<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 15, 1997
G & L REALTY CORP.
(Exact name of Registrant as specified in its charter)
MARYLAND 1-12566 95-4449388
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
439 N. BEDFORD DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 273-9930
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<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On August 15, 1997, G&L Realty Partnership, L.P. (the "Operating
Partnership") acquired an additional 18.5% ownership interest in GL/PHP, LLC
("GL/PHP"), a Delaware limited liability company, from PHP Healthcare
Corporation ("PHP"). PHP's remaining 1% ownership interest was acquired by G&L
Management Delaware Corp., a newly formed Delaware corporation and wholly owned
subsidiary of G&L Realty Corp. (the "Company"). The Company is the sole general
partner of and holds an 88.9% interest in the Operating Partnership.
In February 1997, the Company, through the Operating Partnership, entered
into an operating agreement with PHP and formed GL/PHP. GL/PHP subsequently
purchased six medical office properties in New Jersey having a total of 80,415
square feet at a purchase price of $22.4 million. The Company and PHP funded the
$4.4 million down payment in proportion to their ownership interests in GL/PHP
(80.5% for the Company and 19.5% for PHP). The balance of the purchase price was
financed by two loans from PHP, secured by first and second deeds of trust. The
greater of the two loans, at $16.0 million, carried a term of six months and
gave PHP a right upon default to purchase the Company's interest in the new
entity. PHP leased the properties from GL/PHP pursuant to a net operating lease.
PHP's 19.5% ownership interest was acquired on August 15, 1997 for total
consideration of $892,000. Concurrent with the August 15, 1997 acquisition,
GL/PHP obtained a new 10-year, $16.0 million fixed rate loan that bears interest
at 8.89% per annum and requires monthly principle and interest payments of
$155,000 per month.
In conjunction with the Company's acquisition of PHP's interest in GL/PHP,
the Operating Partnership borrowed $2.0 million from PHP and contributed the
loan proceeds to GL/PHP. GL/PHP used the funds to retire the $2.0 million note
payable to PHP. The Operating Partnership's new $2.0 million loan from PHP
requires quarterly interest only payments at 8.5% per annum with all unpaid
interest and principal due July 31, 2007.
As of August 15, 1997, GL/PHP has leased 100% of the following properties
to PHP under the terms of a 17-year net operating lease that provides for rent
increases equal to the annual increase in the Consumer Price Index subject to a
5% maximum annual increase.
Page 2
<PAGE>
<TABLE>
<CAPTION>
YEAR
CONSTRUCTED RENTABLE TOTAL AVERAGE
OR SQUARE ANNUALIZED RENT PER
PROPERTY REHABILITATED FEET (1) RENT (2) SQ. FT. (3)
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2103 Mt. Holly Rd.
Burlington, NJ 1994 12,560 $ 434,950 $34.63
150 Century Parkway
Mt. Laurel, NJ 1995 12,560 391,310 31.16
274 Highway 35, South
Eatontown, NJ 1995 12,560 481,030 38.30
80 Eisenhower Drive
Paramus, NJ 1994 12,675 421,800 33.28
16 Commerce Drive
Cranford, NJ 1963 17,500 491,670 28.10
4622 Black Horse Pike
Mays Landing, NJ 1994 12,560 437,490 34.83
------ ----------
Total 80,415 $2,658,250 $33.06
====== ==========
</TABLE>
(1) Rentable square feet includes space used for management purposes but does
not include storage space.
(2) Rent is based on third-party leased space billed in February 1997; no rent
is assumed from management space.
(3) Average rent per square foot is calculated based upon third-party leased
space, excluding management space.
Page 3
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(B) PRO FORMA FINANCIAL INFORMATION
It is impracticable to file at this time the pro forma financial information
required by Item 7 of Form 8-K. Such pro forma financial information will be
filed when available, but in any event no later than sixty days from the date
hereof.
(C) EXHIBITS
10.45 First Amendment to GL/PHP, LLC Limited Liability Company Agreement
by and among G&L Realty Partnership, L.P., a Delaware limited
partnership, G&L Realty Partnership, L.P., a Delaware limited
partnership, and G&L Management Delaware Corp., a Delaware
corporation, dated as of August 15, 1997.
10.46 Lease Agreement between GL/PHP, a Delaware limited liability company
and Pinnacle Health Enterprises, LLC, a Delaware limited liability
company wholly owned by PHP Healthcare Corporation, a Delaware
corporation, dated as of August 15, 1997.
10.47 Guaranty of Lease by PHP Healthcare Corporation, a Delaware
corporation, dated as of February 15, 1997.
10.48 8.5% Note Due July 31, 2007 by and between G&L Realty Partnership,
L.P., a Delaware limited partnership and PHP Healthcare Corporation
for the principal sum of $2,000,000.00, dated as of August 15, 1997.
10.49 Mortgage Note by and between GL/PHP, LLC a Delaware limited
liability company and Nomura Asset Capital Corporation, a Delaware
corporation, for the principal sum of $16,000,000.00, dated as of
August 15, 1997.
10.50 Mortgage, Assignment of Leases and Rents and Security Agreement by
and between GL/PHP, LLC a Delaware limited liability company and
Nomura Asset Capital Corporation, a Delaware corporation, dated as
of August 15, 1997.
10.51 Assignment of Leases and Rents by and between GL/PHP, LLC a Delaware
limited liability company and Nomura Asset Capital Corporation, a
Delaware corporation, dated as of August 15, 1997.
10.52 Environmental and Hazardous Substance Indemnification Agreement by
and between GL/PHP, LLC a Delaware limited liability company and
Nomura Asset Capital Corporation, a Delaware corporation, dated as
of August 15, 1997.
Page 4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
G & L REALTY CORP.
Date: August 28, 1997 /s/ Quentin Thompson
--------------------------------
Quentin Thompson
Chief Accounting Officer,
Treasurer and Secretary
Page 5
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.45 First Amendment to GL/PHP, LLC Limited Liability Company Agreement
by and among G&L Realty Partnership, L.P., a Delaware limited
partnership, G&L Realty Partnership, L.P., a Delaware limited
partnership, and G&L Management Delaware Corp., a Delaware
corporation, dated as of August 15, 1997.
10.46 Lease Agreement between GL/PHP, a Delaware limited liability
company and Pinnacle Health Enterprises, LLC, a Delaware limited
liability company wholly owned by PHP Healthcare Corporation, a
Delaware corporation, dated as of August 15, 1997.
10.47 Guaranty of Lease by PHP Healthcare Corporation, a Delaware
corporation, dated as of February 15, 1997.
10.48 8.5% Note Due July 31, 2007 by and between G&L Realty Partnership,
L.P., a Delaware limited partnership and PHP Healthcare Corporation
for the principal sum of $2,000,000.00, dated as of August 15,
1997.
10.49 Mortgage Note by and between GL/PHP, LLC a Delaware limited
liability company and Nomura Asset Capital Corporation, a Delaware
corporation, for the principal sum of $16,000,000.00, dated as of
August 15, 1997.
10.50 Mortgage, Assignment of Leases and Rents and Security Agreement by
and between GL/PHP, LLC a Delaware limited liability company and
Nomura Asset Capital Corporation, a Delaware corporation, dated as
of August 15, 1997.
10.51 Assignment of Leases and Rents by and between GL/PHP, LLC a
Delaware limited liability company and Nomura Asset Capital
Corporation, a Delaware corporation, dated as of August 15, 1997.
10.52 Environmental and Hazardous Substance Indemnification Agreement by
and between GL/PHP, LLC a Delaware limited liability company and
Nomura Asset Capital Corporation, a Delaware corporation, dated as
of August 15, 1997.
Page 6
<PAGE>
EXHIBIT 10.45
FIRST AMENDMENT TO
GL/PHP, LLC LIMITED LIABILITY COMPANY AGREEMENT
This FIRST AMENDMENT TO LIMITED LIABILITY COMPANY AGREEMENT OF GL/PHP, LLC
is made as of August 15, 1997 (this "First Amendment"), by and among G&L Realty
Partnership, L.P., a Delaware limited partnership, as the retiring Manager (the
"Retiring Manager"), G&L Realty Partnership, L.P., a Delaware limited
partnership, as a Member ("G&L Member"), and G&L Management Delaware Corp as a
Member and as the new Manger ("Manager Member" and, together with G&L Member,
collectively called, the "Members"). All capitalized terms used and not
otherwise defined herein shall have the meanings set forth in the Original
Agreement, as defined below.
R E C I T A L S:
- - - - - - - -
GL/PHP, LLC, a Delaware limited liability company (the "Company"), has been
formed and is operating pursuant the GL/PHP, LLC to a Limited Liability Company
Agreement, dated as of February 26, 1997 (the "Original Agreement" and, as
amended by this First Amendment, is hereafter called the "Agreement"), by and
among the Members and the Retiring Manager.
Pursuant to the Redemption Agreement, dated as of the date hereof (the
"Redemption Agreement"), between the Company and PHP Healthcare Corporation, a
Delaware corporation ("PHP"), the Company has redeemed a portion of the
Interests held by PHP equal to 18.50% of the Interests in the Company. Pursuant
to the Assignment and Assumption Agreement, dated as of the date hereof (the
"Assignment and Assumption Agreement"), between PHP and Manager Member, PHP has
conveyed, transferred and assigned to Manager Member and Manager Member has
acquired and assumed a portion of the Interests held by PHP equal to 1% of the
Interests in the Company. Upon the consummation of the foregoing transactions,
PHP will have no Interests in the Company and Manager Member will constitute a
new Member of the Company.
Retiring Manager has retired as Manager of the Company but remains a
Member, and Manager Member has become the sole Manager of the Company.
In connection with a loan to the Company, the prospective lender has
required that the purposes of the Company be restricted to the ownership and
leasing of the properties currently owned by the Company. To satisfy such
requirement, the purposes and powers of the Company are being restricted.
In accordance with Section 14.4 of the Original Agreement, the Members and
the Retiring Manager desire to amend the Original Agreement. In accordance with
Section 13.8.2 of the Original
<PAGE>
2
Agreement, the Members desire to consent to the retirement of the Retiring
Manager and the Manager Member desires to evidence its acceptance of its
appointment as Manager.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency are hereby acknowledged, the
parties hereto agree to amend the Original Agreements as set forth herein.
Section 1 Amendments to the Original Agreement.
------------------------------------
1.1 In each place where the name "PHP Healthcare Corporation" or the
term "PHP Member" appears in the Original Agreement, such references are hereby
deleted and "G&L Management Delaware Corp" and "Manager Member", respectively,
are hereby inserted in their place.
1.2 Section 1.8 of the Original Agreement is hereby amended by deleting
-----------
the reference to "or Reston, Virginia," as it appears therein.
1.3 Section 1.31 of the Original Agreement is hereby amended by changing
------------
"G&L Realty Corp." to "G&L Management Delaware Corp."
1.4 Section 6 of the Original Agreement is hereby deleted in its
---------
entirety and the following inserted in its place:
6.1 Purpose. The business and purpose of the Company shall be to (a)
-------
accomplish any lawful business or activity conducive to or expedient for the
protection or benefit of the Company and its Assets and related (directly or
indirectly, including but not limited to origination, purchase, disposition,
financing, and securitization of Property and/or the Credit Leases) to (i) the
acquisition of the properties more particularly described on Exhibit B attached
hereto (the "Properties") and the origination of Credit Leases approved pursuant
hereto; (ii) the sale, assignment, disposition or securitization of any of the
Properties and/or the Credit Leases; (iii) incurring indebtedness and obtaining
financing for the Company to acquire the Properties and originate the Credit
Leases, including interest or other hedging facilities all in accordance with
Section 6.2 below; (b) exercise all other powers necessary to or reasonably
connection with the foregoing Company's business which may be legally exercised
by a limited liability company under the Act, and (c) engage in all activities
necessary, or incidental to any of the foregoing.
6.2(a) Nomura Loan. Notwithstanding anything in this Agreement to the
-----------
contrary, (i) unless and until that certain loan (the "Loan") from Nomura Asset
Capital Corporation (together with its successors and assigns, the "Lender") to
the LLC made pursuant to that certain Mortgage with Assignment of Leases and
Security Agreement dated on or about August 15, 1997 (the
<PAGE>
3
"Mortgage") is paid in full in accordance with the Loan Documents, each Member
agrees and covenants as follows: with capitalized terms used but not defined in
this Article 12 having the meanings ascribed to them in the Mortgage:
(b) Single-Purpose Entity. (a) the LLC and each SPE Equity Owner shall
---------------------
each be a Single-Purpose Entity as defined in Section 6.2(c) hereof, and (b) the
LLC and each Member shall act in a manner to cause the LLC and each SPE Equity
Owner to be and neither the LLC nor any Member shall take any action that could
cause the LLC or any SPE Equity Owner not to be a Single-Purpose Entity as
defined in Section 6.2(c) hereof.
(c) Definition of Single-Purpose Entity. "Single-Purpose Entity" means a
-----------------------------------
corporation, limited partnership or limited liability company which at all times
since its formation and thereafter:
(1) Was and will be organized solely for the purpose of (i) owning the
Mortgaged Property (as defined in the Mortgage) or (ii) acting as the managing
member of the limited liability company which owns the Mortgaged Property or
(iii) acting as the general partner of a limited partnership which owns the
Facility or (iv) acting as the managing member of the limited liability company
which acts as managing member of the limited liability company which owns the
Mortgaged Property;
(2) Has not and will not engage in any business unrelated to (i) the
ownership of the Mortgaged Property or (ii) acting as a member of a limited
liability company which owns the Mortgaged Property or (iii) acting as a general
partner of a limited partnership which owns the Mortgaged Property or (iv)
acting as a member of a limited liability company which acts as the managing
member of the limited liability company which owns the Mortgaged Property;
(3) Has not and will not have any assets other than (i) those related
to the Mortgaged Property or (ii) its member interest in the limited liability
company which owns the Mortgaged Property or (iii) its general partnership
interest in the limited partnership which owns the Mortgaged Property, as
applicable or (iv) its member interest in the limited liability company which
acts as managing member of the limited liability company which owns the
Mortgaged Property;
(4) Has not and will not engage in, seek or consent to any
dissolution, winding up, liquidation, consolidation or merger, and, except as
otherwise expressly permitted by this Agreement, has not and will not engage in,
seek or consent to any asset sale, transfer of partnership or membership or
shareholder interests, or amendment of its limited partnership agreement,
articles of incorporation, articles of organization, certificate of formation or
operating agreement (as applicable);
<PAGE>
4
(5) If such entity is a limited partnership, has and will have as its
only general partners, general partners which are and will be Single-Purpose
Entities which are corporations;
(6) If such entity is a corporation, at all relevant times, has and
will have at least one independent Director (as defined in the Mortgage, Section
10(p));
(7) The board of directors of such entity if any has not taken and
will not take any action requiring the unanimous affirmative vote of 100% of the
members of the board of directors unless all of the directors, including without
limitation all Independent Directors, shall have participated in such vote;
(8) Has not and will not fail to correct any known misunderstanding
regarding the separate identity of such entity;
(9) If such entity is a limited liability company, has and will have
as its only managing members (i) one or more corporations which are and will be
Single-Purpose Entities or (ii) one or more limited liability companies which
are and will be Single-Purpose Entities and which have and will have as their
only managing members, one or more corporations which are and will be
Single-Purpose Entities;
(10) Without the unanimous consent of all of the partners, directors
(including without limitation all Independent Directors) or members, as
applicable, has not and will not with respect to itself or to any other entity
in which it has a direct or indirect legal or beneficial ownership interest (i)
file a bankruptcy, insolvency or reorganization petition or otherwise institute
insolvency proceedings or otherwise seek any relief under any laws relating to
the relief from debts or the protection of debtors generally; (ii) seek or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator, custodian or any similar official for such entity or all or any
portion of such entity's properties; (iii) make any assignment for the benefit
of such entity's creditors; or (iv) take any action that might cause such entity
to become insolvent;
(11) Has maintained and will maintain its accounts, books and records
separate from any other person or entity;
(12) Has maintained and will maintain its books, records, resolutions
and agreements as official records;
(13) Has not commingled and will not commingle its funds or assets
with those of any other entity;
(14) Has held and will hold its assets in its own name;
<PAGE>
5
(15) Has conducted and will conduct its business in its name;
(16) Has maintained and will maintain its financial statements,
accounting records and other entity documents separate from any other person or
entity;
(17) Has paid and will pay its own liabilities out of its own funds
and assets;
(18) Has observed and will observe all partnership, corporate or
limited liability company formalities as applicable;
(19) Has maintained and will maintain an arms-length relationship with
its affiliates;
(20) (i) If such entity owns the Mortgaged Property, has and will have
no indebtedness other than the indebtedness and unsecured trade payables in the
ordinary course of business relating to the ownership and operation of the
Mortgaged Property, which unsecured trade payables (1) do not exceed, at any
time, a maximum amount of two and one half percent (2.5%) of the Loan Amount and
(2) are paid within sixty (60) days of the date incurred, or (ii) if such entity
acts as the general partner of a limited partnership which owns the Mortgaged
Property, has and will have no indebtedness other than unsecured trade payables
in the ordinary course of business relating to acting as general partner of the
limited partnership which owns the Mortgaged Property which (1) do not exceed,
at any time, $10,000 and (2) are paid within sixty (60) days of the date
incurred, or (iii) if such entity acts as a member of a limited liability
company which owns the Mortgaged Property, has and will have no indebtedness
other than unsecured trade payables in the ordinary course of business relating
to acting as a member of the limited liability company which owns the Mortgaged
Property which (1) do not exceed, at any time, $10,000 and (2) are paid within
thirty (30) days of the date incurred, or (iv) if such entity acts as a member
of a limited liability company which is the managing member of the limited
liability company which owns the Mortgaged Property, has and will have no
indebtedness other than unsecured trade payables in the ordinary course of
business relating to acting as a member of the limited liability company which
owns the Mortgaged Property which (1) do not exceed, at any time, $10,000 and
(2) are paid within thirty (30) days of the date incurred.
21. Has not and will not assume or guarantee or become obligated for
the debts of any other entity or hold out its credit as being available to
satisfy the obligations of any other entity except for the indebtedness;
22. Has not acquired and will not acquire obligations or securities
of its partners, members or shareholders;
<PAGE>
6
23. Has allocated and will allocate fairly and reasonably shared
expenses, including, without limitation, shared office space and uses separate
stationary, invoices and checks;
24. Except pursuant to the Mortgage, has not and will not pledge its
assets for the benefit of any other person or entity;
25. Has held and identified itself and will hold itself out and
identify itself as a separate and distinct entity under its own name and not as
a division or part of any other person or entity;
26. Has not made and will not make loans to any person or entity;
27. Has not and will not identify its partners, members or
shareholders, or any affiliates of any of them as a division or part of it;
28. If such entity is a limited liability company, such entity shall
dissolve only upon the bankruptcy of the managing member, and such entity's
articles of organization, certificate of formation and/or operating agreement,
as applicable, shall contain such provision;
29. Has not entered and will not enter into or be a party to any
transaction with its partners, members, shareholders or its affiliates except in
the ordinary course of its business and on terms which are intrinsically fair
and are no less favorable to it than would be obtained in a comparable
arms-length transaction with an unrelated third party;
30. Has paid and will pay the salaries of its own employees from its
own funds;
31. Has maintained and will maintain adequate capital in light of its
contemplated business operations; and
32. If such entity is a limited liability company or limited
partnership, and such entity has one or more managing members or general
partners, as applicable, then such entity shall continue (and not dissolve) for
so long as a solvent managing member of general partner, as applicable, exists
and such entity's organizational documents shall contain such provision.
(d) Transfers. The LLC and each Member shall not engage in or consent to
---------
any Transfer (as hereinafter defined) other than a Permitted Transfer (as
defined in the Mortgage). As used in this Section 6.2(d), "Transfer" means any
conveyance, transfer (including, without limitation, any transfer of any direct
or indirect legal or beneficial interest (including, without limitation, any
profit interest) in the LLC or any SPE Equity Owner), sale, Lease (including,
without limitation, any amendment, extension, modification, waiver or renewal
thereof), or Lien, whether by law or
<PAGE>
7
otherwise, of, on or affecting any Collateral, the LLC or any SPE Equity Owner,
other than a Permitted Transfer.
(e) Dissolution and Winding Up.
--------------------------
1. Notwithstanding any provision of this Agreement to the
contrary, the LLC shall be dissolved only upon the bankruptcy of the last
remaining Member and if such bankruptcy occurs, the Members hereby agree and
covenant to reconstitute the LLC with a Member that is a Single-Purpose Entity.
2. Except as otherwise required by applicable law, the proceeds
from liquidation of the LLC's assets shall be utilized to satisfy fully any and
all of the LLC's obligations and liabilities to Lender in accordance with the
Loan Documents prior to paying or distributing any of such proceeds to satisfy
other obligations or liabilities of the LLC.
(f) Priority of Distributions. At all times, the LLC's assets shall
-------------------------
be utilized to satisfy fully any and all of the LLC's obligations and
liabilities to Lender in accordance with the Loan Documents prior to paying or
distributing any of such proceeds to satisfy other obligations or liabilities of
the LLC. Any and all fees, distributions or other payments owned by Borrower to
any third party pursuant to this Agreement (including without limitation all of
the Members and the property manager of the Mortgaged Property) shall be in all
respects subordinate to and subject to the terms and conditions of the Loan
Documents.
(g) Conflicts. To the extent that this Article 6 conflicts with any
---------
other provision of this Agreement, this Article 6 shall control. To the extent
that this Article 6 or this Agreement conflicts with any Loan Documents such
Loan Documents shall control.
1.5 Section 19.1 of the Original Agreement is hereby amended by
------------
deleting the address for PHP Healthcare Corporation.
1.6 Exhibit A to the Original Agreement is hereby amended by
---------
i. deleting the Percentage equal to "80.50%" set forth
opposite G&L Realty Partnership, L.P. and inserting "99.0%"
in its place;
ii. deleting the Percentage equal to "19.50%" set forth
opposite PHP Healthcare Corporation and inserting "1.0%" in
its place; and
iii. deleting the addresses for Notices to PHP Member and
inserting in its place the following address(es): 439 North
Bedford Drive, Beverly Hills,
<PAGE>
8
California 90210 with copies to the same recipients as in
the case of notices to G&L Member.
Section 2. Change of Manager.
-----------------
Retiring Manager hereby retires as Manager of the Company and the Members
consent to such retirement. Manager Member is hereby appointed the sole Manager
of the Company, and hereby accepts such appointment.
Section 3. Miscellaneous
-------------
Except as otherwise expressly amended by this First Amendment, the Original
Agreement shall continue in full force and effect and is confirmed and ratified
hereby. This First Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original. Such counterparts shall
constitute but one and the same agreement. The First Amendment shall be
governed by and construed in accordance with the laws of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
date first set forth above.
G&L Realty Partnership, L.P., as Retiring Manager
By: G&L Realty Corp., its General Partner
By: /s/ Mark H. Hamermesh
----------------------------------------
Name: Mark H. Hamermesh
Title: Sr. VP
G&L Realty Partnership, L.P., as Member
By: G&L Realty Corp., its General Partner
By: /s/ Mark H. Hamermesh
----------------------------------------
Name: Mark H. Hamermesh
Title: Sr. VP
G&L Management Delaware Corp, as a Member
By: /s/ Mark H. Hamermesh
----------------------------------------
Name: Mark H. Hamermesh
Title: Sr. VP
G&L Management Delaware Corp, as a Manager
By: /s/ Mark H. Hamermesh
----------------------------------------
Name: Mark H. Hamermesh
Title: Sr. VP
<PAGE>
BASIC LEASE INFORMATION
LEASE DATED AS OF FEBRUARY 1, 1997
Landlord: GL/PHP, LLC
- --------
Tenant: Pinnacle Health Enterprises, LLC
- ------
Commencement Date: February 28, 1997
- -------------------
Lease Expiration
- ----------------
Date: March 31, 2014 unless extended pursuant to paragraph
- ---- 3(c) of the Lease.
Primary Term Fixed Rent: The annual Fixed Rent during the Interim and Primary
- -----------------------
Term of the Lease shall be payable monthly in advance as follows:
(a) For February 28, 1997, $7,278.47, payable on the date of delivery of
this Lease.
(b) From March 1, 1997 through August 14, 1997: $2,602,250, 1/12 of which
shall be payable in advance on the first day of each month, commencing
March 1, 1997. From August 15, 1997 through February 28, 1998:
$2,658,250, 1/12 of which shall be payable in advance on the first day of
each month.
(c) From March 1, 1999 through February 28, 2014: increased every twelve
months during such period, beginning March 1, 1998, by the product (the
"escalator") of (x) the prior year's Fixed Rent and (y) 1 plus the
percentage increase (but not decrease) in the All Urban Consumer Price
Index ("CPI") most recently published prior to the date of calculation
over the CPI at the date of the last preceding calculation (but the
escalator shall in no event be more than 5% in any year), 1/12 of which
shall be payable in advance on the first day of such month, beginning
March 1, 1998, provided that if the method of calculating CPI is changed,
then the escalator shall be CPI as calculated by the method in effect in
January 1997, if reasonably determinable, or, if not reasonably
determinable, then on the basis of the most comparable index maintained
by the U.S. Department or Labor or its successor.
<PAGE>
Renewal Term Rent: The annual Fixed Rent during each year of the Renewal Term
- -----------------
shall be the fair market rental value of the Premises determined as of March 1
of the first year of each Renewal Term on the basis set forth in paragraph 26 of
the Lease, payable monthly in advance.
Landlord Address
- ----------------
for Payment: GL/PHP, LLC
- ----------- c/o G&L Realty Corp.
439 North Bedford Drive
Beverly Hills, California 90210
Attention: Quinton Thompson
Tenant Address: Pinnacle Health Enterprises, LLC
c/o PHP Healthcare Corporation
11440 Commerce Park Drive
Reston, Virginia 22091
Attention: Ben Rosenbaum III, General Counsel
<PAGE>
LEASE AGREEMENT
Between
GL/PHP, LLC
as Landlord
and
PINNACLE HEALTH ENTERPRISES, LLC
as Tenant
Dated as of February 1, 1997
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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Page
----
<S> <C>
1. DEMISE OF PREMISES; QUIET ENJOYMENT......................... 3
2. USE......................................................... 3
3. TERM........................................................ 4
4. RENTAL...................................................... 5
5. TAXES; CONTEST OF IMPOSITIONS:.............................. 6
6. NET LEASE; NON-TERMINABILITY................................ 8
7. SERVICES.................................................... 9
8. REPAIRS AND MAINTENANCE; REPLACEMENT........................ 10
9. DESTRUCTION OF OR DAMAGE TO PREMISES........................ 12
10. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION................ 13
11. COMPLIANCE WITH LAWS, COVENANTS:............................ 16
12. PARTIAL TAKING.............................................. 17
13. SUBSTANTIAL TAKING ......................................... 18
14. DEFAULT: Events of Default.................................. 19
15. REMEDIES.................................................... 20
16. SUBORDINATION............................................... 21
17. LANDLORD'S RIGHT OF ENTRY................................... 22
18. NOTICES..................................................... 23
19. ESTOPPEL CERTIFICATE; FINANCIAL DATA........................ 24
</TABLE>
<PAGE>
<TABLE>
<S> <C>
20. MECHANICS' LIENS............................................ 25
21. END OF TERM................................................. 26
22. ALTERATIONS:................................................ 27
23. MEMORANDUM OF LEASE......................................... 29
24. SUBLETTING/ASSIGNMENT....................................... 29
25. HAZARDOUS MATERIAL.......................................... 30
26. DETERMINATION OF FAIR MARKET RENTAL VALUE:.................. 33
27. GRANTING OF EASEMENTS:...................................... 35
28. MISCELLANEOUS PROVISIONS.................................... 35
</TABLE>
EXHIBITS
A. LEGAL DESCRIPTION - REAL ESTATE
B. DESCRIPTION OF PERSONAL PROPERTY AND FIXTURES
C. PERMITTED ENCUMBRANCES
<PAGE>
THIS LEASE, made and entered into as of February 1, 1997 (together with all
amendments and supplements hereto, this "Lease"), by and between GL/PHP, LLC, a
Delaware limited liability company with offices at 439 North Bedford Drive,
Beverly Hills, California 90210, (together with any successor or assigns,
hereinafter called the "Landlord") and PINNACLE HEALTH ENTERPRISES, LLC, a
Delaware limited liability company, having an address at 11440 Commerce Park
Drive, Reston, Virginia 22091 (together with any permitted successor or assigns,
hereinafter collectively called the "Tenant"). Capitalized terms used herein not
otherwise defined shall have the meanings specified in the following
definitions.
As used in this Lease, the following terms have the meanings specified:
DEFINITIONS
The following terms shall have the following meanings for all purposes of
this Lease and shall be equally applicable to both the singular and plural forms
of the terms herein defined.
"Additional Rent" means all amounts, liabilities and obligations other than
-----------------
Fixed Rent which Tenant assumes or agrees to pay under this Lease to Landlord or
others.
"Basic Lease Information" means the pages preceding this Lease which are
-------------------------
hereby incorporated by reference.
"Commencement Date" is defined in paragraph 3(b) of this Lease.
-------------------
"Environmental Laws" is defined in paragraph 25(b) of this Lease.
--------------------
"Event of Default" is defined in paragraph 14 of this Lease.
------------------
"First Mortgage" or "Mortgage" shall mean a first mortgage on the Premises
------------------------------
given by Landlord to the Mortgagee to secure a loan financing or refinancing the
acquisition of Landlord's interest in the Premises.
"First Renewal Term" is defined in paragraph 3(c) of this Lease.
--------------------
"Fixed Rent" is defined in paragraph 4 of this Lease.
------------
"Imposition" means the various tax and other charges referred to in
------------
paragraph 4 and the present and future governmental laws and regulations more
specifically described in paragraph 11.
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"Improvements" means all of the buildings, structures, improvements, and all
-------------
building fixtures therein (including, without limitation, parking areas and
driveways) now or hereafter located on the Land.
"Interior Term" is defined in paragraph 3(a) of this Lease.
---------------
"Land" means the land, but none of the Improvements thereon, described in
-----
Exhibit A hereto.
"Landlord" is defined in the first paragraph of this Lease.
----------
"Lease" is defined in the first sentence of this Lease.
-------
"Lease Expiration Date" is defined in paragraph 3(a) of this Lease.
-----------------------
"Mortgagee" shall mean any holder of a First Mortgage with respect to the
-----------
Premises or any part thereof.
"Overdue Rate" means 13.5 % per annum or, if lower, the maximum annual
--------------
interest rate allowed by law for business loans (not primarily for personal,
family or household purposes).
"Person" means any individual, corporation, partnership, limited liability
--------
company, joint venture, association, joint stock company, trust, trustee(s) of a
trust, unincorporated organization, or government or governmental authority,
agency or political subdivision thereof.
"Permitted Encumbrances" means:
------------------------
(a) Any liens for taxes, assessments and other governmental charges and any
liens of mechanics, materialmen and laborers for work or services
performed or materials furnished in connection with the Premises, which
are not due and payable;
(b) The easements, rights-of-way, encroachments, encumbrances, restrictive
covenants or other matters affecting the title to the Premises or any
part thereof set forth in Schedule B to the policy of owners title
insurance (or commitments therefor) delivered to and accepted by
Landlord with respect to the Premises in connection with the delivery of
this Lease as shown on Exhibit C attached hereto;
(c) This Lease and the rights of Tenant hereunder;
"Primary Term" is defined in paragraph 3(a) of this Lease.
--------------
-2-
<PAGE>
"Premises" is defined in paragraph 1 of this Lease.
----------
"Renewal Term" is defined in paragraph 3(c) of this Lease.
--------------
"Rent" means Fixed Rent and Additional Rent.
------
"Site Assessments" is defined in paragraph 25(d) of this Lease.
------------------
"Site Reviewers" is defined in paragraph 25(d) of this Lease.
----------------
"Tenant's Trade Fixtures" means all personal property of Tenant in or on the
-------------------------
Premises which is not necessary for the operation of the Improvements.
"Term" means the Interim Term and Primary Term, together with the Renewal
------
Term.
1. DEMISE OF PREMISES: QUIET ENJOYMENT: (a) Landlord hereby demises and
-----------------------------------
leases to Tenant and Tenant hereby leases and rents from Landlord the Premises,
IN THEIR "AS IS" CONDITION, SUBJECT TO THE EXISTING STATE OF TITLE (WITHOUT
EXPRESS OR IMPLIED WARRANTY OF LANDLORD WITH RESPECT TO THE CONDITION, QUALITY,
REPAIR OR FITNESS OF THE PREMISES FOR A PARTICULAR USE OR TITLE THERETO, ALL
SUCH WARRANTIES BEING HEREBY WAIVED AND RENOUNCED BY TENANT), consisting of the
Land, the Improvements, together with any easements, rights, and appurtenances
in connection therewith or belonging to said Land and Improvements, all being
collectively hereinafter referred to as "the Premises". No easement for light,
air or view is included with or appurtenant to the Premises.
(b) Landlord covenants with Tenant, that upon the payment of the Fixed Rent
and Additional Rent and the performance of all the terms of this Lease, Tenant
shall at all times during the Term, peaceably and quietly enjoy the Premises
without any disturbance from Landlord or from any person claiming by, through,
or under Landlord. Exercise by Landlord of its rights to come upon the Premises
as set forth in this Lease shall not constitute a violation of this paragraph.
2. USE: Tenant may use and occupy the Premises for any lawful purpose. In
---
all events, Tenant shall not use or occupy the same, or knowingly permit them to
be used or occupied, contrary to any statute, rule, order, ordinance,
requirement or regulation applicable thereto, or in any manner which would
violate any certificate of occupancy affecting the same or which would make void
or voidable any insurance then in force with respect thereto, or which would
cause structural injury to the Premises or cause the value or usefulness of the
Premises, or
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<PAGE>
any portion thereof, to diminish, or which would constitute a public or private
nuisance or waste, and Tenant agrees that it will promptly, upon discovery of
any such use, take all necessary steps to compel the discontinuance of such use.
Tenant shall not use, suffer or permit the Premises, or any portion thereof, to
be used by Tenant, any third party or the public, as such, without restriction
or in such manner as might impair Landlord's title to the Premises, or in such
manner as might reasonably make possible a claim or claims of adverse usage or
adverse possession by the public, as such, or third Persons, or of implied
dedication of the Premises, or any portion thereof. Nothing contained in this
Lease and no action by Landlord shall be construed to mean that Landlord has
granted to Tenant any authority to do any act or make any agreement that may
create any such third party or public right, title, interest, lien, charge or
other encumbrance upon the estate of the Landlord in the Premises, except
Permitted Exceptions. The preceding sentence does not limit Tenant's right to
assign or sublet its interest hereunder, as provided in paragraph 24.
3. TERM:
-----
(a) The interim term of this Lease ("Interim Term") shall commence on the
Commencement Date and end on February 28, 1997. The primary term of this Lease
(the "Primary Term") shall be for a period of approximately seventeen (17)
years, beginning on the Commencement Date and ending on March 31, 2014 (the
"Lease Expiration Date"), subject to paragraph 25(d).
(b) The term "Commencement Date" shall mean February 28, 1997.
(c) Tenant shall have the right, at its option, to renew the Primary Term
of this Lease, for two (2) renewal terms (the "Renewal Terms"), which shall
renew the Primary Term for an additional five (5) years each. Each Renewal Term
shall commence on the day after the expiration of the preceding term and shall
expire on the fifth (5th) anniversary of the Lease Expiration Date in the case
of the first Renewal Term and on the tenth (10th) anniversary of the Lease
Expiration Date in the case of the second Renewal Term. The option to renew the
Term of this Lease as described above shall be exercised by Tenant by written
notice to Landlord given at least six (6) months prior to the Lease Expiration
Date or expiration of the first Renewal Term, as the case may be Subject to the
provisions of paragraph 4, the terms and conditions of this Lease shall apply to
each Renewal Term with the same force and effect as if such Renewal Term had
originally been included in the Primary Term of the Lease. If such notice is not
given in a timely fashion, the option to renew the term of this Lease shall
terminate. The right of Tenant to the Renewal Terms shall be conditioned upon
(i) Tenant not being in default under this Lease beyond any applicable grace
period on the date on which notice of exercise of the renewal option is given
and on the Lease Expiration Date or expiration of the first Renewal Term, as the
case may be, and (ii) this Lease being in full force and effect as of the Lease
Expiration Date or expiration of the
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<PAGE>
first Renewal Term, as the case may be. The Interim Term, Primary Term, together
with any Renewal Term, shall constitute the "Term" of this Lease.
4. RENTAL: (a) Tenant shall pay to Landlord the following amounts as rent
-------
for the Premises:
(i) During the term of this Lease, Tenant shall pay to Landlord, as fixed
monthly rent, the amount of monthly rent specified in the Basic Lease
Information (the Fixed Rent). In the event this Lease shall be terminated with
respect to any one or more of the six separate facilities constituting the
Premises pursuant to paragraph 13 hereof, Fixed Rent will thereafter be reduced
by the amount of Fixed Rent attributable to the portion of the Premises as to
which this Lease has terminated. The initial amounts of Fixed Rent attributable
to the various facilities are noted on Exhibit A hereto.
(ii) Throughout the term of this Lease, Tenant shall pay, as additional
rent, all other amounts of money and charges required to be paid by Tenant under
this Lease, whether or not such amounts of money or charges are designated
Additional Rent. As used in this Lease, "Rent" shall mean and include all Fixed
Rent and Additional Rent payable by Tenant in accordance with this Lease.
(b) It is the intention of Landlord and Tenant that the Fixed Rent payable
by Tenant to Landlord during the entire term of this Lease shall be absolutely
net of all costs and expenses incurred in connection with the management,
operation, maintenance and repair of the Premises in accordance with this Lease.
Landlord shall have no obligations or liabilities whatsoever with respect to the
management, operation, maintenance or repair of the Premises during the term of
this Lease, and Tenant shall manage, operate, maintain and repair the Premises
in accordance with this Lease and shall pay all costs and expenses incurred in
connection therewith before such costs or expenses become delinquent. Without
limiting the generality of the foregoing, throughout the entire term of this
Lease, Tenant shall pay, as Additional Rent, all premiums for all property and
liability insurance covering the Premises, all Property Taxes (as defined in
paragraph 4(e)) and all Other Taxes (as defined in paragraph 5(b)) that accrue
during or are allocable to the terms of this Lease.
(c) Tenant shall pay all Fixed Rent to Landlord, in advance, on or before
the first day of each and every calendar month during the Term of this Lease
without notice, by wire transfer or other electronic means (or otherwise so
there are collected funds available to Landlord on the due date). Tenant shall
pay all Additional Rent upon demand. Tenant shall pay all Fixed Rent to Landlord
without notice, demand, deduction or offset, in lawful money of the United
States of America, at the address of Landlord specified in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate in writing.
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<PAGE>
(d) Tenant acknowledges that the late payment by Tenant of any Fixed Rent or
reimbursement of Additional Rent advanced by Landlord (including the items
described in paragraph 4(b)) will cause Landlord to incur costs and expenses,
the exact amount of which is extremely difficult and impractical to fix. If any
Fixed Rent is not received by Landlord on or before its due date or if
reimbursement for Additional Rent advanced by Landlord is not received by
Landlord within five (5) business days after demand, Tenant shall pay to
Landlord interest on such delinquent amount at the Overdue Rate until paid. In
no event shall payment of interest at the Overdue Rate be deemed to grant to
Tenant a grace period or extension of time within which to pay any Rent or
prevent Landlord from exercising any right or enforcing any remedy available to
Landlord upon Tenant's failure to pay all Rent due under this Lease in a timely
fashion, including the right to terminate this Lease. All amounts of money
payable by Tenant to Landlord hereunder, if not paid when due, shall bear
interest from the due date until paid at the Overdue Rate.
5. TAXES; CONTEST OF IMPOSITIONS:
------------------------------
(a) Tenant shall pay, as Additional Rent, all Property Taxes prior to the
assessment of any interest or penalty for late payment. Property Taxes shall
mean all taxes, assessments, excises, levies, fees and charges (and any tax,
assessment, excise, levy, fee or charge levied wholly or partly in lieu thereof
or as a substitute therefor or as an addition thereto) of every kind and
description, general or special, ordinary or extraordinary, foreseen or
unforeseen, secured or unsecured, whether or not now customary or within the
contemplation of Landlord and Tenant, that are at any time levied, assessed,
charged, confirmed or imposed by any public or government authority on or
against, or otherwise with respect to, the Premises or any part thereof or any
personal property used in connection with the Premises, and are payable during
the Term of this Lease. Property Taxes shall be pro rated for the tax year in
which the Term hereof ends. If any Property Tax may legally be paid in
installments, Tenant shall be liable only for the installments thereof payable
during the Term of this Lease. Property Taxes shall not include net income
(measured by the income of Landlord from all sources or from sources other than
solely Rent), franchise, capital, documentary transfer or inheritance taxes of
Landlord, unless levied or assessed against Landlord in whole or in part in lieu
of, as a substitute for any Property Taxes, provided Tenant's liability for such
Property Taxes shall be limited to the amount calculated as if the Premises were
the only assets owned by Landlord.
(b) Tenant shall pay, as Additional Rent, all Other Taxes prior to the
assessment of any interest or penalty for late payment. Other Taxes shall mean
all taxes, assessments, excises, levies, fees and charges, including all
payments related to the cost of providing facilities or services, whether or not
now customary or within the contemplation of Landlord and Tenant, that are
levied, assessed, charged, confirmed or imposed by any public or government
authority upon, or measured by, or reasonably attributable to (i) the Premises,
(ii) the cost or value of Tenant's
-6-
<PAGE>
equipment, furniture, fixtures and other personal property located in the
Premises or the cost or value of any leasehold improvements made in or to the
Premises by or for Tenant, regardless of whether title to such improvements is
vested in Tenant or Landlord, (iii) any Rent payable under this Lease, including
any gross receipts tax or excise tax levied by any public or government
authority with respect to the receipt of any such Rent (as opposed to a net
income tax), (iv) the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or (v) this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. Other Taxes shall not include net
income (measured by the income of Landlord from all sources or from sources
other than solely Rent), franchise, capital, documentary transfer or inheritance
taxes of Landlord, unless levied or assessed against Landlord in while or in
part in lieu of, as a substitute for any Other Taxes, provided that Tenant's
liability for Other Taxes shall be limited to the amount calculated as if the
Premises and five other properties leased by Landlord to Tenant under leases
dated the date hereof were the only assets owned by Landlord.
(c) Except for any tax on the net income derived from the Fixed Rent, if at
any time during the Term, any method of taxation shall be such that there shall
be levied, assessed or imposed on the Landlord, or on the Fixed Rent or
Additional Rent, or on the Premises, or any portion thereof, a capital levy,
gross receipts tax, occupational license tax or other tax on the Rents received
therefrom, or a franchise tax, or an assessment, gross receipts levy or charge
measured by or based in whole or in part upon such gross Rents, Tenant, to the
extent permitted by law, covenants to pay and discharge the same, it being the
intention of the parties hereto that the Fixed Rent to be paid hereunder shall
be paid to Landlord absolutely net without deduction or charge of any nature
whatsoever, foreseeable or unforeseeable, ordinary or extraordinary, or of any
nature, kind, or description, except as otherwise expressly provided in this
Lease.
(d) Tenant covenants to furnish Landlord, as promptly as possible and in any
event within seventy-five (75) days after request by Landlord, official receipts
of the appropriate taxing authority, if any, or other appropriate proof
reasonably satisfactory to Landlord, evidencing the payment of the same.
(e) Tenant shall have the right to contest the amount or validity, in whole
or in part, of any Imposition or to seek a reduction in the valuation of the
Premises as assessed for real estate property tax purposes by appropriate
proceedings diligently conducted in good faith (but in the case of Property
Taxes or Other Taxes only after either payment of such Tax or, in the case of
any Imposition where the amount in controversy exceeds $25,000, depositing with
Landlord reasonable security for such contingent obligation). Landlord shall not
be required to join in any proceeding referred to in this subparagraph (e)
unless required by law or necessary for Tenant to obtain the relief it seeks, in
either of which events Landlord shall, upon written request by Tenant,
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<PAGE>
join in such proceedings or permit the same to be brought in its name. Tenant
covenants that Landlord shall not suffer or sustain any costs or expenses
(including, but not limited to, counsel fees) or any liability in connection
with any such proceeding. No such consent shall subject Landlord to any material
civil liability or the risk of any criminal liability. Tenant shall be entitled
to any refund and interest thereon of Property Taxes or Other Taxes paid by
Tenant, and Landlord will assign (or pay, if previously received by Landlord)
its interest in any such refund and interest thereon. Upon conclusion of any
such contest in which Tenant does not prevail, Tenant shall pay or perform the
Imposition.
