premises which
has been approved in writing by Mortgagee shall be entitled to use
and store supplies for cleaning and maintenance and standard office
supplies in commercially reasonable amounts, provided, however, that
such items are incidental to the use of the Premises and are stored
and used in compliance with all Environmental Laws;
(o) notify Mortgagee of any Hazardous Material that exists on or is
discharged from the Premises within ten (10) days after Mortgagor
first has knowledge of such existence or discharge;
(p) deliver to Mortgagee within thirty (30) days after Mortgagor
receives written notice that such coverage becomes available at
commercially reasonable rates from an ALTA member title insurance
company doing business in the state where the Premises is located, a
new title policy, endorsement or amendment in form and substance
acceptable to Mortgagee which provides Mortgagee with affirmative
coverage against loss of priority of the lien of this Mortgage
resulting from the existence of any Hazardous Material on the
Premises;
(q) if other than a natural person, do all things necessary to preserve
and keep in full force and effect its existence, franchises, rights
and privileges under the laws of the state of its formation and, if
other than its state of formation, the state where the Premises is
located;
(r) do all things necessary to preserve and keep in full force and
effect Mortgagee's title insurance coverage insuring the lien of
this Mortgage as a first and prior lien, subject only to the
exceptions stated in Exhibit B, including without limitation,
delivering to Mortgagee not less than 30 days prior to the effective
date of anymodification or extension of the Note any new policy or
<PAGE>
endorsement which may be required to assure Mortgagee of such
continuing coverage;
(s) not directly or indirectly, commit waste;
(t) not change the property management company from the present property
management company of Brandywine Realty Trust without the prior
written consent of Mortgagee; and
(u) not acquire, invest in, or obtain any form of ownership in any real
estate properties except those owned as of the date hereof as
described in Exhibits A and A-1 attached hereto.
2. (a) Mortgagor shall pay when due and before any penalty
attaches or interest accrues all general taxes, special taxes,
assessments (including assessments for benefits from public works or
improvements whenever begun or completed), water charges, sewer
service charges, CAM charges, if any, vault or space charges and all
other like charges against or affecting the Premises or against any
property or equipment owned by Mortgagor located on the Premises, or
which might become a lien on the Premises, and shall, within 30 days
following the last day on which any such tax, assessment or charge
may be paid without incurring any penalty or interest for nonpayment
thereof, furnish to Mortgagee a duplicate receipt of such payment.
If any such tax, assessment or charge may legally be paid in
installments, Mortgagor may, at its option, pay such tax, assessment
or charge in installments.
(b) To prevent default hereunder Mortgagor shall pay in full, under
protest in the manner provided by law, any tax, assessment or charge
which Mortgagor may desire to contest; provided, however, that
(i) if contest of any tax, assessment or charge may be made without
the payment thereof, and
(ii) such contest shall have the effect of preventing the collection
of the tax, assessment or charge so contested and the sale or
forfeiture of the Premises or any part thereof or any interest
therein to satisfy the same,
then Mortgagor may at its option and in its discretion and upon the
giving of written notice to Mortgagee of its intended action and
upon the furnishing to Mortgagee of such security or bond as
Mortgagee may require, contest any such tax, assessment or charge in
good faith and in the manner provided by law. All costs and expenses
incidental to such contest shall be paid by Mortgagor. In the event
of a ruling or adjudication adverse to Mortgagor, Mortgagor shall
promptly pay such tax, assessment or charge, provided, however that
said security or bond remains in full force and effect until said
ruling is final and all appeals have been exhausted. Mortgagor shall
indemnify and save harmless the Mortgagee and the Premises from any
loss or damage arising from such contest and shall, if necessary to
<PAGE>
prevent sale, forfeiture or any other loss or damage to the Premises
or to the Mortgagee, pay such tax, assessment or charge or take
whatever action is necessary to prevent any sale, forfeiture or
loss.
3. (a) Mortgagor shall at all times keep in force property insurance
insuring all buildings and improvements which now are or
hereafter become a part of the Premises for perils covered by
a causes of loss-special form insurance policy with an
ordinance or law coverage endorsement containing both
replacement cost and agreed amount endorsements or options.
Mortgagor shall also keep in force commercial general
liability insurance naming Mortgagee as additional insured
protecting Mortgagor and Mortgagee against liability for
bodily injury or property damage occurring in, on or adjacent
to the Premises in commercially reasonable amounts. In
addition, Mortgagor shall at all times keep in force boiler
and machinery insurance if the property has a boiler or is an
office building and rental value insurance for the perils
specified herein for one hundred percent (100%) of the rents
(including operating expenses, real estate taxes, assessments
and insurance costs which are lessee's liability) for a period
of twelve (12) months. Mortgagor shall also obtain insurance
against all other hazards as may be reasonably required by
Mortgagee, including, without limitation, insurance against
loss or damage by flood, earthquake and war risk, but only to
the extent available at commercially reasonable rates and
owners of similar or competing projects are carrying such
insurance.
(b) All insurance shall be in form, content and amounts approved by
Mortgagee and written by an insurance company or companies rated A,
class size X or better in the most current issue of Best's Insurance
Reports and which is licensed to do business in the state in which
the Premises are located and domiciled in the United States or a
governmental agency or instrumentality approved by Mortgagee. The
policies for such insurance shall have attached thereto standard
mortgagee clauses in favor of and permitting Mortgagee to collect
any and all proceeds payable thereunder and shall include a 30 day
(except for nonpayment of premium, in which case, a 10 day) notice
of cancellation clause in favor of Mortgagee. All policies or
certificates of insurance shall be delivered to and held by
Mortgagee as further security for the payment of the Note and any
other obligations arising under the Loan Documents, with evidence of
renewal coverage delivered to Mortgagee at least 30 days before the
expiration date of any policy. Not more frequently than once every
three years, if Mortgagee has a reasonable belief that the
replacement cost value is not correct, it shall notify Mortgagor and
Mortgagor, at its expense, will furnish Mortgagee with an appraisal
of the full insurable replacement cost value of the Premises, made
by fire insurance appraisers satisfactory to Mortgagee and fire
insurance companies generally. Mortgagor shall not carry separate
insurance, concurrent in kind or form and contributing in the event
of loss, with any insurance required herein.
4. (a) Mortgagor shall deposit with and pay to Mortgagee, on each
payment date specified in the Note secured by this Mortgage, a sum
equivalent to: (1) the taxes and assessments assessed or levied
<PAGE>
against and next due on the Premises divided by the number of
payments that will become due and payable under the Note before the
date when such taxes and assessments will become due and payable,
plus (2) upon the request of Mortgagee, the premiums that will next
become due and payable for insurance required by this Mortgage to be
furnished by Mortgagor divided by the number of payments that will
become due and payable under the Note before the date when such
premiums will become due and payable. Notwithstanding the provisions
of paragraph 2(a) hereof to the contrary, Mortgagee shall use such
deposits to pay the taxes, assessments and premiums when the same
become due. Mortgagee shall not be liable for interest on such
deposits. Mortgagor shall procure and deliver to Mortgagee, in
advance, statements for such charges. If the total payments made by
Mortgagor under this paragraph plus interest, if any, accrued
thereon exceed the amount of payments actually made by Mortgagee for
taxes, assessments and insurance premiums, such excess shall be
credited by Mortgagee on subsequent deposits to be made by
Mortgagor. If, however, the deposits are insufficient to pay the
taxes, assessments and insurance premiums when the same shall be due
and payable, Mortgagor will pay to Mortgagee any amount necessary to
make up the deficiency, on or before the date when payment of such
taxes, assessments and insurance premiums shall be due. If at any
time Mortgagor shall tender to Mortgagee, in accordance with the
provisions of the Note secured by this Mortgage, full payment of the
entire indebtedness represented thereby, Mortgagee shall, in
computing the amount of such indebtedness, credit to the account of
Mortgagor any balance remaining in the funds accumulated and held by
Mortgagee under the provisions of this paragraph. If there is a
default under any of the provisions of this Mortgage resulting in a
public sale of the Premises, or if Mortgagee otherwise acquires the
Premises after default, Mortgagee shall apply, at the time of
commencement of such proceedings, or at the time the Premises is
otherwise acquired, the balance then remaining in the funds
accumulated under this paragraph as a credit on the interest accrued
and unpaid and the balance to the principal then remaining unpaid
under the Note. The provisions of this paragraph shall not affect
the enforceability of the covenants relating to taxes, assessments
and insurance premiums provided for in this Mortgage except to the
extent that obligations for the same have been actually met by
compliance with this paragraph.
(b) Any funds held under this paragraph shall not constitute any deposit
or account of the Mortgagor or moneys to which the Mortgagor is
entitled upon demand, or upon the mere passage of time, or sums to
which Mortgagor is entitled to any interest or crediting of interest
by virtue of Mortgagee's mere possession of such deposits. Mortgagee
shall not be required to segregate such deposits or hold such
deposits in any separate account for the benefit of Mortgagor.
Mortgagee may hold such deposits in its general account or any other
account and may commingle such deposits with any other moneys of
Mortgagee or any other person or entity. Mortgagor hereby consents
to the investment of such deposits by Mortgagee as outlined herein.
Mortgagee shall not be liable for any claims, suits, actions, costs,
damages, liabilities and expenses (collectively, the "Liabilities")
in connection with the subject matter hereof or obligations
hereunder, including, without limitation, any Liabilities arising
out of the investment of such deposits in such investment vehicles
as the Mortgagee chooses, or the failure of the investment vehicle
to produce a reasonable return on such deposits, or the loss of such
<PAGE>
deposits as a result of the insolvency of the financial entity in
which such deposits are deposited. The foregoing limitation on
liability with respect to the Mortgagee shall not apply to any of
the Liabilities directly caused solely by the gross negligence or
intentional misconduct of Mortgagee.
5. In the event of any damage to or destruction of the buildings or
improvements which are a part of the Premises:
(a) Mortgagor will immediately notify Mortgagee thereof in the manner
provided in this Mortgage for the giving of notices. Mortgagee may
in its discretion (and it is hereby authorized to) either settle and
adjust any claim under such insurance policies, or allow Mortgagor
to agree with the insurance company or companies on the amount to be
paid upon the loss. In either case, the proceeds shall be paid to
Mortgagee and Mortgagee is authorized to collect and to give
receipts therefor. In the event Mortgagee elects to either settle or
adjust any claim under such insurance policies, and provided there
is no Event of Default or event which with the passage of time or
notice or both would constitute an Event of Default which has
occurred and is continuing, Mortgagor shall have the right to
participate in said settlement or adjustment; provided, however,
that any settlement or adjustment shall be subject to the written
approval of Mortgagee, provided, however, that if such claim is less
than $50,000.00, Mortgagee's written approval shall not be required.
(b) Such proceeds, after deducting therefrom any expenses incurred in
the collection thereof, including reasonable attorneys' fees and
costs, shall be applied at the option of Mortgagee either to the
cost of rebuilding and restoring the buildings and improvements or
in reduction of the indebtedness secured hereby whether or not then
due and payable, provided however, that if no Event of Default has
occurred and Mortgagee has not otherwise accelerated the whole or
any part of the indebtedness secured hereby, such reduction shall be
without a Make Whole Premium (as defined in the Note). Any excess
proceeds remaining after said indebtedness is fully paid shall be
promptly remitted to Mortgagor.
(c) Regardless of the cause of the damage or destruction or the
availability or sufficiency of insurance proceeds until all
indebtedness secured hereby shall be fully paid, Mortgagor shall be
obligated to repair, restore and rebuild any buildings or
improvements so damaged or destroyed, provided however, that if any
insurance proceeds have been paid to Mortgagee under any insurance
policies maintained by Mortgagor under the provisions of Paragraph 3
hereof, Mortgagor shall be so obligated only if Mortgagee elects to
apply such proceeds to the cost of rebuilding and restoration.
Repair and restoration of the buildings and improvements shall be
commenced promptly after the occurrence of the loss and shall be
prosecuted to completion diligently, and the buildings and
improvements shall be so restored and rebuilt as to be of at least
equal value and substantially the same character as prior to such
damage and destruction. In the event the estimated costs of
rebuilding and restoration exceed 25% of the indebtedness then
remaining unpaid as secured hereby, the drawings and specifications
<PAGE>
pertaining to such rebuilding and restoration shall be subject to
the prior written approval of Mortgagee.
(d) In the event that Mortgagor is to be reimbursed out of the insurance
proceeds, such proceeds shall be made available from time to time
upon the furnishing to Mortgagee of satisfactory evidences of the
estimated cost of completion thereof and such architect's
certificates, waivers of lien, contractor's sworn statements, and
other evidence of cost and of payment and of the continued priority
of the lien hereof over any potential liens of mechanics and
materialmen as Mortgagee may require and approve. No payment made by
Mortgagee prior to the final completion of the work shall, together
with all payments theretofore made, exceed 90% of the value of the
work performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least sufficient to
pay for the cost of completion of the work free and clear of liens.
Any proceeds remaining after payment of the cost of rebuilding and
restoration shall, at the option of Mortgagee, either be applied in
reduction of the indebtedness secured hereby or paid to Mortgagor.
(e) Should such damage or destruction occur after foreclosure or sale
proceedings have been instituted, the proceeds of any such insurance
policy or policies, if not applied in rebuilding or restoration of
the buildings or improvements, shall be used to pay the
indebtedness, then due and owing in the event of a non-judicial sale
or the amount due in accordance with any decree of foreclosure or
deficiency judgment that may be entered in connection with such
proceedings, and the balance, if any, shall be paid to the owner of
the equity of redemption if he shall then be entitled to the same,
or otherwise as any court having jurisdiction may direct. Following
any foreclosure sale, or other sale of the Premises by Mortgagee
pursuant to the terms hereof, Mortgagee is authorized without the
consent of Mortgagor to assign any and all insurance policies to the
purchaser at the sale and to take such other steps as Mortgagee may
deem advisable to cause the interests of such purchaser to be
protected by any of such insurance policies.
6. Mortgagor hereby assigns, transfers and sets over to Mortgagee the
entire proceeds of any award or claim for damage to any of the Premises
taken or damaged under the power of eminent domain or by condemnation.
In the event of the commencement of any eminent domain or condemnation
proceeding affecting the Premises:
(a) Mortgagor shall notify Mortgagee thereof in the manner provided in
this Mortgage for the giving of notices. Mortgagee may participate
in such proceeding, and Mortgagor shall deliver to Mortgagee all
documents requested by it to permit such participation.
(b) Mortgagee may elect to (i) apply the proceeds of the award upon or
in reduction of the indebtedness secured hereby whether or not then
due and payable, provided however, that if no Event of Default has
occurred and Mortgagee has not otherwise accelerated the whole or
any part of the indebtedness secured hereby, such reduction shall be
without Make Whole Premium, or (ii) require Mortgagor to restore or
rebuild, in which event the proceeds shall be held by Mortgagee and
<PAGE>
used to reimburse Mortgagor for the cost of restoring and rebuilding
all buildings and improvements in accordance with plans and
specifications to be submitted to and approved by Mortgagee.
(c) In the event Mortgagee elects to reimburse Mortgagor for the costs
of restoring and rebuilding the Premises, then the proceeds of the
award shall be paid out in the same manner as provided in this
Mortgage for the payment of insurance proceeds in reimbursement of
the costs of rebuilding and restoration. If the amount of such award
is insufficient to cover the cost of restoring and rebuilding,
Mortgagor shall pay such cost in excess of the award before being
entitled to reimbursement out of the award. Any proceeds remaining
after payment of cost of restoring and rebuilding shall, at the
option of Mortgagee, either be applied on account of the
indebtedness secured hereby or be paid to Mortgagor.
7. If by the laws of the United States of America or of any state
or governmental subdivision having jurisdiction of Mortgagor or of the
Premises or of the transaction evidenced by the Note and this Mortgage,
any tax or fee is due or becomes due in respect of the issuance of the
Note hereby secured or the making, recording and registration of this
Mortgage, except for Mortgagee's income or franchise taxes, Mortgagor
covenants and agrees to pay such tax or fee in the manner required by
such law, and to hold harmless and indemnify Mortgagee, its successors
and assigns, against any liability incurred by reason of the imposition
of any such tax or fee.
8. In the event of the enactment after the date hereof of any
applicable law deducting from the value of land for the purpose of
taxation any lien thereon, or imposing upon Mortgagee the payment
of the whole or any part of the taxes or assessments or charges or
liens herein required to be paid by Mortgagor, or changing in any
way the laws relating to the taxation of mortgages or debts
secured by mortgages or Mortgagee's interest in the Premises, or
the manner of collection of taxes, so as to affect this Mortgage
or the debt secured hereby or the holder thereof, except for
Mortgagee's income or franchise taxes, then and in any such event
Mortgagor shall, upon demand by Mortgagee, pay such taxes or
assessments or reimburse Mortgagee therefor; provided, however,
that, if in the opinion of counsel for Mortgagee (a) it might be
unlawful to require Mortgagor to make such payment or (b) the
making of such payment might be construed as imposing a rate of
interest beyond the maximum permitted by law, then and in such
event Mortgagee may elect to declare all of the indebtedness
secured hereby to be and become due and payable 120 days from the
giving of written notice of such election to Mortgagor, without
premium or penalty provided no Event of Default exists under this
Mortgage or any other document securing this Mortgage.
9. (a) Upon the occurrence of any Event of Default, Mortgagee may,
but need not, make any payment or perform any act herein
required of Mortgagor, in any form and manner deemed expedient
and may, but need not, make full or partial payments of
principal or interest on prior encumbrances, if any, and
purchase, discharge, compromise or settle any tax lien or
other prior lien or title or claim thereof, or redeem from any
tax sale or forfeiture affecting said Premises, or contest any
tax or assessment. All moneys paid for any of the purposes
herein authorized and all reasonable expenses paid or incurred
in connection therewith, including reasonable attorneys' fees
and costs and attorneys' fees and costs on appeal, and any
<PAGE>
other money advanced by Mortgagee to protect the Premises and
the lien hereof, shall be so much additional indebtedness
secured hereby and shall become immediately due and payable
without notice and with interest thereon at the Default Rate
(as hereinafter defined) from the date of expenditure or
advance until paid.
(b) In making any payment hereby authorized relating to taxes or
assessments or for the purchase, discharge, compromise or settlement
of any prior lien, Mortgagee may make such payment according to any
bill, statement or estimate secured from the appropriate public
office without inquiry into the accuracy thereof or into the
validity of any tax, assessment, sale, forfeiture, tax lien or title
or claim thereof or without inquiry as to the validity or amount of
any claim for lien which may be asserted.
10. If one or more of the following events (herein called "Events
of Default") shall have occurred:
(a) default shall be made in the payment of any principal, interest or
premium payable with respect to the Note, or taxes or assessments
referred to in this Mortgage or insurance premiums for the insurance
required pursuant to this Mortgage when due under the Note or this
Mortgage, and such default shall have continued for 10 days; or
(b) Mortgagor or any general partner of Mortgagor shall be dissolved, or
a decree or order for relief shall be entered by a court having
jurisdiction in respect of Mortgagor or any general partner of
Mortgagor in a voluntary or involuntary case under the Federal
Bankruptcy Code as now or hereafter constituted, or Mortgagor or any
general partner of Mortgagor shall file a voluntary petition in
bankruptcy or for reorganization or an arrangement or any
composition, readjustment, liquidation, dissolution or similar
relief pursuant to any similar present or future state or federal
bankruptcy law, or shall be adjudicated a bankrupt or become
insolvent, or shall commit any act of bankruptcy as defined in such
law, or shall take any action in furtherance of any of the
foregoing; or
(c) a petition or answer shall be filed proposing the adjudication of
Mortgagor or any general partner of Mortgagor as a bankrupt or its
reorganization or arrangement, or any composition, readjustment,
liquidation, dissolution or similar relief with respect to it
pursuant to any present or future federal or state bankruptcy or
similar law, and Mortgagor or any general partner of Mortgagor shall
consent to the filing thereof, or such petition or answer shall not
be discharged within 60 days after the filing thereof; or
(d) by the order of a court of competent jurisdiction, a receiver,
trustee or liquidator of the Premises or any part thereof or of
Mortgagor or any general partner of Mortgagor or of substantially
all of its assets shall be appointed and shall not be discharged or
dismissed within 60 days after such appointment, or if Mortgagor or
any general partner of Mortgagor shall consent to or acquiesce in
such appointment; or
<PAGE>
(e) with respect to the matters not described in the other subparagraphs
of this paragraph 10, default shall be made in the due observance or
performance of any covenant, condition or agreement of the Mortgagor
contained in this Mortgage, the Note, the Assignment of Lease and
Rents or in any other instrument or agreement by which the Note is
secured (the "Loan Documents"), and such default shall have
continued for 30 days after notice specifying such default is given
by Mortgagee to Mortgagor; or
(f) any representation or warranty made by Mortgagor in the Loan
Documents shall prove to be untrue or inaccurate in any
material respect; or
(g) an Event of Default shall occur and be continuing under the
Other Mortgage or Other Note;
then, in each and every such case, the whole of said principal sum
hereby secured shall, at the option of the Mortgagee and without further
notice to Mortgagor, become immediately due and payable together with
accrued interest thereon and a Make Whole Premium calculated in
accordance with the provisions hereof, and whether or not Mortgagee has
exercised said option, interest shall accrue on the entire principal
balance and any interest or premium then due, at the Default Rate until
fully paid or if Mortgagee has not exercised said option, for the
duration of any Event of Default.
If any Event of Default under "(e)" above shall be of such nature that
it cannot be cured or remedied within 30 days, Mortgagor shall be
entitled to a reasonable period of time to cure or remedy such Event of
Default, provided Mortgagor commences the cure or remedy thereof within
the 30 day period following the giving of notice and thereafter proceeds
with diligence to complete such cure or remedy.
11. Mortgagor agrees that if Mortgagee accelerates the whole or any
part of the principal sum hereby secured, or applies any proceeds as if
such application had been made as a result of such acceleration,
pursuant to the provisions hereof, Mortgagor waives any right to prepay
the principal sum hereby secured in whole or in part without premium and
agrees to pay, as yield maintenance protection and not as a penalty, a
"Make Whole Premium." The Make Whole Premium shall mean an amount equal
to the greater of one percent (1%) of the principal amount to be prepaid
or a premium calculated as follows:
(a) Determine the "Reinvestment Yield." The Reinvestment Yield will be
equal to the yield on the applicable* U.S. Treasury Bond, Note or
Bill ("primary issue")** published two weeks prior to the date of
prepayment and converted to an equivalent monthly compounded nominal
yield.
*As set forth above, the U.S. Treasury Bond, Note or
Bill applicable for each prepayment period is as follows:
<PAGE>
Prepayment Period U.S. Treasury Issue
----------------- -------------------
To May 15, 1998 May 1998, 9%
May 15, 1998 to April 15, 2001 ***
**In the event there is no market activity involving the primary
issue at the time of prepayment, Mortgagee shall choose a comparable
Treasury Bond, Note or Bill ("secondary issue") which Mortgagee
deems to be similar to the primary issue's characteristics (i.e.,
rate, remaining time to maturity, yield).
***At this time there is not a U.S. Treasury Bond, Note
or Bill for this prepayment period. At the time of prepayment,
Mortgagee shall select in its sole and absolute discretion a U.S.
Treasury Issue with similar remaining time to maturity as the Note.
(b) Calculate the "Present Value of the Mortgage." The Present Value of
the Mortgage is the present value of the payments to be made in
accordance with the Note (all installment payments and any remaining
payment due on the Maturity Date) discounted at the Reinvestment
Yield for the number of months remaining from the date of prepayment
to the Maturity Date. In the event of a partial prepayment
hereunder, the Present Value of the Mortgage shall be calculated in
accordance with the preceding sentence multiplied by the fraction
which results from dividing the amount of the prepaid proceeds by
the principal balance immediately prior to prepayment.
(c) Subtract the amount of the prepaid proceeds from the Present Value
of the Mortgage as of the date of prepayment. Any resulting positive
differential shall be the premium.
12. Upon the occurrence of any Event of Default, Mortgagee shall have the
right to foreclose the lien hereof, and to the extent permitted herein
and by applicable law to sell the Premises by sale independent of the
foreclosure proceedings. In any suit to foreclose the lien hereof, and
in any sale of the Premises, there shall be allowed and included as
additional indebtedness payable by Mortgagor to Mortgagee and secured
hereby all expenditures and expenses which may be paid or incurred by or
on behalf of Mortgagee for attorneys' fees and costs, including
attorneys' fees and costs on appeal, appraisers' fees, expenditures for
documentary and expert evidence, stenographer's charges, publication and
advertising costs, survey costs, environmental audits and costs (which
may be estimated as to items to be expended after the entry of any
decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies, Torrens certificates and similar
data and assurances with respect to title as Mortgagee deems reasonably
necessary either to prosecute such suit or to consummate such sale or to
evidence to bidders at any sale the true condition of the title to or
the value of the Premises.
13. The proceeds of any foreclosure sale, or other sale of the
Premises in accordance with the terms hereof or as permitted by law,
shall be distributed and applied in the following order of priority:
First, to the payment of all costs and expenses incident to the
foreclosure and/or sale proceedings, including all items as are
<PAGE>
mentioned in any preceding or succeeding paragraph hereof; second, to
the payment of all other items which under the terms hereof constitute
secured indebtedness in addition to that evidenced by the Note, with
interest thereon as herein provided; third, to the payment of all
principal and accrued interest remaining unpaid on the Note; fourth, any
surplus to the Mortgagor, its successors or assigns, as their rights may
appear.
