<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report
(Date of earliest event reported) June 19, 1998 (December 31, 1997)
---------------------------------
GLIMCHER REALTY TRUST
---------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Maryland 1-12482 31-1390518
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF (COMMISSION (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) FILE NUMBER) IDENTIFICATION NO.)
20 South Third Street, Columbus, Ohio 43215
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (614) 621-9000
-----------------------------
- --------------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
================================================================================
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 1, 1998, Glimcher Northtown Venture, LLC, a Delaware
limited liability company of which the managing member is a wholly owned
subsidiary of Glimcher Realty Trust (the "Company") and of which the only other
member is Glimcher Properties Limited Partnership (the "Operating Partnership"),
acquired Northtown Mall ("Northtown") from Northtown LLP, State of Wisconsin
Investment Board and Northtown Associates. Northtown is located in Blaine,
Minnesota and contains approximately 842,000 square feet of gross leasable area.
The purchase price for Northtown was approximately $54.0 million and was paid in
cash. The funds to pay the purchase price were obtained from the proceeds of (i)
a loan of $40.0 million made by Nomura Asset Capital Corporation secured by a
first mortgage lien on Northtown having an interest rate of LIBOR (approximately
5.65% at June 1, 1998), plus 125 basis points per annum with a maturity in
August 2001 and (ii) the borrowing of approximately $14.0 million under the
Operating Partnership's credit facility which currently bears interest at a rate
of LIBOR plus 160 basis points per annum.
The Operating Partnership has entered into an agreement with
SI-Lloyd Associates Limited Partnership and LGM Partners (the "Sellers")
pursuant to which it will acquire Lloyd Center Mall ("Lloyd"). Lloyd is located
in Portland, Oregon and contains approximately 1.5 million square feet of gross
leasable area. The Operating Partnership will pay approximately $166.8 million
in cash for Lloyd. The Company expects that the funds required will be obtained
from the proceeds of (i) a three year loan of approximately $130.0 million
secured by a first mortgage lien on Lloyd having an interest rate of LIBOR plus
125 basis points per annum and (ii) the borrowing of approximately $36.8 million
under the Operating Partnership's credit facility which currently bears interest
at a rate of LIBOR plus 160 basis points per annum.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Included herewith are the following financial statements of
Northtown and Lloyd (and the Independent Accountants' Report
thereon).
- Statement of Revenues and Certain Expenses for the year
ended December 31, 1997 and the three months ended March 31,
1998.
(b) Pro Forma Financial Information
Included here with are an unaudited Pro Forma Consolidated
Balance Sheet as of March 31, 1998, and the unaudited Pro
Forma Consolidated Statements of Operations for the three
months ended March 31, 1998 and the year ended December 31,
1997, for Glimcher Realty Trust.
(c) Exhibits
10.1 Promissory Note dated as of June 1, 1998, issued by
Glimcher Northtown Venture, LLC, in the amount of forty
million dollars ($40,000,000.00).
10.2 Mortgage, assignment of leases and rents, security
agreement and fixture financing statement by Glimcher
Northtown Venture, LLC, to Nomura Asset Capital Corporation
dated as of June 1, 1998.
23. Consent of Independent Accountants
2
<PAGE> 3
SIGNATURE
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.
Date: June 19, 1998
GLIMCHER REALTY TRUST
By: /s/ William G. Cornely
---------------------------------------------
William G. Cornely,
Senior Executive Vice President, Chief
Operating Officer and Chief Financial Officer
3
<PAGE> 4
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees
and Shareholders of
Glimcher Realty Trust
We have audited the statement of revenues and certain expenses of
Northtown Mall for the year ended December 31, 1997. This financial statement is
the responsibility of Northtown Mall's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses, as
described in Note 1, was prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission for inclusion in a
Form 8-K of Glimcher Realty Trust. The statement of revenues and certain
expenses is not intended to be a complete presentation of Northtown Mall's
revenues and expenses.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the revenues and certain expenses as described
in Note 1 of Northtown Mall for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 27, 1998
4
<PAGE> 5
<TABLE>
NORTHTOWN MALL
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE THREE
MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<CAPTION>
THREE
YEAR ENDED MONTHS ENDED
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Minimum rents .......................................... $ 4,790 $1,270
Percentage rents ....................................... 792 118
Tenant recoveries ...................................... 4,279 1,139
Other .................................................. 574 188
------- ------
10,435 2,715
------- ------
Certain expenses:
Real estate taxes ...................................... 2,097 554
Recoverable operating expenses ......................... 2,244 601
Other operating expenses ............................... 479 172
------- ------
4,820 1,327
------- ------
Revenues in excess of certain expenses............ $ 5,615 $1,388
======= ======
</TABLE>
The accompanying notes are an integral part of the financial statement.
5
<PAGE> 6
NORTHTOWN MALL
NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BUSINESS AND BASIS OF PRESENTATION
The accompanying financial statement is not representative of the
actual operations for the periods presented as certain expenses, which may not
be comparable to the expenses expected to be incurred in the proposed future
operations of Northtown Mall, ("Northtown"), have been excluded. Management of
Northtown is not aware of any material factors relating to Northtown that would
cause the reported financial information not to be indicative of future
operating results. Expenses excluded consist of interest, depreciation and
amortization, management fees and other costs not directly related to the future
operations of Northtown.
The preparation of the financial statement in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. For example, estimates are used to establish tenant recoveries,
rents, property operating expenses, real estate taxes and provisions for
accounts receivable. Actual results could differ from those estimates.
The accompanying interim unaudited statement of revenues and certain
expenses for the three months ended March 31, 1998, has been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations, although management believes
that the disclosures are adequate to make the information presented not
misleading. In the opinion of management, all adjustments consisting only of
normal recurring adjustments, necessary to present fairly the statement of
revenues and certain expenses of Northtown for the three months ended March 31,
1998, have been included. The results of operations for interim periods are not
necessarily indicative of the results for the full year.
2. OPERATING LEASES
Minimum rents contain straight-line adjustments for rental revenue in
accordance with generally accepted accounting principles. The net rental revenue
increase resulting from straight-line adjustments for the year ended December
31, 1997 was $84. No rental payments from individual tenants represented 10.0%
or more of the total rents for any period presented.
Northtown provides for doubtful accounts representing that portion of
accounts receivable which is estimated to be uncollectible and has provided $270
for the year ended December 31, 1997, in other operating expenses.
Northtown is leased to tenants under operating leases with expiration
dates extending to the year 2011. Future minimum rents do not include amounts
which may be received from certain tenants based upon a percentage of their
gross sales or as a reimbursement of operating expense. Future minimum rents
under non-cancelable leases for the year ending December 31, are approximately
as follows:
1998.................................. $ 4,380
1999.................................. 3,976
2000.................................. 3,665
2001.................................. 3,307
2002.................................. 3,024
Thereafter.............................. 13,159
-------
$31,511
=======
6
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees
and Shareholders of
Glimcher Realty Trust
We have audited the statement of revenues and certain expenses of Lloyd
Center Mall for the year ended December 31, 1997. This financial statement is
the responsibility of Lloyd Center Mall's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses, as
described in Note 1, was prepared for the purpose of complying with the rules
and regulations of the Securities and Exchange Commission for inclusion in a
Form 8-K of Glimcher Realty Trust. The statement of revenues and certain
expenses is not intended to be a complete presentation of Lloyd Center Mall's
revenues and expenses.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the revenues and certain expenses as described
in Note 1 of Lloyd Center Mall for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 27, 1998
7
<PAGE> 8
<TABLE>
LLOYD CENTER MALL
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE THREE
MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
(DOLLARS IN THOUSANDS)
<CAPTION>
THREE
YEAR ENDED MONTHS ENDED
DECEMBER 31, MARCH 31,
1997 1998
------------ ------------
(UNAUDITED)
<S> <C> <C>
Revenues:
Minimum rents...................................... $12,808 $3,368
Percentage rents .................................. 1,740 165
Tenant recoveries ................................. 6,820 1,825
Other ............................................. 1,889 378
------- ------
23,257 5,736
------- ------
Certain expenses:
Real estate taxes ................................. 2,262 565
Recoverable operating expenses .................... 5,498 1,506
Other operating expenses .......................... 1,308 222
------- ------
9,068 2,293
------- ------
Revenues in excess of certain expenses ...... $14,189 $3,443
======= ======
</TABLE>
The accompanying notes are an integral part of the financial statement.
8
<PAGE> 9
LLOYD CENTER MALL
NOTES TO THE STATEMENT OF REVENUES AND CERTAIN EXPENSES
(DOLLARS IN THOUSANDS)
1. BUSINESS AND BASIS OF PRESENTATION
The accompanying financial statement is not representative of the
actual operations for the periods presented as certain expenses, which may not
be comparable to the expenses expected to be incurred in the proposed future
operations of Lloyd Center Mall, ("Lloyd"), have been excluded. Management of
Lloyd is not aware of any material factors relating to Lloyd that would cause
the reported financial information not to be indicative of future operating
results. Expenses excluded consist of interest, depreciation and amortization,
management fees and other costs not directly related to the future operations of
Lloyd.
The preparation of the financial statement in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. For example, estimates are used to establish tenant recoveries,
rents, property operating expenses, real estate taxes and provisions for
accounts receivable. Actual results could differ from those estimates.
The accompanying interim unaudited statement of revenues and certain
expenses for the three months ended March 31, 1998, has been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations, although management believes
that the disclosures are adequate to make the information presented not
misleading. In the opinion of management, all adjustments consisting only of
normal recurring adjustments, necessary to present fairly the statement of
revenues and certain expenses of Lloyd for the three months ended March 31,
1998, have been included. The results of operations for interim periods are not
necessarily indicative of the results for the full year.
2. OPERATING LEASES
Minimum rents contain straight-line adjustments for rental revenue in
accordance with generally accepted accounting principles. The net rental revenue
increase resulting from straight-line adjustments for the year ended December
31, 1997 was $113. No rental payments from individual tenants represented 10% or
more of the total rents for any period presented.
Lloyd provides for doubtful accounts representing that portion of
accounts receivable which is estimated to be uncollectible and has provided $230
for the year ended December 31, 1997, in other operating expenses.