(f) In the event any billing or taxing authority refuses to bill or notify
Tenant directly, Landlord shall, within two (2) business days after receipt by
Landlord, forward to Tenant all notice(s) and bill(s) for any tax(s),
assessment(s), excise(s), fee(s), charge(s) and Imposition(s) to be paid by
Tenant. Failure to timely forward any such bill(s) or notice(s) shall absolve
Tenant from liability or obligation to pay any late penalty or interest relative
to such bill(s) or notice(s) attributable to Landlord's delay.
6. NET LEASE; NON-TERMINABILITY: (a) This is an absolutely net lease and the
-----------------------------
Fixed Rent, Additional Rent and all other sums payable hereunder by Tenant shall
be paid without notice (except as expressly provided herein), demand, set-off,
counterclaim, abatement, suspension, deduction or defense. It is the intention
of the parties hereto that the Fixed Rent shall be an absolutely net return to
Landlord throughout the term of this Lease. In order that such Rent shall be
absolutely net to Landlord, Tenant shall pay when due (except as expressly
otherwise permitted herein), and save Landlord harmless from and against, any
and all costs, charges and expenses attributable to the Premises, including but
not limited to, each fine, fee penalty, charge (including governmental charges),
assessments, sewer rent, Impositions, insurance premiums as may be required from
time to time by Mortgagee, utility expenses, carrying charges, costs, expenses
and obligations of every kind and nature whatsoever, general and special,
ordinary and extraordinary, foreseen and unforeseen, the payment for which
Landlord or Tenant is, or shall become liable by reason of any rights or
interest of Landlord or Tenant in, to or under the Premises or this Lease or in
any manner relating to the ownership, leasing, operation, management,
maintenance, repair, rebuilding use or occupation of the Premises, or of any
portion thereof; provided, however, that nothing herein contained shall be
construed as imposing upon Tenant any obligation to pay any estate, inheritance,
succession or transfer tax of the Landlord growing out of, or levied in
connection with, this Lease or the Landlord's right or interest in the Premises.
(b) This Lease shall not terminate, nor shall Tenant have any right to
terminate this Lease, nor shall Tenant be entitled to any abatement or (except
as otherwise expressly provided in paragraph 13) reduction of Rent hereunder,
nor shall the obligations of Tenant under this Lease be affected, by reason of
(i) any damage to or destruction of all or any part of the Premises from
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<PAGE>
whatever cause, (ii) subject to paragraph 13, the taking of the Premises or any
portion thereof by condemnation, requisition or otherwise, (iii) the
prohibition, limitation or restriction of Tenant's use of all or any part of the
Premises, or any interference with such use, (iv) any eviction by paramount
title or otherwise, (v) Tenant's acquisition or ownership of all or any part of
the Premises otherwise than as expressly provided herein unless such termination
is consented to in writing by any assignee of Landlord's interest under this
Lease, (vi) any default on the part of Landlord under this Lease, or under any
other agreement to which Landlord and Tenant may be parties, (vii) the failure
of Landlord to deliver possession of the Premises on the commencement of the
term hereof or (viii) any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding. It is the
intention of the parties hereto that the obligations of Tenant hereunder shall
be separate and independent covenants and agreements, that the Fixed Rent, the
Additional Rent and all other sums payable by Tenant hereunder shall continue to
be payable in all events and that the obligations of Tenant hereunder shall
continue unaffected unless the requirement to pay or perform the same shall have
been terminated pursuant to any express provision of this Lease. Tenant waives
the benefit of New Jersey Revised Statutes, Title 46, Chapter 8, Sections 6 and
7, and agrees that Tenant will not be relieved of the obligations to pay the
Basic Rent or any Additional Rent in case of damage to or destruction of the
Premises.
(c) Tenant agrees that it will remain obligated under this Lease in
accordance with its terms, and that it will not take any action to terminate,
rescind or avoid this Lease, notwithstanding (i) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or winding-
up or other proceeding affecting Landlord or its successor in interest, or (ii)
any action with respect to this Lease which may be taken by any trustee or
receiver of Landlord or its successor in interest or by any court in any such
proceeding.
(d) Tenant waives all rights which may now or hereafter be conferred by law
(i) to quit, terminate or surrender this Lease or the Premises or any part
thereof, or (ii) to any abatement, suspension, deferment or (except as provided
in paragraph 13(b)) reduction of the Fixed Rent, Additional Rent or any other
sums payable under this Lease, except as otherwise expressly provided herein.
7. SERVICES
--------
Tenant shall, at Tenant's sole cost and expense, supply the Premises with
electricity, heating, ventilating and air conditioning, water, natural gas,
lighting, replacement for all lights, restroom supplies, telephone service,
window washing, security service, janitor, scavenger and disposal services
(including hazardous and biological waste disposal), and such other services as
Tenant determines to furnish to the Premises. Except to the extent damage or
loss results directly from the wilful act of Landlord, Landlord shall not be in
default under this Lease or be liable for
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<PAGE>
any damage or loss directly or indirectly resulting from, and in no event shall
the Fixed Rent or Additional Rent be abated or a constructive or other eviction
be deemed to have occurred by reason of, the installation, use or interruption
of use of any equipment in connection with the furnishing of any of the
foregoing services, any failure to furnish or delay in furnishing any such
services, whether such failure or delay is caused by accident or any condition
beyond the control of Landlord or Tenant or by the making of repairs or
improvements to the Premises, or any limitation, curtailment, rationing or
restriction on use of water, electricity, gas or any form of energy serving the
Premises, whether such results from mandatory governmental restriction or
voluntary compliance with governmental guidelines. Tenant shall pay the full
cost of all of the foregoing services and all other utilities and services
supplied to the Premises as Additional Rent.
8. REPAIRS AND MAINTENANCE; REPLACEMENT:
-------------------------------------
(a) Tenant shall, at its own sole cost and expense, keep the Premises in
good order and condition, at all times on and after commencement of the Term to
and including the date of the termination of the Term, by lapse of time or
otherwise. Tenant shall promptly and adequately repair the Premises and all its
component parts, and replace or repair all landscaping and all damaged or broken
fixtures, (including Tenant's Trade Fixtures) and appurtenances.
In addition, to the extent necessary to keep the Premises in good repair and
condition, Tenant shall timely and properly maintain, repair and to the extent
necessary, replace all of the Premises including, but not necessarily limited
to, parking lot surface and stripes, mechanical systems, electrical and lighting
systems, plumbing and sewage systems, roof, foundations and floor slabs, glazing
systems, structural steel, masonry walls and wall enclosures, and water
tightness of all curtain walls by a qualified engineer or otherwise, so as to
preserve and protect the useful life, utility and value of such component, but
in all events so as to preserve the effectiveness of any warranty relating
thereto. In addition, Tenant shall maintain and repair or replace, or cause
others to maintain and repair or replace, as the case may be, the roof, and
repair or replace any material defect in materials or workmanship relating to
the foundation, columns, and structural steel which comprise a part of the
Premises. If any building system or component shall become obsolete or
uneconomic to repair, Tenant shall remove such item from the Premises and,
promptly replace it with an item of comparable initial value and function.
Tenant shall obtain Landlord's prior written consent before making any material
change in the structure of the Improvements or any building system, provided
that if the breakdown of any part of the Improvements or any building system
shall render the Premises untenantable, Tenant may make emergency repairs
without Landlord's prior written consent. Tenant shall, upon Landlord's request,
deliver tO Landlord a written statement showing all removals and replacements of
such systems or components during the preceding calendar year, including
manufacturers, model numbers, and serial numbers in order to establish a current
list of what assets are owned by whom; Landlord shall have 30 days after
delivery of such statement to object tO any item therein,
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and such statement shall thereafter be conclusive as to all items not objected
to. Landlord, may upon two (2) business days prior notice cause independent
private inspectors, qualified in the specific discipline, to make inspections of
any building and building systems on the Premises or segments thereof to
determine Tenant's compliance under this paragraph 8. Landlord shall endeavor to
minimize the interference with Tenant's use of the Premises during any such
inspection.
Landlord may, but is not required to, after five (5) days notice to Tenant
(except in the case of emergency, in which case Tenant shall be given notice
contemporaneously with entry), enter the Premises and make such repairs,
alterations, improvements, additions, replacements or maintenance as Landlord
deems reasonably necessary and which Tenant failed to do as required in this
Lease after notice and the expiration of any applicable grace period, and Tenant
shall pay Landlord as Additional Rent forthwith upon being billed for same by
Landlord the cost thereof plus an administrative fee of 5% of such cost, such
fee representing Landlord's reasonable overhead, fees and other costs or
expenses arising from Landlord's involvement with such repairs, alterations,
improvements, additions, replacements and maintenance. Such amounts shall bear
interest at the Overdue Rate from the date of billing until paid.
Notwithstanding the foregoing, if any building system or other material
capital element of the Premises must be replaced in the last three years of the
Primary Term or during a Renewal Term and, in either such case the replacement
costs more than $50,000 and has a useful life extending beyond the Primary Term
or any exercised Renewal Term, then Tenant shall be liable only for a fraction
of the cost of such system or element, the numerator of which fraction shall be
the number of months remaining in the Primary Term or Renewal Term, if
applicable, as of the date of such replacement and the denominator of which is
the number of months of estimated useful life of the system or element. If
Tenant extends the term of this Lease for one or more Renewal Terms, the Basic
Rent for such Renewal Terms shall be increased in the aggregate by a fraction of
the original cost of such system or element, the denominator of which is the
number of months of estimated useful life of the system or element as of the
date of installation and the numerator of which the lesser of 60 or the number
of months of estimated remaining useful life of the system or element as of the
beginning of such Renewal Term.
(b) It is intended by Tenant and Landlord that Landlord shall have no
obligation, in any manner whatsoever except in the case of damage caused by
Landlord's wilful act, to repair or maintain the Premises (or any equipment
therein), whether structural or nonstructural, all of which obligations are
intended, as between Landlord and Tenant, to be those of Tenant. Tenant
expressly waives the benefit of any statute now or in the future in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair.
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<PAGE>
(c) Tenant shall maintain on the Premises, and turn over to Landlord upon
expiration or termination of this Lease, current operating manuals for the
equipment now or hereafter located on the Premises.
(d) Tenant covenants not to install any underground storage tank on the
Land.
9. DESTRUCTION OF OR DAMAGE TO PREMISES: If the Premises, or any part
------------------------------------
thereof, is damaged by fire or other casualty during the Term of this Lease,
Tenant shall repair such damage and restore the Premises to substantially the
same or better condition as existed before the occurrence of such fire or other
casualty using materials of the same or better grade than that of the materials
being replaced, and this Lease shall remain in full force and effect. Such
repair and replacement by Tenant shall be done in accordance with paragraph 22
and the standards of paragraph 8 and Tenant shall, at its expense, obtain all
permits required for such work; if necessary, Landlord will join at Tenant's
expense in the application for any permit. In no event shall Fixed Rent or
Additional Rent abate, nor shall this Lease terminate by reason of such damage
or destruction. Provided Tenant has (i) delivered to Landlord plans and
specifications and a budget for such repair and restoration (all of which
Landlord shall have approved in its reasonable judgment), and (ii) deposited
with Landlord or the Proceeds Trustee hereinafter mentioned cash in the sum
equal to the excess, if any, of the total cost set forth in such approved budget
over the amount of insurance proceeds received on account of such casualty, then
Landlord shall make available to Tenant all insurance proceeds actually received
by Landlord on account of such casualty, for application to the costs of such
approved repair and restoration, as set forth below.
In the event the estimated cost of reconstruction is in excess of $350,000
(adjusted by CPI changes from November 1, 1996, all insurance proceeds shall be
paid to or deposited with either a bank or trust company designated by Landlord,
subject to the reasonable approval of Tenant (herein called the "Proceeds
Trustee") in the name of the Proceeds Trustee as trustee for Landlord and Tenant
and disbursed in the manner hereinafter provided. In the event Landlord
mortgages the Premises with a First Mortgage, the mortgagee thereunder may, at
its option, be appointed Proceeds Trustee for so long as such First Mortgage
remains outstanding and such Mortgage does not control Landlord or is not
controlled by or under common control with Landlord. Insurance proceeds shall be
deposited in an interest bearing account and interest shall be distributed to
Tenant upon completion of said installation, repair, replacement or rebuilding,
provided no default has occurred and is continuing hereunder. All checks drawn
on said account shall be co-signed by the Proceeds Trustee and Tenant. Insurance
proceeds shall be disbursed to Tenant by the Proceeds Trustee under the
following procedure:
(i) From time to time, Tenant may request that Landlord or Proceeds
Trustee, as the case may be, to reimburse Tenant for costs incurred by Tenant
for work in place to repair and restore the Premises since the last preceding
reimbursement and/or to advance funds required
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<PAGE>
to pay contractor's bills for materials ordered. Tenant's request shall certify
that all work for which reimbursement is requested was performed substantially
in compliance with the plans and specifications approved by Landlord pursuant to
paragraph 8 and all applicable laws, and shall include reasonably satisfactory
evidence of the costs incurred by Tenant and unconditional lien releases from
vendors relating to work or materials for which payment was previously made or
for which payment is to be made from the requested draw, in form and substance
required by applicable law executed by all mechanic's, materialmen, laborers,
suppliers and contractors who performed any portion of the repair work or
applied materials.
(ii) Within seven (7) business days after receiving Tenant's request,
Landlord shall approve or disapprove Tenant's request, which approval shall not
be unreasonably withheld, by written notice to Tenant. If Landlord approves all
or any portion of a request and Landlord has received (and not previously
disbursed) insurance proceeds, then Landlord's approval shall include a check in
the amount approved by Landlord. If Landlord disapproves all or any portion of a
request, then Landlord's notice shall state the reasons for that disapproval.
Landlord's failure to deliver a notice approving or disapproving a request shall
be conclusively deemed Landlord's approval of the request. In addition, Landlord
shall have the right to impose other conditions upon disbursement so long as
they are consistent with customary construction loan disbursement practices.
10. INSURANCE, HOLD HARMLESS AND INDEMNIFICATION:
--------------------------------------------
(a) Landlord shall not be liable to Tenant for any damage to or loss or
theft of any property or for any bodily or personal injury, illness or death of
any person in, on or about the Premises arising at any time and from any cause
whatsoever, except to the extent caused by the negligence or willful misconduct
of Landlord. Tenant waives all claims against Landlord arising from any
liability described in this paragraph 10(a), except to the extent caused by the
negligence or willful misconduct of Landlord.
(b) Tenant hereby agrees to indemnify and defend Landlord against and hold
Landlord harmless from all claims, demands, liabilities, damages, losses, costs
and expenses, including reasonable attorneys' fees and disbursements, arising
from or related to any use or occupancy of the Premises, or any condition of the
Premises, or any default in the performance of Tenant's obligations hereunder,
or any damage to any property (including property of employees and invitees of
Tenant) or any bodily or personal injury, illness or death of any person
(including employees and invitees of Tenant) occurring in, on or about the
Premises or any part thereof or any part of the buildings or the land
constituting a part of the Premises arising at any time and from any cause
whatsoever (except to the extent caused by the negligence or willful misconduct
of Landlord) or occurring outside the Premises when such damage, bodily or
personal injury, illness or death is caused by any act or omission of Tenant or
its agents, officers, employees,
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contractors, invitees or licensees. This paragraph 10(b) shall survive the
termination of this Lease with respect to any damage, bodily or personal injury,
illness or death occurring prior to such termination, for a period of six years.
THE WAIVER PROVISION IN PARAGRAPH 10(a) AND THE INDEMNITY PROVISION IN THIS
PARAGRAPH 10(b) ARE INTENDED TO EXCULPATE AND INDEMNIFY LANDLORD FROM AND
AGAINST ANY LIABILITY OF LANDLORD BASED ON ANY APPLICABLE DOCTRINE OF STRICT
LIABILITY.
(c) Tenant shall, at all times and during the term of this Lease and at
Tenant's sole cost and expense, obtain and keep in force comprehensive
commercial general liability and special cause of loss insurance, including
contractual liability (specifically covering this Lease), cross liability, fire
legal liability, and premises operations, all on an "occurrence" policy form,
with a minimum combined single limit in the amount of $5,000,000 per occurrence
for bodily or personal injury to, illness of, or death of persons and damage to
property occurring in, on or about the Premises, and such insurance shall name
the Landlord and any Mortgagee as additional insureds. Tenant shall, at Tenant's
sole cost and expense, be responsible for insuring Tenant's furniture,
equipment, fixtures, computers, office machines and personal property.
(d) Tenant shall, at all times during the term of this Lease and at
Tenant's sole cost and expense, obtain and keep in force worker's compensation
and employer's liability insurance in all states in which the Premises and any
other operations of the Tenant are located and any other state in which the
Tenant or its contractors or subcontractors may be subject to any statutory or
other liability arising in any manner whatsoever out of the actual or alleged
employment of others.
(e) Tenant shall, at all times during the term of this Lease, at Tenant's
sole cost and expense, obtain and keep in force or, at Tenant's option after 30
day written notice to Landlord, reimburse Landlord for the cost of (a) insurance
against loss (including earthquake and flood) or damage to the Premises by fire
and all other risks of physical loss (including earthquake and flood) covered by
insurance of the type now known as "all risk," with difference in conditions
coverage, in an amount not less than the full replacement cost of the Premises
(without deduction for depreciation), including the cost of debris removal and
such endorsements as Landlord may reasonably require, and containing
"Replacement Cost" and "Agreed Amount" endorsements; (b) boiler and machinery
insurance covering pressure vessels, air tanks, boilers, machinery, pressure
piping, heating, ventilation and air conditioning equipment, and elevator and
escalator equipment, provided the Premises contain equipment of such nature and
insurance against loss of occupancy or use arising from any breakdown of any
such items, in such amounts as Landlord may reasonably determine; (c) plate
glass insurance in such amounts as Landlord may reasonably determine if the
Premises contain plate glass; (d) business interruption insurance insuring that
the Fixed Rent will be paid to Landlord for up to one year if the Premises are
destroyed or rendered untenantable by any cause insured against (it being
understood that the existence of such insurance does not reduce Tenant's
obligation to pay Fixed Rent without diminution); and (e) insurance in
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<PAGE>
amounts and against such other risks as Landlord or Mortgagee may reasonably
require and against such risks as are customarily insured against by operators
of similar properties.
(f) All insurance required to be maintained by Tenant under this paragraph
10 and all renewals thereof shall be issued by good and responsible companies
qualified to do and doing business in the state of where the Premises are
located and having a Standard and Poor's Corporation claims paying ability
rating of at least "A" and shall be reasonably satisfactory to Landlord. All
deductible amounts under each such insurance policy shall be subject to
Landlord's prior written approval. Each policy to be maintained by Tenant shall
expressly provide that the policy shall not be canceled or altered without
thirty (30) days' prior written notice to Landlord and shall remain in effect
notwithstanding any such cancellation or alteration until such notice shall have
been given to Landlord and such period of thirty (30) days shall have expired.
All insurance under this paragraph 10 to be maintained by Tenant shall name
Landlord and any other parties designated by Landlord as an additional insured
and loss payee, shall be primary and noncontributing with any insurance which
may be carried by Landlord, shall afford coverage for all claims based on any
act, omission, event or condition that occurred or arose (or the onset of which
occurred or arose) during the policy period, and shall expressly provide that
Landlord, although named as an insured, shall nevertheless be entitled to
recover under the policy for any loss, injury or damage to Landlord. Upon the
issuance of each such policy to be maintained by Tenant, Tenant shall deliver
each such policy or a certified copy and a certificate thereof (Acord 27 form)
to Landlord for retention by Landlord. Tenant may maintain the insurance
required by this paragraph 10 under blanket insurance policies, provided that
the insurer provides evidence that an amount necessary to meet the requirements
of this paragraph 10 has been reserved for the Premises.
(g) Tenant waives on behalf of all insurers under all policies of property,
liability and other insurance (excluding workers' compensation) now or hereafter
carried by Tenant insuring or covering the Premises, or any portion or any
contents thereof, or any operations therein, all rights of subrogation which any
insurer might otherwise, if at all, have to any claims of Tenant against
Landlord. Landlord waives on behalf of all insurers under all policies of
property, liability and other insurance (excluding workers' compensation) now or
hereafter carried by Landlord insuring or covering the Premises or any portion
or any contents thereof, or any operations therein, all rights of subrogation
which any insurer might otherwise, if at all, have to any claims of Landlord
against Tenant. Tenant shall, prior to or immediately after the date of this
Lease, procure from each of the insurers under all policies of property,
liability and other insurance (excluding workers' compensation) now or hereafter
carried by Tenant insuring or covering the Premises, or any portion or any
contents thereof, or any operations therein, a waiver of all rights of
subrogation which the insurer might otherwise, if at all, have to any claims of
Tenant against Landlord as required by this paragraph 10(g).
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11. COMPLIANCE WITH LAWS, COVENANTS:
-------------------------------
(a) Tenant shall throughout the Term promptly comply or cause compliance
with or remove or cure any violation of any and all present and future laws,
including, without limitation, the Americans with Disabilities Act of 1990, as
the same may be amended from time to time, ordinances (zoning or otherwise),
orders, rules, regulations and requirements of all Federal, State, municipal and
other governmental bodies having jurisdiction over the Premises and the
appropriate departments, commissions, boards and officers thereof, and the
orders, rules and regulations of the Board of Fire Underwriters where the
Premises are situated, or any other body now or hereafter constituted exercising
lawful or valid authority over the Premises, or any portion thereof, or the
sidewalks, curbs, roadways, alleys or entrances adjacent or appurtenant thereto,
or exercising authority with respect to the use or manner of use of the
Premises, or such adjacent or appurtenant facilities, and whether the
compliance, curing or removal of any such violation and the costs and expenses
necessitated thereby shall have been foreseen or unforeseen, ordinary or
extraordinary, and whether or not the same shall be presently within the
contemplation of Landlord or Tenant or shall involve any change in governmental
policy, or require structural or extraordinary repairs, alterations or additions
by Tenant and irrespective of the amount of the costs thereof. Tenant, at its
sole cost and expense, shall comply with all agreements, contracts, easements,
restrictions, reservations or covenants, if any, running with the land, or
hereafter created by Tenant or consented to, in writing, by Tenant or requested,
in writing, by Tenant. Tenant shall also comply with, observe and perform all
provisions and requirements of all policies of insurance at any time in force
with respect to the Premises and required to be obtained and maintained under
the terms of paragraph 11 hereof and shall comply with all development permits
issued by governmental authorities issued in connection with development of the
Premises.
(b) If Tenant shall at any time fail to pay any Imposition in accordance
with the provisions of paragraph 4, or to take out, pay for, maintain and
deliver any of the insurance policies or certificates of insurance provided for
in paragraph 10, or shall fail to make any other payment or perform any other
act on its part to be made or performed hereunder after any required notice and
the expiration of any applicable grace period, then Landlord, after seven (7)
business days prior written notice to Tenant (or without notice in situations
where Landlord determines, in the exercise of commercially reasonable
discretion, that delay is likely to cause harm to Landlord's interest in the
Premises), and without waiving or releasing Tenant from any obligation of Tenant
contained in this Lease, may, but shall be under no obligation to do so,
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<PAGE>
(i) pay any Imposition payable by Tenant pursuant to the provisions
of this paragraph 11;
(ii) take out, pay for and maintain any of the insurance policies
provided for in paragraph 10; or
(iii) make any other payment or perform any other act on Tenant's
part to be paid or performed hereunder, except that any time
permitted to Tenant to perform any act required to be performed
by Tenant hereunder shall be extended for such period as may be
necessary to effectuate such performance, provided Tenant is
continuously, diligently and in good faith prosecuting such
performance.
Landlord may enter upon the Premises for any such purpose and take all such
action therein or thereon as may be necessary therefor. All sums, reasonable
under the circumstances, actually so paid by Landlord and all costs and
expenses, including reasonable attorney's fees and the administrative fee
referred to in paragraph 8(a), incurred by Landlord in connection with the
performance of any such act, together with interest thereon at the Overdue Rate,
shall be paid by Tenant to Landlord on demand and submission of reasonable
evidence of such expenditures. Landlord shall not be limited in the proof of any
damages which Landlord may claim against Tenant arising out of or by reason of
Tenant's failure to provide and keep in force insurance as aforesaid, to the
amount of the insurance premium or premiums not paid or incurred by Tenant, and
which would have been payable upon such insurance, but Landlord shall also be
entitled to recover, as damages for such breach, the uninsured amount of any
loss (to the extent of any deficiency between the dollar limits of insurance
required by the provisions of this Lease and the dollar limits of the insurance
actually carried by Tenant), damages, costs and expenses of suit, including
reasonable attorney's fees, suffered or incurred by reason of damage to or
destruction of the Premises, or any portion thereof or other damage or loss
which Tenant is required to insure against hereunder, occurring during any
period when Tenant shall have failed or neglected to provide insurance as
aforesaid.
12. PARTIAL TAKING:
--------------
If less than substantially all of the Premises shall be taken for public
or quasi-public purposes, Tenant will promptly, at its sole cost and expense,
restore, repair, replace or rebuild the improvements so taken in conformity with
the requirements of paragraph 8 as nearly as practicable to the condition, size,
quality of workmanship and market value thereof immediately prior to such
taking, without regard to the adequacy of any condemnation award for such
purpose. There shall be no abatement of Rent during such period of restoration.
In performing its obligations, Tenant shall be entitled to all condemnation
proceeds available to Landlord under the
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same terms and conditions for disbursement set forth for casualty proceeds in
paragraph 9 hereof. Any condemnation proceeds in excess of the amounts as are
made available to Tenant for restoration or repair of the Premises, shall be the
sole and exclusive property of Landlord. Tenant shall have the right to
participate in condemnation proceedings with Landlord, and shall be entitled to
receive any award made by the condemning authority in respect of business loss
or, if available, business relocation and any other claim permitted by law which
does not, in any such case, diminish Landlord's recovery.
13. SUBSTANTIAL TAKING:
-------------------
If all or substantially all of any one or more of the six facilities
constituting the Premises shall be taken for public or quasi-public purposes, or
if Tenant, after any taking affecting any one of more of the facilities
constituting the Premises of access thereto, determines that such event has
rendered such facility unavailable for use or unsuitable for restoration for
continued use and occupancy in Tenant's business, then Tenant, in lieu of
rebuilding as contemplated by Paragraph 12, shall, not later than 90 days after
such occurrence, deliver to Landlord (i) notice of its intention to terminate
this Lease as to the affected facility on a date occurring not more than 95 days
nor less than 60 days after such notice (the Termination Date), (ii) a
certificate of Tenant describing the event giving rise to such termination and
stating that such event has rendered such facility unavailable for use or
unsuitable for restoration for continued use and occupancy in Tenant's business,
and (iii) an irrevocable offer to purchase such facility on the next date for
the payment of Fixed Rent (the "Termination Date") which occurs not less than 45
days after the delivery of such notice, at a price equal to the price specified
for such facility on Exhibit A hereto, plus all costs of transferring title to
the Premises to Tenant, including without limitation all transfer taxes,
recording fees and any unwind costs resulting from a prepayment of debt secured
in part by the Premises (including prepayment premiums or make whole amounts).
Landlord shall accept or reject such offer by notice given to Tenant not later
than thirty (30) days after receipt of Tenant's notice, and if Landlord fails to
act, it shall be presumed to have accepted the offer. If Landlord shall have
accepted such offer or is deemed to have accepted such offer, on the Termination
Date, Landlord shall convey by special warranty deed to Tenant any remaining
portion of such facility free of liens and encumbrances (except those existing
on the Commencement Date or thereafter created with the written consent of the
Tenant), along with the right to receive any condemnation award to which
Landlord is entitled. If Landlord rejects such offer, this Lease shall terminate
on the Termination Date with respect to such facility except for liabilities
which accrued prior thereto. Upon payment of all Fixed Rent and Additional Rent
payable through the Termination Date, this Lease shall terminate with respect to
such facility on the Termination Date, except with respect to liabilities which
arose on or prior to the Termination Date.
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14. DEFAULT: Events of Default.
---------------------------
The occurrence of any one or more of the following events ("Event of
Default") shall constitute a breach of this Lease by Tenant:
(a) Tenant fails to pay any Fixed Rent as and when such Fixed Rent becomes
due and such failure continues for ten (10) business days after notice thereof
has been delivered to Tenant; or
(b) Tenant fails to pay any Additional Rent as and when such Additional Rent
becomes due and payable and such failure continues for more than ten (10) days
after Landlord gives written notice thereof to Tenant; or
(c) Tenant fails to perform or breaches any other agreement or covenant of
this Lease to be performed or observed by Tenant as and when performance or
observance is due and such failure or breach continues for more than thirty (30)
days after the earlier of (i) Tenant having knowledge of such failure or breach,
and (ii) Landlord's giving written notice thereof to Tenant; provided, however,
that if, by the nature of such agreement or covenant, such failure or breach
cannot reasonably be cured within such period of thirty (30) days, an Event of
Default shall not exist as long as Tenant commences with due diligence and
dispatch the curing of such failure or breach within such period of ten (10)
days and, having so commenced, thereafter prosecutes with diligence and dispatch
and completes the curing of such failure or breach within 260 days after
Tenant's acquisition of knowledge or notice of such failure or breach; or
(d) Tenant (i) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or any
other petition in bankruptcy or for liquidation or to take advantage of any
bankruptcy, insolvency or other debtors' relief law of any jurisdiction, (ii)
makes an assignment for the benefit of its creditors, (iii) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of Tenant or of any substantial part of Tenant's property, or (iv) takes
action for the purpose of any of the foregoing; or
(e) Without consent by Tenant, a court or government authority enters an
order, and such order is not vacated within ninety (90) days, (i) appointing a
custodian, receiver, trustee or other officer with similar powers with respect
to Tenant or with respect to any substantial part of Tenant's property, or (ii)
constituting an order for relief or approving a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, insolvency or
other debtors' relief law of any jurisdiction, or (iii) ordering the
dissolution, winding-up or liquidation of Tenant; or
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(f) This Lease or any estate of Tenant hereunder is levied upon under any
attachment or execution and such attachment or execution is not vacated within
thirty (30) days; or
(g) Tenant's representations or warranties contained in this Lease or in any
certificate delivered pursuant hereto or thereto shall have been incorrect in
any material adverse way when made.
Landlord may treat the occurrence of any one or more of the foregoing Events
of Default as a breach of this Lease. For so long as such Event of Default
continues, Landlord, at its option and with or without notice or demand of any
kind to Tenant or any other person, may have any one or more of the remedies
provided in this Lease, in addition to all other remedies and rights provided at
law or in equity.
15. REMEDIES: In the event of any Event of Default, Landlord may, in
---------
addition to, and not in derogation of any remedies for any preceding breach,
with or without notice of demand (except as otherwise expressly provided herein)
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such Event of Default:
(a) Landlord shall have the right at any time to give a written termination
notice to Tenant and, on the date specified in such notice (which shall be not
less than five (5) days after such notice is given), Tenant's right to
possession shall terminate and this Lease shall terminate. Upon such
termination, Landlord shall have the right to recover from Tenant:
(i) The worth at the time of determination of all unpaid Rent which had
been earned at the time of termination;
(ii) The worth at the time of determination of the amount by which all
unpaid Rent which would have been earned after termination until the time of
determination exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided;
(iii) The worth at the time of determination of the amount by which all
unpaid Rent for the balance of the term of this Lease after the time of
determination exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; and
(iv) All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform all of Tenant's
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom. The "worth at the time of determination" of the
amounts referred to in clauses (i) and (ii) above shall be computed by allowing
interest at the Overdue Rate. The "worth at the time of determination" of the
amount referred to in clause (iii) above shall be computed by discounting such
amount at the discount rate
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<PAGE>
of the New York Federal Reserve Bank at the time of award plus one percent (1%).
For the purpose of determining unpaid Rent under clause (i), (ii) and (iii)
above, the Rent reserved in this Lease shall be deemed to be the total Rent
payable by Tenant under paragraph 4 hereof.
(b) Even though Tenant has breached this Lease, this Lease shall continue in
effect for so long as Landlord does not terminate Tenant's right to possession,
and Landlord shall have the right to enforce all its rights and remedies under
this Lease, including the right to recover all Rent as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to relet the Premises or
the appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a terminate of Tenant's right to
possession unless written notice of termination is given by Landlord to Tenant.
(c) All agreements and covenants to be performed or observed by Tenant under
this Lease shall be at Tenant's sole cost and expense and without any abatement
of Fixed Rent or Additional Rent.
(d) If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade fixtures or
personal property belonging to Tenant and left in the Premises shall be deemed
to be abandoned, at the option of Landlord, and Landlord shall have the right to
sell or otherwise dispose of such personal property in any commercially
reasonable manner. Landlord shall have the right, but not the obligation, to
sublet the Premises on reasonable terms for the account of Tenant, and Tenant
shall be liable for all costs of such subletting, including without limitation
the cost of preparing the Premises for subtenants and leasing commissions paid
to brokers.
16. SUBORDINATION:
--------------
(a) Subordination, Non-Disturbance. Tenant agrees at any time hereafter, and
------------------------------
from time to time within ten (10) days of written request of Landlord, to
execute and deliver to Landlord an instrument in the form customarily used by
any institutional investor becoming a Mortgagee subjecting and subordinating
this Lease to the lien of any mortgage, deed of trust, security instrument,
ground or underlying lease or other document of like nature (hereinafter
collectively referred to as "Superior Mortgage") which at any time may be placed
upon the Premises, or any portion thereof, by Landlord, and to any replacements,
renewals, amendments, consolidations, modifications, extensions or refinancing
thereof, and to each and every advance made under any Superior Mortgage. It is
agreed, nevertheless, that so long as there exists no Event of Default, such
subordination agreement or other instrument, release or document (herein
"Subordination Agreement") shall not interfere with, hinder or reduce Tenant's
right to quiet enjoyment under this Lease, nor the right of Tenant to continue
to occupy the Premises, and all portions thereof, and to conduct its business
thereon in accordance with the covenants, conditions,
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provisions, terms and agreements of this Lease. The costs of preparing and
recording such document shall be borne by Landlord, but Tenant shall be
responsible for its own counsel fees.
(b) Mortgagee Protection Clause. In the event of any act or omission of
---------------------------
Landlord constituting a default by Landlord, Tenant shall not exercise any
remedy until Tenant has given Landlord and any Mortgagee of the Premises written
notice of such act or omission, and until a reasonable period of time (not to
exceed 10 business days) to allow Landlord or the Mortgagee to remedy such act
or omission shall have elapsed following receipt of such notice. However, if
such act or omission cannot, with due diligence and in good faith, be remedied
within such period or cannot be cured simply by the payment of money, the
Landlord and the Mortgagee shall be allowed such further period of time as may
be reasonably necessary provided that it commences remedying the same with due
diligence and in good faith and thereafter diligently prosecutes such cure,
provided such cure period shall not extend beyond 270 days after the notice of
such default. Nothing herein contained shall be construed or interpreted as
requiring any Mortgagee receiving such notice to remedy such act or omission.
(c) Attornment. If any Mortgagee shall succeed to the rights of Landlord
------------
under this Lease or to ownership of the Premises, whether through possession or
foreclosure or the delivery of a deed to the Premises in lieu of foreclosure,
then such Mortgagee shall automatically be deemed to have recognized this Lease
and to assume the obligations of Landlord hereunder accruing on and after the
date such Mortgagee acquired title to the Premises, and Tenant shall attorn to
and recognize such Mortgagee as Tenant's landlord under this Lease and shall
promptly execute and deliver any instrument that such Mortgagee may reasonably
request to evidence such attornment (whether before or after the making of the
Mortgage). In the event of any other transfer of Landlord's interest hereunder,
such transferee shall automatically be deemed to have recognized this Lease and
to assume the obligations of Landlord hereunder accruing on and after the date
of such transfer, Tenant shall attorn to and recognize such transferee as
Tenant's landlord under this Lease and shall promptly execute and deliver any
instrument that such transferee and Landlord may reasonably request to evidence
such attornment.
(d) Upon ten days' advance written notice, Tenant agrees to execute,
acknowledge and deliver a document consenting to the assignment by Landlord of
this Lease to a Mortgagee, in a form then in use among institutional lenders,
with such changes therein as may be reasonably requested by the Mortgagee.
17. LANDLORD'S RIGHT OF ENTRY: Landlord and its designees shall have the
--------------------------
right to enter the public areas of the Premises at any time during normal
business hours and any part of the Premises on 48 hours advance notice and to
inspect the same, post notices of non-responsibility, exhibit the Premises to
prospective purchasers and mortgagees, and examine Tenant's books and records
pertaining to the maintenance of the Premises, insurance policies,
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certificates of occupancy and other documents, records and permits in Tenant's
possession with respect to the Premises, all of which shall be customary and
adequate and reasonably satisfactory to Landlord.
18. NOTICES: Notices, statements, demands, or other communications required
--------
or permitted to be given, rendered or made by either party to the other pursuant
to this Lease or pursuant to any applicable law or requirement of public
authority, shall be in writing (whether or not so stated elsewhere in this
Lease) and shall be deemed to have been properly given, rendered or made, when
received by overnight delivery or overnight courier delivery (of if such
delivery is refused) or facsimile transmission with a confirmation copy sent by
overnight delivery or by overnight courier delivery addressed to the other
parties as follows:
To Landlord:
GL/PHP, LLC
c/o G&L Realty Corp.
439 North Bedford Drive
Beverly Hills, California 90210
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attention: Lewis A. Burleigh, Esq.
With a further copy to:
Martin H. Blank, Jr., Esq.
11755 Wilshire Boulevard, Suite 1400
Los Angeles, California 90025-1520
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To Tenant:
Pinnacle Health Enterprises, LLC
11440 Commerce Park Drive
Reston, Virginia 20191
Attention: Ben Rosenbaum III, Esq.
Any party listed in this paragraph 18 may, by notices as aforesaid, designate a
different address for addresses for notice, statements, demands or other
communications intended for it.
19. ESTOPPEL CERTIFICATE; FINANCIAL DATA:
-------------------------------------
(a) At any time and from time to time, Tenant shall, within ten (10) days
after written request by Landlord, execute, acknowledge and deliver to Landlord
a certificate certifying: (a) that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that this Lease is in full
force and effect as modified, and stating the date and nature of each
modification); (b) the Commencement Date and the Expiration Date determined in
accordance with paragraph 3 and the date, if any, to which all Rent and other
sums payable hereunder have been paid; (c) that no notice has been received by
Tenant of any default by Tenant hereunder which has not been cured, except as to
defaults specified in such certificate; (d) that, to the best of Tenant's
knowledge, Landlord is not in default under this Lease, except as to defaults
specified in such certificate; and (e) such other matters as may be reasonably
requested by Landlord or any actual or prospective purchaser or mortgage lender.
Any such certificate may be relied upon by Landlord and any actual or
prospective purchaser or mortgage lender of the Premises or any part thereof.
(b) Tenant shall, on request, deliver to Landlord and to any prospective
lender or purchaser designated by Landlord, a balance sheet of Tenant and its
consolidated subsidiaries as at the end of the most recent fiscal year, a
statement of profits and losses of Tenant and its consolidated subsidiaries for
such year, and a statement of cash flows of Tenant and its consolidated
subsidiaries for such year, setting forth in each case, in comparative form, the
corresponding figures for the preceding fiscal year in reasonable detail and
scope and certified to be true and complete by a financial officer of Tenant
having knowledge thereof; the foregoing financial statements all being prepared
in accordance with generally accepted accounting principles, consistently
applied.
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20. MECHANICS' LIENS:
-----------------
Liens and Right of Contest. (a) Tenant shall not suffer or permit any
--------------------------
mechanic's lien or other lien to be filed or recorded against the Premises,
equipment or materials supplied or claimed to have been supplied to the Premises
at the request of Tenant, or anyone holding the Premises, or any portion
thereof, through or under Tenant whereby the estate, rights or title of Landlord
are encumbered. If any such mechanic's lien or other lien shall at any time be
filed or recorded against the Premises, or any portion thereof, Tenant shall
cause the same to be discharged of record within sixty (60) days after the date
of filing or recording of the same. However, in the event Tenant desires to
contest the validity of any such lien, it shall notify Landlord in writing that
Tenant intends to so contest same and, on or before the due date thereof, post a
bond or otherwise discharge of record or procure title insurance over such lien.
If Tenant complies with the foregoing, and Tenant continues, in good faith,
to contest the validity of such lien by appropriate legal proceedings which
shall operate to prevent the collection thereof and the sale or forfeiture of
the Premises, or any part thereof, to satisfy the same, Tenant shall be under no
obligation to pay such lien until such time as the same has been decreed, by
court order, to be a valid lien on the Premises. Any surplus deposit retained by
Landlord, after the payment of the lien shall be repaid to Tenant. Landlord
agrees not to pay such lien during the period of Tenant's contest in accordance
with this paragraph. If Tenant fails to discharge or contest any such lien in
accordance with this paragraph and Landlord pays for the discharge of any such
lien or any part thereof from funds of Landlord, any amount paid by Landlord,
together with all costs, fees and expenses in connection therewith (including
reasonable attorney's fees of Landlord), together with interest thereon at the
Overdue Rate, shall be repaid by Tenant to Landlord on demand by Landlord.
Tenant shall indemnify and defend Landlord against and save Landlord and the
Premises, and any portion thereof, harmless from and against all losses, costs,
damages, expenses, liabilities, suits, penalties, claims, demands and
obligations, including, without limitation, reasonable attorney's fees,
resulting from the assertion, filing, foreclosure or other legal proceedings
with respect to any such mechanic's lien or other lien or the attempt by Tenant
to discharge same as above provided.
(b) All materialmen, contractors, artisans, engineers, mechanics, laborers
and any other Person now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to the Premises, or any portion
thereof, are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for the same. Notice is hereby given that Landlord
shall not be liable for any labor, services, materials, supplies, skill,
machinery, fixtures or equipment furnished or to be furnished to Tenant upon
credit, and that no mechanic's lien or other
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lien for any such labor, services, materials, supplies, machinery, fixtures or
equipment shall attach to or affect the estate or interest of Landlord in and to
the Premises, or any portion thereof.
(c) Without Landlord's prior written consent, which shall be given or
withheld in Landlord's sole discretion, Tenant shall not create, permit or
suffer, and, subject to the provisions of paragraph 20(a) hereof, shall promptly
discharge and satisfy of record, any other lien, encumbrance, charge, security
interest, or other right or interest which, as a result of Tenant's action or
inaction contrary to the provisions hereof, shall be or become a lien,
encumbrance, charge or security interest upon the Premises, or any portion
thereof, or the income therefrom, other than Permitted Encumbrances.
21. END OF TERM: (a) Upon the expiration or earlier termination of the Term
-------------
of this Lease, Tenant shall surrender the Premises to Landlord in the same
condition and suitable for the same use in which the Premises was originally
received from Landlord except for ordinary wear and tear and except as repaired,
rebuilt or altered as required or permitted by this Lease, and shall surrender
all keys to the Premises to Landlord at the place then fixed for notices to
Landlord and shall inform Landlord of all combinations on locks, safes and
vaults, if any. Except as otherwise provided herein, Tenant shall at such time
remove all of its property (including Tenant's Trade Fixtures) therefrom, if so
requested by Landlord. Tenant shall repair any damage to the Premises caused by
such removal, and any and all such property not so removed when required shall,
at Landlord's option, become the exclusive property of Landlord or be disposed
of by Landlord, at Tenant's cost and expense, without further notice to or
demand upon Tenant. Notwithstanding the foregoing, Tenant shall have no
obligation to surrender any of Tenant's Trade Fixtures.
(b) If the Premises are not surrendered as above set forth, Tenant shall pay
to Landlord a sum equal to 150% of the Fixed Rent herein provided during each
month or portion thereof for which Tenant shall remain in possession of the
Premises or any part thereof after the termination of the Term or of Tenant's
rights of possession, whether by lapse of time or otherwise. The provisions of
this paragraph 21(b) shall not be deemed to limit or constitute a waiver of any
other rights or remedies of Landlord provided herein, at law or at equity.
(c) All property of Tenant not removed on or before the last day of the Term
of this Lease shall be deemed abandoned. Tenant hereby appoints Landlord its
agent to remove all property of Tenant, including Tenant's Trade Fixtures, from
the Premises upon termination of this Lease and to cause its transportation and
storage for Tenant's benefit, all at the sole cost and risk of Tenant and
Landlord shall not be liable for damage, theft, misappropriation or loss thereof
and Landlord shall not be liable in any manner in respect thereto. Tenant shall
pay all costs and
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expenses, reasonable under the circumstances, of such removal, transportation
and storage. Tenant shall reimburse Landlord upon demand for any expenses
reasonably and actually incurred by Landlord with respect to removal or storage
of abandoned property and with respect to restoring said Premises to good order,
condition and repair.
(d) Except for surrender upon the expiration or earlier termination of the
Term hereof, no surrender to Landlord of this Lease or of the Premises shall be
valid or effective unless agreed to and accepted in writing by Landlord.