14. During the continuance of any Event of Default, Mortgagor shall
forthwith upon demand of Mortgagee surrender to Mortgagee possession of
the Premises, and Mortgagee shall be entitled to take actual possession
of the Premises or any part thereof personally or by its agents or
attorneys, and Mortgagee in its discretion may, with or without force
and with or without process of law, enter upon and take and maintain
possession of all or any part of the Premises together with all
documents, books, records, papers and accounts of the Mortgagor or the
then owner of the Premises relating thereto, and may exclude Mortgagor,
its agents or assigns wholly therefrom, and may as attorney-in-fact or
agent of the Mortgagor, or in its own name as Mortgagee and under the
powers herein granted:
(a) hold, operate, manage or control the Premises and conduct the
business, if any, thereof, either personally or by its agents, and
with full power to use such measures, legal or equitable, as in its
discretion it deems proper or necessary to enforce the payment or
security of the income, rents, issues and profits of the Premises,
including actions for the recovery of rent, actions in forcible
detainer and actions in distress for rents, hereby granting full
power and authority to exercise each and every of the rights,
privileges and powers herein granted at any and all times hereafter,
without notice to Mortgagor;
(b) cancel or terminate any lease or sublease for any cause or on
any ground which would entitle Mortgagor to cancel the same;
(c) elect to cancel any lease or sublease made subsequent to this
Mortgage or subordinated to the lien hereof unless this Mortgage has
specifically been made subordinate to such lease or sublease;
(d) extend or modify any then existing leases and make new leases, which
extensions, modifications or new leases may provide for terms to
expire, or for options to lessees to extend or renew terms to
expire, beyond the Maturity Date of the Note and the issuance of a
deed or deeds to a purchaser or purchasers at a foreclosure sale, it
being understood and agreed that any such leases, and the options or
other such provisions to be contained therein, shall be binding upon
Mortgagor and all persons whose interests in the Premises are
subject to the lien hereof and shall be binding also upon the
purchaser or purchasers at any foreclosure sale, notwithstanding any
redemption from sale, discharge of the indebtedness secured hereby,
satisfaction of any foreclosure decree, or issuance of any
certificate of sale or deed to any purchaser;
(e) make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and improvements
<PAGE>
to the Premises as it may deem judicious, insure and reinsure the
same and all risks incidental to Mortgagee's possession, operation
and management thereof, and receive all income, rents, issues and
profits.
Mortgagee shall not be obligated to perform or discharge, nor does it
hereby undertake to perform or discharge, any obligation, duty or
liability under any lease, and the Mortgagor shall and does hereby agree
to indemnify and to hold Mortgagee harmless of and from all liability,
loss or damage which it might incur under said leases or under or by
reason of the assignment thereof, and of and from any and all claims or
demands whatsoever which may be asserted against it by reason of any
alleged obligations or undertakings on its part to perform or discharge
any of the terms, covenants or agreements contained in said leases.
Should Mortgagee incur any such liability, loss or damage under any of
said leases, or under or by reason of the assignment thereof, or in the
defense of any claims or demands, the amount thereof, including costs,
expenses and reasonable attorneys' fees and costs, including attorneys'
fees and costs on appeal, shall be secured hereby and Mortgagor shall
reimburse Mortgagee therefor immediately upon demand, together with
interest at the Default Rate from the date of payment by Mortgagee to
the date of reimbursement.
15. Mortgagee in the exercise of the rights and powers hereinabove
conferred upon it shall have the full power to use and apply the avails,
rents, issues and profits of the Premises to the payment of or on
account of the following, in such order as Mortgagee may determine:
(a) to the payment of the expenses of operating the Premises, including
cost of management and leasing thereof (which shall include
reasonable compensation to Mortgagee and its agent or agents if
management is delegated to an agent or agents, and shall also
include lease commissions and other compensation and expenses of
seeking and procuring tenants and entering into leases), established
claims for damages, if any, and premiums on insurance as hereinabove
authorized;
(b) to the payment of taxes and special assessments now due or
which may hereafter become due on the Premises;
(c) to the payment of all repairs, decorating, renewals, replacements,
alterations, additions, betterments and improvements of the Premises
and of placing the Premises in such condition as will in the
judgment of Mortgagee make it readily rentable; and/or
(d) to the payment of any indebtedness secured hereby or any deficiency
which may result from any foreclosure sale.
16. During the continuance of any Event of Default under this
Mortgage, Mortgagee may apply to any court having jurisdiction for the
appointment of a receiver of the Premises. Such appointment may be made
either before or after sale, without notice, without regard to the
solvency or insolvency of Mortgagor at the time of application for such
<PAGE>
receiver and without regard to the then value of the Premises or the
adequacy of Mortgagee's security. Mortgagee or any holder of the Note
may be appointed as such receiver. The receiver shall have power to
collect the rents, issues and profits of the Premises during the
pendency of any foreclosure proceedings and, in case of a sale, during
the full redemption period, if any, as well as during any further times
when Mortgagor, except for the intervention of such receiver, would be
entitled to collect such rents, issues and profits. In addition, the
receiver shall have all other powers which shall be necessary or are
usual in such cases for the protection, possession, control, management
and operation of the Premises during the whole of said period. The court
from time to time may authorize the receiver to apply the net income in
his hands in payment in full or in part of:
(a) the indebtedness secured hereby or provided by any decree
foreclosing this Mortgage, or any tax, special assessment or other
lien which may be or become superior to the lien hereof or of such
decree, provided such application is made prior to foreclosure sale;
and
(b) the deficiency in case of a sale and deficiency.
17. (a) Mortgagor agrees that all reasonable costs, charges and
expenses, including attorneys' fees, incurred or expended by
Mortgagee arising out of or in connection with any action,
proceeding or hearing, legal, equitable or quasi-legal, including
the preparation therefor and any appeal therefrom, in any way
affecting or pertaining to this Mortgage, the Note or the Premises,
shall be promptly paid by Mortgagor. All such sums not promptly paid
by Mortgagor shall be added to the indebtedness secured hereby and
shall bear interest at the Default Rate from the date of such
advance and shall be due and payable on demand.
(b) Mortgagor hereby agrees that upon the occurrence of an Event of
Default and the acceleration of the principal sum secured hereby
pursuant to this Mortgage, to the full extent that such rights can
be lawfully waived, Mortgagor hereby waives and agrees not to insist
upon, plead, or in any manner take advantage of, any notice of
acceleration, any stay, extension, exemption, homestead, marshaling
or moratorium law or any law providing for the valuation or
appraisement of all or any part of the Premises prior to any sale or
sales thereof under any provision of this Mortgage or before or
after any decree, judgement or order of any court or confirmation
thereof, or claim or exercise any right to redeem all or any part of
the Premises so sold and hereby expressly waives to the full extent
permitted by applicable law on behalf of itself and each and every
person or entity acquiring any right, title or interest in or to the
all or any part of the Premises, all benefit and advantage of any
such laws which would otherwise be available to Mortgagor or any
such person or entity, and agrees that neither Mortgagor nor any
such person or entity will invoke or utilize any such law to
otherwise hinder, delay or impede the exercise of any remedy granted
or delegated to Mortgagee herein but will permit the exercise of
such remedy as though any such laws had not been enacted. Mortgagor
hereby further expressly waives to the full extent permitted by
applicable law on behalf of itself and each and every person or
entity acquiring any right, title or interest in or to all or any
part of the Premises any and all rights of redemption from any sale
or any order or decree of foreclosure obtained pursuant to
provisions of this Mortgage.
<PAGE>
18. Mortgagor hereby assigns to Mortgagee directly and absolutely, and not
merely collaterally, the rents, issues, profits, royalties, and payments
payable under any lease of the Premises, or portion thereof, including
any oil, gas or mineral lease, or any installments of money payable
pursuant to any agreement or any sale of the Premises or any part
thereof. Mortgagee, without regard to the adequacy of any security for
the indebtedness hereby secured, shall be entitled to (a) collect such
rents, issues, profits, royalties, payments and installments of money
and apply the same as more particularly set forth in this paragraph, all
without taking possession of the Premises, or (b) enter and take
possession of the Premises or any part thereof, in person, by agent, or
by a receiver to be appointed by the court and to sue for or otherwise
collect such rents, issues, profits, royalties, payments and
installments of money. Mortgagee may apply any such rents, issues,
profits, royalties, payments and installments of money so collected,
less costs and expenses of operation and collection, including
reasonable attorneys' fees and costs and attorneys' fees and costs on
appeal, upon any indebtedness secured hereby, in such order as Mortgagee
may determine, and, if such costs and expenses and attorneys' fees and
costs shall exceed the amount collected, the excess shall be immediately
due and payable. The collection of such rents, issues, profits,
royalties, payments and installments of money and the application
thereof as aforesaid shall not cure or waive any Event of Default or
notice of default hereunder or invalidate any act done pursuant to such
notice, except to the extent any such Event of Default is fully cured.
Failure or discontinuance of Mortgagee at any time, or from time to
time, to collect any such moneys shall not impair in any manner the
subsequent enforcement by Mortgagee of the right, power and authority
herein conferred on Mortgagee. Nothing contained herein, including the
exercise of any right, power or authority herein granted to Mortgagee,
shall be, or be construed to be, an affirmation by Mortgagee of any
tenancy, lease or option, or an assumption of liability under, or the
subordination of the lien or charge of this Mortgage to any such
tenancy, lease or option. Mortgagor hereby agrees that, in the event
Mortgagee exercises its rights as in this paragraph provided, Mortgagor
waives any right to compensation for the use of Mortgagor's furniture,
furnishings or equipment in the Premises for the period such assignment
of rents or receivership is in effect, it being understood that the
rents, issues, profits, royalties, payments and installments of money
derived from the use of any such items shall be applied to Mortgagor's
obligations hereunder as above provided.
19. (a) Mortgagor has executed and delivered that certain Assignment of
Leases and Rents of even date herewith assigning to Mortgagee
directly and absolutely, and not merely collaterally, the interest
of Mortgagor as lessor under the existing leases of the Premises, as
well as all other leases which may hereafter be made in respect of
the Premises, and the rents and other income arising thereunder and
from the use of the Premises. Said Assignment of Leases and Rents
grants to Mortgagee specific rights and remedies in respect of said
leases and the collection of rents and other income thereunder and
from the use of the Premises, and such rights and remedies so
granted shall be cumulative of those granted herein. Notwithstanding
anything hereinabove to the contrary, Mortgagor shall be entitled to
a license to collect rents as set forth in the Assignment of Leases
and Rents of even date herewith.
<PAGE>
(b) Mortgagor shall keep and perform all terms, conditions and covenants
required to be performed by it as lessor under the aforesaid leases;
shall promptly advise Mortgagee in writing of any claim of material
default by Mortgagor made by a lessee under any such lease or of any
material default thereunder by a lessee; and shall promptly provide
Mortgagee with a copy of any notice of material default or other
material notice served upon Mortgagor by any such lessee. Mortgagor
will not cancel, modify or alter, or accept the surrender of, any
existing or future lease of the Premises or any part thereof without
first obtaining written consent of Mortgagee unless otherwise
specifically permitted in the Assignment of Leases and Rents.
20. (a) All rights and remedies granted to Mortgagee in the Loan
Documents shall be in addition to and not in limitation of any
rights and remedies to which it is entitled in equity, at law or by
statute, and the invalidity of any right or remedy herein provided
by reason of its conflict with applicable law or statute shall not
affect any other valid right or remedy afforded to Mortgagee. No
waiver of any Event of Default or of any default in the performance
of any covenant contained in the Note or any other instrument
securing the Note shall at any time thereafter be held to be a
waiver of any rights of the Mortgagee hereunder, nor shall any
waiver of a prior Event of Default or default operate to waive any
subsequent Event of Default or default. All remedies provided for
herein, in the Note and in any other instrument securing the Note
are cumulative and may, at the election of Mortgagee, be exercised
alternatively, successively, or concurrently. No act of Mortgagee
shall be construed as an election to proceed under any one provision
herein to the exclusion of any other provision or to proceed against
one portion of the Premises to the exclusion of any other portion.
(b) This Mortgage is upon any existing statutory condition and upon the
further condition that all covenants and agreements of Mortgagor
herein shall be fully or timely performed, time being of the essence
under this Mortgage, and that no breach of any such condition or
agreement shall be permitted, for any breach of which Mortgagee
shall have any statutory power of sale and this Mortgage shall be
subject to foreclosure as provided by law.
21. By accepting payment of any sum secured hereby after its due date,
Mortgagee does not waive its right either to require prompt payment when
due of all other sums or installments so secured or to declare a default
for failure to pay such other sums or installments.
22. Notwithstanding anything herein or in the Note to the contrary, no
provision contained herein or in the Note which purports to obligate
Mortgagor to pay any amount of interest or any fees, costs or expenses
which are in excess of the maximum permitted by applicable law, shall be
effective to the extent that it calls for the payment of any interest or
other sums in excess of such maximum. All agreements between Mortgagor
and Mortgagee, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether
by reason of demand for payment of or acceleration of the maturity of
<PAGE>
any of the indebtedness secured hereby or otherwise, shall the interest
contracted for, charged or received by Mortgagee exceed the maximum
amount permissible under applicable law. If, from any circumstance
whatsoever, interest would otherwise be payable to Mortgagee in excess
of the maximum lawful amount, the interest payable to Mortgagee shall be
reduced to the maximum amount permitted under applicable law; and if
from any circumstance Mortgagee shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excessive interest shall at Mortgagee's
option, be refunded to Mortgagor or be applied to the reduction of the
principal balance of the indebtedness secured hereby and not to the
payment of interest or, if such excessive interest exceeds the unpaid
balance of principal of the indebtedness secured hereby, such excess
shall be refunded to Mortgagor. This paragraph shall control all
agreements between Mortgagor and Mortgagee.
23. In the event one or more provisions of the Loan Documents shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, and this Mortgage shall be construed as if any such provision
had never been contained herein.
24. If the payment of the indebtedness secured hereby or of any part thereof
shall be extended or varied, or if any part of the security be released,
all persons now or at any time hereafter liable therefor, or interested
in said Premises, shall be held to assent to such extension, variation
or release, and their liability and the lien and all provisions hereof
shall continue in full force, the right of recourse against all such
persons being expressly reserved by Mortgagee notwithstanding such
variation or release.
25. Upon payment in full of the indebtedness secured hereby and the
performance by Mortgagor of all of the obligations imposed on Mortgagor
in the Loan Documents, these presents shall be null and void, and
Mortgagee shall release this Mortgage and the lien hereof by proper
instrument executed in recordable form.
26. Mortgagor shall have the privilege of making prepayments on the
principal of the Note (in addition to the required payments) if and only
to the extent and upon the terms and conditions, if any, expressly set
forth in the Note. If not expressly so set forth, the Note is not
subject to such prepayment.
27. Mortgagor hereby grants to Mortgagee and its respective agents,
attorneys, employees, consultants, contractors and assigns, an
irrevocable license and authorization to enter upon and inspect the
Premises and all facilities located thereon including, but not limited
to the right to conduct a Phase I environmental audit at reasonable
times provided such grant is expressly subject to rights of tenants of
the Premises. In the event Mortgagee has formed a reasonable belief,
based on its inspection of the Premises or other factors known to it,
that Hazardous Materials may be present on the Premises, then Mortgagor
shall perform such tests at Mortgagee's request, including without
limitation, subsurface testing, soil and ground water testing, and other
tests which may physically invade the Premises or facilities from a
consultant and pursuant to a scope of work approved by Mortgagee (the
<PAGE>
"Tests"), as Mortgagee, in its sole discretion, determines as necessary
to (i) investigate the condition of the Premises, (ii) protect the
security interests created under this Mortgage or (iii) determine
compliance with all laws relating to Hazardous Materials, the provisions
of this Mortgage and other matters relating thereto, and Mortgagor shall
provide true and accurate written copies of the results of the Tests to
Mortgagee upon receipt of the results. In the event that Mortgagor fails
to conduct the Tests requested by Mortgagee and to provide Mortgagee
with the results within sixty (60) days of such request or such
additional time as Mortgagee shall agree in writing in its sole
discretion, or if Mortgagee is not reasonably satisfied with the results
of any of the Tests or of any Phase I environmental audit, then
Mortgagor grants to Mortgagee and its respective agents, attorneys,
employees, consultants, contractors and assigns, an irrevocable license
and authorization to conduct the Tests necessary in Mortgagee's sole
discretion to accomplish (i) through (iii) in this paragraph, provided
such grant is expressly subject to rights of tenants of the Premises.
28. Within 15 days after any written request by Mortgagee, Mortgagor shall
certify, by a written statement duly acknowledged, the amount of
principal and interest then owing on the Note and whether any offsets or
defenses exist against the indebtedness secured hereby. Within 30 days
after any written request by Mortgagor, Mortgagee shall certify, by a
written statement duly acknowledged, the amount of principal and
interest then owing on the Note.
29. A foreclosure of this Mortgage or the Other Mortgage, whether by a
judicial sale or pursuant to a power of sale, or an acceptance of a deed
in lieu of foreclosure, shall not constitute a curing or satisfaction of
any default under the remaining mortgage or note.
30. (a) Mortgagor shall furnish to Mortgagee within 90 days after the
end of each fiscal year of Mortgagor a detailed and analytical
financial report in form and substance reasonably acceptable to
Mortgagee covering the full and complete operation of the Premises,
including without limitation: (i) income and expense statements ,
and, (ii) a report of the leasing status of the Premises as of the
end of such year, identifying the lessee, square footage leased,
rental amount, rental concessions and/or rental deferments, if any,
and expiration date under each lease of the Premises. Such reports
shall be prepared by an accountant who may be an employee of
Mortgagor, or of an affiliate of Mortgagor, acceptable to Mortgagee.
In addition to the reports referred to herein, Mortgagor shall
promptly supply any additional information or records relating to
the Premises or its operation as Mortgagee may from time to time
reasonably request.
(b) Mortgagor shall submit to Mortgagee during the life of this Mortgage
within 90 days following the end of each fiscal year annual
unaudited balance sheets and income statements for Mortgagor.
Mortgagor shall submit to Mortgagee during the life of this Mortgage
within 90 days following the end of each fiscal year annual audited
balance sheets and income statements for Brandywine Realty Trust.
31. Any notice which any party hereto may desire or be required to
give to the other shall be deemed to be an adequate and sufficient
<PAGE>
notice if given in writing and service is made by either (i) registered
or certified mail, postage prepaid, in which case notice shall be deemed
to have been received three (3) business days following deposit to the
mail; or (ii) nationally recognized overnight air courier, next day
delivery, prepaid, in which case such notice shall be deemed to have
been received one (1) business day following delivery to such courier.
All notices shall be addressed to Mortgagor at its address given on the
first page hereof or to Mortgagee at 711 High Street, Des Moines, Iowa
50392, Attn: Commercial Real Estate Loan Administration, Loan No.
D-750594, or to such other place as either party may by written notice
to the other hereafter designate as a place for service of notice.
32. This Mortgage and all the provisions hereof shall extend to and be
binding upon Mortgagor and all persons claiming by, under or through
Mortgagor, and the word "Mortgagor" when used herein shall include all
such persons and all persons liable for the payment of the indebtedness
secured hereby or any part thereof, whether or not such persons have
executed the Note or this Mortgage. The word "Mortgagee" as used herein
shall include the successors and assigns of the Mortgagee named herein,
and the holder or holders from time to time of the Note secured hereby.
33. Mortgagor has had the opportunity to fully negotiate the terms hereof
and modify the draftsmanship of this Mortgage. Therefore, the terms of
this Mortgage shall be construed and interpreted without any
presumption, inference, or rule requiring construction or interpretation
of any provision of this Mortgage against the interest of the party
causing this Mortgage or any portion of it to be drafted. Mortgagor is
entering into this Mortgage freely and voluntarily without any duress,
economic or otherwise.
34. This Mortgage shall be governed by and construed in accordance with the
laws of the State of New Jersey. Paragraph 7The Default Rate is not a
penalty, but rather a rate of interest negotiated by the parties to
compensate Mortgagee additionally in the Event of Default.
35. As used herein, the term "Default Rate" means a rate equal to the lesser
of (i) four percent (4.0%) per annum above the then applicable interest
rate payable under the Note or (ii) the maximum rate allowed by
applicable law.
36. Notwithstanding any provision of this Mortgage, the Note or any other
instruments evidencing or securing the loan evidenced by the Note which
might be construed to the contrary, the assignment of rents and other
amounts provided for herein is an absolute assignment and not merely a
collateral assignment or a security interest, and is effective whether
or not a default occurs hereunder, subject only to a license, if any,
granted by Mortgagee to Mortgagor with respect thereto prior to the
occurrence of an Event of Default hereunder. It is the intention of
Mortgagor and Mortgagee that the assignment effectuated by this Mortgage
with respect to such rents and other amounts payable under the leases
shall be a direct and currently effective assignment and shall not
constitute merely the granting of a lien, security interest or pledge
for the purpose of securing the indebtedness secured hereby. In the
event that a court of competent jurisdiction determines that,
notwithstanding such expressed intent of the parties, Mortgagee's
interest in the rents and other amounts payable under the leases
<PAGE>
constitutes a lien on or security interest in or pledge thereof, it is
agreed and understood that the forwarding of a notice to Mortgagor after
the occurrence of an Event of Default, advising Mortgagor of the
revocation of any license then in favor of Mortgagor to collect such
rents or other amounts payable under the leases, or of the existence of
an Event of Default, shall be sufficient action by Mortgagee to (i)
perfect such lien on or security interest in or pledge of the rents and
other amounts payable under the leases, (ii) take possession thereof,
and (iii) entitle Mortgagee to immediate and direct payment of the rents
and other amounts payable under the leases, for application as provided
in this Mortgage, all without the necessity of any further action by
Mortgagee, including, without limitation, any action to obtain
possession of the land, improvements or any other portion of the
Premises. Notwithstanding the direct and absolute assignment of the
rents and other amounts payable under the leases as herein described,
there shall be no pro tanto reduction in any portion of the indebtedness
secured by this Mortgage except with respect to rents and other amounts
payable under the leases actually received by Mortgagee and applied by
Mortgagee toward payment of the indebtedness. Mortgagee may, upon
written notice to Mortgagor, elect to (i) exclude from the assignment
provided in this Mortgage any of the leases as specified in such notice
so that the interest under such indicated lease is not assigned to
Mortgagee, and (ii) subordinate the lien and other terms and provisions
of this Mortgage to any of the leases as indicated in said notice to
Mortgagor.
37. Mortgagor knowingly, voluntarily and intentionally waives, to the extent
permitted by law, trial by jury in any actions brought by Mortgagor or
Mortgagee in connection with this Mortgage, any of the Loan Documents,
the indebtedness secured hereby, or any other statements or actions of
Mortgagee.
38. (a) Notwithstanding any provision to the contrary in the Note, this
Mortgage or any other instrument or agreement by which the Note is
secured and except as otherwise provided in this paragraph, the
liability of Mortgagor and any general partner of Mortgagor under
the Loan Documents shall be limited to the interest of Mortgagor and
any general partner of Mortgagor in the Premises and the rents,
issues, proceeds and profits thereof. In the event of foreclosure of
the liens evidenced by the Loan Documents, no judgment for any
deficiency upon the indebtedness evidenced by the Loan Documents
shall be sought or obtained by Mortgagee against Mortgagor or any
general partner of Mortgagor. Nothing contained in this paragraph
shall:
(i) prevent the failure of Mortgagor to make any payment or to
perform any obligation under any of the Loan Documents
within the time periods provided therein from being an Event
of Default thereunder;
(ii) be construed as limiting the obligations of Mortgagor
to any tenant under any lease of the Premises;
(iii) in any way limit or impair the lien or
enforcement of the Loan Documents pursuant to the
terms thereof; or
<PAGE>
(iv) limit the obligations of any indemnitor or guarantor, if
any, of Mortgagor's obligations under the Loan Documents.
(b) Notwithstanding subparagraph (a) above, Mortgagor and any general
partner of Mortgagor shall be personally liable to Mortgagee for:
(i) Mortgagor's failure to comply with paragraphs 2 (taxes
and assessments) and 3 (insurance) hereof, provided
that Mortgagor's personal liability shall be limited
to the extent that Mortgagor received rents, issues,
proceeds and profits from the Premises (A) during the
eighteen (18) month period prior to an Event of
Default and/or (B) after an Event of Default under the
Loan Documents has occurred and is continuing and such
rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or
maintenance of the Premises and the taxes,
assessments, utility charges and insurnace of the
Premises, taking into account sufficient reserves for
the same and for replacements and recurring items, and
(z) payment of principal, interest and other charges
when due under the Loan Documents, and further
provided that any payments to parties related to
Mortgagor shall be considered as expenses of operation
only if they are at market rates or fees consistent
with market rates or fees for the same or similar
services;
(ii) any event or circumstance for which Mortgagor
indemnifies Mortgagee under paragraph 1(m)
(environmental indemnity) hereof;
(iii)Mortgagor's failure to pay utilities on or before the date
such payments are due, provided that Mortgagor's personal
liability shall be limited to the extent that Mortgagor
received rents, issues, proceeds and profits from the
Premises (A) during the eighteen (18) month period prior to
an Event of Default and/or (B) after an Event of Default
under the Loan Documents has occurred and is continuing and
such rents, issues, proceeds and profits are not first
applied to (y) expenses for the operation or maintenance of
the Premises and the taxes, assessments, utility charges and
insurnace of the Premises, taking into account sufficient
reserves for the same and for replacements and recurring
items, and (z) payment of principal, interest and other
charges when due under the Loan Documents, and further
provided that any payments to parties related to Mortgagor
shall be considered as expenses of operation only if they
are at market rates or fees consistent with market rates or
fees for the same or similar services;
(iv) operation and maintenance of the Premises, provided that
Mortgagor's personal liability shall be limited to the
extent that Mortgagor received rents, issues, proceeds and
<PAGE>
profits from the Premises (A) during the eighteen (18) month
period prior to an Event of Default and/or (B) after an
Event of Default under the Loan Documents has occurred and
is continuing and such rents, issues, proceeds and profits
are not first applied to (y) expenses for the operation or
maintenance of the Premises and the taxes, assessments,
utility charges and insurnace of the Premises, taking into
account sufficient reserves for the same and for
replacements and recurring items, and (z) payment of
principal, interest and other charges when due under the
Loan Documents, and further provided that any payments to
parties related to Mortgagor shall be considered as expenses
of operation only if they are at market rates or fees
consistent with market rates or fees for the same or similar
services;
(v) any sums expended by Mortgagee in fulfilling the
obligations of Mortgagor as lessor under any lease of
the Premises prior to a sale of the Premises pursuant
to foreclosure or power of sale, a bona fide sale
(permitted by the terms of paragraph 1(l) hereof or
consented to in writing by Mortgagee) to an unrelated
third party or upon conveyance to Mortgagee of the
Premises by a deed acceptable to Mortgagee in form and
content (each of which shall be referred to as a
"Sale" for purposes of this paragraph) or expended by
Mortgagee after a Sale of the Premises for obligations
of Mortgagor which arose prior to a Sale of the
Premises, provided that Mortgagor's personal liability
shall be limited to the extent that Mortgagor received
rents, issues, proceeds and profits from the Premises
(A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default
under the Loan Documents has occurred and is
continuing and such rents, issues, proceeds and
profits are not first applied to (y) expenses for the
operation or maintenance of the Premises and the
taxes, assessments, utility charges and insurnace of
the Premises, taking into account sufficient reserves
for the same and for replacements and recurring items,
and (z) payment of principal, interest and other
charges when due under the Loan Documents, and further
provided that any payments to parties related to
Mortgagor shall be considered as expenses of operation
only if they are at market rates or fees consistent
with market rates or fees for the same or similar
services;
(vi) any rents or other income regardless of type or source of
payment (including, but not limited to, CAM charges, lease
termination payments, refunds of any type, prepayment of
rents, settlements of litigation, or settlements of past due
rents) from the Premises which Mortgagor has received after
an Event of Default under the Loan Documents has occurred
and is continuing, and which are not applied to (A) expenses
of operation and maintenance of the Premises and the taxes,
assessments, utility charges and insurance of the Premises,
taking into account sufficient reserves for the same and for
replacements and recurring items, and (B) payment of
principal, interest and other charges when due under the
Loan Documents; provided that any payments to parties
related to Mortgagor shall be considered expenses of
<PAGE>
operation only if they are at market rates or fees
consistent with market rates or fees for the same or
similar services;
(vii) any unforfeited security deposits of tenants not turned
over to Mortgagee upon conveyance of the Premises to
Mortgagee pursuant to foreclosure or power of sale or by a
deed acceptable to Mortgagee in form and content;
(viii) misapplication or misappropriation of tax reserve
accounts, tenant improvement reserve accounts, security
deposits, prepaid rents or other similar sums paid to or
held by Mortgagor or any other entity or person in
connection with the operation of the Premises;
(ix) any waste committed or allowed by Mortgagor with respect
to the Premises; and
(x) any insurance or condemnation proceeds or other similar
funds or payments applied by Mortgagor in a manner other
than as expressly provided in the Loan Documents.