Lloyd is leased to tenants under operating leases with expiration dates
extending to the year 2017. Future minimum rents do not include amounts which
maybe received from certain tenants based upon a percentage of their gross sales
or as a reimbursement of operating expense. Future minimum rents under
non-cancelable leases for the year ending December 31, are approximately as
follows:
1998.................................. $12,632
1999.................................. 12,523
2000.................................. 12,051
2001.................................. 8,589
2002.................................. 5,995
Thereafter.............................. 19,370
-------
$71,160
=======
9
<PAGE> 10
<TABLE>
GLIMCHER REALTY TRUST
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PAR VALUE AMOUNTS)
<CAPTION>
ASSETS
GLIMCHER
GLIMCHER REALTY TRUST
REALTY CONSOLIDATED
TRUST ADJUSTMENTS PRO FORMA
----- ----------- ---------
(A)
<S> <C> <C> <C>
Investment in real estate:
Land .................................................................... $ 91,177 $ 33,268 (B) $ 124,445
Buildings, improvements and equipment ................................... 977,609 187,320 (B) 1,164,929
Developments in progress:
Land ................................................................. 6,521 6,521
Developments ......................................................... 11,162 11,162
---------- -------- ----------
1,086,469 220,588 1,307,057
Less accumulated depreciation ........................................... 114,554 114,554
---------- -------- ----------
Net investment in real estate ........................................ 971,915 220,588 1,192,503
Cash and cash equivalents ................................................. 5,619 5,619
Cash in escrow ............................................................ 7,062 7,062
Investment in and advances to unconsolidated entities ..................... 176,452 176,452
Tenant accounts receivable, net ........................................... 25,043 25,043
Deferred expenses, net .................................................... 7,623 2,017 (C) 9,640
Prepaid and other assets .................................................. 17,321 313 (B) 17,634
---------- -------- ----------
$1,211,035 $222,918 $1,433,953
========== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage notes payable .................................................... $ 494,149 $170,000 (C) $ 664,149
Notes payable ............................................................. 142,167 52,734 (C) 194,901
Accounts payable and accrued expenses ..................................... 21,915 184 (B) 22,099
Distributions payable ..................................................... 17,726 17,726
---------- -------- ----------
675,957 222,918 898,875
Minority interest in operating partnership ................................ 35,733 35,733
Redeemable preferred shares:
Series A-1 and Series C convertible preferred shares of
beneficial interest, $0.01 par value, 90,000 and 34,000
shares issued and outstanding as of March 31, 1998 and
December 31, 1997, respectively ...................................... 90,000 90,000
Shareholders' equity:
Series B cumulative redeemable preferred shares of beneficial
interest, $0.01 par value, 5,118,000 shares issued and outstanding.... 127,950 127,950
Common shares of beneficial interest, $0.01 par value, 23,681,312
and 23,669,960 shares issued and outstanding as of March 31, 1998
and December 31, 1997, respectively .................................. 237 237
Additional paid-in capital .............................................. 352,804 352,804
Distributions in excess of accumulated earnings ......................... (71,646) (71,646)
---------- -------- ----------
$1,211,035 $222,918 $1,433,953
========== ======== ==========
</TABLE>
The accompanying notes are an integral part of these
pro forma consolidated financial statements.
10
<PAGE> 11
<TABLE>
GLIMCHER REALTY TRUST
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
GLIMCHER
GLIMCHER REALTY TRUST
REALTY CONSOLIDATED
TRUST NORTHTOWN LLOYD ADJUSTMENTS PRO FORMA
----- --------- ----- ----------- ---------
(A) (B) (B)
<S> <C> <C> <C> <C> <C>
Revenues:
Minimum rents ..................................... $29,638 $1,270 $3,368 $34,276
Percentage rents .................................. 1,175 118 165 1,458
Tenant recoveries ................................. 7,190 1,139 1,825 10,154
Other ............................................. 1,661 188 378 2,227
------- ------ ------ -------
Total revenues .................................. 39,664 2,715 5,736 48,115
------- ------ ------ -------
Operating expenses:
Real estate taxes ................................. 3,796 554 565 4,915
Recoverable operating expenses .................... 4,152 601 1,506 6,259
------- ------ ------ -------
7,948 1,155 2,071 11,174
Other operating expenses .......................... 875 172 222 1,269
------- ------ ------ -------
Total operating expenses ........................ 8,823 1,327 2,293 12,443
------- ------ ------ -------
Depreciation and amortization .......................... 8,051 $ 1,230 (C) 9,281
General and administrative ............................. 2,138 2,138
Interest income ........................................ 620 620
Interest expense ....................................... 10,205 3,950 (D) 14,155
Equity in income (loss) of unconsolidated entities ..... (188) (188)
Minority interest in operating partnership ............. 667 (39)(E) 628
------- ------ ------ ------- -------
Net income ...................................... 10,212 1,388 3,443 (5,141) 9,902
Preferred stock dividends .............................. 4,908 4,908
------- ------ ------ ------- -------
Net income available to common shareholders..... $ 5,304 $1,388 $3,443 $(5,141) $ 4,994
======= ====== ====== ======= =======
Earnings per share diluted ............................. $ 0.22 $ 0.21 (F)
======= =======
</TABLE>
The accompanying notes are an integral part of these
pro forma consolidated financial statements.
11
<PAGE> 12
<TABLE>
GLIMCHER REALTY TRUST
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
GLIMCHER
GLIMCHER REALTY TRUST
REALTY CONSOLIDATED
TRUST NORTHTOWN LLOYD ADJUSTMENTS PRO FORMA
----- --------- ----- ----------- ---------
(A) (B) (B)
<S> <C> <C> <C> <C> <C>
Revenues:
Minimum rents ..................................... $107,895 $ 4,790 $12,808 $125,493
Percentage rents .................................. 3,499 792 1,740 6,031
Tenant recoveries ................................. 24,186 4,279 6,820 35,285
Other ............................................. 4,558 574 1,889 7,021
-------- ------- ------- --------
Total revenues .................................. 140,138 10,435 23,257 173,830
-------- ------- ------- --------
Operating expenses:
Real estate taxes ................................. 10,868 2,097 2,262 15,227
Recoverable operating expenses .................... 15,515 2,244 5,498 23,257
-------- ------- ------- --------
26,383 4,341 7,760 38,484
Other operating expenses .......................... 3,165 479 1,308 4,952
-------- ------- ------- --------
Total operating expenses ........................ 29,548 4,820 9,068 43,436
-------- ------- ------- --------
Depreciation and amortization .......................... 27,869 $ 4,917 (C) 32,786
General and administrative ............................. 8,286 8,286
Gain on sale of property ............................... 155 155
Interest income ........................................ 1,032 1,032
Interest expense ....................................... 42,146 15,654 (D) 57,800
Equity in income (loss) of unconsolidated entities ..... (661) (661)
Minority interest in operating partnership ............. 3,022 (76)(E) 2,946
-------- ------- ------- -------- --------
Net income ...................................... 29,793 5,615 14,189 (20,495) 29,102
Preferred stock dividends .............................. 4,705 4,705
-------- ------- ------- -------- --------
Net income available to common shareholders ..... $ 25,088 $ 5,615 $14,189 $(20,495) $ 24,397
======== ======= ======= ======== ========
Earnings per share diluted.............................. $ 1.12 $ 1.09 (F)
======== ========
</TABLE>
The accompanying notes are an integral part of these
pro forma consolidated financial statements.
12
<PAGE> 13
NOTES AND MANAGEMENT'S ASSUMPTIONS TO
THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated balance sheet is
presented as if the acquisition of Northtown and Lloyd occurred as of March 31,
1998.
The accompanying unaudited pro forma consolidated statements of
operations are presented as if the acquisition of Northtown and Lloyd had been
made as of January 1, 1997.
These pro forma financial statements should be read in conjunction with
the historical financial statements and notes thereto of Glimcher Realty Trust
(the "Company"), Northtown and Lloyd. In management's opinion, all adjustments
necessary to reflect the effects of the acquisition of Northtown and Lloyd have
been made.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of what the actual financial position would have been as
of March 31, 1998, or what the actual results of operations of the Company would
have been assuming the acquisition of Northtown and Lloyd had been completed as
of January 1, 1997, nor do they purport to represent the results for future
periods.
2. ADJUSTMENTS TO PRO FORMA CONSOLIDATED BALANCE SHEET
(A) Reflects the balance sheet of the Company as of March 31, 1998.
(B) Reflects the allocation of the purchase price of $220,588 between land and
buildings, improvements and equipment and the assumption of certain accrued
expenses.
(C) Reflects the placement of new mortgage notes payable of $170,000, the net
increase in the Company's credit facility and related financing costs associated
with the acquisition of Northtown and Lloyd.
13
<PAGE> 14
NOTES AND MANAGEMENT'S ASSUMPTIONS TO
THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
3. ADJUSTMENTS TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
A) Reflects the operations of the Company for the pro forma periods
indicated.
(B) Reflects revenues and certain expenses of Northtown and Lloyd for
the pro forma periods.
(C) Reflects depreciation and amortization relative to the purchase of
Northtown and Lloyd.
(D) Reflects the increase in interest expense based upon the weighted
average interest rates for the periods presented, as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
Interest on mortgage note payable - Northtown... $ 701 $ 2,757
Interest on mortgage note payable - Lloyd....... 2,278 8,961
Interest on the Company's credit facility....... 971 3,936
------ -------
$3,950 $15,654
====== =======
</TABLE>
(E) Reflects the adjustment in minority interest in operating
partnership as a result of the pro forma adjustments to net income.
(F) Pro forma earnings per diluted share is based upon 26,815,380 and
24,995,415 shares as of March 31, 1998 and December 31, 1997,
respectively.
14
<PAGE> 15
GLIMCHER REALTY TRUST
INDEX TO EXHIBITS
EXHIBITS
- --------
10.1 Promissory note dated as of June 1, 1998, issued by Glimcher Northtown
Venture, LLC, in the amount of forty million dollars ($40,000,000.00).
10.2 Mortgage, assignment of leases and rents, security agreement and fixture
financing statement by Glimcher Northtown Venture, LLC, to Nomura Asset Capital
Corporation dated as of June 1, 1998.
23. Consent of Independent Accountants
15
<PAGE> 1
Exhibit 10.1
PROMISSORY NOTE
---------------
New York, New York
$40,000,000 June 1, 1998
FOR VALUE RECEIVED, GLIMCHER NORTHTOWN VENTURE, LLC, a Delaware limited
liability company (hereinafter "MAKER"), having its principal place of business
at c/o Glimcher Properties Limited Partnership, 20 South Third Street, Columbus,
Ohio 43215, promises to pay to the order of Nomura Asset Capital Corporation, a
Delaware corporation, (hereinafter, "PAYEE") at its principal place of business
at Two World Financial Center, Building B, New York, New York 10281, or at such
place as the holder hereof may from time to time designate in writing, the
principal sum of FORTY MILLION AND NO/100 DOLLARS ($40,000,000), 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 Interest Rate (as
hereinafter defined), and to be paid in installments as follows:
A. One installment of interest, in advance, on the date hereof,
for the period commencing on (and including) the date hereof
and ending on (and including) June 10, 1998.
B. On July 11, 1998 and each Debt Service Payment Date thereafter
(as defined in the Loan Agreement (as hereinafter defined)),
payments of interest on the outstanding principal balance of
this Note from time to time outstanding computed at the
Interest Rate (as defined in the Loan Agreement).
and the balance of said principal sum together with all accrued and unpaid
interest thereon shall be due and payable on August 30, 2001 (the "MATURITY
DATE"). Interest on the principal sum of this Note shall be calculated on the
basis of the actual number of days elapsed and a three hundred sixty (360) day
year. All amounts due under this Note shall be payable without setoff,
counterclaim or any other deduction whatsoever and are payable without relief
from valuation and appraisement laws and with all expenses, costs and charges
incurred in collection or enforcement hereof, including, without limitation,
attorneys' fees and court costs.