22. ALTERATIONS:
------------
(a) Tenant shall not make any alterations, additions or improvements in or
to the Premises or any part thereof, or attach any fixtures or equipment
thereto, without Landlord's prior written consent (which will not be
unreasonably withheld or delayed). Notwithstanding the preceding sentence,
Tenant may make such alterations, additions or improvements without Landlord's
consent only if (i) such alterations, additions or improvements will be in
compliance with all applicable laws, codes, rules, regulations and ordinances,
(ii) such alterations, additions or improvements will not reduce the fair market
value of the Premises, considered as unencumbered by this Lease, and (iii) such
alterations, additions or improvements will not adversely affect in any way the
structural, exterior or roof elements of the Premises or mechanical, electrical,
plumbing, utility or life safety systems of the Premises. Tenant shall give
prior written notice to Landlord of any such alterations, additions or
improvements having an estimated project cost of more than $25,000. In no event
shall Tenant be permitted to install underground storage tanks or fuel systems
on the Premises. Landlord's refusal to consent to the installation of an
underground tank or fuel system shall be conclusively presumed to be reasonable.
(b) All alterations, additions or improvements requiring Landlord's consent
shall be made at Tenant's sole cost and expense as follows:
(i) Tenant shall submit to Landlord, for Landlord's written approval,
complete plans and specifications for all work to be done by Tenant. Such plans
and specifications shall be prepared by the licensed architect(s) and
engineer(s), shall comply with all applicable codes, ordinances, rules and
regulations, shall not adversely affect the structural elements of the Premises,
shall be in a form sufficient to secure the approval of all government
authorities with jurisdiction over the Premises, and shall be otherwise
satisfactory to Landlord in Landlord's reasonable discretion.
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(ii) Landlord shall notify Tenant in writing within thirty (30) days whether
Landlord approves, approves on condition that Tenant reverse the alteration at
Tenant's expense at the termination or expiration of this Lease, or disapproves
such plans and specifications; Landlord shall describe the reasons for any such
disapproval which reasons must be based on either noncompliance with law or
insurance policies or on reduction of the value or utility of the Premises. If
Landlord does not respond within such 30 day period, Tenant may send a second
notice, prominently marked "Second Notice--Failure to Respond Will Result in
Deemed Approval", and if Landlord fails to respond within ten (10) business
days, the proposed plans and specifications shall be deemed approved. Tenant may
submit to Landlord revised plans and specifications for Landlord's prior written
approval, which approval shall not be withheld or delayed if (a) the work to be
done would not adversely affect the value, character, rentability or usefulness
of the Premises or any part thereof, or (b) the work to be done shall be
required by any Law (hereinafter defined). Tenant shall pay all costs, including
the fees and expenses of the licensed architect(s) and engineer(s), in preparing
such plans and specifications.
(iii) All material changes in the plans and specifications approved by
Landlord shall be subject to Landlord's prior written approval on the same terms
and conditions as set forth above. If Tenant wishes to make such change in
approved plans and specifications, Tenant shall have such architect(s) and
engineer(s) prepare plans and specifications for such change and submit them to
Landlord for Landlord's written approval. Landlord shall notify Tenant in
writing promptly whether Landlord approves, approves on condition that Tenant
reverse the alteration at Tenant's expense at the termination or expiration of
this Lease, or disapproves such change and, if Landlord disapproves such change,
Landlord shall describe the reasons for disapproval. Tenant may submit to
Landlord revised plans and specifications for such change for Landlord's written
approval. After Landlord's written approval of such change, such change shall
become part of the plans and specifications approved by Landlord.
(iv) Tenant shall obtain and comply with all building permits and other
government permits and approvals required in connection with the work. Tenant
shall, through Tenant's licensed contractor, perform the work substantially in
accordance with the plans and specifications approved in writing by Landlord or
deemed approved by Landlord. Tenant shall pay, as Additional Rent, the entire
cost of all work (including the cost of all utilities, permits, fees, taxes, and
property and liability insurance premiums in connection therewith) actually
performed or obtained. Under no circumstances shall Landlord be liable to Tenant
for any damage, loss, cost or expenses incurred by Tenant on account of any
plans and specifications, contractors or subcontractors, design of any work,
construction of any work, or delay in completion of any work.
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<PAGE>
(c) Tenant shall give written notice to Landlord of the date on which
construction of any work to be done by outside contractors will be commenced at
least ten (10) days prior to such date. Landlord shall have the right to post
and keep posted on the Premises any notices that may be provided by law or which
Landlord may deem to be proper for the protection of Landlord and the Premises
from such liens, and to take any other action Landlord deems necessary to remove
or discharge liens or encumbrances at the expense of Tenant.
(d) All alterations, additions, fixtures and improvements, whether temporary
or permanent in character, made in or to the Premises by Tenant, shall become
part of the Premises and Landlord's property. Upon termination of this Lease,
Tenant shall, at Tenant's expense, remove all movable furniture, equipment,
trade fixtures, office machines and other personal property from the Premises
and repair all damages caused by such removal. Termination of this Lease shall
not affect the obligations of Tenant pursuant to this paragraph 22(d) to be
performed after such termination.
23. MEMORANDUM OF LEASE: The parties agree to promptly execute a Memorandum
---------------------
of Lease in recordable form and either of the parties shall have the right,
without notice to the other party, to record such Memorandum of Lease.
24. SUBLETTING/ASSIGNMENT:
----------------------
(a) Subject to paragraph 28(k) and the terms of this paragraph, Tenant may
assign this Lease or any interest herein or sublease the Premises or any part
thereof, or permit the use or occupancy of the Premises by any person or entity
other than Tenant. Tenant agrees that the instrument by which any assignment or
sublease is accomplished shall expressly provide that the assignee or subtenant
will perform all of the covenants to be performed by Tenant under this lease (in
the case of a sublease, only insofar as such covenants relate to the portion of
the Premises subject to such sublease) as and when performance is due after the
effective date of the assignment or sublease and that Landlord will have the
right to enforce such covenants directly against such assignee or subtenant. Any
purported assignment or sublease without an instrument containing the foregoing
provisions shall be void.
(b) (i) No assignment or sublease shall be valid and no assignee or
subtenant shall take possession of the premises or any part thereof until an
executed duplicate original of such assignment or sublease, in compliance with
paragraph 24(a), has been delivered to Landlord, (ii) so long as there is no
Event of Default under this Lease, Tenant shall be entitled to 100% of the
profit on any subletting.
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(c) No assignment or sublease whatsoever shall release Tenant from Tenant's
obligations and liabilities under this Lease (which shall continue as the
obligations of a principal and not of a guarantor or surety) or alter the
primary liability of Tenant to pay all Rent and to perform all obligations to
be paid and performed by Tenant. The acceptance of Rent by Landlord from any
other person or entity shall not be deemed to be a waiver by Landlord of any
provision of this Lease. If any assignee, subtenant or successor of Tenant
defaults in the performance of any obligation to be performed by Tenant under
this Lease, Landlord may proceed directly against Tenant without the necessity
of exhausting remedies against such assignee, subtenant or successor. Landlord
may consent to amendments or modifications to this Lease with assignees,
subtenants or successor of Tenant, without notifying Tenant or any successor of
Tenant and without obtaining any consent thereto from Tenant or any successor of
Tenant, provided that Tenant shall not be bound by any such amendment or
modification to which it has not consented except for amendments and
modifications made when Tenant is default hereunder.
(d) Tenant shall not mortgage its interest under this Lease. The foregoing
prohibition shall not be violated by a lien on all assets of Tenant granted to
institutional lenders as security for a bank loan or line of credit.
25. HAZARDOUS MATERIAL:
------------------
(a) Tenant (i) shall comply, and cause the Premises to comply, with all
Environmental Laws (as hereinafter defined) applicable to the Premises
(including the making of all submissions to governmental authorities required by
Environmental Laws and the carrying out of any remediation program specified by
such authority), (ii) shall prohibit the use of the Premises for the generation,
manufacture, refinement, production, or processing of any Hazardous Material (as
hereinafter defined) or for the storage, handling, transfer or
transportation of any Hazardous Material (other than in connection with the
operation, business and maintenance of the Premises and in commercially
reasonable quantities as a consumer thereof and supplier of consumer products
and in compliance with Environmental Laws), (iii) shall not permit to remain,
install or permit the installation on the Premises of any surface impoundments,
underground storage tanks, or asbestos-containing materials except in compliance
with Environmental Laws, and (iv) shall cause any alterations of the Premises to
be done in a way so as to not expose, in violation of any applicable law, the
persons working on or visiting the Premises to Hazardous Materials and in
connection with any such alterations shall remove any Hazardous Materials
present upon the Premises which are not in compliance with Environmental Laws or
which present a danger to persons working on or visiting the Premises in
violation of any applicable law.
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(b) "Environmental Laws" means the Resource Conservation and Recovery Act of
1976, as amended, 42 U.S.C. (S)(S)6901, et seq. (RCRA), the Comprehensive
-- ---
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. (S)(S)9601
et seq. (CERCLA), the Toxic Substance Control Act, as amended, 15 U.S.C.
- -- ---
(S)(S)2601 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, as
-- ---
amended, 7 U.S.C. (S)(S)136 et seq., New Jersey Environmental Cleanup
-- ---
Responsibility Act (N.J.S.A. 13:1k-6 et seq.), and all applicable federal, state
-- ---
and local environmental laws, ordinances, rules and regulations, as any of the
foregoing may have been or may be from time to time amended, supplemented or
supplanted, and any other federal, state or local laws, ordinances, rules and
regulations, now or hereafter existing relating to regulations or control of
Hazardous Material or materials. The term "Hazardous Materials" as used in this
Lease shall mean substances defined as "hazardous substances", "hazardous
materials", "hazardous wastes" or "toxic substances" in any applicable federal,
state or local statute, rule, regulation or determination, including but not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. (S)(S)9601, et seq,.; the Hazardous Materials
-- ---
Transportation Act, 49 U.S.C. (S)(S) 1801, et seq.; the Resource, Conservation
-- ---
and Recovery Act of 1976, 42 U.S.C. (S)(S)6901, et seq.; and, asbestos, pcb's,
-- ---
radioactive substances, methane, volatile hydrocarbons, petroleum or petroleum-
derived substances or wastes, radon, industrial solvents or any other material
as may be specified in applicable law or regulations.
(c) Except to the extent of liability resulting from or arising out of the
acts of Landlord or its Mortgagee or their agents or their successors and
assigns on or about the Premises, Tenant agrees to protect, defend, indemnify
and hold harmless Landlord and its Mortgagee, their respective directors,
officers, employees and agents, and any successors to Landlord's interest in the
chain of title to the Premises, their direct or indirect partners, directors,
officers, employees, and agents, from and against any and all liability,
including all foreseeable and all unforeseeable damages including but not
limited to reasonable attorney's and consultant's fees, fines, penalties and
civil or criminal damages, directly or indirectly arising out of the use,
generation, storage, treatment, release, threatened release, discharge, spill,
presence or disposal of Hazardous Materials from, on, at, to or under the
Premises prior to or during the Term of this Lease, and including, without
limitation, the cost of any required or necessary repair, response action,
remediation, investigation, cleanup or detoxification and the preparation of any
closure or other required plans, whether such action is required or necessary
prior to or following transfer of title to the Premises. This agreement to
indemnify and hold harmless shall be in addition to any other obligations or
liabilities Tenant may have to Landlord at common law under all statutes and
ordinances or otherwise, and shall survive following the date of expiration or
earlier termination of this Lease for five years, except where the event giving
rise to the liability for which indemnity is sought arises out of Tenant's acts,
in which case the agreement to indemnify shall survive the
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expiration or termination of this Lease without limit of time. Tenant expressly
agrees that the representations, warranties and covenants made and the
indemnities stated in this Lease are not personal to Landlord, and the benefits
under this Lease may be assigned to subsequent parties in interest to the chain
of title to the Premises, which subsequent parties in interest may proceed
directly against Tenant to recover pursuant to this Lease. Tenant, at its
expense, may institute appropriate legal proceedings with respect to
environmental matters of the type specified in this paragraph 25(c) or any lien
for such environmental matters, not involving Landlord or its Mortgagee as a
defendant (unless Landlord or its mortgagee is the alleged cause of the damage),
conducted in good faith and with due diligence, provided that such proceedings
shall not in any way impair the interests of Landlord or Mortgagee under this
Lease. Counsel to Tenant in such proceedings shall be reasonably approved by
Landlord if Landlord is a defendant in the same proceeding. Landlord shall have
the right to appoint co-counsel, which co-counsel will cooperate with Tenant's
counsel in such proceedings. The fees and expenses of such co-counsel shall be
paid by Landlord, unless such co-counsel are appointed because the interests of
Landlord and Tenant in such proceedings, in such counsel's opinion, are or have
become adverse, or Tenant or Tenant's counsel is not conducting such proceedings
in good faith or with due diligence.
(d) Tenant, upon 48 hours prior notice shall permit such persons as Landlord
or any assignee of Landlord may designate and (unless an Event of Default has
occurred and is continuing) approved by Tenant, which approval shall not be
unreasonably withheld or delayed ("Site Reviewers") to visit the Premises from
time to time and perform Environmental site investigations and assessments
("Site Assessments") on the Premises for the purpose of determining whether
there exists on the Premises any environmental condition which may result in any
liability, cost or expense to Landlord or any other owner or occupier of the
Premises relating to Hazardous Material. Such Site Assessments may include both
above and below the ground testing for environmental damage or the presence of
Hazardous Material on the Premises and such other tests on the Premises as may
be necessary to conduct the Site Assessments in the reasonable opinion of the
Site Reviewers. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Premises as may be reasonably requested by
the Site Reviewers to facilitate the Site Assessments (other than information
previously supplied in writing to Landlord by Tenant) and shall make available
for meetings with the Site Reviewers appropriate personnel having knowledge of
such matters. The cost of performing and reporting all Site Assessments shall be
paid by Landlord unless an Event of Default has occurred and is continuing or
unless the Site Reviewers discover an environmental condition causing the
Premises to be in noncompliance with applicable Environmental Laws, in either of
which events such cost will be paid by Tenant within thirty (30) days after
demand by Landlord with interest to accrue at the Overdue Rate. Landlord,
promptly after written request by Tenant and payment by Tenant to the extent
required as aforesaid, shall deliver to Tenant copies of reports, summaries or
other
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compilations of the results of such Site Assessments. Tenant's sole remedy for
Landlord's breach of the preceding sentence shall be a mandatory injunction, and
not a termination of this Lease or a withholding or reduction of Rent. If a Site
Assessment conducted under this paragraph 25(d) indicates that the Premises are
in violation of Environmental Laws or otherwise do not conform to the
requirements of this paragraph 25 at the time the Term is expiring or being
terminated, the term shall be automatically extended for the period of
remediation of such violation or nonconformity and shall not expire until twelve
months after notice from Tenant specifying the date such remediation shall be
completed, and the remediation is in fact completed before the expiration of
such twelve month period. All of the terms, covenants and conditions of this
Lease shall continue in full force and effect during the period of any such
extension, except that the annual Fixed Rent shall be at the holdover rate
specified in paragraph 28(k). Upon completion of such remediation within the
notice period provided above, this Lease and the obligations of Tenant hereunder
(except those that accrued prior to such date) shall terminate.
(e) Tenant shall notify Landlord in writing, promptly upon Tenant's learning
thereof, of any:
(i) notice or claim to the effect that Tenant is or may be liable to any
Person as a result of the release or threatened release of any Hazardous
Material into the environment from the Premises;
(ii) notice that Tenant is subject to investigation by any governmental
authority evaluating whether any remedial action is needed to respond to the
release or threatened release of any Hazardous Material into the environment
from the Premises; and
(iii) notice that the Premises are subject to an environmental lien.
26. DETERMINATION OF FAIR MARKET RENTAL VALUE:
------------------------------------------
Fair market rental value for purposes of setting Renewal Term Fixed Rent
shall be determined by an appraisal, which shall be performed by an appraiser
selected by Landlord within thirty (30) days after the first day of the ninth
month before the end of the Term or the Renewal Term (as the case may be), and
paid one half by Tenant and one half by Landlord. Any appraiser selected by
Landlord shall have qualifications that include a minimum of five (5) years of
experience in the appraisal of commercial real estate in the County where the
Premises are located. Such appraiser shall be disinterested, and shall be a
member of a nationally recognized appraisal association. Further, any such
appraiser shall comply with the licensing law then in
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effect for appraisers authorized to perform general appraisals within the state
where the Premises are located. If there are then any existing United States
laws governing appraisers, said appraiser shall be in compliance with the then
applicable Federal laws for appraisers performing appraisals of commercial real
estate. In the event that Tenant disputes the appraised fair market rental value
determined by an appraiser (hereinafter the "First Appraiser"), who performed an
appraisal pursuant to this paragraph 26, it shall so notify Landlord within
twenty (20) days after receipt of such written determination by the First
Appraiser, and the disagreement shall be resolved as follows:
(i) Within five (5) days after the service of such notice by Tenant to
Landlord, Tenant shall designate a second appraiser (the "Second Appraiser"),
who shall appraise the fair market rental value of the Premises, assuming the
provisions of this Lease (except the Fixed Rent provision) would govern for a
five (5) year term, all in accordance with the requirements of this paragraph
26. This Second Appraiser shall render its opinion of the fair market rental
value no later than thirty (30) days after the service of notice by Tenant
stated above. In the event that the higher of the two appraised fair market
rental values rendered herein is not more than ten percent (10%) greater than
the lower of the two appraised fair market rental values, then the mean between
the two appraised values shall be utilized to fix the appraised fair market
rental value.
(ii) In the event that the higher of the two appraised fair rental values is
more than ten percent (10%) higher than the lower of the two appraised fair
market rental values, then the First Appraiser and the Second Appraiser will
meet within five (5) days after receipt and acceptance of the Second Appraisal
by Tenant, to attempt to agree upon the appraised fair market rental value. If
the First Appraiser and Second Appraiser do not agree upon the appraised fair
rental value after such meeting, then they shall appoint a third appraiser (the
"Third Appraiser").
(iii) If the First and Second Appraiser shall be unable to agree upon the
appointment of the Third Appraiser within five (5) days after the time specified
in subsection "(ii)" above, then the Third Appraiser shall be selected by the
Tenant and Landlord themselves. If the Tenant and Landlord cannot agree on the
third appraiser, within a further period of five (5) days, then either, on
behalf of both, may apply to the person who is, at the time, the most senior in
service, active Judge of the United States District Court for the District of
where the Premises are located, for the selection of the Third Appraiser. If
that Judge cannot or will not
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<PAGE>
make the appointment, then the application will be made to the next
most senior Judge, and so on down the line of seniority. The fees and
costs of the Second and Third Appraisers will be divided equally
between Tenant and Landlord. The cost of application to the Judge of
the United States District Court shall be divided equally between
Tenant and Landlord. In the event of the failure, refusal or inability
of any appraiser to act, a new appraiser shall be appointed in this
stead, which appointment shall be made in the same manner as provided
herein; e.g., if the Second Appraiser must be replaced, then Tenant
will have the right to designate its replacement. In the event that a
Third Appraiser is selected in the manner aforesaid, it shall select
one of the first two appraisals as most nearly establishing fair market
rental value.
27. GRANTING OF EASEMENT
Provided no Event of Default has occurred and is continuing hereunder,
Landlord shall join with Tenant at the request of Tenant (and at Tenant's sole
cost and expense) to (i) sell, assign, convey or otherwise transfer an interest
in the Premises to any person legally empowered to take such interest under the
power of eminent domain, (ii) grant, in the ordinary course of business,
easements, licenses, rights of way, (iii) release, in the ordinary course of
business, existing easements and appurtenances which benefit the Premises, (iv)
dedicate or transfer unimproved portions of the Premises for road, highway or
other public purposes, (v) execute petitions to have the Premises annexed to any
municipal corporation or utility district, all with or without consideration,
but only if Landlord shall have received (x) a certificate of Tenant stating
that such action was taken in the ordinary course of business, does not
interfere with the conduct of Tenant's business, does not materially impair the
utility of the Premises, and does not reduce the fair market value of the
Premises by an amount greater than the consideration (if any) being paid to
Landlord in connection therewith, and (y) and undertaking of Tenant to remain
obligated under this Lease as if such action had not been taken
28. MISCELLANEOUS PROVISIONS:
-------------------------
(a) This Lease and all of the covenants and provisions hereof shall inure to
the benefit of, and be binding upon, the parties hereto and the heirs, personal
representatives, successors and permitted assigns of the parties.
(b) The titles and headings appearing in this Lease are for reference only
and shall not be considered a part of this lease or in any way to modify, amend
or affect the provisions thereof.
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<PAGE>
(c) This Lease contains the complete agreement of the parties with reference
to the leasing of the Premises, and may not be amended except by an instrument
in writing signed by Landlord and Tenant and consented by Mortgagee (if any).
(d) Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and the remaining provisions hereof shall nevertheless remain
in full force and effect.
(e) This Lease may be executed in one or more counterparts, each of which
shall be an original, and all of which shall constitute one and same instrument.
(f) The term "Landlord" as used in this Lease shall mean only the owner or
owners at the time in question of the Premises and in the event of any transfer
of such title or interest, Landlord named in this Lease (and in case of any
subsequent transfers, then the grantor) shall be relieved from and after the
date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed hereunder, provided that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
(g) This Lease shall be governed by and construed and enforced in accordance
with and subject to the laws of the state where the Premises are located.
(h) Any claim based on or in respect of any liability of Landlord under this
Lease shall be enforced only against the Premises and not against any other
assets, properties or funds of (1) Landlord or any director, officer,
shareholder, general partner, limited partner, or direct or indirect partners,
employee or agent of Landlord or its general partners (or any legal
representative, heir, estate, successor or assign of any thereof), (2) any
predecessor or successor partnership or corporation (or other entity) of
Landlord or its general partners, either directly or through Landlord or its
predecessor or successor partnership or corporation (or other Person) of
Landlord or its general partners, and (3) any other person.
(i) Without the written approval of Landlord and Tenant, no Person other
than Landlord (including its direct and indirect partners), Mortgagee, Tenant
and their respective successors and assigns shall have any rights under this
Lease.
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<PAGE>
(j) There shall be no merger of the leasehold estate created hereby by
reason of the fact that the same Person may own directly or indirectly, (1) the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate and (2) the fee estate in the Premises. Notwithstanding any such combined
ownership, this Lease shall continue in full force and effect until terminated
by an instrument executed by both Landlord and Tenant.
(k) If, without objection by Landlord, Tenant holds possession of the
Premises after expiration of the Term of this Lease, Tenant shall become a
tenant from month to month upon the terms herein specified but at a Fixed Rent
equal to one hundred fifty percent (150%) of the Fixed Rent in effect at the
expiration of the Term of this Lease pursuant to paragraph 4 payable in advance
on or before the first day of each month. Such month to month tenancy may be
terminated by either Landlord or Tenant by giving thirty (30) days' written
notice of termination to the other at any time, except as otherwise provided in
paragraph 25(d).
(1) It shall be a condition precedent to the merger, consolidation or sale
of substantially all the assets of Tenant in any transaction in which Tenant is
not the surviving party, that the entity or entities into which Tenant is either
merged or consolidated or to which its assets are sold shall (x) upon completion
of such transaction, shall have a net worth and fixed cost coverage ratio equal
to or greater than those of Tenant immediately before such transaction, and (y)
deliver to Landlord a duly authorized assumption of all liabilities of Tenant
under this Lease.
-37-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands under seal on
the day and year first above written.
GL/PHP, LLC, Landlord
By: G&L Realty Partnership, L.P.,
its manager
By: G&L Realty Corp., general partner
By:
-----------------------------------------
Name:
Title:
PINNACLE HEALTH ENTERPRISES, LLC
Tenant
By:
------------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
Legal Description - Real Estate
-------------------------------
-39-
<PAGE>
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of BURLINGTON, County of BURLINGTON and State of NEW JERSEY, being more
particularly described as follows:
BEGINNING at a point in the Northeasterly side of Mount Holly-
Burlington Road (66 feet wide) on a course of North 27 degrees 42 minutes
25 seconds West, 250 feet from the intersection of the Northeasterly line
of Mount Holly-Burlington Road with the Northerly line of Cadillac Road
(proposed) (70 feet wide) and continued thence (1) along Mount Holly-
Burlington Road North 27 degrees 42 minutes 25 seconds West 313.87 feet to
a point in line of lands of Public Service Electric and Gas Company; thence
(2) along the same North 63 degrees 52 minutes 15 seconds East 203.70 feet
to a point in same; thence (3) still along the same North 68 degrees 59
minutes 15 seconds East 370.07 feet to a point in line of Public Service
Electric and Gas Company right of way; thence (4) along the same curving to
the right with a radius of 5696.65 feet an arc distance of 296.63 feet to a
point in the dividing line between Lots 1 and 2, Section 1, Plan of
Levittown Industrial Park; thence (5) along the same South 62 degrees 17
minutes 35 seconds West 438.01 feet to the point and place of beginning.
BEING known and designated as Lot 1, Section 1, Plan of Levittown
Industrial Park.
EXCEPTING THEREOUT AND THEREFROM all that certain tract or parcel of
land contained in a Deed from Lee Maimon and Barbara Maimon, his wife to
Board of Chosen Freeholders of the County of Burlington, dated 1-6-86,
recorded 1-9-86 in Deed Book 3126, page 106.
FURTHER EXCEPTING THEREOUT AND THEREFROM all that certain tract or
parcel of land contained in Deed from Lee Maimon and Barbara Maimon, his
wife to Board of Chosen Freeholders of the County of Burlington, dated
5-16-88, recorded 5-17-88 in Deed Book 3640, page 34.
NOTE: Being known and designated as Lot No. 2, Block No. 118.02 as shown on the
Tax maps of the Township of Burlington.
ANNUAL RENT: $434,952.11
PURCHASE PRICE: $3,630,652.00
<PAGE>
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of CRANFORD, County of UNION and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the northwesterly right of way line of Commerce
Drive (60.00 feet wide) said point being N 51 degrees - 57 minutes - 40
seconds E 80.00 feet as measured along said line of Commerce Drive as
produced southwesterly from the intersection of the same with the
northeasterly right of way line of Commerce Drive, formerly Clearly Avenue,
as produced northwesterly and running thence:
1. Along lands of the Garden State Parkway N 38 degrees - 02 minutes - 20
seconds W 17.42 feet, thence
2. Still along lands of the Garden State Parkway, northerly, along a curve
to the left, having a radius of 6,150.00 feet, an arc length of 580.66
feet and a chord of N 09 degrees - 40 minutes - 17 seconds W 580.45
feet, thence
3. Along lands now or formerly of Calcran, Inc., S 68 degrees - 24 minutes
- 00 seconds E 353.44 feet, thence
4. Still along lands of Calcran Inc., S 32 degrees - 54 minutes - 16
seconds E 103.44 feet, thence
5. Along the aforesaid northwesterly right of way line of Commerce Drive,
S 51 degrees - 57 minutes - 40 seconds W 598.77 feet to the point of
beginning.
NOTE: Being known and designated as Lot No. 1, Block No. 636 as shown on the
Tax Maps of the Township of Cranford.
ANNUAL RENT: $491,668.66
PURCHASE PRICE: $4,104,079.00
<PAGE>
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
EATONTOWN, County of MONMOUTH and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point on the westerly side of New Jersey State Highway Route
35 (100 minutes R.O.W.) at the northeast corner of Lands now or formerly
Alan R. Cohn & Ira S. Port and from thence; running
1. South 69 degrees 39 minutes 19 seconds West, 275.00 feet to a point;
thence
2. South 20 degrees 20 minutes 41 seconds East, 150.00 feet to a point;
thence
3. South 69 degrees 39 minutes 19 seconds West, 148.95 feet to a point;
thence
4. North 02 degrees 03 minutes 35 seconds East, 79.42 feet to a point;
thence
5. North 88 degrees 34 minutes 33 seconds West, 321.75 feet to a point;
thence
6. North 01 degrees 25 minutes 27 seconds East, 330.00 feet to a point;
thence
7. South 88 degrees 34 minutes 33 seconds East, 267.53 feet to a point;
thence
8. North 69 degrees 39 minutes 19 seconds East, 321.65 feet to a point;
thence
9. South 20 degrees 20 minutes 41 seconds East, 250.00 feet along the
westerly side of New Jersey State Highway Route 35 (100 minutes R.O.W.)
to the point or place of beginning.
NOTE: BEING shown and designated as Lot 1:02 Block 111 on the Tax Maps of the
Borough of Eatontown.
ANNUAL RENT: $481,034.86
PURCHASE PRICE: $4,015,316.00
<PAGE>
ALL THAT CERTAIN lot, tract or parcel of land situate in Hamilton Township,
County of Atlantic and State of New Jersey and described as follows:
BEGINNING on the southerly line of Route 322, also known as the Black Horse Pike
(115 feet from the original centerline) at the division of Lot 9 and Lot 8 as
established by a survey dated June 7, 1990 by John G. Reutter & Associates as
the second corner of land as described in deed from Benjamin L. Jaffe and wife
to William C. Jones, and wife, dated September 30, 1948 and recorded in Deed
Book 1420 Page 129; and extended thence
1. South 64 degrees, 43 minutes and 49 seconds East along the southerly line of
the Black Horse Pike, 528.52 feet to a non-tangent point of curve; thence
2. Eastwardly and southwardly curving to the right along a curve having a
radius of 75.00 feet and an arc length of 67.90 feet to a point of tangency on
the westerly curb line of an entrance drive; thence
3. South 25 degrees, 16 minutes and 11 seconds West along said curve line,
155.00 feet to a point of curve; thence
4. Southwardly and westwardly curving to the right along a curve having a
radius of 25.00 feet and an arc length of 39.27 feet to the northerly curbline
of an access drive; thence
5. North 64 degrees, 43 minutes and 49 seconds West, along said curb line and
the extension thereof 403.63 feet to the division line of Lot 9.01 and Lot 8;
thence
6. North 03 degrees, 00 minutes and 46 seconds West, along said division line
271.40 feet to the point of beginning.
IN compliance with Chapter 157, Laws of 1977 premises herein are known as part
of Lots 9, 10.01, 10.02 and 11 in block 1134 as shown on the official tax map of
Hamilton Township, New Jersey and are designated as Lot 9.01 on a minor
subdivision plat being recorded simultaneously herewith, being Map #3342, filed
December 22, 1994.
ANNUAL RENT: $437,490.07
PURCHASE PRICE: $3,651,837.00
<PAGE>
DESCRIPTION OF PROPERTY
-----------------------
Block 1311, Lot 1.06
ALL THAT CERTAIN tract or parcel of land situated in the Township of Mount
Laurel, County of Burlington and State of New Jersey, being more particularly
described as follows:
BEGINNING at a point of intersection of the easterly line of Fellowship
Road (aka Burlington County Route No. 673, as widened to 43.00 feet from
centerline) and the centerline of a private access street known as Century
Parkway (public dedication now vacated) as illustrated on a filed, or soon to be
filed, plan entitled "Major Subdivision Plan, Block 1311, Lot 1", prepared by
Taylor, Wiseman & Taylor (Dwg. No. 351-18527-F), dated August, 1994, revised to
October 28, 1994 and extends; thence, along said easterly line (1) No. 16
degrees 44 minutes 57 seconds E., 253.26 feet to a point; thence, along the
proposed subdivision line (2) S. 73 degrees 15 minutes 03 seconds E., 430.00
feet to a point in the westerly line of Lot 1.04, Block 1311; thence, along said
westerly line (3) S. 16 degrees 44 minutes 57 seconds W., 253.26 feet to a point
in the aforementioned centerline of Century Parkway; thence, along said
centerline (4) N. 73 degrees, 15 minutes 03 seconds W., 430.00 feet to a point
and the place of BEGINNING.
ANNUAL RENT: $391,309.81
PURCHASE PRICE: $3,266,359.00
<PAGE>
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
PARAMUS, County of BERGEN and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the southerly line of Eisenhower Drive (formerly
Quad Road) (60.00 feet wide) distant the following courses and distances
from the intersection of the center line of Eisenhower Drive with the
center line of Essex Road (formerly Kent Road) (60.00 feet wide) all as
shown on a certain map entitled "Final Subdivision Plat, Quad Associates
and Centurian Plaza Corp." filed in the Bergen County Clerk's Office on
October 24, 1967, as Map No. 6632:
A. Along the center line of Essex Road (formerly Kent Road), if
produced, South 37 degrees 56 minutes 41 seconds West 30.00 feet to a point
in the southerly line of Eisenhower Drive (formerly Quad Road); thence,
B. Along the southerly line of Eisenhower Drive (formerly Quad Road),
North 52 degrees 16 minutes 13 seconds West 149.975 feet to the point or
place of beginning and running; thence,
1. Along the westerly line of Proposed Lot 3 in Block 1803 as shown
on a certain map entitled "Subdivision, Eisenhower Drive, Block 1803, Lots
2 and 3, Paramus, Bergen County, New Jersey" dated 5/19/89, last revised
8/11/89, prepared by Lapatka Associates Inc., 22 Madison Avenue, Paramus,
New Jersey 07652 and approved by the Planning Board of the Borough of
Paramus on August 10, 1989, South 37 degrees 43 minutes 47 seconds West
280.64 feet to a point on a curve; thence,
2. Along the northerly line of Lot 2 in Block 1101 as shown on the
current assessment map of the Borough of Paramus being lands, now or
formerly, of Arcola Country Club, northwesterly, on a curve to the right
having a radius of 675.00 feet, central angle of 2 degrees 37 minutes 28
seconds, an arc distance of 30.92 feet to a point of reverse curvature;
thence,
3. Along the same, northwesterly, on a curve to the left having a
radius of 620.00 feet, central angle of 9 degrees 9 minutes 12 seconds, an
arc distance of 99.05 feet to a point of tangency; thence,
4. Along the same, North 52 degrees 16 minutes 13 seconds West 237.15
feet to a point; thence,
5. Along the easterly line of Lot 1 in Block 1803 as shown on the
referenced Assessment Map, being lands, now or formerly, of Emil Schroth,
North 37 degrees 43 minutes 47 seconds East 268.53 feet to a point; thence,
6. Along the southerly line of Eisenhower Drive (formerly Quad Road),
South 52 degrees 16 minutes 13 seconds East 366.405 feet to the point or
place of beginning.
NOTE: Being known and designated as Lot No. 2, Block No. 1803 as shown on the
Tax Maps of the Borough of Paramus.
ANNUAL RENT: $421,794.95
PURCHASE PRICE: $3,520,826.00
<PAGE>
EXHIBIT 10.47
GUARANTY OF LEASE
-----------------
Guaranty of Lease, dated as of February 15, 1997, by PHP Healthcare
Corporation, a Delaware corporation herein, together with any corporation
succeeding thereto by consolidation, merger or acquisition of its assets
substantially as an entirety, called "Guarantor".
GL/PHP, LLC, a Delaware limited liability company (herein together with its
successors and assigns as owner of the property hereinafter described, called
"Landlord"), is about to acquire an interest in the land described on Schedule A
hereto together with the buildings, fixtures and other improvements located on
said land (collectively, the "Property") at the request of Guarantor, and lease
said Property to Pinnacle Health Enterprises, LLC, a Delaware limited
liability company wholly owned by Guarantor ("Tenant") pursuant to a lease dated
as of February 1, 1997 (the "Lease"). Landlord is unwilling to acquire the
Property or enter into the Lease unless the Guarantor enters into this
agreement. Guarantor directly or indirectly owns all the equity of Tenant. The
acquisition by Landlord of the Property and the lease of the Property to Tenant
is of direct benefit to the Guarantor.
NOW, THEREFORE, in consideration of the execution and delivery of the Lease
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Guarantor, intending to be legally bound,
covenants and agrees with Landlord as follows:
1. The Guarantor unconditionally and irrevocably guarantees to Landlord
that (a) all Fixed Rent and Additional Rent (as defined in the Lease) and all
other sums stated in the Lease to be payable by the Tenant, insurance premiums
and costs of maintenance and repair, whether due by acceleration or otherwise,
including costs and expenses of collection (collectively, the "Monetary
Obligations") will be promptly paid in full when due, in accordance with the
provisions thereof, and (b) Tenant will perform and observe each and every
covenant, agreement, term and condition in the Lease (the "Performance
Obligations"). If for any reason any Monetary Obligations shall not be paid
promptly when due after receipt of required notice to Tenant under the Lease, if
any, and after the expiration of any applicable grace period therefor, Guarantor
shall, immediately upon demand, pay the same to Landlord with interest due
thereon as stated in the Lease. In addition to the foregoing, the Guarantor
hereby becomes surety to Landlord for the due and punctual payment and
performance of the Monetary Obligations and the Performance Obligations and the
Guarantor hereby waives all defenses of any nature that may be available to
Guarantor as a surety and guarantor other than the defenses of payment of the
Monetary Obligations and performance of the Performance Obligations.
<PAGE>
2. Landlord may enforce this Guaranty without first having recourse
against Tenant or exhausting its rights or remedies under the Lease; provided,
that nothing herein shall prohibit Landlord from exercising its rights against
both Guarantor and Tenant simultaneously. This Guaranty and the obligations of
the Guarantor hereunder are present, primary, direct, continuing, unconditional,
irrevocable and absolute and independent of any obligations of Tenant. This
Guaranty constitutes the agreement to pay money to act in the First instance and
is not to be construed as a contract of indemnity or as a guaranty of
collectability.
3. The obligations, covenants, agreements and duties of the Guarantor
under this Guaranty shall in no way be discharged, affected or impaired by any
of the following and Landlord may at any time and from time to time, with or
without consideration, without prejudice to any claim against Guarantor
hereunder, without in any way changing, releasing or discharging Guarantor from
its liabilities and obligations hereunder and without notice to or the consent
of Guarantor waive, release or consent to any of the following:
(a) the waiver by Landlord of the performance or observance by Tenant or
any other party of any of the agreements, covenants, terms or conditions
contained in the Lease;
(b) the extension, in whole or in part, of the time for payment by Tenant
of any sums owing or payable under the Lease, or of any other sums or
obligations under or arising out of or on account of the Lease, or the renewal
or extension of the Lease;
(c) any sublease of any or all of the Property by Tenant to any other
person;
(d) any assumption by any person of any or all of Tenant's obligations
under, or Tenant's assignment of any or all of its interest in the Lease;
(e) the waiver or release or modification or amendment (whether material
or otherwise) of any provision of the Lease, and Guarantor hereby consents to
any such waivers, releases, modifications and amendments and to any future terms
or agreements heretofore or hereafter made by Landlord and Tenant in accordance
with the terms of the Lease, provided that Guarantor shall not be responsible
for any increase in the obligations of tenant under the Lease resulting solely
from an amendment to the Lease made by a tenant which was not, at the time of
such amendment, an affiliate of Guarantor;
<PAGE>
(f) any failure, omission or delay on the part of Landlord to enforce,
assert or exercise any right, power or remedy conferred on or available to
Landlord in or by the Lease or this Guaranty, or any action on the part of
Landlord granting indulgence or extension in any form whatsoever;
(g) the voluntary or involuntary liquidation, dissolution, sale of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, conservatorship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization or other similar proceeding affecting
Landlord, Tenant or Guarantor or any of their assets or any impairment,
modification, release or limitation of liability of Landlord, Tenant or
Guarantor or any of their estates in bankruptcy or of any remedy for the
enforcement of such liability resulting from the operation of any present or
future provision of the Federal Bankruptcy Act or other similar statute or from
the decision of any court;
(h) the release of Tenant from the performance or observance of any of the
agreements, covenants, terms or conditions contained in the Lease by operation
of law;
(i) the power or authority or lack thereof of Tenant to execute,
acknowledge or deliver the Lease;
(j) the legality, validity or invalidity of the Lease;
(k) any defenses whatsoever that Tenant may or might have to the payment
of the Monetary Obligations except for the payment thereof;
(l) the existence or non-existence of Tenant as a legal entity or the
existence or non-existence of any corporate or other business relationship
between Tenant and Guarantor;
(m) any sale or assignment by Landlord of this Guaranty and/or the Lease
(including any assignment by Landlord to any Mortgage (as defined in the Lease);
(n) any default by Guarantor under this Guaranty or any right of setoff,
counterclaim or defense (other than payment in full of the Monetary Obligations
in accordance with the
<PAGE>
terms of the Lease) that Guarantor may or might have to its respective
undertakings, liabilities and obligations hereunder, each and every such defense
being hereby waived by Guarantor; or
(o) any other cause, whether similar or dissimilar to any of the foregoing,
that might constitute a legal or equitable discharge of Guarantor (whether or
not Guarantor shall have Knowledge or notice thereof) other than payment in full
of the Monetary Obligations.
Without in any way limiting the generality of the foregoing, Guarantor
specifically agrees that if Tenant's obligations under the Lease are modified or
amended with the express written consent of Landlord, this Guaranty shall extend
to such obligations as so amended or modified but shall not extend to any
increase in the obligations of Tenant under the Lease if such modification or
amendment was made by a tenant which was not, at the time of such modification
or amendment, and affiliate of Guarantor.
4. Guarantor hereby waives notice (other than any notice required by the
terms of the Lease), demand, presentment, protest and notice of protest.
5. Guarantor agrees that, in the event of the rejection or disaffirmance of
the Lease by Tenant or Tenant's trustee in bankruptcy pursuant to bankruptcy law
or any other law affecting creditors rights, the Guarantor will, if Landlord so
requests, assume all obligations and liabilities of Tenant under the Lease, to
the same extent as if the Guarantor had been originally named instead of Tenant
as a party to such document and there had been no such rejection or
disaffirmance; and the Guarantor will confirm such assumption in writing at the
request of Landlord upon or after such rejection or disafirmance. The
Guarantor, upon such assumption, shall have all rights of Tenant, under the
Lease (to the extent permitted by law).
6. The following events following the expiration of the applicable cure
periods, in this Paragraph are sometimes referred to as an "Event of Default";
a. If default shall be made in the payment of any sum required to be paid
by Guarantor under this Guaranty;
b. If default shall be made in the observance or performance of any of the
other covenants in this Guaranty which the Guarantor is required to observe and
perform and such default shall continue for thirty (30) days after written
notice to the Guarantor provided that
<PAGE>
the time within which Tenant is permitted to cure the default shall be extended
for such period as may be necessary for the curing thereof provided Guarantor is
continuously, diligently and in good faith prosecuting such cure;
c. If any representation or warranty made by Guarantor herein or in any
certificate, demand or request proves to be incorrect in any material respect
when made and the representation or warranty continues to be incorrect for a
period of thirty (30) days after written notice from Landlord, or if the facts
cannot be changed so as to make the representation or warranty correct within
such thirty day period, Guarantor fails to provide Landlord with protection
(including, by way of example, additional collateral or letters of credit)
against loss arising from breach of such representation or warranty, such
protection to be satisfactory to Landlord in its sole discretion;
d. If a petition for relief is filed under the Bankruptcy Code by Guarantor
or the Tenant to place Guarantor or Tenant under the protection of the
Bankruptcy Code;
e. If any involuntary petition in bankruptcy shall be filed against
Guarantor under any Federal or State bankruptcy or insolvency act and shall not
have been dismissed within ninety (90) days of the filing thereof; and
f. If a receiver or similar official shall be appointed for Guarantor or
any substantial portion of the property of Guarantor by any court and any such
receiver shall not have been discharged within thirty (30) days from the date of
his or her appointment.
Upon the occurrence of any such Event of Default, Landlord shall have whatever
rights at law or equity it might have to enforce this Guaranty.
7. Guarantor agrees that any claim or claims or liens or security interests
it may now have or may in the future have against Tenant are or shall be
subordinate to Tenant's obligations to Landlord under the Lease. Guarantor
waives all rights of subrogation against Tenant for any amounts expended by
Guarantor under this Guaranty.
8. If Landlord incurs any expenses in the enforcement of this Guaranty,
including reasonable attorneys' fees and disbursements, whether or not legal
action be institute, the Guarantor shall pay the same immediately upon demand by
Landlord which shall be accompanied by evidence of such fees and disbursements.
<PAGE>
9. Landlord shall not by any act of omission or commission be deemed
to waive any of its rights or remedies hereunder unless such waiver be in
writing and signed by Landlord, and then only to the extent specifically set
forth therein; a waiver on one event shall not be construed as continuing or as
a bar to or waiver of such right or remedy on a subsequent event.
10. The Guarantor will deliver to Landlord, promptly upon their
becoming available, copies of Guarantor's Form 10Q, 10k and annual report, At
any time when Guarantor is not a reporting company under the Securities and
Exchange Act of 1934, as amended, it will deliver to Landlord the following
information:
(a) within 120 days after the end of each fiscal year of Guarantor, a
balance sheet of Guarantor and its consolidated subsidiaries as at the
end of such year, a statement of profits and losses of Guarantor and
its consolidated subsidiaries for such year, and a statement of change
in the financial position of Guarantor, and its consolidated
subsidiaries for such year, setting forth in each case, in comparative
form, the corresponding figures for the preceding fiscal year in
reasonable detail and scope and certified by independent certified
public accountants of recognized national standing selected by
Guarantor; (b) within 60 days after the end of each of the first three
fiscal quarters of Guarantor a balance sheet of Guarantor and its
consolidated subsidiaries as at the end of such quarter, statements of
profits and losses of Guarantor and its consolidated subsidiaries for
such quarter and a statement of change in financial position of
Guarantor in each case, in comparative form, the corresponding figures
for the similar quarter of the preceding year, in reasonable detail
and scope, and certified to be true and complete by a financial
officer of Guarantor having knowledge thereof; the foregoing financial
statements all being prepared in accordance with generally accepted
accounting principles, consistently applied (except as otherwise
stated therein).