(c) Notwithstanding anything to the contrary in the Loan Documents, the
limitation on liability contained in subparagraph (a) above SHALL
BECOME NULL AND VOID and shall be of no further force and effect in
the event:
(i) of any breach or violation of paragraph 1(l) (due on
sale or encumbrance) hereof, other than the filing of
a nonmaterial mechanic's lien affecting the Premises,
the granting of any utility or other nonmaterial
easement or servitude burdening the Premises, or any
other transfer or encumbrance not in the nature of a
transfer, reduction or impairment of any material
economic interest in the Premises; or
(ii) of any fraud or willful misrepresentation by Mortgagor or
any general partner of Mortgagor regarding the Premises, the
making or delivery of any of the Loan Documents or in any
materials or information provided by Mortgagor or any
general partner of Mortgagor in connection with the loan.
39. This Mortgage and the indebtedness secured hereby is for the sole
purpose of conducting or acquiring a lawful business, professional
or commercial activity or for the acquisition or management of real
or personal property as a commercial investment, and all proceeds of
such indebtedness shall be used for said business or commercial
investment purpose. Such proceeds will not be used for the purchase
of any security within the meaning of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto,
including without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System. This is not a purchase
money mortgage where a seller is providing financing to a buyer for
<PAGE>
the payment of all or any portion of the purchase price, and the
Premises secured hereby is not a residence or homestead or used for
mining, grazing, agriculture, timber or farming purposes.
40. Unless Mortgagee shall otherwise direct in writing, Mortgagor shall
appear in and defend all actions or proceedings purporting to affect the
security hereunder, or any right or power of the Mortgagee. The
Mortgagee shall have the right to appear in such actions or proceedings.
Mortgagor shall save Mortgagee harmless from all costs and expenses,
including reasonable attorneys' fees and costs of a title search,
continuation of abstract and preparation of survey, incurred by reason
of any action, suit, proceeding, hearing, motion or application before
any court or administrative body in and to which Mortgagee may be or
become a party by reason hereof. Such proceedings shall include but not
be limited to condemnation, bankruptcy, probate and administration
proceedings, as well as any other action, suit, proceeding, right,
motion or application wherein proof of claim is by law required to be
filed or in which it becomes necessary to defend or uphold the terms of
this Mortgage or otherwise purporting to affect the security hereof or
the rights or powers of Mortgagee. All money paid or expended by
Mortgagee in that regard, together with interest thereon from date of
such payment at the Default Rate shall be additional indebtedness
secured hereby and shall be immediately due and payable by Mortgagor
without notice.
41. In an Event of Default, all rents, issues and profits collected or
received by Mortgagor shall be accepted and held for Mortgagee in trust
and shall not be commingled with the funds and property of Mortgagor,
but shall be promptly paid over to Mortgagee.
42. MODIFICATION This Mortgage and the Note which it secures are subject to
modification at the consent of the Mortgagee as allowed by P.L. 1985, C.
353 (N.J.S.A. 46:9-8.1 et seq.).
43. Mortgagor and Mortgagee may agree to change the interest rate,
maturity date, or other term or terms of this Mortgage, of any of the
documents referred to herein or of the Indebtedness. Any such agreement
shall be in writing, duly executed by both Mortgagor and Mortgagee. In
the event that any such agreement shall occur, it shall, to the extent
permitted by law, be deemed a "modification" as defined in N.J.S.A.
46:9-8.1 et seq., and this Mortgage shall be subject to, and the
Mortgagee shall be the beneficiary of, the mortgage lien priority
provisions of such statute.
<PAGE>
THE MORTGAGOR HAS RECEIVED A TRUE COPY OF THIS MORTGAGE.
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly executed
and delivered as of the date first above written.
BRANDYWINE REALTY PARTNERS, a Pennsylvania
general partnership
By: BRANDYWINE REALTY TRUST, a Maryland
real estate investment trust,
general partner
By _/s/ Gerard H. Sweeney___________
Gerard H. Sweeney
President and CEO
<PAGE>
EXHIBIT A
All the real property located in the Township of Evesham, County of Burlington,
State of New Jersey and more particularly described as follows:
OFFICE I:
Known and designated as Lot No.(s) 1 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No.
3562, and being further described as follows:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide) where
the same is intersected by the centerline of Lincoln Drive East (66 feet wide)
as illustrated on Map. No. 3562 filed December 4, 1981 in Burlington County
Clerk's Office and from said beginning point; thence along said centerline of
Greentree Road,
1. South 73 degrees 49 minutes 46 seconds West, 402.73 feet to a point where
the same is intersected by the truncated intersection between said Greentree
Road and New Jersey State Highway Route 73 (normal width 126.00 feet);
thence along said truncation,
2. North 56 degrees 45 minutes 20 seconds West, 190.51 feet to a point in the
Northeasterly curve line of said Route 73; thence along the same on a curve
to the right having a radius of 5643.65 feet,
3. Northwestwardly, an arc distance of 200.64 feet to a point corner to
Block 2.03, Lot 2, thence along the Southeasterly line of said lot 2,
4. North 73 degrees 49 minutes 46 seconds East, 560.14 feet to a point in
the aforementioned centerline of Lincoln Drive East; thence along said
centerline,
5. South 16 degrees 10 minutes 14 seconds East, 342.50 feet to the point
and place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 2.03, Tax Map of the
Township of Evesham.
<PAGE>
OFFICE II
Known and designated as Lot No.(s) 2 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No.
3562, and being further described as follows:
BEGINNING at a point in the centerline of Lincoln Drive East (66.00 feet wide)
where the same is intersected by the division line between Block 2.03, Lots 1
and 2, as illustrated on Map No. 3562 filed December 4, 1981 and from said
beginning point; thence along said division line:
1. South 73 degrees 49 minutes 46 seconds West, 560.14 feet to a point in the
curved Northeasterly right of way line of New Jersey State Highway Route 73,
thence:
2. Along the same, on a curve to the right having a radius of 5643.65 feet
Northwestwardly, an arc distance of 49.16 feet to a point of tangency in the
same; thence still along the same:
3. North 24 degrees 15 minutes 20 seconds west, 167.59 feet to a point where
the same is intersected by the centerline of "Ramp C" (variable width);
thence along said centerline the following three courses:
4. North 19 degrees 04 minutes 35 seconds East, 44.35 feet to a point of
curvature; thence:
5. Northeastwardly on an arc, curving to the right having a radius of
103.00 feet, an arc distance of 83.89 feet to a point of tangency;
thence
6. North 65 degrees 44 minutes 40 seconds East 494.23 feet to a point in the
aforementioned centerline of Lincoln Drive East; thence:
7. Southwardly, on an arc, curving to the right having a radius of 1,000.00
feet, an arc distance of 112.27 feet to a point of tangency; thence still
along the same:
8. South 16 degrees 10 minutes 14 seconds East, 250.80 feet to the point
and place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 2, Block 2.03, Tax Map of the
Township of Evesham.
OFFICE III:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide),
where the same is intersected by the centerline of Lincoln Drive West (66.00
feet wide), and from said beginning point; thence:
1. Along said centerline of Greentree Road, North 74 degrees 44 minutes 35
seconds East, 418.41 feet to a point where the same is intersected by the
truncated intersection of said Greentree Road and New Jersey State Highway
Route 73 (126.00 feet wide); thence along said truncation,
<PAGE>
2. South 67 degrees 04 minutes 33 seconds East, 170.39 feet to a point in the
curved Southwesterly right of way line of Route 73; thence:
3. Southeastwardly, on an arc, curving to the left having a radius of 5769.65
feet, an arc distance of 217.06 feet to a point where the same is
intersected by the curved centerline of a ramp connecting said Route 73 and
the aforementioned Lincoln Drive West; thence along said centerline, the
following five courses:
4. Southwardly, on an arc, curving to the right having a radius of 163.00 feet,
an arc distance of 56.62 feet to a point of compound curvature; thence:
5. Southwestwardly, on an arc, curving to the right having a radius of
103.00 feet, an arc distance of 111.24 feet to a point of tangency;
thence
6. South 75 degrees 44 minutes 35 seconds West, 297.99 feet to a point of
curvature; thence:
7. Westwardly, on an arc, curving to the left having a radius of 213.00
feet, an arc distance of 83.34 feet to a point of tangency; thence
8. South 52 degrees 19 minutes 35 seconds West, 65.18 feet to a point in the
aforementioned centerline of Lincoln Drive West; thence:
9. Northwestwardly, on an arc, curving to the right having a radius of
800.00 feet, an arc distance of 313.00 feet to a point of tangency;
thence still along the same,
10. North 15 degrees 15 minutes 25 seconds West, 158.88 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 3-33, Tax Map of the
Township of Evesham.
<PAGE>
EXHIBIT B
1. Servitude to the public in and to so much of the subject lands as lie
withing the documented right of way of the public roads know as Lincoln
Drive, Greentree Road.
2. Slope and Drainage rights per document recorded in Deed Book 746, Page 105
and Deed Book 921, Page 352.
3. Easements contained in Deed Book 2219, Page 254; Deed Book 2559, Page 291;
Deed Book 2562, Page 137 and Deed Book 2562, Page 157.
4. Easements contained in Deed Book 2562, Page 147 and Deed Book 2562,
Page 169.
5. Clear Site and No Access Permitted easements as shown per filed Map
No. 02954.
BB/dt/s:750594/mtg
2/13/95
<PAGE>
Record and return to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-1360
ATTN: Commercial Real Estate Closing
Bob Bailey
DEED OF TRUST, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
D-750595
THIS DEED OF TRUST, made as of _____April 20_____________, 1995, between
BRANDYWINE REALTY PARTNERS, a Pennsylvania general partnership, having a post
office address at 200 Berwyn Park, Suite 100, Berwyn, Pennsylvania 19312, as
Trustor, RONALD B. FRANKLIN of 711 High Street, Des Moines, Iowa 50392, as
Trustee, and PRINCIPAL MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation,
having its principal place of business and post office address at 711 High
Street, Des Moines, Iowa 50392, as Beneficiary,
WITNESSETH:
THAT Trustor is justly indebted to Beneficiary for money borrowed in
the principal sum of Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000.00), evidenced by Trustor's promissory note (herein called the Note)
of even date herewith, made payable and delivered to Beneficiary, in which Note
Trustor promises to pay to Beneficiary the said principal sum or so much thereof
as may be advanced from time to time by Beneficiary, together with interest at
the rate, at the times, and in installments as in the Note provided, until the
entire principal and accrued interest have been paid, but in any event, the
principal balance (if any) remaining due on the Note shall be due and payable on
the fifteenth day of April 2001 ("Maturity Date").
The term the "Other Note" as used herein shall mean the Secured Promissory
Note dated the date hereof in the principal amount of $6,250,000.00 payable to
Beneficiary and the term the "Other Mortgage" shall mean the Mortgage and
Security Agreement dated the date hereof in the principal amount of
$6,250,000.00 from the Beneficiary creating a lien on the Other Premises (as
hereinafter defined).
NOW, THEREFORE, to secure the payment of the said indebtedness in
accordance with the terms and conditions hereof and of the Note, and all
extensions, modifications, and renewals thereof and the performance of the
<PAGE>
covenants and agreements contained herein, and also to secure the payment of any
and all other indebtedness, direct or contingent, that may now or hereafter
become owing from Trustor to Beneficiary, under the Note, the Other Note (as
defined herein), this Deed of Trust and the Other Mortgage (as defined herein),
and in consideration of Ten Dollars in hand paid, receipt of which is hereby
acknowledged, Trustor does by these presents grant, bargain, sell and convey, in
Trust, with power of sale and right of entry and possession unto Trustee, his
successors and assigns forever, that certain real estate and all of Trustor's
estate, right, title and interest therein, located in the County of Wake, State
of North Carolina, more particularly described in Exhibit A attached hereto and
made a part hereof, and that certain real estate and all of Beneficiary's
estate, right, title and interest therein, located in the County of Burlington,
State of New Jersey, more particularly described in Exhibit A-1 attached hereto
and made a part hereof ("Other Premises"), which real estate, together with the
following described property, rights and interests, is collectively referred to
herein as the "Premises."
Together with Trustor's interest as lessor in and to all leases of
the said Premises, or any part thereof, heretofore or hereafter made and entered
into by Trustor during the life of this Deed of Trust or any extension or
renewal hereof and all rents, issues, proceeds and profits accruing or to accrue
from the Premises (which are pledged primarily and on a parity with the real
estate and not secondarily).
Together with all and singular the tenements, hereditaments, easements,
appurtenances, passages, waters, water courses, riparian rights, rights in trade
names (other than the name "Brandywine" or any derivation thereof), other
rights, liberties and privileges thereof or in any way now or hereafter
appertaining, including homestead and any other claim at law or in equity as
well as any after-acquired title, franchise or license and the reversion and
reversions and remainder and remainders thereof.
Together with, the right in case of foreclosure hereunder of the encumbered
property for Beneficiary to take and use the name by which the buildings and all
other improvements situated on the Premises are commonly known and the right to
manage and operate the said buildings under any such name and variants thereof
(other than the name "Brandywine" or any derivation thereof).
Together with all right, title and interest of Trustor in any and all
buildings and improvements of every kind and description now or hereafter
erected or placed on the said real estate and all materials intended for
construction, reconstruction, alteration and repairs of such buildings and
improvements now or hereafter erected thereon, all of which materials shall be
deemed to be included within the Premises immediately upon the delivery thereof
to the Premises, and all fixtures now or hereafter owned by Trustor and attached
to or contained in and used in connection with the Premises including, but not
limited to, all machinery, motors, elevators, fittings, radiators, awnings,
shades, screens, and all plumbing, heating, lighting, ventilating,
refrigerating, incinerating, air conditioning and sprinkler equipment and
fixtures and appurtenances thereto; and all items of furniture, furnishings,
equipment and personal property owned by Trustor used or useful in the operation
of the Premises; and all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are or shall be attached to said
buildings or improvements in any manner; it being mutually agreed, intended and
declared that all the aforesaid property owned by Trustor and placed by it on
the real estate or used in connection with the operation or maintenance of the
<PAGE>
Premises shall, so far as permitted by law, be deemed to form a part and parcel
of the real estate and for the purpose of this Deed of Trust to be real estate
and covered by this Deed of Trust, and as to any of the property aforesaid which
does not form a part and parcel of the real estate and does not constitute a
"fixture" (as such term is defined in the Uniform Commercial Code) this Deed of
Trust is hereby deemed to be, as well, a Security Agreement under the Uniform
Commercial Code for the purpose of creating hereby a security interest in such
property which Trustor hereby grants to Beneficiary as Secured Party. Trustor
agrees to execute any and all documents, including financing statements which
may be required by Beneficiary to perfect the security interest granted hereby.
Together with all right, title and interest of Trustor, now or hereafter
acquired, in and to any and all strips and gores of land adjacent to and used in
connection with the Premises and all right, title and interest of Trustor, now
owned or hereafter acquired, in, to, over and under the ways, streets, sidewalks
and alleys adjoining the Premises.
Together with all funds now or hereafter held by Beneficiary under any
escrow security agreement, except that certain Escrow Agreement dated the date
hereof, or under any of the terms hereof, including but not limited to funds
held under the provisions of paragraph 4 hereof.
Beneficiary has concurrently executed a Mortgage and Security Agreement in
favor of Beneficiary dated the date hereof covering certain real property in the
County of Burlington, State of New Jersey as additional security for the payment
of the indebtedness secured hereby.
TO HAVE AND TO HOLD the same unto Trustee, Trustee's successors and
assigns, upon the trusts, covenants and agreements herein expressed.
Trustor represents that it is the absolute owner in fee simple of
the Premises described in Exhibit A, which Premises are free and clear of any
liens or encumbrances except as set out in Exhibit B attached hereto, and except
for taxes which are not yet due or delinquent. Trustor shall forever warrant and
defend the title to the Premises against all claims and demands of all persons
whomsoever and will on demand execute any additional instrument which may be
required to give Trustee a valid first lien on all of the Premises, except as
stated in Exhibit B.
Trustor further represents that: (i) the Premises is not subject
to any unrepaired casualty damage; (ii) to the best of its knowledge
after due and diligent inquiry and investigation, except as disclosed
in that Asbestos Survey conducted by McLaren Hart Environmental
Engineering Corporation and that Phase I Environmental Report
conducted by McLaren Hart Environmental Engineering Corporation dated
March 13, 1995 (the "Report"), and except for supplies for cleaning
and maintenance and standard office supplies in commercially
reasonable amounts, there is no Hazardous Material (as hereinafter
defined) on the Premises, nor has any Hazardous Material been
discharged from the Premises or penetrated any surface or subsurface
rivers or streams crossing or adjoining the Premises or the aquifer
underlying the Premises; (iii) Trustor has complied and caused the
Premises to comply with all statutes, laws, ordinances, rules and
regulations of all local, state or federal authorities having
jurisdiction over the Premises or its use relative to any Hazardous
Material; and (iv) there is no other property presently owned or used
by Trustor from which the existence or discharge of Hazardous
<PAGE>
Material would result in any charge or lien upon the Premises.
Hazardous Material as used in this Deed of Trust means any hazardous
or toxic material, substance, pollutant, contaminant, or waste which
is defined by those or similar terms or is regulated as such under
any statute, law, ordinance, rule or regulation of any local, state
or federal authority having jurisdiction over the Premises or its
use, including but not limited to (a) the Federal Water Pollution
Control Act, as amended (33 U.S.C. ss.1251 et. seq.) (b) the Resource
Conservation and Recovery Act, as amended (42 U.S.C. ss.6901 et. seq.);
(c) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended (42 U.S.C. ss.9601 et. seq.); or (d) the
Federal Clean Air Act, as amended (42 U.S.C. ss.7401 et. seq.)
(hereinafter collectively referred to as "Environmental Laws").
TRUSTOR COVENANTS AND AGREES AS FOLLOWS:
1. Trustor shall
(a) pay each item of indebtedness secured by this Deed of
Trust when due according to the terms hereof and of the
Note;
(b) pay a late charge equal to four percent (4.0%) of any payment of
principal, interest or premium which is not paid within fifteen (15)
days following the due date thereof, or such shorter period of time
as may be permitted by North Carolina law to cover the expense
involved in handling such late payment;
(c) pay on or before the due date thereof any indebtedness which may be
secured by a lien or charge on the Premises, and upon request of
Beneficiary exhibit satisfactory evidence of the discharge thereof,
provided, however, Trustor may contest any mechanics liens in
accordance with Section 2(b) herein, provided same is less than
$50,000.00 in aggregate;
(d) complete within a reasonable time the construction of any
building now or at any time in process of construction
upon the real estate;
(e) make no material alteration to the Premises without the prior
written consent of Beneficiary, except such as are required by law
or ordinance or by the terms of any lease of the Premises which have
been approved by Beneficiary;
(f) remove or demolish no building or other improvement at any time a
part of the Premises other than as required by law or ordinance, and
shall keep the Premises, including the buildings and improvements,
in good condition and repair, normal wear and tear excepted, without
waste, and free from mechanics' liens or other liens or claims for
liens and encumbrances not expressly subordinated to the lien
hereof, provided, however, Trustor may contest any mechanics liens
in accordance with Section 2(b) herein, provided same is less than
$50,000.00 in aggregate;
(g) comply, and use diligent efforts to cause each lessee or other user
of the Premises to comply, with all requirements of law and
ordinance, and with all rules and regulations, now or hereafter
<PAGE>
enacted, by authorities having jurisdiction of the Premises and the
use thereof, all orders and directions of the National Fire
Protection Association or similar body, and all covenants,
conditions and restrictions of record pertaining to the Premises,
including the building and improvements, and the use thereof;
(h) cause or permit no change to be made in the general use
of the Premises without Beneficiary's prior written
consent;
(i) initiate or acquiesce in no zoning reclassification or
material change in zoning without Beneficiary's prior
written consent;
(j) make or permit no use of the Premises that could with the passage of
time result in the creation of any right of use, or any claim of
adverse possession or easement on, to or against any part of the
Premises in favor of any person or the public;
(k) subject to the provisions of paragraph 5(c) hereof, promptly repair,
restore or rebuild any buildings or improvements now or hereafter a
part of the Premises which may become damaged or be destroyed by any
cause whatsoever, so that upon completion of the repair, restoration
and rebuilding of the building and improvements, there will be no
liens of any nature arising out of the construction and the Premises
will be of substantially the same character and will have a
commercial value at least as great as the commercial value thereof
prior to the damage or destruction;
(l) not, directly or indirectly, due to assignment of beneficial
interest under a trust, partnership interest in a partnership, or
otherwise, cause or permit any sale, transfer or conveyance of the
Premises or create, suffer or permit any encumbrance or lien on the
Premises other than the lien hereof (subject, however, to the
provisions of paragraph 1(f) above), the leases of the Premises
assigned to Beneficiary and other exceptions expressly referred to
herein, it being understood and agreed that the indebtedness
evidenced by the Note and its terms are personal to Trustor and in
accepting the same Beneficiary has relied upon what it perceived as
the willingness and ability of Trustor to perform its obligations
hereunder, under the Note, and as lessor under leases of the
Premises; Beneficiary may consent to a sale, transfer, conveyance or
encumbrance and expressly waive this provision in writing to Trustor
however any such consent and waiver shall not constitute any consent
or waiver of this provision as to any sale, transfer, conveyance or
encumbrance other than that for which the consent and waiver was
expressly granted; Beneficiary's ability to consent to any sale,
transfer, conveyance or encumbrance and waive this provision implies
no standard of reasonableness in determining whether or not such
consent shall be granted and the same may be based upon what
Beneficiary solely deems to be in its best interest; without
limiting Beneficiary's right to withhold its consent and waiver
entirely, such consent and waiver may be conditioned upon an
increase in the rate of interest under the Note and the imposition
of other terms and conditions thereunder or hereunder; any sale,
transfer, conveyance or encumbrance made, created or permitted in
violation of this provision shall be null and void and in addition
<PAGE>
to the other rights and remedies available to Beneficiary hereunder,
Beneficiary shall have the option of declaring the unpaid principal
balance of the Note, together with all accrued and unpaid interest,
premium, if any and all other sums and charges evidenced thereby or
owing hereunder, immediately due and payable;
Notwithstanding anything hereinabove to the contrary, Beneficiary
does hereby consent to the sale, transfer or conveyance of (i) the
stock of Brandywine Realty Trust, and (ii) the limited partnership
interests in Brandywine Specified Property Investors Limited
Partnership.