1. INTENTIONALLY DELETED.
2. This Note is evidence of that certain mortgage loan made by Payee to
Maker contemporaneously herewith (the "LOAN") and is executed pursuant to the
terms and conditions of that certain Loan Agreement executed the date hereof,
between Maker and Payee (the "LOAN AGREEMENT"). This Note is secured by, among
other things: (a) a Mortgage, Assignment of Leases and Rents and Security
Agreement dated as of the date hereof, given by Maker, as mortgagor, for the use
and benefit of Payee, as mortgagee, encumbering the fee estate
<PAGE> 2
of Maker in a certain property located in the County of Anoka and State of
Minnesota, as more particularly described therein (the "MORTGAGE"), (b) an
Assignments of Leases and Rents dated as of the date hereof, executed by Maker
in favor of Payee (the "ASSIGNMENT OF LEASES"), and (c) the other Loan Documents
(as defined in the Loan Agreement). Reference is made to the Mortgage, the
Assignment of Leases and the other Loan Documents for a description of the
nature and extent of the security afforded thereby, the rights of the holder
hereof in respect of such security, the terms and conditions upon which this
Note is secured and the rights and duties of the holder of this Note. The holder
of this Note is entitled to the benefits of the Mortgage, the Assignment of
Leases and the other Loan Documents and may enforce the agreements contained
therein and exercise the remedies provided therein or otherwise in respect
thereof, all in accordance with the terms thereof. Except for the provisions and
limitations set forth in Paragraph 9 of this Note, no reference herein to any of
the Mortgage, the Assignment of Leases or other Loan Documents and no other
provision of this Note or of the Mortgage, the Assignment of Leases or the other
Loan Documents shall alter or impair the obligation of Maker, which is absolute
and unconditional, to pay the principal of and interest on this Note at the time
and place and at the rates and in the monies and funds described herein. All of
the agreements, conditions, covenants, provisions and stipulations contained in
the Mortgage, the Assignment of Leases and the other Loan Documents which are to
be kept and performed by Maker are by this reference hereby made part of this
Note to the same extent and with the same force and effect as if they were fully
set forth in this Note, and Maker covenants and agrees to keep and perform the
same, or cause the same to be kept and performed, in accordance with their
terms. All capitalized terms not otherwise defined herein shall have the meaning
set forth in the Loan Agreement.
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
three percent (3%) 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, 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 national banks in New
York, New York are not open for business.
4. The whole of the principal sum of this Note, together with all
interest accrued and unpaid thereon and all other sums due hereunder and under
the other 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 Loan Agreement). 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, without limitation, attorneys' fees,
and costs reasonably incurred for the services of counsel whether or not suit be
brought.
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<PAGE> 3
5. Maker does hereby agree that upon the occurrence of an Event of
Default, Payee shall be entitled to receive and Maker shall pay to Payee (a)
interest on the entire unpaid principal sum of this Note and any other amounts
(including interest to the extent permitted by applicable law) due at the
Default Rate (as defined in the Loan Agreement), and (b) on the eleventh day of
each month during which such Event of Default shall continue, an aggregate
amount equal to the Mortgaged Property Cash Flow (as defined in the Loan
Agreement) for the prior month (less any payments made to Payee pursuant to
clause (a) above from the Mortgaged Property Cash Flow for the prior month and
not including any Security Deposits to the extent any Tenant may have any right
to the return of such Security Deposit), such Mortgaged Property Cash Flow to be
applied by Payee to the payment of the Debt in such order as Payee shall
determine in its sole discretion, including, without limitation, alternating
applications thereof between interest and principal. Interest at the Default
Rate shall be computed from the occurrence of the Event of Default until the
actual receipt and collection of the Debt (or that portion thereof that is then
due). Interest at the Default Rate, to the extent not paid, 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 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. The acceptance of any payment
of Mortgaged Property Cash Flow shall not be deemed to cure or constitute a
waiver of any Event of Default. Payee retains its rights under this Note and the
other Loan Documents to accelerate and to continue to demand payment of the Debt
upon the happening of any Event of Default, despite any payment of Mortgaged
Property Cash Flow.
6. Other than as set forth in Sections 2.2.1, 2.3.2 and 2.3.3 of the
Loan Agreement, this Note may not be prepaid. Following the occurrence of any
Event of Default, Maker shall tender payment of an amount sufficient to satisfy
the Debt and such tender by Maker shall be deemed to be voluntary. Any
application of Insurance Proceeds or Condemnation Proceeds to payment of the
Debt or any other prepayment of the Debt permitted pursuant to Section 7.1.2 or
Section 7.1.3 of the Loan Agreement shall be without any prepayment
consideration.
7. All of the Debt shall be due and payable on the Maturity Date.
8. 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, the Loan Agreement, the 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 this Note, the Loan Agreement, the Mortgage
or any 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 any prepayment by Maker results in Maker having
paid any interest in excess of that permitted by applicable law, then it is
Maker's and 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, the Loan Agreement, the Mortgage and the
other Loan Documents immediately be deemed
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<PAGE> 4
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 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.
9. Section 9.4 of the Loan Agreement is incorporated herein by
reference and all of the provisions of this Note shall be subject thereto.
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 notice 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. The remedies of the holder hereof as provided in this Note or in
the Mortgage, the Assignment of Leases or the other Loan Documents shall be
cumulative and concurrent, and may be pursued singly, successively, or together
at the sole discretion of the holder hereof, and may be exercised as often as
occasion therefor shall occur; and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release thereof. Nothing
herein contained shall be construed as limiting the holder of this Note to the
remedies mentioned above.
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 Loan Agreement,
the Mortgage and the other Loan Documents and that this Note, the Loan
Agreement, the Mortgage and the other Loan Documents constitute valid and
binding obligations of Maker.
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<PAGE> 5
14. If any term or provision of this Note or the application thereof to
any person or circumstance shall to any extent be invalid, illegal or
unenforceable, the remainder of this Note or the application of such term or
provision to persons or circumstances other than those as to which it is
invalid, illegal or unenforceable shall not be affected thereby.
15. All notices or other communications required or permitted to be
given pursuant hereto shall be given and shall be effective in the manner
specified in the Loan Agreement, directed to the parties at their respective
addresses as provided therein.
16. 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 ENCOMPASS INDIVIDUALLY EACH INSTANCE
AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
PAYEE IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY MAKER.
17. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS) AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
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<PAGE> 6
Maker has duly executed this Promissory Note the day and year first
above written.
GLIMCHER NORTHTOWN VENTURE, LLC, a
Delaware limited liability company
By: GLIMCHER BLAINE, INC., a Delaware
corporation, its managing member
By: /s/George A. Schmidt
----------------------------------
Name: George A. Schmidt
Title: Senior Vice President
Pay to the order of_________________________________________________,
without recourse.
NOMURA ASSET CAPITAL CORPORATION,
a Delaware corporation
By:
----------------------------------
Name:
Title:
<PAGE> 1
Exhibit 10.2
================================================================================
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FINANCING STATEMENT
MORTGAGOR: GLIMCHER NORTHTOWN VENTURE, LLC
c/o Glimcher Properties Limited Partnership
20 South Third Street, Columbus, Ohio 43215
MORTGAGEE: NOMURA ASSET CAPITAL CORPORATION
Two World Financial Center, Building B
New York, New York 10281
THE MAXIMUM PRINCIPAL
INDEBTEDNESS SECURED BY
THIS INSTRUMENT IS: $40,000,000
DATE: As of June 1, 1998
DRAFTED BY: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
J. Philip Rosen, Esq.
RECORD AND RETURN TO:
Weil, Gotshal and Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
J. Philip Rosen, Esq.
================================================================================
<PAGE> 2
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
---------------------------------------------------------------
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT
(this "MORTGAGE"), is made as of June 1st, 1998, between GLIMCHER NORTHTOWN
VENTURE, LLC, a Delaware limited liability company ("MORTGAGOR"), with an
address for the transaction of business at c/o Glimcher Properties Limited
Partnership, 20 South Third Street, Columbus, Ohio 43215, and NOMURA ASSET
CAPITAL CORPORATION, a Delaware corporation ("MORTGAGEE"), having its principal
place of business at Two World Financial Center, Building B, New York, New York
10281.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS:
A. Mortgagor is the owner of fee simple title to that certain parcel of
real property located in the County of Anoka, State of Minnesota, and more
particularly described on Exhibit A attached hereto and incorporated herein by
this reference (the "PREMISES"), and the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
other improvements now or hereafter located thereon (the "IMPROVEMENTS"); and
B. Pursuant to that certain Loan Agreement dated as of the date hereof
(the "LOAN AGREEMENT"), between Mortgagor and Mortgagee, Mortgagee is making a
loan (the "LOAN") to Grantor in the original principal amount of $40,000,000 and
Mortgagor has executed that certain Note (as defined in the Loan Agreement)
evidencing the Loan (the "NOTE"), which Note is made payable to the order of
Mortgagee in the stated in the principal amount of $40,000,000, together with
interest thereon, with final payment being due on or before August 30, 2001, the
Stated Maturity Date (all capitalized terms not otherwise defined herein shall
have the meaning set forth in the Loan Agreement); and
C. To induce Mortgagee to make the Loan to Mortgagor and to further
secure payment of the Note, together with interest thereon, and all other sums
due hereunder and under the other Loan Documents, the parties desire to enter
into this Mortgage.
D. Mortgagor and Mortgagee intend these recitals to be a material part
of this Mortgage.