11. All notices, demands, requests, approvals or consents made
pursuant to, under or by virtue of this Guaranty must be in writing and mailed
to the party to which the notice, demand, request, approval or consent is being
sent by certified or registered mail, return receipt requested, or by overnight
courier delivery, addressed as follows, or at such other address as such party
may designate by notice to the other party:
To Guarantor:
PHP Healthcare Corporation
<PAGE>
11440 Commerce Park Drive
Reston, Virginia 22091
Attn: Ben Rosenbaum, III, Esq., General Counsel
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
1001 Pennsylvania Avenue, N.W., Suite 800
Washington, D.C. 20004
Attn: Andrew P. Varney, Esq.
To Landlord:
GL/PHP, LLC
c/o G&L Realty, Inc.
439 North Bedford Drive
Beverly Hills, California 90210
Attn: Gary Grabel
With a copy to:
Day, Berry & Howard
260 Franklin Street
Boston, Massachusetts 02110
Attn: Lewis A. Burleigh, Esq.
Any notice, demand, request, approval or consent given in accordance with
the provisions of this Paragraph 11 shall be effective on the date of receipt or
delivery or when proper delivery is refused by the addressee.
12. Notice of acceptance of this Guaranty by Landlord and notice of any
obligations or liabilities contracted or incurred by any Tenant under the Lease
are hereby waived by the Guarantor.
13. This Guaranty shall be governed by and construed in accordance with
the laws of the State of New Jersey.
14. This Guaranty may not be modified or amended except by a written
agreement duly executed by Guarantor and Landlord and Landlord's first fee
mortgagee from time to
<PAGE>
time, if any. This Guaranty shall be binding upon the Guarantor and shall inure
to the benefit of Landlord and its successors and assigns as permitted
hereunder, including, without limitation, any mortgagee of Landlord's interest
in the Property. In the event any one or more of the provisions contained in
this Guaranty shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Guaranty, but this Guaranty shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein. As used herein the term "Tenant" includes its successors
and assigns with respect to the Lease.
15. The rights of Landlord under this Guaranty may be assigned in whole or
in part by Landlord, its successors and assigns, whether directly or by way of a
grant of a security interest herein, without the consent of Guarantor.
16. Within 15 days after request by Landlord, Guarantor shall deliver a
certificate confirming that this Guaranty is in full force and effect and
unamended (or, if amended, specifying such amendment), and whether, to the
knowledge of Guarantor, any default exists under the Lease or under this
Guaranty.
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and its corporate seals to be hereunto affixed and attested by its
officers thereunto duly authorized.
PHP Healthcare Corporation
[Corporate Seal]
ATTEST:
By: /s/ Ben Rosenbaum
---------------------------
Name: Ben Rosenbaum III
_____________________ Title:Corporate Secretary and
Name: General Counsel
Title:
<PAGE>
EXHIBIT 10.48
G&L REALTY PARTNERSHIP, L.P.
NON-NEGOTIABLE 8.5% NOTE DUE JULY 31, 2007
FOR VALUE RECEIVED, the G&L REALTY PARTNERSHIP, L.P. (the "Company"), a
limited partnership organized and existing under the laws of the State of
Delaware, hereby promises to pay to PHP HEALTHCARE CORPORATION (the "Payee"), or
permitted assigns, the principal sum of TWO MILLION DOLLARS ($2,000,000.00) on
or before July 31, 2007 with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 8.5%
per annum from the date hereof, payable quarterly, on the last day of January,
April, July and October in each year, commencing with October 31, 1997 until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law, on any overdue payment of principal or interest at 9.5% per
annum.
Payments of principal of and interest on this Note are to be made in lawful
money of the United States of America at 11440 Commerce Park Drive, Reston,
Virginia 22091 or at such other place in the continental United States as the
Payee shall have designated by written notice to the Company.
This Note is subject to prepayment at the option of the Company, in whole
or from time to time in part, at any time at a price equal to the principal
amount to be prepaid plus interest accrued and unpaid thereon, if any, without
premium.
If an Event of Default, as defined in the Lease Agreement, dated as of
February 1, 1997, between GL/PHP, LLC (an affiliate of the Company), as
landlord, and Pinnacle Health Enterprises, LLC (an affiliate of Payee whose
obligations under such Lease Payee has guaranteed), as tenant, occurs and is
continuing, the Company may offset against interest payments due hereunder
and/or the principal hereof an amount equal to the amount of its direct loss as
a result of such Event of Default.
This Note is intended as part of a commercial transaction and is not
negotiable. This Note may be assigned only with the prior written consent of the
Company, which will not be unreasonably withheld but which may be conditioned on
(a) written recognition by the proposed transferee of the provisions of the
preceding paragraph, and (b) delivery of evidence satisfactory to the Company
that such transfer will not violate any federal or state securities laws.
This Note shall be construed and enforced in accordance with the laws of
the State of California, excluding choice of law principles of the law of such
State that would require the applications of the laws of a jurisdiction other
than such State.
G&L REALTY PARTNERSHIP, L.P.
By: G&L Realty Corp., general partner
By /s/ Mark H. Hamermesh
-------------------------------
Name: Mark H. Hamermesh
Title: Sr. Vice President
<PAGE>
EXHIBIT 10.49
MORTGAGE NOTE
$16,000,000.00 August 15, 1997
For value received, GL/PHP,LLC, a Delaware limited liability company,
having its principal place of business at 439 North Bedford Drive, Beverly
Hills, California 90210 (hereinafter referred to as "MAKER"), promises to pay to
the order of NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, at its
principal place of business at Two World Financial Center, Building B, New York,
New York 10281 (hereinafter referred to as "PAYEE"), or at such place as the
holder hereof may from time to time designate in writing, the principal sum of
Sixteen Million and no/100 Dollars ($16,000,000.00), in lawful money of the
United States of America, with interest thereon to be computed on the unpaid
principal balance from time to time outstanding at the Applicable Interest Rate
(as hereinafter defined), and to be paid in installments as follows:
A. A payment of interest only on September 11, 1997;
B. A constant payment of $155,197.14 (such amount hereinafter the
"MONTHLY DEBT SERVICE PAYMENT AMOUNT"), on the eleventh day of
October, 1997 and on the eleventh day of each calendar month
thereafter up to and including the eleventh day of February, 2014;
each of such payments to be applied (a) to the payment of interest
computed at the Initial Interest Rate (as hereinafter defined); and
(b) the balance applied toward the reduction of the principal sum:
and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on the eleventh day of March, 2014
(the "MATURITY DATE"). Interest on the principal sum of this Note shall be
calculated on the basis of the actual number of days elapsed in a three hundred
sixty (360) day year. The constant payment required hereunder is based on an
amortization schedule of one hundred ninety-eight (198) months (the
"AMORTIZATION TERM"). The first interest accrual period hereunder shall commence
on and include the date that principal is advanced hereunder and shall end on
and include the next tenth (10th) day of a calendar month; unless principal is
advanced on the tenth (10th) day of a month, in which case the first interest
accrual period shall consist of only such tenth (10th) day. Each interest
accrual period thereafter shall commence on the eleventh (11th) day of each
calendar month during the term of this Note and shall end on and include the
tenth (10th) day of the next occurring calendar month. All amounts due under
this Note shall be payable without setoff, counterclaim or any other deduction
whatsoever.
1. The term "APPLICABLE INTEREST RATE" as used in this Note shall mean
from (a) the date of this Note through but not including the Optional Prepayment
Date (as hereinafter defined), a rate of eight and ninety-eight one hundredths
percent (8.98%) per annum (the "INITIAL INTEREST RATE"), and (b) from and after
the Optional Prepayment Date through and including the date this Note is paid in
full, a rate per annum equal to the greater of (i) the Initial Interest Rate
plus five (5) percentage points or (ii) the Treasury Rate (as hereinafter
defined) plus five (5) percentage points (the "REVISED INTEREST RATE"). For
purposes of this Note, (A) the term "OPTIONAL PREPAYMENT DATE" shall mean,
December 11, 2009, and (B) the term "TREASURY RATE" shall mean, as of the
Optional Prepayment Date, the yield, calculated by linear interpolation (rounded
to the nearest one-thousandth of one percent (i.e., 0.001%)) of the yields of
---
noncallable United States Treasury obligations with terms (one longer and one
shorter) most nearly approximating the period from the Optional Prepayment Date
to the Maturity Date, as determined by Payee on the basis of Federal Reserve
Statistical Release H.15-Selected Interest Rates under the heading U.S.
Governmental Security/Treasury Constant Maturities, or other recognized source
of financial market information selected by Payee.
2. This Note is evidence of that certain loan made by Payee to Maker
contemporaneously herewith (the "LOAN"). This Note is secured by (a) a Mortgage,
Assignment of Leases and Rents and Security Agreement of even date herewith in
the amount of this Note given by Maker for the use and benefit of Payee covering
the fee estate of Maker in certain premises as more particularly described
therein (the "MORTGAGE"), (b) an Assignment of
<PAGE>
Leases and Rents of even date herewith executed by Maker in favor of Payee (the
"ASSIGNMENT OF LEASES"), and (c) the other Loan Documents (as hereinafter
defined). The term "LOAN DOCUMENTS" as used in this Note relates collectively to
this Note, the Mortgage, the Assignment of Leases and any and all other
documents securing, evidencing, or guaranteeing all or any portion of the Loan
or otherwise executed and/or delivered in connection with this Note and the
Loan.
3. If any sum payable under this Note is not paid on the date on which it
is due, Maker shall pay to Payee upon demand an amount equal to the lesser of
five percent (5%) of such unpaid sum or the maximum amount permitted by
applicable law in order to defray a portion of the expenses incurred by Payee in
handling and processing such delinquent payment and to compensate Payee for the
loss of the use of such delinquent payment. If the day when any payment required
under this Note is due is not a Business Day (as hereinafter defined), then
payment shall be due on the first Business Day thereafter. The term "BUSINESS
DAY" shall mean a day other than (i) a Saturday or Sunday, or (ii) any day on
which banking and savings and loan institutions in New York are authorized or
obligated by law or executive order to be closed.
4. The whole of the principal sum of this Note, together with all
interest accrued and unpaid thereon and all other sums due under the Loan
Documents (all such sums hereinafter collectively referred to as the "DEBT"), or
any portion thereof, shall without notice become immediately due and payable at
the option of Payee if any payment required in this Note is not paid on the date
on which it is due or upon the happening of any other Event of Default (as
defined in the Mortgage). In the event that it should become necessary to employ
counsel to collect or enforce the Debt or to protect or foreclose the security
therefor, Maker also shall pay on demand all costs of collection incurred by
Payee, including attorneys' fees and costs reasonably incurred for the services
of counsel whether or not suit be brought.
5. Maker does hereby agree that upon the occurrence of an Event of
Default (including upon the failure of Maker to pay the Debt in full on the
Maturity Date), Payee shall be entitled to receive and Maker shall pay interest
on the entire unpaid principal sum and any other amounts due at a rate (the
"DEFAULT RATE") equal to the lesser of (a) the maximum rate permitted by
applicable law, or (b) five percent (5%) above the Applicable Interest Rate. The
Default Rate shall be computed from the occurrence of the Event of Default until
the date Maker cures the Event of Default and such cure is accepted by Payee.
This charge shall be added to the Debt and shall be secured by the Mortgage.
This paragraph, however, shall not be construed as an agreement or privilege to
extend the date of the payment of the Debt, nor as a waiver of any other right
or remedy accruing to Payee by reason of the occurrence of any Event of Default.
6. This Note may not be prepaid prior to the Optional Prepayment Date;
provided, however, Maker shall have the right and option to release the
Mortgaged Property (as defined in the Mortgage) from the lien of the Mortgage in
accordance with the terms and provisions set forth in Paragraph 51 of the
Mortgage (the "DEFEASANCE OPTION"). Notwithstanding the foregoing sentence,
Maker shall have the privilege to prepay the entire principal balance of this
Note and any other amounts outstanding on any scheduled payment date during the
six (6) months preceding the Optional Prepayment Date without payment of the
Yield Maintenance Premium (as defined in the Mortgage) or any other premium or
penalty. In addition, on the Optional Prepayment Date or on any scheduled
payment date thereafter, the Maker may, at its option and upon thirty (30) days
prior written notice from Maker to Payee, prepay in whole or in part the
outstanding principal balance of this Note and any other amounts outstanding
without payment of the Yield Maintenance Premium or any other premium or
penalty. If prior to the Optional Prepayment Date and following the occurrence
of any Event of Default, Maker shall tender payment of an amount sufficient to
satisfy the Debt at any time prior to a sale of the Mortgaged Property, either
through foreclosure or the exercise of the other remedies available to Payee
under the Mortgage, such tender by Maker shall be deemed to be voluntary and
Maker shall pay, in addition to the Debt, the Yield Maintenance Premium, if any,
that would be required under the Defeasance Option. In addition to the
foregoing, Maker shall not be required to pay any fee or consideration if, in
accordance with the terms and conditions of the Mortgage, Payee receives (a)
insurance proceeds or other payments as a result of fire or other casualties, or
(b) awards or other payments made in any condemnation or eminent domain
proceedings, including, without limitation, payments by Pinnacle Health
Enterprises, LLC ("PINNACLE"), as tenant of the Mortgaged Property, to Maker in
connection with a sale of all or
2
<PAGE>
any portion of the Mortgaged Property to Pinnacle upon a taking of all or such
portion of the Mortgaged Property through a condemnation or eminent domain
proceeding pursuant to that certain Lease dated as of February 1, 1997 between
Maker, as landlord and Pinnacle, as tenant (collectively, "INVOLUNTARY
PAYMENTS"), and such involuntary Payments are applied by Payee toward reduction
of the Debt; provided, however, if an Event of Default, or an event with notice
and/or the passage of time would constitute an Event of Default, has occurred
then the Maker shall pay to the Payee an additional amount equal to the Yield
Maintenance Premium, if any, that would be required under the Defeasance Option.
In the event that any such Involuntary Payments are applied to the outstanding
principal balance due under this Note, Payee shall, upon written notice to
Maker, recalculate the Monthly Debt Service Payment Amount subsequently due
hereunder based on (i) the principal balance outstanding after application of
any such Involuntary Payment, (ii) the Remaining Amortization Term (hereinafter
defined), and (iii) the Applicable Interest Rate. For the purpose hereof, the
term "REMAINING AMORTIZATION TERM" shall mean the Amortization Term less the
number of calender months for which a Monthly Debt Service Payment Amount was
made hereunder on or prior to the date of the Involuntary Payment.
7. (a) From and after the date hereof and pursuant to the terms of the
Cash Management Agreement (as defined in Section 52 of the Mortgage) until the
Optional Prepayment Date, Maker (i) shall cause all Rents (as defined in the
Mortgage) and other sums collected from or arising with respect to, the
Mortgaged Property to be deposited in the deposit account (the "DEPOSIT
ACCOUNT") established pursuant to the Cash Management Agreement; and (ii) shall
require the deposit bank to wire all amounts that it receives in the Deposit
Account, after the payment of the Monthly Debt Service Amount, to the Maker on a
monthly basis.
(b) For each calendar year commencing on June 1, 2009 and for each
calendar year thereafter, the Maker shall submit to the Payee for the Payee's
written approval an annual budget (an "ANNUAL BUDGET") not later than sixty (60)
days prior to the commencement of such calendar year, in form satisfactory to
Payee setting forth in reasonable detail budgeted monthly operating income and
monthly operating capital and other expenses for the Mortgaged Property, if any.
Each Annual Budget shall contain, among other things, limitations on management
fees, third party service fees, and other expenses as the Payee may reasonably
determine. Payee shall have the right to approve such Annual Budget and in the
event that Payee objects to the proposed Annual Budget submitted by Maker, Payee
shall advise Maker of such objections within fifteen (15) days after receipt
thereof (and deliver to Maker a reasonably detailed description of such
objections) and Maker shall within three (3) days after receipt of notice of any
such objections revise such Annual Budget and resubmit the same to Payee. Payee
shall advise Maker of any objections to such revised Annual Budget within ten
(10) days after receipt thereof (and deliver to Maker a reasonably detailed
description of such objections) and Maker shall revise the same in accordance
with the process described in this subparagraph until the Payee approves an
Annual Budget, provided, however, that if Payee shall not advise Maker of its
objections to any proposed Annual Budget within the applicable time period set
forth in this paragraph, then such proposed Annual Budget shall be deemed
approved by Payee. Each such Annual Budget approved by Payee in accordance with
terms hereof shall hereinafter be referred to as an "APPROVED ANNUAL BUDGET."
Until such time that Payee approves a proposed Annual Budget, the most recently
Approved Annual Budget shall apply; provided that, such Approved Annual Budget
shall be adjusted to reflect actual increases in real taxes, insurance premiums
and utilities expenses.
8. In the event that the Maker does not prepay the entire principal
balance of this Note and any other amounts outstanding on the Optional
Prepayment Date, the provisions of subparagraph 7(b) as set forth above shall
remain in full force and effect, and the following subparagraph also shall
apply:
(a) From and after the Optional Prepayment Date, interest shall
accrue on the unpaid principal balance from time to time outstanding on this
Note at the Revised Interest Rate. Interest accrued at the Revised Interest Rate
and not paid pursuant to this paragraph 8 shall be deferred and added to the
Debt and shall earn interest at the Revised Interest Rate to the extent
permitted by applicable law (such accrued interest is hereinafter defined as "
ACCRUED INTEREST"). All of the Debt, including and Accrued Interest, shall be
due and payable on the Maturity Date.
3
<PAGE>
(b) Maker shall pay on the Optional Prepayment Date and the eleventh
day of each calendar month thereafter up to and including the Maturity Date the
following payments from Rents received on or before such day in the listed order
of priority:
i) First, payments to the Tax and Insurance Escrow Fund (as
defined in the Mortgage) in accordance with the terms and conditions
of the Mortgage, if any;
ii) Second, the payment of the Monthly Debt Service Payment
Amount to be applied first to the payment of interest computed at the
Initial Interest Rate with the remainder applied to the reduction of
the outstanding principal balance of this Note;
iii) Third, payments for monthly Cash Expenses (as hereinafter
defined), less management fees payable to affiliates of Maker, if any,
pursuant to the terms and conditions of the related Approved Annual
Budget;
iv) Fourth, payments for monthly Net Capital Expenditures, if
any, pursuant to the terms and conditions of the related Approval
Annual Budget;
v) Fifth, payment for Extraordinary Expenses (as hereinafter
defined) approved by Payee, if any;
vi) Sixth, payments to the Payee to be applied against the
outstanding principal due under this Note until such principal
amount is paid in full;
vii) Seventh, payments to the Payee for Accrued Interest;
viii) Eighth, payments to the Payee of any other amounts due
under the Loan Documents; and
ix) Lastly, payment to the Maker of any excess amounts.
(c) Nothing in this paragraph 8 shall limit, reduce or otherwise
affect Maker's obligations to make payments of the Monthly Debt Service Payment
Amount, payments to the Tax and Insurance Escrow Fund, if any, and payments of
other amounts due hereunder and under the other Loan Documents, whether or not
Rents are available to make such payments.
(d) In the event that the Maker must incur an extraordinary operating
expense or capital expense not set forth in the Annual Budget (each an
"EXTRAORDINARY EXPENSE"), then the Maker shall promptly deliver to Payee a
reasonably detailed explanation of such Extraordinary Expense for the Payee's
approval.
(e) For the purposes of this Note, (i) "CASH EXPENSES" shall mean,
for any period, the operating expenses for the operation and maintenance of the
Mortgaged Property as set forth in an Approved Annual Budget to the extent that
such expenses are actually incurred by Maker minus payments into the Tax and
Insurance Escrow Fund, if any, and (ii) "NET CAPITAL EXPENDITURES" shall mean
for any period the amount expended which exceeds reimbursement from any fund
established under the Mortgage for items capitalized under generally accepted
accounting principles (including expenditures for building improvements or major
repairs, leasing commissions and tenant improvements).
9. It is expressly stipulated and agreed to be the intent of Maker and
Payee at all times to comply with applicable state law or applicable United
States Federal law (to the extent that it permits Payee to contract for, charge,
take, reserve, or receive a greater amount of interest than under state law) and
that this paragraph shall control every other covenant and agreement in this
Note and the other Loan Documents. If the applicable law (state or federal) is
ever judicially interpreted so as to render unsurious any amount called for
under this Note or under any
4
<PAGE>
of the other Loan Documents, or contracted for, charged, taken, reserved, or
received with respect to the Debt, or if Payee's exercise of the option to
accelerate the Maturity Date, or if any prepayment or the exercise of any
Defeasance Option by Maker results in Maker having paid any interest in excess
of that permitted by applicable law, then it is Payee's express intent that all
excess amounts theretofore collected by Payee shall be credited on the principal
balance of this Note and all other Debt and the provisions of this Note and the
other Loan Documents immediately be deemed reformed and the amounts thereafter
collectible and hereunder and thereunder reduced, without the necessity of the
execution of any new documents, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
or thereunder. All sums paid or agreed to be paid to Payee for the use,
forbearance, or detention of the Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Debt until payment in full so that the rate or amount of
interest on account of the Debt does not exceed the maximum lawful rate from
time to time in effect and applicable to the Debt for so long as the Debt is
outstanding. Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, it is not the intention of Payee to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.
10. This Note may not be modified, amended, waived, extended, changed,
discharged or terminated orally or by any act or failure to act on the part of
Maker or Payee, but only by an agreement in writing signed by the party against
whom enforcement of any modification, amendment, waiver, extension, change,
discharge or termination is sought. Whenever used, the singular number shall
include the plural, the plural the singular, and the words "PAYEE" and "MAKER"
shall include their respective successors, assigns, heirs, executors and
administrators. If Maker consists of more than one person or party, the
obligations and liabilities of each such person or party shall be joint and
several.
11. Maker and all others who may become liable for the payment of all
or any part of the Debt do hereby severally waive presentment and demand for
payment, notice of dishonor, protest, notice of protest, notice of nonpayment,
notice of intent to accelerate the maturity hereof and of acceleration. No
release of any security for the Debt or any person liable for payment of the
Debt, no extension of time for payment of this Note or any installment hereof,
and no alteration, amendment or waiver of any provision of the Loan Documents
made by agreement between Payee and any other person or party shall release,
modify, amend, waive, extend, change, discharge, terminate or affect the
liability of Maker, and any other person or party who may become liable under
the Loan Documents for the payment of all or any part of the Debt.
12. Subject to the qualifications below, Payee shall not enforce the
liability and obligation of Maker to perform and observe the obligations
contained in this Note, the Mortgage or the other Loan Documents by any action
or proceeding wherein a money judgment shall be sought against Maker, except
that Payee may bring a foreclosure action, an action for specific performance or
any other appropriate action or proceeding to enable Payee to enforce and
realize upon its interest under this Note, the Mortgage and the other Loan
Documents, or in the Mortgaged Property, the Rents, or any other collateral
given to Payee pursuant to the Loan Documents; provided, however, that, except
-------- -------
as specifically provided herein, any judgement in any such action or proceeding
shall be enforceable against Maker only to the extent of Maker's interest in the
Mortgaged Property, in the Rents and in any other collateral given to Payee, and
Payee, by accepting this Note, the Mortgage and the other Loan Documents, agrees
that it shall not sue for, seek or demand any deficiency judgment against Maker
in any such action or proceeding under or by reason of or under or in connection
with this Note, the Mortgage or the other Loan Documents. The provisions of this
paragraph shall not, however, (a) constitute a waiver, release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Payee to name Maker as a party defendant in any action or suit for
foreclosure and sale under the Mortgage; (c) affect the validity or
enforceability of or any guaranty made in connection with the Loan or any of the
rights and remedies of the Payee thereunder; (d) impair the right of Payee to
obtain the appointment of a receiver; (e) impair the enforcement of the
Assignment of Leases; or (f) constitute a waiver of the right of Payee to
enforce the liability and obligation of Maker, by money judgment or otherwise,
to the extent of any loss, damage, cost, expense, liability, claim or other
obligation incurred by Payee (including attorneys' fees and costs reasonably
incurred) arising out of or in connection with the following:
5
<PAGE>
i) fraud or intentional misrepresentation by Maker or any
guarantor in connection with the Loan;
ii) the gross negligence or willful misconduct of Maker;
iii) intentional actual waste of the Mortgaged Property;
iv) the breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous
Substance Indemnification Agreement of even date herewith given by
Maker to Payee or in the Mortgage concerning environmental laws,
hazardous substances or asbestos;
v) the removal or disposal of any portion of the Mortgaged
Property after an Event of Default;
vi) the misapplication or conversion by Maker of (A) any
insurance proceeds paid by reason of any loss, damage or destruction
to the Mortgaged Property, (B) any awards or other amounts received in
connection with the condemnation of all or a portion of the Mortgaged
Property, or (C) any Rents following an Event of Default;
vii) failure to pay charges for labor or materials or other
charges that can create liens on any portion of the Mortgaged
Property; and
viii) any security deposits collected with respect to the
Mortgaged Property which are not delivered to Payee upon a foreclosure
of the Mortgaged Property or action in lieu thereof, except to the
extent any such security deposits were applied in accordance with the
terms and conditions of any of the Leases (as defined in the
Mortgage) prior to the occurrence of the Event of Default that gave
rise to such foreclosure or action in lieu thereof.
Notwithstanding anything to the contrary in this Note or any of the Loan
Documents, (A) Payee shall not be deemed to have waived any right which Payee
may have under Section 506(a), 506(b), 1111(b) or any other provisions of the
U.S. Bankruptcy Code to file a claim for the full amount of the Debt secured by
the Mortgage or to require that all collateral shall continue to secure all of
the Debt owing to Payee in accordance with the Loan Documents, and (B) the Debt
shall be fully recourse to Maker in the event that; (i) the first full monthly
payment of principal and interest under this Note is not paid when due; (ii)
Maker fails to permit on-site inspections of the Mortgaged Property within ten
(10) days after request by Payee, fails to provide financial information within
thirty (30) days after the date upon which such financial information is due and
Payee has given at least fifteen (15) days prior written notice to Maker of such
failure by Maker to provide such information, or fails to maintain its status as
a single purpose entity as required by, and in accordance with the terms and
provisions of, the Mortgage; (iii) Maker fails to obtain Payee's prior written
consent to any subordinate financing or other voluntary lien encumbering the
Mortgaged Property; or (iv) Maker fails to obtain Payee's prior written consent
to any assignment, transfer, or conveyance of the Mortgaged Property or any
interest therein as required by the Mortgage.
Further notwithstanding anything to the contrary contained herein, no
liability or obligation shall be personally binding upon nor shall resort to the
enforcement thereof be had to the property of the shareholders, directors or
officers of G&L Management Delaware Corp., the corporate managing member in
Maker, or to the members in Maker, to the extent that the terms of this
Paragraph 50 hereof are breached.
13. Maker (and the undersigned representative of Maker, if any) represents
that Maker has full power, authority and legal right to execute, deliver and
perform its obligations pursuant to this Note, the Mortgage and the other Loan
Documents and that this Note, the Mortgage and the other Loan Documents
constitute valid and binding obligations of Maker.
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14. All notices or other communications required or permitted to be given
pursuant hereto shall be given in the manner specified in the Mortgage directed
to the parties at their respective addresses as provided therein.
15. MAKER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE
OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MAKER,
AND IS INTENDED TO EMCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCURE, PAYEE IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY MARKER.
16. This Note shall be governed by and construed in accordance with the
laws of the State in which the Mortgaged Property is located and the applicable
laws of the United States of America.
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<PAGE>
Maker has duly executed this Note the day and year first above written.
MAKER:
GL/PHP,LLC, a Delaware limited liability
company
By: G&L MANAGEMENT DELAWARE CORP.,
a Delaware corporation, as Managing Member
/s/ GARY GRABEL
By: ----------------------------------
Gary Grabel, Vice President
Pay to the order of __________________________________,2_______________, without
recourse.
NOMURA ASSET CAPITAL, CORPORATION, a
Delaware corporation
By: ________________________________
Name:___________________________
Title:__________________________
<PAGE>
================================================================================
GL/PHP, LLC
(Mortgagor)
to
NOMURA ASSET CAPITAL CORPORATION
(Mortgagee)
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS
AND SECURITY AGREEMENT
Dated: As of August 15, 1997
Property Location: 2103 Mount Holly Road, Burlington, New Jersey
16 Commerce Drive, Cranford, NJ
274 Highway 35, Eatontown, NJ
4622 Black Horse Pike, Hamilton, NJ
150 Century Parkway, Mount Laurel, NJ
80 Eisenhouwer Drive, Paramus, NJ
Loan No.: 13431
-----
================================================================================
DOCUMENT PREPARED BY AND WHEN RECORDED, RETURN TO:
Brownstein Hyatt Farber & Strickland, P.C.
410 Seventeenth 17th Street, 22nd Floor
Denver, Colorado 80202
Attention: Ana Lazo Tenzer, Esq.
<PAGE>
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT (the
"MORTGAGE"), made as of August 15, 1997, by GL/PHP, LLC, a Delaware limited
liability company, having its principal place of business at 439 North Bedford
Drive, Beverly Hills, California 90210, ("MORTGAGOR"), to NOMURA ASSET CAPITAL
CORPORATION, a Delaware corporation, having its principal place of business at
Two World Financial Center, Building B, New York, New York 10281 Attention:
Chief Legal Counsel ("MORTGAGEE").
W I T N E S E T H:
To secure the payment of an indebtedness in the original principal sum of
Sixteen Million and no/100 Dollars ($16,000,000.00), lawful money of the United
States of America, to be paid with interest according to a certain mortgage note
of even date herewith made by Mortgagor to Mortgagee (the mortgage note together
with all extensions, renewals or modifications thereof being hereinafter
collectively called the "NOTE") and all other sums due hereunder, under the
other Loan Documents (hereinafter defined) and under the Note (said indebtedness
and interest due under the Note and all other sums due hereunder, under the Note
and under the other Loan Documents being hereinafter collectively referred to as
the "DEBT"), Mortgagor has mortgaged, given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, warranted, pledged, assigned, and
hypothecated and by these presents does hereby mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, warrant, pledge, assign and hypothecate
unto Mortgagee the real property described in Exhibit A attached hereto (the
---------
"PREMISES") and the buildings, structures, fixtures, additions, enlargements,
extensions, modifications, repairs, replacements and improvements now or
hereafter located thereon (the "IMPROVEMENTS");
TOGETHER WITH: all right, title, interest and estate of Mortgagor now
owned, or hereafter acquired, in and to the following property, rights,
interests and estates (the Premises, the Improvements, and the property, rights,
interests and estates hereinafter described are collectively referred to herein
as the "MORTGAGED PROPERTY"):
(a) all easements, rights-of-way, strips and gores of land, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, all rights to oil, gas, minerals, coal and
other substances of any kind or character, and all estates, rights, titles,
interests, privileges, liberties, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way belonging, relating or pertaining to the
Premises and the Improvements and the reversion and reversions, remainder and
remainders, and all land lying in the bed of any street, road, highway, alley or
avenue, opened, vacated or proposed, in front of or adjoining the Premises, to
the center line thereof and all the estates, rights, titles, interests, dower
and rights of dower, curtsey and rights of curtsey, property, possession, claim
and demand whatsoever, both at law and in equity, of Mortgagor of, in and to the
Premises and the Improvements and every part and parcel thereof, with the
appurtenances thereto;
(b) all machinery, furniture, furnishings, equipment, computer software and
hardware, fixtures (including, without limitation, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Mortgagor, or in which Mortgagor has or shall have an
interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant thereto, and usable in connection with the present or future
operation and occupancy of the Premises and the Improvements and all building
equipment, materials and supplies of any nature whatsoever owned by Mortgagor,
or in which Mortgagor has or shall have an interest, now or hereafter located
upon the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation, enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively referred to as the
"EQUIPMENT"), including any leases of any of the foregoing, any deposits
existing at any time in connection with any of the foregoing, and the proceeds
of any sale or transfer of the foregoing, and the right, title and interest of
Mortgagor in and to any of the Equipment that may be subject to any "security
interests" as defined in the Uniform Commercial Code, as adopted and enacted by
the State or States where any of the Mortgaged Property is located (the "UNIFORM
COMMERCIAL CODE"), superior in lien to the lien of this Mortgage;
(c) all awards or payments, including interest thereon, that may heretofore
and hereafter be made with respect to the Premises and the Improvements, whether
from the exercise of the right of eminent domain or condemnation (including,
without limitation, any transfer made in lieu of or in anticipation of the
exercise of said
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<PAGE>
rights), or for a change of grade, or for any other injury to or decrease in the
value of the Premises and Improvements;
(d) all leases and other agreements or arrangements heretofore or hereafter
entered into affecting the use, enjoyment or occupancy of, or the conduct of any
activity upon or in, the Premises and the Improvements, including any
extensions, renewals, modifications or amendments thereof (hereinafter
collectively referred to as the "LEASES") and all rents, rent equivalents,
moneys payable as damages or in lieu of rent or rent equivalents, royalties
(including, without limitation, all oil and gas or other mineral royalties and
bonuses), income, fees, receivables, receipts, revenues, deposits (including,
without limitation, security, utility and other deposits), accounts, cash,
issues, profits, charges for services rendered, and other payment and
consideration of whatever form or nature received by or paid to or for the
account of or benefit of Mortgagor or its agents or employees from any and all
sources arising from or attributable to the Premises and the Improvements
(hereinafter collectively referred to as the "RENTS"), together with all
proceeds from the sale or other disposition of the Leases and the right to
receive and apply the Rents to the payment of the Debt;
(e) all proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged Property, including, without limitation, the right to
receive and apply the proceeds of any insurance, judgments, or settlements made
in lieu thereof, for damage to the Mortgaged Property;
(f) all accounts, escrows, documents, instruments, chattel paper, claims,
deposits and general intangibles, as the foregoing terms are defined in the
Uniform Commercial Code, and all franchises, trade names, trademarks, symbols,
service marks, books, records, plans, specifications, designs, drawings,
permits, consents, licenses, management agreements, contract rights (including,
without limitation, any contract with any architect or engineer or with any
other provider of goods or services for or in connection with any construction,
repair, or other work upon the Mortgaged Property), approvals, actions, refunds
of real estate taxes and assessments (and any other governmental impositions
related to the Mortgaged Property), and causes of action that now or hereafter
relate to, are derived from or are used in connection with the Mortgaged
Property, or the use, operation, maintenance, occupancy or enjoyment thereof or
the conduct of any business or activities thereon (hereinafter collectively
referred to as the "INTANGIBLES"); and
(g) all proceeds, products, offspring, rents and profits from any of the
foregoing, including, without limitation, those from sale, exchange, transfer,
collection, loss, damage, disposition, substitution or replacement of any of the
foregoing.
TO HAVE AND TO HOLD the above granted and described Mortgaged Property unto
and to the use and benefit of Mortgagee and its successors and assigns, forever;
PROVIDED, HOWEVER, these presents are upon the express condition that, if
Mortgagor shall well and truly pay to Mortgagee the Debt at the time and in the
manner provided in the Note and this Mortgage and shall well and truly abide by
and comply with each and every covenant and condition set forth herein, in the
Note and in the other Loan Documents (hereinafter defined) in a timely manner,
these presents and the estate hereby granted shall cease, terminate and be void;
AND Mortgagor represents and warrants to and covenants and agrees with
Mortgagee as follows:
PART I
GENERAL PROVISIONS
1. PAYMENT OF DEBT AND INCORPORATION OF COVENANTS, CONDITIONS AND
--------------------------------------------------------------
AGREEMENTS. Mortgagor shall pay the Debt at the time and in the manner provided
- ----------
in the Note and in this Mortgage. All the covenants, conditions and agreements
contained in (a) the Note and (b) all and any of the documents including the
Note and this Mortgage now or hereafter executed by Mortgagor and/or others and
by or in favor of Mortgagee, which evidences, secures or guarantees all or any
portion of the payments due under the Note or otherwise is executed and/or
delivered in connection with the Note and this Mortgage (the "LOAN DOCUMENTS")
are hereby made a part of this Mortgage to
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<PAGE>
the same extent and with the same force as if fully set forth herein. The Note
is evidence of that certain loan made to the Mortgagor by the Mortgagee (the
"LOAN").
2. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has good,
-----------------
marketable and insurable title to the Mortgaged Property and has the full power,
authority and right to execute, deliver and perform its obligations under this
Mortgage and to encumber, mortgage, give, grant, bargain, sell, alienate,
enfeoff, convey, confirm, pledge, assign and hypothecate the same and that
Mortgagor possesses an unencumbered fee estate in the Premises and the
Improvements and that it owns the Mortgaged Property free and clear of all
liens, encumbrances and charges whatsoever except for those exceptions shown in
the title insurance policy insuring the lien of this Mortgage and that this
Mortgage is and will remain a valid and enforceable first lien on and security
interest in the Mortgaged Property, subject only to said exceptions. Mortgagor
shall forever warrant, defend and preserve such title and the validity and
priority of the lien of this Mortgage and shall forever warrant and defend the
same to Mortgagee against the claims of all persons whomsoever.
3. INSURANCE.
---------
(a) Mortgagor, at its sole cost and expense, for the mutual benefit of
Mortgagor and Mortgagee, shall obtain and maintain or cause to be obtained and
maintained, during the entire term of this Mortgage (the "TERM") policies of
insurance against loss or damage by fire, lightning, wind and such other perils
as are included in a standard "all-risk" or "special causes of loss" form, and
against loss or damage by all other risks and hazards covered by a standard
extended coverage insurance policy including, without limitation, riot and civil
commotion, vandalism, malicious mischief, burglary and theft. Such insurance
shall be in an amount equal to the greatest of (i) the then full replacement
cost of the Improvements and Equipment, without deduction for physical
depreciation, (ii) the outstanding principal balance of the Loan, and (iii) such
amount that the insurer would not deem Mortgagor a co-insurer under said
policies. The policies of insurance carried in accordance with this paragraph
shall be paid annually in advance and shall contain a "Replacement Cost
Endorsement" with a waiver of depreciation and an "Agreed Amount Endorsement."
The policies shall have a deductible no greater than $25,000 unless agreed to by
Mortgagee.
(b) Mortgagor, at its sole cost and expense, for the mutual benefit of
Mortgagor and Mortgagee, shall also obtain and maintain or cause to be obtained
and maintained during the Term the following policies of insurance:
i) Flood insurance if any part of the Mortgaged Property is
located in an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has been made
available under the National Flood Insurance Program in an amount at least equal
to the outstanding principal amount of the Loan or the maximum limit of coverage
available with respect to the Improvements and Equipment under said Program,
whichever is less.
ii) Comprehensive General Liability or Commercial General
Liability insurance, including broad form comprehensive general liability
endorsement and coverage for broad form property damage, contractual damages,
personal injuries (including death resulting therefrom) and a liquor liability
endorsement if liquor is sold on the Mortgaged Property, containing minimum
limits per occurrence of $1,000,000 and $2,000,000 in the aggregate for any
policy year. In addition, at least $10,000,000 excess and/or umbrella liability
insurance shall be obtained and maintained for any and all claims, including all
legal liability imposed upon Mortgagor and all court costs and attorneys' fee
incurred in connection with the ownership, operation and maintenance of the
Mortgaged Property.
iii) Rental loss and/or business interruption insurance in an
amount equal to the greater of (A) estimated gross revenues for eighteen (18)
months from the operations of the Mortgaged Property or (B) the projected
operating expenses (including debt service) for eighteen (18) months for the
maintenance and operation of the Mortgaged Property. The amount of such
insurance shall be increased from time to time during the Term as and when new
Leases and renewal Leases are entered into and the Rents increase or the
estimate of (or the actual) gross revenue, as may be applicable, increases.
iv) Insurance against loss or damage from (A) leakage of
sprinkler systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure
4
<PAGE>
vessels or similar apparatus now or hereafter installed in the Improvements
(without exclusion for explosions), in an amount at least equal to the
outstanding principal amount of the Note or $2,000,000.00 whichever is less.
v) If the Mortgaged Property includes commercial property,
worker's compensation insurance with respect to any employees of Mortgagor, as
required by any governmental authority or legal requirement.
vi) During any period of repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full insurable
value of the Mortgaged Property against such risks (including, without
limitation, fire and extended coverage and collapse of the Improvements to
agreed limits) as Mortgagee may request, in form and substance acceptable to
Mortgagee.
(vii) If the Mortgaged Property or any part thereof is now or
ever a non-conforming use or structure or in non-conformance with the applicable
zoning requirements, ordinance or law coverage to compensate for the cost of
demolition and the increased cost of construction.
(viii) Such other insurance as may from time to time be
reasonably required by Mortgagee in order to protect its interests.
(c) All policies of insurance (the "POLICIES") required pursuant to
this paragraph: (i) shall be issued by companies approved by Mortgagee and
licensed to do business in the state where the Mortgaged Property is located,
with a claims paying ability rating of "BBB" or better by Standard & Poor's
Ratings Services, a division of McGraw-Hill Companies, Inc. and a rating of
"A:VII" or better in the current Best's Insurance Reports; (ii) shall name
Mortgagee and its successors and/or assigns as their interest may appear as the
mortgagee; (iii) shall contain a Non-Contributory Standard Mortgagee Clause and
a Lender's Loss Payable Endorsement, or their equivalents, naming Mortgagee as
the person to which all payments made by such insurance company shall be paid;
(iv) shall contain a waiver of subrogation against Mortgagee; (v) shall be
maintained throughout the Term without cost to Mortgagee; (vi) shall be assigned
and the originals delivered to Mortgagee (including certified copies of the
Policies in effect on the date hereof within thirty (30) days after the closing
of the Loan); (vii) shall contain such provisions as Mortgagee deems reasonably
necessary or desirable to protect its interest including, without limitation,
endorsements providing that neither Mortgagor, Mortgagee nor any other party
shall be a co-insurer under said Policies and that Mortgagee shall receive at
least thirty (30) days prior written notice of any modification, reduction or
cancellation; and (viii) shall be satisfactory in form and substance to
Mortgagee and shall be approved by Mortgagee as to amounts, form, risk coverage,
deductibles, loss payees and insureds. Mortgagor shall pay the premiums for
such Policies (the "INSURANCE PREMIUMS") as the same become due and payable and
shall furnish to Mortgagee evidence of the renewal of each of the Policies with
receipts for the payment of the Insurance Premiums or other evidence of such
payment reasonably satisfactory to Mortgagee (provided, however, that Mortgagor
is not required to furnish such evidence of payment to Mortgagee in the event
that such Insurance Premiums have been paid by Mortgagee pursuant to Paragraph 5
-----------
hereof). If Mortgagor does not furnish such evidence and receipts at least
thirty (30) days prior to the expiration of any expiring Policy, then Mortgagee
may procure, but shall not be obligated to procure, such insurance and pay the
Insurance Premiums therefor, and Mortgagor agrees to reimburse Mortgagee for the
cost of such Insurance Premiums promptly on demand. Within thirty (30) days
after request by Mortgagee, Mortgagor shall obtain such increases in the amounts
of coverage required hereunder as may be reasonably requested by Mortgagee,
taking into consideration changes in the value of money over time, changes in
liability laws, changes in prudent customs and practices, and the like.
(d) If the Mortgaged Property shall be damaged or destroyed, in whole
or in part, by fire or other casualty (an "INSURED CASUALTY"), Mortgagor shall
give prompt notice thereof to Mortgagee. Following the occurrence of an Insured
Casualty, Mortgagor, regardless of whether insurance proceeds are available,
shall promptly proceed to restore, repair, replace or rebuild the same to be of
at least equal value and of substantially the same character as prior to such
damage or destruction, all to be effected in accordance with applicable law and
the terms and conditions of that certain Lease dated February 1, 1997 between
Mortgagor, as landlord, and Pinnacle Health Enterprises, LLC, as tenant covering
the Mortgaged Property (the "PINNACLE LEASE"). The expenses incurred by
Mortgagee in the adjustment and collection of insurance proceeds shall become
part of the Debt and be secured hereby and shall be reimbursed by Mortgagor to
Mortgagee upon demand.