(m) not cause or permit any Hazardous Material to exist on or
discharge from the Premises, and comply with all Environmental Laws,
and promptly: (i) pay any claim against Trustor or the Premises,
(ii) remove any charge or lien upon the Premises, and (iii)
indemnify and hold Beneficiary harmless from any and all loss or
damage, resulting from any Hazardous Material that exists on or is
discharged from the Premises; provided, however, that this indemnity
does not apply to Hazardous Material that exists on or is discharged
from the Premises due to acts or omissions occurring after Trustor
or any person or entity in any way related to Trustor no longer
holds title to or has any interest in the Premises;
(n) not cause or permit any Hazardous Material to exist on or discharge
from any property owned or used by Trustor which would result in any
charge or lien upon the Premises; provided, however, that
notwithstanding the provisions of subparagraphs (m) and (n), Trustor
and/or any tenant under any lease on the Premises which has been
approved in writing by Beneficiary shall be entitled to use and
store supplies for cleaning and maintenance and standard office
supplies in commercially reasonable amounts, provided, however, that
such items are incidental to the use of the Premises and are stored
and used in compliance with all laws and regulations governing
Hazardous Materials;
(o) notify Beneficiary of any Hazardous Material that exists on or is
discharged from the Premises within ten (10) days after Trustor
first has knowledge of such existence or discharge;
(p) deliver to Beneficiary within thirty (30) days after Trustor
receives written notice that such coverage becomes available at
commercially reasonable rates from an ALTA member title insurance
company doing business in the state where the Premises is located, a
new title policy, endorsement or amendment in form and substance
acceptable to Beneficiary which provides Beneficiary with
affirmative coverage against loss of priority of the lien of this
Deed of Trust resulting from the existence of any Hazardous Material
on the Premises;
(q) if other than a natural person, to preserve and keep in full force
and effect its existence, franchises, rights and privileges under
the laws of the state of its formation and, if other than its state
of formation, the state where the Premises is located;
<PAGE>
(r) do all things necessary to preserve and keep in full force and
effect Beneficiary's title insurance coverage insuring the lien of
this Deed of Trust as a first and prior lien, subject only to the
exceptions stated in Exhibit B, including without limitation,
delivering to Beneficiary not less than 30 days prior to the
effective date of modification or extension of the Note, any new
policy or endorsement which may be required to assure Beneficiary of
such continuing coverage;
(s) not, directly or indirectly, commit waste;
(t) not change the property management company from the present property
management company of Lamm Realty Services without the prior written
consent of Beneficiary, however, Trustor may change the property
manangement company to Brandywine Realty Trust without the prior
written consent of Beneficiary ; and
(u) not acquire, invest in, or obtain any form of ownership in any real
estate properties except those owned as of the date hereof as
described in Exhibits A and A-1 attached hereto.
2. (a) Trustor shall pay when due and before any penalty attaches
or interest accrues all general taxes, special taxes, assessments
(including assessments for benefits from public works or
improvements whenever begun or completed), water charges, sewer
service charges, CAM charges, if any, vault or space charges and all
other like charges against or affecting the Premises or against any
property or equipment owned by Trustor located on the Premises, or
which might become a lien on the Premises, and shall, within 30 days
following the last day on which any such tax, assessment or charge
may be paid without incurring any penalty or interest for nonpayment
thereof, furnish to Beneficiary a duplicate receipt of such payment.
If any such tax, assessment or charge may legally be paid in
installments, Trustor may, at its option, pay such tax, assessment
or charge in installments.
(b) To prevent default hereunder Trustor shall pay in full, under
protest in the manner provided by law, any tax, assessment or charge
which Trustor may desire to contest; provided, however, that
(i) if contest of any tax, assessment or charge may be
made without the payment thereof, and
(ii) such contest shall have the effect of preventing the collection
of the tax, assessment or charge so contested and the sale or
forfeiture of the Premises or any part thereof or any interest
therein to satisfy the same,
then Trustor may at its option and in its discretion and upon the
giving of written notice to Beneficiary of its intended action and
upon the furnishing to Beneficiary of such security or bond as
<PAGE>
Beneficiary may require, contest any such tax, assessment or charge
in good faith and in the manner provided by law. All costs and
expenses incidental to such contest shall be paid by Trustor. In the
event of a ruling or adjudication adverse to Trustor, Trustor shall
promptly pay such tax, assessment or charge. Trustor shall indemnify
and save harmless the Beneficiary and the Premises from any loss or
damage arising from any such contest and shall, if necessary to
prevent sale, forfeiture or any other loss or damage to the Premises
or the Beneficiary, pay such tax, assessment or charge or take
whatever action is necessary to prevent any sale, forfeiture or
loss.
3. (a) Trustor shall at all times keep in force property
insurance insuring all buildings and improvements which
now are or hereafter become a part of the Premises for
perils covered by a causes of loss-special form insurance
policy with an ordinance or law coverage endorsement
containing both replacement cost and agreed amount
endorsements or options. Trustor shall also keep in
force commercial general liability insurance naming
Trustee and Beneficiary as additional insureds protecting
Trustor, Beneficiary and Trustee against liability for
bodily injury or property damage occurring in, on or
adjacent to the Premises in commercially reasonable
amounts. In addition, Trustor shall at all times keep in
force boiler and machinery insurance if the property has
a boiler or is an office building and rental value
insurance for the perils specified herein for one hundred
percent (100%) of the rents (including operating
expenses, real estate taxes, assessments and insurance
costs which are lessee's liability) for a period of
twelve (12) months. Trustor shall also obtain insurance
against all other hazards as may be reasonably required
by Beneficiary, including, without limitation, insurance
against loss or damage by flood, earthquake and war risk,
but only to the extent available at commercially
reasonable rates and owners of similar or competing
projects are carrying such insurance.
(b) All insurance shall be in form, content and amounts approved by
Beneficiary and written by an insurance company or companies rated
A, class size X or better in the most current issue of Best's
Insurance Reports and which is licensed to do business in the state
in which the Premises are located and domiciled in the United States
or a governmental agency or instrumentality approved by Beneficiary.
The policies for such insurance shall have attached thereto standard
mortgagee clauses in favor of and permitting Beneficiary to collect
any and all proceeds payable thereunder and shall include a 30 day
(except for nonpayment of premium, in which case, a 10 day) notice
of cancellation clause in favor of Beneficiary. All policies or
certificates of insurance shall be delivered to and held by
Beneficiary as further security for the payment of the Note and any
other obligations arising under the Loan Documents, with evidence of
renewal coverage delivered to Beneficiary at least 30 days before
the expiration date of any policy. Not more frequently than once
every three years, if Beneficiary has a reasonable belief that the
replacement cost value is not correct, it shall notify Trustor and
Trustor, at its expense, will furnish Beneficiary with an appraisal
of the full insurable replacement cost value of the Premises, made
by fire insurance appraisers satisfactory to Beneficiary and fire
<PAGE>
insurance companies generally. Trustor shall not carry separate
insurance, concurrent in kind or form and contributing in the event
of loss, with any insurance required herein.
4. (a) Trustor shall deposit with and pay to Beneficiary, on each
payment date specified in the Note secured by this Deed of Trust, a
sum equivalent to: (1) the taxes and assessments assessed or levied
against and next due on the Premises divided by the number of
payments that will become due and payable under the Note before the
date when such taxes and assessments will become due and payable,
plus (2) upon request of Beneficiary, the premiums that will next
become due and payable for insurance required by this Deed of Trust
to be furnished by Trustor divided by the number of payments that
will become due and payable under the Note before the date when such
premiums will become due and payable. Notwithstanding the provisions
of paragraoh 2(a) hereof to the contrary, Beneficiary shall use such
deposits to pay the taxes, assessments and premiums when the same
become due. Beneficiary shall not be liable for interest on such
deposits. Trustor shall procure and deliver to Beneficiary, in
advance, statements for such charges. If the total payments made by
Trustor under this paragraph exceed the amount of payments actually
made by Beneficiary for taxes, assessments and insurance premiums,
such excess shall be credited by Beneficiary on subsequent deposits
to be made by Trustor. If, however, the deposits are insufficient to
pay the taxes, assessments and insurance premiums when the same
shall be due and payable, Trustor will pay to Beneficiary any amount
necessary to make up the deficiency, on or before the date when
payment of such taxes, assessments and insurance premiums shall be
due. If at any time Trustor shall tender to Beneficiary, in
accordance with the provisions of the Note secured by this Deed of
Trust, full payment of the entire indebtedness represented thereby,
Beneficiary shall, in computing the amount of such indebtedness,
credit to the account of Trustor any balance remaining in the funds
accumulated and held by Beneficiary under the provisions of this
paragraph. If there is a default under any of the provisions of this
Deed of Trust resulting in a public sale of the Premises, or if
Beneficiary otherwise acquires the Premises after default,
Beneficiary shall apply, at the time of commencement of such
proceedings, or at the time the Premises is otherwise acquired, the
balance then remaining in the funds accumulated under this paragraph
as a credit on the interest accrued and unpaid and the balance to
the principal then remaining unpaid under the Note. The provisions
of this paragraph shall not affect the enforceability of the
covenants relating to taxes, assessments and insurance premiums
provided for in this Deed of Trust, except to the extent that
obligations for the same have been actually met by compliance with
this paragraph.
(b) Any funds held under this paragraph shall not constitute any deposit
or account of the Trustor or moneys to which the Trustor is entitled
upon demand, or upon the mere passage of time, or sums to which
Trustor is entitled to any interest or crediting of interest by
virtue of Beneficiary's mere possession of such deposits.
Beneficiary shall not be required to segregate such deposits or hold
such deposits in any separate account for the benefit of Trustor.
<PAGE>
Beneficiary may hold such deposits in its general account or any
other account and may commingle such deposits with any other moneys
of Beneficiary or any other person or entity. Trustor hereby
consents to the investment of such deposits by Beneficiary as
outlined herein. Beneficiary shall not be liable for any claims,
suits, actions, costs, damages, liabilities and expenses
(collectively, the "Liabilities") in connection with the subject
matter hereof or obligations hereunder, including, without
limitation, any Liabilities arising out of the investment of such
deposits in such investment vehicles as the Beneficiary chooses, or
the failure of the investment vehicle to produce a reasonable return
on such deposits, or the loss of such deposits as a result of the
insolvency of the financial entity in which such deposits are
deposited. The foregoing limitation on liability with respect to the
Beneficiary shall not apply to any of the Liabilities directly
caused solely by the gross negligence or intentional misconduct of
Beneficiary.
5. In the event of any damage to or destruction of the buildings or
improvements which are a part of the Premises:
(a) Trustor will immediately notify Beneficiary thereof in the manner
provided in this Deed of Trust for the giving of notices.
Beneficiary may in its discretion (and it is hereby authorized to)
either settle and adjust any claim under such insurance policies, or
allow Trustor to agree with the insurance company or companies on
the amount to be paid upon the loss. In either case, the proceeds
shall be paid to Beneficiary and Beneficiary is authorized to
collect and to give receipts therefor. In the event Beneficiary
elects to either settle or adjust any claim under such insurance
policies, and provided there is no Event of Default or event which
with the passage of time or notice or both would constitute an Event
of Default which has occurred and is continuing, Trustor shall have
the right to participate in said settlement or adjustment; provided,
however, that any settlement or adjustment shall be subject to the
written approval of Beneficiary, provided, however, that if such
claim is less than $50,000.00, Trustee's written approval shall not
be required.
(b) Such proceeds, after deducting therefrom any expenses incurred in
the collection thereof, including reasonable attorneys' fees and
costs, shall be applied at the option of Beneficiary either to the
cost of rebuilding and restoring the buildings and improvements or
in reduction of the indebtedness secured hereby whether or not then
due and payable, provided however, that if no Event of Default has
occurred and Beneficiary has not otherwise accelerated the whole or
any part of the indebtedness secured hereby, such reduction shall be
without Make Whole Premium (as defined in the Note). Any excess
proceeds remaining after said indebtedness is fully paid shall be
promptly remitted to Trustor.
(c) Regardless of the cause of the damage or destruction or the
availability or sufficiency of insurance proceeds until all
indebtedness secured hereby shall be fully paid, Trustor shall be
obligated to repair, restore and rebuild any buildings or
improvements so damaged or destroyed, provided however, that if any
insurance proceeds have been paid to Beneficiary under any insurance
policies maintained by Trustor under the provisions of Paragraph 3,
<PAGE>
Trustor shall be so obligated only if Beneficiary elects to apply
such proceeds to the cost of rebuilding and restoration. Repair and
restoration of the buildings and improvements shall be commenced
promptly after the occurrence of the loss and shall be prosecuted to
completion diligently, and the buildings and improvements shall be
so restored and rebuilt as to be of at least equal value and
substantially the same character as prior to such damage and
destruction. In the event the estimated costs of rebuilding and
restoration exceed 25% of the indebtedness then remaining unpaid as
secured hereby, the drawings and specifications pertaining to such
rebuilding and restoration shall be subject to the prior written
approval of Beneficiary.
(d) In the event that Trustor is to be reimbursed out of the insurance
proceeds, such proceeds shall be made available from time to time
upon the furnishing to Beneficiary of satisfactory evidences of the
estimated cost of completion thereof and such architect's
certificates, waivers of lien, contractor's sworn statements, and
other evidence of cost and of payment and of the continued priority
of the lien hereof over any potential liens of mechanics and
materialmen as Beneficiary may require and approve. No payment made
by Beneficiary prior to the final completion of the work shall,
together with all payments theretofore made, exceed 90% of the value
of the work performed to the time of payment, and at all times the
undisbursed balance of said proceeds shall be at least sufficient to
pay for the cost of completion of the work free and clear of liens.
Any proceeds remaining after payment of the cost of rebuilding and
restoration shall, at the option of Beneficiary, either be applied
in reduction of the indebtedness secured hereby or paid to Trustor.
(e) Should such damage or destruction occur after foreclosure or sale
proceedings have been instituted, the proceeds of any such insurance
policy or policies, if not applied in rebuilding or restoration of
the buildings or improvements, shall be used to pay the amount due
in accordance with any decree of foreclosure or deficiency judgment
that may be entered in connection with such proceedings, and the
balance, if any, shall be paid to the owner of the equity of
redemption if he shall then be entitled to the same, or otherwise as
any court having jurisdiction may direct. Following any foreclosure
sale, or other sale of the Premises by Beneficiary pursuant to the
terms hereof, Beneficiary is authorized without the consent of
Trustor to assign any and all insurance policies to the purchaser at
the sale and to take such other steps as Beneficiary may deem
advisable to cause the interests of such purchaser to be protected
by any of such insurance policies.
6. Trustor hereby assigns, transfers and sets over to Beneficiary
the entire proceeds of any award or claim for damage to any of the
Premises taken or damaged under the power of eminent domain or by
condemnation. In the event of the commencement of any eminent domain or
condemnation proceeding affecting the Premises:
(a) Trustor shall notify Beneficiary thereof in the manner provided in
this Deed of Trust for the giving of notices. Beneficiary may
<PAGE>
participate in such proceeding, and Trustor shall deliver to
Beneficiary all documents requested by it to permit such
participation.
(b) Beneficiary may elect to (i) apply the proceeds of the award upon or
in reduction of the indebtedness secured hereby, whether or not then
due and payable, provided however, that if no Event of Default has
occurred and Beneficiary has not otherwise accelerated the whole or
any part of the indebtedness secured hereby, such reduction shall be
without Make Whole Premium, or (ii) require Trustor to restore or
rebuild, in which event the proceeds shall be held by Beneficiary
and used to reimburse Trustor for the cost of restoring and
rebuilding all buildings and improvements in accordance with plans
and specifications to be submitted to and approved by Beneficiary.
(c) In the event Beneficiary elects to reimburse Trustor for the costs
of restoring and rebuilding the Premises, then the proceeds of the
award shall be paid out in the same manner as provided in this Deed
of Trust for the payment of insurance proceeds in reimbursement of
the costs of rebuilding and restoration. If the amount of such award
is insufficient to cover the cost of restoring and rebuilding,
Trustor shall pay such cost in excess of the award before being
entitled to reimbursement out of the award. Any proceeds remaining
after payment of cost of restoring and rebuilding shall, at the
option of Beneficiary, either be applied on account of the
indebtedness secured hereby or be paid to Trustor.
7. If by the laws of the United States of America or of any state
or governmental subdivision having jurisdiction of Trustor or of the
Premises or of the transaction evidenced by the Note and this Deed of
Trust, any tax or fee is due or becomes due in respect of the issuance
of the Note hereby secured or the making, recording and registration of
this Deed of Trust, except for Beneficiary's income or franchise tax,
Trustor covenants and agrees to pay such tax or fee in the manner
required by such law, and to hold harmless and indemnify Trustee and
Beneficiary, their successors and assigns, against any liability
incurred by reason of the imposition of any such tax or fee.
8. In the event of the enactment after the date hereof of any
applicable law deducting from the value of land for the
purpose of taxation any lien thereon, or imposing upon
Trustee or Beneficiary the payment of the whole or any part
of the taxes or assessments or charges or liens herein
required to be paid by Trustor, or changing in any way the
laws relating to the taxation of deeds of trust or debts
secured by deeds of trust or the interest of Trustee or
Beneficiary in the Premises, or the manner of collection of
taxes, so as to affect this Deed of Trust or the debt secured
hereby or the holder thereof, except for Beneficiary's income
or franchise tax, then and in any such event Trustor shall,
upon demand by Beneficiary, pay such taxes or assessments or
reimburse Beneficiary therefor; provided, however, that, if
in the opinion of counsel for Beneficiary (a) it might be
unlawful to require Trustor to make such payment, or (b) the
making of such payment might be construed as imposing a rate
of interest beyond the maximum permitted by law, then and in
such event Beneficiary may elect to declare all of the
indebtedness secured hereby to be and become due and payable
120 days from the giving of written notice of such election
<PAGE>
to Trustor, without premium or penalty provided no Event of
Default exists under this Deed of Trust or any other document
securing this Deed of Trust.
9. Upon the occurrence of any Event of Default, Beneficiary may,
but need not, make any payment or perform any act herein
required of Trustor, in any form and manner deemed expedient
and may, but need not, make full or partial payments of
principal or interest on prior encumbrances, if any, and
purchase, discharge, compromise or settle any tax lien or
other prior lien or title or claim thereof, or redeem from
any tax sale or forfeiture affecting said Premises, or
contest any tax or assessment. All moneys paid for any of
the purposes herein authorized and all reasonable expenses
paid or incurred in connection therewith, including
reasonable attorneys' fees and costs and attorneys' fees and
costs on appeal, and any other money advanced by Beneficiary
to protect the Premises and the lien hereof, shall be so much
additional indebtedness secured hereby and shall become
immediately due and payable without notice and with interest
thereon at the Default Rate (as hereinafter defined) from the
date of expenditure or advance until paid.
In making any payment hereby authorized relating to taxes or assessments
or for the purchase, discharge, compromise or settlement of any prior
lien, Beneficiary may make such payment according to any bill, statement
or estimate secured from the appropriate public office without inquiry
into the accuracy thereof or into the validity of any tax, assessment,
sale, forfeiture, tax lien or title or claim thereof or without inquiry
as to the validity or amount of any claim for lien which may be
asserted.
10. If one or more of the following events (herein called "Events
of Default") shall have occurred:
(a) default shall be made in the payment of any principal, interest or
premium payable with respect to the Note, or taxes or assessments
referred to in this Deed of Trust or insurance premiums for the
insurance required pursuant to this Deed of Trust when due under the
Note or this Deed of Trust, and such default shall have continued
for 10 days; or
(b) Trustor or any general partner of Trustor shall be dissolved, or a
decree or order for relief shall be entered by a court having
jurisdiction in respect of Trustor or any general partner of Trustor
in a voluntary or involuntary case under the Federal Bankruptcy Code
as now or hereafter constituted, or Trustor or any general partner
of Trustor shall file a voluntary petition in bankruptcy or for
reorganization or an arrangement or any composition, readjustment,
liquidation, dissolution or similar relief pursuant to any similar
present or future state or federal bankruptcy law, or shall be
adjudicated a bankrupt or become insolvent, or shall commit any act
of bankruptcy as defined in such law, or shall take any action in
furtherance of the foregoing; or
<PAGE>
(c) a petition or answer shall be filed proposing the adjudication of
Trustor or any general partner of Trustor as a bankrupt or its
reorganization or arrangement, or any composition, readjustment,
liquidation, dissolution or similar relief with respect to it
pursuant to any present or future federal or state bankruptcy or
similar law, and Trustor or any general partner of Trustor shall
consent to the filing thereof, or such petition or answer shall not
be discharged within 60 days after the filing thereof; or
(d) by the order of a court of competent jurisdiction, a receiver,
trustee, custodian or liquidator of the Premises or any part thereof
or of Trustor or any general partner of Trustor or of substantially
all of its assets shall be appointed and shall not be discharged or
dismissed within 60 days after such appointment, or if Trustor or
any general partner of Trustor shall consent to or acquiesce in such
appointment; or
(e) with respect to the matters not described in the other subparagraphs
of this paragraph 10, default shall be made in the due observance or
performance of any covenant, condition or agreement of the Trustor
contained in this Deed of Trust, the Note, the Assignment of Lease
and Rents or in any other instrument or agreement by which the Note
is secured (the "Loan Documents"), and such default shall have
continued for 30 days after notice specifying such default is given
by Beneficiary to Trustor; or
(f) any representation or warranty made by Trustor herein or
in the Loan Documents shall prove to be untrue or
inaccurate in any material respect; or
(g) An Event of Default shall occur and be continuing under
the Other Mortgage or Other Note;
then, in each and every such case, the whole of said principal sum
hereby secured shall, at the option of the Beneficiary and without
further notice to Trustor, become immediately due and payable together
with accrued interest thereon and a Make Whole Premium calculated in
accordance with the provisions hereof, and whether or not Beneficiary
has exercised said option, interest shall accrue on the entire principal
balance and any interest or premium then due, at the Default Rate until
fully paid or if Beneficiary has not exercised said option, for the
duration of any Event of Default.
If any Event of Default under "(e)" above shall be of such nature that
it cannot be cured or remedied within 30 days, Trustor shall be entitled
to a reasonable period of time to cure or remedy such Event of Default,
provided Trustor commences the cure or remedy thereof within the 30 day
period following the giving of notice and thereafter proceeds with
diligence to complete such cure or remedy.
THIS CONVEYANCE IS MADE UPON THIS SPECIAL TRUST that if Trustor
shall pay the note secured hereby in accordance with its terms, together
with interest thereon, and all renewals and extensions thereof, and
shall faithfully comply with all of the covenants, stipulations and
conditions of this Deed of Trust and of the other documents evidencing
<PAGE>
the obligations secured hereby, then this Deed of Trust shall become
null and void and may be canceled of record at the request and at the
cost of Trustor; however, if an Event of Default (as hereinafter shall
occur), Beneficiary may, at its option, declare the entire principal sum
secured hereby, immediately due and payable; and upon application of
Beneficiary, it shall be the duty of Trustee or his successor or
substitute trustee to sell the Premises at public auction to the highest
bidder for cash either on the Premises or at such place as is customary
to hold public sale in Wake County, North Carolina after first giving
notice of sale to Trustor and to the then record owner of the Premises
and to any other person entitled by law to such notice and after all
hearings required by law are held and after first advertising the
Premises for sale for a period as is required by law immediately prior
to the sale by posting a notice of sale at such place as is customary in
Wake County, North Carolina and also by publishing notice of sale
containing the information required by law at least once a week for two
(2) consecutive weeks or as is required by law in a newspaper qualified
for legal advertising in Wake County, North Carolina or in a newspaper
of general circulation published in Wake County, North Carolina. Upon
any such sale, Trustee shall execute and deliver to the purchaser a deed
for the Premises; and after deducting a maximum of one percent (1%) of
the proceeds of such sale as compensation to the Trustee and after
paying all expenses incurred by him, including reasonable attorneys'
fees for legal services actually performed, Trustee shall apply the
remaining proceeds of the sale first to the payment of all indebtedness
secured hereby, and the balance, if any, shall be paid to Trustor or to
such other person or persons as may be lawfully entitled thereto.
Trustor agrees that Beneficiary shall have the right to bid at any sale
conducted by Trustee hereunder and shall have the right to purchase the
Premises at such sale.
11. Trustor agrees that if Beneficiary accelerates the whole or any part of
the principal sum hereby secured, or applies any proceeds as if such
application had been made as a result of such acceleration, pursuant to
the provisions hereof, Trustor waives any right to prepay the principal
sum hereby secured in whole or in part without premium and agrees to
pay, as yield maintenance protection and not as a penalty, a "Make Whole
Premium." The Make Whole Premium shall mean an amount equal to the
greater of one percent (1%) of the principal amount to be prepaid or a
premium calculated as follows:
(a) Determine the "Reinvestment Yield." The Reinvestment Yield will be
equal to the yield on the applicable* U.S. Treasury Bond or Note
("primary issue")** published two weeks prior to the date of
prepayment and converted to an equivalent monthly compounded nominal
yield.
As set forth above, the U.S. Treasury Bond, Note or
Bill applicable for each prepayment period is as follows:
Prepayment Period U.S. Treasury Issue
----------------- -------------------
To May 15, 1998 May 1998, 9%
May 15, 1998 to April 15, 2001 ***
<PAGE>
**In the event there is no market activity involving the primary
issue at the time of prepayment, Beneficiary shall choose a
comparable Treasury Bond, Note or Bill ("secondary issue") which
Beneficiary deems to be similar to the primary issue's
characteristics (i.e., rate, remaining time to maturity, yield).
***At this time there is not a U.S. Treasury Bond, Note
or Bill for this prepayment period. At the time of prepayment,
Beneficiary shall select in its sole and absolute discretion a U.S.
Treasury Issue with similar remaining time to maturity as the Note.
(b) Calculate the "Present Value of the Mortgage." The Present Value of
the Mortgage is the present value of the payments to be made in
accordance with the Note (all installment payments and any remaining
payment due on the Maturity Date) discounted at the Reinvestment
Yield for the number of months remaining from the date of prepayment
to the Maturity Date. In the event of a partial prepayment
hereunder, the Present Value of the Mortgage shall be calculated in
accordance with the preceding sentence multiplied by the fraction
which results from dividing the amount of the prepaid proceeds by
the principal balance immediately prior to prepayment.
(c) Subtract the amount of the prepaid proceeds from the Present Value
of the Mortgage as of the date of prepayment. Any resulting positive
differential shall be the premium.
12. In the event of a sale of the Premises or any part thereof and
the execution of a deed or deeds therefor under these trusts, any
recital therein of the occurrence of an Event of Default or of the
giving or recording of any notice or demand by Trustee or Beneficiary
regarding such sale shall be conclusive proof thereof, and the receipt
of the purchase money recited therein shall fully discharge the
purchaser from any obligation for the proper application of the proceeds
of sale in accordance with these trusts.