NOW, THEREFORE, in consideration of the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and legal sufficiency whereof
are hereby acknowledged, and the mutual covenants herein contained, Mortgagor
and Mortgagee hereby agree as follows:
<PAGE> 3
THAT, in order to secure the payment of an indebtedness in the
principal sum of FORTY MILLION and No/100 Dollars $40,000,000, and all other
sums which may or shall become due hereunder or under the Note or any of the
other documents evidencing, securing or executed in connection with the Loan
(such other documents, including, without limitation, the Loan Agreement and
that certain Assignment of Leases and Rents dated as of the date hereof given by
Mortgagor to Mortgagee with respect to the Premises (as such assignment may be
amended from time to time, the "ASSIGNMENT"), together with the Note and this
Mortgage (as any of the same may, from time to time, be modified, amended or
supplemented) being hereinafter collectively referred to as the "LOAN
DOCUMENTS"), and including the costs and expenses of enforcing any provision of
the Note, this Mortgage or any of the other Loan Documents (all such sums being
hereinafter collectively referred to as the "DEBT"), and in order to charge with
such performance and with such payments the Premises, the Improvements and the
other property hereinafter described and the rents, revenues, issues, income and
profits thereof, Mortgagor has executed and delivered this Mortgage and
MORTGAGOR HAS MORTGAGED, GRANTED, BARGAINED, SOLD, CONVEYED, TRANSFERRED AND
ASSIGNED, AND BY THESE PRESENTS DOES HEREBY IRREVOCABLY MORTGAGE, GRANT,
BARGAIN, SELL, CONVEY, TRANSFER AND ASSIGN, TO MORTGAGEE, ITS SUCCESSORS AND
ASSIGNS, the Premises and 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
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<PAGE> 4
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 any 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 Equipment 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 rights), or for a change of grade, or for
any other injury to or decrease in the value of the Premises and the
Improvements;
(d) all current and future leases, rental agreements,
occupancy agreements and other agreements of whatever form now or hereafter
affecting the use, enjoyment or occupancy of, or the conduct of any activity
upon or in, all or any part of the Premises and the Improvements, including any
guaranties, extensions, renewals, replacements or modifications 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, receivables, receipts, revenues, deposits
(including, without limitation, security, utility and other deposits), accounts,
cash, issues, profits, charges for services rendered, and other 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 (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 Premises, the Improvements and the Equipment, 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
Premises, the Improvements or the Equipment;
(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, property 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
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<PAGE> 5
construction, repair or other work upon the Premises, the Improvements or the
Equipment and all rights, interest and privileges which Mortgagor has or may
have as developer or declarant under any covenants, restrictions or declarations
now or hereafter relating to the Premises or the Improvements), approvals,
actions, refunds of real estate taxes and assessments (and any other
governmental impositions related to the Premises, the Improvements or the
Equipment), and causes of action that now or hereafter relate to, are derived
from or are used in connection with the Premises, the Improvements or the
Equipment, 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");
(g) all options to purchase and rights of first refusal to
purchase and acquire a fee estate, easement interest or other real property
right to land, both vacant and improved, adjoining the Premises now or hereafter
in effect (hereinafter collectively referred to as the "OPTIONS");
(h) the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect to the
Premises, the Improvements, the Equipment, the Leases, the Intangibles or the
Options and to commence any action or proceeding to protect the interest of
Mortgagee in the Premises, the Improvements, the Equipment, the Leases, the
Intangibles or the Options; and
(i) 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 Mortgagee, its successors and assigns, forever, for the purposes and uses
herein set forth and Mortgagor hereby binds itself and its heirs, executors,
administrators, personal representatives, successors and assigns to warrant and
forever defend the Mortgaged Property unto Mortgagee, its successors and
assigns, against the claim or claims of all persons claiming or to claim the
same or any part thereof.
AND, for the purpose of further securing the Debt and for the
protection of the security of this Mortgage, for so long as the Debt or any part
thereof remains unpaid, Mortgagor represents and warrants to and covenants and
agrees with Mortgagee as follows:
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, the Loan Agreement, this Mortgage and the other Loan Documents. All
the covenants, conditions and agreements contained in the Note, the Loan
Agreement and the other Loan
4
<PAGE> 6
Documents are hereby made a part of this Mortgage to the same extent and with
the same force as if fully set forth herein.
2. WARRANTY OF TITLE. Mortgagor hereby warrants that: (a) Mortgagor has
good, marketable and insurable title to the Mortgaged Property; (b) Mortgagor
has the full power, authority and right to execute, deliver and perform its
obligations under this Mortgage and to encumber, grant, bargain, sell, convey,
assign and mortgage the Mortgaged Property in the manner and form hereby done or
intended; (c) Mortgagor possesses an unencumbered fee simple estate in the
Premises and the Improvements and Mortgagor 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 (d) this Mortgage is and will remain a valid and enforceable first
lien on and security interest in the Mortgaged Property, subject only to those
exceptions shown in the title insurance policy insuring the lien of this
Mortgage. 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.
The foregoing warranty of title shall survive the foreclosure of this Mortgage
and shall inure to the benefit of and be enforceable by Mortgagee in the event
Mortgagee acquires title to the Mortgaged Property pursuant to any foreclosure.
3. INSURANCE.
(a) Mortgagor, at its sole cost and expense, for the mutual
benefit of Mortgagor and Mortgagee, shall obtain and maintain during the entire
term of this Mortgage policies of insurance against loss or damage by fire and
lightning and against loss or damage by all other risks and hazards as required
and in accordance with the terms and provisions of Section 7.1 of the Loan
Agreement.
(b) If the Mortgaged Property shall be damaged or destroyed,
in whole or in part, by fire or other casualty (a "CASUALTY"), Mortgagor shall
give prompt written notice thereof to Mortgagee. Following the occurrence of a
Casualty, Mortgagor, regardless of whether insurance proceeds are available
(unless such insurance proceeds have been used to repay the Debt in full), shall
promptly proceed to restore, repair, replace or rebuild the Mortgaged Property
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. All amounts to be paid in connection with a Casualty under such policies
shall be governed by the terms and provisions of the Loan Agreement.
4. PAYMENT OF TAXES, ETC. Subject to Section 5.1(b) of the Loan
Agreement, Mortgagor shall pay 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 maintenance charges, ground
rents, impositions other than Taxes 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
5
<PAGE> 7
Property or any part thereof (the "OTHER CHARGES"), before delinquency,
provided, however, that Mortgagor's obligation to directly pay Taxes shall be
suspended for so long as Mortgagor complies with the terms and provisions of
Section 7.3 of the Loan Agreement.
5. CONDEMNATION.
(a) Mortgagor shall promptly give Mortgagee written notice of
the actual or threatened commencement of any condemnation or eminent domain
proceeding against the Premises or the Improvements or any part thereof (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 (as hereinafter defined)
is available, (unless such Award has been used to repay the Debt in full), shall
promptly proceed to restore, repair, replace or rebuild the Mortgaged Property
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.
(b) 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 and to make any compromise or settlement in connection
with such Condemnation, subject to the provisions of this Mortgage and section
7.1.3(b) of the Loan Agreement. Notwithstanding any taking in connection with a
Condemnation by any public or quasi-public authority (including, without
limitation, any transfer made in lieu of or in anticipation of such a
Condemnation), Mortgagor shall continue to pay the Debt at the time and in the
manner provided for in the Note, the Loan Agreement, 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. All amounts to be paid in connection with a Condemnation shall be
governed by the terms and provisions of the Loan Agreement.
6. LEASES AND RENTS.
(a) Mortgagor does hereby irrevocably, absolutely and
unconditionally assign to Mortgagee, its successors and assigns, all of
Mortgagor's right, title and interest in and to all current and future Leases
and Rents, it being intended by Mortgagor that this assignment constitutes a
present, absolute and unconditional 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.
6
<PAGE> 8
Nevertheless, subject to the terms of this Paragraph, Mortgagee grants to
Mortgagor a license (revocable upon an Event of Default) to operate and manage
the Mortgaged Property; provided, however, that all Rents shall be sent to a
financial institution acceptable to Mortgagee for deposit into an account
designated and established by Mortgagee to secure repayment of the Debt, all in
accordance with the terms, covenants and conditions contained in the Loan
Agreement. Any Rents collected by Mortgagor shall be held by Mortgagor in trust
for the benefit of Mortgagee for use in the payment of the Debt. Upon the
occurrence of an Event of Default (as hereinafter defined), the following
provision shall apply:
(i) ASSIGNMENT OF RENTS AND PROFITS. As additional security
for the payment of the Debt and any amounts which Mortgagor is obligated to pay
Mortgagee pursuant to the Loan Agreement, Mortgagor hereby assigns the rents and
profits from the Mortgaged Premises to Mortgagee (the "ASSIGNMENT OF RENTS").
Mortgagee may enforce the Assignment of Rents upon the occurrence of an Event of
Default, as defined in this Mortgage, without regard to waste, adequacy of
security or the solvency of the Mortgagor. To enforce the Assignment of Rents,
Mortgagee may, at is option, either:
(A) Apply to a Minnesota District Court for the Judicial District
in which all or any part of the Mortgaged Premises are located
for the appointment of a receiver pursuant to Minnesota
Statute Section 559.17. The Mortgagee shall be entitled to the
appointment of a receiver upon a showing that an Event of
Default has occurred under the terms of the Mortgage and
without regard to waste, adequacy of security or the solvency
of the Mortgagor. If the Court appoints a receiver, the
receiver shall have the right to manage, operate and lease
(for terms of any duration) the Mortgaged Premises and shall
collect the rents and profits from the Mortgaged Premises from
the date of the appointment to the date of a Court Order
discharging the receiver. The receiver shall apply the rents
and profits collected:
(1) To pay the expenses listed in clauses (1), (2) and
(3) of Minn. Stat. ? 576.01, Subd. 2 in the priority
numbered;
(2) To pay all expenses for normal maintenance of the
Mortgaged Premises in the manner provided in Section
576.01, subd. 2;
(3) To pay Mortgagee for any amounts which Mortgagor owes
to Mortgagee pursuant to Section 7(i) or 9(a) of this
Mortgage the Loan Agreement;
(4) To pay the holder of any prior mortgage for
installments of principal and interest as they become
due;
(5) To pay the holder or any other prior liens or
encumbrance as payments on such liens or encumbrances
become due;
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(6) If application of the rents and profits is made
before the occurrence of a Sheriff's sale foreclosing
this Mortgage, to pay Mortgagee for amounts due under
the Debt;
(7) If application of the rents and profits is made after
the occurrence of a Sheriff's sale foreclosing this
Mortgage and Mortgagee is not entitled to obtain a
deficiency judgment under Minnesota Statutes, Section
582.30, to the holder of the Sheriff's Certificate of
Sale as a credit against the amount required to be
paid to effect a redemption of the Mortgaged Premises
from foreclosure of this Mortgage;
OR
If application of rents and profits is made after the
occurrence of a Sheriff's sale foreclosing this
Mortgage and the Mortgagee is entitled to obtain a
deficiency judgment pursuant to Minnesota Statutes,
Section 582.30, first, to the Mortgagee for the
payment of any deficiency for which the Mortgagee is
entitled to seek a judgment (whether or not Mortgagee
has obtained a judgment) and second, to the holder of
the Sheriff's Certificate of Sale; as a credit
against the amount required to be paid to effect a
redemption of the Mortgaged Premises from the
foreclosure of this Mortgage;
(8) If the application of rents and profits pursuant to
Section (6)(a)(i)(A)(6) and (6)(a)(i)(A)(7) above is
sufficient to pay all amounts due under the Note or
is sufficient to pay all amounts necessary to redeem
the Mortgaged Premises from the foreclosure of this
Mortgage and the Mortgagor or another party with a
right to redeem actually redeems the Mortgaged
Premises from the foreclosure of this Mortgage and
obtains a Certificate of Redemption, to the Mortgagor
or, if applicable, to the holder of a subordinate
assignment of rents and profits.