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<PAGE>
(e) In case of loss or damages covered by any of the Policies, the
following provisions shall apply:
i) In the event of an Insured Casualty that does not exceed ten
percent (10%) of the original principal amount of the Note, Mortgagor may settle
and adjust any claim without the consent of Mortgagee and agree with the
insurance company or companies on the amount to be paid upon the loss; provided
that such adjustment is carried out in a competent and timely manner. In such
case, Mortgagor is hereby authorized to collect and receipt for any such
insurance proceeds.
ii) In the event an Insured Casualty shall exceed ten percent
(10%) of the original principal amount of the Note, then and in that event,
Mortgagee may settle and adjust any claim without the consent of Mortgagor and
agree with the insurance company or companies on the amount to be paid on the
loss and the proceeds of any such policy shall be due and payable solely to
Mortgagee and held in escrow by Mortgagee in accordance with the terms of this
Mortgage.
iii) In the event of an Insured Casualty where the loss is in an
aggregate amount less than twenty-five percent (25%) of the original principal
balance of the Note, and if, in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within six (6) months and prior to maturity
of the Note to an economic unit not less valuable (including an assessment of
the impact of the termination of any Leases due to such Insured Casualty) and
not less useful than the same was prior to the Insured Casualty, and after such
restoration will adequately secure the outstanding balance of the Debt, then, if
no Event of Default (as hereinafter defined) shall have occurred and be then
continuing, the proceeds of insurance (after reimbursement of any expenses
incurred by Mortgagee) shall be applied to reimburse Mortgagor for the cost of
restoring, repairing, replacing or rebuilding the Mortgaged Property or part
thereof subject to the Insured Casualty, in the manner set forth below and in
accordance with the terms of that certain Lease (as defined in Section 3(d)
above. Mortgagor hereby covenants and agrees to commence and diligently
prosecute, or shall cause to be commenced and diligently prosecuted such
restoring, repairing, replacing or rebuilding; provided always, that Mortgagor
shall pay all costs (and if required by Mortgagee, Mortgagor shall deposit the
total thereof with Mortgagee in advance) of such restoring, repairing, replacing
or rebuilding in excess of the net proceeds of insurance made available pursuant
to the terms hereof.
iv) Except as provided above, the proceeds of insurance collected
upon any Insured Casualty shall, at the option of Mortgagee in its sole
discretion, be applied to the payment of the Debt (to the extent such
application is not in breach of the terms of the Pinnacle Lease) or applied to
reimburse Mortgagor for the cost of restoring, repairing, replacing or
rebuilding the Mortgaged Property or part thereof subject to the Insured
Casualty, in the manner set forth below. Any such application to the Debt shall
be without any prepayment consideration except that if an Event of Default, or
an event with notice and/or the passage of time would constitute an Event of
Default, has occurred then the Mortgagor shall pay to Mortgagee an additional
amount equal to the Yield Maintenance Premium (hereinafter defined), if any,
that would be required under Paragraph 52 hereof if a Defeasance Deposit
(hereinafter defined) was to be made by Mortgagor. Any such application to the
Debt shall (A) be applied to those payments of principal and interest last due
under the Note but shall not postpone any payments otherwise required pursuant
to the Note other than such last due payments and (B) cause the Note to be re-
amortized in accordance with its terms and conditions.
v) In the event Mortgagor is entitled to reimbursement out of
insurance proceeds held by Mortgagee, such proceeds shall be disbursed from time
to time upon Mortgagee being furnished with (1) evidence satisfactory to it of
the estimated cost of completion of the restoration, repair, replacement and
rebuilding, (2) funds or, at Mortgagee's option, assurances satisfactory to
Mortgagee that such funds are available, sufficient in addition to the proceeds
of insurance to complete the proposed restoration, repair, replacement and
rebuilding, and (3) such architect's certificates, waivers of lien, contractor's
sworn statements, title insurance endorsements, bonds, plats of survey and such
other evidences of cost, payment and performance as Mortgagee may reasonably
require and approve. Mortgagee may, in any event, require that all plans and
specifications for such restoration, repair, replacement and rebuilding be
submitted to and approved by Mortgagee prior to commencement of work. No payment
made prior to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety percent (90%) of the value of the work performed
from time to time; funds other than proceeds of insurance shall be disbursed
prior to
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<PAGE>
disbursement of such proceeds; and at all times, the undisbursed balance of such
proceeds remaining in the hands of Mortgagee, together with funds deposited for
that purpose or irrevocably committed to the satisfaction of Mortgagee by or on
behalf of Mortgagor for that purpose, shall be at least sufficient in the
reasonable judgment of Mortgagee to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear of all liens or
claims for lien. Any surplus which may remain out of insurance proceeds held by
Mortgagee after payment of such costs of restoration, repair, replacement or
rebuilding shall be paid to any party entitled thereto.
4. PAYMENT OF TAXES, ETC. Mortgagor shall pay, or shall cause to be
---------------------
paid, all taxes, assessments, water rates and sewer rents, now or hereafter
levied or assessed or imposed against the Mortgaged Property or any part thereof
(the "TAXES") and all ground rents, maintenance charges, other impositions, and
other charges, including, without limitation, vault charges and license fees for
the use of vaults, chutes and similar areas adjoining the Premises, now or
hereafter levied or assessed or imposed against the Mortgaged Property or any
part thereof (the "OTHER CHARGES") as the same become due and payable.
Mortgagor will deliver to Mortgagee receipts for payment or other evidence
satisfactory to Mortgagee that the Taxes and Other Charges have been so paid or
are not then delinquent no later than thirty (30) days prior to the date on
which the Taxes and/or Other Charges would otherwise be delinquent if not paid.
Mortgagor shall not suffer and shall promptly cause to be paid and discharged
any lien or charge whatsoever which may be or become a lien or charge against
the Mortgaged Property, and shall promptly pay for all utility services provided
to the Mortgaged Property. Mortgagor shall furnish to Mortgagee receipts for
the payment of the Taxes and the Other Charges prior to the date the same shall
become delinquent (provided, however, that Mortgagor is not required to furnish
such receipts for payment of Taxes in the event that such Taxes have been paid
by Mortgagee pursuant to Paragraph 5 hereof).
5. TAX AND INSURANCE ESCROW FUND. (a) Mortgagor shall pay to Mortgagee
-----------------------------
on the eleventh day of each calendar month (a) one-twelfth of the Taxes that
Mortgagee estimates will be payable during the next ensuing twelve (12) months
in order to accumulate with Mortgagee sufficient funds to pay all such Taxes at
least thirty (30) days prior to their respective due dates, and (b) one-twelfth
of the Insurance Premiums that Mortgagee estimates will be payable for the
renewal of the coverage afforded by the Policies upon the expiration thereof in
order to accumulate with Mortgagee sufficient funds to pay all such Insurance
Premiums at least thirty (30) days prior to the expiration of the Policies (said
amounts in (a) and (b) above hereinafter called the "TAX AND INSURANCE ESCROW
FUND"). The Tax and Insurance Escrow Fund and the payments of interest or
principal or both, payable pursuant to the Note, shall be added together and
shall be paid as an aggregate sum by Mortgagor to Mortgagee. Mortgagor hereby
pledges to Mortgagee and grants to Mortgagee a security interest in any and all
monies now or hereafter deposited in the Tax and Insurance Escrow Fund as
additional security for the payment of the Debt. Mortgagee will apply the Tax
and Insurance Escrow Fund to payments of Taxes and Insurance Premiums required
to be made by Mortgagor pursuant to Paragraphs 3 and 4 hereof. In making any
payment relating to the Tax and Insurance Escrow Fund, Mortgagee may do so
according to any bill, statement or estimate procured from the appropriate
public office (with respect to Taxes) or insurer or agent (with respect to
Insurance Premiums), without inquiry into the accuracy of such bill, statement
or estimate or into the validity of any tax, assessment, sale, forfeiture, tax
lien or title or claim thereof. If the amount of the Tax and Insurance Escrow
Fund shall exceed the amounts due for Taxes and Insurance Premiums pursuant to
Paragraphs 3 and 4 hereof, Mortgagee shall, in its sole discretion, return any
excess to Mortgagor or credit such excess against future payments to be made to
the Tax and Insurance Escrow Fund. In allocating such excess, Mortgagee may
deal with the person shown on the records of Mortgagee to be the owner of the
Mortgaged Property. If at any time Mortgagee determines that the Tax and
Insurance Escrow Fund is not or will not be sufficient to pay the items set
forth in (a) and (b) above, Mortgagee shall notify Mortgagor of such
determination and Mortgagor shall increase its monthly payments to Mortgagee by
the amount that Mortgagee estimates is sufficient to make up the deficiency at
least thirty (30) days prior to delinquency of the Taxes and/or expiration of
the Policies, as the case may be. Upon the occurrence of an Event of Default,
Mortgagee may apply any sums then present in the Tax and Insurance Escrow Fund
to the payment of the Debt in any order in its sole discretion. Until expended
or applied as above provided, any amounts in the Tax and Insurance Escrow Fund
shall constitute additional security for the Debt. The Tax and Insurance Escrow
Fund shall not constitute a trust fund and may be commingled with other monies
held by Mortgagee. The Tax and Insurance Escrow Fund shall be held in an
interest bearing account in Mortgagee's name at a financial institution selected
by Mortgagee in its sole discretion. All earnings or interest on the Tax and
Insurance Escrow Fund shall be and become part of such Tax and Insurance Escrow
Fund and shall be disbursed as provided in this Paragraph 5. If Mortgagee so
elects at any time, Mortgagor shall provide, at Mortgagor's expense, a tax
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service contract for the Term issued by a tax reporting agency acceptable to
Mortgagee. If Mortgagee does not so elect, Mortgagor shall reimburse Mortgagee
for the cost of making annual tax searches throughout the Term.
(b) Notwithstanding the foregoing, for so long as (i) no Event of Default
has occurred or is continuing, (ii) Pinnacle Health Enterprises, LLC is the
tenant if the Mortgaged Property under the Pinnacle Lease, (iii) Mortgagor
maintains with Mortgagee a reserve in the principal amount of $152,461.64 which
amount shall be deposited with Mortgagee for payment of Taxes and Insurance
Premiums in accordance with the terms hereof (the "T&I RESERVE"), and (iv)
Mortgagor provides Mortgagee with evidence of payment of each insurance premium
installment to be paid during the term of the Loan no later than the due date
thereof, Mortgagor shall not be obligated to deposit with Mortgagee into the Tax
and Insurance Escrow Fund the monthly installment amount required under this
Section 5 in connection with the payment of Taxes and Insurance Premiums due
- ---------
during the term of the Loan. If at any time during the term of the Loan the
Mortgagor fails to comply with any of the conditions set forth in clauses (i)
through (iv), Mortgagor commence to deposit the monthly payments into the Tax
and Insurance Escrow Fund required by and in accordance with the terms of this
Section 5, in addition to its continued maintenance of the T&I Reserve with
Mortgagee.
6. INTENTIONALLY DELETED.
7. CONDEMNATION. Mortgagor shall promptly give Mortgagee written notice
------------
of the actual or threatened commencement of any condemnation or eminent domain
proceeding (a "CONDEMNATION") and shall deliver to Mortgagee copies of any and
all papers served in connection with such Condemnation. Following the
occurrence of a Condemnation, Mortgagor, regardless of whether an Award
(hereinafter defined) is available, shall promptly proceed to restore, repair,
replace or rebuild the same or shall cause the same to be restored, repaired,
replaced or rebuilt, to the extent practicable to be of at least equal value and
of substantially the same character as prior to such Condemnation, all to be
effected in accordance with applicable law, the terms hereof and the terms of
the Pinnacle Lease.
(a) Mortgagee is hereby irrevocably appointed as Mortgagor's attorney-
in-fact, coupled with an interest, with exclusive power to collect, receive and
retain any award or payment ("AWARD") for any taking accomplished through a
Condemnation (a "TAKING") and to make any compromise or settlement in connection
with such Condemnation, subject to the provisions of this Mortgage.
Notwithstanding any Taking by any public or quasi-public authority (including,
without limitation, any transfer made in lieu of or in anticipation of such a
Taking), Mortgagor shall continue to pay the Debt at the time and in the manner
provided for in the Note, in this Mortgage and the other Loan Documents and the
Debt shall not be reduced unless and until any Award shall have been actually
received and applied by Mortgagee to expenses of collecting the Award and to
discharge of the Debt. Mortgagee shall not be limited to the interest paid on
the Award by the condemning authority but shall be entitled to receive out of
the Award interest at the rate or rates provided in the Note. Mortgagor shall
cause any Award that is payable to Mortgagor to be paid directly to Mortgagee.
(b) In the event of any Condemnation where the Award is in an
aggregate amount less than fifteen percent (15%) of the original principal
balance of the Note, and if, in the reasonable judgment of Mortgagee, the
Mortgaged Property can be restored within six (6) months and prior to maturity
of the Note to an economic unit not less valuable (including an assessment of
the impact of the termination of any Leases due to such Condemnation) and not
less useful than the same was prior to the Condemnation, and after such
restoration will adequately secure the outstanding balance of the Debt, then, if
no Event of Default shall have occurred and be then continuing, the proceeds of
the Award (after reimbursement of any expenses incurred by Mortgagee) shall be
applied to reimburse Mortgagor for the cost of restoring, repairing, replacing
or rebuilding the Mortgaged Property or part thereof subject to Condemnation, in
the manner set forth below. Mortgagor hereby covenants and agrees to commence
and diligently to prosecute such restoring, repairing, replacing or rebuilding;
provided always, that Mortgagor shall pay all costs (and if required by
Mortgagee, Mortgagor shall deposit the total thereof with Mortgagee in advance)
of such restoring, repairing, replacing or rebuilding in excess of the Award
made available pursuant to the terms hereof and shall be disbursed in accordance
with the terms hereof and the terms of the Pinnacle Lease.
(c) Except as provided above, the Award collected upon any
Condemnation shall, at the option of Mortgagee in its sole discretion, be
applied to the payment of the Debt (to the extent such application is not in
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breach of the terms of the Pinnacle Lease) or applied to reimburse Mortgagor for
the cost of restoring, repairing, replacing or rebuilding the Mortgaged Property
or part thereof subject to the Condemnation, in the manner set forth below. Any
such application to the Debt shall be without any prepayment consideration
except that if an Event of Default, or an event with notice and/or the passage
of time would constitute an Event of Default, has occurred then the Mortgagor
shall pay to Mortgagee an additional amount equal to the Yield Maintenance
Premium, if any, that would be required under Paragraph 52 hereof if a
Defeasance Deposit was to be made by Mortgagor. Any such application to the
Debt shall (i) be applied to those payments of principal and interest last due
under the Note but shall not postpone any payments otherwise required pursuant
to the Note other than such last due payments and (ii) cause the Note to be re-
amortized in accordance with its terms and conditions. If the Mortgaged
Property is sold, through foreclosure or otherwise prior to the receipt by
Mortgagee of such Award, Mortgagee shall have the right, whether or not a
deficiency judgment on the Note shall be recoverable or shall have been sought,
recovered or denied, to receive all or a portion of said Award sufficient to pay
the Debt.
(d) In the event Mortgagor is entitled to reimbursement out of the
Award received by Mortgagee, such proceeds shall be disbursed from time to time
upon Mortgagee being furnished with (1) evidence satisfactory to it of the
estimated cost of completion of the restoration, repair, replacement and
rebuilding resulting from such condemnation, (2) funds or, at Mortgagee's
option, assurances satisfactory to Mortgagee that such funds are available,
sufficient in addition to the proceeds of the Award to complete the proposed
restoration, repair, replacement and rebuilding, and (3) such architect's
certificates, waivers of lien, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of costs, payment
and performance as Mortgagee may reasonably require and approve; and Mortgagee
may, in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and approved by
Mortgagee prior to commencement of work. No payment made prior to the final
completion of the restoration, repair, replacement and rebuilding shall exceed
ninety percent (90%) of the value of the work performed from time to time; funds
other than proceeds of the Award shall be disbursed prior to disbursement of
such proceeds; and at all times, the undisbursed balance of such proceeds
remaining in hands of Mortgagee, together with funds deposited for that purpose
or irrevocably committed to the satisfaction of Mortgagee by or on behalf of
Mortgagor for that purpose, shall be at least sufficient in the reasonable
judgment of Mortgagee to pay for the costs of completion of the restoration,
repair, replacement or rebuilding, free and clear of all liens or claims for
lien. Any surplus which may remain out of the Award received by Mortgagee after
payment of such costs of restoration, repair, replacement or rebuilding shall,
in the sole and absolute discretion of Mortgagee, be retained by Mortgagee and
applied to payment of the Debt.
8. LEASES AND RENTS.
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(a) Mortgagor does hereby absolutely and unconditionally assign to
Mortgagee, all Mortgagor's right, title and interest in all current and future
Leases and Rents, it being intended by Mortgagor that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Mortgagee shall not be construed to bind
Mortgagee to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise impose any obligation upon Mortgagee.
Mortgagor agrees to execute and deliver to Mortgagee such additional
instruments, in form and substance satisfactory to Mortgagee, as may hereafter
be requested by Mortgagee to further evidence and confirm such assignment.
Nevertheless, subject to the terms of this paragraph, Mortgagee grants to
Mortgagor a revocable license to operate and manage the Mortgaged Property and
to collect the Rents. Mortgagor shall hold the Rents, or a portion thereof,
sufficient to discharge all current sums due on the Debt, in trust for the
benefit of Mortgagee for use in the payment of such sums. Upon an Event of
Default, without the need for notice or demand, the license granted to Mortgagor
herein shall automatically be revoked, and Mortgagee shall immediately be
entitled to possession of all Rents, whether or not Mortgagee enters upon or
takes control of the Mortgaged Property. Mortgagee is hereby granted and
assigned by Mortgagor the right, at its option, upon revocation of the license
granted herein, to enter upon the Mortgaged Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after the
revocation of the license may be applied toward payment of the Debt in such
priority and proportions as Mortgagee in its sole discretion shall deem proper.
(b) All Leases shall be written on the standard form of lease which
has been approved by Mortgagee or as otherwise approved by Mortgagee. No
material changes may be made to the Mortgagee approved standard lease without
the prior written consent of Mortgagee. All Leases shall provide that they are
subordinate to
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this Mortgage and that the tenant agrees to attorn to Mortgagee. Unless
otherwise approved by Mortgagee, each retail Lease shall contain a provision
requiring continuous operations of tenant's business on the premises, and shall
contain a prohibition against tenant operating a competing business at or near
the Mortgaged Property. None of the Leases shall contain any option to purchase,
any right of first refusal to lease or purchase (other than the right of the
Tenant to offer to purchase a condemned Improvement as contained in Section 13
of the Lease), any right to terminate the lease term, any requirement that the
Mortgagor rebuild the Mortgaged Property in connection with a casualty or
condemnation of any portion of the Mortgaged Property (except as approved by
Mortgagee) or which might adversely affect the rights of any holder of the
Mortgaged Loan without the prior written consent of Mortgagee. Each tenant shall
conduct business only in that portion of the Mortgaged Property covered by its
lease. Upon request, Mortgagor shall furnish Mortgagee with executed copies of
all Leases.
(c) Mortgagor (i) shall observe and perform all the obligations
imposed upon the lessor under the Leases and shall not do or permit to be done
anything to impair the value of the Leases as security for the Debt; (ii) shall
promptly send copies to Mortgagee of all notices of default which Mortgagor
shall send or receive thereunder; (iii) shall enforce all the terms, covenants
and conditions contained in the Leases upon the part of the lessee thereunder to
be observed or performed, short of termination thereof; (iv) shall not collect
any of the Rents more than one (1) month in advance; (v) shall not execute any
other assignment of the lessor's interest in the Leases or the Rents; (vi) shall
deliver to Mortgagee, upon request, tenant estoppel certificates from each
commercial tenant at the Mortgaged Property in form and substance reasonably
satisfactory to Mortgagee, provided that Mortgagor shall not be required to
deliver such certificates more frequently than two (2) times in any calendar
year; and (vii) shall execute and deliver at the request of Mortgagee all such
further assurances, confirmations and assignments in connection with the
Mortgaged Property as Mortgagee shall from time to time require. Except to the
extent Mortgagor is acting in the ordinary course of business as a prudent
operator of property similar to the Mortgaged Property, Mortgagor (A) shall not,
alter, modify or change the terms of the Leases in any material respect without
the prior written consent of Mortgagee; (B) shall not convey or transfer or
suffer or permit a conveyance or transfer of the Mortgaged Property or of any
interest therein so as to effect a merger of the estates and rights of, or a
termination or diminution of the obligations of, tenants under the Leases; (C)
shall not consent to any assignment of or subletting under the Leases not in
accordance with their terms, without the prior written consent of Mortgagee; and
(D) shall not cancel or terminate the Leases or accept a surrender thereof,
except if a tenant is in default thereunder; provided, however, that any Lease
may be cancelled if at the time of the cancellation thereof a new Lease is
entered into on substantially the same terms or more favorable terms as the
cancelled Lease.
(d) Mortgagor may enter into proposed new Leases and proposed renewals
or extensions of existing Leases without the prior written consent of Mortgagee
if such proposed Lease or extension: (i) is not for greater than or equal to
ten percent (10%) of the gross leasable area of the Mortgaged Property, or
greater than or equal to ten percent (10%) of the total gross rental revenues of
the Mortgaged Property; (ii) shall have an initial term of not less than three
(3) years or greater than ten (10) years; (iii) shall provide for rental rates
comparable to existing local market rates and shall be an arms-length
transaction; (iv) shall not contain any options for renewal or expansion by the
tenant thereunder at rental rates which are either below comparable market
levels or less than the rental rates paid by the tenant during the initial lease
term; (v) shall be to a tenant which is experienced, creditworthy and reputable;
and (vi) shall comply with the requirements of subparagraph (b), above.
Mortgagor may enter into a proposed lease which does not satisfy all of the
conditions set forth in clauses (i) through (vi) immediately above only with the
prior written consent of Mortgagee, such consent not to be unreasonably withheld
or delayed. Mortgagor expressly understands that any and all new or proposed
leases are included in the definition of "Lease" or "Leases" as such terms may
be used throughout this Mortgage and the other Loan Documents.
(e) All security deposits of tenants, whether held in cash or any
other form, shall not be commingled with any other funds of Mortgagor and, if
cash, shall be deposited by Mortgagor at such commercial or savings bank or
banks as may be reasonably satisfactory to Mortgagee. Any bond or other
instrument which Mortgagor is permitted to hold in lieu of cash security
deposits under any applicable legal requirements shall be maintained in full
force and effect in the full amount of such deposits unless replaced by cash
deposits as hereinabove described, shall be issued by an institution reasonably
satisfactory to Mortgagee, shall, if permitted pursuant to any legal
requirements, name Mortgagee as payee or mortgagee thereunder (or at Mortgagee's
option, be fully assignable to Mortgagee) and shall, in all respects, comply
with any applicable legal requirements and otherwise be reasonably satisfactory
to Mortgagee. Mortgagor shall, upon request, provide Mortgagee with evidence
reasonably satisfactory
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to Mortgagee of Mortgagor's compliance with the foregoing. Following the
occurrence and during the continuance of any Event of Default, Mortgagor shall,
upon Mortgagee's request, if permitted by any applicable legal requirements,
turn over to Mortgagee the security deposits (and any interest theretofore
earned thereon) with respect to all or any portion of the Mortgaged Property, to
be held by Mortgagee subject to the terms of the Leases.
9. REPRESENTATIONS AND COVENANTS CONCERNING LOAN. Mortgagor represents,
---------------------------------------------
warrants and covenants as follows:
(a) The Note, this Mortgage and the other Loan Documents are not
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, nor would the operation of any of the terms of the Note,
this Mortgage and the other Loan Documents, or the exercise of any right
thereunder, render this Mortgage unenforceable, in whole or in part, or subject
to any right of rescission, set-off, counterclaim or defense, including the
defense of usury.
(b) All certifications, permits, licenses and approvals, including,
without limitation, certificates of completion and occupancy permits required
for the legal use, occupancy of the Mortgaged Property, have been obtained and
are in full force and effect. The Mortgaged Property is free of material damage
and is in good repair, and there is no proceeding pending for the total or
partial condemnation of, or affecting, the Mortgaged Property. The Mortgagor
shall comply with all of the recommendations concerning the maintenance and
repair of the Mortgaged Property which are contained in the inspection and
engineering report which was delivered to Mortgagee in connection with the
origination of the Loan.
(c) Except as disclosed in the survey delivered to Mortgagee prior to
the date hereof, all of the Improvements which were included in determining the
appraised value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property, and no easements or
other encumbrances upon the Premises encroach upon any of the Improvements, so
as to affect the value or marketability of the Mortgaged Property except those
which are insured against by title insurance. Except as may be disclosed by the
survey delivered to Mortgagee prior to the date hereof, all of the Improvements
comply with all material requirements of any applicable zoning and subdivision
laws and ordinances.
(d) The Mortgaged Property is not subject to any Leases other than the
Leases described in the rent roll delivered to Mortgagee in connection with this
Mortgage. No person has any possessory interest in the Mortgaged Property or
right to occupy the same except under and pursuant to the provisions of the
Leases. The current Leases are in full force and effect and there are no
defaults thereunder by either party and there are no conditions that, with the
passage of time or the giving of notice, or both, would constitute defaults
thereunder.
(e) To the best of Mortgagor's knowledge, the survey of the Mortgaged
Property delivered to Mortgagee in connection with this Mortgage, has been
performed by a duly licensed surveyor or registered professional engineer in the
jurisdiction in which the Mortgaged Property is situated, is certified to the
Mortgagee, its successors and assigns, and the title insurance company, and is
in accordance with the most current minimum standards for title surveys as
determined by the American Land Title Association, with the signature and seal
of a licensed engineer or surveyor affixed thereto, and does not fail to reflect
any material matter affecting the Mortgaged Property or the title thereto.
(f) The Mortgaged Property is and shall at all times remain in
compliance with all statutes, ordinances, regulations and other governmental or
quasi-governmental requirements and private covenants now or hereafter relating
to the ownership, construction, use or operation of the Mortgaged Property.
(g) As of the date hereof the Mortgagor has not entered into an
management agreement pursuant to which a manager operates the Mortgaged
Property. If the Mortgagor shall after the date hereof enter into a management
agreement for the operation of the Mortgaged Property, any fee due under such
management agreement, and the terms and provisions of such management agreement
shall be subordinate to this Mortgage and the manager thereunder shall attorn to
Mortgagee. Mortgagor shall not enter into any agreement relating to the
management or operation of the Mortgaged Property with a manager or any other
party without the express written
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consent of Mortgagee, which consent shall not be unreasonably withheld. If at
any time Mortgagee consents to the appointment of a manager, such manager and
Mortgagor shall, as a condition of Mortgagee's consent, execute a Manager's
Consent and Subordination of Management Agreement in the form then used by
Mortgagee.
10. SINGLE PURPOSE ENTITY/SEPARATENESS. Mortgagor represents, warrants
----------------------------------
and covenants as follows:
(a) Mortgagor does not own and will not own any asset or property
other than (i) the Mortgaged Property, and (ii) incidental personal property
necessary for the ownership or operation of the Mortgaged Property.
(b) Mortgagor will not engage in any business other than the
ownership, management and operation of the Mortgaged Property and Mortgagor will
conduct and operate its business as presently conducted and operated.
(c) Mortgagor will not enter into any contract or agreement with any
affiliate of the Mortgagor, any constituent party of Mortgagor, any guarantor (a
"GUARANTOR") of the Debt or any part thereof or any affiliate of any constituent
party or Guarantor, except upon terms and conditions that are intrinsically fair
and substantially similar to those that would be available on an arms-length
basis with third parties other than any such party.
(d) Mortgagor has not incurred and will not incur any indebtedness,
secured or unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation), other than (i) the Debt, (ii) trade and
operational debt incurred in the ordinary course of business with trade
creditors and in amounts as are normal and reasonable under the circumstances,
and (iii) debt incurred in the financing of equipment and other personal
property used on the Premises. No indebtedness other than the Debt may be
secured (subordinate or pari passu) by the Mortgaged Property.
(e) Mortgagor has not made and will not make any loans or advances to
any third party (including any affiliate or constituent party, any Guarantor or
any affiliate of any constituent party or Guarantor), and shall not acquire
obligations or securities of its affiliates or any constituent party.
(f) Mortgagor is and will remain solvent and Mortgagor will pay its
debts and liabilities (including, as applicable, shared personnel and overhead
expenses) from its assets as the same shall become due.
(g) Mortgagor has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Mortgagor will not, nor will Mortgagor permit any constituent party or Guarantor
to amend, modify or otherwise change the partnership certificate, partnership
agreement, articles of incorporation and bylaws, trust or other organizational
documents of Mortgagor or such constituent party or Guarantor without the prior
written consent of Mortgagee.
(h) Mortgagor will maintain all of its books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Mortgagor will file its own tax returns. Mortgagor shall
maintain its books, records, resolutions and agreements as official records.
(i) Mortgagor will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any affiliate of Mortgagor, any constituent party of Mortgagor, any Guarantor or
any affiliate of any constituent party or Guarantor), shall correct any known
misunderstanding regarding its status as a separate entity, shall conduct
business in its own name, shall not identify itself or any of its affiliates as
a division or part of the other and shall maintain and utilize a separate
telephone number and separate stationery, invoices and checks.
(j) Mortgagor will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(k) Neither Mortgagor nor any constituent party will seek the
dissolution, winding up, liquidation, consolidation or merger in whole or in
part, of the Mortgagor.
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(l) Mortgagor will not commingle the funds and other assets of
Mortgagor with those of any affiliate or constituent party, any Guarantor, or
any affiliate of any constituent party of Guarantor, or any other person.
(m) Mortgagor has and will maintain its assets in such a manner that
it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or constituent party, any
Guarantor, or any affiliate of any constituent party or Guarantor, or any other
person.
(n) Mortgagor does not and will not hold itself out to be responsible
for the debts or obligations of any other person.
(o) If Mortgagor is a limited partnership or a limited liability
company, each general partner or managing member (an "SPC MEMBER") shall be a
corporation whose sole asset is its interest in Mortgagor and each such general
partner or SPC Member will at all times comply, and will cause Mortgagor to
comply, with each of the representations, warranties, and covenants contained in
this Paragraph 10 as if such representation, warranty or covenant was made
directly by such general partner.
(p) Mortgagor shall at all times cause there to be at least one duly
appointed member of the board of directors (an "INDEPENDENT DIRECTOR") of [THE
GENERAL PARTNER OF OR EACH SPC MEMBER OF] Mortgagor reasonably satisfactory to
Mortgagee who shall not have been at the time of such individual's appointment,
and may not have been at any time during the preceding five years (i) a
shareholder of, or an officer, director, partner or employee of, Mortgagor or
any of its shareholders, subsidiaries or affiliates, (ii) a customer of, or
supplier to, Mortgagor or any of its shareholders, subsidiaries or affiliates,
(iii) a person or other entity controlling or under common control with any such
shareholder, partner, supplier or customer, or (iv) a member of the immediate
family of any such shareholder, officer, director, partner, employee, supplier
or customer of Mortgagor. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person or entity, whether through
ownership of voting securities, by contract or otherwise.
(q) Mortgagor shall not cause or permit the board of directors of [THE
GENERAL PARTNER OF OR EACH SPC MEMBER OF] Mortgagor to take any action which,
under the terms of any certificate of incorporation, by-laws or any voting trust
agreement with respect to any common stock, requires the vote of the board of
directors of [THE GENERAL PARTNER OF] Mortgagor unless at the time of such
action there shall be at least one member who is an Independent Director.
(r) Mortgagor shall conduct its business so that the assumptions made
with respect to Mortgagor in that certain opinion letter, dated as of August 15,
1997 (the "INSOLVENCY OPINION") delivered by Day Berry & Howard in connection
with the Loan shall be true and correct in all respects.
11. MAINTENANCE OF MORTGAGED PROPERTY. Mortgagor shall cause the
---------------------------------
Mortgaged Property to be maintained in a good and safe condition and repair.
The Improvements and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment) without the
consent of Mortgagee. Mortgagor shall promptly comply with all laws, orders and
ordinances affecting the Mortgaged Property, or the use thereof. Mortgagor
shall promptly repair, replace or rebuild any part of the Mortgaged Property
that is destroyed by any casualty, or becomes damaged, worn or dilapidated or
that is affected by any proceeding of the character referred to in Paragraph 7
hereof and shall complete and pay for any structure at any time in the process
of construction or repair on the Premises. Mortgagor shall not initiate, join
in, acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Mortgaged Property or any part thereof. If under
applicable zoning provisions the use of all or any portion of the Mortgaged
Property is or shall become a nonconforming use, Mortgagor will not cause or
permit such nonconforming use to be discontinued or abandoned without the
express written consent of Mortgagee. Mortgagor shall not (i) change the use of
the Mortgaged Property, (ii) permit or suffer to occur any waste on or to the
Mortgaged Property or to any portion thereof or (iii) take any steps whatsoever
to convert the Mortgaged Property,
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or any portion thereof, to a condominium or cooperative form of management.
Mortgagor will not install or permit to be installed on the Premises any
underground storage tank.
12. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.
-------------------------------------------------
(a) Mortgagor acknowledges that Mortgagee has examined and relied on
the creditworthiness and experience of Mortgagor in owning and operating
properties such as the Mortgaged Property in agreeing to make the Loan, and that
Mortgagee will continue to rely on Mortgagor's ownership of the Mortgaged
Property as a means of maintaining the value of the Mortgaged Property as
security for repayment of the Debt. Mortgagor acknowledges that Mortgagee has a
valid interest in maintaining the value of the Mortgaged Property so as to
ensure that, should Mortgagor default in the repayment of the Debt, Mortgagee
can recover the Debt by a sale of the Mortgaged Property. Mortgagor shall not,
without the prior written consent of Mortgagee, sell, convey, alienate,
mortgage, encumber, pledge or otherwise transfer the Mortgaged Property or any
part thereof, or permit the Mortgaged Property or any part thereof to be sold,
conveyed, alienated, mortgaged, encumbered, pledged or otherwise transferred,
except as specifically permitted under the terms of Subparagraph 12(i) of this
Mortgage.
(b) A sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer within the meaning of this Paragraph 12 shall be deemed to include (i)
an installment sales agreement wherein Mortgagor agrees to sell the Mortgaged
Property or any part thereof for a price to be paid in installments; (ii) an
agreement by Mortgagor leasing all or a substantial part of the Mortgaged
Property for other than actual occupancy by a space tenant thereunder or a sale,
assignment or other transfer of, or the grant of a security interest in,
Mortgagor's right, title and interest in and to any Leases or any Rents; (iii)
if Mortgagor, Guarantor, or any managing member of Mortgagor or Guarantor is a
corporation, the voluntary or involuntary sale, conveyance or transfer of such
corporation's stock (or the stock of any corporation directly or indirectly
controlling such corporation by operation of law or otherwise) or the creation
or issuance of new stock in one or a series of transactions by which an
aggregate of more than 10% of such corporation's stock shall be vested in a
party or parties who are not now stockholders or any change in the control of
such corporation; (iv) if Mortgagor, any Guarantor or any managing member
partner of Mortgagor or any Guarantor is a limited or general partnership, joint
venture or limited liability company, the change, removal, resignation or
addition of a general partner, managing partner, limited partner, joint venturer
or member or the transfer of the partnership interest of any general partner,
managing member or limited partner or the transfer of the interest of any joint
venturer or member; and (v) any pledge, hypothecation, assignment, transfer or
other encumbrance of any ownership interest in Mortgagor.
(c) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Mortgagor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property without Mortgagee's consent. This provision shall apply to
every sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of
the Mortgaged Property regardless of whether voluntary or not, or whether or not
Mortgagee has consented to any previous sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property.
(d) Mortgagee's consent to one sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer of the Mortgaged Property shall not be deemed to
be a waiver of Mortgagee's right to require such consent to any future
occurrence of same. Any sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property made in contravention of this
paragraph shall be null and void and of no force and effect.
(e) Mortgagor agrees to bear and shall pay or reimburse Mortgagee on
demand for all reasonable expenses (including, without limitation, reasonable
attorneys' fees and disbursements, title search costs and title insurance
endorsement premiums) incurred by Mortgagee in connection with the review,
approval and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
(f) Mortgagee's consent to the sale or transfer of the Mortgaged
Property will not be unreasonably withheld after consideration of all relevant
factors, provided that:
i) no Event of Default or event which with the giving of notice
or the passage of time would constitute an Event of Default shall have occurred
and remain uncured;
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ii) the proposed transferee ("TRANSFEREE") shall be a reputable
entity or person of good character, creditworthy, with sufficient financial
worth considering the obligations assumed and undertaken, as evidenced by
financial statements and other information reasonably requested by Mortgagee;
iii) the Transferee and its property manager shall have sufficient
experience in the ownership and management of properties similar to the
Mortgaged Property, and Mortgagee shall be provided with reasonable evidence
thereof (and Mortgagee reserves the right to approve the Transferee without
approving the substitution of the property manager);
iv) Mortgagee shall have recommendations in writing from the
Rating Agencies (as hereinafter defined) to the effect that such transfer will
not result in a re-qualification, reduction or withdrawal of any rating
initially assigned or to be assigned in a Secondary Market Transaction (as
hereinafter defined). The term "RATING AGENCIES" as used herein shall mean each
of Standard & Poor's Ratings Group, a division of McGraw-Hill Companies, Inc.
("S&P"), Moody's Investors Service, Inc. ("MOODYS"), Duff & Phelps Credit Rating
Co. and Fitch Investors Service, L.P., or any other nationally-recognized
statistical rating agency which has been approved by Mortgagee;
v) the Transferee shall have executed and delivered to Mortgagee
an assumption agreement in form and substance acceptable to Mortgagee,
evidencing such Transferee's agreement to abide and be bound by the terms of the
Note, this Mortgage and the other Loan Documents, together with such legal
opinions and title insurance endorsements as may be reasonably requested by
Mortgagee; and
vi) Mortgagee shall have received payment of all costs and
expenses incurred by Mortgagee in connection with such assumption (including
reasonable attorney's fees and costs).
(g) Notwithstanding anything to the contrary contained in this
Paragraph 12, holders of interests in Mortgagor (or holders of interests in any
- ------------
entity directly or indirectly holding an interest in Mortgagor) as of the date
of this Mortgage (the "Interest Holders") shall have the right to transfer their
----------------
interest in Mortgagor (or any entity directly or indirectly holding an interest
in Mortgagor) to another person or entity who is not an Interest Holder,
including without limitation to immediate family members for estate planning
purposes, without Mortgagee's consent; provided, however, that:
(i) after taking into account any prior transfers pursuant to this
sentence, whether to the proposed transferee or otherwise, no such
transfer (or series of transfers) shall result in (x) the proposed
transferee, together with all members of his/her immediate family or
any affiliates thereof, owning in the aggregate (directly, indirectly
or beneficially) more than 20% of the interests in Mortgagor (or any
entity directly or indirectly holding an interest in Mortgagor), or
(y) a transfer in the aggregate of more than 20% in Mortgagor as of
the date hereof;
(ii) no such transfer of interest shall result in a change of control
of Mortgagor or the day to day operations of the Mortgaged Property;
(iii) Mortgagor shall give Mortgagee notice of such transfer together
with copies of all instruments effecting such transfer not less than
ten (10) days prior to the date of such transfer;
(iv) no Event of Default has occurred and remains uncured; and
(v) the legal and financial structure of Mortgagor after such transfer
and its shareholders, partners or members and the single purpose
nature and bankruptcy remoteness of Mortgagor and its shareholders,
partners or members satisfies Mortgagee's then current applicable
underwriting criteria and requirements, including without limitation
the requirement at the request of Mortgagee to deliver written
confirmations from the Rating Agencies that such transfer or series of
transfers will not result in a qualification, downgrade or withdrawal
of the then applicable ratings.
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(h) Notwithstanding anything to the contrary in this Paragraph 12, a
------------
transfer that occurs by inheritance, devise or bequest or by operation of law
upon the death of a natural person who is an Interest Holder shall not require
the consent of Mortgagee, provided that such transfer is to a member of the
immediate family of such Interest Holder, or a trust established for the benefit
of such immediate family member, and provided further that each of the following
transfer conditions (the "49% Transfer Conditions") are satisfied:
(i) after taking into account any prior transfers pursuant to this
sentence, whether to the proposed transferee or otherwise, no such
transfer (or series of transfers) shall result in (x) the proposed
transferee, together with all members of his/her immediate family or
any affiliates thereof, owning in the aggregate (directly, indirectly
or beneficially) more than 49% of the interests in Mortgagor (or any
entity directly or indirectly holding an interest in Mortgagor), or
(y) a transfer in the aggregate of more than 49% of the interests in
Mortgagor as of the date hereof;
(ii) no such transfer of interest shall result in a change of control
or Mortgagor or the day to day operations of the Mortgaged Property;
(iii) Mortgagor shall give Mortgagee notice of such transfer together
with copies of all instruments effecting such transfer not less than
ten (10) days prior to the date of such transfer;
(iv) no Event of Default has occurred and remains uncured; and
(v) the legal and financial structure of Mortgagor after such transfer
and its shareholders, partners or members and the single purpose
nature and bankruptcy remoteness of Mortgagor and its shareholders,
partners or members satisfies Mortgagee's then current applicable
underwriting criteria and requirements, including without limitation
the requirement at the request of Mortgagee to deliver written
confirmations from the Rating Agencies that such transfer or series of
transfers will not result in a qualification, downgrade or withdrawal
of the then applicable ratings.
(i) Furthermore and notwithstanding the foregoing prohibitions on
transfer, provided no Event of Default exists, if all or a portion of the
Mortgaged Property shall be taken by Condemnation and as a result therefrom
Mortgagor (the "CONDEMNED PORTION OF THE MORTGAGED PROPERTY") shall accept the
offer of Pinnacle to purchase the Condemned Portion of the Mortgaged Property
pursuant to the terms of Section 13 of the Pinnacle Lease, Mortgagor may obtain
the release of the Condemned Portion of the Mortgaged Property from the lien of
this Mortgage upon the satisfaction of the following conditions precedent:
i) not less than 30 days prior written notice to Mortgagee
specifying a regularly scheduled payment date (the "TRANSFER DATE") on which the
Prepayment Deposit (as hereinafter defined) is to be made;
ii) the payment to Mortgagee of the then outstanding interest
accrued and unpaid and the outstanding principal balance of the Debt allocated
to the Condemned Portion of the Mortgaged Property, in the amount set forth on
Exhibit B attached hereto, to and including the Transfer Date;
- ---------
iii) the payment to Mortgagee of all other sums, other than as
set forth in clause ii) above, then due under the Note, this Mortgage, the
Assignment of Leases and the other Loan Documents;
iv) Mortgagor shall pay all costs and expenses of Mortgagee
relating to the release of the lien of this Mortgage on the Condemned Portion of
the Mortgaged Property; and
iv) the delivery to Mortgagee of:
(A) fully executed copies of all documents transferring the
Condemned Portion of the Mortgaged Property to Pinnacle, including, without
limitation, a warranty deed;
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(B) a release of the Mortgaged Property from the lien of this
Mortgage (for execution by Mortgagee) in a form appropriate for the jurisdiction
in which the Mortgaged Property is located;
(C) an officer's certificate of Mortgagor certifying that the
requirements set forth in this subparagraph have been satisfied;
(D) evidence in writing from the applicable Rating Agencies
to the effect that such release will not result in a re-qualification, reduction
or withdrawal of any rating in effect immediately prior to such defeasance for
any securities issued in connection with a Secondary Market Transaction;
(E) such other certificates, documents or instruments as
Mortgagee may reasonably request; and
(F) an endorsement to Mortgagee's Title Policy insuring the
lien of this Mortgage, as modified and amended to reflect the release of the
Condemned Portion of the Mortgaged Property, as a first priority lien on the
remaining unreleased portion of the Mortgaged Property as of the date of the
Transfer Date, (B) extending the effective date of the title policy to the
Transfer Date and showing no exceptions to title other than the Permitted
Exceptions or those exceptions acceptable to Mortgagee in its sole discretion,
and (C) such other endorsements as may be reasonably required by Mortgagee; and
(G) revised insurance certificates reflecting the release
Condemned Portion of the Mortgaged Property.
13. ESTOPPEL CERTIFICATES AND NO DEFAULT AFFIDAVITS.
-----------------------------------------------
(a) After request by Mortgagee, Mortgagor shall within ten (10) days
furnish Mortgagee with a statement, duly acknowledged and certified, setting
forth (i) the amount of the original principal amount of the Note, (ii) the
unpaid principal amount of the Note, (iii) the rate of interest of the Note,
(iv) the date installments of interest and/or principal were last paid, (v) any
offsets or defenses to the payment of the Debt, if any, and (vi) that the Note,
this Mortgage and the other Loan Documents are valid, legal and binding
obligations and have not been modified or if modified, giving particulars of
such modification.
(b) After request by Mortgagee, Mortgagor shall within ten (10) days
furnish Mortgagee with a certificate reaffirming all representations and
warranties of Mortgagor set forth herein and in the other Loan Documents as of
the date requested by Mortgagee or, to the extent of any changes to any such
representations and warranties, so stating such changes.