13. During the continuance of any Event of Default, Trustor shall
forthwith upon demand of Trustee or Beneficiary surrender to Beneficiary
possession of the Premises, and Beneficiary shall be entitled to take
actual possession of the Premises or any part thereof personally or by
its agents or attorneys, and Beneficiary in its discretion may, with or
without force and with or without process of law, enter upon and take
and maintain possession of all or any part of the Premises together with
all documents, books, records, papers and accounts of the Trustor or the
then owner of the Premises relating thereto, and may exclude Trustor,
its agents or assigns wholly therefrom, and may as attorney-in-fact or
agent of the Trustor, or in its own name as Beneficiary and under the
powers herein granted:
(a) hold, operate, manage or control the Premises and conduct the
business, if any, thereof, either personally or by its agents, and
with full power to use such measures, legal or equitable, as in its
discretion it deems proper or necessary to enforce the payment or
<PAGE>
security of the income, rents, issues and profits of the Premises,
including actions for the recovery of rent, actions in forcible
detainer and actions in distress for rents, hereby granting full
power and authority to exercise each and every of the rights,
privileges and powers herein granted at any and all times hereafter,
without notice to Trustor;
(b) cancel or terminate any lease or sublease for any cause
or on any ground which would entitle Trustor to cancel
the same;
(c) elect to cancel any lease or sublease made subsequent to this Deed
of Trust or subordinated to the lien hereof unless this Deed of
Trust has specifically been made subordinate to such lease or
sublease;
(d) extend or modify any then existing leases and make new leases, which
extensions, modifications or new leases may provide for terms to
expire, or for options to lessees to extend or renew terms to
expire, beyond the maturity date of the Note and the issuance of a
deed or deeds to a purchaser or purchasers at a foreclosure sale, it
being understood and agreed that any such leases, and the options or
other such provisions to be contained therein, shall be binding upon
Trustor and all persons whose interests in the Premises are subject
to the lien hereof and shall be binding also upon the purchaser or
purchasers at any foreclosure sale, notwithstanding any redemption
from sale, discharge of the indebtedness secured hereby,
satisfaction of any foreclosure decree, or issuance of any
certificate of sale or deed to any purchaser; and/or
(e) make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and improvements
to the Premises as it may deem judicious, insure and reinsure the
same and all risks incidental to Beneficiary's possession, operation
and management thereof, and receive all income, rents, issues and
profits.
Neither Trustee nor Beneficiary shall be obligated to perform or
discharge, nor does either hereby undertake to perform or discharge, any
obligation, duty or liability under any lease, and the Trustor shall and
does hereby agree to indemnify and to hold Trustee and Beneficiary
harmless of and from all liability, loss or damage which either might
incur under said leases or under or by reason of the assignment thereof,
and of and from any and all claims or demands whatsoever which may be
asserted against either of them by reason of any alleged obligations or
undertakings on the part of either of them to perform or discharge any
of the terms, covenants or agreements contained in said leases. Should
Trustee or Beneficiary incur any such liability, loss or damage under
any of said leases, or under or by reason of the assignment thereof, or
in the defense of any claims or demands, the amount thereof, including
costs, expenses and reasonable attorneys' fees and costs, including
attorneys' fees and costs on appeal, shall be secured hereby and Trustor
shall reimburse Trustee or Beneficiary therefor immediately upon demand,
together with interest at the Default Rate from the date of payment by
Trustee or Beneficiary to the date of reimbursement.
<PAGE>
14. Trustee and Beneficiary in the exercise of the rights and
powers hereinabove conferred upon them shall have the full power to use
and apply the avails, rents, issues and profits of the Premises to the
payment of or on account of the following, in such order as Beneficiary
may determine:
(a) to the payment of the expenses of operating the Premises, including
cost of management and leasing thereof (which shall include
reasonable compensation to Trustee, Beneficiary and their respective
agent or agents if management is delegated to an agent or agents,
and shall also include lease commissions and other compensation and
expenses of seeking and procuring tenants and entering into leases),
established claims for damages, if any, and premiums on insurance as
hereinabove authorized;
(b) to the payment of taxes and special assessments now due
or which may hereafter become due on the Premises;
(c) to the payment of all repairs, decorating, renewals, replacements,
alterations, additions, betterments and improvements of the Premises
and of placing the Premises in such condition as will in the
judgment of Beneficiary make it readily rentable; and/or
(d) to the payment of any indebtedness secured hereby or any deficiency
which may result from any foreclosure sale.
15. During the continuance of any Event of Default under this Deed
of Trust, Beneficiary may apply to any court having jurisdiction for the
appointment of a receiver of the Premises. Such appointment may be made
either before or after sale, without notice, without regard to the
solvency or insolvency of Trustor at the time of application for such
receiver and without regard to the then value of the Premises or the
adequacy of Beneficiary's security. Beneficiary or any holder of the
Note may be appointed as such receiver. The receiver shall have power to
collect the rents, issues and profits of the Premises during the
pendency of any foreclosure proceedings and, in case of a sale, during
the full statutory period of any redemption period as well as during any
further times when Trustor, except for the intervention of such
receiver, would be entitled to collect such rents, issues and profits.
In addition, the receiver shall have all other powers which shall be
necessary or are usual in such cases for the protection, possession,
control, management and operation of the Premises during the whole of
said period. The court from time to time may authorize the receiver to
apply the net income in his hands in payment in full or in part of:
(a) the indebtedness secured hereby or provided by any decree
foreclosing this Deed of Trust, or any tax, special assessment or
other lien which may be or become superior to the lien hereof or of
such decree, provided such application is made prior to foreclosure
sale; and
(b) the deficiency in case of a sale and deficiency.
<PAGE>
16. (a) Trustor agrees that all reasonable costs, charges and
expenses, including attorneys' fees and costs, incurred or expended
by Trustee or Beneficiary arising out of or in connection with any
action, proceeding or hearing, legal, equitable or quasi-legal,
including the preparation therefor and any appeal therefrom, in any
way affecting or pertaining to this Deed of Trust, the Note or the
Premises, shall be promptly paid by Trustor. All such sums not
promptly paid by Trustor shall be added to the indebtedness secured
hereby and shall bear interest at the Default Rate from the date of
such advance and shall be due and payable on demand.
(b) Trustor hereby agrees that upon the occurrence of an Event of
Default and the acceleration of the principal sum secured hereby
pursuant to this Deed of Trust, to the full extent that such rights
can be lawfully waived, Trustor hereby waives and agrees not to
insist upon, plead, or in any manner take advantage of, any notice
of acceleration, any stay, extension, exemption, homestead,
marshaling or moratorium law or any law providing for the valuation
or appraisement of all or any part of the Premises prior to any sale
or sales thereof under any provision of this Deed of Trust or before
or after any decree, judgment or order of any court or confirmation
thereof, or claim or exercise any right to redeem all or any part of
the Premises so sold and hereby expressly waives to the full extent
permitted by applicable law on behalf of itself and each and every
person or entity acquiring any right, title or interest in or to all
or any part of the Premises, all benefit and advantage of any such
laws which would otherwise be available to Trustor or any such
person or entity, and agrees that neither Trustor nor any such
person or entity will invoke or utilize any such law to otherwise
hinder, delay or impede the exercise of any remedy granted or
delegated to Beneficiary herein but will permit the exercise of such
remedy as though any such laws had not been enacted. Trustor hereby
further expressly waives to the full extent permitted by applicable
law on behalf of itself and each and every person or entity
acquiring any right, title or interest in or to all or any part of
the Premises any and all rights of redemption from any sale or any
order or decree of foreclosure obtained pursuant to provisions of
this Deed of Trust.
17. Trustor hereby assigns to Beneficiary directly and absolutely, and not
merely collaterally, the rents, issues, profits, royalties, and payments
payable under any lease of the Premises, or portion thereof, including
any oil, gas or mineral lease, or any installments of money payable
pursuant to any agreement for any sale of the Premises or any part
thereof. Beneficiary, without regard to the adequacy of any security for
the indebtedness hereby secured, shall be entitled to (a) collect such
rents, issues, profits, royalties, payments and installments of money
and apply the same as more particularly set forth in this paragraph, all
without taking possession of the Premises, or (b) enter and take
possession of the Premises or any part thereof, in person, by agent, or
by a receiver to be appointed by the court and to sue for or otherwise
collect such rents, issues, profits, royalties, payment and installments
of money. Beneficiary may apply any such rents, issues, profits,
royalties, payments and installments of money so collected, less costs
and expenses of operation and collection, including reasonable
<PAGE>
attorneys' fees and costs and attorneys' fees and costs on appeal, upon
any indebtedness secured hereby, in such order as Beneficiary may
determine, and, if such costs and expenses and attorneys' fees and costs
shall exceed the amount collected, the excess shall be immediately due
and payable. The collection of such rents, issues, profits, royalties,
payments and installments of money and the application thereof as
aforesaid shall not cure or waive any Event of Default or notice of
default hereunder or invalidate any act done pursuant to such notice,
except to the extent any such Event of Default fully is cured. Failure
or discontinuance of Beneficiary at any time, or from time to time, to
collect any such moneys shall not impair in any manner the subsequent
enforcement by Beneficiary of the right, power and authority herein
conferred on Beneficiary. Nothing contained herein, including the
exercise of any right, power or authority herein granted to Beneficiary,
shall be, or be construed to be, an affirmation by Beneficiary of any
tenancy, lease or option, or an assumption of liability under, or the
subordination of the lien or charge of this Deed of Trust to any such
tenancy, lease or option. Trustor hereby agrees that, in the event
Beneficiary exercises its rights as in this paragraph provided, Trustor
waives any right to compensation for the use of Trustor's furniture,
furnishings or equipment in the Premises for the period such assignment
of rents or receivership is in effect, it being understood that the
rents, issues, profits, royalties, payments and installments of money
derived from the use of any such items shall be applied to Trustor's
obligations hereunder as above provided.
18. (a) Trustor has executed and delivered that certain
Assignment of Leases and Rents of even date herewith assigning to
Beneficiary, directly and absolutely, and not merely collaterally,
the interest of Trustor as lessor under the existing leases of the
Premises, as well as all other leases which may hereafter be made in
respect of the Premises, and the rents and other income arising
thereunder and from the use of the Premises. Said Assignment of
Leases and Rents grants to Beneficiary specific rights and remedies
in respect of said leases and the collection of rents and other
income thereunder and from the use of the Premises, and such rights
and remedies so granted shall be cumulative of those granted herein.
Notwithstanding anything hereinabove to the contrary, Trustor shall
be entitled to a license to collect rents as set forth in the
Assignment of Leases and Rents of even date herewith.
(b) Trustor shall keep and perform all terms, conditions and covenants
required to be performed by it as lessor under the aforesaid leases;
shall promptly advise Beneficiary in writing of any claim of
material default by Trustor made by a lessee under any such lease or
of any material default thereunder by a lessee; and shall promptly
provide Beneficiary with a copy of any notice of material default or
other material notice served upon Trustor by any such lessee.
Trustor will not cancel, modify or alter, or accept the surrender
of, any existing or future lease of the Premises or any part thereof
without first obtaining written consent of Beneficiary unless
otherwise specifically permitted in the Assignment of Leases and
Rents.
19. (a) All rights and remedies granted to Trustee or Beneficiary in the
Loan Documents shall be in addition to and not in limitation of any
rights and remedies to which it is entitled in equity, at law or by
<PAGE>
statute, and the invalidity of any right or remedy herein provided
by reason of its conflict with applicable law or statute shall not
affect any other valid right or remedy afforded to Trustee or
Beneficiary. No waiver of any Event of Default or of any default in
the performance of any covenant contained in the Loan Documents
shall at any time thereafter be held to be a waiver of any rights of
the Trustee or Beneficiary hereunder, nor shall any waiver of a
prior Event of Default or default operate to waive any subsequent
Event of Default or default. All remedies provided for in the Loan
Documents are cumulative and may, at the election of Beneficiary, be
exercised alternatively, successively, or concurrently. No act of
Trustee or Beneficiary shall be construed as an election to proceed
under any one provision herein to the exclusion of any other
provision or to proceed against one portion of the Premises to the
exclusion of any other portion.
(b) This Deed of Trust is upon any existing statutory condition and upon
the further condition that all covenants and agreements of Trustor
herein shall be fully or timely performed, time being of the essence
under this Deed of Trust and that no breach of any such condition or
agreement shall be permitted, for any breach of which Beneficiary
shall have any statutory power of sale and this Deed of Trust shall
be subject to foreclosure as provided by law.
20. By accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive its right either to require prompt payment
when due of all other sums or installments so secured or to declare a
default for failure to pay such other sums or installments.
21. Notwithstanding anything herein or in the Note to the contrary, no
provision contained herein or in the Note which purports to obligate
Trustor to pay any amount of interest or any fees, costs or expenses
which are in excess of the maximum permitted by applicable law, shall be
effective to the extent that it calls for the payment of any interest or
other sums in excess of such maximum. All agreements between Trustor and
Beneficiary, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether
by reason of demand for payment of or acceleration of the maturity of
any of the indebtedness secured hereby or otherwise, shall the interest
contracted for, charged or received by Beneficiary exceed the maximum
amount permissible under applicable law. If, from any circumstance
whatsoever, interest would otherwise be payable to Beneficiary in excess
of the maximum lawful amount, the interest payable to Beneficiary shall
be reduced to the maximum amount permitted under applicable law; and if
from any circumstance Beneficiary shall ever receive anything of value
deemed interest by applicable law in excess of the maximum lawful
amount, an amount equal to any excessive interest shall at Beneficiary's
option, be refunded to Trustor or be applied to the reduction of the
principal balance of the indebtedness secured hereby and not to the
payment of interest or, if such excessive interest exceeds the unpaid
balance of principal of the indebtedness secured hereby, such excess
shall be refunded to Trustor. This paragraph shall control all
agreements between Trustor and Beneficiary.
22. In the event one or more provisions of the Loan Documents shall
be held to be invalid, illegal or unenforceable in any respect, such
<PAGE>
invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Deed of Trust shall be construed as if any
such provision had never been contained herein.
23. If the payment of the indebtedness secured hereby or of any part thereof
shall be extended or varied, or if any part of the security be released,
all persons now or at any time hereafter liable therefor, or interested
in said Premises, shall be held to assent to such extension, variation
or release, and their liability and the lien and all provisions hereof
shall continue in full force, the right of recourse against all such
persons being expressly reserved by Beneficiary notwithstanding such
variation or release.
24. Upon payment in full of the indebtedness secured hereby and the
performance by Trustor of all of the obligations imposed on Trustor in
the Loan Documents, these presents shall be null and void, and Trustee
shall release this Deed of Trust and the lien hereof by proper
instrument executed in recordable form.
25. Trustor shall have the privilege of making prepayments on the principal
of the Note (in addition to the required payments) if and only to the
extent and upon the terms and conditions, if any, expressly set forth in
the Note. If not expressly set forth, the Note is not subject to such
prepayment.
26. Trustor hereby grants to Beneficiary and its respective agents,
attorneys, employees, consultants, contractors and assigns, an
irrevocable license and authorization to enter upon and inspect the
Premises and all facilities located thereon including, but not limited
to the right to conduct a Phase I environmental audit at reasonable
times provided such grant is expressly subject to rights of tenants of
the Premises. In the event Beneficiary has formed a reasonable belief,
based on its inspection of the Premises or other factors known to it,
that Hazardous Materials may be present on the Premises, then Trustor
shall perform such tests at Beneficiary's request, including without
limitation, subsurface testing, soil and ground water testing, and other
tests which may physically invade the Premises or facilities from a
consultant and pursuant to a scope of work approved by Beneficiary (the
"Tests"), as Beneficiary, in its sole discretion, determines as
necessary to (i) investigate the condition of the Premises, (ii) protect
the security interest created under this Deed of Trust or (iii)
determine compliance with all laws relating to Hazardous Materials, the
provisions of this Deed of Trust and other matters relating thereto, and
Trustor shall provide true and accurate written copies of the results of
the Tests to Beneficiary upon receipt of the results. In the event that
Trustor fails to conduct the Tests requested by Beneficiary and to
provide Beneficiary with the results within sixty (60) days of such
request or such additional time as Beneficiary shall agree in writing in
its sole discretion, or if Beneficiary is not reasonably satisfied with
the results of any of the Tests or of any Phase I environmental audit,
then Trustor grants to Beneficiary and its respective agents, attorneys,
employees, consultants, contractors and assigns, an irrevocable license
and authorization to conduct the Tests necessary in Beneficiary's sole
discretion to accomplish (i) through (iii) in this paragraph, provided
such grant is expressly subject to rights of tenants of the Premises.
<PAGE>
27. Within 15 days after any written request by Beneficiary, Trustor shall
certify, by a written statement duly acknowledged, the amount of
principal and interest then owing on the Note and whether any offsets or
defenses exist against the indebtedness secured hereby. Within 30 days
ofter any written request by Trustor, Beneficiary shall certify, by a
written statement duly acknowledged, the amount of principal and
interest then owing on the Note.
28. A foreclosure of this Deed of Trust or the Other Mortgage, whether by a
judicial sale or pursuant to a power of sale, or an acceptance of a deed
in lieu of foreclosure, shall not constitute a curing or satisfaction of
any default under the remaining mortgage or note.
29. (a) Trustor shall furnish to Beneficiary within 90 days after the
end of each fiscal year of Trustor a detailed and analytical
financial report in form and substance reasonably acceptable to
Beneficiary covering the full and complete operation of the
Premises, including without limitation: (i) income and expense
statements, and, (ii) a report of the leasing status of the Premises
as of the end of such year, identifying the lessee, square footage
leased, rental amount, rental concessions and/or rental deferments,
if any, and expiration date under each lease of the Premises. Such
reports shall be prepared by an accountant who may be an employee of
Trustor, or of an affiliate of Trustor, acceptable to Beneficiary.
In addition to the reports referred to herein, Trustor shall
promptly supply any additional information or records relating to
the Premises or its operation as Beneficiary may from time to time
reasonably request.
(b) Trustor shall submit to Beneficiary, during the life of this Deed of
Trust, within 90 days following the end of each fiscal year annual
unaudited balance sheets and income statements for Trustor and
Brandywine Realty Trust. Trustor shall submit to Beneficiary during
the life of this Deed of Trust within 90 days following the end of
each fiscal year annual audited balance sheets and income statements
for Brandywine Realty Trust.
30. Any notice which any party hereto may desire or be required to
give to the other shall be deemed to be an adequate and sufficient
notice if given in writing and service is made by either (i) registered
or certified mail, postage prepaid, in which case notice shall be deemed
to have been received three (3) business days following deposit to the
mail; or (ii) nationally recognized overnight air courier, next day
delivery, prepaid, in which case such notice shall be deemed to have
been received one (1) business day following delivery to such courier.
All notices shall be addressed to Trustor at its address given on the
first page hereof, or to Beneficiary at 711 High Street, Des Moines,
Iowa 50392-1450, Attn: Commercial Real Estate Loan Administration, Loan
No. 750595, or to such other place as any party may by notice in writing
to the other parties designate as a place for service of notice.
31. Beneficiary, from time to time, may substitute another Trustee
in place of the Trustee named herein, to execute the trusts hereby
created; and upon such appointment, and without conveyance to the
successor trustee, the successor trustee shall be vested with all the
<PAGE>
title, interest, powers, duties and trusts in the Premises hereby vested
in or conferred upon Trustee herein named. Each such appointment and
substitution shall be made by written instrument executed by the
Beneficiary containing reference to this Deed of Trust sufficient to
identify it, which instrument, when recorded in the office of the County
Recorder of the county or counties in which the Premises is situated,
shall be conclusive proof of proper appointment of the successor
trustee. The recital or statement, in any instrument executed by Trustee
in pursuance of any of said trusts, of the due authorization of any
agent of the Trustee executing the same shall for all purposes be
conclusive proof of such authorization.
32. Trustee at any time, at Trustee's option, may commence and maintain suit
in any court of competent jurisdiction and obtain the aid and direction
of said court in the execution by him of the trusts or any of them,
herein expressed or contained, and, in such suit, may obtain the orders
or decrees, interlocutory or final of said court directing the execution
of said trusts, and confirming and approving Trustee's acts, or any of
them, or any sales or conveyances made by Trustee, and adjudging the
validity thereof, and directing that the purchasers of the property sold
and conveyed be let into immediate possession thereof, and providing for
orders of court or other process requiring the Sheriff of the county in
which said property is situated to place and maintain said purchasers in
quiet and peaceable possession of the property so purchased by them, and
the whole thereof.
33. Trustor has had the opportunity to fully negotiate the terms hereof and
modify the draftsmanship of this Deed of Trust. Therefore, the terms of
this Deed of Trust shall be construed and interpreted without any
presumption, inference, or rule requiring construction or interpretation
of any provision of this Deed of Trust against the interest of the party
causing this Deed of Trust or any portion of it to be drafted. Trustor
is entering into this Deed of Trust freely and voluntarily without any
duress, economic or otherwise.
34. Trustor, forthwith upon request, at any and all times hereafter, at the
expense of Trustor, will cause to be made, executed, acknowledged and
delivered to Trustee, any and every deed or assurance in law which
Trustee or counsel of Trustee shall reasonably advise or require for the
more sure, effectual and satisfactory granting and confirming of said
Premises unto Trustee.
35. Trustee shall not be liable or responsible with respect to its acts or
omissions hereunder, except for Trustee's own gross negligence or
willful misconduct, or be liable or responsible for any acts or
omissions of any agent, attorneys or employee by him employed hereunder,
if selected with reasonable care.
36. Trustee accepts this trust when this Deed of Trust executed and
acknowledged is made a public record as provided by law. Trustee is not
obligated to notify any party hereto of pending sale under any other
deed of trust or of any action or proceeding in which Trustor,
Beneficiary, or Trustee shall be a party unless brought by Trustee.
37. This is not a purchase money deed of trust, where a seller is providing
financing to a buyer for the payment of all or any portion of the
purchase price.
<PAGE>
38. This Deed of Trust and all provisions hereof shall extend to and be
binding upon Trustor and all persons claiming by, under and through
Trustor, and the word "Trustor" when used herein shall include all such
persons and all persons liable for the payment of the indebtedness
secured hereby or any part thereof, whether or not such parties shall
have executed the Note or this Deed of Trust. The word "Beneficiary"
when used herein shall include the successors and assigns of the
Beneficiary named herein, and the holder or holders from time to time of
the Note secured hereby.
39. This Deed of Trust shall be governed by, and construed in
accordance with, the laws of the State of North Carolina.
40. As used herein, the term "Default Rate" means a rate equal to the lesser
of (i) four (4.0%) per annum above the then applicable interest rate
payable under the Note or (ii) the maximum rate allowed by applicable
law.
41. Notwithstanding any provision of this Deed of Trust, the Note or any
other instruments evidencing or securing the loan evidenced by the Note
which might be construed to the contrary, the assignment of rents and
other amounts provided for herein is an absolute assignment and not
merely a collateral assignment or a security interest, and is effective
whether or not a default occurs hereunder, subject only to a license, if
any, granted by Beneficiary to Trustor with respect thereto prior to the
occurrence of an Event of Default hereunder. It is the intention of
Beneficiary and Trustor that the assignment effectuated by this Deed of
Trust with respect to such rents and other amounts payable under the
leases shall be a direct and currently effective assignment and shall
not constitute merely the granting of a lien, security interest or
pledge for the purpose of securing the indebtedness secured hereby. In
the event that a court of competent jurisdiction determines that,
notwithstanding such expressed intent of the parties, Beneficiary's
interest in the rents and other amounts payable under the leases
constitutes a lien on or security interest in or pledge thereof, it is
agreed and understood that the forwarding of a notice to Trustor after
the occurrence of an Event of Default, advising Trustor of the
revocation of any license then in favor of Trustor to collect such rents
or other amounts payable under the leases, or of the existence of an
Event of Default, shall be sufficient action by Beneficiary to (i)
perfect such lien on or security interest in or pledge of the rents and
other amounts payable under the leases, (ii) take possession thereof,
and (iii) entitle Beneficiary to immediate and direct payment of the
rents and other amounts payable under the leases, for application as
provided in this Deed of Trust, all without the necessity of any further
action by Beneficiary, including, without limitation, any action to
obtain possession of the land, improvements or any other portion of the
Premises. Notwithstanding the direct and absolute assignment of the
rents and other amounts payable under the leases as herein described,
there shall be no pro tanto reduction in any portion of the indebtedness
secured by this Deed of Trust except with respect to rents and other
amounts payable under the leases actually received by Beneficiary and
applied by Beneficiary toward payment of the indebtedness. Beneficiary
may, upon written notice to Trustor, elect to (i) exclude from the
assignment provided in this Deed of Trust any of the leases as specified
<PAGE>
in such notice so that the interest under such indicated lease is not
assigned to Beneficiary, and (ii) subordinate the lien and other terms
and provisions of this Deed of Trust to any of the leases as indicated
in said notice to Trustor.
42. Trustor knowingly, voluntarily and intentionally waives, to the extent
permitted by law, trial by jury in any actions brought by Trustor,
Trustee or Beneficiary in connection with this Deed of Trust, any of the
Loan Documents, the indebtedness secured hereby, or any other statements
or actions of Beneficiary.
43. (a) Notwithstanding any provision to the contrary in the
Note, this Deed of Trust or any other instrument or agreement by
which the Note is secured and except as otherwise provided in this
paragraph, the liability of Trustor and any general partner of
Trustor under the Loan Documents shall be limited to the interest of
Trustor and any general partner of Trustor in the Premises and the
rents, issues, proceeds and profits thereof. In the event of
foreclosure of the liens evidenced by the Loan Documents, no
judgment for any deficiency upon the indebtedness evidenced by the
Loan Documents shall be sought or obtained by Beneficiary against
Trustor or any general partner of Trustor. Nothing contained in this
paragraph shall:
(i) prevent the failure of Trustor to make any payment or to perform
any obligation under any of the Loan Documents within the time
periods provided therein from being an Event of Default
thereunder;
(ii) be construed as limiting the obligations of Trustor to
any tenant under any lease of the Premises;
(iii) in any way limit or impair the lien or enforcement of
the Loan Documents pursuant to the terms thereof; or
(iv) limit the obligations of any indemnitor or guarantor, if any, of
Trustor's obligations under the Loan Documents.