(B) File in the Office of the County Recorder, or in the case of
registered property, in the Office of the County Registrar of
Titles, a notice of the occurrence of an Event of Default in
the terms and conditions of this Mortgage and serve the notice
of the occurrence of an Event of Default upon the occupiers of
the Mortgage Premises, and from and after the date of filing
and service through the date Mortgagee files and serves a
notice that Mortgagor has cured all Events of Default, collect
all rents and profits from the occupiers of the Mortgage
Premises, without regard to waste, adequacy of security or
solvency of the Mortgagor, and apply the rents and profits
collected in the manner provided for the application of
amounts which a receiver collects pursuant to Section 6(a)(i)A
above.
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Mortgagee's exercise of its rights under this paragraph
6(a)(i)(B) shall not cause Mortgagee to be deemed a mortgagee
in possession of the Mortgage Premises.
Any Rents collected after the revocation of the license herein granted may be
applied toward payment of the Debt in such priority and proportions as
Mortgagee, in its sole discretion, shall deem proper. Mortgagee is obligated to
account only for such Rents as are actually collected or received by Mortgagee.
Neither the exercise by Mortgagee of any rights under this Paragraph nor the
application of any Rents to the Debt shall cure or be deemed a waiver of any
Event of Default hereunder. The assignment of Rents hereinabove granted shall
continue in full force and effect during any period of foreclosure and/or
redemption with respect to the Mortgaged Property. Mortgagor has executed the
Assignment covering all of the right, title and interest of Mortgagor, as
landlord, in and to any Leases relating to all or portions of the Mortgaged
Property. All rights and remedies granted to Mortgagee under the Assignment
shall be in addition to and cumulative of all rights and remedies granted to
Mortgagee hereunder.
(b) Mortgagor shall duly and punctually comply with its
obligations under Section 5.1(t) of the Loan Agreement which sets forth certain
covenants of Mortgagor with regard to leasing of the Mortgaged Property.
(c) INTENTIONALLY DELETED
(d) 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 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.
7. PROPERTY MANAGEMENT AGREEMENT; LICENSES. Mortgagor hereby represents
and warrants to Mortgagee as follows:
(a) The Property Management Agreement dated of even date (the
"PROPERTY MANAGEMENT AGREEMENT"), between Mortgagor and Glimcher Properties
Limited Partnership,
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as manager, pursuant to which such manager operates the Mortgaged Property as a
shopping center, is in full force and effect and there is no default, breach or
violation existing thereunder by any party thereto and no event has occurred
(other than payments due but not yet delinquent) that, with the passage of time
or the giving of notice, or both, would constitute a default, breach or
violation by any party thereunder.
(b) Neither the execution and delivery of the Loan Documents,
the Mortgagor's performance thereunder, the recordation of this Mortgage, nor
the exercise of any remedies by Mortgagee, will adversely affect Mortgagor's
rights under the Property Management Agreement.
(c) The Property Management Agreement complies with the
requirements set forth in Section 5.1(v) of the Loan Agreement.
(d) All certifications, permits, licenses and approvals,
including, without limitation, certificates of completion and occupancy permits
required for the legal use, occupancy and operation of the Mortgaged Property as
a retail shopping center, have been obtained and are in full force and effect.
8. 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 Improvements and Equipment)
without the consent of Mortgagee. Mortgagor shall promptly comply with all laws,
orders and ordinances affecting the Mortgaged Property, or the use thereof,
including, without limitation, building and zoning ordinances and codes. Subject
to Section 3(b) and 5(a) hereof, 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 Condemnation
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, 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 without Mortgagee's prior
written consent.
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9. TRANSFER OR ENCUMBRANCE OF THE MORTGAGED PROPERTY.
(a) Mortgagor acknowledges that Mortgagee, in agreeing to make
the Loan, has examined and relied on the creditworthiness and experience of
Mortgagor in owning and operating properties such as the Mortgaged Property, and
that Mortgagee will continue to rely on Mortgagor's ownership and operation 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 all or a portion of the Debt by a sale of the
Mortgaged Property. Accordingly, except as permitted in the Loan Agreement,
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.
(b) A sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of the Mortgaged Property within the meaning of this
Paragraph 9 shall be deemed to include: (i) an installment sales agreement
wherein Mortgagor agrees to sell the Mortgaged Property or any part thereof or
any interest therein 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 or any
general partner or managing member of Mortgagor is a corporation, the voluntary
or involuntary sale, conveyance, alienation, mortgage, encumbrance, pledge 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; (iv)
if Mortgagor or any general partner or managing member of Mortgagor is a limited
or general partnership, joint venture or limited liability company, the change,
removal, resignation or addition of a partner, joint venturer or member or the
sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
partnership interest of any partner or the sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the interest of any joint venturer
or member; (v) if Mortgagor is a limited or general partnership, joint venture,
limited liability company, trust, nominee trust, tenancy in common or other
unincorporated form of business association or form of ownership interest, the
voluntary or involuntary sale, conveyance, alienation, mortgage, encumbrance,
pledge or transfer of an interest of any person having a direct legal or
beneficial ownership in Mortgagor, including any legal or beneficial interest in
any constituent partner or member of Mortgagor; (vi) any instrument subjecting
the Mortgaged Property to a condominium regime or transferring ownership to a
cooperative corporation; and (vii) the dissolution or termination of Mortgagor
or any general partner or managing member of Mortgagor or the merger or
consolidation of Mortgagor or any general partner or managing member of
Mortgagor with any other person.
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<PAGE> 13
(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 the 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.
10. 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 to Mortgagor of not less than ninety (90) days, to declare the Debt
immediately due and payable.
11. 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 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.
12. 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
intangible tax or any other tax or charge on the same, Mortgagor will pay for
the same, with interest and penalties thereon, if any.
13. 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 13 (with the similar
provision contained in the Note) shall control every other covenant and
agreement in this
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<PAGE> 14
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 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, this Mortgage 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.
14. 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.
15. FURTHER ACTS, ETC. 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,
reasonably require, for the better assuring, conveying, assigning, transferring
and confirming unto Mortgagee the property and rights hereby granted, bargained,
sold, conveyed, assigned, transferred and mortgaged 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 and transfer of the Loan
and the Loan Documents as described in Section 9.1 of the Loan Agreement.
Mortgagor, on demand, will execute and deliver, and Mortgagor 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
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<PAGE> 15
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.
16. 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.
17. REPORTING REQUIREMENTS. Mortgagor agrees to give prompt notice to
Mortgagee of the insolvency or bankruptcy filing of Mortgagor or any general
partner or managing member of Mortgagor.
18. 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) any portion of the Debt is not paid when due;
(b) except as expressly permitted by the terms of the Loan
Agreement, any of the Taxes or Other Charges are not paid before delinquency and
payable;
(c) the Policies (as defined in the Loan Agreement) are not
kept in full force and effect, or certified copies of the Policies are not
delivered to Mortgagee within ten (10) days of request;
(d) except as expressly permitted in this Mortgage, Mortgagor
transfers or encumbers any portion of the Mortgaged Property or any interest
therein without Mortgagee's prior written consent;
(e) any representation or warranty made by Mortgagor herein or
in any other Loan Document or in any certificate, report, financial statement or
other instrument, agreement
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or document furnished to Mortgagee shall have been false or misleading in any
material respect when made; provided, however, if such false or misleading
representation or warranty is susceptible of being cured within thirty (30)
days, the same shall be an Event of Default hereunder only if the same is not
cured within a reasonable time not to exceed thirty (30) days after notice from
Mortgagee;
(f) Mortgagor shall make an assignment for the benefit of
creditors;
(g) a receiver, liquidator or trustee shall be appointed for
Mortgagor or Mortgagor shall be adjudicated a bankrupt or insolvent, or 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 proceeding for the
dissolution or liquidation of Mortgagor shall be instituted; provided, however,
that if such appointment, adjudication, petition or proceeding was involuntary
and not consented to by Mortgagor, then the same shall be an Event of Default
hereunder only if the same is not discharged, stayed or dismissed within sixty
(60) days after the date of such appointment or adjudication, the date such
petition is first filed or the date such proceeding is instituted, as the case
may be;
(h) 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) 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, (subject to Section 5.1(b) of the Loan
Agreement in the case of real estate taxes and assessments), unless a corporate
surety bond in form and with sureties satisfactory to Mortgagee, cash or other
security satisfactory to Mortgagee is posted therefor within sixty (60) days
after the filing of such lien, but in any event prior to the commencement of any
action to foreclose such lien, and such lien is removed (or bonded off) from the
Mortgaged Property within such sixty (60) days;
(j) 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, however, that if such violation is susceptible of
cure but cannot reasonably be cured within such 30-day period and provided
further that Mortgagor shall have commenced to cure such violation within such
30-day period and thereafter diligently and expeditiously proceeds to cure the
same and provided further that any governmental authority having jurisdiction
over the subject matter of such violation consents to a longer cure period, such
30-day period shall be extended for such time as is reasonably necessary for
Mortgagor in the exercise of due diligence to cure such violation, such
additional period not to exceed ninety (90) days;
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<PAGE> 17
(k) except as expressly permitted in this Mortgage or the Loan
Agreement, the actual or threatened material alteration, improvement, demolition
or removal of any of the Improvements without the prior written consent of
Mortgagee;
(l) without Mortgagee's prior consent, (i) the property
manager for the Mortgaged Property under the Property Management Agreement (or
any successor property management agreement) resigns or is removed, or (ii) the
ownership, management or control of such property manager is transferred to
another person or entity, or (iii) there is any material change in the Property
Management Agreement (or any successor property management agreement);
(m) a default has occurred and continues beyond any applicable
cure period under the Property Management Agreement (or any successor property
management agreement) if such default permits the property manager to terminate
or cancel the Property Management Agreement (or any successor property
management agreement);
(n) Mortgagor ceases to do business as a retail shopping
center on the Mortgaged Property or terminates such business for any reason
whatsoever (other than temporary cessation in connection with any renovations to
the Mortgaged Property);
(o) Mortgagor fails to cure a default under any other term,
covenant or provision of this Mortgage not specified in clauses (a) through (n)
above, within ten (10) days after Mortgagor first receives notice of such
default in the case of any default which can be cured by the payment of a sum of
money or within thirty (30) days after Mortgagor first receives notice of such
default in the case of any other default; provided, however, that if such
non-monetary default is susceptible of cure but cannot reasonably be cured
within such 30-day period and provided further that Mortgagor shall have
commenced to cure such default within such 30-day period and thereafter
diligently and expeditiously proceeds to cure the same, such 30-day period shall
be extended for such time as is reasonably necessary for Mortgagor in the
exercise of due diligence to cure such default, such additional period not to
exceed ninety (90) days; or
(p) Mortgagor shall be in default under any term, covenant or
provision of the Note, the Loan Agreement, the Assignment or any of the other
Loan Documents beyond any applicable cure periods contained in such documents,
whether as to Mortgagor or the Mortgaged Property, or any other such event shall
occur or condition shall exist, if the effect of such event or condition is to
accelerate the maturity of any portion of the Debt or to permit Mortgagee to
accelerate the maturity of all or any portion of the Debt.
19. 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 three percent (3%) 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
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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.