(c) If the Mortgaged Property includes commercial property, Mortgagor
shall deliver to Mortgagee upon request, tenant estoppel certificates from each
commercial tenant at the Mortgaged Property in form and substance reasonably
satisfactory to Mortgagee provided that Mortgagor shall not be required to
deliver such certificates more frequently than two (2) times in any calendar
year.
14. CHANGES IN LAWS REGARDING TAXATION. If any law is enacted or adopted
----------------------------------
or amended after the date of this Mortgage which deducts the Debt from the value
of the Mortgaged Property for the purpose of taxation or which imposes a tax,
either directly or indirectly, on the Debt or Mortgagee's interest in the
Mortgaged Property, Mortgagor will pay such tax, with interest and penalties
thereon, if any. In the event Mortgagee is advised by counsel chosen by it that
the payment of such tax or interest and penalties by Mortgagor would be unlawful
or taxable to Mortgagee or unenforceable or provide the basis for a defense of
usury, then in any such event, Mortgagee shall have the option, by written
notice of not less than ninety (90) days, to declare the Debt immediately due
and payable.
15. NO CREDITS ON ACCOUNT OF THE DEBT. Mortgagor will not claim or demand
---------------------------------
or be entitled to any credit or credits on account of the Debt for any part of
the Taxes or Other Charges assessed against the Mortgaged Property, or any part
thereof, and no deduction shall otherwise be made or claimed from the assessed
value of the Mortgaged Property, or any part thereof, for real estate tax
purposes by reason of this Mortgage or the Debt. In the
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event such claim, credit or deduction shall be required by law, Mortgagee shall
have the option, by written notice of not less than ninety (90) days, to declare
the Debt immediately due and payable.
16. DOCUMENTARY STAMPS. If at any time the United States of America, any
------------------
State thereof or any subdivision of any such State shall require revenue or
other stamps to be affixed to the Note or this Mortgage, or impose any other tax
or charge on the same, Mortgagor will pay for the same, with interest and
penalties thereon, if any.
17. CONTROLLING AGREEMENT. It is expressly stipulated and agreed to be
---------------------
the intent of Mortgagor, and Mortgagee at all times to comply with applicable
state law or applicable United States federal law (to the extent that it permits
Mortgagee to contract for, charge, take, reserve, or receive a greater amount of
interest than under state law) and that this Paragraph 17 shall control every
other covenant and agreement in this Mortgage and the other Loan Documents. If
the applicable law (state or federal) is ever judicially interpreted so as to
render usurious any amount called for under the Note or under any of the other
Loan Documents, or contracted for, charged, taken, reserved, or received with
respect to the Debt, or if Mortgagee's exercise of the option to accelerate the
maturity of the Note, or if any prepayment by Mortgagor results in Mortgagor
having paid any interest in excess of that permitted by applicable law, then it
is Mortgagor's and Mortgagee's express intent that all excess amounts
theretofore collected by Mortgagee shall be credited on the principal balance of
the Note and all other Debt, and the provisions of the Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of any
new documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder.
All sums paid or agreed to be paid to Mortgagee for the use, forbearance, or
detention of the Debt shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Debt until payment in full so that the rate or amount of interest on account
of the Debt does not exceed the maximum lawful rate from time to time in effect
and applicable to the Debt for so long as the Debt is outstanding.
Notwithstanding anything to the contrary contained herein or in any of the other
Loan Documents, it is not the intention of Mortgagee to accelerate the maturity
of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
18. FINANCIAL STATEMENTS.
--------------------
(a) The financial statements heretofore furnished to Mortgagee are, as
of the dates specified therein, complete and correct and fairly present the
financial condition of the Mortgagor and any other persons or entities that are
the subject of such financial statements, and are prepared in accordance with
generally accepted accounting principles. Mortgagor does not have any
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments
that are known to Mortgagor and reasonably likely to have a materially adverse
effect on the Mortgaged Property or the operation thereof as a multifamily
residential apartment project, except as referred to or reflected in said
financial statements. Since the date of such financial statements, there has
been no materially adverse change in the financial condition, operation or
business of Mortgagor from that set forth in said financial statements.
(b) Mortgagor will maintain full and accurate books of accounts and
other records reflecting the results of the operations of the Mortgaged Property
and will furnish to Mortgagee on or before forty-five (45) days after the end of
each calendar quarter the following items, each certified by Mortgagor as being
true and correct: (i) a written statement (rent roll) dated as of the last day
of each such calendar quarter identifying each of the Leases by the term, space
occupied, rental required to be paid, security deposit paid, any rental
concessions, and identifying any defaults or payment delinquencies thereunder;
and (ii) monthly and year to date operating statements prepared for each
calendar month during each such calendar quarter, each of which shall include an
itemization of actual (not pro forma) capital expenditures during the applicable
period. Until a Secondary Market Transaction (hereinafter defined) has
occurred, the Mortgagor shall furnish monthly each of the items listed in the
immediately preceding sentence (collectively, the "PRE-SECURITIZATION
FINANCIALS") within twenty (20) days after the end of such month. Within ninety
(90) days following the end of each calendar year, Mortgagor shall furnish
statements of its financial affairs and condition including a balance sheet and
a statement of profit and loss for the Mortgagor in such detail as Mortgagee may
request, and setting forth the financial condition and the income and expenses
for the Mortgaged Property for the immediately preceding calendar year prepared
by a certified public accountant approved by Mortgagee. Mortgagor's annual
financial statements shall include (i) a list of the tenants, if any, occupying
more than
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twenty (20%) percent of the total floor area of the Improvements, and (ii) a
breakdown showing the year in which each Lease then in effect expires and the
percentage of total floor area of the Improvements and the percentage of base
rent with respect to which Leases shall expire in each such year, each such
percentage to be expressed on both a per year and a cumulative basis.
Mortgagor's annual financial statements shall be accompanied by a certificate
executed by the chief financial officer of Mortgagor or the general partner of
Mortgagor, as applicable, stating that each such annual financial statement
presents fairly the financial condition of the Mortgaged Property being reported
upon and has been prepared in accordance with generally accepted accounting
principles consistently applied. At any time and from time to time Mortgagor
shall deliver to Mortgagee or its agents such other financial data as Mortgagee
or its agents shall reasonably request with respect to the ownership,
maintenance, use and operation of the Mortgaged Property.
(c) In the event that Mortgagor fails to provide to Mortgagee or its
designee any of the financial statements, certificates, reports or information
(the "REQUIRED RECORDS") required by this Paragraph 18 within thirty (30) days
after the date upon which such Required Record is due, Mortgagor shall pay to
Mortgagee, at Mortgagee's option and in its sole discretion, an amount equal to
$10,000 for each Required Record that is not delivered; provided that, Mortgagee
has given at least fifteen (15) days prior written notice to Mortgagor of such
failure by Mortgagor to timely submit the applicable Required Record.
Notwithstanding the foregoing, in the event that Mortgagor fails to provide
Mortgagee with Pre-Securitization Financials on or before the date they are due,
Mortgagor shall pay to Mortgagee, at Mortgagee's option and in its sole
discretion, an amount equal to $10,000 for the Pre-Securitization Financial that
is not delivered.
19. PERFORMANCE OF OTHER AGREEMENTS. Mortgagor shall observe and perform
-------------------------------
each and every term to be observed or performed by Mortgagor pursuant to the
terms of any agreement or recorded instrument affecting or pertaining to the
Mortgaged Property.
20. FURTHER ACTS, ETC.
-----------------
(a) Mortgagor will, at the cost of Mortgagor, and without expense to
Mortgagee, do, execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, mortgages, assignments, notices of assignment, Uniform
Commercial Code financing statements or continuation statements, transfers and
assurances as Mortgagee shall, from time to time, require, for the better
assuring, conveying, assigning, transferring, and confirming unto Mortgagee the
property and rights hereby mortgaged, given, granted, bargained, sold,
alienated, enfeoffed, conveyed, confirmed, pledged, assigned and hypothecated or
intended now or hereafter so to be, or which Mortgagor may be or may hereafter
become bound to convey or assign to Mortgagee, or for carrying out the intention
or facilitating the performance of the terms of this Mortgage or for filing,
registering or recording this Mortgage or for facilitating the sale of the Loan
and the Loan Documents as described in Paragraph 20(b) below. Mortgagor, on
demand, will execute and deliver and hereby authorizes Mortgagee to execute in
the name of Mortgagor or without the signature of Mortgagor to the extent
Mortgagee may lawfully do so, one or more financing statements, chattel
mortgages or other instruments, to evidence more effectively the security
interest of Mortgagee in the Mortgaged Property. Upon foreclosure, the
appointment of a receiver or any other relevant action, Mortgagor will, at the
cost of Mortgagor and without expense to Mortgagee, cooperate fully and
completely to effect the assignment or transfer of any license, permit,
agreement or any other right necessary or useful to the operation of the
Mortgaged Property. Mortgagor grants to Mortgagee an irrevocable power of
attorney coupled with an interest for the purpose of exercising and perfecting
any and all rights and remedies available to Mortgagee at law and in equity,
including, without limitation, such rights and remedies available to Mortgagee
pursuant to this paragraph.
(b) Mortgagor acknowledges that Mortgagee and its successors and
assigns may (i) sell this Mortgage, the Note and other Loan Documents to one or
more investors as a whole loan, (ii) participate the Loan secured by this
Mortgage to one or more investors, (iii) deposit this Mortgage, the Note and
other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as
"SECONDARY MARKET TRANSACTION"). Mortgagor shall cooperate with Mortgagee in
effecting any such Secondary Market Transaction and shall cooperate to implement
all requirements imposed by any Rating Agency involved in any Secondary Market
Transaction. Mortgagor shall provide such information, legal opinions and
documents relating to Mortgagor, Guarantor, if any, the Mortgaged Property and
any tenants of the
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Improvements as Mortgagee may reasonably request in connection with such
Secondary Market Transaction, provided that the costs incurred by Mortgagor in
connection with the delivery of such opinions shall not exceed $6,000. In
addition, Mortgagor shall make available to Mortgagee all information concerning
its business and operations that Mortgagee may reasonably request. Mortgagee
shall be permitted to share all such information with the investment banking
firms, Rating Agencies, accounting firms, law firms and other third-party
advisory firms involved with the Loan and the Loan Documents or the applicable
Secondary Market Transaction. It is understood that the information provided by
Mortgagor to Mortgagee may ultimately be incorporated into the offering
documents for the Secondary Market Transaction and thus various investors may
also see some or all of the information. Mortgagee and all of the aforesaid
third-party advisors and professional firms shall be entitled to rely on the
information supplied by, or on behalf of, Mortgagor and Mortgagor indemnifies
Mortgagee as to any losses, claims, damages or liabilities that arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such information or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated in such information or necessary in order to make the statements in such
information, or in light of the circumstances under which they were made, not
misleading. Mortgagee may publicize the existence of the Loan in connection with
its marketing for a Secondary Market Transaction or otherwise as part of its
business development.
21. RECORDING OF MORTGAGE, ETC. Mortgagor forthwith upon the execution
--------------------------
and delivery of this Mortgage and thereafter, from time to time, will cause this
Mortgage, and any security instrument creating a lien or security interest or
evidencing the lien hereof upon the Mortgaged Property and each instrument of
further assurance to be filed, registered or recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the lien or security interest hereof upon, and
the interest of Mortgagee in, the Mortgaged Property. Mortgagor will pay all
filing, registration or recording fees, and all expenses incident to the
preparation, execution and acknowledgment of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, and all federal, state, county
and municipal, taxes, duties, imposts, assessments and charges arising out of or
in connection with the execution and delivery of this Mortgage, any mortgage
supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance, except where prohibited by law
so to do. Mortgagor shall hold harmless and indemnify Mortgagee, its successors
and assigns, against any liability incurred by reason of the imposition of any
tax on the making and recording of this Mortgage.
22. REPORTING REQUIREMENTS. Mortgagor agrees to give prompt notice to
----------------------
Mortgagee of the insolvency or bankruptcy filing of Mortgagor or the death,
insolvency or bankruptcy filing of any Guarantor.
23. EVENTS OF DEFAULT. The Debt shall become immediately due and payable
-----------------
at the option of Mortgagee upon the happening of any one or more of the
following events of default (each an "EVENT OF DEFAULT"):
(a) if any portion of the Debt is not paid when due;
(b) subject to Mortgagor's right to contest as provided herein, if any
of the Taxes or Other Charges are not paid when the same are due and payable;
(c) if the Policies are not kept in full force and effect, or if the
Policies are not delivered to Mortgagee upon request;
(d) if Mortgagor transfers or encumbers any portion of the Mortgaged
Property without Mortgagee's prior written consent, except as permitted pursuant
to Subparagraph 12(i) above;
(e) if any representation or warranty of Mortgagor, or of any
Guarantor, made herein or in any other Loan Document or in any certificate,
report, financial statement or other instrument or document furnished to
Mortgagee shall have been false or misleading in any material respect when made;
(f) if Mortgagor or any Guarantor shall make an assignment for the
benefit of creditors or if Mortgagor shall generally not be paying its debts as
they become due;
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(g) if a receiver, liquidator or trustee of Mortgagor or of any
Guarantor shall be appointed or if Mortgagor or any Guarantor shall be
adjudicated a bankrupt or insolvent, or if any petition for bankruptcy,
reorganization or arrangement pursuant to federal bankruptcy law, or any similar
federal or state law, shall be filed by or against, consented to, or acquiesced
in by, Mortgagor or any Guarantor or if any proceeding for the dissolution or
liquidation of Mortgagor or of any Guarantor shall be instituted; however, if
such appointment, adjudication, petition or proceeding was involuntary and not
consented to by Mortgagor or such Guarantor, upon the same not being discharged,
stayed or dismissed within sixty (60) days;
(h) if Mortgagor shall be in default under any other mortgage or
security agreement covering any part of the Mortgaged Property whether it be
superior or junior in lien to this Mortgage;
(i) subject to Mortgagor's right to contest as provided herein, if the
Mortgaged Property becomes subject to any mechanic's, materialman's or other
lien except a lien for local real estate taxes and assessments not then due and
payable;
(j) if Mortgagor fails to cure properly any violations of laws or
ordinances affecting or which may be interpreted to affect the Mortgaged
Property within thirty (30) days after Mortgagor first receives notice of any
such violations, provided that if such violation of law is not susceptible to
cure within such 30-day period, Mortgagor may have an additional period of time
to cure such violation of up to, but not in excess of the lesser of (A) 60 days
or (B) the period of time by which Mortgagor shall have cured such violation in
accordance with applicable law;
(k) except as permitted in this Mortgage, the actual or threatened
alteration, improvement, demolition or removal of any of the Improvements
without the prior consent of Mortgagee;
(l) if Mortgagor shall continue to be in default under any term,
covenant, or provision of the Note or any of the other Loan Documents, beyond
applicable cure periods contained in those documents;
(m) if Mortgagor shall be in default under the Mortgages or the other
Loan Documents covering the Collateral Mortgaged Property;
(n) if Mortgagor fails to cure a default under any other term,
covenant or provision of this Mortgage within thirty (30) days after Mortgagor
first receives notice of any such default; provided, however, if such default is
reasonably susceptible of cure, but not within such thirty (30) day period, then
Mortgagor may be permitted up to an additional sixty (60) days to cure such
default provided that Mortgagor diligently and continuously pursues such cure;
(o) if, without Mortgagee's prior written consent, (i) the Management
Agreement is terminated, (ii) the ownership, management or control of Manager is
transferred, (iii) there is a material change in the Management Agreement, or
(iv) if there shall be a material default by Mortgagor under the Management
Agreement; or
(p) if Mortgagor ceases to continuously operate the Mortgaged Property
or any material portion thereof as a commercial office building for any reason
whatsoever (other than temporary cessation in connection with any repair or
renovation thereof undertaken with the consent of Mortgagee).
(q) if any of the assumptions set forth in the Insolvency Opinion
shall be or become inaccurate.
24. LATE PAYMENT CHARGE. If any portion of the Debt is not paid on the
-------------------
date on which it is due, Mortgagor shall pay to Mortgagee upon demand an amount
equal to the lesser of five percent (5%) of such unpaid portion of the Debt or
the maximum amount permitted by applicable law in order to defray a portion of
the expenses incurred by Mortgagee in handling and processing such delinquent
payment and to compensate Mortgagee for the loss of the use of such delinquent
payment, and such amount shall be secured by this Mortgage.
21
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25. RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of Default
----------------------
or if Mortgagor fails to make any payment or to do any act as herein provided,
Mortgagee may, but without any obligation to do so and without notice to or
demand on Mortgagor and without releasing Mortgagor from any obligation
hereunder, make or do the same in such manner and to such extent as Mortgagee
may deem necessary to protect the security hereof. Mortgagee is authorized to
enter upon the Mortgaged Property for such purposes or appear in, defend, or
bring any action or proceeding to protect its interest in the Mortgaged Property
or to foreclose this Mortgage or collect the Debt, and the cost and expense
thereof (including reasonable attorneys' fees and disbursements to the extent
permitted by law), with interest at the Default Rate (as defined in the Note)
for the period after notice from Mortgagee that such cost or expense was
incurred to the date of payment to Mortgagee, shall constitute a portion of the
Debt, shall be secured by this Mortgage and the other Loan Documents and shall
be due and payable to Mortgagee upon demand.
26. REMEDIES.
--------
(a) Upon the occurrence of any Event of Default, Mortgagee may take
such action, without notice or demand, as it deems advisable to protect and
enforce its rights against Mortgagor and in and to the Mortgaged Property by
Mortgagee itself or otherwise, including, without limitation, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such order as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Mortgagee:
i declare the entire Debt to be immediately due and payable;
ii institute a proceeding or proceedings, judicial or
nonjudicial, by advertisement or otherwise, for the complete foreclosure of this
Mortgage in which case the Mortgaged Property or any interest therein may be
sold for cash or upon credit in one or more parcels or in several interests or
portions and in any order or manner;
iii with or without entry, to the extent permitted and pursuant
to the procedures provided by applicable law, institute proceedings for the
partial foreclosure of this Mortgage for the portion of the Debt then due and
payable, subject to the continuing lien of this Mortgage for the balance of the
Debt not then due;
iv sell for cash or upon credit the Mortgaged Property or any
part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to the power of
sale or otherwise, at one or more sales, as an entirety or in parcels, at such
time and place, upon such terms and after such notice thereof as may be required
or permitted by law;
v institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained herein,
or in any of the other Loan Documents;
vi recover judgment on the Note either before, during or after
any proceedings for the enforcement of this Mortgage;
vii apply for the appointment of a trustee, receiver, liquidator
or conservator of the Mortgaged Property, without notice and without regard for
the adequacy of the security for the Debt and without regard for the solvency of
the Mortgagor, any Guarantor or of any person, firm or other entity liable for
the payment of the Debt;
viii enforce Mortgagee's interest in the Leases and Rents and
enter into or upon the Mortgaged Property, either personally or by its agents,
nominees or attorneys and dispossess Mortgagor and its agents and servants
therefrom, and thereupon Mortgagee may (A) use, operate, manage, control,
insure, maintain, repair, restore and otherwise deal with all and every part of
the Mortgaged Property and conduct the business thereat; (B) complete any
construction on the Mortgaged Property in such manner and form as Mortgagee
deems advisable; (C) make alterations, additions, renewals, replacements and
improvements to or on the Mortgaged Property; (D) exercise all rights and powers
of Mortgagor with respect to the Mortgaged Property, whether in the name of
Mortgagor or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and demand, sue for,
collect and receive all Rents; and (E) apply the receipts from the Mortgaged
Property to the payment of Debt, after deducting therefrom all expenses
(including reasonable attorneys' fees and disbursements)
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incurred in connection with the aforesaid operations and all amounts necessary
to pay the taxes, assessments insurance and other charges in connection with the
Mortgaged Property, as well as just and reasonable compensation for the services
of Mortgagee, its counsel, agents and employees; or
ix pursue such other rights and remedies as may be available at
law or in equity or under the Uniform Commercial Code.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Mortgaged Property, this Mortgage shall continue as a lien on the remaining
portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Debt in such
priority and proportion as Mortgagee in its sole discretion shall deem proper.
(c) Mortgagee may adjourn from time to time any sale by it to be made
under or by virtue of this Mortgage by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Mortgagee, without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.
(d) Upon the completion of any sale or sales pursuant hereto,
Mortgagee, or an officer of any court empowered to do so, shall execute and
deliver to the accepted purchaser or purchasers a good and sufficient
instrument, or good and sufficient instruments, conveying, assigning and
transferring all estate, right, title and interest in and to the property and
rights sold. Any sale or sales made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale, shall
operate to divest all the estate, right, title, interest, claim and demand
whatsoever, whether at law or in equity, of Mortgagor in and to the properties
and rights so sold, and shall be a perpetual bar both at law and in equity
against Mortgagor and against any and all persons claiming or who may claim the
same, or any part thereof from, through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph, whether
made under a power of sale or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, Mortgagee may bid for and acquire
the Mortgaged Property or any part thereof and in lieu of paying cash therefor
may make settlement for the purchase price by crediting upon the Debt the net
sales price after deducting therefrom the expenses of the sale and costs of the
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any liens,
rights, powers or remedies of Mortgagee hereunder, but such liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
(g) Mortgagee may terminate or rescind any proceeding or other action
brought in connection with its exercise of the remedies provided in this
paragraph at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(h) Mortgagee may resort to any remedies and the security given by
the Note, this Mortgage or in any of the other Loan Documents in whole or in
part, and in such portions and in such order as determined by Mortgagee's sole
discretion. No such action shall in any way be considered a waiver of any
rights, benefits or remedies evidenced or provided by the Note, this Mortgage or
in any of the other Loan Documents. The failure of Mortgagee to exercise any
right, remedy or option provided in the Note, this Mortgage or any of the other
Loan Documents shall not be deemed a waiver of such right, remedy or option or
of any covenant or obligation secured by the Note, this Mortgage or any of the
other Loan Documents. No acceptance by Mortgagee of any payment after the
occurrence of any Event of Default and no payment by Mortgagee of any obligation
for which Mortgagor is liable hereunder shall be deemed to waive or cure any
Event of Default with respect to Mortgagor, or Mortgagor's liability
23
<PAGE>
to pay such obligation. No sale of all or any portion of the Mortgaged Property,
no forbearance on the part of Mortgagee, and no extension of time for the
payment of the whole or any portion of the Debt or any other indulgence given by
Mortgagee to Mortgagor, shall operate to release or in any manner affect the
interest of Mortgagee in the remaining Mortgaged Property or the liability of
Mortgagor to pay the Debt. No waiver by Mortgagee shall be effective unless it
is in writing and then only to the extent specifically stated. All costs and
expenses of Mortgagee in exercising its rights and remedies under this Paragraph
26 (including reasonable attorneys' fees and disbursements to the extent
permitted by law), shall be paid by Mortgagor immediately upon notice from
Mortgagee, with interest at the Default Rate for the period after notice from
Mortgagee and such costs and expenses shall constitute a portion of the Debt and
shall be secured by this Mortgage.
(i) The interests and rights of Mortgagee under the Note, this
Mortgage or any of the other Loan Documents shall not be impaired by any
indulgence, including (i) any renewal, extension or modification which Mortgagee
may grant with respect to any of the Debt, (ii) any surrender, compromise,
release, renewal, extension, exchange or substitution which Mortgagee may grant
with respect to the Mortgaged Property or any portion thereof; or (iii) any
release or indulgence granted to any maker, endorser, Guarantor or surety of any
of the Debt.
27. RIGHT OF ENTRY. In addition to any other rights or remedies granted
--------------
under this Mortgage, Mortgagee and its agents shall have the right to enter and
inspect the Mortgaged Property at any reasonable time during the Term, upon five
(5) Business Days' notice to Mortgagor. The cost of such inspections or audits
shall be borne by Mortgagor should Mortgagee determine that an Event of Default
exists, including the cost of all follow up or additional investigations or
inquiries deemed reasonably necessary by Mortgagee. The cost of such
inspections, if not paid for by Mortgagor following demand, may be added to the
principal balance of the sums due under the Note and this Mortgage and shall
bear interest thereafter until paid at the Default Rate.
28. SECURITY AGREEMENT. This Mortgage is both a real property mortgage
------------------
and a "security agreement" within the meaning of the Uniform Commercial Code.
The Mortgaged Property includes both real and personal property and all other
rights and interests, whether tangible or intangible in nature, of Mortgagor in
the Mortgaged Property. Mortgagor by executing and delivering this Mortgage has
granted and hereby grants to Mortgagee, as security for the Debt, a security
interest in the Mortgaged Property to the full extent that the Mortgaged
Property may be subject to the Uniform Commercial Code (said portion of the
Mortgaged Property so subject to the Uniform Commercial Code being called in
this paragraph the "COLLATERAL"). Mortgagor hereby agrees with Mortgagee to
execute and deliver to Mortgagee, in form and substance satisfactory to
Mortgagee, such financing statements and such further assurances as Mortgagee
may from time to time, reasonably consider necessary to create, perfect, and
preserve Mortgagee's security interest herein granted. This Mortgage shall also
constitute a "fixture filing" for the purposes of the Uniform Commercial Code.
As such, this Mortgage covers all items of the Collateral that are or are to
become fixtures. Information concerning the security interest herein granted
may be obtained from the parties at the addresses of the parties set forth in
the first paragraph of this Mortgage. If an Event of Default shall occur,
Mortgagee, in addition to any other rights and remedies which it may have, shall
have and may exercise immediately and without demand, any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code, including, without limiting the generality of the foregoing, the right to
take possession of the Collateral or any part thereof, and to take such other
measures as Mortgagee may deem necessary for the care, protection and
preservation of the Collateral. Upon request or demand of Mortgagee, Mortgagor
shall at its expense assemble the Collateral and make it available to Mortgagee
at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee
on demand any and all expenses, including attorneys' fees and disbursements,
incurred or paid by Mortgagee in protecting the interest in the Collateral and
in enforcing the rights hereunder with respect to the Collateral. Any notice of
sale, disposition or other intended action by Mortgagee with respect to the
Collateral sent to Mortgagor in accordance with the provisions hereof at least
five (5) days prior to such action, shall constitute commercially reasonable
notice to Mortgagor. The proceeds of any disposition of the Collateral, or any
part thereof, may be applied by Mortgagee to the payment of the Debt in such
priority and proportions as Mortgagee in its sole discretion shall deem proper.
In the event of any change in name, identity or structure of any Mortgagor, such
Mortgagor shall notify Mortgagee thereof and promptly after request shall
execute, file and record such Uniform Commercial Code forms as are necessary to
maintain the priority of Mortgagee's lien upon and security interest in the
Collateral, and shall pay all expenses and fees in connection with the filing
and recording thereof. If Mortgagee shall require the filing or recording of
additional Uniform Commercial Code forms or continuation statements,
24
<PAGE>
Mortgagor shall, promptly after request, execute, file and record such Uniform
Commercial Code forms or continuation statements as Mortgagee shall deem
necessary, and shall pay all expenses and fees in connection with the filing and
recording thereof, it being understood and agreed, however, that no such
additional documents shall increase Mortgagor's obligations under the Note, this
Mortgage and the other Loan Documents. Mortgagor hereby irrevocably appoints
Mortgagee as its attorney-in-fact, coupled with an interest, to file with the
appropriate public office on its behalf any financing or other statements signed
only by Mortgagee, as secured party, in connection with the Collateral covered
by this Mortgage.
29. ACTIONS AND PROCEEDINGS. Mortgagee has the right to appear in and
-----------------------
defend any action or proceeding brought with respect to the Mortgaged Property
and to bring any action or proceeding, in the name and on behalf of Mortgagor,
which Mortgagee, in its sole discretion, decides should be brought to protect
their interest in the Mortgaged Property. Mortgagee shall, at its option, be
subrogated to the lien of any mortgage or other security instrument discharged
in whole or in part by the Debt, and any such subrogation rights shall
constitute additional security for the payment of the Debt.
30. CONTEST OF CERTAIN CLAIMS. Notwithstanding the provisions of
-------------------------
Paragraphs 4 and 23 hereof, Mortgagor shall not be in default for failure to pay
or discharge Taxes, Other Charges or mechanic's or materialman's lien asserted
against the Mortgaged Property if, and so long as, (a) Mortgagor shall have
notified Mortgagee of same within five (5) days of obtaining knowledge thereof;
(b) Mortgagor shall diligently and in good faith contest the same by appropriate
legal proceedings which shall operate to prevent the enforcement or collection
of the same and the sale of the Mortgaged Property or any part thereof, to
satisfy the same; (c) Mortgagor shall have furnished to Mortgagee a cash
deposit, or an indemnity bond satisfactory to Mortgagee with a surety
satisfactory to Mortgagee, in the amount of the Taxes, Other Charges or
mechanic's or materialman's lien claim, plus a reasonable additional sum to pay
all costs, interest and penalties that may be imposed or incurred in connection
therewith, to assure payment of the matters under contest and to prevent any
sale or forfeiture of the Mortgaged Property or any part thereof; (d) Mortgagor
shall promptly upon final determination thereof pay the amount of any such
Taxes, Other Charges or claim so determined, together with all costs, interest
and penalties which may be payable in connection therewith; (e) the failure to
pay the Taxes, Other Charges or mechanic's or materialman's lien claim does not
constitute a default under any other deed of trust, mortgage or security
interest covering or affecting any part of the Mortgaged Property; and (f)
notwithstanding the foregoing, Mortgagor shall immediately upon request of
Mortgagee pay (and if Mortgagor shall fail so to do, Mortgagee may, but shall
not be required to, pay or cause to be discharged or bonded against) any such
Taxes, Other Charges or claim notwithstanding such contest, if in the opinion of
Mortgagee, the Mortgaged Property or any part thereof or interest therein may be
in danger of being sold, forfeited, foreclosed, terminated, cancelled or lost.
Mortgagee may pay over any such cash deposit or part thereof to the claimant
entitled thereto at any time when, in the judgment of Mortgagee, the entitlement
of such claimant is established.
31. RECOVERY OF SUMS REQUIRED TO BE PAID. Mortgagee shall have the right
------------------------------------
from time to time to take action to recover any sum or sums which constitute a
part of the Debt as the same become due, without regard to whether or not the
balance of the Debt shall be due, and without prejudice to the right of
Mortgagee thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Mortgagor existing at the time such earlier action was
commenced.
32. MARSHALLING AND OTHER MATTERS. Mortgagor hereby waives, to the extent
-----------------------------
permitted by law, the benefit of all appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all rights of
marshalling in the event of any sale hereunder of the Mortgaged Property or any
part thereof or any interest therein. Further, Mortgagor hereby expressly
waives any and all rights of redemption from sale under any order or decree of
foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of each and
every person acquiring any interest in or title to the Mortgaged Property
subsequent to the date of this Mortgage and on behalf of all persons to the
extent permitted by applicable law.
33. HAZARDOUS SUBSTANCES. Mortgagor hereby represents and warrants to
--------------------
Mortgagee that, to the best of Mortgagor's knowledge, after due inquiry and
investigation, except as may be disclosed in that certain environmental report
prepared by EMG Consultants and delivered to Mortgagee prior to the date hereof:
(a) the Mortgaged Property is not in direct or indirect violation of any local,
state, federal or other governmental authority, statute, ordinance, code, order,
decree, law, rule or regulation pertaining to or imposing liability or standards
of
25
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conduct concerning environmental regulation, contamination or clean-up
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), the Resource Conservation
and Recovery Act, as amended ("RCRA"), the Emergency Planning and Community
Right-to-Know Act of 1986, as amended, the Hazardous Substances Transportation
Act, as amended, the Solid Waste Disposal Act, as amended, the Clean Water Act,
as amended, the Clean Air Act, as amended, the Toxic Substance Control Act, as
amended, the Safe Drinking Water Act, as amended, the Occupational Safety and
Health Act, as amended, any state super-lien and environmental clean-up statutes
and all regulations adopted in respect to the foregoing laws (collectively,
"ENVIRONMENTAL LAWS"); (b) the Mortgaged Property is not subject to any private
or governmental lien or judicial or administrative notice or action or inquiry,
investigation or claim relating to hazardous and/or toxic, dangerous and/or
regulated, substances, wastes, materials, raw materials which include hazardous
constituents, pollutants or contaminants including without limitation,
petroleum, tremolite, anthlophylie, actinolite or polychlorinated biphenyls and
any other substances or materials which are included under or regulated by
Environmental Laws or which are considered by scientific opinion to be otherwise
dangerous in terms of the health, safety and welfare of humans (collectively,
"HAZARDOUS SUBSTANCES"); (c) no Hazardous Substances are or have been (including
the period prior to Mortgagor's acquisition of the Mortgaged Property),
discharged, generated, treated, disposed of or stored on, incorporated in, or
removed or transported from the Mortgaged Property other than in compliance with
all Environmental Laws; (d) no Hazardous Substances are present in, on or under
any nearby real property which could migrate to or otherwise affect the
Mortgaged Property; and (e) no underground storage tanks exist on any of the
Mortgaged Property. So long as Mortgagor owns or is in possession of the
Mortgaged Property, Mortgagor (i) shall keep or cause the Mortgaged Property to
be kept free from Hazardous Substances and in compliance with all Environmental
Laws, (ii) shall promptly notify Mortgagee if Mortgagor shall become aware of
any Hazardous Substances on or near the Mortgaged Property and/or if Mortgagor
shall become aware that the Mortgaged Property is in direct or indirect
violation of any Environmental Laws and/or if Mortgagor shall become aware of
any condition on or near the Mortgaged Property which shall pose a threat to the
health, safety or welfare of humans, and (iii) shall remove such Hazardous
Substances and/or cure such violations and/or remove such threats, as
applicable, as required by law (or as shall be required by Mortgagee in the case
of removal which is not required by law, but in response to the opinion of a
licensed hydrogeologist, licensed environmental engineer or other qualified
consultant engaged by Mortgagee ("MORTGAGEE'S CONSULTANT")), promptly after
Mortgagor becomes aware of same, at Mortgagor's sole expense and (iv) shall
comply with all of the recommendations contained in the environmental report
which was delivered to Mortgagee in connection with the origination of the Loan.
Nothing herein shall prevent Mortgagor from recovering such expenses from any
other party that may be liable for such removal or cure. The obligations and
liabilities of Mortgagor under this Paragraph 33 shall survive any termination,
satisfaction, or assignment of this Mortgage and the exercise by Mortgagee of
any of its rights or remedies hereunder, including, without limitation, the
acquisition of the Mortgaged Property by foreclosure or a conveyance in lieu of
foreclosure.
34. ASBESTOS. Mortgagor represents and warrants that, to the best of
--------
Mortgagor's knowledge, after due inquiry and investigation, no asbestos or any
substance or material containing asbestos ("ASBESTOS") is located on the
Mortgaged Property except as may have been disclosed in an environmental report
delivered to Mortgagee prior to the date of this Mortgage. Mortgagor shall not
install in the Mortgaged Property, nor permit to be installed in the Mortgaged
Property, Asbestos and shall remove any Asbestos promptly upon discovery to the
satisfaction of Mortgagee, at Mortgagor's sole expense. Mortgagor shall in all
instances comply with, and ensure compliance by all occupants of the Mortgaged
Property with, all applicable federal, state and local laws, ordinances, rules
and regulations with respect to Asbestos, and shall keep the Mortgaged Property
free and clear of any liens imposed pursuant to such laws, ordinances, rules or
regulations. In the event that Mortgagor receives any notice or advice from any
governmental agency or any source whatsoever with respect to Asbestos on,
affecting or installed on the Mortgaged Property, Mortgagor shall immediately
notify Mortgagee. The obligations and liabilities of Mortgagor under this
Paragraph 34 shall survive any termination, satisfaction, or assignment of this
Mortgage and the exercise by Mortgagee of any of its rights or remedies
hereunder, including but not limited to, the acquisition of the Mortgaged
Property by foreclosure or a conveyance in lieu of foreclosure.
35. ENVIRONMENTAL MONITORING. Mortgagor shall give prompt written notices
------------------------
to Mortgagee of: (a) any proceeding or inquiry by any party with respect to the
presence of any Hazardous Substance or Asbestos on, under, from or about the
Mortgaged Property, (b) all claims made or threatened by any third party against
Mortgagor or the Mortgaged Property relating to any loss or injury resulting
from any Hazardous Substance or Asbestos, and (c) Mortgagor's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of the
26
<PAGE>
Mortgaged Property that could cause the Mortgaged Property to be subject to any
investigation or cleanup pursuant to any Environmental Law. Mortgagor shall
permit Mortgagee to join and participate in, as a party if it so elects, any
legal proceedings or actions initiated with respect to the Mortgaged Property in
connection with any Environmental Law or Hazardous Substance, and Mortgagor
shall pay all attorneys' fees and disbursements incurred by Mortgagee in
connection therewith. Upon Mortgagee's request, at any time and from time to
time while this Mortgage is in effect, Mortgagor shall provide (i) an
inspection or audit of the Mortgaged Property prepared by a licensed
hydrogeologist or licensed environmental engineer approved by Mortgagee
indicating the presence or absence of Hazardous Substances on, in or near the
Mortgaged Property, and (ii) an inspection or audit of the Mortgaged Property
prepared by a duly qualified engineering or consulting firm approved by
Mortgagee, indicating the presence or absence of Asbestos on the Mortgaged
Property. The cost and expense of such audit or inspection shall be paid by
Mortgagor not more frequently than once every five (5) calendar years after the
occurrence of a Secondary Market Transaction unless Mortgagee, in its good faith
judgment, determines that reasonable cause exists for the performance of an
environmental inspection or audit of the Mortgaged Property, then such
inspection or audit described in the preceding sentence shall be at Mortgagor's
sole expense. If Mortgagor fails to provide any inspection or audit required
pursuant to this Paragraph 35 within thirty (30) days after such request,
Mortgagee may order same, and Mortgagor hereby grants to Mortgagee and its
employees and agents access to the Mortgaged Property and a license to undertake
such inspection or audit. The cost of such inspection or audit may be added to
the Debt and shall bear interest thereafter until paid at the Default Rate. In
the event that any environmental site assessment report prepared in connection
with such inspection or audit recommends that an operations and maintenance plan
be implemented for Asbestos or any Hazardous Substance, Mortgagor shall cause
such operations and maintenance plan to be prepared and implemented at
Mortgagor's expense upon request of Mortgagee. In the event that any
investigation, site monitoring, containment cleanup, removal, restoration or
other work of any kind is reasonably necessary or desirable under an applicable
Environmental Law (the "REMEDIAL WORK"), Mortgagor shall commence and thereafter
diligently prosecute to completion all such Remedial Work within thirty (30)
days after written demand by Mortgagee for performance thereof (or such shorter
period of time as may be required under applicable law). All Remedial Work
shall be performed by contractors approved in advance by Mortgagee, and under
the supervision of a consulting engineer approved by Mortgagee. All costs and
expenses of such Remedial Work shall be paid by Mortgagor including, without
limitation, Mortgagee's reasonable attorneys' fees and disbursements incurred in
connection with monitoring or review of such Remedial Work. In the event
Mortgagor shall fail to timely commence, or cause to be commenced, or fail to
diligently prosecute to completion, such Remedial Work, Mortgagee may, but shall
not be required to, cause such Remedial Work to be performed, and all costs and
expenses thereof, or incurred in connection therewith, may be added to the Debt
and shall bear interest thereafter until paid at the Default Rate.
36. HANDICAPPED ACCESS.
------------------
(a) Mortgagor agrees that the Mortgaged Property shall at all times
strictly comply to the extent applicable with the requirements of the Americans
with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all
state and local laws and ordinances related to handicapped access and all rules,
regulations, and orders issued pursuant thereto including, without limitation,
the Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities (collectively "ACCESS LAWS").
(b) Notwithstanding any provisions set forth herein or in any other
document regarding Mortgagee's approval of alterations of the Mortgaged
Property, Mortgagor shall not alter the Mortgaged Property in any manner which
would increase Mortgagor's responsibilities for compliance with the applicable
Access Laws without the prior written approval of Mortgagee. The foregoing
shall apply to tenant improvements constructed by Mortgagor or by any of its
tenants. Mortgagee may condition any such approval upon receipt of a
certificate of Access Law compliance from an architect, engineer, or other
person acceptable to Mortgagee.
(c) Mortgagor agrees to give prompt notice to Mortgagee of the receipt
by Mortgagor of any complaints related to violation of any Access Laws and of
the commencement of any proceedings or investigations which relate to compliance
with applicable Access Laws.
37. INDEMNIFICATION. In addition to any other indemnifications provided
---------------
herein or in the other Loan Documents, Mortgagor shall protect, defend,
indemnify and save harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including,
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without limitation, reasonable attorneys' fees and disbursements), imposed upon
or incurred by or asserted against Mortgagee by reason of (a) ownership of this
Mortgage, the Mortgaged Property or any interest therein or receipt of any
Rents; (b) any accident, injury to or death of persons or loss of or damage to
property occurring in, on or about the Mortgaged Property or any part thereof or
on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas,
streets or ways; (c) any use, nonuse or condition in, on or about the Mortgaged
Property or any part thereof or on adjoining sidewalks, curbs, adjacent property
or adjacent parking areas, streets or ways; (d) any failure on the part of
Mortgagor to perform or comply with any of the terms of this Mortgage; (e)
performance of any labor or services or the furnishing of any materials or other
property in respect of the Mortgaged Property or any part thereof; (f) the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release, or threatened release of any Hazardous Substance or Asbestos on, from,
or affecting the Mortgaged Property; (g) any personal injury (including wrongful
death) or property damage (real or personal) arising out of or related to such
Hazardous Substance or Asbestos; (h) any lawsuit brought or threatened,
settlement reached, or government order relating to such Hazardous Substance or
Asbestos; (i) any violation of the Environmental Laws, which are based upon or
in any way related to such Hazardous Substance or Asbestos including, without
limitation, the costs and expenses of any Remedial Work, attorney and consultant
fees and disbursements, investigation and laboratory fees, court costs, and
litigation expenses; (j) any failure of the Mortgaged Property to comply with
any Access Laws; (k) any representation or warranty made in the Note, this
Mortgage or any of the other Loan Documents being false or misleading in any
material respect as of the date such representation or warranty was made; (l)
any claim by brokers, finders or similar persons claiming to be entitled to a
commission in connection with any Lease or other transaction involving the
Mortgaged Property or any part thereof under any legal requirement or any
liability asserted against Mortgagee with respect thereto; and (m) the claims of
any lessee of any or any portion of the Mortgaged Property or any person acting
through or under any lessee or otherwise arising under or as a consequence of
any Lease. Any amounts payable to Mortgagee by reason of the application of this
paragraph shall be secured by this Mortgage and shall become immediately due and
payable and shall bear interest at the Default Rate from the date loss or damage
is sustained by Mortgagee until paid. The obligations and liabilities of
Mortgagor under this Paragraph 37 shall survive the termination, satisfaction,
or assignment of this Mortgage and the exercise by Mortgagee of any of its
rights or remedies hereunder, including, but not limited to, the acquisition of
the Mortgaged Property by foreclosure or a conveyance in lieu of foreclosure.
38. NOTICES. Any notice, demand, statement, request or consent made
-------
hereunder shall be in writing, addressed to the address, as set forth above, of
the party to whom such notice is to be given, or to such other address as
Mortgagor or Mortgagee, as the case may be, shall designate in writing, and
shall be deemed to be received by the addressee on (i) the day such notice is
personally delivered to such addressee, (ii) the third (3rd) day following the
day such notice is deposited with the United States postal service first class
certified mail, return receipt requested, (iii) the day following the day on
which such notice is delivered to a nationally recognized overnight courier
delivery service, or (iv) the day facsimile transmission is confirmed after
transmission of such notice by telecopy to such telecopier number as Mortgagor
or Mortgagee, as the case may be, shall have previously designated in writing.
39. AUTHORITY. (a) Mortgagor (and the undersigned representative of
---------
Mortgagor, if any) represent and warrant that it (or they, as the case may be)
has full power, authority and right to execute, deliver and perform its
obligations pursuant to this Mortgage, and to mortgage, give, grant, bargain,
sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and assign
the Mortgaged Property pursuant to the terms hereof and to keep and observe all
of the terms of this Mortgage on Mortgagor's part to be performed; and (b)
Mortgagor represents and warrants that Mortgagor is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended and the related Treasury Department regulations, including temporary
regulations.
40. NON-WAIVER. The failure of Mortgagee to insist upon strict
----------
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Any consent or approval by Mortgagee in any single instance
shall not be deemed or construed to be Mortgagee's consent or approval in any
like matter arising at a subsequent date. Mortgagor shall not be relieved of
Mortgagor's obligations hereunder by reason of (a) the failure of Mortgagee to
comply with any request of Mortgagor or Guarantor to take any action to
foreclose this Mortgage or otherwise enforce any of the provisions hereof or of
the Note, or any of the other Loan Documents, (b) the release, regardless of
consideration, of the whole or any part of the Mortgaged Property, or of any
person liable for the Debt or any portion thereof, or (c) any agreement or
stipulation by Mortgagee extending the time of payment or otherwise modifying or
supplementing the terms of the Note, this Mortgage or any of the other Loan
Documents. Mortgagee
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may resort for the payment of the Debt to any other security held by Mortgagee
in such order and manner as Mortgagee, in its sole discretion, may elect.