(b) Notwithstanding subparagraph (a) above, Trustor and any general
partner of Trustor shall be personally liable to Beneficiary for:
(i) Trustor's failure to comply with paragraphs 2
(taxes and assessments) and 3 (insurance) hereof;
provided that Trustor's personal liability shall be
limited to the extent that Trustor received rents,
issues, proceeds and profits from the Premises (A)
during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default
under the Loan Documents has occurred and is
continuing and such rents, issues, proceeds and
profits are not first applied to (y) expenses for the
operation or maintenance of the Premises and the
taxes, assessments, utility charges and insurance of
the Premises, taking into account sufficient reserves
for the same and for replacements and recurring items,
and (z) payment of principal, interest and other
charges when due under the Loan Documents, and further
<PAGE>
provided that any payments to parties related to
Trustor shall be considered as expenses of operation
only if they are at market rates or fees consistent
with market rates or fees for the same or similar
services;
(ii) any event or circumstance for which Trustor
indemnifies Beneficiary under paragraph 1(m)
(environmental indemnity) hereof;
(iii)Trustor's failure to pay utilities on or before the date such
payments are due; provided that Trustor's personal liability
shall be limited to the extent that Trustor received rents,
issues, proceeds and profits from the Premises (A) during the
eighteen (18) month period prior to an Event of Default and/or
(B) after an Event of Default under the Loan Documents has
occurred and is continuing and such rents, issues, proceeds and
profits are not first applied to (y) expenses for the operation
or maintenance of the Premises and the taxes, assessments,
utility charges and insurance of the Premises, taking into
account sufficient reserves for the same and for replacements and
recurring items, and (z) payment of principal, interest and other
charges when due under the Loan Documents, and further provided
that any payments to parties related to Trustor shall be
considered as expenses of operation only if they are at market
rates or fees consistent with market rates or fees for the same
or similar services;
(iv) operation and maintenance of the Premises; provided that
Trustor's personal liability shall be limited to the extent that
Trustor received rents, issues, proceeds and profits from the
Premises (A) during the eighteen (18) month period prior to an
Event of Default and/or (B) after an Event of Default under the
Loan Documents has occurred and is continuing and such rents,
issues, proceeds and profits are not first applied to (y)
expenses for the operation or maintenance of the Premises and the
taxes, assessments, utility charges and insurance of the
Premises, taking into account sufficient reserves for the same
and for replacements and recurring items, and (z) payment of
principal, interest and other charges when due under the Loan
Documents, and further provided that any payments to parties
related to Trustor shall be considered as expenses of operation
only if they are at market rates or fees consistent with market
rates or fees for the same or similar services;
(v) any sums expended by Beneficiary in fulfilling the
obligations of Trustor as lessor under any lease of
the Premises prior to a sale of the Premises pursuant
to foreclosure or power of sale, a bona fide sale
(permitted by the terms of paragraph 1(l) hereof or
consented to in writing by Beneficiary) to an
unrelated third party or upon conveyance to
Beneficiary of the Premises by a deed acceptable to
Beneficiary in form and content (each of which shall
be referred to as a "Sale" for purposes of this
paragraph) or expended by Beneficiary after a Sale of
the Premises for obligations of Trustor which arose
prior to a Sale of the Premises, provided that
<PAGE>
Trustor's personal liability shall be limited to the
extent that Trustor received rents, issues, proceeds
and profits from the Premises (A) during the eighteen
(18) month period prior to an Event of Default and/or
(B) after an Event of Default under the Loan Documents
has occurred and is continuing and such rents, issues,
proceeds and profits are not first applied to (y)
expenses for the operation or maintenance of the
Premises and the taxes, assessments, utility charges
and insurance of the Premises, taking into account
sufficient reserves for the same and for replacements
and recurring items, and (z) payment of principal,
interest and other charges when due under the Loan
Documents, and further provided that any payments to
parties related to Trustor shall be considered as
expenses of operation only if they are at market rates
or fees consistent with market rates or fees for the
same or similar services;
(vi) any rents or other income regardless of type or source of payment
(including, but not limited to, CAM charges, lease termination
payments, refunds of any type, prepayment of rents, settlements
of litigation, or settlements of past due rents) from the
Premises which Trustor has received after an Event of Default
under the Loan Documents has occurred and is continuing, and
which are not applied to (A) expenses of operation and
maintenance of the Premises and the taxes, assessments, utility
charges and insurance of the Premises, taking into account
sufficient reserves for the same and for replacements and
recurring items, and (B) payment of principal, interest and other
charges when due under the Loan Documents; provided that any
payments to parties related to Trustor shall be considered
expenses of operation only if they are at market rates or fees
consistent with market rates or fees for the same or similar
services;
(vii)any unforfeited security deposits of tenants not turned over to
Beneficiary upon conveyance of the Premises to Beneficiary
pursuant to foreclosure or power of sale or by a deed acceptable
to Beneficiary in form and content;
(viii) misapplication or misappropriation of tax reserve accounts,
tenant improvement reserve accounts, security deposits, prepaid
rents or other similar sums paid to or held by Trustor or any
other entity or person in connection with the operation of the
Premises;
(ix) any waste committed or allowed by Trustor with respect
to the Premises; and
(x) any insurance or condemnation proceeds or other similar funds or
payments applied by Trustor in a manner other than as expressly
provided in the Loan Documents.
(c) Notwithstanding anything to the contrary in the Loan Documents, the
limitation on liability contained in subparagraph (a) above SHALL
BECOME NULL AND VOID and shall be of no further force and effect in
the event:
<PAGE>
(i) of any breach or violation of paragraph 1(l) (due on
sale or encumbrance) hereof, other than the filing of
a nonmaterial mechanic's lien affecting the Premises,
the granting of any utility or other nonmaterial
easement or servitude burdening the Premises, or any
other transfer or encumbrance not in the nature of a
transfer, reduction or impairment of any material
economic interest in the Premises; or
(ii) of any fraud or willful misrepresentation by Trustor or any
general partner of Trustor regarding the Premises, the making or
delivery of any of the Loan Documents or in any materials or
information provided by Trustor or any general partner of Trustor
in connection with the loan.
44. This Deed of Trust and the indebtedness secured hereby is for
the sole purpose of conducting or acquiring a lawful business,
professional or commercial activity or for the acquisition or management
of real or personal property as a commercial investment, and all
proceeds of such indebtedness shall be used for said business or
commercial investment purpose. Such proceeds will not be used for the
purchase of any security within the meaning of the Securities Exchange
Act of 1934, as amended, or any regulation issued pursuant thereto,
including without limitation, Regulations G, T and X of the Board of
Governors of the Federal Reserve System. This is not a purchase money
deed of trustand the Premises secured hereby is not a residence or
homestead or used for mining, grazing, agriculture, timber or farming
purposes.
45. Unless Beneficiary shall otherwise direct in writing, Trustor shall
appear in and defend all actions or proceedings purporting to affect the
security hereunder, or any right or power of the Beneficiary. The
Beneficiary shall have the right to appear in such actions or
proceedings. Trustor shall save Beneficiary harmless from all costs and
expenses, including reasonable attorneys' fees and costs of a title
search, continuation of abstract and preparation of survey, incurred by
reason of any action, suit, proceeding, hearing, motion or application
before any court or administrative body in and to which Beneficiary may
be or become a party by reason hereof. Such proceedings shall include
but not be limited to condemnation, bankruptcy, probate and
administration proceedings, as well as any other action, suit,
proceeding, right, motion or application wherein proof of claim is by
law required to be filed or in which it becomes necessary to defend or
uphold the terms of this Deed of Trust or otherwise purporting to affect
the security hereof or the rights or powers of Beneficiary. All money
paid or expended by Beneficiary in that regard, together with interest
thereon from date of such payment at the Default Rate shall be
additional indebtedness secured hereby and shall be immediately due and
payable by Trustor without notice.
46. In an Event of Default, all rents, issues and profits collected or
received by Trustor shall be accepted and held for Beneficiary in trust
and shall not be commingled with the funds and property of Trustor, but
shall be promptly paid over to Beneficiary.
<PAGE>
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be duly executed
and delivered as of the date first hereinabove written.
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
ATTEST: By: BRANDYWINE REALTY TRUST,
a Maryland real estate
investment trust, general
partner
/s/ Francine M. Haulenbeek By /s/ Gerard H. Sweeney
- --------------------------------- -------------------------------
Francine M. Haulenbeek Gerard H. Sweeney (Seal)
Secretary President and CEO
<PAGE>
EXHIBIT A
A certain tract or parcel of realty, lying and being in the City of Raleigh,
Wake County North Carolina, being more fully describe as follows, viz:
BEGINNING at an iron pipe set in the southern right of way of Lynn Road and the
terminus of a sight triangle with Six Forks Road; thence with the southern right
of way of Lynn Road, a course of S. 51 deg 10' 58" E for a distance of 556.31
feet to a lead plug with tack set in the western right of way of Sandy Forks
Road, in a concrete sidewalk; thence following the western right of way of Sandy
Forks Road the following 5 courses: 1) along the arc of a circular curve with a
radius of 6,737.48 feet and a delta angle of 2 deg 54' 19" for an arc length of
341.62 feet, a chord bearing of S 24 deg 37' 26" E and chord length of 341.59
feet to lead plug with tack set in a concrete sidewalk; 2) thence along the arc
of a circular curve with a radius of 2,085.22 feet and a delta angle of 11 deg
23' 28" for an arc length of 414.57 feet, a chord bearing of S 31 deg 46' 14" W
and chord length of 413.88 feet to lead plug with tack set in a concrete
sidewalk; 3) thence along the arc of a circular curve with a radius of 1,115.15
feet and a delta angle of 2 deg 56' 12" for an arc length of 57.15 feet a chord
bearing S 39 deg 42' 24" W and chord length of 57.15 feet to existing concrete
right of way monument; 4) thence a course of S. 58 deg 33' 11" W for a distance
of 80.54 feet to a concrete monument found; 5) thence along the arc of a
circular curve with a radius of 246.85 feet and a delta angle of 58 deg 24' 36"
for an arc length of 251.65 feet, a chord bearing of S 89 deg 18' 33" W and
chord length of 240.89 feet to an existing iron pipe; thence departing from the
right of way of Sandy Forks Road, along a sight triangle with Six Forks Road a
course of N 21 deg 32' 07" W for a distance of 21.20 feet to a concrete monument
found in the eastern right of way of Six Forks Road; thence with said Six Forks
Road along the arc of a circular curve with a radius of 2,909.80 feet and a
delta angle of 21 deg 42' 46" for an arc length of 1102.70 feet, a chord bearing
of N 13 deg 02' 15" E and chord length of 1096.12 feet to an iron pipe set;
thence departing said Six Forks Roads, along a sight triangle with Lynn Road, a
course of N 69 deg 37' 02" E for a distance of 35.63 feet to an iron pipe set,
the point and place of BEGINNING and containing 397,935 square feet or 9,135
acres, more or less.
<PAGE>
EXHIBIT B
1. Easement(s) recorded in Book 4305, Page 499 and Book 3012, Page 658.
2. Rights of way of Six Forks Road, Sandy Forks Road and Lynn Road as set
forth in Agreement recorded in Book 1981, Page 45.
3. Agreement recorded in Book 2985, Page 4.
4. Easement as set forth in Book of Maps 1982, Page 214.
<PAGE>
Record and return to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-1360
ATTN: Commercial Real Estate Closing
Bob Bailey
ASSIGNMENT OF
LEASES AND RENTS
D-750594
THIS ASSIGNMENT, made as of _____April 20______, 1995, by BRANDYWINE REALTY
PARTNERS, a Pennsylvania general partnership, having a post office address at
200 Berwyn Park, Suite 100, Berwyn, Pennsylvania 19312, as Assignor ("Assignor"
to be construed as "Assignors" if the context so requires), to PRINCIPAL MUTUAL
LIFE INSURANCE COMPANY, an Iowa corporation having its principal place of
business and post office address at 711 High Street, Des Moines, Iowa 50392, as
Assignee,
WITNESSETH THAT:
WHEREAS, Assignor, to evidence and secure a loan indebtedness, has made and
delivered to Assignee a promissory note of even date herewith (the "Note") in
the principal amount of $6,250,000.00, payable as provided for in the Note and
finally maturing (absent any acceleration of maturity as therein provided) on
April 15, 2001, with interest as therein expressed, and has executed and
delivered a Mortgage and Security Agreement (it being agreed that "Mortgage" as
hereinafter used shall be construed to mean "deed of trust" or "trust deed" or
"deed to secure debt" if the context so requires) bearing the aforesaid date to
secure the Note and creating a lien on Assignor's interest in certain real
estate in the County of Burlington, State of New Jersey, more particularly
described in Exhibit A attached hereto and made a part hereof, including the
improvements now or hereafter thereon and the easements, rights and
appurtenances thereunto belonging, all of which are hereinafter called the
"Mortgaged Premises"; and
WHEREAS, Assignor is the lessor under those certain written leases of the
Mortgaged Premises listed in Exhibit B attached hereto and made a part hereof,
and Assignor may hereafter make other leases of the Mortgaged Premises or parts
thereof; and
WHEREAS, Assignee has required the assignment hereafter made as a
condition to making the above described loan;
NOW, THEREFORE, Assignor, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby absolutely and
directly (and not merely collaterally) assign, bargain, sell, transfer, convey,
<PAGE>
set over and deliver unto Assignee, all rights of the lessor under the above
described lease(s) and all other leases, tenancies, rental arrangements and
subleases affecting the Mortgaged Premises, or any part thereof, now existing or
which may be executed at any time in the future during the life of this
Assignment, and all amendments, extensions and renewals of said leases and
subleases and any of them, all of which are hereinafter called the "Leases," and
all rents or other income or payments, regardless of type or source of payment
(including but not limited to CAM charges, lease termination payments, refunds
of any type, prepayment of rents, settlements of litigation or settlements of
past due rents) which may now or hereafter be or become due or owing under the
Leases, and any of them, or on account of the use of the Mortgaged Premises. It
is intended hereby to establish a present and complete transfer, and direct and
absolute assignment of all the Leases and all rights of the lessor thereunder
and all the rents, and other payments arising thereunder on account of the use
of the Mortgaged Premises unto Assignee, with the right, but without the
obligation, to collect all of said rents, income and other payments which may
become due during the life of this Assignment. Assignor agrees to deposit with
Assignee copies of all leases of all or any portion of the Mortgaged Premises.
1. Assignor hereby appoints Assignee the true and lawful attorney of
Assignor with full power of substitution and with power for it and in
its name, place and stead, to demand, collect, receipt and give complete
acquittances for any and all rents and other amounts herein assigned
which may be or become due and payable by the lessees and other
occupants of the Mortgaged Premises, and at its discretion to file any
claim or take any other action or proceeding and make any settlement of
any claims, either in its own name or in the name of Assignor or
otherwise, which Assignee may deem necessary or desirable in order to
collect and enforce the payment of any and all rents and other amounts
herein assigned. Lessees of the Mortgaged Premises, or any part thereof,
are hereby expressly authorized and directed to pay all rents and other
amounts herein assigned to Assignee or such nominee as Assignee may
designate in writing delivered to and received by such lessees who are
expressly relieved of any and all duty, liability or obligation to
Assignor in respect of all payments so made.
2. Assignee is hereby vested with full power to use all measures,
legal and equitable, deemed by it necessary or proper to enforce this
Assignment and to collect the rents and other amounts assigned
hereunder, including the right to enter upon the Mortgaged Premises, or
any part thereof, and take possession thereof forthwith to the extent
necessary to effect the cure of any default on the part of Assignor as
lessor in any of the Leases. Assignor hereby grants full power and
authority to Assignee to exercise all rights, privileges and powers
herein granted at any and all times hereafter, without notice to
Assignor except as otherwise expressly required herein or in the
Mortgage, with full power to use and apply all of the rents and other
amounts assigned hereunder to the payment of the costs of managing and
operating the Mortgaged Premises and of any indebtedness or liability of
Assignor to Assignee, including but not limited to the payment of taxes,
special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the improvements on the
Mortgaged Premises or of making same rentable, attorney fees and costs
incurred in connection with the interpretation and/or enforcement of
this Assignment, and of principal and interest payments due from
Assignor to Assignee on the Note and the Mortgage, all in such order as
<PAGE>
Assignee may determine. Assignee shall be under no obligation to press
any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any of the Leases
and does not assume any of the liabilities in connection with or arising
or growing out of the covenants and agreements of Assignor in the
Leases; and Assignor covenants and agrees that it will faithfully
perform all of the obligations imposed under any and all of the Leases
and hereby agrees to indemnify Assignee and to hold it harmless from any
liability, attorney's fees, costs, loss or damage which may or might be
incurred by it under the Leases or by reason of this Assignment, and
from any and all claims and demands whatsoever which may be asserted
against Assignee 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 of the Leases. This Assignment shall not
operate to place responsibility for the control, care, management or
repair of the Mortgaged Premises, or parts thereof, upon Assignee nor
shall it operate to make Assignee liable for the carrying out of any of
the terms and conditions of any of the Leases, or for any waste of the
Mortgaged Premises by the lessee under any of the Leases or any other
party, or for any dangerous or defective condition of the Mortgaged
Premises or for any negligence in the management, upkeep, repair or
control thereof resulting in loss or injury or death to any lessee,
licensee, employee or stranger.
The manner of the application of rentals, the reasonableness of the
costs and charges to which such rentals are applied and the item or
items which shall be credited thereby shall be within the sole and
unlimited discretion of Assignee.
3. Provided the license referenced in paragraph 7 below has not been
revoked, any amounts collected hereunder by Assignee which are in excess
of those applied to pay in full the aforesaid liabilities and
indebtedness at the time due shall be promptly paid to Assignor.
In the event that Assignor's license to collect rents and other income
is terminated, all such rents and income paid to Assignee under this
Assignment need not be segregated and may be applied by Assignee under
the terms of this Assignment or under that certain Assignment of Lease
and Rents (the "Other Assignment") dated the date hereof, by Assignor
for the benefit of Assignee, which relates to the Premises described in
Exhibit A-1 hereto.
4. Assignor hereby represents and warrants to Assignee that it is the sole
owner of the entire lessor's interest in each of the Leases; that to the
best of Assignor's knowledge, after due inquiry and investigation, the
Leases are not in default and are valid and enforceable and have not
been altered, modified or amended in any manner whatsoever except as
herein expressly mentioned; that to the best of Assignor's knowledge,
after due inquiry and investigation, all conditions precedent to the
effectiveness of the Leases have been satisfied; that Assignor has not
heretofore transferred or assigned the Leases or any of the rents
thereunder or any right or interest therein, nor has it collected more
than one month in advance or anticipated any of the rents thereunder;
and Assignor represents and warrants that it is not indebted to the
<PAGE>
lessees under the Leases in any manner whatsoever so as to give rise to
any right of setoff against, or reduction of, the rents payable under
the Leases.
5. Assignor covenants not to alter, modify, amend or change the terms of
the Leases or give any consent or permission or exercise any option
required or permitted by the terms thereof or waive any obligation
required to be performed by any lessee or execute, cancel or terminate
any of the Leases or accept a surrender thereof or enter into leases
after the date hereof without prior written consent of Assignee, and
Assignor will not make any further transfer or assignment thereof, or
attempt to pledge, assign or encumber any of the Leases or rents or
other amounts payable thereunder, or convey or transfer or suffer a
conveyance or transfer of the Mortgaged Premises or of any interest
therein so as to effect, directly or indirectly, a merger of the estates
and rights of, or a termination or diminution of the obligations of, any
lessee thereunder. Assignor further covenants to deliver to Assignee,
promptly upon receipt thereof, copies of any and all material demands,
claims or notices of default received by it from any lessee under any of
the Leases assigned herein. If requested by Assignee, Assignor shall
enforce the Leases and all remedies available to Assignor against the
lessees thereunder in case of default under the Leases by lessees.
Notwithstanding anything herein or in the Mortgage to the contrary,
subject to termination as hereinafter provided, Assignee hereby waives
its right to require its prior written consent set forth in the
immediately preceding paragraph and therefore considers its consent to
be deemed approved of in writing, provided no Event of Default has
occurred under the Note, the Mortgage, this Assignment of Lease and
Rents or any other documents securing the Note and further provided all
of the following requirements are met: (i) the debt service coverage on
the Mortgaged Premises as determined by Assignee is at least 1.55 (based
on leases in place with no uncured defaults with a remaining term
greater than 2 years); (ii) the lease is on a standard lease form
pre-approved by Assignee and attached hereto as Exhibit C and made a
part hereof by this reference provided, however, that this provision
shall be operative until three (3) years from the date hereof, at which
time, Assignor shall submit an updated or modified standard lease form
for Assignee's approval in the manner provided for the giving of notices
in the Mortgage, and if Assignee approves such updated lease form, it
shall be used instead of the form attached hereto as Exhibit C, and
further provided that the procedure outlined in this subpart (ii) shall
be followed every 3 years thereafter until the Note is paid in full and
only leases on the form approved in writing pursuant to such procedure
shall satisfy subpart (ii) hereof; (iii) a Subordination,
Non-Disturbance and Attornment Agreement in form and content acceptable
to Assignee is provided to Assignee for leases of 8,000 square feet or
more; (iv) the lease has gross rents of at least $16.00 per square foot
per year; (v) the lease has a term of 5 years or less; (vi) the lease is
for less than 3,000 square feet of space; (vii) the lease is to a
creditworthy tenant; (viii) the tenant's business will not include the
presence of Hazardous Materials on the Mortgaged Premises other than
supplies for cleaning and maintenance and standard office supplies in
commercially reasonable amounts, provided, however, that such items are
incidental to the use of Premises and are stored and used in compliance
<PAGE>
with all laws and regulations governing Hazardous Materials; and (ix)
the proposed use is consistent with the use of the Mortgaged Premises as
of the date hereof. Notwithstanding the foregoing sentence, Assignor
shall send copies within thirty (30) days of the occurrence thereof in
the manner provided for the giving of notices in the Mortgage of any
alterations, modifications, changes or amendments to the leases; any
consent or permission given to exercise any option required or permitted
by the terms thereof; any waiver of any obligation required to be
performed by any lessee; any execution, cancellation or termination of
any of the leases; or if Assignor accepts a surrender thereof. Nothing
contained herein shall constitute a waiver of Assignee's right to
require its prior written consent regarding leases which do not meet all
of the requirements set forth in this subparagraph. Assignee's right to
require said prior written consent shall be immediately reinstated upon
termination of the license to collect rents as provided herein.
6. Upon payment in full of the principal sum, interest and other
indebtedness secured hereby, and by any other documents which secure the
Note, this Assignment shall be and become null and void; otherwise, it
shall remain in full force and effect as herein provided and, with the
covenants, warranties and power of attorney herein contained, shall
inure to the benefit of Assignee and any subsequent holder of the Note,
and shall be binding upon Assignor, and its heirs, legal
representatives, successors and assigns, and any subsequent owner of the
Mortgaged Premises.
7. Notwithstanding any provision herein to the contrary, prior to an
Event of Default, Assignee hereby grants to Assignor the license to
collect as the same become due and payable, but in any event for not
more than one calendar month in advance, all rents and other income
arising under the Leases and from the Mortgaged Premises, and to enforce
all provisions contained in the Leases. Assignor shall render such
accounts of collections as Assignee may require. The license herein
granted to Assignor shall terminate immediately and automatically,
without further action or documentation, upon the occurrence of an Event
of Default; and upon written notice of Assignor's Event of Default at
any time hereafter given by Assignee to any lessee, all rentals
thereafter payable and all agreements and covenants thereafter to be
performed by the lessee shall be paid and performed by the lessee
directly to Assignee in the same manner as if the above license had not
been granted, without prosecution of any legal or equitable remedies
under the Mortgage. Any lessee of the Mortgaged Premises or any part
thereof is authorized and directed to pay to Assignor any rent herein
assigned currently for not more than one calendar month in advance and
any payment so made prior to receipt by such lessee of notice of
Assignor's default shall constitute a full acquittance to lessee
therefor.
8. Concurrently with the execution of any lease covering the
Mortgaged Premises, Assignor will notify the lessee, by U. S. Certified
Mail, of the existence of this Assignment directing such lessee to make
all payments under its lease to Assignee or its nominee in accordance
with the terms of this Assignment.
<PAGE>
9. It is understood and agreed that this Assignment shall become effective
concurrently with the Note and the Mortgage. This Assignment shall be
governed by and construed in accordance with the laws of the State where
the Mortgaged Premises is located.
10. It is the intention of Assignee and Assignor that the assignment
effectuated by this Assignment with respect to the rents and other
amounts due under the Leases shall be a direct and currently effective
assignment and shall not constitute merely the granting of a lien,
security interest or pledge for the purpose of securing the indebtedness
secured by the Mortgage. In the event that a court of competent
jurisdiction determines that, notwithstanding such expressed intent of
the parties, Assignee's interest in the rents or other amounts due under
the Leases constitutes a lien on or security interest in or pledge of
the rents or other amounts due under the Leases, it is agreed and
understood that the forwarding of a notice to Assignor after the
occurrence of an Event of Default, advising Assignor of the revocation
of Assignor's license to collect such rents and other amounts due under
the Leases, shall be sufficient action by Assignee to (i) perfect such
lien on or security interest in or pledge of the rents and other amounts
due under the Leases, (ii) take possession thereof, and (iii) entitle
Assignee to immediate and direct payment of the rents and other amounts
due under the Leases, for application as provided in the Note or
Mortgage, all without the necessity of any further action by Assignee,
including, without limitation, any action to obtain possession of the
land, improvements or any other portion of the Mortgaged Premises.
Notwithstanding the direct and absolute assignment of the rents and
other amounts as herein described, there shall be no pro tanto reduction
of any portion of the indebtedness secured by the Mortgage except with
respect to rents or other amounts actually received by Assignee and
applied by Assignee toward payment of such indebtedness.
11. Notwithstanding anything in this Assignment to the contrary, Assignee
may, upon written notice to Assignor, elect to (i) exclude from the
assignment provided in this Assignment any of the Leases as specified in
such notice so that the interest under such indicated Lease is not
assigned to Assignee, and (ii) subordinate the lien and other terms and
provisions of the Mortgage to any of the Leases as indicated in said
notice to Assignor.