20. 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 for the period from the
date such cost or expense was incurred by Mortgagee 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.
21. REMEDIES.
(a) Subject to Section 9.4 of the Loan Agreement and the
requirements of applicable law, 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 or any part thereof, 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) INTENTIONALLY DELETED;
(iii) INTENTIONALLY DELETED;
(iv) INTENTIONALLY DELETED;
(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) INTENTIONALLY DELETED;
(vii) INTENTIONALLY DELETED;
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(viii) enforce Mortgagee's interest in the Leases and
Rents and enter into or upon the Premises, 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, any brokers' fees, any Gains Tax (as hereinafter
defined) and any transfer taxes) incurred in connection with the
aforesaid operations and all amounts necessary to pay the Taxes,
insurance and Other Charges in connection with the Mortgaged Property,
as well as just and reasonable compensation for the services of
Mortgagee, its counsel, brokers, agents and employees;
(ix) require Mortgagor to pay monthly in advance to
Mortgagee, or any receiver appointed to collect the Rents, the fair and
reasonable rental value for the use and occupation of any portion of
the Mortgaged Property occupied by Mortgagor and require Mortgagor to
vacate and surrender possession to Mortgagee of the Mortgaged Property
or to such receiver and, in default thereof, evict Mortgagor by summary
proceedings or otherwise; or
(x) pursue such other rights and remedies as may be
available at law or in equity or under the Uniform Commercial Code,
including, without limitation, the right to receive and/or establish a
lock box for all Rents and proceeds from the Intangibles and any other
receivables or rights to payments of Mortgagor relating to the
Mortgaged Property.
(xi) foreclose the lien of this Mortgage by
advertisement pursuant to the procedures set forth in Minnesota
Statutes Chapters 580 and 582. Mortgagor hereby grants Mortgagee the
statutory power of sale, as described in Minnesota Statutes Section
507.15, subd. 5 to foreclose the lien of this mortgage by advertisement
and to the extent allowed by law, commence a District Court action to
obtain a judgment for any deficiency.
(xii) foreclose the lien of this Mortgage by action
pursuant to Minnesota Statutes, Chapters 581 and 582 and obtain a
judgment for any deficiency to the full extent permitted under
Minnesota Statutes, Section 582.30.
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(xiii) enforce the assignment of rents and profits
set forth in Section 6 of Mortgage.
MORTGAGOR HEREBY: EXPRESSLY CONSENTS TO THE FORECLOSURE AND SALE OF THE
MORTGAGED PREMISES BY ACTION PURSUANT TO MINNESOTA STATUTES CHAPTER 581 OR, AT
THE OPTION OF MORTGAGEE, BY ADVERTISEMENT PURSUANT TO MINNESOTA STATUTES CHAPTER
580, WHICH PROVIDES FOR SALE AFTER SERVICE OF NOTICE THEREOF UPON THE OCCUPANT
OF THE MORTGAGED PREMISES AND PUBLICATION OF SAID NOTICE FOR SIX WEEKS IN THE
COUNTY IN MINNESOTA WHERE THE MORTGAGED PREMISES IS SITUATED; ACKNOWLEDGES THAT
SERVICE NEED NOT BE MADE UPON MORTGAGOR PERSONALLY (UNLESS MORTGAGOR IS AN
OCCUPANT) AND THAT NO HEARING OF ANY TYPE IS REQUIRED IN CONNECTION WITH THE
SALE; AND EXCEPT AS MAY BE PROVIDED IN SAID STATUTES, EXPRESSLY WAIVES ANY AND
ALL RIGHT TO PRIOR NOTICE OF SALE OF THE MORTGAGED PREMISES AND ANY AND ALL
RIGHTS TO A PRIOR HEARING OF ANY TYPE IN CONNECTION WITH THE SALE OF THE
MORTGAGED PREMISES.
(b) The proceeds of any sale made under or by virtue of this
Paragraph 21, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this Paragraph 21 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) Any sale made by Mortgagee under or by virtue of this
Mortgage may be subject to such existing tenancies as Mortgagee, in its sole
discretion, may elect.
(e) 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. Mortgagee is hereby irrevocably appointed the true and lawful
attorney of Mortgagor, in its name and stead, to make all necessary conveyances,
assignments, transfers and deliveries of the Mortgaged Property and rights so
sold and for that purpose Mortgagee may execute all necessary instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, Mortgagor hereby ratifying and confirming all that its said attorney
or
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<PAGE> 21
such substitute or substitutes shall lawfully do by virtue hereof. Any sale
or sales made under or by virtue of this Paragraph 21, whether made under the
power of sale granted under this Mortgage 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.
(f) Upon any sale made under or by virtue of this Paragraph
21, 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.
(g) 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.
(h) Mortgagee may terminate or rescind any proceeding or other
action brought in connection with its exercise of the remedies provided in this
Paragraph 21 at any time before the conclusion thereof, as determined in
Mortgagee's sole discretion and without prejudice to Mortgagee.
(i) Mortgagee may resort to any remedies and the security
given by the Note, this Mortgage or any of the other Loan Documents in whole or
in part, and in such portions and in such order as determined in 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
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 unless otherwise explicitly agreed by Mortgagee in writing. No
acceptance by Mortgagee of any payment after the occurrence of an 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 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.
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<PAGE> 22
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 21 (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 from the date paid or incurred by Mortgagee until
repaid by Mortgagor, and such costs and expenses shall constitute a portion of
the Debt and shall be secured by this Mortgage.
(j) 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.
22. 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 upon reasonable notice
under the circumstances until the Debt is paid in full. The cost of such
inspections 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.
23. SECURITY AGREEMENT.
(a) 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 referred to
in this Paragraph 23 as 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
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<PAGE> 23
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 its interest in the Collateral and in enforcing its
rights hereunder with respect to the Collateral. 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, 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. 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.
(b) Upon an Event of Default, Mortgagee shall have the right,
at Mortgagee's opinion:
(i) To proceed as to both the real and personal
property covered by this Mortgage in accordance with Mortgagee's rights
and remedies in respect of said real property, in which event (A) the
provisions of the Uniform Commercial Code otherwise applicable to sale
of the Collateral shall not apply, and (B) the sale of the Collateral
in conjunction with and as one parcel with said real property (or any
portion thereof) shall be deemed to be a commercially reasonable manner
of sale; or
(ii) To proceed as to the Collateral separately from
the Premises and the Improvements, in which event the requirement of
reasonable notice shall be met by mailing notice of the sale, postage
prepaid, to Mortgagor or any other person entitled thereto at least ten
(10) days before the time of the sale or other disposition of any of
the Collateral.
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<PAGE> 24
23A. FIXTURE FILING. The filing of this Mortgage shall constitute a
filing of a financing statement in the office wherein it is filed and a carbon,
photographic or other reproduction of this document may also be filed as a
financing statement.
Name and Address Glimcher Northtown Venture, LLC
of Debtor: c/o Glimcher Properties Limited Partnership
20 South Third Street
Columbus, OH 43215
Name and Address of Nomura Asset Capital Corporation
Secured Party: Two World Financial Center, Building B
New York, NY 10281
Description of the types
(or items of property)
covered by this
financing statement: All building materials, equipment,
fixtures, furniture and furnishings,
(including, but not limited to all engines,
boilers, elevators, machinery, heating
apparatus, electrical equipment, air
conditioning equipment, water and gas
fixtures, plumbing, communication devices,
stoves, refrigerators, carpeting, shades,
awnings, screens, storm sashes, and blinds)
now or hereafter located or intended to be
located on the Mortgaged Property of
whatsoever type or nature whether now owned
or hereafter acquired by Mortgagor,
including all replacements, repairs and
substitutions thereto and proceeds thereof.
Description of real
estate to which all or
part of the collateral
is attached or upon
which it is located: See Exhibit "A" attached hereto
24. ACTIONS AND PROCEEDINGS. After and Event of Default, 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.
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25. WAIVER OF SETOFF AND COUNTERCLAIM. All amounts due under this
Mortgage, the Note and the other Loan Documents shall be payable without setoff,
counterclaim (except for compulsory counterclaims) or any deduction whatsoever.
Mortgagor hereby waives the right to assert a setoff, counterclaim (except for
compulsory counterclaims) or deduction in any action or proceeding in which
Mortgagee is a participant, or arising out of or in any way connected with this
Mortgage, the Note, any of the other Loan Documents, or the Debt.
26. 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.
27. MARSHALLING AND OTHER MATTERS.
(a) 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. To the extent permitted by law, Mortgagor shall not have or assert any
right under any statute or rule of law pertaining to the exemption of homestead
or other exemption under any federal, state or local law now or hereafter in
effect, the administration of estates of decedents or other matters whatever to
defeat, reduce or affect the right of Mortgagee under the terms of this Mortgage
to a sale of the Mortgaged Property, for the collection of the Debt without any
prior or different resort for collection, or the right of Mortgagee under the
terms of this Mortgage to the payment of the Debt out of the proceeds of sale of
the Mortgaged Property in preference to every other claimant whatever. Further,
Mortgagor hereby knowingly, intentionally and voluntarily waives, releases,
relinquishes and forever forgoes all present and future statutes of limitations
as a defense to any action to enforce the provisions of this Mortgage or to
collect any of the Debt secured hereby to the fullest extent permitted by law.
(b) Mortgagor acknowledges and agrees that the lien of this
Mortgage shall be absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of Mortgagee and,
without limiting the generality of the foregoing, the lien hereof shall not be
impaired by any acceptance by Mortgagee of any other security for any portion of
the Debt, or by any failure, neglect or omission on the part of Mortgagee to
realize upon or protect any portion of the Debt or any collateral security
therefor. The lien of this Mortgage shall not in any manner be impaired or
affected by any release (except as to the
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<PAGE> 26
property released), sale, pledge, surrender, compromise, settlement, renewal,
extension, indulgence, alteration, changing, modification or disposition of any
portion of the Debt or of any of the collateral security therefor, and Mortgagee
may foreclose, or exercise any other remedy available to Mortgagee, without
first exercising or enforcing any of its other remedies under this Mortgage and
any exercise of the rights and remedies of Mortgagee hereunder shall not in any
manner impair the Debt or any of Mortgagee?s rights and remedies hereunder.
28. HAZARDOUS SUBSTANCES. Mortgagor hereby represents and warrants to
Mortgagee that except as set forth in the environmental report delivered to
Mortgagee on the Closing Date in connection with the closing of the Loan: (a)
except where the failure to comply is not reasonably likely to cause a Material
Adverse Change the Mortgaged Property is in full compliance with all local,
state, federal and other governmental authority statutes, ordinances, codes,
orders, decrees, laws, rules and regulations 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 of 1980, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, 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, orders and guidelines
adopted in respect of the foregoing laws, whether presently in force or coming
into being and/or effectiveness hereafter (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, asbestos or any
substance or material containing asbestos, 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 or welfare of humans (collectively, "HAZARDOUS SUBSTANCES"); (c)
to the best knowledge of Mortgagor no Hazardous Substances are or have been
(including, the period prior to Mortgagor's acquisition of the Mortgaged
Property) released, 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) to the best knowledge of
Mortgagor 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) to the best knowledge of Mortgagor no underground storage tanks exist on 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; (ii) shall keep or cause the Mortgaged
Property to be kept in compliance with all Environmental Laws; (iii) shall
promptly notify Mortgagee in writing if Mortgagor shall become aware of any
Hazardous Substances on or near the Mortgaged Property and/or if Mortgagor shall
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<PAGE> 27
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 could pose a threat to the health,
safety or welfare of humans; and (iv) 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), promptly after Mortgagor becomes aware of the same, at
Mortgagor's sole expense. The obligations and liabilities of Mortgagor under
this Paragraph 28 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.