Mortgagee may take action to recover the Debt, or any portion thereof, or to
enforce any covenant hereof without prejudice to the right of Mortgagee
thereafter to foreclosure this Mortgage. The rights and remedies of Mortgagee
under this Mortgage shall be separate, distinct and cumulative and none shall be
given effect to the exclusion of the others. No act of Mortgagee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Mortgagee shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
41. NO ORAL CHANGE. This Mortgage, and any provisions hereof, may not be
--------------
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Mortgagor or Mortgagee, but only by
an agreement in writing signed by the party against whom enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
42. LIABILITY. If Mortgagor consists of more than one person, the
---------
obligations and liabilities of each such person hereunder shall be joint and
several. Subject to the provisions hereof requiring Mortgagee's consent to any
transfer of the Mortgaged Property, this Mortgage shall be binding upon and
inure to the benefit of Mortgagor and Mortgagee and their respective successors
and assigns forever.
43. INAPPLICABLE PROVISIONS. If any term, covenant or condition of the
-----------------------
Note or this Mortgage is held to be invalid, illegal or unenforceable in any
respect, the Note and this Mortgage shall be construed without such provision.
44. HEADINGS, ETC. The headings and captions of various paragraphs of
-------------
this Mortgage are for convenience of reference only and are not to be construed
as defining or limiting, in any way, the scope or intent of the provisions
hereof.
45. DUPLICATE ORIGINALS. This Mortgage may be executed in any number of
-------------------
duplicate originals and each such duplicate original shall be deemed to be an
original.
46. DEFINITIONS. Unless the context clearly indicates a contrary intent
-----------
or unless otherwise specifically provided herein, words used in this Mortgage
may be used interchangeably in singular or plural form and the word "MORTGAGOR"
shall mean "each Mortgagor and any subsequent owner or owners of the Mortgaged
Property or any part thereof or any interest therein," the word "MORTGAGEE"
shall mean "Mortgagee and any subsequent holder of the Note," the word "NOTE"
shall mean "the Note and any other evidence of indebtedness secured by this
Mortgage," the word "PERSON" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, the words "MORTGAGED PROPERTY" shall include
any portion of the Mortgaged Property and any interest therein and the words
"ATTORNEYS' FEES" shall include any and all attorneys' fees, paralegal and law
clerk fees, including, without limitation, fees at the pre-trial, trial and
appellate levels incurred or paid by Mortgagee in protecting its interest in the
Mortgaged Property and Collateral and enforcing its rights hereunder. Whenever
the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.
47. HOMESTEAD. Mortgagor hereby waives and renounces all homestead and
---------
exemption rights provided by the Constitution and the laws of the United States
and of any state, in and to the Mortgaged Property as against the collection of
the Debt, or any part hereof.
48. ASSIGNMENTS. Mortgagee shall have the right to assign or transfer its
-----------
rights under this Mortgage without limitation. Any assignee or transferee shall
be entitled to all the benefits afforded Mortgagee under this Mortgage.
49. WAIVER OF JURY TRIAL. MORTGAGOR HEREBY AGREES NOT TO ELECT A TRIAL BY
--------------------
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE NOTE, THIS MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM,
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<PAGE>
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY MORTGAGOR, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. MORTGAGEE IS HEREBY AUTHORIZED
TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF
THIS WAIVER BY MORTGAGOR.
50. RECOURSE PROVISIONS. Subject to the qualifications below, Mortgagee
-------------------
shall not enforce the liability and obligation of Mortgagor to perform and
observe the obligations contained in this Mortgage, the Note or in any of the
other Loan Documents by any action or proceeding wherein a money judgment shall
be sought against Mortgagor, except that Mortgagee may bring a foreclosure
action, an action for specific performance or any other appropriate action or
proceeding to enable Mortgagee to enforce and realize upon its interests under
the Note, this Mortgage or the other Loan Documents or in the Mortgaged
Property, the Rents or any other collateral given to Mortgagee pursuant to this
Mortgage and the other Loan Documents; provided, however, that, except as
specifically provided herein, any judgment in any such action or proceeding
shall be enforceable against Mortgagor only to the extent of Mortgagor's
interest in the Mortgaged Property, in the Rents and in any other collateral
given to Mortgagee, and Mortgagee, by accepting this Mortgage, the Note and the
other Loan Documents, agrees that it shall not sue for, seek or demand any
deficiency judgment against Mortgagor in any such action or proceeding under or
by reason of or in connection with this Mortgage, the Note or the other Loan
Documents. The provisions of this paragraph shall not, however, (i) constitute
a waiver, release or impairment of any obligation evidenced or secured by this
Mortgage, the Note or any of the other Loan Documents; (ii) impair the right of
Mortgagee to name Mortgagor as a party defendant in any action or suit for
foreclosure and sale under this Mortgage; (iii) affect the validity or
enforceability of any guaranty made in connection with the Loan or any of the
rights and remedies of the Mortgagee thereunder; (iv) impair the right of
Mortgagee to obtain the appointment of a receiver; (v) impair the enforcement of
the Assignment of Leases and Rents executed in connection herewith; or (vi)
constitute a waiver of the right of Mortgagee to enforce the liability and
obligation of Mortgagor, by money judgment or otherwise, to the extent of any
loss, damage, cost, expense, liability, claim or other obligation incurred by
Mortgagee (including attorneys' fees and costs reasonably incurred) arising out
of or in connection with the following:
(a) fraud or intentional misrepresentation by Mortgagor or any
Guarantor in connection with the Loan;
(b) the gross negligence or willful misconduct of Mortgagor;
(c) intentional actual waste of the Mortgaged Property;
(d) the breach of any representation, warranty, covenant or
indemnification provision in that certain Environmental and Hazardous Substance
Indemnification Agreement of even date herewith given by Mortgagor to Mortgagee
or in this Mortgage concerning Environmental Laws, Hazardous Substances or
Asbestos;
(e) the removal or disposal of any portion of the Mortgaged Property
after an Event of Default;
(f) the misapplication or conversion by Mortgagor of (i) any insurance
proceeds paid by reason of any loss, damage or destruction to the Mortgaged
Property, (ii) any awards or other amounts received in connection with the
condemnation of all or a portion of the Mortgaged Property, or (iii) any Rents
following an Event of Default;
(g) failure to pay charges for labor or materials or other charges
that can create liens on any portion of the Mortgaged Property; and
(h) any security deposits collected with respect to the Mortgaged
Property which are not delivered to Mortgagee upon a foreclosure of the
Mortgaged Property or action in lieu thereof, except to the extent any such
security deposits were applied in accordance with the terms and conditions of
any of the Leases prior to the occurrence of the Event of Default that gave rise
to such foreclosure or action in lieu thereof.
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Notwithstanding anything to the contrary in any of the Loan Documents, (i)
Mortgagee shall not be deemed to have waived any right which Mortgagee may have
under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Debt secured by this
Mortgage or to require that all collateral shall continue to secure all of the
Debt owing to Mortgagee in accordance with the Loan Documents, and (ii) the Debt
shall become fully recourse to Mortgagor in the event that: (A) the first full
monthly payment of principal and interest under the Note is not paid when due;
(B) Mortgagor fails to permit on-site inspections of the Mortgaged Property
within ten (10) days after request by Mortgagee, fails to provide financial
information within thirty (30) days after the date upon which such financial
information is due and Mortgagee has given at least fifteen (15) days prior
written notice to Mortgagor of such failure by Mortgagor to provide such
information, or fails to maintain its status as a single purpose entity as
required by, and in accordance with the provisions of, this Mortgage; (C)
Mortgagor fails to obtain Mortgagee's prior written consent to any subordinate
financing or other voluntary lien encumbering the Mortgaged Property; or (D)
Mortgagor fails to obtain Mortgagee's prior written consent to any assignment,
transfer, or conveyance of the Mortgaged Property or any interest therein as
required by this Mortgage.
Further notwithstanding anything to the contrary contained herein, no
liability or obligation shall be personally binding upon nor shall resort to the
enforcement thereof be had to the property of the shareholders, directors or
officers of G&L Management Delaware Corp., the corporate managing member in
Mortgagor, or to the members in Mortgagor, to the extent that the terms of this
Paragraph 50 hereof are breached.
51. DEFEASANCE.
----------
(a) At any time after the date which is three years from the date
hereof and before the Optional Prepayment Date (as such term is defined in the
Note) and provided no Event of Default exists, Mortgagor may obtain the release
of the Mortgaged Property from the lien of this Mortgage upon the satisfaction
of the following conditions precedent:
i) not less than thirty (30) days prior written notice to
Mortgagee specifying a regularly scheduled payment date (the "RELEASE DATE") on
which the Defeasance Deposit (hereinafter defined) is to be made;
ii) the payment to Mortgagee of interest accrued and unpaid on
the principal balance of the Note to and including the Release Date;
iii) the payment to Mortgagee of all other sums, not including
scheduled interest or principal payments, due under the Note, this Mortgage, the
Assignment of Leases, and the other Loan Documents;
iv) the payment to Mortgagee of the Defeasance Deposit; and
v) the delivery to Mortgagee of:
(A) a security agreement, in form and substance satisfactory
to Mortgagee, creating a first priority lien on the Defeasance Deposit and the
U.S. Obligations (hereinafter defined) purchased on behalf of Mortgagor with the
Defeasance Deposit in accordance with this provision of this paragraph (the
"SECURITY AGREEMENT");
(B) a release of the Mortgaged Property from the lien of this
Mortgage (for execution by Mortgagee) in a form appropriate for the jurisdiction
in which the Mortgaged Property is located;
(C) an officer's certificate of Mortgagor certifying that the
requirements set forth in this subparagraph (a) have been satisfied;
(D) an opinion of counsel for Mortgagor in form satisfactory
to Mortgagee stating, among other things, that Mortgagee has a perfected first
priority security interest in the Defeasance Deposit and the U.S. Obligations
purchased by Mortgagee on behalf of Mortgagor;
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(E) evidence in writing from the applicable Rating Agencies
to the effect that such release will not result in a re-qualification, reduction
or withdrawal of any rating in effect immediately prior to such defeasance for
any securities issued in connection with a Secondary Market Transaction; and
(F) such other certificates, documents or instruments as
Mortgagee may reasonably request.
In connection with the conditions set forth in subparagraph (a)(v) above,
Mortgagor hereby appoints Mortgagee as its agent and attorney-in-fact for the
purpose of using the Defeasance Deposit to purchase U.S. Obligations which
provide payments on or prior to, but as close as possible to, all successive
scheduled payment dates after the Release Date upon which interest and principal
payments are required under the Note (assuming that the Mortgagor were to prepay
the Note in full on the Optional Prepayment Date) and in amounts equal to the
scheduled payments due on such dates under the Note (the "SCHEDULED DEFEASANCE
PAYMENTS"). Mortgagor, pursuant to the Security Agreement or other appropriate
document, shall authorize and direct that the payments received from the U.S.
Obligations may be made directly to Mortgagee and applied to satisfy the
obligations of the Mortgagor under the Note.
(b) Upon compliance with the requirements of this paragraph, the
Mortgaged Property shall be released from the lien of this Mortgage and the
pledged U.S. Obligations shall be the sole source of collateral securing the
Note. Any portion of the Defeasance Deposit in excess of the amount necessary
to purchase the U.S. Obligations required by subparagraph (a) above and satisfy
the Mortgagor's obligations under this paragraph shall be remitted to the
Mortgagor with the release of the Mortgaged Property from the lien of this
Mortgage. In connection with such release, Nomura Asset Capital Corporation
("NACC") shall establish or designate a successor entity (the "SUCCESSOR
MORTGAGOR") and Mortgagor shall transfer and assign all obligations, rights and
duties under and to the Note together with the pledged U.S. Obligations to such
Successor Mortgagor. The obligation of NACC to establish or designate a
Successor Mortgagor shall be retained by NACC notwithstanding the sale or
transfer of this Mortgage unless such obligation is specifically assumed by the
transferee. Such Successor Mortgagor shall assume the obligations under the
Note and the Security Agreement and Mortgagor shall be relieved of its
obligations thereunder. The Mortgagor shall pay $1,000.00 to any such Successor
Mortgagor as consideration for assuming the obligations under the Note and the
Security Agreement. Notwithstanding anything in this Mortgage to the contrary,
no other assumption fee shall be payable upon a transfer of the Note in
accordance with this paragraph, but Mortgagor shall pay all costs and expenses
incurred by Mortgagee, including Mortgagee's attorneys' fees and expenses,
incurred in connection with this paragraph.
(c) For purposes of this paragraph, the following terms shall have the
following meanings:
i) The term "DEFEASANCE DEPOSIT" shall mean an amount equal to
the remaining principal amount of the Note, the Yield Maintenance Premium, any
costs and expenses incurred or to be incurred in the purchase of U.S.
Obligations necessary to meet the Scheduled Defeasance Payments and any revenue,
documentary stamp or intangible taxes or any other tax or charge due in
connection with the transfer of the Note or otherwise required to accomplish the
agreements of this Paragraph 52;
ii) The term "YIELD MAINTENANCE PREMIUM" shall mean the amount
(if any) which, when added to the remaining principal amount of the Note, will
be sufficient to purchase U.S. Obligations providing the required Scheduled
Defeasance Payments; and
iii) The term "U.S. OBLIGATIONS" shall mean direct non-callable
obligations of the United States of America.
52. CASH MANAGEMENT AGREEMENT. On the date hereof, the Mortgagor has
-------------------------
entered into one or more clearing and deposit agreements acceptable to Mortgagee
between Mortgagor, Mortgagee and one or more certain financial institutions
(together with any modification, amendment, substitution or replacement thereof,
hereinafter collectively referred to as the "CASH MANAGEMENT AGREEMENT") which
provide, among other things, that all Rents and other sums collected from, or
arising with respect to, the Mortgaged Property be deposited in the deposit
account established in connection with such Cash Management Agreement and that
such amounts shall be disbursed in
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accordance with paragraphs 7 and 8 of the Note. The Mortgagor shall pay all
costs and expenses required under the Cash Management Agreement. Upon the
occurrence of an Event of Default, Mortgagee may apply any sums then held
pursuant to the Cash Management Agreement to the payment of the Debt in any
order in its sole discretion. Until expended or applied, amounts held pursuant
to the Cash Management Agreement shall constitute additional security for the
Debt. The Cash Management Agreement shall be a "Loan Document" for all purposes
under the Note, this Mortgage and the other Loan Documents.
53. RATING OF PHP HEALTHCARE CORPORATION.
------------------------------------
(a) Mortgagor acknowledges that Pinnacle Health Enterprises, LLC, (the
"PINNACLE"), is a wholly owned subsidiary of PHP Healthcare Corporation (the
"PARENT COMPANY"), and that Pinnacle is the sole tenant in each of the
Improvements comprising the Mortgaged Property under the terms of that certain
Lease dated as of February 1, 1997 between Mortgagor, as landlord and Pinnacle,
as tenant, and that Mortgagee would not be making the Loan to Mortgagor were it
not for (i) the rating of the Parent Company by the Rating Agencies as of the
date hereof (the "PARENT'S CURRENT RATING"), (ii) the execution by the Parent
Company of that certain unconditional lease guaranty dated as if February 1,
1997 given by the Parent Company to Mortgagor with respect to each and every
obligation of Pinnacle under the Pinnacle Lease, and (iii) the status of
Pinnacle as a wholly owned subsidiary of the Parent Company.
(b) If the Parent's credit rating is reduced by any of the Rating
Agencies to a rating below the Parent's Current Rating at any time during the
term of the Loan, Mortgagor shall deliver to Mortgagee, within five (5) Business
Days after Mortgagee's demand therefore, an irrevocable, unconditional, direct-
pay letter of credit issued by a financial institution and in form acceptable to
Mortgagee, in its sole discretion, in the following applicable original
principal amount: (i) if the Parent's Current Rating shall be reduced on or
before October 11, 2005, the letter of credit shall be in the original principal
amount of $1,500,000.00 or (ii) if the Parent's Current Rating shall be reduced
after October 11, 2005 the letter of credit shall be in the original principal
amount of $750,000.00 (the "LETTER OF CREDIT"). Anything contained herein to
the contrary notwithstanding, the failure of the Parent Company to maintain a
credit rating equal to the Parent's Current Credit Rating shall not in and of
itself constitute an Event of Default under this Mortgage.
(c) Mortgagor hereby pledges the Letter of Credit delivered to
Mortgagee as additional security for the payment of the Debt. Provided that no
Event of Default shall exist and remain uncured, Mortgagee shall make draws on
the Letter of Credit, at the request of Mortgagor, to reimburse Mortgagor for
expenses reasonably incurred by Mortgagor for new Leases entered into in
accordance with the provisions of Paragraph 8 below (a "REIMBURSEMENT AMOUNT").
All such expenses shall be approved by Mortgagee in its sole discretion. All
such requests for a Reimbursement Amount shall include delivery by Mortgagor of
copies of paid invoices (or with respect to requests in excess of $10,000,
unpaid invoices) for the amounts requested for tenant improvements and leasing
commissions, the newly executed Lease, extension, renewal, or modification, with
terms commensurate with the expired Lease, a certification for tenant
improvement disbursements from the Mortgagor stating (1) the nature and type of
the related improvement, (ii) that the related improvement has been completed in
a good and workmanlike manner and (iii) that the related improvement has been
paid in full (or, with respect to requests in excess of $10,000, will be paid
for in full from the requested disbursement) or a certification for leasing
commission disbursements stating that such leasing commission has been paid in
full (or, with respect to requests in excess of $10,000, will be paid for in
full from the requested disbursement) and, if required by Mortgagee, lien
waivers and releases from all parties furnishing materials and/or services in
connection with the requested Reimbursement Amount. Mortgagor shall have the
right to deliver to Mortgagee a replacement Letter of Credit in a principal
amount equal to (i) the original principal amount of the Letter of Credit minus
-----
the requested Reimbursement Amount approved by Mortgagee in accordance with the
terms hereof, in lieu of requesting a draw on the Letter of Credit equal to such
Reimbursement Amount. Any draw by Mortgagee hereunder in excess of $10,000 and
not already paid for by Mortgagor, shall be disbursed by joint check, payable to
Mortgagor and the applicable contractor, supplier, materialman, mechanic,
subcontractor, broker or other party to whom payment is due in connection with
such disbursement. Mortgagee may require an inspection of the Mortgaged
Property at Mortgagor's expense prior to making a disbursement in order to
verify completion of improvements for which reimbursement is sought. Upon the
occurrence of an Event of Default, Mortgagee may apply the Letter of Credit to
the payment of the Debt in any order in its sole discretion.
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(d) If after the occurrence of a reduction in the Parent's Current
Rating and the delivery of the Letter of Credit by Mortgagor to Mortgagee, the
Parent's rating shall be increased by the Rating Agencies above the Parent's
Current Rating, Mortgagee shall return the Letter of Credit to Mortgagor,
provided, however, if Parent's rating shall once again be reduced by any of the
Rating Agencies to a rating below the Parent's Current Rating, Mortgagor shall
once again deliver a Letter of Credit to Mortgagee in accordance with the terms
of this Section 53.
54. MISCELLANEOUS.
-------------
(a) Mortgagor covenants and agrees that during the Term, unless
Mortgagee shall have previously consented in writing, (a) Mortgagor will take no
action that would cause it to become an "EMPLOYEE BENEFIT PLAN" as defined in 29
C.F.R. Section 2510.3-101, or "ASSETS OF A GOVERNMENTAL PLAN" subject to
regulation under the state statutes, and (b) Mortgagor will not sell, assign or
transfer the Mortgaged Property, or any portion thereof or interest therein, to
any transferee that does not execute and deliver to Mortgagee its written
assumption of the obligations of this covenant. Mortgagor further covenants and
agrees to protect, defend, indemnify and hold Mortgagee harmless from and
against all loss, cost, damage and expense (including without limitation, all
attorneys' fees and excise taxes, costs of correcting any prohibited transaction
or obtaining an appropriate exemption) that Mortgagee may incur as a result of
Mortgagor's breach of this covenant. This covenant and indemnity shall survive
the extinguishment of the lien of this Mortgage by foreclosure or action in lieu
thereof; furthermore, the foregoing indemnity shall supersede any limitations on
Mortgagor's liability under any of the Loan Documents.
(b) The Loan Documents contain the entire agreement between Mortgagor
and Mortgagee relating to or connected with the Loan. Any other agreements
relating to or connected with the Loan not expressly set forth in the Loan
Documents are null and void and superseded in their entirety by the provisions
of the Loan Documents.
(c) Mortgagor represents and warrants to Mortgagee that there has not
been committed by Mortgagor or any other person in occupancy of or involved with
the operation or use of the Mortgaged Property any act or omission affording the
federal government or any state or local government the right of forfeiture as
against the Mortgaged Property or any part thereof or any monies paid in
performance of Mortgagor's obligations under the Note or under any of the other
Loan Documents. Mortgagor hereby covenants and agrees not to commit, permit or
suffer to exist any act, omission or circumstance affording such right of
forfeiture. In furtherance thereof, Mortgagor hereby indemnifies Mortgagee and
agrees to defend and hold Mortgagee harmless from and against any loss, damage
or injury by reason of the breach of the covenants and agreements or the
representations and warranties set forth in this paragraph. Without limiting
the generality of the foregoing, the filing of formal charges or the
commencement of proceedings against Mortgagor or all or any part of the
Mortgaged Property under any federal or state law for which forfeiture of the
Mortgaged Property or any part thereof or of any monies paid in performance of
Mortgagor's obligations under the Loan Documents is a potential result, shall,
at the election of Mortgagee, constitute an Event of Default hereunder without
notice or opportunity to cure.
(d) Mortgagor acknowledges that, with respect to the Loan, Mortgagor
is relying solely on its own judgement and advisors in entering into the Loan
without relying in any manner on any statements, representations or
recommendations of Mortgagee or any parent, subsidiary or affiliate of
Mortgagee. Mortgagor acknowledges that Mortgagee engages in the business of
real estate financings and other real estate transactions and investments which
may be viewed as adverse to or competitive with the business of the Mortgagor or
its affiliates. Mortgagor acknowledges that it is represented by competent
counsel and has consulted counsel before executing the Loan Documents.
(e) Mortgagor covenants and agrees to pay Mortgagee upon receipt of
written notice from Mortgagee, all reasonable costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements and the costs
and expenses of any title insurance company, appraisers, engineers or surveyors)
incurred by Mortgagee in connection with (i) the preparation, negotiation,
execution and delivery of this Mortgage and the other Loan Documents; (ii)
Mortgagor's performance of and compliance with Mortgagor's respective agreements
and covenants contained in this Mortgage and the other Loan Documents on its
part to be performed or complied with after the date hereof; (iii) the
negotiation, preparation, execution, delivery and administration of any
consents, amendments, waivers or other modifications to this Mortgage and the
other Loan Documents; and (iv) the filing and recording fees
34
<PAGE>
and expenses, title insurance fees and expenses, and other similar expenses
incurred in creating and perfecting the lien in favor of Mortgagee pursuant to
this Mortgage and the other Loan Documents.
(f) This Mortgage shall be governed by and construed in accordance
with the laws of the State in which the Premises are located and the applicable
laws of the United States of America.
PART II
NEW JERSEY SPECIAL STATE PROVISIONS
None.
35
<PAGE>
IN WITNESS WHEREOF, Mortgagor has executed this instrument the day and year
first above written.
MORTGAGOR:
GL/PHP, LLC, a Delaware limited liability company
By: G&L MANAGEMENT DELAWARE CORP.,
a Delaware corporation, as Managing Member
By:
---------------------------
Gary Grabel, Vice President
STATE OF )
-----------------------
) ss.
COUNTY OF )
-----------------------
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Gary Grabel, known to me to be the Vice
President of G&L Management Delaware Corp., a Delaware corporation, the Managing
Member of GL/PHP, LLC, a Delaware limited liability company, that executed the
foregoing instrument, and known to me to be the person who executed the
foregoing instrument on behalf of said G&L Management Delaware Corp., and
acknowledged to me that he executed the same as such Vice President for the
corporation and that such corporation executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this ________ day of August, 1997.
------------------------
Notary Public
My commission expires:
---------------
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION FOR ALL SIX PROJECTS
(See Attached)
<PAGE>
EXHIBIT B
ALLOCATION OF THE DEBT PER PROPERTY COMPRISING THE MORTGAGED PROPERTY
<TABLE>
<CAPTION>
Property Location: Allocated Portion of the Debt:
----------------- -----------------------------
<S> <C> <C>
A. 2103 Mount Holly Road, Burlington, New Jersey $ 2,617,975.00
B. 16 Commerce Drive, Cranford, New Jersey $ 2,959,350.00
C. 274 Highway 35, Eatontown, New Jersey $ 2,895,349.00
D. 4622 Black Horse Pike, Hamilton, New Jersey $ 2,633,250.00
E. 150 Century Parkway, Mount Laurel, New Jersey $ 2,355,293.00
F. 80 Eisenhouwer Drive, Paramus, New Jersey $ 2,538,783.00
--------------
$16,000,000.00
</TABLE>
2
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of BURLINGTON, County of BURLINGTON and State of NEW JERSEY, being more
particularly described as follows:
BEGINNING at a point in the Northeasterly side of Mount Holly-
Burlington Road (86 feet wide) on a course of North 27 degrees 42 minutes
23 seconds West, 250 feet from the Intersection of the Northeasterly line
of Mount Holly-Burlington Road with the Northerly line of Cadillac Road
(proposed) (70 feet Wide), and continued thence (1) along Mount Holly-
Burlington Road North 27 degrees 12 minutes 25 seconds West 313.87 feet to
a point in line of lands of Public Service Electric and Gas Company theads
(2) along the same North 63 degrees 52 minutes 13 seconds East 203.70 feet
to a point in same, thence (3) still along the same North 68 degrees 57
minutes 15 seconds East 370.07 feet to a point in line of Public Service
Electric and Gas Company right of way, thence (4) along the same curving to
the right with a radius of 5696.65 feet an arc distance of 296.63 feet to a
point in the dividing line between Lots 1 and 2. Section 1, Plan of
Levittown Industrial Park, thence (5) along the same South 62 degrees 17
minutes 35 seconds West 438.01 feet to the point and place of beginning.
BEING know and designated as Lot 1, Section 1, Plan of Levittown
Industrial Park.
EXCEPTING THEREOUT AND THEREFROM all that certain tract or parcel of
land contained in a Deed from Les Malmon and Barbara Malmon, his wife to
Board of Chosen Freeholders of the County of Burlington dated 1-6-86,
recorded 1-7-86 in Deed Book 2136, page 106.
FURTHER EXCEPTING THEREOUT AND THEREFROM all that certain tract or
parcel of land contained in Deed from Les Malmon and Barbara Malmon, his
wife to Board of Chosen Freeholders of the County of Burlington, dated
5-16-88, recorded 5-17-88 in Deed Book 3440, page 34.
NOTE: Being known and designated as Lot No. 2, Block No. 118.02 as shown on the
Tax Maps of the Township of Burlington.
<PAGE>
________________________________________________________________________________
SCHEDULE 4
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
PARAMUS, County of BERGEN and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the southerly line of Elsenhower Drive (formerly
Quad Road) (60.00 feet wide) distant the following courses and distances
from the intersection of the center line of Elsenhower Drive with the
center line of Essex Road (formerly Kent Road) (60.00' feet wide) all as
shown on a certain map entitled - Final Subdivision Plat, Quad Associates
and Centurian Plaza Corp." filed in the Bergen County Clerk's Office on
October 24, 1967, as Map No. 6632:"
A. Along the center line of Essex Road (formerly Kent Road), if
produced, South 37 degrees 56 minutes 41 seconds West 30.00 feet to a point
in the southerly line of Elsenhower Drive (formerly Quad Road); thence,
B. Along the southerly line of Elsenhower Drive (formerly Quad
Road), North 52 degrees 16 minutes 13 seconds West 149.975 feet to the
point or place of beginning and running; thence,
1. Along the westerly line of Proposed Lot 3 in Block 1803 as shown
on a certain map entitled "Subdivision, Elsenhower Drive, Block 1803, Lots
2 and 3, Paramus, Bergen County, New Jersey" dated 5/19/89, last revised
8/11/89, Prepared by Lapatka Associates Inc., 22 Madison Avenue, Paramus,
New Jersey 07652 and approved by the Planning Board of the Borough of
Paramus on August 10, 1989, South 37 degrees 43 minutes 47 seconds West
280.64 feet to a point on a curve; thence,
2. Along the northerly line of Lot 2 in Block 1101 as shown on the
current assessment map of the Borough of Paramus being lands, now or
formerly, of Arcola Country Club, northwesterly, on a curve to the right
having a radius of 675.00 feet, central angle of 2 degrees 37 minutes 28
seconds, an arc distance of 30.92 feet to a point of reverse curvature;
thence,
3. Along the same, northwesterly, on a curve to the left having a
radius of 620.00 feet, central angle of 9 degrees 9 minutes 12 seconds, and
arc distance of 99.05 feet to a point of tangency; thence
4. Along the same, North 52 degrees 16 minutes 13 seconds West
237.15 feet to a point; thence,
5. Along the easterly line of Lot 1 in Block 1803, as shown on the
referenced Assessment Map, being lands, now or formerly, of Emil
Schroth, North 37 degrees 43 minutes 47 seconds East 268.50 feet to a
point; thence,
6. Along the southerly line of Elsenhower Drive (formerly Quad
Road), South 52 degrees 16 minutes 13 seconds East 366.405 feet to the
point or place of beginning.
NOTE: Being known and designated as Lot No. 2, Block No. 1803 as shown on the
Tax Maps of the Borough of Paramus.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL THAT CERTAIN lot, tract or parcel of land situate in Hamilton Township,
County of Atlanic and State of New Jersey and described as follows:
BEGINNING on the southerly line of Route 322, also known as the Black Horse Pike
(115 feet from the original centerline) at the division of Lot 9 and Lot 8 as
established by a survey dated June 7, 1990 by John G. Reutier & Associates as
the second corner of land as described in deed from Benjamin L. Jaffe and wife
to William C. Jones, and wife, dated September 30, 1948 and recorded in Deed
Book 1420 Page 129; and extending thence
1. South 64 degrees, 43 minutes and 49 seconds East along the southerly line
of the Black Horse Pike, 528.52 feet to a non-tangent point of curve;
thence
2. Eastwardly and southwardly curving to the right along a curve having a
radius of 75.00 feet and an arc length of 67.90 feet to a point of tangency
on the westerly curb line of an entrance drive; thence
3. South 25 degrees, 16 minutes and 11 seconds West along said curve line,
155.00 feet to a point of curve; thence
4. Southwardly and westwardly curving to the right along a curve having a
radius of 25.00 feet and an arc length of 39.37 feet to the northerly
curbline of an access drive; thence
5. North 64 degrees, 43 minutes and 49 seconds West, along said curb line and
the extension thereof 403.63 feet to the division line of Lot 9.01 and Lot
8; thence
6. North 03 degrees, 00 minutes and 46 seconds West, along said division line
271.40 feet to the point of beginning.
IN compliance with Chapter 157, Laws of 1977 premises herein are known as part
of Lots 9, 10.01, 10.02 and 11 in Block 1134 as shown on the official tax map of
Hamilton Township, New Jersey and are designated as Lot 9.01 on a minor
subdivision plus being recorded simultaneously herewith, being Map #3342, filed
December 23, 1994.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of CRANFORD, County of UNION and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the northwesterly right of way line of Commerce
Drive (60.00 feet wide) said point being N 51(degrees) - 57' - 40" E 80.00 feet
as measured along said line of Commerce Drive as produced southwesterly from the
intersection of the same with the northwesterly right of way line of Commerce
Drive, formerly Clearly Avenue, as produced northwesterly and running thence;
1. Along lands of the Garden State Parkway N 38(degrees) - 02' -
20" W 17.42 feet, thence
2. Still along lands of the Garden State Parkway, northerly, along a
curve to the left, having a radius of 6,150.00 feet, an arc
length of 580.66 feet and a chord of N 09(degrees) - 40' - 17"
W 580.45 feet, thence
3. Along lands now or formerly of Calcran, Inc., S 68(degrees) -
24' - 00" E 353.44 feet, thence
4. Still along lands of Calcran Inc., S 32(degrees) - 54' - 16" E
103.44 feet, thence
5. Along the aforesaid northwesterly right of way line of Commerce
Drive, S 51(degrees) - 57' - 40" W 598.77 feet to the point of
beginning.
NOTE: Being known and designated as Lot No. 1, Block No. 636 as shown on the Tax
Maps of the Township of Cranford.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
EATONTOWN, County of MONMOUTH and State of NEW JERSEY, being more particular
described as follows:
Beginning at a point on the westerly side of New Jersey State Highway,
Route 35 (100" R.O.W) at the northeast corner of Lands now or formerly Alan
R. Cohn & Ira S. Port and from thence; running
1. South 60 (degrees) 39' 19" West, 275.00 feet to a point; thence
2. South 20 (degrees) 20' 41" East, 150.00 feet to a point; thence
3. South 69 (degrees) 30' 19" West, 148.95 feet to a point; thence
4. North 02 (degrees) 03' 35" East, 79.42 feet to a point; thence
5. North 88 (degrees) 34' 33" West, 321.75 feet to a point; thence
6. North 01 (degrees) 25' 27" East, 330.00 feet to a point, thence
7. South 88 (degrees) 34' 33" East, 267.53 feet to a point, thence
8. North 69 (degrees) 99' 19" East, 321.66 feet to a point, thence
9. South 20 (degrees) 20' 41" East, 250.00 feet along westerly side of
New Jersey State Highway Route 35 (100' R.O.W.) to the point or place
of beginning.
NOTE: BEING shown and designated as Lot 1:02 Block 111 on the Tax Maps of the
Borough of Eatontown.
<PAGE>
EXHIBIT 10.51
================================================================================
GL/PHP,LLC
(Assignor)
to
NOMURA ASSET CAPITAL CORPORATION
(Assignee)
ASSIGNMENT OF LEASES AND RENTS
Dated As of: August 15, 1997
Property Location: 2103 Mount Holly Road, Burlington, New Jersey
16 Commerce Drive, Cranford, New Jersey
274 Highway 35, Eatontown, New Jersey
4622 Black Horse Pike, Hamilton, New Jersey
150 Century Parkway, Mount Laurel, New Jersey
80 Eisenhouwer Drive, Paramus, New Jersey
Loan No. 13431
-----
================================================================================
DOCUMENTATION PREPARED BY AND WHEN RECORDED, RETURN TO:
Brownstein Hyatt Farber & Strickland, P.C.
410 Seventeenth Street, Suite 2200
Denver, Colorado 80202
Attention: Ann Lazo Tenzer, Esq.
<PAGE>
THIS ASSIGNMENT OF LEASES AND RENTS ("ASSIGNMENT") made as of August 15,
1997, by GL/PHP, LLC, a Delaware limited liability company, having its principal
place of business at 439 North BedFord Drive, Beverly Hills, California
90210("ASSIGNOR") to NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation,
having its principal place of business at 2 World Financial Center, Building B,
New York, New York 10281 ("ASSIGNEE").
W I T N E S S E T H:
THAT Assignor for good and valuable consideration, receipt whereof is
hereby acknowledged, hereby grants, transfers and absolutely and unconditionally
assigns to Assignee the entire lessor's interest in and to all current and
future leases and other agreements affecting the use, enjoyment, or occupancy of
all or any part of that certain lot or piece of land, more particularly
described in Exhibit "A" annexed hereto and made a part hereof, together with
-----------
the buildings, structures, fixtures, additions, enlargements, extensions,
modifications, repairs, replacements and improvements now or hereafter located
thereon (hereinafter collectively referred to as the "MORTGAGED PROPERTY");
TOGETHER WITH all other leases and other agreements affecting the use,
enjoyment or occupancy of any part of the Mortgaged Property now or hereafter
made affecting the Mortgaged Property or any portion thereof, together with any
extensions or renewals of the same, this Assignment of other present and future
leases and present and future Agreements being effective without further or
supplemental assignment;
The leases and other agreements described above together with all other
present and future leases and present and future agreements and any extension
or renewal of the same are hereinafter collectively referred to as the "LEASES";
TOGETHER WITH all accounts, deposits, rents, income, issues, revenues,
receipts, insurance proceeds and profits arising from the Leases and renewals
thereof and together with all rents, income, issues and profits (including, but
not limited to, all oil and gas or other mineral royalties and bonuses) from the
use, enjoyment and occupany of the Mortgaged Property, or the sale, lease,
sublease, license, concession or other grant of right to use or occupy any
portion thereof, vending machine proceeds, and any compensation received for the
rendering of services by Assignor (hereinafter collectively referred to as the
"RENTS").
THIS ASSIGNMENT is made in consideration of that certain mortgage loan made
by Assignee to Assignor evidenced by that certain note made by Assignor to
Assignee, dated the date hereof, in the principal sum of $16,000,000.00 (the
"NOTE"), and secured by that certain mortgage, assignment of leases and rents
and security agreement given by Assignor to Assignee, dated the date hereof
covering the Mortgaged Property and intended to be duly recorded (the
"MORTGAGE").
The principal sum, interest and all other sums due and payable under the
Note and Mortgage are hereinafter collectively referred to as the "DEBT". This
Assignment, the Note, the Mortgage and any other documents now or hereafter
executed by Assignor and/or others and by or in favor of Assignee which
evidences, secures or guarantees all or any portion of the payments due under
the Note or otherwise is executed and/or delivered in connection with the Note
and the Mortgage are hereinafter referred to as the "LOAN DOCUMENTS".
ASSIGNOR WARRANTS that (A) Assignor is the sole owner of the entire
lessor's interest in the Leases; (B) the Leases are valid, enforceable and in
full force and effect and have not been altered, modified or amended in any
manner whatsoever; (C) none of the Rents have been assigned or otherwise pledged
or hypothecated; (D) none of the Rents have been collected for more than one
(1) month in advance; (E) Assignor has full power and authority to execute and
deliver this Assignment and the execution and delivery of this Assignment has
been duly authorized and does not conflict with or constitute a default under
any law, judicial order or other agreement affecting Assignor or the Mortgaged
Property: (F) the premises demised under the Leases have been completed and
1
<PAGE>
the tenants under the Leases have accepted the same and have taken possession of
the same on a rent-paying basis; and (vii) there exist no offsets or defenses to
the payment of any portion of the Rents.
ASSIGNOR COVENANTS with Assignee that Assignor (A) shall observe and
perform all the obligations imposed upon the lessor under the Leases and shall
not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (B) shall promptly send copies to Assignee of all notices
of default which Assignor shall send or receive thereunder; (C) shall enforce
all of the terms, covenants and conditions contained in the Leases upon the part
of the lease thereunder to be observed and performed, short of termination
thereof; (D) shall not collect any of the Rents more than one (1) month in
advance; (E) shall not execute any other assignment of the lessor's interest in
the Leases or the Rents; (F) shall deliver to Assignee, upon request, tenant
estoppel certificates from each commercial tenant at the Mortgaged Property in
form and substance reasonably satisfactory to Assignee, provided that Assignor
shall not be required to deliver such certificates more frequently than two (2)
times in any calendar year; and (G) shall execute and deliver at the request of
Assignee all such further assurances, confirmations and assignments in
connection with the Mortgaged Property as Assignee shall from time to time
require.
ASSIGNOR FURTHER COVENANTS with Assignee that, except to the extent
Assignor is acting in the ordinary course of business as a prudent operator of
property similar to the Mortgaged Property, Assignor (A) shall not, alter,
modify or change the terms of the Leases or any guarantee of any of the Leases
in any material respect without the prior written consent of Assignee; (B) shall
not convey or transfer or suffer or permit a conveyance or transfer of the
Mortgaged Property or of any interest therein so as to effect a merger of the
estates and rights of, or a termination or diminution of the obligations of,
tenants under the Leases; (C) shall not consent to any assignment of or
subletting under the Leases not in accordance with their terms, without the
prior written consent of Assignee; and (D) shall not cancel or terminate the
Leases or accept a surrender thereof, except if a tenant is in default
thereunder; provided, however, that any Lease may be cancelled if at the time of
the cancellation thereof a new Lease is entered into on substantially the same
terms or more favorable terms as the cancelled Lease.
ASSIGNOR FURTHER COVENANTS with Assignee that (A) all Leases shall be
written on the standard form of lease which has been approved by Assignee or as
otherwise approved by Assignee; (B) no material changes may be made to the
Assignee-approved standard lease without the prior written consent of Assignee;
(C) all Leases shall provide that they are subordinate to the Mortgage and that
the tenant agrees to attorn to Assignee; (D) unless otherwise approved by
Assignee, each Lease shall contain a provision requiring continuous operations
of tenant's business on the premises, and shall contain a prohibition against
tenant operating a competing business at or near the Mortgaged Property; (E)
none of the Leases shall contain any option to purchase, any right of first
refusal to lease or purchase, any right to terminate the lease term (except in
the event of the destruction of all or substantially all of the Mortgaged
Property), any non-disturbance or similar recognition agreement, and requirement
that the Assignor rebuild the Mortgaged Property in connection with a casualty
or condemnation of any portion of the Mortgaged Property or any other similar
provisions which adversely affect the Mortgaged Property or which might
adversely affect the rights of the Assignee, and (F) each tenant shall conduct
business only in that portion of the Mortgaged Property covered by its lease.
Upon request, Mortgagor shall furnish Mortgagee with executed copies of all
Leases.
ASSIGNOR FURTHER COVENANTS with Assignee that Assignor may enter into new
Leases and proposed renewals or extension of existing Leases without the prior
written consent of Assignee if such proposed Lease or extension; (i) is not for
greater than or equal to ten percent (10%) of the gross leasable area of the
Mortgaged Property, or greater than or equal to ten percent (10%) of the total
gross rentable revenues of the Mortgaged Property; (ii) shall have an initial
term of not less than three (3) years or greater than ten (10) years; (iii)
shall provide for rental rates comparable to existing local market rates and
shall be an arms-length transaction; (iv) shall not contain any options for
renewal or expansion by the tenant thereunder at rental rates which are either
below comparable market levels or less than the rental rates paid by the tenant
during the initial lease term; (v) shall be to a tenant which is experienced,
creditworthy and reputable; and (vi) shall comply with the requirements of the
preceding paragraph. Assignor may enter into a proposed lease which does not
satisfy all of the conditions set forth in clauses (i) through (vii) immediately
above, only with the prior written consent of Assignee, such consent not
2
<PAGE>
to be unreasonably withheld or delayed, Assignor expressly understands that any
and all new or proposed Leases are included in the definition of "Lease" or
"Leases" as such terms may be used throughout this Assignment.
THIS ASSIGNMENT is made on the following terms, covenants and conditions:
1. PRESENT ASSIGNMENT. Assignor does hereby absolutely and
------------------
unconditionally assign to Assignee Assignor's right, title and interest in all
current and future Leases and Rents, it being intended by Assignor that this
assignment constitutes a present, absolute and unconditional assignment and not
an assignment for additional security only. Such assignment to Assignee shall
not be construed to bind Assignee to the performance of any of the covenants,
conditions, or provisions contained in any such Lease or otherwise to impose any
obligation upon Assignee. Assignor agrees to execute and deliver to Assignee
such additional instruments, in form and substance satisfactory to Assignee, as
may hereinafter be requested by Assignee to further evidence and confirm said
assignment. Nevertheless, subject to the terms of this paragraph, Assignee
grants to Assignor a revocable license to operate and manage the Mortgaged
Property and to collect the Rents. Assignor shall hold the Rents, or a portion
thereof, sufficient to discharge all current sums due on the Debt for use in the
payment of such sums. Upon an Event of Default (as defined in the Mortgage), the
license granted to assignor herein shall automatically be revoked by Assignee
and Assignee shall immediately be entitled to receive and apply all Rents,
whether or not Assignee enters upon and takes control of the Mortgaged Property.
Assignee is hereby granted and assigned by Assignor the right, at its option,
upon the revocation of the license granted herein to enter upon the Mortgaged
Property in person, by agent or by court-appointed receiver to collect the
Rents. Any Rents collected after the revocation of the license herein granted
may be applied toward payment of the Debt in such priority and proportion as
Assignee, in its discretion, shall deem proper.