12. Assignor has had the opportunity to fully negotiate the terms hereof and
modify the draftsmanship of this Assignment. Therefore, the terms of the
Assignment shall be construed and interpreted without any presumption,
inference, or rule requiring construction or interpretation of any
provision of this Assignment against the interest of the party causing
this Assignment or any portion of it to be drafted. Assignor is entering
into this Assignment freely and voluntarily without any duress, economic
or otherwise.
<PAGE>
IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly executed and
delivered as of the date first hereinabove written.
BRANDYWINE REALTY PARTNERS,
a Pennsylvania general partnership
By: BRANDYWINE REALTY TRUST, a
Maryland real estate
investment trust, general
partner
By ______/s/ Gerard H. Sweeney_____
Gerard H. Sweeney
President and CEO
BB/dt/s:750594/alr
2/13/95
<PAGE>
EXHIBIT A
All the real property located in the Township of Evesham, County of Burlington,
State of New Jersey and more particularly described as follows:
OFFICE I:
Known and designated as Lot No.(s) 1 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No. 3562, and being further described as
follows:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide) where
the same is intersected by the centerline of Lincoln Drive East (66 feet wide)
as illustrated on Map. No. 3562 filed December 4, 1981 in Burlington County
Clerk's Office and from said beginning point; thence along said centerline of
Greentree Road,
1. South 73 degrees 49 minutes 46 seconds West, 402.73 feet to a point where
the same is intersected by the truncated intersection between said Greentree
Road and New Jersey State Highway Route 73 (normal width 126.00 feet);
thence along said truncation,
2. North 56 degrees 45 minutes 20 seconds West, 190.51 feet to a point in the
Northeasterly curve line of said Route 73; thence along the same on a curve
to the right having a radius of 5643.65 feet,
3. Northwestwardly, an arc distance of 200.64 feet to a point corner
to Block 2.03, Lot 2, thence along the Southeasterly line of said
lot 2,
4. North 73 degrees 49 minutes 46 seconds East, 560.14 feet to a
point in the aforementioned centerline of Lincoln Drive East;
thence along said centerline,
5. South 16 degrees 10 minutes 14 seconds East, 342.50 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 2.03, Tax Map of
the Township of Evesham.
<PAGE>
OFFICE II
Known and designated as Lot No.(s) 2 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No. 3562, and being further described as
follows:
BEGINNING at a point in the centerline of Lincoln Drive East (66.00 feet wide)
where the same is intersected by the division line between Block 2.03, Lots 1
and 2, as illustrated on Map No. 3562 filed December 4, 1981 and from said
beginning point; thence along said division line:
1. South 73 degrees 49 minutes 46 seconds West, 560.14 feet to a point in the
curved Northeasterly right of way line of New Jersey State Highway Route 73,
thence:
2. Along the same, on a curve to the right having a radius of 5643.65 feet
Northwestwardly, an arc distance of 49.16 feet to a point of tangency in the
same; thence still along the same:
3. North 24 degrees 15 minutes 20 seconds west, 167.59 feet to a point where
the same is intersected by the centerline of "Ramp C" (variable width);
thence along said centerline the following three courses:
4. North 19 degrees 04 minutes 35 seconds East, 44.35 feet to a
point of curvature; thence:
5. Northeastwardly on an arc, curving to the right having a radius
of 103.00 feet, an arc distance of 83.89 feet to a point of
tangency; thence
6. North 65 degrees 44 minutes 40 seconds East 494.23 feet to a point in the
aforementioned centerline of Lincoln Drive East; thence:
7. Southwardly, on an arc, curving to the right having a radius of 1,000.00
feet, an arc distance of 112.27 feet to a point of tangency; thence still
along the same:
8. South 16 degrees 10 minutes 14 seconds East, 250.80 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 2, Block 2.03, Tax Map of
the Township of Evesham.
<PAGE>
OFFICE III:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide),
where the same is intersected by the centerline of Lincoln Drive West (66.00
feet wide), and from said beginning point; thence:
1. Along said centerline of Greentree Road, North 74 degrees 44 minutes 35
seconds East, 418.41 feet to a point where the same is intersected by the
truncated intersection of said Greentree Road and New Jersey State Highway
Route 73 (126.00 feet wide); thence along said truncation,
2. South 67 degrees 04 minutes 33 seconds East, 170.39 feet to a point in the
curved Southwesterly right of way line of Route 73; thence:
3. Southeastwardly, on an arc, curving to the left having a radius of 5769.65
feet, an arc distance of 217.06 feet to a point where the same is
intersected by the curved centerline of a ramp connecting said Route 73 and
the aforementioned Lincoln Drive West; thence along said centerline, the
following five courses:
4. Southwardly, on an arc, curving to the right having a radius of 163.00 feet,
an arc distance of 56.62 feet to a point of compound curvature; thence:
5. Southwestwardly, on an arc, curving to the right having a radius
of 103.00 feet, an arc distance of 111.24 feet to a point of
tangency; thence
6. South 75 degrees 44 minutes 35 seconds West, 297.99 feet to a
point of curvature; thence:
7. Westwardly, on an arc, curving to the left having a radius of
213.00 feet, an arc distance of 83.34 feet to a point of
tangency; thence
8. South 52 degrees 19 minutes 35 seconds West, 65.18 feet to a point in the
aforementioned centerline of Lincoln Drive West; thence:
9. Northwestwardly, on an arc, curving to the right having a radius
of 800.00 feet, an arc distance of 313.00 feet to a point of
tangency; thence still along the same,
10. North 15 degrees 15 minutes 25 seconds West, 158.88 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 3-33, Tax Map of
the Township of Evesham.
<PAGE>
EXHIBIT B
Tenant Name Lease Date
----------- ----------
1) Temple University of the Commonwealth Jan 1, 1995
System Higher Education
2) Senator Bill Bradley Jan 1, 1993*
* Lease Amendment June 14, 1993
3) Integrated Device Technology, Inc. Sept 7, 1990*
* Lease Amendments Sept 1, 1993 and
Sept 29, 1994
4) 6001/Three Inc., T/A Remax Subdivision April 10, 1992
5) Jack M. O'Hea, D.C. Oct 1, 1992*
* Lease Amendment July 13, 1993
6) Standard Register Feb 21, 1990*
* Lease Amendment Feb 1, 1993
7) Merrill, Lynch, Pierce, Fenner, & Smith, Inc. Dec 2, 1994
8) Murray Financial Services, Inc. Feb 1, 1994
9) Marshall, Dennehy, Warner, Coleman, & Goggin April 18, 1988*
* Lease Amendments Oct 13, 1989,
Nov 5, 1990,
Sept 30, 1991 and
Aug 20, 1992
10) Parker, McKay, & Criscuolo, P.C. Oct 25, 1983*
* Lease Amendments Mar 28, 1984, Mar 22,
1985, April 16, 1985,
May 30, 1989, Mar 30,
1990, Apr 23, 1991,
Aug 18,1993, and
July 5, 1994
11) Memorex Telex Corporation Jan 18, 1991
12) Memorex Telex Corporation Apr 7, 1989*
* Lease Amendment Jan 20, 1994
<PAGE>
13) Citicard Establishment Services, Inc. Oct 29, 1991*
* Lease Amendment Nov 21, 1994
14) American Executive Centers of Marlton, Ltd. Feb 1, 1983*
* Lease Amendments One, Two and Three Not dated
Amendment Four May 6,1991
15) Lesser & Kaplin, P.C. July 30, 1990
16) West Jersey Health Systems, Inc. Jan 26, 1990
17) Olde Discount Corporation Feb 9, 1995
18) HCFM, Ltd. Aug 7, 1991*
* Lease Amendments Feb 25, 1992 and
Sept 12, 1992
19) Medical Imaging Centers of South Oct 24, 1984
Jersey Limited Partnership
20) Plaza Research Corporation June 13, 1984
21) Levenson, Vodges, Nathanson, Cohen August 1983*
& Obringer
* Lease Amendments Dec 31, 1985,
Jan 10, 1989,
Oct 2, 1992, and
Jan 23, 1995
22) Wagner, Sharer & Company Feb 24, 1987*
* Lease Amendments May 31, 1990,
Jan 18, 1991, and
Feb 16, 1994
23) PNC Mortgage Corp June 13, 1986*
* Lease Amendments July 26, 1989,
Sept 2, 1992 and
Aug 9, 1994
<PAGE>
24) The Hertz Corporation Oct 12, 1992*
* Lease Amendment Oct 22, 1992
25) Sungman and Rosa Paik, T/A Rosa's Nook Nov 18, 1994
26) Source One Mortgage Services Corporation Apr 16, 1984
<PAGE>
Record and return to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, IA 50392-1360
ATTN: Commercial Real Estate Closing
Bob Bailey
ASSIGNMENT OF
LEASES AND RENTS
D-750595
THIS ASSIGNMENT, made as of _____April 20____, 1995, by BRANDYWINE REALTY
PARTNERS, a Pennsylvania general partnership, having a post office address at
200 Berwyn Park, Suite 100, Berwyn, Pennsylvania 19312, as Assignor ("Assignor"
to be construed as "Assignors" if the context so requires), to PRINCIPAL MUTUAL
LIFE INSURANCE COMPANY, an Iowa corporation having its principal place of
business and post office address at 711 High Street, Des Moines, Iowa 50392, as
Assignee,
WITNESSETH THAT:
WHEREAS, Assignor, to evidence and secure a loan indebtedness, has made and
delivered to Assignee a promissory note of even date herewith (the "Note") in
the principal amount of $2,750,000.00, payable as provided for in the Note and
finally maturing (absent any acceleration of maturity as therein provided) on
April 15, 2001, with interest as therein expressed, and has executed and
delivered a Deed of Trust Security Agreement and Assignment of Rents (it being
agreed that "Mortgage" as hereinafter used shall be construed to mean "deed of
trust" or "trust deed" or "deed to secure debt" if the context so requires)
bearing the aforesaid date to secure the Note and creating a lien on Assignor's
interest in certain real estate in the County of Wake, State of North Carolina,
more particularly described in Exhibit A attached hereto and made a part hereof,
including the improvements now or hereafter thereon and the easements, rights
and appurtenances thereunto belonging, all of which are hereinafter called the
"Mortgaged Premises"; and
WHEREAS, Assignor is the lessor under those certain written leases of the
Mortgaged Premises listed in Exhibit B attached hereto and made a part hereof,
and Assignor may hereafter make other leases of the Mortgaged Premises or parts
thereof; and
WHEREAS, Assignee has required the assignment hereafter made as a
condition to making the above described loan;
NOW, THEREFORE, Assignor, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, does hereby absolutely and
<PAGE>
directly (and not merely collaterally) assign, bargain, sell, transfer, convey,
set over and deliver unto Assignee, all rights of the lessor under the above
described lease(s) and all other leases, tenancies, rental arrangements and
subleases affecting the Mortgaged Premises, or any part thereof, now existing or
which may be executed at any time in the future during the life of this
Assignment, and all amendments, extensions and renewals of said leases and
subleases and any of them, all of which are hereinafter called the "Leases," and
all rents or other income or payments, regardless of type or source of payment
(including but not limited to CAM charges, lease termination payments, refunds
of any type, prepayment of rents, settlements of litigation or settlements of
past due rents) which may now or hereafter be or become due or owing under the
Leases, and any of them, or on account of the use of the Mortgaged Premises. It
is intended hereby to establish a present and complete transfer, and direct and
absolute assignment of all the Leases and all rights of the lessor thereunder
and all the rents, and other payments arising thereunder on account of the use
of the Mortgaged Premises unto Assignee, with the right, but without the
obligation, to collect all of said rents, income and other payments which may
become due during the life of this Assignment. Assignor agrees to deposit with
Assignee copies of all leases of all or any portion of the Mortgaged Premises.
1. Assignor hereby appoints Assignee the true and lawful attorney of
Assignor with full power of substitution and with power for it and in
its name, place and stead, to demand, collect, receipt and give complete
acquittances for any and all rents and other amounts herein assigned
which may be or become due and payable by the lessees and other
occupants of the Mortgaged Premises, and at its discretion to file any
claim or take any other action or proceeding and make any settlement of
any claims, either in its own name or in the name of Assignor or
otherwise, which Assignee may deem necessary or desirable in order to
collect and enforce the payment of any and all rents and other amounts
herein assigned. Lessees of the Mortgaged Premises, or any part thereof,
are hereby expressly authorized and directed to pay all rents and other
amounts herein assigned to Assignee or such nominee as Assignee may
designate in writing delivered to and received by such lessees who are
expressly relieved of any and all duty, liability or obligation to
Assignor in respect of all payments so made.
2. Assignee is hereby vested with full power to use all measures,
legal and equitable, deemed by it necessary or proper to enforce this
Assignment and to collect the rents and other amounts assigned
hereunder, including the right to enter upon the Mortgaged Premises, or
any part thereof, and take possession thereof forthwith to the extent
necessary to effect the cure of any default on the part of Assignor as
lessor in any of the Leases. Assignor hereby grants full power and
authority to Assignee to exercise all rights, privileges and powers
herein granted at any and all times hereafter, without notice to
Assignor exceptas otherwise expressly required herein or in the
Mortgage, with full power to use and apply all of the rents and other
amounts assigned hereunder to the payment of the costs of managing and
operating the Mortgaged Premises and of any indebtedness or liability of
Assignor to Assignee, including but not limited to the payment of taxes,
<PAGE>
special assessments, insurance premiums, damage claims, the costs of
maintaining, repairing, rebuilding and restoring the improvements on the
Mortgaged Premises or of making same rentable, attorney fees and costs
incurred in connection with the interpretation and/or enforcement of
this Assignment, and of principal and interest payments due from
Assignor to Assignee on the Note and the Mortgage, all in such order as
Assignee may determine. Assignee shall be under no obligation to press
any of the rights or claims assigned to it hereunder or to perform or
carry out any of the obligations of the lessor under any of the Leases
and does not assume any of the liabilities in connection with or arising
or growing out of the covenants and agreements of Assignor in the
Leases; and Assignor covenants and agrees that it will faithfully
perform all of the obligations imposed under any and all of the Leases
and hereby agrees to indemnify Assignee and to hold it harmless from any
liability, attorney's fees, costs, loss or damage which may or might be
incurred by it under the Leases or by reason of this Assignment, and
from any and all claims and demands whatsoever which may be asserted
against Assignee 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 of the Leases. This Assignment shall not
operate to place responsibility for the control, care, management or
repair of the Mortgaged Premises, or parts thereof, upon Assignee nor
shall it operate to make Assignee liable for the carrying out of any of
the terms and conditions of any of the Leases, or for any waste of the
Mortgaged Premises by the lessee under any of the Leases or any other
party, or for any dangerous or defective condition of the Mortgaged
Premises or for any negligence in the management, upkeep, repair or
control thereof resulting in loss or injury or death to any lessee,
licensee, employee or stranger.
The manner of the application of rentals, the reasonableness of the
costs and charges to which such rentals are applied and the item or
items which shall be credited thereby shall be within the sole and
unlimited discretion of Assignee.
3. Provided the license referenced in paragraph 7 below has not been
revoked, any amounts collected hereunder by Assignee which are in excess
of those applied to pay in full the aforesaid liabilities and
indebtedness at the time due shall be promptly paid to Assignor.
In the event that Assignor's license to collect rents and other income
is terminated, all such rents and income paid to Assignee under this
Assignment need not be segregated and may be applied by Assignee under
the terms of this Assignment or under that certain Assignment of Lease
and Rents (the "Other Assignment") dated the date hereof, by Assignor
for the benefit of Assignee, which relates to the Premises described in
Exhibit A-1 hereto.
4. Assignor hereby represents and warrants to Assignee that it is the sole
owner of the entire lessor's interest in each of the Leases; that to the
best of Assignor's knowledge, after due inquiry and investigation, the
Leases are not in default and are valid and enforceable and have not
<PAGE>
been altered, modified or amended in any manner whatsoever except as
herein expressly mentioned; that to the best of Assignor's knowledge,
after due inquiry and investigation, all conditions precedent to the
effectiveness of the Leases have been satisfied; that Assignor has not
heretofore transferred or assigned the Leases or any of the rents
thereunder or any right or interest therein, nor has it collected more
than one month in advance or anticipated any of the rents thereunder;
and Assignor represents and warrants that it is not indebted to the
lessees under the Leases in any manner whatsoever so as to give rise to
any right of setoff against, or reduction of, the rents payable under
the Leases.
5. Assignor covenants not to alter, modify, amend or change the terms of
the Leases or give any consent or permission or exercise any option
required or permitted by the terms thereof or waive any obligation
required to be performed by any lessee or execute, cancel or terminate
any of the Leases or accept a surrender thereof or enter into leases
after the date hereof without prior written consent of Assignee, and
Assignor will not make any further transfer or assignment thereof, or
attempt to pledge, assign or encumber any of the Leases or rents or
other amounts payable thereunder, or convey or transfer or suffer a
conveyance or transfer of the Mortgaged Premises or of any interest
therein so as to effect, directly or indirectly, a merger of the estates
and rights of, or a termination or diminution of the obligations of, any
lessee thereunder. Assignor further covenants to deliver to Assignee,
promptly upon receipt thereof, copies of any and all material demands,
claims or notices of default received by it from any lessee under any of
the Leases assigned herein. If requested by Assignee, Assignor shall
enforce the Leases and all remedies available to Assignor against the
lessees thereunder in case of default under the Leases by lessees.
Notwithstanding anything herein or in the Mortgage to the contrary,
subject to termination as hereinafter provided, Assignee hereby waives
its right to require its prior written consent set forth in the
immediately preceding paragraph and therefore considers its consent to
be deemed approved of in writing, provided no Event of Default has
occurred under the Note, the Mortgage, this Assignment of Lease and
Rents or any other documents securing the Note and further provided all
of the following requirements are met: (i) the debt service coverage on
the Mortgaged Premises as determined by Assignee is at least 1.55 (based
on leases in place with no uncured defaults with a remaining term
greater than 2 years); (ii) the lease is on a standard lease form
pre-approved by Assignee and attached hereto as Exhibit C and made a
part hereof by this reference provided, however, that this provision
shall be operative until three (3) years from the date hereof, at which
time, Assignor shall submit an updated or modified standard lease form
for Assignee's approval in the manner provided for the giving of notices
in the Mortgage, and if Assignee approves such updated lease form, it
shall be used instead of the form attached hereto as Exhibit C, and
further provided that the procedure outlined in this subpart (ii) shall
be followed every 3 years thereafter until the Note is paid in full and
only leases on the form approved in writing pursuant to such procedure
shall satisfy subpart (ii) hereof; (iii) the lease has gross rents of at
least $13.50 per square foot per year; (v) the lease has a term of 5
years or less; (vi) the lease is for less than 3,000 square feet of
<PAGE>
space; (vii) the lease is to a creditworthy tenant; (viii) the tenant's
business will not include the presence of Hazardous Materials on the
Mortgaged Premises other than supplies for cleaning and maintenance and
standard office supplies in commercially reasonable amounts, provided,
however, that such items are incidental to the use of Premises and are
stored and used in compliance with all laws and regulations governing
Hazardous Materials; and (ix) the proposed use is consistent with the
use of the Mortgaged Premises as of the date hereof . Notwithstanding
the foregoing sentence, Assignor shall send copies within thirty (30)
days of the occurrence thereof in the manner provided for the giving of
notices in the Mortgage of any alterations, modifications, changes or
amendments to the leases; any consent or permission given to exercise
any option required or permitted by the terms thereof; any waiver of any
obligation required to be performed by any lessee; any execution,
cancellation or termination of any of the leases; or if Assignor accepts
a surrender thereof. Nothing contained herein shall constitute a waiver
of Assignee's right to require its prior written consent regarding
leases which do not meet all of the requirements set forth in this
subparagraph. Assignee's right to require said prior written consent
shall be immediately reinstated upon termination of the license to
collect rents as provided herein.
6. Upon payment in full of the principal sum, interest and other
indebtedness secured hereby, and by any other documents which secure the
Note, this Assignment shall be and become null and void; otherwise, it
shall remain in full force and effect as herein provided and, with the
covenants, warranties and power of attorney herein contained, shall
inure to the benefit of Assignee and any subsequent holder of the Note,
and shall be binding upon Assignor, and its heirs, legal
representatives, successors and assigns, and any subsequent owner of the
Mortgaged Premises.
7. Notwithstanding any provision herein to the contrary, prior to an
Event of Default, Assignee hereby grants to Assignor the license to
collect as the same become due and payable, but in any event for not
more than one calendar month in advance, all rents and other income
arising under the Leases and from the Mortgaged Premises, and to enforce
all provisions contained in the Leases. Assignor shall render such
accounts of collections as Assignee may require. The license herein
granted to Assignor shall terminate immediately and automatically,
without further action or documentation, upon the occurrence of an Event
of Default; and upon written notice of Assignor's Event of Default at
any time hereafter given by Assignee to any lessee, all rentals
thereafter payable and all agreements and covenants thereafter to be
performed by the lessee shall be paid and performed by the lessee
directly to Assignee in the same manner as if the above license had not
been granted, without prosecution of any legal or equitable remedies
under the Mortgage. Any lessee of the Mortgaged Premises or any part
thereof is authorized and directed to pay to Assignor any rent herein
assigned currently for not more than one calendar month in advance and
<PAGE>
any payment so made prior to receipt by such lessee of notice of
Assignor's default shall constitute a full acquittance to lessee
therefor.
8. Concurrently with the execution of any lease covering the
Mortgaged Premises, Assignor will notify the lessee, by U. S. Certified
Mail, of the existence of this Assignment directing such lessee to make
all payments under its lease to Assignee or its nominee in accordance
with the terms of this Assignment.
9. It is understood and agreed that this Assignment shall become effective
concurrently with the Note and the Mortgage. This Assignment shall be
governed by and construed in accordance with the laws of the State where
the Mortgaged Premises is located.
10. It is the intention of Assignee and Assignor that the assignment
effectuated by this Assignment with respect to the rents and other
amounts due under the Leases shall be a direct and currently effective
assignment and shall not constitute merely the granting of a lien,
security interest or pledge for the purpose of securing the indebtedness
secured by the Mortgage. In the event that a court of competent
jurisdiction determines that, notwithstanding such expressed intent of
the parties, Assignee's interest in the rents or other amounts due under
the Leases constitutes a lien on or security interest in or pledge of
the rents or other amounts due under the Leases, it is agreed and
understood that the forwarding of a notice to Assignor after the
occurrence of an Event of Default, advising Assignor of the revocation
of Assignor's license to collect such rents and other amounts due under
the Leases, shall be sufficient action by Assignee to (i) perfect such
lien on or security interest in or pledge of the rents and other amounts
due under the Leases, (ii) take possession thereof, and (iii) entitle
Assignee to immediate and direct payment of the rents and other amounts
due under the Leases, for application as provided in the Note or
Mortgage, all without the necessity of any further action by Assignee,
including, without limitation, any action to obtain possession of the
land, improvements or any other portion of the Mortgaged Premises.
Notwithstanding the direct and absolute assignment of the rents and
other amounts as herein described, there shall be no pro tanto reduction
of any portion of the indebtedness secured by the Mortgage except with
respect to rents or other amounts actually received by Assignee and
applied by Assignee toward payment of such indebtedness.
11. Notwithstanding anything in this Assignment to the contrary, Assignee
may, upon written notice to Assignor, elect to (i) exclude from the
assignment provided in this Assignment any of the Leases as specified in
such notice so that the interest under such indicated Lease is not
assigned to Assignee, and (ii) subordinate the lien and other terms and
provisions of the Mortgage to any of the Leases as indicated in said
notice to Assignor.
12. Assignor has had the opportunity to fully negotiate the terms hereof and
modify the draftsmanship of this Assignment. Therefore, the terms of the
<PAGE>
Assignment shall be construed and interpreted without any presumption,
inference, or rule requiring construction or interpretation of any
provision of this Assignment against the interest of the party causing
this Assignment or any portion of it to be drafted. Assignor is entering
into this Assignment freely and voluntarily without any duress, economic
or otherwise.
IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly executed and
delivered as of the date first hereinabove written.
BRANDYWINE REALTY PARTNERS,
a Pennsylvania general partnership
ATTEST By: BRANDYWINE REALTY TRUST, a
Maryland real estate investment trust,
general partner
/s/ Francine M. Haulenbeek By /s/ Gerard H. Sweeney
-------------------------- ----------------------------
Francine M. Haulenbeek Gerard H. Sweeney (SEAL)
Secretary President and CEO
<PAGE>
EXHIBIT A
A certain tract or parcel of realty, lying and being in the City of Raleigh,
Wake County North Carolina, being more fully describe as follows, viz:
BEGINNING at an iron pipe set in the southern right of way of Lynn Road and the
terminus of a sight triangle with Six Forks Road; thence with the southern right
of way of Lynn Road, a course of S. 51 deg 10' 58" E for a distance of 556.31
feet to a lead plug with tack set in the western right of way of Sandy Forks
Road, in a concrete sidewalk; thence following the western right of way of Sandy
Forks Road the following 5 courses: 1) along the arc of a circular curve with a
radius of 6,737.48 feet and a delta angle of 2 deg 54' 19" for an arc length of
341.62 feet, a chord bearing of S 24 deg 37' 26" E and chord length of 341.59
feet to lead plug with tack set in a concrete sidewalk; 2) thence along the arc
of a circular curve with a radius of 2,085.22 feet and a delta angle of 11 deg
23' 28" for an arc length of 414.57 feet, a chord bearing of S 31 deg 46' 14" W
and chord length of 413.88 feet to lead plug with tack set in a concrete
sidewalk; 3) thence along the arc of a circular curve with a radius of 1,115.15
feet and a delta angle of 2 deg 56' 12" for an arc length of 57.15 feet a chord
bearing S 39 deg 42' 24" W and chord length of 57.15 feet to existing concrete
right of way monument; 4) thence a course of S. 58 deg 33' 11" W for a distance
of 80.54 feet to a concrete monument found; 5) thence along the arc of a
circular curve with a radius of 246.85 feet and a delta angle of 58 deg 24' 36"
for an arc length of 251.65 feet, a chord bearing of S 89 deg 18' 33" W and
chord length of 240.89 feet to an existing iron pipe; thence departing from the
right of way of Sandy Forks Road, along a sight triangle with Six Forks Road a
course of N 21 deg 32' 07" W for a distance of 21.20 feet to a concrete monument
found in the eastern right of way of Six Forks Road; thence with said Six Forks
Road along the arc of a circular curve with a radius of 2,909.80 feet and a
delta angle of 21 deg 42' 46" for an arc length of 1102.70 feet, a chord bearing
of N 13 deg 02' 15" E and chord length of 1096.12 feet to an iron pipe set;
thence departing said Six Forks Roads, along a sight triangle with Lynn Road, a
course of N 69 deg 37' 02" E for a distance of 35.63 feet to an iron pipe set,
the point and place of BEGINNING and containing 397,935 square feet or 9,135
acres, more or less.