29. ENVIRONMENTAL MONITORING; REMEDIAL WORK. Mortgagor shall give
prompt written notice to Mortgagee of: (a) any proceeding or inquiry by any
party with respect to the presence of any Hazardous Substance 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; and (c) Mortgagor'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 clean-up 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, at Mortgagor's
sole expense, an inspection or audit of the Mortgaged Property prepared by a
licensed hydrogeologist, a licensed environmental engineer or other qualified
consultant approved by Mortgagee indicating the presence or absence of Hazardous
Substances and/or the violation or threatened violation of any Environmental
Laws at, on, in, under or near the Mortgaged Property; provided, however, that
Mortgagee may not require Mortgagor to provide such inspection or audit unless:
(i) Mortgagee is required by law to obtain such inspection or audit, (ii) such
inspection or audit is requested by Mortgagee in conjunction with a foreclosure
or other enforcement proceeding under the Loan Documents, or (iii) Mortgagee has
determined (in the exercise of its good faith judgment) that reasonable cause
exists for the performance of an environmental inspection or audit of the
Mortgaged Property. If Mortgagor fails to provide any such inspection or audit
within sixty (60) 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 shall 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 any
Hazardous Substance, Mortgagor shall cause such operations and maintenance plan
to be prepared and implemented at Mortgagor's expense upon request of
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Mortgagee. In the event that any investigation, testing, assessment, audit, site
monitoring, containment, clean-up, removal, restoration or other work of any
kind is reasonably necessary or desirable under an applicable Environmental Law
or otherwise required under this Mortgage in connection with any Hazardous
Substance (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, shall be added to the
Debt and shall bear interest thereafter until paid at the Default Rate.
30. 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 written 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.
31. INDEMNIFICATION. In addition to any other indemnifications provided
herein or in the other Loan Documents, Mortgagor shall protect, defend,
indemnify and hold harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including, without limitation, reasonable
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attorneys' fees and disbursements), imposed upon or incurred by or asserted
against Mortgagee (other than as a direct result of Mortgagee's fraud or wilful
misconduct)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 at, on, in, under, from or affecting the Mortgaged Property,
any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to such Hazardous Substance, and any lawsuit
brought or threatened, settlement reached, or government order relating to such
Hazardous Substance; (g) any violation of Environmental Laws which is based upon
or in any way related to any Hazardous Substance at, on, in, under, from or
affecting the Mortgaged Property, 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; (h) any
failure of the Mortgaged Property to comply with any Access Laws; (i) 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; (j) 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
or any liability asserted against Mortgagee with respect thereto; and (k) the
claims of any tenant of any portion of the Mortgaged Property or any person
acting through or under any tenant or otherwise arising under or as a
consequence of any Lease. The indemnifications set forth in the preceding
clauses (f) and (g) shall include, without limitation, the costs of removal of
the Hazardous Substances before or after foreclosure or other taking of title to
the Mortgaged Property by Mortgagee, additional costs required to take necessary
precautions to protect against the release of Hazardous Substances into the air,
any body of water or any other public domain or onto or under any other
property, costs incurred to comply with all applicable Environmental Laws, and
any diminution in the value of the security afforded by the Mortgaged Property
or any future reduction in the sale price of the Mortgaged Property by reason of
any matter set forth above in said clauses (f) or (g) of this Paragraph 31 to
the extent that such diminution in value or such future reduction in sale price
results in Mortgagee receiving less than the full amount of all principal,
interest and other sums payable by Mortgagor under the Loan, but shall
specifically not include any such costs relating to Hazardous Substances which
are initially placed on, in or under the Mortgaged Property after foreclosure or
other taking of title to the Mortgaged Property by Mortgagee. 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
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<PAGE> 30
Mortgagor under this Paragraph 31 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 but
only to the extent based on facts existing at the time Grantor owned the
Mortgaged Property.
32. NOTICES. Any notice, demand, statement, request or consent made
hereunder shall be sent and shall be effective in the manner set forth in the
Loan Agreement.
33. AUTHORITY. 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 grant, bargain, sell, convey,
assign, transfer and mortgage 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 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.
34. WAIVER OF NOTICE. Mortgagor shall not be entitled to any notices of
any nature whatsoever from Mortgagee except with respect to matters for which
the Loan Documents specifically and expressly provide for the giving of notice
by Mortgagee to Mortgagor and except with respect to matters for which Mortgagee
is required by applicable law to give notice. To the extent permitted by
applicable law, Mortgagor hereby expressly waives the right to receive any
notice from Mortgagee with respect to any matter for which this Mortgage does
not specifically and expressly provide for the giving of notice by Mortgagee to
Mortgagor.
35. REMEDIES OF MORTGAGOR. In the event that a claim or adjudication is
made that Mortgagee has acted unreasonably or unreasonably delayed acting in any
case where by law or under the Note, this Mortgage or the other Loan Documents
it has an obligation to act reasonably or promptly, Mortgagee shall not be
liable for any monetary damages, and Mortgagor's remedies shall be limited to
injunctive relief or declaratory judgment.
36. SOLE DISCRETION OF MORTGAGEE. Wherever pursuant to this Mortgage,
Mortgagee exercises any right given to it to consent or not consent or approve
or disapprove, or any arrangement or term is to be satisfactory to Mortgagee,
the decision of Mortgagee to consent or not consent, to approve or disapprove or
to decide that arrangements or terms are satisfactory or not satisfactory shall
be in the sole discretion of Mortgagee and shall be final and conclusive, except
as may be otherwise expressly and specifically provided herein.
37. 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. 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 to take any action to foreclose this Mortgage or
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<PAGE> 31
otherwise enforce any of the provisions hereof or of the Note, the Loan
Agreement 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, the Loan Agreement, this Mortgage or any of
the other Loan Documents. Mortgagee 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.
38. 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.
39. LIABILITY. If more than one person signs this Mortgage as
Mortgagee, 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.
40. 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.
41. 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.
42. 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.
43. 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 (a) the word
"MORTGAGOR" shall mean "each Mortgagor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or any interest
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<PAGE> 32
therein," (b) the word "MORTGAGEE" shall mean "Mortgagee and any subsequent
holder of this Mortgage," (c) the word "NOTE" shall mean "the Note and any other
evidence of indebtedness secured by this Mortgage," (d) the word "PERSON" shall
include an individual, corporation, partnership, trust, limited liability
company, unincorporated association, government, governmental authority and any
other entity, (e) the words "MORTGAGED PROPERTY" shall include any portion of
the Mortgaged Property and any interest therein, and (f) 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 the 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.
44. 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.
45. 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,
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.
46. MISCELLANEOUS.
(a) 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, and the failure of Mortgagee to
promptly exercise any right, power, remedy, consent or approval provided herein
or at law or in equity shall not constitute or be construed as a waiver of the
same nor shall Mortgagee be estopped from exercising such right, power, remedy,
consent or approval at a later date. Any consent or approval requested of and
granted by Mortgagee pursuant hereto shall be narrowly construed to be
applicable only to Mortgagor and the matter identified in such consent or
approval and no third party shall claim any benefit by reason thereof, and any
such consent or approval shall not be deemed to constitute Mortgagee a venturer
or partner with Mortgagor nor shall privity of contract be presumed to have been
established with any such third party. If Mortgagee deems it to be in its best
interest to retain
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assistance of persons, firms or corporations (including, without limitation,
attorneys, title insurance companies, appraisers, engineers and surveyors) with
respect to a request for consent or approval, Mortgagor shall reimburse
Mortgagee for all out of pocket costs (except after an Event of Default,
Mortgagor shall reimburse Mortgagee for all costs and expenses) reasonably
incurred in connection with the employment of such persons, firms or
corporations.
(b) Mortgagor covenants and agrees that during the term of
this Mortgage, unless Mortgagee shall have previously consented in writing: (i)
Mortgagor will take no action that would cause it to become an "employee benefit
plan" as defined in Section 3(3) of ERISA (as defined in the Loan Agreement) or
cause the assets of Mortgagor to constitute "plan assets" of one or more such
plans within the meaning of 29 C.F.R. Section 2510.3-101; and (ii) Mortgagor
will take no action that would cause it to be a "governmental plan" within the
meaning of Section 3(32) of ERISA and shall not engage in any transaction which
would subject Mortgagor to state statutes regulating investments of, and
fiduciary obligations with respect to, governmental plans. 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 the foregoing covenants.
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 the cost of correcting
any prohibited transaction or obtaining an appropriate exemption) that Mortgagee
may incur as a result of Mortgagor's breach of the foregoing covenants. These
covenants and indemnity shall survive the extinguishment of the lien of this
Mortgage by foreclosure or action in lieu thereof provided such indemnity
relates to facts in existence prior to the extinguishment of the lien of this
Mortgage. In addition, the foregoing indemnity shall be a recourse obligation of
Mortgagor but not against its members and shall supersede any limitations on
Mortgagor's liability under any of the Loan Documents.
(c) 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.
(d) Time is of the essence with respect to all provisions of
this Mortgage.
(e) Mortgagor represents and warrants to Mortgagee that there
has not been committed by Mortgagor or to Mortgagor's knowledge 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
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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 against 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.
(f) The relationship between Mortgagor and Mortgagee is that
of a borrower and a lender only and neither of those parties is, nor shall it
hold itself out to be, the agent, employee, joint venturer or partner of the
other party.
(g) An Event of Default hereunder shall be a default under
each of the other Loan Documents.
(h) In the event the Mortgaged Property or any part thereof
shall be sold upon foreclosure as provided hereunder, to the extent permitted by
law, the sum for which the same shall have been sold shall, for purposes of
redemption (pursuant to the laws of the state where the Mortgaged Property is
located), bear interest at the Default Rate.
(i) This document may be construed as a mortgage, deed of
trust, chattel mortgage, conveyance, assignment, security agreement, pledge,
financing statement, hypothecation or contract, or any one or more of the
foregoing, in order to fully effectuate the liens and security interests created
hereby and the purposes and agreements herein set forth.