2. REMEDIES OF ASSIGNEE. Upon or at any time after an Event of Default,
--------------------
Assignee may, at its option, without waiving such Event of Default, without
notice and without regard to the adequacy of the security for the Debt, either
in person or by agent, with or without bringing any action or proceeding, or by
a receiver appointed by a court, take possession of the Mortgaged Property and
have, hold, manage, lease and operate the Mortgaged Property on such terms and
for such period of time as Assignee may deem proper and either with or without
taking possession of the Mortgaged Property in its own name, demand, sue for or
otherwise collect and receive all Rents, including those past due and unpaid,
with full power to make from time to time all alterations, renovations, repairs
or replacements thereto or thereof as may seem proper to Assignee and may apply
the Rents to the payment of the following in such order and proportion as
Assignee in its sole discretion may determine, any law, custom or use to the
contrary notwithstanding; (a) all expenses of managing and securing the
Mortgaged Property, including, without being limited thereto, the salaries, fees
and wages of a managing agent and such other employees or agents as Assignee may
deem necessary or desirable and all expenses of operating and maintaining the
Mortgaged Property, including, without being limited thereto, all taxes,
charges, claims, assessments, water charges, sewer rents and any other liens,
and premiums for all insurance which Assignee may deem necessary or desirable,
and the cost of all alterations, renovations, repairs or replacements, and all
expenses incident to taking and retaining possession of the Mortgaged Property;
and (b) the Debt, together with all costs and attorneys' fees. In addition to
the rights which Assignee may have herein, upon the occurrence of an Event of
Default, Assignee, at its option, may either require Assignor to pay monthly in
advance to Assignee, or any receiver appointed to collect the Rents, the fair
and reasonable rental value for the use and occupation of such part of the
Mortgaged Property as may be in possession of Assignor or require Assignor to
vacate and surrender possession of the Mortgaged Property to Assignee or to such
receiver and, in default thereof, Assignor may be evicted by summary proceedings
or otherwise. Additionally, Assignee shall have the right to establish a lock
box for the deposit of all Rents and other receivables of Assignor relating to
the Mortgaged Property. For purposes of paragraphs 1 and 2 hereof, Assignor
grants to Assignee its irrevocable power of attorney, coupled with an interest,
to take any and all of the aforementioned actions and any or all other actions
designated by Assignee for the proper management and preservation of the
Mortgaged Property. The exercise by Assignee of the option granted it in this
paragraph and the collection of the Rents and the application thereof as herein
provided shall not be considered a waiver of any default by Assignor under the
Note, the Mortgage, the Leases, this Assignment or the other Loan Documents.
3
<PAGE>
3. NO LIABILITY OF ASSIGNEE. Assignee shall not be liable for any loss
-------------------------
sustained by Assignor resulting from Assignee's failure to let the Mortgaged
Property after an Event of Default or from any other act or omission of Assignee
in managing the Mortgaged Property after an Event of Default. Assignee shall not
be obligated to perform or discharge any obligation, duty or liability under the
Leases or under or by reason of this Assignment and Assignor shall, and hereby
agrees, to indemnify Assignee for, and to hold Assignee harmless from, any and
all liability, loss or damage which may or might be incurred under the Leases or
under or by reason of this Assignment and from any and all claims and demands
whatsoever, including the defense of any such claims or demands which may be
asserted against Assignee by reason of any alleged obligations and undertakings
on its part to perform or discharge any of the terms, covenants or agreements
contained in the Leases. Should Assignee incur any such liability, the amount
thereof, including costs, expenses and reasonable attorneys' fees, shall be
secured hereby and by the Mortgage and the other Loan Documents and Assignor
shall reimburse Assignee therefor immediately upon demand and upon the failure
of Assignor to do so Assignee may, at its option, declare all sums secured
hereby, the Note, the Mortgage and the other Loan Documents immediately due and
payable. This Assignment shall not operate to place any obligation or liability
for the control, care, management or repair of the Mortgaged Property upon
Assignee, nor for the carrying out of any of the terms and conditions of the
Leases; nor shall it operate to make Assignee responsible or liable for any
waste committed on the Mortgaged Property by the tenants or any other parties,
or for any dangerous or defective condition of the Mortgaged Property,
including, without limitation, the presence of any Hazardous Substance (as
defined in the Mortgage), or for any negligence in the management, upkeep,
repair or control of the Mortgaged Property resulting in loss on injury or death
to any tenant, licensee, employee or stranger.
4. NOTICE TO TENANTS. Assignor hereby authorizes and directs the tenants
-----------------
named in the Leases or any other or future tenants or occupants of the Mortgaged
Property upon receipt from Assignee of written notice to the effect that the
Assignee is then the holder of the Note and that a default exists thereunder or
under this Assignment, the Note, the Mortgage or the other Loan Documents to pay
over to Assignee all Rents and to continue so to do until otherwise notified by
Assignee.
5. OTHER SECURITY. Assignee may take or release other security for the
--------------
payment of the Debt, may release any party primarily or secondarily liable
therefor and may apply any other security held by it to the reduction or
satisfaction of the Debt without prejudice to any of its rights under this
Assignment.
6. OTHER REMEDIES. Nothing contained in this Assignment and no act done
--------------
or omitted by Assignee pursuant to the power and rights granted to Assignee
hereunder shall be deemed to be a waiver by Assignee of its rights and remedies
under the Note, the Mortgage or the other Loan Documents and this Assignment is
made and accepted without prejudice to any of the rights and remedies possessed
by Assignee under the terms thereof. The right of Assignee to collect the Debt
and to enforce any other security therefor held by it may be exercised by
Assignee either prior to, simultaneously with, or subsequent to any action taken
by it hereunder.
7. NO MORTGAGEE IN POSSESSION. Nothing herein contained shall be
--------------------------
construed as constituting Assignee a "mortgagee in possession" in the absence of
the taking of actual possession of the Mortgaged Property by Assignee. In the
exercise of the powers herein granted Assignee, no liability shall be asserted
or enforced against Assignee, all such liability being expressly waived and
released by Assignor.
8. CONFLICT OF TERMS. In case of any conflict between the terms of this
-----------------
Assignment and the terms of the Mortgage, the terms of the Mortgage shall
prevail.
9. NO ORAL CHANGE. This Assignment and any provisions hereof may not be
--------------
modified, amended, waived, extended, changed, discharged or terminated orally,
or by any act or failure to act on the part of Assignor or Assignee, but only by
an agreement in writing signed by the party against whom the enforcement of any
modification, amendment, waiver, extension, change, discharge or termination is
sought.
4
<PAGE>
10. CERTAIN DEFINITIONS. Unless the context clearly indicates a contrary
-------------------
intent or unless otherwise specifically provided herein, words used in this
Assignment may be used interchangeable in singular or plural form and the word
"Assignor" shall mean each Assignor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or any interest therein, the word
"Assignee" shall mean Assignee and any sebsequent holder of the Note, the word
"Note" shall mean the Note and any other evidence of indebtedness secured by the
Mortgage, the word "person" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, the words "Mortgaged Property" shall include
any portion of the Mortgaged Property and any interest therein; whenever the
context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms; and the singular form of nouns and pronouns
shall include the plural and vice versa.
11. NON-WAIVER. The failure of Assignee to insist upon strict performance
----------
of any term hereof shall not be deemed to be a waiver of any term of this
Assignment. Assignor shall not be relieved of Assignor's obligations hereunder
by reason of (i) failure of Assignee to comply with any request of Assignor or
any other party to take any action to enforce any of the provisions hereof or of
the Mortgage, the Note or the other Loan Documents, (ii) the release regardless
of consideration, of the whole or any part of the Mortgaged Property, or (iii)
any agreement or stipulation by Assignee extending the time of payment or
otherwise modifying or supplementing the terms of this Assignment, the Note, the
Mortgage or the other Loan Documents. Assignee may resort for the payment of the
Debt to any other security held by Assignee in such order and manner as
Assignee, in its discretion, may elect. Assignee may take any action to recover
the Debt, or any portion thereof, or to enforce any covenant hereof without
prejudice to the right of Assignee thereafter to enforce its rights under this
Assignment. The rights of Assignee under this Assignment shall be separate,
distinct and cummulative and none shall be given effect to the exclusion of the
others. No act of Assignee shall be construed as an election to proceed under
any one provision herein to the exclusion of any other provision.
12. INAPPLICABLE PROVISIONS. If any term, covenant or condition of this
-----------------------
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.
13. DUPLICATE ORIGINALS. This Assignment may be executed in any number of
-------------------
duplicate originals and each such duplicate original shall be deemed to be an
original.
14. GOVERNING LAW. This Assignment shall be governed and construed in
-------------
accordance with the laws of the State in which the real property encumbered by
the Mortgage is located.
15. TERMINATION OF ASSIGNMENT. Upon payment in full of the Debt and the
-------------------------
delivery and recording of a satisfaction, release, reconveyance or discharge of
the Mortgage duly executed by Assignee, this Assignment shall become and be void
and of no effect.
16. WAIVER OF JURY TRIAL. ASSIGNOR HEREBY AGREES NOT TO ELECT A TRIAL BY
--------------------
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THIS ASSIGNMENT, THE MORTGAGE OR THE OTHER LOAN DOCUMENTS OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER
OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY ASSIGNOR, AND IS
INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE
RIGHT TO TRIAL BY JURY WOULD OTHERWISE ACCRUE. ASSIGNEE IS HEREBY AUTHORIZED TO
FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS
WAIVER BY ASSIGNOR.
17. SPECIAL STATE PROVISIONS. None.
------------------------
5
<PAGE>
THIS ASSIGNMENT shall inure to the benefit of Assignee and any subsequent
holder of the Note and shall be binding upon Assignor, and Assignor's heirs,
executors, administrators, successors and assigns and any subsequent owner of
the Mortgaged Property.
Assignor has executed this instrument the day and year first above written.
ASSIGNOR:
GL/PHP, LLC, a Delaware limited liability company
By: G&L MANAGEMENT DELAWARE CORP.,
a Delaware corporation, as Managing Member
By: /s/ Gary Grabel
-----------------------------
Gary Grabel, Vice President
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Gary Grabel, known to me to be the Vice
President of G&L Management Delaware Corp., a Delaware corporation, the Managing
Member of GL/PHP, LLC, a Delaware limited liability company, that executed the
foregoing instrument, and known to me to be the person who executed the
foregoing instrument on behalf of said G&L Management Delaware Corp., and
acknowledged to me that he executed the same as such Vice President for the
corporation and that such corporation executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 19th day of August, 1997.
/s/ Helen Nelson
-----------------------
Notary Public
My commission expires: Dec. 11, 1998
[SEAL APPEARS HERE]
6
<PAGE>
EXHIBIT A
---------
LEGAL DESCRIPTION
(See Attached)
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of BURLINGTON, County of BURLINGTON and State of NEW JERSEY, being more
particularly described as follows:
BEGINNING at a point in the Northeasterly side of Mount Holly-
Burlington Road (86 feet wide) on a course of North 27 degrees 42 minutes
23 seconds West, 250 feet from the Intersection of the Northeasterly line
of Mount Holly-Burlington Road with the Northerly line of Cadillac Road
(proposed) (70 feet Wide), and continued thence (1) along Mount Holly-
Burlington Road North 27 degrees 12 minutes 25 seconds West 313.87 feet to
a point in line of lands of Public Service Electric and Gas Company theads
(2) along the same North 63 degrees 52 minutes 13 seconds East 203.70 feet
to a point in same, thence (3) still along the same North 68 degrees 57
minutes 15 seconds East 370.07 feet to a point in line of Public Service
Electric and Gas Company right of way, thence (4) along the same curving to
the right with a radius of 5696.65 feet an arc distance of 296.63 feet to a
point in the dividing line between Lots 1 and 2. Section 1, Plan of
Levittown Industrial Park, thence (5) along the same South 62 degrees 17
minutes 35 seconds West 438.01 feet to the point and place of beginning.
BEING know and designated as Lot 1, Section 1, Plan of Levittown
Industrial Park.
EXCEPTING THEREOUT AND THEREFROM all that certain tract or parcel of
land contained in a Deed from Les Malmon and Barbara Malmon, his wife to
Board of Chosen Freeholders of the County of Burlington dated 1-6-86,
recorded 1-7-86 in Deed Book 2136, page 106.
FURTHER EXCEPTING THEREOUT AND THEREFROM all that certain tract or
parcel of land contained in Deed from Les Malmon and Barbara Malmon, his
wife to Board of Chosen Freeholders of the County of Burlington, dated
5-16-88, recorded 5-17-88 in Deed Book 3440, page 34.
NOTE: Being known and designated as Lot No. 2, Block No. 118.02 as shown on the
Tax Maps of the Township of Burlington.
<PAGE>
________________________________________________________________________________
SCHEDULE 4
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
PARAMUS, County of BERGEN and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the southerly line of Elsenhower Drive (formerly
Quad Road) (60.00 feet wide) distant the following courses and distances
from the intersection of the center line of Elsenhower Drive with the
center line of Essex Road (formerly Kent Road) (60.00' feet wide) all as
shown on a certain map entitled - Final Subdivision Plat, Quad Associates
and Centurian Plaza Corp." filed in the Bergen County Clerk's Office on
October 24, 1967, as Map No. 6632:"
A. Along the center line of Essex Road (formerly Kent Road), if
produced, South 37 degrees 56 minutes 41 seconds West 30.00 feet to a point
in the southerly line of Elsenhower Drive (formerly Quad Road); thence,
B. Along the southerly line of Elsenhower Drive (formerly Quad
Road), North 52 degrees 16 minutes 13 seconds West 149.975 feet to the
point or place of beginning and running; thence,
1. Along the westerly line of Proposed Lot 3 in Block 1803 as shown
on a certain map entitled "Subdivision, Elsenhower Drive, Block 1803, Lots
2 and 3, Paramus, Bergen County, New Jersey" dated 5/19/89, last revised
8/11/89, prepared by Lapatka Associates Inc., 22 Madison Avenue, Paramus,
New Jersey 07652 and approved by the Planning Board of the Borough of
Paramus on August 10, 1989, South 37 degrees 43 minutes 47 seconds West
280.64 feet to a point on a curve; thence,
2. Along the northerly line of Lot 2 in Block 1101 as shown on the
current assessment map of the Borough of Paramus being lands, now or
formerly, of Arcola Country Club, northwesterly, on a curve to the right
having a radius of 675.00 feet, central angle of 2 degrees 37 minutes 28
seconds, an arc distance of 30.92 feet to a point of reverse curvature;
thence,
3. Along the same, northwesterly, on a curve to the left having a
radius of 620.00 feet, central angle of 9 degrees 9 minutes 12 seconds, and
arc distance of 99.05 feet to a point of tangency; thence
4. Along the same, North 52 degrees 16 minutes 13 seconds West
237.15 feet to a point; thence,
5. Along the easterly line of Lot 1 in Block 1803, as shown on the
referenced Assessment Map, being lands, now or formerly, of Emil
Schroth, North 37 degrees 43 minutes 47 seconds East 268.50 feet to a
point; thence,
6. Along the southerly line of Elsenhower Drive (formerly Quad
Road), South 52 degrees 16 minutes 13 seconds East 366.405 feet to the
point or place of beginning.
NOTE: Being known and designated as Lot No. 2, Block No. 1803 as shown on the
Tax Maps of the Borough of Paramus.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL THAT CERTAIN lot, tract or parcel of land situate in Hamilton Township,
County of Atlanic and State of New Jersey and described as follows:
BEGINNING on the southerly line of Route 322, also known as the Black Horse Pike
(115 feet from the original centerline) at the division of Lot 9 and Lot 8 as
established by a survey dated June 7, 1990 by John G. Reutier & Associates as
the second corner of land as described in deed from Benjamin L. Jaffe and wife
to William C. Jones, and wife, dated September 30, 1948 and recorded in Deed
Book 1420 Page 129; and extending thence
1. South 64 degrees, 43 minutes and 49 seconds East along the southerly line
of the Black Horse Pike, 528.52 feet to a non-tangent point of curve;
thence
2. Eastwardly and southwardly curving to the right along a curve having a
radius of 75.00 feet and an arc length of 67.90 feet to a point of tangency
on the westerly curb line of an entrance drive; thence
3. South 25 degrees, 16 minutes and 11 seconds West along said curve line,
155.00 feet to a point of curve; thence
4. Southwardly and westwardly curving to the right along a curve having a
radius of 25.00 feet and an arc length of 39.37 feet to the northerly
curbline of an access drive; thence
5. North 64 degrees, 43 minutes and 49 seconds West, along said curb line and
the extension thereof 403.63 feet to the division line of Lot 9.01 and Lot
8; thence
6. North 03 degrees, 00 minutes and 46 seconds West, along said division line
271.40 feet to the point of beginning.
IN compliance with Chapter 157, Laws of 1977 premises herein are known as part
of Lots 9, 10.01, 10.02 and 11 in Block 1134 as shown on the official tax map of
Hamilton Township, New Jersey and are designated as Lot 9.01 on a minor
subdivision plus being recorded simultaneously herewith, being Map #3342, filed
December 23, 1994.
<PAGE>
________________
DESCRIPTION OF PROPERTY
-----------------------
Block 1311, Lot 1.06
ALL THAT CERTAIN tract or parcel of land situated in the Township of Mount
Laurel, County of Burlington and State of New Jersey, being more particularly
described as follows:
BEGINNING at a point of intersection of the easterly line of Fellowship
Road (aka Burlington County Route No. 673, as widened to 43.00 feet from
centerline) and the centerline of a private access street known as Century
Parkway (public dedication now vacated) as illustrated on a filed, or soon to be
filed, plan entitled "Major Subdivision Plan, Block 1311, Lot 1", prepared by
Taylor, Wiseman & Taylor (Dwg. No. 351-18527-F), dated August, 1994, revised to
October 28, 1994 and extends; thence, along said easterly line (1) N. 16 degrees
44 minutes 57 seconds H, 253.24 feet to a polar; thence, along the proposed
subdivision line (2) S. 73 degrees 15 minutes 03 seconds H, 430.00 feet to a
point in the westerly line of Lot 1.04, Block 1311; thence, along said westerly
line (3) S. 16 degrees 44 minutes 37 seconds W, 253.26 feet to a point in the
aforementioned centerline of Century Parkway; thence, along said centerline (4)
73 degrees 15 minutes 03 seconds W., 430.00 feet to a point and the place of
BEGINNING.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of CRANFORD, County of UNION and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the northwesterly right of way line of Commerce
Drive (60.00 feet wide) said point being N 51(degrees) - 57' - 40" E 80.00 feet
as measured along said line of Commerce Drive as produced southwesterly from the
intersection of the same with the northwesterly right of way line of Commerce
Drive, formerly Clearly Avenue, as produced northwesterly and running thence;
1. Along lands of the Garden State Parkway N 38(degrees) - 02' -
20" W 17.42 feet, thence
2. Still along lands of the Garden State Parkway, northerly, along a
curve to the left, having a radius of 6,150.00 feet, an arc
length of 580.66 feet and a chord of N 09(degrees) - 40' - 17"
W 580.45 feet, thence
3. Along lands now or formerly of Calcran, Inc., S 68(degrees) -
24' - 00" E 353.44 feet, thence
4. Still along lands of Calcran Inc., S 32(degrees) - 54' - 16" E
103.44 feet, thence
5. Along the aforesaid northwesterly right of way line of Commerce
Drive, S 51(degrees) - 57' - 40" W 598.77 feet to the point of
beginning.
NOTE: Being known and designated as Lot No. 1, Block No. 636 as shown on the Tax
Maps of the Township of Cranford.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
EATONTOWN, County of MONMOUTH and State of NEW JERSEY, being more particular
described as follows:
Beginning at a point on the westerly side of New Jersey State Highway,
Route 35 (100" R.O.W) at the northeast corner of Lands now or formerly Alan
R. Cohn & Ira S. Port and from thence; running
1. South 60 (degrees) 39' 19" West, 275.00 feet to a point; thence
2. South 20 (degrees) 20' 41" East, 150.00 feet to a point; thence
3. South 69 (degrees) 30' 19" West, 148.95 feet to a point; thence
4. North 02 (degrees) 03' 35" East, 79.42 feet to a point; thence
5. North 88 (degrees) 34' 33" West, 321.75 feet to a point; thence
6. North 01 (degrees) 25' 27" East, 330.00 feet to a point, thence
7. South 88 (degrees) 34' 33" East, 267.53 feet to a point, thence
8. North 69 (degrees) 99' 19" East, 321.66 feet to a point, thence
9. South 20 (degrees) 20' 41" East, 250.00 feet along westerly side of
New Jersey State Highway Route 35 (100' R.O.W.) to the point or place
of beginning.
NOTE: BEING shown and designated as Lot 1:02 Block 111 on the Tax Maps of the
Borough of Eatontown.
<PAGE>
EXHIBIT 10.52
ENVIRONMENTAL AND HAZARDOUS
SUBSTANCE INDEMNIFICATION AGREEMENT
THIS ENVIRONMENTAL AND HAZARDOUS SUBSTANCE INDEMNIFICATION AGREEMENT (the
"AGREEMENT") is made as of the 15th day of August, 1997 by GL/PHP, LLC, a
Delaware limited liability company (the "BORROWER") to and for the benefit of
NOMURA ASSET CAPITAL CORPORATION, a Delaware Corporation (the "LENDER").
W I T N E S S E T H:
ARTICLE I
DEFINITIONS
-----------
1.1 DEFINITIONS. As used herein, the following terms shall have the
-----------
following meanings:
ASBESTOS: Asbestos or any substance or material containing asbestos.
--------
ENVIRONMENTAL LAW: Any local, state, federal or other governmental
-----------------
authority, statute, ordinance, code, order, decree, law, rule or regulation
pertaining to or imposing liability or standards of conduct concerning
environmental regulation, contamination or clean-up including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA"), the Resource Conservation and Recovery Act, as
amended ("RCRA"), the Emergency Planning and Community Right-to-Know Act of
1986, as amended, the Hazardous Substances Transportation Act, as amended, the
Solid Waste Disposal Act, as amended, the Clean Water Act, as amended, the Clean
Air Act, as amended, the Toxic Substances Control Act, as amended, the Safe
Drinking water Act, as amended, the Occupational Safety and Health Act, as
amended, any state superlien and environmental clean-up statures and all
regulations adopted in respect of the foregoing laws whether presently in force
or coming into being and/or effectiveness hereafter.
HAZARDOUS SUBSTANCE: Hazardous and/or toxic, dangerous and/or regulated,
-------------------
substances, wastes, materials, raw materials which include hazardous
constituents, pollutants and contaminants including without limitation,
petroleum, tremolite, anthlophylie, actinolite or polychlorinated biphenyls and
any other substances or materials which are included under or regulated by
Environmental Laws or are considered by scientific opinion to be otherwise
dangerous in terms of the health, safety or welfare of humans.
[MORTGAGE]: That certain Mortgage, Assignment of Leases and Rents and
--------
Security Agreement, dated of even date herewith, executed by Borrower for the
benefit of Lender, covering the Mortgaged Property more particularly described
therein, including the real property or interest therein described in Exhibit A
---------
attached hereto and incorporated herein by this reference.
REMEDIAL WORK: Any investigation, site monitoring, containment cleanup,
-------------
removal, restoration or other work of any kind which is reasonably necessary or
desirable under any applicable Environmental Law or otherwise required under
this Agreement in connection with any Hazardous Substance or Asbestos.
1.2 OTHER DEFINED TERMS: Any capitalized term utilized herein shall have
-------------------
the meaning as specified in the Mortgage, unless such term is otherwise
specifically defined herein.
ARTICLE II
WARRANTIES AND REPRESENTATIONS
------------------------------
Borrower hereby represents and warrants to Lender that, to the best of
Borrower's knowledge after due inquiry and investigation: (a) the Mortgaged
Property is not in direct or indirect violation of any Environmental
<PAGE>
Law; (b) the Mortgaged Property is not subject to any private or governmental
lien or judicial or administrative notice or inquiry, investigation or claim
relating to any Hazardous Substance; (c) no Hazardous Substances are or have
been (including the period prior to Borrower's acquisition of the Mortgaged
Property), discharged, generated, treated, disposed of or stored on,
incorporated in, or removed or transported from the Mortgaged Property other
than in compliance with all Environmental Laws; (d) no Hazardous Substances are
present in, on or under any nearby real property which could migrate onto or
otherwise affect the Mortgaged Property; (e) no underground storage tanks exist
on any of the Mortgaged Property; and (f) except as may have been disclosed in
an environmental report delivered to Lender prior to the date of the Mortgage,
no Asbestos is located on the Mortgaged Property.
ARTICLE III
AFFIRMATIVE COVENANTS
----------------------
Borrower hereby unconditionally covenants and agrees with Lender, until the
entire Debt shall have been paid in full and all of the obligations of Borrower
under the Loan Documents shall have been fully performed and discharged, as
follows:
3.1 OPERATIONS. So long as Borrower owns or is in possession of the
----------
Mortgaged Property, Borrower; (i) shall keep or cause the Mortgaged Property to
be kept free from Hazardous Substances and in compliance with all Environmental
Laws; (ii) shall promptly notify Lender if Borrower shall become aware of any
Hazardous Substances on or near the Mortgaged Property and/or if Borrower shall
become aware that the Mortgaged Property is in direct or indirect violation of
any Environmental Laws and/or if Borrower shall become aware of any condition on
the Mortgaged Property which in the opinion of a licensed hydrogeologist,
licensed environmental engineer or other qualified engineer or consultant
engaged by Lender ("LENDER'S ENVIRONMENTAL CONSULTANT") shall pose a threat to
the health, safety, or welfare of humans; and (iii) shall remove those Hazardous
Substances and/or cure those violations and/or remove such threats, as
applicable, as required by law (or as shall be required by Lender, in the case
of removal which is not required by the provisions of law, but in response to
the opinion of Lender's Environmental Consultant), promptly after Borrower
becomes aware of same, at Borrower's sole expense; and (iv) shall comply with
all of the recommendations contained in the environmental report which was
delivered to Lender in connection with the origination of the loan transaction
evidenced by the Loan Documents. Nothing herein shall prevent Borrower from
recovering such expenses from any other party that may be liable for such
removal or cure. Borrower shall not install in the Mortgaged Property, nor
permit to be installed in the Mortgaged Property, Asbestos and shall remove any
Asbestos promptly upon discovery to the satisfaction of Lender, at Borrower's
sole expense. Borrower shall in all instances comply with, and ensure compliance
by all occupants of the Mortgaged Property with, all applicable federal, state
and local laws, ordinances, rules and regulations with respect to Asbestos, and
shall keep the Mortgaged Property free and clear of any liens imposed pursuant
to such laws, ordinances, rules or regulations. In the event that Borrower
receives any notice or advice from any governmental agency or any source
whatsoever with respect to Asbestos on, affecting or installed on the Mortgaged
Property, Borrower shall immediately notify Lender.
3.2 ENVIRONMENTAL MONITORING. Borrower shall give prompt written notices
------------------------
to Lender of: (a) any proceeding or inquiry by any party with respect to the
presence of any Hazardous Substances or Asbestos on, under, from or about the
Mortgaged Property, (b) all claims made or threatened by any third party against
Borrower or the Mortgaged Property relating to any loss or injury resulting from
any Hazardous Substance or Asbestos, and (c) Borrower's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of the
Mortgaged Property that could cause the Mortgaged Property to be subject to any
investigation or cleanup pursuant to any Environmental Law. Borrower shall
permit Lender to join and participate in, as a party if it so elects, any legal
proceedings or action initiated with respect to the Mortgaged Property in
connection with any Environmental Law or Hazardous Substance, and Borrower shall
pay all attorneys' fees and disbursements incurred by Lender in connection
therewith. Upon Lender's request, Borrower shall provide (i) an inspection or
audit of the Mortgaged Property prepared by a licensed hydrogeologist or
licensed environmental engineer approved by Lender indicating the presence or
absence of Hazardous Substances in, or near the Mortgaged Property; and (ii) an
inspection or audit of the Mortgaged Property prepared by a duly qualified
engineering or consulting firm approved by Lender.
2
<PAGE>
indicating the presence or absence of Asbestos on the Mortgaged Property. The
cost and expense of such audit or inspection shall be paid by Borrower not more
frequently than once every five (5) calendar years after the occurrence of a
Secondary Market Transaction unless Lender, in its good faith judgement,
determines that reasonable cause exists for the performance of an environmental
inspection or audit of the Mortgaged Property, then such inspections or audits
described in the preceding sentence shall be at Borrower's sole expense. If
Borrower fails to provide inspection or audit required pursuant to this Section
3.2 within thirty (30) days after such request, Lender may order same, and
Borrower hereby grants to Lender and its employees and agents access to the
Mortgaged Property and a license to undertake those inspections or audits. The
cost of such inspections or audits shall be added to the principal balance of
the sums due under the Note and the Mortgage and shall bear interest thereafter
until paid at the Default Rate (as defined in the Note). In the event that any
environmental site assessment report prepared in connection with such inspection
or audit recommends that an operations and maintenance plan be implemented for
Asbestos or any Hazardous Substance, Borrower shall cause such operations and
maintenance plan to be prepared and implemented at Borrower's expense upon
request of Lender. Borrower shall commence and thereafter diligently prosecute
to completion any Remedial Work within thirty (30) days after written demand by
Lender for performance thereof (or such shorter period of time as may be
required under applicable law). All Remedial Work shall be performed by
contractors approved in advance by Lender, and under the supervision of a
consulting engineer approved by Lender. All costs and expenses of such Remedial
Work shall be paid by Borrower including, without limitation, Lender's
reasonable attorneys' fees and costs incurred in connection with monitoring or
review of such Remedial Work. In the event Borrower shall fail to timely
commence, or cause to be commenced, or fail to diligently prosecute to
completion, such Remedial Work, Lender may, but shall not be required to, cause
such Remedial Work to be performed, and all costs and expenses thereof, or
incurred in connection therewith, shall become part of the Debt and shall bear
interest thereafter until paid at the Default Rate.
ARTICLE IV
INDEMNIFICATION
---------------
Borrower shall protect, indemnify, and hold harmless Lender from and
against all liabilities, obligations, claims, demands, damages, penalties,
causes of action, losses, fines, costs and expenses (including without
limitation reasonable attorneys' fee and disbursements), imposed upon or
incurred by or asserted against Lender by reason of (a) the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release, or threatened
release of any Hazardous Substance or Asbestos on, from or affecting the
Mortgaged Property; (b) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Substance or Asbestos; (c) any lawsuit brought or threatened, settlement
reached, or government order relating to such Hazardous Substance or Asbestos;
and (d) any violation of the Environmental Laws, which are based upon or in any
way related to such Hazardous Substance or Asbestos including, without
limitation, the costs and expenses of any Remedial Work, attorney and consultant
fees and disbursements, investigation and laboratory fees, court costs, and
litigation expenses.
ARTICLE V
MISCELLANEOUS
-------------
5.1 SURVIVAL OF OBLIGATIONS. Each and all of the representations,
-----------------------
covenants and agreements and indemnities contained herein shall survive any
termination, satisfaction or assignment of the Note, the Mortgage and the other
Loan Documents or the exercise by Lender of any of its rights or remedies
thereunder including, but not limited to, the acquisition of the Mortgaged
Property by foreclosure or a conveyance in lieu of foreclosure. This Agreement
is not intended to be, nor shall it be, secured by the Mortgage and it is not
intended to secure payment of the Note.
5.2 SUCCESSIVE ACTIONS. A separate right of action hereunder shall arise
------------------
each time any Lender acquires knowledge of any violation of any of the terms
hereof. Separate and successive actions may be brought hereunder to enforce any
of the provisions hereof at any time and from time to time. No action hereunder
shall preclude any subsequent action, and Borrower hereby waives and covenants
not to assert any defense in the nature of splitting of causes of action or
merger of judgments.
3
<PAGE>
5.3 NOTICES. All notices or other communications required or permitted to
-------
be given hereunder shall be given to the parties and become effective as
provided in the Mortgage.
5.4 BINDING EFFECT. This Agreement shall be binding on the parties hereto,
--------------
their successors, assigns, heirs and legal representatives and all other persons
claiming by, through or under them.
5.5 DUPLICATE ORIGINALS. This Agreement may be executed in any number of
-------------------
duplicate originals and each duplicate original shall be deemed to be an
original.
5.6 APPLICABLE LAW. This Agreement shall be governed by and construed
--------------
according to the laws, from time to time in effect, of the State of New York,
except (i) to the extent preempted by United States Federal Law and (ii) to the
extent of the application of the Environmental Laws of the state in which the
Mortgaged Property is located.
5.7 RELIANCE. Borrower recognizes and acknowledges that in entering into
--------
the loan transaction evidenced by the Loan Documents and accepting the Mortgage,
Lender is expressly and primarily relying on the truth and accuracy of the
warranties and representations set forth in this Agreement without any
obligation to investigate the Mortgaged Property and notwithstanding any
investigations of the Mortgaged Property by Lender; that such reliance exists on
the part of Lender prior hereto; that such warranties and representations are a
material inducement to Lender in making the loan evidenced by the Loan Documents
and accepting the Mortgage; and that Lender would not be willing to make the
loan evidenced by the Loan Documents and accept the Mortgage in the absence of
any such warranties and representations.
5.8 HEADINGS. The article, section and subsection entitlements hereof are
--------
inserted for convenience of reference only and shall in no way alter, modify, or
define, or be used in construing the text of such articles, sections or
subsections.
5.9 AMENDMENT. The provisions of this Agreement may be amended or waived
---------
only by an instrument in writing signed by the Borrower and Lender.
5.10 WAIVER OF JURY TRIAL. BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY
--------------------
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THIS AGREEMENT, THE NOTE, THE MORTGAGE, OR THE OTHER LOAN DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH, THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER,
AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO
WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY BORROWER.
4
<PAGE>
EXECUTED as of the date first above written.
BORROWER:
GL/PHP, LLC, a Delaware Limited liability company
By: G&L MANAGEMENT DELAWARE CORP.,
a Delaware corporation, as Managing Member
By: /s/ Gary Grabel
--------------------------------------
Gary Grabel, Vice President
STATE OF CALIFORNIA )
) ss.
COUNTRY OF LOS ANGELES )
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared Gary Grabel, known to me to be the Vice
President of G&L Management Delaware Corp., a Delaware corporation, the Managing
Member of GL/PHP, LLC, a Delaware limited liability company, that executed the
foregoing instrument, and known to me to be the person who executed the
foregoing instrument on behalf of said G&L Management Delaware Corp., and
acknowledged to me that he executed the same as such Vice President for the
corporation and that such corporation executed the same for the purposes and
consideration therein expressed.
Given under my hand and seal of office this 13th day of August, 1997.
/s/ Helen Nelson
-------------------------
Notary Public
My commission expires: Dec. 11, 1998 [STAMP APPEARS HERE]
<PAGE>
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
[See Attached]
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
All that certain tract, lot and parcel or land lying and being in the TOWNSHIP
of BURLINGTON, County of BURLINGTON and State of NEW JERSEY, being more
particularly described as follows:
BEGINNING at a point in the Northeasterly side of Mount Holly-
Burlington Road (66 feet wide) on a course of North 27 degrees 42 minutes
25 seconds West. 250 feet from the Intersection of the Northeasterly line
of Mount Holly-Burlington Road with the Northerly line of Cadillac Road
(proposed) (70 feet wide). and continued thence (1) along Mount Holly-
Burlington Road North 27 degrees 12 minutes 25 seconds West 317.07 feet to
a point in line of lands of Public Service Electric and Gas Company, thence
(2) along the same North 63 degrees 52 minutes 15 seconds East 203.70 feet
to a point in line thence (3) still along the same North 68 degrees 59
minutes 15 seconds East 370.07 feet to a point in line of Public Service
Electric and Gas Company right of way, thence (4) along the same curving to
the right with a radius of 5696.65 feet (an arc distance of 296.53 feet to
a point in the dividing line between lots 1 and 2. Section 1, Plan of
Levittown Industrial Park, thence (5) along the same South 63 degrees 17
minutes 25 seconds West 438.01 feet to the point and place of beginning.
BEING known and designated as lot 1, section 1, plan of Levittown
Industrial Park.
EXCEPTING THEREOUT AND THEREFROM all that certain tract or parcel of
land contained in a Deed from Les Malmon and Barbara Malmon, his wife to
Board of Chosen Freeholders of the County of Burlington, dated 1-6-86,
recorded 1-7-86 in Deed book 2126, page 106.
FURTHER EXCEPTING THEREOUT AND THEREFROM all that certain trade or
parcel of land contained in Deed from Les Malmom and Barbara Malmom, his
wife to Board of Chosen Freeholders of the County of Burlington, dated
5-16-88, recorded 5-17-88 in Deed book 3440, page 34.
NOTE: Being known and designated as Lot No 2. Block No. 118.02 as shown on the
Tax maps of the Township of Burlington.
<PAGE>
________________________________________________________________________________
SCHEDULE 4
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH of
PARAMUS, County of BERGEN and State of NEW JERSEY, being more particularly
described as follows:
Beginning at a point in the southerly line of Elsenhower Drive (formerly
Quad Road) (60.00 feet wide) distant the following courses and distances
from the intersection of the center line of Elsenhower Drive with the
center line of Essex Road (formerly Kent Road) (60.00' feet wide) all as
shown on a certain map entitled - Final Subdivision Plat, Quad Associates
and Centurian Plaza Corp." filed in the Bergen County Clerk's Office on
October 24, 1967, as Map No. 6632:"
A. Along the center line of Essex Road (formerly Kent Road), if
produced, South 37 degrees 56 minutes 41 seconds West 30.00 feet to a point
in the southerly line of Elsenhower Drive (formerly Quad Road); thence,
B. Along the southerly line of Elsenhower Drive (formerly Quad
Road), North 52 degrees 16 minutes 13 seconds West 149.975 feet to the
point or place of beginning and running; thence,
1. Along the westerly line of Proposed Lot 3 in Block 1803 as shown
on a certain map entitled "Subdivision, Elsenhower Drive, Block 1803, Lots
2 and 3, Paramus, Bergen County, New Jersey" dated 5/19/89, last revised
8/11/89, prepared by Lapatka Associates Inc., 22 Madison Avenue, Paramus,
New Jersey 07652 and approved by the Planning Board of the Borough of
Paramus on August 10, 1989, South 37 degrees 43 minutes 47 seconds West
280.64 feet to a point on a curve; thence,
2. Along the northerly line of Lot 2 in Block 1101 as shown on the
current assessment map of the Borough of Paramus being lands, now or
formerly, of Arcola Country Club, northwesterly, on a curve to the right
having a radius of 675.00 feet, central angle of 2 degrees 37 minutes 28
seconds, an arc distance of 30.92 feet to a point of reverse curvature;
thence,
3. Along the same, northwesterly, on a curve to the left having a
radius of 620.00 feet, central angle of 9 degrees 9 minutes 12 seconds, and
arc distance of 99.05 feet to a point of tangency; thence
4. Along the same, North 52 degrees 16 minutes 13 seconds West
237.15 feet to a point; thence,
5. Along the easterly line of Lot 1 in Block 1803, as shown on the
referenced Assessment Map, being lands, now or formerly, of Emil
Schroth, North 37 degrees 43 minutes 47 seconds East 268.50 feet to a
point; thence,
6. Along the southerly line of Elsenhower Drive (formerly Quad
Road), South 52 degrees 16 minutes 13 seconds East 366.405 feet to the
point or place of beginning.
NOTE: Being known and designated as Lot No. 2, Block No. 1803 as shown on the
Tax Maps of the Borough of Paramus.
<PAGE>
________________
DESCRIPTION OF PROPERTY
-----------------------
Block 1311, Lot 1.06
ALL THAT CERTAIN tract or parcel of land situated in the Township of Mount
Laurel, County of Burlington and State of New Jersey, being more particularly
described as follows:
BEGINNING at a point of intersection of the easterly line of Fellowship
Road (aka Burlington County Route No. 673, as widened to 43.00 feet from
centerline) and the centerline of a private access street known as Century
Parkway (public dedication now vacated) as illustrated on a filed, or soon to be
filed, plan entitled "Major Subdivision Plan, Block 1311, Lot 1", prepared by
Taylor, Wiseman & Taylor (Dwg. No. 351-18527-F), dated August, 1994, revised to
October 28, 1994 and extends; thence, along said easterly line (1) N. 16 degrees
44 minutes 57 seconds H, 253.24 feet to a polar; thence, along the proposed
subdivision line (2) S. 73 degrees 15 minutes 03 seconds H, 430.00 feet to a
point in the westerly line of Lot 1.04, Block 1311; thence, along said westerly
line (3) S. 16 degrees 44 minutes 37 seconds W, 253.26 feet to a point in the
aforementioned centerline of Century Parkway; thence, along said centerline (4)
73 degrees 15 minutes 03 seconds W., 430.00 feet to a point and the place of
BEGINNING.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the TOWNSHIP
of CRANFORD, County of UNION and State of New JERSEY, being more particularly
described as follows:
Beginning at a point in the northwesterly right of way line of Commerce
Drive (60.00 feet wide) said point being N 51"- 57" - 40" E 80.00 feet as
measured along said line of Commerce Drive as produced southwesterly from
the intersection of the same with the northeasterly right of way line of
Commerce Drive, formerly Clearly Avenue, as produced northwesterly and
running thence:
1. Along lands of the Garden State Parkway N 38 (degrees) - 02' -
20" W 17.42 feet, thence
2. Still along lands of the Garden State Parkway, northerly, along a
curve to the left, having a radius of 6,150.00 feet, an arc
length of 580.66 feet and a chord of N 09 (degrees) - 40' - 17"
W 580.45 feet, thence
3. Along lands now or formerly of Calcran, Inc, S 68 (degrees) - 24'
00" E 353.44 feet, thence
4. Still along lands of Calcran Inc., S 32 (degrees) - 54' - 16" E
103.44 feet, thence
5. Along the aforesaid northwesterly right of way line of Commerce
Drive, S 51(degrees) - 57' - 40" W 598.77 feet to the point of
beginning.
NOTE: Being known and designated as Lot No. 1, Block No. 636 as shown on the
Tax Maps of the Township of Cranford.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL that certain tract, lot and parcel of land lying and being in the BOROUGH
of EATONTOWN, County of MONMOUTH and State of NEW JERSEY, being more
particularly described as follow:
Beginning at a point on the westerly side of New Jersey State Highway-Route
35 (100" R.O.W) at the northeast corner of Landa now or formerly Alan R.
Cohn & Ira S. Port and from thence; running
1. South 60(Degrees) 39" 19" West, 276.00 feet to a point; thence
2. South 20(Degrees) 20" 41" East, 160.00 feet to a point; thence
3. South 69(Degrees) 30" 19" West, 148.96 feet to a point; thence
4. North 02(Degrees) 03" 35" East, 79.42 feet to a point; thence
5. North 88(Degrees) 34" 33" West, 321.76 feet to a point; thence
6. North 01(Degrees) 25" 27" East, 330.00 feet to a point; thence
7. South 88(Degrees) 34" 33" East, 267.53 feet to a point; thence
8. North 60(Degrees) 30" 19" East, 321.66 feet to a point; thence
9. South 20(Degrees) 20" 41" East, 250.00 feet along the westerly side of
New Jersey State Highway Route 35 (100" R.O.W.) to the point or place of
beginning.
NOTE: BEING shown and designated as Lot 1:02 Block 111 on the Tax Maps of the
Borough of Eastontown.
<PAGE>
________________________________________________________________________________
SCHEDULE A
NUMBER 4
(CONTINUED)
DESCRIPTION
________________________________________________________________________________
ALL THAT CERTAIN lot, tract or parcel of land situate in Hamilton Township,
County of Atlanic and State of New Jersey and described as follows:
BEGINNING on the southerly line of Route 322, also known as the Black Horse Pike
(115 feet from the original centerline) at the division of Lot 9 and Lot 8 as
established by a survey dated June 7, 1990 by John G. Reutier & Associates as
the second corner of land as described in deed from Benjamin L. Jaffe and wife
to William C. Jones, and wife, dated September 30, 1948 and recorded in Deed
Book 1420 Page 129; and extending thence
1. South 64 degrees, 43 minutes and 49 seconds East along the southerly line
of the Black Horse Pike, 528.52 feet to a non-tangent point of curve;
thence
2. Eastwardly and southwardly curving to the right along a curve having a
radius of 75.00 feet and an arc length of 67.90 feet to a point of tangency
on the westerly curb line of an entrance drive; thence
3. South 25 degrees, 16 minutes and 11 seconds West along said curve line,
155.00 feet to a point of curve; thence
4. Southwardly and westwardly curving to the right along a curve having a
radius of 25.00 feet and an arc length of 39.37 feet to the northerly
curbline of an access drive; thence
5. North 64 degrees, 43 minutes and 49 seconds West, along said curb line and
the extension thereof 403.63 feet to the division line of Lot 9.01 and Lot
8; thence
6. North 03 degrees, 00 minutes and 46 seconds West, along said division line
271.40 feet to the point of beginning.
IN compliance with Chapter 157, Laws of 1977 premises herein are known as part
of Lots 9, 10.01, 10.02 and 11 in Block 1134 as shown on the official tax map of
Hamilton Township, New Jersey and are designated as Lot 9.01 on a minor
subdivision plus being recorded simultaneously herewith, being Map #3342, filed
December 23, 1994.