<PAGE>
EXHIBIT B
RENT ROLL
1. Mark A. Shiver, LUTCF May 27, 1993*
*Lease Amendments June 1, 1994 and Feb 20, 1995
2. Med Therapy Rehabilitation Services, Inc. March 28, 1990*
*Lease Amendments May 10, 1994 and July 1,
1994
3. Dynasty Builders February 23, 1993*
*Lease Amendments Mar 3, 1994 and Feb 9, 1995
4. American Child Support Recovery, Inc. Sept 30, 1995*
*Lease Amendment Sept 29, 1994
5. Glen White Associates, Inc. March 23, 1988*
*Lease Amendments Nov 30, 1990 and Nov 17, 1993
6. Electro Source U.S., Inc. May 19, 1994
7. C&S Enterprises Oct 25, 1994
8. The General Electric Company Jan 5, 1990*
*Lease Amendment June 6, 1994
9. Berlitz International, Inc. July 23, 1991
10. Frank Coleman & Associates, Inc. April 4, 1994
11. XILINX, Inc. Aug 19, 1992*
*Lease Amendments June 14, 1993 and July 8, 1994
12. Universsal Instrument Corporation Dec 8, 1992
13. Dr. Milton Waldo Richardson Jan 19, 1993
14. The Scudder Group, Inc. Dec 16, 1994
15. Michael K. Schley, AIA Aug 9, 1994
16. Michael K. Schley, AIA Oct 19, 1989*
*Lease Amendments May 28, 1993 and June 1, 1994
<PAGE>
17. Dr. Fernando R. Puente May 31, 1991*
*Lease Amendment Sep 14, 1992
18. Jack Perkins, CPA Oct 27, 1989*
*Lease Amendment Nov 19, 1992
19. Nursefinders of Raleigh-Durham, Inc. March 11, 1987*
*Lease Amendments Oct 6, 1988 and Nov 4, 1991
20. Dr. Benu Chatterjee, MD Oct 26, 1989*
*Lease Amendment Oct 25, 1994
21. Nancy Jernigan, MD March 15, 1984*
*Lease Amendments Feb 28, 1995, April 1, 1986,
March 27, 1987, Sep 30, 1988,
March 15, 1989, Aug 30, 1990
and Aug 1, 1991
22. CCC Gems Jan 20, 1995
23. Vonnie B. Smith, DDS, PA Oct 31, 1991*
*Lease Amendments Oct 31, 1991, Nov 11, 1991 and
Dec 29, 1992
24. A-La Dance Magic Aug 9, 1993
25. The Money Centre, Inc. April 2, 1990*
*Lease Amendment March 11, 1993
26. Linda Ingram Dec 8, 1992
27. R&S Learning Systems, Inc. Oct 31, 1991*
*Lease Amendment Nov 22, 1993
28. Tyres International, Inc. Nov 1, 1987*
*Lease Amendments Sep 12, 1988, Oct 17, 1989,
May 24, 1991 and Feb 20, 1995
29. Max Ray Williams & H. Stuart Parker, Jr. Sept 21, 1990*
*Lease Amendment June 11, 1993
<PAGE>
30. Computer Training and Consulting, Inc. Oct 1, 1993
31. Gettier & Associates, Inc. Nov 9, 1992
32. Michael G. Pottmeyer Dec 20, 1994
33. Accounting Management Incorporated Sept 27, 1989*
*Lease Amendment April 30, 1993
34. Lamm Realty Services, LLC Dec 21, 1994
35. Lamm Realty Services, LLC Dec 21, 1994
36. Hilton Investigative Services, Inc. July 9, 1993*
*Lease Amendment Sept 13, 1993
37. The Money Centre, Inc. July 1, 1994
38. Weis & Associates of Raleigh, Inc. Sept 4, 1986*
*Lease Amendments Mar 1, 1991 and Sept 29, 1994
39. PMC Partnership, Ltd. May 2, 1988*
*Lease Amendments Dec 18, 1990, Jan 30, 1992 and
Jan 25, 1994
40. Thomas K. Buttley, DDS, MS, PA Feb 15, 1991
41. Ablest Service Corporation Feb 1, 1993
42. Alley Enterprises, Inc. Sept 24, 1986*
*Lease Amendments Aug 11, 1988, Oct 28, 1991
and Nov 16, 1994
43. Reptron Electrics, Inc. May 15, 1989*
*Lease Amendments May 23, 1989, May 23,
1991, Sept 14, 1992
and Aug 22, 1994
<PAGE>
IDEMNIFICATION AND HOLD HARMLESS AGREEMENT
D-750594
THIS INDEMNIFICATION AND HOLD HARMLESS AGREEMENT dated _April 20_, 1995 is
made by BRANDYWINE REALTY PARTNERS, a Pennsylvania general partnership, having
its principal office located at 200 Berwyn Park, Suite 100, Berwyn, Pennsylvania
19312 (hereinafter referred to as "Indemnitor") to PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY, an Iowa corporation, having its principal office located at
c/o The Principal Financial Group, Des Moines, Iowa 50392-1450 (hereinafter
referred to as "Indemnitee");
WHEREAS, Indemnitee is on this date making a loan to Indemnitor in the
amount of $6,250,000.00 (the "Loan"), which Loan is being secured by a mortgage
lien encumbering the property described on the attached Exhibit A (the
"Property"); and
WHEREAS, as an inducement to the making of the Loan, Indemnitee has
required that the Indemnitor execute this Indemnification and Hold Harmless
Agreement, and would not make the Loan without the execution of this
Indemnification and Hold Harmless Agreement.
THEREFORE, Indemnitor covenants and agrees as follows:
1. Indemnitor agrees to defend, indemnify and hold the
Indemnitee, its subsidiaries, directors, officers and
employees harmless, from and against, and upon
Indemnitee's demand to pay or reimburse Indemnitee for
any and all losses, liabilities, obligations, damages,
deficiencies (including without limitation any
deficiency of principal, interest or premium that might
occur under the Loan), interest, penalties, judgments,
impositions, assessments, fines, costs and expenses, in
whole or in part, resulting from, caused by, arising
out of, or attributable to any claims, actions, suits
or other proceedings under the Federal Water Pollution
Control Act (33 U.S.C.ss.1317), as amended, the Resource
Conservation and Recovery Act (42 U.S.C.ss.6901 et
seq.), as amended, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.Sss.9601
et. seq.), as amended, the New Jersey Spill
Compensation and Control Act (N.J.S.A. 58:10-23.11 et
seq.), as amended, the New Jersey Water Pollution
Control Act, as amended, the New Jersey Hazardous
Substances Reports and Notification Act, the New Jersey
Industrial Site Recovery Act N.J.S.A. 13:1K-6 et seq.),
regulations promulgated under any of the above acts,
common law or any other federal, state or local law or
to the spillage, discharge, release or other
intentional or unintentional action or omission which
directly or indirectly results in the presence or
discharge of any Hazardous Material, as defined in the
Mortgage and Security Agreement dated of even date
herewith executed by Indemnitor for the benefit of
Indemnitee, upon the Property, into water or into the
environment, caused by, attributed to, or arising out
of, the operations, use, control or ownership of the
Property, provided, however, that this indemnity does
not apply to Hazardous Material that exists on or is
discharged from the Property due to acts or omissions
<PAGE>
occurring after Indemnitor or any person or entity in
any way related to Indemnitor no longer holds title to
or has any interest in the Property.
2. In the event of the threatened or actual imposition
of any loss, liability, obligation, damage, deficiency,
interest, penalty, judgment, assessment, fine, cost,
suit or other proceeding, the outcome of which could
require indemnification hereunder, Indemnitee may
retain, in its sole judgment, such attorneys, engineers
or consultants as it believes to be reasonably
necessary to defend itself, and Indemnitor shall
reimburse Indemnitee for the full amount of the fees of
such attorneys, engineers, or consultants. In all
events, Indemnitee shall retain the discretion to
defend itself, at the expense of Indemnitor, or to
require that Indemnitor assume the defense.
In addition, the Indemnitor shall be obligated to promptly cause the
removal of any lien and to remove such spillage, discharge, release or
take steps necessary to correct such other intentional or unintentional
action or omission which has led to or results in the presence of such
substances upon the Property, into water or into the environment, in a
manner and in accordance with a time schedule satisfactory to the
holder hereof, but, in any event, in accordance with all applicable
laws and regulations.
3. Without limiting the obligations of the Indemnitor under this
Agreement, it is not the intention of this Agreement to release any
tenant of the Property of any obligations such tenant may have under
its lease.
4. No Trustee, beneficiary or shareholder of Indemnitor shall be liable
hereunder in such persons individual capacity, all such liability being
limited to the respective estates of the entities constituting
Indemnitor.
5. If more than one, all obligations and agreements of the
Indemnitor herein are joint and several.
<PAGE>
IN WITNESS WHEREOF, the Indemnitor hereto has executed this INDEMNIFICATION
AND HOLD HARMLESS AGREEMENT the day and year first above written.
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By: BRANDYWINE REALTY TRUST,
a Maryland real estate
investment trust, general
partner
By _/s/ Gerard H. Sweeney_____
Gerard H. Sweeney
President and CEO
BB/dt/s:750594/ihha
2/13/95
<PAGE>
EXHIBIT A
All the real property located in the Township of Evesham, County of Burlington,
State of New Jersey and more particularly described as follows:
OFFICE I:
Known and designated as Lot No.(s) 1 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No. 3562, and being further described as
follows:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide) where
the same is intersected by the centerline of Lincoln Drive East (66 feet wide)
as illustrated on Map. No. 3562 filed December 4, 1981 in Burlington County
Clerk's Office and from said beginning point; thence along said centerline of
Greentree Road,
1. South 73 degrees 49 minutes 46 seconds West, 402.73 feet to a point where
the same is intersected by the truncated intersection between said Greentree
Road and New Jersey State Highway Route 73 (normal width 126.00 feet);
thence along said truncation,
2. North 56 degrees 45 minutes 20 seconds West, 190.51 feet to a point in the
Northeasterly curve line of said Route 73; thence along the same on a curve
to the right having a radius of 5643.65 feet,
3. Northwestwardly, an arc distance of 200.64 feet to a point
corner to Block 2.03, Lot 2, thence along the Southeasterly
line of said lot 2,
4. North 73 degrees 49 minutes 46 seconds East, 560.14 feet to
a point in the aforementioned centerline of Lincoln Drive
East; thence along said centerline,
5. South 16 degrees 10 minutes 14 seconds East, 342.50 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 2.03, Tax
Map of the Township of Evesham.
<PAGE>
OFFICE II
Known and designated as Lot No.(s) 2 in Block No. 2.03 on a certain Map entitled
"Greentree Village, Block 2.03, Lots 1 and 2, Mid-Rise Office Building" prepared
by Taylor, Wiseman and Taylor and dated April 1, 1981, filed December 4, 1981 in
Burlington County Clerk's Office as Map No. 3562, and being further described as
follows:
BEGINNING at a point in the centerline of Lincoln Drive East (66.00 feet wide)
where the same is intersected by the division line between Block 2.03, Lots 1
and 2, as illustrated on Map No. 3562 filed December 4, 1981 and from said
beginning point; thence along said division line:
1. South 73 degrees 49 minutes 46 seconds West, 560.14 feet to a point in the
curved Northeasterly right of way line of New Jersey State Highway Route 73,
thence:
2. Along the same, on a curve to the right having a radius of 5643.65 feet
Northwestwardly, an arc distance of 49.16 feet to a point of tangency in the
same; thence still along the same:
3. North 24 degrees 15 minutes 20 seconds west, 167.59 feet to a point where
the same is intersected by the centerline of "Ramp C" (variable width);
thence along said centerline the following three courses:
4. North 19 degrees 04 minutes 35 seconds East, 44.35 feet to a
point of curvature; thence:
5. Northeastwardly on an arc, curving to the right having a
radius of 103.00 feet, an arc distance of 83.89 feet to a
point of tangency; thence
6. North 65 degrees 44 minutes 40 seconds East 494.23 feet to a point in the
aforementioned centerline of Lincoln Drive East; thence:
7. Southwardly, on an arc, curving to the right having a radius of 1,000.00
feet, an arc distance of 112.27 feet to a point of tangency; thence still
along the same:
8. South 16 degrees 10 minutes 14 seconds East, 250.80 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 2, Block 2.03, Tax
Map of the Township of Evesham.
<PAGE>
OFFICE III:
BEGINNING at a point in the centerline of Greentree Road (86.00 feet wide),
where the same is intersected by the centerline of Lincoln Drive West (66.00
feet wide), and from said beginning point; thence:
1. Along said centerline of Greentree Road, North 74 degrees 44 minutes 35
seconds East, 418.41 feet to a point where the same is intersected by the
truncated intersection of said Greentree Road and New Jersey State Highway
Route 73 (126.00 feet wide); thence along said truncation,
2. South 67 degrees 04 minutes 33 seconds East, 170.39 feet to a point in the
curved Southwesterly right of way line of Route 73; thence:
3. Southeastwardly, on an arc, curving to the left having a radius of 5769.65
feet, an arc distance of 217.06 feet to a point where the same is
intersected by the curved centerline of a ramp connecting said Route 73 and
the aforementioned Lincoln Drive West; thence along said centerline, the
following five courses:
4. Southwardly, on an arc, curving to the right having a radius of 163.00
feet, an arc distance of 56.62 feet to a point of compound curvature;
thence:
5. Southwestwardly, on an arc, curving to the right having a radius
of 103.00 feet, an arc distance of 111.24 feet to a point of
tangency; thence
6. South 75 degrees 44 minutes 35 seconds West, 297.99 feet to a
point of curvature; thence:
7. Westwardly, on an arc, curving to the left having a radius of
213.00 feet, an arc distance of 83.34 feet to a point of
tangency; thence
8. South 52 degrees 19 minutes 35 seconds West, 65.18 feet to a point in the
aforementioned centerline of Lincoln Drive West; thence:
9. Northwestwardly, on an arc, curving to the right having a radius
of 800.00 feet, an arc distance of 313.00 feet to a point of
tangency; thence still along the same,
10. North 15 degrees 15 minutes 25 seconds West, 158.88 feet to the point and
place of beginning.
NOTE: FOR INFORMATION ONLY: Being Lot(s) 1, Block 3-33, Tax Map of
the Township of Evesham.
<PAGE>
ESCROW AGREEMENT
D-750594 and D-750595
RE: Secured Promissory Note (the "750594 Note") dated the date hereof, in the
original principal amount of $6,250,000.00 made by Brandywine Realty
Partners, a Pennsylvania general partnership (the "Borrower") in favor of
Principal Mutual Life Insurance Company, an Iowa corporation (the "Lender"),
secured by a Mortgage and Security Agreement and an Assignment of Leases and
Rents (collectively the "750594 Mortgage") dated the date hereof to be
recorded in the records of Burlington County, New Jersey.
Secured Promissory Note (the "750595 Note") dated the date hereof, in the
original principal amount of $2,750,000.00 made by Borrower, in favor of
Lender, secured by a Deed of Trust, Security Agreement and Assignment of
Rents and an Assignment of Leases and Rents (collectively the "750595
Mortgage") dated the date hereof to be recorded in the records of Wake
County, North Carolina.
The 750594 Note and the 750595 Note are collectively referred to as the
"Note" and the 750594 Mortgage and the 750595 Mortgage are collectively
referred to as the "Mortgage".
This Escrow Agreement (the "Agreement"), made this _20_ day of
_____April_____, 1995 by and between Lender and Borrower.
RECITALS
WHEREAS, concurrently herewith, Lender has made a loan to Borrower in the
original principal amount of $6,250,000.00 (the "750594 Loan") subject to the
terms of the 750594 Note and the 750594 Mortgage and secured by certain real
property and improvements thereon described in the 750594 Mortgage
(collectively, the "750594 Property"); and
WHEREAS, concurrently herewith, Lender has made a loan to Borrower in the
original principal amount of $2,750,000.00 (the "750595 Loan") subject to the
terms of the 750595 Note and the 750595 Mortgage and secured by certain real
property and improvements thereon described in the 750595 Mortgage
(collectively, the "750595 Property"); and
WHEREAS, the 750594 Loan and the 750595 Loan are collectively referred to as
the "Loan" and the 750594 Property and the 750595 Property are collectively
referred to as the "Property"; and
WHEREAS, Borrower has agreed to place in escrow with Lender the sum of
$1,559,400.00 (said escrowed monies are hereinafter referred to as the "Initial
Funds"), which is an amount of money equal to the estimated cost to complete
certain tenant improvements (for example, ceiling tiles, wall covering, carpet,
dry wall, restroom, lights, and interior partitions and doors) and capital
improvements on the Property (said tenant improvements and capital improvements
are hereinafter referred to as the "Improvements"), and to pay leasing
commissions for leases on the Property; and
<PAGE>
WHEREAS, Borrower has agreed to place in escrow with Lender on each
installment date under the Note commencing May 15, 1995 and continuing through
April 15, 1996 the sum of $10,000.00 and commencing May 15, 1996 and continuing
until the final maturity thereof the sum of $25,000.00 (any escrowed monies
accumulated under the terms hereof are hereinafter referred to as the "Monthly
Funds"), to cover anticipated Improvements and leasing commissions on the
Property during the duration of the Loan; and
WHEREAS, the Initial Funds and the Monthly Funds are collectively
referred to as the "Funds"; and
WHEREAS, Lender and Borrower desire to set forth the terms and conditions
for placing the Funds with Lender and the terms and conditions upon which said
Funds shall be held and disbursed or applied as contemplated by the parties
hereto.
NOW THEREFORE, in consideration of the making of the Loan, the mutual
promises and agreements contained herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, Lender and Borrower
agree as follows:
1. Recitals. Lender and Borrower agree that the foregoing
recitals are true and correct and are incorporated herein by
reference.
2. Funds. Simultaneously with the execution of this Agreement, Borrower
shall place the Initial Funds in escrow with Lender. Said Initial Funds shall be
held by Lender and disbursed or applied as hereinafter provided. On each
installment date under the Note until the final maturity thereof, Borrower shall
place the Monthly Funds, in the amounts as set forth above, in escrow with
Lender. Said Monthly Funds shall be held by Lender and disbursed or applied as
hereinafter provided.
3. Terms of Deposit.The Funds shall constitute fully disbursed
principal under the Note, and Borrower shall pay interest thereon in accordance
with the terms of the Note. Any interest credited on the Funds under the terms
of this Agreement shall be solely in consideration of the escrow created hereby
and Borrower's continued, timely performance of all of the terms and provisions
of the Note, the Mortgage and this Agreement. Neither the Funds nor the escrow
created hereby shall constitute any deposit or account of the Borrower or monies
to which the Borrower is entitled upon demand, or upon the mere passage of time,
or sums to which Borrower is entitled to any interest or crediting of interest
by virtue of Lender's mere possession of the Funds. Lender shall not be required
to segregate the Funds or hold the Funds in any separate account for the benefit
of the Borrower. Lender may hold the Funds in its general account or any other
account and may commingle the Funds with any other monies of Lender or any other
person or entity.
<PAGE>
4. Interest on Funds. As long as Borrower is not in default under the Note,
the Mortgage or any other document securing the Loan, Lender agrees to remit to
Borrower the interest on the Funds on a quarterly basis, provided however that
interest shall cease to be credited on the Funds or any portion thereof after
they have been disbursed to Borrower or otherwise applied in any manner provided
in this Agreement. Interest shall be credited on the average Funds balance for
the preceding calendar month on or before the tenth (10th) day of each calendar
month at a rate equal to the 30 day average of the daily Federal Reserve
Composite Commercial Paper Rate, as published in the Wall Street Journal or
similar financial publications, provided however that where interest is to be
credited on the average Funds balance for a period which is less than one (1)
calendar month, interest shall be credited for such period at a rate equal to
the average of the daily Federal Reserve Composite Commercial Paper Rate for
such period. Interest shall be disbursed to Borrower at such time and in the
same manner as provided in this Agreement.
5. Disbursement Terms. Except as hereinafter provided, within ten
(10) business days of Lender's receipt of the items stated in (a) through (g)
below, Lender shall make disbursements of the Funds from time to time as the
work on the Improvements is completed and leasing commissions are paid, in
amounts not less than $10,000.00 and not more frequently than once every 60
days, provided the applicable conditions (a) through (g) below, as determined by
Lender, have been met in each instance.
a. Borrower has furnished to Lender: (i) copies of lien waivers for
completed Improvements, or (ii) such endorsements or other assurances
satisfactory to Lender from the title insurance company insuring the continued
first lien priority of the Mortgage, without exception for mechanics' or
materialmen's liens and subject only to those exceptions previously approved by
Lender and any other exceptions approved in writing by Lender subsequent to the
date hereof;
b. Borrower has furnished to Lender an architect's or
general contractor's certificate as to the extent and cost of the
Improvements completed;
c. Lender has inspected, or expressly waived in writing such
inspection, and approved the completed Improvements;
d. Borrower has furnished to Lender fully executed lease(s), and
lessee's estoppel certificate(s) for the improved space, which lease complies
with the Assignment of Leases and Rents dated of even date hereof with respect
to the applicable project, in form and substance acceptable to Lender indicating
among other things lessee's unconditional acceptance of the Improvements;
e. Borrower has furnished to Lender a certificate of
occupancy in a form satisfactory to Lender for the improved space
from the local authority responsible for issuing such certificate;
f. Lender shall receive a $500 fee for each release, which
fee shall include any inspection fee for Lender hereunder; and
<PAGE>
g. Borrower has furnished to Lender evidence satisfactory to Lender that
verifies that any leasing commissions for which Borrower is requesting
disbursement are due and owing with respect to the Property, have been paid in
full in cash.
Notwithstanding the above, Lender will allow up to four (4) releases of
up to $200,000.00 in aggregate, for dividend payments, commencing on the date
the Loan is funded and continuing for twelve months thereafter, provided (i)
Borrower provides Lender with a written request for said release, and (ii)
Lender receives a $500 fee for each release.
Further notwithstanding the above, until such time as title is transferred to
Lender, its designee or any purchaser at a foreclosure sale pursuant to
foreclosure, or power of sale or Deed in Lieu of foreclosure, Lender shall
retain possession of the Funds, its designee or any purchaser at a foreclosure
sale. Upon any such transfer of title to Lender, the Funds, not inculding any
interest thereon, shall be released to Borrower.
6. Termination. Provided this Agreement has not been terminated in
accordance with the terms hereof, this Agreement shall automatically terminate
at such time as the Funds and any interest credited thereon have been fully
disbursed to Borrower pursuant to the provisions hereof.
7. Limitation of Liability. Borrower, by executing this Agreement, hereby
consents to the investment of said Funds by Lender as outlined above. Lender
shall not be liable for any claims, suits, actions, costs, damages, liabilities
and expenses (collectively, the "Liabilities") in connection with any
Liabilities arising out of the investment of the Funds in such investment
vehicles as the Lender chooses, or the failure of the investment vehicle to
produce a reasonable return on the Funds deposited therein, or the loss of any
Funds as a result of the insolvency of the financial entity in which such funds
are deposited. The foregoing limitation on liability with respect to Lender
shall not apply to any of the Liabilities directly caused solely by the gross
negligence or intentional misconduct of Lender.
8. Proxy. Borrower hereby consents to and appoints Lender as
its agent and attorney in fact with power and authority to vote or to
execute a proxy for the shares evidencing the Funds for Borrower in
its name in whatever manner Lender may desire in its sole discretion.
9. Notices. All notices required to be sent hereunder shall be deemed to be
an adequate and sufficient notice if given in writing and service is made by
either (i) registered or certified mail, postage prepaid, in which case notice
shall be deemed to have been received three (3) business days following deposit
to the mail; or (ii) overnight air courier, next day delivery, prepaid, in which
case such notice shall be deemed to have been received one (1) business day
following delivery to such courier. Notice shall be sent to the following
addresses:
<PAGE>
If to Lender: Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-1450
Attn: Commercial Real Estate Loan Administration
If to Borrower: Brandywine Realty Partners
300 Berwyn Park
Berwyn, PA 19312
10. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Iowa.
11. Headings. The headings used herein are for convenience only
and are not to be used in interpreting this Agreement.
12. Amendments. This Agreement is irrevocable and may only be
amended by a written amendment executed by all the parties hereto.
13. Counterparts. This agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of
which, when taken together shall constitute a single agreement.
IN WITNESS WHEREOF, the Parties hereto have set their hands and seals as of the
date herein before written.
LENDER:
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY, an Iowa corporation
By ____/s/Timothy E. Minton___________
Its: Director, Commercial Real
Estate Reporting and Computer Services
By _/s/ Kurt D. Schaeffer____________
Its: Assistant Director-Commercial
Real Estate
<PAGE>
BORROWER:
BRANDYWINE REALTY PARTNERS, a
Pennsylvania general partnership
By BRANDYWINE REALTY TRUST, a
Maryland real estate investment
trust, general partner
By _/s/ Gerard H. Sweeney__________
Name: Gerard H. Sweeney
Its: President and CEO