(j) In the case of any receivership, insolvency, bankruptcy,
reorganization, arrangement, adjustment, composition or other proceedings
affecting Mortgagor or the general partners, members or principals in Mortgagor,
or their respective creditors or property, Mortgagee, to the extent permitted by
law, shall be entitled to file such proofs of claim and other documents as may
be necessary or advisable in order to have the claims of Mortgagee allowed in
such proceedings for the entire secured Debt at the date of the institution of
such proceedings and for any additional amount which may become due and payable
by Mortgagor hereunder after such date.
47. INTENTIONALLY DELETED
48. MATURITY DATE. The maturity date of the Debt secured hereby is the
State Maturity Date.
49. FUTURE ADVANCES. This Mortgage secures such future or additional
advances as may be made by Mortgagee or the holder hereof, at its exclusive
option, to Mortgagor or its successors or assigns in title for any purpose. All
such future advances shall be secured to the same extent as if made on the date
of the execution of this Mortgage and this Mortgage shall
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secure the payment of the Note and any additional advances made from time to
time pursuant hereto, all of said Debt being equally secured hereby and having
the same priority as any amounts advanced as of the date of this Mortgage. It is
agreed that any additional sum or sums advanced by Mortgagee shall be equally
secured with and have the same priority as the original Debt and shall be
subject to all of the terms, provisions and conditions of this Mortgage, whether
or not such additional loans or advances are evidenced by other promissory notes
or other guaranties of Mortgagor and whether or not identified by a recital that
it or they are secured by this Mortgage. It is further agreed that any
additional promissory note or guaranty or promissory notes or guaranties
executed and delivered pursuant to this Paragraph shall automatically be deemed
to be included in the term "NOTE" wherever it appears in the context of this
Mortgage.
50. AFTER-ACQUIRED PROPERTY. All property acquired by Mortgagor after
the date of this Mortgage which by the terms of this Mortgage shall be subject
to the lien and/or the security interest created hereby, shall immediately upon
the acquisition thereof by Mortgagor and without any further mortgage,
conveyance or assignment become subject to the lien and security interest
created by this Mortgage. Nevertheless, Mortgagor shall execute, acknowledge,
deliver and record or file, as appropriate, all and every such further
mortgages, security agreements, financing statements, assignments and assurances
as Mortgagee shall require for accomplishing the purposes of this Mortgage.
51. CERTAIN RETAIL COVENANTS. Mortgagor further covenants and agrees
with Mortgagee as follows:
(a) Mortgagor shall:
(i) promptly perform and/or observe all of the
covenants and agreements required to be performed and observed by it
under the Property Management Agreement and do all things necessary to
preserve and to keep unimpaired its material rights thereunder;
(ii) promptly notify Mortgagee in writing of any
default under the Property Management Agreement of which it is aware;
(iii) promptly deliver to Mortgagee a copy of each
financial statement, business plan, capital expenditures plan, notice,
report and estimate prepared by Grantor or Manager under the Property
Management Agreement; and
(iv) promptly enforce the performance and observance
of all of the covenants and agreements required to be performed and/or
observed by the property manager under the Property Management
Agreement.
(b) Mortgagor shall not, without Mortgagee's prior written
consent:
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(i) surrender, terminate or cancel the Property
Management Agreement or otherwise replace the property manager under
the Property Management Agreement or enter into any other management
agreements with respect to the Mortgaged Property, provided, however,
that Mortgagor may terminate or cancel the Property Management
Agreement in accordance with the terms thereof so long as, prior to
such termination or cancellation, Mortgagor has selected a replacement
property manager and such replacement property manager has been
approved by Mortgagee;
(ii) reduce or consent to the reduction of the term
of the Property Management Agreement;
(iii) increase or consent to the increase of the
amount of any charges under the Property Management Agreement; or
(iv) otherwise modify, change, supplement, alter or
amend, or waive or release any of its rights and remedies under, the
Property Management Agreement in any material respect which adversely
effects Mortgagor's rights thereunder or Mortgagee's interest in the
Mortgaged Property.
(c) Mortgagor shall not, without Mortgagee's prior written
consent, enter into transactions with any affiliate, including, without
limitation, any arrangement providing for the managing of the Mortgaged
Property, the rendering or receipt of services or the purchase or sale of
inventory, except any such transaction in the ordinary course of business of
Mortgagor if the monetary or business consideration arising therefrom would be
substantially as advantageous to Mortgagor as the monetary or business
consideration that Mortgagor would obtain in a comparable transaction with a
person not an affiliate of Mortgagor.
(d) Mortgagor will enter into and cause the property manager
to enter into an assignment and subordination of the Property Management
Agreement in form satisfactory to Mortgagee, assigning to Mortgagee all of
Mortgagor's rights and interest under the Property Management Agreement and
subordinating the property manager's interest in the Mortgaged Property and all
fees and other rights of the property manager pursuant to the Property
Management Agreement to this Mortgage and the other Loan Documents and the
rights of Mortgagee hereunder and thereunder. If a monetary default or an Event
of Default shall occur, Mortgagor, at Mortgagee?s request made at any time while
such monetary default or such Event of Default is continuing, shall terminate
the Property Management Agreement and replace the property manager with a
property manager approved by Mortgagee on terms and conditions satisfactory to
Mortgagee.
52. LOCAL LAW. INTENTIONALLY DELETED
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53. CHOICE OF LAW. THIS MORTGAGE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE WHERE THE MORTGAGED PROPERTY IS LOCATED
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT THAT THE LAWS OF THE
STATE OF NEW YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS) SHALL
GOVERN THE RESOLUTION OF ISSUES ARISING UNDER THE LOAN AGREEMENT AND NOTE TO THE
EXTENT THAT SUCH RESOLUTION IS NECESSARY TO THE INTERPRETATION OF THIS MORTGAGE.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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<PAGE> 38
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage, Assignment of
Leases and Rents and Security Agreement as of the day and year first above
written.
GLIMCHER NORTHTOWN VENTURE, LLC, a
Delaware limited liability company
By: GLIMCHER BLAINE, INC., a Delaware
corporation, its managing member
By: /s/ George A. Schmidt
--------------------------------------
Name: George A. Schmidt
Title: Senior Vice President
[CORPORATE SEAL]
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
I certify that I know or have satisfactory evidence that
George A. Schmidt is the person who appeared before me, and said person
acknowledged that he/she signed this instrument, on oath stated that he/she was
authorized to execute the instrument and acknowledged it as the Senior Vice
President of Glimcher Blaine, Inc., to be the free and voluntary act of such
party for the uses and purposes mentioned in the instrument.
Dated: May 29, 1998
------------
/s/ Judith Tompkins
-------------------------------------
Notary Public
Print Name Judith Tompkins
-------------------------
My commission expires Dec. 26, 1999
--------------
<PAGE> 39
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
That part of Lots 2,3,4,5,6 and 7 of Block 2, MUIR?S NORTHTOWN ADDITION
according to the plat on file and of record in the office of the County
Recorder, Anoka County, Minnesota and that part of vacated University Avenue
Northeast described as follows:
Beginning at the most Northerly corner of said Lot 2; thence South 60E 39' 03"
East assumed bearing along the Northeasterly line of said Lot 2 and its
Southeasterly extension a distance of 592.06 feet; thence South 57E 29' 46" East
a distance of 1009.34 feet to the East line of said Lot 4; thence South 00E 28'
56" East along said East line a distance of 420.93 feet; thence South 89E 38'
14" West a distance of 535.00 feet; thence Southerly along a tangential curve
concave to the Southeast having a radius of 200.00 feet, a central angle of 90E
00' 00" and an arc length of 314.16 feet; thence tangent to said curve South 00E
21' 46" East a distance of 58.00 feet; thence Southerly along a tangential curve
concave to the West having a radius of 150.00 feet, a central angle of 35E 16'
49" and an arc length of 92.36 feet; thence nontangential to said curve South
55E 05' 02" East a distance of 56.32 feet; thence Southerly along a
nontangential curve concave to the East having a radius of 230.00 feet a central
angle of 35E 16' 49", an arc length of 141.62 feet, a chord bearing of South 17E
16' 38" West and a chord distance of 139.40 feet; thence tangent to said curve
South 00E 21' 46" East a distance of 60.00 feet to the South line of said Lot 4;
thence South 89E 38' 14" West along said South line a distance of 849.34 feet;
thence Northwesterly along a tangential curve concave to the Northeast having a
radius of 210.83 feet, a central angle of 77E 28' 16" and an arc length of
285.07 feet; thence tangent to said curve North 12E 53' 30" West a distance of
165.85 feet; thence 32E 59' 20" West a distance of 108.06 feet; thence North 68E
45' 03" West a distance of 72.38 feet; thence North 19E 29' 46" West a distance
of 303.39 feet; thence South 00E 21' 46" East a distance of 228.82 feet to the
centerline of vacated University Avenue Northeast; thence North 19E 29' 46" West
along said centerline a distance of 380.35 feet; thence Northwesterly along a
tangential curve concave to the Southwest having a radius of 545.67 feet, a
central angle of 40E 00' 00" and an arc length of 380.95 feet; thence
Northwesterly along a reverse curve concave to the Northeast having a radius of
545.67 feet, a Central angle of 13E 01' 26" and an arc length of 124.04 feet;
thence South 43E 31' 40" West a distance of 75.00 feet; thence North 34E 31' 26"
West a distance of 148.02 feet; thence North 07E 29' 02" East a distance of
209.36 feet; thence Northerly along a nontangential curve concave to the East
having a radius of 470.67 feet a central angle of 30E 05' 34", an arc length of
247.20 feet, a chord bearing of North 13E 04' 08" East and a chord distance of
244.37 feet; thence South 57E 29' 46" East a distance of 310.20 feet; thence
South 32E 30' 14" West a distance of 168.00 feet; thence Southeasterly along a
tangential curve concave to the Northeast having a radius of 190.00 feet, a
central angle of 90E 00' 00" and an arc length of 298.45 feet; thence South 57E
29' 46" East tangent to said curve a distance of 456.16; thence Southeasterly
<PAGE> 40
along a tangential curve concave to the Southwest having a radius of 190.00
feet, a central angle of 38E 00' 00" and an arc length of 126.01 feet; thence
South 19E 29' 46" East tangent to said curve a distance of 84.67 feet; thence
North 32E 30' 14" East a distance of 257.40 feet; thence North 57E 29' 46" West
a distance of 150.00 feet; thence North 32E 30' 14" East a distance of 460.00
feet; thence South 57E 29' 46" East a distance of 85.00 feet; thence North 32E
30' 14" East a distance of 230.00 feet; thence North 57E 29' 46" West a distance
of 55.50 feet; thence North 32E 30' 14" East a distance of 147.42 feet to the
point of beginning and there terminating.
2
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Glimcher Realty Trust on Forms S-3 (File Nos. 33-90730, 33-91084, 333-43317 and
333-43319) and on Forms S-8 (File Nos. 33-94542 and 333-10221) of our report
dated May 27, 1998, relating to the Statement of Revenues and Certain Expenses
of Northtown Mall and Lloyd Center Mall for the year ended December 31, 1997,
which report appears in this Form 8-K of Glimcher Realty Trust.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
June 19, 1998
